Public Authorities (Fraud, Error and Recovery) Bill

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Committee stage
Wednesday 25th June 2025 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, I hope to be even more brief. I have sympathy for this amendment, but it is backward-looking, as it relates to situations that have already happened. We also need to stop them happening in the future. These problems have arisen because of a very badly designed benefit. It has a cliff-edge threshold. Cliff-edge thresholds will always be the ones that cause problems, so I really hope that we learn the lessons from this situation and stop applying cliff-edge thresholds to benefits. It does not work and is almost guaranteed to create problems of this nature.

[Viscount Younger of Leckie (Con)]

My Lords, these amendments are well intentioned—an expression I believe I used in the last group, but I mean it. I want to acknowledge from the outset that they speak to a principle that I believe we can all support: the importance of integrating independent expert advice into the policy and operational decisions that we take, especially in areas where there have been clear signs that something has gone wrong.

The ongoing concerns around carer’s allowance overpayments are a case in point. The issue has rightly attracted attention, both inside and outside the House, in particular last year, and I believe that the decision to commission an independent review is right. Where there are systemic weaknesses, whether in communication, process or oversight, they must be identified and addressed, and we should absolutely be willing to listen to expert recommendations to improve how the DWP operates in the future.

I want to recognise the principle behind these amendments: it would be wrong to ignore serious and credible concerns raised by carers, campaigners and the public. They deserve answers and a process that ensures that the mistakes of the past are not repeated. That is why the review matters, and I hope we will all welcome it when it reports. I add to the questions raised earlier about the timing and when it will come.

However, that brings me to the core of my hesitation with these amendments. Although they stem from an entirely legitimate concern, I fear that they may go too far in how they propose to respond to it. Amendment 124, as laid out eloquently by the noble Lord, Lord Palmer, would delay all recovery of carer’s allowance overpayments until the independent review had concluded and, crucially, all its recommendations had been implemented. Amendment 127 goes even further, effectively delaying the entire Act until those recommendations have been acted on.

I am not sure that this is a workable or proportionate course of action. We must remember that the review currently under way is, as I understand it, largely focused—this is an important point—on prevention. It asks how overpayments were allowed to happen in the first place, what lessons can be drawn and how the department can ensure that this does not recur. That is vital, but it is a forward-looking exercise: it is about improving systems going forward, not about deciding whether an overpayment that has already been identified should be recovered. The Minister might want to comment on my assessment of the review.

To put it plainly, if an overpayment has been made and the department has established this through due process, that money is owed to the public purse. The review likely will not and should not change that fundamental fact. We should not conflate the need to prevent future errors with the obligation to recover public funds that have already been incorrectly distributed. We are talking about money that could and should be supporting others in genuine need—to further a theme I made in the last group. While it is essential that recovery processes are fair and humane, it is also important that the recovery duty is not unduly delayed.

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[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.

[Viscount Younger of Leckie (Con)]

My Lords, I support Amendment 126, tabled by the noble Lord, Lord Palmer of Childs Hill, which would require an independent assessment of the impact of this Bill on those at risk of financial exclusion and, crucially, ensure that the findings of that assessment are made public and laid before Parliament.

The principle behind this amendment is very important. We have heard throughout the Committee’s deliberations from me, my noble friend Lady Finn and the noble Lord, Lord Vaux, about the real and pressing risk that some of the measures in this Bill could unintentionally deepen financial exclusion. As we have said several times, there is a risk that banks are made to feel concerned about their customers if they are subject to an EVN, or, as the noble Lord, Lord Vaux, has powerfully expressed previously and now, that banks could be deterred from taking on customers who are in receipt of benefits in the first place as a pre-emptive measure against the additional workload that this could demand.

As we do not yet have clarity from the Government about when and how often notices and demands will be made of banks, everyone is currently in the dark about how much of an additional workload this will mean for financial institutions. It is therefore entirely feasible that these institutions, which are, as we always need to remember, designed and operated to make money, could simply choose not to take the risks, impacting people who have not necessarily done anything wrong in the process. If we empower government to work more closely with banks to verify eligibility, recover funds and issue deductions, we must be equally mindful of the unintended consequences for those who sit at the margins of our financial system.

