Jobcentres: Staffing Levels

Baroness Sherlock Excerpts

Thursday 23rd October 2025 Lords Chamber

[The Lord Bishop of Leicester]

To ask His Majesty’s Government what assessment they have made of the staffing levels within Job Centres.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, DWP monitors demand for jobcentre support on an ongoing basis and has well-established workforce planning systems to make sure that we have the right people in the right place at the right time. These systems help us to prioritise jobcentre activities where needed, protecting our most effective interventions and making sure that we maintain a constant focus on getting people into work, while remaining within funding limits and providing value for money.

[The Lord Bishop of Leicester]

I thank the Minister for her response. A recent BBC article suggested that capacity has been created in jobcentres only by reducing the number and length of appointments. One work coach they spoke to said that having only 10 minutes with clients means

“you’re just being a benefits policeman”,

and some work coaches feel that they are not able to provide the necessary support, in particular to help disabled people into work. Are the Government confident of being able to improve the employment rate for people with disabilities?

[Baroness Sherlock (Lab)]

My Lords, our jobcentres provide a professional, targeted service. DWP recently conducted a thorough review of jobcentre activity, to look at ways in which we can respond to demand without having a negative impact on outcomes for claimants, or indeed on benefit expenditure or fraud and error. After the review, the department introduced a series of operational changes, the aim of which was to maintain consistency in jobcentres across the country.

However, consistency is not the same as uniformity. It cannot be sensible to have the same regime for a 20 year-old who has not worked ever since leaving school, a 40 year-old who is recovering from a serious illness, and a 60 year-old who is working in a job but not earning quite enough to escape from the demands of the jobcentre. So we are exploring ways to adapt the length, frequency and channels for appointments so they are better tailored to the needs of the individual. That way, we will be able to protect the interventions that are most effective but also try to make sure that we direct the resources where they are most needed. We now have additional work coaches working specifically on our programmes to support people with health conditions and disabilities, and we have committed to spending £1 billion by the end of the decade, investing in those very customers.

[Lord Bellingham (Con)]

My Lords, during my time as an MP, I made a point of trying to visit local jobcentres every year on a very regular basis. One of my consistent observations was that, all too often, local offices were never properly involved in designing services to address local priorities. So, is it not time we got away from this one-size-fits-all, Whitehall-led mentality?

[Baroness Sherlock (Lab)]

My Lords, I suspect that the noble Lord has been reading our Get Britain Working plan—that is the only explanation for that comment. That is exactly what we want to do, and he is so right on this. We have been saying from the beginning that one size does not fit all, and that in employment interventions we are looking to work closely with local leaders, so we are running a series of trailblazers around the country, working with local mayoral authorities and local government.

Every labour market is different. The noble Lord is quite right that we do not have a single labour market in Britain; we have a series of different labour markets, with different challenges, populations and employment patterns, and our job is to make sure that we respond to those needs. For example, we have eight youth trailblazers running around the country, from Teesside to the south-west, Cambridgeshire and Peterborough, the East and West Midlands and London, to look at what works. We will learn from that and will then help people to make the right decisions for their people.

[Lord Palmer of Childs Hill (LD)]

My Lords, that sounds a very optimistic viewpoint from the Minister. However, the reports are that staff stress levels are at historic heights, and many are leaving for better pay and less stress. Aligned to that, staff shortages also mean less support for vulnerable clients. Can the Minister give a more optimistic view than is being reported?

[Baroness Sherlock (Lab)]

My Lords, I may be an optimist but I am also very positive. I believe in our staff, and I understand that there are times when this can be a really stressful job: there is no question about that. But we have been looking really carefully to make sure that we can predict demand levels and manage our staffing levels accordingly.

One of the challenges is that we are asking people to do a different job from what they did in the past. I had a really interesting conversation recently with one of our senior people who has worked on the front line about who she recruits to be a work coach, because you have to find people who have the appropriate levels of empathy and can motivate people, but who are also able to have a tough conversation when you need that. One of the things I asked was, “Where do people recruit from?” She said that they come from really different backgrounds. They are teachers, people from retail, people from call centres, the emergency services and from some legal offices. We are looking for skill sets and characteristics that can enable people to do a really tough job. We are also investing in our people, creating a work coach academy to upskill them and give them the tools they need to do the job, and we are investing in AI so that they have the information they need to help the customers. We can do this, and we are going to.

[Baroness Winterton of Doncaster (Lab)]

My Lords, when my noble friend the Minister refers to people with medical conditions that may be preventing them getting back into work, will she look at whether there are in fact enough health advisers in jobcentres who could help by referring them quickly? I know that there are some pilots on mental health advisers, but can she look at whether this could perhaps be extended through the trailblazers?

[Baroness Sherlock (Lab)]

My Lords, that is really interesting. I know that we do have advisers working out of GP centres, for example in Darwen, in Lancashire, and in Braehead, where we are placing people so that, when GPs encounter people with certain kinds of difficulties, we can provide employment support right then, so that people do not then get out of the labour market and end up being out for some time. We also have projects working closely with the NHS for people who are in work but at risk of falling out of work. If we can support them to stay in their jobs, it is much easier and better for the employer than having them falling out. I do not know whether we have GPs or healthcare workers working in our jobcentres, but what an interesting idea—I will go off and ask that very question.

[The Earl of Kinnoull (CB)]

My Lords, I declare my interest as the chairman of the charity that runs the libraries and museums in Perth and Kinross. In Perth and Kinross, there is a feeling that libraries have a part to play here, and that is because sometimes a certain amount of stigma is attached to going into a jobcentre for people who are thinking of needing careers advice or job progress. There is no stigma associated with going to a library, and the libraries in Perth and Kinross have been able to provide all sorts of support. Would the Minister like to comment on that?

[Baroness Sherlock (Lab)]

I am very grateful to the noble Earl—that is a really interesting idea. There are people who are happy to go into a jobcentre, and there are people for whom that would be really difficult. We have a number of jobcentres around the country, but we also have a number of different services operating out of different places, including libraries, but also youth hubs. We are also testing vans: we have mobile vans going out into communities where people will not come out to us. For example, in Burnley jobcentre there are family community work coaches based at a community grocer, where they can reach out to people. We also have people working out of city councils and all kinds of different areas, but there are specifically groups working in libraries. I will go and find out whether there is any more of that we can do, but I have been assured that they can work really well. Also, I am concerned about the future of libraries, and if that is a way to make sure that there are lots of reasons to go to a place, it can be a win-win.

[Viscount Younger of Leckie (Con)]

My Lords, further to the questions raised by the right reverend Prelate, more than half of jobcentres are reportedly reducing support for people claiming universal credit due to a shortage of work coaches, not so much to do with shortened appointment times—although I take the right reverend Prelate’s point. Recent data obtained through a freedom of information request shows that just 16,640 work coaches were employed by the DWP in August, the lowest number since March last year. But, given this, and the department’s plans to place job advisers in GP surgeries and mental health services, how do the Government intend to ensure that there are enough work coaches to deliver effective employment support across all settings?

[Baroness Sherlock (Lab)]

My Lords, that is the question. We have an increasingly sophisticated model for mapping demand and the number that the noble Viscount gave pretty much matches the demand we are predicting. But, if demand rises significantly, we will have to prioritise. As I said at the beginning, at the moment, standard processes are that, when somebody first comes into a jobcentre, we will want to see them weekly for the first 13 weeks, but there is no point in treating everybody the same. It is not necessarily a shortage of work coaches that is driving this; we have some turnover but, actually, we are looking at faster ways to recruit them and we are happy that we have the right numbers at the moment. The challenge is to make sure that the support is in the right place, for the right people. If all the work coaches spent all their time checking and ticking everybody’s boxes, they would not be out there doing the things that only they can do, which is to get people into jobs. That is what we want them to do.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

3rd reading
Thursday 23rd October 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the Bill do now pass.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, it has been a privilege for my noble friend Lady Anderson and me to take this important Bill through the House. This Government are committed to safeguarding public money and tackling fraud and waste. Public sector fraud is not a victimless crime; it damages our public services and, ultimately, it is taxpayers who suffer when they pick up the bill. Tens of billions of pounds are being lost to public sector fraud—money desperately needed by our public services. This Bill delivers on that commitment to safeguard public money and reduce fraud and overpayments resulting from errors across the public sector. It will enable the Public Sector Fraud Authority to support public sector bodies in investigating and dealing with fraud, and it will help the DWP better identify, prevent and deter fraud and error in the social security system. In doing so, this Bill will protect the public purse and deliver £1.5 billion of benefits over the next five years.

I thank all noble Lords who have given so generously of their time and wisdom in scrutinising this important legislation. Although we have not always agreed with them, my noble friend Lady Anderson and I have been grateful for the very many thoughtful and considered contributions that have prompted us at various points to improve the Bill or to clarify its provisions. This is what the House of Lords is for, and I am grateful for it.

Before I conclude, I offer some words of thanks, first, to the Opposition Front Bench. The noble Baroness, Lady Finn, and the noble Viscount, Lord Younger, have given robust but constructive challenge throughout the passage of the Bill. I am grateful for their time, both inside the Chamber and beyond. Similarly, I thank the noble Baroness, Lady Kramer, and the noble Lord, Lord Palmer of Childs Hill, from the Liberal Democrat Benches, who have been passionate advocates on issues such as whistleblowing and carers. I am grateful to the noble Lord, Lord Verdirame, and my noble friend Lady Lister for their careful engagement, both in and beyond the Chamber. I am grateful for the constructive challenge from around House, including from my noble friends Lord Sikka and Lord Davies of Brixton, the noble Baronesses, Lady Bennett and Lady Fox, and the right reverend Prelate the Bishop of Leicester.

Thanks must go to the noble Lord, Lord Vaux, who has maintained a keen interest in both parts of the Bill throughout its passage. The noble Lord has advocated for a number of different issues. We thank him for his constructive engagement and hope he welcomes the progress that has been made.

My noble friend Lady Anderson and I thank our Whips, especially our noble friend Lord Katz for his support throughout the Bill, and put on record our appreciation of all the officials and public servants who provided such dedicated support throughout this legislative process. I thank Georgia, Oliver, Alana and Ewan from our brilliant private offices, Matt, Louise and Tanya from the fabulous Bill team, and all the policy colleagues who stood behind them. Noble Lords who have met them will have been as impressed as I am with their professionalism and knowledge.

Finally, unusually, I thank my noble friend Lady Anderson’s husband for sharing her with us so extensively in the run-up to not just her wedding but her honeymoon. It is a sign of her dedication that she has given so much time to this Bill. She is the only person I know who can, while taking the content incredibly seriously, bring quite so many laughs to the subject of public sector fraud. I am grateful to so many noble Lords, and I beg to move.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the Minister for her remarks. I will make a short reflection on our discussions on Report and in Committee. I speak for my noble friend Lady Finn in so doing. Despite the technical title, this is an important Bill, as the noble Baroness said. It addresses one of the most serious problems that public authorities face. Based on the Public Sector Fraud Authority’s methodology, fraud and error cost the taxpayer £55 billion to £81 billion in 2023-24. The Bill has sought to address this problem, at least in part, through the provision of extensive powers to officials in the DWP and the Cabinet Office. It is largely these that we have discussed over the past few months.

I am proud of the work that this House has done in scrutinising the Bill, identifying issues and problems, and working in the genuine spirit of collaboration to make it better, fairer and more effective. I pay particular tribute to the noble Baronesses, Lady Anderson of Stoke-on-Trent and Lady Sherlock, for the way they have engaged with Members from across the House. They have listened to concerns, shown genuine willingness to make improvements and demonstrated what responsible government should look like. I firmly believe that the Bill before us is stronger and more balanced than the one first introduced to this House. There is more to be done and areas for further improvement, but we have reflected this in our amendments. The changes that have been made are indeed welcome, and we look forward to ping-pong when it comes. I am also grateful to the noble Baronesses for following up on commitments swiftly, not least for providing the now famous flow charts, which have been genuinely useful to us and, I hope, their departments.

I thank other noble Lords for their engagement with this Bill and their support of our amendments both in Committee and on Report. We have sought to address what we see to be serious shortcomings in the Bill on questions of oversight, accountability, proportionality and fairness. I am thankful to noble Lords who supported us in the Divisions that we called. The amendments we have passed in this place advocate for greater oversight, clearer lines of accountability and a PSFA that can actively pursue fraud. I believe that these are important changes that make the Bill more effective and fairer.

I particularly thank the noble Lord, Lord Vaux, and the noble Baroness, Lady Fox, for their support of our amendments, and I certainly do not forget the noble Lord, Lord Palmer, and the noble Baroness, Lady Kramer. I thank them for their support on some of our proposals. I look forward with interest to seeing how the arrangement with the PSFA, the DWP and the banks evolves and becomes effective. We accept that it is test and learn. It is vital that the legislation to seal the agreement becomes effective in combating fraud.

Finally, I thank the officials who have worked so hard from the government side to enable this process to happen. I know from my time as a Minister that we rely on our officials for a great deal; indeed, it is often to them who we turn for advice and support. I also know that their work is often not credited because they are not visible in the way that we are during debates. I therefore thank officials from the DWP, the Cabinet Office, the PSFA and the Ministers’ private offices who have worked hard to support them and, indirectly, all of us in the discussions we have had on the Bill. Noble Lords from across the House should recognise them and their work. I pay particular tribute to and thank my assistant, Oliver Bramley, for his sterling work during this period.

I urge the Government to meet this House on the amendments that it has added to the Bill, given the extensive discussions and strong cross-party support that they command from across the House. The Bill that we return to the Commons is a better one and I urge the Government to use this opportunity to make these changes permanent.

Finally, we all leave the Bill with certain expressions ringing in our ears, such as “test and learn”, which I alluded to earlier, but particularly the tongue-twister “eligibility verification measure”. I think I can just still say that.

--- Later in debate ---

[Lord Palmer of Childs Hill (LD)]

My Lords, I am probably the last person to speak and mull over all that has happened. I thank sincerely the noble Baronesses, Lady Sherlock and Lady Anderson, and their team. They have been very helpful to us in answering our questions, trying to agree with us and offering a meeting to discuss the part of this Bill on carers. We appreciate and look forward to that departmental meeting, together with, I hope, one of our MPs, so that we can have a reasonable view towards ping-pong and what goes forward.

I thank the noble Lord, Lord Vaux, as everyone has, for many things that we worked closely on and supported. I also thank particularly the Conservative Front Bench, who have not been confrontational but have tried to work to get a better Bill. The Bill has been quite exemplary in the way that people have worked towards improving it in many ways. I obviously also thank my noble friend Lady Kramer, who has worked with me on the Bill, and Adam Bull, our legislative and political adviser, who has been giving me support throughout.

We have among us—the Cross Benches, the Government, the Conservative Benches, this Bench and the Bishops’ Bench—all improved the Bill. I hope that the improvements we have made will last through ping-pong and that we end up with a better Bill—not a confrontational Bill but one that will help public funds, which is obviously its aim, while protecting the vulnerable in society who are not really going to be the paymasters of dealing with errors in the past. Congratulations to all, including the staff in the background of the Government who have made this such an interesting exercise, even though I am surprised that we have got to Third Reading so quickly after Report, and in almost indecent haste. If all legislation could be so quick, it would be a great advantage to this House and the other House. I hope that the Bill passes successfully.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to all noble Lords—in fact, that was so nice that I would like it to carry on, but the Chief Whip will kick me from behind if it goes on any longer. However, I will say a couple of things. In response to the right reverend Prelate the Bishop of Leicester, we have already begun to think about how we can look at making things better in the way that I described. I will find the most appropriate way to communicate that, but I assure him that I stand by the assurances that I gave on Report—and I say likewise to the noble Lord, Lord Palmer. In response to the noble Lord, Lord Vaux, I will reflect on what has happened. Having given so much ground, I do not want to spoil the unanimity, but I will not be able to give everything. I am sure he will not be surprised to hear that.

Finally, as we send the Bill down the Corridor, it is now for the elected House to consider and respond to the changes proposed by this House. I am sure I speak for the whole House when I say that we would welcome a swift consideration to make sure that we can move quickly and get on with the important job of addressing fraud and overpayments across the public sector.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

Moved by

[Baroness Sherlock]

89: Clause 91, page 57, line 25, at end insert—
“(aa) section 80AA (restrictions on use of further methods),”Member's explanatory statement
This amendment is consequential to my other amendment to clause 91.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I shall speak to government Amendments 89, 91, 101 and 102; I start with Amendments 89 and 91. I tabled these amendments because it has been clear that, despite all my attempts to reassure noble Lords at earlier stages, concerns continue to be raised as though DWP’s new recovery powers could be applied to debtors who are in receipt of benefits. Indeed, I think that may be the concern of the noble Baroness, Lady Kramer, as the explanatory statement on her Amendment 92 in this group relates to the use of these powers on benefit claimants. To be clear, this is not the case.

