Data Protection and Digital Information Bill

Baroness Kidron Excerpts

Committee stage
Monday 22nd April 2024 Grand Committee

Debate on whether Clause 128 should stand part of the Bill.

[Baroness Kidron (CB)]

My Lords, I also submit that Schedule 11 should not stand part of the Bill. I note the amendments from the noble Baroness, Lady Sherlock, which seek to temper the impact of these powers, but they do not go far enough. To have these clauses in a Bill labelled “data protection” contradicts its very title. I thank the noble Baroness, Lady Chakrabarti, and the noble Lords, Lord Clement-Jones and Lord Kamall, for their support. The noble Lord, Lord Anderson, is detained elsewhere but he asked that I raise a number of his concerns. I am grateful for his experience, as I am for the legal opinion provided by Dan Squires KC and Aidan Wills of Matrix Chambers.

The provisions create new powers for the DWP to obtain information about the bank accounts of people who receive benefit payments by requiring financial institutions to monitor customers’ accounts, to identify cases that merit further consideration and to establish whether the relevant benefits are being, or have been, paid in accordance with the law. Paragraph 2(1) of proposed new Schedule 3B makes it clear that the information that can be requested is very wide indeed, although it is not specified.

Schedule 11 also sets out provisions that would allow the DWP to issue account information notices; those AINs would apply to any account into which benefits will be, are being or have been paid within the past year, as well as to any account linked to such an account. The account holder may be a person who is entitled to the benefit or a person who receives the payment on their behalf, such as a parent, partner or carer. It may also include a joint account holder or, where housing benefit is paid direct, a landlord and all their related accounts.

All benefits, both those that are means tested and those that are not—child tax credit, the state pension, personal independence payments, the disability living allowance, working tax credit, universal credit and the employment and support allowance—are in scope. Counsel’s advice is that it is

“reasonable to assume that AINs will be issued on a rolling basis to most financial institutions which provide banking services and, in order to comply, financial institutions would need to subject most, if not all, of their account holders to algorithmic surveillance”.

Counsel also found that an AIN being issued to a particular financial institution would almost certainly be secret, to avoid tipping off account holders, and that the criteria triggering a search would also be kept confidential.

The Social Security Administration Act 1992 already contains powers for the Secretary of State to compel banks and others to provide information in order to ascertain whether a benefit is being paid correctly, as well as to prevent, detect and secure evidence of benefit fraud—that is to say, the DWP already has these powers if it has reasonable grounds to suspect that fraud is taking place. What is proposed is that the DWP no longer has to have a suspicion of wrongdoing but can survey vast swathes of the UK population without their knowledge in order proactively to surface cases that may or may not merit further consideration.

The legal opinion is also pretty damning on whether the powers contravene Article 8 on the possibility of extremely private information—such as on political allegiance and sexuality—being accessed, and it is equally damning on both the practicalities and the lack of oversight. If the noble Lord, Lord Anderson, had been with us, he would have made the following points. First, this is a power to collect highly sensitive personal information in bulk. Such powers exist under the Investigatory Powers Act but are attended by an array of statutory safeguards, ranging from authorisation of the original warrant, which must be approved by an independent judicial commissioner, and checks on the level of material requested to other issues such as record keeping, retention, dissemination and destruction, error reporting and a right to reply to the Investigatory Powers Tribunal. Few, if any, of these safeguards exist in the Schedule 11 power.

Secondly, the full extent and significance of the power will be apparent only once there is a code of practice. However, there is no draft code of practice and no commitment to produce one; there is merely a discretion. This is in sharp contrast to the Investigatory Powers Act, where key excerpts were made available in advance of Committee in both Houses. The impact of Schedule 11 on privacy is arguably much greater, yet we have seen no draft code of practice—indeed, we cannot be sure that a code of practice will be issued at all.

Finally, Schedule 11 contrasts with HMRC’s much more limited power to access information and documents for the purpose of checking a taxpayer’s tax position or collecting a tax debt. Under paragraph 4A of Schedule 36 to the Finance Act 2008, HMRC has been able to authorise a financial information notice on an individual, but not on a bulk basis. An FIN, unlike an AIN, must name the taxpayer to whom it relates. The most recent corporate report records that only 647 FINs were issued in the year to March 2023—an insignificant number in relation to the proposals in front of us. I hope that, when he responds, the Minister will be able to explain why investigating tax fraud is so carefully and narrowly constructed, whereas the DWP measures that will impact many more millions of people, a significant proportion of whom do not even receive benefits, are so broad.

