Public Authorities (Fraud, Error and Recovery) Bill

Debate between Lord Deben and Lord Vaux of Harrowden

Report stage
Tuesday 21st October 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, during the debate on the previous group, I mentioned that the two amendments in this group are designed to strengthen the safeguards around the use of the eligibility verification powers that are created by the Bill. I am once again grateful to the noble Baroness, Lady Kramer, and the noble Viscount, Lord Younger, for their support.

Amendment 52 deals with how the bank account data that is provided by the banks may be used. The Bill requires banks to carry out a trawl of all accounts they hold to identify any that are in receipt of specified benefits and then to test those against criteria that will be provided by the DWP. If they meet those criteria, this raises a flag called an “eligibility indicator”, details of which must be provided to the DWP, along with certain other limited information, in a format to be decided by the DWP. The trawl can be required on a periodic basis. It could be, for example, daily—we do not yet know. No suspicion is required; this is simply a trawling operation of all bank accounts.

This raises two important issues. First, the existence of an eligibility indicator will presumably trigger action by the DWP. At the moment, there is nothing in the Bill that decides what that action could be. Clause 73 creates a range of very intrusive investigatory powers to investigate if an authorised officer of the DWP has reasonable grounds to suspect wrongdoing. Reasonable grounds for suspicion are not defined. Could the mere existence of an eligibility indicator constitute such grounds? There is nothing in the Bill to say that it cannot. I do not think that the amendments that were referred to in the last group by the Minister and which say the eligibility indicator can be used only to assist in identifying fraud or error solve this issue.

Secondly, and similarly, there is nothing in the Bill to prevent action being taken to suspend or alter a benefit payment in the event that an eligibility indicator is flagged. As we have heard, there are many innocent reasons why an eligibility indicator may exist. Indeed, as I have said, the eligibility indicator can be set at a level which would not indicate fraud at all—for example, £8,000 for a universal credit situation. The existence of an eligibility indicator does not indicate any guilt.

The Minister has told us the department will not treat an eligibility indicator as reasonable grounds for suspicion, but there is nothing in the Bill to define that. The draft code of practice that we have been provided with says that a benefit cannot be altered just because of the existence of an eligibility indicator, but that is only a code, which can be changed at will by this or any future Government without scrutiny. Furthermore, it is not known how much data will be sent to the DWP by the banks under the EVM process but, presumably, it is going to be substantial. It is clear that it will be processed electronically, and there is nothing in the Bill to prevent this process from becoming fully automated, including the decision-making. The DWP has made it publicly very clear that it is rolling out AI processes generally, which may be more efficient, but, in my view, any decisions need to be subject to human review.

In Committee, we heard about the Netherlands child benefits scandal, which was caused by automated decision-making—and interestingly, it eventually led to a Government falling. The Minister has been clear, and the draft code is also fairly clear, that the information will be reviewed by a person before any action, such as an amendment to or suspension of benefits, can be taken. But it is only in the code, and this could be changed without scrutiny.

I think that all of us in this Chamber trust the Minister completely, but she will not always be the Minister, however much we might wish that were the case. Indeed, it is even possible that this Government will not always be the Government. But this law will remain the law. A future Government may be less scrupulous about how benefit recipients are treated. The Bill, left unamended, would open the possibility that eligibility indicators, regardless of innocence, could lead to deeply intrusive actions or unfair financial impacts, potentially on a fully automated basis.

All Amendment 52 does is to make it clear that the existence of an eligibility indicator alone does not constitute reasonable grounds for suspicion, and it would make it a requirement that a suitably experienced person must have reviewed the information before any action to use intrusive powers against a benefit recipient or to amend or suspend payments is taken. I believe that is what the Government intend, so I really do not understand why there is a problem with accepting the amendment. It does not add any onerous obligations; it simply clarifies the situation that we are being told is the case.

