Data Protection and Digital Information Bill

Debate between Lord Clement-Jones and Viscount Younger of Leckie

Committee stage
Wednesday 24th April 2024 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, it has been a privilege to be at the ringside during these three groups. I think the noble Baroness, Lady Sherlock, is well ahead on points and that, when we last left the Minister, he was on the ropes, so I hope that to avoid the knock- out he comes up with some pretty good responses today, especially as we have been lucky enough to have the pleasure of reading Hansard between the second and third groups. I think the best phrase that noble Baroness had was the “astonishing breadth” of Clause 128 and Schedule 11 that we explored with horror last time. I very much support what she says.

The current provisions seem to make the code non-mandatory, yet we discovered they are without “reasonable suspicion”, the words that are in the national security legislation—fancy having the Home Office as our model in these circumstances. Does that not put the DWP to shame? If we have to base best practice on the Home Office, we are in deep trouble.

That aside, we talked about “filtering” and “signals” last time. The Minister used that phrase twice, I think, and we discovered about “test and learn”. Will all that be included in the code?

All this points to the fragility and breadth of this schedule. It has been dreamt up in an extraordinarily expansive way without considering all the points that the noble Lord, Lord Anderson, has mentioned, including the KC’s opinion, all of which point to the fact that this schedule is going to infringe Article 8 of the European Convention on Human Rights. I hope the Minister comes up with some pretty good arguments.

My final question relates to the impact assessment–or non-impact assessment. The Minister talked about the estimate of DWP fraud, which is £6.4 billion. What does the DWP estimate it will be after these powers are implemented, if they are ever implemented? Should we not have an idea of the DWP’s ambitions in this respect?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, this has been a somewhat shorter debate than we have been used to, bearing in mind Monday’s experience. As with the first two groups debated then, many contributions have been made today and I will of course aim to answer as many questions as I can. I should say that, on this group, the Committee is primarily focusing on the amendments brought forward by the noble Baroness, Lady Sherlock, and I will certainly do my very best to answer her questions.

From the debate that we have had on this measure, I believe that there is agreement in the Committee that we must do more to clamp down on benefit fraud. That is surely something on which we can agree. In 2022-23, £8.3 billion was overpaid due to fraud and error in the benefit system. We must tackle fraud and error and ensure that benefits are paid to those genuinely entitled to the help. These powers are key to ensuring that we can do this.

I will start by answering a question raised by the noble Lord, Lord Anderson—I welcome him to the Committee for the first time today. He described himself as a “surveillance nerd”, but perhaps I can entreat him to rename himself a “data-gathering nerd”. As I said on Monday, this is not a surveillance power and suggesting that it is simply causes unnecessary worry. This is a power that enables better data gathering; it is not a surveillance or investigation power.

The third-party data measure does not allow the DWP to see how claimants spend their money, nor does it give the DWP access to millions of people’s bank accounts, as has been inaccurately presented. When the DWP examines the data that it receives from third parties, this data may suggest that there is fraud or error and require a further review. This will be done through our normal, regular, business-as-usual processes to determine whether incorrect payments are indeed being made. This approach is not new. As alluded to in this debate, through the Finance Act 2011, Parliament has already determined that this type of power is proportionate and appropriate, as HMRC already owns similar powers regarding banking institutions and third parties in relation to all taxpayers.

I listened very carefully to the noble Lord and will, however, take back his points and refer again to our own legal team. I think the point was made about the legality of all this. It is a very important point that he has made with all his experience, and I will take it back and reflect on it.

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[Viscount Younger of Leckie (Con)]

That is a very fair question, and I hope that I understand it correctly. I can say that the limit for the DWP is that it can gain only from what the third party produces. Whatever goes on behind the doors of the third party is for them and not us. Whether there is a related account and how best to operate is a matter for the bank to decide. We may therefore end up getting very limited information, in terms of the limits of our powers. I hope that helps, but I will add some more detail in the letter.

