94: Clause 61, page 33, line 18, after “means” insert “those anti-fraud organisations which may be”

The noble Baroness said: My Lords, I shall speak also to Amendment No. 95. I have tabled these amendments to ask for further clarification from the Government about the process by which anti-fraud organisations will be specified under the provisions of this part of the Bill.

Clause 61(1) confers powers on a public authority to disclose information as a member of a specified anti-fraud organisation or otherwise in accordance with arrangements made by such an organisation for the purposes of preventing fraud. That is a complicated way of indicating that information is to be shared more widely, but among organisations that must meet specific standards if they are to take part in that exchange.

Between Committee and Report, I met representatives of both Experian and CIFAS. Noble Lords will recall that Experian is a leading UK credit reference agency. CIFAS is a fraud prevention service covering the United Kingdom. It was created in 1988 by a group of retail credit companies and now encompasses many types of financial service organisations including banks, building societies, insurance companies, credit card companies, share dealers and finance houses. The Minister referred to CIFAS in Committee.

I am grateful to both organisations for their helpful briefings. It was as a direct consequence of discussions with them that I felt that it was right to ask the Minister to set out more clearly today the process of designation that the Government expect to implement as a result of the Bill. The Minister gave us some assistance on these matters 26 March. I refer to col. 1513 of the Official Report. The anti-fraud organisations will be specified by order of the Secretary of State. As a result of a recommendation made by the Delegated Powers and Regulatory Reform Committee, which was accepted by the Government in Committee, that statutory instrument will be subject to the affirmative procedure.

It will be vital that the system of designating bodies is secure, effective and capable of withstanding attacks by criminals who would wish to gain access to or corrupt the information that they hold. The system of designating them must be right and those bodies that we designate must properly be able to deal with the information to which they will have access and hold.

What will be the criteria for the designation of anti-fraud organisation that will be specified under the provisions of the Bill? Who will make the decision about which organisations shall be so specified? At the outset, is it the Government’s intention that at least two anti-fraud organisations will be designated, perhaps to include CIFAS, in order to avoid creating a monopoly position? Does the Minister agree with the view of the British Bankers’ Association, circulated to noble Lords, that the,

“likely outcome should involve more than one organisation … and that if a single organisation only were to be chosen, then that could be open to monopolies’ challenge”?

I beg to move.

96: After Clause 63, insert the following new Clause—

“Role of Information Commissioner

(1) Section 51 of the Data Protection Act 1998 (c. 29) (general duties of the Commissioner) is amended as follows.

(2) In subsection (7), at the beginning insert “Subject to subsection (7A),”.

(3) After subsection (7), insert—

“(7A) The Information Commissioner may, on his own initiative, assess any data processing conducted under sections 61 to 65 of the Serious Crime Act 2007.””

The noble Baroness said: My Lords, the purpose of the amendment is to ensure that the information commissioner has the right to carry out assessments of data processing under Clauses 61 to 65 of his own volition. He would not have to wait for an invitation to do so. In Committee we debated at some length the importance of the oversight that should be carried out by the information commissioner.

I am grateful to Mr Vernon Coaker, the Home Office Minister, for arranging between the Committee and Report stages a meeting with the Information Commissioner, Mr Richard Thomas. The meeting was attended by my noble friend Lord Lucas and myself, and we both found it most constructive. I want to put on record that I found it invaluable to hear from the IC himself an overview of his position regarding the provisions of the Bill and his recommendations for improvement. His opinion has determined my approach to amendments at Report throughout the whole of Part 3.

The discussions helped me to crystallise in my mind the core amendments that should be made to the Bill to make it work more effectively and fairly. The Government have already tabled some such amendments, which we shall reach later in the group beginning Amendment No. 105. Of course I shall not pre-empt that discussion, but there remains one issue that has not yet been resolved. It is covered by my Amendment No. 96. I believe that it is important for public confidence in the new proposals for data matching and data mining that the Information Commissioner should have the authority to initiate assessments. The Home Office Minister, Mr Coaker, made it clear at our meeting that he was prepared to take up this proposal from the Information Commissioner by way of an amendment. Will the Minister tell the House what progress the Government have made with their own amendment on this matter? Are they still committed to ensuring that it is inserted in the Bill, and do they believe that that will be achieved before the Bill leaves this House? I beg to move.

99: Clause 65, page 36, line 17, leave out from “which” to “has” in line 18 and insert “makes provision about data matching)”

The noble Lord said: My Lords, before I describe the effect of the amendments in this group, I ought to put on record that they replicate in Wales and Northern Ireland the data-matching provisions in Clause 65 and Schedule 6. This group includes government amendments in relation to England, to which my noble friend Lady Scotland will speak later. Our ambition is to create a system with safeguards that apply equally to all relevant audit bodies in different jurisdictions. The amendments will have the effect of amending not only the Audit Commission Act 1998 but also the relevant legislation in Wales and Northern Ireland; namely, the Public Audit (Wales) Act 2004 and the Audit and Accountability (Northern Ireland) Order 2003, as specified in Schedule 6, with respect to the insertion of new powers to undertake data-matching exercises. For that reason, Amendment No. 99 amends Clause 65 to reflect the fact that Schedule 6 to the Bill will make provision for data matching more generally, not just in respect of England under the Audit Commission Act.

Amendment No. 103 governs the disclosure of information in order to allow the Audit Commission to disclose the results of data matching to local government auditors in Northern Ireland. This is consistent with the overall purposes of new Clause 32D(2)(b) and new Clause 32D(3) as they currently stand, where we have recognised that benefits may arise from sharing the results of data matching on a cross-border basis with the relevant auditors in the devolved Administrations. The amendment recognises that in addition to being able to share data-matching results with the auditor general for Northern Ireland, the Audit Commission should be able to share results with local government auditors in Northern Ireland. This reflects the audit arrangements in place in Northern Ireland and is a natural consequence of the extension of data-matching powers to relevant audit bodies there.

Amendment No. 104 amends the provision governing the definition of “body” for the purposes of new Clause 32D so that it includes “office”. This is in order to recognise that not all the bodies listed in new Clause 32D(3) are, strictly speaking, bodies but are office holders, such as the respective auditors general. The purpose of this amendment is to remove the potential for confusion.

Amendment No. 115 to Schedule 6 amends the Public Audit (Wales) Act 2004 to grant the Auditor General for Wales statutory powers under which to carry out data-matching exercises and provides safeguards for the appropriate conduct of such exercises. It will ensure that data matching in Wales is conducted on a similar basis to that in England. The amendment is necessary to ensure that the national fraud initiative and the benefits it provides may continue in Wales with the necessary safeguards. The amendment includes provisions for bodies other than Welsh local authorities and Welsh NHS bodies to provide data to the auditor general for matching. Such participation will be on the proviso that the auditor general thinks it appropriate. He will have to satisfy himself that it is appropriate to accept the data and that it would meet the purpose of the data-matching exercise.

It is envisaged that, in practice, the auditor general would co-operate closely with the Audit Commission, as he has done to date, to undertake the same national fraud initiative exercise in Wales that is undertaken in England. The most recent national fraud initiative cycle led Welsh public bodies to uncover fraudulent and erroneous payments totalling £2.6 million and, as in England, the auditor general used the results of the exercise to help public bodies in Wales make their systems more robust in the protection of public money.

The Welsh provisions will allow the sharing of data-matching information across the Welsh border. That is necessary to reflect the cross-border facility in the English provisions, and it is important as some fraud involves multiple claims of, for example, housing benefit from local authorities on both sides of the border.

The Welsh data-matching provisions provide the same safeguards as those in the English provisions, including those added by later government amendments. The auditor general’s data-matching activity will, as ever, be subject to the processing requirements of the Data Protection Act 1998. An additional safeguard is that the activity may not be used to profile individuals on the basis of patterns that suggest potential to commit fraud. The auditor general will have to prepare a code of practice for data matching, consult the Information Commissioner on it and lay it before the National Assembly for Wales. The conduct of Welsh data-matching exercises will have to have regard to that code of practice. Anyone disclosing data-matching information outside the permitted purposes in Schedule 6 will face criminal sanctions. In short, the amendment replicates for Wales the Bill’s data-matching provisions for England.

Amendment No. 116 extends the application of the powers we are creating for the Audit Commission in England to Northern Ireland and incorporates the same safeguards. It will mean that Northern Ireland’s Comptroller and Auditor General will be able to use the powers to conduct data matching to assist public bodies to detect and prevent fraud in his jurisdiction. The proposals differ from the arrangements in England only to the extent that many of the functions provided by local government in England are provided by central government in Northern Ireland. That affects the range of bodies mandatorily required to provide data to the auditor general.

