Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025
Baroness Sherlock Excerpts(2 days, 23 hours ago)
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Baroness Sherlock
That the draft Regulations laid before the House on 23 October be approved.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 8 December.
Universal Credit: Two-child Limit
Baroness Sherlock Excerpts(2 days, 23 hours ago)
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Lord Farmer
To ask His Majesty’s Government what assessment they have made of the impact on work incentives of lifting the two-child limit in Universal Credit.
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, this Government are determined to lift children out of poverty, and removing the two-child limit is the fastest and most cost-effective way to do so. The benefit cap is still in place, encouraging parents to take responsibility and work towards financial independence. Our approach balances fairness and provides a strong safety net without undermining the incentives to work.
Lord Farmer (Con)
My Lords, recent international evidence found that unconditional cash transfers increase fertility. Families claiming health-related benefits are not capped, so even these workless families will get UC for every child, again affecting work incentives. Research by the Institute for Fiscal Studies found that money-per-child tax credits increased births by 15% and decreased contraceptive use among beneficiaries. Have the Government assessed whether lifting the two-child limit will incentivise more births in benefit-dependent households, and whether many of the 450,000 children this measure intends to lift out of poverty would not otherwise have been born?
Baroness Sherlock (Lab)
My Lords, the Government have seen no evidence that the two-child limit had an impact on family size. For example, 47% of households affected by the two-child limit were not claiming universal credit when any of their children were born. In other words, things happen; people set out, they have children and something happens. Maybe someone loses their job, they are bereaved, their spouse leaves them, or they get sick and cannot work. The welfare state should be there to support people, both into work and in work, but it is also there to support them when they cannot work. We already know that some 60% of households affected by this are in work. Our strategy is to make sure we do all we can to get people into work, get them to develop in work and support them, but we are there as a safety net when they cannot do so.
Baroness Lister of Burtersett (Lab)
My Lords, academic research has found that the two-child limit had no positive employment effect and that parents living in poverty are pushed further from the labour market because of stress, insecurity and the sheer hard work of struggling to get by. Does my noble friend therefore agree that a decent social security system can support effective job-seeking and plays an important role in tackling child poverty, as the child poverty strategy recognised?
Baroness Sherlock (Lab)
My Lords, my noble friend makes a really important point about the scarring effects of poverty. Our aim is to make sure that everyone who can work, does, with all the help they need to do that. That is what this Government have been doing. We are investing heavily in childcare to make it possible to work, making sure wages pay enough so that work is a good thing, and supporting children.
We know that when children grow up in poverty, things get worse for them. They are less likely to work as adults, and they earn 25% less at the age of 30. Even if some parts of the House are not persuaded on the grounds of the importance of the individual child, this is an investment in the future of our country. No other G7 country has a policy like this and there is a reason for it. We cannot compete on the world stage, grow our economy or create prosperous futures for our kids if we do not enable them to grow up thriving and healthy.
Lord Palmer of Childs Hill (LD)
Does the Minister agree that this is not about getting people back to work; it is about improving living standards and making sure children are safe, and that this Question, which tries to link people getting into work with this benefit, is completely ridiculous?
Baroness Sherlock (Lab)
My Lords, I think I have made my views clear on the impact of this policy. It is, in essence, a failed social experiment which has been pushing 100 children a day into poverty. We simply cannot allow that to happen. We want to support families. Most parents want to work to support their kids. Already, 84% of parents are in work—that is what people do. I used to work with single parents, who would say, “Even when it’s really a struggle, I want my kids to see this is what you do when you grow up”, but many people face barriers to work, and it is our job to make that possible. If you cannot afford childcare, how can you get to work? If you are not paid enough to be able to make life even bearable, how can you do that? The social security system should be there to support those who cannot work, but for those who can, to make it possible and to help them have a decent standard of living when doing so.
Baroness Deech (CB)
My Lords, around £450 million is owed to the Child Maintenance Service by absent fathers and some absent mothers. Some 160,000 children would be lifted out of poverty if the defaulting parents paid what they owed to the Child Maintenance Service. Does the Minister agree that is not right for the taxpayer to pick up the burden owed by defaulting parents and that the Child Maintenance Service must get that money from the parents?
Baroness Sherlock (Lab)
My Lords, the great advantage is not an either/or. The wonderful thing about child maintenance is that it does not impact on somebody’s social security, so if someone is working and getting some universal credit, maintenance tops that up further. The Child Maintenance Service does an astonishing job in many, sometimes very challenging, circumstances. Here is one simple statistic: since the Child Maintenance Service was set up in 2012, it has collected 93% of all the maintenance owed, but I am sorry to say that there are some parents who simply do not want to pay for their children. The Child Maintenance Service has astonishing powers. It will go after them, and it will keep after them, but we should encourage everybody to do the right thing: pay for your children, go out there and make it possible for them to have a decent life.
Lord Gove (Con)
My Lords, if this policy is such a good idea, why was the Whip removed from seven Labour MPs in the other place when they voted in favour of it last year?
Baroness Sherlock (Lab)
My Lords, perhaps the noble Lord knows more than I do about the state of the economy that this party inherited when we came into government. We have dealt with all the challenges that his Government left behind. Chief among those was the state of—not just support for children—the welfare state. We had huge numbers of people who had been abandoned. Under the last Government, the bill went up by £88 billion. This Government came in with a budget. We invested £1.5 billion in employment support; we have reformed Motability and universal credit. We are going to make a difference. We care about children.
Lord Winston (Lab)
My Lords, can we come back to the original Question? We have had some very spurious statistics about fertility and contraception. Does the Minister agree that contraception has been hugely important in getting women back to work and earning money?
Baroness Sherlock (Lab)
I am grateful to my noble friend for calling me back to order. The availability of contraception has been transformative for women, and we should all recognise that. Being able to have control over their fertility makes an enormous difference to the choices that women make. For many of them, it means they can work and manage family size most of the time. However, we want to enable mothers and fathers both to have children and to work. That is the job of the state. Mothers should not have to choose between having kids and having a job. Families should never have to do that. The job of the state is to make both possible for the sake of those families and those children.
Lord Londesborough (CB)
My Lords, child poverty is undoubtedly a serious issue, and the steep drop in the number of children being born in this country is perhaps even more serious. Last week, we learned that the average cost of raising a child has now risen to £249,000, according to research by Moneyfarm, which may explain why an increasing number of working parents choose to have just one child or none at all. Down the line, this means a shrinking workforce in an ageing population. What is the Minister’s view on this?
Baroness Sherlock (Lab)
My Lords, the noble Lord makes a really important point, which is that we need as a country to make sure that we prioritise the cost of living and enabling people to earn enough. It should be possible to go out to work and earn enough to support your family, but that is one reason why we think it is important to invest in appropriate levels of social security. Crucially, we have to help people to develop skills. We want people to get into work, but we do not want them stuck on the lowest-paid work. We have increased the national minimum wage and invested in childcare and free school meals—we are doing all the things to make it possible to do the right thing. However, we need to go further. We need to see people in this country in higher-skilled, higher-paid jobs that will help them, grow our economy, and create opportunities for their children in due course.
Viscount Younger of Leckie (Con)
My Lords, can I bring the House back to the original intention behind the two-child limit? It was to make the benefits system fairer to taxpayers who support themselves and their families solely through work. It encouraged parents on benefit to make the same financial choices about family size as those not on benefits. With the Government’s poverty argument in mind, the IFS has said that reversing the two-child limit is “not a silver bullet”. It said that the benefit cap will
“wipe out the gains for some children in the … poorest families”,
as 70,000 more households are affected by the cap. Surely supporting parents into work and into quality jobs is much more important for reducing child poverty. Finally, the IFS says that raising the employment rate to 80% from the current 75% would lift up to 350,000 children out of poverty.
Baroness Sherlock (Lab)
My Lords, that is why the Government have set that as their target. I say to the noble Viscount that the whole point about this is that it is not a choice. It is not a question of either supporting children or helping parents to go into work. Supporting families makes work possible. Most parents want to work. Our job is to make that possible, so we have done that. We have invested in expanding free school meals to everyone on universal credit, including those in work; we have raised the national living wage, and we have put in more help for childcare—30 hours a week for parents of preschoolers—and more help for childcare in universal credit. Children deserve the best possible start in life and their parents deserve the best chance to have a decent life. We want to do both.
Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025
Baroness Sherlock Excerpts(4 days, 23 hours ago)
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Baroness Sherlock
That the Grand Committee do consider the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.
Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I am pleased to introduce this instrument. Subject to the approval of this Committee, these regulations will be another significant step forward in the reform of our occupational pensions framework, building on the foundations laid by the Pension Schemes Act 2021 and the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022. The primary purpose of these regulations is to extend the legal framework for collective money purchase schemes—commonly known as collective defined contribution, or CDC, schemes—to allow multiple unconnected employers to participate. Until now, CDC schemes have been restricted to single employers or groups of connected employers.
