Public Authorities (Fraud, Error and Recovery) Bill

Baroness Sherlock Excerpts

Report stage
Tuesday 21st October 2025 Lords Chamber

Moved by

[Baroness Sherlock]

29: Clause 68, page 36, line 25, leave out “processing” and insert “disclosure or obtaining”
Member's explanatory statement
See my explanatory statement for my amendment to clause 68, page 36, line 29.

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Moved by

[Baroness Sherlock]

36: Schedule 2, page 70, line 18, at end insert—
“Part A1Powers to establish the PSFA and transfer functionsMain powers
A1 (1) The Minister may by regulations—(a) provide that a body corporate called the Public Sector Fraud Authority (and referred to in this Schedule as “the PSFA”) is established;(b) provide for the transfer to the PSFA of all or any of the functions to which this paragraph applies.(2) The Minister may by regulations provide for the transfer to a public authority other than the PSFA of all or any of the functions to which this paragraph applies.(3) This paragraph applies to the functions initially conferred on the Minister by Chapters 1 to 5 of Part 1 of this Act (including functions conferred by an amendment of another enactment), except any function of making regulations or issuing a code of practice.(4) A function transferred under sub-paragraph (2) may subsequently be transferred to the PSFA under sub-paragraph (1)(b).(5) But a function transferred to the PSFA under sub-paragraph (1)(b) may not subsequently be transferred to another public authority under sub-paragraph (2).Authorised officers
B1 (1) The reference in paragraph A1(3) to functions initially conferred on the Minister includes functions initially conferred on authorised officers.(2) In relation to a function initially conferred on an authorised officer, references in this Part of this Schedule to the transfer of the function to another body are to be read as references to the transfer of the function to an authorised officer of that body.(3) Where—(a) a function initially conferred on an authorised officer is transferred by regulations under paragraph A1, and(b) as a result of any provision of Chapters 1 to 5 of Part 1 of this Act, that function could be exercised only by an authorised officer of a particular rank, grade or description,the regulations must provide for the function to be exercised by an authorised officer of the transferee of a corresponding grade, rank or description.Associated modifications
C1 (1) Where functions are transferred to the PSFA or another public authority under paragraph A1, the Minister may by regulations—(a) make provision about the application, with any necessary modifications, of Part 1 of this Act in relation to the PSFA or other authority;(b) provide for the Minister to give the PSFA or other authority (or its authorised officers) general or specific directions about the exercise of the transferred functions.(2) Where functions are transferred to or from a public authority, other than the Minister or the PSFA, under paragraph A1, the Minister may by regulations— (a) make any modifications that the Minister considers appropriate in connection with the transfer to the constitutional arrangements, funding arrangements or the functions of the authority;(b) make provision in relation to the authority corresponding to that enabled by paragraph 15 (transfer schemes) in relation to—(i) the PSFA, where functions are being transferred to the authority, or(ii) a “relevant person”, where functions are being transferred from the authority.(3) In sub-paragraph (2)(a), “constitutional arrangements” includes the matters referred to in section 3(2) of the Public Bodies Act 2011.(4) Regulations under paragraph A1 or this paragraph may amend—(a) Part 1 of this Act, except this Schedule, and(b) any provision amended by Part 1 of this Act.Procedure
D1 Regulations under this Part of this Schedule are subject to the affirmative procedure.”Member's explanatory statement
See the explanatory statement for my amendment to clause 70, page 37, line 28.

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Moved by

[Baroness Sherlock]

41: Leave out Clause 73 and insert the following new Clause—
“Information notices(1) The Social Security Administration Act 1992 is amended as follows.(2) After section 109B insert—“109BZA Power to require information about suspected fraud etc(1) An authorised officer may give a person (“P”) a written notice (an “information notice”) requiring P to give an authorised officer specified information where the officer— (a) has reasonable grounds to suspect that a person has committed, is committing or intends to commit a DWP offence, and(b) considers that it is necessary and proportionate to require the specified information for a purpose mentioned in section 109A(2)(c) or (d) (investigating compliance with the relevant social security legislation etc).(2) Information may be specified in an information notice only if it relates to a person who is identified (by name or description) in the information notice as—(a) the person suspected as mentioned in subsection (1)(a), or(b) a member of that person’s family (within the meaning of Part 7 of the Contributions and Benefits Act).(3) An authorised officer may require P to give specified information only if the officer has reasonable grounds to suspect that P has or is able to access the information.(4) An information notice must set out—(a) the identity (by name or description) of the person to whom the information requested relates;(b) how, where and the period within which the information must be given;(c) information about the consequences of not complying with the notice.(5) The power under this section to require P to give information includes power to—(a) take copies of or extracts from information;(b) require P to provide information in a specified form;(c) if any specified information is not given to an authorised officer, require P to state, to the best of P’s knowledge and belief, both where that information is and why it has not been given to an authorised officer.(6) Subsection (2E) of section 109B (communications data) applies to an information notice under this section as it applies to a notice under that section.(7) In this section—“information” means information in the form of a document or in any other form;“specified” means—(a) specified, or described, in the information notice, or(b) falling within a category that is specified or described in the information notice.(8) Nothing in this section limits the powers conferred on the Secretary of State by Schedule 3B.”(3) In section 109A (authorisations for investigators)—(a) in subsection (1), for “109B and 109C below” substitute “109B to 109C”;(b) in subsection (2)(d), at the end insert “or other DWP offences”;(c) in subsection (8), for “109B and 109C below” substitute “109B to 109C”.(4) In section 109B (power to require information)—(a) in the heading, at the end insert “about entitlement etc”;(b) in subsection (1)(a) omit “or (2A)”;(c) in subsection (1)(b), for “any one or more of the purposes mentioned in section 109A(2) above” substitute “a purpose mentioned in section 109A(2)(a) or (b)”;(d) omit the following provisions—(i) subsection (2A);(ii) subsection (2B);(iii) subsection (2C); (iv) subsection (2D);(v) subsection (5);(vi) subsection (6);(vii) subsection (7A);(e) in subsection (7) omit the definitions of—(i) “bank”;(ii) “credit”;(iii) “insurer”;(iv) “residential premises”.(5) In section 109BA (power of the Secretary of State to require electronic access to information)—(a) in subsection (1)—(i) in paragraph (a) omit “falling within section 109B(2A)”;(ii) in paragraph (b), for “109A(2)” substitute “109A(2)(c) or (d)”;(b) in subsection (2)(b), for “109B above” substitute “109BZA”;(c) in subsection (4), for “109B” substitute “109BZA”.(6) In section 109C (powers of entry), in subsection (6), for “Subsections (2E) and (5) of section 109B apply for the purposes of this section as they apply” substitute “Subsection (2E) of section 109B applies for the purposes of this section as it applies”.(7) In section 190 (Parliamentary control of orders and regulations), in subsection (1) omit paragraph (aza).”Member's explanatory statement
This amendment, together with my amendments to clause 74, my amendment replacing clause 101 and my amendment to Schedule 3, page 91, line 3, reverses changes made in the House of Commons, in response to confirmation from the Scottish Ministers that they would like the changes to the Secretary of State’s functions in respect of information notices to apply to them as well.

