Data Protection and Digital Information Bill

Baroness Lister of Burtersett Excerpts

Committee stage
Monday 22nd April 2024 Grand Committee

We support tackling fraud. Wherever we are on the political spectrum and whatever we think of the benefit system, we do not think that people should be receiving money to which they are not entitled. At the same time, we must make sure that this is not an excuse for a mass trawling exercise or a Big Brother initiative, which many of us would oppose.

[Baroness Lister of Burtersett (Lab)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Kamall. Although we probably come from very different positions on the role of the state, I agree with virtually everything that he said. I apologise for popping up at this late stage of proceedings on the Bill but, as someone with a long-standing concern about social security matters, I was shocked by the inclusion of these powers and want to add my support to those opposing them and, should this opposition prove unsuccessful, to the very sensible set of recommendations made by my noble friend Lady Sherlock.

The Child Poverty Action Group, of which I am honorary president, and Z2K warn that the stakes are high for claimants, as getting caught up in an error and fraud investigation can lead to the wrongful suspension and/or termination of their benefits. They give some horrendous examples of where this has happened. I will read just one: “A claimant with severe mental health problems whose main carer had recently passed away had his UC suspended in October 2023 by the UC case review when he was unable to obtain and upload bank statements on request. The suspension continued for four months and he was unable to pay for food, electricity or heating. When he was referred for benefits advice and his welfare rights adviser contacted the UC case review team, she was told that claims under review are randomly chosen and they are not targeted in any way”. This is someone with mental health problems left without any money; this could become the norm under this proposal.

The briefing from the CPAG and Z2K also cites the perspective of Changing Realities—families with experience in claiming low-income benefits. One warns that

“it will put folk off claiming altogether”.

I always remember, when I worked at the CPAG, getting a phone call from a woman who started by saying, “Please don’t think I’m a scrounger”. I am afraid that is still very much how people often feel about claiming benefits. Treating all social security recipients as potentially fraudulent can but increase the stigma associated with claiming. Amendment 219 in the name of my noble friend Lord Sikka is highly pertinent here. The point has already been made, but how would we feel if we knew that our bank accounts could well be scrutinised for potential tax evasion? I realise that I should declare an interest: as a pensioner, ultimately my bank account will be trawled, but that is down the line. Underlying this is a double standard that has operated year after year in social security and tax fraud.

The CPAG and Z2K also warn that some of the most marginalised people in our society could get caught up in these speculative searches. Given this, can the Minister explain why—I believe this is still the case—there is no equalities impact assessment for these provisions? Disabled people’s organisations are very worried about the likely implications for their members, such as in the case of disabled people who set up bank accounts to pay for their social care. They warn of the potential mental health impact as existing mental distress and trauma could be exacerbated by the knowledge that they are under surveillance—a point made by the noble Baroness, Lady Kidron.

The Government state that they

“are confident that the power is proportionate and would operate in a way that it only brings in data on DWP claimants, and specifically those claimants where there is a reasonable suspicion that something is wrong within their claim”.

Given the evidence of people already being wrongfully targeted for fraud and the strongly expressed view of organisations such as Justice, as well as the Information Commissioner, that the measures are disproportionate and therefore arguably unlawful, can the Minister say on what evidence that confidence is based? Given this confidence, I hope that the Government will accept without demur Amendments 220 to 222 in the next group from my noble friend Lady Sherlock.

Picking up what my noble friend Lord Sikka said, what is the breakdown between suspected fraud and error? It is not helpful that they are always talked about as though they are one and the same thing. The Government have argued that one reason the power is necessary is to provide the tools to enable the DWP to

“minimise the impact of genuine mistakes that can lead to debt”.

Try telling that to recipients of carer’s allowance who have been charged with fraud as a result of genuine mistakes relating to the earnings threshold. The fact that the DWP already has the information and power it needs to act to ensure that debts do not accrue in this situation, yet in countless cases has not used it until the point where very large sums may be owing, does not instil confidence, as mentioned by the noble Baroness, Lady Kidron.

On Amendment 303, which relates to Amendment 230, one of the criticisms of these provisions has been the lack of consultation. Has the Social Security Advisory Committee been consulted? If so, what was its response; if not, why not?

In conclusion, I support the opposition to Clause 128 and Schedule 11 standing part of the Bill, but so long as they do stand part, I hope very much that the Minister will take seriously the amendments in the name of my noble friend in this group and the next two.

[Lord Vaux of Harrowden (CB)]

My Lords, I was also too late to put my name to these stand part notices for Clause 128 and Schedule 11. There must have been a stampede towards the Public Bill Office, meaning that some of us failed to make it.

At Second Reading, I described Clause 128 as “draconian”. Having dug into the subject further, I think that was an understatement. Data protection is a rather dry subject and, as the debates throughout this Committee stage have shown, it does not generate a lot of excitement. We data protection enthusiasts are a fairly select group, but it is nice to see a few new faces here today.

