Public Authorities (Fraud, Error and Recovery) Bill
Tuesday 21st October 2025
(1 day, 21 hours ago)
Lords ChamberPublic Authorities (Fraud, Error and Recovery) Bill 2024-26 View all Public Authorities (Fraud, Error and Recovery) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 114-II Second marshalled list for Report - (17 Oct 2025)
Baroness Sherlock
“(aa) section 80AA (restrictions on use of further methods),”Member's explanatory statement
This amendment is consequential to my other amendment to clause 91.
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I shall speak to government Amendments 89, 91, 101 and 102; I start with Amendments 89 and 91. I tabled these amendments because it has been clear that, despite all my attempts to reassure noble Lords at earlier stages, concerns continue to be raised as though DWP’s new recovery powers could be applied to debtors who are in receipt of benefits. Indeed, I think that may be the concern of the noble Baroness, Lady Kramer, as the explanatory statement on her Amendment 92 in this group relates to the use of these powers on benefit claimants. To be clear, this is not the case.
The DWP’s new debt recovery measures can be applied only to debtors who are no longer receiving DWP benefits and where we cannot recover from PAYE. However, to further reassure noble Lords and everybody else, we are making it even clearer in the legislation, through new Section 80AA, that the new powers cannot be applied to those receiving benefits from my department. This provides further clarification that a direct deduction order or immediate disqualification from driving order must always be suspended or revoked if the debtor subsequently receives a benefit payment from the DWP while that order is ongoing. I hope that provides further assurance to the House.
Amendment 101 is a procedural amendment regarding the technical mechanisms for DWP to make applications to the court for disqualification orders. The Bill already allows DWP to make an application to the magistrates’ court for a suspended or immediate DWP disqualification order. The purpose of this amendment is to introduce a regulation-making power enabling DWP to set out at a later stage any practical steps necessary for those applications to be made and considered. This engages commonplace procedure rules, dealing with practical matters to ensure cases are progressed fairly and efficiently for all parties involved, such as the type of form used or how notices and orders are served on parties.
Amendment 102 is a technical amendment which ensures that the term “processing” is correctly understood in new Section 80D, which establishes the DWP debt code of practice. It is a small change to provide clarity by linking the term “processing” to the definition already set out in Section 3(4) of the Data Protection Act 2018. This helps avoid any ambiguity in interpretation and ensures consistency with existing data protection legislation.
None of these government amendments changes the existing policy intent for how the powers will be used or the safeguards that are set out in the Bill. These will continue to be powers of last resort, to be used only after DWP has made all reasonable attempts to negotiate an affordable and sustainable repayment plan. These amendments support the policy intent and delivery of the Bill, and I urge noble Lords to accept them. I beg to move.
Baroness Kramer (LD)
My Lords, I will be very brief. I laid Amendment 92 in the same spirit as the amendments that I laid in an earlier group. The part of paragraph 3 of Schedule 5 that I find most difficult is a subset of the requirement for banks to provide information. The overarching requirement instructs banks to hand over to the Government, on request, three months of account statements for them to examine. The schedule says that the information must be used only to help determine whether or not to make a deduction under the Bill. I was trying to find out from the Minister what assurances there are that the use will be that narrow. It may be that I have misread it, but I cannot see any form of transparency or accountability that would provide that kind of assurance. It all seems to be completely internal to the DWP. My first question to the Minister is therefore this: how will the scheme verify that the information is not used for other purposes, because detailed account statements undoubtedly have information that could interest all kinds of people? Most importantly, will that information be destroyed after an investigation is closed?
The part of paragraph 3 that exercised me the most, in the original language of the Bill that came from the Commons, is that which prohibited banks from ever notifying the account holder that their information has been handed over to the state and for what purpose. To the Minister’s credit, that now seems to have been amended to say that the account holder can be told after three months. I am unclear whether that is an automatic notification, notification at the bank’s choice, or notification that requires a request from the account holder. To me, this matters, because I suspect that transparency is the only way to ensure that the information in the account is not used for purposes other than those stated in the Bill.
I am generally exceedingly uncomfortable with the idea that the original version basically required a sort of covert process, in which the information held on an individual by the state was not disclosed to that individual. The Minister has often suggested that the monitoring of accounts is to start a dialogue to see if a person has made a mistake in overclaiming rather than committing fraud. If somebody is not told that their information has been taken, read through, examined and dealt with in detail, I cannot see how they can possibly enter into a constructive discussion to explain what is happening.
I want to draw the attention of the Minister to an underlying principle. Jonathan Fisher KC has published part 1 of an independent review of disclosure and fraud offences, which was commissioned by the Government. I want to quote his words on transparency, because it seems that transparency was not built into the original Bill and is still limited in the revised version. He said that:
“A modern disclosure regime must require the prosecution”—
he is talking about the courts—
“to be honest concerning the reasonable lines of inquiry that have been pursued and how investigative material has been gathered, handled, and interrogated”.
I would very much like to see those principles embedded in this part of the Bill. I think we need assurances from the Minister that if we cannot find the language then they will in practice be embedded in this part of the Bill, because transparency is fundamental.
Viscount Younger of Leckie (Con)
My Lords, the amendments in this group tabled by the Government contain a mixture of substantive safeguards and some technical improvements designed to tidy up and clarify the Bill.
The main amendment, government Amendment 91, introduces further restrictions and procedural safeguards around the use of the new recovery methods created by Schedules 5 and 6. It requires that liable persons are properly notified and given an opportunity to settle their liability before enforcement action is taken, and that alternative routes of recovery, such as deductions from earnings or benefits, are considered before more intrusive powers are used. These are sensible and welcome provisions that strengthen procedural fairness and ensure that the new powers are exercised proportionately.
We do, however, note that these changes have come rather late in the passage of the Bill. They are substantive clarifications, going to the heart of how these powers will operate in practice. However, I listened to the explanations from the Minister on an earlier point I made about this and I now understand her position—while not necessarily agreeing with it, I understand it.
The group includes two largely technical amendments. The first, to Schedule 6, allows the Secretary of State to make regulations relating to applications to or appeals from magistrates’ courts in England and Wales, ensuring clarity and consistency in procedure. The second, to Clause 94, aligns the Bill with the Data Protection Act 2018 by confirming that “processing” has the same meaning as in the Act. This is a straight- forward but important clarification. It is my view that these amendments strengthen the fairness and clarity of the Bill, ensuring that it operates in a way that is proportionate, consistent and aligned with existing law. We therefore support them.
On Amendment 92, tabled by the noble Baroness, Lady Kramer, she may not be surprised that we do not support this amendment. It would remove a key part of the machinery that underpins the operation of this Bill—specifically, the ability of the Department for Work and Pensions to obtain limited, relevant bank information to determine whether a direct deduction order should be made. I realise that this chimes with the noble Baroness’s earlier Amendment 45A, so I will not repeat the comments I made then, save to say that this is a considerable change and would strike at the heart of the framework that enables the recovery of money lost to fraud and error.