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

My Lords, in moving government Amendment 41, I will speak also to government Amendments 42, 43, 64, 80, 90 and 111.

Under current devolution arrangements, DWP administers certain devolved benefits on behalf of the Scottish Government through agency agreements. These amendments will ensure that the expanded information gathering powers introduced in this Bill will be available to Scottish Ministers, should they require them in the future. This follows confirmation from the Scottish Government that they would like the updates to these powers to apply to them too.

These amendments will ensure necessary changes are made to the DWP debt recovery powers in the Bill. As drafted in Clause 91, the UK Government are seeking powers to apply new recovery methods to debts of certain devolved benefits delivered under agency agreements. However, the Scottish Government have confirmed that they do not wish these new recovery methods to be applied to devolved benefits administered by DWP through agency arrangements.

Taking the amendments in turn, government Amendment 41 simplifies Clause 73, reflecting how it was originally introduced, with new Section 109BZA now containing the expanded power to issue information notices to any information holder as part of a DWP criminal fraud investigation and ensuring that Scottish Ministers will have access to these equivalent expanded powers in the event that Scottish Ministers deliver any benefits covered by the 1992 Act.

Government Amendments 42 and 43, made to Clause 74, update the Social Security Fraud Act 2001, aligning it with the new powers and ensuring that the requirement to issue a code of practice and the ability to make payments for information also apply properly to Scottish Ministers.

Government Amendment 90 to Clause 91 reflects the position of the Scottish Government on the DWP debt recovery powers. It ensures that the Scottish Government retain control over how debts relating to their devolved benefits are recovered. Once these agency agreements come to an end, it will be for the Scottish Government to determine their own approach to debt recovery, including establishing new powers if necessary.

Finally, government Amendment 111 to Clause 101 confirms that Clauses 73 and 74 are treated as pre-commencement enactments for the purposes of the Scotland Act 1998, enabling Scottish Ministers to use these updated powers for fraud investigations in relation to devolved benefits. It confirms that the provisions in Clauses 96 and 97 relating to cost recovery and data protection apply to Scottish Ministers’ existing debt recovery powers. Amendments 80 and 64 update the clause references in Clause 85 and Schedule 3 as a consequence of these changes.

Having outlined the case for these amendments, I hope noble Lords will accept them so that we can fulfil our agreements with the Scottish Government. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, on these Benches, we welcome the agreement reached with the devolved Administrations—may this be a lesson to people around the world on how to deal with them, at least in this case.

The amendments in this group relate to how the powers in the Bill refer to Scotland specifically. Amendment 41, together with related amendments to Clause 74, and the replacement of Clause 101 and others, reverses—I stress that—the changes made in the House of Commons. I gather that this follows confirmation from Scottish Ministers that they wish the changes to the Secretary of State’s functions regarding information notices to apply to them as well. This seems to me a positive movement of Administrations working together—long may it continue.

[Viscount Younger of Leckie (Con)]

My Lords, as it is my first appearance at the opposition Dispatch Box on Report, I echo remarks made by my noble friend Lady Finn on the first day of Report, because I also appreciate the constructive approach that the Government have taken following Committee.

It is perhaps appropriate that, as a Scot, my first brief contribution relates to matters north of the border. It is our understanding that this amendment has been brought forward by the Government in order to apply to Scotland those provisions of the Bill which we have already debated in earlier clauses, in particular those concerning the new powers to issue information notices under the Social Security Administration Act 1992, and to clarify that the new methods of recovery introduced under the Bill will not apply to devolved benefits.

In that sense, these amendments are essentially technical in nature, as the Minister said, ensuring consistency across the United Kingdom and confirming that the devolved benefits system in Scotland remains outside the scope of the new recovery powers. We appreciate and support the clarification. However, while the amendments themselves are straightforward, they raise some wider questions about the relationship between the UK and the devolved Administrations in this area.

It is somewhat surprising that these changes have had to come forward as government amendments at this relatively late stage of the Bill, when one might have expected such matters to have been settled at the drafting stage through earlier consultation and agreement with Scottish Ministers. The Government have placed great store over the past year in stating that they seek to improve communications and trust between the UK Government and the devolved nations, so can the Minister give us an update on how they view progress on these changes and what has changed in the past year?

While we do not oppose these amendments—indeed, we welcome the fact that the necessary legislative consent has now been secured—they prompt reflection on the importance of ensuring that such engagement happens promptly and systematically in future. The relationship between the UK and the devolved Governments works best when issues of competence and application are identified and agreed well in advance, rather than being corrected through amendments on Report.

That said, I would be grateful if the Minister could take this opportunity to update the House on the Government’s current assessment of the risk of fraud in relation to devolved benefits and on what engagement has taken place with the devolved Administrations to address that risk. Can she tell us what steps she is aware of in those authorities to tackle fraud within their systems and how information sharing and co-ordination between the UK Government and the devolved Governments is being managed to ensure that fraud risks are tackled effectively across all jurisdictions?

We are content to support these amendments that bring Scotland into line with the rest of the UK where appropriate while respecting the devolution settlement and maintaining clarity over responsibilities in the fight against fraud.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for his kind words. I, too, have enjoyed the engagement we have had across the House. It shows how the Lords can make a constructive contribution to the scrutiny of legislation.

The noble Lord, Lord Palmer, is quite right that we have a developed and developing devolution situation in the UK, and are showing that it is possible for different jurisdictions to make different judgments and to find ways of coexisting peacefully. We are very glad to be able to do that, and I thank him for flagging that up.

On the timing, I am advised that it is routine for these matters to be resolved at this point in the process. I reassure the House that our officials have engaged with their Scottish counterparts throughout the policy development stage and the passage of the Bill. It was during Lords Committee that we received formal confirmation from the Scottish Government that they wished the updates to the information gathering powers in the Bill to apply to them too, hence we have brought forward appropriate amendments.

In response to the questions from the noble Viscount, Lord Younger, fundamentally—this stems from the point made by the noble Lord, Lord Palmer—tackling fraud and error in devolved benefits must be the responsibility of the relevant devolved Government. That is the nature of devolution. However, we have engaged extensively with the devolved Governments throughout the passage of the Bill, and these amendments reflect that engagement. I reassure him that we routinely work closely with the Scottish Government to share information and good practice to support each other’s efforts to tackle fraud and error. That includes data-sharing agreements so that we can share information where necessary, which I suspect is the kind of assurance that he was hoping for.

