Mother and Baby Institutions Payment Scheme: Capital Disregard

Andrew Western Excerpts

Tuesday 10th June 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

It is a pleasure to serve under your chairship this afternoon, Ms Jardine, and to do so in a debate on such an important and emotive subject. I thank my hon. Friend the Member for Beckenham and Penge (Liam Conlon) for securing it. He has spoken passionately today, as have all Members who contributed, and has done so consistently in his fight to bring forward Philomena’s law. I want to say on the record what a champion he has been for that cause.

As we have heard, this was a painful, scandalous and shameful episode in Ireland’s history. It is impossible to imagine the trauma that the women and children who were sent to these institutions suffered; the heartbreaking accounts of their experiences are distressing in the extreme. What happened to them is truly appalling—all the more so because it was only in 2021 that they finally received an apology from the then Taoiseach, Micheál Martin. It is absolutely right that the victims of the scandal are at last receiving some kind of redress through the mother and baby institutions payment scheme in Ireland.

The payments can never, ever put right the terrible suffering that those women were forced to endure. No amount of compensation can make up for what they lost, but compensation for them and their family members is an important acknowledgment of the wrong that was done. Norma Foley, the Irish Government’s Minister for Children, Disability and Equality, recently highlighted how disappointed she is that not all the religious bodies involved have offered meaningful compensation. It appears that only two religious orders have contributed to the scheme in Ireland, so there is still quite some way to go to ensure that there is proper accountability and responsibility for the impact that time in these institutions had on the lives of those women and their children.

What does this scandal mean for the United Kingdom and our social security system? Due to the close historic ties between Ireland and this country, there has always been movement of people from one to the other. My constituency of Stretford and Urmston, much like that of my neighbour, my hon. Friend the Member for Salford (Rebecca Long Bailey), has a long history of drawing in families from Ireland, which contributed to the economic and cultural growth of the area and helped to shape the communities of today.

My hon. Friend the Member for Liverpool West Derby (Ian Byrne) continued the theme highlighted by my hon. Friend the Member for Salford of the north-west’s significant Irish population and the contributions made by those Irish people to the cities of Manchester and Liverpool in particular. Other Members referenced the same thing in their communities, and the point is not lost on me. The same is true for many of the constituencies that are not represented here today, particularly urban areas where there is a significant Irish diaspora.

It is therefore not surprising that some of the people affected by this scandal are now living in the United Kingdom. The Irish Government estimate the number of applicants to the compensation scheme will be in the region of 34,000. They estimate around 40%—13,600—are living outside Ireland, with the majority assumed to be in the UK, though some will be in other countries too, particularly the United States.

However, as queried by the Opposition spokesperson, the hon. Member for South West Devon (Rebecca Smith), there is no way of knowing exactly how many of those affected and now living in this country are also in receipt of an income-related benefit. On the question of cost, it is simply not possible to give a firm figure or determine the implications of the change, were it to be adopted. It is even less possible to speculate on how many might, at some point in the future, claim an income-related benefit. That is an important factor.

Income-related benefits such as universal credit, housing benefit and pension credit provide a taxpayer-funded safety net for people in various circumstances and on low incomes. The nature of those benefits and the rules under which they operate are approved by Parliament. To ensure that money is directed to those most in need, rules have been developed over many years setting out not only conditions of entitlement, but how a person’s financial and personal circumstances affect the amount they receive. That means income, such as earnings or pensions as well as capital and any savings above a certain level are generally taken into account; that is the point of income-related benefits.

The more money a person already has, the less they can expect to receive from the taxpayer. However, the social security system recognises that, in certain cases, the money or capital someone has can be ignored—or, as the terminology has it, disregarded. In pension credit, for instance, there are 28 separate categories of capital that are disregarded. Examples relevant for today’s debate include various compensation payments, and my hon. Friend the Member for Beckenham and Penge and others highlighted some examples. These disregards cover medical compensation, such as payments in respect of infected blood; payments in respect of an historic wrong, as was highlighted, including those concerning Windrush and child migrants; and payments resulting from specific events, including payments relating to Grenfell tower and the London Bombings Relief Charitable Fund.

The number of disregards has grown over time as Parliament has responded to tragic events and scandals, such as the recent Post Office scandal. We must not forget that income-related benefits are paid for through general taxation, so disregarding a compensation payment comes at a cost to the taxpayer. That is why, when deciding whether a new disregard is appropriate—unfortunately, we live in a world where tragic events and scandals happen—several factors are considered: where the event took place, who is responsible, how many people are affected, and whether it is proportionate to amend the law.

What all the examples I have given have in common is that the circumstances that gave rise to that compensation payment either occurred in this country or involved events for which the UK Government have direct responsibility or liability. The events that are the subject of this debate were a truly horrendous episode in Ireland’s history. We heard multiple references to the film “Philomena,” which I saw a very long time ago—not knowing what it was about, but because Judi Dench was in it. I will watch anything she is in, as I think she is amazing. As the hon. Member for South West Devon said, the film hits particularly hard as one watches it and sees what people endured.

Philomena’s example, what we have heard from her and her family’s Member of Parliament, the Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper), and Christina’s story, which was raised by my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins), show just how significant an impact these events had on so many lives. It is absolutely right, therefore, that the Irish Government have taken responsibility, apologised and set up a compensation scheme to address the wrongs that occurred.

Let me address the Opposition spokesperson’s intervention on the hon. Member for Upper Bann (Carla Lockhart) about those from Northern Ireland who spent time in mother and baby institutions. My understanding is that Northern Ireland is setting up its own scheme, but of course social security matters are devolved to its institutions. Whether Northern Ireland and the Republic establish a reciprocal agreement is a matter for them—such is the nature of devolution. I assure the hon. Lady that a scheme is in development.

Before securing this debate, my hon. Friend the Member for Beckenham and Penge introduced a ten-minute rule Bill, which shows how strongly and passionately he cares about this issue. I assure him that both the Minister for pensions and the Minister for Social Security and Disability—I am sorry to disappoint everybody, but I am neither—are already carefully considering whether to legislate to disregard payment from Ireland’s mother and baby institutions payment scheme.

A decision on that has not yet been made, partly because, to answer the hon. Member for South West Devon, conversations are ongoing across the Government, with Foreign and Commonwealth Office Ministers and officials, as well as directly with the Irish Government, about whether it is possible and how it might work. It is raised at that level frequently, because of the historical relationship between the two nations. I realise that Members will be disappointed that I am unable to confirm today whether a scheme will be put in place.

[Daisy Cooper]

It is not unusual in this House for Ministers to say that things are actively under consideration. In a previous Parliament, I have been in this room when Ministers have said that repeatedly. If it is under active consideration, can the Minister please say when that might conclude? Is he in a position to give us a deadline today, or is he able instead to write to every Member that has contributed to this debate within the next 14 days with a deadline?

[Andrew Western]

I am going to disappoint the Liberal Democrat spokesperson, because I am unable to give her that assurance today. Conversations between the UK and Irish Governments, as well as conversations between Government Departments, are ongoing. I do not want to suggest that we are leaning one way or another, or that a decision is imminent.

The hon. Member for South West Devon set out how unprecedented a decision this would be. We regularly receive requests for scandals and issues that have happened in other countries to be considered for a disregard in this country. For instance, when the coalition Government were in power, the Magdalene Laundries was one such example where a disregard was not put in place. More recently, we saw this with the Australian child abuse scandal and with Gurkhas seeking a disregard to the 28-day rule around the allocation of pension credit.

This would be a significant change with broader ramifications, but that is not to say that we are not looking to take that change forward. Thought still needs to be given to this, and conversations need to continue. I am grateful to all Members for the opportunity to set out the current conversations, and to hear directly about people’s experiences.

[Carla Lockhart]

I thank the Minister for his response in relation to Northern Ireland, but I reiterate that the Northern Ireland Executive is just the postman for social benefits. The UK Parliament is sovereign. For something of this nature, given the small number it would impact and the small cost, I would want Northern Ireland to be part of the conversation from a UK-wide perspective, so that we go hand in hand, because constituents in Northern Ireland are as deserving as those here in GB.

[Andrew Western]

I do not want to openly disagree with the hon. Lady, but I gently say that social security matters are devolved to the Northern Ireland Assembly, although of course it seeks alignment on issues wherever it is able to do so, and I welcome that. The fact that it is looking at its own scheme related to people from Northern Ireland who were in mother and baby institutions in Northern Ireland points to the flexibility within the devolved system. However, I accept the point that she makes about the importance of ensuring that, were the UK Government to apply a disregard, we would look to have conversations with the Northern Ireland Assembly about that also being applicable in its jurisdiction.

As I was saying, this debate has been an important opportunity not just to set out the Government’s position, but to hear powerful testimony about Christina’s story and more information about Philomena’s story.

[Daisy Cooper]

I know that the Minister is just about to respond to the fact that we have heard powerful testimony. I understand that he is not in a position to set out any deadlines today, so I implore him to make a different commitment. Will he please commit today, in front of the many people who have joined us, to use his good offices to facilitate a meeting between our constituents who are affected by this issue and the relevant Minister, so that they can speak directly to those in power who may be in a position to make decisions in due course? Will he please commit to doing everything he can to ensure that our constituents have their voices heard by those at the top?

[Andrew Western]

I will happily take that request back to the Department; clearly, it is a matter for the relevant Minister. However, I can perhaps liaise with my hon. Friend the Member for Beckenham and Penge, who has led this campaign, to see whether such a meeting is possible, and I will happily update all Members on whether or not we are able to convene that meeting.

As I was saying, this debate has been an important opportunity not only to set out the Government’s position, but to hear powerful testimony. I am grateful to all Members who have contributed to the debate, everyone who has come along to listen and everyone who agreed to have their story told. As I have said, no decision has been made yet. We are very much listening to those who have been impacted by this issue. It would be a significant change—setting a precedent—but none the less we are keen, as I have said, to continue talks with the Irish Government and across Government before coming to a decision on this matter.

Office for Nuclear Regulation Corporate Plan 2025-26

Andrew Western Excerpts

Tuesday 20th May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

Later today I will lay before this House the Office for Nuclear Regulation’s corporate plan 2025-26. This document will also be published on the ONR website.

I can confirm, in accordance with paragraph 25(3) of schedule 7 to the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.

[HCWS648]

Benefit System: Fraud and Error

Andrew Western Excerpts

Thursday 15th May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

The annual statistics for fraud and error in the benefit system for the financial year ending 2025, were published on Thursday 15 May 2024, at 9.30am.

Today's figures confirm the overall rate of overpayments is now 3.3% (£9.5 billion) for 2024-25, compared to 3.6% (£9.7 billion) in 2023-24. Overpayments due to fraud account for 2.2% compared to 2.7% last year while claimant error and official error are now at 0.7% and 0.4% respectively, compared to 0.6% and 0.3% last year.

This Government made a manifesto commitment that they will safeguard taxpayers’ money and not tolerate fraud or waste anywhere in public services. With welfare benefits paid to around 24 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals and it is vital that the Government continue to robustly tackle fraud to ensure support goes to those who need it most. We are taking further steps to minimise error, ensuring the right people are paid the right amount at the right time. The total rate of benefit expenditure underpaid in FYE 2025 was 0.4% (£1.2 billion), compared with 0.4% (£1.1 billion) in FYE 2024.

Through autumn Budget 2024 and spring statement 2025, the Department has committed to deliver £9.6 billion in scored savings out to 2029-30. This will be delivered through a suite of measures, including additional resourcing for the Verify Earnings and Pension Service which uses HMRC data to identify changes in claimants’ earnings and private pensions that may impact entitlement to carer’s allowance and pension credit, and new verification measures for capital and self-employed income and expenses across universal credit claims.

As part of this, the Public Authorities (Fraud, Error and Recovery Bill), which moves to Second Reading in the House of Lords today, is estimated to deliver benefits of £1.5 billion over the next five years. It will safeguard public money by reducing public sector fraud and error and allowing the more effective recovery of moneys owed to the Government. The Bill will also help spot and stop errors earlier to avoid claimants’ getting into debt. The latest fraud and error in the benefit system statistics show overpayments at a staggering £9.5 billion in the last year, with capital remaining one of the top reasons for overpayments in UC and PC. This demonstrates the continued importance of the eligibility verification measure, which is a core part of the Bill.

Today we have also published our unfulfilled eligibility statistics, following last year’s reclassification from customer error underpayments. Unfulfilled eligibility measures how much a customer could have been eligible for had they told us their correct circumstances. The total unfulfilled eligibility rate in FYE 2025 was 1.3% (£3.7 billion) compared with 1.2% (£3.1 billion) in FYE 2024. The Department will report more on both overpayments and underpayments by way of its annual report and accounts, which are due to be published in July 2025.

[HCWS637]

Contingencies Fund Advance

Andrew Western Excerpts

Wednesday 14th May 2025 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

I would like to notify the House that the Department for Work and Pensions has obtained approval for an advance from the Contingencies Fund of £4,500,000. This will enable the Department to start building an IT solution, for the delivery of the eligibility verification measure, from May 2025 onwards, before the Public Authorities (Fraud, Error and Recovery) Bill, which includes this measure, receives Royal Assent.

Funding for this measure was included in the 2024 spending review. It is expected to generate £940 million in savings over five years to 2029-30. Expenditure before Royal Assent will help to ensure the timely delivery of these savings.

Parliamentary approval for capital of £4,500,000 for this new service will be sought in a main estimate for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £ 4,500,000 will be met by repayable cash advances from the Contingencies Fund.

The advance will be repaid at the earliest opportunity following Royal Assent of the Public Authorities (Fraud, Error and Recovery) Bill.

[HCWS631]

Oral Answers to Questions

Andrew Western Excerpts

Monday 12th May 2025 Commons Chamber

[Robin Swann (South Antrim) (UUP)]

5. What steps her Department is taking to help increase the accuracy of personal independence payment assessments.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

The Department is committed to ensuring that individuals receive high-quality and accurate assessments. Assessment suppliers are closely monitored using a range of performance measures designed to improve the accuracy of their advice. Independent audits are conducted to maintain high standards, and as part of our pathways to work proposals we are considering recording assessments as standard to increase transparency and build trust in the system.

[Robin Swann]

Data shared with me by Dermot Devlin from Disabled People Against Cuts shows that £50 million has been spent on PIP appeals in the past year alone, and also that His Majesty’s Courts and Tribunals Service has reported that over 70% of those PIP appeals have been successful. When people are put through the harrowing process of being told that their PIP appeal is not appropriate and having to go through the entire appeal system, what are Ministers doing to ensure that any changes make that system friendly to those using it?

[Andrew Western]

I would be very happy to have a conversation with the hon. Gentleman about the assessment process and the mandatory reconsideration process, but I would also say to him that I do not recognise those statistics. Indeed, under the current statistics, appeals are down by 16% on the previous year to January 2025. The other point that I would make to him is that while around 20% of applications are subject to a mandatory reconsideration, only around 5% of those are successful.

[Sonia Kumar (Dudley) (Lab)]

The Centre for Inclusive Living in Dudley, which supports those with disabilities, and many residents have written to me to raise concerns about the PIP entitlement criteria and assessment. What reassurances can my hon. Friend give that this Government will protect those most vulnerable in society and that those with disabilities will be enabled, not disabled?

[Andrew Western]

I thank my hon. Friend for raising her constituents’ concerns and say to them that, as my right hon. Friend the Secretary of State said at the beginning of this session, we have this week announced a broader review of the PIP assessment process that I hope in due course, and by working with stakeholders, will be able to give my hon. Friend’s constituents and stakeholder organisations considerable reassurance.

[Sir Julian Lewis (New Forest East) (Con)]

Can the Minister explain why it appears that telephone assessments for PIP have a significantly higher success rate in applications than face-to-face applications?

[Andrew Western]

I am not able to explain the reason for that difference, but I am able to reassure the right hon. Gentleman that we are looking to move away from telephone appointments and return as quickly as possible to assessments made face to face wherever we are able to do so.

[Steve Yemm (Mansfield) (Lab)]

Can the Minister give us more information on what the PIP assessment review will look like?

[Andrew Western]

As my hon. Friend will appreciate, the review has only been announced today. There are a considerable number of strands to it that will be led by my right hon. Friend the Minister for Social Security and Disability. What I can tell my hon. Friend is that, as my right hon. Friend the Secretary of State said earlier, that work is beginning this week by reaching out, as is entirely appropriate, to those stakeholder organisations, who will feed in to the purpose and scope of that work moving forward.

[Richard Burgon (Leeds East) (Lab)]

6. What progress her Department has made on its review of the personal independence payment assessment system.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

This Government are committed to tackling poverty right across the UK. We are reviewing universal credit to ensure that it is doing the job we want it to do: making work pay and tackling poverty. We have already announced that we will improve the adequacy of the standard allowance in universal credit, and we have introduced the fair repayment rate. Alongside that, the child poverty taskforce is exploring all available levers to reduce child poverty in all four nations, including considering social security reforms.