The Bill runs to 289 pages and is called the Data Protection and Digital Information Bill. Nothing in that name suggests that around 20 pages of it relate, in effect, to giving the Government unlimited access to the bank accounts of large swathes of the population without suspicion of any wrongdoing—20 pages is larger than many Bills. I wonder what the reaction in this Committee and the other place might have been if those 20 pages had been introduced as a stand-alone Bill—called, perhaps, the government right to access bank account information Bill. I suspect that we might have had a few more people in this Room. It feels as if this draconian clause is being hidden in the depths of a Bill that the Government perhaps felt would not generate much interest. It is particularly concerning that it was dropped into the Bill at the last minute in the other place and has not, therefore, received scrutiny there either. This sort of draconian power deserves much more scrutiny than on day 6 in Committee in the Moses Room.

I hope that my desire to stamp out fraud is well known—indeed, I think I can probably describe myself as rather boring on the subject—so I have a lot of sympathy for the Government’s underlying intention here. However, a right to require banks to carry out suspicionless surveillance over the bank accounts of anybody who receives pretty much any kind of benefit, directly or indirectly, is a huge intrusion into privacy and feels completely disproportionate. Others have covered the detail eloquently, so I just want to ask a number of questions of the Minister—I see that we have had a viscount swap at this stage.

I have been trying to work out exactly which accounts could be covered by this requirement. Schedule 11 is not the easiest document to read. It seems clear that if, for example, I am a landlord receiving rent directly from the benefit system on behalf of a tenant, the account of mine that receives the money would be covered, as would any other account in my name. However, would it also catch, for example, a joint account with my wife? I think it would. Would it catch a business account or an account for a charity where I am a signatory, a director or a trustee? I am not sure from reading it, I am afraid. Can the noble Minister clarify that?

Once received, the information provided by the banks may be used

“for the purposes of, or for any purposes connected with, the exercise of departmental functions”.

That seems extremely broad, and I cannot find anything at all setting out for how long the information can be retained. Again, can the Minister clarify that?

As well as being a data protection enthusiast, I am also an impact assessment nerd. I have been trying to work out from the impact assessment that accompanies the Bill—without much success—how much money the Government anticipate recovering as a result of these proposed rights, as well as the cost to the banks, the department and any other parties in carrying out these orders. The impact assessment is rather impenetrable—I cannot find anything in it that covers these costs—so I would be grateful if the Minister could say what they are and on what assumptions those numbers are based.

The noble Lord, Lord Kamall, mentioned unintended consequences. I echo his points: this is really important. Putting additional onerous obligations on banks may make them decide that it is too difficult to provide accounts to those in receipt of benefits. Access to bank accounts for vulnerable people is already an issue, and any incentive to make that worse is a real problem. As the noble Lord pointed out, we have a good example of that with PEPs. All of us have, I suspect, experienced finding it at least difficult to open an account. Some of us have had accounts refused or even closed simply because we have made it difficult for the banks to act for us. The same risk applies to landlords. Why would a landlord want to receive money from housing benefits directly when it will mean that all of his bank accounts and linked accounts will be looked at? He will simply say no. We are therefore reducing the pool of potential accommodation available to housing benefit claimants.

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[Baroness Buscombe (Con)]

My Lords, I speak as someone who was a Minister at the Department for Work and Pensions back in 2017. I well remember, when I was in charge of fraud and benefit, when we had a new addition to my team. I felt very strongly about this area because, when I first started as a Minister there, I was incredibly shocked by the level of fraud. Someone talked about having a fraud strategy, but this area is very complex. In the years since then, we have learned that the greatest incidence of fraud is people misstating their assets. Everybody in the Room will know that it is important that you must have only a certain amount of assets to claim benefits, whatever your situation, unless they are not means-tested or are disability benefits.

In 2017, the Treasury ran a controlled pilot. I do not know the details of how it was run, but I saw the results and they were extraordinary. The pilot was at one bank, using the powers they already had, for those who may be avoiding tax—which of course is not a crime—to see whether there was an issue with regard to benefit claimants misstating the extent of their assets when claiming. The extraordinary thing was that they found that between 25,000 and 30,000 at that one bank alone were misstating their assets.

So we know that there is a real problem here, and we know that fraud itself has gone up and up. We are unable to calculate all fraud in the system because, under the legacy system, we found it difficult to check the degree of housing benefit and so on. Maybe it is easier now under universal credit—I hope my noble friend the Minister will be able to tell us that it is—to check people in receipt of benefits who claim to be living alone when they are not.

This is a very nuanced area, but all I can say is that we knew we had a major problem with people misstating their assets. We had to deal with that, but we could not do so without working out how to do so with care, bearing in mind all the issues that noble Lords have raised today about doing it in a proportionate way, in a way that does not conflict with human rights in a way that does not become mass surveillance for everyone. We should bear in mind that since 2011 taxpayers, the people actually funding the benefits system, including some benefit claimants themselves, have had their bank accounts checked to make sure that they are not avoiding tax, which is not a crime—I am talking not about evasion but about avoiding—while fraud in the benefits system is a crime.

