Lords Chamber

Tuesday 21st October 2025

(began 3 hours, 24 minutes ago)

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None Portrait Oral questions: Developing a rolling stock strategy for Great British Railways
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Second oral question. Baroness Pidgeon.
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Lord Hendy of Richmond Hill Portrait Lord Hendy of Richmond Hill, Minister of State (Department for Transport) (Labour)
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rolling stock strategy for the competitive rolling stock industry that we established over the last decade or so. Yeah, yeah.

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Yeah, yeah. Noble Lords recollection of what happened in his term of office might be quite good, but the fact is that be quite good, but the fact is that the industry doesn't have much regard for what was published at the end of the term of the previous government and is actively and interestingly, waiting for something which relates to a real future, which is related to the age of the rolling stock and future usage. There are currently already three live procurements in the market for rolling stock, which will be referred to in in in the in the publication of the Rolling Stock and Infrastructure Strategy, which I expect to be next summer.



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And my Lords. My Lords in in the North East, we

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My Lords in in the North East, we rejoice at the success of the reinstated Northumberland Line linking Ashington to Newcastle, linking Ashington to Newcastle, which has seen over 700,000 journeys since the line was reopened last since the line was reopened last December. But my Lords, this this particular route struggles with a lack of carriages because they'd lack of carriages because they'd like to put more trains on. So can I ask the noble Lord, the minister, ask the noble Lord, the minister, whether the strategy will seek to prioritise regions in our country which have traditionally been which have traditionally been underinvested in so to fast forward economic growth that the government

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so desires. The. If that's an answer, I'll sit and

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If that's an answer, I'll sit and listen to it. The right reverend listen to it. The right reverend prelate is correct that the new line to Ashington is a success. Northern trains are resolving to put additional rolling stock on those additional rolling stock on those trains. Now they are able to do that at certain times of the day. But one at certain times of the day. But one of the procurements that I referred to is for 464 vehicles for northern, which replaces a large and elderly fleet of existing diesel trains over the next several years.

And that will result in enough rolling stock to satisfactorily serve demand on the Ashington line and indeed on other routes.
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None Portrait Oral questions: Negotiations with the European Union for the UK to rejoin Erasmus+
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Third or a question Baroness cousins. question.
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Lord Leong Portrait Lord Leong (Labour)
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to prepare for such. Disruptions in the future?

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My noble friend, for those questions, there is no evidence that this was caused by any malicious activity. And we've got to be very careful that we do not speculate otherwise. AWS has publicly stated the outage was initially caused by an issue with its configuration of the Domain Name System, or DNS, as we know it, and some wider related complications. Now, departments independently determine which suppliers to use based on their own use cases. Some cloud providers are strategic suppliers, but departments make decisions on adoption based not only on resilience but on cost, capability and their staff expertise.

Now, my Lords, we are working to diversify the UK's cloud ecosystem and encourage greater participation by UK based and European providers, as well as promoting innovation through our digital infrastructure and cybersecurity programmes. My Lords, at the same time, the NCC offers advice and guidance on how businesses and organisations can make themselves more cyber resilience, and this advice is also broadly applicable to digital resilience issues. My loss, as I mentioned in last week's oral question, I mean, businesses also take it upon themselves to ensure that they do have sufficient cyber resilience systems in place by ensuring that their software and hardware is up to date and at the same time, if they can, to seek certification so that the systems are cyber essentials certified at the same time, businesses should also be encouraged to have actually a business continuity plan so that if anything happens, they have a plan in place.
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Lord Leong Portrait Lord Leong (Labour)
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Well, my.

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At the end of the day, I think businesses has to also take upon businesses has to also take upon themselves their responsibilities towards in the future cyber attacks. And whether, like I said, the And whether, like I said, the infrastructure and digital framework is in a secure from any such attacks is in a secure from any such attacks and all that. I'm a firm believer. I mean, before I came to this house, when I was running various when I was running various businesses, the first thing I did was to ensure that we had a comprehensive risk assessment as to whether it our system will be attacked.

And at the same time, we also ensured that not only do our also ensured that not only do our website and software source codes are actually so large with an escrow account to protect it further, so that in case anything happens, we can get access to those source codes. And I would urge businesses codes. And I would urge businesses to ensure that the systems are compliant with the latest patches, compliant with the latest patches, security patches and, if possible, to actually get these Cyber Essentials certified so that they Essentials certified so that they can have confidence that the systems is actually protected from any such attacks.



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attacks. My Lords. It seems to me that I'm going to be up and down on my feet like a jack in the box for the next few items of business. This, therefore, may be a suitable time for noble
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Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
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Well, the noble Lord will know very clearly that there are certain threats provided by the Chinese government, self-evidently. And those threats are well known, well understood and well assessed by the Home Office under the government departments. But also the China remains the one of the largest economies in the world. We import and export and deal with China on a number of issues. Well and therefore well, I'm giving the noble Lord the answer that I will give him to whatever he is asked.

And I'm saying to him, now that we recognise there are certain threats in China, we recognise there are certain issues with the Chinese government that we need to address, but we also recognise that there are major trading partners that we need to work with. And on the question of the embassy, the Home Secretary and the Foreign Secretary have submitted evidence from their perspective about the nature of the embassy. There is a planning application being undertaken and that planning application will be considered in due course.

Following a report by the Secretary of State for Communities and Local Government. That's the right and proper way to undertake that instance. The Prime Minister is very cognisant of the fact that there are opportunities with China, but there are also threats, and that's why we have to keep all these matters under constant review. That answer may not satisfy the noble Lord, but that's the answer I've given him. I was the chair of the. chair of the.
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Baroness Finn Portrait Baroness Finn (Conservative)
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the support of the noble Lord, Lord Volks of Harridan. They concern the crucial question of ministerial and parliamentary oversight of the extensive and extensive investigatory and enforcement powers granted under this bill. The bill sets out to create a powerful investigatory body with wide authority, but the lines of accountability are unclear. The first of these amendments routes the power, the exercise of the powers provided for in this part of the bill, firmly within the framework of the act itself, it makes clear that investigatory and enforcement powers under sections three, seven, 17 and 38 covering information, notices, entry and seizure powers, direct deduction orders and deduction from earnings.

Orders may not be exercised except as expressly provided for in this section. This is, My Lords, a vital safeguard. It ensures that these powers cannot be used arbitrarily or for purposes beyond those envisaged by Parliament. In essence, it ties the use of such powers to the functions and the objectives clearly defined elsewhere in the bill. Preventing mission creep, ensuring accountability and anchoring their use in clear statutory purpose. The Second Amendment, which is closely related, builds upon that principle of restraint by setting out a clear system of authorisation, accountability, and recordkeeping, it would require that the most serious powers those involving access to personal financial information, entry and search of premises, or the recovery of large sums of money can only be exercised with explicit ministerial approval.

My Lords, this is not just bureaucracy, it is responsibility. It makes ministers ministers answerable for the exercise of powers in their name. Other powers of a lesser nature would require sign off at senior civil service level or above, ensuring that every exercise of authority is subject to appropriate scrutiny and senior oversight. In addition, the PFA would be required to maintain a register recording each use of these powers. The data nature of the action, the official or minister who authorised it, and the justification for doing so that register would then be laid before Parliament annually.

My Lords, if we are to give such considerable powers to civil servants acting on behalf of ministers, then we must be absolutely certain that there are clear lines of responsibility and clear records of decision making. Without those, we risk creating a dangerous vacuum of accountability. And let us be clear, the significant new powers which this bill grants to officials are not powers to be taken lightly. They go to the heart of personal privacy, financial autonomy and potentially due process under this amendment is certain.

Especially intrusive powers such as requiring the disclosure of personal financial records, applying for search and seizure warrants, or imposing deduction orders over £10,000. Would require explicit approval from a minister of the Crown. This ensures that decisions with the potential to impact individuals lives in a profound way are not taken in isolation by junior officials. Because, my Lords, if something goes wrong, if those powers are misused or abused, it will not be the officials who are hauled before select committees or public inquiries.

It will be the Minister for the Cabinet Office who is called upon to account for actions taken in his or her name, actions of which they may have had absolutely no knowledge. It is therefore vital that the Minister is satisfied that the action is justified, and is willing to stand behind that decision if challenged. This line of accountability is crucial for proper oversight, and it also protects the Minister. We have seen through painful and enduring examples like the horizon scandal, what happens when the chain of accountability between operational decision makers and ministers is allowed to break down? Victims are left without recourse.