I have been advised that there are two minor drafting errors in Schedule 2 to the SI as laid in draft, resulting in two cross-headings before paragraph 2 where there should be only one and a repetition of “regulation” in paragraph 2. The intention is for these to be corrected in the version that is made so that there is a single cross-heading reading “General” and a single appearance of the word “regulation” in paragraph 2. I apologise for these errors, but I assure the Committee that these corrections do not change the legal meaning of Schedule 2 in general or paragraph 2 in particular.
Before I move on to the detail of this instrument, it may be helpful if I give some context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The Government believe that CDC schemes have an integral role to play in addressing the challenges faced in our pensions system, so long as the guiding principle is to ensure that we protect the interests of members. Although good progress has been made, four in 10 working-age people are under-saving for their retirement. CDC schemes can help address this issue: by pooling longevity and investment risk across the membership, such schemes have the potential to target higher investment returns for their members than a DC scheme. CDC schemes also have potentially infinite investment horizons and no need to lifestyle investments, which means they can invest productively for longer. Industry modelling suggests that CDC schemes could boost retirement income by anywhere between 25% and 60%. The Committee will agree, I am sure, that if such increases in returns were realised, CDCs could really help address the issue of inadequate retirement incomes.
CDCs can support the wider economy, too. Longer investment horizons mean greater investment in vital UK infrastructure and the technologies of the future, such as renewable energy. Pooling can also shield savers from much of the uncertainty and risk faced by members of DC schemes, which is especially important as they approach retirement. CDC schemes offer members a seamless transition from saving into receiving a trustee-managed retirement income. We know that many people do not want—and, indeed, feel ill-equipped—to make complex financial decisions at retirement. Some 72% of DC members want a pension income yet 50% of pots are taken fully as cash, exposing them to individualised longevity risk. CDC schemes provide a target income for life and will target at least inflationary increases in member benefits at a scheme’s outset, helping members’ money keep pace with the cost of living through their retirement.
The Government want to ensure that as many savers as possible can take advantage of these benefits. That is why we have introduced this legislation. This instrument opens the door for broader adoption of CDCs: it will allow different, unconnected employers to participate in the same scheme, including smaller employers who lack the scale or expertise to go it alone. It also opens the door to CDC being a solution for specific sectors and for commercial schemes. For employers, the benefits are clear. Their liability is no greater than in a DC scheme, with contributions being made in the same way. Yet, with the aforementioned benefits, CDC schemes can be a valued employee benefit, allowing employers both to attract and retain talent in a competitive labour market.
I will now dive into the detail of this instrument, and there is, of necessity, plenty of detail. Despite the successful launch of the Royal Mail collective plan last year, CDC remains a relatively novel concept. It is critical that employers and their employees can have confidence in CDC pensions. The Government therefore make no apology for this instrument setting a high bar for entry. The robust authorisation and supervisory framework introduced by this legislation means employers can be confident they are joining well-run, well-governed schemes.
Part 2 of this instrument removes the exclusion in the Pension Schemes Act 2021 which limits the schemes that can be collective money purchase schemes to schemes used, or intended to be used, by single or connected employers. This allows for the creation of unconnected multiple employer schemes. Part 2 also amends the definition of a qualifying scheme, so that a broader range of organisations can set up a collective money purchase scheme. This will enable commercial organisations to establish unconnected multiple employer schemes.
A scheme applying for authorisation must satisfy the regulator that it meets the authorisation criteria. These criteria are listed in Section 9(3) of the Pension Schemes Act 2021. Part 2 amends the existing authorisation criteria in the 2021 Act and thereby creates additional criteria, specifically for unconnected multiple employer collective money purchase schemes. We have identified persons that we consider will have important roles in unconnected multiple employer CDC schemes and have brought these people within the scope of the “fit and proper persons” test, so that they are subject to appropriate scrutiny.
Regulation 10 amends the 2021 Act to require that the scheme has a single scheme proprietor meeting specific criteria and the specific requirements set out in new Section 14C of that Act. As we are seeking to extend CDC provision to unconnected multiple employer CDC schemes, we know there will be new entities involved in the operation and funding of these new types of CDC scheme. We want to ensure that any financing required to meet relevant costs is credible and realisable, so that it is available at the point of need. Therefore, the scheme proprietor’s ability to deliver such financing will need to be assessed by the regulator, both at authorisation and on an ongoing basis.
Regulation 10 of the instrument also inserts a business plan requirement under new Section 14A of the 2021 Act. The scheme proprietor would be required to prepare, maintain and submit a business plan to the regulator, which will include the key financial information for its financial sustainability assessment. The detailed content of the business plan is set out in newly inserted Schedule 1B to the 2021 Act.
These regulations will permit schemes that intend to operate on a commercial basis. This will involve acquiring new business through the promotion or marketing of their scheme. To mitigate the risk of schemes overpromising to gain a commercial advantage, or mis-selling, we are introducing a new promotion or marketing authorisation criterion for these schemes. The requirement is that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification, and that the scheme has adequate systems and processes for ensuring that its promotion or marketing is clear and not misleading.
We also want trustees of these schemes to focus entirely on the interests of the scheme members and to have complete autonomy to do so. If the trustee were also to act as a person who promotes or markets the scheme, or as the scheme’s CFO, it would detract from that responsibility and create a clear conflict of interest. Regulation 5 makes a separation of these roles a criterion for authorisation. The Government’s intention is that running an unconnected multiple employer CDC scheme as a closed scheme should always be an option open to trustees, where it is viable to do so, and to the extent permitted under wider legislation. Regulation 5 therefore inserts a new authorisation criterion into the 2021 Act to ensure that trustees can choose this option if appropriate.
Finally, on Part 2, Regulation 6 imposes a mandatory deadline of 24 months from authorisation by which an authorised unconnected multiple employer CDC scheme must start being operated. This is to deter speculators. We want only people or organisations that are fully committed to providing well-run and soundly designed unconnected multiple employer CDC schemes to apply for authorisation.
Part 3 of this instrument supplements the meaning of “connected” in Section 49(2)(a) of the Pension Schemes Act 2021. This is relevant for determining whether a collective money purchase scheme is a single and connected employer scheme or an unconnected multiple employer scheme and therefore which of the two legislative frameworks applies to it.
Baroness Sherlock (Lab)
My Lords, I am grateful to the Committee for the handful of questions that has been offered up. I share with the noble Viscount, Lord Younger, disappointment that there are not hordes of colleagues here wanting to question these regulations. They are extremely important and utterly fascinating, but there is no accounting for taste—what can we say? I am very grateful to him and to my noble friend Lord Davies of Brixton for being here, asking such excellent questions and keeping me on my toes. I am going to try to work my way through them.
It is worth saying at the outset that my noble friend Lord Davies had quite a nice analogy about moving into a house. I moved house a year ago, and he is absolutely right—I now realise there should be power points in the middle of my kitchen where I actually use my devices and none of them are there. However, the reality is that there have to be some power points; some decisions have to be taken. At some point down the line, I may decide on additional power points and just have them put in. There may be new lights in the house, but we have to start off with lights, and we may add more lights later.
We have gone to considerable care to make sure that the system is set up as robustly as possible, but we will adapt and learn as we have experience from this. That is an important question, but it is one I am happy to offer reassurance on.
We think that CDCs are a type of money purchase because there is a type of money purchase benefits in the legislation. They are covered by the legislation applying to money purchase benefits and not DB benefits. I can see him shaking his head; I have failed to persuade him, but I will keep trying on subsequent questions.
My noble friend mentioned in passing that there are lots of different kinds of legislation and asked how they join up. I assure him they absolutely do join up. The Government have a vision for the pensions landscape. Most of these issues are coming in stages; for example, we have made our views known; we have had comments and clear steers from the Chancellor; we have had the pensions investment review, which set out the landscape, and as a result of that, we have the Pension Schemes Bill, which starts next week and which he and I are looking forward to so much. That will make the necessary adjustments to the landscape so that the Pensions Commission, which is doing its work on issues such as adequacy, can make sure that if savers, or indeed employers, are encouraged to invest more, or in different ways, the market is fit for it at that point.
These things do connect; I accept that they are complicated. One of the challenges is that pensions are very complicated, and there is a lot of money at stake, and therefore it matters—he raised the point about regulation—that we get that absolutely right.
My noble friend mentioned in passing the question about retirement CDCs. He will be aware the consultation has just closed and so more information on that will be coming out soon. He asked about whether CDC schemes will be captured by things such as the scale requirements in the Pension Schemes Bill. Because CDC schemes are a new and innovative development with the potential to offer improved outcomes, they will need to have a degree of scale and a long investment horizon to enable them to invest in a wider range of assets, including productive assets. It is right to give this new market the space to develop with confidence, but we are going to keep the requirements for these schemes under review as the market develops.
He asked about how the legislation will ensure fairness between members of different employers. Regulation 40 specifies that any adjustment to benefits that may need to be made must be applied to all members “without variation”. Regulation 40 also requires that benefit rates must be determined on the principle of actuarial equivalence and that, as he will of course be only too aware, is achieved when the expected accrual and expected contribution levels are equal over a period of time. That prevents new entrants unfairly subsidising existing members and avoids cross-subsidies between employers, which could, for example, happen if one employer had a younger workforce than another.