We appreciate that this amendment does not seek to obstruct or weaken the Bill. Quite the opposite—it offers the Government a constructive, concrete mechanism for assessing whether our enforcement framework is functioning in a way that is fair, proportionate and inclusive. This is an important measure, and I am sure that noble Lords across the Committee who have raised concerns about this issue will be somewhat reassured if the Government commit to undertaking a review as set out in this amendment.

We have heard Ministers reassure us that these powers will be used carefully and that the risk of harm is low. This amendment provides an opportunity to put those assurances to the test—not through speculation, but through evidence. Twelve months after this Bill is enacted, the independent reviewer would be tasked with producing a report examining the extent to which the measures we have passed are having an adverse impact on those already struggling to access or maintain financial stability.

In conclusion, this is not a burdensome ask; it is a safeguard. It would ensure that, as we work to strengthen our systems against fraud, we do not inadvertently erect new barriers for those who are financially vulnerable already. It would give the House and the other place the opportunity to revisit and respond to those findings, if and when action is needed. I therefore urge the Minister to consider this proposal seriously and to work with colleagues to ensure that the fight against fraud does not come at the cost of fairness or financial exclusion.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Committee stage
Monday 16th June 2025 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, I have Amendment 89ZA in this group—I still do not understand the numbering system that the Public Bill Office uses.

Before I move on to that, I want to make a couple of comments on the two amendments that the noble Baroness, Lady Fox, just raised. I have to say that I am a bit cautious about Amendment 82, because if you tell everybody what the eligibility indications are, it becomes very easy to avoid them. There is also a massive, gaping loophole in the Bill, which is that it covers only one bank at a time. I do not know—I would be quite interested to understand from the noble Baroness—whether, having received data from individual banks, the DWP will be amalgamating and therefore will be able to track the sort of concept that, if you have £8,000 in this bank account and £8,000 in that bank account, that puts you up to the £16,000 that would trigger the eligibility indicator. But there is a gaping hole there and, if you publish everything you are looking for, it makes it so much easier to get around it. So I am a little cautious about that one.

I am much more sympathetic to at least the spirit behind Amendment 88. We had a long debate the other day around the issues of machine learning, bias, stereotyping and generalisation creeping into decision-making processes, and there is more to do in this Bill around the safeguards around the use of automated decision-making. I know that the noble Baroness will talk about the code of practice, but that is very specific. It requires a human element only where the decision could impact on benefit eligibility. So it does not include stepping into the next phase of an intrusive investigation using the powers in Clause 72, for example. So, whether or not Amendment 88 is the right way to go, there is definitely more that we need to think about in terms of safeguards around the use of algorithmic or machine learning—or AI or whatever—trawling through this, and a number of amendments later cover the same ground a bit.

Amendment 89ZA is very simple. It simply says that applicants for benefits should be informed at the time of their application that information relating to their bank accounts may be provided to the Secretary of State, and that people who are already in receipt of benefits are informed within three months of the commencement of the Bill.

The information-gathering powers that this Bill creates are a significant step, and are carried out without any suspicion of fraud, so it must be appropriate and fair that people are informed that their bank account information may be provided to the department. I cannot actually see any reason for not accepting this one; it would improve transparency and also make those who are considering fraud think twice if they are being told that their bank account details could be accessed. In fact, I mean “provided”, because technically they are not accessed but provided.

As a general principle, as set out in our data protection laws, people have the right to know where their data is going and how it is being used, and I really cannot see any reason why this situation should be any different.

[Viscount Younger of Leckie (Con)]

My Lords, I wish to speak broadly in support of Amendment 82 in the name of the noble Baroness, Lady Fox of Buckley. This amendment goes to the heart of something that we should all be able to agree on: that the public have a right to know the rules by which they may be judged and that those tasked with making assessments, such as banks, should not be left to act on unclear or unpublished guidance.