The DWP’s new debt recovery measures can be applied only to debtors who are no longer receiving DWP benefits and where we cannot recover from PAYE. However, to further reassure noble Lords and everybody else, we are making it even clearer in the legislation, through new Section 80AA, that the new powers cannot be applied to those receiving benefits from my department. This provides further clarification that a direct deduction order or immediate disqualification from driving order must always be suspended or revoked if the debtor subsequently receives a benefit payment from the DWP while that order is ongoing. I hope that provides further assurance to the House.

Amendment 101 is a procedural amendment regarding the technical mechanisms for DWP to make applications to the court for disqualification orders. The Bill already allows DWP to make an application to the magistrates’ court for a suspended or immediate DWP disqualification order. The purpose of this amendment is to introduce a regulation-making power enabling DWP to set out at a later stage any practical steps necessary for those applications to be made and considered. This engages commonplace procedure rules, dealing with practical matters to ensure cases are progressed fairly and efficiently for all parties involved, such as the type of form used or how notices and orders are served on parties.

Amendment 102 is a technical amendment which ensures that the term “processing” is correctly understood in new Section 80D, which establishes the DWP debt code of practice. It is a small change to provide clarity by linking the term “processing” to the definition already set out in Section 3(4) of the Data Protection Act 2018. This helps avoid any ambiguity in interpretation and ensures consistency with existing data protection legislation.

None of these government amendments changes the existing policy intent for how the powers will be used or the safeguards that are set out in the Bill. These will continue to be powers of last resort, to be used only after DWP has made all reasonable attempts to negotiate an affordable and sustainable repayment plan. These amendments support the policy intent and delivery of the Bill, and I urge noble Lords to accept them. I beg to move.

[Baroness Kramer (LD)]

My Lords, I will be very brief. I laid Amendment 92 in the same spirit as the amendments that I laid in an earlier group. The part of paragraph 3 of Schedule 5 that I find most difficult is a subset of the requirement for banks to provide information. The overarching requirement instructs banks to hand over to the Government, on request, three months of account statements for them to examine. The schedule says that the information must be used only to help determine whether or not to make a deduction under the Bill. I was trying to find out from the Minister what assurances there are that the use will be that narrow. It may be that I have misread it, but I cannot see any form of transparency or accountability that would provide that kind of assurance. It all seems to be completely internal to the DWP. My first question to the Minister is therefore this: how will the scheme verify that the information is not used for other purposes, because detailed account statements undoubtedly have information that could interest all kinds of people? Most importantly, will that information be destroyed after an investigation is closed?

The part of paragraph 3 that exercised me the most, in the original language of the Bill that came from the Commons, is that which prohibited banks from ever notifying the account holder that their information has been handed over to the state and for what purpose. To the Minister’s credit, that now seems to have been amended to say that the account holder can be told after three months. I am unclear whether that is an automatic notification, notification at the bank’s choice, or notification that requires a request from the account holder. To me, this matters, because I suspect that transparency is the only way to ensure that the information in the account is not used for purposes other than those stated in the Bill.

I am generally exceedingly uncomfortable with the idea that the original version basically required a sort of covert process, in which the information held on an individual by the state was not disclosed to that individual. The Minister has often suggested that the monitoring of accounts is to start a dialogue to see if a person has made a mistake in overclaiming rather than committing fraud. If somebody is not told that their information has been taken, read through, examined and dealt with in detail, I cannot see how they can possibly enter into a constructive discussion to explain what is happening.

I want to draw the attention of the Minister to an underlying principle. Jonathan Fisher KC has published part 1 of an independent review of disclosure and fraud offences, which was commissioned by the Government. I want to quote his words on transparency, because it seems that transparency was not built into the original Bill and is still limited in the revised version. He said that:

“A modern disclosure regime must require the prosecution”—


he is talking about the courts—

“to be honest concerning the reasonable lines of inquiry that have been pursued and how investigative material has been gathered, handled, and interrogated”.

I would very much like to see those principles embedded in this part of the Bill. I think we need assurances from the Minister that if we cannot find the language then they will in practice be embedded in this part of the Bill, because transparency is fundamental.

[Viscount Younger of Leckie (Con)]

My Lords, the amendments in this group tabled by the Government contain a mixture of substantive safeguards and some technical improvements designed to tidy up and clarify the Bill.

The main amendment, government Amendment 91, introduces further restrictions and procedural safeguards around the use of the new recovery methods created by Schedules 5 and 6. It requires that liable persons are properly notified and given an opportunity to settle their liability before enforcement action is taken, and that alternative routes of recovery, such as deductions from earnings or benefits, are considered before more intrusive powers are used. These are sensible and welcome provisions that strengthen procedural fairness and ensure that the new powers are exercised proportionately.

We do, however, note that these changes have come rather late in the passage of the Bill. They are substantive clarifications, going to the heart of how these powers will operate in practice. However, I listened to the explanations from the Minister on an earlier point I made about this and I now understand her position—while not necessarily agreeing with it, I understand it.

The group includes two largely technical amendments. The first, to Schedule 6, allows the Secretary of State to make regulations relating to applications to or appeals from magistrates’ courts in England and Wales, ensuring clarity and consistency in procedure. The second, to Clause 94, aligns the Bill with the Data Protection Act 2018 by confirming that “processing” has the same meaning as in the Act. This is a straight- forward but important clarification. It is my view that these amendments strengthen the fairness and clarity of the Bill, ensuring that it operates in a way that is proportionate, consistent and aligned with existing law. We therefore support them.

On Amendment 92, tabled by the noble Baroness, Lady Kramer, she may not be surprised that we do not support this amendment. It would remove a key part of the machinery that underpins the operation of this Bill—specifically, the ability of the Department for Work and Pensions to obtain limited, relevant bank information to determine whether a direct deduction order should be made. I realise that this chimes with the noble Baroness’s earlier Amendment 45A, so I will not repeat the comments I made then, save to say that this is a considerable change and would strike at the heart of the framework that enables the recovery of money lost to fraud and error.

The Government must have the legal capacity to verify whether an individual is eligible for the payments they are receiving and whether further action is required to prevent overpayment or recover funds that are owed to the state and, by extension, to the taxpayer. If a person receives money from the state, the state has both the right and the duty to ensure that this money is not being misused—and certainly is not ending up in the pockets of fraudsters or criminals. The Minister has already made clear that individuals in receipt of benefits will be informed that the Government may access certain account information for the purposes of investigating suspected fraud or error.

We are satisfied with the Government’s assurance that the information obtained under these provisions will be high level, proportionate and strictly limited to what is necessary for the purpose of recovering money lost to fraud and overpayment. Far from being excessive, the powers set out in this part of the schedule are a necessary and measured tool to protect public funds. For those reasons, we oppose Amendment 92.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for his support on these matters. Amendment 92 from the noble Baroness, Lady Kramer, seeks to remove the requirement for banks to provide information to the DWP for the purposes of making a direct deduction order from benefit recipients. I am not sure whether that was her intention or whether she intended to remove it from all, but that is the effect. I therefore need to clarify for the record that these powers cannot be used for those in receipt of benefit, and Amendments 89 and 91 make that even clearer.

--- Later in debate ---

Moved by

[Baroness Sherlock]

90: Clause 91, page 58, line 2, leave out from “2016” to end of line 12
Member’s explanatory statement
This amendment prevents the new methods of recovery from being available in relation to a recoverable amount or a penalty relating to a devolved benefit.

--- Later in debate ---

Moved by

[Baroness Sherlock]

93: Schedule 5, page 106, line 21, at beginning insert “Subject to sub-paragraph (9A),”
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 106, line 28.

--- Later in debate ---

Moved by

[Baroness Sherlock]

101: Schedule 6, page 123, line 23, at end insert “, or
(b) about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under this Schedule.”Member’s explanatory statement
This amendment would allow the Secretary of State to make regulations containing supplementary provision about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under new Schedule 3ZB to the Social Security Administration Act 1992 .

--- Later in debate ---

Moved by

[Baroness Sherlock]

102: Clause 94, page 60, line 37, after “processing” insert “(within the meaning of section 3(4) of the Data Protection Act 2018)”
Member’s explanatory statement
This amendment provides that “processing”, in new section 80D of the Social Security Administration Act 1992, has the meaning given by section 3(4) of the Data Protection Act 2018.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I am afraid that we must oppose Amendments 103 and 113 set out by the noble Lord, Lord Palmer of Childs Hill, for the same reasons that we gave in Committee.

The independent review to which I believe the noble Lord refers has a clear and limited purpose. As set out in the Government’s own guidance, it is designed to establish three things: first, how overpayments of carer’s allowance linked to earnings have occurred; secondly, what can best be done to support those who have accrued them; and, thirdly, how to reduce the risk of such problems arising in the future.

Nowhere in that remit does it question whether the overpayments were made. That point is already settled. The individuals in question have received government funds—taxpayer funds—to which they were not entitled. To put this in context, since 2019 over £357 million has been overpaid to carers for various reasons, such as where claimants breached the earnings limit, where claimants ceased to provide care, and where the claimant was also in receipt of an overlapping benefit. Often, I have to say, there have been innocent reasons.

The review will rightly examine how the system can be improved and how claimants can be better supported, but it will not, and cannot, rewrite the fact that money was misallocated and must therefore be returned. We think it would make no sense to halt all recovery activity pending the outcome of a review that does not address the underlying question of entitlement. The amendment would effectively suspend the recovery of public money that we already know has been wrongly paid out. We believe this cannot be justified, whether fiscally or morally.

I appreciate that the noble Baroness, Lady Kramer, who is in her place, set out to us outside the Chamber her concerns about a cliff edge. I welcome that input—her doing that and saying that—and the Government may want to comment on that. But it is also worth remembering that, even according to charities in support of those who have caring responsibilities, overpayments have been made to people who have not correctly reported that their caring responsibilities have ceased, that the person they are caring for has died, or that they are in receipt of an overlapping benefit. The person in question has a duty to report these changes, and it is clearly wrong that the person has not fulfilled their obligation to the taxpayer to report when these events happen.

Moreover, this amendment goes even further by requiring the Government not only to await the completion of the review and the laying of its report before Parliament but to implement its recommendations in full—I must emphasise that—before recovery can resume. We believe that this is quite extraordinary. We have no idea what those recommendations will be, and it would be deeply irresponsible to commit the Government in advance to implementing them wholesale without the ability to assess, modify or reject them as appropriate.

Public funds must be safeguarded and the Government must retain the flexibility to act responsibly in response to the review’s findings. This amendment would tie their hands and delay indefinitely the recovery of money that should never have been paid in the first place. In his summing up, the noble Lord might suggest how long the wait would be; the noble Baroness might also hazard a guess. Will it be many months, if not possibly a year or two? We really do not know, but I am sure it will be many months. It will become increasingly difficult to recover the money when so much time has gone by. Individuals may have experienced substantial changes in their lives or gone abroad. At worst, the individuals may, very sadly, have died.

For whatever reason, and bearing in mind people’s circumstances or vulnerabilities, we believe in principle that overpayments—a reminder that this is taxpayers’ money—are just that. They have been made to individuals in error—please note that—and should be repaid as soon as possible. I have an iota of sympathy with the noble Lord, Lord Palmer, on the principle behind the amendment—namely, ensuring fairness and learning lessons from what has gone wrong—but its practical effect would be short-sighted, costly and contrary to the basic duty of government to protect the public purse. For those reasons, we cannot and will not support it.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Lord, Lord Palmer, for explaining his amendments. Before we discuss the detail, I pay tribute to the millions of unpaid carers across the country. The Government value carers highly and recognise the vital contribution they make every day. I assure the noble Lord that my new Secretary of State feels just as strongly about this as the rest of us.

However, the reality is that, when we came into government, we realised we faced a flawed system where too many hard-working carers were left with often large overpayments to be repaid, sometimes worth thousands of pounds. I say clearly that I recognise the concerns of the noble Lord, Lord Palmer, and others on the whole issue of carer’s allowance. It is precisely because this Government take the issue so seriously that we commissioned an independent review of earnings-related overpayments of carer’s allowance to understand exactly what had gone wrong and to make any necessary improvements.

We have received the report from the independent reviewer, and I thank Liz Sayce OBE who led the review for her work. We are currently finalising our response to the report, following careful and detailed consideration of its findings and recommendations. I am pleased to confirm that we will publish both the report produced by Liz Sayce and the Government’s response to it before the end of this year. My ministerial colleague has written to the chair of the Commons Work and Pensions Select Committee to notify her of this.

This Government set up the review because we are determined to deal with the problems the system has created for carers. I hope the noble Lord, Lord Palmer, will be reassured by today’s commitment. Once the report and government response are published, and he and his colleagues in the other place, if he wishes, have had the opportunity to consider both, the ministerial team and the DWP will be happy to meet them to discuss this important issue and the Government’s next steps in detail.

I also remind the noble Lord and the House that this review is not all the Government have done to put things right for carers. We have been reviewing our communications to make it as easy as possible for carers to tell the DWP when there has been a change in their circumstances that may affect their carer’s allowance payment. We have been improving guidance and processes for our staff on the treatment of earnings and putting in extra resources to process the earnings information we receive from HMRC.

I think the noble Viscount, Lord Younger, mentioned the cliff edge, which the noble Baroness, Lady Kramer, is interested in. We have begun scoping work on introducing an earnings taper in carer’s allowance in the long run. This was mentioned by the Chancellor in the Budget. It is not straightforward, but a taper might be a way to further incentivise unpaid carers to do some work and could reduce the risk of significant overpayments. However, introducing a taper in carer’s allowance is not without its challenges. It could complicate the benefit as it currently stands and mean a significant rebuild of the system. The DWP has begun some scoping work to see whether an earnings taper might be an option in the longer term, but any taper, if introduced, will be several years away. I do not want to underplay the significance of trying to make changes such as that.

We have also introduced the largest increase in the earnings limit since carer’s allowance was introduced in 1976. That limit is now 16 hours of work at national living wage levels and over 60,000 additional people will be able to receive carer’s allowance between 2025-26 and 2029-30. I hope the noble Lord recognises this progress. He asked whether we would meet Carers UK. I can reassure him that Ministers and officials regularly meet Carers UK and other organisations which represent unpaid carers, as well as unpaid carers themselves. There have been meetings specifically on earnings-related overpayments in the past, and we expect further meetings in the future.

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Moved by

[Baroness Sherlock]

104: Clause 97, page 62, line 5, leave out “processing” and insert “disclosure or obtaining”
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.

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[Baroness Finn (Con)]

My Lords, I speak in strong support of this amendment, so ably tabled by the noble Lord, Lord Verdirame, and supported by the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Leicester, and to which I am pleased to have added my name.

The amendment speaks across so many of the principles that have underpinned our debates and the position that we on these Benches have adopted throughout Committee and Report—fairness, proportionality, transparency and responsibility. This amendment is about finding this balance and ensuring that the recovery of overpaid public funds is carried out in a way that is both effective and humane.

We have been clear from the outset that we support the core objectives of this Bill. Public money that has been wrongly paid out, whether through error or fraud, must be recovered. We owe that duty to the taxpayer and the integrity of our public finances. Equally, it is a duty of government to ensure that such recovery is done in a way that is fair, measured and responsible, does not impose unnecessary hardship, recognises the realities of individual circumstances and upholds confidence in the system.

This amendment embodies precisely that balance. It would establish clear and necessary safeguards before deductions are made from a person’s benefits. It would require that the liable person be notified of the rate and the basis of deduction, and, crucially, that they be given the opportunity to make representations about affordability. It would insist that deductions should proceed only where the Secretary of State is satisfied that recovery will not cause hardship in meeting essential living expenses and that the process is fair in all circumstances, including where the overpayment may have arisen through official delay or error. Sensibly, it seeks to sets a six-year limit for recovery, in line with the limitation period that applies through the courts. In other words, this amendment would ensure that the state exercises its right to recover the money in a way that is just, proportionate and accountable, and would align the recovery of overpayments through benefit deductions with the very same principles of fairness and restraint that we have already built into Schedule 5 in relation to deductions from bank accounts.

Throughout our scrutiny of this legislation, we have repeatedly emphasised that good governance is not simply about having the power to act but about exercising that power responsibly. This amendment reflects that philosophy perfectly. It strikes the right equilibrium between fiscal responsibility and social justice and between protecting the taxpayer and those who may already be in vulnerable situations. I thank the noble Lord, Lord Verdirame, for bringing forward this thoughtful and well-crafted proposal. It would strengthen the Bill, give legislative effect to the principles of transparency, fairness and proportionality, and ensure that, in pursuing the legitimate goal of recovering public funds, we do so in a manner that remains worthy of public trust. This is a measured, sensible and responsible amendment and we are very pleased to support it. I hope the Minister will give welcome assurances on it.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Verdirame, and my noble friend Lady Lister for their early and constructive engagement on this topic. I understand that the intent of Amendment 109 is to replicate some of the safeguards introduced in Schedule 5 for direct deduction orders for the recovery of universal credit and new-style overpayments by deduction from benefit. Although I understand clearly what the proposers of this amendment want to do, I cannot accept it. However, I hope I can provide some assurances along the way.

