Data Protection and Digital Information Bill

Lord Clement-Jones Excerpts

Committee stage
Monday 22nd April 2024 Grand Committee

There are a number of interesting models and proposals for addressing cookie fatigue out there. My sense is that the department and the regulator would be better off getting together and looking again at those models, possibly on the basis of widened consultation, and then regulating, rather than taking sweeping powers now on the promise that they may get it right in future. The Government have some serious questions to answer here. We are particularly supportive of the efforts of the noble Lord, Lord Lucas, and others to get a better quality of consultation before we take significant legislative steps forward.

[Lord Clement-Jones (LD)]

My Lords, I do not know how unusual this is, but we are on the same page across both sides of the Committee.

First, having signed the amendments by the noble Lord, Lord Lucas, I express my support for the first batch, Amendments 199 to 201, which are strongly supported by the Advertising Association and the Interactive Advertising Bureau for obvious reasons. The noble Lords, Lord Lucas and Lord Bassam, and the noble Viscount, Lord Chandos, have expressed why they are fundamental to advertising on the internet. Audience measurement is an important function, for media owners in particular, to determine the consumption of content and to price advertising space for advertisers.

I understand that the department, DSIT, has conceded that most of the use cases for audience measurement fit within the term “statistical purposes”. It is this area of performance that is so important. As the noble Lord, Lord Bassam, seemed to indicate, we may be within touching distance of agreement on that, but the Minister needs to be explicit about it so that the industry understands what the intent behind that clause really is. As a number of noble Lords have said, this is a specific and targeted exemption for audience measurement and performance cookies that limits the consent exemption for those purposes and, as such, should definitely be supported. I very much hope that, if the Minister cannot give the necessary assurance now, then, as a number of noble Lords have said, he will engage in further discussions.

Amendments 203, which I have signed, and 205 are extremely important too. Amendment 203, picked up clearly by the noble Lord, Lord Bassam, is potentially important; it could save an awful lot of aggravation for users on the internet. It is potentially game-changing given that, when we approach the same site—even Google—we have to keep clicking the cookie. I very much hope the Minister will see the sense in that because, if we are changing the EC regulations, we need to do something sensible and useful like that. It might even give the Bill a good name.

As all noble Lords have rightly said, the Secretary of State needs to think about the implementation of the regulations and what they will affect. Amendment 202 is fundamental and badly needed. You need only look at the list of those who are absolutely concerned about the centralisation of cookies: the Internet Advertising Bureau, the Advertising Association, the Data & Marketing Association, the Market Research Society, the News Media Association, the Incorporated Society of British Advertisers, the Association of Online Publishers and the Professional Publishers Association. I hope that the Government are in listening mode and will listen to their concerns.

As the PPA says, centralising cookie consent with browsers could cause consumers far more harm than good. The Secretary of State’s powers would override cookie consent relationships between individuals and specialist publishers, which the noble Lord, Lord Bassam, talked about in particular. As the PPA says, in all likelihood a significant number of internet users would not consent to cookies from the browser but would consent to cookies on the websites of publishers that they know and trust. If the Secretary of State were to use this power to enforce cookie centralisation, many publishing businesses would be forced to present consumers with paywalls in order to be financially sustainable. As the PPA says, this would lead to consumers missing the opportunity to access high-quality publishing content without having to pay a fee.

The PPA has made an extremely good case. This would amplify existing barriers to competition in the digital market. There are provisions in the DMCC Bill that would give powers to the CMA to address any problems, such as enforced data sharing from platforms to publishers, but centralising cookie consent would completely undermine the objectives of that legislation. It is clear that this Bill should be amended to withdraw the provisions giving the Secretary of State the power to introduce these centralised cookie controls. I very much hope that the Minister will have second thoughts, given the weight of opinion and the impact that the Secretary of State’s powers would have.

[Baroness Stowell of Beeston (Con)]

My Lords, if the Committee will indulge me, I was a little late arriving for the introduction to this group of amendments by my noble friend Lord Lucas, but I heard most of what he said and I will speak briefly. I am quite sympathetic to the arguments about the exemption being too tightly drawn and the advantage that this is likely to give the likes of Google and Meta in the advertising ecology. As the noble Lord, Lord Clement-Jones, said, a range of different trade bodies have raised concerns about this, certainly with me.