I am grateful for those questions, and I hope that with those assurances noble Lords can accept these amendments.

Amendment 41 agreed.

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Moved by

[Baroness Sherlock]

42: Clause 74, page 42, line 38, leave out subsections (2), (3) and (4) and insert—
“(2) In section 3 (code of practice about use of information powers), in subsection (1)—(a) in the words before paragraph (a), after the second “of” insert “the powers that are exercisable by an authorised officer under section 109BZA of the Administration Act.”, and(b) omit paragraphs (a) and (b).”Member’s explanatory statement
See the explanatory statement for my amendment replacing clause 73.

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Moved by

[Baroness Sherlock]

45: Clause 75, page 43, line 31, after “of” insert “assisting in”
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

[Baroness Sherlock (Lab)]

My Lords, since we are moving on to discuss the eligibility verification measure, about which we had extensive discussions in Committee, I want to say a few words about the need for it and the intent behind it. This enables the Secretary of State to issue a bank or other financial institution with an eligibility verification notice—EVN—that will help the DWP identify incorrect payments in the social security system.

This measure has been misunderstood and occasionally misrepresented throughout the Bill’s passage. It is simply a measure that enables the DWP to ask for limited data from financial institutions that will help the department to identify incorrect payments and verify eligibility for specific benefits. It requires financial institutions to look within their own data and provide limited, relevant information on the accounts which match the specific eligibility indicators provided by the DWP. This limited information will help the DWP to identify where claimants do not meet the eligibility criteria for the benefit that they are receiving.

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[Viscount Younger of Leckie (Con)]

My Lords, there are a number of amendments in this group, each touching on different principles relating to the operation of and limits to the eligibility verification measure. I will address them all briefly. I appreciate the Minister’s full reminder of the intent of this and of some of the operational details behind the EVM, which was very helpful.

I am afraid that we cannot support Amendments 45A, 65 and 74A in the name of the noble Baroness, Lady Kramer, as she may expect. As the noble Baroness herself iterated, these amendments would in practice remove one of the Bill’s core operational mechanisms: the framework that enables the detection and investigation of fraud and error in the welfare system. Taking out Clauses 75 and 76 and Schedule 3 would not simply adjust how the powers are used; it would dismantle the machinery that allows the system to function. We on these Benches support the principles behind the Bill and, broadly speaking, how it seeks to counter fraud and deter wrongdoing. As the Minister reminded us, it was a Conservative Government, up until the general election last year, who initiated the approach for the DWP to ask banks and financial institutions for their help in tackling welfare fraud. I also acknowledge that some improvements have been made in the past year.

Removing these clauses would, in effect, as the noble Baroness has admitted, be a wrecking amendment, denying the Department for Work and Pensions the tools it needs to identify and evidence cases of fraud. The real debate, which this House has been having constructively throughout Committee and again on Report, is about how those powers are exercised—proportionately, cost-effectively and with due regard to rights, safeguards and well-being. That is the discussion we should be having, not one that seeks to strike out the core of the Bill.

We broadly welcome the government amendments, which make sensible, constructive improvements to the operation of EVNs. The first, set out in Amendment 48, is the insertion of the “necessary and proportionate” test, which is a welcome safeguard that raises the standard for how these powers are applied. The second clarification, that EVNs may be used only for assisting in identifying incorrect payments, provides welcome precision and helps prevent any risk of mission creep.

Talking of precision, I thank the Minister and her team for producing a series of flow charts. As she knows, I was pressing for these in Committee because there is considerable complexity, including work in progress—I am not quite sure whether we now call it “test and learn” instead of proof of concept—for all those involved in understanding the processes and operations between the banks and the DWP, with the checks, balances and timeframes set out. I hope the Minister acknowledges that this is a help for the department and that it will be continuously updated and improved as the system evolves.

We believe, however, that there remains scope for further clarification, which is why I was glad to add my name to the amendment from the noble Lord, Lord Vaux of Harrowden. This additional clarification through the language of his amendment is important. It would make it explicit that the exercise of this power is anchored to the purposes of the Bill rather than to any broader or more flexible administrative interpretation that might develop over time. In practical terms, it would ensure that the Secretary of State’s use of these powers cannot be varied or expanded except by returning to Parliament to amend the primary legislation; for example, were the Government at some future point to seek to extend these powers to cover other forms of welfare support.

We believe that this is an important safeguard. It ties the scope of the eligibility verification regime firmly to the text of the Bill, providing Parliament and the public with confidence that its use will remain confined to the limited, proportionate purposes that we have debated. For that reason, we consider this a sensible and necessary amendment and we are glad to support the noble Lord, Lord Vaux, in bringing it forward.

We are sorry to say that we cannot support Amendment 50, tabled by the noble Baroness, Lady Fox of Buckley, although we entirely appreciate her engagement with us on this point and the spirit in which it was brought forward. The aim of improving transparency is understandable but requiring banks to inform account holders that they have been flagged following an eligibility verification notice risks undermining the integrity of ongoing investigations.

I listened carefully to the noble Baroness’s speech, and despite her explanation and the safeguard that she outlined, we remain worried that notifying a potentially liable person too early could allow them to conceal or move funds, frustrating the process. While the intention is fair, it could cause or create a serious loophole. Therefore, I am afraid we cannot support it.

However, one of the points on which I agree with the Government is that some of those seeking to defraud the state—after all, it is taxpayers’ money we are talking about—will stop at nothing to get their way to make money for themselves. There is a line to be drawn to ensure that transparency does not provide an open goal for fraudsters.

It appears that the drafting of Amendment 60, in the name of the noble Lord, Lord Sikka, may not achieve what is intended. As it stands, it would seem, having read it, to place a duty on banks or institutions, rather than individuals, to receive legal advice before complying with a notice. The DWP, in any case, has access to legal advice intradepartmental, so it would be up to the department’s discretion to use this on a case-by-case basis and should not be statutory.

If, however, the noble Lord’s intent, which became clearer in his remarks, is to ensure that individuals affected by DWP actions can access advice or support, that is a broader and legitimate issue. However, this amendment does not appear to address it; therefore, we do not and cannot support it. Individuals might choose to consult a lawyer, but this would be up to them. Can the Minister confirm that no taxpayers’ funds would be used to fund this, if this was indeed the intention?

We welcome the Government’s change in Amendment 61 to extend the review period from seven to 14 days. This responds directly to concerns raised by these Benches and by other noble Lords in Committee that the original timeframe was too short for financial institutions to act upon. It is a practical and welcome step that reflects the realities of compliance, and we are glad that the Government have listened.