This amendment would require the Secretary of State to publish the eligibility indicators that banks are expected to use when checking their customers’ accounts under the new regime. In plain terms, it asks the Government to set out clearly, before these provisions are enforced, what criteria are being used to determine eligibility. This chimes with the opening remarks made by the noble Baroness, Lady Fox. It is difficult to see how a system of such potential consequence to individuals and to financial institutions alike can be implemented fairly, if the basis on which it operates is not published and understood in advance.

We have heard throughout the debates on this Bill about the need to balance effective fraud prevention with the protection of individual rights, proper due process, and clarity for institutions involved. Amendment 82 speaks directly to that balance. If banks are to play a front-line role in identifying accounts or individuals under suspicion, they must be given unambiguous and publicly available guidance to avoid the risk of overreach, error or unjustified intrusion. We cannot have a system where accounts are flagged or actions taken on the basis of indicators that are withheld from public view. That would be both untransparent and unjust.

We should not legislate for a regime that affects people’s access to their financial resources or that places duties on banks to act in quasi-investigative ways, without knowing exactly how those judgments are to be made. This is not a wrecking amendment—it does not oppose the broader framework of the Bill. It merely insists that, before new powers are exercised, the public and partners involved in delivery know the criteria. That is not too much to ask. In fact, it is the very least we should expect in a system rooted in fairness and good governance. Again, this echoes the remarks made by the noble Baroness, Lady Fox.

To pick up on remarks made by the noble Lord, Lord Vaux, there is a balance to be struck between not giving too much away in the interest of transparency so that fraudsters are given fuel to manipulate the system. Can the Minister say where that balance should be struck, as balance there must be?

Similarly, I speak in support of Amendment 88, also in the name of the noble Baroness, Lady Fox. I believe it represents a sensible and timely addition to the schedule. As we have discussed throughout the passage of this Bill, the use of data and automated decision-making, particularly through algorithms, is becoming an increasingly central feature of fraud detection and eligibility verification. That in itself is not a problem; it is a reflection of the complexity and scale of modern fraud threats. But it also means that we need clear and consistent standards for how these tools are developed, deployed and scrutinised. The cautionary tale from the Netherlands, highlighted by the noble Baroness, Lady Fox, is very much noted. I am sure that the Committee has noted it.

This amendment goes to the heart of the need for standards. By requiring the code of practice to include mechanisms for the scrutiny of algorithms used by those in receipt of eligibility verification notices, typically banks, it creates a shared framework for oversight. This is particularly important when algorithms are applied across several discrete institutions, each of which may have slightly different internal systems, standards or even risk profiles. Without a common baseline, we risk inconsistency, a lack of accountability and potential harm to individuals through opaque or poorly calibrated processes.

Moreover, new sub-paragraph (g) proposed in this amendment rightly extends that principle of scrutiny to the powers themselves, and we must also be willing to assess whether they are effective and 100% secure in their specified and sole objective. We must also be willing to assess whether they are proportionate to the outcomes that they set out to deliver. In short, this is a practical amendment rooted in the principles of clarity, consistency and continuous improvement—perhaps part of the test and learn. It does not obstruct the Government’s goals; it helps to make them more credible and accountable, we believe.

I express my support for Amendment 89ZA in the name of the noble Lord, Lord Vaux of Harrowden, which I believe strikes a careful and important balance between transparency, accountability and the effective operation of the powers contained in this schedule. At its core, this amendment does something quite simple but significant: it ensures that individuals applying for or receiving relevant benefits are clearly informed—that is, in writing—that information relating to their bank accounts may, under certain circumstances, be shared with the Secretary of State. This is a matter of basic transparency and fairness. I note that this is being proposed at the time the benefit is applied for, and I might describe it—perhaps putting words into the mouth of the noble Lord, Lord Vaux—as part of an induction process when one applies for any benefit in scope. In other words, fair warning is given that a benefit that comes from the taxpayers’ pocket has responsibilities attached to it. Perhaps this should also be placed in the code of practice, and I ask that question of the Minister.