The DWP is committed to improving payment accuracy to prevent overpayments occurring through continuous improvement activity. Where overpayments do arise, the Secretary of State has an obligation to protect public funds and ensure that, wherever possible, money owed to DWP is repaid. But within that objective, we are clear that our aim is to secure affordable and sustainable repayment plans and ensure that safeguards are in place to protect vulnerable debtors.

As the noble Lord, Lord Verdirame, said, Amendment 109 applies not just to official error but to all universal credit and new-style benefit overpayments recovered from benefits, including debts arising from fraud. The DWP already sets out that fraud overpayments are subject to stricter recovery rules due to their nature and seriousness. To treat all debts the same would not be right; it would be unfair on those who obtained a DWP benefit in good faith. This amendment also applies only to debts being recovered by deductions from benefits. A key driver for the new debt recovery measures is to bring greater fairness to debt recovery, giving DWP the tools to recover debts from those debtors who are not on benefits and have the means to repay but choose not to. This amendment could undermine that important objective.

Taking each part of Amendment 109 in turn, proposed new subsection 8(a)(i) would require DWP to give an individual notice on the basis of the deduction amounts. Individuals receive a notification about the overpayment; setting out the deduction rate and basis for this would present significant challenges. Benefit awards can fluctuate month to month, and deductions for repayment of debt are calculated accordingly. The deduction rate will also depend on other deductions being taken. Therefore, a legal requirement to issue a fixed notice setting out a single rate of recovery may risk being inaccurate, confusing or even misleading.

However, noble Lords are making an important point, and while I cannot accept the amendment, I commit to the House that in response I will explore how we might notify individuals more clearly about forthcoming deductions within the existing legal framework. I intend to do this as a part of the commitments I have made to review our communications to those with debts.

Proposed new subsection (8)(a)(ii) seeks to replicate the representation stage for direct deduction orders where recovery takes place by deduction from benefits. These processes are intentionally different because when deductions are made from benefits, DWP already holds accurate information about benefit payments, existing deductions and in some cases income from other sources. Crucially, there is also no ambiguity about ownership of the funds. Notifications already make it clear that at any time, the individual can contact DWP to discuss the affordability of the deduction.

By contrast, for the DDO process, DWP may know little or nothing about a person’s financial circumstances because they are not on benefits or in PAYE and they have refused to engage with us. This is why the Bill makes provision for DWP to obtain bank statements as an important safeguard. However, we recognise this may not give DWP as complete a picture as we have for benefit claimants. It is therefore right that individuals and any joint account holders can make representations about information that may not be apparent from statements alone before a deduction is taken from a bank account.

Nevertheless, in line with my previous commitment, I will commit to look at what more we can do to make our communications as clear as possible on how claimants can contact the department at any time to discuss repayment. I will also look at the timing of these communications.

Turning to proposed new subsection (8)(b), I agree that deductions from benefit should not cause unintended hardship and should be fair. This Government are committed to the principle of debt repayment being affordable; that is why processes exist to achieve this. Protections are in place to prevent excessive deductions. Regulations set out the maximum rates of recovery from benefits for fraud and non-fraud debts. For those in receipt of universal credit, as my noble friend Lady Lister mentioned, the fair repayment rate policy, which this Government introduced on 30 April, reduced the total amount that can be deducted from universal credit from 25% to 15% of the standard allowance in most cases, and I am grateful to her for acknowledging that. Crucially, there is also a priority order for deductions taken from universal credit to ensure that debts such as housing arrears are taken first to prevent people facing eviction and thus causing hardship. Recovery of overpayments is a long way down the list of priority order.

Moreover, there are robust processes in place to support the vulnerable and those struggling with debts, such as referrals to the Money Adviser Network for free and independent and impartial money and debt advice. I again stress that individuals can and should contact DWP at any time to discuss repayment terms. Where individuals make contact, DWP can reduce or temporarily suspend recovery depending on the circumstances. In exceptional cases, DWP can consider waiving recovery of the debt entirely.

I turn now to the question of fairness in this amendment. The extension of whether the act of recovery itself is fair differs from the provision in Schedule 5, which is limited to consideration of the deduction being fair in the circumstances as known to DWP. Every overpayment decision has existing mandatory reconsideration and appeal rights, and these are the right routes to challenge whether the overpayment should be recovered.

Although Amendment 109 is specific to recovery by deduction from benefits, it risks creating uncertainty as to whether it was fair to recover by other methods too, such as by deductions from earnings, or voluntary repayment plans.

Finally, proposed new subsection (8)(c) would limit the commencement of recovery of any overpayment of UC or new-style benefits from deductions from benefits to six years. The existing framework under Managing Public Money provides enough flexibility to forgo the recovery of historic debt where appropriate. Imposing a statutory time limit on commencing recovery would have consequences that may not be intended; for example, DWP could be prevented from recovering money obtained through benefit fraud where we could not reasonably identify the fraud until six years after the payment was made.

It is important to distinguish DWP recoveries from those by other creditors through court orders, for which a limitation period might otherwise apply, as the noble Lord, Lord Verdirame, indicated. DWP recovers benefit overpayment debts one at a time, beginning with the oldest. Due to the protections that I outlined earlier, we recover by deductions from benefit at a much lower rate than other creditors typically would, and we rightly prioritise deductions for certain debts, such as housing or utilities arrears, over benefit overpayments to prevent hardship. That means that recovery of a UC or new-style benefit overpayment could rightly take place some time after the initial overpayment has been notified to the individual. A blanket limitation would risk undermining the integrity of the process, could create hardship for individuals and could significantly reduce the amount of taxpayers’ money returned to the public purse.

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[Baroness Sherlock (Lab)]

My Lords, I share the interest of the noble Viscount, Lord Younger, in the important issue of fraudulent activity in the digital age, especially where it affects our social security system. I start by recognising that online activity in this space is wide-ranging. There are people who offer advice on social media or elsewhere online because they genuinely want to help others, often disabled people, to understand the benefits system better so that they can access the support they need. That is understandable and perfectly legal. However, there are others who deliberately use online platforms to encourage or facilitate benefit fraud by sharing information or organising fraud themselves. This kind of behaviour is calculated, harmful and must be taken seriously, but we do not need new legislation to deal with it.

Those individuals can and should face consequences under existing law. Section 7 of the Fraud Act 2006 and Section 44 of the Serious Crime Act 2007 already make it a criminal offence to assist or promote fraud. This amendment would not strengthen that existing legislation. In fact, as I pointed out in Committee, it would be softer than existing offences. It would reduce the maximum sentence for the proposed offence to just five years, compared to the 10 years already available under existing legislation. That is a weaker deterrent. Moreover, introducing a new offence risks duplicating the powers that the Government already have. This would create unnecessary overlap and a more confusing legal landscape, and could create a disparity in how cases are prosecuted and sentenced. There is no need to complicate the legal framework when legislation is already in place.

Where there is online activity which provides information on how to commit fraud, and where this activity can be reasonably countered, we think we have the right tools and networks in place beyond the legislation that I have already outlined. The department actively collaborates with a range of government partners, including Action Fraud, the City of London Police and the National Cyber Security Centre, to identify malicious sites that impersonate the department, enable fraudulent activity or target DWP customers.

For example, in partnership with Action Fraud, we have recently been raising awareness of winter fuel payment scams across Facebook and X—formerly known as Twitter. This has taken place alongside the DWP’s continued work with trusted partners and charities such as Independent Age to ensure that accurate and timely information is available. The DWP has also developed a recorded message for our telephone lines and issued a press release via GOV.UK to raise awareness of such scams.

Secondly, social media companies also have clear responsibilities under the Online Safety Act. They are required to remove harmful and illegal content, including anything that encourages or helps others to commit offences. The Act enables us to work with Ofcom through its new trusted flagger process. This builds on established relationships and escalation routes that we have with individual companies to report suspicious content on certain platforms quickly and effectively.

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Moved by

[Baroness Sherlock]

111: Leave out Clause 101 and insert the following new Clause—
“Powers of Scottish Ministers(1) The following provisions of this Act have effect as if they were pre-commencement enactments for the purposes of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016—(a) sections 73 and 74;(b) section 96, so far as relating to an amount that is recoverable by the Scottish Ministers under Part 3 of the Social Security Administration Act 1992;(c) section 97.(2) Accordingly, an individual who for the time being has the Scottish Ministers’ authorisation for the purposes of Part 6 of the Social Security Administration Act 1992, in accordance with section 109A of that Act as amended by section 73 of this Act, has the functions conferred by sections 109B to 109C of that Act, as amended or, in the case of section 109BZA, as inserted, by section 73 of this Act.” Member’s explanatory statement
See the explanatory statement for my amendment replacing clause 73.

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Moved by

[Baroness Sherlock]

114: Clause 106, page 67, line 21, at end insert “or different areas”
Member’s explanatory statement
This amendment would allow commencement regulations to provide for provisions to commence on different days in relation to different areas.

[Baroness Sherlock (Lab)]

My Lords, government Amendment 114 ensures flexibility in the commencement of certain provisions of the Bill across the different nations of the United Kingdom. This approach is well established in legislation such as the Care Act 2014, the Digital Economy Act 2017 and the Public Order Act 2023. It ensures that implementation is both practical and responsive to the specific circumstances in each jurisdiction. For example, the courts in one part of the UK may be ready to hear certain applications while, in another, staff training and procedural updates may still be under way.

This amendment allows the flexibility to commence later in one area without unnecessarily delaying implementation in an area that is ready. Crucially, the amendment does not alter the substantive provisions contained in the Bill, and nor does it affect how or to whom they apply. It is simply a matter of good governance, ensuring that the legislation is brought into force in a way that is orderly, effective and sensitive to operational realities.

I hope that the House will support this amendment as a sensible and necessary step in delivering the Bill effectively across the UK. I beg to move.

[Viscount Younger of Leckie (Con)]

My Lords, I will keep my remarks brief. Amendment 114 is, as the Minister has indicated, a technical amendment but one that raises a point of some practical importance in how this legislation will be implemented. The amendment would allow commencement regulations to provide for provisions of the Bill to come into force on different days in relation to different areas. We recognise that this is a standard enabling power and we do not object to it in principle.

However, while we appreciate that this is likely to be a technical and administrative provision, we would welcome a little more clarity from the Minister as to the intended purpose. In particular, can the Minister explain whether the Government currently anticipate that the legislation will, in practice, come into force in a staggered way across different parts of the UK? It would be helpful to know whether any particular regional or administrative reasons have led to this amendment being proposed—for example, to accommodate devolved competencies or pilot schemes, or differences in data infrastructure between public authorities—or whether this is simply a precautionary measure to preserve flexibility.

We would also be grateful if the Minister confirmed whether the Government expect any significant differences in timing or rollout between areas once the Bill is enacted. If such differences are anticipated, what criteria will determine the order of commencement and how will Parliament and the public be kept informed of that process? So while we are content to support this amendment as a sensible technical adjustment, we would appreciate some reassurance that it will not result in confusion or inconsistencies.

Finally, as we come to the end of Report, I want, on a lighter note, to take this opportunity to thank all noble Lords for their engagement throughout these proceedings, and all those who have voted on the amendments upon which we have divided. I look forward to seeing some noble Lords again at Third Reading on Thursday.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Viscount for his questions. First, we have no reason to believe that any area or jurisdiction will not be ready; this is simply a precautionary measure to provide flexibility in case unexpected issues arise down the line. It is a standard legislative approach that provides flexibility to adapt if needed, and avoids holding back implementation in areas that are ready, should there be another area that needs more time. No specific powers have been earmarked or delayed. The amendment is an enabling one, and where readiness exists, powers will be commenced without delay. On how people will know, Parliament and the public will see the commencement regulations, which will make that clear. This amendment is simply to ensure flexibility in the commencement provisions across the different nations of the UK, and I commend it to the House.

Amendment 114 agreed.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

Moved by

[Baroness Sherlock]

29: Clause 68, page 36, line 25, leave out “processing” and insert “disclosure or obtaining”
Member's explanatory statement
See my explanatory statement for my amendment to clause 68, page 36, line 29.

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Moved by

[Baroness Sherlock]

36: Schedule 2, page 70, line 18, at end insert—
“Part A1Powers to establish the PSFA and transfer functionsMain powers
A1 (1) The Minister may by regulations—(a) provide that a body corporate called the Public Sector Fraud Authority (and referred to in this Schedule as “the PSFA”) is established;(b) provide for the transfer to the PSFA of all or any of the functions to which this paragraph applies.(2) The Minister may by regulations provide for the transfer to a public authority other than the PSFA of all or any of the functions to which this paragraph applies.(3) This paragraph applies to the functions initially conferred on the Minister by Chapters 1 to 5 of Part 1 of this Act (including functions conferred by an amendment of another enactment), except any function of making regulations or issuing a code of practice.(4) A function transferred under sub-paragraph (2) may subsequently be transferred to the PSFA under sub-paragraph (1)(b).(5) But a function transferred to the PSFA under sub-paragraph (1)(b) may not subsequently be transferred to another public authority under sub-paragraph (2).Authorised officers
B1 (1) The reference in paragraph A1(3) to functions initially conferred on the Minister includes functions initially conferred on authorised officers.(2) In relation to a function initially conferred on an authorised officer, references in this Part of this Schedule to the transfer of the function to another body are to be read as references to the transfer of the function to an authorised officer of that body.(3) Where—(a) a function initially conferred on an authorised officer is transferred by regulations under paragraph A1, and(b) as a result of any provision of Chapters 1 to 5 of Part 1 of this Act, that function could be exercised only by an authorised officer of a particular rank, grade or description,the regulations must provide for the function to be exercised by an authorised officer of the transferee of a corresponding grade, rank or description.Associated modifications
C1 (1) Where functions are transferred to the PSFA or another public authority under paragraph A1, the Minister may by regulations—(a) make provision about the application, with any necessary modifications, of Part 1 of this Act in relation to the PSFA or other authority;(b) provide for the Minister to give the PSFA or other authority (or its authorised officers) general or specific directions about the exercise of the transferred functions.(2) Where functions are transferred to or from a public authority, other than the Minister or the PSFA, under paragraph A1, the Minister may by regulations— (a) make any modifications that the Minister considers appropriate in connection with the transfer to the constitutional arrangements, funding arrangements or the functions of the authority;(b) make provision in relation to the authority corresponding to that enabled by paragraph 15 (transfer schemes) in relation to—(i) the PSFA, where functions are being transferred to the authority, or(ii) a “relevant person”, where functions are being transferred from the authority.(3) In sub-paragraph (2)(a), “constitutional arrangements” includes the matters referred to in section 3(2) of the Public Bodies Act 2011.(4) Regulations under paragraph A1 or this paragraph may amend—(a) Part 1 of this Act, except this Schedule, and(b) any provision amended by Part 1 of this Act.Procedure
D1 Regulations under this Part of this Schedule are subject to the affirmative procedure.”Member's explanatory statement
See the explanatory statement for my amendment to clause 70, page 37, line 28.