On the day I tabled my amendments, I received an email from a woman who cares for her adult son with complex needs. She has a bank account to receive his benefits, from which she pays for his care. Under the terms of the Government’s proposal, all her bank accounts would be connected to his payments and therefore open to monitoring. Caring for an adult child is a heavy burden for a parent. Many parents do it with a love-filled grace that is humbling to witness, but it is a task that is out of season with the life that most of us live and all of us expect, in which children grow up, leave home and, as our strength wanes, come to our aid. It is also a service that the Government—and, by extension, all the rest of us—rely on.

In 2023, the University of Sheffield and Carers UK estimated that unpaid care, largely from family members, saved UK plc a whopping £162 billion a year, dwarfing the £120 million the Government expect to retrieve by these measures. It is nothing less than cruel to make a claimant or carer anxious, let alone homeless. But, if I cannot appeal to the Government’s compassion, I hope they will consider this: some who have contacted me suggested that they would no longer be prepared to continue to hold accounts on behalf of others; others suggested that their landlords would not be prepared to let them rent; and one said that their mental health had already suffered at the prospect. How many families need to put caring responsibilities back on the state, how many landlords need to make people on benefits homeless and how many people need to seek support from mental health services before the advertised gains are eroded?

For the life of me, I cannot work out whether these measures are intended to hurt or whether a focus on the shiny prospect of AI to sort out the DWP’s problems led incrementally to this place. Whichever it is, the measures are cruel to a degree that should worry us all. In a later group of amendments, we will discuss the capacity for technological systems to malfunction. Horizon might be top of mind, but Nationwide, McDonald’s, Tesco, Sainsbury’s, Greggs, 999, air traffic control and public bodies, including the NHS and DWP, have all experienced technology failures where service provision suffered.

I am not against technology—we live in a world organised by technological systems—but introducing a system that may impact the finances of up to 40% of the UK’s population, including the most vulnerable, the poorest and the oldest, without checks and balances and, indeed, while downgrading the protections on automated decision-making, is dangerous.

Can the Minister can tell the Committee what plans the DWP has for when things go wrong, when people have benefits stopped and their children go hungry because the computer says no? Can he tell us how it will prevent a repeat of the hounding of so-called fraudulent payments, as is currently being reported in relation to the carer’s allowance, until people lose homes, jobs and mental health as a result of overpayments? In many cases, they were the department’s own fault and, in one case, involved as little as 30p a week. What has the department learned from a similar Australian scheme that, over 12 months, resulted in 1 million additional welfare payments being stopped, often without warning and notified by text with no human to complain to? That scheme dissipated as it became unworkable.

--- Later in debate ---

[Baroness Buscombe (Con)]

When the noble Baroness says, “more targeted”, is what way are they more targeted? That is what I would like to know.

[Baroness Kidron (CB)]

They relate to individual people by name, not whole sweeps of people who have done nothing wrong but get a particular benefit.

[Baroness Chakrabarti (Lab)]

What I am advocating to the Committee is that, in terms of our approach in this country to everyone in either category—or to people who are sometimes in both categories because they are, for example, entitled to some universal benefits but none the less must pay tax on their earnings, inheritance or whatever—the appropriate approach is a targeted approach beginning with at least some reasonable suspicion that a person’s financial matters are a cause for concern. Once there is reasonable suspicion—not even hard proof—because of their activities, that should be the trigger for an intrusion into their affairs. We have had that approach to privacy in this country for a very long time; it is the approach that, broadly speaking, is entrenched in Article 8 of the convention. Even if one does not like human rights conventions, it is none the less a tradition that people in this country—not just lawyers—have long understood.

Further, and in reference to the remarks attributed to the noble Lord, Lord Anderson of Ipswich—who is not in his place, which is the reason why I am also risking being sensible—it is absolutely flabbergasting that there are greater checks and balances for investigating matters of national security than for investigating what could be minor benefit fraud. An example is the allegation that the person giving a Christmas present to their pensioner relative or their relative who is not able to work should trigger a response in the algorithm that this is somebody who should no longer be worthy of the benefit or who, worse still, should face criminality or even potential incarceration.