Finally, we have some sympathy with Amendment 62, also tabled by the noble Baroness, Lady Fox. I remember that the noble Baroness spoke to this in Committee. It is right that individuals should be able to understand, at least in part, the role of algorithms used in decisions that affect them, and being able to have sight of this as part of a review makes sense. However, transparency must not come at the cost of investigatory integrity. As I stated earlier, there is a delicate balance between fairness to individuals and protecting methods that could be exploited if disclosed.

The noble Baroness, Lady Fox, asked many questions, which I will certainly not repeat. I simply ask the Minister to clarify how these concerns might be addressed in practice, perhaps through the review or the appeal mechanism, while maintaining that balance.

Finally, we welcome that the amendments in this group provide us with an opportunity to have a further discussion on this important part of the Bill, the essence of its prime aim. We are grateful to the Government for listening to the concerns that were raised in Committee, as well as to other noble Lords for identifying areas about which they are concerned and offering the Government the chance to comment. We shall be listening with interest to the Minister’s response.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions today and, indeed, throughout Committee. We have a better Bill as a result, and I am grateful for that. I am grateful to the noble Viscount, Lord Younger, for his support for the principle we are discussing here and for his gracious acknowledgement of the improvements to the Bill. I thank him for that; it was a kind and gracious comment, and I appreciate it.

In response to the noble Lord, Lord Vaux, I will not dwell on this matter, but I am grateful to him for accepting that, even if he came at the issue from a slightly different angle, he is happy with where we have ended up. I thank him again for pushing us, throughout the stages of the Bill, in various ways, and I am grateful that he has accepted where we have ended up with our amendment.

The noble Baroness, Lady Kramer, is absolutely right that her amendment is not nuanced; it lands firmly in the court of whatever the opposite of nuance is. In a sense, it is straightforward: her party does not support these measures at all. I have no doubt that, were her party to form a Government, it would locate another place to find £1 billion to make up for this. However, our party is determined that, if we are to spend money on social security, it should go to the people who are entitled to it and the people who need it—it should not go to other people. We will take the necessary measures to make sure that that happens, and we are doing that in this Bill. We also want to make sure that it is done appropriately and with enough safeguards, and I hope that I have shown to the House my willingness to bend over backwards to provide those safeguards. The principle is that people should not get money to which they are not entitled; it should go to those who are entitled to it and who need it—and that is what we are doing here.

The noble Viscount, Lord Younger, is right that my noble friend Lord Sikka’s Amendment 60 applies to the section that covers penalties that may be issued to financial institutions that fail to comply with an EVN. Therefore, the effect of the amendment would be that the DWP would be required to ensure financial institutions had taken legal advice before issuing a penalty for failing to comply with an EVN. I think we would all agree that, if they need legal advice, they could probably afford it—and so we are okay on that front. However, I fully understand that it is very hard to table amendments outside government, so I take it that the intention of the amendment is as my noble friend made clear: that the DWP is required to ensure that claimants receive legal advice before the DWP can make any adjustments to a person’s claim. However, we do not regard that as either practical or necessary.

There are already existing protections for claimants whenever an overpayment is calculated, including the ability to request a mandatory reconsideration and/or appeal to tribunal. Where an individual is investigated on a suspicion of fraud, they may be interviewed under caution. In that situation, they will always be notified of their right to seek legal advice and provided information about applying for financial assistance with legal costs through legal aid. In response to the question from the noble Viscount, legal aid is funded from the public purse, so if somebody were to qualify for legal aid, it would be funded by the taxpayer in the appropriate way. I confess that that is about as much as I can offer on that front.

My noble friend Lord Sikka mentioned a range of difficult circumstances. A lot of the debate here tends to mix up fraud, error and all the other reasons for overpayments. There are different reasons why somebody may have been overpaid: it may have been a genuine error; they may have been careless; they may have forgotten or deliberately failed to tell us about some change to their circumstance that affects their entitlement; it may be fraud; or there may have been an error on the part of the state. Gathering data early minimises the extent of the build-up of any overpayment, whatever the reason. That has to be a good thing; it is what we found out elsewhere. I hope that my noble friend appreciates that that is at least part of our approach.

I turn to the amendments tabled by the noble Baroness, Lady Fox. As she said, Amendment 50 would require account holders to be informed. Even though I know that she does not intend the amendment to do this, the reality is that it could compromise the DWP’s ability to tackle fraud. In most cases where it is just an error that has been made, the DWP will contact claimants to give them the opportunity to explain potential incorrect payments, in which case the amendment would not be needed. However, in the cases where there is a suspicion of fraud, it would clearly undermine any criminal investigation to inform potential fraudsters that their information had been identified using an EVM or what the financial institution had identified. It might also cause unnecessary distress for those who are not guilty of fraud, such as account holders and claimants who, for example, may have a disregarded compensation payment and who otherwise would have been quite rightly left alone because they had not done anything wrong—there is no need to try to scare people into thinking that an issue will be coming down track. It would also impose further burdens on financial institutions, which would have to inform their customers about this.

Amendment 62 from the noble Baroness, Lady Fox, seeks scrutiny of the methods that a financial institution may use to identify relevant accounts. At the risk of boring the House, I note that the EVM asks banks to return specified data only where criteria, set out in the Bill, have been met. Financial institutions operate in many ways, and it is for each individual financial institution to work out how it identifies relevant accounts, rather than for the Government to set out potentially cumbersome processes.

Just to pick up on a couple of things that the noble Baroness, Lady Fox, said, I want to make this really clear: we will not be asking banks, for example, to work out whether somebody is entitled to a health benefit, such as ESA. We may ask them to identify an account into which ESA is being paid. Health data will be special data and will therefore be expressly prohibited from being returned. The intention is very simple: to ask them to identify the kind of things I described earlier. In response to the noble Lord, Lord Vaux, I was giving an example. There are many examples, but that was the one I chose.

To sum up, I have set out a clear case for the EVM and how our government amendments today and other changes that have been made address many of the areas of concern. I recognise that I have not persuaded the noble Baroness, Lady Kramer, but I hope other noble Lords can see the point of this measure, can see the difference it would make and can understand that with the safeguards around, it is the right thing to do. The EVM will save an estimated £940 million by 2029-30. It will be a vital tool to help the DWP spot and detect errors quickly, while also assisting us in identifying fraud. I urge noble Lords to support this measure.

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Moved by

[Baroness Sherlock]

46: Schedule 3, page 77, line 12, leave out “identifying, or”
Member’s explanatory statement
This amendment, together with my amendments to clause 75, page 43, line 31, clause 76, page 44, line 30 and Schedule 3, page 80, line 23, means that eligibility verification notices can be used only for assisting in identifying incorrect payments of a relevant benefit.

