Lords Chamber

Wednesday 15th October 2025

(began 2 hours, 57 minutes ago)

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None Portrait Oral questions: NHS support to unpaid carers
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Foster Foster requested Foster requested Baroness Pitkeathley.
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15:54
None Portrait Legislation: Absent Voting (Elections in Scotland and Wales) Bill - committee stage
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And no has to be in committee on the Absent Voting (Elections in Scotland and Wales) Bill Lord Murphy of Torfaen.
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Lord Murphy of Torfaen Portrait Lord Murphy of Torfaen (Labour)
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My Lords, I understand. That no amendments. Have been set. Down to this bill. Not.

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No noble Lord has indicated a wish to move a manuscript. committee.

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committee. Unless, therefore, any noble Lord objects, I beg to move that the

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objects, I beg to move that the order of. Commitment be discharged. The question is that the order of

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The question is that the order of commitment be discharged, as many of that room will say, content, not content. The.

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content. The. Contents have it report of. The. Public Authorities (Fraud, Error

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Public Authorities (Fraud, Error and Recovery) Bill. Baroness Sherlock. Apologies, my Lords, I.

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Apologies, my Lords, I. Beg to me that this report be now received. The question is this. Report be. Now received?

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Now received? As many of that we will say content contrary, not content. The

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content contrary, not content. The contents have it. Amendment one. Baroness Kramer. Oh it's. It's I put down amendments one

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It's I put down amendments one and 20. The two amendments in this group to raise again the issue of whistleblowing. I mean, very sadly, I don't think it's necessary to repeat in any detail why the
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None Portrait Legislation: Public Authorities (Fraud, Error and Recovery) Bill - report stage (day 1)
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existing whistleblowing framework is completely inadequate. We only have
15:55
Baroness Kramer Portrait Baroness Kramer (Liberal Democrat)
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completely inadequate. We only have to look at the scandals at the post office. Contaminated blood. Let be office. Contaminated blood. Let be the Hillsborough cover up, the fake costings for HS2, the mis selling of costings for HS2, the mis selling of PPI mini bonds are now car finance, and these are just a few of the very and these are just a few of the very real outrages and tragedies that could have been nipped in the bud if we had had a system that in we had had a system that in actuality and effectively protected whistleblowers who speak out, and whistleblowers who speak out, and which ensured investigation of their disclosures, most importantly, disclosures, most importantly, victims of these many scandals would have been spared.

But also the taxpayer would have been protected from huge compensation payouts. My Lords, I believe strongly that the Public Sector Fraud Authority, sitting as it does under the Cabinet sitting as it does under the Cabinet Office and with its investigative powers, is very well placed to be powers, is very well placed to be the hub of a proper framework. I would call it an office of the whistleblower, but that's not a whistleblower, but that's not a precious issue. That and at least act as a hub for whistleblowing.

That's protection and investigation across the whole of the public sector. It could provide proper guidance to government departments and agencies, set standards for proper whistleblowing protection and redress, ensure investigation when appropriate, and provide the consistency, clarity and ease of use that are essential to effectiveness. Now I realise that the amendments that I have done are inadequate to this task, and what I'm seeking from the government is a sense of also some, some a conclusion that there is real progress in this direction.

Increasingly, the government has recognised the importance of the issue and the Minister herself, and I have to give her real credit, has commendably talked about the importance of whistleblowing. Collectively, the House has made progress in the Employment Rights Bill on limiting the abuse of non-disclosure agreements and in the Armed Forces Commissioner's Act, in developing a whistleblowing framework for the commissioner, which will possibly extend to all of defence. Now, in the context of fraud and whistleblowing, we currently await the second part of the Fisher Review of Disclosure.

This bill itself contains provisions for an independent review of the ministers functions, so there are tools available to the government for this government. Ask any other. There is always the risk that without change, new scandals will occur and those would then be laid directly at the government's door. And nobody wants that. This is an area where all parties should be cooperating and not competing. And so I look forward to hearing the minister's reply, and I hope to conclude that progress is seriously being made.



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The amendment repays clause one, page one, line 13 at end, insert the page one, line 13 at end, insert the words as printed on the marshalled
15:57
Baroness Finn Portrait Baroness Finn (Conservative)
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list. My Lords, I want to begin today by thanking both the noble by thanking both the noble Baronesses, the ministers of Set and noble Lords across the House for their engagement with us on the substance of this bill. Since we entered the committee stage, I feel that we've had some very valuable discussions, and I welcome that the government has approached this with a view to compromise and listen to and listening to noble Lords across the House on the bill.

I hope we can conclude report in the same spirit, and I look forward to the discussions we shall have in these sessions. My Lords, we on these benches welcome that we are starting report by discussing an important issue. And I thank the noble Lady Baroness Cramer for bringing forward these two amendments. Both amendments in this group speak to a common principle that individuals who come forward with evidence of wrongdoing should be able to do so safely, confidently and with the assurance that their actions will lead to meaningful action rather than personal detriment.

My Lords, the decision to do the right thing and report wrongdoing is far from an easy decision for anyone to make. To come forward with evidence of fraud is often to put oneself at considerable risk of losing employment, damaging one's reputation, or straining relationships. If we expect people to do the right thing, then it is incumbent upon us to ensure that the system does right by them in return. Whistleblowers are very often the first line of defence against fraud. They can identify irregularities and provide information that would otherwise remain hidden, information that the public sector fraud authority will need in order to act swiftly and effectively.

And that is why it is so important that individuals know that they will be listened to, supported and protected. Only then will they feel able to come forward, and only then will we be able to tackle fraud before it escalates. My Lords, in addition to the channel set out in amendment one, this principle links directly to the Second Amendment before US amendment 20, which proposes the establishment of an office of the whistleblower for public sector fraud. The purpose of such an office would be to oversee and safeguard the process of whistleblowing, to ensure that concerns are acted upon, and that those who raised them are not left exposed or ignored.

We understand that the noble Lady has likely brought this proposal to emphasise the importance of the issue, rather than to suggest this particular structure is the final answer. And we shall, of course, be very interested to hear how the noble Baroness the Minister, will meet the challenge that has been set on this question. My Lords, as the noble Baroness Lady Kramer set out, whistleblowers can only operate effectively when they know that their efforts will not be in vain. And when they know that the authorities will respond and the risks they take will not go on and on.

In the specific context of this bill, that raises a very practical question, which relates to the amendment that we have brought to clause two. If a whistleblower were to bring actionable evidence of fraud to light, would the public Sector Fraud Authority be able to act on it directly, or would they still have to wait for a formal invitation from the relevant department or authority before beginning an investigation? Our reading of the bill suggests the latter, and if that is the case, then the system risks leaving whistleblowers stranded, even when they have provided precisely the sort of information that this legislation is intended to uncover.

So I would be grateful if the noble Lady the Baroness the Minister could use this opportunity to set out clearly how the framework envisaged under the Bill would work in practice to protect and honour those who come forward. While we may not believe that a statutory office of the whistleblower in the form proposed is necessarily the right approach, and indeed the principle behind it is unassailable, whistleblowers must know that their efforts will be taken seriously, that they should be, that they will be shielded from retaliation, and that that courage will help to protect the public purse rather than be punished for it.

My Lords, the fight against fraud depends as much on human integrity as it does on institutional power. We should do everything we can to ensure that those who act with integrity are supported, not silenced. And for that reason, I have the government give serious consideration to the merits of these amendments and to the broader protections that

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underpin them, and answer the questions that have been raised. Here.
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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Here. My Lords, so we begin report stage. Can I first thank all noble Lords for their genuinely Lords for their genuinely constructive engagement on this important bill as we seriously engage in efforts to protect taxpayers money, something I know every member of your Lordships' House cares vehemently about. Can I also especially thank the opposition front Benches, who have been so, who have genuinely given much of their time to make sure this works. And I hope that you will see through the responses from the government today.

