If the noble Lord will allow me, I would like to make some progress and I hope that this will come out in terms of what we may be seeking on a limited basis.
The first third parties that we will designate will be banks and other financial institutions, as the Committee is aware. We know that they hold existing data that will help to independently verify key eligibility factors for benefits.
This clause does not give DWP access to any bank accounts—a very important point—nor will it allow DWP to monitor how people spend their money or to receive sensitive information, such as medical records or data on opinions or beliefs.
As the noble Baroness, Lady Sherlock, mentioned—I want to try to answer one of her questions—this power cannot be used to suspend someone’s benefit. Cases that are flagged must be reviewed under existing processes and powers—business as usual, which I mentioned earlier—to determine whether incorrect payments are being made.
Our approach is not new. HMRC has long been using powers to request data at scale from banks on all taxpayers under Schedule 23 to the Finance Act 2011. Our approach carries similar safeguards. Tax fraud is no different from welfare fraud and should be treated similarly. This was a key point that the Prime Minister made only on Friday when he committed to bring DWP’s fraud and error powers more in line with those of HMRC. This is one clear area where we are seeking to do this.
This allows me to go on to very important points about safeguards. Not all the cases found through this power will be fraud. Some will be errors which the power will help to correct, preventing overpayment debt building up. Some cases may also have legitimate reasons for seemingly not meeting eligibility requirements, for example where claimants have certain compensation payments that are disregarded for benefit eligibility rules. In those cases, no further action will be taken. Our robust business-as-usual processes will ensure that all cases are dealt with appropriately.
Another question raised by the noble Lord, Lord Vaux, on safeguards was to do with the legislation. A key safeguard is that we cannot approach any third party either; there must be a three-way relationship with the department, the claimant and the third party. This safeguard will narrow the use of this power substantially and ensure that it is used proportionately, as these three-way relationships are limited, meaning that data cannot be gathered at scale from just any source for any purpose. Any third party we will want to get data from will need to be designated in affirmative regulations that noble Lords will have an opportunity to scrutinise. These regulations will be accompanied by a code of practice. We will be bringing that forward, and we will consult on the code before presenting it to Parliament—which answers a question raised by, I think, the noble Baroness, Lady Kidron.
The power also ensures that we can request only very limited data on benefit recipients. I think this addresses a point raised by the noble Lord, Lord Vaux. We must work with key third parties to define what is shared, but our expectation is that this would be a name and date of birth or a unique payment number, along with the eligibility criteria someone has matched against: for example, a benefit claimant who has more savings than the benefit rules would normally allow.
Outside controls will apply here, too. DWP already handles vast amounts of data, including personal data, and must adhere to the UK GDPR and the Data Protection Act 2018.
On the point, which again was raised during this debate, about the remarks made by the Information Commissioner’s Office and its updated report on this measure, published as Committee started and which the Committee may be aware of, I was pleased to see that the commissioner now acknowledges that the third-party data measure is in pursuit of a legitimate aim, stating:
“I understand and recognise the scale of the problem with benefit fraud and error that government is seeking to address and accept that the measure is in pursuit of a legitimate aim. I am not aware of any alternative, less intrusive, means of achieving the government’s stated policy intent based on their analysis”.
I think that is a significant point to make, and it is a point with which I very strongly agree.