From my perspective, the other point of interest that I want to flag is that the Communications and Digital Committee is currently doing an inquiry into the future of news. As part of the evidence that we have taken in that inquiry, one of our witnesses from the news industry raised their concerns about a lack of joined-up thinking, as they described it, within government when it comes to various different bits of legislation in which there are measures that are inadvertently detrimental to the news or publishing industry because there has been no proper understanding or recognition of how the digital news environment is now so interconnected. Something like this, on cookies, could have quite a profound effect on the news and publishing industry, which we know is reliant on advertising and is increasingly feeling the pinch because the value that it gets from digital advertising is being squeezed all the time. I just wanted to reinforce the point, for the benefit of my noble friend the Minister, that concern about this is widespread and real.

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[Lord Bassam of Brighton (Lab)]

I am interested in the Minister’s point about the flexibility the Government see in this clause, but I am not sure who in the end has the responsibility to lead on that flexibility. Will it come from the commissioner or be driven by the Secretary of State’s considerations? The consultation duties seem very dependent on the commissioner’s view and I am not sure at what stage the Secretary of State would want to intervene to ensure that they have got this bit right. That is very important, because the balance is quite sophisticated.

[Lord Clement-Jones (LD)]

The Minister used the expression “when the evidence emerges”, as did the noble Viscount, Lord Camrose, in another context last week. I would have thought that these organisations know what they are about, and they have provided some pretty comprehensive evidence about the impact on their businesses. Is that not a pretty good reason for the Government to think that they might not have this set of provisions entirely right, quite apart from the other aspects of this group of amendments? If that evidence is not enough—I read out the list of organisations—the Government are more or less saying that they will not accept any evidence.

[Lord Harlech (Con)]

I thank both noble Lords for their interventions. On the point from the noble Lord, Lord Bassam, there is a trifecta of decision-making between the Secretary of State, the ICO and the organisations all working together. That is why there is a consultation requirement before using the power. On the point from the noble Lord, Lord Clement-Jones, it is a question of your point of view; we feel that we have done stakeholder engagement and believe that we have got the balance right between the needs of organisations—

[Lord Clement-Jones (LD)]

Will the Minister write and unpack exactly what the balance of opinion was? We are talking about pretty crucial stuff here. It is not always a question just of numbers; it is quite often a question of weighting the arguments. The Minister should write to us and tell us how they came to that conclusion, because the case was clearly being made during the consultation, but the Government have effectively ignored it.

[Lord Bassam of Brighton (Lab)]

In this tripartite geography that the noble Lord described, the power—

[Lord Clement-Jones (LD)]

It is a trifecta, actually—that is a betting term.

[Lord Bassam of Brighton (Lab)]

I am not a gambling man. It is an interesting term. The Minister is suggesting that power rests equally among those three elements but it does not. The Secretary of State is the all-powerful being and the commissioner is there to ensure that regulation works effectively. How will this operate in practice? There is no advisory body here; it is the Secretary of State having a discussion with the commissioner and then, on the balance of some of the consultation information that comes in, making a decision. That will not enable the sector, the market and those providers to be engaged.

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[Lord Harlech (Con)]

I thank noble Lords for those further points requesting clarification. On how we have come to this decision, I am happy to write to all noble Lords in the Committee. The noble Lord went in an interesting direction because, in the context of the rest of the Bill, so many of the amendments have been about protecting private users, but the noble Lord seems to be swaying more in favour of the advertisers here.

[Lord Clement-Jones (LD)]

My Lords, it is all about the relative importance and the weighting. Maybe that is a good illustration of where the Government are not getting their weighting correct for the beginning and this part of the Bill.

[Lord Harlech (Con)]

I take the noble Lord’s point. We are working with industry and will continue to do so. For the benefit of the Committee, we are, as I said, happy to write and explain the points of view, including those from Data: A New Direction. In response to the noble Lord, Lord Bassam, power ultimately lies with Parliament via the affirmative resolution procedure for the Secretary of State power.