Officials retreat into anonymity and ministers are left to apologise for decisions they did not make and could not have prevented. And we should learn from that experience. We should ensure that the exercise of coercive state powers, particularly powers as sensitive as these, are traceable, reviewable and ultimately answerable to Parliament. These amendments were well received and supported by noble Lords across the House. At committee, I want to thank again the noble Lord, Lord Foulkes, for adding his name and to other noble lords who supported these proposals.

My Lords, these amendments protect the Minister, they protect the department, and they protect the individuals who may be subject to these powers. They ensure that no power is used without proper authorisation, that every use is recorded, and that Parliament can see each year how these powers have been exercised and by whom. We support the government's ambition to tackle fraud and error in the public sector. But we must always remember that power without responsibility breeds mistrust. This is not an abstract constitutional point.

It is a matter of basic fairness, of good governance, and of trust and public administration. For those reasons, my Lords, this amendment is of vital importance. It provides the clear lines of authority and accountability that must underpin any responsible use of the significant powers contained in this bill. The government may say that safeguards already exist, but those safeguards are internal, opaque and unenforceable by Parliament. What we are proposing here is a statutory framework for oversight, one that gives ministers clarity, parliament visibility and the public reassurance that power is being exercised carefully, lawfully and transparently.

This amendment is not about obstructing the government's aims. It is about protecting them and protecting the integrity of the system we are building. I beg to move.
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Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Conservative)
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My Lords, this bill creates a wide range of. Unprecedented and intrusive powers for both the Cabinet Office and DWP throughout Cabinet Office and DWP throughout the course of the Bill to date, and indeed in its previous incarnation, under the last government, my focus has been on trying to ensure that these powers are restricted to what is actually required for the purposes of dealing with fraud

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against the public. Sector. And to ensure that there are appropriate and strong safeguards appropriate and strong safeguards against overreach and overuse of these powers. And I should start by saying, I do recognise and acknowledge that the government has acknowledge that the government has introduced a lot of safeguards into the bill compared to those we had when we were discussing the similar when we were discussing the similar messages. Measures under the aborted Data Protection and Digital Information Bill last year. This is

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Information Bill last year. This is a much better bill, but it does still introduce a wide range of new powers. And whilst better, there.

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And whilst better, there. Are still areas where I. Think the safe. Safeguards should be improved, in

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particular, when creating powers of this nature, it's important that. The safeguards. Should be. On the. Face of the bill.

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And not. Left to. Codes of practice or. Internal departmental rules, both of which departmental rules, both of which can be changed without scrutiny. And we'll come back to that theme I think, several times later today.

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think, several times later today. These two amendments cover the police powers. That the bill would give to the. Cabinet Office and the Public. Sector.

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Sector. Fraud Authority. Now, I have serious doubts as to whether it is genuinely necessary to give search, genuinely necessary to give search, entry and seizure. Police powers to civil servants anyway. But if we are civil servants anyway. But if we are to do so, it's essential that there are very robust safeguards around their use. So these two amendments, which have already been well explained by the noble Baroness, Lady Finn, simply define who may use the powers, particularly ensuring that serious use of them requires explicit ministerial authorisation, and ensures that the use of the powers of robustly recorded and reported upon.

I think those are, at the very least, safeguards that should be in place, so I am happy to support them wholeheartedly, and I very much hope the noble Baroness will seek the approval of the House for them. My Lords, the amendments, as has been so clearly stated by Baroness Finn and by Lord rooks. Concern ministerial and parliamentary oversight. And it's the oversight that's important. Or the oversight that's important. Or the powers granted to authorised officers for reclaiming finances under this act.

Now, these amendments would require, as been stated by other noble Lords, that a stated by other noble Lords, that a minister of the Crown authorise the use of such powers where the amount use of such powers where the amount involved exceeds £10,000. This would also in oblige the Public Sector also in oblige the Public Sector Fraud Authority to maintain a register of instances in which these powers are exercised, with the powers are exercised, with the relevant Minister required to lay a copy of this register before Parliament.

On these benches. We have been critical throughout the passage of the Bill or the broad, passage of the Bill or the broad, and in some cases inadequately checked powers really described by checked powers really described by the noble Lord, walks now granted recover funds require identified perhaps as. perhaps as.
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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My Lords, while I appreciate the intention behind these amendments, the reality of their drafting would give ministers the ability to block politically inconvenient investigations. They would prevent counter fraud enforcement at any kind of scale, and they would expose the identities of civil servants investigating serious criminals. On that basis, we cannot accept them, although we cannot agree to these amendments. It might surprise the noble lady that I believe there is a lot that we do agree on. We agree that the measures in this bill are powerful and must be used with care.

We agree that staff must be appropriately trained before they are able to use these powers, and we agree that there must be robust oversight, both internal and external. That is essential with regards to ministerial oversight. For as long as the powers sit in the Cabinet Office, that they will be exercised in the name of the Minister for the Cabinet Office. But these amendments go beyond accountability. They bring the Minister into specific operational decisions. It is not appropriate to mandate that the Minister for the Cabinet Office is brought into hundreds of operational decisions in the way that these amendments suggest.

First, ministers must be free to delegate or the work of government will grinds to a halt. Your all ships house would be rightly concerned if Cabinet Office ministers, who need to be making government more effective and efficient, were spending their days taking detailed counter fraud operational decisions. Secondly, it would be inappropriate for ministers of whichever party happens to be in power to be taking operational decisions on enforcement and individual enforcement cases that would make enforcement political. It would necessarily expose every case to charges of political interference.

It would place all this ministers in an invidious position. It would give dishonest ministers the power to block investigations that are politically inconvenient. But the noble lady is right that ministers should know what is happening in their name. Ministers are accountable and must therefore choose how these powers should be dedicated, not simply hand them over to civil servants and forget about them until a crisis occurs, which I know is a genuine concern. So in response to the noble lady's challenge, let me set out what ministers will do before any of these powers are used.

My Lords ministers will scrutinise the set up of the PSA for its plans to use the powers, the oversight arrangements in place in the skills and experience of authorised officers and authorised investigators. Also, ministers will decide what thresholds they wish to set and what constraints they wish to place around the exercise of powers in their name. My Lords ministers will decide what reports they want to receive and their frequency. Also, ministers will decide how they wish to appoint authorised officers and authorised investigators, and will take a strong interest in the training and experience and professionalism of these staff.

Finally, ministers will be accountable to your lordships House and the other place to show that they have done this and I am happy to commit to ministers bringing forward a statement before the powers are first used to demonstrate that these commitments have been fulfilled. And every time there is a change of minister, officials will ask for the new minister's view on these questions, not silently continue them. Out of sight, as I know, is a genuine concern for the noble lady. Noble.

The noble lady is absolutely right to draw attention to how dedication works in government. It is for ministers who are accountable to decide on the appropriate delegation. Turning now to the seniority of civil servants provided for in subsection one B by requiring senior civil servant to sign off for every use of powers. In part one, the noble lady is setting the bar for internal authorisation too high. At the moment, the SFA's enforcement unit is relatively small. I love the use of the relatively.

It's not large. So for example, the numbers of information notices envisaged in a year could all be reviewed by a senior civil servant. But we are making this legislation to last decades, and its operation can't be contingent on keeping our capacity to pursue public sector fraudsters, small at any scale, requiring excessive civil servant grading in legislation is a strict operational limitation and unnecessarily expansive expensive. That is why those who use these powers successfully elsewhere in government, such as the HMRC, do not have the these requirements either in their legislation or their practice, because it is not the Grange that matters.

It is the skills, experience and professionalism. Authorised investigators and authorised officers in the PSA will all be members of the government. Counter for profession. They will undergo bespoke training on top of the previous knowledge, skills and experience they bring to the role. Current members of the PSA. PSA enforcement units bring a wealth of experience with them. They include former police officers, customs officers and other civil servants who have worked in industry roles across a number of departments. Noble Lords have been clear during this discussion that they are particularly concerned about the use of Pace powers.

Let me remind your lordships House that this is the courts that will authorise any application of the PSA that the PSA makes under pace. No civil servant of any grade, nor any minister, can authorise a search warrant or a production order under pace. Only the court can authorise such actions each and every time we seek to use them. This means that the PSA must be able to demonstrate to the court satisfaction that there are reasonable grounds to believe that an offence of fraud has been committed against a public authority and, as set out on pace itself, reasonable grounds to believe that the material sought is likely to be of substantial value to the investigation.

