Youth Unemployment

Lord Palmer of Childs Hill Excerpts

Thursday 16th October 2025 Lords Chamber

[Baroness Smith of Malvern (Lab)]

My noble friend is absolutely right that the opportunities that young people have throughout their lives are dependent on the standards, quality and success that they experience in schools. That is why we have already taken action to ensure that new routes are available for young people post-16—for example, through foundation apprenticeships—and why we have increased the support available to young people in colleges to get the qualifications in English and maths that are so important for them later in life. It is also why, through both Becky Francis’s curriculum and assessment review and the Government’s post-16 skills and education White Paper, we will have more to say about how we ensure that there are clear, successful routes for all our young people post-16.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am disappointed to hear the Minister, in discussing youth unemployment, mention universal credit and other such things. I ask the Minister to consider whether—as I would have thought—one of the basic ways of reducing youth unemployment is to encourage and introduce more apprentices. If only we had people who were encouraged financially by the Government in plumbing, electrical work and all the trades that people need; instead, we are using people from overseas because we are not training anyone. Are the Government giving financial incentives to the plumbers, electricians and so on to train the tradespeople for the future?

Jobs Market

Lord Palmer of Childs Hill Excerpts

Monday 13th October 2025 Lords Chamber

[Baroness Sherlock (Lab)]

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

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

[Lord Palmer of Childs Hill (LD)]

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

[Baroness Sherlock (Lab)]

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

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

Youth Unemployment

Lord Palmer of Childs Hill Excerpts

Thursday 11th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

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

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

[Lord Palmer of Childs Hill (LD)]

My Lords—

[Lord Leigh of Hurley (Con)]

My Lords—

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

We will hear from the Lib Dem Benches next.

[Lord Palmer of Childs Hill (LD)]

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

[Baroness Sherlock (Lab)]

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

Sickness Benefits: In-person Interviews

Lord Palmer of Childs Hill Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

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

[Lord Palmer of Childs Hill (LD)]

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

[Baroness Sherlock (Lab)]

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

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

Child Poverty Strategy

Lord Palmer of Childs Hill Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

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

[Lord Palmer of Childs Hill (LD)]

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

[Baroness Sherlock (Lab)]

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

Labour Market

Lord Palmer of Childs Hill Excerpts

Monday 8th September 2025 Lords Chamber

[Baroness Sherlock (Lab)]

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

[Lord Palmer of Childs Hill (LD)]

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

[Baroness Sherlock (Lab)]

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

Universal Credit Bill

Lord Palmer of Childs Hill Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

I thank the noble Lord. With speakers in the gap, you never know quite where you are.

My Lords, first of all, it is a great pleasure to welcome the noble Baroness, Lady Shawcross-Wolfson, and to compliment her on her maiden speech, as well as to compliment the noble Baroness, Lady Bryan, on her valedictory speech. The noble Baronesses enshrine the principle we have often noted in your Lordships’ House of “one in, one out”. This is a good example.

The Minister gave, as usual, a very good summary of the Government’s position, including the reasons for the removal of the PIP provisions from the Bill. A comment was made that she has been gentle and supportive, and I would comment from the Opposition Benches that I always find her gentle and supportive.

The noble Viscount, Lord Younger, made some interesting comments, including that the House will not be fooled. I thought that was very pertinent. He also said that the Government are running away from real reform.

My noble friend Lady Tyler drew great attention to the reduction of support for those with mental health problems, and to the involvement of carers, which has not been emphasised too much during this debate.

The noble Baroness, Lady Bennett, has her regret amendment, to which she spoke eloquently. If she moves to a vote, the Liberal Democrats will be supporting that. It is a welcome relief in a money Bill to have an opportunity to vote for anything—and this is not just anything but something worth voting for.

The noble Lord, Lord Elliott, made some points about decent jobs and giving a carrot to employers. That is an interesting aspect, which has not been discussed in the Bill. He also raised something that I did not know about ex-servicemen’s relief, which is something to be borne in mind.

My noble friend Lady Brinton gave a good clarification on PIP during her comments.

There needs to be reform of the welfare system, but this Bill is not the way to do it. On its way to this Chamber, the Bill has been described by others, including my noble friend Lady Tyler, as shambolic. There is not enough linkage between the NHS and the care system. There are still people stuck on universal credit because they are stuck in an unresponsive NHS.

From April 2026, the health element for new universal credit claimants will be cut, from £97 to £50 a week. As was drawn attention to by the noble Lord, Lord Sikka, that means a loss of £2,444 per year. This will push hundreds of thousands into deep poverty, stripping away legal protections and forcing people to choose between food and essential medication.

The consequences are clear: spiralling hunger, mental health crises and suicide. These changes will destroy lives. Only one in nine claimants who would currently receive the full limited capability for work and work-related activity support will qualify under the proposed severe conditions criteria; that is, just 200,000 people.

The SCC introduces four new harsh eligibility hurdles. First, there is the finding of unfitness for work and work-related activity. Secondly, it specifies an NHS-only diagnosis, excluding private specialists, which is a trip into the old world. People are not using only the NHS, so why exclude private specialist diagnoses? Perhaps the Minister could explain that. Thirdly, there is the hurdle of a lifelong condition. Fourthly, symptoms must meet Schedule 7 descriptors constantly and not episodically.

These requirements structurally exclude and discriminate against people with fluctuating conditions, such as multiple sclerosis, schizophrenia and Parkinson’s. They punish those stuck on NHS diagnostic wait lists, some for more than a decade. My noble friend Lady Scott drew attention to ME as a long-standing symptom, but it is one of many.

The Bill also scraps ESA Regulation 35(2), a vital safety net that protects people from being forced into unsafe work where there is substantial risk of harm or suicide. The safeguard is applied only when clinicians provide serious evidence of the danger, and its removal is reckless. Coroners’ prevention of future death reports have repeatedly warned of tragic outcomes with such protections missing.

No one has really talked about whether the Bill will now save money. I quote Helen Miller, the deputy director of the IFS:

“The government’s original reform was set to save £5.5 billion in the short run … and double that in the long run when fully rolled out. Without reform to Personal Independence Payment, the watered down bill is expected to deliver essentially no savings over the next four years. This is because over this period the forecast savings from reducing the Universal Credit (UC) health element for new claimants … will be roughly offset by the cost of increasing the UC standard allowance”.


This is typical of the Government and just like the winter fuel allowance. We understand why the winter fuel allowance was cut but, with people claiming additional benefits, the monetary benefit of removing it was not there. History is repeating itself.

This is a money Bill and our formal powers are limited, so I put it in simple terms to the Government—four very simple points. First, they should recognise that the exclusion of fluctuating conditions is unfair. Can the Minister answer that? Secondly, the change to require NHS-only diagnosis and treatment is also unfair. Thirdly, we should defend the protections of those at substantial risk. Fourthly, where is the engagement with carers’ organisations, as referred to by other Peers?

From these Benches we call for revision to the severe conditions criteria and the restoration of essential safeguards, which will help future legal challenges and put disabled people’s voices and lived realities on the record. This is a faulty Bill, and it should not even be here.