We have tried to listen and make as many amendments as possible to make sure this bill is effective and will work in practice. I want to once again warmly welcome the amendments tabled by the noble Lady Baroness Cramer on the important issue of whistleblowing, as I did during committee stage, the noble Baronesses commitment and diligence in this area. As ever, she has proved to be tenacious and determined, but with due cause. Ensuring that we can prevent some of the appalling scandals that she has named my Lords, it is clear that protections for whistleblowing are a key aspect of counter fraud investigations.

A 2023 National Audit Office report into whistleblowing showed that a total of 41 organisations employing civil servants recorded and reported 939 concerns over a three year period, and fraud was consistently the most common category, representing 39.9% of all concerns across the three years. It is only right that the PSFA closely considers its role in this landscape. As such, I am pleased to have an opportunity to place on record our efforts. Since your lordships last debated the issue. We are listening to your lordships House.

We are doing everything we can to ensure that both this legislation and the work of the PSFA are effective, as and as impactful as they can be. Officials across government have come together to understand what can be done in the public sector. Fraud, whistleblowing, space, in particular, the PSFA Bill team has worked with the other bill teams where this important issue has also been raised recently in your Lordships' House to ensure that departments work in partnership to deliver a coherent response.

As a result, I am pleased to give the noble Lady Baroness Kramer a series

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of commitments this government can make. First to ensure. This important issue continues to be taken forward effectively. be taken forward effectively. Officials will continue co-ordinating across the whistleblowing landscape to identify whistleblowing landscape to identify areas where the PSFA can add value, such as joint guidance documents. In the area of public sector fraud. the area of public sector fraud. PSFA will also seek to work closely with officials in the SFO and HMRC. with officials in the SFO and HMRC.

HMRC have deployed a whistle blower incentivization scheme, and the SFO had developed proposals for a had developed proposals for a similar scheme. PSFA and the SFO have already agreed to identify areas where they can support each areas where they can support each other's work on whistleblowing. Once Jonathan Fisher's review is published, the PSFA will work with other government departments to consider and, where possible, adopt his whistleblower recommendations. I his whistleblower recommendations. I am also pleased to announce that as soon as practicable, all likely to be within 12 months of the powers be within 12 months of the powers being first used, the government will ask the independent reviewer who will be appointed under clause who will be appointed under clause 65 of this bill, to conduct a review of SFA's use of whistleblowing in of SFA's use of whistleblowing in cases of public sector fraud.

The PSFA will also endeavour to publish updates on whistleblowing in public updates on whistleblowing in public sector fraud in its annual reports, where appropriate. Going forward, those reports will be used as an opportunity to communicate routes available for whistleblowers on public sector fraud. Also my Lords. Once this bill becomes law, PSFA will seek a place on the described sorry prescribed persons list under the Public Interest Disclosure Act, 1998. I look forward to future engagement on this issue and given the commitments I have outlined and the necessity of maintaining the focus of this legislation, I hope that the noble Lady Baroness Kramer will withdraw her amendments.
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Baroness Finn Portrait Baroness Finn (Conservative)
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Baroness Finn. My Lords. I. Began by thanking the noble Baronesses opposite for their Baronesses opposite for their constructive engagement with us on this bill. Our meetings with the ministers have been genuinely useful, and I welcome the spirit of good faith and collaboration with which the noble Baroness the Minister has approached our discussions. Tackling fraud against the public purse is a shared ambition across this House, and it is in that constructive spirit that we have brought forward the amendments in this group.

As drafted. Clause two provides that the Minister may investigate or take enforcement action in respect of suspected fraud against another public authority only at the request of that public authority. In other words, the public sector fraud authority can act only if invited to do so. And indeed, that was the word used by the noble Lady in her remarks at committee. My Lords, this is an extraordinary limitation to place on an organisation or on an organisation whose very purpose is to root out fraud across government.

The Bill seeks to confer considerable powers of investigation and enforcement upon the Cabinet Office. Yet the exercise of these powers is ultimately hamstrung by the restriction in clause two. The effect is to create a PSFA that is at once empowered and yet toothless, an authority that has wide ranging powers on paper but which cannot use them unless those potentially under scrutiny choose to permit it. It cannot be right that a public authority suspected of fraud has the power to decide whether or not to be investigated, to rely on department or agency, to invite in the PSFA to look at themselves or their workers is frankly, far too weak.

There are obvious disincentives the reputational risk, the potential embarrassment, and the possibility of drawing attention to failings that might otherwise have gone unnoticed. As my noble friend Lord Maude of Horsham notably observed at committee, assuming that departments will voluntarily expose their own shortcomings is a triumph of hope over experience. If we are serious about protecting the taxpayer, then the PSFA must be able to act proactively to initiate investigation where credible concerns arise. Not to wait passively for a polite invitation that they never come.

My Lords, I have been in government and I know how these things work. We cannot rely on goodwill. We must be both forthright and proactive in tackling this issue, which is an offence against every single person in this country. Fraud against the taxpayer is not a matter to be settled or not by an informal phone call between permanent secretaries, as we were told could currently happen. Such a situation must be backed up by a statutory mechanism that ensures action is taken swiftly and decisively.

Of course, such discussions can should happen in the first instance, but there needs to be a way to compel such action if necessary. Our amendment would therefore enable the Minister for the Cabinet Office, through the PSFA, to undertake proactive investigations or recovery actions in respect of suspected fraud against a public authority on their own initiative, where it is in the public interest to do so. It would preserve the authority's own internal fraud functions under subsection five, but it would finally give the PSFA PSFA the power it needs to do its job properly.

My Lords, this amendment is not about centralising control or creating a culture of interference. It is about clarity, closing a glaring loophole, one that every complacent official and every fraudster will otherwise see coming a mile off. It is about ensuring that when the PSFA becomes aware of fraud, that awareness marks the beginning of an investigation, not the point at which the system grinds to a halt while waiting for consent to be granted. Alongside this, and in the same spirit of strengthening accountability, we have tabled a Second Amendment one which we raised a committee and returned to again today, as we believe the government should take this opportunity to outline how they are working to create a counter fraud, duty and culture across public authorities.

This amendment would require that where a recovery made under clause ten exceeds £50,000, the public authority on whose behalf that amount was recovered must conduct an internal review into the circumstances that gave rise to that loss, and provide that review to the Minister within three months of completion. This is a practical, proportionate proposal to ensure that public bodies learn from their mistakes. It seeks to prevent the creation of a pass the buck to the PSFA mentality. The PSFA cannot and should not become a convenient dumping ground for departmental failures.

Fraud and error often originate within the systems and processes of individual departments. Responsibility for preventing and detecting it must therefore remain with them. I hope, therefore, that in her remarks on this amendment 19 the noble Baroness the Minister can set out to this House how this culture is being created and how authorities are going to be held accountable for the mess in their own houses without simply leaning on the PSFA my Lords. This is an opportunity for the opportunity for us to get this right.

If we want to tackle fraud, then we cannot create a mighty but toothless body with expansive powers on paper, but which has no power to go after fraud when it should. We risk creating a situation in which the PSFA is legally unable to tackle fraud and wire fraud, which is known about, but not formally referred to, the PSFA goes unchecked. The noble Lady may stand up and say that she expects many cases to be referred to the PSFA, but this misses the central point, which is that the PSFA must be able to tackle all fraud, of which it becomes aware and can have a role in stopping.