Both he and the noble Viscount, Lord Younger, asked about communication to members of CDC schemes. The regulations require schemes to inform members regularly and clearly that the rate or amount of benefits provided under the scheme is not guaranteed and can fluctuate. This includes providing this information at joining, annually and in retirement. CDC schemes are also required to have adequate systems and processes for communicating with members and must provide information in their authorisation application about monitoring them to help ensure the systems and processes remain effective. To ensure transparency, key scheme information must be made available on a publicly available website, including the scheme rules, a summary of the scheme design and information about the most recent actuarial evaluation of the scheme.
My noble friend commented about whether the regulation is all too burdensome or too hard to join, but as in DC schemes, members will bear all the risks of the CDC scheme in accumulation and decumulation. So, we think it is only right that we make sure these schemes are well-designed, well-run and resourced properly so that employers, members and the Pensions Regulator can have confidence in the scheme at authorisation and on an ongoing basis.
My noble friend raised the question of commercial interests. I know he was not necessarily challenging there being commercial providers; it was more about the language and how that is understood. We have worked quite hard to make sure that the authorisation criteria require a clear separation between the trustees and those funding the scheme, promoting the scheme and trying to make a profit out of it. The promotion and marketing authorisation criterion mitigates against the risk of overpromising to gain a competitive advantage, as I said in my opening speech. Although my noble friend does not like the term “proprietor”, the financial sustainability requirements are designed to prevent that person passing on to members the costs of setting up and operating the scheme.
Viscount Younger of Leckie (Con)
I thank the noble Baroness for spelling out the code of practice; we look forward to seeing that. I remain quite surprised that the Pensions Commission will finally report as late as spring 2027. I cannot believe it is going to take that long, despite the fact that pensions are generally known to be quite technical and detailed. I am not expecting the noble Baroness to comment on that, but I just wanted to put it on record. The noble Baroness did not answer my question about surpluses, and I am very happy to be written to about that. Perhaps the main question I wanted to ask, which the noble Baroness also did not answer, is about membership take-up at Royal Mail. What was the rate of take-up for the Royal Mail scheme?
Baroness Sherlock (Lab)
On the question of surpluses, the regulators will ensure that a scheme has sufficient financial resources through a range of key mechanisms centred around the role of a scheme proprietor, robust planning and ongoing regulatory oversight. The Pensions Regulator must be satisfied that the scheme is financially sustainable before it can be authorised. That would obviously involve a rigorous assessment of its expected costs, income and the strategy for recovering any shortfalls. The schemes accounts have to be submitted to the regulator on an ongoing basis to give transparency. I am not sure that that does answer his question on surpluses, but if I have an answer, I will write to him.
On the membership take-up of the Royal Mail scheme, 110,000 people have joined and around 700 have opted out. I hope that answers that question, and that I have answered all the other questions. I thank both noble Lords for their helpful contributions to this debate. This instrument will allow CDC schemes to play an integral role in the future of pensions in this country, affording potentially millions of savers access to the benefits they offer. With that, I commend this instrument to the Committee, and I beg to move.
Carer’s Allowance: Overpayments
Baroness Sherlock Excerpts(1 week, 3 days ago)
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Baroness Pitkeathley (Lab)
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I acknowledge the Government’s positive response to the recommendations in the independent review.
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, the Government accept that between 2015 and summer 2025, the guidance on whether and how to average earnings in carer’s allowance did not accurately reflect the statutory position. We will therefore be reassessing earnings-related overpayment cases that occurred between 2015 and September 2025. Where it is found that overpayments were lower than originally calculated, carers will have their debts reduced or cancelled entirely, with the Government refunding any money already paid. We will set out plans for doing this in early 2026.
Baroness Pitkeathley (Lab)
I thank my noble friend for that response and for her patience at my persistence. After the problems for carers were ignored for so long by the previous Administration, and after systems did not respond to the clear evidence about the distress caused, carers naturally have a high level of mistrust about how their benefits are administered. Does my noble friend agree that rebuilding that trust must be a priority and that any changes must be completely transparent, with carers consulted and informed at every step of the way?
Baroness Sherlock (Lab)
I thank my noble friend for that question and for her work. I pay tribute to the millions of unpaid carers across this country; the Government greatly value them and the work they do. Carers are also fortunate to have some excellent advocates, including many Members of this House—and I think we would probably all acknowledge that supreme among them is my noble friend, whose work in this area has for so very long been recognised by us all.
Carer’s allowance provides support to around 1 million people and, for most of those who receive it, the experience is positive and the rules are clear. But my noble friend is right that, when we came into government, it became clear that there were far too many cases where working carers had been left with large overpayments to be repaid. That is why we commissioned an independent review of earnings-related overpayments. We are very grateful to Liz Sayce for her recommendations, but also to her advisory panel and especially to the unpaid carers who shared their experiences to make that right. We have accepted or partially accepted 38 of the 40 recommendations in the report, we have begun working on many of them already, and we will set out the details in the new year. We will be very clear and transparent: many of the recommendations regard reviewing how we write to people, how we make things clear and how transparent we are. Above all, when the Government make mistakes, they should acknowledge them and put them right, and that is what we are doing.
Lord Young of Cookham (Con)
When we discussed this matter a few days ago, I raised with the Minister the issue of the so-called cliff edge, whereby if you earn 1p over the earnings limit you lose the whole allowance. The Minister replied with characteristic sympathy, but she said that modernising the system would take “some years”. The independent review referred to by the noble Baroness, Lady Pitkeathley, takes a totally different view. It says that addressing the impact of a cliff edge is urgent, and asks the department to be
“creative in its thinking about options for short term changes to remove or reduce this impact more quickly”.
Does the Minister accept that recommendation?
Baroness Sherlock (Lab)
My Lords, what I said last time we discussed this is absolutely the Government’s position. For the reasons I explained then—I will not go back into them again—carer’s allowance is traditionally not a classic means-tested benefit, so we want to find ways to tackle this. It will take time, because everything about the system has been built in ways that were designed around a simple, non-means-tested benefit. However, we have already done significant things to make a difference; one of the most important of those was to raise the level at which people could earn by the largest cash amount since the benefit was created. This means that if you earn less than 16 hours a week at the national living wage, there is no problem at all. We have also gone through to make sure that most of the ways in which people have fallen foul of the system can be corrected. For example, we have taken action on guidance and communications, and we are now checking automatically all the data that comes in directly from HMRC. We are doing all the things that can be done in the short term.
Much as I do not want to say this, the noble Lord will have to be patient. To be able to remove a cliff edge, the first requirement is to automate earnings coming from HMRC, which cannot be done overnight. We have already begun the work and we are looking for all possible workarounds in the short term. This problem has been around for a long time and no one paid any attention. We spotted it, we are taking action and we will sort it.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for that. The Sayce review identified the problem. I am reminded, sadly, of Lewis Carroll’s “jam tomorrow”, a promised reward that is often postponed. I am not really encouraged by the point that it will be dealt with in 2026. I ask the Minister to be more definite and give us a date in 2026 when this will happen, so that it is not, in Lewis Carroll’s words, “jam tomorrow”.
Baroness Sherlock (Lab)
My Lords, if I could give the noble Lord a precise date on which all the computer systems and all the systems will have changed, I would be glad to do it. Let me put this in context: we estimate that about 15% of people who get a carer’s allowance payment are also in paid work and 90% of people who reported earnings did so without difficulty, so we are talking about a very important but specific subset of people, most of whom had fluctuating earnings, which this is designed to address. The biggest challenge in the short term is to make sure that we have clear guidance, we communicate with people, they know what to tell us and we are able to manage that. There is a big prize at the end as we modernise all DWP systems to get this right. A lot of the improvements will be made by really old-fashioned analogue systems—by making sure that we have the right information, communicate well with carers and make it as easy as possible to get the information. Those recommendations may not be exciting, but they actually make a lot of difference.
Baroness Stedman-Scott (Con)
My Lords, given that some 185,000 unpaid carers will now have their carer’s allowance overpayments reviewed following the independent report, will the Minister set out how these carers will be notified of the reassessment process and what steps the Government will take to ensure that communications are clear, timely and accessible?
Baroness Sherlock (Lab)
I am grateful to the noble Baroness for her important question. Our data suggests that there are around 212,000 overpayment cases in the relevant period, between 2015 and September 2025. We will set out the details in the new year, but we plan to review every case to understand where mistakes were made. Cases that were affected specifically by our unclear guidance will have their overpayment reassessed. If the review confirms that the money was not due, we will make an appropriate refund or reduction. I should say that if it were to result in a higher overpayment, we will not ask anyone for additional money—I just want to reassure anyone who is listening. If the review confirms that the person still owes money, we will give the usual support to make sure that it can be repaid appropriately, because it is not to do with this question.