Universal Credit: Two-child Limit

Lord Palmer of Childs Hill Excerpts

Wednesday 9th July 2025 Lords Chamber

[Baroness Sherlock (Lab)]

I am sorry to hear about the noble Lord’s health; we are very pleased to see him here today, and as often as he is able to make it. I wish I could be in two places at once, because then I would watch what is happening down the other end of the Corridor, as well as at the better end, but so be it.

Noble Lords will be aware that the Government set out a Bill looking at reforming support for sick and disabled people. It came in two parts, addressing PIP and the extra cost benefit, and universal credit. As the result of the proceedings in the Commons last week, the Government, having listened to comments from around and beyond the House, will now look again at the PIP part after the review being led by my right honourable friend Sir Stephen Timms, co-produced with disability charities and disabled people.

However, down the other end they are discussing a Bill, which will soon arrive in this House, dealing with important issues such as rebalancing universal credit. We will be looking at producing the biggest sustained increase in the basic standard allowance of universal credit since it was set up, but also at how to balance that by making sure the gap between that and the amount people get as a health top-up is less. It will introduce lots of other things, including a right to try, bringing forward regulations so that trying a job will never mean in and of itself that you get reassessed. There is a lot of welfare reform to be done yet. It is tough going but we are determined to keep doing it, and I hope to see the noble Lord at the debate, if he is well enough, in the next few weeks.

[Lord Palmer of Childs Hill (LD)]

I thank the Minister for explaining the Government’s position, but it always seems to be that the real position is how much money we can save and how we can make the system financially viable. What analysis has the department conducted of the effects of the policy on children’s life chances, educational achievements and mental health? You cannot measure it all in how much money is saved.

[Baroness Sherlock (Lab)]

If the noble Lord is referring to the two-child limit, he will be aware that the policy was introduced not by a Labour Government but by a Conservative Government, and it is not a policy we would have introduced. We are working our way through the entire landscape we inherited. In tackling child poverty, we are setting out not to save money but to make children’s lives better. We understand that poverty is not just about one thing. Look at the things we have already done. We have announced a fair repayment rate to try to make sure that being in debt to the Government does not drive you further into poverty. Some 100,000 children will be lifted out of poverty by extending free school meals to all those on universal credit. We have raised the minimum wage by so much that an average full-time worker on the national living wage will get a pay rise of £1,400 a year on average. We are looking at the full range, and we have already taken steps to try to make the lives of our citizens better, particularly of our children. The child poverty strategy is not about money; it is designed to make children’s lives better, and I commend it to him.

Welfare Reform

Lord Palmer of Childs Hill Excerpts

Wednesday 2nd July 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I apologise for the repetition, but for 32 years I dedicated my working life to helping people into work, not just by finding them jobs but by opening their eyes to the opportunity, purpose and dignity that meaningful employment brings. I do not rise today to lecture the Minister on the challenges that her department faces, nor do I believe that it serves this House to relay political refrains about the past 14 years, which do little to address the pressing realities we face.

We all recognise the scale of the task ahead, which is why yesterday’s events were so concerning. In response to widespread unease across Parliament, key elements of the Bill were withdrawn. The result is a significantly weakened piece of legislation that now faces serious questions about its purpose, scope and impact. Even with those changes, more than 40 Labour MPs felt compelled to vote against it. That should give us all cause for concern and cause to pause. It reflects not just concern with the process but discomfort with the overall direction.

I genuinely do not envy the Minister. Ministers were asked to defend proposals that have since been fundamentally altered. In the process, the Government have not only damaged their credibility but opened a £4.5 billion hole in their fiscal plans.

These Benches are clear: urgent welfare reform is necessary, but it must be long-term, evidence-led and considered. Reforming PIP or any other benefit should never be reduced to short-term savings driven by arbitrary fiscal targets. We were told that the Bill would reform personal independence payments, but this approach to welfare has been crude and alarmingly hasty. Both the Institute for Fiscal Studies and the Resolution Foundation confirm that the revised proposals will deliver no net savings this decade. This is not just a missed opportunity but a collapse of any clear policy.

Welfare is a vital lifeline for people facing illness, disability or disadvantage. Reform must focus on strengthening this support, securing long-term financial sustainability and maintaining public confidence. This starts with asking the right questions. Is the current system sustainable? No. Are eligibility criteria fair and effective? No. Why are 3,000 people entering incapacity-related benefits each day? How do our costs compare internationally and are those differences justified? How do we strike the right balance between compassion and cost? These are not questions for headlines or quick fixes; they are serious questions about complex and long-term governance, requiring thoughtful cross-party collaboration.

This also highlights the limits of top-down approaches. Tackling entrenched unemployment, or an ever-increasing PIP bill, requires more than a new set of policies; it requires moral leadership, cultural awareness and deep community engagement. If we are to tackle the welfare challenge, policy must be person-centred, culturally intelligent and grounded in the lived experience of the communities it seeks to serve. Real fiscal gains come from reform: a smarter, outcome-focused approach that helps people to move into work. That is how we reduce the welfare bill: not by crudely cutting support but by reducing the need for it, while protecting those with serious health conditions.

I urge Ministers to take stock. Do not confuse speed with strategy. Do not mistake cuts—much needed as they are—for reform. Go back, reflect, consult widely and return to Parliament with a plan that meets the scale of the challenge, with the care and responsibility it demands.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the noble Baroness, Lady Stedman-Scott, for introducing questions on the Statement. She quite rightly talks about missed opportunities of not only the current Government but the previous Government.

Welfare provision is a broken system. We should not proceed until we hear from the Timms review. I hope the Minister will comment on that. There is no doubt that we are abandoning valuable members of our society. People within the leadership of the Labour Party who described PIP as “pocket money” should know better. We are enshrining in law that we have a system that all disabled people are equal, but some are more equal than others—this is an early proclamation by the pigs who control government in Animal Farm; the phrase is a comment on the hypocrisy of Governments.

Let us be clear: the proposals are a leap in the dark and not even the Ministers know where they are going to land. The proposals are ill thought-out, rushed and continually amended. As days, weeks and months pass, we will see the unedifying and unintended consequences.

The access to work scheme for those with a disability needs to be urgently fixed. Could the Minister tell the House what consultations have been made with carers about this legislation?

The Universal Credit and Personal Independence Payment Bill sends a message to disabled children that those who have gone down the path of their disability degenerating to the extent that they can claim PIP will be over the line, but those youngsters who know they have a degenerative condition can look forward to no PIP under the Bill.

PIP is a passport to other levels of support, such as blue badges or railcards, which give people the opportunity of getting out and living their best lives. Perhaps the most passported benefit from PIP is the carer’s allowance. On these Benches, we have grave concerns about the Bill’s impact on those families who will no longer benefit from carer’s allowances. They will be robbed of up to £12,000 a year.

We recognise the benefit system is broken and needs resolving, but it needs to be co-designed with disabled groups and carers groups to make sure that we get it right for our people.