The Government must have the legal capacity to verify whether an individual is eligible for the payments they are receiving and whether further action is required to prevent overpayment or recover funds that are owed to the state and, by extension, to the taxpayer. If a person receives money from the state, the state has both the right and the duty to ensure that this money is not being misused—and certainly is not ending up in the pockets of fraudsters or criminals. The Minister has already made clear that individuals in receipt of benefits will be informed that the Government may access certain account information for the purposes of investigating suspected fraud or error.
We are satisfied with the Government’s assurance that the information obtained under these provisions will be high level, proportionate and strictly limited to what is necessary for the purpose of recovering money lost to fraud and overpayment. Far from being excessive, the powers set out in this part of the schedule are a necessary and measured tool to protect public funds. For those reasons, we oppose Amendment 92.
Baroness Sherlock (Lab)
My Lords, I am grateful to the noble Viscount for his support on these matters. Amendment 92 from the noble Baroness, Lady Kramer, seeks to remove the requirement for banks to provide information to the DWP for the purposes of making a direct deduction order from benefit recipients. I am not sure whether that was her intention or whether she intended to remove it from all, but that is the effect. I therefore need to clarify for the record that these powers cannot be used for those in receipt of benefit, and Amendments 89 and 91 make that even clearer.
Baroness Sherlock
Member’s explanatory statement
This amendment prevents the new methods of recovery from being available in relation to a recoverable amount or a penalty relating to a devolved benefit.
“80AA Restrictions relating to further methods(1) The Secretary of State may not exercise a power under Schedule 3ZA or Schedule 3ZB for the purpose of recovering an amount from a liable person unless the Secretary of State has—(a) given the liable person a reasonable opportunity to settle their liability in respect of the amount,(b) notified the liable person that the Secretary of State may exercise the power for the purpose of recovering the amount if the liable person does not settle their liability in respect of the amount, and (c) given the liable person a summary of how the power would be exercised.(2) The Secretary of State may not—(a) make a direct deduction order under Schedule 3ZA,(b) re-start a requirement to make deductions and payments that has been suspended under paragraph 16 of Schedule 3ZA, or(c) apply for a suspended or immediate DWP disqualification order under Schedule 3ZB,in respect of a liable person if subsection (3) or (4) applies.(3) This subsection applies if it is reasonably possible to recover the amount from the liable person by way of deductions from earnings.(4) This subsection applies if the liable person is entitled to and in receipt of a relevant benefit.(5) The Secretary of State may not exercise the powers under Schedule 3ZB for the purpose of recovering an amount from a liable person unless satisfied that it is not reasonably possible to recover the amount by way of a direct deduction order under Schedule 3ZA.(6) Subsections (7) and (8) apply where a liable person becomes entitled to and in receipt of a relevant benefit at a time when—(a) a direct deduction order under Schedule 3ZA, or(b) an immediate DWP disqualification order under Schedule 3ZB,has effect in relation to the liable person.(7) In a case within subsection (6)(a), the Secretary of State must revoke or suspend the direct deduction order.(8) In a case within subsection (6)(b)—(a) the Secretary of State must notify the court that made the immediate DWP disqualification order that the person to whom the order relates has become entitled to and in receipt of a relevant benefit, and(b) a court officer must make an order (without a hearing) revoking the immediate DWP disqualification order.(9) In this section—“court officer” means a member of the staff of the court in question authorised by the court for the purposes of subsection (8)(b);“deductions from earnings” means deductions from earnings under, or by virtue of, section 71 or 71ZD;“relevant benefit” means a benefit that is—(a) administered by the Secretary of State with responsibility for social security, and(b) recoverable under section 71 or 71ZB.”Member’s explanatory statement
This amendment imposes further restrictions on when the new recovery methods introduced by Schedules 5 and 6 of the Bill can be used, including by ensuring that they cannot be used in cases where an amount could be recovered by deduction from earnings or a liable person is entitled to and in receipt of benefits.
Baroness Sherlock
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 106, line 28.
“(9A) The prohibition in sub-paragraph (9) ceases to apply—(a) at the end of the period of 3 months beginning with the day on which the account information notice or general information notice is given to the bank, or(b) if earlier, when the bank is given a notice under paragraph 5(1).”Member’s explanatory statement
This amendment would limit how long the prohibition on a bank telling an account holder that it had received an information notice in respect of the holder’s account has effect.
(a) secure that no transaction takes place (except for any deduction under the order) which would result in the amount in the account falling below the specified amount, or, if the amount in the account is already below that amount, falling any further, or(b) take the action set out in sub-paragraph (2).”Member’s explanatory statement
This amendment would remove the requirement for banks to prevent the closure of an account when given a notice under paragraph 5 of new Schedule 3ZA in relation to a proposed direct deduction order, or a direct deduction order, under paragraph 1 of that Schedule.
“(3) Where the requirement is suspended for a continuous period of two years the regular direct deduction order in question is to be treated as having been revoked at the end of that period.(4) Where a regular direct deduction order is treated as having been revoked by virtue of sub-paragraph (3), the Secretary of State must give notice to that effect to—(a) the bank to which the order was given,(b) the liable person, and(c) in the case of a joint account, each of the other account holders.(5) Sub-paragraph (3) does not prevent the Secretary of State making a further regular direct deduction order in respect of the same liable person and account.”Member’s explanatory statement
This amendment means that where the requirement to make deductions and payments under a regular direct deduction order made by the Secretary of State is suspended for a continuous period of two years it may not be re-started.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 5, page 116, line 39.
Member’s explanatory statement
This amendment removes an unnecessary provision.
Member’s explanatory statement
This amendment is consequential on my amendment to Schedule 5, page 113, line 20.
“(4) Sub-paragraph (5) applies where— (a) a bank is given—(i) an account information notice or a general information notice under paragraph 3,(ii) a notice under paragraph 5,(iii) a further information notice under paragraph 15, or(iv) a direct deduction order, and(b) a deputy acts on behalf of an account holder of an account to which the notice or order relates.(5) The bank must give the Secretary of State the name and correspondence address that it holds for that deputy (unless the bank has already provided that information).”Member’s explanatory statement
This amendment would require a bank to give the Secretary of State details of any deputy acting on behalf of an account holder to which certain notices or a direct deduction order relate.
Baroness Sherlock
(b) about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under this Schedule.”Member’s explanatory statement
This amendment would allow the Secretary of State to make regulations containing supplementary provision about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under new Schedule 3ZB to the Social Security Administration Act 1992 .
Baroness Sherlock
Member’s explanatory statement
This amendment provides that “processing”, in new section 80D of the Social Security Administration Act 1992, has the meaning given by section 3(4) of the Data Protection Act 2018.
Lord Palmer of Childs Hill
“Recovery of overpayments of Carer’s AllowanceThe Secretary of State may not exercise any of the powers of recovery under this Act in relation to a person who has received an overpayment of Carer’s Allowance until such time as—(a) the Secretary of State has commissioned an independent review of the overpayment of Carer’s Allowance,(b) the review has concluded its inquiry and submitted a report containing recommendations to the Secretary of State, (c) the Secretary of State has laid the report of the independent review before Parliament, and(d) the Secretary of State has implemented the recommendations of the independent review.”Member’s explanatory statement
This amendment would delay any payments being taken from people who the Government may think owe repayments of Carer’s Allowance until the independent review into Carer’s Allowance overpayments has been published and fully implemented.