[Lord Clement-Jones (LD)]

My Lords, the Minister extolled the green-rated nature of this impact assessment. In the midst of all that, did he answer my question?

[Viscount Younger of Leckie (Con)]

I need to be reminded of the question.

[Lord Clement-Jones (LD)]

I asked about the amount of fraud that the Government plan to detect, on top of the £6.4 billion in welfare overpayments that was detected last year.

[Viscount Younger of Leckie (Con)]

The figure that we have is £600 million but, again, I will reflect on the actual question that we are looking to address—the actual amount of fraud in the system.

[Lord Clement-Jones (LD)]

The Minister is saying that that figure is not to be found in this green-rated impact assessment, which most of us find to be completely opaque.

[Viscount Younger of Leckie (Con)]

I will certainly take that back, but it is green rated.

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[Lord Vaux of Harrowden (CB)]

My Lords, the Minister was kind enough to mention me a little earlier. Can I just follow up on that? In the impact assessment, which I have here, nowhere can I find the £600 million figure, nor can I find anywhere the costs related to this. There will be a burden on the banks and clearly quite a burden on the DWP, actually, if it has got to trawl through this information, as the noble Viscount says, using people rather than machines. The costs are going to be enormous to save, it would appear, up to £120 million per year out of £6.4 billion per year of fraud. It does seem odd. It would be really helpful to have those cost numbers and to understand in what document they are, because I cannot find in the impact assessment where these numbers are.

[Viscount Younger of Leckie (Con)]

I hope I can help both noble Lords. Although I must admit that I have not read every single page, I understand that the figure of £500 million is in the IA.

[Lord Clement-Jones (LD)]

Did the Minister say £500 million?

[Viscount Younger of Leckie (Con)]

Yes, £500 million. I mentioned £600 million altogether; that was mentioned by the OBR, which had certified this, and by the way, that figure was in the Autumn Statement.

[Lord Clement-Jones (LD)]

My Lords, has not that demonstrated the disproportionality of these measures?

[Baroness Jones of Whitchurch (Lab)]

The noble Viscount explained in response to the noble Lord, Lord Anderson, that at every stage where the powers are going to be expanded, it would come back as an affirmative regulation. I might have been a bit slow about this, but I have been having a look and I cannot see where it says that. Perhaps he could point that out to me, because that would provide some reassurance that each stage of this is coming back to us.

[Viscount Younger of Leckie (Con)]

I understand, very quickly, that it is in paragraph 1(1), but again, in the interests of time, maybe we could talk about that outside the Room.

[Lord Clement-Jones (LD)]

Could the Minister clarify: was that paragraph 1(1)?

[Viscount Younger of Leckie (Con)]

I can reassure the noble Lord that that is the case, yes.

[Viscount Younger of Leckie (Con)]

I reassure noble Lords that is correct—it is paragraph 1(1). It may be rather complex, but it is in there, just to reassure all noble Lords.

[Lord Clement-Jones (LD)]

I am sorry to keep coming back, but did the Minister give us the paragraph in the impact assessment that referred to £500 million?

[Viscount Younger of Leckie (Con)]

No, I did not, but that is something which surely we can deal with outside the Room. However, I can assure noble Lords that it is in there.

Data Protection and Digital Information Bill

Debate between Lord Clement-Jones and Viscount Younger of Leckie

Committee stage
Monday 22nd April 2024 Grand Committee

[Viscount Younger of Leckie (Con)]

That is a fair challenge and I will certainly be coming on to that. I have in my speech some remarks and a much more limited reassurance for the noble Lord.

It is only when there is a signal of potential fraud or error that the DWP may undertake a further review, using our business-as-usual processes and existing powers—an important point. DWP will not share any personal information with third parties under this power, and only very limited data on accounts that indicate a potential risk of fraud or error will be shared with DWP in order to identify a claimant on our system. As I said earlier, I will say more about the limited aspects of this later in my remarks.