I want to reassure those who are listening that nobody needs to get in touch with DWP at the moment. Our intention is to work through the cases. We have data for most of these cases and we will contact people proactively. We will set out in the new year how that process will work and what we will do in any remaining cases, but no one needs to get in touch. Please do not phone us at the moment.
Baroness Tyler of Enfield (LD)
My Lords, I welcome the independent review and the Government’s response, but what will happen to those carers who have already been convicted of benefit fraud as a result of the mistakes that have been made? Why did the Government decide not to offer compensation to those who have already been so badly affected and whose lives have, frankly, been made a nightmare by the mistakes?
Baroness Sherlock (Lab)
My Lords, I said that we will set out in the new year the details of how the reassessment is going to work. We will be working our way through all the cases. I do not know how many, if any, of the cases resulted in prosecution. We will work through what will happen in cases where people, for example, either had overpayments or may have had a civil penalty or even possibly another form of administrative penalty. On compensation, it is not unusual for there to be reassessment exercises when guidance or other systems are found to be wrong, and DWP does not routinely make special payments under those circumstances. The noble Baroness may not welcome it, but I am very grateful that carers’ organisations have really welcomed the fact that we have taken the trouble to work out through an independent review precisely what went wrong and are putting it right. I am delighted that we are able to do it, and I look forward to our being able to right those wrongs.
Lord Laming (CB)
My Lords, I hope I am right in thinking that the whole House is in support of what the Minister is trying to achieve, so well done. Can she extend this just a little further and help carers feel that they are recognised and listened to? Some of the points that I receive are of course about the financial arrangements, but more than that, many carers continue to feel aggrieved that their work and their worth are not recognised and valued.
Baroness Sherlock (Lab)
I am grateful to the noble Lord, who makes a really important point. One of the good things about the Sayce review is that it involved carers directly and listened to them, and by listening to them was able to get to the bottom of what had gone wrong. My colleague Minister Timms, who is the Minister in charge of this, has carefully gone out to meet carers and is going to do so again. I know that he will want to hear not just what went wrong here but how people’s lives are impacted by the care that they give. How do the Government make their lives easier or harder, and how can we learn from that?
Finally, since the noble Lord prompts me to do the right thing always, I say once again that the whole House will want to join me in thanking carers for the service they give to those they love. Many in this House will have experience of either giving or receiving care, possibly both. It is an act of love and it is the Government’s job to support it and not get in the way, and we pledge to try to do that.
Jobs Market
Baroness Sherlock Excerpts(4 weeks, 1 day ago)
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Lord Hunt of Wirral
To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, despite Tuesday’s unemployment figures, there is positive information on the labour market. However, the latest figures show why we are right to focus on supporting people into work with our Get Britain Working plan, which includes modernisation of jobcentres, tackling economic inactivity due to ill health and delivering our youth guarantee.
Lord Hunt of Wirral (Con)
My Lords, there are now nearly 2 million unemployed people on this Government’s watch and the number is rising month by month since the introduction of the penal national insurance job tax and now the threat of first-day unfair dismissal rights under the Employment Rights Bill. Will the Minister listen to business, listen to the Resolution Foundation, listen to Tony Blair and listen to this House when it debates this issue on Monday? Will she undertake to persuade her colleagues that this Budget must have measures that inspire business to give people the dignity of work? Otherwise, the message will be what I said in my maiden speech 50 years ago: “Labour isn’t working”. It was not working then, and it is not working now.
Baroness Sherlock (Lab)
My Lords, I regret that I was not here to hear the noble Lord’s maiden speech 50 years ago, but it is interesting that his message has not changed in the intervening years. Let me give him a few thoughts. First, he should look at what is happening underneath the employment figures and around the world. Let me point a few things out to him. Over the last year, more than 329,000 people have moved into work. In the first half of this year, the UK was the fastest-growing economy in the G7. We have the third-highest employment rate in the G7—it is above the G7 average. Over the most recent quarter, the number of people claiming unemployment benefits fell by 35,000. Those people in work are doing well. Let me give the noble Lord one final stat: since July 2024, real wages have risen more than they did in the first 10 years of the previous Government. I celebrate that.
Lord St John of Bletso (CB)
My Lords, can the Minister outline what assessment has been made of the dual impact of artificial intelligence on the UK job market, in both the potential for job displacement in some sectors and the creation of new roles? What is the Government’s strategy to manage this transition and equip the British workforce with the skills to drive the new AI economy?
Baroness Sherlock (Lab)
This is a really great question that is obsessing most government departments and most employers, as the noble Lord will know. I think the impact depends on the sector and on the individual job, but the evidence is quite clear, which is that, across the piece, it is better for businesses to embrace AI than not to. The biggest risk to our country is in not embracing artificial intelligence—if we do not take the opportunities it offers.
The World Economic Forum has forecast that AI will create 170 million new jobs globally over the next five years and displace 90 million. We will find that there are jobs out there, but they will be different. In our country, we have to make sure that we get those good jobs in the UK. What we are doing as a Government is analysing that very carefully and supporting businesses and individuals to make sure they have the skills they need to move on to the next area. We have reformed skills; we are bringing skills into DWP for many young people; we have a brand-new skills academy; we are looking at developing apprenticeships and we are focusing on supporting education to give young people the skills they need. There will be jobs there in the future; we just want to make sure our people get them.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for her statistics, but the latest ONS figures show unemployment has risen from 4.8% to 5%—the highest level for four years. On that basis, can the Minister share concern that the UK’s sluggish productivity growth and skills shortages are still holding back economic recovery? What further measures are being considered to invest in adult skills and retraining? We will keep coming back to this. I thank the Minister for what she has said, but I would like a bit more information.
Baroness Sherlock (Lab)
On the unemployment figures, different things are going on under the surface if one digs down into the figures, which I am sure the noble Lord has done. For example, he may be aware that two things are going on. On the quarter increases and on the unemployment level, a chunk of that is driven by young people aged 16 to 24, including those in full-time education. Crucially, falling inactivity has contributed to increase in unemployment. We are tackling people who are economically inactive, but as people return to the labour market, they move from the figures of economic inactivity into the figures for unemployment. One thing that has happened is that the significant rise in economic inactivity down to ill health has been flattened, and that is really significant.
I would love to talk to the noble Lord at a greater length about skills. As he now knows, I have the great joy that my noble friend Lady Smith, who is now a Minister not only in DfE but in DWP, because she is the Minister for Skills, is joining up the two departments.
Baroness Sherlock (Lab)
Yes, I was going to say the less important one, but I will get in trouble any which way I do this.
We are joining up with DfE to invest heavily in skills. We have new qualifications and new apprenticeships coming online and investment in skills strategies. A huge amount is going on—more than I can say at the Dispatch Box—but I would love to talk to the noble Lord more about this.
Lord Woodley (Lab)
My Lords, the Government have given notice that they will stop the employee car ownership scheme, ECOS, in the British car industry. That will reduce production by at least 80,000 units and cost 5,000 jobs. Does the Minister agree that it is time to re-evaluate this proposal?
Baroness Sherlock (Lab)
My Lords, I do not often say it, but I know absolutely nothing about that, so I will take it back to my department and somebody will write to the noble Lord.
Lord Bailey of Paddington (Con)
My Lords, 111,000 fewer young people are employed than at the beginning of the year. With the rise in NI and the rise in minimum wage, many employers say that they cannot afford to employ young people. What work are the Government doing to make sure that our young people have a future in employment and not on welfare?
Baroness Sherlock (Lab)
I am grateful for that question; I know that it is something that the noble Lord cares very much about. We are doing a lot for young people. This is what is so exciting about what is happening. We have a youth guarantee, but my boss as Secretary of State has also made it clear that if an eligible young person has been on universal credit for 18 months, we will create a guaranteed job for them to support them in getting back into a job and transitioning into work. We need to move to a point where every young person out there is either earning, learning or preparing themselves to do one or the other. I am particularly worried about the growing number of young people who are not in education, employment or training, particularly on health grounds or because for some reason they are outside the labour market altogether. The noble Lord may have heard that my Secretary of State has asked Alan Milburn to look specifically at an inquiry to find out what is going on with those young people. We are already doing huge amounts in this area, but we need to address work specifically on that. I am looking forward to finding out what he has to say.
Lord Tyrie (Non-Afl)
Has the Secretary of State commissioned an internal report on the effect of the national insurance change on unemployment, and have they passed that information to the Treasury?
Baroness Sherlock (Lab)
My Lords, the Government did an impact assessment at the time and acknowledged that there might be an impact on labour supply when they made changes to the national insurance regime. Obviously, what happens in the new Budget I know nothing about and it will come forward. What we have done is work very closely with employers. We know that employers are out there and want to take on people, and they want to support particularly people who are not in the labour market. Our job is to help them in doing that, and we are determined to do so.
Lord McNicol of West Kilbride (Lab)
My Lords, I bring to the House my registered interest—I chair the Nuclear Industry Association. We had the recent announcement of the SMR, the small modular reactor, the Rolls-Royce build, going to Wylfa in Wales. Will the Minister join me in welcoming those highly skilled, well-paid and very often trade-unionised jobs being brought to the shores of the UK?