[Ann Davies]

Just a day before the new figures revealed yet another rise in child poverty in Wales, the UK Labour Government confirmed plans for billions of pounds-worth of welfare cuts, pushing tens of thousands more children into hardship. The Government tell me that the data is not robust enough to know the poverty impact on Wales, which is really not good enough. The Labour First Minister—of the Senedd, not the “Assembly”, if I may correct the hon. Member for Bristol North East (Damien Egan)—has also criticised this Government’s approach. Will the Secretary of State now listen to the First Minister of Wales, conduct a Wales-specific impact assessment and scrap these cruel measures?

[Andrew Western]

I am sorry to disappoint the hon. Lady, but I am sure she would not want us to produce a potentially inaccurate assessment of the impact on Wales. What I would say—and I am sure that she agrees with this—is that the levels of poverty in Wales are unacceptable, which is a result of 14 years of the Conservative party failing to address the long-term industrial decline of many communities across Wales. I would also say to her that the best way to get people out of poverty is to get them into work, so I am sure she will welcome the recent launch of the inactivity trailblazer in Wales.

[Catherine Fookes (Monmouthshire) (Lab)]

Does the Minister agree with me that the new fair repayment rate, which caps universal credit deductions at 15%, along with the actions of the Welsh Government to help more than 48,000 young people gain skills and find jobs through the young person’s guarantee scheme will help alleviate poverty in Wales, and therefore should be welcomed?

[Andrew Western]

I of course agree with my hon. Friend, about both the benefits of the youth guarantee and the specific impact of the fair repayment rate, which across the country will support 1.2 million of the poorest families, including 700,000 families with children.

[Greg Smith (Mid Buckinghamshire) (Con)]

T2. If she will make a statement on her departmental responsibilities.

Public Authorities (Fraud, Error and Recovery) Bill

Andrew Western Excerpts

Report stage & 3rd reading
Tuesday 29th April 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

With this it will be convenient to discuss the following:

Government new clause 18—Consequential amendments to the Social Security Fraud Act 2001.

Government new clause 19—Devolved benefits.

Government new clause 20—Powers of Scottish Ministers.

New clause 1—Recovery of overpayments of Carer’s Allowance—

“The 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; and

(d) the Secretary of State has implemented the recommendations of the independent review.”

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.

New clause 2—Impact of Act on people facing financial exclusion—

“(1) The independent person appointed under section 64(1) of this Act must carry out an assessment of the impact of this Act on the number of people facing financial exclusion.

(2) The independent person must, after 12 months of 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.”

This new clause would look into the impact of the Act on people facing financial exclusion.

New clause 3—Audit of algorithmic systems used in relation to Carer’s Allowance overpayments—

“(1) An independent audit of algorithmic systems used in the assessment, detection or recovery of Carer’s Allowance overpayments must be conducted at least once every six months.

(2) Any audit under subsection (1) must be conducted by persons with relevant expertise in data science, ethics and social policy who have no direct affiliation with—

(a) the Department for Work and Pensions, or

(b) any person or body involved in the development or operation of the algorithmic systems under review.

(3) An audit conducted under this section must consider—

(a) the accuracy of the algorithmic systems in identifying overpayments, and

(b) the fairness of the systems’ design, application and operation, including any disproportionate impact on particular groups.

(4) After every audit a report on its findings must be—

(a) published;

(b) laid before both Houses of Parliament within 14 days of publication; and

(c) made publicly available in an accessible format.

(5) If any audit identifies significant inaccuracies, unfairness or biases in any algorithmic systems, the Secretary of State must, within 30 days of the publication of the report outlining these findings, present an action plan to Parliament which outlines the steps which the Government intends to take to address the identified issues.”

This new clause would provide for an audit of algorithmic systems used in relation to Carer’s Allowance overpayments.

New clause 4—Inclusion of systems within the Algorithmic Transparency Reporting Standard—

“(1) For the purposes of this section, “system” means—

(a) algorithms, algorithmic tools, and systems; and

(b) artificial intelligence, including machine learning;

provided that they are used in fulfilling the purposes of this Act.

(2) Where at any time after the passage of this Act, the use of any system is—

(a) commenced;

(b) amended; or

(c) discontinued;

the Minister must, as soon as reasonably practicable, accordingly include information about the system in the Algorithmic Transparency Reporting Standard.”

This new clause would require the use of algorithms, algorithmic tools, and systems, and artificial intelligence, including machine learning, to be included within the Algorithmic Transparency Reporting Standard.

New clause 5—Duty to consider domestic abuse risk to account holders—

“(1) Before any direct deduction order under Schedule 5 is made, the Secretary of State has a duty to consider its effect on any person who—

(a) is a victim of domestic abuse, or

(b) the Minister reasonably believes to be at risk of domestic abuse.

(2) In this section “domestic abuse” has the meaning given by section 1 of the Domestic Abuse Act 2021.”

New clause 6—Review of whistle blowing processes in relation to public sector fraud—

“(1) Secretary of State must, within one year of the passing of this Act, conduct a review of whistle blowing processes in relation to fraud in the public sector.

(2) A review conducted under this section must consider—

(a) the appropriateness and efficacy of existing whistle blowing processes;

(b) barriers to reporting fraud and reasons for under reporting of fraud; and

(c) recommendations for change.

(3) The Secretary of State must publish a report containing—

(a) the findings and conclusions of the review, and

(b) a timetable for the delivery of any recommendations for change within six months of the completion of the review.”

New clause 7—Overpayments made as a result of official error—

“(1) Section 71ZB of the Social Security Administration Act 1992 is amended as follows.

(2) In subsection (1), for “The” substitute “Subject to subsection (1A), the”.

(3) After subsection (1) insert—

“(1A) The amount referred to in subsection (1) shall not include any overpayment that arose in consequence of an official error where the claimant or a person acting on the claimant’s behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.””

This new clause would provide that, where universal credit overpayments have been caused by official error, they can only be recovered where the claimant could reasonably have been expected to realise that there was an overpayment.

New clause 8—Offence of fraud against a public authority—

“(1) A person who-

(a) commits,

(b) assists or conspires in the committal of, or

(c) encourages the committal of,

fraud against a public authority commits an offence.

(2) A person who commits an offence under subsection (1) is liable-

(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);

(b) on conviction on indictment, to imprisonment for a term not exceeding 10 years.”

New clause 9—Application of the Police and Criminal Evidence Act 1984 to investigations conducted by the Department for Work and Pensions—

“(1) The Secretary of State must, within six months of the passing of this Act, introduce regulations for the purpose of applying certain powers of the Police and Criminal Evidence Act 1984, subject to such modifications as the order may specify, to investigations of offences conducted by the Department for Work and Pensions.

(2) The powers to be applied must include–

(a) the power of arrest;

(b) any other such powers that the Secretary of State considers appropriate.

(3) Regulations made under this section shall be made by statutory instrument.”

New clause 10—Liability orders—

“(1) Where a person–

(a) has been found guilty of an offence under section 1 or section 11 of the Fraud Act 2006, or the offence at common law of conspiracy to defraud,

(b) that offence relates to fraud committed against a public authority, and

(c) has not paid the required penalties or not made the required repayments,

the Secretary of State must apply to a magistrates’ court or, in Scotland, to the sheriff for an order (“a liability order”) against the liable person.

(2) Where the Secretary of State applies for a liability order, the magistrates’ court or (as the case may be) sheriff shall make the order if satisfied that the payments in question have become payable by the liable person and have not been paid.

(3) The Secretary of State may make regulations in relation to England and Wales—

(a) prescribing the procedure to be followed in dealing with an application by the Secretary of State for a liability order;

(b) prescribing the form and contents of a liability order; and

(c) providing that where a magistrates’ court has made a liability order, the person against whom it is made shall, during such time as the amount in respect of which the order was made remains wholly or partly unpaid, be under a duty to supply relevant information to the Secretary of State.

(4) Where a liability order has been made against a person ("the liable person"), the Secretary of State may use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (taking control of goods) to recover the amount in respect of which the order was made, to the extent that it remains unpaid.”

New clause 11—Publication of results of pilot schemes—

“Within three months of the passing of this Act, the Secretary of State must publish the results of any pilot schemes run with banks to test the provisions in Chapter 1 of Part 2.”

New clause 12—Report on cost implications for banks—

“The Secretary of State must, within three months of the passing of this Act, publish a report on the expected cost implications of the provisions of this Act for banks.”

New clause 13—Annual reporting of amounts recovered—

“(1) The Secretary of State must publish an annual report detailing the amount of money which has been recovered under the provisions of this Act.

(2) A first report must be published no later than 12 months after the passing of this Act with subsequent reports published at intervals of no more than 12 months.”

New clause 14—Impact of Act on vulnerable customers—

“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament an assessment of the expected impact of the Act on vulnerable customers.

(2) For the purposes of this section, “vulnerable customers” means someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.”

New clause 15—Publication of an Anti-Fraud and Error Technology Strategy—

“(1) The Secretary of State must, within six months of the passing of this Act, publish an Anti-Fraud and Error Technology Strategy.

(2) An Anti-Fraud and Error Technology Strategy published under this section must set out–

(a) how the Government intends to use automated technologies or artificial intelligence to tackle fraud against public authorities and the making of erroneous payments by public authorities, and

(b) a series of safeguards to provide for human oversight of decision making that meet the aims set out in subsection (3);

(c) how rights of appeal will be protected;

(d) a framework for privacy and data sharing.

(3) The aims of the safeguards in subsection (2)(b) are—

(a) to ensure that grounds for decision making can only be reasonable if they are the result of a process in which there has been meaningful human involvement by a human of adequate expertise to scrutinise any insights or recommendations made by automated systems,

(b) to make clear that grounds cannot be reasonable if they are the result of an entirely automated process, and

(c) to ensure that any information notice issued is accompanied by a statement—

(i) setting out the reasonable grounds for suspicion that have been relied on, and

(ii) confirming that the conclusion has been formed on the basis of human involvement.”

New clause 21—Offence of encouraging or assisting others to commit fraud—

“(1) The Social Security Administration Act 1992 is amended as follows.

(2) In section 111A (dishonest representation for obtaining benefit etc), after subsection (1G) insert—

“(1H) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.

(1I) An offence under this section can be committed where the encouragement, assistance or guidance happens online.

(1J) A person who commits an offence under this section is liable on conviction on indictment to imprisonment for a term not exceeding five years or an unlimited fine.”

(3) In section 112 (false representations for obtaining benefit etc), after subsection (1F) insert—

“(1G) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.

(1H) An offence under this section can be committed where the encouragement, assistance or guidance happens online.

(1I) A person who commits an offence under this section is liable on conviction on indictment to imprisonment for a term not exceeding five years or an unlimited fine.””

New clause 22—Impact of Act on people with protected characteristics—

“The Secretary of State must, prior to making regulations under section 103 to bring into force any provision of this Act, lay before Parliament an assessment of the expected impact of the Act on people with protected characteristics who are in receipt of social security benefits.”

This new clause would ensure any impact of the Bill on people with protected characteristics in receipt of social security benefits was examined prior to the Act’s implementation.

New clause 23—Report on public sector fraud during COVID-19 pandemic—

“(1) The Minister for the Cabinet Office must, within six months of the passing of this Act, lay before Parliament a report evaluating the extent of public sector fraud that occurred during the COVID-19 pandemic.

(2) The report must include—

(a) an account of fraudulent or erroneous payments made by or on behalf of public authorities, including but not limited to the Department of Health and Social Care and NHS England,

(b) a review of how public procurement practices in place between March 2020 and December 2021, including—

(i) the use of high priority and expedited contracting for suppliers, and

(ii) the role of political appointments and personal connections in procurement decisions,

may have contributed to fraud against public authorities,

(c) the cost to the public purse of fraud against public authorities during the COVID-19 pandemic, and

(d) an assessment of the adequacy of Government oversight and other measures then in place to prevent fraud against public authorities.

(3) Where the report finds or concludes that there were—

(a) failings in Government oversight and other measures then in place to prevent fraud against public authorities, or

(b) any action or inaction by the Government which enabled fraud against public authorities,

the Minister must make a statement to the House of Commons acknowledging these findings and setting out actions planned to ensure any failings are not repeated.”

Amendment 15, in clause 3, page 3, line 10, leave out “10” and insert “28.”

Government amendments 23 and 24.

Amendment 16, in clause 4, page 3, line 33, leave out “Minister” and insert “First Tier Tribunal”.

Amendment 13, page 3, line 33, after “notice” insert

“or of the duration of the period mentioned in section 3(4)(a)”.

Amendment 80, page 3, line 34, leave out “7” and insert “28”.

Amendment 17, page 3, line 36, leave out “Minister” and insert “First Tier Tribunal”.

Amendment 18, page 3, line 38, leave out “Minister” and insert “First Tier Tribunal”.

Amendment 14, page 4, line 2, after “notice” insert

“, including by extending the duration of the period mentioned in section 3(4)(a) where satisfied that the person is reasonably unable to comply with the requirement to provide the information within the time required by the notice”.

Amendment 19, page 4, line 3, leave out “Minister” and insert “First Tier Tribunal”.

Amendment 81, page 4, line 10, at end insert—

“(7) Where a person has applied for a review of an information notice, the period mentioned in section 3(4)(a) is to be treated as beginning on the day after which the outcome of the review is notified to the person to whom the information notice was given.”

Government amendments 25 to 29.

Amendment 1, in clause 64, page 34, line 15, at end insert—

“(1A) Prior to appointing an independent person, the Minister must consult the relevant committee of the House of Commons.

(1B) For the purposes of subsection (1A), “the relevant committee” means a committee determined by the Speaker of the House of Commons.”

This amendment would provide for Parliamentary oversight of the appointment of the “Independent person”.

Government amendments 30, 31, 76, 75, 32 and 33.

Amendment 2, page 40, line 36, leave out clause 74.

This amendment removes the requirement for Banks to look into relevant claimants’ bank accounts.

Amendment 3, in clause 75, page 41, line 21, at end insert—

“(1A) Prior to appointing an independent person, the Minister must consult the relevant committee of the House of Commons.

(1B) For the purposes of subsection (1A), “the relevant committee” means a committee determined by the Speaker of the House of Commons.”

This amendment would provide for Parliamentary oversight of the appointment of the “Independent person”.

Government amendments 34 to 43.

Amendment 8, in clause 89, page 55, line 6, leave out from “unless” to the end of line 14 and insert—

“(a) the liable person agrees, or

(b) there has been a final determination by a court or tribunal that it is necessary and proportionate to exercise a power under Schedule 3ZA.”

This amendment would mean that the Secretary of State can only exercise powers to recover amounts from a person where the person agrees or where a court or tribunal has determined that such recovery is necessary and proportionate.

Amendment 10, page 56, line 16, leave out clause 91.

Government amendments 79, 78, 77, 74, 73 and 44.

Amendment 4, in clause 103, page 63, line 29, leave out from start to “following” in line 32 and insert—

“Subject to subsections (1A) and (2), this Act comes into force on such day as the Secretary of State or the Minister for the Cabinet Office may by regulations appoint.

(1A) No part of this Act may come into force until the recommendations of a report commissioned under section [Recovery of overpayments of Carer’s Allowance] have been implemented.

(2) Subject to subsection (1A), the”

This amendment which would delay the implementation of the whole Act until the findings of the independent review into Carer’s Allowance overpayments has been published and fully implemented.

Amendment 20, page 64, line 1, at end insert—

“(3A) Before bringing into force any of the provisions of Part 1 of this Act, the Secretary of State must consult with banks as to the costs which will be incurred by banks upon application of the provisions of Part 1.

(3B) Where consultation finds that the expected costs to banks are at a disproportionate level, the Secretary of State may not bring into force the provisions which are expected to result in such disproportionate costs.”

Government amendments 72 and 45.

Amendment 5, page 73, line 6, leave out schedule 3.

This amendment is related to Amendment 2 and removes the requirement for Banks to look into relevant claimants’ bank accounts.

Amendment 11, in schedule 3, page 73, line 25, leave out from “accounts” to the end of line 31 and insert—

“which belong to a person who the authorised officer has reasonable grounds to suspect has committed, is committing or intends to commit a DWP offence.”

This amendment would limit the exercise of an eligibility verification notice to cases where the welfare recipient is suspected of wrongdoing.

Amendment 22, page 84, line 12, at end insert “(d) housing benefit.”

Amendment 6, page 84, leave out line 12

This amendment would remove pension credit from being a “relevant benefit” for the purposes of the Act.

Amendment 71, page 84, line 13, leave out from “to” to end of line 17 and insert—

“remove types of benefit from the definition of”.

This amendment would mean that benefits could not be added to the list of “relevant benefits” by regulations.

Amendment 7, page 84, leave out lines 13 to 17.

This amendment ensure that the bill can only be used in relation to benefits listed in the Bill.

Amendment 21, page 84, line 25, after “money” insert

“or such an account which is held by a person appointed to receive benefits on behalf of another person.”

Government amendments 46 to 67.

Amendment 9, in schedule 5, page 98, line 10, leave out from beginning to end of line 24 on page 99.

This amendment would remove the requirement for banks to provide information to the Secretary of State for the purposes of making a direct deduction order.

Government amendments 68 and 69.

Amendment 12, page 111, line 18, leave out schedule 6.

