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Michael Willis, minister of state for the Ministry of Justice, said that a privacy review would be crucial for keeping public confidence. "We are wholly sympathetic to the purpose of it," he said.
Tony McNulty, the Home Office minister of state for security, counter-terrorism, crime and policing, was more cautious, but said that the idea was worth investigating.
He told the Lords' Constitution Committee, "Especially on areas of real sensitivity, it is a point worth exploring. But we have got to think about the practicalities as well".
Members of the committee criticised the government for using secondary legislation, which does not require a parliamentary debate, to push through plans to hold more data on citizens.
McNulty told the committee he was sympathetic with the Information Commissioner Richard Thomas's comment that the UK could be "sleepwalking into a surveillance society".
"There is a potential [for this happen] if we do not do things in the right fashion. We are struggling with how to deal with the very positive benefits of new technology and the interface of this with individual's privacy. It is a warning we would do well to heed."
"There is an increasing culture of being alive to the impact of surveillance and data collection. We are getting a principle of greater data minimisation," he said.
But he said the idea we were heading into 1984-style society is "nonsense".