Opponents to the plans argue that it will permit massive snooping exercises by Government which are not the result of specific suspicions or inquiries.
A data protection expert said that though some of the measures must comply with existing data protection codes of practice, new powers are not subject to specific codes or guidelines.
"The Audit Commission exercises have to be subject to the Data Protection Code of Practice, and that will be the same one that is in place now," said Rosemary Jay, a data protection specialist at Pinsent Masons, the law firm behind OUT-LAW.COM.
"But the safeguard provisions in sections 61 and 62 are very patchy and will give rise to a lot of debate and a lot of concerns. It says it must be subject to the Data Protection Act but there is no requirement to have a code of practice, detailed guidance or supervision by the Data Protection Commissioner," she said. "It completely removes the protection of confidentiality."
Civil liberties pressure group Liberty said that the new law allows for previously illegal general trawls for information rather than searches specific to an investigation. "New measures include data matching powers which will allow electronic ‘fishing expeditions’ not based on suspicion or intelligence," said a Liberty statement.
The new measures are designed to make it easier to detect and punish fraud and serious crime. The data matching process is designed to look at a number of different databases to detect patterns which might indicate that fraud is taking place.
Currently, a fundamental principle of data protection law provides that information gathered for one purpose and by one agency is not used for another purpose and by a different agency. That principle will no longer apply once the Bill is passed.
The Bill also opens the door to private sector information being included in searches. Government searches will be permitted to trawl through records provided by banks and other companies, but the Government will not be permitted to demand access to such information.
"At least they have drawn back from requiring building societies and banks to disclose information about people's finances," said Jay.
As well as the data matching exercises to be conducted by the Audit Commission, the new Bill allows the public sector to disclose information including personal data to the private sector in the form of specific fraud avoidance organisations such as the Credit Industry Fraud Avoidance System.
"Very broad powers have been given to the Secretary of State, and that will cause a lot of concern amongst human rights activists and lawyers and civil liberties groups," said Jay. "I think we can expect some lively debate."
The Government defended its move against accusations that it was eroding civil liberties. "We are committed to providing the best possible tools for our law enforcement agencies to ensure they stay one step ahead of those who commit serious crime and these tough new measures will strengthen their ability to crack down on criminals and disrupt their operations," said Home Office minister Vernon Coaker.
To match the increase in data sharing the Bill introduces an increase in penalties for abuse of that power. For the first time the threat of imprisonment has been introduced in cases of wrongful disclosures of data.