Government amendment 70.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

It is my pleasure to bring this Bill back to the House. I start by thanking all Members who have made contributions so far, and extend a special thanks to Members of the Bill Committee, some of whom are present today, for their detailed scrutiny.

This Government have an ambitious plan for change. To deliver everything we want to achieve, we must spend taxpayers’ money wisely, which is why we committed in our manifesto not to tolerate fraud or waste anywhere in our public services. The Bill delivers on that commitment. It is part of the biggest crackdown on fraud against the public purse in a generation. Nothing less will do, given the appalling position we inherited.

[David Davis (Goole and Pocklington) (Con)]

Does the Minister recognise that the Government’s own assessment of the effectiveness of the Bill is that it will recover a tiny 1.8% of losses?

[Andrew Western]

The right hon. Gentleman will be aware that we lose a total of £55 billion a year to fraud across the public sector; the Bill will recover £1.5 billion. However, it is part of broader measures—certainly on the Department for Work and Pensions side of the Bill —to save £9.6 billion across the forecast period. By the very nature of the changes that we are making with the Public Sector Fraud Authority, we are designing them to be scalable. As the PSFA becomes more familiar with the work it is undertaking, we think that it will be able to save a significant amount more.

As I was saying, Madam Deputy Speaker, with benefit fraud alone costing £7.4 billion in 2023-24, this is a major problem that is getting worse, not better. We cannot afford to ignore it, and we certainly do not accept it. Fraud against the public sector is not a victimless crime. Our public services, everyone who depends on them, and the taxpayers who fund them, all suffer. And they are increasingly suffering at the hands of fraudsters who use ever more sophisticated techniques to steal money meant for the public good.

The private sector has evolved and adapted its tools and tactics to respond, but, as the scale of the losses that I have just outlined make clear, the same cannot yet be said for the public sector. With this Bill, we will put that right. There will be new powers for the Public Sector Fraud Authority to investigate and deal with public sector fraud outside the tax and social security systems, and new powers for the DWP to modernise its response to fraud and error in the benefit system.

As my right hon. Friend the Secretary of State said on Second Reading, this Bill is tough and it is fair. It is tough on the dodgy business people who try to defraud our public services and it is tough on the criminal gangs and individuals who cheat the benefit system. It is fair to claimants who make genuine mistakes, by helping us to spot and prevent errors earlier. And it is fair to taxpayers, who deserve to know that every single pound of their hard-earned money is being spent wisely.

[Ian Lavery (Blyth and Ashington) (Lab)]

The Human Rights Act 1998 was one of the best pieces of legislation ever passed by a Labour Government. Can the Minister assure the House that this Bill in no way contravenes the secrecy part of the 1998 Act?

[Andrew Western]

I can give my hon. Friend that assurance and, indeed, that all of our legal obligations have been satisfied as part of the consideration of this Bill. The imperative thing for me as a Minister in the Department for Work and Pensions is that we are supporting those who need the social security safety net, not the fraudsters who pick holes in it.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

One concern that we have is the change in the way that people conduct benefit fraud. Through the use of key buzzwords, they help people to navigate the system so that they are able to take out of it what is not theirs. Does he think that there is scope in the Bill, particularly in some of the new clauses, to include specific legislation to prevent people from using words and buzzwords, or from teaching other people how to cheat the benefit system?

[Andrew Western]

The hon. Gentleman is correct that we have a problem with so-called “sickfluencers”, but as we will hear in the debate more broadly, the Government do have existing powers through the Fraud Act 2006 and the Serious Crime Act 2007 to take action in those areas if necessary. He is right to suggest that we should be doing more, and I encourage Conservative Members to reflect on what they did in this space during their period in power. He will be reassured to know that I have commissioned work within the Department to look at what further we can do, but in legislative terms—[Interruption.] I do believe that we have somebody crossing the Floor, Madam Deputy Speaker.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Just for the record, in case Hansard did not pick that up, that was Jenny the dog crossing the Floor, not a Member of Parliament.

[Andrew Western]

I am sure the hon. Member for Torbay (Steve Darling) is grateful to you for that clarification, Madam Deputy Speaker, even if I am not, as Jenny would always be most welcome on this side of the House.

I hope that I have reassured the hon. Gentleman that we do have the legislation required to act.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

The Minister said that powers exist, but, plainly, they are not working, because we know that “sickfluencers” are doing their deeds and people are responding to them, particularly in the mental health sphere, where many of the claims are made. Indeed, we know that officials, or those acting on behalf of officials, are looking out for buzzwords, because, if there is a buzzword in there somewhere, they can bank the case and move on to the next one. Therefore, something plainly needs to be done to stop this. Will he look again at the Opposition’s new clauses 8 and 21, which would ensure that “sickfluencers” are targeted specifically, and say what, in the Government’s amended terms, they would do to deal with this particular group that are contributing significantly to the failure identified by my right hon. Friend the Member for Goole and Pocklington (David Davis) in relation to the amount of money that we are able to claim back from the huge sum that is lost to fraud every year?

[Andrew Western]

I very much agree with the right hon. Gentleman that more needs to be done; what we differ on is the need for specific legislation in that regard. Where we are falling down at present is in the scale of the activity we are undertaking. We could be doing significantly more at the moment, but as I said in response to the previous intervention, I have commissioned work to ensure that that happens. We already routinely contact social media companies to ask them to take down specific posts that could help people to commit fraud against the welfare system. I am very happy to consider practical points, but I am convinced that we have the legislative weaponry required to take the necessary action to deal with people who are encouraging others to commit fraud, both online and elsewhere.

Government amendments 23, 24, 39 and 40 bring into scope the kind of information necessary for fraud investigations and enable the PSFA and DWP to compel certain types of special procedure material, including banking records or records of employment, in line with the policy intent. Requesting this type of information is not new for DWP and occurs under its existing powers. The amendments ensure that the PSFA and DWP can compel this information to support fraud investigations, while also ensuring that important exemptions are in place, such as those for excluded material and journalistic material.

Government amendments 30 and 31 seek to address two separate issues in respect of clause 67. Government amendment 30 includes a provision in the Bill so that the powers granted to the PSFA under the Police and Criminal Evidence Act 1984—or PACE—by clause 7 of the Bill are exempt from the application of clause 67(5). This will ensure that the clause does not interfere with existing PACE provisions in relation to legal professional privilege, enabling the Bill’s PACE measures to function as intended.

Government amendment 31 removes subsection (6) in clause 67, which currently overrides existing self-incrimination protections on the PSFA’s information-gathering powers and PACE powers. This allows the common law principle of the privilege against self-incrimination to apply in the usual way—under the information-gathering powers—and ensures that the proposed PACE powers align with established PACE practices. The amendments ensure that clause 67 provides essential safeguards for the PSFA powers in the Bill related to the processing of information.

[Mr Joshua Reynolds (Maidenhead) (LD)]

I am sure the Minister will accept that there is growing concern about issues of automated decision making, artificial intelligence and algorithms. While wanting to ensure that we get the best results, is the Minister able to commit to the transparency we need when it comes to AI and algorithms in relation to the Bill to ensure that the most vulnerable in our society are not unfairly hit?

[Andrew Western]

The hon. Member will be pleased to know that I can give him that assurance and that we comply with all the Government’s required standards around the publication of such information.

Government amendments 25 and 26 relate to clause 9, which amends the Police Reform Act 2002 to extend the Independent Office for Police Conduct director general’s functions to include oversight of public sector fraud investigators, enabling them to consider PSFA’s use of PACE powers and associated investigations. Clause 9 also enables the Minister for the Cabinet Office to issue regulations conferring functions on the director general in relation to these investigations. Section 105 of the Police Reform Act 2002 sets out requirements for such regulations made under that Act.

However, section 105 only applies to regulations made by a Secretary of State. As the Cabinet Office has no Secretary of State, this section would not include the regulations that the Minister for the Cabinet Office can make under clause 9. Government amendment 26 corrects that technicality so that section 105 also applies to that Minister. In addition, Government amendment 25 simply removes reference to part 2 of the Police Reform Act 2002 within clause 9(1), as the Bill will refer to the Act more widely, rather than just part 2.

Government amendments 48 and 72 provide a clear legislative framework for how the DWP and the PSFA will handle and transfer seized evidence to the most appropriate law enforcement agency, including the National Crime Agency and the Serious Fraud Office. The amendments will ensure that evidence is handled by the organisation best equipped to deal with the specific nature of the alleged crime, fostering inter-agency collaboration and reducing delays to investigations.

--- Later in debate ---

[Dr Murrison]

The Minister is presumably keen to determine how much money is lost to fraud in Scotland, and I imagine he will require the Scottish Government to report back to the UK Government on their progress in clamping down on benefit fraud, but the same should apply in the rest of the country. That, of course, is the purpose of new clause 13, which would require an annual report on the amount of money recovered through the processes that he has outlined. Will he accept new clause 13? Will he also assure me on the point about the Scottish Government’s reporting of fraud?

[Andrew Western]

I assure the right hon. Member on his point with regard to the Scottish Government. However, I will resist new clause 13 because the publication of the DWP’s annual accounts will provide sufficient information about our performance on fraud and error.

Government amendment 42 specifies that the functions of the independent person who can be appointed by the Secretary of State in clause 87 do not apply to devolved benefits unless those are delivered by the Secretary of State under agency agreement. Government amendments 60 and 67 will amend the time required for compliance with a production order served in Scotland. That is to match normal conventions in Scotland. Government amendment 43 ensures that the new debt recovery powers taken by the Secretary of State under the Bill apply only to devolved benefits, while the Secretary of State recovers devolved debts under agency agreements.

Government new clause 18 and Government amendment 33 are consequential amendments to the Social Security Fraud Act 2001 and ensure that the powers of Scottish Ministers under the 2001 Act are unchanged by the Bill. Government amendments 36, 37 and 38 seek to clarify exemptions in the DWP’s information-gathering powers to deliver the intended policy outcome.

A key safeguard in the new DWP information-gathering powers is the exclusion of personal information about users of particular types of free services, such as advocacy and advice services that offer crisis support, for example when someone is fleeing domestic abuse. The intent of the safeguard is to ensure that nobody is deterred from seeking the support they need when they need it. However, the current drafting of that exemption in the Bill as “not for profit” is too broad. That excludes certain information that is very likely to be relevant to a DWP fraud investigation. For example, it prevents the Department from compelling information from housing associations, such as an individual’s address or tenancy, which can be instrumental in proving or disproving a suspicion of fraud.

[Siân Berry (Brighton Pavilion) (Green)]

The independent person is required to produce an annual report on the use of the new powers, which, as the Minister has just laid out, are quite extensive. However, there is no requirement for the DWP to adopt the report’s recommendations. In cases where it does not accept the recommendations, will the Government consider committing to at least explaining why they have reached that conclusion?

[David Davis]

I thank the Minister for giving way, and I hope he will forgive me for waiting till what appears to be the end of his list. When the hon. Member for Blyth and Ashington (Ian Lavery) asked him about the application of the Human Rights Act in this context, he said that the Bill did not breach it, in effect. My advice is a little different, and I waited to hear about his amendments to see whether anything in them changed that. My advice is that suspicionless financial surveillance could breach article 8, which covers the right to privacy, and article 14 on the prohibition of discrimination. Will the Minister make his legal advice on this available to the House? This is incredibly important and it is central to the major criticism of this Bill.

[Andrew Western]

I have already made clear that I am satisfied with the advice I have received. We will make available all the information we are required to make available, but the right hon. Member will appreciate that I am not able to give an undertaking to release all legal advice at this stage. What I can say to him is that I am very confident that there is no breach of article 8 in particular. That has been explored at length as we have gone through the process.

I welcome the ongoing engagement with industry and key stakeholders. We have made a significant effort to engage all interested parties and listen to their views. That feedback has been important in shaping our approach to the Bill to date and will continue to be so as it moves to the other place.

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[Rebecca Smith]

With the leave of the House, I will make a few additional comments. This is the perfect opportunity to respond to some of the points made about Conservative amendments and new clauses.

The hon. Member for Hendon (David Pinto-Duschinsky) was on a short time limit and was not able to take any interventions, but I want to speak to the points he made on including our new clauses—for example, new clause 12. He rattled off the other amendment numbers quickly, so I hope he will forgive me if I did not hear them all, but I believe that new clauses 12 and 15 were included. His implication was that the new clauses we tabled would delay the Bill being put into law. That would not be the case, because each of them is worded for after the Act comes into force. The new clauses would be additional safeguards on the cost implications for banks, annual reporting and the publication of an antifraud and error technology strategy that would make the Bill even better, rather than essentially being wrecking amendments. Regardless of the other amendments included in the hon. Member’s list, ours are certainly not in that vein.

The hon. Member for Aberdeen North (Kirsty Blackman) said that she was slightly unhappy about new clause 21 because those who genuinely help benefit claimants get what they are entitled to may inadvertently be caught by it. That is not our intention. We want only those who push people towards committing fraud to be caught. Citizens Advice and Improving Lives Plymouth, for example, which help people claim what they are entitled to, would not be caught by the new clause, because they would be involved in error only if a mistake were made, rather than through fraud. I appreciate what she said, but that was not our intention. The wording of our new clause covers that.

Concern was raised in Committee about the extent of bank account searches. In our view, other bank accounts used by those who commit fraud would not be checked under the Bill, so we probably need to go further to ensure that fraud is properly tackled. To be more light-hearted for a moment, if I may, anybody reading the report of the debate will see plenty of references to cheesecake, and I think I should explain why. Concern was raised in Committee about the fact that, under the Bill, an account’s individual transactions could be assessed and judged, so everybody would feel terrible if they bought a cheesecake from Waitrose—other shops are available—and that would be a problem in future. If anybody was wondering why we were talking about cheesecake, it related to concern about transactions being checked. At the time, the Minister kindly reassured us that the Bill would not provide for individual transactions to be checked; it would deal just with benefit payments and whether someone has capital that they should not have while claiming benefits. I hope that that is helpful.

[Andrew Western]

With the leave of the House, I thank all hon. Members for their contributions. In the time I have, I will try to respond to some of the points raised. I have listened closely to the concerns set out by Members from across the House, and I will of course ensure that they are taken forward as the Bill progresses to the other place, but today I will resist all non-Government amendments. I will make initial comments in response to several Members, before turning specifically to the nature of the amendments and new clauses.

The Opposition spokesperson, the hon. Member for South West Devon (Rebecca Smith), and the hon. Member for Mid Leicestershire (Mr Bedford), said that the Bill builds on the previous Administration’s work to tackle fraud and error. I have to say, I think that is a fairly generous interpretation of that work, not least because, as far as I can see, the previous Government introduced absolutely no powers for the Public Sector Fraud Authority to tackle fraud across the public sector, and, moreover, nothing on debt recovery. The only evidence we can find of any new powers the previous Government sought to introduce is in the eligibility verification space. I accept that they sought to do that, but they did so in a rather botched fashion, which was subject to significant criticism, and with none of the safeguards and oversight in place. We have now built those into the Bill. I absolutely agree with the Opposition spokesperson that the Government cannot be complacent in tackling fraud—and we will not be—but I say gently that, having allowed fraud and error in the welfare system to spiral to £9.7 billion at the time of the last election, the same cannot be said of the previous Government.

The Liberal Democrat spokesperson, the hon. Member for Torbay (Steve Darling), spoke of a broken welfare system. I do not want to be drawn into a debate on that, but a broken approach to tackling benefit fraud and error is certainly part of any problem that the Department faces.

--- Later in debate ---

[Kirsty Blackman]

Can the Minister reassure us that no action will be taken to stop social security payments until the human investigation has happened?

[Andrew Western]

I am happy to provide that assurance; the hon. Member has stolen my next line. I can say categorically that this is a data push only. No decisions will be taken as a direct result, other than a decision to look further into an account, and potentially initiate a human investigation, if needed.

I want to say a little more about amendments 10 and 12, tabled by my hon. Friend the Member for Poole, which relate to driving licences. He rightly said that welfare recipients may not be able to engage with the Department. For the record, nobody in receipt of benefits or paid through pay-as-you-earn employment will be in scope of the debt recovery powers and therefore of the power to suspend driving licences. Where we do seek to suspend someone’s driving licence, it is worth remembering that this is after we have made at least four attempts to contact them through our debt management team, and at least four further attempts through our debt enforcement team, and we have established their ability to repay by looking at three months’ bank statements. If, when we seek to deduct from that bank account, an individual has removed the funds that we know they have, it is only then that we would look into the possibility of suspending their driving licence. Even then, because this is very much a last resort power, we would seek to agree a repayment plan with them right up until the end. The court would set repayment terms if a driving licence was suspended. It is also worth saying that it is always a suspended decision, subject to compliance with an affordable repayment plan set by the court. As I say, this is a power of last resort. I hope colleagues are reassured to hear of the many steps before we reach that point and, most importantly of all, to hear that the power does not apply to current benefit recipients or anybody paid through PAYE employment.