Baroness Sherlock (Lab)
I am delighted to welcome that. It was a really exciting announcement, and the Government are committed to investing in new high-quality, highly skilled jobs. We want to be a country that brings inward investment in, trains people up, gets them into good jobs and keeps them there. That is a good example.
Baroness Stedman-Scott (Con)
My Lords, we are losing around 5,000 people a day from the labour market on to benefits. What is the department’s latest projection for the number of people expected to flow on to out-of-work and health-related benefits over the next 12 to 24 months? What are the main drivers behind that projection? Will the Government publish the underlying assumptions of the quarterly progress data so that your Lordships can track whether the interventions that the noble Baroness refers to are working?
Baroness Sherlock (Lab)
My Lords, we have made clear what our ambitions are with Get Britain Working and that we will have metrics and publish regular data on them. One thing I want to take the opportunity to say at the Dispatch Box is that I have seen headlines this week suggesting that large numbers of people are flowing on to universal credit, as though this was a reason they were flowing out of work. I know the noble Baroness knows this and she is far too smart to raise it at the Dispatch Box, but I remind the House that the key reason for that is that the previous Government decided to close the legacy benefits and move anyone on to universal credit. For example, 800,000 people have left old benefits and made a claim to universal credit. I would encourage noble Lords, if they see those kinds of headlines, to think twice.
Public Authorities (Fraud, Error and Recovery) Bill
Baroness Sherlock ExcerptsTuesday 11th November 2025
(1 month ago)
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Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I have already spoken to Motion B. I beg to move.
Motion B agreed.
Motion C
Baroness Sherlock
Moved by
That this House do not insist on its Amendment 43, to which the Commons have disagreed for their Reason 43A.
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I will also speak to Motions E and F, with the leave of the House. I thank the noble Lord, Lord Vaux, for his continued constructive engagement on these issues. I hope that today we will reach a resolution with the amendments in lieu and assurances that I provide.
I start with Motion E and Lords Amendment 84 on the treatment of information obtained using an eligibility verification notice, or EVN. As drafted, this amendment carries three key risks: first, it risks DWP not being able to use EVM information properly, even in those cases where it might be a strong indicator of potential fraud; secondly, it risks legislating for a person’s state of mind; and thirdly, it risks undermining the existing public law principle that staff at DWP take decisions on behalf of the Secretary of State. Government Amendments 84A and 84B in lieu are therefore presented as a substitute. These amendments address those risks, build on the amendments I tabled on Report and reflect the Government’s stated policy intent throughout; namely, that EVM information considered in isolation cannot constitute reasonable grounds for suspicion or indicate wrongdoing.
These amendments focus on the actions which DWP staff must take following receipt of EVM information and clarify that where DWP has received it, staff must also have regard to all other relevant information held before taking further action. This approach would, first, require an authorised officer to consider all information held which is relevant to the question of whether to issue an information notice under new Section 109BZA of the Social Security Administration Act 1992, as well as the relevant EVM information. As a reminder, an information notice under that new section can be issued only where the authorised officer has reasonable grounds to suspect that a person has committed or intends to commit fraud, and the authorised officer considers the notice necessary and proportionate for the purposes of investigating that suspicion. The amendments in lieu make it clear that where EVM information is relevant to those considerations, the authorised officer must also consider non-EVM information that is relevant to the question of whether to issue the notice.
Secondly, it requires that before a DWP staff member can suspend benefit payments, they must consider all information held which is relevant to the question of whether to do so, as well as the relevant EVM information. Finally, it requires that before a DWP staff member can make a change to an earlier benefit decision, they must consider all information held which is relevant to the question of whether to change that earlier benefit decision, as well as the relevant EVM information.
DWP will always hold at least some further information on benefit claims, such as the presence or absence of relevant capital disregards, claimants’ declarations about capital or known vulnerabilities. This amendment provides the necessary assurance that DWP staff will consider this context carefully before taking further action. I think this reflects the intent of the original amendment from the noble Lord, Lord Vaux, as well as the Government’s stated policy intent. I am grateful for his engagement on this matter and hope that these government amendments in lieu offer the necessary reassurance.
I turn to Motion C and Lords Amendment 43 on the requirements of the independent reviewer. The noble Lord, Lord Vaux, knows that I cannot accept his amendment; I shall go through each part to explain why. Officials in my department have discussed its proposed paragraph (d) with the finance industry, which agrees that it may place a significant burden on financial institutions if they are asked to report on costs every year. However, I have put it on record before, and reassure the House again today, that the Government are committed to keeping costs associated with this measure proportionate.
I can assure the House that we will continue working closely with businesses as we implement these measures to ensure it is done in the most efficient and effective way. I have also previously committed to publishing a further, updated impact assessment within 12 months of Royal Assent, taking into account the ongoing work with industry through our test-and-learn period. I am happy to reaffirm that commitment to the House today.
As for proposed paragraph (e), there is no reason for individuals to lose access to banking services solely because of information shared under EVM. We have been clear that this information does not imply any wrongdoing, and we have worked closely with the finance industry to provide clarity in the draft code of practice to prevent any such problems. The role of the independent EVM reviewer is not to review every process which DWP carries out; rather, it is to review the exercise and effectiveness of that specific data-gathering power and to consider the Government’s compliance with the legislation.
I have stressed often before that DWP has strong support in place for vulnerable people. For example, all DWP front-line operational colleagues are trained to help identify and support our most vulnerable customers. This includes mental health training and the ability to provide reasonable adjustments.
Amendments 84A and 84B reaffirm that further decisions will not be taken without considering all relevant information, in addition to EVM information. This would of course include any available information on vulnerabilities.
Government amendments made on Report also introduced a specific requirement that the Secretary of State be satisfied that it is necessary and proportionate to issue an EVM, and clarified that the purpose for which an eligibility notice can be issued is to assist in identifying incorrect payments. As such, the independent reviewer can assess the Government’s actions against these requirements as part of their consideration of compliance with the legislation. We will work closely with the independent reviewer, especially in the test and learn phase, to identify any issues quickly and take steps to prevent or mitigate them.
Turning to subsection (f), Government amendments tabled on Report address this point. They require the Secretary of State to provide the independent EVM reviewer with all reasonably required material. I hope that this duty, alongside the Government’s commitment to work constructively with the reviewer, is sufficient.
My noble friend Lady Anderson made a commitment that Members will have an opportunity to meet with the PSFA’s independent reviewer. Today, I offer the House a parallel commitment that there will be opportunities for Members of this House to meet with the EVM independent reviewer, once they are appointed, and share their views with them.
I turn to Motion F, and Amendment 97 from the noble Lord, Lord Vaux, which concerns DWP-authorised investigators’ use of reasonable force. As I have made clear to the House, the powers of search and seizure, including warrant applications and production orders, are drawn from the Police and Criminal Evidence Act 1984. This also includes the power of reasonable force, as set out in Section 117 of PACE. These powers will be used by expert DWP staff, trained to industry standards, to tackle only serious and organised crime against DWP.
As I outlined on Report, I am not able to accept Lords Amendment 97 as drafted, although our stated policy intent is that DWP-authorised investigators would not use reasonable force against a person. The reason I cannot accept the amendment is that we cannot break down Section 117 of PACE to make the distinction between property and persons, and there is no precedent for specifying in PACE where or on what reasonable force may be applied. The Government’s preferred approach is for DWP to take powers of reasonable force from PACE, following precedents from other government departments.
However, I have listened to the concerns expressed in the House and looked for another way to reflect the stated policy intent in the Bill. The Government have therefore introduced, as amendments in lieu, Amendments 97A, 97B and 97C to Clause 76, and Amendments 97D, 97E and 97F to Schedule 4. These reflect our stated policy intent and draw a distinction between the power of reasonable force, exercisable by DWP-authorised investigators, and police officers or others with constable powers. These amendments remove the power of reasonable force that was derived from Section 117 of PACE and instead create a stand-alone provision on reasonable force in this Bill. This provision restricts DWP-authorised investigators’ use of reasonable force to force against property only, while retaining the police’s power to use reasonable force where necessary against people and property. This delivers our stated policy intent but brings DWP’s power of reasonable force outside of PACE. I believe this reflects the intent behind Lords Amendment 97, and I hope that the noble Lord, Lord Vaux, will welcome it.
However, this is a bespoke approach, and it is important that we maintain the same safeguards when DWP-authorised investigators exercise reasonable force. My department is working closely with the Home Office on this. To ensure that DWP-authorised investigators will still operate in the same way as others with powers of reasonable force under PACE, we will maintain compliance with PACE Code B, which governs the exercise of powers of entry, search and seizure.