My Lords, substantial value. This means that the subject of an application has the protection of a court scrutiny before authorised investigators can execute a warrant or a production order. Moreover, the powers in the bill are subject to review by an independent person as specified under clause 65. I have committed to ensuring that the independent person is passed. All the concerns raised by parliamentarians, including those we have heard today, and the PSA will be subject to inspections by His Majesty's Inspectorate of Constabulary and Fire and Rescue Services.

Inspection reports will be made publicly available and will be laid before Parliament's. The final point I would like to address is the question of maintaining a register, which has to be laid before Parliament. We will, of course, be keeping meticulous records of how and when powers are used. That would be a bare minimum for good investigative investigatory practice. These records will be made available to the independent reviewer, who will report on the use of the powers to Parliament, ensuring democratic oversight.

But laying this register before Parliament carries significant risks. It may compromise ongoing cases and expose the identities of investigators to dangerous individual individuals, jeopardising their safety and the integrity of the justice system. My Lords, can we remember that we are talking about people who undertake criminal activity, typically online in some of these cases, and publishing the names of the investigating officers could make them vulnerable. And with regards to the point raised by the noble Baroness, Lady Finn and the appalling horizon scandal, I want to take this opportunity to reassure noble lords and remind nobles that the scandal was based on private prosecutions, that the SFA won't undertake.

My Lords, I understand the noble ladies concerns, and I have set out how ministers will act in an effort to assuage them. But this amendment cannot stand. It would allow dishonest ministers to block politically inconvenient investigations. It would make counter fraud enforcement at any scale impossible, and would expose the names of officials to the fraudsters they are investigating. I urge the noble lady to withdraw her amendment.
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Baroness Finn Portrait Baroness Finn (Conservative)
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Yeah, yeah. reply. But I must be absolutely clear that we are not satisfied with that. The tests we have set out have been met, and with the responses received, the government asks this House to confer upon the Public Sector Fraud Authority powers that are extraordinary in scope, powers to compel information, to enter premises, to seize property, and to reach directly into private finances of individuals. They are powers that in any other context would belong to the police.

And we have voiced in the noble Lord law books to as has also voiced reservations about granting police powers to civil servants in this instance. But our amendments seek to provide a clear statutory foundation for the exercise of those investigatory enforcement powers, ensuring that they are explicitly bound by the structures and intentions set out by Parliament. They provide a clear chain of accountability from the official who exercises the power through the minister who authorises it to the Parliament.

That must ultimately answer for it. And I'm hearing the noble baroness, the minister, talking about, you know, dishonest ministers choosing to block an investigation. But ultimately, if the minister chooses to block an investigation, that is a decision for the minister who is responsible for the public finances and who will be accountable in Parliament for his or her decision. And it's not about putting ministers in charge of operations. The, the clear purpose behind these amendments, as I say, is to create a clear chain of accountability for great powers, because that clarity matters.

That's how responsible government works, and that's how public confidence is earned and sustained. Instead, what the government is proposing leaves the PFA largely insulated from meaningful scrutiny. It gives immense authority to civil servants while shielding their actions from the transparency and parliamentary visibility that such authority demands. And that is not proportionate oversight. The recent China espionage scandal has laid bare the dangers of confusion and obfuscation. When questions of accountability and responsibility are left unresolved. These amendments would provide the structure and safeguards that the bill so plainly lacks.

They do not remove powers, but they make those powers defensible. When we are dealing with an authority that will routinely exercise serious and far reaching powers, there can be no room for ambiguity. We must have clarity about who is responsible, who is accountable, and where the lines of authority lie. These amendments provide that certainty. They embody the minimum requirements for a just and serious law. My Lord, we have tried at every stage of this bill to work constructively with the government, and I appreciate the engagement we have been given.

But the state must be equipped to confront fraud in a way that preserves trust. That trust is earned through transparency and accountability. That these amendments offer a constructive and proportionate way to embed those principles into this bill. We have a duty to ensure that power is never granted, that power is never granted with account without accountability, and that no one, how ever well intentioned, operates beyond the reach of ministerial and parliamentary scrutiny. And for that reason, I wish to test the opinion of the House.



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Question is that amendment 27 be agreed with? Many that opinion will
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None Portrait Division
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say content contrary, not content? The question will be decided by a division. I will notify the House division. I will notify the House when voting is open. when voting is open. Which is now open. Clear the bar. Yes. Yes. The Yes. The people. Of. This country. Can find.

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The question is it amendment 27 be agreed, as many of that opinion will say? Content.

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will say? Content. To the country. Not content? Thanks. The contents will go to the right

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The contents will go to the right by the thrown, the not contents to

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Here,

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Here, here. Yes, yes, I did Here, here. Yes, yes, I did not.

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The question is that amendment 27

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Mr. Chair, Chair, and Chair, and agreed

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The The have The have voted The have voted contents

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The have voted contents 270, The have voted contents 270, not contents 160. The contents have it. contents 160. The contents have it. Amendment 28 moved formally. The question is at amendment 28. We agreed as many that opinion will say content to the contrary, not content. The contents have it. Government amendments 29 to 33 moved formally. The question is that these amendments be agreed to on block, as amendments be agreed to on block, as many of our opinion will say.

Content the contrary not content. The contents have it become now to

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The contents have it become now to amendment 34. Baroness. Sherlock. My Lords.
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Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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My Lords. I now turn to amendments 34, 36,

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I now turn to amendments 34, 36, 37, 38, 39 and 14. This group of amendments addresses some concern we have heard throughout the passage of have heard throughout the passage of the Bill, most recently by the noble lady Baroness Finn. During growing Committee, that the enforcement unit being part of the Cabinet Office means that there is limited oversight and accountability of the use of powers in part one of the Bill. But that setting up the SFA's Enforcement unit as a standalone statutory body would be disproportionate.

While it is still small. Whilst I strongly believe that the PSC has established a robust oversight provision and built a multitude of safeguards into this legislation as well as their processes and structures, I am aware of how complicated and contentious this space is, particularly in respect of protecting the public from the misuse or incorrect use of powers. So we have tabled this group of amendments to enable the SFA and the powers in this Bill to be to be merged with another statutory body, rather than necessarily being set up as a standalone statutory authority, sorry, statutory body.

Although the power to do save as a to do so remains, this builds flexibility into the legislation to achieve the same aim in terms of separation between the investigators and ministers in future, but avoids the need to set up an entirely new statutory body if it is not considered proportionate to do so. Importantly, this would enable the SFA's enforcement unit to be moved at arm's length from ministers sooner, adopting the protections and governance and accountability set out in central two of the bill.

As the government has said during the passage of the bill, it is not proportionate to set up a new standalone Alb for a small enforcement unit. These amendments allow for even a relatively small unit to be placed at arm's length from ministers if desired, without incurring disproportionate overheads. Ministers also have a responsibility to the taxpayer to ensure public money is spent judiciously, and where it is most needed. It is counter to government policy to establish a new statutory body when its functions should be undertaken by existing bodies.

Building in this flexibility through these amendments enables us to achieve the same policy intent without necessarily adding to the proliferation of albas when it is the right time to establish the SFA's enforcement unit at arm's length from ministers, that will only happen with engagement, debate and agreement of both Houses of Parliament. My Lords, your lordships House has spoken and we have listened. I beg to move these amendments.

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A member. Proposed clause 70, page 37, line 28. Leave out from provision to end of line 31 and provision to end of line 31 and insert as printed on the marshalled

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list. My Lords, we do give this amendment a partial welcome. It amendment a partial welcome. It speaks to the principle, to a principle that we on these benches have consistently raised in relation have consistently raised in relation to the formation and constitution of the public sector. Broad authority. The changes proposed shared that the PSA should be established through affirmative regulations rather than by simple commencement, is certainly a step in the right direction. It introduces an additional layer of parliamentary scrutiny and prevents the authority from being created entirely at the discretion of the minister.

That is an improvement, and we are pleased to see it reflected in this amendment. However, this provision addresses only the beginning of the story at the moment of establishment, but it the moment of establishment, but it does not address the far more fundamental questions about how the PSA will operate once it is up and PSA will operate once it is up and running, and how it will exercise the very considerable powers conferred by this bill. This conferred by this bill. This amendment speaks to the PSA being set in motion.