Lord Palmer of Childs Hill (LD)
My Lords, throughout the passage of the Bill, we on these Benches have repeatedly raised concerns about the punitive measures applied to carers who receive carer’s allowance and subsequently earn small amounts through additional work, often losing their carer’s allowance entirely. Amendment 103 would prohibit the Secretary of State using recovery methods in cases of overpayment of carer’s allowance until an inquiry has concluded and recommendations from that inquiry have been implemented on carer’s allowance overpayment.
We have had discussions with the Minister’s department on this, and we are hopeful that the Government will commit from the Dispatch Box to a date for publication. In those conversations we were promised a departmental briefing to me and, if necessary, to an MP of my choice. I will give advance notice of what we would expect to learn in that briefing: when do the Government expect to publish their response to the report? It has been nearly three months since they received the report. We acknowledge that there has been a change of Secretary of State, but are the Government still treating this with the high level of priority that they have given it so far? At our meeting, can the Government also set out a timetable for the publication of the report and actions they will take to deal with the issues set out in that report?
What are the Minister’s reflections, if she has reflections, on the report and its findings? Will the Government meet with carers—and in particular Carers UK, with which I have been in constant touch—who have been affected? Finally—and this will probably be the nail in the coffin—are the Government considering writing off any overpayments to carers?
From discussions that we have had outside this Chamber, I hope we can have a meeting with the department to deal with these matters and get some progress on them. Maybe it would not solve them completely, but it would mean that we feel we do not need to test the feelings of the House.
Viscount Younger of Leckie (Con)
My Lords, I am afraid that we must oppose Amendments 103 and 113 set out by the noble Lord, Lord Palmer of Childs Hill, for the same reasons that we gave in Committee.
The independent review to which I believe the noble Lord refers has a clear and limited purpose. As set out in the Government’s own guidance, it is designed to establish three things: first, how overpayments of carer’s allowance linked to earnings have occurred; secondly, what can best be done to support those who have accrued them; and, thirdly, how to reduce the risk of such problems arising in the future.
Nowhere in that remit does it question whether the overpayments were made. That point is already settled. The individuals in question have received government funds—taxpayer funds—to which they were not entitled. To put this in context, since 2019 over £357 million has been overpaid to carers for various reasons, such as where claimants breached the earnings limit, where claimants ceased to provide care, and where the claimant was also in receipt of an overlapping benefit. Often, I have to say, there have been innocent reasons.
The review will rightly examine how the system can be improved and how claimants can be better supported, but it will not, and cannot, rewrite the fact that money was misallocated and must therefore be returned. We think it would make no sense to halt all recovery activity pending the outcome of a review that does not address the underlying question of entitlement. The amendment would effectively suspend the recovery of public money that we already know has been wrongly paid out. We believe this cannot be justified, whether fiscally or morally.
I appreciate that the noble Baroness, Lady Kramer, who is in her place, set out to us outside the Chamber her concerns about a cliff edge. I welcome that input—her doing that and saying that—and the Government may want to comment on that. But it is also worth remembering that, even according to charities in support of those who have caring responsibilities, overpayments have been made to people who have not correctly reported that their caring responsibilities have ceased, that the person they are caring for has died, or that they are in receipt of an overlapping benefit. The person in question has a duty to report these changes, and it is clearly wrong that the person has not fulfilled their obligation to the taxpayer to report when these events happen.
Moreover, this amendment goes even further by requiring the Government not only to await the completion of the review and the laying of its report before Parliament but to implement its recommendations in full—I must emphasise that—before recovery can resume. We believe that this is quite extraordinary. We have no idea what those recommendations will be, and it would be deeply irresponsible to commit the Government in advance to implementing them wholesale without the ability to assess, modify or reject them as appropriate.
Public funds must be safeguarded and the Government must retain the flexibility to act responsibly in response to the review’s findings. This amendment would tie their hands and delay indefinitely the recovery of money that should never have been paid in the first place. In his summing up, the noble Lord might suggest how long the wait would be; the noble Baroness might also hazard a guess. Will it be many months, if not possibly a year or two? We really do not know, but I am sure it will be many months. It will become increasingly difficult to recover the money when so much time has gone by. Individuals may have experienced substantial changes in their lives or gone abroad. At worst, the individuals may, very sadly, have died.
For whatever reason, and bearing in mind people’s circumstances or vulnerabilities, we believe in principle that overpayments—a reminder that this is taxpayers’ money—are just that. They have been made to individuals in error—please note that—and should be repaid as soon as possible. I have an iota of sympathy with the noble Lord, Lord Palmer, on the principle behind the amendment—namely, ensuring fairness and learning lessons from what has gone wrong—but its practical effect would be short-sighted, costly and contrary to the basic duty of government to protect the public purse. For those reasons, we cannot and will not support it.
Baroness Sherlock (Lab)
My Lords, I am grateful to the noble Lord, Lord Palmer, for explaining his amendments. Before we discuss the detail, I pay tribute to the millions of unpaid carers across the country. The Government value carers highly and recognise the vital contribution they make every day. I assure the noble Lord that my new Secretary of State feels just as strongly about this as the rest of us.
However, the reality is that, when we came into government, we realised we faced a flawed system where too many hard-working carers were left with often large overpayments to be repaid, sometimes worth thousands of pounds. I say clearly that I recognise the concerns of the noble Lord, Lord Palmer, and others on the whole issue of carer’s allowance. It is precisely because this Government take the issue so seriously that we commissioned an independent review of earnings-related overpayments of carer’s allowance to understand exactly what had gone wrong and to make any necessary improvements.
We have received the report from the independent reviewer, and I thank Liz Sayce OBE who led the review for her work. We are currently finalising our response to the report, following careful and detailed consideration of its findings and recommendations. I am pleased to confirm that we will publish both the report produced by Liz Sayce and the Government’s response to it before the end of this year. My ministerial colleague has written to the chair of the Commons Work and Pensions Select Committee to notify her of this.
This Government set up the review because we are determined to deal with the problems the system has created for carers. I hope the noble Lord, Lord Palmer, will be reassured by today’s commitment. Once the report and government response are published, and he and his colleagues in the other place, if he wishes, have had the opportunity to consider both, the ministerial team and the DWP will be happy to meet them to discuss this important issue and the Government’s next steps in detail.
I also remind the noble Lord and the House that this review is not all the Government have done to put things right for carers. We have been reviewing our communications to make it as easy as possible for carers to tell the DWP when there has been a change in their circumstances that may affect their carer’s allowance payment. We have been improving guidance and processes for our staff on the treatment of earnings and putting in extra resources to process the earnings information we receive from HMRC.
I think the noble Viscount, Lord Younger, mentioned the cliff edge, which the noble Baroness, Lady Kramer, is interested in. We have begun scoping work on introducing an earnings taper in carer’s allowance in the long run. This was mentioned by the Chancellor in the Budget. It is not straightforward, but a taper might be a way to further incentivise unpaid carers to do some work and could reduce the risk of significant overpayments. However, introducing a taper in carer’s allowance is not without its challenges. It could complicate the benefit as it currently stands and mean a significant rebuild of the system. The DWP has begun some scoping work to see whether an earnings taper might be an option in the longer term, but any taper, if introduced, will be several years away. I do not want to underplay the significance of trying to make changes such as that.