I will go back to the amendments we were discussing. This regulation applies to complex and technical markets. The very reason we have taken a delegated power is so that the new exemptions can be carefully created in consultation with all affected stakeholders. As I explained, the Bill includes a requirement to consult the Information Commissioner, the Competition and Markets Authority and any other relevant stakeholders, which would include trade associations and consumers or web users.

Amendment 201 would widen the application of the “strictly necessary” exemption. Currently, it applies only to those purposes essential to provide the service requested by the user. Amendment 201 would extend this exemption so that it applies to the purposes considered essential to the website owner. We do not think this would be desirable, as it would reduce a user’s control over their privacy in a way that they might not expect.

For the reasons I have set out—and once again reaffirming the commitment to write to noble Lords on how the weighting was worked out—I hope my noble friend and the noble Baroness will not press their amendments.

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[Lord Kirkhope of Harrogate (Con)]

My Lords, I support Amendment 208A. I declare my interest as a solicitor but not one who has been directly involved with personal injury claims. This is an area of particular specialism that requires particular expertise and experience for it to be carried out to the best advantages of those who seek that help.

Looking back, I am concerned that this matter has been raised, in different fora, on a number of occasions. For instance, in 2016, the Telephone Preference Scheme opt-out was discussed when it was removed from the control of Ofcom to that of the ICO. At that point, there was a great opportunity for this matter to be dealt with. Indeed, a number of organisations, including personal injury lawyers, the Motor Accident Solicitors Society and others, said that it was vital to carry this out and that cold calling should be ended because of the pressures it placed on an awful lot of very vulnerable people.

Since 2016, things have got worse in one respect—although, perhaps, they are a little less bad in respect of telephone calling. It is a little while now since I was last told that I had just had a major accident in my car as I was sitting enjoying a glass of wine and not having such worries in my mind. Telephone cold calling seems to have diminished but pressures through social media contact, various scams and so on have increased dramatically. I have been told this by a number of my legal colleagues.

In 2023, the Government produced the UK’s Fraud Strategy. As I am sure noble Lords will know, when it was published, it specifically pursued the question of extending the ban on cold calling to personal injury cases; that was very important and included all servers. So, unless there is some relationship already in place—something where that is a defence, as it were, here—and a voluntary willingness on the part of those who suffer from personal injuries to be contacted by an organisation with which they already have a relationship, this is something that we should pursue very strongly indeed.

Although it is correct that the legal profession, and perhaps other professions, are banned from this procedure, on a regulatory or disciplinary basis, some of my colleagues in the profession are, in some cases, susceptible to financial and commercial challenges through these organisations, such that they would become—sometimes, almost inadvertently—part of the process. Therefore, I hope that, in passing such an amendment, we would give a clear sign to the Solicitors Regulation Authority and the Law Society that it underlines yet again that these practices are not acceptable to those members of the profession.

[Lord Clement-Jones (LD)]

My Lords, I support Amendment 208A. I am a recovering solicitor. Many moons ago, I gave public affairs advice to the Association of Personal Injury Lawyers, which is a fine organisation. I very much support its call and this amendment on that basis. I congratulate the noble Lord, Lord Leong, on his introduction to this amendment; he and the noble Lord, Lord Kirkhope, made a terrific case.

APIL took the trouble to commission research from YouGov, which showed that 38% of UK adults had received a cold call or text while 86% had a strong emotional response and were left feeling annoyed, angry, anxious, disgusted or upset. Therefore, the YouGov research reveals that almost all those who received a call supported a total ban on personal injury cold calls and text messages.

There is little for me to add but I am sorry that the noble Baroness, Lady Buscombe, is not with us—she has just exited the Room, which is unhappy timing because, in looking back at some of the discussions we have had in the House, I was about to quote her. During Report stage in the Lords on the Financial Guidance and Claims Bill, when she was a Minister, she told us:

“We know that cold calls continue and understand that more needs to be done truly to eradicate this problem. We have already committed to ban cold calls relating to pensions, and are minded to bring forward similar action in relation to the claims management industry. I have asked officials to consider the evidence for implementing a cold-calling ban in relation to claims management activities, and I am pleased to say that the Government are working through the detail of a ban on cold calling by claims management companies. There are complex issues to work through, including those relating, for example, to EU directives”;


of course, we do not have those any more. She went on to say:

“We would therefore like time to consider this important issue properly, and propose bringing forward a government amendment in the other place to meet the concerns of this House”.—[Official Report, 24/10/17; col. 861.]