The root of the problem, sadly, is the NHS, which is where a lot of these problems start. We really need to sort out the National Health Service and social care. They are part of the problem and the solution. This so-called reform sticks a piece of sticking plaster over it, pats it on the head and says, “Now leave it to Auntie”. Sadly, Auntie has not a clue.

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

My Lords, I thank both noble Lords for their contributions. I thank the noble Baroness, Lady Stedman-Scott, for the tone of her contribution. She and I may sometimes disagree on analysis and solutions, but we both recognise the system is flawed and want to find ways of making it better, and I am grateful to her for that.

Before I turn to the specifics that were raised, it is worth reiterating the principles behind our reform, because that is what the noble Baroness challenged me to do—to have a principles or evidence-based approach to reform. Our principles are quite simple: those who can work should work; if you need help into work, the Government should support you; if you cannot work, you should be supported to live with dignity.

The Universal Credit and Personal Independence Payment Bill sets out to do two things: to reform PIP and to reform universal credit. As was announced yesterday, and I suspect most noble Lords will know by now, we will now be looking at PIP in the round, in the context of the review being led by my right honourable friend Stephen Timms. I will return to that and the question from the noble Lord in a moment.

The rest of the Bill makes crucial changes to universal credit, so our social security system can offer the right incentives and support to sick and disabled people. It introduces the first-ever sustained, above-inflation rise to the universal credit standard allowance. According to the IFS, that is the largest permanent, real-terms increase in the headline rate of out-of-work benefit in decades. It ensures that those with severe, life-long health conditions, who we do not ever expect to work, will never be reassessed.

The changes in the Bill are part of a wider package of reforms, including our right to try guarantee, scrapping the work capability assessment and our massive investment in employment support for sick and disabled people.

I absolutely agree with the noble Baroness, Lady Stedman-Scott, that this cannot be done top-down. We are working with councils, regional authorities and mayors to try and build these from the bottom up by getting local “Get Britain working” plans and devolving support working in partnership. What helps you to get to work in Liverpool is not the same as in Lincoln or in parts of Cornwall. We are doing that and making sure that it works.

However, this is going to be a record amount of money: across this Parliament, a total of £3.8 billion of health and disability support. This remains an important piece of legislation, and we all seem to agree that the current system is clearly in need of reform. But the truth is that welfare reform is never easy. If I ever thought it was, I now know that it definitely never is. It is perhaps particularly hard for Labour, because a lot of my colleagues care passionately about this and it really matters. I know other colleagues do as well.

We always said that we would listen: to disabled people and their organisations, and to MPs, and no one can say we have not been listening. We have definitely listened. Having listened carefully, we have tabled amendments in the other place to remove Clause 5 from the Bill, and the corresponding provisions for Northern Ireland. That means that we will move straight to the wider PIP review, mentioned by the noble Lord, Lord Palmer, and will let that conclude before we make changes to PIP.

The noble Baroness, Lady Stedman-Scott, mentioned how we got here. The reality is that we are doing the difficult work required to fix a fundamentally broken system. I know she knows how hard this is. She is right—we do not want to throw bottles at each other—but her Government invented PIP to try to solve the problems with DLA, and now PIP has the problems that we see here. Having inherited a system that is not working, we have to try to find a way to make it work properly.

We also have to do something about proper employment support. One of the many things the last Labour Government did, through measures such as the New Deal for Disabled People, was narrow the disability gap. I am sorry to say that when the coalition came in and scrapped it, the gap began to widen and has never really shifted since. We have to give good, proper investment in employment support of the kind that I know the noble Baroness has experience of.

I think one speaker asked about the fiscal consequences. Obviously, we are well aware that these changes will have a cost, but the cost will be certified by the OBR in the usual way. However, the real prize here is long-term reform. It is long-term reform that will start to shift the dial on the way we approach social security.

To answer the questions about the Timms review, it will be led by my right honourable friend the Minister for Social Security and Disability, and it will be co-produced with disabled people, disability charities, other experts and parliamentarians. We have already published the terms of reference. The work begins now and I hope that reassures the noble Lord about the work that it will be doing. Our aim is to get a new assessment that commands the widest support possible so that we can ensure that PIP is fit for the future in a changing world.

While the work begins on the Timms review, the Bill presses ahead with important reforms to universal credit. Crucially, it addresses the disincentives to work that have been allowed to build up. Because the previous Government froze the standard allowance repeatedly, we ended up in a situation where someone who gets the health top-up in universal credit gets more than double what a single person just getting the standard allowance gets. That traps some people in the system entirely unnecessarily by incentivising people to define themselves as incapable of work. Our permanent real-terms increase to the standard allowance will mean nearly 4 million households getting an income boost worth around £725 a year by 2029-30 for someone aged 25 or over. That is balanced by a reduction in the health top-up for new health claims from next April.

I also listen because some people expressed concerns about our original proposal of a freeze to the health top-up for existing claimants. We are committed now, in another change, to ensure that the combined value of the standard allowance and the health top-up rises at least in line with inflation for existing claimants. That will protect their income and these benefits in real terms every year for the rest of this Parliament—that is, for existing claimants. That will also apply to those who have severe lifelong conditions who we do not expect ever to be able to work, and those near the end of life. We think that strikes the right and fair balance.

I have probably answered most of the questions. To make a general point, however, we have just closed a consultation on a Green Paper. There is a lot of reform going on. We have this Bill, with all the universal credit measures still here, but with the Timms review looking at PIP, which will be engaging and co-producing it with disability organisations and other experts. There is also a big consultation out on major changes in this space. But for all of us, the country needs us to get this right. We know we need to get it right. I am one of those people in politics who thinks listening is a good thing. If you listen and you want to change your mind, you change what you are going to do. That is what we have done. I think we are doing a better job and I commend this Statement to the House.

Public Authorities (Fraud, Error and Recovery) Bill

Lord Palmer of Childs Hill Excerpts

Committee stage
Wednesday 25th June 2025 Grand Committee

[Baroness Finn (Con)]

My Lords, many congratulations to the noble Viscount on the birth of his granddaughter.

Amendment 122D, in my name and that of my noble friend Lord Younger, touches on a principle that we have returned to time and again during Committee: that those institutions asked to play a role in the delivery of public policy must be treated not as passive instruments but as valued and active partners.

Clause 95, as currently drafted, enables the Secretary of State to recover costs from those individuals committing wrongdoing or fraud that the Secretary of State “reasonably incurs” in the exercise of the powers set out in this legislation. That is both logical and fair. However, what it does not do, and what our amendment seeks to rectify, is recognise that banks, too, will incur costs in the process of complying with the obligations imposed by this Bill. Those obligations are not trivial. Banks will be expected to carry out eligibility checks, respond to requests for information and facilitate direct deduction orders. These are significant operational functions, requiring staff time, system changes and compliance resources. The financial and logistical burden on institutions, particularly smaller and mid-tier banks, should not be underestimated.