The amendment will also enable cross-jurisdictional data matching and sharing of information between the Audit Commission and audit authorities in Northern Ireland. It is important that that should be the case because, as I said, fraud does not respect national boundaries. The amendment will enable a more proactive approach to be taken to fraud prevention in Northern Ireland.

It is envisaged that the auditor general would co-operate closely with the Audit Commission to undertake similar national fraud initiatives in Northern Ireland to those in England, with the same potential to identify fraudulent payments and errors. The same restrictions and safeguards will apply to Northern Ireland audit bodies in applying these powers as apply in England, including compliance with the Data Protection Act. There will be criminal sanctions for disclosure of information outside permitted purposes, restrictions on the use of patient data and a code of practice governing the data matching on which the Information Commissioner will be consulted, which will be laid before the Northern Ireland Assembly.

Amendment No. 129 ensures that data-matching provisions in Wales are in line with those in England, including those on the safeguards to ensure the appropriate conduct of such activity. It enables, in respect of Wales, the inclusion of an appropriate deterrent from disclosing data-matching information outside the circumstances set out in Schedule 6. The amendment would modify the saving provision that takes account of the need for Section 282(1) of the Criminal Justice Act 2003 to commence before a maximum sentence of 12 months can be given for the offence of unauthorised disclosure of data-matching information—by virtue of Section 64D(8) of the Public Audit (Wales) Act 2004.

Amendment No. 134 to Clause 80 removes the confinement to England and Wales that would otherwise apply to proposed Part 3 of Schedule 6. It is needed to take account of the inclusion of data-matching provisions for Northern Ireland in Part 3.

Amendment No. 99 allows for the extension of the data-matching powers being created for the Audit Commission in England to Northern Ireland and Wales. Amendment No. 116 creates this power, under proposed Part 3 of Schedule 6, by inserting the provision in the relevant Northern Ireland audit legislation. The amendment simply restricts to Northern Ireland the extent of proposed Part 3 of Schedule 6. As this amendment inserts data-matching powers into the Audit and Accountability (Northern Ireland) Order 2003, it is necessary to restrict the extent of the provision to Northern Ireland only. I beg to move.

99A: After Clause 65, insert the following new Clause—

“Exempted data

Nothing in this Part authorises the disclosure of data contained in—

(a) the National Identity Register (as defined in the Identity Cards Act 2006 (c. 15)), or(b) any database established pursuant to section 12 of the Children Act 2004 (c. 31) (information databases),or the use of such data in data matching exercises.”

The noble Lord said: My Lords, this amendment would prevent data in the children's index or the national identity register being shared or used in data-matching exercises for the purposes of identifying and preventing fraud or for such other purposes as the Government may choose. The purpose of sharing and using data is, at least initially, for the prevention and detection of fraud. It is not for the protection of children. It was for the protection of children that Parliament agreed to the legislation authorising the creation of the children's index. Providing in-depth access to the data in these databases for the purposes covered by Part 3 amounts to an unacceptable example of function creep. The Government say that they want to collect and retain our personal data for one purpose, but then seek to use those data for another, unrelated purpose in the future.

When it comes to the collection of data for the children's index, the Government have heard from these Benches on numerous occasions in the past few weeks, not least from my noble friend Lady Walmsley, about the sensitivity of this issue and how it is becoming increasingly obvious to parents that information which is given about their children may be used for purposes that they did not envisage. I beg to move.

Let me take this opportunity to explore whether part of the impetus for this amendment is the fear that data matching might be used to profile the propensity of children to commit offences in the future. I do not know whether the noble Lord, Lord Thomas of Gresford, had that in mind. I see him nodding. It is the sort of issue that I anticipate might concern him. I can quickly put his mind to rest by saying that I have tabled the amendment that will prevent the Audit Commission profiling individuals, both adults and children. So we have got rid of that difficulty.

I turn now to the national identity register, which, as your Lordships know, is not yet in existence but will hold identity information on everyone issued with an ID card. It is intended eventually to include everyone aged 16 and over who is resident in the United Kingdom. I should stress that this will be a register of identity—information such as name, address, date of birth, nationality and so on. It will include photographs and biometric information such as fingerprints, but it will not be an amalgamation of every bit of personal data held by government. So there will be no criminal records, medical records or tax records.

It is conceivable that under the Identity Card Act 2006 information in that register could be supplied to the Audit Commission under the statutory gateways already provided for in that legislation and subject to the terms of the secondary legislation. In particular, Section 20 of that Act would allow for the provision of specified information in the register to a specified public authority for a specified purpose. This would in theory enable identity information to be provided to the Audit Commission, but no information could be provided under Section 20 unless and until an order subject to the affirmative resolution procedure has been debated and agreed by both Houses of Parliament.

The national fraud initiative is one of the very tools that might in the future provide the basis on which provision of information to the Audit Commission might be necessary in order to confirm an individual’s identity or provide particular information relating to a person, such as date of birth or address. Therefore, we can see no reason in principle why we should seek expressly to prohibit the Audit Commission’s use of the register in the manner proposed.

Similarly we believe it would be a mistake not even to admit the possibility that the national identity register could be effectively and properly used for the prevention of fraud within the terms of Clause 61. One of the statutory purposes of the register as specified in Section 1(4) of the Identity Cards Act 2006 is the prevention and detection of crime. So, at a general level, if one accepts that fraud is a serious problem—the Government do, and the noble Lady opposite has said that she does too—and a corrosive problem that undermines confidence and makes us all pay more for services than we need to, it seems unwise to block off the use of means that might, and I emphasise might, be used to help to counter it. But the amendment is saying that in no circumstances could these two databases be used under this part of the Bill to prevent and detect fraud. I do not know whether either of them could or would be so used. In the case of the databases made under the Children Act 2004, I have already said that it is hard to conceive of their use for preventing and detecting fraud, but it would be going too far to rule them out from the start. We are not arguing in this part of the Bill for a free-for-all in the sharing or matching of data; it will be allowable only for the prevention and detection of fraud and will be subject to the safeguards of the Data Protection Act as regards proportionality and the other conditions which it applies.

I also indicated when discussing Amendments Nos. 96, 97 and 98 that we will be looking to introduce a code of practice for data sharing that would ensure that such data disclosure as takes place under Clause 61 is entirely correct and proper—one already exists for the Audit Commissioner. The range of safeguards available is such that we think that fears over the national identity register, which have been echoed by the noble Baroness, Lady Carnegy of Lour, will not prove well founded. We think that fears about databases established under the Children Act 2004, which are demonstrated by the amendment, are also unfounded.

The noble Lord, Lord Dholakia, asked for a general comment about the JCHR report. We very much appreciate the concern raised by the JCHR on Clauses 61 to 64. We are considering these matters further and will return to them later; we have already committed to doing so, albeit in another place. We will seek to do this as soon as we can.

The noble Baroness, Lady Anelay, asked whether we discussed the limitation of data matching involving the identity register to serious crime. We have—the Audit Commission is quite content with the limitation that we have, so we think that there is a really good balance.

I am relatively confident from hearing the contributions that have been made that noble Lords will be loath to prevent this opportunity to identify fraud and crime if, following the affirmative resolution procedure, both Houses thought that that was a fit and proper thing to do. I hope that on that basis, and with the assurance that noble Lords opposite have done so much to underline about the need for care, attention and scrutiny, that the noble Lord, Lord Thomas of Gresford, will think that he has done his valiant best and can rest content that his duty is done.

Schedule 6 [Data Matching]:

[Amendment No. 100 not moved.]

101: Schedule 6, page 64, line 26, at end insert—

“( ) A data matching exercise may not be used to identify patterns and trends in an individual’s characteristics or behaviour which suggest nothing more than his potential to commit fraud in the future.”

The noble Baroness said: My Lords, I invite your Lordships to consider further the Government’s amendments on the data-matching provisions of the Bill. I should like to make it clear that although I will speak as though they affect only the Audit Commission’s work in England they will similarly apply to equivalent exercises undertaken by the auditing bodies in Wales and Northern Ireland.

Your Lordships expressed concerns in Committee that the Audit Commission could use its new powers to profile individuals on the basis of their particular characteristics and behaviour in order to predict their future propensity to offend. The Audit Commission had, and has, no intention of profiling individuals in this way. Rather, as I explained in Committee, the purpose of including a power to identify patterns and trends is to enable the Audit Commission to identify where individuals may be working in concert to commit fraud or crime, or where organised crime rings may be operating across a particular geographic area. As drafted, the definition of “data matching” would allow the Audit Commission to provide its analysis of emerging trends and patterns to those participating in the exercise so that they can co-ordinate their efforts in tackling at its root cause fraud that is happening now.