The Home Office has confirmed that, when parliamentary time allows, secondary legislation will be brought forward to ensure that the stand-alone provision in the Bill will be subject to PACE Code B. My department has also worked swiftly to secure assurances that inspection of the use of this stand-alone provision will be provided by HMICFRS and the IOPC. The other relevant powers of entry, search and seizure, beyond reasonable force, will still be drawn down from PACE, and are subject to the safeguards and operational standards I have outlined over the passage of the Bill.
A different approach has been adopted for the provisions in Schedule 4 which apply to Scotland. These broadly replicate PACE search and seizure provisions to achieve parity but make some small, necessary adaptations for Scots law. Therefore, Amendments 97D to 97F make equivalent changes to powers of reasonable force in Scotland.
I hope this reassures noble Lords and puts this question about the use of reasonable force beyond doubt, as DWP-authorised investigators now cannot use reasonable force against people. I hope that the House will support this Motion. I beg to move.
Baroness Finn (Con)
My Lords, as we come to this final group of government amendments on the DWP section of the Bill, I begin by recognising the real progress that has been made on the DWP use of PACE powers and eligibility verification provisions—progress that has been driven by this House’s detailed scrutiny and the persistence of Members from all sides, not least the noble Lords, Lord Vaux of Harrowden and Lord Verdirame, and the noble Baroness, Lady Fox of Buckley. Throughout, we on these Benches have sought to ensure that the Bill strikes the right balance—strong on fraud prevention but fair, proportionate and mindful of its impact on vulnerable people. We therefore welcome the Government’s concessions in several areas, which have come about as a result of the sustained pressure applied by this House.
Amendment 43 concerns the eligibility verification mechanism. Our overriding concern has been the impact on vulnerable individuals and those at risk of financial exclusion. The system must not lead to people being debanked, subject to excessive deductions or left unable to access essential services. We are pleased that the Government have now committed to an assurance that Parliament will be able to engage with the independent reviewer after Royal Assent to explore these issues, and that the concerns that we have raised here and in the other place will be formally shared with the reviewer.
I am grateful that the Minister in the other place claimed the may/must change as a government initiative—imitation, after all, is the sincerest form of flattery—but it was in fact first proposed from these Conservative Benches. That is another example of the constructive scrutiny that has improved the Bill, and I am sure that the Minister will be keen to correct this on the record.
We welcome the Government’s concession in Amendments 84A and 84B. These make it clear that human decision-makers must have regard to all relevant information and ensure that human judgment remains embedded in the process. This protects against the risks of mechanistic or AI-driven decision-making, not only now but into the future as these technologies evolve and become more widespread. This is a sensible safeguard and a direct result of arguments advanced in your Lordships’ House.
Regarding PACE powers, I am pleased that the Government have finally accepted that DWP investigators should not be able to use reasonable force against individuals. This corrects a serious drafting flaw in the text of the Bill and aligns its provisions with the Government’s stated policy. It makes the law safer, clearer and more coherent. I really thank the Minister for her valiant efforts in this area. However, it is surprising, especially given that it protects the integrity of the Government’s stated policy, that it should have required so much persuasion from your Lordships’ House for the Government to get to this position.
As a result of the changes made to the Bill in this House, the Public Sector Fraud Authority and the DWP will be better equipped to act against frauds while operating within a framework of stronger safeguards. Because of efforts on these Benches and others, the PSFA will be proactive but also more accountable and transparent. As a result of the work of the noble Lord, Lord Vaux, and other noble Lords, vulnerable people will be better protected and represented in the independent review, and the use of artificial intelligence will be subject to clearer human oversight. Fundamentally, the use of PACE powers will be strictly limited to property, not people.
Having said all that, there are still gaps in the Bill. The Government have yet to engage seriously with the growing problem of sickfluencers, online figures who use their platforms to encourage and advise people to make fraudulent benefits claims. Unless the Government begin to analyse and address this issue, they risk falling behind and missing the opportunity to tackle a significant driver of future fraud risk. We welcome the progress achieved, but we will continue to raise the issues we have championed during the passage of this Bill and keep a watchful eye on how its provisions are enacted. The Bill now better reflects the need to protect the public purse from fraud and the duty to safeguard the public. It leaves your Lordships’ House in a far better place than when it arrived and demonstrates once again, as the noble Lord, Lord Vaux, has said, the constructive and vital work of this House.
Baroness Sherlock (Lab)
My Lords, I thank all the noble Lords who have spoken in this debate. I am grateful that all noble Lords who have contributed have conceded that we have reached a point where we are all now content to move forward with this important Bill.
On the specifics, the noble Lord, Lord Vaux, asked whether we would move forward without any other information. DWP will always hold some other information on benefit claims, but it is crucial that appropriate weight can be given to EVM information if necessary. That is the reason we took the approach we did in the new amendment, because it makes clear that, where EVM information is relevant to a question, DWP must also consider non-EVM information that is also relevant. That other information could take different forms; it could be about the presence or absence for disregard or other information, as I went through. I hope that helps.
“(4) In this paragraph, “authorised officer” includes “authorised investigator”.”
Baroness Sherlock
That this House do not insist on its Amendment 84 and do agree with the Commons in their Amendments 84A and 84B in lieu.
“(2) Sub-paragraph (3) applies where—
(a) an authorised officer is considering whether to give an information notice under section 109BZA in relation to a person, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to give the information notice.
(3) The authorised officer must have regard to all information that the Secretary of State has that is relevant to the question whether to give the information notice, including information that is not EVM information.
(4) Sub-paragraph (5) applies where—
(a) the Secretary of State is considering whether to suspend payments of a benefit to a person in accordance with regulations under section 21 or 22 of the Social Security Act 1998, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to suspend the payments.
(5) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether to suspend the payments, including information that is not EVM information.
(6) Sub-paragraph (7) applies where—
(a) the Secretary of State is considering whether a decision taken under section 8, 9 or 10 of the Social Security Act 1998 in relation to a person (“the earlier decision”) should be revised or superseded, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether the earlier decision should be revised or superseded.
(7) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether the earlier decision should be revised or superseded, including information that is not EVM information.”
Baroness Sherlock
That this House do not insist on its Amendment 97 and do agree with the Commons in their Amendments 97A, 97B, 97C, 97D, 97E and 97F in lieu.
People with Disabilities: Employment
Baroness Sherlock Excerpts(1 month, 2 weeks ago)
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Baroness Monckton of Dallington Forest (Con)
I beg leave to ask the Question standing in my name on the Order Paper. I declare my interest as chairman of Team Domenica.
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, notwithstanding the valuable role that volunteering plays in helping people prepare for work, we want disabled people and people with health conditions to be able to secure sustained employment. That is why we are funding local authorities to open our supported employment programme, Connect to Work, throughout England and Wales. Crucially, as part of this programme, specialist employment advisers work with both participants and employers, ensuring that participants are supported and workplaces are inclusive.
Baroness Monckton of Dallington Forest (Con)
I thank the Minister for her response, but the fact remains that only 5% of people with learning disabilities are in paid employment. Will the Minister agree to giving businesses an exemption or a remission from the employers’ national insurance contribution for this cohort, whose lives would be transformed by being included in the workplace and their communities?
Baroness Sherlock (Lab)
My Lords, I share the noble Baroness’s desire to find more opportunities for people with learning disabilities, severe autism and other conditions to get the benefits of work, of which money is but one. I pay tribute to the work she has done in creating Team Domenica and the work it has done in supporting learning-disabled people into work. I am sure the whole House would share in that.
Having said all that, successive Governments have taken a view that the best way to support disabled people into work is not necessarily by changing the rules around national insurance or the minimum wage. The noble Baroness is absolutely right that the level of employment for disabled people is only around 50% and for those with autism around 30%, and, as she says, it is vanishingly small for those with learning disabilities. We believe passionately that disabled people are vital to the UK’s workforce. The way we have approached this is with the priority of providing opportunities and support for disabled people to thrive in work. That is why we commissioned the independent Keep Britain Working review, which will be published shortly, to understand how we can create and maintain the kind of workplaces that want to support disabled people and enable them to thrive. It is why we are reforming employment, health and skills support, to tackle rising economic inactivity and get people into good jobs. We want the same thing; we are doing it in different ways, but we are determined to make things better.
Baroness Uddin (Non-Afl)
My Lords, I thank the noble Baroness, Lady Monckton, for her important Question. I declare my interest as having a 46 year-old son with a learning disability and autism. I am currently mentoring a highly educated 38 year-old young man, who has four degrees, including a master’s and a PhD. He still cannot find a job. Is the Minister satisfied that the local authority allocation for Connect to Work will be ring-fenced for that precise purpose? Will she consider apprenticeship schemes specially designated for people with autism?
Baroness Sherlock (Lab)
My Lords, I thank my noble friend for sharing her circumstance with us. I am really optimistic about Connect to Work. For noble Lords who do not know, Connect to Work is a specialist voluntary support and employment programme. It is for anyone who is disabled or who has a health condition or other barrier to work, such as homelessness. Local authorities, supported by DWP, are developing programmes. The reason it works—there is international evidence that shows what works in this space—is that it incorporates helping someone to work out what they want, engaging with employers and job-finding. A specialist adviser works with an individual and with local employers, and connects an individual to an employer, gets them into conversations, and then gets them into work and carries on supporting them in work. Crucially, they help the employers know how best to support people. Recently, I was talking to the head of this programme at one of the south coast councils. She said that lots of employers want to do the right thing but often they do not know how to —they may lack knowledge or be worried about how to have the necessary conversations. We have to tackle this on both fronts, but I am positive about it.