We have also introduced the largest increase in the earnings limit since carer’s allowance was introduced in 1976. That limit is now 16 hours of work at national living wage levels and over 60,000 additional people will be able to receive carer’s allowance between 2025-26 and 2029-30. I hope the noble Lord recognises this progress. He asked whether we would meet Carers UK. I can reassure him that Ministers and officials regularly meet Carers UK and other organisations which represent unpaid carers, as well as unpaid carers themselves. There have been meetings specifically on earnings-related overpayments in the past, and we expect further meetings in the future.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for all that she has said. We are looking to have a departmental meeting to deal with the problems out of the public eye. I take some issue with what the noble Viscount said about carers. Many of them are receiving things they should not receive. I accept that. The trouble is, once you have received it and bought your loaf of bread or whatever it is, there is no money left. A lot of those people are in straitened circumstances and we have to understand that not everybody is good at managing their finances when they have very little. I ask for us to look at that in a caring way, punishing those who have blatantly taken money they should not take, but also by building up the comments I have made. If the Minister agrees to such a meeting with me and one of my Members of Parliament so that we are all singing from the same page, in those circumstances I am prepared to withdraw my amendment.
Baroness Sherlock
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.
Member's explanatory statement
This amendment, and my amendments to clause 97, page 62, line 5, clause 97, page 62, line 7, clause 97, page 62, lines 12 to 14 and clause 97, page 62, lines 21 to 23, would remove provision that is no longer needed because of the general data protection override in section 183A of the Data Protection Act 2018, which was inserted by section 106(2) of the Data (Use and Access) Act 2025 and came into force on 20 August 2025, and make consequential provision.
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.
Lord Verdirame
“Overpayment recovery(1) Section 71ZB of the Social Security Administration Act 1992 (recovery of overpayments of certain benefits) is amended as follows.(2) In subsection (7), at beginning insert “Subject to subsection (7A),”(3) After subsection (7), insert—“(8) An amount recoverable under this section may only be recovered by deduction from benefit—(a) where the Secretary of State has first—(i) given the liable person a notice setting out the rate of deduction from benefit and the basis for it, and(ii) invited the liable person to make representations about the affordability of the rate of deduction from benefit,(b) if the Secretary of State is satisfied on the basis of the information received by virtue of (a)(ii) that recovery of the recoverable amount—(i) will not cause the liable person to suffer hardship in meeting essential living expenses, and(ii) is otherwise fair in all the circumstances, including taking into account whether the overpayment was caused by a failure to act, a delay or mistaken assessment by the Secretary of State, and(c) if recovery is commenced before the expiration of six years from the date on which the recoverable amount was paid.”(4) In section 191 of the Social Security Administration Act 1992 (interpretation - general), after the definition for “inland revenue” insert—““liable person” means the person from whom a recoverable amount is recoverable;””Member's explanatory statement
This new Clause would bring the safeguards for recovery of overpayments by way of deduction from benefit into line with (1) the safeguards contained in Schedule 5 of this Bill in relation to the new powers for recovery from bank accounts, and (2) the limitation period that applies to recovery of overpayments by way of court action.
Lord Verdirame (Non-Afl)
My Lords, this amendment follows on from a previous amendment tabled by the noble Baroness, Lady Lister, in Committee. It also has support from the right reverend Prelate the Bishop of Leicester and the noble Baroness, Lady Finn. I am very grateful to both of them. Since Committee, the noble Baroness, Lady Lister, and I have engaged with the Minister, who has been very helpful and constructive. I also thank the Public Law Project for its assistance, not least in navigating a complex area of law and public policy.
The amendment seeks to ensure that the recovery of overpayments by deductions from universal credit payments, which is the DWP’s preferred method for recovering overpayments from people still in receipt of universal credit, is fair and affordable. It seeks to achieve this objective by adding a new subsection to Section 71ZB of the Social Security Administration Act 1992. The new subsection would have two effects.
First, it would require DWP to consult claimants before deductions are applied and to ensure that the rate of recovery is affordable to that individual. The version of this amendment that we debated in Committee would essentially have written off official error overpayments. The version that we have brought on Report is wider in scope, in that it applies to all overpayments, not just those due to official error, but it is also less ambitious in that it does not require any write-off of overpayments.
The second effect of the amendment is that it would limit the powers of recovery to overpayments that are less than six years old, in line with the limitation period that applies to the recovery of debts through the courts. In Committee, the Minister stated that the department’s preference was,
“always to agree an affordable and sustainable repayment plan”.—[Official Report, 25/6/25; col. GC 16.]
This is not currently the approach applied to the recovery of overpayments from individuals still in receipt of benefits. Instead, in these circumstances, DWP has the power to deduct 15% of an individual’s monthly universal credit payments directly, with limited notice and without the individual’s consent. For a single adult aged 25 and over, this amounts to a sudden, unanticipated loss of £60 a month.
The current approach to the recovery of overpayments stands in stark contrast to the requirements that apply to commercial lenders, such as banks and utilities companies, which are required by regulation to engage with customers extensively if they owe them money. That approach also contrasts with the provision of new powers to recover deductions from the bank accounts of individuals no longer in receipt of benefits and who are not engaging with the system. In these cases, the legislation would provide for an opportunity to make representations on affordability and hardship, before the deductions begin.
By requiring the Secretary of State to give notice and invite affected persons to make representations on affordability, the amendment seeks to ensure that equivalent protections are put in place for the recovery mechanism that applies to those who continue to be in receipt of benefits. As far as the limitation period is concerned, the new subsection would require that a recovery must commence before the expiration of a six-year period from the date on which the recoverable amount was paid. Currently, no such restriction applies, which means that individuals can face recovery action for overpayments that are many years old—and of course, in those cases, people will often not be able to locate records.
I understand that the Government are sympathetic towards the objectives of our amendment but still have concerns. We have addressed at least one of those concerns in the version of the amendment that has been tabled; that concern related to the way in which we had formulated the subsection on limitation. But I understand that the Government have a wider concern: the Minister explained in particular that, in a complex system such as welfare, there is a risk of unintended consequences once any new statutory provision is put into operational effect. I know that she speaks from depths of experience and from a sincere commitment to make the system fair and efficient.
Given that we have agreement on first principles, if in her reply the Minister is not inclined to support this amendment in its current terms, I hope that she might consider a Third Reading amendment that reflects the Government’s concerns—although I echo the concern of the noble Lord, Lord Vaux, about the very limited time we have before Third Reading. If the Government are not inclined to bring back a Third Reading amendment, can the Minister reassure us in two critical respects: first, that the Government agree with the objective of giving people in receipt of benefits a fair chance to discuss an affordable repayment plan rather than applying the automatic deduction of 15%? Secondly, can the Minister outline concrete alternatives to the statutory provision that we have proposed whereby this objective might be achieved? One solution might be the setting up of a task and finish group within the governance structure of the current review of universal credit to work through the technicalities.