I understand from the demonstration of the national fraud initiative that the Audit Commission recently gave to some Members of the House that the noble Lord, Lord James, was anxious to know how the national fraud initiative would help tackle organised crime rings where a Mr Big was lurking behind a number of small operators. I do not see the noble Lord in his place, but I know that it is an issue of concern and so I am happy to deal with it. As I have explained, this is precisely why the Audit Commission needs the power to be able to identify patterns and trends that emerge from data matching.

Your Lordships may also recall the point I made to the House earlier; the new power will enable the Audit Commission to identify emergent risks in areas where existing fraud is on the increase so that bodies can better target their resources. That said, I do recognise that legitimate limits need to be in place to ensure the protection of individual liberties, not least privacy and the presumption of innocence, that citizens in this country are entitled to enjoy.

Following a useful discussion with the noble Baroness, Lady Anelay, for which I am grateful, I understand that her concern is to prevent profiling which could be used to predict the propensity to offend in the future. I can understand the noble Baroness’s concern considering the particular nature and purpose of the national fraud initiative. As we have said all along, this initiative is designed specifically to detect anomalies without making any assumptions as to guilt. On that basis, I have tabled an amendment which I hope will meet that concern. It will impose a sensible limit on the extent to which data matching can be used for the identification of patterns and trends in the national fraud initiative. Specifically, the amendment will ensure that data matching cannot be used to profile individuals according to their characteristics or behaviour so as to predict the likelihood of future offending. I hope that that will provide the desired assurance about what the Audit Commission can and cannot do with the national fraud initiative tool and, at the same time, leave in place provisions which are essential in the fight against existing fraud. I hope that the noble Lords, Lord Thomas of Gresford and Lord Dholakia, will agree with that. I know that that concern was raised on the matter.

The noble Lord, Lord Henley, and the noble Baroness, Lady Anelay, propose that the Audit Commission should not be able to obtain patient data from bodies that are under a mandatory duty to participate in the national fraud initiative. Patient data are already explicitly excluded from the data that bodies may contribute to the Audit Commission on a voluntary basis. Therefore, Amendment No. 102 would effectively mean that the Audit Commission would not be able to require patient data at all.

I must resist this amendment on the grounds that, first, the exclusion of these data could severely undermine the value of the national fraud initiative to the “mandatory bodies”, particularly NHS trusts, and, secondly, there are adequate safeguards to ensure that this sensitive information is dealt with in an appropriate manner. I should say at the outset that the national fraud initiative does not currently use medical records or clinical data in its data-matching exercises, nor does it have any plans to do so in the future.

The term “patient data” is, however, defined more broadly than that to include not just clinical information, which the Audit Commission does not, in any event, use, but also demographic data, such as a patient’s name and address. Specifically, patient data for data-matching purposes mean data that relate to an individual and are held for “medical purposes”, as defined in the National Health Service Act 2006. The term “medical purposes” is, itself, broadly defined to capture information held for the purposes of preventive medicine, medical diagnosis and research, the provision of care and treatment and the management of health and social care services, as well as information about individuals’ physical or mental health or condition, the diagnosis of their condition or their care and treatment.

The Audit Commission may wish to use demographic data in data-matching exercises where they could indicate fraudulent activity, such as where practitioners either knowingly receive payments from NHS trusts for patients who are no longer registered with them or duplicate payments for those patients. NHS trusts will be mandatory bodies for the purposes of the Audit Commission’s data-matching exercises, and these data will be obtained from those bodies.

However, we recognise that patient data—even just their demographic aspect—are particularly sensitive pieces of information. For that reason, following consultation with officials at the Department of Health, voluntary bodies have been precluded from providing any patient data, both demographic and clinical, to the Audit Commission on a voluntary basis under these provisions. In our view, this achieves the correct balance between, on the one hand, using patient data for those bodies for which we have decided it is especially important, and therefore mandatory, to participate in the national fraud initiative and, on the other, bodies for whom it is merely optional.

I also draw your Lordships’ attention to the specific protections that will apply with respect to the use and disclosure of any patient data used for data-matching purposes. Where patient data have been included in the national fraud initiative, the results of those matches will, under new Section 32D, be disclosable only if the purpose relates to a relevant NHS body or its auditor. A breach of these provisions governing disclosure will attract criminal sanctions. On that basis, I hope that the noble Baroness will not feel it necessary to press her amendment.

I turn now to Amendments Nos. 101A to 101C, tabled in the names of the noble Lords, Lord Dholakia, Lord Burnett and Lord Thomas. They would have the effect of amending the proposal that we have tabled with respect to the Audit Commission’s power to identify patterns and trends from data matching. I shall address Amendments Nos. 101A to 101C together.

Their intention seems to be further to limit the extent to which the Audit Commission will be able to undertake data matching, first, by removing the words “nothing more than” and, secondly, by adding another circumstance where the Audit Commission will be specifically precluded from using its powers.

I am afraid that we must resist these amendments for the following reasons. I refer noble Lords to the proposal that the words “nothing more than” be removed. I understand that the amendment is designed to ensure that data matching cannot be undertaken to profile individuals who are likely to commit fraud in the future, even if there are ancillary benefits to be had. I appreciate the concerns that have been raised in this House regarding the extent to which data matching may be used to profile individuals. This is precisely why I tabled Amendment No. 101. However, this subsequent amendment goes too far. The words “nothing more than” have been deliberately chosen to target the specific mischief we are trying to address, without compromising the exercise as a whole. I hope we all agree that we do not want the Audit Commission to be able to use data matching to identify patterns and trends in individual behaviour or characteristics so as to predict future propensity to offend. However, by removing the words “nothing more than”, we run the serious risk of losing data matches that indicate fraud that is happening right now merely on the basis that they might also be taken as an indication of propensity to commit fraud in the future. We are seeking to preserve not simply ancillary benefits but the integrity of the core exercise itself.

Noble Lords have proposed an amendment that will insert a further circumstance in which the Audit Commission will be precluded from undertaking data matching. I understand that this is to make clear that the Audit Commission should also be prevented from using data matching in order to identify individuals who may fit a profile of those who might commit offences in the future. I shall start by reiterating that the Audit Commission has no intention of using data matching to profile individuals in the first place, much less to identify individuals who may fit these. In any event, the amendment that I am proposing will already prevent the Audit Commission creating such profiles in the first place. If this is the case, it must surely beg the question as to exactly what it is anticipated the Audit Commission will have available in order to achieve the mischief that is feared. On this basis, we hope that the House will be content with the amendment. We think that it is significant; it hones the issue finely; and goes further than the amendment suggested by the noble Baroness. The reason it goes further is that we thought it important to have the clarity that will prevent the Audit Commission doing that which none of us would wish it to do, and that which it itself asserts it does not wish to do. Our amendment gets it just about right. As your Lordships know, I claim no credit for the drafting because those who are really experienced and specialist in drafting have helped us to do this on behalf of the House. With that, I hope that the noble Baroness, the noble Lord, Lord Dholakia, and other noble Lords will be content. I beg to move.

101A: Schedule 6, line 2, leave out “to identify” and insert “for the purposes of identifying—

(a)”

The noble Lord said: My Lords, I am grateful to the Minister. The purpose of the amendment, which was suggested by Liberty, was to tease out as much information from the Minister as possible. It is a probing amendment and we are satisfied with the explanation that the Minister has offered. In light of that, we do not intend to move the amendment.

[Amendments Nos. 101A to 101C, as amendments to Amendment No. 101, not moved.]

103: Schedule 6, page 66, line 24, at end insert—

“( ) a person designated as a local government auditor under Article 4 of the Local Government (Northern Ireland) Order 2005 (S.I. 2005/1968 (N.I. 18)).”

104: Schedule 6, page 67, line 19, at end insert—

“( ) In this section, “body” includes office.”

On Question, amendments agreed to.

105: Schedule 6, page 67, line 19, at end insert—

“32DA Publication

(1) Nothing in section 32D prevents the Commission from publishing a report on a data matching exercise (including on the results of the exercise).

(2) But the report may not include information relating to a particular body or person if—

(a) the body or person is the subject of any data included in the data matching exercise,(b) the body or person can be identified from the information, and(c) the information is not otherwise in the public domain.(3) A report published under this section may be published in such manner as the Commission considers appropriate for bringing it to the attention of those members of the public who may be interested.

(4) Section 51 does not apply to information to which section 32D applies.

(5) This section does not affect any powers of an auditor where the data matching exercise in question forms part of an audit under Part 2.”

The noble Baroness said: My Lords, Amendment No. 105 provides a publication power to the Audit Commission so that it may report on its data-matching exercises. It also limits the kinds of information which may appear in this report.