It is a not a question of which cases are referred to the PSFA, but which cases will be missed because the PSFA was not invited to go in after it. And this is simply not good enough. We must be really clear now in giving the PSFA the power to tackle wrongdoing proactively, I beg to move.

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Amendment repays. Clause to. Page two. Leave out line ten and insert whether, at the request of that public authority or whether the Minister considers it necessary in

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Minister considers it necessary in the public interest or on the Minister's own initiative. My Lords, I. Wanted to speak.

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Wanted to speak. Very. Briefly in support. Of amendment two. Before I start that, I would like to echo the words of the noble Lady Baroness Finn about the engagement on this bill, which has been, I think, exemplary and extremely.

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think, exemplary and extremely. Constructive, and I'm very grateful to both noble Ladies for that. The Bill. As it's currently.
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Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-affiliated)
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I find myself in a difficult position because I'm not usually one to want to give ministers of state or the PFA, or bodies like the PFA more power. However, I am very sensitive to contemporary events in which local authorities have indeed not necessarily always been open about things happening on their watch. I'm thinking of things like the grooming gang scandal, but in all seriousness, things happen and they're covered up and I want to be in a position where, therefore the correct authorities, if they suspect something is happening that is wrong, can intervene.

So in that sense, I do, with some trepidation, support amendment two. I particularly, though, wanted to emphasise the importance of the Second Amendment in this group, amendment 19, because one of the things that is absolutely crucial to building trust, which I know the noble Lady, the Minister has emphasised this bill can do is that we have transparency, is that we are able to see wrongdoing, that it is open for the public to be able to find out what's happening locally.

I think otherwise a culture of secrecy could well continue. So I simply say these amendments are sensible in engendering real trust in the process moving forward.

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Looks like my. My, my Lords, I.

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My, my Lords, I. Rise to speak to these these two amendments. Our principle. Generally is.

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Generally is. The lowest. Level of government. Should make. Those decisions. To put it up.
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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My Lords fought against. The public sector, takes money away from vital public services, enriches those who seek to attack the those who seek to attack the government, and damages the integrity of the state. This bill is part of the government's response to this urgent and challenging problem. The bill gives functions and powers to the Minister of the Cabinet Office, which will be exercised by all authorised officers and investigators based in the Public Sector Fraud Authority.

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I hope it will. Assist your Lordships' House if I remind noble Lords of the PSFA remind noble Lords of the PSFA mission. The PSFA is the UK Government centre of expertise for the management of fraud and associated error against the public sector. It leads the Government Counter Fraud Function, which brings Counter Fraud Function, which brings together the approximately 16,000 people who've worked in government departments and public bodies to

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departments and public bodies to fight fraud. The standards. And guidance that the function creates, led by the PSFA, must be creates, led by the PSFA, must be used in central government and can be used more widely in the public sector and beyond to improve the robustness of how we understand, prevent and respond to fraud. My prevent and respond to fraud. My Lord, these two amendments make significant changes to government's intention in bringing forward this intention in bringing forward this bill and how the PSFA works.

They change the impact of the bill and are necessary to be put into law, so are necessary to be put into law, so we cannot accept them. Turning first to clause two, the noble Baroness to clause two, the noble Baroness Lady Finn offered a version of this amendment in Grand Committee which simply deleted line ten, which I resisted because removing that line without putting something else in its place created uncertainty and potentially conflicted with the with potentially conflicted with the with the preservation of public authorities own fraud functions.

In clause two five, it is clear this draft has been influenced by the debates on the original, and I thank the noble Lady for it. However, the new version goes further and dramatically changes the impact of the bill. It creates an extensive new power for the Minister for the Cabinet Office, and changes the relationship between the PSFA and the public and public authorities they work with. The government's intention is that the PSFA offers a public sector fraud service, collaborating with public authorities, which have been attacked by fraudsters to take action to investigate, enforce and recover the funds.

Collaboration is vital in the government's fight against fraud. Noble Lords will be aware that in the last 12 months, the government that last month the government announced that in the last 12 months, since April 2024, over £480 million was prevented from

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going into fraudsters pockets. cross-government. Collaboration is what PSFA is

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Collaboration is what PSFA is for. We can do more, which is why we need the Bill. But my Lords, the need the Bill. But my Lords, the PSFA is already working, so I firmly believe that the normal mechanisms of government can ensure that counter fraud cooperation happens as it is already happening in the work of the current pilot unit in PSFA. of the current pilot unit in PSFA. Also, my Lords, in issues of national importance, there will be some moral and public pressure for some moral and public pressure for something to be done.

So I believe it is not necessary for the Minister to have a director of power in law to have a director of power in law to investigate on their own initiative. My Lords, we truly believe that the collaborative approach outlined in the bill, approach outlined in the bill, combined with the normal operations of government, would ensure the PSFA has the access it needs. The definition of clause of public authority in clause 71 is broad, and this amendment would affect this amendment would affect different public authorities and differently, my Lords, for central government departments, it would government departments, it would mean a minister below Secretary of State level directing and overriding Secretaries of State.



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Secretaries of State. For local authorities. The amendment would be a new power for central government to take over a responsibility without their consent. The Local Government Act 1999 already has powers to this effect, and we do not want to create a new one specifically for fraud. Turning to and turning to the new clause, this is identical amendment. Sorry. Turning to the other agreement, it would require departments to conduct an internal review if, following a PSFA investigation, it is confirmed that they have lost more than £50,000 to overpayment or fraud.

My Lords. All losses on this scale should already be investigated and reported on. There are established audit, assurance and reporting processes for this. In addition, the facts of this case would already have been established by the PSFA and learning taken from it will be shared across government aid. The prevention of fraud. This amendment creates an extra burden on the Department and replicates the work of the PSFA is unnecessary as the core, as its core aim will already be addressed through other activities.

I would therefore encourage noble Lady Baroness King to withdraw her amendments after my very persuasive arguments.

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Yes. I thank the noble Baroness for
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Baroness Finn Portrait Baroness Finn (Conservative)
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her incredibly persuasive arguments. My Lords, we are clear that this is an unacceptable settlement. If the PSFA could act only if invited by the very body that they have failed. This is that is not a system of scrutiny. It's an invitation to inertia. It cannot be right that officials in a department where fraud is suspected should have the power to decide whether or not to be investigated. The DWP does not wait to be invited before it goes off to benefits, cheats, and there is no reason why public officials should be held to a different standard.

The government is proposing to create an authority with with wide powers on paper, but no real agency in practice. A watchdog told to bark only when asked. In short, it should be called out for what it is a farce. Fraud against the taxpayer is not a matter for polite phone calls between permanent secretaries. It demands action. Statutory, swift, unambiguous. When the credible evidence of fraud arises. That must be the starting gun for any investigation, not the moment the system looks away.

Our amendment gives the PSFA the ability to act proactively with proper safeguards wherever fraud occurs. If we are serious about protecting public money, we cannot design a system that waits to be asked before doing its job. I am not satisfied. I'm afraid that the response from the government meets the conditions set out, and therefore I want to test the opinion of the House on

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amendment two, standing in my name. The question is that amendment to be agreed to, as many of that

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opinion will say, content. Content contrary, not content. Not content. The question will be decided by a

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The question will be decided by a division. I will advise the House division. I will advise the House when voting is open. Voting is now open. Clear the bar. Know, yeah. Know, yeah. Thank Know, yeah. Thank you Know, yeah. Thank you so Know, yeah. Thank you so much. Know, yeah. Thank you so much. I A A well A well done.