We have heard repeatedly throughout Committee that the effective functioning of this legislation depends on strong co-operation between government and the financial sector. If that is true—we believe that it is, notably from what we have heard from the Government so far on the test and learn exercises—we must be honest about the responsibilities that we are placing on banks and we must be clear that those responsibilities come with real-world costs.

We understand that this arrangement between the DWP and the banks is new and, as such, it is unclear how many cases there may be to deal with. It may be a huge number, or it may end up being fairly minimal. Of course, we hope for the latter. More likely, this is an exercise of checking and counter-checking between the banks and the DWP in order to ascertain clarity of wrongdoing or not. It therefore begs the question of resources and costs. Can the Minister give us some estimates of the likely number of cases involved? Who will pay for the costs of managing these cases? If it is the banks, what discussions, if any, have taken place on the amounts? Is there an understanding of what happens if the costs become too great a burden on the banking sector? Is there some agreement that, if costs exceed a certain amount, the DWP—ie the taxpayer—will pay the excess?

We do not think that it is good enough to say that banks must comply. We must also ask how they can comply and what support or protections the Government are willing to offer them in return. Amendment 122D would provide a simple but important clarification: that banks, as defined in this Bill, are entitled to recover the costs that they incur as part of fulfilling their legal obligations. This is not about profit; it is about fairness, sustainability, and operational feasibility.

Let us not forget that we are asking private institutions to assist in the delivery of public sector enforcement mechanisms. That is a departure from many traditional roles and it is only right that we recognise the cost implications of that shift. We would not expect public bodies to take on additional responsibilities without due consideration of the costs involved, nor should we expect that of banks. They are not merely pipelines through which government powers are to be channelled. They are regulated institutions, fundamental to our economy, whose engagement in this regime must be underpinned by a mutual understanding of expectations, limits and recompense.

We have rightly asked for high standards of data protection, compliance and verification. We have spoken about building confidence in the system and ensuring proportionality in the exercise of power. That confidence must also apply to those partners on whom the success of the Bill relies. If we expect efficiency, we must also provide clarity, including clarity about the financial impact of compliance.

The other significant and important point to raise here is the impact of opportunity costs. We know that the banks will dedicate staff, time and resources to undertake these tasks, which will prevent them from undertaking core duties that would otherwise make them money. We cannot just focus on operational costs; we need to focus on the benefits that banks will miss out on as a result of complying with the Bill. Can the Minister therefore set out to the Committee how the Government will calculate the opportunity cost? Can she confirm that these costs will be determined in partnership with banks and where the money for the reimbursement of these opportunity costs will come from?

In the spirit of pragmatism and partnership, I urge the Minister to consider how the principles of our amendment could be taken forward. It seeks a small change to the text but would be an important signal to those we rely on to help deliver the objectives of the Bill that they will be supported, not simply directed. We all want to see this legislation succeed; we have made that point many times. For that to happen, those on whom it places demands must have confidence that they are part of a fair, transparent and properly resourced framework. Amendment 122D would help us move one step closer to that goal. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendment 122D, tabled by the noble Viscount, Lord Younger of Leckie, and moved and spoken to so fully by the noble Baroness, Lady Finn, would permit banks to recover the costs that they incur, as defined in the Bill. The principle behind the amendment is to recognise that, while banks play an essential role in supporting public authorities to identify and recover funds lost through fraud or error, the operational and administrative demands placed on them can be significant. Allowing banks to recover reasonable costs would ensure that the burden of implementing these public service functions does not fall unfairly on private institutions and would support a collaborative approach between the Government and the financial sector.

However, it is important to ensure that any cost-recovery mechanism is transparent, proportionate—how often we keep using that word—and subject to appropriate oversight. Questions remain about how the “reasonable costs” mentioned in the Explanatory Notes for Clause 95 will be defined, who will determine the quantum that can be recovered and what safeguards will be in place to protect individuals from excessive fees. There must be a clear framework to prevent costs from undermining the overall financial benefit to the taxpayer or placing undue hardship on those subject to deduction orders.

As the Bill progresses, it will be vital to clarify these details—I hope the Minister will help do that—ideally through the code of practice and ongoing consultations with stakeholders to maintain fairness, accountability and public confidence in the system. I await the Minister’s response, to fill the gaps that the noble Baroness, Lady Finn, and I have outlined, particularly what “reasonable costs” is meant to mean.

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

My Lords, I thank the noble Baroness, Lady Finn, for introducing Amendment 122D and the noble Lord, Lord Palmer, for his contribution. It is worth saying at the outset that the noble Baroness’s comments ran quite wide, encompassing some of the broader issues that we discussed in previous debates on the Bill.

New Section 80F, inserted by Clause 95, allows any reasonable costs incurred by DWP in recovering debt to be added to the total debt owed, and therefore for them to be collected through any means of recovery available to DWP. As drafted, the amendment would permit the Secretary of State, but not the bank, to recover any costs incurred by the bank as though it were part of the debt owed to DWP through methods of recovery such as deductions from benefit, et cetera, but without any requirement to pass any money recovered to the bank. I realise how hard it is to draft amendments in opposition—I have been there—so I believe it is possible that the intention of the amendment was to allow a bank only to recover any cost it had incurred when complying with its obligation under Schedule 5, so I shall address the amendment on the assumption that was the intention.

Officials have engaged extensively with key representatives from the finance sector, including UK Finance, and we are seeking to work collaboratively to ensure that the legislation enables banks reasonably to meet their legislative obligations without causing problematic burdens for them or unintended consequences for individuals. Indeed, changes have already been made to the Bill based on that engagement and feedback.

I agree that banks should be able to recover administrative costs associated with implementing a direct deduction order on behalf of DWP. These costs should be reasonable, providing some protection to debtors and consistent with existing legislation. In line with existing Child Maintenance Service recovery regulations, therefore, DWP will set the maximum limits for costs associated with implementing regular and lump sum deduction orders that banks can recover. Paragraph 24 of Schedule 5 further requires DWP to consult persons who represent the interests of the bank and any other appropriate persons in making the regulations.

On safeguards, banks are able to deduct any reasonable costs they incur when complying with a direct deduction order. In practice, that prevents a bank charging the debtor more than its costs. Paragraph 24 of Schedule 5 allows us to make provision about the administrative charges that can be imposed by banks. That power will be used to introduce a cap on the charges that can be imposed under this clause that can be adjusted in line with inflation to ensure that the charges remain reasonable at all times. I think we made that clear.

The code of practice spells out specifically what we will do in this area. I assure the noble Lord that we are discussing with the banks what is reasonable. This works in other areas. The code of practice says that banks may deduct any reasonable costs and that the costs that they can deduct will be limited by legislation and taken into consideration when the terms of the deduction order are done, to ensure that it remains affordable. I hope that, with those reassurances, the noble Baroness will feel able to withdraw her amendment.

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[Lord Palmer of Childs Hill (LD)]

My Lords, I support Amendment 123, tabled by the noble Baroness, Lady Lister of Burtersett, and others, which would bring the test for recovery of universal credit overpayments caused by official error into line with Regulation 100(2) of the Housing Benefit Regulations 2006.