So our concern is what happens once the wheels are what happens once the wheels are turning. We have tabled amendments elsewhere to explore those issues in more detail, and I shall not detain the House by rehearsing them all at this stage. But I do want to touch briefly on one key point, which is accountability. In our view, it is it is vital that the PSA, in carrying out its functions and exercising its investigatory powers, remains directly and properly accountable to ministers, and ministers, in turn, must be in a position to answer truthfully and fully in these houses, or a select committee or an inquiry for the actions taken in their name.

That chain of responsibility cannot be allowed to become blurred or detached, as the Bill currently proposes. What? When we are dealing with powers of this magnitude, powers that reach across government affect individual citizens and involve the use of sensitive information. Direct accountability is a constitutional necessity. So while we welcome this first step from the government, and what we ultimately need is not accountability only on day one, but accountability from day one and every day thereafter. My Lords are no. Previous day in committee, I indicated that I would consider alongside my noble friend Lord Junker, the assurances given to us by the name of Baroness, the Minister on the review of pace powers, specifically within the Cabinet Office section, which we discussed in amendment 35.

Having done so, and I know that amendment, I believe amendment 35 would be called after this group. Having done so, I am assured on the back of what the noble Baroness set out last week that our concerns in this area have been met, and I am not, therefore, intending to push this matter to a division. I want to thank the noble lady for working with us on this point to ensure that the independent reviewer, in part one, has the power to assess the use of Pace powers and whether it meets the metrics that we set out.
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16:34
Baroness Anderson of Stoke-on-Trent Portrait Baroness Anderson of Stoke-on-Trent (Labour)
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I'm very grateful for the level of support that is available to right support that is available to right from the old order. I think it would be helpful just to confirm that any statutory body, regardless of where statutory body, regardless of where the PFA ultimately ends up, the PFA the PFA ultimately ends up, the PFA as a as an entity, will publish public annual reports on its operations, including the use of new powers in the bill, as well as the powers in the bill, as well as the findings of reviews on the use of these powers.

Should the PFA transition to either a standalone statutory body or be merged with an existing arm's length body, it will be required by the bill to produce an annual report for the relevant minister, who would then lay it before Parliament. My Lords, we have put significant safeguards in this legislation and have listened to the debate both at committee and report to make sure that as many safeguards to make sure that as many safeguards as we can are added. These amendments will provide important flexibility regarding the future of the PFA.

When she's put on the statutory footing, they address concerns we have heard through the concerns we have heard through the passage of this bill about the oversight and accountability of the enforcement unit whilst in the Cabinet Office, and the Cabinet Office, and the disproportionate disproportionality of setting up a new Alb while the unit remains small. I therefore hope

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unit remains small. I therefore hope the Noble Lords will provide your support to these amendments, and I beg to move them. The question is that the amendment 34 be agreed. So many of that opinion will say content in the country, not content if you don't have them at 35 not moved amendments 36 to 40 moved formally down to Sherlock. The question is that amendments 36 to 40 degree to unblock as many that opinion will say. Content with country not content.

The contents have it become now to amendment 41. Baroness Sherlock.

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My Lords, I rise to remove government amendments 41, 42, 43,
16:35
Baroness Sherlock Portrait Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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government amendments 41, 42, 43, 64, 1890 and 111. Under current devolution arrangements, DWP administers certain devolved

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Government. amendments. Will ensure that the expanded

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Will ensure that the expanded information gathering powers introduced in this Bill will also be available to Scottish Ministers, should they require them in the should they require them in the future. This follows confirmation from the Scottish Government that they would like the updates to these they would like the updates to these powers to apply to them too. These amendments will also ensure necessary changes are made to the

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DWP debt recovery powers in this bill. As drafted. In clause 91, the UK government is also seeking powers to apply new recovery methods to debts of certain devolved benefits delivered under agency agreements. However, the Scottish Government has confirmed it does not wish these new recovery methods to be applied to devolved methods to be applied to devolved benefits administered by DWP through. Agency arrangements. Taking the amendments in term, Government Amendment 41 simplifies clause 73, reflecting how it was originally reflecting how it was originally introduced with new section 109 Bza now containing the expanded power to issue information notices to any information holder as part of a DWP criminal fraud investigation, and criminal fraud investigation, and ensuring that Scottish Ministers will have access to these equivalent expanded powers in the event that expanded powers in the event that Scottish Ministers deliver any benefits covered by the 1992 act.

Government amendments 42 and 43 made. Clause 74 update The Social Security Fraud Act 2001, aligning it with the new powers and ensuring that the requirement to issue a code of practice and the ability to make payments for information also apply properly to Scottish Ministers. Government amendment 90 to close to 91 reflects the position of the Scottish Government on the DWP debt

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recovery powers. It ensures that the Scottish Government retains control over how debts. Relating to its.

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Relating to its. Devolved benefits are recovered. Once these agency agreements come to Once these agency agreements come to an end, it will be for the Scottish Government to determine its own approach to debt recovery, including establishing new powers if establishing new powers if necessary. Finally, Government Amendment. 111 to clause 101

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Amendment. 111 to clause 101 confirms that clauses 73 and 74 are. Treated as pre commencement enactments for the purposes of. The Scotland.

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The Scotland. Act 1998, enabling Scottish Ministers to use these updated powers for fraud investigations in powers for fraud investigations in relation to devolved benefits. It also confirms that the provision in also confirms that the provision in clauses 96 and 97 relating to cost recovery and data protection apply to Scottish Ministers existing debt to Scottish Ministers existing debt recovery powers and amendments 80 and 64 update the clause references and 64 update the clause references in clause 85 and schedule three.

As a consequence of these changes, but Lords, having outlined the case for Lords, having outlined the case for these amendments, I hope Northern Noble Lords will accept them so we can fulfil our agreements with the

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can fulfil our agreements with the Scottish Government. I beg to move. Those. Leave out clause 73 and insert the following new clause as

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insert the following new clause as printed on the marshalled list. And my Lords, these on on these benches we welcome the agreement which reached with devolved administrations. May this be a

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lesson to people around the world how to deal with devolved administrations, at least. In this case.

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In this case. The in this group relate to how the powers and the act specifically the powers and the act specifically refer to Scotland. Amendment 41, together with the amendments across 74 and the replacement of clause 101 and others, reverses. And I would stress that reverses the changes made in the House of Commons. This, I gather, follows confirmation of I gather, follows confirmation of the Scottish Ministers that they wish to changes to the Secretary of wish to changes to the Secretary of State's functions regarding information notices to apply to them information notices to apply to them as well.

It seems to be a positive movement of administrations working
16:39
16:40
Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Conservative)
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in earlier clauses, in particular those concerning the new powers to issue information notices under the Social Security Administration Act 1992, and to clarify that the new methods of recovery introduced under this bill will not apply to devolved benefits. In that sense, these amendments are essentially technical in nature, as the noble Baroness has said, ensuring consistency across the United Kingdom and confirming that the devolved benefit system in Scotland remains outside the scope of the new recovery powers. We appreciate and support the clarification.

However, while the amendments themselves are straightforward, they do raise some wider questions about the relationship between the UK and devolved administrations in this area, and it is somewhat surprising that these changes have had to come forward as government amendments at this relatively late stage of the bill, when one might have expected such matters to have been settled at the drafting stage through earlier consultation and agreement with the Scottish Ministers. And now the government has placed great story over the past year in stating that they seek to improve the communications and trust between the UK government and the devolved nations.

So can the noble Baroness, the Minister give us an update on how they view progress on these changes and indeed, what has actually changed in the last year? So while we do not oppose these amendments, indeed, we welcome the fact that the necessary legislative consent has now been secured. It does prompt reflection on the importance of ensuring that such engagement happens promptly and systematically in future. The relationship between the UK and devolved government works best when issues of competence and application are identified and agreed well in advance, rather than being corrected through amendments on report.

That said, I would be grateful if the Minister could take this opportunity to update the House on the government's current assessment of the risk of fraud in relation to devolved benefits and on what engagement has taken place with the devolved administrations to address that risk. Can she also tell us what steps she is aware of in those authorities taking steps to tackle fraud within their systems, and how information sharing or coordination between the UK government and the devolved governments is being managed to ensure that fraud risks are tackled effectively across all jurisdictions.