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Just

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Just Just the Just the question Just the question is Just the question is that amendment to be agreed to as many of.

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of. That option will say content. That.

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Contrary not content the contents go to the right by the thrown the not contents the left by the bar. not contents the left by the bar. Yes. I I not I not that.

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The The laws The laws that

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The laws that have The laws that have voted.

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The laws that have voted. Contents 200 not contents 190 for the contents have it.

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the contents have it. No. Not.

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No. Not. In clause three. Amendment three. Baroness Finn.

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Baroness Finn. My Lords, I speak in this group. Two amendments three and four tabled in my name and that of my noble

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in my name and that of my noble friend Viscount Younger of Leckie. Lackey. Both concerned the information gathering and sharing powers contained within this bill, and both are designed to ensure that those powers are exercised with fairness, powers are exercised with fairness, clarity and restraint. The First Amendment after clause three would require that any information notice require that any information notice issued to a bank or financial institution includes a clear statement that the person named or statement that the person named or described in that notice is not necessarily guilty of the suspected fraud.

My Lords, this is an important safeguard. As noble Lords will recall, clause three enables investigators to issue information notices to banks where there is a reasonable suspicion of fraud. That is a proper and necessary power, which is central to the operation of the bill. And we do, of course, accept that. But it is equally vital that the use of that power does not inadvertently imply culpability on the part of the individual concerned, particularly in the early stages of implementation, when departments and financial institutions are still adjusting to these new processes, there is a real risk that an information notice could be misinterpreted as a formal accusation of wrongdoing.

A simple, clear statement of non culpability within the notice would prevent that risk. It would protect innocent individuals from reputational harm, ensure that they are not subject to de banking or any action from the side of the bank. Ensure transparency in the use of investigatory powers and demonstrate that the government is determined to act fairly as well as firmly in the pursuit of fraud. If this is a small addition, my Lords, but one with significant practical effect, what may seem a technicality in legislation can have a real and tangible effect on people in the real world who will be affected by the words we use and the words we approve.

On the face of this bill, clarity on this question would be a small change for the government, but could avoid risking some serious and damaging circumstances for people outside of this place who have done nothing wrong, but may nevertheless be presumed to have done so without the sort of clarifications we are suggesting. We therefore hope the government will look closely at how such a clarification might be built into the final version of the bill, the Second Amendment after clause five concerns the disclosure of information once it has been gathered.

As the bill stands. Clause five the last minister to disclose information to another person for the purposes of exercising the powers in the bill, but it gives no definition or limitation as to who that other person might be. That, my Lords, is an extraordinarily broad formulation. Our amendment would simply require the Secretary of State to specify by regulations, the persons or categories of persons to whom such information may be disclosed. This would provide a transparent and accountable framework, one that allows for flexibility but still ensures that Parliament has visibility of how and where sensitive data can be shared.

We are not seeking to obstruct the legitimate flow of information between public bodies. On the contrary, we recognise that effective information exchange is essential to combat fraud across the public sector, but we must ensure that these powers are not open ended. We trust the present minister to use them responsibly. But as noble Lords in this House have often reminded us, we are legislating for future ministers and future governments as well, and the safeguards we are building now will protect individuals for years to come.

My Lords, these are not amendments on which we intend to divide the House. We bring them back to ensure that these important issues are not lost as the bill progresses, and that the government meet the challenge they raise, and that appropriate assurances or requirements are provided before the bill leaves this House. Both proposals are constructive. One protects individuals from being unfairly stigmatised when information is sought about them. The other ensures that personal information, once obtained, can only be shared within clear, regulated limits.

Together, they speak to a single principle that strong powers must always be matched by strong safeguards. We therefore hope that the noble Baroness, the Minister, will take these concerns in that spirit, and consider how best to address them as the Bill moves forward, and we look forward to hearing her response. I beg to move.

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The amendment. Proposed clause three, page three, line nine at end, insert the words as printed on the marshalled list. To briefly add my support to amendment three, which
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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Lady bringing forward these amendments again, and I find myself agreeing with the concerns of the noble Lady. Baroness Finn and other members of your Lordships' House has been outlined, so I will seek to reassure you, all members of your Lordships' House that we are already undertaking this work and the safeguards are in place in respect of amendment three. We will be including specific information in guidance for authorised officers to ensure there are lines included in information notices advising the information holder that it is an ongoing investigation and no inference should be made that the individual specified on the notice is guilty, as was just raised by the noble Baroness Lea G force.

This amendment is therefore not required, as it is already our intent to do this, and it will be achieved in guidance. Turning to amendment four again, I would like to assure the noble Lady and other members of your Lordships' House that I agree with the intention of the amendment, which is why there already safeguards in the bill which restrict the disclosure of information. Clause five details that information can only be disclosed for the purpose of exercising the core functions. This restricts to whom and for what purpose.

The information can be disclosed. However, by also including a prescriptive list of persons who can have access, who can have information disclosed to them, would further restrict the intent of the clause and the effectiveness of the scope of the clause in exercising the core functions detailed in one of the bill. I hope to further reassure your Lordships noble Lords that the PSFA Enforcement Unit would also have memorandums of understanding for each person they would be sharing information with, as well as maintaining a data protection impact assessment to ensure this information is shared and held in adherence to data protection legislation, we have taken every step to ensure there are appropriate safeguards in the disclosure information, while balancing this with making the powers relevant and effective for an investigation.

I hope this reassures noble Lords and that the noble Lady will withdraw

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her amendments. My Lords, I am grateful to the Baroness, the Minister, for her
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Baroness Finn Portrait Baroness Finn (Conservative)
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Baroness, the Minister, for her response, and also to the noble Lord, Lord Palmer, for his support, and to the noble Lord Lord fo and the noble Baroness Lady Fookes for their support for amendment three. These are, on the face of it, small and technical matters, but they go to the heart of how this bill will operate. In practice, the smallest drafting choices, the subtlest omissions, can have very real consequences for individuals caught up in these processes. We cannot allow the system to treat people as wrongdoers.

When nothing has been proven or concluded. The language of the bill must make that absolutely clear. What may seem a flippant technicality in this chamber can, in the real world, determine whether someone is wrongly stigmatised, denied banking services or placed under suspicion without cause. And that is why these details matter. Because fairness, clarity and restraint are not afterthoughts. They are the foundation of public confidence in the powers this bill creates. So again, I thank the Minister for her engagement, and I hope that as the bill progresses, these small but important safeguards might be reflected in the final

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drafting. And on that note, I beg leave to withdraw. The amendment. Is it your Lordship's pleasure that this amendment be withdrawn? Amendment by leave withdrawn. Amendment by leave withdrawn. Amendment four not moved. Enclosed seven. Amendment five. Baroness

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King. My Lords, this amendment tabled in my name and that of my Noble friend Viscount Younger of Leckie.

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Excuse me. Viscount Younger of Leckie seeks to insert a new clause after clause seven, requiring the Minister to seven, requiring the Minister to publish within six months of Royal Assent statutory guidance setting out the process by which to out the process by which to authorise. Investigators are appointed under this part of the Bill. Clause seven, as it stands, is one of the most powerful provisions in the Bill. It confers unauthorised investigators a suite of powers drawn from the Police and Criminal Evidence Act 1984, powers which are Evidence Act 1984, powers which are usually reserved for police officers.

These include the ability to search, to apply for search to search, to apply for search warrants, seize property and access computerised information. These are not trivial powers. They allow the not trivial powers. They allow the state to enter homes and businesses, to seize personal possessions, and to compel the disclosure of data. Yet, as currently drafted, clause seven defines in an unauthorised investigator as and I quote an individual who is authorised by the Minister to exercise the powers conferred by this section.