Lord Laming (CB)
Does the Minister recall the Public Services Committee’s report on the transition of young people with a disability from education into adult services? The evidence showed that there was a remarkable divergence. In some parts of the country, local authorities demonstrated quite inspiring work in getting young people with disabilities into work; in other parts of the country, the parents described it as like facing a cliff face. Does the Minister agree that we should set targets for every local authority, to make sure that, year on year, the number of young people with a disability going into employment is increasing? The noble Baroness, Lady Monckton, can demonstrate that very well.
Baroness Sherlock (Lab)
I am grateful to the noble Lord, who makes a very important point. There has been an issue for some time—I am not telling him anything new; he knows it better than I do—around the transition between the support for young people when they are in school and the support when they get out of school. The bit that we can do something about is around funding to local authorities, which we are providing. A couple of weeks ago, we announced further funding of £167 million to roll out Connect to Work to nine further areas in England, and we expect all areas to be open by early next year. We are working with them to look at what they are providing, how they provide it, and how they tailor it to their local populations and job markets. If we can make a difference and get young people into work—I thought the example of Tom working in Waitrose, until things went wrong, was so interesting—then what is gained from them working is certainly money, but also self-respect, teamwork, a peer group and the chance to make a difference. If we can do that, it can be transformative.
Lord Palmer of Childs Hill (LD)
My Lords, can the Minister add to her comments by providing an update on the publication of the Charlie Mayfield report into employment for people with long-term sickness and disabilities? We have been waiting for that report for some months.
Baroness Sherlock (Lab)
We have indeed. Despite being a Minister, I have not yet completely calibrated the scale that runs from, at one end, “in due course”, to, at the other end, “very soon”, but it is very much not at the “in due course” end. Watch this space; it will be out very soon.
Viscount Younger of Leckie (Con)
My Lords, I too pay tribute to the work of my noble friend Lady Monckton. In November 2017, my noble friend Lady May of Maidenhead set the UK Government a target to get 1 million more disabled people into work by 2027. In 2022, the Conservative Government hit that target five years early, giving 1 million more disabled people the opportunity of fulfilling employment. The noble Baroness spoke about giving opportunity and offering support, which is fair enough, but perhaps she could go further and say what practical steps Ministers are taking to support small and medium-sized businesses, especially those rooted in local communities, such as cafés and pubs, to accommodate these additional needs?
Baroness Sherlock (Lab)
I am grateful to the noble Viscount for that really good question. We have a service called “support with employee health and disability”. We are not great at names in DWP, but it does what it says on the tin. That was developed directly with input from smaller businesses and disability organisations. The idea is that it gives employers step-by-step guidance on how they can support employees in common workplace scenarios involving health and disability. For example, employers using the resource may be asked, “Have you got somebody you are working with now?”, and if they say yes then it will ask them what the challenge is. It can support them in understanding what the law says and how to have difficult conversations.
Most people who either are working or want to work, and who have a health condition or a disability, are happy to have conversations to help the employer know how to go about moving them into a job. One of the reasons that the Connect to Work programme I mentioned works so well is that the specialist advisers will work with the employer to help answer all those questions; they will also work with the person who is trying to move into work and can help bring the two together. A person I was talking to recently, who is a lead in one of these programmes, said that small businesses especially just do not have the resources—they have not got a huge HR department and so might not know how to do it—but they are really up for hiring people in the local community, and just want to be supported in doing so. I am really looking forward to seeing how that works out.
Lord Sikka (Lab)
My Lords, last year, the TUC estimated that there is an average disability pay gap of £4,300 a year. Add this to the gender and ethnicity pay gaps, and then imagine the plight of disabled women from ethnic minorities. Can the Minister explain how many employers a year are investigated for persistently underpaying disabled persons and ethnic-minority females with disabilities?
Baroness Sherlock (Lab)
My Lords, if anyone is not paying the legal minimum then they are breaking the law, whatever the circumstances, and should absolutely be taken to task for that. However, my noble friend is making a broader point, which is that there are clear gaps in employment: for female employment, for the disability employment gap and in pay rates for a number of ethnic minorities, although the pattern is more varied there. One challenge in the whole strategy of trying to move to a more inclusive labour market is that it is not about trying to do something for its own sake but about recognising that if we do not use the talents of all our people, businesses are not getting the best people that they want to do the jobs, and we will not get the kind of growth we need or development in companies. One of the reasons we have had such a focus on working with combined mayoral authorities and local authorities is to try to make sure that they have local Get Britain Working plans which reflect their local populations, so that, as they develop them, everybody in the local area has a good chance to get into work. That is our approach.
Jobcentres: Staffing Levels
Baroness Sherlock Excerpts(1 month, 2 weeks ago)
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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 ExcerptsThursday 23rd October 2025
(1 month, 2 weeks ago)
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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.
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 ExcerptsTuesday 21st October 2025
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Public Authorities (Fraud, Error and Recovery) Act 2025 View all Public Authorities (Fraud, Error and Recovery) Act 2025 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 114-II Second marshalled list for Report - (17 Oct 2025)
Baroness Sherlock
“(aa) section 80AA (restrictions on use of further methods),”Member's explanatory statement
This amendment is consequential to my other amendment to clause 91.
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I shall speak to government Amendments 89, 91, 101 and 102; I start with Amendments 89 and 91. I tabled these amendments because it has been clear that, despite all my attempts to reassure noble Lords at earlier stages, concerns continue to be raised as though DWP’s new recovery powers could be applied to debtors who are in receipt of benefits. Indeed, I think that may be the concern of the noble Baroness, Lady Kramer, as the explanatory statement on her Amendment 92 in this group relates to the use of these powers on benefit claimants. To be clear, this is not the case.
The DWP’s new debt recovery measures can be applied only to debtors who are no longer receiving DWP benefits and where we cannot recover from PAYE. However, to further reassure noble Lords and everybody else, we are making it even clearer in the legislation, through new Section 80AA, that the new powers cannot be applied to those receiving benefits from my department. This provides further clarification that a direct deduction order or immediate disqualification from driving order must always be suspended or revoked if the debtor subsequently receives a benefit payment from the DWP while that order is ongoing. I hope that provides further assurance to the House.
Amendment 101 is a procedural amendment regarding the technical mechanisms for DWP to make applications to the court for disqualification orders. The Bill already allows DWP to make an application to the magistrates’ court for a suspended or immediate DWP disqualification order. The purpose of this amendment is to introduce a regulation-making power enabling DWP to set out at a later stage any practical steps necessary for those applications to be made and considered. This engages commonplace procedure rules, dealing with practical matters to ensure cases are progressed fairly and efficiently for all parties involved, such as the type of form used or how notices and orders are served on parties.
Amendment 102 is a technical amendment which ensures that the term “processing” is correctly understood in new Section 80D, which establishes the DWP debt code of practice. It is a small change to provide clarity by linking the term “processing” to the definition already set out in Section 3(4) of the Data Protection Act 2018. This helps avoid any ambiguity in interpretation and ensures consistency with existing data protection legislation.
None of these government amendments changes the existing policy intent for how the powers will be used or the safeguards that are set out in the Bill. These will continue to be powers of last resort, to be used only after DWP has made all reasonable attempts to negotiate an affordable and sustainable repayment plan. These amendments support the policy intent and delivery of the Bill, and I urge noble Lords to accept them. I beg to move.
Baroness Kramer (LD)
My Lords, I will be very brief. I laid Amendment 92 in the same spirit as the amendments that I laid in an earlier group. The part of paragraph 3 of Schedule 5 that I find most difficult is a subset of the requirement for banks to provide information. The overarching requirement instructs banks to hand over to the Government, on request, three months of account statements for them to examine. The schedule says that the information must be used only to help determine whether or not to make a deduction under the Bill. I was trying to find out from the Minister what assurances there are that the use will be that narrow. It may be that I have misread it, but I cannot see any form of transparency or accountability that would provide that kind of assurance. It all seems to be completely internal to the DWP. My first question to the Minister is therefore this: how will the scheme verify that the information is not used for other purposes, because detailed account statements undoubtedly have information that could interest all kinds of people? Most importantly, will that information be destroyed after an investigation is closed?
The part of paragraph 3 that exercised me the most, in the original language of the Bill that came from the Commons, is that which prohibited banks from ever notifying the account holder that their information has been handed over to the state and for what purpose. To the Minister’s credit, that now seems to have been amended to say that the account holder can be told after three months. I am unclear whether that is an automatic notification, notification at the bank’s choice, or notification that requires a request from the account holder. To me, this matters, because I suspect that transparency is the only way to ensure that the information in the account is not used for purposes other than those stated in the Bill.