If we are to entrust public authorities with powers of this magnitude—which allow for sensitive financial data to be accessed without the individual’s active consent—surely it is right that we also commit to informing individuals of the possibility that those powers might be used. This is not about compromising investigations or alerting fraudsters in advance; it is about ensuring that people understand the system that they are entering and can act responsibly and lawfully within it. Providing this information up front reinforces personal responsibility. As I said earlier, it says clearly to the individual, “If you are claiming public money, there is a legitimate expectation that your eligibility may be subject to verification”. It allows claimants to know the rules of engagement in advance, and it ensures that they cannot claim later to have been caught unawares.

At the same time, I recognise, and I think the noble Lord does as well—I hope he does—that this amendment must not inadvertently encourage more sophisticated methods of deception. It is a fine line to walk, and this chimes with my earlier question to the Minister. We must not turn transparency into a user manual for fraud, but I believe that this amendment is framed carefully enough to avoid that risk. It does not disclose when, how or under what criteria information will be requested—only that it may be. That is, I believe, a proportionate step. Ultimately, this amendment supports the legitimacy of the wider regime, and I therefore support it and hope that the Government will see it as a constructive addition to the schedule.

Data Protection and Digital Information Bill

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Committee stage
Wednesday 24th April 2024 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, the Minister was kind enough to mention me a little earlier. Can I just follow up on that? In the impact assessment, which I have here, nowhere can I find the £600 million figure, nor can I find anywhere the costs related to this. There will be a burden on the banks and clearly quite a burden on the DWP, actually, if it has got to trawl through this information, as the noble Viscount says, using people rather than machines. The costs are going to be enormous to save, it would appear, up to £120 million per year out of £6.4 billion per year of fraud. It does seem odd. It would be really helpful to have those cost numbers and to understand in what document they are, because I cannot find in the impact assessment where these numbers are.

[Viscount Younger of Leckie (Con)]

I hope I can help both noble Lords. Although I must admit that I have not read every single page, I understand that the figure of £500 million is in the IA.

Data Protection and Digital Information Bill

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Committee stage
Monday 22nd April 2024 Grand Committee

[Lord Vaux of Harrowden (CB)]

I apologise for interrupting, but can the Minister show us in the Bill where those restrictions on the information that can be requested reside? As I read it, as I mentioned to the noble Baroness, Lady Buscombe, paragraph 2(1) of new Schedule 3B, as inserted by Schedule 11 of the Bill, is pretty wide when it refers to

“names of holders … other specified information relating to the holders … and … such further information in connection with those accounts as may be specified”.

So it appears that the DWP can ask for whatever it wants, rather than what the Minister just described.

[Viscount Younger of Leckie (Con)]

That is a fair challenge and I will certainly be coming on to that. I have in my speech some remarks and a much more limited reassurance for the noble Lord.

It is only when there is a signal of potential fraud or error that the DWP may undertake a further review, using our business-as-usual processes and existing powers—an important point. DWP will not share any personal information with third parties under this power, and only very limited data on accounts that indicate a potential risk of fraud or error will be shared with DWP in order to identify a claimant on our system. As I said earlier, I will say more about the limited aspects of this later in my remarks.

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[Viscount Younger of Leckie (Con)]

Yes, I am aware of that. I think the noble Lord was alluding to the point about proportionality. I listened carefully and took note of that, but do not entirely agree with it. I hope that I can provide further reassurances, if not now then in the coming days and weeks. The point is that there is no other reasonable way to independently verify claimants’ eligibility for the payment that they are receiving.

I turn to the amendments raised, starting with the stand part notice from the noble Baronesses, Lady Kidron and Lady Chakrabarti, the noble Lord, Lord Anderson of Ipswich, who is not in his place, and the noble Lord, Lord Clement-Jones. They and my noble friend Lord Kamall, who is not in his place, interestingly, all made their case for removing the clause, of which I am well aware. However, for the reasons that I just set out, this clause should stand part of the Bill.