[Lord Clement-Jones (LD)]

I am sorry to interrupt the Minister, but will he be coming on to explain what these signals are? He is almost coming to a mid-point between innocence and suspicion called “signals”—is this a new concept in law? What are we talking about and where in all of Schedule 11 is the word “signal”?

[Viscount Younger of Leckie (Con)]

If the noble Lord will allow me, I would like to make some progress and I hope that this will come out in terms of what we may be seeking on a limited basis.

The first third parties that we will designate will be banks and other financial institutions, as the Committee is aware. We know that they hold existing data that will help to independently verify key eligibility factors for benefits.

This clause does not give DWP access to any bank accounts—a very important point—nor will it allow DWP to monitor how people spend their money or to receive sensitive information, such as medical records or data on opinions or beliefs.

As the noble Baroness, Lady Sherlock, mentioned—I want to try to answer one of her questions—this power cannot be used to suspend someone’s benefit. Cases that are flagged must be reviewed under existing processes and powers—business as usual, which I mentioned earlier—to determine whether incorrect payments are being made.

Our approach is not new. HMRC has long been using powers to request data at scale from banks on all taxpayers under Schedule 23 to the Finance Act 2011. Our approach carries similar safeguards. Tax fraud is no different from welfare fraud and should be treated similarly. This was a key point that the Prime Minister made only on Friday when he committed to bring DWP’s fraud and error powers more in line with those of HMRC. This is one clear area where we are seeking to do this.

This allows me to go on to very important points about safeguards. Not all the cases found through this power will be fraud. Some will be errors which the power will help to correct, preventing overpayment debt building up. Some cases may also have legitimate reasons for seemingly not meeting eligibility requirements, for example where claimants have certain compensation payments that are disregarded for benefit eligibility rules. In those cases, no further action will be taken. Our robust business-as-usual processes will ensure that all cases are dealt with appropriately.

Another question raised by the noble Lord, Lord Vaux, on safeguards was to do with the legislation. A key safeguard is that we cannot approach any third party either; there must be a three-way relationship with the department, the claimant and the third party. This safeguard will narrow the use of this power substantially and ensure that it is used proportionately, as these three-way relationships are limited, meaning that data cannot be gathered at scale from just any source for any purpose. Any third party we will want to get data from will need to be designated in affirmative regulations that noble Lords will have an opportunity to scrutinise. These regulations will be accompanied by a code of practice. We will be bringing that forward, and we will consult on the code before presenting it to Parliament—which answers a question raised by, I think, the noble Baroness, Lady Kidron.

The power also ensures that we can request only very limited data on benefit recipients. I think this addresses a point raised by the noble Lord, Lord Vaux. We must work with key third parties to define what is shared, but our expectation is that this would be a name and date of birth or a unique payment number, along with the eligibility criteria someone has matched against: for example, a benefit claimant who has more savings than the benefit rules would normally allow.

Outside controls will apply here, too. DWP already handles vast amounts of data, including personal data, and must adhere to the UK GDPR and the Data Protection Act 2018.

On the point, which again was raised during this debate, about the remarks made by the Information Commissioner’s Office and its updated report on this measure, published as Committee started and which the Committee may be aware of, I was pleased to see that the commissioner now acknowledges that the third-party data measure is in pursuit of a legitimate aim, stating:

“I understand and recognise the scale of the problem with benefit fraud and error that government is seeking to address and accept that the measure is in pursuit of a legitimate aim. I am not aware of any alternative, less intrusive, means of achieving the government’s stated policy intent based on their analysis”.


I think that is a significant point to make, and it is a point with which I very strongly agree.

[Lord Clement-Jones (LD)]

It is also worth pointing out that the paragraph I quoted follows immediately on that. That is the qualification that I quoted.

[Viscount Younger of Leckie (Con)]

Yes, I am aware of that. I think the noble Lord was alluding to the point about proportionality. I listened carefully and took note of that, but do not entirely agree with it. I hope that I can provide further reassurances, if not now then in the coming days and weeks. The point is that there is no other reasonable way to independently verify claimants’ eligibility for the payment that they are receiving.