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Moved by

[Baroness Sherlock]

41: Leave out Clause 73 and insert the following new Clause—
“Information notices(1) The Social Security Administration Act 1992 is amended as follows.(2) After section 109B insert—“109BZA Power to require information about suspected fraud etc(1) An authorised officer may give a person (“P”) a written notice (an “information notice”) requiring P to give an authorised officer specified information where the officer— (a) has reasonable grounds to suspect that a person has committed, is committing or intends to commit a DWP offence, and(b) considers that it is necessary and proportionate to require the specified information for a purpose mentioned in section 109A(2)(c) or (d) (investigating compliance with the relevant social security legislation etc).(2) Information may be specified in an information notice only if it relates to a person who is identified (by name or description) in the information notice as—(a) the person suspected as mentioned in subsection (1)(a), or(b) a member of that person’s family (within the meaning of Part 7 of the Contributions and Benefits Act).(3) An authorised officer may require P to give specified information only if the officer has reasonable grounds to suspect that P has or is able to access the information.(4) An information notice must set out—(a) the identity (by name or description) of the person to whom the information requested relates;(b) how, where and the period within which the information must be given;(c) information about the consequences of not complying with the notice.(5) The power under this section to require P to give information includes power to—(a) take copies of or extracts from information;(b) require P to provide information in a specified form;(c) if any specified information is not given to an authorised officer, require P to state, to the best of P’s knowledge and belief, both where that information is and why it has not been given to an authorised officer.(6) Subsection (2E) of section 109B (communications data) applies to an information notice under this section as it applies to a notice under that section.(7) In this section—“information” means information in the form of a document or in any other form;“specified” means—(a) specified, or described, in the information notice, or(b) falling within a category that is specified or described in the information notice.(8) Nothing in this section limits the powers conferred on the Secretary of State by Schedule 3B.”(3) In section 109A (authorisations for investigators)—(a) in subsection (1), for “109B and 109C below” substitute “109B to 109C”;(b) in subsection (2)(d), at the end insert “or other DWP offences”;(c) in subsection (8), for “109B and 109C below” substitute “109B to 109C”.(4) In section 109B (power to require information)—(a) in the heading, at the end insert “about entitlement etc”;(b) in subsection (1)(a) omit “or (2A)”;(c) in subsection (1)(b), for “any one or more of the purposes mentioned in section 109A(2) above” substitute “a purpose mentioned in section 109A(2)(a) or (b)”;(d) omit the following provisions—(i) subsection (2A);(ii) subsection (2B);(iii) subsection (2C); (iv) subsection (2D);(v) subsection (5);(vi) subsection (6);(vii) subsection (7A);(e) in subsection (7) omit the definitions of—(i) “bank”;(ii) “credit”;(iii) “insurer”;(iv) “residential premises”.(5) In section 109BA (power of the Secretary of State to require electronic access to information)—(a) in subsection (1)—(i) in paragraph (a) omit “falling within section 109B(2A)”;(ii) in paragraph (b), for “109A(2)” substitute “109A(2)(c) or (d)”;(b) in subsection (2)(b), for “109B above” substitute “109BZA”;(c) in subsection (4), for “109B” substitute “109BZA”.(6) In section 109C (powers of entry), in subsection (6), for “Subsections (2E) and (5) of section 109B apply for the purposes of this section as they apply” substitute “Subsection (2E) of section 109B applies for the purposes of this section as it applies”.(7) In section 190 (Parliamentary control of orders and regulations), in subsection (1) omit paragraph (aza).”Member's explanatory statement
This amendment, together with my amendments to clause 74, my amendment replacing clause 101 and my amendment to Schedule 3, page 91, line 3, reverses changes made in the House of Commons, in response to confirmation from the Scottish Ministers that they would like the changes to the Secretary of State’s functions in respect of information notices to apply to them as well.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, in moving government Amendment 41, I will speak also to government Amendments 42, 43, 64, 80, 90 and 111.

Under current devolution arrangements, DWP administers certain devolved benefits on behalf of the Scottish Government through agency agreements. These amendments will ensure that the expanded information gathering powers introduced in this Bill will be available to Scottish Ministers, should they require them in the future. This follows confirmation from the Scottish Government that they would like the updates to these powers to apply to them too.

These amendments will ensure necessary changes are made to the DWP debt recovery powers in the Bill. As drafted in Clause 91, the UK Government are seeking powers to apply new recovery methods to debts of certain devolved benefits delivered under agency agreements. However, the Scottish Government have confirmed that they do not wish these new recovery methods to be applied to devolved benefits administered by DWP through agency arrangements.

Taking the amendments in turn, government Amendment 41 simplifies Clause 73, reflecting how it was originally introduced, with new Section 109BZA now containing the expanded power to issue information notices to any information holder as part of a DWP criminal fraud investigation and ensuring that Scottish Ministers will have access to these equivalent expanded powers in the event that Scottish Ministers deliver any benefits covered by the 1992 Act.

Government Amendments 42 and 43, made to 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 Clause 91 reflects the position of the Scottish Government on the DWP debt recovery powers. It ensures that the Scottish Government retain control over how debts relating to their devolved benefits are recovered. Once these agency agreements come to an end, it will be for the Scottish Government to determine their own approach to debt recovery, including establishing new powers if necessary.

Finally, government Amendment 111 to Clause 101 confirms that Clauses 73 and 74 are treated as pre-commencement enactments for the purposes of the Scotland Act 1998, enabling Scottish Ministers to use these updated powers for fraud investigations in relation to devolved benefits. It confirms that the provisions in Clauses 96 and 97 relating to cost recovery and data protection apply to Scottish Ministers’ existing debt recovery powers. Amendments 80 and 64 update the clause references in Clause 85 and Schedule 3 as a consequence of these changes.

Having outlined the case for these amendments, I hope noble Lords will accept them so that we can fulfil our agreements with the Scottish Government. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, on these Benches, we welcome the agreement reached with the devolved Administrations—may this be a lesson to people around the world on how to deal with them, at least in this case.

The amendments in this group relate to how the powers in the Bill refer to Scotland specifically. Amendment 41, together with related amendments to Clause 74, and the replacement of Clause 101 and others, reverses—I stress that—the changes made in the House of Commons. I gather that this follows confirmation from Scottish Ministers that they wish the changes to the Secretary of State’s functions regarding information notices to apply to them as well. This seems to me a positive movement of Administrations working together—long may it continue.

[Viscount Younger of Leckie (Con)]

My Lords, as it is my first appearance at the opposition Dispatch Box on Report, I echo remarks made by my noble friend Lady Finn on the first day of Report, because I also appreciate the constructive approach that the Government have taken following Committee.

It is perhaps appropriate that, as a Scot, my first brief contribution relates to matters north of the border. It is our understanding that this amendment has been brought forward by the Government in order to apply to Scotland those provisions of the Bill which we have already debated 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 the Bill will not apply to devolved benefits.

In that sense, these amendments are essentially technical in nature, as the Minister said, ensuring consistency across the United Kingdom and confirming that the devolved benefits 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 raise some wider questions about the relationship between the UK and the devolved Administrations in this area.

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 Scottish Ministers. The Government have placed great store over the past year in stating that they seek to improve communications and trust between the UK Government and the devolved nations, so can the Minister give us an update on how they view progress on these changes and what has changed in the past year?

While we do not oppose these amendments—indeed, we welcome the fact that the necessary legislative consent has now been secured—they prompt reflection on the importance of ensuring that such engagement happens promptly and systematically in future. The relationship between the UK and the devolved Governments 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 tell us what steps she is aware of in those authorities to tackle fraud within their systems and how information sharing and co-ordination between the UK Government and the devolved Governments is being managed to ensure that fraud risks are tackled effectively across all jurisdictions?

We are content to support these amendments that bring Scotland into line with the rest of the UK where appropriate while respecting the devolution settlement and maintaining clarity over responsibilities in the fight against fraud.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for his kind words. I, too, have enjoyed the engagement we have had across the House. It shows how the Lords can make a constructive contribution to the scrutiny of legislation.

The noble Lord, Lord Palmer, is quite right that we have a developed and developing devolution situation in the UK, and are showing that it is possible for different jurisdictions to make different judgments and to find ways of coexisting peacefully. We are very glad to be able to do that, and I thank him for flagging that up.

On the timing, I am advised that it is routine for these matters to be resolved at this point in the process. I reassure the House that our officials have engaged with their Scottish counterparts throughout the policy development stage and the passage of the Bill. It was during Lords Committee that we received formal confirmation from the Scottish Government that they wished the updates to the information gathering powers in the Bill to apply to them too, hence we have brought forward appropriate amendments.

In response to the questions from the noble Viscount, Lord Younger, fundamentally—this stems from the point made by the noble Lord, Lord Palmer—tackling fraud and error in devolved benefits must be the responsibility of the relevant devolved Government. That is the nature of devolution. However, we have engaged extensively with the devolved Governments throughout the passage of the Bill, and these amendments reflect that engagement. I reassure him that we routinely work closely with the Scottish Government to share information and good practice to support each other’s efforts to tackle fraud and error. That includes data-sharing agreements so that we can share information where necessary, which I suspect is the kind of assurance that he was hoping for.

I am grateful for those questions, and I hope that with those assurances noble Lords can accept these amendments.

Amendment 41 agreed.

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Moved by

[Baroness Sherlock]

42: Clause 74, page 42, line 38, leave out subsections (2), (3) and (4) and insert—
“(2) In section 3 (code of practice about use of information powers), in subsection (1)—(a) in the words before paragraph (a), after the second “of” insert “the powers that are exercisable by an authorised officer under section 109BZA of the Administration Act.”, and(b) omit paragraphs (a) and (b).”Member’s explanatory statement
See the explanatory statement for my amendment replacing clause 73.

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Moved by

[Baroness Sherlock]

45: Clause 75, page 43, line 31, after “of” insert “assisting in”
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

[Baroness Sherlock (Lab)]

My Lords, since we are moving on to discuss the eligibility verification measure, about which we had extensive discussions in Committee, I want to say a few words about the need for it and the intent behind it. This enables the Secretary of State to issue a bank or other financial institution with an eligibility verification notice—EVN—that will help the DWP identify incorrect payments in the social security system.

This measure has been misunderstood and occasionally misrepresented throughout the Bill’s passage. It is simply a measure that enables the DWP to ask for limited data from financial institutions that will help the department to identify incorrect payments and verify eligibility for specific benefits. It requires financial institutions to look within their own data and provide limited, relevant information on the accounts which match the specific eligibility indicators provided by the DWP. This limited information will help the DWP to identify where claimants do not meet the eligibility criteria for the benefit that they are receiving.

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[Viscount Younger of Leckie (Con)]

My Lords, there are a number of amendments in this group, each touching on different principles relating to the operation of and limits to the eligibility verification measure. I will address them all briefly. I appreciate the Minister’s full reminder of the intent of this and of some of the operational details behind the EVM, which was very helpful.

I am afraid that we cannot support Amendments 45A, 65 and 74A in the name of the noble Baroness, Lady Kramer, as she may expect. 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 Clauses 75 and 76 and Schedule 3 would not simply adjust how the powers are used; it would dismantle the machinery that allows the system to function. We on these Benches support the principles behind the Bill and, broadly speaking, how it seeks to counter fraud and deter wrongdoing. As the Minister reminded us, it was a Conservative Government, up until the general election last year, who initiated the approach for the DWP to ask banks and financial institutions for their help in tackling welfare fraud. I also acknowledge that some improvements have been made in the past year.

Removing these clauses would, in effect, as the noble Baroness has admitted, be a wrecking amendment, denying the Department for Work and Pensions the tools it needs to identify and evidence cases of fraud. The real debate, which this House has been having constructively throughout Committee and again on Report, is about how those powers are exercised—proportionately, cost-effectively and with due regard to rights, safeguards and well-being. That is the discussion we should be having, not one that seeks to strike out the core of the Bill.

We broadly welcome the government amendments, which make sensible, constructive improvements to the operation of EVNs. The first, set out in Amendment 48, is the insertion of the “necessary and proportionate” test, which is a welcome safeguard that raises the standard for how these powers are applied. The second clarification, that EVNs may be used only for assisting in identifying incorrect payments, provides welcome precision and helps prevent any risk of mission creep.

Talking of precision, I thank the Minister and her team for producing a series of flow charts. As she knows, I was pressing for these in Committee because there is considerable complexity, including work in progress—I am not quite sure whether we now call it “test and learn” instead of proof of concept—for all those involved in understanding the processes and operations between the banks and the DWP, with the checks, balances and timeframes set out. I hope the Minister acknowledges that this is a help for the department and that it will be continuously 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 Vaux of Harrowden. This additional clarification through the language of his amendment is important. It would make it explicit that the exercise of this power is anchored to the purposes of the Bill rather than to any broader or more flexible administrative interpretation that might develop over time. In practical terms, it would ensure 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, were the Government at some future point to seek to extend these powers to cover other forms of welfare support.

We believe that 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. For that reason, we consider this a sensible and necessary amendment and we are glad to support the noble Lord, Lord Vaux, in bringing it forward.

We are sorry to say that we cannot support Amendment 50, tabled by the noble Baroness, Lady Fox of Buckley, 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.

I listened carefully to the noble Baroness’s speech, and despite her explanation and the safeguard that she outlined, we remain worried that notifying a potentially liable person too early could allow them to conceal or move funds, frustrating the process. While the intention is fair, it could cause or create a serious loophole. Therefore, I am afraid we cannot support it.

However, one of the points on which I agree with the Government is that some of those seeking to defraud the state—after all, it is taxpayers’ money we are talking about—will stop at nothing to get their way to make money for themselves. There is a line to be drawn to ensure that transparency does not provide an open goal for fraudsters.

It appears that the drafting of Amendment 60, in the name of the noble Lord, Lord Sikka, may not achieve what is intended. As it stands, it would seem, having read it, to place a duty on banks or institutions, rather than individuals, to receive legal advice before complying with a notice. The DWP, in any case, has access to legal advice intradepartmental, 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 Lord’s intent, which became 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. However, this amendment does not appear to address it; therefore, we do not and cannot support it. Individuals might choose to consult a lawyer, but this would be up to them. Can the Minister confirm that no taxpayers’ funds would be used to fund this, if this was indeed the intention?

We welcome the Government’s change in Amendment 61 to extend the review period from seven to 14 days. This responds directly to concerns raised by these Benches and by other noble Lords in Committee that the original timeframe was 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.

Finally, we have some sympathy with Amendment 62, also tabled by the noble Baroness, Lady Fox. I 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.

The noble Baroness, Lady Fox, asked many questions, which I will certainly not repeat. I simply ask the Minister to clarify how these concerns might be addressed in practice, perhaps through the review or the appeal mechanism, while maintaining that balance.

Finally, we welcome that the amendments in this group provide us with an opportunity to have a further discussion on this important part of the Bill, the essence of its prime aim. We are grateful to the Government for listening to the concerns that were raised in Committee, as well as to other noble Lords for identifying areas about which they are concerned and offering the Government the chance to comment. We shall be listening with interest to the Minister’s response.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions today and, indeed, throughout Committee. We have a better Bill as a result, and I am grateful for that. I am grateful to the noble Viscount, Lord Younger, for his support for the principle we are discussing here and for his gracious acknowledgement of the improvements to the Bill. I thank him for that; it was a kind and gracious comment, and I appreciate it.

In response to the noble Lord, Lord Vaux, I will not dwell on this matter, but I am grateful to him for accepting that, even if he came at the issue from a slightly different angle, he is happy with where we have ended up. I thank him again for pushing us, throughout the stages of the Bill, in various ways, and I am grateful that he has accepted where we have ended up with our amendment.

The noble Baroness, Lady Kramer, is absolutely right that her amendment is not nuanced; it lands firmly in the court of whatever the opposite of nuance is. In a sense, it is straightforward: her party does not support these measures at all. I have no doubt that, were her party to form a Government, it would locate another place to find £1 billion to make up for this. However, our party is determined that, if we are to spend money on social security, it should go to the people who are entitled to it and the people who need it—it should not go to other people. We will take the necessary measures to make sure that that happens, and we are doing that in this Bill. We also want to make sure that it is done appropriately and with enough safeguards, and I hope that I have shown to the House my willingness to bend over backwards to provide those safeguards. The principle is that people should not get money to which they are not entitled; it should go to those who are entitled to it and who need it—and that is what we are doing here.

The noble Viscount, Lord Younger, is right that my noble friend Lord Sikka’s Amendment 60 applies to the section that covers penalties that may be issued to financial institutions that fail to comply with an EVN. Therefore, the effect of the amendment would be that the DWP would be required to ensure financial institutions had taken legal advice before issuing a penalty for failing to comply with an EVN. I think we would all agree that, if they need legal advice, they could probably afford it—and so we are okay on that front. However, I fully understand that it is very hard to table amendments outside government, so I take it that the intention of the amendment is as my noble friend made clear: that the DWP is required to ensure that claimants receive legal advice before the DWP can make any adjustments to a person’s claim. However, we do not regard that as either practical or necessary.

There are already existing protections for claimants whenever an overpayment is calculated, including the ability to request a mandatory reconsideration and/or appeal to tribunal. Where an individual is investigated on a suspicion of fraud, they may be interviewed under caution. In that situation, they will always be notified of their right to seek legal advice and provided information about applying for financial assistance with legal costs through legal aid. In response to the question from the noble Viscount, legal aid is funded from the public purse, so if somebody were to qualify for legal aid, it would be funded by the taxpayer in the appropriate way. I confess that that is about as much as I can offer on that front.

My noble friend Lord Sikka mentioned a range of difficult circumstances. A lot of the debate here tends to mix up fraud, error and all the other reasons for overpayments. There are different reasons why somebody may have been overpaid: it may have been a genuine error; they may have been careless; they may have forgotten or deliberately failed to tell us about some change to their circumstance that affects their entitlement; it may be fraud; or there may have been an error on the part of the state. Gathering data early minimises the extent of the build-up of any overpayment, whatever the reason. That has to be a good thing; it is what we found out elsewhere. I hope that my noble friend appreciates that that is at least part of our approach.

I turn to the amendments tabled by the noble Baroness, Lady Fox. As she said, Amendment 50 would require account holders to be informed. Even though I know that she does not intend the amendment to do this, the reality is that it could compromise the DWP’s ability to tackle fraud. In most cases where it is just an error that has been made, the DWP will contact claimants to give them the opportunity to explain potential incorrect payments, in which case the amendment would not be needed. However, in the cases where there is a suspicion of fraud, it would clearly undermine any criminal investigation to inform potential fraudsters that their information had been identified using an EVM or what the financial institution had identified. It might also cause unnecessary distress for those who are not guilty of fraud, such as account holders and claimants who, for example, may have a disregarded compensation payment and who otherwise would have been quite rightly left alone because they had not done anything wrong—there is no need to try to scare people into thinking that an issue will be coming down track. It would also impose further burdens on financial institutions, which would have to inform their customers about this.