Again, I am very thankful to the Minister for her exemplary engagement with us on this amendment. With that, I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, I start by thanking the noble Lord, Lord Verdirame, for tabling this amendment, which, as he said, follows up on the one I tabled in Committee, to which he spoke so eloquently. I too thank my noble friend the Minister and her officials for the very useful meeting we had recently and the Public Law Project for all its help.
Through the universal credit system, the Government determine the minimum amount that people and families need to live on. As has been evidenced by the Joseph Rowntree Foundation, for many that amount is not sufficient to meet their essential needs. As acknowledged by the DWP’s own policies, any deduction that takes people below that amount will result in hardship.
A Public Law Project survey of 500 people who had deductions applied found that a third of respondents became destitute as a result. Some 97% of Citizens Advice advisers reported that overpayment or advance loan deductions negatively affect people’s ability to afford essentials, while analysis by Policy in Practice found that, in addition to lowering income, deductions increased income volatility,
“making it harder for low income households to budget and plan ahead”,
with
“far reaching consequences, particularly for housing affordability and the risk of homelessness”.
The need to address the impact of deductions on poverty and financial instability was recognised by the Government at last year’s Autumn Budget, when they introduced the fair repayment rate. This move, which reduced the maximum amount that can be taken from someone’s universal credit payment to repay debt from 25% to 15%, was very welcome, but it is not enough to address the issues associated with overpayment recovery. The 15% rate is the rate that already applied for recovery of overpayments where individuals do not have earned income. Further, while it is helpful to have a maximum cap, it is not a substitute for assessing what constitutes an affordable rate of repayment for individuals.
A recent report from the Money and Mental Health Policy Institute, while welcoming the fair repayment rate, expressed concern that the 15% rate would continue to drive hardship. Its research found that the current system for overpayment recovery
“disproportionately affects people with severe mental health conditions … who are eight times more likely to have been overpaid benefits”.
The result, the charity says, is
“serious financial and psychological harm for many people already struggling with money and mental health problems”.
One research participant commented on the deduction, saying,
“some days I have been not eating because I can’t afford to, which is leaving my mental health in tatters”.
The Lord Bishop of Leicester
My Lords, I am pleased to have added my name to this amendment. As this is the first time that I have spoken at this stage, I want to thank the Ministers for their careful consideration of the concerns raised by noble Lords, as well as all those who have engaged with such diligence on this matter. For the record, this is an important Bill. Attempts to commit fraud will not stop as a result of this Bill—that will never be possible—but it will be far harder for those making these attempts, and that is absolutely right, as is the ability to recover overpayments.
The principles behind this amendment are fairness in the face of the various reasons for an overpayment being made, including error by the department, and affordability, ensuring that those already in poverty are not pushed further into it. Let us remember who will bear the brunt of these new powers: people who are reliant on benefits, which independent research suggests are already insufficient to meet people’s basic needs. With the requirement to pay off their debts via universal credit deductions of up to 15% of the standard allowance, there is a real risk that many will, I fear, be pushed even deeper into poverty.
It is not a trivial number of people who will be affected. According to a DWP Freedom of Information Act response in 2023-24, nearly 900,000 new overpayment debts were entered on DWP’s debt management system, nearly 80% of which were recorded as caused by official error. The amendment before us offers a constructive path to stop people being pushed into even more precarious circumstances. By introducing a clear limit on how far back overpayment recovery can go, it would bring predictability and restraint to the process. People should not live in fear that an administrative slip-up made a decade ago will suddenly resurface as a bill they cannot hope to pay. Other areas of law recognise the principle of limitation periods and so should we here. Equally, by requiring an affordability assessment, the amendment would ensure that any repayment plans are fair, sustainable and consistent with human dignity. This is for the good of the individuals but also of the Government. If the state appears heavy-handed then confidence in the integrity of our welfare system, which is the thrust of this whole Bill, is undermined.
The amendment would not weaken the fight against fraud. It does not seek to excuse dishonesty or to diminish accountability. It seeks to uphold the Government’s stated objective of ensuring that recovery of overpayments is done in a fair and affordable way. I urge the Minister to take these concerns into account, in particular the suggestions of the noble Lord, Lord Verdirame, on how these concerns can be addressed practically. I, like others, will not be pushing for a Division on this matter, but I seek real reassurance from the Government.
Baroness Finn (Con)
My Lords, I speak in strong support of this amendment, so ably tabled by the noble Lord, Lord Verdirame, and supported by the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Leicester, and to which I am pleased to have added my name.
The amendment speaks across so many of the principles that have underpinned our debates and the position that we on these Benches have adopted throughout Committee and Report—fairness, proportionality, transparency and responsibility. This amendment is about finding this balance and ensuring that the recovery of overpaid public funds is carried out in a way that is both effective and humane.
We have been clear from the outset that we support the core objectives of this Bill. Public money that has been wrongly paid out, whether through error or fraud, must be recovered. We owe that duty to the taxpayer and the integrity of our public finances. Equally, it is a duty of government to ensure that such recovery is done in a way that is fair, measured and responsible, does not impose unnecessary hardship, recognises the realities of individual circumstances and upholds confidence in the system.
This amendment embodies precisely that balance. It would establish clear and necessary safeguards before deductions are made from a person’s benefits. It would require that the liable person be notified of the rate and the basis of deduction, and, crucially, that they be given the opportunity to make representations about affordability. It would insist that deductions should proceed only where the Secretary of State is satisfied that recovery will not cause hardship in meeting essential living expenses and that the process is fair in all circumstances, including where the overpayment may have arisen through official delay or error. Sensibly, it seeks to sets a six-year limit for recovery, in line with the limitation period that applies through the courts. In other words, this amendment would ensure that the state exercises its right to recover the money in a way that is just, proportionate and accountable, and would align the recovery of overpayments through benefit deductions with the very same principles of fairness and restraint that we have already built into Schedule 5 in relation to deductions from bank accounts.
Throughout our scrutiny of this legislation, we have repeatedly emphasised that good governance is not simply about having the power to act but about exercising that power responsibly. This amendment reflects that philosophy perfectly. It strikes the right equilibrium between fiscal responsibility and social justice and between protecting the taxpayer and those who may already be in vulnerable situations. I thank the noble Lord, Lord Verdirame, for bringing forward this thoughtful and well-crafted proposal. It would strengthen the Bill, give legislative effect to the principles of transparency, fairness and proportionality, and ensure that, in pursuing the legitimate goal of recovering public funds, we do so in a manner that remains worthy of public trust. This is a measured, sensible and responsible amendment and we are very pleased to support it. I hope the Minister will give welcome assurances on it.
Baroness Sherlock (Lab)
My Lords, I thank the noble Lord, Lord Verdirame, and my noble friend Lady Lister for their early and constructive engagement on this topic. I understand that the intent of Amendment 109 is to replicate some of the safeguards introduced in Schedule 5 for direct deduction orders for the recovery of universal credit and new-style overpayments by deduction from benefit. Although I understand clearly what the proposers of this amendment want to do, I cannot accept it. However, I hope I can provide some assurances along the way.
