The proposals, set out in a consultation which will last for eight weeks, would also allow the Office for National Statistics (ONS) to access detailed administrative data from government and the private sector to improve the way censuses and statistics are compiled.

The consultation also sets out how new legislation would allow data-sharing to tackle fraud and debt; let public bodies access civil registration data on births, deaths and marriages; and permit researchers to access anonymised data in “secure facilities” to carry out research for the public benefit.

Launching the consultation, Cabinet Office minister Matt Hancock said: “There is huge potential for improving citizens’ lives through data sharing in the UK. The consultation we launch today will help make sure we get data right and bolster security whilst making people’s lives better.”

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To protect data privacy, a new criminal offence for unlawful disclosure would be created, with a penalty of up to two years’ imprisonment, a fine, or both.

Two Codes of Practice would be produced – one on data-sharing for research and statistics, the other on public services – setting out if, how and when data can be disclosed.

The government wants the new legislation to cover “the widest range of public authorities possible”, including, in the case of fraud and debt reduction, private bodies that fulfil a public function. The codes would say that organisations using the data sharing powers should demonstrate they are “fit and proper to disclose and receive information”.

There are likely to be “additional safeguards regarding confidential personal information” where health and care data is to be shared, and the Cabinet Office will work with health officials to ensure that new legislation is in line with recommendations from the ongoing Caldecott review into data security.

The consultation also proposes that public authorities would be able to charge researchers to provide data, in order to cover costs, and that researchers would be need to be accredited by the UK Statistics Authority before they can access data.

And it also sets out the benefits of sharing data between public bodies across the UK, but since some of the proposed new powers are devolved matters, it stops short of giving a clear indication of whether proposals would impact authorities in Scotland, Wales and Northern Ireland.

“There are clear benefits to citizens and the devolved territories if powers to share information are exteneded across the UK,” says the consultation.

It adds: “Discussions with officials in the devolved administrations are on-going about how the needs of all territories can be best met by legislation.”