Amendment 62 from the noble Baroness, Lady Fox, seeks scrutiny of the methods that a financial institution may use to identify relevant accounts. At the risk of boring the House, I note that the EVM asks banks to return specified data only where criteria, set out in the Bill, have been met. Financial institutions operate in many ways, and it is for each individual financial institution to work out how it identifies relevant accounts, rather than for the Government to set out potentially cumbersome processes.

Just to pick up on a couple of things that the noble Baroness, Lady Fox, said, I want to make this really clear: we will not be asking banks, for example, to work out whether somebody is entitled to a health benefit, such as ESA. We may ask them to identify an account into which ESA is being paid. Health data will be special data and will therefore be expressly prohibited from being returned. The intention is very simple: to ask them to identify the kind of things I described earlier. In response to the noble Lord, Lord Vaux, I was giving an example. There are many examples, but that was the one I chose.

To sum up, I have set out a clear case for the EVM and how our government amendments today and other changes that have been made address many of the areas of concern. I recognise that I have not persuaded the noble Baroness, Lady Kramer, but I hope other noble Lords can see the point of this measure, can see the difference it would make and can understand that with the safeguards around, it is the right thing to do. The EVM will save an estimated £940 million by 2029-30. It will be a vital tool to help the DWP spot and detect errors quickly, while also assisting us in identifying fraud. I urge noble Lords to support this measure.

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Moved by

[Baroness Sherlock]

46: Schedule 3, page 77, line 12, leave out “identifying, or”
Member’s explanatory statement
This amendment, together with my amendments to clause 75, page 43, line 31, clause 76, page 44, line 30 and Schedule 3, page 80, line 23, means that eligibility verification notices can be used only for assisting in identifying incorrect payments of a relevant benefit.

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Moved by

[Baroness Sherlock]

51: Schedule 3, page 80, line 23, leave out “identify, or”
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

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[Viscount Younger of Leckie (Con)]

My Lords, I speak in support of these amendments tabled by the noble Lord, Lord Vaux of Harrowden, and I am pleased to have added my name to them, because both amendments make valuable and necessary clarifications to the operation and oversight of the eligibility verification mechanism—EVM—and they do so in a way that strengthens, rather than weakens, the Government’s objectives under this Bill.

Amendment 52 makes a particularly important clarification. As the Government have repeatedly described their approach to the EVM as a test and learn process, it is vital that we make clear in the Bill that the mere existence of an eligibility indicator does not in itself constitute reasonable grounds for suspicion. That may sound like a technical point, but it has real-world implications. When a system is still developing, when its data sources are still being refined and when human understanding of how it operates is still evolving, there is a very real risk of false positives and unintended consequences.

The Government have said that there is some clarification within the process of an investigation that would help to clarify that persons subject to an EVM are not guilty, and that there are not, therefore, necessarily reasonable grounds for suspicion. However, putting this clarification in the Bill would be a really valuable step in making this absolutely clear, in black and white, to everyone involved. This amendment removes ambiguity and ensures that this point is not in question.

We have already discussed throughout this Bill the importance of safeguards and clarity when new investigative systems are created, particularly where multiple third parties are involved in data sharing and enforcement, which is paramount. This amendment provides exactly that and sets out this lack of reasonable suspicion in the Bill so that we avoid the potentially harmful ambiguity.

Moreover, this amendment ensures that, before any intrusive action is taken—in other words, before any benefit is amended, suspended or investigated—a person of appropriate seniority and experience must review the information and confirm that there are genuine reasonable grounds for suspicion. This aspect of the amendment places human oversight where it belongs: between the algorithm and the citizen. This matters all the more because, as many noble Lords will have seen, the Government themselves are moving rapidly to expand the use of AI in fraud detection and enforcement. Only a couple of weeks ago, civil servants across Whitehall received an internal update about the significant expansion of AI use within the Public Sector Fraud Authority in an article titled:

“Behind the Scenes: Building the AI Tool that is Revolutionising Fraud Prevention”.


I listened very carefully to the passionate speech from the noble Lord, Lord Deben, added to by the noble Lord, Lord Palmer. We believe that this makes these safeguards an urgent necessity. As we rightly modernise our defences against fraud, we must also modernise our protections against error, bias and overreach. Ensuring human involvement in that process in the way it has been set out in this Bill is fundamentally important, and this amendment provides that assurance.

Amendment 67 complements the first one by broadening the remit of the independent review of the EVM powers. The noble Lord, Lord Vaux, eloquently laid out his reasoning here. It makes sure that the reviewer looks at not just operational effectiveness but proportionality, costs, unintended consequences and how these powers affect vulnerable people and those interacting with the banking system. These are precisely the areas where well-intentioned powers can have unintended harm if they are not closely monitored.

We on these Benches raised these concerns in Committee and do so again on Report. There is the potential for disproportionate costs on financial institutions, the potential chilling effect on access to basic banking services for those already on the margins and, above all, the potential for harm to vulnerable people who find themselves caught up in complex enforcement processes. It is right that the independent reviewer should have these matters placed explicitly within their remit. I am therefore glad that the noble Lord, Lord Vaux, has framed his amendment to achieve exactly that. We need to recover public money which has been overpaid—we are in no doubt on that point—but doing so in a way that causes more harm than good benefits no one. The reviewer must have regard to this, not as a suggested area of review but as a statutory duty.

These are measured, practical amendments that I believe carry broad support across the House. They are not about blocking the Bill or frustrating its purpose: they are about ensuring that the new systems it creates are used wisely, fairly and proportionately. We therefore hope that the Government will listen and take these proposals seriously, recognise their constructive intent and accept them as a genuine improvement to the Bill. If the noble Lord, Lord Vaux, decides to test the opinion of the House, we on these Benches will be supporting him.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to all noble Lords for their contributions. My response to these amendments builds on the arguments I made at greater length in the last group.

Amendment 52, from the noble Lord, Lord Vaux, states that the existence of an eligibility indicator alone does not constitute reasonable grounds for the suspicion of fraud under Section 109BZB of the Social Security Administration Act. I have sought to assure noble Lords already today that a conclusion will never be drawn from EVM information. At the point the information is shared, no one is suspected of having done anything wrong and therefore, by definition, no action could be taken to correct the thing that could have been done wrong because no one is suspected of having done anything wrong. I could not be clearer on that.

I think it is worth reminding the House that there are two different things happening here. This measure allows DWP to ask banks to flag up accounts that may on the face of it have received a benefit to which someone is not entitled. That is a piece of information that comes into the department. Along with other pieces of information, it will be sifted and examined, and decisions will be made through the usual processes. DWP does this all the time, with all kinds of information. Those decisions are made. Pursuing fraud is something that is done day to day. Whenever DWP receives data in response to an EVM, the data will be matched with information that DWP holds, so it can identify the claimant and any inconsistencies between the information received from the financial institution and the information provided by the claimant over the life of their claim. It will also look at any possible disregards and any other relevant information, as I explained on the last group.

It is only then, as with our current practice, when a possible inconsistency is identified, that steps will be taken to determine how or even whether a claim needs to be reviewed. In some cases, it will be clear that no further action is required and the data from the EVM will be used no further. In cases of potential error, DWP may contact the customer to discuss the claim or ask for further information. In cases where potential fraud is then suspected, the case may be passed to an authorised officer, who will consider all relevant information to determine whether there are reasonable grounds to suspect that a DWP offence has been committed.

The noble Lord, Lord Deben, made a passionate speech, and he is someone for whom I have a great deal of respect. If what he suspected was happening, his passion would be justified, but I want to persuade him that it is misplaced. The decision to judge that someone has been guilty of fraud and to take action is not an automatic process. It is also not a determination that can be made by just anyone. It can be made only by an authorised officer in the DWP. If there are no reasonable grounds to suspect that a DWP offence has been committed, the case is passed back to the relevant benefit team or compliance team. At all times during that process, as is the case now, DWP will ensure that any next steps are reasonable and proportionate. There are no immediate suspensions of benefits during the process and, where appropriate, DWP will always endeavour to work with the customer to establish the facts around a benefit claim and identify any possible vulnerabilities. I hope that my position on that is clear and is made even clearer by the government amendments—

[Lord Deben (Con)]

If that is so, what is wrong with making it statutory? The issue is that what the Minister says is what now happens. We are concerned about what could happen if it is not in the Bill.

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[Baroness Sherlock (Lab)]

My Lords, it is in the Bill. The requirement for reasonable suspicion for exercising powers under Clause 109BZB is set out in that clause. The fact that an account meets an eligibility indicator does not necessarily mean that there are any grounds for suspicion of fraud or other offences. It does not even necessarily mean that a benefit has been overpaid. Paragraph 3(1) of Schedule 3B on eligibility verification makes clear that eligibility indicators only indicate that a benefit

“may have been, or may be, incorrectly paid”.

The eligibility indicators in an eligibility verification notice must be criteria which indicate that the specified relevant benefit may have been or may be incorrectly paid.

The legislation therefore clearly reflects that EVM information will have to be considered alongside all other relevant information before further steps are taken. As I have said, DWP is required to consider all relevant information to determine whether there are reasonable grounds to suspect an offence. This is about not just this but about existing legislation and powers. I hope that my position on that is clear and that the government amendments in the previous group have helped to make it clearer.

Amendment 52 also requires that the information be reviewed by an appropriately senior person. We do not know exactly what the definition is of a senior person. However, it is an established legal principle that the Secretary of State must be satisfied that officials are suitably trained and experienced to take decisions on their behalf. The amendment is therefore unnecessary. I hope that the noble Lord will not feel the need to press it.

Amendment 67 would add three additional requirements to the role that the EVM independent reviewer will be required to undertake. Government Amendments 68 and 69, spoken to in an early group by my noble friend Lady Anderson, addressed paragraph (f) of that requirement by requiring the Secretary of State to provide information to the independent reviewer where it is “reasonably required”. In case there are any concerns about that, we foresee a close working relationship between DWP and the independent EVM reviewer, where DWP gives the reviewer the information that it needs.

However, the government amendment makes it even clearer that we are committed to providing necessary information. If necessary, DWP could ask the reviewer to demonstrate why a certain piece of information is necessary for the purposes of their review, by reference to the scope of the review and the matter that it has to cover, as set out in legislation. If the independent reviewer then demonstrates that the information is necessary for them to carry out their review, the legislation is clear that DWP must provide it.

On paragraph (d) of this amendment regarding costs incurred by business, this is a matter the Government take seriously. We are committed to keeping costs associated with this measure proportionate and to a minimum. As the noble Lord, Lord Vaux, is well aware, over the passage of the Bill we have worked very closely with UK Finance to improve the Bill and our draft codes of practice. At a recent meeting with Ministers, UK Finance welcomed this extensive engagement, which it feels has significantly strengthened the Bill. It indicated that it was not calling for further legislative change.

Crucially, I do not regard this amendment as necessary because the independent reviewer must already assess the measure’s effectiveness. Financial institutions receiving an EVN have the right to appeal a notice that is unduly onerous. We have committed to provide a further impact assessment 12 months after Royal Assent.

Paragraph (e) of the amendment would require the independent reviewer to include within their annual report any adverse effect that the EVN may have on vulnerable persons’ or benefit claimants’ access to banking services. I assure the noble Lord and the House that protecting DWP customers, especially those who are vulnerable, is very much a priority for this Government. However, we do not believe that this amendment is necessary.

First, there is no reason for individuals to lose access to banking services solely because of information shared under EVM. We have been clear that information does not imply any wrongdoing. The Bill makes provision to exempt financial institutions from returning suspicious activity reports in certain circumstances if the information that they have is only the result of an EVM match. We are working with the FCA to prevent any unintended consequences. Secondly, as I have indicated, this measure simply provides a source of data that feeds into the long-standing processes in DWP, where layers of support and specialist staff already exist to ensure that those who are vulnerable or have complex needs get the right support. Thirdly, this measure will help our customers, including those who are vulnerable. It will help us to spot genuine errors in claims early, help us to take steps to correct these and prevent large overpayments and debts building up that are recoverable.

I hope that the arguments which I have put out there have been enough to persuade the House on why we should move ahead. I beg the noble Lord to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank every noble Lord who has taken part in this debate. I particularly thank the noble Lord, Lord Deben, for his generous words, and the Minister for her fulsome response. On the comments of the noble Lord, Lord Palmer, about allowing people to get away with fraud, I want to make it really clear that I do not want people to get away with fraud. I am as keen as anyone to make sure that fraud and error are reduced. Please do not take away from this that I am soft on fraud. I hope my track record on fraud is well known within this House.

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Moved by

[Baroness Sherlock]

53: Schedule 3, page 80, line 27, leave out “processing and data protection” and insert “disclosure”
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 80, line 30.

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Moved by

[Baroness Sherlock]

61: Schedule 3, page 84, line 35, leave out “7” and insert “14”
Member's explanatory statement
This amendment extends the period of time within which a person given an eligibility verification notice can apply for a review of the decision to give the notice.

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Moved by

[Baroness Sherlock]

63: Schedule 3, page 89, leave out lines 34 and 35
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 80, line 30.

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Moved by

[Baroness Sherlock]

66: Clause 76, page 44, line 30, leave out “identifying, or”
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

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Moved by

[Baroness Sherlock]

68: Clause 76, page 44, line 36, leave out “may” and insert “must”
Member’s explanatory statement
This amendment, together with my amendment to clause 76, page 44, line 38, would mean that the Secretary of State must provide information where the information is reasonably required for the purposes of independent reviews carried out under new section 121DC of the Social Security Administration Act 1992.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, a lot of questions have been asked and I will do my best to answer them all. I will start by making clear what we are seeking to do. These powers would give authorised and trained DWP officers the ability to use reasonable force. We want them to be able to use that against property, not against people. Making a distinction in the way that the noble Lord, Lord Vaux, does in one of his amendments is not straightforward, despite the wishes of the noble Viscount, Lord Younger.

A number of noble Lords have said that they would be horrified to see civil servants using powers meant for the police. I am sure that members of the previous Government will be aware that HMRC, Border Force and the Gangmasters Licensing Authority already have these powers. This is not unprecedented.

[Lord Harper (Con)]

My Lords, I have not spoken on this Bill before, and I was genuinely trying to be helpful to the Minister. She has just said that you cannot make an easy distinction between the use of force against things and people. That is exactly the point. If you give powers to be used against things, you will get drawn into using them against people. I am well aware that Border Force has these powers, but if she talks to her noble friend sitting next to her she will find out that, as a result of the independent inquiry we had, there is extensive training for Border Force and for immigration enforcement officers before they are allowed use that force. That is my counsel; I urge her to be cautious.

[Baroness Sherlock (Lab)]

My Lords, I will come on to answer all the noble Lord’s questions if he will give me a moment to do so. I have not got there. That was my opening paragraph. I will answer the points one by one, so I hope he will be patient with me.

I am sure that the noble Lord, Lord Vaux, did not mean to do this, but the impression he and some other speakers gave is that the DWP will seek to use these powers against an average benefit claimant who has accidentally overclaimed by £20. I make it clear that this power cannot be used in those circumstances. It will be used where the DWP has a reasonable belief that someone has intentionally committed sophisticated, often high-value fraud against the DWP. These operations seek to find evidence of criminality that is not obtainable through the DWP’s other criminal investigation powers, such as its information-gathering powers, which would be the normal route for obtaining evidence in investigations. To use these powers, we have to seek a warrant from the court. The warrant application will go to the court, which will be the ultimate arbiter of whether a warrant is approved, based on a relevant justification. Those warrants have to be used for investigating serious organised criminality, and those offences tend to be high-value and complex. For that to happen, there would need to be reasonable suspicion related to indictable offences. We are not talking about individuals who have accidentally been overpaid a small amount of money.

I will go through the specifics that have been raised. I understand what the noble Lord, Lord Vaux, wants to do with his amendments and his desire to limit the use of reasonable force to property and not people. However, the use of reasonable force is set out in the Police and Criminal Evidence Act 198, which, as he pointed out, does not distinguish between the use of force on items and persons. There is no precedent for breaking down the PACE power of reasonable force to restrict it to people or items. As I will go on to explain in a moment, to do so could result in unintended consequences.

The DWP has been clear from the outset that its intention is that reasonable force will be used only against things, not people. That will be made clear in guidance and training. The power will enable DWP-authorised investigators to use reasonable force to access locked cabinets and digital devices once they are lawfully on a premises. Without that ability to secure evidence, the DWP would have to continue to be reliant on the police, who would need to remain on the premises for the duration of the search activity. Imagine a situation where, for example, a significant universal credit fraud has taken place. There are potentially a lot of papers, either in filing cabinets in a premises or on devices. The police effect entry to a premises and secure them. The police stay there, and we ask them to carry on picking up every single file so that DWP officials can tell them if it is right or not. The police could be out on the streets tackling real crime and protecting people or they could spend that time in the premises while the DWP searches devices.