The DWP is committed to improving payment accuracy to prevent overpayments occurring through continuous improvement activity. Where overpayments do arise, the Secretary of State has an obligation to protect public funds and ensure that, wherever possible, money owed to DWP is repaid. But within that objective, we are clear that our aim is to secure affordable and sustainable repayment plans and ensure that safeguards are in place to protect vulnerable debtors.
As the noble Lord, Lord Verdirame, said, Amendment 109 applies not just to official error but to all universal credit and new-style benefit overpayments recovered from benefits, including debts arising from fraud. The DWP already sets out that fraud overpayments are subject to stricter recovery rules due to their nature and seriousness. To treat all debts the same would not be right; it would be unfair on those who obtained a DWP benefit in good faith. This amendment also applies only to debts being recovered by deductions from benefits. A key driver for the new debt recovery measures is to bring greater fairness to debt recovery, giving DWP the tools to recover debts from those debtors who are not on benefits and have the means to repay but choose not to. This amendment could undermine that important objective.
Taking each part of Amendment 109 in turn, proposed new subsection 8(a)(i) would require DWP to give an individual notice on the basis of the deduction amounts. Individuals receive a notification about the overpayment; setting out the deduction rate and basis for this would present significant challenges. Benefit awards can fluctuate month to month, and deductions for repayment of debt are calculated accordingly. The deduction rate will also depend on other deductions being taken. Therefore, a legal requirement to issue a fixed notice setting out a single rate of recovery may risk being inaccurate, confusing or even misleading.
However, noble Lords are making an important point, and while I cannot accept the amendment, I commit to the House that in response I will explore how we might notify individuals more clearly about forthcoming deductions within the existing legal framework. I intend to do this as a part of the commitments I have made to review our communications to those with debts.
Proposed new subsection (8)(a)(ii) seeks to replicate the representation stage for direct deduction orders where recovery takes place by deduction from benefits. These processes are intentionally different because when deductions are made from benefits, DWP already holds accurate information about benefit payments, existing deductions and in some cases income from other sources. Crucially, there is also no ambiguity about ownership of the funds. Notifications already make it clear that at any time, the individual can contact DWP to discuss the affordability of the deduction.
By contrast, for the DDO process, DWP may know little or nothing about a person’s financial circumstances because they are not on benefits or in PAYE and they have refused to engage with us. This is why the Bill makes provision for DWP to obtain bank statements as an important safeguard. However, we recognise this may not give DWP as complete a picture as we have for benefit claimants. It is therefore right that individuals and any joint account holders can make representations about information that may not be apparent from statements alone before a deduction is taken from a bank account.
Nevertheless, in line with my previous commitment, I will commit to look at what more we can do to make our communications as clear as possible on how claimants can contact the department at any time to discuss repayment. I will also look at the timing of these communications.
Turning to proposed new subsection (8)(b), I agree that deductions from benefit should not cause unintended hardship and should be fair. This Government are committed to the principle of debt repayment being affordable; that is why processes exist to achieve this. Protections are in place to prevent excessive deductions. Regulations set out the maximum rates of recovery from benefits for fraud and non-fraud debts. For those in receipt of universal credit, as my noble friend Lady Lister mentioned, the fair repayment rate policy, which this Government introduced on 30 April, reduced the total amount that can be deducted from universal credit from 25% to 15% of the standard allowance in most cases, and I am grateful to her for acknowledging that. Crucially, there is also a priority order for deductions taken from universal credit to ensure that debts such as housing arrears are taken first to prevent people facing eviction and thus causing hardship. Recovery of overpayments is a long way down the list of priority order.
Moreover, there are robust processes in place to support the vulnerable and those struggling with debts, such as referrals to the Money Adviser Network for free and independent and impartial money and debt advice. I again stress that individuals can and should contact DWP at any time to discuss repayment terms. Where individuals make contact, DWP can reduce or temporarily suspend recovery depending on the circumstances. In exceptional cases, DWP can consider waiving recovery of the debt entirely.
I turn now to the question of fairness in this amendment. The extension of whether the act of recovery itself is fair differs from the provision in Schedule 5, which is limited to consideration of the deduction being fair in the circumstances as known to DWP. Every overpayment decision has existing mandatory reconsideration and appeal rights, and these are the right routes to challenge whether the overpayment should be recovered.
Although Amendment 109 is specific to recovery by deduction from benefits, it risks creating uncertainty as to whether it was fair to recover by other methods too, such as by deductions from earnings, or voluntary repayment plans.
Finally, proposed new subsection (8)(c) would limit the commencement of recovery of any overpayment of UC or new-style benefits from deductions from benefits to six years. The existing framework under Managing Public Money provides enough flexibility to forgo the recovery of historic debt where appropriate. Imposing a statutory time limit on commencing recovery would have consequences that may not be intended; for example, DWP could be prevented from recovering money obtained through benefit fraud where we could not reasonably identify the fraud until six years after the payment was made.
It is important to distinguish DWP recoveries from those by other creditors through court orders, for which a limitation period might otherwise apply, as the noble Lord, Lord Verdirame, indicated. DWP recovers benefit overpayment debts one at a time, beginning with the oldest. Due to the protections that I outlined earlier, we recover by deductions from benefit at a much lower rate than other creditors typically would, and we rightly prioritise deductions for certain debts, such as housing or utilities arrears, over benefit overpayments to prevent hardship. That means that recovery of a UC or new-style benefit overpayment could rightly take place some time after the initial overpayment has been notified to the individual. A blanket limitation would risk undermining the integrity of the process, could create hardship for individuals and could significantly reduce the amount of taxpayers’ money returned to the public purse.
Lord Verdirame (Non-Afl)
My Lords, I thank all noble Lords who have spoken. I will not press this to a vote, so the Whips do not need to worry. Instead, I would like to make a few points.
My first point is about the complexity of setting out to claimants the deduction rate. I hear what the Minister said, but it does not entirely reassure me. I believe that, as a matter of basic fairness, however complex certain calculations are, the Government should, just like commercial enterprises, be able to set them out in as simple a way as possible to the beneficiaries—the claimants.
My second point is that the way we crafted the amendment—the comprehensive provision on fairness in proposed new subsection (8)(b)(ii)—was precisely designed to distinguish fraud cases from other cases. However, as the right reverend Prelate the Bishop of Leicester said, the vast majority of these debts are actually due to official error; that is mainly what we are dealing with. Of course, it would have been possible to exclude the recovery of debts from overpayments due to fraud from the scope of the amendment.
Limitation periods are very important in any legal system because they are about both fairness and efficiency. Given the mountain of overpayments that various reports have pointed to, a system that does not have a cut-off time will continue to repeat those same mistakes. It is therefore about efficiency as much as fairness.
With that in mind, I am grateful to the Minister for the reassurances she has given. They go to two critical elements: clarity of communication with affected individuals, and timeliness. I hope that she will pursue those two objectives as much as she can within the policy, because it is absolutely necessary that people are told about these deductions before they actually begin. They have to be told clearly what the deductions will be, and as soon as possible—ideally, quite a bit before the deductions begin. With those assurances in mind, I beg leave to withdraw the amendment.