In raising her questions, the noble Baroness, Lady Kidron, made some comparisons with HMRC. There are appropriate safeguards in place for this data-gathering power, which will be included in the code of practice. The safeguards for this measure will be equivalent to those in place for the similar HMRC power which Parliament approved in the Finance Act 2011.

[Lord Vaux of Harrowden (CB)]

When might we see the code of practice? It would be extremely helpful to see it before Report, as that might short-cut some of these discussions.

[Viscount Younger of Leckie (Con)]

I will need to get back to the noble Lord on that, but perhaps can reassure him that it is already being worked on. You can imagine that, because of the sensitivity of these powers, we are working very carefully on this and making sure that it will be fit for purpose.

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[Viscount Younger of Leckie (Con)]

I am not sure I agree with that. I hope I can reassure the noble Baroness, as I tried to on the previous group. Using our test and learn process, which is already under way working closely with the banks, bringing them along with us and them bringing us along with them—there is a good relationship there—we are working through these important matters.

The point made by the noble Baroness, Lady Kidron, is important, as is that of the noble Baroness, Lady Jones. Again, it is important to give those reassurances. They will be forthcoming, and that is all part of our test and learn process, which I hope provides some reassurance.

[Lord Vaux of Harrowden (CB)]

I want to be absolutely clear on this point, because I am still not totally sure I am—I raised this the first time around on the last group. If I, as a landlord, have been paid rent as housing benefit directly, my accounts are caught. If I am a trustee of a charity and a cosignatory on a bank account, is the Minister saying that that charity’s account will be caught or not? I want to be absolutely crystal clear on that.

[Viscount Younger of Leckie (Con)]

This is part of the filtering discussions that are already taking place at the moment.

[Lord Vaux of Harrowden (CB)]

Under the terms of the Bill, would this allow that to be caught?

[Viscount Younger of Leckie (Con)]

Yes it would. Landlords are in scope. We will filter this through in terms of the business as usual. If we receive any information—

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[Viscount Younger of Leckie (Con)]

Right. A number of questions have been asked. I am not sure that I can give too much more clarity—only that I will go back to what I said on the first group in terms of the limited nature of what we are trying to do. I was very clear about its limited nature, I think.

This leads on to the numbers that noble Lords are asking me about. Of course, I cannot give that figure, as we do not honestly know it. Until we move forward on bringing the measure in, we will not know it. What is certain is that we need this power to be able to gain the limited data that we need. When we receive the data, it may be the case that we need to follow up. I am sure that we will not need to follow up in the vast majority of cases but we must have this power.

To the noble Lord, Lord Vaux, I say this: this measure is for UK accounts only. I hope that that is also helpful to the noble Baroness, Lady Bennett.

[Lord Vaux of Harrowden (CB)]

This is the problem. We have been talking about limited information, a limited nature and the limited things that we will look at, but that is not what the Bill says. We need to think seriously about how we should limit the rights in the Bill to match the requirements of the DWP. At the moment, there seems to be a huge gap.

[Viscount Younger of Leckie (Con)]

That point is very much noted. I will certainly take it back. Clearly, we need to provide greater reassurance on the limits and scope, as well as on what we are trying to do. I regret that I am not able to give those answers in full to the Committee now but I hope that, today, I have already taken us further forward than we were before we started. That is quite an important point to make.

I shall touch on the benefits that are in scope of this measure, a point that was raised by the noble Baroness, Lady Sherlock. I think the noble Baroness wishes to restrict the power to working-age benefits, but pension-age benefits are not immune to fraud and error—I wanted to address that—and it is our duty to ensure that these benefits are paid correctly and in line with the benefit eligibility rules that Parliament has previously agreed. Every payment that the DWP makes has eligibility criteria to it. Parliament has considered these criteria in the passage of the relevant social security legislation, and the Government have a responsibility to check that payments are being made in line with those rules so that taxpayers’ money is spent responsibly.