I understand the intention behind the amendments—

[Lord Harper (Con)]

My Lords—

[Baroness Sherlock (Lab)]

I remind the noble Lord that this is Report.

[Lord Harper (Con)]

I know, but I am trying to ask some sensible questions. The noble Lord, Lord Vaux, will have to decide whether to press Amendment 76. I encourage him to press Amendment 75 and take this out completely. The Minister just talked about the police having to stay there to pick up files and devices. Why would they need to use force to do that? That is an administrative exercise. She is in danger of defending the indefensible in an unnecessarily complicated way. We are trying to be helpful.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord for his help but I will try to manage for now. To open a filing cabinet or to open a device without the consent of the owner requires using reasonable force. I fully accept that he does not think that the DWP should have any of those powers. I hope he will bear with me and allow me to move through the arguments to make a case as to why I think it is necessary. If I cannot persuade him then I accept that, and he will go into the other Division Lobby, but I hope he will allow me to explain why I think this is necessary and proportionate.

One of the risks of the approach that has been taken to try to limit the use of reasonable force as set out by PACE is that it could have the unintended consequence of removing an authorised investigator’s common-law right to self-defence—for example, if they were physically threatened during a search and seizure activity. Clearly, the safety of our authorised investigators is paramount and they, like anyone else, must have the right to defend themselves if threatened. We will of course take a number of steps to ensure staff members’ safety. That includes conducting risk assessments on application for the warrant and during the search and seizure activity itself, and equipping staff with critical safety equipment and protective clothing.

The noble Lord, Lord Harper, asked about training. All DWP-authorised investigators will be required to complete training to the equivalent standard of the police before they can use these PACE powers. I assure the noble Lord, Lord Deben, that money will be made available to pay for that. We will not expect people to use these powers if they have not had appropriate training. That was a good question and I am pleased to answer it. In addition, DWP criminal investigators undertake investigative training as part of the Government Counter Fraud Profession. All staff must have training to industry standards before they can be considered even for authorised investigator status. That will ensure that staff are benchmarked to the same standard.

The DWP will not have the power of arrest. I remind the noble Viscount, Lord Younger, that the previous Government’s fraud plan, including the version put out in 2024, when he was standing where I am, proposed not only the powers we have here but that DWP staff should have the powers of arrest. We decided that was not appropriate but, as I have said, we do think that the power to have reasonable force against property is reasonable. We have taken what I think is a proportionate view. In the situation described, where the DWP arrives at premises but the police are not there and its staff find their entry is obstructed, the policy will be that they should remove themselves from any potential danger and request police presence.

The noble Lord, Lord Vaux, also mentioned oversight. We will be commissioning His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services to inspect the use and effectiveness of these powers in England and Wales and His Majesty’s Inspectorate of Constabulary in Scotland to do so there. These inspections can focus on any part of the end-to-end criminal investigation and their reports will be published by the Secretary of State. In addition, the Independent Office for Police Conduct will be responsible for reviewing any serious incidents or complaints in relation to these powers in England and Wales, with the Police Investigations & Review Commissioner responsible in Scotland.

While I am here, two other questions were asked on the IOPC. In one, I think the noble Lord, Lord Vaux, said that the IOPC regs were a Henry VIII power. I am advised that they are not, because they do not seek to amend or repeal primary legislation. The proposed amendments to Part 2 of the Police Reform Act are contained in the Bill itself. On the question of funding, the DWP has secured the necessary agreements with the IOPC and will continue to work closely and in partnership with it to ensure that its needs are considered, including financial arrangements. The regulations will make provision as to payment for this service and permit the lawful disclosure of sensitive files and information relating to the exercise of the functions and powers. I hope that reassures the noble Lord on that point.

On the other questions that have been mentioned, just to be clear, the drafting in Schedule 4 for Scotland is intended to clarify that force cannot be used to compel individuals to provide information when required to do so by a court protection order. This mirrors PACE as it applies in England and Wales. On the exercise of reasonable force when executing search warrants, the provisions in the Bill both in Scotland and in England and Wales are comparable. I hope that reassures noble Lords who think that we think that people in Scotland are less dangerous than people in England and Wales. I can assure them that is not the case.

Noble Lords asked about the difference between the PSFA and the DWP. Primarily, this is a matter of scale. A tailored approach has been adopted by the DWP and the PSFA. The PSFA is likely to do a smaller number of investigations; the scale at which the DWP operates would be a very different use of police resource than it would be in the case of the PSFA. Therefore, we think it is appropriate.

Finally, I think somebody—I am sorry, I have forgotten which noble Lord this was—asked whether we would use this provision against vulnerable people, benefit claimants being vulnerable. Again, another form of reassurance is that the law requires any warrant application to include information about any vulnerable individuals who may be present on the premises. As a result, the DWP has to conduct risk assessments before even applying to the court.

I understand the comments that have been made. I hope that I have been able to reassure noble Lords that our proposals are proportionate. On that basis, I urge the noble Lord to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who have taken part in this debate. In particular, I thank the noble Lord, Lord Harper, for giving us the benefit of his real-life experience on this and the very powerful example of how this can go wrong.

I confess that I am not persuaded of the need for DWP officers to have the ability to use reasonable force and I am tempted to go down the route the noble Lord, Lord Harper, suggests of removing it altogether. However, I want to be constructive. I do not want to ruin the Bill, so I think I can live with a situation where the Bill tries to mirror what the Minister has said the powers will be used for and limit it to that. If she thinks there are unintended consequences from that, those can be fixed at a later stage, at Third Reading. I make the point now that it is outrageous that Third Reading is in less than two days’ time from now, on Thursday. That is not the way we do things in this House. It does not give us time to sit down and try to work things out. I put it on record that it is just wrong.

I was slightly confused by one thing the Minister said. She described a situation where the police are there throughout as a waste of police time, when they could be off dealing with real crime, but just the sentence before she told us that this will be used only in cases of sophisticated high-value fraud. Is that not real crime? I confess that I am a bit confused by that.

Anyway, nothing I have heard has changed my view about the ability to use reasonable force against people being appropriate for DWP officials, particularly if the police are likely to be there all along anyway. I beg leave to withdraw Amendment 75, but I will, when the time comes, test the opinion of the House on Amendment 76.

--- Later in debate ---

Moved by

[Baroness Sherlock]

78: Clause 83, page 50, leave out lines 19 to 21
Member's explanatory statement
This amendment, and my amendment to clause 83, page 50, lines 25 and 26, would remove provision that is no longer needed because of the general data protection override in section 183A of the Data Protection Act 2018, which was inserted by section 106(2) of the Data (Use and Access) Act 2025 and came into force on 20 August 2025

--- Later in debate ---

Moved by

[Baroness Sherlock]

80: Clause 85, page 51, leave out lines 37 and 38
Member's explanatory statement
This amendment is consequential on my amendment replacing clause 101.

--- Later in debate ---

Moved by

[Baroness Sherlock]

81: Clause 87, page 52, line 18, leave out “processing” and insert “disclosure or obtaining”
Member's explanatory statement
See the explanatory statement for my amendment to clause 87, page 52, line 24.

--- Later in debate ---

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for explaining his amendment. I will start by gently reminding him of something. He said that we should not avoid oversight because it is inconvenient. Does he remember that when his Government, led and represented by him, introduced equivalent powers to many of these in the DPDI Bill, there was literally no independent oversight at all anywhere in that Bill? So, I am very happy to respond on the way we are putting it in, but I hope the House will give us credit for having actually put in significant independent oversight, and I would encourage him to remember that.

Having said that, while I understand the rationale for Amendments 86 to 88, we do not believe that they are appropriate or necessary. DWP’s intention for Clause 89 is to appoint an independent, external inspectorate body to inspect DWP’s end-to-end criminal investigations. His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services has provided this function for public services for over 160 years. DWP has committed to commissioning HMICFRS as the body best placed to provide an independent inspection role in England and Wales and, similarly, His Majesty’s Inspectorate of Constabulary in Scotland, for Scotland. I can assure the House that DWP are committed to ensuring the right level of scrutiny for these powers and will follow existing HMICFRS and HMIC Scotland’s processes and guidance, which requires transparency and accountability.

These inspectorate bodies bring huge experience of working in this area, providing robust inspections to other similar bodies. That is why DWP will work with them to agree mutually that each inspection takes place over a suitable period, so that they are assessing and reporting on a period which realistically reflects DWP’s use of search and seizure powers. DWP has worked closely with both HMICFRS and HMIC Scotland, and we understand that sharing information is an integral part of the inspection process. That is why the department is committed to providing all relevant information, so that meaningful inspections can be carried out.

It is important to highlight the unnecessary risk Amendments 86 and 87 create. These amendments could result in sharing information with the inspectorate that could then become disclosable material in a live investigation, potentially jeopardising the outcome. Because of the range of investigatory techniques used during DWP criminal investigations, it is important that the Secretary of State retains discretion not to provide information when the consequences of sharing that information outweigh the benefit to an inspection—for instance, to protect customers or prevent compromising future prosecutions. Depending on the circumstances, examples of such sensitive material not suitable for sharing might include material given in confidence, details about witnesses or other persons who may be in danger if their identities are revealed, material revealing the location of any premises or other place used for surveillance, and material relating to the private life of a witness. I hope that explains why I cannot accept these amendments.

Amendment 88 seeks to extend the remit and scope of an independent person appointed under Clause 89. We have already confirmed that this will be HMICFRS and HMIC Scotland. They will provide an additional safeguard to ensure that the DWP is using these powers proportionally and in line with their intended purpose. However, although the inspectorates are very impressive in their fields, it is clearly not within their remit to assess expenditure or amounts recovered and conduct cost-benefit assessments of the various measures in the Bill. But the Office for Budget Responsibility has certified the estimated £1.5 billion of benefits contained in this Bill and, separately, our impact assessment clearly outlines the estimated costs and how we will scale up our rollout to deliver the savings and commits to monitoring and evaluation of Part 2 of the Bill.

I also remind the House of the existing reporting mechanisms for the DWP’s fraud and error activities that make this amendment unnecessary. In the DWP’s annual report and accounts, the department reports on the savings made from our fraud and error activities, including savings made from activity across our counterfraud and targeted case review teams. In addition, we also report on our debt recovery totals and debt stock. The departmental annual report and accounts are reviewed and scrutinised by the National Audit Office, which publishes a report on the accounts and provides independent assurance to Parliament on the proper use of public funds.

Finally, a question was asked about what is different between the DWP and the PSFA. The type and nature of DWP and PSFA criminal investigations are likely to be very different. That means the risks and decisions involved in disclosing sensitive material are different for each organisation. Due to the function it plays, the DWP is likely to have significantly more individuals who may be vulnerable, and it considers that disclosing sensitive material relating to those persons is not an appropriate approach for it to adopt. For that reason, the DWP must be able to withhold material in such cases to ensure that there is no detriment or risk to vulnerable persons who may be placed at risk.

To conclude, the DWP is committed to transparency and to delivering this Bill and its savings, but I do not think it is helpful or necessary to ask the inspectorates to step outside their existing remit given the routes already in place. I therefore urge the noble Viscount not to press his amendments.

[Viscount Younger of Leckie (Con)]

My Lords, I am grateful to the Minister for her response, but I am afraid we are still not persuaded on the point we raised around the powers of the independent reviewer to be provided with information. I certainly do not want to repeat what I said in opening but, in response to her earlier remarks, I want her to be clear that we recognise that some progress has been made on the Bill after a year. Without further ado, I have listened very carefully and heard her responses to Amendments 86 to 88, and I will test the opinion of the House on Amendment 87. I beg leave to withdraw.

Jobs Market

Baroness Sherlock Excerpts

Monday 13th October 2025 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of the jobs market in the United Kingdom, and of the implications for the economy.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, economic growth remains this Government’s No. 1 mission and boosting labour market participation is central to achieving this. The UK jobs market continues to show resilience, with high employment and falling inactivity. However, there is more to do, which is why we are continuing with our Get Britain Working strategy to drive forward the biggest reforms to employment support in a generation.

[Lord Hunt of Wirral (Con)]

My Lords, given that every Labour Government in the last century have left office with unemployment higher than when they came in, will the Minister reconsider the Government’s opposition to those cross-party amendments to the Employment Rights Bill, achieved by substantial majorities in your Lordships’ House, which seek to protect jobs? In that way, she can prevent history repeating itself.

[Baroness Sherlock (Lab)]

My Lords, I am very fond of our traditions in the House of Lords, but we now have a new one: on a monthly basis, we relitigate the Employment Rights Bill in the form of an Oral Question. One reason why I do not like having this Question every month is that we end up having the kind of ding-dong that is more typical of the Commons, so let me try to answer in a more serious way without getting into scrapping about it.

This Government had to take some difficult decisions to strengthen the country’s finances. However, we believe the Employment Rights Bill was the right choice. We have looked at the evidence and it is backed by academic and business voices as a driver of productivity. I encourage the noble Lord to look carefully at the employment data, where he will see a positive trajectory. Employment is up, inactivity is down, wages are growing and vacancy levels remain healthy. These are clear signs of resilience in the labour market. However, there are clear global headwinds and, where there is slack, one of the most important things for our Government to do is to address supply-side measures, because if times get tough then the people who risk losing out are young people and those farther from the labour market. We have a strategy to support people, tackle the barriers into work and make that work. That is what we are trying to do. We are pushing forward and it is getting results.

[Baroness Winterton of Doncaster (Lab)]

My Lords, given the emphasis being put on gold-star vocational qualifications, what are the Government doing to encourage local businesses to horizon-scan with regard to future skills requirements and work with local educational institutions, so that courses properly reflect the local jobs market and we avoid the rather hit-and-miss approach where skills do not match the jobs on offer locally?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for an excellent question. I assume that she refers to the Government’s recent announcement that we are moving away from a target for university entrance to an ambition for two-thirds of young people to reach level 4 by age 25 and 10% to reach levels 4 and 5. In this country, we have traditionally done well on university degrees, but too few young people have level 4 and 5 qualifications—a missing middle that holds back our productivity and stops people getting those higher technical jobs. My noble friend’s point about horizon scanning is crucial. We know that by 2030 we will need 900,000 more skilled workers in priority sectors, two-thirds of whom will need qualifications at levels 4 and 5, so the DWP is working closely with business and, at a local level, local skills improvement plans are led by employers working with jobcentres and local partners. The detail is coming—the Government have a strategy for post-16 education and skills in the long term, which will come out in a White Paper on education and skills that I am assured is imminent.

[The Earl of Clancarty (CB)]

My Lords, more than 84,000 jobs have been lost in the hospitality industry since the last Budget. This is an industry that should be growing, not contracting, as I hope the Minister would agree. What is the Government’s assessment of why this is occurring and how will they address it?

[Baroness Sherlock (Lab)]

My Lords, within hospitality, there are still 78,000 vacancies in accommodation and food service activities. That is unchanged on the quarter and is only 7,000 below the pre-pandemic level. Of course, there are global headwinds across the economy, but retail and hospitality are sectors where there has always been a lot of churn. We need to make sure that there are the appropriate workers at the appropriate level.

Therefore, we have announced the rollout of the hospitality SWAP pilots—sector-based work academy programmes—launched in partnership with UKHospitality. We are spreading them to 26 new areas which are in need of jobs and opportunities, including 13 coastal towns like Scarborough and Blackpool. We are also working with other key sectors. One challenge we have is to make sure we match the skills of workers with the jobs that are available. A SWAP can get someone job-ready and able to move into one of those jobs when they become available. There will always be vacancies and part of our job is to ensure that everyone has a chance of getting one. That is what we are focused on.

[Lord Palmer of Childs Hill (LD)]

My Lords, the UK is experiencing a decline in payrolled employees and a significant drop in graduate job opportunities, with listings for entry-level graduate jobs at the lowest level for seven years. This does not really tie in with the wonderful statistics the Minister told us about. There is another set of statistics which are not very good. What are the Government doing to improve those statistics in real terms?

[Baroness Sherlock (Lab)]

My Lords, as I am sure the noble Lord is very aware, there is a whole range of statistics. If he goes through the official statistics, he will see a wide range of data, each of which tells us something slightly different. He is right about nudging at payroll data, but I am absolutely right that the employment rate of the UK is at record levels—that is a fact; it is from the Office for National Statistics.

One of the challenges for the Government is to ensure that even when times are tough, we have a strategy to do three things. We must continue to develop growth and investment in our economy to make sure that the labour market is functioning. We then need to make sure that it is an inclusive labour market, and that those who are farthest from it get the skills they need to have a chance of getting the jobs, so employers can have the workers they need. Finally, we need to make sure that every area of the country works. Some local labour markets have 80% employment already, but others do not. The Government’s job is to target those three things, and that is what we are doing.