I turn to the amendments raised, starting with the stand part notice from the noble Baronesses, Lady Kidron and Lady Chakrabarti, the noble Lord, Lord Anderson of Ipswich, who is not in his place, and the noble Lord, Lord Clement-Jones. They and my noble friend Lord Kamall, who is not in his place, interestingly, all made their case for removing the clause, of which I am well aware. However, for the reasons that I just set out, this clause should stand part of the Bill.

In raising her questions, the noble Baroness, Lady Kidron, made some comparisons with HMRC. There are appropriate safeguards in place for this data-gathering power, which will be included in the code of practice. The safeguards for this measure will be equivalent to those in place for the similar HMRC power which Parliament approved in the Finance Act 2011.

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[Viscount Younger of Leckie (Con)]

The noble Lord has set me quite a challenge at the Dispatch Box. It is out of scope of today’s session but, having said that, I will reflect on his question afterwards.

I am aware that time is marching on. My noble friend Lord Kamall asked about burdens on banks. We believe that the burdens on banks will be relatively low.

The noble Baroness, Lady Sherlock, made a number of points; I may have to write to her to expand on what I am about to say. Removing the requirement for third parties to provide legible copies of information means that DWP could receive the information but there is a risk that the information is not usable; that is my answer to her points. This could limit the data that DWP receives and prevent us utilising the power in full, which could in turn impact the savings due to be realised from this important measure.

I turn to the final amendments in this group, which were raised by the noble Baroness. They would place requirements on the Secretary of State to issue statements in the House and consult on the code of practice. We will talk more about the code of practice later on in this debate, and I have already made clear my firm opinions on it: we will take it forward and are already working on it. There will be a consultation that will, of course, allow anybody with an interest in this to give their views.

I turn to the number of statements that must be made in the House regarding the practical use of the measures before powers can commence, such as the role that artificial intelligence will play or assurances on any outsourcing of subsequent investigations. This is an important point to make and was raised by other Peers. I want to make it clear that this measure will be rolled out carefully and slowly through a “test and learn” approach from 2025, in conjunction with key third parties. To make these statements in the House would pre-empt the crucial “test and learn” period. I say again that discussions with the third parties are deep and detailed and we are already making progress; this point was made by the noble Lord, Lord Clement-Jones, on the link with banks and third parties.

Importantly, I assure the noble Baroness, Lady Sherlock, that we will not make any automated decisions off the back of this power; this was also raised by the noble Baroness, Lady Kidron. The final decision must and will always involve a human being—a human agent in these cases—and any signals of potential fraud or error will be looked at comprehensively. I am grateful for the remarks of my noble friend Lady Buscombe on this matter.

I know that I have not answered a number of questions. Perhaps I can do so in our debate on another group; otherwise, I certainly wish to answer them fully in a letter. I hope that I have explained clearly, from our perspective, why this power is so important; why it is the right power to take; and how we have carefully designed it, and continue to design it, with the key safeguards in mind. I strongly value the input from all those who have contributed today but I remain unconvinced that the proposed amendments are necessary and strengthen the power beyond the clear safeguards I have set out. With that, I hope that the noble Baroness will not press her opposition to Clause 128.

[Lord Clement-Jones (LD)]

I may have missed something, but can I just check that the Minister will deal with the matter of signals, which he mentioned at the beginning of his response? Will he deal with where that phrase comes from, what they are, whether they will be in the code, et cetera? There are a lot of questions around that. Does it amount to actual suspicion?

[Viscount Younger of Leckie (Con)]

Absolutely; I am keen to make sure that I answer on that. It may be possible to do so in the next group but, if not, I will certainly do so in the form of a precise letter—added to the larger letter that I suspect is coming the noble Lord’s way.

