Public Authorities (Fraud, Error and Recovery) Bill

Baroness Fox of Buckley Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

I hope that gives a good explanation of the way in which the EVM operates and all the steps we have taken. I beg to move.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I appreciate the reassurances given by the Minister—they are taken into account—but none the less I have two amendments that could go even further. I hope that the Minister can listen.

Amendment 50 seeks to ensure that affected parties are informed by their own bank when they are flagged following an eligibility verification notice. To note, the EVM will by design, as has been conceded, detect not only serious fraudsters but people who have been flagged because they have erroneously received an overpayment, possibly due to the DWP’s own mistakes—a possibility not acknowledged enough by measures in this Bill, in my opinion. Because of this, it is important that individuals identified by the power understand the basis on which they have been subjected to greater scrutiny and intrusion.

I stress that this amendment is not intended to compromise investigations or tip off fraudsters, as was implied in Committee. In fact, it would come into play only after an individual has been identified by the EVM. This matters because one principle of the rule of law, which I know this Government are very keen on, is that if you are accused of wrongdoing, you should be told the basis for that suspicion.

Being flagged by the EVM should not constitute reasonable grounds for suspicion in and of itself, as dealt with in Amendment 52, which I will fully support when we get to it. There is even less reason for an individual who is not suspected of any criminal wrongdoing but who may be the victim of DWP administrative error to be subjected to further checks and requirements without even being told why. It is just not good enough for the DWP to warn people in the personal information charter that the bank account information for the recipients of benefits may be provided to the department. People need to be informed at the moment when the powers bite—that is, once they have been flagged. It is important to note that organisations such as the Public Law Project are keen on seeing this being made a reality.

To humanise why this amendment matters, last week several leading charities and advocacy groups, including Big Brother Watch, Age UK and Disability Rights UK, sent a joint letter to DWP Ministers, highlighting the potential human impact and real-life costs of this Bill’s powers. It included testimony from members of the public receiving pension credit, who told their stories to Silver Voices, the advocacy organisation for older people. I was particularly struck by the testimony of Sue from Manchester, who recounted her experience of having to clear her name due to a previous wrongful flag by the DWP, which accused her of having multiple undeclared bank accounts. Sue said,

“I had to get letters from each of those banks to clear my name as none of the banks answered the DWP. The mental anguish this has caused me is unbearable and nearly sent me under”.


I appreciate that the DWP has gone to great pains to emphasise that it does not consider the EVM to be a government surveillance power, but the idea that you could be flagged by an algorithm that has rifled through your private bank statements and reported you back to the department for further checks, all without you being informed, is—and I say this tentatively—Kafkaesque, so I would like Amendment 50 to correct that.

I have also tabled Amendment 62, which requires that the code of practice include scrutiny provisions about the algorithm used by banks—an issue I raised quite a lot in Committee, with some support from fellow Peers. The situation is that the bank accounts of millions of people will be scoured by third-party algorithms that neither the Government nor banks had any hand in creating. It is therefore essential that we be able to scrutinise exactly what these algorithms are doing. I know that the Minister understands the concerns; she has just explained and articulated that well. The Government have said that the code of practice is not the appropriate vehicle for such scrutiny, but we still have not been provided with any alternative. What is more, there has been ministerial opposition to amendments designed to provide greater transparency over the eligibility indicators, which I find worrying.

The Minister characterised the algorithm that will be deployed for the EVM as merely comprising two tests that must be met to determine whether an individual can be flagged: whether an account receives a relevant benefit, and whether the account meets the criteria set by the DWP and the EVM. The Minister also said in Committee, and again today, that it is the DWP that will review all the information received and DWP staff who will make any decisions about entitlement where potential fraud or error is identified. But—and it is a big but—that review will only take place on the basis of information returned from the EVM, meaning that we have to be able to scrutinise exactly what is being picked up by the algorithm. They may be simple tests, but they will be applying unpublished eligibility indicators that can complicate issues, depending on what those eligibility indicators require banks to search for.

There may be little to scrutinise in algorithms which simply detect whether someone has more than £16,000 in their bank account, or whether, for example, 50% of their transactions have occurred abroad over a period of four weeks. However, should the algorithms have to assess conditions that are more complicated, the algorithms deployed by banks will necessarily be more involved. For example, for relevant benefits currently in scope, such as pension credit, employment and support allowance, and universal credit, could the DWP require banks to find people who they suspect are claiming ESA when not actually suffering from a disability or health condition that affects how much they can work? Or could the DWP require banks to identify recipients of pension credit who live with a partner but claim to live alone?