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Moved by

[Baroness Sherlock]

51: Schedule 3, page 80, line 23, leave out “identify, or”
Member’s explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

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[Viscount Younger of Leckie (Con)]

My Lords, I speak in support of these amendments tabled by the noble Lord, Lord Vaux of Harrowden, and I am pleased to have added my name to them, because both amendments make valuable and necessary clarifications to the operation and oversight of the eligibility verification mechanism—EVM—and they do so in a way that strengthens, rather than weakens, the Government’s objectives under this Bill.

Amendment 52 makes a particularly important clarification. As the Government have repeatedly described their approach to the EVM as a test and learn process, it is vital that we make clear in the Bill that the mere existence of an eligibility indicator does not in itself constitute reasonable grounds for suspicion. That may sound like a technical point, but it has real-world implications. When a system is still developing, when its data sources are still being refined and when human understanding of how it operates is still evolving, there is a very real risk of false positives and unintended consequences.

The Government have said that there is some clarification within the process of an investigation that would help to clarify that persons subject to an EVM are not guilty, and that there are not, therefore, necessarily reasonable grounds for suspicion. However, putting this clarification in the Bill would be a really valuable step in making this absolutely clear, in black and white, to everyone involved. This amendment removes ambiguity and ensures that this point is not in question.

We have already discussed throughout this Bill the importance of safeguards and clarity when new investigative systems are created, particularly where multiple third parties are involved in data sharing and enforcement, which is paramount. This amendment provides exactly that and sets out this lack of reasonable suspicion in the Bill so that we avoid the potentially harmful ambiguity.

Moreover, this amendment ensures that, before any intrusive action is taken—in other words, before any benefit is amended, suspended or investigated—a person of appropriate seniority and experience must review the information and confirm that there are genuine reasonable grounds for suspicion. This aspect of the amendment places human oversight where it belongs: between the algorithm and the citizen. This matters all the more because, as many noble Lords will have seen, the Government themselves are moving rapidly to expand the use of AI in fraud detection and enforcement. Only a couple of weeks ago, civil servants across Whitehall received an internal update about the significant expansion of AI use within the Public Sector Fraud Authority in an article titled:

“Behind the Scenes: Building the AI Tool that is Revolutionising Fraud Prevention”.


I listened very carefully to the passionate speech from the noble Lord, Lord Deben, added to by the noble Lord, Lord Palmer. We believe that this makes these safeguards an urgent necessity. As we rightly modernise our defences against fraud, we must also modernise our protections against error, bias and overreach. Ensuring human involvement in that process in the way it has been set out in this Bill is fundamentally important, and this amendment provides that assurance.

Amendment 67 complements the first one by broadening the remit of the independent review of the EVM powers. The noble Lord, Lord Vaux, eloquently laid out his reasoning here. It makes sure that the reviewer looks at not just operational effectiveness but proportionality, costs, unintended consequences and how these powers affect vulnerable people and those interacting with the banking system. These are precisely the areas where well-intentioned powers can have unintended harm if they are not closely monitored.

We on these Benches raised these concerns in Committee and do so again on Report. There is the potential for disproportionate costs on financial institutions, the potential chilling effect on access to basic banking services for those already on the margins and, above all, the potential for harm to vulnerable people who find themselves caught up in complex enforcement processes. It is right that the independent reviewer should have these matters placed explicitly within their remit. I am therefore glad that the noble Lord, Lord Vaux, has framed his amendment to achieve exactly that. We need to recover public money which has been overpaid—we are in no doubt on that point—but doing so in a way that causes more harm than good benefits no one. The reviewer must have regard to this, not as a suggested area of review but as a statutory duty.

These are measured, practical amendments that I believe carry broad support across the House. They are not about blocking the Bill or frustrating its purpose: they are about ensuring that the new systems it creates are used wisely, fairly and proportionately. We therefore hope that the Government will listen and take these proposals seriously, recognise their constructive intent and accept them as a genuine improvement to the Bill. If the noble Lord, Lord Vaux, decides to test the opinion of the House, we on these Benches will be supporting him.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to all noble Lords for their contributions. My response to these amendments builds on the arguments I made at greater length in the last group.

Amendment 52, from the noble Lord, Lord Vaux, states that the existence of an eligibility indicator alone does not constitute reasonable grounds for the suspicion of fraud under Section 109BZB of the Social Security Administration Act. I have sought to assure noble Lords already today that a conclusion will never be drawn from EVM information. At the point the information is shared, no one is suspected of having done anything wrong and therefore, by definition, no action could be taken to correct the thing that could have been done wrong because no one is suspected of having done anything wrong. I could not be clearer on that.

I think it is worth reminding the House that there are two different things happening here. This measure allows DWP to ask banks to flag up accounts that may on the face of it have received a benefit to which someone is not entitled. That is a piece of information that comes into the department. Along with other pieces of information, it will be sifted and examined, and decisions will be made through the usual processes. DWP does this all the time, with all kinds of information. Those decisions are made. Pursuing fraud is something that is done day to day. Whenever DWP receives data in response to an EVM, the data will be matched with information that DWP holds, so it can identify the claimant and any inconsistencies between the information received from the financial institution and the information provided by the claimant over the life of their claim. It will also look at any possible disregards and any other relevant information, as I explained on the last group.

It is only then, as with our current practice, when a possible inconsistency is identified, that steps will be taken to determine how or even whether a claim needs to be reviewed. In some cases, it will be clear that no further action is required and the data from the EVM will be used no further. In cases of potential error, DWP may contact the customer to discuss the claim or ask for further information. In cases where potential fraud is then suspected, the case may be passed to an authorised officer, who will consider all relevant information to determine whether there are reasonable grounds to suspect that a DWP offence has been committed.

The noble Lord, Lord Deben, made a passionate speech, and he is someone for whom I have a great deal of respect. If what he suspected was happening, his passion would be justified, but I want to persuade him that it is misplaced. The decision to judge that someone has been guilty of fraud and to take action is not an automatic process. It is also not a determination that can be made by just anyone. It can be made only by an authorised officer in the DWP. If there are no reasonable grounds to suspect that a DWP offence has been committed, the case is passed back to the relevant benefit team or compliance team. At all times during that process, as is the case now, DWP will ensure that any next steps are reasonable and proportionate. There are no immediate suspensions of benefits during the process and, where appropriate, DWP will always endeavour to work with the customer to establish the facts around a benefit claim and identify any possible vulnerabilities. I hope that my position on that is clear and is made even clearer by the government amendments—

[Lord Deben (Con)]

If that is so, what is wrong with making it statutory? The issue is that what the Minister says is what now happens. We are concerned about what could happen if it is not in the Bill.

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[Baroness Sherlock (Lab)]

My Lords, it is in the Bill. The requirement for reasonable suspicion for exercising powers under Clause 109BZB is set out in that clause. The fact that an account meets an eligibility indicator does not necessarily mean that there are any grounds for suspicion of fraud or other offences. It does not even necessarily mean that a benefit has been overpaid. Paragraph 3(1) of Schedule 3B on eligibility verification makes clear that eligibility indicators only indicate that a benefit

“may have been, or may be, incorrectly paid”.

