GovCoin

Lord Henley Excerpts

Monday 27th March 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)]

My Lords, the initial independent assessment of the small-scale trial has been positive. The Department for Work and Pensions continues to work with industry to explore new and innovative products such as this that have the potential to support people with their personal budgeting and reduce the overall costs of welfare administration.

[Lord Holmes of Richmond (Con)]

My Lords, would my noble friend agree that initial findings offer real potential in this area, not least in greatly empowering the relationship between benefit recipient and the Government while at the same time realising significant savings for the taxpayer? To this end, will he urge colleagues in the department to push ahead with a full-scale trial to see whether we can deploy this technology—not only in the DWP but potentially across government?

[Lord Henley]

My Lords, I would not want to speak for the rest of government, although obviously I answer on behalf of Her Majesty’s Government on this occasion. Certainly, we want to look carefully at this particular trial. It was a very small trial, involving only some 20 to 30 people. It was more what I think is termed a proof of concept rather than a trial, but it produced encouraging results and we want to look at those in due course.

[Baroness Lister of Burtersett (Lab)]

My Lords, concerns have been raised, including as I understand it by members of the Government Digital Service, that this technology could be used in future to monitor or even control how social security claimants spend their benefits. Could the Minister give a categorical assurance that this will not happen, in the interests of claimants’ privacy and freedom of choice?

[Lord Henley]

My Lords, I give the noble Baroness that categorical assurance. The Department for Work and Pensions has absolutely no access to any such claimant information and will have no access to it in any further trials we look at. We want to keep it like that. Obviously, information will be able to Disc—which is GovCoin, referred to in the Question—but that will be protected by data protection principles. I reiterate what I said to the noble Baroness: the department and the Government will have no access to that information.

[Baroness Tyler of Enfield (LD)]

My Lords, does the Minister agree with me that this initiative, however welcome, is but one small step in tackling the much larger problem of financial exclusion? Could he give an assurance that the Government will carefully consider the recommendations of the Select Committee on Financial Exclusion, the report of which was published on Saturday? I had the privilege of chairing that committee. Particularly, there is the recommendation that fewer people are unbanked in the first place and so would not need this technology.

[Lord Henley]

My Lords, I wondered whether the noble Baroness would want to get in to highlight the fact that she produced the report that came out on Saturday. I think the report was embargoed until midnight on Friday and I have not yet had the opportunity to read it. I glanced at it but assure the noble Baroness that the Government will give it due consideration.

[Baroness Sherlock (Lab)]

My Lords, I am tempted to invite the Minister to explain how bitcoin and blockchain technology work, but I will take pity on him. For people like me, it is much simpler. I understand that volunteers were given an app through which, essentially, electronic, digital money was paid to them and they could spend it only in certain ways which were tracked and recovered. Obviously, that raises significant issues about privacy and data. My understanding is that the Government’s own report on what is called distributed ledger technology said that it clearly needs a regulatory, ethical and data framework. In the absence of that, when the DWP started this, how did its Ministers assure themselves that benefit claimants were genuinely giving free, informed consent to be able to use this? If it is now to be a much larger-scale project, what kind of parliamentary oversight and scrutiny will there be?

[Lord Henley]

My Lords, as I said, we have not yet decided to move on to a fuller and larger trial, but if we did, no doubt that would have the appropriate checks and balances and be examined by the noble Baroness and others in due course. This is a simple, small-scale trial involving some 20 or 30 people. I am assured that they all gave full and proper consent to it, and that some of them found it very useful indeed. I am grateful to the noble Baroness for not asking me to explain the more technical matters, which are probably beyond her—and me. As she knows, it is a very simple app designed in the form of jam jars into which one can put one’s money and then take it out for specific tasks. As I said earlier—and the assurance I gave on this would apply to any further trials—the department and the Government will have no access to that information; that is, what has come out of the jam jars and gone into housing or whatever.

[Lord Campbell-Savours (Lab)]

Will traders who sign up to and agree to trade under this scheme be able to offer discounts to benefit recipients? By the way, I thought the next trial was for 1,000 people.

[Lord Henley]

My Lords, there is no next trial planned at this stage. We are considering that. It is not a question of discounts but of the fact that those who have to deal purely in cash can find life very much more expensive than those who are able to pay by other, more advanced means. That is the point behind it.

[Viscount Ridley (Con)]

Does my noble friend agree that blockchain technology in general has applications far beyond this trial—indeed, all the way across government and society? Are the Government studying the phenomenon to check where it might be useful?

[Lord Henley]

My noble friend is absolutely right that very interesting ideas can come from blockchain and other things. I do not want to expand further on that in this Question. We are dealing with just a small-scale trial here, designed to make life easier for certain benefit claimants and to make it easier for them to manage their money.

[Lord Harris of Haringey (Lab)]

My Lords, my noble friend talked about the need for an ethical framework underpinning the use of this sort of technology. Obviously, the Government have decided to go ahead with this trial in the absence of such a framework, but does the Minister agree that one is needed, not only for further developments in this area but for developments in the sorts of areas that have just been referred to by his noble friend?

[Lord Henley]

My Lords, that might or might not be the case, but what we are talking about here is this particular trial. The important thing is that we achieved the proper consent of those taking part and we gave the proper assurances, as I have repeated, that there would be no release of information about how those individuals spent their money to the department or the Government more widely.