I am generally exceedingly uncomfortable with the idea that the original version basically required a sort of covert process, in which the information held on an individual by the state was not disclosed to that individual. The Minister has often suggested that the monitoring of accounts is to start a dialogue to see if a person has made a mistake in overclaiming rather than committing fraud. If somebody is not told that their information has been taken, read through, examined and dealt with in detail, I cannot see how they can possibly enter into a constructive discussion to explain what is happening.
I want to draw the attention of the Minister to an underlying principle. Jonathan Fisher KC has published part 1 of an independent review of disclosure and fraud offences, which was commissioned by the Government. I want to quote his words on transparency, because it seems that transparency was not built into the original Bill and is still limited in the revised version. He said that:
“A modern disclosure regime must require the prosecution”—
he is talking about the courts—
“to be honest concerning the reasonable lines of inquiry that have been pursued and how investigative material has been gathered, handled, and interrogated”.
I would very much like to see those principles embedded in this part of the Bill. I think we need assurances from the Minister that if we cannot find the language then they will in practice be embedded in this part of the Bill, because transparency is fundamental.
Viscount Younger of Leckie (Con)
My Lords, the amendments in this group tabled by the Government contain a mixture of substantive safeguards and some technical improvements designed to tidy up and clarify the Bill.
The main amendment, government Amendment 91, introduces further restrictions and procedural safeguards around the use of the new recovery methods created by Schedules 5 and 6. It requires that liable persons are properly notified and given an opportunity to settle their liability before enforcement action is taken, and that alternative routes of recovery, such as deductions from earnings or benefits, are considered before more intrusive powers are used. These are sensible and welcome provisions that strengthen procedural fairness and ensure that the new powers are exercised proportionately.
We do, however, note that these changes have come rather late in the passage of the Bill. They are substantive clarifications, going to the heart of how these powers will operate in practice. However, I listened to the explanations from the Minister on an earlier point I made about this and I now understand her position—while not necessarily agreeing with it, I understand it.
The group includes two largely technical amendments. The first, to Schedule 6, allows the Secretary of State to make regulations relating to applications to or appeals from magistrates’ courts in England and Wales, ensuring clarity and consistency in procedure. The second, to Clause 94, aligns the Bill with the Data Protection Act 2018 by confirming that “processing” has the same meaning as in the Act. This is a straight- forward but important clarification. It is my view that these amendments strengthen the fairness and clarity of the Bill, ensuring that it operates in a way that is proportionate, consistent and aligned with existing law. We therefore support them.
On Amendment 92, tabled by the noble Baroness, Lady Kramer, she may not be surprised that we do not support this amendment. It would remove a key part of the machinery that underpins the operation of this Bill—specifically, the ability of the Department for Work and Pensions to obtain limited, relevant bank information to determine whether a direct deduction order should be made. I realise that this chimes with the noble Baroness’s earlier Amendment 45A, so I will not repeat the comments I made then, save to say that this is a considerable change and would strike at the heart of the framework that enables the recovery of money lost to fraud and error.
The Government must have the legal capacity to verify whether an individual is eligible for the payments they are receiving and whether further action is required to prevent overpayment or recover funds that are owed to the state and, by extension, to the taxpayer. If a person receives money from the state, the state has both the right and the duty to ensure that this money is not being misused—and certainly is not ending up in the pockets of fraudsters or criminals. The Minister has already made clear that individuals in receipt of benefits will be informed that the Government may access certain account information for the purposes of investigating suspected fraud or error.
We are satisfied with the Government’s assurance that the information obtained under these provisions will be high level, proportionate and strictly limited to what is necessary for the purpose of recovering money lost to fraud and overpayment. Far from being excessive, the powers set out in this part of the schedule are a necessary and measured tool to protect public funds. For those reasons, we oppose Amendment 92.
Baroness Sherlock (Lab)
My Lords, I am grateful to the noble Viscount for his support on these matters. Amendment 92 from the noble Baroness, Lady Kramer, seeks to remove the requirement for banks to provide information to the DWP for the purposes of making a direct deduction order from benefit recipients. I am not sure whether that was her intention or whether she intended to remove it from all, but that is the effect. I therefore need to clarify for the record that these powers cannot be used for those in receipt of benefit, and Amendments 89 and 91 make that even clearer.
Baroness Sherlock
Member’s explanatory statement
This amendment prevents the new methods of recovery from being available in relation to a recoverable amount or a penalty relating to a devolved benefit.
Baroness Sherlock
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 5, page 106, line 28.
Baroness Sherlock
(b) about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under this Schedule.”Member’s explanatory statement
This amendment would allow the Secretary of State to make regulations containing supplementary provision about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under new Schedule 3ZB to the Social Security Administration Act 1992 .
Baroness Sherlock
Member’s explanatory statement
This amendment provides that “processing”, in new section 80D of the Social Security Administration Act 1992, has the meaning given by section 3(4) of the Data Protection Act 2018.
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.
Baroness Sherlock
Member's explanatory statement
See the explanatory statement for my amendment to clause 97, page 62, line 9.
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.
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.
Baroness Sherlock
“Powers of Scottish Ministers(1) The following provisions of this Act have effect as if they were pre-commencement enactments for the purposes of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016—(a) sections 73 and 74;(b) section 96, so far as relating to an amount that is recoverable by the Scottish Ministers under Part 3 of the Social Security Administration Act 1992;(c) section 97.(2) Accordingly, an individual who for the time being has the Scottish Ministers’ authorisation for the purposes of Part 6 of the Social Security Administration Act 1992, in accordance with section 109A of that Act as amended by section 73 of this Act, has the functions conferred by sections 109B to 109C of that Act, as amended or, in the case of section 109BZA, as inserted, by section 73 of this Act.” Member’s explanatory statement
See the explanatory statement for my amendment replacing clause 73.
Baroness Sherlock
Member’s explanatory statement
This amendment would allow commencement regulations to provide for provisions to commence on different days in relation to different areas.
Baroness Sherlock (Lab)
My Lords, government Amendment 114 ensures flexibility in the commencement of certain provisions of the Bill across the different nations of the United Kingdom. This approach is well established in legislation such as the Care Act 2014, the Digital Economy Act 2017 and the Public Order Act 2023. It ensures that implementation is both practical and responsive to the specific circumstances in each jurisdiction. For example, the courts in one part of the UK may be ready to hear certain applications while, in another, staff training and procedural updates may still be under way.
This amendment allows the flexibility to commence later in one area without unnecessarily delaying implementation in an area that is ready. Crucially, the amendment does not alter the substantive provisions contained in the Bill, and nor does it affect how or to whom they apply. It is simply a matter of good governance, ensuring that the legislation is brought into force in a way that is orderly, effective and sensitive to operational realities.
I hope that the House will support this amendment as a sensible and necessary step in delivering the Bill effectively across the UK. I beg to move.
Viscount Younger of Leckie (Con)
My Lords, I will keep my remarks brief. Amendment 114 is, as the Minister has indicated, a technical amendment but one that raises a point of some practical importance in how this legislation will be implemented. The amendment would allow commencement regulations to provide for provisions of the Bill to come into force on different days in relation to different areas. We recognise that this is a standard enabling power and we do not object to it in principle.
However, while we appreciate that this is likely to be a technical and administrative provision, we would welcome a little more clarity from the Minister as to the intended purpose. In particular, can the Minister explain whether the Government currently anticipate that the legislation will, in practice, come into force in a staggered way across different parts of the UK? It would be helpful to know whether any particular regional or administrative reasons have led to this amendment being proposed—for example, to accommodate devolved competencies or pilot schemes, or differences in data infrastructure between public authorities—or whether this is simply a precautionary measure to preserve flexibility.
We would also be grateful if the Minister confirmed whether the Government expect any significant differences in timing or rollout between areas once the Bill is enacted. If such differences are anticipated, what criteria will determine the order of commencement and how will Parliament and the public be kept informed of that process? So while we are content to support this amendment as a sensible technical adjustment, we would appreciate some reassurance that it will not result in confusion or inconsistencies.
Finally, as we come to the end of Report, I want, on a lighter note, to take this opportunity to thank all noble Lords for their engagement throughout these proceedings, and all those who have voted on the amendments upon which we have divided. I look forward to seeing some noble Lords again at Third Reading on Thursday.
Baroness Sherlock (Lab)
My Lords, I thank the noble Viscount for his questions. First, we have no reason to believe that any area or jurisdiction will not be ready; this is simply a precautionary measure to provide flexibility in case unexpected issues arise down the line. It is a standard legislative approach that provides flexibility to adapt if needed, and avoids holding back implementation in areas that are ready, should there be another area that needs more time. No specific powers have been earmarked or delayed. The amendment is an enabling one, and where readiness exists, powers will be commenced without delay. On how people will know, Parliament and the public will see the commencement regulations, which will make that clear. This amendment is simply to ensure flexibility in the commencement provisions across the different nations of the UK, and I commend it to the House.