The eligibility indicators in an eligibility verification notice must be criteria which indicate that the specified relevant benefit may have been or may be incorrectly paid.

The legislation therefore clearly reflects that EVM information will have to be considered alongside all other relevant information before further steps are taken. As I have said, DWP is required to consider all relevant information to determine whether there are reasonable grounds to suspect an offence. This is about not just this but about existing legislation and powers. I hope that my position on that is clear and that the government amendments in the previous group have helped to make it clearer.

Amendment 52 also requires that the information be reviewed by an appropriately senior person. We do not know exactly what the definition is of a senior person. However, it is an established legal principle that the Secretary of State must be satisfied that officials are suitably trained and experienced to take decisions on their behalf. The amendment is therefore unnecessary. I hope that the noble Lord will not feel the need to press it.

Amendment 67 would add three additional requirements to the role that the EVM independent reviewer will be required to undertake. Government Amendments 68 and 69, spoken to in an early group by my noble friend Lady Anderson, addressed paragraph (f) of that requirement by requiring the Secretary of State to provide information to the independent reviewer where it is “reasonably required”. In case there are any concerns about that, we foresee a close working relationship between DWP and the independent EVM reviewer, where DWP gives the reviewer the information that it needs.

However, the government amendment makes it even clearer that we are committed to providing necessary information. If necessary, DWP could ask the reviewer to demonstrate why a certain piece of information is necessary for the purposes of their review, by reference to the scope of the review and the matter that it has to cover, as set out in legislation. If the independent reviewer then demonstrates that the information is necessary for them to carry out their review, the legislation is clear that DWP must provide it.

On paragraph (d) of this amendment regarding costs incurred by business, this is a matter the Government take seriously. We are committed to keeping costs associated with this measure proportionate and to a minimum. As the noble Lord, Lord Vaux, is well aware, over the passage of the Bill we have worked very closely with UK Finance to improve the Bill and our draft codes of practice. At a recent meeting with Ministers, UK Finance welcomed this extensive engagement, which it feels has significantly strengthened the Bill. It indicated that it was not calling for further legislative change.

Crucially, I do not regard this amendment as necessary because the independent reviewer must already assess the measure’s effectiveness. Financial institutions receiving an EVN have the right to appeal a notice that is unduly onerous. We have committed to provide a further impact assessment 12 months after Royal Assent.

Paragraph (e) of the amendment would require the independent reviewer to include within their annual report any adverse effect that the EVN may have on vulnerable persons’ or benefit claimants’ access to banking services. I assure the noble Lord and the House that protecting DWP customers, especially those who are vulnerable, is very much a priority for this Government. However, we do not believe that this amendment is necessary.

First, there is no reason for individuals to lose access to banking services solely because of information shared under EVM. We have been clear that information does not imply any wrongdoing. The Bill makes provision to exempt financial institutions from returning suspicious activity reports in certain circumstances if the information that they have is only the result of an EVM match. We are working with the FCA to prevent any unintended consequences. Secondly, as I have indicated, this measure simply provides a source of data that feeds into the long-standing processes in DWP, where layers of support and specialist staff already exist to ensure that those who are vulnerable or have complex needs get the right support. Thirdly, this measure will help our customers, including those who are vulnerable. It will help us to spot genuine errors in claims early, help us to take steps to correct these and prevent large overpayments and debts building up that are recoverable.

I hope that the arguments which I have put out there have been enough to persuade the House on why we should move ahead. I beg the noble Lord to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank every noble Lord who has taken part in this debate. I particularly thank the noble Lord, Lord Deben, for his generous words, and the Minister for her fulsome response. On the comments of the noble Lord, Lord Palmer, about allowing people to get away with fraud, I want to make it really clear that I do not want people to get away with fraud. I am as keen as anyone to make sure that fraud and error are reduced. Please do not take away from this that I am soft on fraud. I hope my track record on fraud is well known within this House.

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Moved by

[Baroness Sherlock]

53: Schedule 3, page 80, line 27, leave out “processing and data protection” and insert “disclosure”
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 80, line 30.

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Moved by

[Baroness Sherlock]

61: Schedule 3, page 84, line 35, leave out “7” and insert “14”
Member's explanatory statement
This amendment extends the period of time within which a person given an eligibility verification notice can apply for a review of the decision to give the notice.

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Moved by

[Baroness Sherlock]

63: Schedule 3, page 89, leave out lines 34 and 35
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 80, line 30.

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Moved by

[Baroness Sherlock]

66: Clause 76, page 44, line 30, leave out “identifying, or”
Member's explanatory statement
See the explanatory statement for my amendment to Schedule 3, page 77, line 12.

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Moved by

[Baroness Sherlock]

68: Clause 76, page 44, line 36, leave out “may” and insert “must”
Member’s explanatory statement
This amendment, together with my amendment to clause 76, page 44, line 38, would mean that the Secretary of State must provide information where the information is reasonably required for the purposes of independent reviews carried out under new section 121DC of the Social Security Administration Act 1992.

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[Baroness Sherlock (Lab)]

My Lords, a lot of questions have been asked and I will do my best to answer them all. I will start by making clear what we are seeking to do. These powers would give authorised and trained DWP officers the ability to use reasonable force. We want them to be able to use that against property, not against people. Making a distinction in the way that the noble Lord, Lord Vaux, does in one of his amendments is not straightforward, despite the wishes of the noble Viscount, Lord Younger.

A number of noble Lords have said that they would be horrified to see civil servants using powers meant for the police. I am sure that members of the previous Government will be aware that HMRC, Border Force and the Gangmasters Licensing Authority already have these powers. This is not unprecedented.

[Lord Harper (Con)]

My Lords, I have not spoken on this Bill before, and I was genuinely trying to be helpful to the Minister. She has just said that you cannot make an easy distinction between the use of force against things and people. That is exactly the point. If you give powers to be used against things, you will get drawn into using them against people. I am well aware that Border Force has these powers, but if she talks to her noble friend sitting next to her she will find out that, as a result of the independent inquiry we had, there is extensive training for Border Force and for immigration enforcement officers before they are allowed use that force. That is my counsel; I urge her to be cautious.

[Baroness Sherlock (Lab)]

My Lords, I will come on to answer all the noble Lord’s questions if he will give me a moment to do so. I have not got there. That was my opening paragraph. I will answer the points one by one, so I hope he will be patient with me.