The right hon. Member for Tatton (Esther McVey) mentioned new clause 11 and the publication of pilot scheme results. I would like to clarify for the House that we are not proposing any further pilot schemes as a result of introducing this legislation. Two pilot schemes have already taken place, so we know that our proposals work. We will be adopting a test-and-learn approach so that we can scale things up. The question of whether this mechanism will yield information that is helpful to us in our inquiries was settled by the previous Government.

[Esther McVey]

Have all the details and all the information from the only pilot schemes that the Government are prepared to run been published in their entirety?

[Andrew Western]

Information of that nature was published prior to Second Reading and is available to Members.

I turn to the amendments and new clauses that attracted the most attention in today’s debate. New clause 1, tabled by the Liberal Democrat spokesperson, the hon. Member for Torbay, pertains to the carer’s allowance. I pay tribute to the millions of unpaid carers across the country. This Government value carers highly, and recognise the vital and valuable contribution they make every day. Like others, I see that in my constituency work, week after week, and I am in awe of all that carers do.

This Government inherited a system in which busy carers, already struggling under a huge weight of responsibility, have been left to repay large sums of overpaid carer’s allowance, sometimes worth thousands of pounds. We need to understand exactly what went wrong, so that we can set out our plan to put this right. That is why we launched an independent review of earnings-related overpayments, and we were delighted that Liz Sayce agreed to lead that review, which will investigate how overpayments of carer’s allowance have occurred, what can best be done to support those who have accrued them, and how to reduce the risk of these problems occurring in future. The independent review is under way and is anticipated to conclude this summer.

But we are not sitting back; we are taking action now. We continue to review and improve our communication with carers to make it as easy as possible for them to tell us when something has changed in their life that could affect their carer’s allowance entitlement. Moreover, this Government introduced the largest ever increase in the earnings limit since carer’s allowance was introduced; the weekly carer’s allowance earnings limit increased to £196 from 7 April this year. It is now pegged permanently to 16 hours.

[Anna Dixon (Shipley) (Lab)]

Clearly, many carers have been affected by overpayments. Overpayment comes as a shock to many who are trying to work in order to bridge the gap between carer’s allowance and their family’s costs, and it has a significant impact on their mental health. Does the Minister share my gratitude to Liz Sayce for the work that she is doing to hopefully provide clarity for the many carers who are trying to juggle unpaid family care and work?

[Andrew Western]

I absolutely agree. Liz Sayce is doing excellent work, and I look forward to seeing the conclusions of her review in due course.

Turning to new clause 1, as I have said, the independent review that has been commissioned is expected to arrive at its conclusions this summer. It would be irresponsible for me to commit in advance to implementing all recommendations. As the House will understand, the recommendations will need to be given careful consideration when they are provided to the Department. Moreover, I do not believe that the new clause would have the effect intended.

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

Will the Minister give way?

[Andrew Western]

If the hon. Gentleman does not mind, I will not, as I am short of time. New clause 1 would prevent recovery of carer’s allowance overpayments via the new recovery powers in this Bill, but the DWP would still be able to recover carer’s allowance overpayments through deductions from benefits or through deductions from PAYE earnings. This would place carers in an unequal position in regard to overpayment recovery, with recovery depending on whether they were in receipt of benefits or in PAYE employment. Even if I believed that that was what the amendment intended, suspending recovery of all carer’s allowance overpayments until the independent review has concluded would be disproport-ionate. There are safeguards and protections for those with overpayments, including appeal rights, affordable repayment plans and, in exceptional circumstances, the option to waive the debt.

I turn to new clause 21, which the Opposition spokesperson, the hon. Member for South West Devon, spoke to, and I will refer to new clause 8, which proposes to introduce a new offence of fraud against a public authority. In my view, that is already covered by existing offences, making the amendment duplicative and unnecessary. Fraud is already an offence under the Fraud Act 2006, and the common law offence of conspiracy to defraud, regardless of whether the fraud is against public authorities or anyone else, is already in existence.

The Government amendments to clause 70 bring together the offences in sections 6 and 7 of the Fraud Act 2006 of

“possessing, making or supplying articles for use in frauds”,

with the offences of “assisting and encouraging” that are found in sections 44 to 46 of the Serious Crime Act 2007. That allows us to tackle the issue that Committee members were concerned about—influencer-style offences, in which a person provides the knowledge needed to commit a fraudulent act through internet videos or manuals.

[Dr Luke Evans]

On that point, will the Minister give way?

[Andrew Western]

I will not. I took an intervention from the hon. Gentleman on this subject earlier, but I am short of time. [Interruption.] Had he stayed for the whole debate, I might have been more willing to do so, but I responded to his earlier invention.

In my view, we simply need to enforce existing law. Similarly, new clause 21 seeks to amend the Social Security Administration Act 1992 to introduce an offence of encouraging or assisting fraud. Again, in my view this is unnecessary, because that is covered by the Fraud Act 2006 and the Serious Crime Act 2007. The hon. Member for South West Devon asked for assurance that we would use the powers that we already have. As I said in response to interventions, I have commissioned work in the Department to look at how we can further use the powers that we have; in my view, historically, we have not taken best advantage of them.

[Iqbal Mohamed]

On that point, will the Minister give way?

[Andrew Western]

I am sorry, but I will not.

Turning to new clause 10, we want to ensure that the Government have access to a wide, appropriate and proportionate range of debt recovery powers, so that we have multiple methods of recovering money from those who have the means to pay but refuse to do so. However, new clause 10 is not required, as equivalent action is already provided for through existing legislation for the DWP, and by clause 16 of this Bill for the PSFA. Clause 16 clarifies that the PSFA is able to seek alternative civil recovery through the civil courts. In addition, there are direct deduction orders and deduction from earnings orders in the Bill, which could include liability orders.

I have largely covered amendment 11. In closing, I want to make a few observations about amendments 8 and 9, tabled by my hon. Friend the Member for Liverpool Wavertree (Paula Barker), but spoken to by other Members. In my view, those amendments would reduce the effectiveness of our debt recovery powers as proposed in the Bill, so I cannot agree to them. I recognise the importance of dialogue with customers all the way through the journey of debt recovery. As I set out in response to the concerns about the revocation of driving licences raised by my hon. Friend the Member for Poole, we will seek to engage with people at all stages of the journey. If we identified any vulnerabilities, we would cease recovery, and at all stages we would look to agree an affordable repayment plan.

I hope that I have addressed the majority of the points raised by right hon. and hon. Members, and I thank them again for their contributions. I thank the witnesses who gave their time to the Committee, and those who provided written evidence. Finally, I extend my thanks to the Clerks, the House staff and civil servants who have contributed to the passage of the Bill.

For too long, too little effort has been made to get a grip on public sector fraud, resulting in the totally unacceptable levels that we see today. With this Bill, we are taking the powers needed to act and to finally take the fight to the crooks and the con artists, from criminal gangs attacking our welfare system to covid fraudsters who stole from hard-working people in a time of national emergency.

This Bill is critical. It will save us billions of pounds, and it is part of a broader package in the Department to save £9.6 billion for the DWP by 2030. I hope that all Members feel able to support it today.

Question put and agreed to.

New clause 17 accordingly read a Second time, and added to the Bill.

Winter Fuel Payment

Andrew Western Excerpts

Wednesday 19th March 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

I am pleased to respond to this important debate. This topic affects millions of pensioners up and down our country. It is one we have debated many times in recent months, and it is right that we do so. Many right hon. and hon. Members have made important contributions that I want to acknowledge.

My hon. Friends the Members for North East Derbyshire (Louise Jones), for Gateshead Central and Whickham (Mark Ferguson) and for Wirral West (Matthew Patrick), among others, talked about the inheritance that we as a Government faced when we came into office and the difficult decisions that have arisen as a result, and they were right to do so. I particularly commend my hon. Friend the Member for Makerfield (Josh Simons), who talked about the work he is doing in his community to drive pension credit take-up. I know that Members across the House are doing the same, and I thank them for doing so.

As my hon. Friend the Pensions Minister set out earlier, the decisions we have made have not been easy, but we have made sure that we have protected those pensioners who need support the most. Winter fuel payments will continue to be paid to pensioner households in England and Wales with someone receiving pension credit or certain other income-related benefits. They will continue to be worth £200 for eligible households or £300 for eligible households with someone aged 80 or over. The majority of those payments—over £1 million—were paid before Christmas.

Means-testing the winter fuel payment was a choice we had to make to protect the most vulnerable pensioners, while doing what is necessary to repair the public finances after 14 years of the wrecking ball that is the Conservative party. It is the difficult decisions we have taken that mean this Government are able to provide much-needed additional investment in the NHS, which benefits us all, including pensioners who rely on these services. The Government are working hard to reform the NHS in England through the 10-year health plan to build a health service that is fit for the future.

[Wendy Morton]

Does the hon. Gentleman not accept that, while he may well be putting money into the NHS, which is great, his policy towards pensioners, based on the statistics we have seen, means that more pensioners are going into the NHS and putting more pressure on the service? It just does not make sense.

[Andrew Western]

I dispute the right hon. Lady’s statistics. She is right to highlight that there has been an increase in hospital admissions among over-65s, but that is entirely in line with the statistics for people entering hospital in other age cohorts. That is actually a result of the collapse of the NHS on the Conservatives’ watch, which means that A&E is the only option for so many people.

As I was saying, as a first step at the autumn Budget, the Government announced a £22.6 billion increase in day-to-day health spending in England and a £3.1 billion increase in the capital budget over this year and the next. But we know that even with our long-term efforts to rebuild critical public services, pensioner poverty is a very real concern.

[Joe Robertson]

Will the Minister give way?

[Andrew Western]

I will make some progress first.

There will always be those who, for whatever reason, have been unable to make sufficient provision for their retirement. The benefit system provides a vital safety net for those on low incomes who need support the most. This, of course, includes help through pension credit, worth on average £4,300 a year and which tops up income, as well as unlocking access to additional support and benefits. We know there are still low-income pensioners who are not claiming pension credit but are eligible to do so and we want everyone to get the support to which they are entitled. That is why, since September, we have been running the biggest ever pension take-up campaign. Around 1.4 million pensioner households receive pension credit, but too many have been missing out. Thanks to our campaign, we have seen 235,000 pension credit applications in the 30 weeks since the end of July last year, an 81% increase on the comparable period in 2023-24. That has led to almost 50,000 extra awards over the same period.

[Kirsty Blackman]

I wonder if the Minister can ask his friend, the hon. Member for Makerfield (Josh Simons), to get in touch with me about how he managed to find out where the 5,000 pensioners are that he was able to write to. I have tried to get that information so I can write to pensioners and tell them about pension credit, but it has not been available anywhere. If he could ask his friend to write to me, I would really appreciate it.

[Andrew Western]

I thank the hon. Lady for her intervention. I am sure she is capable of contacting my hon. Friend the Member for Makerfield herself, but I recall that he did mention that he was working closely with his local authority. I am sure it has been able to assist in that campaign, which he described as a partnership rather than his own work, to drive take-up in his area.

As detailed earlier by the Pensions Minister, we are directly targeting all pensioners who make a new claim for housing benefit, bringing together the administration of pension credit and housing benefit, and we are introducing new research on the triggers and motivations that encourage people to apply for pension credit, to guide future policymaking.

I echo the Pensions Minister’s remarks on the triple lock. It is worth repeating that over 12 million pensioners will benefit from our commitment here. Over this Parliament, up to and including 2029-30, the OBR forecasts that Government spending on the state pension will rise by over £31 billion. And there is lots of other support too, including the warm home discount and the household support fund, available to pensioners.

I will turn now to some of the other specific points raised during today’s debate. Several Members raised the delays in pension credit processing. It is important for me to recognise here the sheer volume of applications the Department received during this period. We understand that pensioners expect their applications to be processed quickly and accurately, which is why we deployed over 500 extra staff to process the huge increase. The latest statistics also show a positive picture: outstanding claims have reduced from 85,500 in mid-December to just 33,700 by 23 February, which is in line with the Department’s usual number of claims awaiting processing.

Some hon. Members raised the issue of an impact assessment at the time of the policy decision. In line with the requirements of the public sector equality duty, an equality analysis was produced as part of the ministerial decision-making process. That was published on 13 September and placed in the House of Commons Library. It assessed the effects on individuals and households according to protected characteristics set out under the Equality Act 2010. They do not include impacts on the NHS.

Other hon. Members have quoted figures on the poverty impact of the changes to winter fuel payments. I simply note that yes, internal Government modelling was produced as part of routine policy advice. Given the interest from the Work and Pensions Committee and the public interest, the Department published this modelling for transparency in a letter to the Select Committee in November. However, it is essential to note that this modelling is subject to a range of uncertainties, which should be taken into account when interpreting the results, and that it does not take into account any impact of the measures we are taking to increase pension credit take-up and ensure pensioners get the benefits to which they are entitled.

[Harriet Cross]

My understanding is that the impact assessment showed that about 100,000 pensioners would be put into poverty. I was just wondering what range either side of that figure would be acceptable to the Minister.

[Andrew Western]

What I would say to the hon. Lady is that I would never want to see those numbers increase, but that number is significantly better than the 300,000 pensioners who went into relative poverty under her Government.

To those asking about Government action with respect to energy costs, I say that the Government recognise that affording energy bills is a struggle for many and that energy debt is rising. The Government have continuous engagement with energy suppliers and have discussed the support they have in place to support vulnerable consumers, including pensioner households. We are continuing to deliver the warm home discount for eligible low-income households and have recently published a consultation on its expansion, which would bring around 2.7 million more households into the scheme, pushing the total number of households receiving the discount next winter up to around 6 million.

I will turn briefly to some of the contributions from Members on the Conservative Benches, and in particular from the shadow Secretary of State for Work and Pensions, who, interestingly—given the description used by the hon. Member for South Leicestershire (Alberto Costa) of this side of the House—I felt expressed faux outrage at this decision. It is rich from a party that, as I said, pushed 300,000 pensioners into relative poverty, made pitiful efforts to address pension credit take-up, made a 2017 manifesto commitment to means-test the winter fuel payment and let the value of the winter fuel payment fall by around 50% during its time in government.

The shadow Secretary of State for Work and Pensions went on to make repeated reference to Labour Members’ consciences, which was relatively offensive, but nothing compared with being called the “nasty party” by the hon. Member for South Leicestershire. I will not accept those sorts of attacks from the Conservatives—the party of Downing Street parties, the party of the inhumane Rwanda scheme, and the party that drove so many to food banks. My conscience is clear, Madam Deputy Speaker; it is appalling to imagine that theirs is the same after what they did to this country over 14 years.

I listened very carefully to—[Interruption.] I am being chuntered at from a sedentary position about the household support fund. I remind the shadow Secretary of State that it was not fully funded by the Conservatives on a multi-year basis, and it is this Government who have provided that certainty to local authorities.

I listened very carefully to the speech from the shadow Health Secretary and, indeed, the more than dozen speeches from Opposition Members, and I am still no clearer on what their policy actually is. We had one Member standing up and saying means-test, another standing up and saying tax the winter fuel payment, but neither shadow Secretary of State present bothered to stand up and tell us what the Conservatives’ policy is. If they want to stand up now and say that they would reverse this policy decision, I would be happy to give way to either of them. Feel free. Their silence says it all, Madam Deputy Speaker.

We have made the hard choices necessary to bring the public finances back under control after 14 years of Tory misrule.

[Ben Obese-Jecty]

At what point would the uptake of pension credit eliminate the savings from cancelling the winter fuel payment? At what number would the uptake overtake that payment?

[Andrew Western]

We have never suggested that they would, and the Minister for Pensions addressed that in his opening statement. The savings put forward do take account of that. I have to say that, in accepting that intervention, I was hopeful that, finally, one Tory would come forward with an actual policy in this area—I would say that I am disappointed, but it is only to be expected. Pensioner households who need support the most will continue to get winter fuel payments. We are getting more and more people on to pension credit, so that they can get winter fuel payments and increase their weekly income.

This motion calls for an apology. The only people who should be giving an apology to pensioners and to this country are those in the Conservative party, for the mess that they left behind.

Question put.

Public Authorities (Fraud, Error and Recovery) Bill (Twelfth sitting)

Andrew Western Excerpts

Committee stage
Tuesday 18th March 2025 Public Bill Committees

[Steve Darling (Torbay) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western. I support the new clause tabled by the hon. Member for Brighton Pavilion. On several occasions over recent weeks, Ministers have gone on the record to describe the DWP and the benefits system as a “broken” system. It is extremely helpful that the hon. Member highlighted the impact that that can have on people who often have chaotic lives and are on the edge.

I have served the people of Torbay in elected office for 30 years. Over that time, I am saddened that, particularly with the recent cost of living crisis, the levels of destitution have become worse, as I hear from people who provide food banks and other support for the people in need in Torbay. Whether it is Scope or the Joseph Rowntree Foundation, many of those good organisations highlight to policy developers that the levels of benefits are really tough and the levels of destitution in our communities are higher than they have been for many years. Therefore, I would welcome some thoughts from the Minister about this proposal, because sadly, recovery will often drive people into destitution and, as highlighted by the hon. Member for Brighton Pavilion, into severe ill health.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

It is a pleasure to serve under your chairship once again, Mr Western. Before I come to my general comments on the new clause from the hon. Member for Brighton Pavilion, I will attempt to respond to some of the questions that we have heard.