So, as I say, my Lords, we are content to support these amendments, which brings Scotland into line with the rest of the UK where appropriate and while respecting the devolved settlement

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and maintaining clarity over responsibilities in the fight against fraud. My Lords.
16:42
Baroness Sherlock Portrait Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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My Lords. I am ungrateful. Firstly to the noble Viscount for his kind words, and I too have enjoyed the engagement we have had across the house. It may, I think it shows how the Lords can really make a constructive contribution to the scrutiny of. Legislation in relation to the points made in the noble Lord, Lord Palmer. It's quite right when we have a developed and developing devolution situation in the UK, and I think we are, we are showing that it is possible for, for different jurisdictions to make different judgements and to find ways of co-existing peacefully.

And we are very glad to be able to do that. And I thank him for flagging that up. In terms of the timing of this, I'm advised that it is routine for these matters to be resolved at this point in the process, but just to reassure the House that our officials have engaged with their Scottish counterparts throughout policy development stage and the passage of the Bill. And it was during Lords committee that we received formal confirmation from the Scottish Government that they wish the updates to the information gathering powers, to the Bill to apply to them to, and hence bringing forward appropriate amendments.

In

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response to the questions from the label of Viscount. Viscount younger. Obviously, fundamentally, and it

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Obviously, fundamentally, and it stems from the point made by the noble Lord Lloyd Palmer, tackling fraud and error in devolved benefits must be the responsibility of the of must be the responsibility of the of the relevant devolved governments. I mean that that is the nature of devolution. However, we have engaged devolution. However, we have engaged extensively with the devolved governments throughout the passage of the Bill and these these amendments reflect that engagement. amendments reflect that engagement. I want to reassure them. We also work routinely.

We work closely with the Scottish Government to share the Scottish Government to share information and good practice, to support each other's efforts to tackle fraud and error, and that includes data sharing agreements so includes data sharing agreements so we can share information when necessary, which I suspect is the kind of assurance that he was hoping for. Some Lords, I'm grateful for

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for. Some Lords, I'm grateful for those questions, but with those assurances, I hope noble Lords can accept these amendments. Question is that amendment 41 be

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Question is that amendment 41 be agreed to as many that opinion will say content the contrary, not content. The contents have it. Government amendments 42 and 43 moved formally. The question is that moved formally. The question is that these amendments be agreed to unblock as many that opinion will say. Content contrary not content to say. Content contrary not content to contents habit them at 44 withdrawn. We come now to amendment 45 bound to Sherlock.

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My Lords, I want to. Start. Since we're moving on to discuss the eligibility verification measure, which we had extensive

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measure, which we had extensive discussions in committee, I want to say. A few. Words about about the eligibility verification, the need for it and

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verification, the need for it and the intent behind it. This enables the Secretary of State. To wish you. A bank. Or other financial institution

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Or other financial institution with an eligibility verification notice and EVM, which will help DWP identify incorrect payments and the identify incorrect payments and the Social Security system. But if this measure has been misunderstood and occasionally misrepresented throughout the bill's passage, it is simply a measure that enables DWP to ask for limited data from financial ask for limited data from financial institutions that will help the department to identify incorrect payments and verify eligibility for payments and verify eligibility for specific benefits.

It requires financial institutions to look within their own data and provide within their own data and provide limited, relevant information on the accounts which match the specific eligibility indicators provided by eligibility indicators provided by DWP. This limited information will. Help DWP to identify where claimants

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Help DWP to identify where claimants don't meet the eligibility criteria for the benefit they're receiving. For example, we may ask. Financial institutions in an EVM

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Financial institutions in an EVM to return limited information about accounts which match the following. Criteria one. The account receives Universal Credit and two the accounts have over £16,000 in capital. After applying the criteria in the EVM, the bank will return the specified limited information that can only include account details such as account numbers and sort codes. Details to identify the individuals, such as names and dates of birth, and details about how the accounts meet the criteria specified in the oven.

This data from banks is then matched with information DWP

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holder. Is. Indeed the benefit claimant, and

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so third parties like appointees or landlords will be screened out. At that. Stage and their information used

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Stage and their information used no further. DWP will then consider any relevant disregards, such as specified compensation payments, specified compensation payments, say, or money from the recent sale of a house, before assessing whether there does seem to have been an incorrect payment and taking the next steps accordingly. So, for example, if accounts were flagged as having more than £16,000 but during routine checks, DWP identifies that it's because someone has a it's because someone has a compensation payment of £50,000 that's disregarded for the purposes of their benefit entitlement.

Their of their benefit entitlement. Their data will not be used further and no further action is taken. Now. Improving access to information is Improving access to information is actually key to addressing and reducing fraud and error. We've seen in DWP how access to data like in DWP how access to data like earnings information from HMRC has really helped reduce overpayments.

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really helped reduce overpayments. In fact, in Universal Credit it is. Virtually eradicated. Earnings will earnings related overpayments for people on Paye overpayments for people on Paye because they can automatically check their data with HMRC. This legislation can help achieve a legislation can help achieve a similar outcome for other types of overpayments, like those who have too much capital or, for example, a living abroad. And what was the scale of fraud and error in the social security system. financial.

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Year. To 2025. In Universal Credit, overpayments totalled £6.4 billion.

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totalled £6.4 billion. In Pension Credit. 610 million. And an ESA.

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And an ESA. 420 million. We need to take action to ensure we spend taxpayers money correctly, and it goes to

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money correctly, and it goes to will. Play a key role. In doing so, saving an estimated

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In doing so, saving an estimated £940 million by 20 2930. Ros, I think it's hard to disagree that the. Government should.

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Government should. Have the tools it needs to help people pay, to help pay people the correct amount of benefit. That's correct amount of benefit. That's not just our view. In the evidence at the Commons committee stage, the National Audit Office said, and I quote, if Parliament has set an eligibility criterion of capital as a part of Universal Credit and some

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a part of Universal Credit and some other benefits, they continue. If you want it actually. To be enforced, then you have to provide. DWP with.

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DWP with. A tool that goes a bit further than just asking. Indeed, my Lords, than just asking. Indeed, my Lords, but I do know there are some members who are still concerned about whether there are sufficient safeguards in this measure. A noble safeguards in this measure. A noble Lords may recall I have my own concerns about the previous government's plans in this area. That's why I work with my colleagues That's why I work with my colleagues in DWP to design a new measure with a multitude of safeguards, protections and oversight provisions.

These safeguards protect benefit recipients, protect their data and seek to minimise compliance costs. These include restricting those on on whom DWP can collect information, limiting just to recipients of specified benefits and excluding the state pension entirely. Restricting the bodies

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from whom DWP can demand information. Limiting it to financial institutions. Clearly limiting.

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Clearly limiting. The purposes for which DWP can collect information tightly limiting collect information tightly limiting the accounts and scope. Limiting the type of information that can be requested with clear provisions that requested with clear provisions that certain data, such as information on transactions, cannot be shared with penalties for financial institutions penalties for financial institutions if they do so. Creating routes for financial institutions to dispute notices and request reviews. notices and request reviews. Requiring that a code of practice must be produced.

Giving guidance must be produced. Giving guidance for DWP and financial institutions on their obligations under this legislation. Ensuring that in cases of fraud and error, a human will make any decisions that affect benefit, entitlement and introducing new independent oversight for this measure and requiring the government to provide the reviewers with requested information.

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requested information. But not these safeguards. Are in stark contrast to the measures proposed by the previous government, in which information government, in which information about anything can be requested from anybody, and every single benefit was in scope from the outset, was in scope from the outset, including the state pension. And I am grateful to the noble Lord, Lord Bork's acknowledgement of the improvements I have been made to the

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improvements I have been made to the bill. I thank him for saying that. safeguards. The government has now put.

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Forward further amendments to reassure the House and the public. That. responsibly.

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responsibly. Government amendments 47 and 48. Create a new requirement that the Secretary of State must consider it Secretary of State must consider it necessary and proportionate to issue an even before doing so. That reflects the commitments I've been reflects the commitments I've been making throughout the Bill that we will only use, even when it's a necessary and proportionate way of necessary and proportionate way of helping to find incorrect payments in relevant benefits. This responds directly to amendment 49 from the directly to amendment 49 from the noble Lord, Lord Vaulks, and his points raised in committee.

And although I may have more to add, once I have heard from the noble once I have heard from the noble Lord today, I hope the noble Lords will agree. This makes this legislation even more robust. I have also made clear.