Viscount Younger of Leckie
“Offence of facilitating fraud through dissemination of information(1) It shall be an offence for any person, by any means including electronic communication or publication on the internet, to intentionally publish, communicate, or otherwise make available information, advice, or instructions that are reasonably likely to be used by another person to— (a) mislead or deceive public authorities for the purpose of obtaining welfare or social security benefits to which they are not lawfully entitled;(b) circumvent eligibility checks, income or capital assessments, or other lawful mechanisms designed to verify entitlement under any enactment relating to the provision of social security or welfare benefits in the United Kingdom.(2) A person commits an offence under this section if they know, or ought reasonably to know, that the information or guidance provided—(a) is intended to facilitate dishonest conduct under the Social Security Administration Act 1992, the Welfare Reform Act 2012, or any associated regulations, or(b) will likely be used to enable or encourage another person to obtain, or attempt to obtain, benefits through deception or misrepresentation.(3) It shall be a defence for a person charged under this section to show that—(a) the information was provided for a legitimate public interest purpose, such as journalistic reporting or academic research, and not with the intention of facilitating unlawful conduct;(b) they took reasonable steps to prevent the information from being used for unlawful purposes.(4) A person found guilty of an offence under this section shall be liable—(a) on summary conviction, to a term of imprisonment not exceeding 12 months or a fine not exceeding the statutory maximum, or both;(b) On conviction on indictment, to a term of imprisonment not exceeding 5 years, or a fine, or both.(5) For the purposes of this section “information” includes written, audio, visual, or digital content, including content distributed via social media platforms, websites and forums.”Member’s explanatory statement
This new amendment would make it an explicit offence to facilitate fraud through the dissemination of relevant information online.
Viscount Younger of Leckie (Con)
My Lords, I realise that we are approaching the end of Report and the hour is late, but I do want to spend a little time speaking to my Amendment 110.
Those who were present in Grand Committee will recall the examples I cited of individuals producing and disseminating videos designed to help people cheat the checks put in place by the DWP to ensure that welfare support goes only to those with genuine entitlement. These were not isolated incidents. We are talking about content with titles such as:
“Unlock The Secret Steps For WINNING Your PIP Claims—Step By Step Guide”,
hosted on channels with names such as “Mike Bolton Benefits Training”. This is what has come to be known as the phenomenon of the “sickfluencer”, and it represents a serious and growing threat to the integrity of the welfare system—a threat which, I regret to say, the Government are, we believe, struggling to keep pace with.
For those to whom this term is unfamiliar, let me briefly explain. Sickfluencers are individuals who use Instagram, YouTube, TikTok and other social media platforms to publish detailed guides on how eligibility checks for welfare benefits can be manipulated or bypassed. They provide ready-made scripts to their viewers, instructing them on how to answer questions, what to disclose, how to pretend to have a disability or injury, and when to tell the truth and when they should lie. In short, they are professionals in coaching claimants to circumvent established eligibility safeguards. Indeed, the testimonies published on their websites and channels make it clear that many successful claimants attribute their outcomes directly to the advice of these sickfluencers. This is not simply a nuisance on the fringes of the system; it is an organised, deliberate effort to undermine the very principles of fairness and integrity on which the welfare system depends.
Since I last spoke on this issue, in Committee, thousands upon thousands more people have viewed this content. Hundreds more will have used it in their eligibility interviews, and possibly dozens will have been successful in their claim, precisely because of these videos and not because of a genuine entitlement.
I want to be clear that I understand that noble Lords on these Benches understand, and that the Conservative Party makes a point of understanding, that there are people in our country who should receive support from the state. There are people who cannot live without the support provided to them through the welfare system and it is absolutely right that we help those people. What can never be right is the abuse of this system of support by people who do not have a genuine eligibility, but who are coached to cheat the system and steal from the limited resources which should rightly be going to those who need them most.
If we have confidence in the system of testing as it currently stands, we should also be confident that it, and the assessors themselves, have the ability and the capacity to determine who is in need of support and those people who are not. This is the context in which we bring forward this amendment, which is designed to deal with this growing problem directly and proportionately. The amendment has been carefully drafted to ensure that we target those who are encouraging, facilitating and enabling fraud, an objective which I am sure noble Lords across the House will support.
Proposed new subsection (1) makes it absolutely clear that the offence applies only where a person intentionally publishes or communicates information that is reasonably likely to be used to mislead or deceive public authorities in order to secure welfare to which they are not entitled. This goes right to the heart of the problem I have described: the deliberate creation and dissemination of coaching materials designed to cheat the system.
Proposed new subsection (2) adds the essential safeguard that culpability arises only where the individual knows or ought reasonably to know that the content is intended to facilitate dishonest conduct under existing legislation, such as the Social Security Administration Act 1992 or the Welfare Reform Act 2012. This ensures that we are not targeting ordinary members of the public, but only those who are actively propagating content to enable fraud.
Proposed new subsection (3) then builds in crucial protections for legitimate activity. Journalists, academics and others who are acting in the public interest or who take reasonable steps to prevent their information being misused have a statutory defence. That means that this amendment does not criminalise responsible commentary or research; it criminalises those who deliberately and knowingly produce guides to cheating welfare assessments.
Proposed new subsection (4) sets out proportionate penalties: up to 12 months on summary conviction and up to five years on indictment. These sanctions are in line with other serious fraud-related offences, reflecting the harm done when organised online actors undermine the integrity of the welfare system.
Finally, proposed new subsection (5) makes clear that this applies across the spectrum of modern media: written, audio, video and digital content, including social media platforms. This allows the provision to keep pace with the reality of how this fraudulent material is produced and shared, and therefore safeguards its operational effectiveness into the future.
Therefore, we believe that this amendment is tightly drafted, carefully targeted and proportionately safeguarded, and would ensure that those who maliciously spread instructions on how to cheat the welfare system can be prosecuted. In short, it would criminalise not the sharing of information but the facilitation of fraud.
Fraud today is not static; it evolves, it adapts and it exploits new platforms with increasing sophistication. If this Bill is to succeed, it must be capable of not only addressing fraud as we see it today but of anticipating and countering the methods of tomorrow. This amendment would ensure that we do precisely that, tackling a wider breadth of fraudulent activity both in the temporal sense and in the online sphere. We believe it is an essential provision if we are to make this legislation truly effective and enduring.
There is a good reason for bringing this up again on Report. As the Minister knows, we seek a much greater effort in action from the Government to take down these abhorrent websites. We seek a series of proactive steps, with a timetable, to neutralise the individuals involved, who are no less than fraudsters. What are the government doing about sickfluencers? If the Minister replies that it is not for this Bill, then where and when?
I am concerned about the fact that the Government are not doing the proper groundwork required to tackle the threat, which is also to understand its scale. Is the Minister aware of work under way in the department to understand the relationship between sickfluencers and the rate of those claiming benefits such as PIP? What is the causal relationship that the department understands there to be between these two matters? In other words, how are the Government assessing the scale of the threat, with a view to crafting a response to match it? Academics at Oxford University and Bournemouth University, and journalists from an ever-increasing range of publications, are highlighting this, and have done so since I raised the issue in Committee. We are not alone in imploring the Government to take action on this front.