[Viscount Younger of Leckie (Con)]

My Lords, there are woeful and worrying figures showing that the number of working-age people signing off work for sickness benefits has gone up from 2,000 to 5,000 per day—per day—with a direct negative impact on employment. What are the Government going to do now, before the publication of the Timms review? I remind the House that we have a whole year to wait until then, which will be one of inaction, inactivity and spiralling costs, will it not?

[Baroness Sherlock (Lab)]

My Lords, given the levels of inactivity due to health over which the noble Viscount’s Government presided, that is a brave question, but let me answer it none the less. This Government are not simply waiting for the review. The Timms review is looking specifically at PIP which, as the noble Viscount knows, is a benefit that applies in and out of work. As I have told the House before, this Government have looked carefully at three things. One is what happens to people who are on benefits. This House backed the Government in making the difficult choice to change the incentives so that for new people coming in, we would reduce by about half the extra amount of money you get on universal credit. The second is to invest up to £1 billion over the scorecard in making sure we give people the support they need. People out there want to get jobs, and we have to help them. Finally, we have invited Charlie Mayfield to produce a report looking at employers. Every time someone loses a job, it can be an £8,000 loss to the employer from lost productivity. We are investing in all three of those things.

[Lord Vaux of Harrowden (CB)]

My Lords—

--- Later in debate ---

[Lord Vaux of Harrowden (CB)]

The Minister quite rightly mentioned young people and the importance of opportunities for them, but there seems to be increasing evidence that entry-level opportunities are reducing and that it is becoming more difficult for young people to take that all-important first step into work. So can the Minister explain why the Government are still insisting on pushing through a change to employment law that their own impact assessment says will actually make it harder for young people to find a job?

[Baroness Sherlock (Lab)]

My Lords, the Government are making a significant investment in young people. I assume the noble Lord is referring to employer national insurance.

[Lord Vaux of Harrowden (CB)]

Day one unfair dismissal rights.

[Baroness Sherlock (Lab)]

We have to have a level playing field in employment rights. We are investing in supporting young people with a youth guarantee. For young people who are intensively looking for work, there should be no fourth alternative to education, training or a job. To put our money where our mouth is, we have announced that we will give young people who have spent 18 months looking for a job on universal credit a guaranteed job. Young people should be out there either earning or learning; we will make sure they can.

[Lord Baker of Dorking (Con)]

Does the Minister appreciate that her Chief Whip opened by asking for shorter answers?

Youth Unemployment

Baroness Sherlock Excerpts

Thursday 11th September 2025 Lords Chamber

[Lord Altrincham]

To ask His Majesty’s Government what steps they are taking to reduce the youth unemployment rate.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, too many young people are at risk of being left behind, without the right skills, opportunities and support to get started in work. This Government are determined to change that. We are developing a new youth guarantee with the ambition to give all young people access to high quality learning and earning opportunities. As a first step, eight mayoral strategic authorities began mobilising trailblazers to inform the future design of the youth guarantee. With adult skills moving into DWP, we are excited about the opportunities that we now have to bring together skills and employment to drive growth and opportunity in the labour market.

[Lord Altrincham (Con)]

I thank the Minister for her Answer and for her work and her commitment to young people. Unemployment for those under 30 is rising steadily. HMRC data every month this year has shown falls in payrolled employment of young people, offset by a small rise in employment for those over 65. Given welfare expansion, the enormous step up in personal independent payment expectations and the fiscal tightening on employers, where do the Government think that unemployment for young people under 30 will be in exactly one year’s time?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord is right to flag that youth unemployment has been rising over the last three years. It is probably worth noting that there is always a higher rate of unemployment for young people than for older age groups; they tend to have higher rates of unemployment mainly because they are more likely to cycle in and out of the labour market around the age that they start into work. However, the trend is one that we need to watch, and he is right to raise it.

The noble Lord is also right to raise the fiscal context, but the real reason that I want to do something about this is not just for my colleague, the Chancellor of the Exchequer—keen though she would be—but because we do not want any young person to leave school and not have the opportunity to learn more or to work. We have tried various things in different Governments, and we have now decided not to leave anyone behind. We are developing a new youth guarantee with a clear commitment that every young person should be earning or learning. We have people in different parts of the country trying to work out what works in their locality, for their young people and their employers. We are transforming apprenticeships, investing in greater support for young people and making sure we identify those young people who are at risk. Frankly, if they are not in education, employment or training at 18 or 19, that is a real risk for the future. We need to find them and support them.

[Lord Blunkett (Lab)]

My Lords, I pay tribute to my noble friend’s energy, commitment and drive on this issue. Would she talk to her new Secretary of State, whose team might then talk to the Chancellor, about examining how we might learn from the New Deal for Young People, which was introduced in 1998? The number of young people aged 16 to 24 who are out of everything is not just a personal and moral challenge but a societal and economic disaster. We absolutely need to make this one of the main pillars of this Government’s policy in the next three years.

[Baroness Sherlock (Lab)]

I thank my noble friend and pay tribute to him. He was a reforming Minister in the last Labour Government and did lots of work in this area. I am conscious that I learned a lot from him in those days. He is absolutely right that this is both a scandal and a challenge for the economy.

One of the difficulties we have nowadays is trying to work out how we reach young people if they are not engaged in society. I was talking to an experienced youth worker recently, who said that she is worried about the range of young people who are simply off-grid. It is not just that we are not aware of them: they are not on benefits or claiming anything; they are simply disappearing. Part of our job is to go out there and find out where they are. For example, trailblazers in different parts of the country are looking at how you track down young people who are not on our radar and then support them, draw them in and engage them in their spaces.

We are trying to find more creative ways to do this. I have talked to young people for whom school just did not work—they failed or were failed by school. But it is possible that they will engage in different kinds of apprenticeships or skills-based training, and that work experience might draw them back in. Our job is to find these young people, work out what will make the difference for them individually and give it to them.

[The Lord Bishop of Oxford]

My Lords, I too welcome and commend the Minister’s passion and commitment. I recently met around 100 young people, as part of the work our diocese is doing, and their number one concern is the impact of technology and AI on their future jobs. There is now robust research in the United States on the likely impact of AI on entry-level jobs. Are the Government aware of that research and do they intend to commission research on the likely impact on the UK of artificial intelligence and strategies that might emerge?

[Baroness Sherlock (Lab)]

The right reverend Prelate raises a really interesting point, and I am very glad to hear that he is talking to young people individually. I would always be interested to hear more about what they say to him, because I find that I learn a lot more from what young people say than from what anybody else says.

He raised a really important point about AI, which I know is an area in which he does a lot of work. We are starting to witness the impact of AI in the labour market, but there is uncertainty over the scale of that impact, especially over the next four years. The Government are planning against a range of plausible future outcomes. A lot of work is going into this in government. Most forecasters project that, in the end, AI will lead to a net increase in employment but with varying impacts across different sectors and for different people. When you get this kind of change and churn in the labour market, the people who lose out most are those at the margins. Our job is to try to make sure that we give those who would otherwise not succeed the skills to do so. For example, the Government are investing to transform apprenticeships and looking at more shorter courses and ways to give young people a chance to gain skills in new areas, such as digital and AI. We are conscious of it and are very much working on it.

[Lord Palmer of Childs Hill (LD)]

My Lords—

--- Later in debate ---

[Lord Palmer of Childs Hill (LD)]

My Lords, building on an earlier question and the Minister’s reply, she will be aware that, as well as young people claiming unemployment benefits, large numbers of them are not in education, employment or training. Given the lasting damage that long periods out of the labour market can have, especially at the start of a young person’s working life, what urgent steps—I stress the word “urgent”—is the Minister taking to meet the particular needs of this group? She has explained what we are doing long term, and I am grateful for that, but this is an urgent matter and so I would like to know what we are doing urgently.

[Baroness Sherlock (Lab)]

I have just talked about what happens with young people who are hidden NEETs, as he describes. Let me turn to those who are NEET who we do know about—for example, those on sickness or disability benefits. The Government are determined to transform that. The noble Lord will have seen our Pathways to Work Green Paper, in which we describe wanting to create a new transition phase for young people from 18 to 21, such that, if they are looking to go on to sickness or disability benefits, we will treat them in a special way. We will support them from the beginning and give them the kind of help that they need. A lot of help is already out there; there is help for people with mental health and physical health issues. The bottom line is that almost everybody should be able to get a job. A small minority will not, but most will. Our job is to help them.

[Baroness Stedman-Scott (Con)]

My Lords, KPMG and the Recruitment and Employment Confederation have launched their August 2025 jobs report. Permanent placements fell for the 17th consecutive month. The number of candidates looking for work has increased, fuelled by redundancies, fewer job openings and economic business threats. Merck has pulled the plug on a £1 billion research site, and the prospect of the Employment Rights Bill and its impact is sending economic shivers down the spines of business. At the end of the list, as the Minister has said, are young people who are struggling to enter the labour market for the first time. I am grateful for the explanation about the programmes that the Government are undertaking, but can the Minister tell us what work they are doing with employers—the only ones that can create jobs—to incentivise them to help young people and integrate them into their workforce?

[Baroness Sherlock (Lab)]

My Lords, the noble Baroness commented on vacancies. She is very aware, as I am, of the facts of the economy and will know that vacancies have been declining steadily since spring 2022, when they reached a historic high. The decline in vacancies is a continuation of longer-term trends, but the noble Baroness is absolutely right: our job is to make sure that we give young people the chance to do this. She will know, for example, that employers who take on a young person under 21 or an apprentice under 25 are given complete relief on basic national insurance class 1 contributions until they hit £50,000. That makes a real difference. Above all, what will make a difference, if we want employers to take on young people, is to make them worth having. We have to skill them up, and give them the confidence to get out there and the ability to work in the workplace. That is what we are investing in now.

Child Poverty Strategy

Baroness Sherlock Excerpts

Wednesday 10th September 2025 Lords Chamber

[Lord Liddle]

To ask His Majesty’s Government what progress they have made towards developing their child poverty strategy.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the Government will publish a strategy in the autumn to deliver measures to tackle the structural and root causes of child poverty. As a significant downpayment ahead of strategy publication, we have already taken substantive action across major drivers of child poverty. This includes an expansion of free school meals, a £39 billion investment in social and affordable housing and a commitment to roll out Best Start family hubs in every local authority.

[Lord Liddle (Lab)]

I very much welcome what the Minister has said about producing a strategy and the actions in the face of economic difficulties that the Government have already taken, but does the Minister accept that further progress is going to be challenging, given the need to make the benefits bill fiscally sustainable, not least because of the legacy we inherited on PIP, disability and SEND? Does she agree that, in addition to the priority for getting NEETs and people on sick benefits back into work where we can, tackling child poverty by putting extra money into the purses and wallets of our poorest families remains a key government priority?

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend for his encouragement on what the Government have done so far. It is significant. As he knows, we have already committed to extending free school meals to all children from households in receipt of universal credit from September next year. That alone will lift 100,000 children across England out of poverty by the end of this Parliament and put £500 back in those families’ pockets. That is really significant. But there is so much more to do; my noble friend is quite right about that. The child poverty strategy in the autumn will set out measures across the piece on dealing with child poverty.

My noble friend mentioned the need to make our system sustainable, and he is quite right. There is no doubt that the social security system is not fit for purpose. It is not serving those who need to depend on it and it is not serving the taxpayer, but we have plans to get involved in making sure the system works well. Getting people into good jobs makes all the difference. It will also lift out of poverty the children in those families, so I look forward to doing that and I hope the whole House will support us.

[Lord Harper (Con)]

My Lords, as the Government are considering their child poverty strategy, can I urge them, particularly in the light of the comments made by the Minister and the noble Lord, Lord Liddle, about constraining the benefits bill, to retain the two-child benefit cap? This is a very important measure to ensure that families on benefits face the same choices as those who are not. If it were removed, rather than being a measure of fairness, it would be unfair to those who work hard, pay their taxes and strive to live within their means.

[Baroness Sherlock (Lab)]

My Lords, I will not be commenting on the future, because the child poverty strategy will look at the ways in which the Government will make changes, not just to the benefits system but across the piece, to tackle child poverty. But I say to the noble Lord, Lord Harper, that the benefits system has so many flaws in it at the moment that we have had to go in and try to look at the way it works across the piece. We have had to recognise, for example, that the way we support people who are sick or disabled does not serve either them or the taxpayer. We are not supporting families in the appropriate way. Our job is to try to make the system work for everyone, so that those who can work and support their families do so and those who cannot work will know the state is there to support them. That is our job.

[Lord Palmer of Childs Hill (LD)]

My Lords, regarding the two-child benefit and the restriction of it, I was disappointed in the things that the Minister said that the Government are doing. There was no mention of it. There needs to be not only a mention of it but a date for when it will happen. The idea that people in poverty, children in poverty, can wait while the Government pontificate on whether they will produce a change to the two-child benefit cap is a disgrace.

[Baroness Sherlock (Lab)]

My Lords, it is clear today that I cannot satisfy the whole House, whichever way I look. I understand the noble Lord’s position on this, but every time he raises it, he accuses the Government of sitting and pontificating and doing nothing. Perhaps he did not hear my last answer. This Government are committed to extending free school meals across the whole of the universal credit spectrum, which will lift 100,000 children out of poverty in this Parliament—and we are going farther. Please can he encourage us in that, not just attack us?

[Lord Sahota (Lab)]

My Lords, removing the two-child benefit cap would significantly impact minority communities, particularly those who have large families and are on low income. This would lead to improved health, education and social outcomes for these children. I am talking about minority community children. You only have to look at places such as Tower Hamlets in London, where child poverty is over 40%. Do the Government have any plans to overcome this and introduce two-child benefits, or to remove the cap?

[Baroness Sherlock (Lab)]

My Lords, if I can persuade the Cross Benches and the Bishops to raise it, I will have a full house. I completely understand the wider point that my noble friend makes. There is an issue in this country for larger families who are facing poverty. However, perhaps I can reassure him by pointing out the impact of some of the things we are doing: for example, expanding free school meals to all children in households. Those meals go to each of the children in that household. We have tripled investment in breakfast clubs to over £30 million, which is worth another £450 to parents. The Healthy Start scheme supports over 356,000 children. We are extending the household support fund, bringing in a new crisis and resilience fund. All these things help families, and bigger families most of all. I hope that reassures him.

[Baroness Stedman-Scott (Con)]

My Lords, I am not going to mention the two-child benefit cap. Can I say how pleased I am to see the Minister in her place? As always, I look forward to working with her. Can she reassure the House that the child poverty strategy will avoid a narrow focus on short-term income measures and instead promote long-term opportunity, resilience and self-reliance for families?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for her kind words. I am very grateful and I agree with her very much indeed on that—I am very glad to be here as well.

She makes a really important point. One of the reasons we have taken our time and been thoughtful about the child poverty strategy is that it cannot ever be just about income transfers. The strategy will be looking across four key themes. Increasing incomes is one of them, but so is reducing essential costs, increasing financial resilience for families and looking at better local support, especially in the early years. We must take action across all those if we are to find a way to tackle the scourge of child poverty in this country in a way that builds in structural improvements for the future. She makes an important point.

[The Lord Bishop of Leicester]

My Lords, my question is also not about the two-child limit, though I am fully supportive of its removal. Can the Minister say something about listening to the voices of children and young people within the formation of the strategy and give some examples of how the voices of children and young people have maybe changed the mind of the Government in their approach?

[Baroness Sherlock (Lab)]

I am grateful to the right reverend Prelate. The task force has engaged astonishingly widely. The Children’s Commissioner was commissioned to do listening events directly with children, to hear their voices. A lot of work has gone on listening to organisations, families and parents, but listening to children describing their own experiences sometimes brings out things that the Government and even those organisations would not have thought of.

In terms of the wider groups, I have been able to do a little bit of this, even though it is not quite in my portfolio. However, the right reverend Prelate’s right reverend friend the Bishop of Derby very kindly invited me up to Derby to meet families at a family hub and to look at what the local authority and the faith groups were doing. Every time this happens, I am blown away by the resilience of individual families and the power of local communities, faith groups and local authorities to work together to make the lives of their communities better. The more we can engage with that and the more we can hear their voices, the better we are going to do this.

[Baroness Watkins of Tavistock (CB)]

My Lords, the recent Children’s Commissioner’s report identifies, through children as well as their parents, that one of the most difficult things that children in poverty have to put up with is temporary accommodation. Moving accommodation often disrupts their education, because they have to move school. Will the child poverty strategy look at this as seriously as it looks at income?

[Baroness Sherlock (Lab)]

I thank the noble Baroness for her question. The Children’s Commissioner’s report, as I am sure she knows, made pretty harrowing reading—as it should. If we are going to tackle these questions, we have to look at the reality of children’s lives nowadays. Her point was very well made. The Government are very aware that homelessness levels are far too high and temporary accommodation is not working. That is really clear. We are committed to delivering long-term solutions to ensure that temporary accommodation is sustainable for local authorities and delivers value for money, because a lot of money is going into something that is not doing a good job for the families using it. That is why the spending review made it clear that we want to encourage better investment in temporary accommodation stock up front and announced £950 million in the latest round of the local authority housing fund.