It is, in effect, circular. An authorised person is whoever the Minister authorises. There is no clarity, no set of criteria and no publicly available process to explain how these individuals are selected, trained or held accountable. My Lords, if we are to grant powers of this magnitude powers that mirror those of the police, then Parliament and the public are entitled to know who Will willed them and on what basis. The police are subject to detailed recruitment standards, codes of ethics and training requirements, all of which are set out in published documents such as the National Recruitment Standards eligibility criteria for police recruitment and consistent recruitment practices.

Those standards exist for a reason because with greater power comes greater responsibility. We should expect nothing less from the public sector fraud authority or from any civil servants who are to exercise police powers on behalf of the minister. The public will rightly expect the same degree of rigour, impartiality and transparency that they would for a police officer acting under similar authority. This amendment, therefore, asks for something very modest a requirement that the process by which such authorises such authorisations are made be set out in guidance published within six months of this provision coming into force.

That guidance would need to explain who is eligible, how individuals are assessed, what qualifications or training they require, and what oversight mechanisms apply. In doing so, we would provide reassurance both to Parliament and the public that these powers will not be exercised lightly, and that those who will them will be suitably qualified, appropriately vetted and properly accountable. We are, after all, creating a precedent here. These powers will not exist in isolation they could endure for decades, exercised by future officials in future departments.

It is therefore essential that we get the governance right at the outset, and that we put clear expectations on the record and ideally on the face of the bill. My Lords, this is an area where guidance can make a real difference. It would strengthen the operational credibility of the new regime, improve transparency and protect the reputation of the PSFA. It was also provide ministers with a clear framework to defend and justify their appointments in the future. I hope, therefore, that government will look carefully at this proposal and if they cannot accept it today, that they will bring back their own amendment at Third Reading to ensure that the appointment and oversight of authorised investigators meet the same professional standards and ethical safeguards that we rightly demand of our police, I beg to move.



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Amendment proposed clause seven, page five, line 22. At end, insert the words as printed on the

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marshalled list. After committee. This was one
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Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-affiliated)
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After committee. This was one area of the bill that I literally had nightmares about. I think there is a really dangerous precedent is a really dangerous precedent being set here. I'm actually rather disappointed that the noble lady Baroness Penn isn't dividing on this, because it is one area where I felt that inadvertently handing over police powers to civil servants could. Completely backfire and cause real serious problems. I was talking recently to a group of people about some of the problems within the police force that know that even though we have vetting, even though we have trained, that there are serious problems of corruption in some instances or misbehaviour well documented, I hardly need rehearse it.

And these officers, police officers are charged with enormous privilege in a way to act on behalf of the state. And therefore we know that even when we have such safeguards in place that people with power can abuse that power, in this instance, this bill, however well-meaning, intends to give similar powers to people who we have no idea what their training will be, whether they will indeed be vetted, what qualifications. And I think, therefore, this amendment is entirely appropriate, is rather modest, but it does at least seek to provide some safeguards for what is happening here, which is the state, or setting up a civilian population to act as police officers.

And to be honest with you, the public don't know about it. And it is shocking. And when you whenever I tell anyone that this came out during committee and then it's contained in the bill was the it was the thing which shocked most people most. So I do hope that again, we can receive reassurances, but not just reassurances that there are concrete responses brought forward by the Minister as to what can be done to ensure that this does not go very badly wrong and backfire.



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My Lords. Clearly it's best if something such as who these
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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My Lords. It is essential that any individuals authorised to use the powers enshrined in the police and evidence the Police and Criminal and evidence the Police and Criminal Evidence Act on change for is competent to discharge their duties under the law. We are committed to ensuring this is the case for the authorised investigators created by this bill. However, for legislation to require the publication of guidance on an internal appointment process is not only unnecessary but also inconsistent with established practice in this area across other government departments.

Other government departments with similar investigative powers. For example, HMRC, the Home Office, Defra and even the Food Standards Agency are not required and do not publish statutory guidance on this point. Let me reassure your Lordships' House ministers take their responsibilities seriously. It is for this reason, as we have consistently affirmed, that no investigator will be authorised to exercise these powers until the Minister is entirely satisfied that they possess the requisite training and expertise. This training will cover proficiency in relevant aspects of Pace, particularly the legal framework and applications of section eight and section nine and Pace codes of practice, as far as they apply to the SFA's powers, proper procedures for applying for and lawfully seizing, lawfully executing warrants, including entry, search, seizure and handling digital information, proper handling and retention of and access to evidence.

Crucially, they will be trained in safeguards for individual rights, drawing investigations and warrant execution, and in the proper handling and retention of and access to evidence. Training will be provided by the College of Policing by means of a series of bespoke training courses, the first of which has commenced this week. Individuals will be required to demonstrate proficiency in all relevant facets of Pace before the Minister will authorise them as authorised investigators, with particular emphasis on the legal framework alongside its accompanying codes of practice.

These authorised investigators will also be members of the Government Counter Fraud Profession, and they will be required to meet the appropriate professional standards. Therefore, my Lord, I urge you to I urge you to consider that the existing framework, bolstered by our commitment to rigorous training, already provides necessary assurances and amendments codified. This is unnecessary. I would also like to reassure and remind noble Lords that these powers cannot be exercised in any specific case unless a court has granted a warrant. The ultimate safeguard.

I hope that this explanation reassures noble Lords and that they can therefore withdraw their amendments.

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Yeah, yeah.

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Yeah, yeah. My Lords, we will not be dividing the House on this amendment. And I'm sorry to disappoint the noble
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Baroness Finn Portrait Baroness Finn (Conservative)
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sorry to disappoint the noble Baroness Lady Fox, for whose support I'm very grateful. But we will be looking later in, in the groupings at safeguards on on pace powers granted to civil servants later today. It. The amendment, however, does speak to a very important point, one that we have raised repeatedly throughout the passage of this bill. We are granting serious powers to officials under this legislation, to so-called authorised investigators who will be able to exercise powers, some of which are drawn from the Police and Criminal Evidence Act.

We can never forget that these are not minor administrative tools. They are police level powers to search, seize and compel. And if we are to trust such authority to civil servants, then Parliament and the public deserve full oversight of how those powers are used, and quite simply by whom. That is the question this amendment asks, and it is one that must be answered clearly before this framework is implemented. The process for authorising investigators, the standards they must meet, and the accountability mechanisms that apply are not small matters of drafting detail.

They go to the heart of public confidence in this regime. We appreciate that the Minister can tell us now how this process will work, but some of the formal but some sort of formal, documented statement setting this out would be immensely helpful as a way of us having this beyond the minister's word. Because while I trust the noble Baroness completely, I don't. Thank you. I do not. We do not know if we can always trust her successor or her successor after that. Setting this out allows everyone to know the standards, know the process, and ensure that this is being met not only now, but in the future.

So in short, I am grateful to the Minister, the Baroness, the Minister for noble Baroness, the Minister for her response. But I hope the government will reflect seriously on this issue and possibly come back with something at Third Reading. The powers in clause seven are significant, and so too must be the safeguards that accompanied them. And on that basis, I beg leave

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to withdraw the amendment. Is it, Your Lordship, especially the amendment being withdrawn? The the amendment being withdrawn? The amendment is by leave withdrawn. Amendment six I. Notes the government Minister Baroness Meyer.