How much time do the Government need? Talk about unfinished business. I know it is slightly unfair as you can unearth almost anything in Hansard but the fact is that this is bull’s eye. It is absolutely spot on on the part of APIL to have found this. I thought for one delirious minute that the noble Baroness, Lady Buscombe, was going to stand up and say, “Yes, I plead guilty. We never pursued this”.

[Lord Evans of Rainow (Con)]

I have texted the noble Baroness asking her to return as soon as possible so that she can listen to the noble Lord’s wise words.

[Lord Clement-Jones (LD)]

I am not going to carry on much longer. I know that that will be a grave disappointment but it makes the case, I think, that it is high time that the Government did something in this area. It is clearly hugely unpopular. We need to make sure that Amendment 208A is passed. If not now, when?

[Lord Harlech (Con)]

My Lords, I thank the noble Baroness, Lady Jones of Whitchurch, for tabling Amendment 208A and the noble Lord, Lord Leong, for moving it. This amendment would insert new Regulation 22A into the privacy and electronic communications regulations and would prohibit via email or text unsolicited approaches encouraging people to commence personal injury claims sent by, or on behalf of, claims management companies.

The Government agree that people should not receive unsolicited emails and texts from claims management companies encouraging them to make personal injury claims. I assure noble Lords that this is already unlawful under the existing regulations. Regulation 22(2) prohibits the sending of all unsolicited electronic communications direct marketing approaches—including, but not limited to, texts and emails—unless the recipient has previously consented to receiving the communication. Regulation 21A already bans live calling by claims management companies.

In the past year, the Information Commissioner has issued fines of more than £1.1 million to companies that have not adhered to the direct marketing rules. Clause 117 considerably increases the financial penalties that can be imposed for breaches of the rules, providing a further deterrent to rogue claims management and direct marketing organisations.

Amendments 211 and 215 relate to Clause 116 so I will address them together. Amendment 211 seeks to confirm that a provider of a public electronic communications service or network is not required to intercept or examine the content of any communication in order to comply with the new duty introduced by Clause 116. I assure the noble Baroness and the noble Lord that the duty is a duty to share information only. It merely requires providers to share any information that they already hold or gather through routine business activities and which may indicate suspicious unlawful direct marketing on their networks; it does not empower, authorise or compel a communications provider to intercept messages or listen to phone calls.

Should a communications provider become aware of information through its routine business activities that indicates that unlawful direct marketing activity may be taking place on its service or network, this duty simply requires it to share that information with the Information Commissioner. For example, a communications provider may receive complaints from its subscribers who have received numerous unsolicited direct marketing communications from a specific organisation. We know from the public consultation that people want action taken against nuisance calls and spam, and this duty will support that.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, in moving Amendment 209, I will also speak to Amendment 210, and I thank the noble Lord, Lord Clement-Jones, for adding his support.

These amendments return to the major debate that we had on day 2 in Committee regarding direct marketing for the use of democratic engagement. It is fair to say that no-one was convinced by the Minister’s arguments about why that relaxation of the rules for political parties was necessary. We will no doubt return to that issue on Report, so I shall not repeat the arguments here. Meanwhile, Clause 113 leads into the democratic engagement provisions in the Bill and provides a soft opt-in for the use of electronic mail for direct marketing for charitable, political or other non-commercial activities when the data has been collected for other purposes.

As we made clear in the previous debate, we have not asked for these more relaxed rules about political electronic marketing. We believe that these provisions take us fundamentally in the wrong direction, acting against the interests of the electorate and risking damaging the already fragile level of trust between politicians and voters. However, we support extending the soft opt-in for charities and other non-commercial organisations. This is a measure that many charities have supported.

Of course, we want to encourage campaigning by charitable organisations to raise awareness of the critical issues of the day and encourage healthy debate, so extending their opportunities to use electronic marketing for this purpose could produce a healthy boost for civic engagement. This is what our amendments are hoping to achieve.