At present, the Department for Work and Pensions is empowered to recover universal credit overpayments even when they result from its own mistakes—a policy introduced with the Welfare Reform Act 2012. This approach marks a significant departure from the previous position on legacy benefits, where overpayments arising from official error could be recovered only if the claimant could reasonably have been expected to realise that there was an overpayment. The current system places an unfair burden on claimants, many of whom have no way of knowing that an error has occurred yet are still liable for repayment. I am grateful for the legal expertise of the noble Lord, Lord Verdirame, on this, showing that it is a complicated matter, with many legal precedents that I trust the Minister will take into account.

The evidence we have shows that the recovery of official-error overpayments can have severe financial and psychological impacts, with some individuals facing destitution as a result of sudden deductions from their benefits. The amendment would restore a vital safeguard by ensuring that only those overpayments that a claimant could reasonably have been expected to notice are recoverable, aligning universal credit with the principles of fairness and justice that underlie our social security system. This change would not prevent the recovery of overpayments where there has been claimant error or fraud but would, I hope, protect honest claimants from being penalised for mistakes entirely out of their control.

Many people do not look too closely at the moneys that come into their bank or Post Office account. They receive it and they think it is what they should receive. Sometimes it is not enough and sometimes, as we are discussing here, it might be too much. But most people take it and use it. We used to have this problem with council house rents, where the benefits were paid to the householder and they sometimes had to make a choice: did they buy bread and food or pay the rent? They used it for bread and food and did not have the money for rent. The rents started to be paid direct to the local authority or housing association, in order to mitigate that. It tends to prove the fact that people do not notice: they take what is needed and receive it. I urge noble Lords to support this amendment, to ensure that the system is both compassionate and just. I commend it to the Committee.

[Viscount Younger of Leckie (Con)]

My Lords, in speaking for the first time today, I take this opportunity to offer my congratulations to the Deputy Chairman of Committees, the noble Viscount, Lord Stansgate, on the arrival of his grandchild; I think he had indicated that he or she had arrived. It is interesting to reflect that when we started off on day one of Committee there was either a wedding or a honeymoon or both— I forget—and this allows me to declare a small interest of my own, which is that my daughter is due to give birth in two weeks.

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Moved by

[Lord Palmer of Childs Hill]

124: After Clause 96, insert the following new Clause—
“Recovery of overpayments of Carer’s AllowanceThe Secretary of State may not exercise any of the powers of recovery under this Act in relation to a person who has received an overpayment of Carer’s Allowance until such time as—(a) the Secretary of State has commissioned an independent review of the overpayment of Carer's Allowance;(b) the review has concluded its inquiry and submitted a report containing recommendations to the Secretary of State;(c) the Secretary of State has laid the report of the independent review before Parliament;(d) the Secretary of State has implemented the recommendations of the independent review.”Member’s explanatory statement
This new clause would delay any payments being taken from people who the Government may think owe repayments on Carer’s Allowance until the independent review into Carer’s Allowance overpayments has been published and fully implemented.

[Lord Palmer of Childs Hill (LD)]

My congratulations to everybody. I shall speak also to Amendment 127 in my name. These amendments seek to delay any payments being taken from carers whom the Government believe owe repayments on carer’s allowance, something I have spoken about a lot during this Committee, until the independent review into carer’s allowance overpayments has been published and, crucially, fully implemented. It is a matter of justice and basic fairness that we do not penalise carers, who are the unsung heroes who support our most vulnerable, while the very system that created those overpayments is under independent scrutiny.

We know from recent figures that at least £357 million has been overpaid since 2019, with many carers accruing large debts that they were not aware of through no fault of their own, often because the Department for Work and Pensions failed to act swiftly on overpayment alerts or to communicate effectively with carers about their obligations. The independent review, commissioned by the Secretary of State and led by Liz Sayce, is tasked with uncovering how those overpayments occurred, how to support those affected and how to prevent such distressing situations in the future. Until we have the benefit of its findings and recommendations, it would be unconscionable to proceed with debt recovery that would push already struggling carers into future hardship.

Furthermore, Amendment 127 proposes that the implementation of what will then be the Act be delayed until the review’s findings are published and acted upon. This is a call not for indefinite inaction but for responsible and evidence-based law-making. The Government’s decision to commission this review is a recognition of the serious flaws in the current system, whether it is just one payment or a mass of payments, as we discussed on the previous amendment, and the real harm caused to carers, many of whom breached the earnings limit by only a small amount yet face life-changing debts. To proceed with the Act before we have learned the lessons from this debacle risks repeating the same mistakes and undermining public trust. We owe it to carers and to the integrity of our social security system to ensure that legislative changes are informed by a full understanding of the problem and a clear plan for preventing its recurrence. Let us show carers the respect they deserve by pausing, listening and acting on the independent review before we ask them to pay a penny more. I beg to move.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise extremely briefly and apologise to the noble Baroness, Lady Lister, that I could not be in the previous group as I was in the Chamber. I will take seconds to intervene in the interesting debate between the noble Baroness and the noble Viscount to say that, of course, if you have a universal basic income, that is an extremely simple system to administer that would not create any of these kinds of problems.

Anyway, I rise with great pleasure to follow the noble Lord, Lord Palmer of Childs Hill, and to back in particular Amendment 124, although I will be interested to hear the Minister’s response to Amendment 127. I felt I had to speak because I raised at some length in earlier discussions the case of Nicola Green. That is one case, but overall the Government have been clawing back £357 million. Hundreds of people have acquired criminal records in what I think most people would agree are entirely unjust circumstances, whatever the detail of the law. Some people now face debts of up to £20,000 or more.

This amendment—waiting until we have the review and not doing more damage to individuals’ lives and to the reputations of the Government and the Department for Work and Pensions—is a really simple, practical measure, and I commend the noble Lord, Lord Palmer, for doing this and for powerfully presenting his case. I also align myself very much with his tributes to unpaid family carers, who are doing so much in our society for what are, on a week-to-week basis, derisory sums of money for an incredible amount of labour.

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[Baroness Sherlock (Lab)]

My Lords, I am grateful to noble Lords for their contributions. Before I get stuck in, I say two things. First, I cannot believe that I failed to congratulate both the grandparents of old and the soon-to-be grandparents. I share in the joy that has arrived and is coming. I also take a moment to pay tribute to the millions of unpaid carers across the country—grandparents and many other kinds. This Government value carers very highly and we recognise the vital and valuable contribution that they make every day.

I turn to the carer’s allowance. When we came into government, it became clear that there were far too many cases where hard-working carers, on carer’s allowance, had been left with large overpayments to be repaid—sometimes worth thousands of pounds. As a result, the Secretary of State acted to commission an independent review of earnings-related overpayments of carer’s allowance to understand exactly what had gone wrong and to make the necessary improvements for the future. The review is well under way; in answer to my noble friend, we expect to receive the report from the independent review in the near future, possibly late summer—that is one of those nice, flexible, government seasons. I hope that it will be before we are all shivering in this Room rather than sweltering. We will publish the report and our initial response as soon as is practicable thereafter.