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also made clear. Throughout the. Bill that. No conclusions about fraudulent intent will be made from the intent will be made from the information alone, as at the point the information is shared, no one is the information is shared, no one is suspected of any wrongdoing. So, for example, again, they may have £50,000 in their account, but it may be from an exempt compensation be from an exempt compensation payment. And it's completely legitimate for them to have it. Nevertheless, to make this clear.



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Government amendments 45. 46, 51 and 66 seek to provide further assurance by clarifying that the purpose for which an event can be issued is only for assisting and

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identifying incorrect payments. That makes it. Clear. That EVM information can only help to identify incorrect benefit payments, and DWP must consider other information which can help other information which can help verify whether benefits have indeed been incorrectly paid. This was always the intent of the power, my always the intent of the power, my Lords, but from the points raised by noble Lords and by some outside it, I know it's continue to be a I know it's continue to be a concern.

So I hope those amendments provide assurance to the House and the wider public that a conclusion will never be drawn from EVM will never be drawn from EVM information alone, and hopefully it puts this issue beyond doubt. In particular, I hope the noble Lord,

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Lord walks will reflect on that. In relation. To the next group. Well, as in previous debates, Noble Lords have raised concerns about the potential raised concerns about the potential burden of EVM on financial institutions. Now, throughout the Bill, we've taken steps to minimise Bill, we've taken steps to minimise those burdens in response to our close work with the finance sector, including UK finance. Government amendments 61 extends the period during which financial institutions

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are able to request an internal review of the decision to issue an EVM from 7. To.

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14 days. This was proposed by the industry to ensure banks have enough time to consider the contents of an event and any other relevant event and any other relevant factors, and requested a review. I'm very grateful to my colleagues in the department for their close work with industry, and I'm very happy to put forward that change today. My Lords, I hope that gives a good explanation of the way in which it operates. Of all the steps we've taken. And, my Lords, I beg to move.

Amendment proposed clause 75, page 43, line 31 after of insert

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assisting in. I appreciate the reassurances
16:53
Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-affiliated)
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I appreciate the reassurances given by the Minister. They are taken into account, but nonetheless taken into account, but nonetheless I rise to move two amendments that I think could go even further, and I would hope that the Minister can listen. Firstly, amendment 56, to ensure that affected parties are informed by their own bank when they are flagged following an eligibility verification notice. To note the even measure will by design, as has been conceded, not only detects serious fraudsters, but also people who have been flagged because they have erroneously received an overpayment, possibly due to the dwp's own mistakes, a possibility not acknowledged enough by measures in this bill, in my opinion.

But because of this, it is important that individuals identified by the power understand the basis on which they have been subjected to greater scrutiny and intrusion. I want to stress that this amendment is not intended to compromise investigations or tip off fraudsters, as was implied in committee stage. In fact, it would only come into play after an individual has been identified by the even measure. Why this matters is because one principle of the rule of law, the rule of law, which I know this government is very keen on, is that if you are accused of wrongdoing, you should be told the basis for that suspicion.

Now, of course, being flagged by the even should not constitute reasonable grounds for suspicion in and of itself, as amendment 52, in fact, deals with. And I will fully support that when we get to it. But there's even less reason for an individual who is not suspected or of any criminal wrongdoing, who may indeed be the victim. As I've said of DWP administrative error, to be subjected to further checks and requirements without even being told why. It's just not good enough for the DWP to warn people in their personal information chart that benefits recipients bank account information may be provided to the departments.

They need to be informed at the moment that the powers bite, that is, once they have been flagged. And I think it's important to note that organisations like the Public Law Project are keen on seeing this being made into a reality, and just to humanise why this amendment matters. Last week, several leading charities and advocacy groups including Big Brother Watch, age UK and Disability Rights UK sent a joint letter to the DWP ministers, which I'm sure the ministers read, highlighting the potential human impact and real life costs of the impact of this bill's powers.

And it included testimony from members of the public receiving Pension Credit who told their stories to Silver Voices, the advocacy organisation for older people. And I was just particularly struck by the testimony of Sue from Manchester, who recounted her experience of having to clear her name due to a previous wrongful flag by the DWP, which accused her of having multiple undeclared bank accounts. And to quote so, she said, I had to get letters from each of those banks to clear my name.

As none of the banks answered the DWP. The mental anguish this has caused me is unbearable and nearly sent me under. Now, I appreciate that the DWP has gone to great pains to emphasise that they do not consider the even measure to be a government surveillance power, but the idea that you could be flagged by an algorithm that is rifling through your private bank statements and reported you back to the departments for further checks, all without being informed about it, is, and I say this tentatively Kafkaesque.

So I would like amendment 50 to correct that I also moving. I'm also moving amendment 62. The requires that the code of practice include scrutiny provisions about the algorithm used by banks, an issue I raised quite a lot at committee stage with some support from fellow peers. The situation is that the bank accounts of millions of people will be scoured through, sorry, scoured through by third party algorithms that neither the government nor banks have any hand in creating. And it's therefore essential we are able to scrutinise exactly what these algorithms are doing.

And I know that the Minister understands the concerns. It has just explained and articulated that well. But the government has said that the code of practice is not the appropriate vehicle for such scrutiny. But still, we have not been provided with any alternative. And what's more, there have been a ministerial opposition to amendments designed to provide greater transparency, apparently, over the eligibility indicators, which I find worrying. The Minister has characterised the algorithm that will be deployed for the even measure as merely comprising of two tests that have to be met to determine whether an individual can be flagged, whether an account is one that receives a relevant benefit, whether the account meets the criteria set up by the DWP in the oven, and the Minister has also answered at committee.

And again, now that it is the DWP that will review all the information received and DWP staff who will make any decisions about entitlement where potential fraud or error is identified. But, and it's a big bot, that review will only take place on the basis of information which is returned from the oven, meaning we do have to be able to scrutinise exactly what is being picked up by the algorithm. There may be simple tests, but they will be applying unpublished eligibility indicators that can complicate issues and will depend on what the eligibility indicators require banks to search for.

Okay, there may be little to scrutinise in relation to algorithmic algorithms, which simply detect whether someone has more than £16,000 in their bank account, or if, for example, 50% of their transactions have occurred abroad over a period of four weeks. However, should the algorithms have to assess conditions that are more complicated then the algorithms deployed by banks will necessarily be more involved. So, for example, for relevant benefits currently in scope, such as Pension Credit, Employment and Support Allowance in Universal Credit, would it be possible for the DWP to require banks to find people who they support, or who they suspect are claiming as being were not actually suffering from a disability or health condition that affects how much they can work.

Or would it be possible for the DWP to require banks to identify recipients on Pension Credit who live with a partner, but claim to live alone? That might be misplaced suspicion, but exactly how the algorithm is determining this sort of complex information, and what information it is extracting to reach its conclusions requires oversight. Otherwise, people will be worried and paranoid. Otherwise, we risk people being identified for further scrutiny. Investigation potentially on the basis of flawed algorithm logic. As I emphasised during committee stage, determining whether bank accounts meet the eligibility criteria for an even requires judgement.

It might not be human judgement, but algorithmic junctions. But the question is what are those criteria? What will the algorithm be asked to search for? And just to finish in another context, algorithmic scrutiny by medical experts revealed that an NHS computer algorithm deciding who to prioritise on the waiting list for liver transplants was discriminating against young patients. I'd like to think that that kind of scrutiny, which would pick up the pitfalls in that instance, is needed for this instance as well, so that we can identify where things go wrong.

And that's a key point recognised by the government, which is committed to algorithmic transparency already elsewhere, with the algorithmic transparency recording standard. Not an attractive title, but this at R. S requires all government departments using algorithms to publish information about how and why they're using algorithmic tools. So can the minister explain why that principle and commitment to transparency should not apply simply because the government are deputising to the banks, to the job of conducting these searches on their behalf in this instance.

So I look to the Minister to provide reassurance by committing to greater transparency over exactly what the eligibility indicators would require of the banks to identify through the use of algorithms. These are modest proposals, and I do not think as

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yet. Despite assurances, I've been reassured. In my.

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In my. Lords, as we've heard, this group relates to the measures in the Bill which would give the DWP the ability which would give the DWP the ability to require banks and other financial institutions to trawl all accounts that they hold in order to identify and provide information on accounts that have received certain benefits and which meets certain criteria as and which meets certain criteria as defined by DWP, all without any suspicion of wrongdoing. This is suspicion of wrongdoing.