We need to be quite careful. Some of the things that have been said today conflating this issue with Horizon are wrong. I have been reading the so-called facts that some of these lobbyists have written about how the clause is disproportionate and unfair and goes too far in terms of people’s privacy. The Department for Work and Pensions works tirelessly to try to do the right thing in the right way. This has not been thrown into the Bill at the last minute as if we have just dreamed it up. That discovery was seven years ago. The noble Lord, Lord Sikka, may laugh, but I do not see the relevance of an awful lot of what he was saying—about the noble Baroness, Lady Mone, and so on—to what we are discussing now.

The reality is that benefit fraud is a serious offence, depriving those who need it most of vital support. A lot of people have come up with cases of very difficult situations that people have to live through. Those are the people we want to support but, frankly, the bill at DWP for this one year is £290 billion. When I was there in 2019, it was £190 billion. We cannot afford to put up with benefit fraud, so we have developed this carefully constructed measure, which needs to be thought through with care. I am sure my noble friend will be able to answer a lot of the questions that have quite rightly been asked today in Committee.

[Baroness Lister of Burtersett (Lab)]

The noble Baroness mentioned lobby groups that say the clause is disproportionate. The Information Commissioner has questioned the proportionality of this measure. Does she consider the Information Commissioner a lobby group?

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[Baroness Buscombe (Con)]

I thank my noble friend very much for all the explanation that he has given thus far. I just want to add a word that has not been mentioned: deterrent. One of the reasons why the Government have sought to introduce this in the Bill, I believe, is that it is hugely important that we are much more thoughtful about what will stop people doing the wrong thing. It has become an old-fashioned word but, from a legal, practical and moral standpoint, does my noble friend agree that this is a practical deterrent to make sure that people do the right thing?

[Baroness Lister of Burtersett (Lab)]

Is it not one of the dangers that this is a deterrent to people claiming these benefits?

[Viscount Younger of Leckie (Con)]

I have a response to the question from the noble Lord, Lord Clement-Jones, about signals. The signal is where the criteria or rules for benefit eligibility appear not to be met, and Parliament will have agreed those rules.

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Mrs Carter’s name is on the number 2 account, her own accounts and her joint account. My reading of this suggests that information could indeed be sought on any accounts in Mrs Carter’s name, including joint accounts, without her knowledge. Could the Minister specifically confirm if that reading is correct? If so, how can he justify it? If it is correct, and if he accepts that it cannot be justified, will he accept Amendment 222A, which would simply make clear that the personal accounts of a benefit claimant’s appointee are not to be considered linked accounts for the purposes of fulfilling account information notices? I beg to move.

[Baroness Lister of Burtersett (Lab)]

My Lords, I intervene very briefly. I thank my noble friend who, with her usual forensic clarity, identified some really important points. The last one in particular is very worrying. I have a question. It may be that I misheard what the Minister said in response to the last set of amendments. I thought I heard him say that child benefit would not be included, but it appears to have been on the list that was given to my noble friend. Of course, the point is partly that it is administered by HMRC, but it has replaced child tax allowances, so it should be treated in the same way as a tax allowance when it comes to this purpose—so I hope that I heard the Minister correctly and that child benefit will not be included.

[Baroness Kidron (CB)]

My Lords, in relation to the excellent speech of the noble Baroness, she mentioned “personal” accounts. I would like to double-check that business accounts, charitable accounts and other accounts that have one’s name or one’s partner’s name on, or are connected, do not go on ad infinitum.

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[Viscount Younger of Leckie (Con)]

Yes it would. Landlords are in scope. We will filter this through in terms of the business as usual. If we receive any information—

[Baroness Lister of Burtersett (Lab)]

Given that, has the department done an assessment of the likely impact on landlords being willing to take people on housing benefit? It is already an issue that landlords are reluctant to take housing benefit recipients, but, with this, I could see the market completely freezing for people on benefit.

[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.

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[Viscount Younger of Leckie (Con)]

My understanding is that it needs to have these powers to be able to cover the ground properly. I say again that these powers are limited, and whatever comes from the data that is requested from the third parties will end up being, we hope, limited. Even then, it may not be used by us because there is no need to do so.

The power covers all relevant benefits, grants and other payments set out in paragraph 16 of new Schedule 3B to the Social Security Administration Act 1992, as inserted by Schedule 11 to the Bill. To remove pension-age payments from the scope of the power would significantly undermine our power to tackle fraud and error where it occurs. Pension-age payments are not immune to fraud and error, as I have mentioned. I will give an example of that. The noble Baroness, Lady Sherlock, asked whether people would be notified of their bank accounts being accessed.

[Baroness Lister of Burtersett (Lab)]

Before the Minister moves on, I asked specifically about child benefit. Could he please answer that?

[Viscount Younger of Leckie (Con)]

I know that I said earlier that child benefit was not included. I will clarify that child benefit is not a benefit for which the DWP is responsible or has any functionality for. This measure will be exercised by the DWP Secretary of State, and we cannot use this power for that benefit.

I was in the middle of answering a question from the noble Baroness, Lady Sherlock.