It is already the practice of the commission to publish a report once the results of data-matching have been properly investigated by the audited bodies and the exercise has been completed. The purpose of these reports is to provide to the public an overarching summary of the exercise, including the amount of detected overpayments and fraud. The reports do not, however, identify individual data subjects, although the commission may, from time to time, identify particular audited bodies following consultation with them. That might arise in circumstances where a particularly significant fraud has been uncovered as a result of a local authority’s investigation into the results of a data-matching exercise. In this way, the public can keep abreast of the commission’s activities and form their own view as to the gains achieved by the national fraud initiative.

The amendment will place the commission’s existing good practice squarely in the Bill. Although the commission will be able to identify those bodies which have provided it with data in its reports, it will not be able to identify the individuals, partnerships or companies to whom the data relate unless that information is already in the public domain. Accordingly, the provision strikes the right balance between ensuring transparency and accountability on the one hand while, on the other, ensuring that the appropriate safeguards are in place.

On Amendment No. 106, the noble Lord, Lord Henley, and the noble Baroness, Lady Anelay, propose that the code of data-matching practice which the Audit Commission prepares, and any revisions to it, should be made subject to the approval of the Information Commissioner and then both Houses of Parliament by way of affirmative resolution. On Amendment No. 107, the code should, alternatively, at least be made subject to the approval of the Information Commissioner. I know the noble Baroness and noble Lord will not be surprised that I shall resist that amendment. I am grateful to them for tabling it, because it again enables me to explain our amendments. I first reiterate the comments I made in Committee: it is not the role of the Information Commissioner to approve codes of practice issued by public authorities. It would severely undermine the Information Commissioner’s independence, and therefore public credibility, if the situation were otherwise. It is probably for this reason that there are no precedents in any other context of which we are aware where the Information Commissioner has been required to approve another body’s code of practice in the way now proposed.

As a matter of practice, the Audit Commission will also seek to consult the Information Commissioner in preparing and revising the code and I will shortly speak further on this point on a government amendment. The Information Commissioner will retain a statutory overview on the Audit Commission’s activities under the Data Protection Act 1998, which gives him all the powers of supervision and intervention that he needs.

It is also for that reason that the further proposal, to require that the code be approved by both Houses of Parliament by way of affirmative resolution, is excessive. It would not be good use of the House's time, or that of our colleagues in another place, if we were required to deliberate on a code in circumstances where the task will already fall within the general supervisory and regulatory remit of the Information Commissioner.

We appreciate that a central premise behind Amendment No. 108 is a desire to enhance the checks and balances that will be in place with respect to the Audit Commissioner's data-matching activities. For that reason, I have tabled an amendment that will place a duty on the Audit Commission to consult the Information Commissioner when preparing and revising the code.

In relation to Amendment No. 109, we believe there is some force in the points that have been made concerning the visibility of the code, which will spell out the standards that members of the public can expect when their data are matched and the detailed safeguards that will apply to each exercise. The amendment places a duty on the Audit Commission to send a copy of the code to the Secretary of State so that it can be laid before the House. It also places a duty on the commission to publish the code from time to time. The Government tabled Amendments Nos. 108 and 109 in order to meet the concerns that have been raised. We believe that they strike the right balance between the exercise of efficient and effective data matching by the Audit Commission and the safeguards that should apply to it. In the circumstances, I hope that the noble Baroness and the noble Lord will not move their amendments. I thank them in advance for keeping the amendments on the Marshalled List as it has allowed me to explain them. I hope that has assured the House that all that should be done has been done and that we are all in agreement. I beg to move.

108: Schedule 6, page 68, line 9, after “32B(2)” insert “, the Information Commissioner”

109: Schedule 6, page 68, line 10, at end insert—

“( ) The Commission must—

(a) send a copy of the code, and of any alterations made to the code, to the Secretary of State, who must lay the copy before Parliament, and(b) from time to time publish the code as for the time being in force.”

On Question, amendments agreed to.

110: Schedule 6, page 68, line 13, leave out “further” and insert “any purpose mentioned in subsection (2) to the”

The noble Baroness said: My Lords, government Amendments Nos. 110 and 112 limit the further purposes to which data-matching exercises can be carried out to those already listed in the Bill. The noble Lord, Lord Henley, and the noble Baroness, Lady Anelay, propose that the Secretary of State's order-making powers to add to the purpose for which data-matching can be undertaken should be removed in their entirety. Amendments Nos. 113 and 114, alternatively, propose the removal of the words “in particular” from proposed new Section 32G(2) of the Audit Commission Act 1998 and the insertion ofthe word “serious” in order to clarify the nature of the crime for which data matching may be extended to prevent or detect.

I am afraid that I have to resist all these amendments. In relation to the first amendment, I would be chary about confining ourselves at the outset to undertaking data matching solely for the purposes of preventing and detecting fraud in circumstances where we already know that there may be other public evils which could be greatly ameliorated through the use of these exercises. Proposed new Section 32G(2) does not provide the Secretary of State with a carte blanche to add further purposes at his whim. Quite the contrary, this can be done only with the approval of both Houses under the affirmative resolution procedure.

With respect to the proposed alternative amendments, I turn first to the suggestion that the words “in particular” be omitted from new Section 32G(2). I understand this amendment is based on the primary concern expressed by noble Lords in Committee that, because the current list of potential new purposes is non-exhaustive, this creates uncertainty and therefore unease as to the nature and types of purpose that might be contemplated. To put it another way, one might describe this concern as possible function creep I think that the noble Baroness has described it like that in the past. However, if that is the case, we cannot see how the omission of the words “in particular” will make any difference. The section will remain open-ended because of the continued presence of the word “includes”, which imports the concept that these are examples only and not an exhaustive list.

I can deal with the further alternative proposal to preface the word “crime” with the word “serious” in relatively short order. The simple insertion of this word does not, in itself, provide any guidance in practice as to what would qualify as a “serious” offence. The amendment makes no attempt to define what would constitute a serious offence and for that reason it simply will not do.

Moreover, it is difficult to limit the uses to which this tool could and should be put simply by saying that it must be restricted to serious crime. I gave the example in Committee that the tool could be used to identify registered sex offenders working in schools. This in itself might be a breach of the conditions placed on a sex offender but would not be a “serious offence” within the meaning of Schedule 1. However, data matching may prevent or detect the offence committed when a person on the sexual offences register slips through the net and is employed in direct contact with children. I would also offer the example of immigration offenders. Overstaying visas may not be considered by some to be a serious crime. None the less, it is something that the public would be keen to see the Government use every tool available to them to prevent and detect.

On Amendments Nos. 110 and 112, notwithstanding the specific objections I have identified above, I thank the noble Baroness for letting her amendment stay because it gives me an opportunity better to explain how we deal this. I can see merit in the thinking behind these amendments to ensure that the prior definition of any new purpose which may be added appears in the Bill. On that basis, I have tabled amendments that will confine the potential extension of purposes for which data matching can be undertaken to those currently listed as examples in new Section 32G(2): namely, first, assisting in the prevention and detection of crime other than fraud; secondly, assisting in the apprehension and prosecution of offenders; and, thirdly, assisting in the recovery of debt owing to public bodies. I hope that these amendments squarely address the specific concerns that have been raised. I thank noble Lords for pursuing these matters, which enabled us to have a good discussion and, I hope, come to a solution which meets all our ends. I therefore beg to move.

112: Schedule 6, page 68, line 17, leave out “include in particular” and insert “are”

On Question, amendment agreed to.

[Amendments Nos. 113 and 114 not moved.]

115: Schedule 6, page 68, line 39, at end insert—

“Part 2Data Matching: Wales4 After Part 3 of the Public Audit (Wales) Act 2004 (c. 23) insert—

“PART 3AData matching64A Power to conduct data matching exercises

(1) The Auditor General for Wales may conduct data matching exercises or arrange for them to be conducted on his behalf.

(2) A data matching exercise is an exercise involving the comparison of sets of data to determine how far they match (including the identification of any patterns and trends).

(3) The power in subsection (1) is exercisable for the purpose of assisting in the prevention and detection of fraud in or with respect to Wales.

(4) That assistance may, but need not, form part of an audit.

(5) A data matching exercise may not be used to identify patterns and trends in an individual’s characteristics or behaviour which suggest nothing more than his potential to commit fraud in the future.

(6) In the following provisions of this Part, reference to a data matching exercise is to an exercise conducted or arranged to be conducted under this section.