The Government set up the review because we are determined to deal with the problems that the system has created for carers. The Secretary of State is eagerly awaiting the report, and she will give the closest consideration to every recommendation. However, as the noble Viscount pointed out, no Government could commit in advance to implementing every recommendation of an independent review sight unseen. I suspect that, if I had announced today that I would be very happy to commit to every recommendation, the Committee might raise a sceptical eyebrow about the genuine independence of the review. In fact, I do not know what the review will say and therefore I am in no position to say what is going to happen or what the Government will do about it. Having gone to the trouble of commissioning it and picking somebody independent to do it—Liz Sayce—the Secretary of State will manifestly look carefully at what comes out.

To stop the use of the new debt recovery powers on any overpayments of carer’s allowance—as Amendment 124 would do—until each and every recommendation had been accepted and implemented would not be proportionate. Maybe I could reassure the Committee that the Government have not been treading water while waiting for the review; we have already taken steps to address the problems that carers have been experiencing. In response to the noble Viscount, letters are sent out with prominent statements about the need to let the DWP know about changes in circumstances, and we send texts to people following alerts about earnings payments from HMRC, again to encourage them to do that.

We have basically been reviewing all 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 might affect their carer’s allowance. Crucially, we introduced the largest increase in the earnings limit since carer’s allowance was introduced in 1976. The earnings limit is now 16 hours’ work at the national living wage, and over 60,000 more people will be able to receive carer’s allowance between 2025-26 and 2029-30.

There are safeguards and protections for those with overpayments, both in existing law and in the Bill, including review and appeal rights, affordable repayment plans and, in exceptional cases, waivers of the debt. Those safeguards ensure that all debtors, not just those with debts from claiming carer’s allowance, are protected.

I remind noble Lords that we are talking specifically about these debt recovery powers. As I have gone on about extensively, these are powers of last resort to be used only with debtors who are not on benefit, including carer’s allowance, and not on PAYE employment. They are to be used only with those who receive income via other means and who can afford to repay, but choose not to do so. This amendment would put people in that category in a better position than those who are on benefits or on PAYE.

Amendment 127, again because I cannot commit in advance to implementing the recommendations of the review, would be even more disproportionate, because it would delay the entire Bill from coming into force until that had happened. Given the benefits that the Bill is expected to deliver, not just in the social security system but in the public sector more widely, that cannot be proportionate. We know that billions of pounds are being lost to public sector fraud; delaying this Act coming into force would put at risk an estimated £1.5 billion of benefits over the next five years, as scored by the OBR. This would place pressure on the Government’s fiscal position and on taxpayers, who deserve to have the confidence that money is being spent by the Government reaching out to those who are entitled to it. The Bill introduces new and important safeguards, including independent oversight and new rights of review and appeal to ensure the proportionate and effective use of the powers. I believe that these protections are sufficient and that we do not need to wait for the outcome of the review simply to proceed with the rest of the Bill.

I also make the point that some of the measures in the Bill are crucial for preventing the types of errors that we found in relation to carer’s allowance. For example, the eligibility verification measure, although we are not proposing to use it in relation to carer’s allowance, will improve DWP’s access to important data to help verify entitlement, ensure that payments of the benefits it covers are correct, and prevent the build-up of large overpayments in those three key benefits. It is important that the DWP is equipped with the right tools.

I will comment on a few questions that were raised. The noble Lord, Lord Vaux, as so often, made an absolutely crucial point: this is a very unusual benefit. It is a cliff-edge benefit and, therefore, if somebody goes over it even slightly, for example on earnings, it can make a very significant overpayment appear. As the Chancellor said at the Budget, we do need to look at the current cliff-edge earnings rules. It might be that a taper, for example, could incentivise unpaid carers to do some work, and reduce the risk of significant overpayments. However, I need to manage expectations. Introducing a taper into carer’s allowance is not without its challenges and could complicate quite a straightforward benefit significantly. It would need a significant technical rebuild. The DWP has begun to do some scoping work to see whether an earnings taper in carer’s allowance might be a feasible option in the longer term. But that could take some years to come through: I ought to be clear about that.

The noble Viscount, Lord Younger, made some important points about understanding that there is a range of types of error that have arisen in relation to carer’s allowance. I remind the Committee that there is no recovery from carer’s allowance of official error: we are not talking about what is classed as official error. These are errors. I will have to look at the record, but it is possible that the figure that the noble Lord, Lord Palmer, mentioned related not just to overpayments about earnings but to all the overpayments in carer’s allowance. Perhaps he could clarify that at the end and, if I am wrong, I apologise and I will clarify that to him.

The reason that is important to clarify is that, looking back, from 2018-19 to 2023-24, there was a fluctuation in the number of overpayments. The values varied. The main cause of carer’s allowance overpayments is a claimant having earnings that exceed the permitted limit. In 2023-24, the causes of new overpayment cases referred to our debt management were as follows: 57% of cases related to earnings, which was a lower proportion than previously, when it was nearly 60%; 23.5% of cases were caused by a claimant who was not providing care any more; 3.1% were caused by breaks in care; 15.8% were for other reasons, which could be that the claimant was in prison, was in full-time education, was getting another benefit or had moved abroad, or the person being cared for had died. There was a range of reasons. So there is a range of reasons why somebody may be overpaid, not all of which are related to earnings.

The job of the Government is to use the benefits of the independent review and the insights it will give us to try to make sure that we make it as easy as possible for claimants to tell us when changes happen, so they do not make those mistakes. Also, we will look carefully at what other recommendations are made and we will do whatever we can that seems reasonable within the powers and resources we have to see how we can make this better. We have also made a number of steps already to try to improve things, including by sending out messages, communicating and raising that ceiling for earnings in the first place. Given all that, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Palmer of Childs Hill (LD)]

My Lords, that was a very detailed debate, and a challenging one in some ways. I say to the Minister, from my time in local government, going round to people who were in council or housing association properties, that I often saw behind the clock the unopened envelopes from HMRC or the DWP. There is no excuse for people just ignoring it, but that is the real world. People do not always open envelopes that might have unfortunate things in them. As a chartered accountant, this is anathema to me, but the fact is that that was the reality of my 28 years on a local council. It was the case: people were not getting and opening the communication, even though it was properly given.

The Minister spoke about the taper. I can probably count on one hand how many recipients understand the taper. They know that they have received or not received a certain amount. The idea that everyone understands the taper is ridiculous.

What these amendments seek to do is purely to ensure that the completion of the review is done as soon as possible. I really do mean as soon as possible. If there is a delay in doing the review, I ask for that delay to be given to the claimants as well. Why should they not have a delay in dealing with it, if the Government cannot get their review together? Delays work both ways.