I am sure that the noble Lord, Lord Vaux, did not mean to do this, but the impression he and some other speakers gave is that the DWP will seek to use these powers against an average benefit claimant who has accidentally overclaimed by £20. I make it clear that this power cannot be used in those circumstances. It will be used where the DWP has a reasonable belief that someone has intentionally committed sophisticated, often high-value fraud against the DWP. These operations seek to find evidence of criminality that is not obtainable through the DWP’s other criminal investigation powers, such as its information-gathering powers, which would be the normal route for obtaining evidence in investigations. To use these powers, we have to seek a warrant from the court. The warrant application will go to the court, which will be the ultimate arbiter of whether a warrant is approved, based on a relevant justification. Those warrants have to be used for investigating serious organised criminality, and those offences tend to be high-value and complex. For that to happen, there would need to be reasonable suspicion related to indictable offences. We are not talking about individuals who have accidentally been overpaid a small amount of money.

I will go through the specifics that have been raised. I understand what the noble Lord, Lord Vaux, wants to do with his amendments and his desire to limit the use of reasonable force to property and not people. However, the use of reasonable force is set out in the Police and Criminal Evidence Act 198, which, as he pointed out, does not distinguish between the use of force on items and persons. There is no precedent for breaking down the PACE power of reasonable force to restrict it to people or items. As I will go on to explain in a moment, to do so could result in unintended consequences.

The DWP has been clear from the outset that its intention is that reasonable force will be used only against things, not people. That will be made clear in guidance and training. The power will enable DWP-authorised investigators to use reasonable force to access locked cabinets and digital devices once they are lawfully on a premises. Without that ability to secure evidence, the DWP would have to continue to be reliant on the police, who would need to remain on the premises for the duration of the search activity. Imagine a situation where, for example, a significant universal credit fraud has taken place. There are potentially a lot of papers, either in filing cabinets in a premises or on devices. The police effect entry to a premises and secure them. The police stay there, and we ask them to carry on picking up every single file so that DWP officials can tell them if it is right or not. The police could be out on the streets tackling real crime and protecting people or they could spend that time in the premises while the DWP searches devices.

I understand the intention behind the amendments—

[Lord Harper (Con)]

My Lords—

[Baroness Sherlock (Lab)]

I remind the noble Lord that this is Report.

[Lord Harper (Con)]

I know, but I am trying to ask some sensible questions. The noble Lord, Lord Vaux, will have to decide whether to press Amendment 76. I encourage him to press Amendment 75 and take this out completely. The Minister just talked about the police having to stay there to pick up files and devices. Why would they need to use force to do that? That is an administrative exercise. She is in danger of defending the indefensible in an unnecessarily complicated way. We are trying to be helpful.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord for his help but I will try to manage for now. To open a filing cabinet or to open a device without the consent of the owner requires using reasonable force. I fully accept that he does not think that the DWP should have any of those powers. I hope he will bear with me and allow me to move through the arguments to make a case as to why I think it is necessary. If I cannot persuade him then I accept that, and he will go into the other Division Lobby, but I hope he will allow me to explain why I think this is necessary and proportionate.

One of the risks of the approach that has been taken to try to limit the use of reasonable force as set out by PACE is that it could have the unintended consequence of removing an authorised investigator’s common-law right to self-defence—for example, if they were physically threatened during a search and seizure activity. Clearly, the safety of our authorised investigators is paramount and they, like anyone else, must have the right to defend themselves if threatened. We will of course take a number of steps to ensure staff members’ safety. That includes conducting risk assessments on application for the warrant and during the search and seizure activity itself, and equipping staff with critical safety equipment and protective clothing.

The noble Lord, Lord Harper, asked about training. All DWP-authorised investigators will be required to complete training to the equivalent standard of the police before they can use these PACE powers. I assure the noble Lord, Lord Deben, that money will be made available to pay for that. We will not expect people to use these powers if they have not had appropriate training. That was a good question and I am pleased to answer it. In addition, DWP criminal investigators undertake investigative training as part of the Government Counter Fraud Profession. All staff must have training to industry standards before they can be considered even for authorised investigator status. That will ensure that staff are benchmarked to the same standard.

The DWP will not have the power of arrest. I remind the noble Viscount, Lord Younger, that the previous Government’s fraud plan, including the version put out in 2024, when he was standing where I am, proposed not only the powers we have here but that DWP staff should have the powers of arrest. We decided that was not appropriate but, as I have said, we do think that the power to have reasonable force against property is reasonable. We have taken what I think is a proportionate view. In the situation described, where the DWP arrives at premises but the police are not there and its staff find their entry is obstructed, the policy will be that they should remove themselves from any potential danger and request police presence.

The noble Lord, Lord Vaux, also mentioned oversight. We will be commissioning His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services to inspect the use and effectiveness of these powers in England and Wales and His Majesty’s Inspectorate of Constabulary in Scotland to do so there. These inspections can focus on any part of the end-to-end criminal investigation and their reports will be published by the Secretary of State. In addition, the Independent Office for Police Conduct will be responsible for reviewing any serious incidents or complaints in relation to these powers in England and Wales, with the Police Investigations & Review Commissioner responsible in Scotland.

While I am here, two other questions were asked on the IOPC. In one, I think the noble Lord, Lord Vaux, said that the IOPC regs were a Henry VIII power. I am advised that they are not, because they do not seek to amend or repeal primary legislation. The proposed amendments to Part 2 of the Police Reform Act are contained in the Bill itself. On the question of funding, the DWP has secured the necessary agreements with the IOPC and will continue to work closely and in partnership with it to ensure that its needs are considered, including financial arrangements. The regulations will make provision as to payment for this service and permit the lawful disclosure of sensitive files and information relating to the exercise of the functions and powers. I hope that reassures the noble Lord on that point.

On the other questions that have been mentioned, just to be clear, the drafting in Schedule 4 for Scotland is intended to clarify that force cannot be used to compel individuals to provide information when required to do so by a court protection order. This mirrors PACE as it applies in England and Wales. On the exercise of reasonable force when executing search warrants, the provisions in the Bill both in Scotland and in England and Wales are comparable. I hope that reassures noble Lords who think that we think that people in Scotland are less dangerous than people in England and Wales. I can assure them that is not the case.

Noble Lords asked about the difference between the PSFA and the DWP. Primarily, this is a matter of scale. A tailored approach has been adopted by the DWP and the PSFA. The PSFA is likely to do a smaller number of investigations; the scale at which the DWP operates would be a very different use of police resource than it would be in the case of the PSFA. Therefore, we think it is appropriate.

Finally, I think somebody—I am sorry, I have forgotten which noble Lord this was—asked whether we would use this provision against vulnerable people, benefit claimants being vulnerable. Again, another form of reassurance is that the law requires any warrant application to include information about any vulnerable individuals who may be present on the premises. As a result, the DWP has to conduct risk assessments before even applying to the court.