On how we can assure ourselves that people could reasonably have known, this assessment is made by our specialist investigation teams, who do this day in, day out. There is a balance of probabilities that they would apply to instances such as that. It is a process that has been in place for years. On whether an appointee would be liable for an overpayment, yes, they would. How much is official error? It is approximately 0.3% of all benefit payments. About £800 million is the most recently available annual figure.

On how a repayment plan is agreed—this goes to the point that the hon. Member for Torbay made also—we again have a specialist team who calculate this. We have a vulnerability framework should that be required. All repayment requests are done on an affordable basis. As we heard last week, the specifics around the new debt recovery power make attempts, throughout the process, to agree an affordable repayment plan. The limits that the Bill would put in place would be not more than 40% in the case of an ongoing deduction and 20% in cases of error. On the point about recovery causing destitution, which the hon. Gentleman also made, he will have noted that towards the end of last year, the Department announced its new fair repayment rates, reducing the amount of deduction that can be made from benefits down to 15%. As I have just outlined, further provision is made where we are looking to take these new powers to deduct directly from bank accounts.

To return to the point that the hon. Member for South West Devon made about prevention of overpayments, the eligibility verification measure is intended to help us to identify fraud, particularly in relation to capital, and people who have been abroad longer than they should be, in terms of aligning that with their eligibility for benefits, and we think that it will enable us to identify error overpayments sooner as well. Of course, people are regularly reminded to update their circumstances also. A range of mechanisms are in place already to assist with the identification of overpayments. We are not complacent. We know that there are too many overpayments through official and claimant error, just as there is far too much fraud in the Department. That is why we are taking many of the steps identified and outlined in this Bill.

Before I turn to my comments about new clause 1 specifically, let me just make a correction to something that I told the Committee last week. I said that the minimum administrative penalty that can be offered, which receives a four-week loss of benefit, is £65. I misspoke and I would like to take this opportunity to correct the record and state that the amount is £350.

New clause 1 seeks to amend existing recovery legislation, to limit when overpayments of universal credit and new-style benefits caused by official error could be recovered. Specifically, those official error overpayments would be recoverable only where the claimant could have been reasonably expected to realise they were not entitled to the overpayments in question at the time they received them. This Government are committed to protecting taxpayers’ money and ensuring that we can recover in a fair and affordable way money owed. The debt recovery powers in the Bill apply to all debt that Parliament has determined can be pursued. Section 71ZB of the Social Security Administration Act 1992, introduced in the Welfare Reform Act 2012 under the coalition Government, made any overpayment of universal credit, new style jobseeker’s allowance and employment and support allowance in excess of entitlement recoverable. That includes overpayments arising as a result of official error.

Official error can arise for a number of different reasons. Some errors, for example, occur as a result of the flexibility of the universal credit system. Unlike the tax credit system it replaces, UC works on a monthly cycle of assessment periods. It is to be expected that on occasion, corrections or changes take place over assessment periods. The system quickly rectifies these “errors” in the next assessment period and it is vital that this functionality is maintained. In these instances, the customer is not worse off as, over the course of subsequent assessment periods, they receive the correct amount on average. It is also helpful to explain that under existing departmental processes, customers have the right to request a mandatory reconsideration of their benefit entitlement as well as the amount and period of any subsequent overpayment. Following that, they can appeal to the first-tier tribunal, should they still disagree with the Department’s decision.

We recognise that overpayments, however they arise, cause anxiety for our customers. The Department’s policy is therefore to recover debts as quickly and cost effectively as possible without causing undue financial hardship to customers. DWP’s overall approach to recovery balances the need to protect public funds by maintaining recovery levels, while providing a compassionate service to all customers regardless of their circumstances. The Department’s policy is therefore to agree affordable and sustainable repayment plans. The debt recovery measures in the Bill, however, are last-resort powers for debtors who are no longer on benefits or in pay-as-you-earn employment and are persistently evading debt recovery. These powers apply across all types of debt.

All our communications to our customers signpost to independent debt advice and money guidance, and we heard from the Money and Pensions Service in our evidence sessions about how strong the partnership working between the Department and debt sector is. DWP is committed to working with anyone who is struggling to repay their debt and customers are never made to pay more than they can afford. Where a customer feels they cannot afford the proposed rate of recovery, they are encouraged to contact the Department to discuss their repayment terms. The rate of repayment can be reduced or recovery suspended for an agreed period, and the Department may also consider refunding the higher deduction that has been made. The Department’s overpayment notifications have been updated to make sure customers are aware they can request a reduction in their repayment terms. In exceptional circumstances, the Department has the discretion to waive recovery of the debt, in line with the Treasury’s “managing public money” guidance. In doing so a range of factors are considered including the circumstances in which the overpayment arose.

Finally, I have listened to and take seriously the concerns from the hon. Member for Brighton Pavilion. As the Committee is aware, the Minister for Social Security and Disability is looking at the policy design of universal credit to ensure outcomes that tackle poverty and help people to manage their money better. I will pass the concerns raised by the hon. Lady on to him, but having outlined the reasons against it, I will resist new clause 1.

[Siân Berry]

I thank the Minister for taking seriously the concerns I raised. I will not press the new clause further today, but I hope that it will be looked at seriously in the next stages of the Bill, and that we can discuss this further in the House. I therefore beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Offence of fraud against a public authority

“(1) A person who—

(a) commits,

(b) assists or conspires in the committal of, or

(c) encourages the committal of

fraud against a public authority commits an offence.

(2) A person who commits an offence under subsection (1) is liable—

(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);

(b) on conviction on indictment, to imprisonment for a term not exceeding 7 years.”—(Rebecca Smith.)

Brought up, and read the First time.

--- Later in debate ---

[The Chair]

I understand, although I was not present at the time, that all the declarations were made at the time of evidence being presented to the Committee. I thank the hon. Member for his point of order.

[Andrew Western]

I would like to understand how the Opposition Front-Bench team consider new clause 15 to make any provision that is not already in the Fraud Act 2006 or the Serious Crime Act 2007, which already make it an offence to encourage or assist an offence including fraud. I stress that because I am particularly concerned about sickfluencers, to whom the hon. Lady referred, but I fail to see how new clause 15 offers any provision not contained in that legislation already. It does not mention at any point that it would extend powers to what happens online, presumably because—or I can say actually because—online sickfluencers would already be covered by that legislation. I understand the intent. We have a problem with sickfluencers that we need to deal with, but I would be incredibly appreciative to understand how the new clause offers anything that is not already in that legislation.

--- Later in debate ---

[Rebecca Smith]

I beg to move, That the clause be read a Second time.

We have tabled the new clause to require the Secretary of State to publish the results of any pilot schemes run with banks to test the provisions of chapter 1 of part 2 of the Bill. We have already discussed how banks will be required to undertake ongoing monitoring work to collect the relevant information as part of eligibility verification. The impact assessment states that two proofs of concept have taken place, including one in 2017, with short summaries provided of each. Given the scale of what is being asked of the banks, however, as well as how technology has moved on in the past eight years, it is reasonable to assume that pilots will also be undertaken to ensure that the system works properly before it is fully rolled out. Can the Minister confirm that this will be the case?

In the interest of transparency, we also need to see the results of the pilots, which is why we have tabled the new clause to ensure that they are published within three months of the Act coming into force. It is regrettable that we needed to table the new clause but, as we have said several times throughout the Bill’s passage, and as we heard from witnesses before the Committee, it is extremely difficult to judge how the legislation will work in practice without seeing the code of practice and understanding what will be required of the banks. As UK Finance said in oral evidence:

“Much will depend on the mechanism through which banks will be required to share the information, the frequency of the information notices, whether the criteria we are required to run the checks against change over time and other factors that will influence how much capacity is required from the banking sector. As I say, at this stage it is challenging to do a detailed assessment.”––[Official Report, Public Authorities (Fraud, Error and Recovery) Public Bill Committee, 25 February 2025; c. 48, Q85.]

The practical implications of how to implement the Bill are not currently clear to the banks.

We also discussed the consequences of getting this wrong. As UK Finance also said in evidence,

“under the Bill banks responding to an information request or a direct deduction order, would have to consider whether there is some indication of financial crime that under POCA requires them to make a suspicious activity report. We think it is simpler to remove that requirement, not least because where there is a requirement to make a suspicious activity report there is a requirement to notify the authorities; clearly, there is already a notification to the authorities when complying with the measure. Removing that requirement would avoid the risk that banks must consider not only how to respond to the measure but whether they are required to treat that individual account as potentially fraudulent.”––[Official Report, Public Authorities (Fraud, Error and Recovery) Public Bill Committee, 25 February 2025; c. 49, Q89.]

The banks are well versed in dealing with fraud, but not so much with error. We need reassurance that there are clear expectations of the banks in delivering their duties under the Bill, that those are compatible with existing obligations regarding financial crime, and that the banks can resource them.

[Andrew Western]

In my view, the new clause is simply not needed. As the hon. Lady said, to demonstrate the feasibility and potential of the eligibility verification measure, the DWP conducted two proofs of concept, in 2017 and 2022, and the results have been published in the impact assessment for the Bill. Further information on the effectiveness of the measure will, of course, be available following the independent overseer’s annual review and report. No pilot schemes have or will be conducted on information notices specifically, as they are an extension of existing powers. On that basis, I resist new clause 5.

[Rebecca Smith]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 7

Annual reporting of amounts recovered

“(1) The Secretary of State must publish an annual report detailing the amount of money which has been recovered under the provisions of this Act.

(2) A first report must be published no later than 12 months after the passing of this Act with subsequent reports published at intervals of no more than 12 months.”—(Rebecca Smith.)

Brought up, and read the First time.

[Rebecca Smith]

I beg to move, That the clause be read a Second time.

The new clause would require the Secretary of State to publish an annual report detailing the amount of money recovered under the provisions of the Bill, with the first report to be published within 12 months of its passage. The main purpose of the Bill is to crack down on error and fraud, and we support that aim. It is reasonable to ask for transparency to understand exactly how much money has been recovered thanks to the measures in the Bill, and to ensure that it is working as hoped. If it is not, further action will be needed, but at least we would know, and a discussion could be had instead of the issue being brushed under the carpet.

An annual report allows the Department enough time to produce it without being an administrative burden, while ensuring that it remains relevant and up to date. Given the large amount of money lost to fraud and error, it is important that we are all able to hold the Government to account for how effectively they are recovering it.

[Andrew Western]

I share and appreciate the hon. Member’s concern and interest in delivering the proposed benefits of the Bill, including the effective recovery of debt. The Bill delivers on our manifesto commitment that this Government will safeguard taxpayers’ money and not tolerate fraud or waste anywhere in public services.

Turning first to part 2 of the Bill, I do not think the new clause is necessary, given the existing routes for external scrutiny and reporting on the DWP’s fraud and error activities, including the new debt recovery powers. The Office for Budget Responsibility provides independent scrutiny of the Government’s costings of welfare measures. The Department estimates that, over the next five years, the EVM will save £940 million and the debt recovery measure £565 million. Those estimates have been certified by the OBR. In total, the Bill is estimated to deliver benefits of £1.5 billion over the next five years. In the published impact assessment, the DWP committed to monitoring and evaluation on part 2 of the Bill, including the new powers to recover debt and the EVM.

Although I understand that the hon. Member is particularly interested in scrutiny of the money recovered under the Bill, I remind the Committee that the Government have committed to the biggest welfare fraud and error package in recent history. The total DWP fraud, error and debt package, with savings from the Bill and other Budget measures, is worth £8.6 billion over the next five years.

In its annual report and accounts, the DWP already reports on the savings made from its fraud and error activities, including savings made from “detect” activity across our counter-fraud and targeted case review teams. In addition, we report on our debt recovery totals and debt stock. I think the annual report and accounts, in particular, will give the hon. Member the information in which she is interested. The Department also publishes annual statistics on the monetary value of fraud and error, including various breakdowns by benefit and type. That is another mechanism by which we can see trends over time and ensure transparency for the public.

Turning to part 1 of the Bill, the PSFA already has a published commitment in its mandate to produce an annual report that makes transparent the levels of fraud in Government and the latest fraud and error evidence base, and an annual report on its performance. Recoveries will be published in the annual report. Paragraph 12 of schedule 2 to the Bill also requires:

“As soon as reasonably practicable after the end of each financial year the PSFA,”

when set up as a statutory body,

“must prepare a report on the exercise of its functions during that financial year.”

Recoveries will be published as part of that.

For the reasons I have outlined, I resist the new clause.

[Rebecca Smith]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 8

Publication of an Anti-Fraud and Error Technology Strategy

“(1) The Secretary of State must, within six months of the passing of this Act, publish an Anti-Fraud and Error Technology Strategy.

(2) An Anti-Fraud and Error Technology Strategy published under this section must set out—

(a) how the Government intends to use automated technologies or artificial intelligence to tackle fraud against public authorities and the making of erroneous payments by public authorities, and

(b) a series of safeguards to provide for human oversight of decision making that meet the aims set out in subsection (3);

(c) how rights of appeal will be protected;

(d) a framework for privacy and data sharing.

(3) The aims of the safeguards in subsection (2)(b) are—

(a) to ensure that grounds for decision making can only be reasonable if they are the result of a process in which there has been meaningful human involvement by a human of adequate expertise to scrutinise any insights or recommendations made by automated systems,

(b) to make clear that grounds cannot be reasonable if they are the result of an entirely automated process, and

(c) to ensure that any information notice issued is accompanied by a statement—

(i) setting out the reasonable grounds for suspicion that have been relied on, and

(ii) confirming that the conclusion has been formed on the basis of human involvement.”—(Rebecca Smith.)

Brought up, and read the First time.

[Rebecca Smith]

I beg to move, that the clause be read a Second time.

The new clause would require the Secretary of State to publish an anti-fraud and error technology strategy within six months of the Act’s passage. That must include: how the Government intend to use automated technologies and AI to tackle fraud, subsection (2)(a); safeguards to ensure human oversight of decision making, subsection (2)(b); protection of rights of appeal, subsection (2)(c); and a framework for privacy and data sharing, subsection (2)(d).

Members might be asking themselves why we tabled the new clause. In part, it is based on the evidence we received. In written evidence, the Public Law Project expressed concern that, although the impact assessment, the human rights memorandum and the statements from the Secretary of State and the Minister for transformation, the hon. Member for Stretford and Urmston, on Second Reading state that a final decision on benefit eligibility will always involve a human agent, this is not reflected in the Bill itself. In response to the Public Law Project’s concerns, the new clause would provide an audit of technology systems used to tackle fraud, ensuring accountability while addressing the risks posed by automation in decision making.

A report published by the Treasury in 2023, “Tackling fraud and corruption against government”, said:

“Public bodies can better protect themselves…by sharing data and intelligence with other public bodies and working together.”

We therefore believe the technology strategy clause recognises that sharing data is beneficial to stopping and recovering fraud, but includes additional provisions that audit its use.

The strategy must include: how the Government intend to use automated technologies or artificial intelligence to tackle fraud and error against public bodies; what safeguards exist for human oversight of decision making; how rights of appeal will be protected; and a framework for privacy and data sharing.

The safeguards must ensure that grounds for decision making are reasonable only if they are the result of a process in which there has been meaningful involvement by a human of adequate expertise to scrutinise any insights or recommendations made by automated systems. They must also make it clear that grounds cannot be reasonable if they are the result of an entirely automated process. To ensure this, any information notice issued must be accompanied by a statement setting out the reasonable grounds for suspicion that have been relied on, and confirming that the conclusion has been formed on the basis of human involvement.

We know that AI and other technologies have huge potential to improve efficiency and productivity, and they should be used where appropriate, but we cannot rely on it yet to the exclusion of people and human judgment. The strategy we propose would ensure that those points were adequately considered by the Department, ensuring that the taxpayer receives value for money while safeguarding claimants through the decision-making process.

[Andrew Western]

I thank the hon. Member for tabling the new clause. The Government recognise the opportunities that AI and machine learning can provide, while also understanding the need to ensure they are used safely and effectively. In January 2025, the Government outlined their response to the AI opportunities action plan led by Matt Clifford, which was commissioned by my right hon. Friend the Secretary of State for Science, Innovation and Technology. The plan outlined 50 recommendations for how the Government can leverage AI, including recommendations to improve access to data, to make better use of digital infrastructure and to ensure the safe use of AI.

Under the leadership of the Prime Minister and the Secretary of State for Science, Innovation and Technology, we have endorsed this plan, and the Government are taking forward those recommendations. As the Government work to implement the action plan’s recommendations, I do not believe that the separate anti-fraud and error technology strategy proposed by the new clause is necessary. I believe the new clause would cut across the work being taken forward under the action plan, so I reject the amendment.

As technology advances, the use of AI and machine learning will play a crucial role in detecting and preventing fraudulent activities. The Government want to make use of technology and data to tackle fraud, as the Department has a responsibility to ensure that fraud is minimised so that the right payments are made to the right people. The Government remain committed to building our AI capability, and at DWP we will take advantage of the opportunities offered by AI while ensuring it is used appropriately and safely.