64B Mandatory provision of data

(1) The Auditor General for Wales may require—

(a) any body mentioned in subsection (2), and (b) any officer or member of such a body, to provide the Auditor General or a person acting on his behalf with such data (and in such form) as the Auditor General or that person may reasonably require for the purpose of conducting data matching exercises.(2) The bodies are—

(a) a local government body in Wales (as defined in section 12(1));(b) a Welsh NHS body (as defined in section 60).(3) A person who without reasonable excuse fails to comply with a requirement of the Auditor General under subsection (1)(b) is guilty of an offence and liable on summary conviction—

(a) to a fine not exceeding level 3 on the standard scale, and(b) to an additional fine not exceeding £20 for each day on which the offence continues after conviction for that offence.(4) If an officer or member of a body is convicted of an offence under subsection (3), any expenses incurred by the Auditor General in connection with proceedings for the offence, so far as not recovered from any other source, are recoverable from that body.

64C Voluntary provision of data

(1) If the Auditor General for Wales thinks it appropriate to conduct a data matching exercise using data held by or on behalf of a body or person not subject to section 64B, the data may be disclosed to the Auditor General or a person acting on his behalf.

(2) A disclosure under subsection (1) does not breach—

(a) any obligation of confidence owed by a person making the disclosure, or(b) any other restriction on the disclosure of information (however imposed).(3) But nothing in this section authorises a disclosure which—

(a) contravenes the Data Protection Act 1998 (c. 29), or(b) is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 (c. 23).(4) Data may not be disclosed under subsection (1) if the data comprise or include patient data.

(5) “Patient data” means data relating to an individual which are held for medical purposes (within the meaning of section 251 of the National Health Service Act 2006 (c. 41)) and from which the individual can be identified.

(6) This section does not limit the circumstances in which data may be disclosed apart from this section.

(7) Data matching exercises may include data provided by a body or person outside England and Wales.

64D Disclosure of results of data matching etc

(1) This section applies to the following information—

(a) information relating to a particular body or person obtained by or on behalf of the Auditor General for Wales for the purpose of conducting a data matching exercise,(b) the results of any such exercise.(2) Information to which this section applies may be disclosed by or on behalf of the Auditor General for Wales if the disclosure is—

(a) for or in connection with a purpose for which the data matching exercise is conducted,(b) to a body mentioned in subsection (3) (or a related party) for or in connection with a function of that body corresponding or similar to the functions of an auditor under Chapter 1 of Part 2 or the functions of the Auditor General under Part 3 or this Part, or(c) in pursuance of a duty imposed by or under a statutory provision.(3) The bodies are—

(a) the Audit Commission, (b) the Auditor General for Scotland,(c) the Accounts Commission for Scotland,(d) Audit Scotland,(e) the Comptroller and Auditor General for Northern Ireland,(f) a person designated as a local government auditor under Article 4 of the Local Government (Northern Ireland) Order 2005 (S.I. 2005/1968 (N.I. 18)).(4) “Related party”, in relation to a body mentioned in subsection (3), means—

(a) a body or person acting on its behalf,(b) a body whose accounts are required to be audited by it or by a person appointed by it,(c) a person appointed by it to audit those accounts.(5) If the data used for a data matching exercise include patient data—

(a) subsection (2)(a) applies only so far as the purpose for which the disclosure is made relates to a relevant NHS body,(b) subsection (2)(b) applies only so far as the function for or in connection with which the disclosure is made relates to such a body.(6) In subsection (5)—

(a) “patient data” has the same meaning as in section 64C,(b) “relevant NHS body” means—(i) a Welsh NHS body as defined in section 60,(ii) a health service body as defined in section 53(1) of the Audit Commission Act 1998 (c. 18),(iii) an NHS body as defined in section 22(1) of the Community Care and Health (Scotland) Act 2002 (asp 5),(iv) an HSS trust within the meaning of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1)).(7) Information disclosed under subsection (2) may not be further disclosed except—

(a) for or in connection with the purpose for which it was disclosed under paragraph (a) or the function for which it was disclosed under paragraph (b) of that subsection,(b) for the investigation or prosecution of an offence (so far as the disclosure does not fall within paragraph (a)), or(c) in pursuance of a duty imposed by or under a statutory provision.(8) Except as authorised by subsections (2) and (7), a person who discloses information to which this section applies is guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both, or(b) on summary conviction, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory maximum or to both.(9) Section 54 does not apply to information to which this section applies.

(10) In this section “statutory provision” has the meaning given in section 59(8).

64E Publication

(1) Nothing in section 64D prevents the Auditor General for Wales from publishing a report on a data matching exercise (including on the results of the exercise).

(2) But the report may not include information relating to a particular body or person if—

(a) the body or person is the subject of any data included in the data matching exercise,(b) the body or person can be identified from the information, and(c) the information is not otherwise in the public domain. (3) A report published under this section may be published in any manner which the Auditor General considers appropriate for bringing it to the attention of those members of the public who may be interested.

(4) This section does not affect any powers of an auditor or the Auditor General where the data matching exercise in question forms part of an audit under Part 2 or 3.

64F Fees for data matching

(1) The Auditor General for Wales must prescribe a scale or scales of fees in respect of data matching exercises.

(2) A body required under section 64B(1) to provide data for a data matching exercise must pay to the Auditor General the fee applicable to that exercise in accordance with the appropriate scale.

(3) But if it appears to the Auditor General that the work involved in the exercise was substantially more or less than that envisaged by the appropriate scale, the Auditor General may charge the body a fee which is larger or smaller than that referred to in subsection (2).

(4) Before prescribing a scale of fees under this section, the Auditor General must consult—

(a) the bodies mentioned in section 64B(2), and(b) such other bodies or persons as the Auditor General thinks fit.(5) If the Welsh Ministers consider it necessary or desirable to do so, they may by regulations prescribe a scale or scales of fees to have effect, for such period as is specified in the regulations, in place of any scale or scales of fees prescribed by the Auditor General and, if they do so, references in this section to the appropriate scale are to be read as respects that period as references to the appropriate scale prescribed by the Welsh Ministers.

(6) Before making any regulations under subsection (5), the Welsh Ministers must consult—

(a) the Auditor General for Wales, and(b) such other bodies or persons as they think fit.(7) The power under subsection (5) is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the Assembly.

(8) In addition to the power under subsection (2), the Auditor General may charge a fee to any other body or person providing data for or receiving the results of a data matching exercise, such fee to be payable in accordance with terms agreed between the Auditor General and that body or person.

64G Code of data matching practice

(1) The Auditor General for Wales must prepare, and keep under review, a code of practice with respect to data matching exercises.

(2) Regard must be had to the code in conducting and participating in any such exercise.

(3) Before preparing or altering the code, the Auditor General must consult the bodies mentioned in section 64B(2), the Information Commissioner and such other bodies or persons as the Auditor General thinks fit.

(4) The Auditor General must—

(a) lay a copy of the code, and of any alterations made to the code, before the Assembly, and(b) from time to time publish the code as for the time being in force.64H Powers of Secretary of State

(1) The Secretary of State may by order amend this Part—

(a) to add any purpose mentioned in subsection (2) to the purposes for which data matching exercises may be conducted,(b) to modify the application of this Part in relation to a purpose so added.(2) The purposes which may be added are—

(a) to assist in the prevention and detection of crime (other than fraud) in or with respect to Wales, (b) to assist in the apprehension and prosecution of offenders in or with respect to Wales,(c) to assist in the recovery of debt owing to Welsh public bodies.(3) The Secretary of State may by order amend this Part—

(a) to add a Welsh public body to the list of bodies in section 64B(2),(b) to modify the application of this Part in relation to a body so added,(c) to remove a body from that list.(4) Before making an order under this section, the Secretary of State must consult the Auditor General for Wales.

(5) An order under this section—

(a) is to be made by statutory instrument, and(b) may include such incidental, consequential, supplemental or transitional provision as the Secretary of State thinks fit.(6) No order under this section may be made unless a draft of the statutory instrument has been laid before, and approved by a resolution of, each House of Parliament.

(7) In this section “Welsh public body” means a public body (as defined in section 12(3)) whose functions relate exclusively to Wales or an area of Wales.”

5 (1) Paragraph 9 of Schedule 8 to the Government of Wales Act 2006 (c. 32) (special finance provisions) is amended as follows.

(2) In sub-paragraph (3)(b) after “government audit)” insert “or, so far as the functions relate to local government bodies in Wales, Part 3A of that Act (data matching)”.

(3) In sub-paragraph (4)(c) for the words from “Part 2” to the end substitute “the following provisions of the Public Audit (Wales) Act 2004 (c. 23)—

(i) Part 2 (including those charged as a result of paragraph 11(3)(c)),(ii) Part 3A (but only those charged to a local government body in Wales).”(4) After sub-paragraph (4) insert—

“(5) “Local government body in Wales” has the meaning given in section 12(1) of the Public Audit (Wales) Act 2004 (c. 23).””

