Serious Crime Bill [HL]

It is consistent with the second data principle. We have been careful to consult the Information Commissioner throughout this process to ensure that he is content that his powers in relation to these issues will prevail. Therefore, to return to this Committee stage, and directing my attention to the amendments, I shall deal with the amendments in the name of the noble Baroness so that I can, I hope, demonstrate why her concerns and fears are not set out. I will take a little time over doing so because I understand that this begins to the set the framework for our discussions from now on. The noble Baroness and the noble Lords propose that the purposes for which data sharing and matching are undertaken should be narrowed. That is the purport of these amendments; it is not for the prevention and detection of possible fraud but forthe detection of actual or attempted fraud. That is the drive. These amendments strike, therefore, at the objective that these provisions seek to achieve. I will attempt to explain why this is so. Prevention is a fundamental plank in the fight against fraud or, indeed, any crime. I would hope that noble Lords would agree that prevention is better than cure when there is a threat of criminal activity. Public authorities receive numerous applications for services and benefits. This clause is addressed to helping to prevent fraudulent applications to these public authorities. The difficulty for them is in identifying the fraudulent from the true. Setting the threshold at the level suggested by the amendment would mean that public authorities would not be able to check the seemingly honest application against any information held by an anti-fraud organisation. That plays directly into the hands of fraudsters who will, by their nature, seek to conceal their attempt. It would defeat the clause’s purpose and whole object. I do not know if that is the intention of the noble Baroness; given her traditional approach to these matters I would be deeply surprised if it was. The type of fraud prevention that the clause seeks to allow is well established in the private sector. Ifwe apply for banking services our applications will routinely be checked to ensure that we have not previously submitted fraudulent applications. The Government do not see why it should be any different for applicants for benefits and services provided by public authorities. In relation to AmendmentsNos. 110C and 116A, if the reasons for undertaking data matching were extended to include crime more generally—by means of the order-making power provided for in new Section 32G(1)—it is proposed that this should be for the detection of actual or attempted crime. The removal of the reference to preventing fraud would mean that the Audit Commission would lose the opportunity to use data matching to identify risk areas, where systems are open to abuse and need to be improved. It is a key role of an auditor to identify such risks. The national fraud initiative has to date played an important rolein helping auditors to discharge this aspect of their statutory duty. They have been congratulated on the efficacy of their work. Furthermore, it is unclear what exactly the noble Lords and the noble Baroness seek to achieve by this amendment. The national fraud initiative currently identifies real fraud—£111 million of it in the 2004-05 cycle. That is real and substantial. We would be loath to take a retrograde step that failed to enable us to stamp this out. It is possible, however, that the noble Baroness intends this amendment to have the effectof enabling the Audit Commission to undertakedata matching only when it is known that actual or attempted fraud has occurred. If so, it reflects a fundamental misunderstanding of what data matching is designed to do. If I have interpreted this amendment correctly, the noble Baroness has based it on the assumption that the Audit Commission or the participating bodies will know from the outset whether there has been any actual or attempted fraud or crime. The whole purpose of data matching exercises is to identify anomalies that we would not otherwise know about. There can then be further investigation to establish if any actual or attempted fraud has been perpetrated. That is the methodology if one looks at the initiative engaged in now, and which has proven to be so successful. I say only briefly now—I will make this point again later—that if a body already knows that there has been fraud or attempted fraud, there will be no need for it to participate in data matching at all. Amendments Nos. 106A and 107A stand in the names of the noble Lords, Lord Henley, Lord Dholakia and Lord Burnett, and the noble Baroness, Lady Anelay, and so are backed by a joint force. They have also suggested that the anti-fraud-organisation information sharing covered by Clause 64 be limited to the detection of actual or attempted fraud rather than to the prevention of it. These amendments are a continuation of the amendments that the noble Lords propose to Clause 61. On that clause, I hope that I explained the difficulties that we envisage if the formulation of ““detecting actual or attempted fraud”” was substituted for ““preventing fraud””. The cover which is provided by Clause 64 is intended to apply to the form of data sharing envisaged by Clause 61. There should be consistency between the terms used. For these reasons we resist the amendments. However, I am very grateful to the noble Baroness because she has enabled us to explore the framework within which the following amendments sit. We may deal subsequently with the issue of notification and the second data protection principle. That issue was raised by the noble Lord. I can deal with it now but it may be more convenient for us to deal with it in its place.