That might be misplaced suspicion, but exactly how the algorithm determines this sort of complex information, and what information it extracts to reach its conclusions, requires oversight. People will otherwise be worried and paranoid; we otherwise risk them being identified for further scrutiny and investigation, potentially on the basis of flawed algorithmic logic. As I emphasised during Committee, determining whether bank accounts meet the eligibility criteria for an EVN requires judgment. It might not be human judgment but algorithmic judgment, yet the question is: what are those criteria? What will the algorithm be asked to search for?

--- Later in debate ---

I urge the Minister, please, to heed the warning and not let fraud be the way we are amending police powers.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I am very grateful to the noble Lord, Lord Vaux, for tabling these amendments. I think they are genuinely key, and very important to resolve before we pass this Bill. I do not think they are minor or unimportant at all. Throughout the debates in Committee, and continuing here, concerns have been raised by some of us about the enormous state power created by the Bill. Largely, we have focused on things such as privacy rights and so on, and these are very important, but this actually gives draconian powers of force to a new body in a way that should make us gulp, in my opinion.

In earlier groups today, people have been very keen to say that the problem is not that this Government will misuse the powers but that we have to worry about future Governments. It is a kind of lurking spectre. Everybody knows who they are referring to. There is a notion that there will be future nasty Governments out there who might misuse the powers but that this Government are absolutely well intentioned. I think that is a little bit of a cop-out because it is this Government who are creating an enormous new set of state powers, and this Government have to answer to why they want these particular powers of force.

I think that is important, not because I have any suspicion about the intentions of the noble Baronesses who are our Ministers here—obviously not—but, none the less, what are the Government doing accruing this force?

I was squeamish about the PFSA having police powers to search, enter and seize, but it did not have the reasonable force clause. The thing I find most difficult to understand is the idea that the sort of major fraudsters that the first half of the Bill deals with are somehow subject to only half the force, but, suddenly, we get on to the people on benefits and physical force is justified. What does that say about our set of priorities? I am not being paranoid to go, “What? You actually think those people are the enemy, so you need to use physical force?” That is one thing.

The second thing on that, by the way, is the idea of physical force against the body versus physical force against property. Of course, there is a distinction, but I do not know if noble Lords have ever been there when somebody has come in and started booting your furniture round or kicking down the doors—I have; it was not the DWP or, indeed, the police. Anyone who has been on the receiving end of somebody destroying property around them will know that it is intimidating, frightening and scary, so I am worried not just about the bodily force but about having the right to do that to your property.

To return to our discussion on an earlier amendment, these are DWP officers. What? I do not want DWP civil servants, who might have been on a minor training course, to have that power. I think it is wrong. For them to have that power of physical force aimed at people on benefits seems wholly wrong and morally dubious.

I note that a number of times the Minister has emphasised the importance of this Bill being hard on fraud. I just want to reiterate a point that the noble Lord, Lord Vaux, made earlier, which is that worrying about some of the aspects of this Bill does not make you soft on fraud. As far as I am concerned, when public money is fraudulently obtained by criminals or malign forces, or just by people on benefits acquiring money they do not deserve, I consider that to be an attack on the public, and I think we should be hard on it. But the way that you demonstrate you are hard is not by playing the hard man. It is not about throwing your weight around; it is about having the appropriate form of state legislation to deal with it. I am afraid this part of the Bill really gives me pause about what is driving this, and I do not even think it will get us anywhere in resolving the problem of people malignly stealing public money.

[Lord Deben (Con)]

I would just like to ask the Minister three direct questions. First, why are people in England and Wales so much nastier that they need this force, whereas the Scots do not? That is not, it seems to me, a very sensible distinction. It should be either all of us or none of us.

Secondly—because I think it should be none of us —can the Minister explain why it is suitable for DWP officers to do something against individuals who are thought to be fraudulent, while officers of a similar kind do not have the power to do it if it is organised crime? Can she explain why that is?

My third question is extremely simple. Everybody who has ever had a ministerial job that involves this kind of thing knows, as the noble Lord, Lord Harper, said so clearly, that you absolutely need to be trained to do this. Can the Minister say who is trained, how much training they have and whether there is a budget for that training? If her answer is not satisfactory on any of those, I suggest she accepts the amendment which gets rid of this entirely.

Let us get to a sensible world in which the police have powers—for which, in most places, people trust them—and civil people do not have powers. We should remember the comment from the noble and right reverend Lord that was very simple: you know when a policeman is there, but how do you really know that this is a DWP individual? You have to look at some piece of paper, perhaps, but you do not know that. I think this is a very dangerous proposal.