On Question, amendment agreed to.

116: Schedule 6, page 68, line 39, at end insert—

“Part 3Data Matching: Northern IrelandAfter Article 4 of the Audit and Accountability (Northern Ireland) Order 2003 (S.I. 2003/418 (N.I. 5)) insert—

“Data matching4A Power to conduct data matching exercises

(1) The Comptroller and Auditor General may conduct data matching exercises or arrange for them to be conducted on his behalf.

(2) A data matching exercise is an exercise involving the comparison of sets of data to determine how far they match (including the identification of any patterns and trends).

(3) The power in paragraph (1) is exercisable for the purpose of assisting in the prevention and detection of fraud.

(4) That assistance may, but need not, form part of an audit.

(5) A data matching exercise may not be used to identify patterns and trends in an individual’s characteristics or behaviour which suggest nothing more than his potential to commit fraud in the future.

(6) In Articles 4B to 4H, reference to a data matching exercise is to an exercise conducted or arranged to be conducted under this Article.

4B Mandatory provision of data

(1) The Comptroller and Auditor General may require—

(a) any body mentioned in paragraph (2); and(b) any officer or member of such a body,to provide the Comptroller and Auditor General or a person acting on his behalf with such data (and in such form) as the Comptroller and Auditor General or that person may reasonably require for the purpose of conducting data matching exercises.(2) The bodies are—

(a) any body (including a holder of a statutory office) whose accounts are required to be audited by the Comptroller and Auditor General, other than a body whose accounts are required to be so audited by virtue of section 55 of the Northern Ireland Act 1998 (c. 47);(b) any body whose accounts are required to be audited by a local government auditor.(3) A person who without reasonable excuse fails to comply with a requirement of the Comptroller and Auditor General under paragraph (1)(b) is guilty of an offence and liable on summary conviction—

(a) to a fine not exceeding level 3 on the standard scale; and(b) to an additional fine not exceeding £20 for each day on which the offence continues after conviction for that offence.(4) If an officer or member of a body is convicted of an offence under paragraph (3), any expenses incurred by the Comptroller and Auditor General in connection with proceedings for the offence, so far as not recovered from any other source, are recoverable from that body.

4C Voluntary provision of data

(1) If the Comptroller and Auditor General thinks it appropriate to conduct a data matching exercise using data held by or on behalf of a body or person not subject to Article 4B, the data may be disclosed to the Comptroller and Auditor General or a person acting on his behalf.

(2) A disclosure under paragraph (1) does not breach—

(a) any obligation of confidence owed by a person making the disclosure; or(b) any other restriction on the disclosure of information (however imposed).(3) But nothing in this Article authorises a disclosure which—

(a) contravenes the Data Protection Act 1998 (c. 29); or(b) is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000 (c. 23).(4) Data may not be disclosed under paragraph (1) if the data comprise or include patient data.

(5) “Patient data” means data relating to an individual which are held for any of the following purposes and from which the individual can be identified—

(a) preventative medicine, medical diagnosis, medical research, the provision of care and treatment and the management of health and social care services;(b) informing individuals about their physical or mental health or condition, the diagnosis of their condition or their care and treatment.(6) This Article does not limit the circumstances in which data may be disclosed apart from this Article.

(7) Data matching exercises may include data provided by a body or person outside Northern Ireland.

4D Disclosure of results of data matching etc

(1) This Article applies to the following information—

(a) information relating to a particular body or person obtained by or on behalf of the Comptroller and Auditor General for the purpose of conducting a data matching exercise;(b) the results of any such exercise. (2) Information to which this Article applies may be disclosed by or on behalf of the Comptroller and Auditor General if the disclosure is—

(a) for or in connection with a purpose for which the data matching exercise is conducted;(b) to a body mentioned in paragraph (3) (or a related party) for or in connection with a function of that body corresponding or similar to the audit functions of the Comptroller and Auditor General or a local government auditor under any statutory provision or the data matching functions of the Comptroller and Auditor General under Article 4A; or(c) in pursuance of a duty imposed by or under a statutory provision.(3) The bodies are—

(a) the Audit Commission for Local Authorities and the National Health Service in England;(b) the Auditor General for Wales;(c) the Auditor General for Scotland;(d) the Accounts Commission for Scotland;(e) Audit Scotland.(4) “Related party”, in relation to a body mentioned in paragraph (3), means—

(a) a body or person acting on its behalf;(b) a body whose accounts are required to be audited by it or by a person appointed by it;(c) a person appointed by it to audit those accounts.(5) If the data used for a data matching exercise include patient data—

(a) paragraph (2)(a) applies only so far as the purpose for which the disclosure is made relates to a relevant NHS body;(b) paragraph (2)(b) applies only so far as the function for or in connection with which the disclosure is made relates to such a body.(6) In paragraph (5)—

(a) “patient data” has the same meaning as in Article 4C;(b) “relevant NHS body” means—(i) an HSS trust within the meaning of the Health and Personal Social Services (Northern Ireland) Order 1991 (NI 1);(ii) a health service body as defined in section 53(1) of the Audit Commission Act 1998 (c. 18);(iii) a Welsh NHS body as defined in section 60 of the Public Audit (Wales) Act 2004 (c. 23);(iv) an NHS body as defined in section 22(1) of the Community Care and Health (Scotland) Act 2002 (asp 5).(7) Information disclosed under paragraph (2) may not be further disclosed except—

(a) for or in connection with the purpose for which it was disclosed under sub-paragraph (a) or the function for which it was disclosed under sub-paragraph (b) of that paragraph;(b) for the investigation or prosecution of an offence (so far as the disclosure does not fall within sub-paragraph (a)); or(c) in pursuance of a duty imposed by or under a statutory provision.(8) Except as authorised by paragraphs (2) and (7), a person who discloses information to which this Article applies is guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both; or(b) on summary conviction, to imprisonment for a term not exceeding 6 months, to a fine not exceeding the statutory maximum or to both. (9) Article 27 of the Local Government (Northern Ireland) Order 2005 (NI 18) does not apply to information to which this Article applies.

(10) In this Article “body” includes office.

4E Publication

(1) Nothing in Article 4D prevents the Comptroller and Auditor General from publishing a report on a data matching exercise (including on the results of the exercise).

(2) But the report may not include information relating to a particular body or person if—

(a) the body or person is the subject of any data included in the data matching exercise;(b) the body or person can be identified from the information; and(c) the information is not otherwise in the public domain.(3) A report published under this Article may be published in such manner as the Comptroller and Auditor General considers appropriate for bringing it to the attention of those members of the public who may be interested.

(4) This Article does not affect any powers of the Comptroller and Auditor General or a local government auditor where the data matching exercise in question forms part of an audit carried out by either of them.

4F Fees for data matching

(1) The Comptroller and Auditor General may charge a fee to any body required under Article 4B(1) to provide data for a data matching exercise.

(2) But a body whose functions are discharged on behalf of the Crown may not be charged a fee under paragraph (1) except with the consent of the Department.

(3) In addition to the power under paragraph (1), the Comptroller and Auditor General may charge a fee to any other body or person providing data for or receiving the results of a data matching exercise, such fee to be payable in accordance with terms agreed between the Comptroller and Auditor General and that body or person.

(4) Any fee received by the Comptroller and Auditor General by virtue of this Article is to be paid by him into the Consolidated Fund.

4G Code of data matching practice

(1) The Comptroller and Auditor General must prepare, and keep under review, a code of practice with respect to data matching exercises.

(2) Regard must be had to the code in conducting and participating in any such exercise.

(3) Before preparing or altering the code, the Comptroller and Auditor General must consult the bodies mentioned in Article 4B(2), the Information Commissioner and such other bodies or persons as he thinks fit.

(4) The Comptroller and Auditor General must—

(a) send a copy of the code, and of any alterations made to the code, to the Department and the Department must lay the copy before the Assembly; and(b) from time to time publish the code as for the time being in force.4H Powers of the Department

(1) The Department may by order amend Articles 4A to 4G—

(a) to add any purpose mentioned in paragraph (2) to the purposes for which data matching exercises may be conducted;(b) to modify the application of those Articles in relation to a purpose so added.(2) The purposes which may be added are—

(a) to assist in the prevention and detection of crime (other than fraud);(b) to assist in the apprehension and prosecution of offenders; (c) to assist in the recovery of debt owing to public bodies.(3) The Department may by order amend Articles 4A to 4G—

(a) to add a public body to the list of bodies in Article 4B(2);(b) to modify the application of those Articles in relation to a body so added;(c) to remove a body from that list.(4) An order under this Article may include such incidental, consequential, supplemental or transitional provision as the Department thinks fit.