The Minister spoke about the review in the near future. The near future is so nebulous when people are being bullied on overpayments. The Minister asks about the £357 million. I honestly cannot give you the proper answer other than that I was given that figure as the overpayments since 2019. It is not immediate but it builds up like interest on a loan builds up.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I will put this amendment in the context of the discussion on the previous group. The noble Lord, Lord Palmer, and the Minister have been telling us regularly that this is all about people who do not engage. As the noble Lord said, he has seen people with a stack of envelopes behind the cheese board or whatever, but I have met many disabled people, particularly because of the demonstrations I have been on, for whom the arrival of the postman every day is a point of fear. People are absolutely terrified and are used to never receiving good news from the DWP. We have to acknowledge the context in which people are not engaging; it may be more than their mental health can take. We have to look at all these amendments in that context.

I warn noble Lords with subsequent amendments that I do not expect this group to take long, because we have already canvassed these issues extensively in terms of the use of algorithms and whether there is a human in the loop—to borrow terminology from another area of technology. Amendment 124A moves towards overpayments recovered from an individual. No final decision shall be considered valid or acted upon unless there is—the terminology here is important—

“meaningful and documented human oversight”,

and a human decision-maker has reviewed, understood and taken responsibility for the final determination. In some ways, this picks up the points made earlier by the noble Baroness, Lady Fox, about there having to be a responsible person in the DWP who can be held to account.

Under proposed new subsection (b), the recipient must have been

“provided with an individual explanation of the relevant decision in their case, including a clear explanation of how an automated system has impacted the decision”.

People need to know that there is this machine in the loop, so they at least understand what is happening to them, have a chance to make representations and are told how they can appeal if they want to appeal. We have canvassed these issues extensively. The amendment particularly addresses the situation that we saw in Australia with the enormous Robodebt scandal, with money being taken off people by a totally automated system. Many people knew that there were issues at the time and the Government in Australia kept being warned that this was going to be a problem. It was an unmitigated disaster, for which apologies had to be made, heads rolled and so on. This amendment is a sensible way in which to protect benefit recipients, as well as the Government from getting themselves tangled into things that they really do not want to get tangled in.

Finally, I suspect the Minister may say, “Well, this is going to happen anyway” but, if that is the case, why not put it into the Bill? I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I will briefly address Amendment 124A, which seeks

“to secure fair administrative processes and meaningful human oversight”—

that is the point—

“for benefits recipients when … automated systems”

are used for decision-making. We have seen those problems with the Post Office and it happens all over.

The increasing adoption of algorithmic and automated decision-making within the public sector offers clear benefits in efficiency and consistency, but it also introduces significant risks, particularly around transparency, bias and the potential for unfair outcomes.

The Public Authority Algorithmic and Automated Decision-Making Systems Bill—that is a mouthful, is not it?—aims to regulate the use of these technologies, requiring impact assessments and transparency standards to ensure that decisions affecting individuals are accountable and subject to appropriate scrutiny. Amendment 124A aligns with those objectives by emphasising the need, as the noble Baroness said, for “human oversight”, especially where decisions have substantial effects on people’s lives.

It is essential that, when we embrace innovative technologies, we do not lose sight of the fundamental principles of fairness and accountability in public administration. Automated systems may be deployed in a way that mitigates risks to individuals and society and provides clear avenues for challenge and redress when errors occur. This amendment reinforces the importance of maintaining human involvement in critical decision-making processes, and ensuring that the rights of benefit recipients are protected and that public confidence in these systems is upheld. By supporting such measures, we can harness the advantages of automation while safeguarding against unintended consequences. I support this amendment.

[Viscount Younger of Leckie (Con)]

My Lords, there is a rather gloomy atmosphere here, but I am not quite sure why. My remarks will be relatively short. I find myself in a very unusual position—namely, I offer strong support for Amendment 124A tabled by the noble Baroness, Lady Bennett of Manor Castle. I do so not only because it incorporates vital safeguards but because it speaks to a principle that these Benches have highlighted and pressed for throughout Committee: that powerful tools must be matched by proper protections. I think we all agree with that.

This amendment could not be timelier. The use of artificial intelligence and automated systems is rapidly expanding across Whitehall, with departments increasingly deploying these tools to assist them in undertaking administrative tasks. There are clear benefits to this: efficiency, consistency and the ability to process large volumes of data quickly. AI can be a force multiplier. It can relieve overstretched teams and streamline basic tasks—I saw that when I was in post in the department—but it can never be a substitute for fair and human decision-making where individuals’ rights, entitlements and welfare are concerned.

The temptation to lean too heavily on automation is very real, particularly in areas such as social security where volumes are high and budgets are stretched. We have sought to highlight several times to the Government the additional workload and expense that we believe the provisions in this Bill will introduce for the department. Once we incorporate the need to consider additional needs, disabilities and those at risk of coercion—important safeguards that noble Lords across the Committee have supported—we start to face a massive workload. It is feasible, in light of this, that AI will increasingly be incorporated as part of this process, but we must ensure that this temptation is tempered by caution, principle and foresight. This amendment does just that; it makes clear that automation can assist, but not replace, the human judgment at the heart of a fair welfare system. Let there be light.

We are not legislating simply for this year, or even this Parliament. We are legislating for a system that must hold up under future Governments, under future pressures and in a future where Al capabilities are likely to expand even further. In just the past couple of years, we have all seen how dramatically these technologies have entered into our lives, often with little warning and even less scrutiny. The safeguards that we write into this Bill now are therefore not merely reactive, they are pre-emptive, and they are essential, a fact that groups such as JUSTICE have recognised and highlighted to us. That is why we have tabled our amendment with the same intent and near-identical wording. It is a proposal that we support wholeheartedly, and I commend the noble Baroness for bringing it forward at this stage.

The amendment would require four simple, yet fundamental things: first, that there is meaningful human involvement in any decision-making process that includes an automated element; secondly, that the individual affected receives an individual explanation, including how automation impacted their case; thirdly, that they are given a clear opportunity to make representations; and, fourthly, that they are provided with accessible information on how to challenge the decision. These are not high bars; they are the basic hallmarks of a just and humane administrative process.

There are also some important questions around accountability here. If there are no controls in the Bill on how AI is used, there is nothing, it seems to me, that would stop the department introducing this further as a matter of operational efficiency. However, this would have massive implications for the review process, which we have rightly discussed at length during Committee. If a decision is even partially informed by AI, who is held accountable? Could the civil servant in question blame AI instead of taking responsibility?

These are serious questions, and without proper safeguards in the Bill, we have no assurance from the Government that we could not, in the very near future, have a situation in which a person is attempting to review a case in which a mistake was made where the fault lies at the feet of a computer program, to put it bluntly. If we have clear human involvement in this process—guaranteed, not just promised—at least there is a person included in determining the final decision who can be held to account. This is a vital safeguard upon which the entire review mechanism would rest.