I understand the comments that have been made. I hope that I have been able to reassure noble Lords that our proposals are proportionate. On that basis, I urge the noble Lord to withdraw his amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank all noble Lords who have taken part in this debate. In particular, I thank the noble Lord, Lord Harper, for giving us the benefit of his real-life experience on this and the very powerful example of how this can go wrong.

I confess that I am not persuaded of the need for DWP officers to have the ability to use reasonable force and I am tempted to go down the route the noble Lord, Lord Harper, suggests of removing it altogether. However, I want to be constructive. I do not want to ruin the Bill, so I think I can live with a situation where the Bill tries to mirror what the Minister has said the powers will be used for and limit it to that. If she thinks there are unintended consequences from that, those can be fixed at a later stage, at Third Reading. I make the point now that it is outrageous that Third Reading is in less than two days’ time from now, on Thursday. That is not the way we do things in this House. It does not give us time to sit down and try to work things out. I put it on record that it is just wrong.

I was slightly confused by one thing the Minister said. She described a situation where the police are there throughout as a waste of police time, when they could be off dealing with real crime, but just the sentence before she told us that this will be used only in cases of sophisticated high-value fraud. Is that not real crime? I confess that I am a bit confused by that.

Anyway, nothing I have heard has changed my view about the ability to use reasonable force against people being appropriate for DWP officials, particularly if the police are likely to be there all along anyway. I beg leave to withdraw Amendment 75, but I will, when the time comes, test the opinion of the House on Amendment 76.

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Moved by

[Baroness Sherlock]

78: Clause 83, page 50, leave out lines 19 to 21
Member's explanatory statement
This amendment, and my amendment to clause 83, page 50, lines 25 and 26, would remove provision that is no longer needed because of the general data protection override in section 183A of the Data Protection Act 2018, which was inserted by section 106(2) of the Data (Use and Access) Act 2025 and came into force on 20 August 2025

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Moved by

[Baroness Sherlock]

80: Clause 85, page 51, leave out lines 37 and 38
Member's explanatory statement
This amendment is consequential on my amendment replacing clause 101.

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Moved by

[Baroness Sherlock]

81: Clause 87, page 52, line 18, leave out “processing” and insert “disclosure or obtaining”
Member's explanatory statement
See the explanatory statement for my amendment to clause 87, page 52, line 24.

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[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Viscount for explaining his amendment. I will start by gently reminding him of something. He said that we should not avoid oversight because it is inconvenient. Does he remember that when his Government, led and represented by him, introduced equivalent powers to many of these in the DPDI Bill, there was literally no independent oversight at all anywhere in that Bill? So, I am very happy to respond on the way we are putting it in, but I hope the House will give us credit for having actually put in significant independent oversight, and I would encourage him to remember that.

Having said that, while I understand the rationale for Amendments 86 to 88, we do not believe that they are appropriate or necessary. DWP’s intention for Clause 89 is to appoint an independent, external inspectorate body to inspect DWP’s end-to-end criminal investigations. His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services has provided this function for public services for over 160 years. DWP has committed to commissioning HMICFRS as the body best placed to provide an independent inspection role in England and Wales and, similarly, His Majesty’s Inspectorate of Constabulary in Scotland, for Scotland. I can assure the House that DWP are committed to ensuring the right level of scrutiny for these powers and will follow existing HMICFRS and HMIC Scotland’s processes and guidance, which requires transparency and accountability.

These inspectorate bodies bring huge experience of working in this area, providing robust inspections to other similar bodies. That is why DWP will work with them to agree mutually that each inspection takes place over a suitable period, so that they are assessing and reporting on a period which realistically reflects DWP’s use of search and seizure powers. DWP has worked closely with both HMICFRS and HMIC Scotland, and we understand that sharing information is an integral part of the inspection process. That is why the department is committed to providing all relevant information, so that meaningful inspections can be carried out.

It is important to highlight the unnecessary risk Amendments 86 and 87 create. These amendments could result in sharing information with the inspectorate that could then become disclosable material in a live investigation, potentially jeopardising the outcome. Because of the range of investigatory techniques used during DWP criminal investigations, it is important that the Secretary of State retains discretion not to provide information when the consequences of sharing that information outweigh the benefit to an inspection—for instance, to protect customers or prevent compromising future prosecutions. Depending on the circumstances, examples of such sensitive material not suitable for sharing might include material given in confidence, details about witnesses or other persons who may be in danger if their identities are revealed, material revealing the location of any premises or other place used for surveillance, and material relating to the private life of a witness. I hope that explains why I cannot accept these amendments.

Amendment 88 seeks to extend the remit and scope of an independent person appointed under Clause 89. We have already confirmed that this will be HMICFRS and HMIC Scotland. They will provide an additional safeguard to ensure that the DWP is using these powers proportionally and in line with their intended purpose. However, although the inspectorates are very impressive in their fields, it is clearly not within their remit to assess expenditure or amounts recovered and conduct cost-benefit assessments of the various measures in the Bill. But the Office for Budget Responsibility has certified the estimated £1.5 billion of benefits contained in this Bill and, separately, our impact assessment clearly outlines the estimated costs and how we will scale up our rollout to deliver the savings and commits to monitoring and evaluation of Part 2 of the Bill.

I also remind the House of the existing reporting mechanisms for the DWP’s fraud and error activities that make this amendment unnecessary. In the DWP’s annual report and accounts, the department reports on the savings made from our fraud and error activities, including savings made from activity across our counterfraud and targeted case review teams. In addition, we also report on our debt recovery totals and debt stock. The departmental annual report and accounts are reviewed and scrutinised by the National Audit Office, which publishes a report on the accounts and provides independent assurance to Parliament on the proper use of public funds.

Finally, a question was asked about what is different between the DWP and the PSFA. The type and nature of DWP and PSFA criminal investigations are likely to be very different. That means the risks and decisions involved in disclosing sensitive material are different for each organisation. Due to the function it plays, the DWP is likely to have significantly more individuals who may be vulnerable, and it considers that disclosing sensitive material relating to those persons is not an appropriate approach for it to adopt. For that reason, the DWP must be able to withhold material in such cases to ensure that there is no detriment or risk to vulnerable persons who may be placed at risk.

To conclude, the DWP is committed to transparency and to delivering this Bill and its savings, but I do not think it is helpful or necessary to ask the inspectorates to step outside their existing remit given the routes already in place. I therefore urge the noble Viscount not to press his amendments.

[Viscount Younger of Leckie (Con)]

My Lords, I am grateful to the Minister for her response, but I am afraid we are still not persuaded on the point we raised around the powers of the independent reviewer to be provided with information. I certainly do not want to repeat what I said in opening but, in response to her earlier remarks, I want her to be clear that we recognise that some progress has been made on the Bill after a year. Without further ado, I have listened very carefully and heard her responses to Amendments 86 to 88, and I will test the opinion of the House on Amendment 87. I beg leave to withdraw.