Therefore, our Amendments 209 and 210 would amend the wording of Clause 113 to remove the relaxation of the rules specifically for political parties and close the loophole by which some political parties may try to negate the provisions by describing themselves as non-commercial entities. We believe that this is the right way forward. Ideally, these amendments would be combined with the removal of the democratic engagement provisions in Clause 114 that we have already debated.

I hope noble Lords will see the sense of these proposals and that the Minister will agree to take these amendments away and rethink the whole proposition of Clauses 113 and 114. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, tracking the provenance of Clause 113 has been a very interesting exercise. If we think that Clause 114 is pretty politically motivated, Clause 113 is likewise. These rules relating to the fact that political parties cannot avail themselves of the soft opt-in provision have been there since 2005. The Information Commissioner issued guidance on political campaigning, and it was brought within the rules. Subsequently, there has been a ruling in a tribunal case which confirmed that: the SNP was issued with an enforcement notice and the information tribunal dismissed the appeal.

The Conservative Party was fined in 2021 for sending emails to people who did not ask for them. Then, lo and behold, there was a Conservative Party submission to the House of Lords Democracy and Digital Technologies Committee in 2020, and that submission has been repeated on a number of occasions. I have been trying to track how many times the submission has been made by the Conservative Party. The submission makes it quite clear that there is frustration in the Conservative Party. I have the written evidence here. It says:

“We have a number of concerns about the Information Commissioner’s draft code”—


as it then was: it is now a full code—

“on the use of data for political campaigning. In the interests of transparency, I enclose a copy of the response that the Conservative Party sent to the consultation. I … particularly flag the potential chilling effect on long-standing practices of MPs and councillors from engaging with their local constituents”.

Now, exactly as the noble Baroness has said, I do not think there is any call from other political parties to change the rules. I have not seen any submissions from any other political party, so I would very much like to know why the Government have decided to favour the Conservative Party in these circumstances by changing the rules. It seems rather peculiar.

The guidance for personal data in political campaigning, which I read while preparing for this debate, seems to be admirably clear. It is quite long, but it is admirably clear, and I congratulate the ICO on tiptoeing through the tulips rather successfully. However, the fact is that we have very clear guidance and a very clear situation, and I entirely agree with the noble Baroness that we are wholly in favour of charities being able to avail themselves of the new provisions, but allowing political parties to do so is a bridge too far and, on that basis, I very much support the amendment.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

My Lords, I thank the noble Baroness, Lady Jones, for Amendments 209 and 210, which would amend Clause 113 by removing electronic communications sent by political parties from the scope of the soft opt-in direct marketing rule. A similar rule to this already exists for commercial organisations so that they can message customers who have previously purchased goods or services about similar products without their express consent. However, the rule does not apply if a customer has opted out of receiving direct marketing material.

The Government consider that similar rules should apply to non-commercial organisations. Clause 113 therefore allows political parties, charities and other non-commercial organisations that have collected contact details from people who have expressed an interest in their objectives to send them direct marketing material without their express consent. If people do not want to receive political messaging, we have included several privacy safeguards around the soft opt-in measure that allow people to easily opt out of receiving further communications.

Support for a political party’s objectives could be demonstrated, for example, through a person’s attendance at a party conference or other event, or via a donation made to the party. In these circumstances, it seems perfectly reasonable for the party to reach out to that person again with direct marketing material, provided that the individual has not objected to receiving it. I reassure the Committee that no partisan advantage is intended via these measures.

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[Lord Clement-Jones (LD)]

My Lords, perhaps the Minister could elucidate exactly what is meant by “supporting the party’s objectives”. For instance, if we had a high street petition, would that be sufficient to grab their email address and start communicating with them?

[Viscount Camrose (Con)]

I suppose it would depend on the petition and who was raising it. If it were a petition raised or an activity supported by a particular party, that would indicate grounds for a soft opt-in, but of course anyone choosing not to receive these things could opt out either at the time or later, on receipt of the first item of material.

[Lord Clement-Jones (LD)]

So what the Minister is saying is that the solicitor, if you like, who is asking you to sign this petition does not have to say, “Do you mind if I use your email address or if we communicate with you in future?” The person who is signing has to say, “By the way, I may support this local campaign or petition, but you’re not going to send me any emails”. People need to beware, do they not?