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My Lords, I was on my honeymoon last week, which is why our amendments are tabled in the name of amendments are tabled in the name of Baroness Sherlock. And just thinking, this time last week I was in Santorini. I told the noble in Santorini. I told the noble Baroness I'd get it in my. I think I've done awfully well to get to a I've done awfully well to get to a group five. My Lords, a bill about a bill that has recently passed in your Lordships' House and its your Lordships' House and its provisions have a direct impact on how we draft and interpret legislation across government,
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Baroness Sherlock Portrait Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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That if one of us was in Santorini and the other one was here and tabling amendments, I may have got the raw end of the deal,

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got the raw end of the deal, although it's possible the noble Baronesses husband maybe wouldn't agree. With that. But I rise.

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But I rise. To move a number of government amendments which contain a series of further safeguards for individuals further safeguards for individuals who are subject to the new debt recovery powers in parts one and two of the bill, specifically in relation to direct reduction orders to recover from bank accounts and deduction from earnings orders to deduct from pay salaries. In part one. And before I address them, I want to add my thanks to noble Lords from around the House. What has been a really constructive consideration of the bill so far, and I hope these government amendments will help to add to that, to that sentiment.

But I'll start with government amendments 89, 93 and 94. These amendments seek to clarify the

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obligations of financial. Institutions. Not to disclose that. They. Have received an information notice under the new power enabling Direct Reduction Orders, or DDOs, under the debt recovery provisions in both parts one and two, financial. Institutions are prohibited from informing account

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prohibited from informing account holders that the PSFA or the DWP have requested account information. This is to militate. Against attempts to avoid the

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Against attempts to avoid the powers, for example by moving money out of the account before a DDO is issued. These amendments.

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These amendments. Clarify that the prohibition ends three months after the notice is given to the bank, or sooner. If a pre deduction notice is subsequently given, three months is long enough for DWP or the PSFA to have assessed for DWP or the PSFA to have assessed the debtor's ability to repay and the affordability of repayments, and to issue a.

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First notice. remove. Any. Doubt as to how long the prohibition lasts, ensuring the prohibition lasts, ensuring the requirement is proportionate and not overly burdensome. It is only during the time that account information is being considered that the prohibition applies. Once the information has been properly assessed and any pre deduction

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assessed and any pre deduction notice given to the bank account. Holders can be. Told that the information was

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Told that the information was the. Account holder. applicable. Will be.

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Notified in writing by the PSFA or the DWP of their right to make. Representations regarding the

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Representations regarding the proposed deductions before any are taken. Government amendments 12.

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Government amendments 12. 13, 98 and 100 A come in response to our further engagement with the financial services sector. They seek financial services sector. They seek to clarify the responsibilities of the PSFA, DWP and financial the PSFA, DWP and financial institutions with specific regard to legal deputies who might be managing the affairs of a debtor subject to a the affairs of a debtor subject to a DDO. Since committee, we have continued to benefit from the insight provided by the financial services sector, and we want to services sector, and we want to provide as much clarity as possible on respective roles and responsibilities.

So these responsibilities. So these amendments will help ensure that the implementation of these measures is straightforward and the government straightforward and the government can recoup money lost to fraud and error in an efficient and effective manner. Government amendments 12 and manner. Government amendments 12 and 13 simplify the drafting of clause 37 and remove redundant provisions. Amendments 97.

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And. five. Government amendments 14 and.

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Government amendments 14 and. 99 are consequential to amendments 11 and 96, limiting the suspension of DDOs, which I'll come

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suspension of DDOs, which I'll come to in a moment. But my Lords. Government amendments.

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14 and 99 mean that where an order has been suspended for two years and is revoked, the PSFA and years and is revoked, the PSFA and DWP will now have an obligation to inform a deputy if there is one in inform a deputy if there is one in place. Government amendments 15 and 100 create a requirement for a bank 100 create a requirement for a bank to provide the PSFA and DWP of the details of any deputy acting on behalf of an account holder, where these are known to the bank, when

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these are known to the bank, when certain notices or orders are issued to them. This was. Implicit before, but at the request of the banks, we're making request of the banks, we're making it explicit that this includes the name and address of the deputy my Lords. Collectively, these Lords. Collectively, these amendments are important to ensure that roles and responsibilities are clear for the minority of cases clear for the minority of cases where there is a legal deputy in place. When the PSFA or DWP use

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place. When the PSFA or DWP use Amendments. 11, 18. 96 and 99. One of these address

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96 and 99. One of these address an issue raised at Second Reading, but there are lots of noble Lords and I'm happy to be able to respond and I'm happy to be able to respond to those comments here. The government is committed to being fair and transparent in the use of these new powers, and it's these new powers, and it's completely reasonable that where an individual has an order in place and the order is suspended, it should the order is suspended, it should not be suspended indefinitely.

We are there for introducing new Amendments.

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11, 18. 96 and 99 to remove that uncertainty for those individuals so uncertainty for those individuals so they know exactly where they stand and to ensure that an order cannot be restarted if the suspension goes be restarted if the suspension goes on for more than two years. And I'd be grateful. I'm grateful to noble Lords for having raised this. It was never the government's intention for never the government's intention for a suspension to be indefinite, but it's right to offer greater clarity and certainty in the law itself.

The PSFA or DWP will inform debtors of any changes to their payment any changes to their payment arrangements. If an order is suspended, the debtor will be notified. In cases where a DDO is revoked, both the account holders and the relevant bank will receive written confirmation from the PSFA written confirmation from the PSFA or DWP. That reflects our continued commitment in supporting individuals in managing their debt, and in managing their debt, and introduces important safeguards to ensure transparency and fairness. Lords turning to the final government amendments in this group, amendments ten and 95, I'd like to thank those in the financial services sector who've worked closely with us in the development of this bill.

We're committed to working collaboratively with the sector to ensure the bill enables banks to meet their legislative obligations while minimising burdens where possible. The cost of meeting obligations under the bill has been an area of interest to the House, and noble Lords have made the point in earlier debates that those helping to enforce the law must be supported, and I agree with them on this. Therefore, these government amendments remove from clause 26 and schedule five the requirements on financial institutions to prevent account holders from closing their accounts upon receipt of a pre deduction notice or DDO from the PSFA or DWP.

The original policy intent was to reduce opportunities for debtors, to frustrate the DDO process and my Lords that remains our objective. However, this requirement would not stop debtors who are persistent in evading repayment from simply redirecting their funds to another account. However, we do know from our engagement with the financial sector that complying with the requirement to prevent account closures risks creating a significant burden for some banks. We reflected on that feedback and the fact that both parts of the bill already contain further safeguards against those bad actors who might wish to take action to frustrate a do so.

In part one, clause 27 places a restriction on the account holder not to do anything that might frustrate the effect of the pre deduction notice or the order. If they do, they become liable to a civil penalty in part two, and schedule six contains provisions for DWP to apply to the court for suspended disqualification or from driving order. In the most serious cases where, for example, someone persistently fails to pay by frustrating a do so my Lords. Removing the requirement for financial institutions to prevent account closure upon receipt of a pre deduction notice or DDO, avoids placing new costly burdens on some banks while still enabling DWP and the PSFA to address effectively the small number of debtors who deliberately and persistently evade repaying taxpayers money.

My Lords,

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I beg to move. A member. Proposed clause 19,

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A member. Proposed clause 19, page 12, line 25. At the beginning,
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Baroness Kramer Portrait Baroness Kramer (Liberal Democrat)
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insert subject to subsection nine A. My Lords, that's we.

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My Lords, that's we. We obviously are pleased to see this, this group of amendments. We understand.

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understand. Quite how far they. Go to meet some of the concerns that. That were.