State Pensions: Canada Free Trade Agreement

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Wednesday 18th October 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Yes, I can certainly give some reassurance on that to my noble friend. She may know that the policy has been challenged in the courts, and the Government’s long-standing position has been upheld by the High Court, the Court of Appeal and the Appellate Committee of the House of Lords in 2005, as well as the European Court of Human Rights in 2008, following a further challenge.

[Lord Vaux of Harrowden (CB)]

My Lords, this goes way beyond Canada. Does the Minister agree that people who have worked and paid national insurance all their lives have earned their state pension? Can he therefore answer the earlier question, which he did not really answer: why, if you choose in retirement to go and live somewhere else, should you not receive what you have earned in full and on the same basis as anybody else?

[Viscount Younger of Leckie (Con)]

This issue goes back to what has happened in the past. The distribution of reciprocal agreements with countries is based on historic ties with those countries and the levels of labour and people mobility flows at the time that the agreements were concluded. We therefore very much have to look back at that, but I reiterate that we have no plans to include this in current or future free trade agreements. I also say to the noble Lord that, as he will know, if we look at the overseas territories, for instance, due to past, historic arrangements, Bermuda, Gibraltar and the sovereign base areas of Cyprus are included, but the rest are not.

UK Infrastructure Bank Bill [HL]

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Committee stage & Lords Hansard - Part 2
Tuesday 14th June 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, perhaps I may be allowed to intervene with a response. I thank all noble Lords who have contributed to this short debate. The baton has been passed to me temporarily.

The amendments in this group broadly focus on the operational aspects of the bank and so clearly my remarks will seek to address those. I start with Amendments 14 and 29 in the name of the noble Lord, Lord Vaux. The approach of the Bill has been to add in what we think is necessary. We do not believe that setting out the details of the operating principles for the bank, which are set out clearly in the framework document, is required in legislation. I am very aware that this takes us back to a key theme of some of the debates today. I was extremely grateful for the views of my noble friend Lady Noakes—if I heard her correctly—supporting the view that we do not want to get into too much detail in this respect, for a very good reason.

Amendment 32, spoken to by the noble Lord, Lord Tunnicliffe, would ensure that the strategic steer includes a reference to the creation of jobs. I am pleased to inform him that, in the strategic steer issued in March, there were two references to job creation. I of course build upon the comments made by my noble friend Lady Penn in an earlier debate, and indeed the noble Lord, Lord Tunnicliffe, has raised the matter just now. I add to what has been said already two examples I would like to give from the strategic steer in respect of job creation.

First, the bank’s framework document explained this objective as supporting growth

“through better connectedness, opportunities for new jobs, and high levels of productivity.”

Secondly, the bank’s existing objectives are to help tackle climate change, as we know, particularly meeting the Government’s net-zero emissions target by 2050, and to support regional and local economic growth through better connectedness, opportunities for new jobs and higher levels of productivity. I think that these comments play reasonably well in answering the questions raised in an earlier debate, particularly by the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Ravensdale, who is not in his place, and link with the levelling-up agenda. The noble Lord, Lord Teverson, and the noble Baroness, Lady Kramer, are absolutely right that our aspiration, and the necessity, is the creation of high-quality jobs. That is essential as part of our levelling-up agenda.

Amendment 39 in the name of the noble Lord, Lord Teverson, seeks to tie any direction given by the Treasury to the National Infrastructure Commission reports. He raised the relationship with the NIC at Second Reading and earlier today, so I hope that I can set that out and reassure him. The bank is intended to complement the work of the NIC. To that extent, there is a definite joining up, as was referred to by the noble Lord and the noble Baroness, Lady Kramer. It is a complementary rather than a duplicative process, and an assessment of the UK’s long-term economic infrastructure needs. Central government will then decide on any policy response to the NIC’s recommendations, and UKIB will consider the case for providing financing to support projects within the economic infrastructure sectors that are within the remit of both the NIC and the bank.