[Viscount Camrose (Con)]

Indeed. Many such petitions are of course initiated by charitable organisations or other not-for-profits and they would equally benefit from the soft opt-in rule, but anyone under any of those circumstances who wished not to receive those communications could opt out either at the time or on receipt of the first communication on becoming aware that they were due to receive these. For those reasons, I hope that the noble Baroness will not press her amendments in relation to these provisions.

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[Baroness Buscombe (Con)]

It is important that my noble friend answers that question. The point is that if we find—I am sorry, I still speak as if I am involved with it, which I am not, but I promise noble Lords that I have spent so much time in this area. If the DWP finds that there is a link that needs pursuing then that obviously has to be opened up to some degree to find what is going on. Remember, the most important thing about this is that the right people get the right benefits. That is what the Government are trying to achieve.

[Lord Clement-Jones (LD)]

My Lords, I note that the DWP has been passed a parcel by the Department for Science, Innovation and Technology—and I am not at all surprised. I am sure it will be extremely grateful to have the noble Baroness, Lady Buscombe, riding to its defence today as well. Also, attendance at this debate demonstrates the sheer importance of this clause.

We on these Benches have made no secret that this is a bad Bill—but this is the worst clause in it, and that is saying something. It has caused civil society organisations and disability and welfare charities to rise as one against it, including organisations as disparate as UK Finance, mentioned by the noble Lord, Lord Davies, and the ICO itself. They have gone into print to say that, for this measure to be deemed a necessary and proportionate interference in people’s private lives, to be in accordance with the law and to satisfy relevant data protection requirements, legislative measures must be drafted sufficiently tightly—et cetera. They have issued a number of warnings about this. For a regulator to go into print is extremely unusual.

Of course, we also have Big Brother Watch and the Child Poverty Action Group—I pay tribute to the noble Baroness, Lady Lister—the National Survivor User Network, Disability Rights UK, the Greater Manchester Coalition of Disabled People and the Equality and Human Rights Commission. We have all received a huge number of briefings on this. This demonstrates the strong feelings, and the speeches today have demonstrated the strong feelings on this subject as well.

There have been a number of memorable phrases that noble Lords have used during their speeches. The noble Baroness, Lady Kidron, referred to a “government fishing expedition”. The noble Baroness, Lady Chakrabarti, called it “breathtaking in its scope”. I particularly appreciated the speech of the noble Lord, Lord Kamall, who said, “What happened to innocence?” In answer to the noble Baroness, Lady Buscombe, this is not “nuanced”: this is “Do you require suspicion or do you not?” That seems to me to be the essence of this.

I was in two minds about what the noble Lord, Lord Sikka, said. I absolutely agree with him that we need to attack the fat cats as much as we attack those who are much less advantaged. He said, more or less, “What is sauce for the goose is sauce for the gander”. The trouble is that I do not like the sauce. That was the problem with that particular argument. The noble Baroness, Lady Lister, talked about stigma. I absolutely agree. The noble Lord, Lord Vaux, more or less apologised for using the word “draconian” at Second Reading, but I thought the word “overreach” was extremely appropriate.

We have heard some powerful speeches against Clause 128. It is absolutely clear that it was slipped into the Bill alongside 239 other amendments on Report in the Commons. I apologise to the Committee, but clearly I need to add a number of points as well, simply to put on record what these Benches feel about this particular clause. It would introduce new powers, as we have heard, to force banks to monitor all bank accounts to find welfare recipients and people linked to those payments. We have heard that that potentially includes landlords and anyone who triggers potential fraud indicators, such as frequent travel or savings over a certain amount. We have seen that the impact assessment indicates that the Government’s intention is to “initially”—that is a weasel word—use the power in relation to universal credit, pension credit and employment support allowance. We have also heard that it could be applied to a much wider range of benefits, including pensions. The Government’s stated intent is to use the power in relation to bank accounts in the first instance, but the drafting is not limited to those organisations.