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That were. Expressed by my, my colleague, that Lord Palmer, earlier in the that Lord Palmer, earlier in the process of this bill. I think I have an amendment in a future state which a future. Group which reflects our very deep concern, particularly at the absence of transparency, the very thought that the original legislation essentially meant that people would have no idea that account statements have been handed over, that to the investigators,

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when. The. Investigation might. Be active.

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Be active. But permanently, that kept uninformed that their account uninformed that their account information had been handed over, just felt to us. Complete breach, just felt to us. Complete breach, that of the rights of the individual and also fundamentally breaks the

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and also fundamentally breaks the institution. And its account holders. So we will want to look closely

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So we will want to look closely at these amendments and at their implications. That and may return to this issue at a later stage.

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this issue at a later stage. But obviously, at this point, we're glad. That the government is. Taking steps to.

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Taking steps to. Deal with some of the features that most concerned us.

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that most concerned us. I just wanted to I expressed considerable concern about this part
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Baroness Finn Portrait Baroness Finn (Conservative)
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represent a constructive and welcome set of clarifications from the government. They respond directly to a number of issues raised at committee about transparency, fairness and proportionality in the way these powers are exercised. First, on the government's amendments limiting the period during which a bank is prohibited from informing an account holder that it has received an information notice. We on these benches see this as a largely sensible change. The amendment means that after three months or sooner, if a further notice is received under section 21, the prohibition on informing the account holder will lapse.

That is an improvement. It ensures that investigations cannot drift indefinitely in silence while still protecting the integrity of life. Inquiries. We would, however, welcome confirmation from the noble Baroness, the Minister, that when no action has been taken within that period, the Department considers the case effectively closed or dormant. If a person is made aware that an information notice has been issued in respect to their account, and they were in fact involved in some sort of fraud, being made aware of this fact would compromise an investigation if it was ongoing, as that person could take action to avoid scrutiny.

If the noble Baroness. The Minister could therefore clarify for us that after this three month period, a live investigation would not be effected through the sharing of this information and we are content with this proposal. Turning to the government's amendments, removing the requirement for banks to prevent an account being closed outright where a deduction order has been made, this amendment achieves the same policy outcome as the as the original drafting, ensuring that sufficient funds remain available for recovery, but it does so in a more proportionate and administratively practical way.

The Bank will still have to preserve the specified sum, but without being forced into the position of acting as an involuntary custodian for the rest of the customer's affairs. That strikes the right balance between protecting public money and minimising unnecessary interference in personal banking arrangements. We warmly welcome the amendment addressing suspended direct reduction orders. This is one that we press strongly in committee, and we are very pleased that the government has responded and taken us up on our suggestion, which was also supported by many other noble Lords such as the noble Lord, Lord Palmer of Charles Hill and the noble Baroness noble Lady Baroness Fox of Buckley.

As drafted originally, the bill would have allowed, under order, to be suspended indefinitely, potentially leaving someone in limbo for years, uncertain whether it would ever be reactivated. That was clearly unsatisfactory. The new provision rightly ensures that if an order has been suspended for more than two years, it must be treated as revoked and all relevant parties notified. That is a fair and proportionate solution that restores clarity and finality for the individual concerned. Finally, the group includes an amendment requiring banks to provide the Minister with the details of any deputy acting on behalf of an account holder.

When a relevant notice or order is issued on its face, that is a sensible and practical improvement, ensuring that where someone is represented, for example, because they lack capacity or are otherwise vulnerable, the department has the information needed to communicate with their deputy directly. However, this also highlights a wider point where a deputy is in place. There is almost always a reason a person may be unwell, may lack capacity or may simply be unable to manage their own affairs. Financial affairs.

It is therefore crucial that the department's process is recognised and respect those circumstances. Contacting the deputy is not enough in itself. The system must also be sensitive to the reasons why the deputy exists, and must handle such cases with the care and discretion they require. My Lords, overall, we do not oppose these amendments. Indeed, we welcome them. They make the Bill clearer, fairer and more workable. But they also remind us of an essential principle that runs through the entire bill that was strong.

Investigatory and recovery powers must come equally strong. Safeguards, transparency, proportionality and compassion must sit alongside efficiency, and we are therefore very grateful to ministers for having listened to the points raised across the House in Committee and for responding constructively. These amendments make genuine improvements, and we hope that our other amendments will be treated in the same spirit of balance and care

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as the bill proceeds here. At my Lords, I'm grateful to the noble Baroness Lady Finn for that constructive response and to other noble Lords for giving us the benefit of the doubt here. To my friend Lord Davis and the government. Amendments I can assure them, were tabled a week ago, as is the requirement for government the requirement for government amendments. And they have been, if it gives them any encouragement seen by UK finance who welcomed them. And
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Baroness Sherlock Portrait Baroness Sherlock (Labour)
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by UK finance who welcomed them. And we were seeking to respond to concerns that were raised just to pick up a couple of points made by noble Lords in response to the noble Baroness Lady Creamer. But talking here specifically about action in relation to recovering of debt from debtors. And just I want to reassure the House that that this does not mean a DWP debtor will not be aware. Action might be taken. Clause 91 of the Bill requires the debtor to be told in advance in writing, that bank statements may be obtained without further warning, to assess whether money can be taken directly from their bank account via a DDO if they don't come into contact.

DWP to discuss repayment in response to other queries. Just to say that the this these measures do not stop a bank telling a debtor if no action is proposed. It's also the case and it is our view in response to Lady Finn, that we believe three months is enough notice for DWP and PSFA to reach a conclusion. Either that we issue a prediction notice or a or a DDO, or if we need it, and we believe that that is that is sufficient, which is why that that, that, that figure, that number is there.

I think somebody and I'm afraid, have already forgotten who don't be my age. Asked if an order has been suspended for two years, what happens and it cannot be restarted as the answer, it will be legally revoked where appropriate. The process can be started again from the beginning for direct reduction orders. That would mean fresh bank statements had to be obtained to carry out a current affordability assessment, rather than relying on ones from from the beginning, and all relevant correspondence would have to be sent out again, where a suspended order is subsequently revoked by DWP or PSFA, a notice will be sent to the debtor and any other relevant parties informing them that this has this has happened.

If an order were revoked and DWP or PSFA is no longer pursuing an action. In the case of a DDO, DWP or PSFA will notify the account holders and the bank in writing, setting out that the order had been revoked. Debtors will also be told if their order has been suspended and an equivalent process applies. PSFA in respect of deduction from earnings orders. In terms of the point about the really important point made by the noble Lady Baroness Finn about about having about deputies being in place, of course.

I mean, that is absolutely right. And I can reassure her that DWP has clear processes for vulnerability, for flagging vulnerability and making sure that's taken into account. But obviously, in a sense, once the debtor is in place, the debtor has the obligations. That would be the I'm sorry, the deputy has the obligations that would originally have been there for the debt. And so it has to be pursued in the appropriate way. My Lords I hope that's answered the questions noble Lords have raised. And again, I hope it shows the government's willingness to engage and, and to be constructive in amending the bill where possible.

So I hope those clarifications happen and I will reassure noble Lords that the protections in the bill operate as intended, and that will work effectively with our banking

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partners. As such, I hope noble Lords will support these amendments. I beg to move you. The noble Baroness would like to

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The noble Baroness would like to move for a member. Question is that amendment eight be agreed to? As amendment eight be agreed to? As many as of that opinion, say 'content' the contrary not content 'content' the contrary not content the contents have it. Amendments 9 to 15 move formally en bloc. The to 15 move formally en bloc. The question is that amendments nine to fifteen en bloc be agreed to as many as are of that opinion say, as are of that opinion say, "content" the contrary not content the contents have it in clause 38, the contents have it in clause 38, amendment 16.