[Rebecca Smith]

Sorry, I should have said this earlier. The new clause would make the Government’s AI strategy a statutory requirement, instead of a manifesto commitment not written into law. That is important to us because, in the case of fraud and particularly benefit fraud, we are dealing with individual people. We want to make sure that we do not inadvertently penalise the wrong people or apply something that is disproportionate. A lot has been said about ensuring proportionality and reasonableness.

I am interested in the Minister’s reflections on where else in the strategy something is applied as personally to potentially vulnerable groups of people, thereby suggesting that we do not need this protection to ensure that people are not inadvertently penalised when we use this legislation to tackle the fraud they are committing.

[Andrew Western]

That is a reasonable question, and clearly the AI framework is not specific to vulnerable groups in the way that the hon. Lady sets out. Decisions regarding benefit entitlement or payments within the Department are made by DWP colleagues who always look at the available information before making a decision. I would not want to make an amendment to restrict that to only the activity within this Bill; I would want it to be Departmental wide.

As I have set out a number of times at every stage and in every area of this Bill, a human is involved in decision making. There is no plan to change that. I can understand the hon. Lady’s anxiousness to see that set out in legislation, but I think it would create an anomaly between the practices within this Bill and in the Department more broadly. For instance, it is outside the scope of this Bill for a human to complete the vulnerability framework when looking at somebody in financial need who has an overpayment. I would not want to make a distinction between these powers and the rest of the Department's activities. If we were to have a broader debate, I would be happy to engage with the hon. Lady on that basis, but I would not want to create a “two-tier”, for want of a better word, description within the Department.

At every stage of model development, as we bring forward the AI opportunities action plan and our work in the AI and tech space, we ensure that checks, balances and strong safeguards are in place. I am proud of our commitment to use AI and machine learning in a safe and effective way.

To provide further assurances to Parliament and the public about our processes, we intend to develop fairness analysis assessments, which will be published alongside our annual report and accounts. These will set out the rationale for why we judge our models to be reasonable and proportionate. This reporting commitment on our fairness analysis assessment further negates the need for the new clause.

Finally, the hon. Lady mentioned the new clause’s role in ensuring reasonable grounds of suspicion when investigating fraud. I remind the Committee that, under the information gathering powers, the DWP may request information only where an authorised officer considers that there are reasonable grounds to suspect a DWP offence and that it is necessary and proportionate to obtain that information. Again, a human is fully baked into the process.

The changes made by the Bill will be reflected in the new code of practice. Updated mandatory training will be provided for staff, who will be accredited to use these new powers. Of course, with the eligibility verification measure in particular, but running throughout the Bill, the principle of independent oversight is very much in place. I hope that will provide the hon. Lady with the necessary information to show that the Government will use the information gathering powers only where there is a reasonable suspicion of fraud, and that this will have considerable human involvement. I agree that there is perhaps a broader conversation to be had about this at an appropriate time.

[Rebecca Smith]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 9

Impact of Act on vulnerable customers

“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament an assessment of the expected impact of the Act on vulnerable customers.

(2) For the purposes of this section, “vulnerable customers” means someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.”—(Rebecca Smith.)

Brought up, and read the First time.

--- Later in debate ---

[Siân Berry]

I have a lot of sympathy with both new clauses. It is really important that we look closely, as we are mandated to do, at the impact of the Bill on the people whose examples have been raised throughout the debate. The Minister should answer the questions asked by hon. Members, and if the Government will not do what is proposed in the new clauses, he should say what the Government will do instead.

[Andrew Western]

I begin with new clause 9, tabled by the hon. Member for South West Devon. I share her view that where the powers in the Bill are exercised, there should be a consideration of the vulnerabilities that customers may have, whether they be the customers of data holders such as banks or customers of Government —for example, DWP customers. However, I do not think that the new clause is necessary given the existing safeguards, oversight and reporting provisions in the Bill.

The Bill includes a number of protections for vulnerable people, including affordability considerations and protections for persons experiencing hardship, rights of review and appeal, and independent oversight. Those provisions have already been debated and considered by the Committee, so I will not labour the point, but I will comment on the provisions in the Bill for independent oversight, as they will play an important role here.

--- Later in debate ---

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western.

The DWP is making extensive and growing use of algorithms for investigation purposes. Without proper oversight, these systems threaten error, unfairness and bias, which could lead to wrongful debt collection. Our amendment therefore calls for an independent audit of these systems at least every six months, to ensure accuracy and fairness. The audit must be conducted by experts in data science, ethics and social policy with no ties to the DWP or system developers. True independence is key.

The audit look at issues such as accuracy, so whether the algorithms are correctly identifying overpayments; fairness, so whether they unfairly target certain groups or operate with bias; and, above all, transparency and accountability. After each audit, we suggest that a full report must be published, presented to Parliament within 14 days, and made publicly accessible. If serious flaws are found, the Secretary of State must respond within 30 days with a clear action plan to fix these issues. Overall, Liberal Democrats are positive about benefiting from new technology, but we do need to consider whether it offers help, not harm.

In the wider context, what work is the use of AI generating? There are already chronic staff shortages at the DWP, with 20% vacancy rates becoming routine. Disability Rights UK has commented that operational failures now permeate every layer of welfare administration. Fraud investigation teams therefore already lack capacity to address the annual £6.4 billion of overpayments. There are only four fraud advisers per regional office to handle cases flagged by frontline staff, which has created a bottleneck, so that very often 90% of suspected fraud cases go uninvestigated. In other words, one could suggest there is already plenty of fraud to investigate without trawling for more. This amendment ensures regular scrutiny, transparency and fairness. I urge the Minister to consider it.

[Andrew Western]

It is important that I begin by paying tribute to the millions of unpaid carers across this country. The Government recognise and value the vital contribution made by carers every day in providing significant care and continuity of support to family and friends, including pensioners and those with disabilities. The 2021 census indicates that around 5 million people in England and Wales may be undertaking some unpaid care, and many of us take on a caring role at some point in our lives. Like other hon. Members, through my postbag and at events across my constituency, I see much of the work carers do. Carers are fortunate to have some wonderful advocates, not only their MPs but organisations such as Carers UK, Carers Trust and the Learning and Work Institute, to name but three.

We inherited a system in which busy carers already struggling under a huge weight of responsibility had been left having to repay large sums of overpaid carer’s allowance, sometimes worth thousands of pounds. We needed to understand exactly what had gone wrong so we could set out our plan to put things right. This is why we launched an independent review of earnings-related overpayment of carer’s allowance. We were delighted that Liz Sayce OBE agreed to lead this review, which is now well under way; we anticipate receiving its conclusions this summer.

The review will investigate how overpayments of carers allowance have occurred, what can be done to best support those who have accrued them, and how to reduce the risk of these problems occurring in future, but we are not sitting back and just waiting for the outcome of the independent review. Right now, we want to make it as easy as possible for carers to tell us when something has changed in their life that could affect their carer’s allowance, so we will continue to review and improve communications. From this April, the weekly carer’s allowance earnings limit will pegged to 16 hours’ work at national living wage levels, so in future it will increase when the national living wage increases. The earnings limit will be £196 a week net earnings, up from £151 today. As a result, over 60,000 more people will be able to receive carer’s allowance between 2025-26 and 2029-30. That is the largest increase in the earnings limit since carer’s allowance was introduced in 1976.

As the Chancellor said at the Budget, we need to look at the current cliff edge earnings rules. A taper could further incentivise unpaid carers to do some work and reduce the risk of significant overpayments, but introducing a taper to carer’s allowance is not without challenges. It could significantly complicate the benefit, and significant rebuilding of the carer’s allowance system would be required. The DWP has begun scoping work to see whether an earnings taper might be a feasible option in the longer term, but any taper is several years away.

New clause 10 sets out four points. As I have mentioned, an independent review has been commissioned, its terms of reference have been published and it is well under way. It is anticipated that it will report its conclusions in the summer. Both the report from the independent review and the Government’s response will be published, and we will report to the House.

I disagree with the hon. Member for Torbay on two issues. It would not be responsible of us to commit in advance to implementing all and any recommendations from such a review, sight unseen. We need to consider them carefully. In addition, the proposed new clause, as I understand it, would not have the effect he desires. We would still be able to recover overpayments of carer’s allowance from benefits under the powers in the Social Security Administration Act 1992.

The new clause would prevent our recovering debts directly from bank accounts of those not on benefits or PAYE, which is one of the additional powers given in this Bill. Even if the new clause operated as intended, it would be disproportionate to suspend all recovery of carer’s allowance overpayments until after the review is concluded, as those with overpayments are already covered by the usual safeguards of appeal rights, affordable deductions and, in exceptional circumstances, waiver. Given the discrepancy this would create between those on PAYE and benefits and those with other forms of income, I hope the hon. Gentleman acknowledges the need to withdraw the new clause rather than create further unfairness in the system.

Regarding new clause 11, I re-emphasise that we will not speculate on the findings or any potential outcomes of the independent review. All recommendations will be considered when the independent review concludes. It would not be appropriate of the Department to commit to this new auditing requirement until that has happened, when we can take a holistic view of carer’s allowance and how DWP uses data. Nevertheless, it is helpful to set out how DWP currently uses data to verify eligibility for carer’s allowance. Verification of earnings and pensions alerts were introduced to carer’s allowance in October 2018 as part of a wider strategy to identify data sources, to verify information provided by the claimant, or to identify if information has not been provided by the claimant. Like all data we use for that, it is not intended to replace the legal requirement of a claimant to provide information that may change their entitlement to social security.

VEP alerts arise from HMRC payroll data. The alert service provides a notification of new earnings or pensions as they come into payment, or if amounts change during the life of the claim. The Department uses business rules to prioritise those alerts, based on data provided by the real-time earnings system. Since 2019, we have actioned around 50% of the alerts received in the Department as part of our focus on reducing the risk and level of overpayments. Having secured additional funding in the one-year spending review, we will be deploying additional resource in 2025-26,to action the alerts received from HMRC as quickly as possible. The Department is also testing an approach of using text messages to remind customers of the need to report changes in their circumstances.

Finally, I emphasise that the use of VEP alerts does not replace human decision making. If the Department processes an alert that highlights a change in earnings and a customer has not reported the change, DWP officials will contact the customer to confirm details have changed. If any overpayment is identified, it will be referred to debt-recovery teams. DWP remains committed to working with anyone who is struggling with their repayment terms, and will always look to negotiate sustainable and affordable repayment plans.

In the light of the information I have set out, and the ongoing work of the carer’s allowance independent review, I urge the hon. Member for Torbay to withdraw the proposed new clause.

[Rebecca Smith]

Liberal Democrat new clause 10 would delay any payments being taken from people who the Government think owe repayments on carer’s allowance until the independent review into carer’s allowance overpayments has been published and fully implemented. Liberal Democrat new clause 11 would provide for an audit of algorithmic systems used in relation to carer’s allowance overpayments. It would require that, if any audit identified significant inaccuracies, unfairness or biases in any algorithmic system, the Secretary of State must, within 30 days of the publication of the report outlining these findings, present an action plan to Parliament that outlines the steps the Government intend to take to discuss the identified issues. I am interested to know why the Liberal Democrats are singling out carer’s allowance for this treatment—namely, the review of the algorithmic systems—rather than any other allowance or benefits. Is there a reason for that?

Liberal Democrat amendment 32 is a commencement block. It specifies that no part of the Bill may come into force until the recommendations of a report commissioned under the clause “Recovery of overpayments of Carer’s Allowance” have been implemented. We would suggest that there is more holistic information that should be made public before the Bill can be commenced, and that the focus on carer’s allowance is in danger of missing the bigger picture. For example, we need to see the codes of practice, and we need to know precisely how the banks will deliver their responsibilities under the Bill. I would suggest that those things, which are sadly not yet available to the Committee as we scrutinise the legislation, and that has greatly hindered us, would provide a much more holistic assessment of whether the Government are ready to implement the Bill than the report on recovering overpayments of carer’s allowance. Would the Liberal Democrats consider an amendment at a later stage that goes wider than that?

[Andrew Western]

I contend that amendment 32 is simply disproportionate given the wide range of benefits that the Bill is expected to deliver to address fraud and error, not just in the social security system but in the public sector more widely. It is essential that all of Government have access to the capabilities and tools required to stop fraudsters stealing from the taxpayer. Tens of billions of pounds are being lost to public sector fraud. These losses are unacceptable, and waste enormous sums of public money, which could be put to good use. Delaying the Bill coming into force will risk £1.5 billion of savings over the next five years. These have been certified by the Office for Budget Responsibility. The Government made a manifesto commitment that we would safeguard taxpayers’ money and not tolerate fraud or waste anywhere in public services. The Bill delivers on that commitment, and delaying its delivery is unfair on taxpayers, who deserve to have confidence that money spent by Government is reaching those who need it, and not those who exploit the system.

Secondly—we have already discussed this point at length—I remind Members that the Bill introduces new, important safeguards, including provisions for independent oversight and reporting mechanisms, to ensure the proportionate and effective use of the powers. New codes of practice will be consulted on and published to govern how new measures will be exercised in more detail. That will include details of further protections. There will be new rights of review and appeal in both parts of the Bill to ensure that there are opportunities to challenge the Government’s approach. A human being will always be involved in decisions about further investigation or the recovery of any debt.

Finally, I return to my earlier point: data and information sharing are crucial when we look at fraud and error. For example, the eligibility verification measure, while it will not be applied to carer’s allowance itself, will improve the DWP’s access to important data to help to verify entitlements, ensure that payments are correct, and prevent the build-up of overpayments. That will enable the DWP to be tough on those who cheat the benefits system and fair to claimants who make genuine mistakes. It is vital that the DWP is equipped with the right tools, and delaying this Bill will only delay these benefits. In the light of that, I hope that Members will not press the amendment.

[Steve Darling]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 13

Liability orders

“(1) Where—

(a) a person has been found guilty of an offence under section 1 or section 11 of the Fraud Act 2006, or the offence at common law of conspiracy to defraud,

(b) that offence relates to fraud committed against a public authority, and

(c) the person has not paid the required penalties or not made the required repayments,

the Secretary of State may apply to a magistrates’ court or, in Scotland, to the sheriff, for an order (“a liability order”) against the liable person.

(2) Where the Secretary of State applies for a liability order, the magistrates’ court or (as the case may be) sheriff shall make the order if satisfied that the payments in question have become payable by the liable person and have not been paid.

(3) The Secretary of State may make regulations in relation to England and Wales—

(a) prescribing the procedure to be followed in dealing with an application by the Secretary of State for a liability order;

(b) prescribing the form and contents of a liability order; and

(c) providing that where a magistrates’ court has made a liability order, the person against whom it is made shall, during such time as the amount in respect of which the order was made remains wholly or partly unpaid, be under a duty to supply relevant information to the Secretary of State.

(4) Where a liability order has been made against a person (“the liable person”), the Secretary of State may use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (taking control of goods) to recover the amount in respect of which the order was made, to the extent that it remains unpaid.”—(Rebecca Smith.)

Brought up, and read the First time.

--- Later in debate ---

[Rebecca Smith]

As we have heard, Liberal Democrat new clause 14 would require the use of algorithms, algorithmic tools, and systems, and artificial intelligence, including machine learning, to be included in the algorithmic transparency reporting standard. I have obviously just heard the comments of the hon. Member for Horsham, but I would be interested to know precisely what the Liberal Democrats are aiming to achieve with this new clause and how such reporting would better enable the Government to crack down on fraud and error. Is that the intention behind the new clause?

[Andrew Western]

I share the support expressed by the hon. Member for Horsham for the algorithmic transparency recording standard as a framework for capturing information about algorithmic tools, including AI systems, and ensuring that public sector bodies openly publish information about the algorithmic tools used in decision-making processes that affect members of the public. However, I do not think the new clause is a necessary addition to the Bill, and I will explain why.

First, all central Government Departments, including the DWP and the Cabinet Office, are already required to comply with the standard as appropriate. We are committed to ensuring that there is appropriate public scrutiny of algorithmic tools that have a significant influence on a decision-making process with public effect, or that directly interact with the public. We have followed and will continue to follow the guidance published by the Department for Science, Innovation and Technology on this to ensure the necessary transparency and scrutiny.

Secondly, I remind the Committee that although the DWP and PSFA are improving their access to relevant data through the Bill, we are not introducing any new use of machine learning or automated decision making in the Bill measures. I can continue to assure the House that, as is the case now, a human will always be involved in decisions that affect benefit entitlement.

Thirdly, although I do not wish to labour the point yet again, I remind the Committee that the Bill introduces new and important safeguards, including reporting mechanisms and independent oversight in the Bill, demonstrating our commitment to transparency and ensuring that the powers will be used proportionately and effectively. The DWP takes data protection very seriously and will always comply with data protection law. Any information obtained will be kept confidential and secure, in line with GDPR.

[John Milne]

I am content to beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 15

Offence of encouraging or assisting others to commit fraud

“(1) The Social Security Administration Act 1992 is amended as follows.

(2) In section 111A (Dishonest representation for obtaining benefit etc), after subsection (1G) insert—

‘(1H) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.’