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[Lord Clement-Jones (LD)]

My Lords, I would of course much prefer Clause 128 not to stand part, but we were just privileged by a master class from the noble Baroness, Lady Sherlock. She talked about these being probing amendments, but I do not think that I have seen a schedule so expertly sliced and diced before. If those are probing, they are pretty lethal. I agree with so many of those elements. If we are to have provisions, those are the kinds of additions that we would want and the questions that we would want to ask about them. I very much hope that the Minister has lots of answers, especially for the noble Baroness, Lady Sherlock, but also for the other noble lords who have spoken.

[Viscount Younger of Leckie (Con)]

My Lords, the debate on this group has focused largely on the amendments from the noble Baroness, Lady Sherlock, regarding using powers only where there is a suspicion of fraud, making provisions so that information collected can be used only for the narrow purpose of determining overpayment, removing pension-age benefits from the scope of the powers and requiring approval from Parliament before the power can be used on specific working-age benefits.

I was going to go over the reason behind these measures once again, but I will not delay the Committee on why we are bringing them forward. I believe I did that at some length in the previous group, so I am going to turn to the amendments raised.

Narrowing these powers as suggested by the noble Baroness, with Amendments 220, 221, 222 and 222A, will leave us exposed to those who are deliberately aiming to defraud the welfare system and undermine the policy intent of this measure. In fact, taken together, these amendments would render the power unworkable and ineffective.

To restrict the power to cases where DWP already has a suspicion of fraud, as suggested by the noble Baroness, would defeat the purpose of this measure. The intent is to enable us to use data from third parties to independently check that benefit eligibility rules are being complied with. We use data from other sources to do this already. For example, we use data from HMRC to verify earnings in UC and check that the benefit eligibility rules are being complied with. Parliament has determined that, to be eligible for a benefit, certain rules and requirements must be met, and the Government have a responsibility to ensure that taxpayers’ money is spent responsibly. Therefore, the DWP should be able to utilise information from third parties to discharge that duty. This is an appropriate and proportionate response to a significant fraud and error challenge.

The noble Baroness, Lady Sherlock, also proposed that the power should be restricted such that it would not apply to persons who hold an account into which a benefit is paid on behalf of someone who cannot manage their own financial affairs—such persons are referred to as “appointees”. An appointee is a person who may be appointed by the Secretary of State to act on behalf of the benefit customer. Usually, the appointee becomes legally responsible for acting on the customer’s behalf in all matters related to the claim. It is also made clear to the appointee, in the documents that they sign, that we may get information about them or the person they are acting for from other parties, or for any other purposes that the law allows, to check the information they provide.

Under our proposed legislation, it is right to say that there may be some people who are not themselves benefit claimants but who have given a person permission to pay benefits into their bank account, who may be picked up in the data returned by third parties. Under the noble Baroness’s amendment, we would not be able to gather data on appointees, which would make the power unworkable, because third parties would not be able to distinguish between an individual managing their own benefit and an appointee. It also assumes that no fraud or error can occur in these cases, which is definitely wrong. I assure the noble Baroness that we handle such cases regularly and have robust existing processes for identifying appointees on our own database and for carefully handling cases of this nature.

The noble Baroness would also like to see the power—

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[Viscount Younger of Leckie (Con)]

I clearly cannot go far enough today, but, because this is important and we are in Committee, I need to give some further reassurances on where we are in the process in terms of filtering. If I may conclude my remarks, I will finish this particular point. This is all part of the test and learn, and I give some reassurance that we are working through these important issues in relation to appointees and landlords.

[Lord Clement-Jones (LD)]

It is precisely as the noble Baroness, Lady Kidron, said on the last group—this is a massive net. It feels as though this is so experimental that there is no certainty about how it will operate, and the powers are so broad that anything could be subject to it. It sounds extremely dangerous, and it is no wonder that everybody is so concerned.

[Viscount Younger of Leckie (Con)]

I do not agree with that. We have done quite a lot of business together across the Chamber. That is a slightly sweeping issue, because I have given some reassurance that we are already working with the third parties to make sure that we have robust processes in place. For instance, when we are talking about landlords, while it is possible that a landlord’s account may be matched under the measure, only minimum information will be provided by the third parties to enable my department to identify an individual within our own database. With all the data received, we will make further inquiries only where appropriate and where the information is relevant to the benefit claim. This is already part of our business-as-usual processes.