Amendment 67 considers the impact and potential unintended consequences of these powers. The Government have included an independent review process in the use of the eligibility verification powers, which is a very welcome and important safeguard and a genuinely excellent addition since we last saw the Bill. But as it stands, the scope of that review is very limited. It covers only that the exercise of the powers has been in accordance with the Bill and the code of practice, that the persons who have been issued with eligibility notices have complied, and that it has been effective in identifying or assisting in identifying incorrect payments. The independent reviewer cannot look at any other impacts the policy might have.

In Committee, we spent a lot of time debating the costs that the Bill will impose on the banks, but no meaningful attempt has been made to quantify those yet. To quote from the impact assessment:

“At this stage we are unable to provide a robust assessment of business costs for validation because the operational solution for the measure is still being developed”.


We really need to make sure that the costs are proportional. All that Amendment 67 adds is a review of the costs of the policy to the scope of the independent review to ensure they are reasonable and proportional to the benefits.

We heard a lot about the fears of the impacts these new powers might have on disabled people and other vulnerable people, as well as the concern that imposing these onerous duties on the banks might reduce the willingness of the banks to provide banking services to those in receipt of benefits. As politically exposed persons, this is a subject that most of us here have personal experience of. We have seen how the banks behave when additional burdens are put on them in respect of a particular group of people. There is no reason to believe that that could not be the same in this situation. But the Bill includes nothing at all in relation to potential unintended consequences. Amendment 67 adds consideration of those potential unintended consequences to the scope of the independent review.

Finally, the amendment gives the independent reviewer the opportunity to confirm that they have received all the information that they require. This is now a bit of a formality, following the welcome government amendment that we debated last week, which changed “may provide information” to become “must”, but it was subject to a reasonably required caveat. There is still a possibility of disagreement between the reviewer and the department as to what information they might reasonably require. This just allows the reviewer to flag that they have not got what they think they need, which I think is a useful but not onerous safeguard.

These proposed eligibility verification powers are extremely intrusive, so they really must be subject to robust safeguards, which these two relatively simple amendments seek to strengthen. Unless I hear something unexpected from the Minister—and I shall listen to her very carefully—I am minded to seek the opinion of the House when the time comes. I beg to move.

[Lord Deben (Con)]

My Lords, there are moments when you hear a speech on a subject of which you are in general support that brings home very clearly the key issues; I think that the noble Lord, Lord Vaux, produced that speech just now.

It is extremely dangerous for us to put ourselves in the hands of AI. It is particularly dangerous to put those who are vulnerable into the hands of AI. Indeed, I find it offensive when people who are able to appreciate things particularly well think it all right for others to be subject to automatic operations. The point made by the noble Lord, Lord Vaux—the Government recognise this matter, which is why it is in the advice, though why is it not in the Bill?—is a very important issue for this House.

I do not think it acceptable to have circumstances increased where vulnerable people are subject to “the system”, which is why I want to say just a word about it. It seems to me that one reason why democracy is so much under threat is because so many people feel themselves to be under threat by the system. The system is an alien thing. Well, if you do not want it to be alien, you have to make sure that it is at least human and not merely a machine.

There is another reason; it is one that the noble Lord, Lord Vaux, gave delicately and politely but effectively. There are some pretty nasty people in this country who are, at the moment, blaming most things on groups of people whom they dislike, whether it is because of their race, because of their position or, in a sense, because they think that they just do not matter. It is always possible that such people get into power. I do not want those people to have a chance to use legislation that we—we are decent people, I hope—have passed. That is why I have come to speak on this particular amendment: in these months and years, we have to stand up on every occasion and recognise the damage that is done in a system where people like that get power. You have only to look across the Atlantic to see what happens when those who build up antagonism against groups get power and use legislation that was meant to be different in order to ensure the ends that they have in mind.

I beg the Minister to recognise that all we want is the guidance in the law. If we have that, she need not worry. I say that as somebody who has a history, as a Minister of some 16 years, of always being very tough on fraud and always believing that people should not get what they do not deserve, do not need and should not have, because that is very damaging to those who do need it. That is why I do not like it: it puts them in so difficult a position. I beg her simply to make sure that, when we do not have Ministers of the standing and quality that she has shown, they cannot use the law for improper purposes.