I can anticipate the response from the Minister: she will say that a human will always be at the end of a decision. However, it is not future-proofed, and I urge her to reflect on the long-term value of this amendment and to recognise that it would strengthen the Bill not only for today, but for the years to come. If the Minister can demonstrate to the Committee that these concerns will be protected against not only now, but in perpetuity—which is, of course, the effect of legislation when passed—I would be most grateful. However, from my perspective, I fear the Minister would struggle to meet this challenge because of how the Bill is drafted. I therefore believe there would be real value in the Government adopting this amendment to make sure that they, and the people they serve, are protected not only now, but into the future.

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In thinking that the issue of sickfluencers is important, it is almost as though the Opposition have picked up on some meme. Sickfluencers are a trivial, unimportant part of this debate. If the Opposition would like to know what is really influencing more and more people to think that they need welfare when perhaps they do not and should not have it, they should consider these broader cultural trends. I would be much more sympathetic if they went down that path. In case anyone thought that was a Second Reading speech, this is the last time I will speak, but I have wanted to get that off my chest for a while.

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendments 125A and 129A relate to the prevention of fraud against public authorities, specifically by seeking to make it an explicit offence to facilitate fraud through the dissemination of relevant information online. I welcome these amendments because they deal with deliberate fraud, rather than chasing carers for errors. That is a difference that I would like to accentuate.

The Bill is designed to safeguard public money by reducing public sector fraud, error and debt, introducing new powers for the Public Sector Fraud Authority and enhancing the DWP’s ability to tackle fraud in the social security system. Amendment 125A seeks to strengthen this framework by targeting those who enable fraud through online channels, reflecting the reality that much fraudulent activity today is co-ordinated or facilitated via the internet. By explicitly criminalising the dissemination of information intended to assist fraud, the amendment aims to deter would-be facilitators and close a loophole that modern fraudsters increasingly exploit.

It is important, however, that such measures are balanced with appropriate safeguards to ensure that legitimate online activity is not inadvertently criminalised and that enforcement is both proportionate and effective. The Bill already provides for oversight, reporting mechanisms and independent review to ensure that the new powers are used appropriately. As we consider these amendments, we must ensure that our legislative response to online facilitation of fraud is robust enough to protect public funds while also safeguarding civil liberties and maintaining public confidence in the fairness of our legal system. In this way, I hope that the Bill and its amendments can deliver the Government’s commitment, which I believe they have, to tackle fraud without overreaching or undermining the rights of individuals and organisations operating lawfully online.

This is an important part of our discussions today because we are talking about deliberate fraud in the modern world, including online fraud, and we have had indications of personal situations from other speakers. This is about how things are moving in the digital age. These amendments are an important part of trying to tackle that, and I support them.

[Lord Verdirame (Non-Afl)]

My Lords, I was not planning to speak, but I thought I would say a couple of words. This is an important amendment and I support the objective that it is pursuing, although I also agree with the comments by the noble Baroness, Lady Fox, on being careful about using criminal law to deal with much bigger cultural and social problems.

However, the amendment needs some tightening in the subjective element, because at the moment it punishes a wide range of conduct. At one end of the spectrum, a person would commit an offence if they ought reasonably to know that

“the information or guidance provided … will likely be used to enable or encourage another person to obtain, or attempt to obtain, benefits through deception”.

There seems to me a rather loose connection between the person who would be committing the offence and the actual fraud; it is a bit too remote. At the other end of the spectrum, a person would commit an offence

“if they know … that the information or guidance provided … is intended to facilitate dishonest conduct under the Social Security Administration Act 1992”.

That does not strike me as a remote connection between the person whose conduct we would be criminalising and the actual dishonest conduct, so there needs to be a bit of tightening of the subjective element, making sure that it is more narrowly focused than it currently is.

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Moved by

[Lord Palmer of Childs Hill]

126: After Clause 100, insert the following new Clause—
“Impact of Act on people facing financial exclusion(1) The independent person appointed under section 64(1) of this Act (independent review) must carry out an assessment of the impact of this Act on the number of people facing financial exclusion.(2) The independent person must, 12 months after the passing of the Act—(a) prepare a report on the review, and(b) submit the report to the Minister.(3) On receiving a report the Minister must—(a) publish it, and(b) lay a copy before Parliament.”Member’s explanatory statement
This new Clause would look into the impact of the Act on people facing financial exclusion.

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendment 126 would require a thorough assessment of the impact of the Bill on people facing financial exclusion. While the Bill’s intent to safeguard public money and tackle fraud is clear and necessary, we must not overlook the reality that those who are financially excluded are often among the most vulnerable in our society.

Financial exclusion can mean lacking access to basic banking services, credit or affordable financial products, which in turn imposes additional costs and barriers on those least able to bear them. Without a clear understanding of how the Bill’s provisions, such as new powers to access bank account information or recover debts, affect this group, we risk compounding their disadvantage and inadvertently causing hardship to those the social security system is meant to support. An independent assessment as proposed in this amendment would ensure that the implementation of the Bill does not create unintended consequences, and they would indeed be unintended for individuals already struggling to access financial services. It will provide Parliament with vital evidence of whether the Bill’s measures are proportionate and fair and whether additional safeguards or support are required for those at risk of exclusion.

This is about not weakening our response to fraud but ensuring that our actions are just and do not undermine the financial resilience of those who are most at risk of falling through the cracks. I know that the Minister and others mean well, but I urge the Committee to support this amendment, which guarantees that our efforts to protect public funds do not come at the expense of the most financially vulnerable in our communities. It is a balance. We need to be very careful that in stopping fraud we do not push people in vulnerable communities further down into debt and disappointment. I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, I add my support at least to the intentions behind this amendment. We have had a number of discussions in Committee on the potential impact of layering costs and bureaucracy on financial services providers that relate to a particular class of people. In doing that, we risk incentivising those providers to stop providing services to that class of people—in this case, benefit recipients—and thereby potentially increasing financial exclusion.

The intention behind this amendment is right and I support adding it to the scope of the independent reviewer. However, I was not totally clear whether this applies to the whole Bill or just to Part 1, because it refers to the independent reviewer under Clause 64(1), which relates only to Part 1. This should relate to the whole Bill on a cumulative basis, because the cumulative impact of all the elements of this Bill may lead to greater changes in the behaviour of financial services companies than the sum of the individual changes themselves. We need to find a way of making sure that this covers the whole Bill and the cumulative impact.

Secondly, the amendment would require only a one-off report after 12 months. I am not sure that that would be sufficient. If there are impacts, as I fear there could be, they are likely to accumulate over time as banks decide that this is more difficult and therefore stop providing services. As we have talked about before, this is a question not of active debanking but more likely of stopping providing services over time. If we are to review this, we need to look at the impact more periodically—not necessarily annually, but over a longer period. I support the intention, but the amendment may need tweaking as it stands.

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[Lord Palmer of Childs Hill (LD)]

As the Minister said, financial exclusion—people not having access to financial matters—can be dreadful, and that is what the amendment is meant to deal with. In answer to the noble Lord, Lord Vaux, I had sought for it to apply to the whole Bill and not just part of it. We have had a lot of debate, so I beg leave to withdraw the amendment.

Amendment 126 withdrawn.