Arrangements for Payments in Respect of Information

Clause 4 – in the House of Commons at 4:15 pm on 1st May 2001.

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Photo of Jacqui Lait Jacqui Lait Conservative, Beckenham 4:15 pm, 1st May 2001

I beg to move amendment No. 20, in page 8, line 21, at end insert— '(g) any person not falling within paragraphs (a) to (f) above but who falls within one of the categories of section 109B(2A) of the Administration Act.'. The amendment relates to payment for compliance with obligations to provide information. Throughout our debates on the measure, the Government have constantly underplayed its potential cost to business. The Secretary of State for Social Security said that he thought that the annual cost of providing information to a bank was estimated as just over one hour of its profits. Indeed, that was reiterated in Committee by the Minister of State. That was a rather light-hearted approach to a serious problem.

The provisions on payment for the supply of information are that the Secretary of State may make payments for information obtained from credit reference agencies. It is a shame that the provision will not include CIFAS, but we may get around to that. There is discretion to make payments to telecommunications providers in cases where they will be asked to perform a unique processing service. Payments may also be made to utility companies for bulk information—they are the only organisations that will be required to provide such information.

There is also a provision whereby the Secretary of State may make payments where he considers that reasonable, but need not do so if he considers such payments inappropriate. Several organisations have expressed concerns to us about that provision—some of which relate to estimates of the actual costs that they are likely to face. The British Bankers Association stated: Banks found it possible to scope the cost of performing individual searches". That is a ghastly use of the word "scope"; I always thought that it was a noun. The association notes that the cost would depend on the quality, the accuracy and the amount of information provided by the DSS. One bank estimated … in excess of £500,000. There are signs that the DSS and local authorities will enter negotiations with telecom service providers to decide when payment is appropriate and how much will be paid. We welcome that. However, there is still concern in the telecoms industry that payments to reimburse the cost of providing information manually have yet to be agreed. That remains a worry to many small and medium-sized telecoms companies. I should appreciate reassurance that the Government have taken that point on board.

Amendment No. 20 tries to provide a system whereby any business or organisation that may be required to provide information can claim financial redress.

Photo of Steve Webb Steve Webb Shadow Spokesperson (Work and Pensions)

I support the amendment. The categories of information provider to whom payment may be made seem somewhat arbitrary. Reasons have been given, but seem to have been plucked from the air. It is reasonable that people who help the Government by providing information should receive compensation for the cost of doing so, especially if there is little reciprocal flow of information—although there may be more than we expect. The hon. Lady has picked up an unfortunate omission in the Bill, for which no good excuse has been offered, so I support her proposal.

Photo of Angela Eagle Angela Eagle Parliamentary Under-Secretary (Department of Social Security)

We debated this issue in Committee, so it may not surprise Opposition Members to hear that we have not changed our mind about it. Obviously, we keep an open mind, and after the Committee debate we re-examined extensively all our thinking on the matter but, funnily enough, we came to the same conclusion that we reached when the Bill was drawn up.

I understand the worries of organisations about Government-imposed costs, but we need to put the provision into perspective. For some of the largest banks, the estimated cost is £7.6 million—that is less than an hour's profit for one of them. There are some reasons for banks to co-operate with us regardless of whether they are reimbursed.

First, they need to demonstrate that they are good corporate citizens. That is certainly a good thing for them to do, given their profits and public image. Secondly, all companies benefit from operating in a well-regulated society, with the rule of law, where obligations are placed on organisations. I should have thought that, today of all days, it is important for us and the banks to make that point.

It is in everyone's interest as taxpayers—corporations pay taxes, as well as individuals—to take responsibility for ensuring that we minimise the chances of fraudsters being successful in their attempts to rip off the private sector or the public sector. We all have an interest in ensuring that loopholes are closed and that circumstances are created in which we can chase the fraudsters as effectively as possible.

We shall not ask for unreasonable amounts of data. I hope that we have reassured organisations that we will not make unreasonable demands. We shall seek to make our inquiries in such a way as to minimise their costs. We have given commitments that businesses will not be required to invest in special software, except in the extraction of bulk information on the utilities, where we shall meet the cost. They will not be required to obtain information especially to meet inquiries, or to store information differently or for longer than they do already.

I should like to reassure businesses that they need not fear the powers and to emphasise that it is right and proper for businesses that enjoy the advantages of trading in this country to help to defend taxpayers' money and to assist us in our fight against fraud, which may spill over from the public sector to the private sector.

Photo of Jacqui Lait Jacqui Lait Conservative, Beckenham

Will the reimbursement for information inquiries be covered in the consultation on the code of practice?

Photo of Angela Eagle Angela Eagle Parliamentary Under-Secretary (Department of Social Security)

The Bill states that there are circumstances in which we shall pay. For example, we shall pay when we require information from organisations, such as credit reference agencies, that exist to sell that information. However, as my right hon. Friend the Minister of State has said, we have been able since the 1940s to require information in certain cases, and have never paid. We will always listen to those organisations that want to make representations to us, and they can clearly do so as part of the consultation on the code of practice.

I hope that, throughout the debates on the Bill, we have explained how we envisage the system of payments for information. Basically, we shall pay those who sell the information that we require. However, we do not expect to pay those from whom we have received information—for example, on collusive employers—in the past, nor do we expect to pay for information from banks, but we shall not make unreasonable demands of them or increase their costs by the way in which we operate the system. Of course, we are always happy to listen to the arguments and observations of those in the private sector with whom we wish to co-operate.

Photo of Jacqui Lait Jacqui Lait Conservative, Beckenham

I am grateful to the hon. Lady for her assurance that those who still have concerns about the cost of compliance can include them in the discussions. I am somewhat concerned that the Government think that they should not pay for the extra burdens that they have put on business, but that is typical of this Government. One of the main complaints that I receive from businesses in my constituency is about the increase in the burden of red tape and the costs of compliance. However, on the ground that they will have the opportunity to be consulted and, I hope, to negotiate a solution to the problems, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.