(5) An order under this Article is subject to affirmative resolution.

(6) In this Article “public body” means a body or person whose functions—

(a) are functions of a public nature; or(b) include functions of that nature,but, in the latter case, the body or person is a public body to the extent only of those functions.”In Article 6 of the Audit (Northern Ireland) Order 1987 (S.I. 1987/460 (N.I. 5)) (expenses and accounts of Northern Ireland Audit Office), in paragraph (5) after “examination” insert “or in respect of data matching”.”

On Question, amendment agreed to.

Clause 66 [Abolition of Assets Recovery Agency and redistribution of functions etc.]:

117: Clause 66, page 36, line 38, at beginning insert “Subject to subsection (3A),”

The noble Viscount said: My Lords, this amendment stands in the name of my noble friend Lord Glentoran, and I thank the noble Baroness, Lady Harris of Richmond, for adding her name to it. The amendment is the same as one moved in Committee. On reading the Minister’s response, I am afraid that I am not entirely reassured that the concerns that we raised were unnecessary. I am still not convinced that a single designated officer will result in the Northern Ireland team being given the priority it deserves or the flexibility it needs to adapt its strategy to the unusual circumstances of the criminal community there.

However, at this stage, I would like to look more deeply at the pratical implications of the restructuring. I am deeply sceptical of change for change’s sake, and I remain unconvinced of the Government’s deeper motives behind this clause. There are three potential uses of an effective asset recovery agency; the first two are the most acceptable. Confiscating criminals’ assets is an effective method of redistribution against criminals and acts as a means of deterring potential criminals by ensuring that neither they nor their families will enjoy the fruits of their crimes during or after any jail sentence. Of course, there is a third benefit to the Government. It provides a very useful source of income. Can the Minister confirm that the Government are not intending to use the assets that Northern Ireland asset recovery teams bring in for operations outside Northern Ireland?

I am also concerned about the cost of this restructuring. How much do the Government predict it will cost to incorporate the current agency into SOCA and how do they intend to pay those costs? How long does the Minister envisage this restructuring will take?

There are also the costs that are far more difficult to measure but are just as crucial to performance—the effect of the change on the performance and morale of the current employees. There is absolutely no demand for this change from those on the ground or from the police or anyone else involved in asset recovery in Northern Ireland. I cannot think that it is to the benefit of asset recovery to force such a change on them. I beg to move.

In his letter to my right honourable friend Peter Hain, the Secretary of State for Northern Ireland, the Home Secretary mentioned an action plan on assets recovery and that action plan will soon go out for consultation on how we will achieve our challenging new targets and on the new ways to transform asset recovery. I cannot give specific details at this stage but there will be a separate action plan on asset recovery for Northern Ireland and that plan will be published. All ARA staff, whether based in England or Belfast, will have the opportunity to transfer to SOCA or the National Policing Improvement Agency. Every possible opportunity will be taken to ensure that we retain the current staff and experience in ARA in Belfast. We cannot guarantee that some will not take the opportunity to leave, but it will remain business as usual. It will be a matter for the director-general of SOCA to determine how best to use his staff in Northern Ireland following the merger. No decisions have yet been taken about the exact shape of the new organisation in Northern Ireland or the total number of staff to be based in Belfast following the merger but there will be no reduction in the resource available for asset recovery work in Northern Ireland. Under the Cabinet Office statement of practice, staff will be offered appropriate opportunities in line with their competencies. All staff will be kept fully informed of the progress of the merger project and both organisations have well established mechanisms and are fully committed to engaging with trade unions regarding the merger. On the practicalities, a tripartite merger project has been set up with representatives of all three agencies to ensure smooth transition that maximises the expertise and best practice of each organisation.

I hope I have said enough to reassure the noble Viscount, Lord Bridgeman, and the noble Baroness that we have taken every step possible to make sure that the good work and fine results we have been able to secure in Northern Ireland are preserved and that there will be proper opportunity to enhance and develop the work as we would deem appropriate. I hope that the noble Lords opposite will be content with that.

119: After Clause 75, insert the following new Clause—

“CHAPTER 4Other measures to disrupt serious crimePower to search for firearms

If a police constable has reason to believe that a person or persons in a particular area may be carrying firearms, he may arrange—

(a) for that area to be sealed off; and(b) for the searching of any people or vehicles in that particular area for firearms, by whatever means he considers appropriate.”

The noble Lord said: My Lords, Amendment No. 119 introduces a new clause to provide power to search for firearms. I note that as recently as last Monday the Minister replied to a Written Question from the noble Lord, Lord Ouseley, on gun crime and outlined a whole series of slightly wishy-washy measures. She concluded—or perhaps I should say Sir Humphrey's draft concluded—with the great words:

“All our work in this area is being driven forward by the Home Secretary's round table group on guns, gangs and knives”.—[Official Report, 23/4/07; col. WA 118.]

Oh dear, oh dear! I hope that we will be able to provide something more substantial for the Government today.

In 2005-06, there were 10,990 offences involving firearms other than airguns. In the same year, firearms were involved in 1,115 serious incidents of violence against the person, excluding homicide, and there were 46 homicides with guns. The Library has supplied a mass of press comment; from the heavy papers alone on gun crime in Britain in the past couple of months, I quote three very short extracts. The Guardian referred on 16 February to,

“three gun murders of teenagers in 11 days and five killings since February 3”.

The Independent said that,

“it is abundantly clear to those who work in areas such as south London that the ‘gun culture’ remains strong—and among young men it is actually getting stronger”.

The Daily Telegraph said on 26 February in an article by the Chief Constable of Merseyside, Bernard Hogan-Howe:

“Most of the victims of gun crime to survive either do not want to make a complaint or give us information to enable us to track down their attacker. We have seen an increase in the number of teenagers involved in gun crime”.

He referred to,

“the need to change the culture of young people who carry guns”.

So I make no apology for reintroducing my amendment.

The purpose of the amendment is very simple: it is to help to get guns off Britain’s streets, and thus to reduce gun crime, which is causing misery not just to those who tragically get caught up in it but to the far greater number whose anxiety has been growing over recent years. Whether they are right or wrong, they perceive themselves as vulnerable. The amendment would give the police a simple and over-riding power which would enable them to make it far more risky for anyone to carry an illegal firearm. Ideally, I would like to make it as risky as it would be for any member of the public who decided to take a gun on an aeroplane from one of Britain’s airports, but that, I fear, we will never achieve. Frankly, no gun-carrying mobster or terrorist would ever risk trying to travel by air with a firearm, but the risk of carrying guns in the streets in Britain today is far too small.

Under the amendment, the police would have the power, as and when they felt it appropriate, to check anyone, in any area, for firearms. Obviously, modern technology makes this far more rapid and effective than it used to be. The primary instrument is the metal detector, in all its many and sophisticated forms. It enables the rapid scanning of large numbers of people in a non-discriminatory way; it is unlike searching for drugs, which is slow, intrusive and involves selecting individuals under the existing stop-and-search powers which, as we know, can cause resentment and problems with community relations.

With metal detectors, you can scan extremely fast, either by putting up a temporary arch, as we know so well, or using hand-held machines. If I am asked to take my keys out of my pocket and the metal detector is used again, it will confirm that I have no gun and I can go through. It happens very fast.

I know that the Minister is normally briefed by the Home Office to say that the police neither need nor want these powers. That is not what I have found. I am particularly glad to have had an invitation from the noble Lord, Lord Graham of Edmonton, to attend last Monday the graduation dinner of the police service parliamentary scheme in the Cholmondeley Room, when I was able to discuss the amendment with a number of very senior police officers. All those with whom I discussed it welcome the prospect of such a power. I particularly noted the enthusiasm of Assistant Commissioner Tariq Ghaffur of the Metropolitan Police, who has particular responsibility for safety on London streets.

I believe that the people of Britain will welcome the knowledge that the police have this new power, just as most of us are glad that the use of modern technology has made our airports safer—and, indeed, the Palace of Westminster has been made much more secure. Those who will be most grateful will be those who live in areas in which the gun culture is strongest, who depend on the police to keep their lives secure. I previously tabled this amendment to other Bills—the Violent Crime Reduction Bill in May last year and the Police and Justice Bill last October. Each time, the Home Office resisted it. I am tempted to say, “Well, it would, wouldn’t it?”.

The Minister has said and perhaps will say again that there are already many different powers of search. I know there are—I am sure there are. However, as I pointed out on 9 October last year, according to the Home Office’s own website, firearms law is “very complicated”. Fighting crime today does not leave time for operational police officers to search the legal text books to ensure that they have cover for what they find that they need to do. I am asking that the police be given a wide and simple power, which they can use and which the public can understand. I am now giving the Government a third chance to take this step forward in the fight against gun culture. I beg to move.