This is done by means of an eligibility verification Notice, which can require. The noble lady didn't
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Lord Vaux of Harrowden Portrait Lord Vaux of Harrowden (Crossbench)
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require. The noble lady didn't mention this when she describes it, which can require periodic reporting. So for example, daily. Although there hasn't been any clarity from the department from the noble lady yet as to the periods that are intended, I should at this point just reiterate this is a much better bill, and the safeguards that are there are much greater than they were last time we saw these, these clauses. But there is more to go. One other little correction I think I'd like to make to the noble lady her example of universal credits on this.

Her example was that the eligibility criteria that would be provided by DWP to the banks would be £16,000, because that is the limit. In fact, under the bill, it could be a much lower number because under the bill, the eligibility indicators may be criteria to be met by single accounts or by a number of accounts combined. So for the universal credit example, it might be 10,000 or 8000 or something of that nature, which means that it's even more likely in that situation that that eligibility indicators would be flagged for innocent people.

But just a wrinkle within the bill. I think many of us are nervous about the introduction of what is effectively suspicion as trawling of benefits recipients accounts, even with the safeguards over there. But I do understand and have an awful lot of sympathy for the need to reduce fraud and error, and the need for the department to have the tools to do that. The noble lady, Baroness Kramer's Amendment 45 A and others that I think we're about to hear would remove it altogether. My approach in this group and the next has been to seek to strengthen the safeguards that surround the use of the powers, rather than to remove them altogether.

And to that end, I've tabled one amendment in this group, amendment 49. The noble lady has already alluded to, and I'm very grateful to both the noble lady, Baroness Kramer and the noble Viscount Younger for their support on this. It's very simple. It simply requires that the Secretary of State may only issue an eligibility verification notice if satisfied that it is necessary and proportionate to do so for the purposes set out in the Bill. My Lords, it was quite surprising that this basic safeguard was not already in the bill because the same wording already appears in relation to all of the other powers created by the Bill.

I am afraid I had assumed this was a drafting error, an oversight, as I can't imagine any reason why it shouldn't be there in relation to these powers. But since I tabled amendment 49, I'm very pleased to say, as the noble lady has mentioned, that she has tabled amendment 48, which just does very much the same thing, although it doesn't restrict the necessity and proportionality to the purposes of the bill, which I think is regrettable, but I can live with her version and I'm grateful to her for doing this.

Following the constructive discussions we've had throughout the process, as we've had, you know, on a range of issues for which we're very grateful. Her other amendments also introduce small but useful tweaks to the safeguards. She I'm not sure I would go as far as she does in the effect of them, but with thanks to the noble lady, the minister for her engagement, I won't be moving amendment 49, but I should be clear now that I don't believe that amendment 48 and the others that she has tabled remove the needs for the changes that we'll be discussing in the next group.

We can have those discussions then, and I will obviously reflect on what she has said. In the meantime.
17:06
Baroness Kramer Portrait Baroness Kramer (Liberal Democrat)
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I will be very brief.

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Has amendments in this. And in other groups, several of which I've signed. To try and ameliorate.

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Or provide. Safeguards for some of the most intrusive. Elements of the current draft of this bill. And I have great sympathy this bill. And I have great sympathy also with the amendments moved by put down by Baroness Fox around the

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issue of. Transparency, which is very evidently absent for most of this

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evidently absent for most of this bill, let me say that I will be supporting that those individuals, if they. If they.

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If they. Move to. If they decide make. A decision. To move for.

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To move for. A vote. My amendments 45 ayes, 65 and 74 A are frankly, by contrast to and 74 A are frankly, by contrast to those of Baroness Fox and Lord Fox.

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That are frankly not nuanced. They simply remove clauses 7576 and schedule three of.

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and schedule three of. The bill. In effect eliminating the. Requirement for banks to look into.

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Claimants bank accounts. In effect, they. Destroy the principle that the bill establishes, which is that a.

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bill establishes, which is that a. Group of people. characteristic. That they are in receipt of

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That they are in receipt of limited. Right to privacy. And data protection.

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Than the rest of the community. I am also very concerned when banks become investigative agents of. The become investigative agents of. The state. I regard these as lines we simply should not cross. Now, I know simply should not cross. Now, I know the Minister does not share that view, and is very contempt that those in receipt of benefits should be under a level of surveillance.

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be under a level of surveillance. In a way. That is considered. Inappropriate for the rest of the community. She for the rest of the community. She has, to her credit, limited some of the most abusive features of the bill we receive from the Commons. But she still. Asserts the underlying principle. I also realise this is very much a paving bill for this is very much a paving bill for the. Intrusions that will follow the introduction of the digital. ID that scheme provides the tools which

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scheme provides the tools which enables the state to carve out for surveillance any variety. Of groups of people.

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Of groups of people. Whom they deem unworthy of sharing the general rights accorded under the law. I have put down.

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under the law. I have put down. My killer amendments. In effect. That's because I think the public needs to know what exactly is at stake and what line has been crossed. I will not be

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has been crossed. I will not be pressing my amendments, but I am also determined. That the issues will not be quietly.

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Tidied away. In. My Lords, if I may say a few words about amendment 60, and also thank the noble lady, Baroness Bennett of Manna Castle for her support. My concern here is about justice. People at the receiving end justice. People at the receiving end of DWP penalties and accusations of fraud will predominantly be old, sick. Disabled and the poor. Most would not be able to afford legal would not be able to afford legal advice would not qualify for legal aid, which is scarce.

In any case, aid, which is scarce. In any case, the DWP actions and penalties could arise because people have made arise because people have made errors in completing very long and. Complex forms. For example.
17:09
Lord Sikka Portrait Lord Sikka (Labour)
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The Pension.

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Credit form is 24 pages long, has 243 questions on it. Errors can be 243 questions on it. Errors can be made in completing the forms interpretation of questions on the interpretation of questions on the form and DWP is assessment of the form and DWP is assessment of the answers given to those questions. There's a high probability that some people may be eventually unjustly people may be eventually unjustly accused of committing fraud and face removal of monies from bank accounts

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removal of monies from bank accounts without their express approval. It will. It will really. Be the.

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Be the. Might of the state on one hand and a poor person on the other, who doesn't really have any legal advice. We know from the Post Office. Scandal that the innocent Office. Scandal that the innocent individuals can be pressurised into admitting frauds, which they did not commit. They can be pressurised into commit. They can be pressurised into handing over monies which they did not steal or do not owe. So there is not steal or do not owe.

So there is an enormous scope for injustice in this bill. If we look at the High this bill. If we look at the High Court case 2023 case of overseas, the Secretary of State for Work and the Secretary of State for Work and Pensions, this case related to a mother, a single mother of two disabled adults who was receiving universal Credit and it was overpaid by £8,623, entirely due to the fault

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of DWP. DWP sought to. Recover the money. The High Court judgement said

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The High Court judgement said that under certain circumstances, benefit claimants may be able to argue that recovering the debt would argue that recovering the debt would be an unlawful breach of their legitimate expectation and the debt legitimate expectation and the debt need not actually be paid. Would many claimants who are accused of many claimants who are accused of committing frauds or receiving overpayments actually be aware of these things? Steve Webb, former these things? Steve Webb, former pension minister, said it can be difficult for people to understand difficult for people to understand what are the demands they are being sent for.

Overpayments are a mistake as benefits such as tax credit and pension credit are so complex. So pension credit are so complex. So without legal advice, these people become ever more even more vulnerable. Last year, a lot of vulnerable. Last year, a lot of press coverage was given to the plight of a 75 year old pensioner plight of a 75 year old pensioner who was chased by DWP for pension Credit fraud, adding up to £22,000.

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Credit fraud, adding up to £22,000. The sun newspaper took up. The case. And eventually the investigation

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And eventually the investigation showed that there were there was no fraud. It was all due to errors by DWP and this case obviously isn't unique. There are many others which don't get the publicity, so I can't help wondering how many people over the years actually have been pressurised into admitting guilt when they are not guilty. How many more will admit guilt when they simply are just pressed into it? Last year, data secured by Big Brother Watt showed that more than 200,000 people have been have wrongly face investigation for housing benefit fraud and error after the performance of the government's algorithm fell far short of expectations.

Earlier this year, 30 charities wrote to the government pointing out the dangers of what this legislation and previous legislation have done, and they identified 686,756 new official error overpayments are on Universal Credit. So eventually, at some point, people who are accused need some advice. So what amendment 60 suggests is that the government actually ought to provide that legal advice to people who may well qualify for that. And on 9th October this year, the government announced that all victims of Post Office Horizon IT scandal who are claiming compensation will be entitled to free legal advice.