I cannot say how horrified I am that the Government should have proceeded with a measure of this kind even as we still learn about the extent of the injustice perpetrated on the postmasters. After what we are just beginning to understand about the postmasters, I cannot understand why the Government would allow this kind of discriminatory intrusion to be turbocharged by AI and inflict the potential for the same type of injustice—not just for a limited cohort of people who were unfortunate enough to be serving their communities by working as postmasters—on millions of people in the United Kingdom.

This is what Committee on a Bill is for. I will therefore calm myself in the knowledge and belief—and certainly the hope—that, in his response, the Minister will at least offer to meet with Members of the Committee who have put their names to the clause stand part notice from the noble Baroness, Lady Kidron, and with campaigners and experts to hear a little about the detail of the concerns and to compare this provision with the other provisions, as the noble Baroness, Lady Buscombe, suggested in relation to national security, or indeed for tax fraud. Nobody is suggesting that fraud should be perpetrated with impunity, but we must learn from the mistakes of injustices already perpetrated. They are perpetrated because of blanket trust in the authorities and AI and a lack of checks and balances. There were plenty of humans in the loop at the Post Office, but that is not enough. This is a sweeping power that will lead only to intrusion, discrimination and the worst kind of injustice. In the meantime, before that moment even comes, millions of people will live in fear.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

I have a response to the question from the noble Lord, Lord Clement-Jones, about signals. The signal is where the criteria or rules for benefit eligibility appear not to be met, and Parliament will have agreed those rules.

[Baroness Kidron (CB)]

My Lords, the Committee will be grateful to hear, I hope, that I will not try to capture such a rich conversation. I thank the Minister for his careful listening and consideration. I will read carefully what was said at the Dispatch Box and what is about to be said during our discussion on the next two groupings because, without seeing all that in the round, I cannot truthfully say whether the questions asked by noble Lords have been answered.

I share a little of the concern that I can see agitating the noble Lord, Lord Clement-Jones, about the words “signals”, “criteria” and “codes”, which are not promised in the Bill but are suddenly appearing. Indeed, the Minister will remember that, in a private meeting, we talked about how those criteria might be gamed and, therefore, how detailed they could possibly be. There may still be some differences of opinion, and possibly differences of practice, that need to be worked out.

Of course, for now, I will not press my opposition to Clause 128 standing part. I welcome further conversation between now and Report but, I have to say, I lost count of the number of times noble Lords have said “proportionate” in this debate and how many times the issues of scope, sweeping powers and so on were stated by some very expert people—both in and outside of this Room, not simply noble Lords.

The noble Baroness, Lady Buscombe, mentioned a pilot but I seem to remember that some of the outcomes on equality in that pilot got lost in translation. Perhaps it would be good to find out exactly what the pilot did and did not reveal—that is, not just the things that the department would like to reveal but some of the things that were not tested.

I do not doubt the personal integrity of the Minister in the slightest but I am unsure about the idea that the “test and learn” approach has no boundaries around it in the Bill. It is like saying, “Trust us. We test and learn, and all those powers exist”. With that, I will withdraw my stand part notice on Clause 128, but we have quite a lot of questions still to answer in our discussions on the next group of amendments and beyond.

Clause 128 agreed.

--- Later in debate ---

[Baroness Lister of Burtersett (Lab)]

My Lords, I intervene very briefly. I thank my noble friend who, with her usual forensic clarity, identified some really important points. The last one in particular is very worrying. I have a question. It may be that I misheard what the Minister said in response to the last set of amendments. I thought I heard him say that child benefit would not be included, but it appears to have been on the list that was given to my noble friend. Of course, the point is partly that it is administered by HMRC, but it has replaced child tax allowances, so it should be treated in the same way as a tax allowance when it comes to this purpose—so I hope that I heard the Minister correctly and that child benefit will not be included.

[Baroness Kidron (CB)]

My Lords, in relation to the excellent speech of the noble Baroness, she mentioned “personal” accounts. I would like to double-check that business accounts, charitable accounts and other accounts that have one’s name or one’s partner’s name on, or are connected, do not go on ad infinitum.

[Lord Davies of Brixton (Lab)]

Because of the way the amendments are grouped, I have the opportunity to repeat my questions. The first one is relatively straightforward. Does the Minister accept that introducing these provisions—obviously we are talking about Amendment 234 on pensions—will discourage people from claiming pension credit? Despite all the efforts of the Government to encourage people to claim pension credit, clearly this will discourage them. Have the Government made any effort to estimate what impact this will have? Obviously, it is a very difficult task, but have they thought about it and does the Minister accept that it will have a deterrent effect.

