Serious Crime Bill [HL]

The noble Lord will know that the Audit Commission can identify areas which can then be offered to bodies to scrutinise to see whether there is any irregularity. That is how the data-matching initiative works. It is not a means by which illicit activity is specifically identified. It simply identifies areas which then would deserve scrutiny by the appropriate body. So working on the debate we had on the previous occasion this arose, it is important to get the right people to look at whether there is improper behaviour. However, that is not the function of the initial matching. As I was saying, these new provisions will allow cross-border activity with the Auditor-General as it is deemed appropriate. The noble Baroness has foreshadowed that Iam going to resist her amendments to the Bill. Amendment No. 106 would achieve the same effect as government Amendments Nos. 129A and 132A which we will come to in their place. I understand why the noble Baroness is moving her amendments now. It is easier to deal with them at this point, although logistically the amendments put forward by the Government fit the Bill a little better. I shall therefore speak first to Amendment No. 105. This amendment suggests changing the order-making power provided in Clause 61 from the negative to the affirmative resolution procedure. The specification of the anti-fraud organisation is inherent to the entire section. Without it, the data sharing we propose to enable for the purpose of detecting and preventing fraud could not take place. I would like to reassure the noble Baroness that any body chosen will not be chosen lightly. We will have a process by which we can scrutinise the functions of the body and how it will operate. Indeed, one of the issues for us now is that we think we need greater flexibility than the rigid prescription currently provides, and we have therefore identified the sort of agency we have in mind in terms of CIFAS. The issue will be looked at with the greatest of care. Further, the requirement of this body and any other bodies sharing information through the designated anti-fraud organisation to comply with the Data Protection Act necessarily limits the scope of the sharing that can take place. Complying with the Data Protection Act automatically attracts the oversight of the Information Commissioner. This is the fundamental safeguard for the operation of the specified anti-fraud organisation, and it is hard to see what additional safeguard would be brought in by making its specification subject to affirmative resolution. The Select Committee on Delegated Powers and Regulatory Reform has also examined this clause and declared that it represents the appropriate level of parliamentary scrutiny, and we respectfully agree. In the circumstances, I hope that the noble Baroness will feel that she has probed sufficiently in this regard. I turn now to Amendment No. 106, which suggests an amendment to the order-making power provided in Clause 62 allowing information other than that of HMRC to have the added protection of the offences provided for in this clause. The noble Baroness referred to the fact that the Delegated Powers and Regulatory Reform Committee, in its fifth report of the Session, felt much as she does about these order-making powers. I am grateful to her for refreshing our memory of the basis on which the committee came to its view. It felt that the definition of protected information is central to the working of the scheme and went on to say that whether or not the information is protected by Clause 62 from onward disclosure, it may impact on the extent to which public authorities will share that information. It also saw the broadening of the definition as extending the scope of the criminal offence. The committee therefore felt that such an order should be subject to the affirmative resolution procedure. I know that the noble Baroness will be delighted to hear that we are persuaded by these arguments, and it was on that basis that we tabled government Amendments Nos. 129A and 132A. These will give effect to the wishes expressed both by the committee and the noble Baroness. Together with her noble friend Lord Henley, the noble Baroness proposes that the anti-fraud organisation referred to in Clause 64 should be designated by order and subject to the affirmative resolution of each House of Parliament. It might be helpful if I explain in a little more detail Schedule 3 to the Data Protection Act and the proposed amendment to it made in Clause 64. Schedule 3 sets out the: "““Conditions relevant for the purposes of the first principle: [the data protection principle] processing of sensitive personal data””." It provides a list of circumstances, one of which must be fulfilled, if the data is to be regarded as being processed fairly and lawfully. Clause 61 provides a gateway for the sharing of information through an anti-fraud organisation for the prevention of fraud. However, not all public authorities will use the power conferred by Clause 61. There will be some which do not require recourse to it. As a consequence, Clause 64 has deliberately been designed to be ““at large”” to ensure that any sharing of sensitive personal information for the purposes of preventing fraud is lawful under the Data Protection Act. If this clause were limited to only a specified anti-fraud organisation, it would not cover that information being shared outside the powers provided by Clause 61. Having listened carefully to the noble Baroness, both during this debate and in the past, I know she would wish to have any such sharing of personal data done in a way that would be consistent with the Data Protection Act and indeed be entitled to the proper scrutiny that Act creates. The noble Baroness made an interesting suggestion about amending Section 70 of the Data Protection Act to include a definition of ““specified anti-fraud organisations””. There would be little point in adding such a definition as the expression does not occur in the Act, but I understand the reasons why she makes that suggestion. I hope I have been able to reassure the Committee that the process we have adopted has been fair. I also reassure the House that the Information Commissioner’s formal response to the consultation paper endorsed the approach taken to improving data sharing. We have since had discussions with the commissioner’s office and will continue to involve it in the development of these policies. Indeed, my honourable friend Vernon Coaker in another place met the Information Commissioner on 25 January to discuss the Bill in detail, and the commissioner will be consulted on any codes of practice produced to guide these proposals. I hope that reassures the noble Baroness. We do not believe we are overburdening him in this regard, and neither do we criticise her for highlighting those areas where his support might be helpful.