The NIC provides recommendations to the Government which the Government then act on. It would not be appropriate to remove that part of the process. Additionally, the Government do not have to implement the NIC’s recommendations or reports, so we believe that it is not appropriate to put this in legislation.

Perhaps the noble Lords, Lord Teverson and Lord Vaux, are concerned about the Government directing the bank in a way that is not in line with its objective. That rather paraphrases some of the mood of the debate. That is not possible with the drafting of the Bill at the moment. The bank must comply with its objectives and the Government cannot direct the bank to act in a manner that falls outside its statutory objectives.

The noble and learned Lord, Lord Thomas, tabled the characteristically thought-provoking Amendment 52. I hope I can convince him that the clause as drafted is sufficient. Much policy thought has gone into setting up the bank and detailing its objectives—which reflect government policy—and governance provisions, including provisions to allow the Treasury and Parliament to review its performance.

In the unlikely event that the bank breached its duties and agreement could not be reached via more usual engagement, the Treasury would clearly be motivated to use its powers, including under Clause 8, to enforce those duties. If a scenario occurred where the bank was in breach and the Treasury did not enforce for some reason, Questions could be asked in the House or a judicial review could be brought against the bank or the Treasury regarding use of its powers, and, if successful, give rise to mandatory or prohibitory orders.

Finally, to help the noble and learned Lord, I see no reason for Clause 8 ever to come into use. The framework document goes into some detail in Chapter 5 on the usual process for engagement between the bank and the Government, and any issues would be resolved much before the need to injunct the bank.

I turn to Amendment 68 in the name of the noble Baroness, Lady Bennett. She again raised the importance of independence but also focused on oversight. The amendment would allow other departments that she mentioned to have oversight of the bank. I assure her that the infrastructure strategy very much represents the view of the Government collectively, and should the Treasury need to exercise any of its functions, it would not do so in isolation or in silo, to use the language we might know better.

With those explanations, I hope that the noble Lord, Lord Vaux, will see fit to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank everyone who has taken part in this short and interesting debate. I do not think the noble Viscount will be particularly surprised that I am not entirely satisfied with his response.

I take the point from the noble Baroness, Lady Noakes. She is right: this is not about taking the whole of the document into the Bill or secondary legislation, but there is a balance. This seems to be one of those situations where the Government are creeping things that are really quite fundamental into areas where they do not get parliamentary scrutiny of any sort. That is unacceptable. As was mentioned, we have seen the same with secondary legislation, but this is a whole new element: there is not even secondary legislation scrutiny. The framework document can be changed at any time at will by the Treasury. The stuff that really matters to the bank should be subject to some form of scrutiny and recognised in the Bill. To me, things that are called “operating principles” clearly fit on that side of the balance, but some of the more day-to-day activities that the noble Baroness, Lady Noakes, referred to are fine.

The noble Lord, Lord Tunnicliffe, talked about the need to find consensus on this and finding the balance. That is really important. Perhaps the noble Viscount or the noble Baroness—I am not sure what the collective noun is for the Lords the noble Lord, Lord Tunnicliffe, mentioned—would be prepared to add this to the agenda of the meeting we have agreed to have. This is a really important area where we have to get the balance right. We cannot have a situation where the Government or the Treasury can change at will things of fundamental importance. Assuming they are prepared to meet to discuss and see whether we can find that consensus, I beg leave to withdraw the amendment.

Coronavirus Grants: Fraud

Debate between Lord Vaux of Harrowden and Viscount Younger of Leckie

Tuesday 25th January 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

That is a good point. It is certainly something that I shall need to look into and I shall need to write to my noble friend about it. There is no question but that the auditing side is particularly important.

[Lord Vaux of Harrowden (CB)]

My Lords, the sorts of fraud that we heard so vividly described yesterday would have been a lot more difficult if directors’ identities had to be verified. The Government announced some 18 months ago that they would do that. When will they start insisting that Companies House verify identities of directors?

[Viscount Younger of Leckie (Con)]

That is certainly one of the lessons learned; I know that it is on the agenda to be looked at.