(3) In section 112 (False representations for obtaining benefit etc), after subsection (1F) insert—

‘(1G) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.’”—(Rebecca Smith.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Rebecca Smith]

The Conservatives—the official Opposition—share the Liberal Democrats’ view that it is vital that we use different Departments across Government to tackle domestic abuse and domestic violence. We have a really strong track record of doing that in government.

In principle, the new clause seems like a good idea. I am conscious that we need to ensure that the Bill does not exacerbate or create problems for victims and put them even more at risk. I have done a lot of work on violence against women and girls away from this place, and I am conscious of how tricky it can be to prove some of these things. I wonder whether there might be other ways to achieve the same outcome. I assume that is why the Government are not able to support the new clause.

The new clause includes language such as “potential” and “believed to be”. My gentle challenge is about whether it could be worded differently, as we go forward to other stages, to make it more achievable and deliverable, and something that would have a place in the Bill. As it stands, I am not sure that would be the case, but I am interested to see this issue debated further, because the official Opposition share the commitment to tackling domestic abuse and domestic violence.

[Andrew Western]

We have reached the stage in Committee at which the hon. Member for Torbay can second-guess my comments. He will be as pleased as I am that this is the last of the new clauses for debate, but it is a very serious one.

New clause 17 seeks to place a duty on Secretary of State to consider the impact of a proposed direct deduction order where a person is a victim of domestic abuse, or officials reasonably believe they are at risk of domestic abuse, and they share an account with a perpetrator of that abuse. I share the hon. Member for Torbay’s view that, where the new recovery powers are exercised, there should be a consideration of whether there is evidence of domestic abuse. However, I do not believe the new clause reflects the right approach. The DWP understands the importance of supporting victims and survivors of domestic abuse, and has existing guidance, processes and operational best practice for supporting them.

The new clause would apply to both debtors and non-debtors, and would not require the DWP to take any steps to identify possible victims. Subsection (1)(a) would place a duty on officials to consider the impact any time a person was a victim, even when the DWP did not and could not have known that that was the case. Subsection (1)(b) would imply a duty to assess whether there was reason to believe the person was at risk of domestic abuse but, as the hon. Member for South West Devon suggested, in many cases the DWP will not be in a position to make that assessment. That would put officials in a difficult, if not impossible, position.

As the direct deduction powers will be used as a last resort where multiple attempts to engage with the debtor to arrange a voluntary, affordable and sustainable repayment plan have failed, we anticipate that the DWP will know very little about the debtor’s current circumstances, unless it had been made aware previously or there were clear identifiable risk factors. We are working closely with charities, some of which the hon. Member for Torbay will have heard from, to help to identify those risks, as I will outline.

Where a joint account holder could be at risk of domestic abuse but is not the debtor, we are unlikely to have ever had direct dealings with them prior to the power being used. Unless we were directly notified, it is unlikely we would have the information necessary to form the reasonable belief that they were at risk, and much less likely that we could identify all the cases where the person was experiencing abuse. I do not, therefore, agree that a placing a legal duty on officials in this way is the right approach.

We are committed to continuing to support victims of domestic abuse whenever they interact with the Department, which is why we are working with charities such as Surviving Economic Abuse, which is dedicated to advocating for women whose partner has controlled their ability to acquire, use and maintain economic resources. SEA is supporting the drafting of the code of practice to ensure that robust safeguards are in place and to encourage engagement specifically from those who are vulnerable, including victims of domestic abuse. Although SEA works with women, the principles will apply to all victims and survivors of domestic abuse.

Frontline debt management staff already receive training for their role, including on assessing affordability, discussing hardship, and identifying and dealing with vulnerable customers. As we have heard, a specialist debt enforcement team will exercise the new recovery powers, and it will be governed by a code of practice. As explained, we will consult on the draft code of practice, and I welcome further views as part of the wider public consultation.

Finally, I note that paragraph 6(1)(b) of schedule 5 already imposes a broad duty on the Secretary of State to ensure that the amount of any deduction is

“fair in all the circumstances.”

That would include consideration of the impact on a victim of domestic abuse, as the hon. Member for Torbay seeks in the new clause, where the relevant context and circumstances are known to the Department. I hope that reassures the hon. Member that his concerns are already addressed in the Bill, and that the DWP takes domestic abuse seriously and will continue to do so when exercising the new recovery powers.

--- Later in debate ---

[Georgia Gould]

The Henry VIII power is to ensure that any other legislation is in line with this legislation. We do not expect it to be used on lots of occasions, but it will be used on some. We welcome the Opposition’s support for the extension to the limit for investigating covid fraud. I thank the Committee again for its work on the Bill, which will ensure that we take action against fraud wherever it occurs.

Question put and agreed to.

Clause 99 accordingly ordered to stand part of the Bill.

Clauses 100 to 104 ordered to stand part of the Bill.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Andrew Western]

I place on the record my thanks to you, Mr Western, and all the other Chairs who have supported and guided us through the Bill. I thank the Clerks and officials from the Cabinet Office and DWP for their support. I also thank my co-pilot, the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Queen’s Park and Maida Vale; the Opposition spokespersons; and all Committee members for their input. I commend the Bill to the Committee.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Oral Answers to Questions

Andrew Western Excerpts

Monday 17th March 2025 Commons Chamber

[Andrew Lewin (Welwyn Hatfield) (Lab)]

9. What assessment she has made of the potential impact of jobcentres on economic growth.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

Supporting everyone to find good, meaningful work and helping them to progress is vital for economic growth. That includes disabled people who want to work and contribute, but who are let down by the current system. Jobcentres have a key role to play in that, and through creating a new jobs and careers service, we will help more people get into work and get on at work, supporting our ambition for an 80% employment rate.

[Andrew Lewin]

I am fortunate in my community that we have an above average number of 18 to 24-year-olds, but when I was talking to the manager of the Hatfield jobcentre just last week, they said that the single biggest barrier to young people getting into work is their mental health, which a number of colleagues have spoken about in the Chamber today. Can the Minister say a little more about our objective of helping young people into work? Does he agree that the only way we will succeed in growing the economy is by helping those people overcome the barriers with their mental health?

[Andrew Western]

My hon. Friend is correct to highlight the importance of tackling economic inactivity in order to drive up economic growth. This Government understand the negative effects that unemployment can have on mental health, particularly among young people, which can impact future prospects. The youth guarantee will help address barriers faced by young people to ensure that they can access quality training opportunities and apprenticeships or help to find work, boosting their confidence and giving them the very best chance of success in the workplace.

[John Glen (Salisbury) (Con)]

A few weeks ago, I visited Salisbury jobcentre and I met Kirstie Reakes and George Thornley, who are helping me organise a jobs fair on Thursday 8 May. They could not have been more helpful. Their encyclopaedic knowledge of the local jobs market and businesses was impressive. Will the Minister congratulate them and thank them for the help they are giving me with the jobs fair in Salisbury Guildhall on 8 May? Will he also reflect on what incentives jobcentres could have to reach out to businesses and deepen their knowledge of local labour markets?

[Andrew Western]

The right hon. Gentleman is correct to raise the issue of jobcentres reaching out to local employers. We know that we have a significant issue with whether the jobcentre is the vehicle of choice to advertise local job opportunities. That is a long-standing issue that we are keen to address. I am delighted to congratulate his local jobcentre on the work it is doing to promote the jobs fair.

[Mr Richard Holden (Basildon and Billericay) (Con)]

10. What assessment she has made of recent trends in levels of unemployment.

--- Later in debate ---

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

12. What steps she is taking with Cabinet colleagues to tackle fraud in the welfare system by serious and organised criminal gangs.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

The Department works collaboratively with other Departments and with law enforcement agencies on investigations of benefit fraud carried out by organised criminal gangs. New powers in the Public Authorities (Fraud, Error and Recovery) Bill, which was mentioned earlier by the Minister for Employment, will strengthen our ability to tackle organised crime by modernising and enhancing our investigation powers, granting DWP officials powers of search and seizure, and ensuring that those who defraud the public sector face appropriate consequences.

[Markus Campbell-Savours]

I welcome the new powers in the fraud Bill, and note the huge increase in pension credit fraud in recent years. Can the Minister explain how capital fraud and fraud in which recipients stay out of the country for longer than the rules require, which together account for 50% of all pension credit fraud, will be targeted under the new rules?

[Andrew Western]

My hon. Friend is right to raise this issue. The eligibility verification measure in the new Bill will do just that, providing a crucial data feed to help us identify fraud that relates to pension credit as well as to universal credit and employment and support allowance. This will flag up claimants who are potentially in breach of eligibility under capital and abroad criteria, so that we can start to lower the unacceptable level of fraud and protect the public purse.

[Luke Akehurst (North Durham) (Lab)]

13. What assessment she has made of the impact of the pensions triple-lock on pensioners in North Durham constituency.

--- Later in debate ---

[Josh MacAlister (Whitehaven and Workington) (Lab)]

18. What steps her Department is taking to support care leavers into employment.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

The Department supports care leavers aged 16 to 24 through an extensive range of interventions to help them into employment. For example, care leavers who start an apprenticeship are signposted to a £3,000 bursary from their training provider, and they can still receive universal credit if they are on a low income. More broadly, under the new youth guarantee, all young people aged 18 to 21 in England, including care leavers, will have access to support to enter employment, education or training opportunities.

[Josh MacAlister]

Some 39% of care-experienced young people are not in education, employment or training—three times the average rate—and that is costing the UK over £145 million a year in lost tax revenue alone. We cannot achieve the ambition of getting Britain working unless we unlock the potential of this amazing group of young people. Do Ministers agree that we need to take bold, imaginative action to radically improve the number going into work?

[Andrew Western]

My hon. Friend is absolutely correct to highlight those statistics. The number of care leavers not in education, employment or training is absolutely unacceptable, and he will be stunned to hear that I am in full agreement with him.

[Jessica Toale (Bournemouth West) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

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[Vikki Slade (Mid Dorset and North Poole) (LD)]

T7. My constituent Sarah left an abusive relationship but, after she applied for maintenance, her ex-partner denied parentage, putting the children through DNA tests; delayed matters; claimed special expenses; and then declared nil earnings, despite having just bought a house with a mortgage—all accepted with no investigation. He is now being asked to pay back his arrears of thousands of pounds at £1 per month. What is being done to review the burden of proof on income, to support parents and children who are being financially abused even after they have left relationships?

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

As the hon. Lady may know, the Department recently consulted on a range of proposals for future improvements to the child maintenance service, such as how we can protect people from financial abuse and better support victims of domestic abuse. I am obviously not familiar with the specifics of the case she references, but I would be more than happy to follow up if she writes to me about it.

[Dr Simon Opher (Stroud) (Lab)]

T9. Pension credit claims, as we have heard, have increased by 64%, and I commend the Minister and the Department for making that happen, as well as Citizens Advice in Stroud and bureaux throughout the country. However, there are 800,000 people who earn just above that limit and live in poverty. I wonder whether, when a fiscal situation arises, the Government will review the cap, and indeed the gradient of this benefit.

--- Later in debate ---

[Mr Peter Bedford (Mid Leicestershire) (Con)]

It is right that the welfare system supports those with disabilities. However, does the Secretary of State agree that social media influencers who are teaching people to game the Motability system in order to get free vehicles is a disgrace? If so, what does she intend to do about it?

[Andrew Western]

The hon. Gentleman will be aware that this issue falls under the umbrella of wider fraud. We inherited an appalling level of fraud in the welfare system under the previous Government. Our fraud Bill goes some way to tackling that, as part of a broader package of £8.6 billion—the largest ever package for tackling fraud.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

Given that nearly half of families in poverty have a disabled member and that without PIP an additional 700,000 disabled households could be pushed into poverty, I am concerned that the rumoured cuts will not help people into work but instead drive them further into destitution. What assurances can the Minister give me that the voices of disabled people have been heard and reflected on in the upcoming Green Paper?

Public Authorities (Fraud, Error and Recovery) Bill (Eleventh sitting)

Andrew Western Excerpts

Committee stage
Thursday 13th March 2025 Public Bill Committees

[The Chair]

I remind Members to send their speaking notes to [e-mail], to switch off electronic devices and to abstain from tea and coffee. It is Lent, after all.

Ordered,

That the Order of the Committee of 25 February be amended as follows—

In paragraph (1)(f) delete the words “and 2.00pm”.—(Gerald Jones.)

Clause 92

Code of practice

Question proposed, That the clause stand part of the Bill.

[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

It is a pleasure to serve again under your chairship, Sir Desmond. After that remarkably collegiate agreement on the most controversial item of today’s business—I hope—I turn to clause 92.

The clause provides a vital safeguard for the new debt recovery measures. It inserts new section 80D into the Social Security Administration Act 1992, making provision for a code of practice. In the clause, we have made it a requirement that the code sets out how and when the Department for Work and Pensions will exercise its functions under direct deduction and driving disqualification powers, as well as its approach to penalties for non-compliance by banks, and how any information obtained will be used and processed. The code will also include further information on how safeguards and other provisions in the Bill will be applied, such as those on reasonable opportunity to settle the debt, and how those struggling with debt can be signposted to independent debt advice and money guidance.

We recognise the importance of transparency in the use of the new debt recovery measures. That is why, before issuing the DWP’s debt code of practice for the first time, as per our statutory obligations we will carry out a formal public consultation on a draft of the codes, to provide an opportunity for all interested parties to review them. Once finalised, all the relevant codes of practice will then be laid before both Houses of Parliament for 40 sitting days, before publication.

The clause is a key safeguard to ensure that the new DWP recovery powers are exercised proportionately, and it offers transparency for the public on their use. I commend it to the Committee.

--- Later in debate ---

[Andrew Western]

Members have asked a number of questions, which I will do my best to cover. On the broader context and content of the code of practice, I outlined a range of areas such as a reasonable opportunity to settle debt, the exercise of functions under direct deduction, driver disqualification powers, penalties for noncompliance by banks, the use and processing of information and ensuring that that is compliant with the Data Protection Act 2018 and GDPR, as one would expect.

On the broader question of how we would work with people with vulnerabilities—the hon. Member for Torbay mentioned financial abuse and learning disabilities—there are a range of existing practices through which the Department supports people, as I set out in some detail on Tuesday afternoon. We have a vulnerability management framework and assessments of an individual’s vulnerabilities at all points throughout the process are built into our existing debt recovery practices, including a specialist team who work with customers who we know to be vulnerable. I think that the Department has sufficient infrastructure in place to deal with and support people who find themselves in those circumstances, either as victims of financial abuse or because of some of the disabilities that the hon. Gentleman mentioned.

The hon. Member for South West Devon asked about the issuing of notices. The code of practice will give guidance on when notices are given and further guidance on how banks should comply. On the subject of consultees, it is important to say that we are in ongoing dialogue with banks and organisations such as the Money and Pensions Service about support for people who find themselves in debt. The public consultation will invite those who are already closely engaged with the subject to correspond with us further. That will include some of the stakeholders I have just mentioned, but we will accept evidence from anybody who wants to feed into that process.

I would not want to second-guess the cause of any future revision, but were it to become apparent that there were issues that we needed to contend with, grapple with and get right—whether they came out in discussion with stakeholders or in the practical application of the code—I imagine that that would be a sensible stage at which to do so.

I was asked about delay and when the code would be in place. We are looking at laying it before both Houses of Parliament for 40 days, so I am confident that delay will not be a particular challenge for us in recovering some of the figures that are scored against this measure. We anticipate that the draft code of practice will be available to Members before Committee stage in the House of Lords.

Question put and agreed to.

Clause 92 accordingly ordered to stand part of the Bill.

Clause 93

Rights of audience

Question proposed, That the clause stand part of the Bill.

[Andrew Western]

The clause inserts proposed new section 80E into the Social Security Administration Act 1992. That provision gives DWP officials right of audience and allows them to conduct litigation in the magistrates, county and Crown courts in England and Wales. New section 80E has been introduced to enable lay DWP officials to oversee civil claims and applications and appear in related court hearings on behalf of the Secretary of State in debt recovery matters. That is similar to the rights already provided to other Government Departments, such as His Majesty’s Revenue and Customs and the Child Maintenance Service, as well as local authorities.

The disqualification from driving power in clause 91 and schedule 6 of the Bill will be exercised by the court only on application from DWP, and there are other civil recovery mechanisms already available to DWP involving the courts. Those are generally routine proceedings, but, without the clause, DWP is required to instruct a solicitor in every case. However, the clause does not prevent DWP from instructing a solicitor for debt recovery proceedings where it would be appropriate to do so. That ensures that DWP can recover public money in the most efficient and effective way from those who evade repayments, thereby reducing costs for the taxpayer.

[Rebecca Smith]

As the Minister has just set out, clause 93 grants rights of audience and rights to conduct litigation in the magistrates court, county court and Crown court in England and Wales for, or in connection with, debt recovery proceedings to designated officers of the Secretary of State. That will allow DWP officials to be able to pursue the enforcement of debts via the court without the need to instruct solicitors, thereby ensuring cost efficiency in the recovery of public funds.