Of course, everyone shares the intent to make sure that fraudulent uses of public money are dealt with, but the point made throughout this debate is that the Government already have power to review the bank statements of welfare fraud suspects. Under current rules, the DWP is able to request bank account holders’ bank transaction details on a case-by-case basis if there are reasonable grounds to suspect fraud. That is the whole point. There are already multiple powers for this purpose, but I will not go through them because they were mentioned by other noble Lords.

This power would obviously amend the Social Security Administration Act to allow the DWP to access the personal data of welfare recipients by requiring the third party served with a notice, such as a bank or building society, to conduct mass monitoring without suspicion of fraudulent activity, as noble Lords have pointed out. Once issued, an account information notice requires the receiver to give the Secretary of State the names of the holders of the accounts. In order to do this, the bank would have to process the data of all bank account holders and run automated surveillance scanning for benefit recipients, as we have heard.

New paragraph 2(1)(b) states that an account information notice requires,

“other specified information relating to the holders of those accounts”,

and new paragraph 2(1)(c) refers to other connected information, “as may be specified”. This vague definition would allow an incredibly broad scope of information to be requested. The point is that the Government already have the power to investigate where there is suspicion of fraud. Indeed, the recently trumpeted prosecution of a number of individuals in respect of fraud amounting to £53.9 million demonstrates that. The headlines are in the Government’s own press release:

“Fraudsters behind £53.9 million benefits scam brought to justice in country’s largest benefit fraud case”.


So what is the DWP doing? It is not saying, “We’ve got the powers. We’ve found this amount of fraud”. No, it is saying, “We need far more power”. Why? There is absolutely no justification for that. No explanation is provided for how these new surveillance powers will be able to differentiate between different kinds of intentional fraud and accidental error.

We have heard about the possibility and probability of automated decision-making being needed here. I do not know what the Minister will say about that, but, if there will not be automated decision-making—that is concerning enough—if the DWP chooses to make these decisions through human intervention the scale of the operation will require a team so large that this will be an incredibly expensive endeavour, defeating the money-saving mandate underpinning this proposed new power, although, as a number of noble Lords have pointed out, we do not know from any impact assessment what the Government expect to gain from this power.

It is wholly inappropriate for the Government to order private banks, building societies and other societies and financial services to conduct mass algorithmic suspicionless surveillance and reporting of their account holders on behalf of the state in pursuit of these policy aims. It would be dangerous for everyone if the Government reversed the presumption of innocence. This level of financial intrusion and monitoring affecting millions of people is highly likely to result in serious mistakes and sets an incredibly dangerous precedent.

This level of auditing and insight into people’s private lives is a frightening level of government overreach, in the words of the noble Lord, Lord Vaux, more so for some of the most marginalised in society. This will allow disproportionate and intrusive surveillance of people in the welfare system. In its impact statement, the DWP says it will ensure that data will be

“transferred, received and stored safely”.

That is in contrast to the department’s track record of data security, particularly considering that it was recently reprimanded by the ICO for data leaks so serious that they were reported to risk the lives of survivors of domestic abuse. With no limitations set around the type of data the DWP can access, the impact could be even more obscure.

We have heard about the legal advice obtained by Big Brother Watch. It is clear that, on the basis that,

“the purpose of the new proposed powers is to carry out monitoring of bank accounts”

and that an account information notice can be issued

“where there are no ‘reasonable grounds’ for believing a particular individual has engaged in benefit fraud or has made any mistake in claiming benefits”,

this clause is defective. It also says that

“financial institutions would need to subject most if not all of their accountholders to algorithmic surveillance”;

that this measure

“will be used not just in relation to detection of fraud but also error”;

and that this measure

“would not be anchored in or constrained by anything like the same legal and regulatory framework”

as the Investigatory Powers Act. It concludes:

“The exercise of the financial surveillance/monitoring powers contained in the DPDIB, as currently envisaged, is likely to breach the Article 8 rights of the holders of bank accounts subject to such monitoring”


in order to comply. It is clear that we should scrap this clause in its entirety.

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[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 Vaux of Harrowden (CB)]

My Lords, I was not intending to speak on this group, but another question occurs to me. We have been assuming throughout this that we are talking about requests of information to banks, but the Bill actually says that:

“The Secretary of State may give an account information notice to a person of a prescribed description”.


Could the Minister explain what that is?

[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.