The ban is Finn.
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Baroness Finn Portrait Baroness Finn (Conservative)
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My Lords, the amendments in this group focus on one central theme ensuring proper scrutiny, transparency and accountability in transparency and accountability in how the powers granted under this bill are exercised. These amendments are about ensuring that as we build a powerful new framework for tackling public sector fraud, we also build in the right checks, balances and reporting duties not only for ministers but for the departments, banks and public bodies that will have to deliver this regime day to day.

The first of these amendments to clause 38 would require that the outcome of any consultations held before making regulations on deduction orders be laid before Parliament. Before these these regulations come into force. That is a reasonable step. Clause 38 already obliges ministers to consult such persons as they consider appropriate. But as things stand, there is no requirement to publish the results or explain how the government has responded to the views expressed. This amendment simply ensures that Parliament can see the evidence and feedback underpinning any regulatory change.

Banks and financial institutions will be at the forefront of implementing these powers. Their experience and Operation Insight will be vital. Parliament should therefore be able to see what those institutions have said, what works, what doesn't, and what the likely impact of proposed changes will be before new rules take effect. Alongside that sits our amendment requiring that any future regulations under clause 38 be months of those of these provisions coming into force, to conduct a review of the administrative and compliance costs imposed on the banks by this bill, including staffing, reporting and opportunity costs.

This, our Lords, is about fairness and about being realistic. We are asking the financial services sector to play a major operational role in this new system, to respond to information notices, processed reduction orders and help recover public funds that is legitimate for the purposes of the bill on which no. All noble Lords broadly agree, but it comes with a cost. Parliament has a right to know what that cost is and whether it is being managed proportionately and effectively, then at a higher level of oversight.

Our next two amendments was introduced annual reporting requirements. The first would require the Minister to publish an annual report on the use of the powers conferred under part one of the Bill, setting out how often they have been used, in what context and with what results. This is about shining a light on the operation of the regime itself, how these new powers are working in practice, how effective they are in recovering public money, and how proportionately they are being exercised. The second would require an annual report on the overall extent of public sector fraud.

The single authoritative assessment of the scale and nature of the problem across government, the Public Accounts Committee, the National Audit Office and indeed the government themselves, have all acknowledged that the current picture is fragmented and inconsistent. Without reliable data, it is impossible to design effective policy, measure progress or target resources where they are most needed. An annual report would help close that gap, improve accountability, and ensure that both Parliament and the public can see whether we are making headway against the problem.

My Lords none of none of these proposals is designed to delay or frustrate the Bill. We are not seeking to divide the House on these amendments. What we are seeking is assurance that the government recognises the importance of these issues, that the machinery of this bill will operate transparently, that Parliament will be kept informed, and that those upon whom these duties fall will be treated fairly and proportionately. They are therefore constructive and common sense measures. They strengthen parliamentary oversight, improve the evidence base for future policy, and help ensure that the strong powers created by this bill are matched by equally strong safeguards and accountability.

I hope, therefore, that the noble Baroness the Minister, will reflect on these proposals in that spirit and that as the Bill proceeds, the government will bring forward their own commitments to embed these principles of transparency, consultation and reporting in the

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way these powers are used. I beg to move. The member proposed clause 38,

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The member proposed clause 38, page 23, line 28, and insert the

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page 23, line 28, and insert the list. I am taking the opportunity

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I am taking the opportunity already to reiterate my concerns that I expressed about parts of this
17:26
17:27
Lord Vaux of Harrowden Portrait Lord Vaux of Harrowden (Crossbench)
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My Lords, I'm generally supportive of all the amendments in this group, but particularly to this group, but particularly to amendments 17 and 22. This bill, and this part of the bill impose a range of onerous obligations on the banks and other financial institutions that are affected by it and that have to respond to information,

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notices and so on. But nowhere does the bill provide for how. The costs that arise from those

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The costs that arise from those obligations should be dealt with, or how to ensure that they are proportionate. Amendments 17 and 22 proportionate. Amendments 17 and 22 simply add an important level of review and transparency, which will allow us to ensure that the costs allow us to ensure that the costs being imposed on those institutions are reasonable and proportionate. The very fact of the requirement to The very fact of the requirement to prepare impact assessments and to review the costs of compliance should of itself ensure that these

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should of itself ensure that these costs are kept at the forefront of the government's mind when using. These powers. And therefore, I hope the noble

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And therefore, I hope the noble Lady will accept amendments 17 and 22, amendment 26. I absolutely support the concept. I'm just slightly confused as to whether it's not already covered by clause 65, not already covered by clause 65, but I support the principle. My but I support the principle. My Lords, these these amendments, there's five of them. The number 16, which ensures the outcome of consultations required by section 38
17:28
Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (Liberal Democrat)
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consultations required by section 38 six is laid by Parliament prior to the implementation of regulations. And amendment 70 is a new clause that ensures the charges the changes to the means through which deduction orders are processed, accompanied by an impact assessment, and an amendment 22, which has received some support. This amendment would require the Minister to undertake yet another review of the costs banks are being imposed upon by part one within 12 months of the new section coming into effect.

Baron and amendment 26 is another new clause requiring the Minister to publish an annual report on the use

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of powers conferred by part one of the. Bill. Which must then be laid before Parliament, and finally amendment 112, a new clause which will require the Minister to publish an annual

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the Minister to publish an annual report on the estimated scale of fraud against public authorities. Much must.

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Again be laid before Parliament. This is going to be a pretty hefty tome of things going to be laid tome of things going to be laid before Parliament. I mean, it's going to be a book or a book all of itself. And whereas the benches welcome measures that increase clarity and accountability, we do feel it is it necessary to prescribe additional reporting mechanisms beyond those already established. beyond those already established. Our focus has been to ensuring that existing processes are effectively implemented.

I don't think they implemented. I don't think they always are, and that's what they've got to be done. And they and they've got to be accessible. And rather got to be accessible. And rather than imposing formal obligations which may not meaningful, enhance which may not meaningful, enhance anything. So I, I understand the thrust of, of these bills, but thrust of, of these bills, but they're going to produce a tome of, of regulations with a line of civil servants to deal with it, to provide

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no meaningful improvements. I thank the noble Baroness for
17:30
Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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I thank the noble Baroness for raising the important issues around annual reporting of the PSFA, for both the use of powers conferred on both the use of powers conferred on them within the Bill, and the extent of fraud against public authorities, as well as her point on the implementation of direct orders, particularly concerning the regulations and publication of consultation outcomes, and also the impact these powers may have on the banking industry. Whilst I agree with the intent behind these amendments, they are important, unfortunate, unfortunately, duplicative, or would have otherwise or would otherwise create an unnecessary burden for the PSFA.

I will therefore address each in turn, starting with amendment 16. This requires that the outcome of any consultation required by regulation making powers for direct deduction orders in clause 38 is laid before Parliament. Prior to the implementation of regulations. This amendment is duplicative where a consultation is required. The explanatory memoranda of the relevant statutory instrument must detail and consider the outcome of that consultation exercise. Furthermore, the Cabinet Office Consultation Principles also sets out that where a consultation concerns a statutory instrument, His Majesty's Government should publish responses before or at the same time as the instrument is laid.

My Lords. We completely agree with noble Lady, which is why the provisions are there. I now turn to the amendment 17, which seeks to hold PSFA to commit to an impact assessment covering projected costs and effects on the operational capacity of banks should any changes be made to the means in which reduction orders are processed by way of regulation, as set out in clause 38, this amendment is also duplicative of statutory instruments required for the impact on the relevant sector is considered, and set out in the explanatory memoranda, even if, that
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