[Lord Clement-Jones (LD)]

My Lords, I am sorry to interrupt the Minister but, throughout these two groups, he has, in a sense, introduced wholly new concepts. We have “test and learn”, “filtering”—which sounds extraordinary—and “signals” but none seem to be in the black letter of the schedule, nor in the rest of the Bill. We have a set of intentions and we are meant to trust what the DWP is doing with these powers. Does the Minister not recognise that the Committee is clearly concerned about this? It needs tying down, whether we need to start from scratch and get rid of the clause or take on board the amendments put forward by the noble Baroness, Lady Sherlock. The uncertainty around this is massive.

Trade Bill

Debate between Lord Clement-Jones and Viscount Younger of Leckie

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

[Viscount Younger of Leckie (Con)]

To answer the second question from the noble Baroness, we could well be. I think I have said, in other respects, when we do finally leave the EU after the transition period, because we will have left the EU it will be up to us to look at our standards and raise them if we think that is right. On the way forward on online harms, which is very close to the heart of the noble Baroness, I reassure her that there is a lot of cross-departmental work going on here. Although this is DCMS-led, I reassure her, on behalf of my noble friend Lord Grimstone, that the DIT and other departments are working together on the way forward, bearing in mind the White Paper.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for his response. It was useful to be reminded by the noble Baroness, Lady Neville-Rolfe, of his antecedents. I remember many happy hours discussing copyright exceptions—I think it was from 2013 onwards —and I am sure it was one of the Minister’s favourite jobs at the time, with all the minutiae of intellectual property involved.

This has been a relatively short but, I hope, well-argued debate and I am grateful to those who supported not only my Amendment 15 but Amendments 16 and 34, which I strongly support as well. If we were looking for an order of priority, Amendment 34 in the name of the noble Baroness, Lady Kidron, is the absolute touchstone for this debate. She referred to putting an intentional red line in the negotiations, a very powerful phrase. The noble Lord, Lord Sheikh, said that children’s safety should not be traded away again, which really emphasises the importance of this. The point was made that we do not yet have all the legislation we need in this area, therefore any negotiations need to take account of future legislation. It is a really tricky one. The Minister has a wonderful bedside manner and used the word “reassure” on a number of occasions, but this is a really difficult and important area. Personally, I am not 100% reassured and if the noble Baroness wanted to bring her amendment back on Report, many of us would give her a great deal of support.

Turning to data, I agree with my noble friend Lord Fox: the one thing giving business sleepless nights is the whole issue of data adequacy and data flows. Post Schrems, that is a really difficult area. The Minister mentioned it and the noble Lord, Lord Agnew, answered a Written Question from me recently about the taskforce. It is urgent that we should have those guidelines in place. It is not adequate that people should simply have to rely on standard contractual clauses, especially for small business, as it will imply that they have to take a great deal of legal advice. I should say that since I no longer charge by the hour, I have no direct personal interest in that. However, it is a serious area and I hope it is being taken on board at speed.

On the IP front, there was a kind of multiple-choice questionnaire which I hope the Minister will use in future negotiations to tick or cross, as the case may be. The big problem is that this all demonstrates the feeling that the scrutiny process is inadequate, whether on continuity agreements or new agreements. The Minister says that the amendments would require another 11 reports, or whatever the tally would be, but that demonstrates a theme that has run through Second Reading and Committee so far: that the level of scrutiny we are being given over free-trade agreements is inadequate. Whether on things such as IP and data, which are crucial to business, or things which have a greater moral and societal foundation, as in the amendment of the noble Baroness, Lady Kidron, this is about the opportunity for scrutiny not being adequate at this point.

I will obviously withdraw the amendment, as we are in Grand Committee, but we are, in a sense, still back with the feeling that we have to go much further on scrutiny. If that involves 11 reports, so be it: these are important agreements for our future. I beg leave to withdraw the amendment.