Baroness Scotland of Asthal: My Lords, I join others who have commended the noble Lord, Lord Marlesford, on his persistence. As he said, this is the third opportunity he has given me to respond. I have to say that my response will be similar in nature to the responses that I have had the joy of giving him in the past. Rarely are such compliments showered on the Home Office—dilatory, obstinate, stubborn. Some more flavoursome adjectives doubtless could come my way. I would rather say that we are being proportionate and reasoned.

I agree with all those who have highlighted the pernicious nature of gun crime, but we have dealt with this matter with a great deal of vigour and energy. We are reminded once again by the recent tragic shooting incidents in London and Manchester that we still have a way to go to win the fight against gun crime. The Prime Minister acknowledged that at his summit on guns and gangs on 22 February, which has already been referred to. However, the reality is that gun crime is falling. Figures released on 26 April for the 12 months to December 2006 show a decrease in firearm offences of 16 per cent. In London, figures from the Metropolitan Police for the 12-month period to the end of March 2007 indicate a reduction in gun-enabled crime of 11.3 per cent. To say that it is not being addressed and is out of hand is contrary to the facts.

Nevertheless, we have already put in place substantial legislation to support the fight to drive down gun crime. For example, there is the five-year minimum sentence for those adults convicted of unlawful possession of a prohibited firearm and the new offence of using someone to mind a weapon, which came into force on 6 April. We know that gun crime affects some communities in some areas disproportionately. The measure, such as that suggested in the amendment, is likely to impact disproportionately on those communities.

Of course, this is not the first outing for this amendment, and I make no apology for restating the other reasons it cannot be accepted, which have not changed. Legislation is already in place, providing a range of enforcement powers to the police under Section 47 of the Firearms Act 1968. For example, in the circumstances specified in this legislation, a constable can require a firearm or ammunition to be handed over for examination. The person can be searched and detained for the purpose of the search. If a vehicle is involved, it may be searched and the person driving it or in control of it can be required to stop it. Furthermore, for the purpose of exercising these powers, a constable may enter any place.

The Government are absolutely clear that they are fully committed to tackling gun crime. We are also committed to ensuring that the police have sufficient and proportionate powers to help make communities safe. The existing legislation helps meet those objectives, and no purpose would be served by duplicating the powers already available under existing legislation.

Schedule 11 [Revenue and Customs: regulation of investigatory powers]:

120: Schedule 11, page 98, line 40, at end insert—

“In section 5 (interception with a warrant) after subsection (3) insert—

“(3A) Paragraphs (a) and (c) of subsection (3) shall not apply to an application for a warrant made by Her Majesty’s Revenue and Customs.””

The noble Baroness said: My Lords, I shall speak also to Amendment No. 121. In Committee I moved several amendments concerning the new powers that the Bill gives Her Majesty’s Revenue and Customs. I was grateful for the fullness of the Minister’s answer then and the comprehensive letter that I received late last week, following up the points that she made. The noble Baroness will see that I have retabled amendments on only one of the topics that I raised in Committee, in a form that I hope addresses some of the technical points that she made.

The amendments concern the powers in the Regulation of Investigatory Powers Act 2000 to allow HMRC to obtain an intercept warrant, under Section 5, and to carry out intrusive surveillance, under Section 32. The powers are available to use for preventing or detecting serious crime as defined by that Act. Amendments Nos. 120 and 121 do not disturb the effect of Schedule 11 to the Bill, which is to extend the use of those powers to all HMRC activities.

My amendment would confine the use of the powers to the prevention and detection of serious crime, hence removing the possibility that HMRC might use them in other circumstances by relying on one of the other purposes for which they may be used under the Act. The two other purposes are the interests of national security and safeguarding the economic well-being of the United Kingdom.

In Committee, the Minister said that HMRC, which can currently use the powers for just its former Customs and Excise functions, only ever applied for the use of the powers to prevent or detect serious crime. She said:

“HMRC does not apply to use the powers for national security purposes or to protect the economic well-being of the United Kingdom as HMRC’s functions do not include those purposes and an application would be inappropriate and no doubt unsuccessful”.—[Official Report, 27/3/07; col. 1615.]

The functions of HMRC are somewhat illusive. The Commissioners for Revenue and Customs Act 2005 basically says that the functions are to collect and manage taxes and that HMRC has all the functions that the former Inland Revenue and Customs and Excise had. We never managed to get a full list of those functions when we debated that Bill in 2005. HMRC’s website does not take one much further. It summarises what HMRC does by saying:

“We are here to ensure that the correct tax is paid at the right time”.

In Committee, I sought to argue that since the collection of taxes is a crucial part of the economics of government it was not difficult to see an argument that pursuing tax assessment and collection could be to protect our economic well-being. When pursuing taxes which are being evaded through serious crime, no issue arises. But I pose the question of the pursuit of tax avoidance—a wholly legal activity which involves no crime whatever. However, tax avoidance reduces the tax take, sometimes very significantly, and has the potential to harm the economic well-being of our country.

The Minister’s argument was that safeguarding the economic well-being of the UK relates to activity that is similar to the security of the state and was, hence, not available to HMRC. The Minister said that the powers could not therefore be used for tax avoidance. I put it to the Minister that the Act does not place this restriction on the use of the economic well-being powers.

I fully accept that the Minister does not believe that HMRC should use the powers other than in the context of serious crime and should not use them for tax avoidance. But I hope she will see that there is some ambiguity in the statute and that it would be better to remove that ambiguity in order to protect future generations.

In her letter to me of 25 April, the Minister pointed to the provisions of the interception of communications code of practice which makes an explicit link between economic well-being and state security, but that is only a code of practice and not the law. In addition, the code of practice for covert surveillance does not make the same link for Section 32 powers.

The Minister will know that my amendments would in no way affect the RIPA powers for any of the other agencies who might need to use them: we have no desire to do that. My amendments are modest, relate only to HMRC and would simply ensure that what the Government think should happen will in fact do so. I beg to move.

129: Schedule 12, page 103, line 6, leave out from “in” to end of line 8 and insert “each of the following provisions is to be read as a reference to 6 months—

(a) section 32D(8)(b) of the Audit Commission Act 1998 (c. 18) (as inserted by paragraph 2 of Schedule 6 to this Act);(b) section 64D(8)(b) of the Public Audit (Wales) Act 2004 (c. 23) (as inserted by paragraph 4 of that Schedule).”

On Question, amendment agreed to.

Schedule 13 [Repeals and revocations]:

130: Schedule 13, page 103, line 19, at end insert—

131: Schedule 13, page 103, line 27, at end insert—

132: Schedule 13, page 103, line 34, at end insert—

On Question, amendments agreed to.

133: Schedule 13, page 109, line 14, at end insert—

The noble Lord said: My Lords, Amendment No. 133 repeals a provision in the Wireless Telegraphy Act 2006 but amends a provision in the Commissioners for Revenue and Customs Act 2005. The Serious Crime Bill will repeal that provision in the Commissioners for Revenue and Customs Act 2005 as a result of the changes being made to the HMRC provisions in the Bill. As a result, that provision in the Wireless Telegraphy Act 2006 is, of course, no longer necessary. These are minor and technical amendments. I beg to move.

On Question, amendment agreed to.

Clause 80 [Extent]:

134: Clause 80, page 43, line 15, leave out paragraphs (a) and (b) and insert—

“(a) section 70(1) and (2); and(b) Parts 1 and 2 of Schedule 6 and section 65 so far as relating to those Parts.”

135: Clause 80, page 43, line 22, leave out “section 55” and insert “sections (Amendments relating to service law) and 55, Schedule (Amendments relating to service law)”

136: Clause 80, page 43, line 33, leave out subsection (4) and insert—

“(4) The following provisions extend to Northern Ireland only—

(a) section 70(3) and (4); and(b) Part 3 of Schedule 6 and section 65 so far as relating to that Part.”

137: Clause 80, page 43, line 34, leave out subsection (5) and insert—

“(5) Any provision of section 55 or Part 2 of Schedule 5 (and any corresponding entry in Schedule 13) has the same extent as the enactment amended, repealed or revoked by it except that—

(a) it does not extend to Scotland; and(b) paragraph 41A of Schedule 5 does not extend to Northern Ireland.”

138: Clause 80, page 43, line 38, after “Schedule” insert “(Amendments relating to service law),”

On Question, amendments agreed to.

Clause 81 [Commencement]:

[Amendments Nos. 139 and 140 not moved.]