To conclude, I will be listening carefully and with interest to the response from the Minister. I am not expecting her to repeat that the current legislation is sufficient. I think she knows from discussions outside the Chamber that what I am really looking for is some real meat behind her remarks to show that the Government are taking this seriously as an abhorrent operation.
Baroness Sherlock (Lab)
My Lords, I share the interest of the noble Viscount, Lord Younger, in the important issue of fraudulent activity in the digital age, especially where it affects our social security system. I start by recognising that online activity in this space is wide-ranging. There are people who offer advice on social media or elsewhere online because they genuinely want to help others, often disabled people, to understand the benefits system better so that they can access the support they need. That is understandable and perfectly legal. However, there are others who deliberately use online platforms to encourage or facilitate benefit fraud by sharing information or organising fraud themselves. This kind of behaviour is calculated, harmful and must be taken seriously, but we do not need new legislation to deal with it.
Those individuals can and should face consequences under existing law. Section 7 of the Fraud Act 2006 and Section 44 of the Serious Crime Act 2007 already make it a criminal offence to assist or promote fraud. This amendment would not strengthen that existing legislation. In fact, as I pointed out in Committee, it would be softer than existing offences. It would reduce the maximum sentence for the proposed offence to just five years, compared to the 10 years already available under existing legislation. That is a weaker deterrent. Moreover, introducing a new offence risks duplicating the powers that the Government already have. This would create unnecessary overlap and a more confusing legal landscape, and could create a disparity in how cases are prosecuted and sentenced. There is no need to complicate the legal framework when legislation is already in place.
Where there is online activity which provides information on how to commit fraud, and where this activity can be reasonably countered, we think we have the right tools and networks in place beyond the legislation that I have already outlined. The department actively collaborates with a range of government partners, including Action Fraud, the City of London Police and the National Cyber Security Centre, to identify malicious sites that impersonate the department, enable fraudulent activity or target DWP customers.
For example, in partnership with Action Fraud, we have recently been raising awareness of winter fuel payment scams across Facebook and X—formerly known as Twitter. This has taken place alongside the DWP’s continued work with trusted partners and charities such as Independent Age to ensure that accurate and timely information is available. The DWP has also developed a recorded message for our telephone lines and issued a press release via GOV.UK to raise awareness of such scams.
Secondly, social media companies also have clear responsibilities under the Online Safety Act. They are required to remove harmful and illegal content, including anything that encourages or helps others to commit offences. The Act enables us to work with Ofcom through its new trusted flagger process. This builds on established relationships and escalation routes that we have with individual companies to report suspicious content on certain platforms quickly and effectively.
Viscount Younger of Leckie (Con)
I thank the Minister for her remarks. As I said, one of my main aims in speaking to this again was to draw out the actions from the Government on what they are doing to address what I call the scourge of sickfluencers. She states that the existing legislation covers the offences, but the offences are still occurring and are growing. However, I think I have succeeded to some extent in that I have managed to elicit from the Minister more information than I did in Committee, which is now on the record, on what the Government are undertaking cross-governmentally here. Although I am not entirely satisfied, I think I have succeeded to some extent. In the meantime, I wish to withdraw this amendment.
Baroness Sherlock
“Powers of Scottish Ministers(1) The following provisions of this Act have effect as if they were pre-commencement enactments for the purposes of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016—(a) sections 73 and 74;(b) section 96, so far as relating to an amount that is recoverable by the Scottish Ministers under Part 3 of the Social Security Administration Act 1992;(c) section 97.(2) Accordingly, an individual who for the time being has the Scottish Ministers’ authorisation for the purposes of Part 6 of the Social Security Administration Act 1992, in accordance with section 109A of that Act as amended by section 73 of this Act, has the functions conferred by sections 109B to 109C of that Act, as amended or, in the case of section 109BZA, as inserted, by section 73 of this Act.” Member’s explanatory statement
See the explanatory statement for my amendment replacing clause 73.
Baroness Sherlock
Member’s explanatory statement
This amendment would allow commencement regulations to provide for provisions to commence on different days in relation to different areas.
Baroness Sherlock (Lab)
My Lords, government Amendment 114 ensures flexibility in the commencement of certain provisions of the Bill across the different nations of the United Kingdom. This approach is well established in legislation such as the Care Act 2014, the Digital Economy Act 2017 and the Public Order Act 2023. It ensures that implementation is both practical and responsive to the specific circumstances in each jurisdiction. For example, the courts in one part of the UK may be ready to hear certain applications while, in another, staff training and procedural updates may still be under way.
This amendment allows the flexibility to commence later in one area without unnecessarily delaying implementation in an area that is ready. Crucially, the amendment does not alter the substantive provisions contained in the Bill, and nor does it affect how or to whom they apply. It is simply a matter of good governance, ensuring that the legislation is brought into force in a way that is orderly, effective and sensitive to operational realities.
I hope that the House will support this amendment as a sensible and necessary step in delivering the Bill effectively across the UK. I beg to move.
Viscount Younger of Leckie (Con)
My Lords, I will keep my remarks brief. Amendment 114 is, as the Minister has indicated, a technical amendment but one that raises a point of some practical importance in how this legislation will be implemented. The amendment would allow commencement regulations to provide for provisions of the Bill to come into force on different days in relation to different areas. We recognise that this is a standard enabling power and we do not object to it in principle.
However, while we appreciate that this is likely to be a technical and administrative provision, we would welcome a little more clarity from the Minister as to the intended purpose. In particular, can the Minister explain whether the Government currently anticipate that the legislation will, in practice, come into force in a staggered way across different parts of the UK? It would be helpful to know whether any particular regional or administrative reasons have led to this amendment being proposed—for example, to accommodate devolved competencies or pilot schemes, or differences in data infrastructure between public authorities—or whether this is simply a precautionary measure to preserve flexibility.
We would also be grateful if the Minister confirmed whether the Government expect any significant differences in timing or rollout between areas once the Bill is enacted. If such differences are anticipated, what criteria will determine the order of commencement and how will Parliament and the public be kept informed of that process? So while we are content to support this amendment as a sensible technical adjustment, we would appreciate some reassurance that it will not result in confusion or inconsistencies.
Finally, as we come to the end of Report, I want, on a lighter note, to take this opportunity to thank all noble Lords for their engagement throughout these proceedings, and all those who have voted on the amendments upon which we have divided. I look forward to seeing some noble Lords again at Third Reading on Thursday.
Baroness Sherlock (Lab)
My Lords, I thank the noble Viscount for his questions. First, we have no reason to believe that any area or jurisdiction will not be ready; this is simply a precautionary measure to provide flexibility in case unexpected issues arise down the line. It is a standard legislative approach that provides flexibility to adapt if needed, and avoids holding back implementation in areas that are ready, should there be another area that needs more time. No specific powers have been earmarked or delayed. The amendment is an enabling one, and where readiness exists, powers will be commenced without delay. On how people will know, Parliament and the public will see the commencement regulations, which will make that clear. This amendment is simply to ensure flexibility in the commencement provisions across the different nations of the UK, and I commend it to the House.