My second question relates to the issue I have already raised. The state pension or state pension equivalent is paid by the state, by a pension fund or by a personal pension provider. Does the Minister think it odd that there is a difference in treatment? Everyone is receiving their pension from the state, but with a person who receives their pension from a private pension scheme or personal pension provider there is not the same right to look at their bank accounts in relation to those benefits. Now I am not advocating that as a solution. The question is: does this not indicate the illogicality and extent of the Government’s powers over some people’s incomes that they do not have over other types of income? To me, particularly when it comes to the payment of a pension—a benefit paid as of right—this discontinuity points to the extent of the Government’s overreach.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

The Government do wish to have that power. I should make it clear that an appointee could be a claimant as well, so there is a dual issue. It is important that we retain that power, to be sure that we cover the whole ground. But I will reflect on the noble Baroness’s point.

[Baroness Kidron (CB)]

There were a number of questions on the other group that related specifically to people’s willingness to take these roles on and what the unintended consequence of putting appointees and carers in this position might be for the DWP, with people saying, “Actually, not me, then”.

[Viscount Younger of Leckie (Con)]

The noble Baroness makes a very good point. I may be able to give her further reassurances in a letter because, on the one hand, we do want the power to be able to cover the ground. On the other hand, there are necessary protections that we must put in place. So further reassurances probably need to be given. There is that balance to be struck, but I hope I can continue to do that.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

I will add to that the issue of overseas bank accounts. I cannot see how the British Government can apply this measure to them. Will this not push people to go to overseas bank accounts? Or will the Government try to pursue them through challenger banks—including multiple accounts from one person who may have one original, normal current account here?

[Baroness Kidron (CB)]

How many accounts of “signalling” already exist in the current backlog in the business-as-usual version? What kind of investment will it take when you supercharge these powers and get many more tens of thousands of signals?

[Lord Vaux of Harrowden (CB)]

I will add to the Minister’s grief. He has talked a number of times about the limited information that will be provided to the DWP, but that is not what the Bill says. The Bill refers to

“such further information in connection with those accounts as may be specified”.

There is no limitation in the Bill to the information that the DWP can request from the bank—assuming that it is a bank, after my previous question. I am struggling to understand how we get from that to “limited”.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

I will finish this answer, if I may. The DWP personal information charter lists banks and financial institutions, and other parties, among the parties with which DWP may share data and from which we may receive data. It also lists checking accuracy and preventing and detecting fraud among the purposes for which we may share or receive information.

A claimant will not be notified if their account details have been returned to DWP by a third party as that could alert fraudsters to the criteria, enabling them to evade detection—I think that is a valid point—but they will be notified if a DWP agent determines that a review is required as a result of the information provided by the third party. That notification will be done through the business-as-usual processes.

Moving on to defining working-age payments in legislation, which relates to the final amendment in this group, Amendment 235, which was tabled by the noble Baroness, Lady Sherlock, it would require the Government to specify in regulations the working-age benefits with which this power could be used. As she demonstrated, there is a wide range of benefits and therefore potential avenues for fraudsters to seek or exploit or for error to creep in. That is why it is important that the power enables the department to respond proactively as new fraud risks emerge.

That said, as the noble Baroness knows, the power will not be exercisable in all the benefits she listed—I took note of her long list—such as child benefit, which we have just mentioned, because the legislation is drafted in such a way that it could reasonably be exercised in relation to benefits for which the Secretary of State is responsible. I reassure the noble Baroness, Lady Sherlock, and the Committee that in the first instance, we plan to use this with universal credit, employment and support allowance—ESA, pension credit and housing benefit. That is the way forward.

There may be a number of questions that I have not addressed, but I hope that I have continued to make the case for why this measure is so important and our aim to tackle fraud and error. I continue to make the case that it is proportionate and that proportionate safeguards are in place. With that, I hope the noble Baroness will agree to withdraw her amendment.

[Baroness Kidron (CB)]

Will people with power of attorney over the account of someone who receives a benefit also be caught up in all this? That is another vulnerable group, so this could be extensive and quite worrying. Secondly, I am concerned by the Minister’s answers on this group. They have made me feel somewhat more strongly than I did when giving my response on the previous group, so I feel I should put that on the record.

[Viscount Younger of Leckie (Con)]

That is understood. I know that I need to provide further reassurances. Attorneys are included for the reasons that I set out for appointees.