Well, why wait till people suffer? Why not offer this advice upfront to save anguish to millions of people? That is what a civilised society would do. I'm sure the minister would not support this and would possibly refer to the cost associated with this. But my Lords, the cost of injustice is even higher. So I do hope that the Minister would be able to offer some

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help with this. My Lords, perhaps I would take this opportunity of referring to the
17:14
Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (Liberal Democrat)
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this opportunity of referring to the title of this bill, which is not just fraud, it's fraud, error and recovery. And what we're really dealing with is unintentional error. If you are at the bottom of the food chain worrying how to pay for your food or all the other necessities of life, and you receive some money in the real world, you people don't

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look too carefully at that. They receive. And it then. Transpires that. They.

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They. Have been an error, not really a fraud. And that's part of the title fraud. And that's part of the title of this bill. And what the noble Lord, Lord Vaulks and my noble Lord, Lord Vaulks and my noble friend Baroness Kramer and Lord Saker have tried to explain, is that Saker have tried to explain, is that this these are errors, not fraud. So this these are errors, not fraud. So this these amendments reflect on our ongoing concerns that the bill ongoing concerns that the bill grants excessive powers that could intrude upon individuals financial intrude upon individuals financial privacy and be applied punitively to those receiving Universal Credit who

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are the bottom of the food chain. Fox. Name Alliance. The safeguards that apply for the

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The safeguards that apply for the use of. Eligibility verification powers. With the safeguards that exist in

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With the safeguards that exist in other. Sections of the Bill ensuring continuity in this legislation. And continuity in this legislation. And my noble friend Baroness Kramer's amendments would remove the requirement for banks to examine requirement for banks to examine bank accounts of relevant claimants. Now, I don't think we expect a division on this bill, but I hope government will take account of the nervousness that many of us feel about the excessive powers that could affect people least able to

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defend themselves. Yeah.
17:16
Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Conservative)
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Yeah. My Lords, there are a number of amendments in this group, each touching on different principles relating to the operation of and relating to the operation of and limits to the eligibility verification measure. And I will address them all briefly in turn. And I would like to start by the fact that I appreciate the full reminder by the noble Baroness, the Minister of the intent, with some operational details behind the EVM. I think it was very helpful on amendments 45, a 65 and 74 a in the name of the noble Baroness, Lady Kramer.

As she may expect, I'm afraid that we cannot support these amendments. And as the noble Baroness herself iterated, these amendments would in practice remove one of the bill's core operational mechanisms. The framework that enables the detection and investigation of fraud and error in the welfare system. Taking out clause 75, 76 and schedule three would not simply adjust how the powers are used, it would dismantle the machinery that allows the system to actually function. So we and these benchers support the principles behind the bill and, broadly speaking, how it seeks to counter fraud and deter wrongdoing.

And as the noble Baroness, the Minister reminded us that it was a conservative government up until the general election last year that initiated the approach for DWP to ask banks and financial institutions for their help in tackling welfare fraud. And I also acknowledge, too, that some improvements in the past year have been made. So removing these clauses would in effect be a wrecking amendment, as the noble Baroness herself has admitted, denying the Department for Work and Pensions the tools that it needs to identify and, as evidence cases of fraud.

The real debate, and the one that this House has been having constructively throughout committee and again here and report, is about how those powers are exercised proportionately, cost effectively and with due regard to rights, safeguards and wellbeing. And that is the discussion I believe we should be having, not one that seeks to straight out strike out the core of the bill. So turning to the government amendments, we broadly welcome them. They make sensible, constructive improvements to the operation of events. The first, as set out in amendment G 48, is the insertion of the necessary and proportionate test, which is a welcome safeguard which raises the standard for how these powers are applied.

The second clarification that events may be used only for assisting in identifying incorrect payments, provides welcome precision and helps prevent any risk of mission creep. And talking of precision, my Lords, may I at this stage thank the noble Baroness, the Minister and her team for producing a series of flowcharts. As she knows, I was pressing for these at committee because there is considerable complexity, including work in progress. Or do we now call it test and learn and not proof of concept? I am not very sure in all those involved in understanding the processes and operations between the banks and DWP with the checks, the balances and the timeframes set out.

And I do hope that the Minister acknowledges that this has been a help for his now, a help for the Department, and that it will continuously be updated and improved as the system evolves. We believe, however, that there remains scope for further clarification, which is why I was glad to add my name to the amendment from the noble Lord, Lord Vaulks of Harrington. This additional clarification in the language of the Lord Lord Walker's amendment is important. It makes it explicit that the exercise of this power is anchored to the purposes of the Bill itself, rather than to any broader or more flexible administrative interpretation that might develop over time.

In practical terms, it ensures that the Secretary of State's use of these powers cannot be varied or expanded, except by returning to Parliament to amend the primary legislation, for example, where the government at some future point to seek to extend these powers to cover other forms of wealth, welfare support, and we believe this is an important safeguard. It ties the scope of the eligibility verification regime firmly to the text of the Bill, providing Parliament and the public with confidence that its use will remain confined to the limited, proportionate purposes that we have debated.

And for that reason, we consider this as a sensible and necessary amendment, and we are glad to support the noble Lord, Lord Fawkes, in bringing it forward. On amendment 50, tabled by the noble Baroness, Lady Fox of Buckley. We are sorry to say that we cannot support support it or indeed this one, although we entirely appreciate her engagement with us on this point and the spirit in which it was brought forward. The aim of improving transparency is understandable. But requiring banks to inform account holders that they have been flagged following an eligibility verification notice risks undermining the integrity of ongoing investigations.

But I listened carefully to the noble Baroness speech and despite the noble Baroness explanation and the safeguard that she outlined, we remain worried that notifying a potential potentially liable person too early, it could allow them, could allow them to conceal or move funds, frustrating the process. So while the intention is fair, it could cause or create a serious loophole and we therefore I am afraid, cannot support it. But one of the points I do agree with the government on is that some of those seeking to defraud the state, which, after all, is taxpayers money that we're talking about will stop at nothing to get their way to make money for themselves.

There is a line to be drawn to ensure transparency does not provide an open goal for fraudsters. Turning now to amendment 60, in the name of the noble Lord, Lord. Second, it appears that the drafting may not achieve what is intended. As it stands. It would see, having read it, to place a duty on banks or institutions rather than individuals, to receive legal advice before complying with the notice. DWP in any case has access to legal advice in departmental, so it would be up to the department's discretion to use this on a case by case basis and should not be statutory.

If, however, the noble Lords intent, which became clear, I think, or clearer in his remarks, is to ensure that individuals affected by DWP actions can access advice or support that is a broader and legitimate issue, but this amendment does not appear to address it and therefore we therefore do not or cannot support it. Individuals might choose to consult a lawyer, but this would be up to them. So can the noble Baroness. The Minister confirm that no taxpayer's funds would be used to fund this? If this was indeed the intention? Turning now to amendment G 61, we welcome the government's change to extend the review period from 7 to 14 days.

This responds directly to concerns raised by us on these benches and by other noble Lords. The committee that the original time frame is too short for financial institutions to act upon. It is a practical and welcome step that reflects the realities of compliance, and we are glad that the government have listened. And finally, on amendment 62, again tabled by the noble Baroness, Lady Fox, we do hear have some sympathy. And I do remember that the noble Baroness spoke to this in committee.

It is right that individuals should be able to understand, at least in part, the role of algorithms used in decisions that affect them, and being able to have sight of this as part of a review makes sense. However, transparency must not come at the cost of investigatory integrity. As I stated earlier, there is a delicate balance between fairness to individuals and protecting methods that could be exploited if disclosed. Now, the noble Baroness, Lady Fox, asked many questions and I certainly won't repeat them, but I would just simply ask the noble Baroness, the Minister, if she could clarify how this concerned and her concerns might be addressed in practice, perhaps through the review of the review or the appeal mechanism, while maintaining that balance.

So finally, my Lords, we welcome that the amendments in this group do provide us with an opportunity to have a further discussion on this important part of the bill, the essence of the prime aim of the Bill. And we are grateful for the government for listening to the concerns that were raised at committee, as well as other labour laws for identifying areas in which they are concerned and offering the government the chance to comment. And we shall be listening with interest to the reply and the response from the group of Baroness, the Minister.
17:24
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