This is not particularly complicated clause, so I have just a few questions. We would like confirmation of the level of seniority of the officials signing off the decisions to bring litigation, and will the DWP officials bringing the cases have appropriate training to do so? Where court appearances are required, does the Minister anticipate a slowing down of recovery proceedings? I know he has talked about cost efficiency, but will this mean that it will take slightly longer? Will costs increase as a result, either in terms of what is owed by the person that the action has being taken against or the costs that might be necessary through the courts?

Finally, what consultation has there been with the Ministry of Justice around these new provisions in terms of capacity, the costs and the court backlogs? Will this measure create a problematic situation, or is the Minister confident that it will be okay going forward?

[Andrew Western]

I may have missed a question about costs, so will the hon. Lady please ask me that again if needed? The team members taking forward cases for us in the court will be HEO, or higher executive officer, level. That is the existing process, and that is the required level of authorisation for those using similar powers. This is not particularly new for us; it is just new for us in this space. A specialised DWP team will receive training in conducting litigation and appearing in court in addition to training on the new recovery powers. We already have the right to conduct and appear in similar tribunal proceedings, so we will share best practice when developing that training.

On the question of MOJ consultation and court pressures, whether we use solicitors or take them forward ourselves, the pressure on the courts will be the same, so there will not be a material impact on the court backlog. Clearly, the MOJ is aware of our intentions in this regard, but this is more about our ability to do that while minimising costs.

[Rebecca Smith]

My final question was about whether court appearances, regardless of whether that is with a solicitor or through DWP officers, will effectively slow down recovery proceedings. As a result, will there be some knock-on costs either for the person who the action has been taken against, if interest is being charged or anything like that, or for the Department in terms of staff and that sort of thing? I assume it will be a last resort, but it would be interesting to have an answer.

[Andrew Western]

It is very much the case that the power is a last resort. Where there are additional costs, we will be able to recover them. It is important to recognise the steps, as I outlined on Tuesday afternoon, that will have been gone through before the point at which we reach this process. If we were to go through a more traditional route outside these powers, it would add considerable time to the process. I remind Members that by the point at which we take somebody to court, we have reached out to them multiple times through debt management and at least four further times through debt enforcement, and we have offered at every break in the process the opportunity to agree an affordable repayment plan. That would be the case right up until this stage, so I can reassure Members that it would be a power of last resort.

Question put and agreed to.

Clause 93 accordingly ordered to stand part of the Bill.

Clause 94

Recovery of costs

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 95 stand part.

[Andrew Western]

Clause 94 inserts proposed new section 80F into the Social Security Administration Act 1992 and relates to the recovery of costs from debtors. The clause simplifies existing legislation to ensure that the costs of court enforcement that DWP is already entitled to reclaim from debtors can be effectively recovered from the debtor, together with any costs incurred by DWP under the new direct deduction and disqualification from driving powers. The clause enables DWP to recover these costs from the debtor using any of the available recovery methods, to make sure that, as debtors’ circumstances change, the money can still be recovered. The clause ensures that the taxpayer does not pick up the burden for costs associated with pursuing debtors who refuse to repay public money, and that DWP can recover these costs from the debtor in the most effective way.

Clause 95 inserts new section 80G into the Social Security Administration Act 1992, providing technical interpretative provisions for the new debt recovery powers contained in part 2 of the Bill. First, it confirms that debt recovery provisions should always be read in a way that is consistent with data protection legislation. This is a relatively standard provision that deals with any unintended and unforeseen ambiguity or apparent conflict with normal data protection principles. Secondly, it confirms that references to “giving notice” can include, among other methods, service by post, as defined in the Interpretation Act 1978. That avoids ambiguity about how, for example, proposed deduction orders can be given to account holders for their consideration, which is a key safeguard under the new direct deduction order power.

[Rebecca Smith]

Clause 94 states that any costs incurred by the Secretary of State in recovering an amount under clauses 71 to 80 or schedules 3ZA or 3ZB of the Social Security Administration Act 1992 may be recovered as though they were recoverable under the same methods as the debt itself. Will it be done separately, and what might the cost to the Department be in putting that forward? Is there any limit to the costs that the Secretary of State can recoup in this way?

Clause 95 clarifies that provision does not require or authorise processing of information that contravenes data protection legislation, or the Investigatory Powers Act 2016. The final line states,

“references to giving a notice or other document…include sending the notice or document by post.”

This also came up in the debate on Tuesday, so I would like to get it on the record. I assume I know the answer, but can the Minister clarify whether this includes electronic methods of communication also, such as email? If I may ask this, as I am intrigued, then why does sending by post need separate legislation? We have debated the subject twice now, and the answer is probably really straightforward, but as it is set out on its own line, it might be a nice idea to find out why it has to be legislated for. I ask that purely because I am nosy and would like to know.

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairmanship, Sir Desmond. Clause 84 states that costs incurred by the Secretary of State in taking recovery actions can be themselves recovered. Will the Minister clarify what happens in a case where the claimant is found to be not guilty? What happens to the costs then? Are they borne by the bank, the DWP or the claimant? Will he also clarify how the cost of the general trawl through all the accounts is apportioned?

Secondly, to go back to the issue of fraud versus error, and how they seem to be treated as pretty much the same throughout the Bill, will the Minister clarify whether, where it is the DWP’s error, a claimant would still end up paying the administrative charge? If that is the case, it seems quite unreasonable, so it would be great if the Minister could clarify those points.

[Andrew Western]

I am a little perplexed by the suggestion that somebody would be found not guilty or be charged. We are talking about debt recovery, so it is a slightly separate matter. It is not a criminal issue; it is a question of how, through civil powers, we can reclaim funding, so I am not sure that those questions arise. But if the hon. Member for Horsham wants to intervene on that, he is welcome to.

On the question of whether fraud and error are distinguishable in the reclamation of debt, the answer is no. They are treated in the same way, because this is about situations in which it has already been established that somebody owes us a recoverable amount and they have repeatedly refused to engage. I refer to my earlier comments about the number of times we would have reached out to somebody to get them to engage with the process. Parliament has previously resolved that overpayments of certain types of benefits are recoverable, and the Bill does not change that.

On the question about savings and so on, we would be able to recover all reasonable costs. There is no particular limit on what we can recover, and it is treated on the same terms as debt.

On the question of why we need to make a distinction for email, this is one of those situations in which I am grateful that I can sometimes reach out for answers. It goes back to the Interpretation Act 1978; we did not have email back then, so we need to set out separately, on a legal and technical basis, that post is specifically allowed, given provisions elsewhere. Yes, digital is still permissible, but we need to state specifically that post is acceptable as well.

[John Milne]

I used the word guilt, but can we forget that? I am referring to a case in which a claimant was investigated, so costs were incurred, but they were found not to be at fault, rather than guilty.

[Andrew Western]

I think the hon. Gentleman is referring to situations in which the court determines that the debt is not recoverable. I imagine that at that point we would bear the cost ourselves; it would not be recoverable from the individual. There is clearly some risk for us in that, as is perfectly usual, but by the point at which we decided to take somebody to court we would be able to demonstrate that a significant amount of effort had gone into attempting, through other mechanisms, to make them pay back what they owed the Department, so I hope we would have a very high success rate in that regard.

Question put and agreed to.

Clause 94 accordingly ordered to stand part of the Bill.

Clause 95 ordered to stand part of the Bill.

Clause 96

Offences: non-benefit payments

Question proposed, That the clause stand part of the Bill.

[Andrew Western]

The clause amends sections 111A and 112 of the Social Security Administration Act 1992 to include non-benefit payments. This will enable the DWP to charge a person with an offence under either of those sections where it relates to a non-benefit payment. This is a key clause that, in conjunction with clause 97, will enable the Department to offer an administrative penalty where there are appropriate grounds to do so.

The Government take a fair and proportional approach to tackling fraud and error. We will always be tough on serious fraud, but for less serious first-time offences it is appropriate and fair that we have the opportunity to offer an alternative to prosecution. The person will always have the choice to accept or reject an administrative penalty, should they wish to do so. I commend the clause to the Committee.

[Rebecca Smith]

The clause makes it an offence for a person to fraudulently claim a non-benefit payment for themselves or another person by making false representations or providing false documentation. Generally, we support this provision.

A non-benefit payment is a prescribed payment that is not a relevant social security benefit and that is made by the Secretary of State to provide financial assistance. Will the Minister provide for the record some examples of the types of payment that would fall within scope of the Bill as a result of this measure? Will he reassure us that it will cover all payments, unlike the provisions on social security benefits, which apply only to the three benefits included in the legislation? The flip question is: does the Minister anticipate any exceptions that will not be covered? If any new non-benefit payments were introduced in the future, would they automatically fall within scope of this legislation? Earlier in Committee we had a similar debate about enabling new benefits to come into scope; would the same apply to new non-benefit payments?

[Steve Darling]

The Minister alluded to proportionality and not wanting to criminalise people in undertaking an administrative charge. As my hon. Friend the Member for Horsham alluded to, it would be helpful if the Minister unpacked a little more for the Committee where that proportionality kicks in.

[Andrew Western]

Where proportionality kicks in is already established in the Department. We have trained investigators who ascertain whether we are looking at deliberate fraud, its severity, and what is therefore the appropriate mechanism to seek recourse. We are talking about administrative penalties for situations in which we consider there to be a clear case of fraud, not error, so proportionality will not really be changed by the Bill. What will change is our ability to extend the existing processes to non-benefit payments.

The example of a non-benefit payment that we use most routinely is a payment from the kickstart scheme, which came about at the end of the pandemic and which I think it is fair to say was open to abuse. We saw some particularly egregious examples of that, so we want to make sure that any similar grant schemes—as opposed to benefit schemes—are within scope of these powers.

On the point that the hon. Member for South West Devon made about only three benefits being in scope of the Bill, that is only as it pertains to the eligibility verification measure. All benefits are in scope of the Bill more broadly.

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Andrew Western]

The clause amends the Social Security Administration Act 1992 to expand the types of overpayments that can be considered for an administrative penalty under sections 115A and 115B to include non-benefit payments, such as the grants that were paid through the kickstart scheme. Currently, the option to offer an administrative penalty as an alternative to prosecution is not available for non-benefit payments, so the DWP is required to refer all such cases for prosecution. Extending the scope to include non-benefit payments will enable the DWP to offer those who receive a non-benefit payment an administrative penalty as an alternative to prosecution, in appropriate circumstances.

The measure gives individuals or colluding employers the choice to accept the administrative penalty or have the evidence reviewed before the courts. The change is really about fairness. It will bring equity and parity to the way the Department tackles and addresses fraud and it will offer first-time offenders or those who commit low-value fraud an alternative to prosecution. It will provide the individual or colluding employer with a choice, allow the courts to focus on the most serious crimes, and enable the Department to resolve cases more quickly where appropriate.

[Rebecca Smith]

The clause makes provision to allow for a penalty to be issued, instead of prosecution, if an overpayment notice has been issued in relation to a non-benefit payment. This can occur only after the review period has passed and, if a review was sought, after a decision has been made and any subsequent appeals have concluded.

We support efforts to be tough on those who have taken advantage through fraudulent methods and gained from benefits they were not entitled to receive. Will the Minister explain in what circumstances a penalty would be deemed more appropriate than prosecution, and why? That said, we also do not want to unfairly hit those who have made a genuine error, so in what circumstances would a penalty be seen as appropriate, assuming the claimant engages with the process?

Has any consideration been given to the likely timescales for the repayment of moneys obtained following erroneous claims? How long does the person have? Would a repayment be allowed before a penalty was applied? From what the Minister just outlined, the answer is likely to be yes, because an entire process would have taken place first; I seek clarification on the timetable or the process involved, particularly for those who have made a genuine error, and on how they will be able to stop the train and settle what they need to without any penalties.

[Andrew Western]

On when a penalty will be considered more appropriate, there are clearly thresholds for our investigators’ interpretation of when somebody has committed fraud and at what level we consider that fraud to be.

On the hon. Lady’s point about genuine error, the clause is for situations where we consider that somebody has committed fraud, not error. The administrative penalty does not arise in cases of what we consider to be error. It may be that it is a first-time offence. It would certainly need to be a low-value offence, because an administrative penalty is capped at £5,000. It is worked out as 50% of the value of the overpayment, so the amount would always need to be below £10,000. For anything beyond that we would be looking at prosecution. How long a person has to pay back will depend on a range of factors. It is clearly dependent on their ability to pay the money back, and what their means of production is and so on. That would always be considered on a case-by- case basis.

Question put and agreed to.

Clause 97 accordingly ordered to stand part of the Bill.

Clause 98

Amendments to the Social Security Fraud Act 2001: loss of benefits following penalty

[Andrew Western]

I beg to move amendment 36, in clause 98, page 61, line 21, leave out from “(a)” to end of line and insert “—

(i) omit the words from ‘section 115A’ to ‘or’, and

(ii) for the words ‘the corresponding provision for Northern Ireland’ substitute ‘penalty as alternative to prosecution in Northern Ireland’, and”.

This amendment updates a parenthetical description in section 6B(2)(a) of the Social Security Fraud Act 2001.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Andrew Western]

This straightforward amendment is a minor and technical change that looks to update section 6B of the Social Security Fraud Act 2001 by removing the phrase “the corresponding provision”, which will no longer be needed once clause 98 is agreed, and substituting in appropriate wording.

Section 6B, as enacted, references two Acts in which a penalty is defined in legislation and which would attract the loss-of-benefit penalty. The first is the Social Security Administration Act and the second is the equivalent legislation for Northern Ireland. Clause 98 will remove reference to one of those Acts—the Social Security Administration Act 1992—to ensure that the loss-of-benefit sanction is no longer applied if an administrative penalty has been offered by the DWP and accepted by a benefit claimant. Doing so will mean there will no longer be corresponding legislation in section 6B(2)(a) of the Social Security Fraud Act 2001, as it will reference only Northern Ireland legislation. I assure the Committee that the amendment is minor and technical and will have no operational impact on the remaining provisions in the 2001 Act.

Clause 98 removes the loss-of-benefit provisions in cases where an administrative penalty has been offered and accepted as an alternative to prosecution. As it stands, the acceptance of an administrative penalty is compounded by a further four-week suspension of certain benefit payments. The suspension of benefits is made in addition to the acceptance of the administrative penalty and alongside the obligation to repay the overpayment. By removing the four-week loss of benefit in these cases, the clause allows for a more proportionate approach to less serious, lower-value fraud and to first-time offenders.

However, the loss-of-benefit penalty is not being removed in its entirety: it will still apply in cases that are convicted in court, with a potential loss of benefit of up to three years. Limiting the loss-of-benefit penalty to convicted cases will ensure that only the most serious cases of fraud face the harshest consequences, without imposing unnecessarily harsh sanctions on lower-level offenders. On that basis, I commend the clause to the Committee.

[Rebecca Smith]

The clause amends the Social Security Fraud Act so that if an administration penalty is accepted instead of prosecution, the individual does not lose their benefit provisions. From what the Minister said, it sounds like different scenarios are affected.

I appreciate what the Minister said about the different situations—for example, for a lower-level or first-time offence, someone might not lose their benefits—but the challenge is that this perhaps seems like a soft touch, depending on the situation. Does there not need to be a bit more discretion than just a threshold depending on each case being dealt with? What are the expected values of the penalties, and how do they compare with the typical benefits? Although we need to ensure that safeguards on affordability remain in place and that claimants can meet their essential living costs—that goes without saying —it is not clear why a penalty should automatically prevent the loss of benefits. Ultimately in these situations, there has to be a deterrent in addition to the penalty.

Government amendment 36 will update the Social Security Fraud Act 2001 to allow a penalty to be an alternative to prosecution in Northern Ireland. Our questions on that are the same as those for clause 98. I have nothing further to add.

--- Later in debate ---

[Siân Berry (Brighton Pavilion) (Green)]

It is a pleasure to speak to this minor amendment. I just wanted to point something out about the wording of amendment 36. In clause 98(2) there are two instances of the letter (a). I know which (a) the Government intend the amendment to refer to, but I wondered whether the wording could be clarified.

[Andrew Western]

I thank the hon. Lady for pointing that out. I will take advice on whether a further amendment may be required but, as she says, it does appear obvious what I mean when I refer to that measure.

On the comments from the hon. Member for South West Devon, we want to make a change so that only the most serious cases fall foul of the loss-of-benefit penalty. That increases hardship for people but, when it comes to our ability to reclaim money, in practical terms it means we would have to wait four weeks before we could start deducting from a person’s benefits.

To to give some reassurance about thresholds, were we to consider that somebody’s fraud, even in a lower-value case, was particularly outrageous—of course, that is a judgment for our investigators based on the sorts of things they see each and every day—we do retain the ability to go straight to prosecution, particularly if we think the fraud is part of something more serious or organised.

The value of the penalty is £65, but if someone loses four weeks’ benefit, as at the moment, the impact is clearly more significant. I accept that, but I think there is a strong question of proportionality here, and of the need to prevent somebody from falling into further poverty —and potentially as a consequence of that being pushed into wider activity that may be, shall we say, unhelpful.

Amendment 36 agreed to.

Clause 98, as amended, ordered to stand part of the Bill.

Ordered,

That further consideration be now adjourned.—(Gerald Jones.)