Sickness Benefits: In-person Interviews

Baroness Sherlock Excerpts

Wednesday 10th September 2025 Lords Chamber

[Lord Balfe]

To ask His Majesty’s Government whether they plan to reinstate in-person interviews for all applicants for sickness benefits.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, we already undertake a number of face-to-face health assessments for people applying for sickness benefits. However, as announced in the Pathways to Work Green Paper, we are planning to increase the number of face-to-face assessments while preserving alternative health assessment channels in order to meet the specific needs of people who require a different channel, for example, as a reasonable adjustment.

[Lord Balfe (Con)]

I thank the Minister for her Answer. This problem goes back a long time. I saw in the Times on 28 June that assessors in the department are apparently paid a bonus on interview numbers—the higher the number, the higher their bonus. This may or may not be reasonable but, at a time when there is a need to reduce expenditure on benefits and we know that in-person interviews tend to lead to a stricter application of the rules, would the Minister consider reintroducing in-person interviews before new benefits are awarded or existing benefits are confirmed?

[Baroness Sherlock (Lab)]

My Lords, face-to-face assessments were stopped during Covid, as they clearly could not happen on public health grounds. They resumed in mid-2021, but the fact is that the levels have been left far too low. In the middle of last year, just 7% of assessments were face to face across PIP and the work capability assessment. That said, the assumption that the benefit bill will automatically come down if we change everything to face to face is not straightforward, based on the available evidence. I assure the noble Lord that, as he may know, in our Pathways to Work Green Paper, we committed to doing more face-to-face assessments while preserving alternative health assessment channels, because those who will not be able to do that will need a reasonable adjustment and another alternative. We will increase them as fast as possible and do it in the right way in order to make sure that we can recruit enough people and provide a good service. I am pleased to tell the noble Lord that that is our plan.

[Lord Cryer (Lab)]

My Lords, I am all in favour of face-to-face interviews, but they would be made a lot easier if we had not seen the closure of many jobcentres prior to 2024. In the last round of closures around eight years ago, 11 Jobcentre Plus offices were shut in London alone. Many of those closures contravened the Government’s own guidelines, and it was purely a cost-cutting exercise.

[Baroness Sherlock (Lab)]

My Lords, most assessments are done in assessment centres. Many of those are conducted by providers because we have to have health providers to do them. My noble friend may be glad to know that we have specific, clear rules about what an assessment centre must do. For example, it must be appropriately accessible and reasonably easy to get to—so that someone can get from their transport to the front door—as well as DDA-compliant in terms of ramps and areas of ground-floor space, et cetera. There are specific assessment centres designed to be suited to this purpose.

[Lord Palmer of Childs Hill (LD)]

My Lords, can the Minister expand on the purpose of a face-to-face assessment? Is this to help people get the sickness benefit they want and need, or is it in some way to make it more difficult for people to get sickness benefit? What is the overriding reason for such attendance at an interview?

[Baroness Sherlock (Lab)]

There are various ways in which you can do an assessment. The starting point is that assessments can be done on paper where there is clear medical evidence of somebody’s diagnosis and functional needs. Some of them are really straightforward. It may be for somebody who is nearer the end of life or somebody who, for example, engages a lot with a physiotherapist or a rehab team after a stroke or a brain injury, where there is clear evidence and a clear track record. There are other people where there is not any evidence for a range of reasons. In those cases, there would need to be an assessment. It can be done on the telephone, by video or face to face.

There are different reasons for different people. Some people are unable to get to a face-to-face assessment. They may be bed-bound or may suffer from a severe mental health affliction, but they can perhaps do a video interview. Some people prefer face-to-face interviews; they feel that they will be seen better and understood better. Our aim is to try to keep all channels available and to get the right balance, both to make sure that we get the right conditions for the claimant and the right decision for the Government and to make sure that we have all the people we need there in order to try to move as fast as possible on assessments.

[Lord Hannan of Kingsclere (Con)]

My Lords, how does the Minister explain some of the following statistics, all of which come from government sources? The number of people expected to go on to long-term benefits will rise from 3.3 million to 4.1 million over this Parliament. Some 3,000 people are signing on every day. In our second city, Birmingham, one in four working-age adults is not working. That is higher than it was during the great depression. In those days, it was considered the greatest problem in politics; now, we just shrug. I think it was Charlie Munger who said, “Show me the incentive and I’ll show you the outcome”. What does the Minister plan to do to switch the incentives for some of the people who are choosing to go on to benefits when they are capable of working?

[Baroness Sherlock (Lab)]

My Lords, I am sure that, if the noble Lord tracked those statistics back, he would see when the numbers began to rise—it was not under this Government. I know that he is making not a partisan point but a broader point; I fully accept that.

The good news is that, as the noble Lord may have noticed from the last labour market statistics, for the first time ever, we have managed to stop that growth in economic inactivity related to sickness and disability. We have a long way to go to bring that down. He is absolutely right to raise this as a major issue. We have seen such a significant rise in the number of people claiming sickness and disability benefits. Broadly speaking, one in 10 of our working-age population is claiming a sickness or disability benefit, and our population is ageing.

In terms of what we will do, it is partly about incentives. The noble Lord will be aware that we recently changed the incentives in the then Universal Credit Bill. For example, we halved the amount of money that someone gets on the standard allowance for sickness and disability and increased the standard allowance overall to reduce those incentives. The truth is that there will be some people who just do not want to work. There are an awful lot of other people out there who would love to work but either cannot find the right job or do not have the confidence, skills, opportunity or support. Our job is to tackle this on all of those fronts. We are trying to transform the whole of employment support so that it is tailored to give people the chance to get into a job, to move up in a job and to get the skills they need, which will serve them and the British economy.

[Baroness Maclean of Redditch (Con)]

My Lords, the Health Minister has reported concerns about the over-medicalisation of normal human emotions such as sadness and anxiety and the labelling of those as mental health conditions. I am sure that the Minister will know—indeed, I am sure that the whole House will be aware of this—that that is behind much of the rise in the numbers of sickness and disability claims. In the Minister’s excellent work, on which I commend her, in bringing back these face-to-face assessments, will she review the process of assessing these mental health conditions so that this can be targeted at the people who are in genuine and serious need?

[Baroness Sherlock (Lab)]

The noble Baroness is absolutely right: there is no doubt that there has been a growth in people claiming support and not being in work as a result of mental health conditions, but also because of other conditions as well. There are other clear patterns, such as musculoskeletal conditions and a range of other things. That is partly about changes in our population and about trends in society.

Our job is to invest in trying to tackle those early enough. One thing that the Government have done is invest money in putting mental health support into schools. In the case of young people, let us tackle those questions early. We consulted in the Green Paper about what we will do in future, but we have announced that we are going to have a youth guarantee. We have a Question tomorrow on youth unemployment. For those who are aged 18 to 21 and are perhaps heading for sickness and disability benefits, let us find a transition phase for them where we find out what the challenges are, figure out how we can support them and then, hopefully, get them on to a path. Sadly, some people will never be able to work, but, for many people, the evidence is that good work is good for their physical and mental health—we just need to help them get into it.

[Baroness Stedman-Scott (Con)]

My Lords, can the Minister set out how increasing in-person assessments, which we on these Benches fully support, will help reduce fraud and error, thus protecting taxpayers’ money, while ensuring another thing that we on these Benches support—that those who can work, do, and those who cannot, get the support they need? Will the Minister encourage her colleagues and the Secretary of State at the DWP to take up the serious and mature offer made by the leader of the Opposition to work with the Government in order to help them cut and reduce benefits?

--- Later in debate ---

[Baroness Sherlock (Lab)]

The noble Baroness asks an interesting question. I do not know whether it was on her watch but she may remember that, in 2022, under the previous Government, the department ran a trial to evaluate whether health assessments conducted by different channels led to different outcomes—that is, did it matter if you did it by video, on the telephone or face to face? The trial data showed no substantial differences between work capability assessment and PIP award rates, lengths or average amounts.

Having said that, my observation is that that does not tell us whether the outcomes of individual claims were affected by the channels used. Also, at the time, there were so few face-to-face assessments being conducted that I do not think it can tell us whether the move to remote assessments under Covid had an impact on the volume of claims. Of course, behaviour changes over time, too. We have committed to increasing face-to-face assessments while preserving the alternatives; we can look carefully at whether that makes a difference.

On the noble Baroness’s broader point, there may be some way to go before the leader of the Opposition in the Commons gains the trust of her opposite number, given what has happened recently. However, I am always very happy to work with the noble Baroness; we can talk about these things day to day.

Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Monday 8th September 2025 Lords Chamber

Moved by

[Baroness Sherlock]

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 7, Schedule 1, Clauses 8 to 70, Schedule 2, Clauses 71 to 75, Schedule 3, Clauses 76 to 78, Schedule 4, Clauses 79 to 92, Schedule 5, Clause 93, Schedule 6, Clauses 94 to 107, Title.

Motion agreed.

Labour Market

Baroness Sherlock Excerpts

Monday 8th September 2025 Lords Chamber

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the state of the labour market.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, the labour market is resilient, with high employment and falling inactivity, but we acknowledge that there is more to be done, particularly for young people and those with health conditions. The Get Britain Working strategy is driving forward reforms and helping create a more inclusive labour market that supports economic growth and opportunity for individuals.

[Lord Londesborough (CB)]

I thank the Minister for her response, although I point out, in the interests of balance, that unemployment is rising while job vacancies are falling fast. In fact, graduate vacancies have now dropped to their lowest level since 2018, with some 40% of our graduates either in low-skilled jobs or unemployed, yet employers report that skills shortages are frustrating job creation and holding back productivity—the two key ingredients of economic growth. Can the Minister tell us how phase 2 or the reset will address this damaging mismatch?

[Baroness Sherlock (Lab)]

My Lords, I do not want to trade stats with the noble Lord but, hey, why not? If he looks carefully, as I am sure he has, at the most recent set of local labour market data, he will see that employment is up to record levels, economic inactivity is down, wages continue to grow and we have a healthy number of vacancies in the labour market. However, he raises an important point about the skills needed by employers at the moment, and the fact is that the labour market is changing.

The noble Lord mentioned graduates, the most recent data for which show that there is still a strong graduate employment market and that graduate employment is still above average. I do not want to send out any messages that degrees are not worth having. Graduate employment is important. However, there are signs of the beginnings of changes in that market.

What the Government are doing is not just for graduates but for all people, as we risk too many young people being left behind if they do not have the right skills or opportunities. As the noble Lord may know, Skills England recently published a report providing an assessment of the Government’s priority skills to 2030. It gave a detailed analysis of future employment needs across 10 critical sectors, aligned with the industrial strategy and the plan for change. I hope he will appreciate that moving adult skills into the DWP strengthens the Government’s focus on the importance of a highly skilled workforce and accompanying economic growth. The DWP has a lot of experience of helping to retrain and reskill workers; that focus will make the difference in future.

[Lord Sharpe of Epsom (Con)]

My Lords, the Minister just said that salaries are increasing, but starting salaries are at their weakest in years, according to the KPMG and Recruitment and Employment Confederation report from yesterday. I quote:

“Shrinking demand for staff and concerns around payroll costs dampened rates of starting pay in August”.


Will the Government now finally commit to reforming the provisions in the Employment Rights Bill, so that they genuinely support both businesses and workers, rather than adding to their costs?

[Baroness Sherlock (Lab)]

My Lords, if ever a Bill was set to be relitigated on a weekly basis, this House is the place to do it. The Government remain committed to our Employment Rights Bill. We believe that having appropriate rights for workers increases productivity and strengthens the labour market. On the broader point, unemployment is dipping down and there is a range of reasons for that. One is that the labour force is growing, and we know that people are moving from inactivity to looking for work. Our challenge, as we face the global headwinds we do, is to make sure that we invest in infrastructure and create jobs across the country. Crucially, when there is any tightening in the labour market, the people who struggle are those farthest from the market. Our job is to make sure that we upskill people and invest in every part of the country, and that the jobs that are there go to the right people. There is a healthy number of vacancies out there. Our job is to make sure that everybody has the chance of a good job, moving on and progressing in work.

[Baroness Winterton of Doncaster (Lab)]

My Lords, does my noble friend the Minister agree that introducing digital identity cards could make a real difference to tackling illegal working? This is very often connected with human trafficking and even modern slavery. Can she assure me that the Government are looking seriously at this and that work on it is happening at pace?

[Baroness Sherlock (Lab)]

My noble friend raises a very important point about illegal working. There are certainly all kinds of difficulties attached to it. She mentioned human trafficking, but there is also the abuse of workers who are not in a position to report abuse or breaches of legislation because of their status. I reassure my noble friend that, when it comes to tackling illegal immigration and illegal working, the Government are already rolling out forms of digital ID through e-visas so that we have a digital record of someone’s ability to work and their ability to enter this country lawfully. We are determined to look at any serious proposals to help strengthen our border security and to benefit society. I can assure my noble friend that this includes digital ID.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for telling us what the Government are doing. When the Chancellor increased employers’ NI in last year’s Budget, she chose to lower the starting point for paying national insurance contributions. In practice, this has meant that employers of part-time workers have been disproportionately affected. Given that part-time and starter jobs are a good way for the unemployed to get a foot in the jobs market, does this decision not undermine the Government’s welfare to work efforts and all the positive points which the Minister has made?

[Baroness Sherlock (Lab)]

The answer to the noble Lord’s question is no. The Government have had to take tough decisions and we knew that they would have some impact. However, all the signs are going in the right direction—there are real signs of progress out there. When it comes to part-time workers, I assure the noble Lord that one of the good things about the way in which the DWP is now organised is that it is tailoring and personalising the employment support it gives people in two ways: first, to get those who are not in jobs into them; and, secondly, to get those in jobs moving on within them, whether that is through more hours, better work or more skills. For example, through our new jobs and careers service, we bring together people who are not on benefits at the moment—perhaps they are working at the margin only for a few hours and do not need to claim—to be part of that. As a country, if we are to have economic growth, we will need a skilled and motivated labour force. I am confident that we are doing that well.

[Lord Forsyth of Drumlean (Con)]

My Lords, if people are better off not working and being on benefits than they are working at the minimum wage, is the Minister surprised that we have millions of people who should be working and who are not?

[Baroness Sherlock (Lab)]

My Lords, I presume the noble Lord is referring to the stories about universal credit. The structure of universal credit was created by the last Government. It was designed to operate in and out of work. We have become aware that there were some imbalances in the system. As the noble Lord will be aware, the Universal Credit Bill that we put through just before the recess has rebalanced the rates of universal credit by halving the amounts that will be paid in future to those who are out of work on grounds of illness or disability. It will increase the standard allowance to help raise incentives to work. I think most people want to work and have a fulfilling life. Our job is both to put the incentives in the right place and to make sure that the jobs are there and that people are skilled to do them. We are determined to do all this.

[Baroness Deech (CB)]

My Lords, thousands of workers who want to go to work today are unable to do so because of the Tube strike. Thousands of Tube drivers who should be at work have stayed at home. Will the Government reverse their policy of giving in to every trade union demand, thereby putting up prices, encouraging inflation and making more people stay at home and not go to work?

[Baroness Sherlock (Lab)]

My Lords, as I am sure the noble Baroness knows, transport in London is devolved to the Mayor and Transport for London.

[Noble Lords]

Oh!

[Baroness Sherlock (Lab)]

Are you finished? As I was saying, the Government understand that this is very disappointing for passengers, including the noble Baroness, and for businesses. We continue to encourage all sides to work together to resolve the dispute as quickly as possible.

[Baroness Northover (LD)]

Has the Minister seen the report from Cancer Research UK that shows that smokers are three times more likely to be out of work owing to poor health than non-smokers? Can she encourage her noble colleague alongside her to bring back the very welcome smoking and vaping Bill initiated by Rishi Sunak, so that we can better protect public health and get people back to work?

[Baroness Sherlock (Lab)]

I am advised that legislation is making its way through Parliament and will come to this House in due course, so we will have plenty of opportunity to debate it.

[Lord Sikka (Lab)]

My Lords, jobs depend on people’s ability to buy goods and services. That ability has been severely eroded. Some 16 million people live in poverty and 1.2 million are on insecure zero-hour contracts. Can the Minister confirm that there will be no rollback of any part of the Employment Rights Bill? What steps will the Government take to increase workers’ share of the gross domestic product?

[Baroness Sherlock (Lab)]

As I have said before, I can reassure the House that the Government are committed to their Employment Rights Bill and will make sure that the measures in it go ahead. There is a great deal of detail yet to be worked out. A lot of consultation is going on, but our job is clear: we want to make sure that people who go to work and work hard are appropriately protected and not exploited. We think that will make them more productive and the economy healthier.