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

John Milne Excerpts

Committee stage
Tuesday 11th March 2025 Public Bill Committees

[Steve Darling]

It is a pleasure to serve under your chairmanship, Mr Western. We have touched previously on having an independent overview of the activities that will take place under the Bill, and this is another opportunity to have the checks and balances I have alluded to on a number of occasions. Of course, all Members in the room are reasonable people, but we see in world politics what happens when people are unreasonable. Given that the United Kingdom’s constitution is unwritten, beginning to build those checks and balances into legislation is important. Amendment 37 would hardwire them into the Bill, and I ask that the Minister give it serious consideration. I have heard hints that it may be taken into account in one way or the other when the Bill goes to the other place, but I would welcome some reassurance, if possible, that that is the case.

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western. As my hon. Friend the Member for Torbay said, the amendment is about checks and balances. We appreciate that the Bill has been introduced in the context of the Government’s desire to cut the benefits bill, but the Treasury deeming something to be financially necessary does not necessarily make it right.

The percentage lost to fraud and error is relatively modest, but of course the sums are huge because the overall number is huge. We need to remember that these measures will not get anywhere near recovering all that money, so the question is: is the action proportionate, considering the sacrifice we are making in terms of civil liberties? It is vital that we get the best value from public money, but the amount expected to be recovered is just 2% of the estimated annual loss to fraud and error of £10 billion, and just a quarter of what is lost to official error at the Department for Work and Pensions.

As drafted, the clause empowers the Minister to appoint an independent person to carry out reviews of the Secretary of State’s function under schedule 3B to the Social Security Administration Act 1992. There is no external oversight, and that undermines the credibility of the role. Our amendment states:

“Prior to appointing an independent person, the Minister must consult the relevant committee of the House of Commons”,

which means

“a committee determined by the Speaker of the House of Commons.”

Without proper scrutiny, the role’s independence is undermined, potentially damaging trust in the process.

The Committee previously heard evidence from Dr Kassem of Aston University, who stated:

“I would recommend a board rather than an individual, because how sustainable could that be, and who is going to audit the individual? You want an unbiased point of view. That happens when you have independent experts discussing the matter and sharing their points of view. You do not want that to be dictated by an individual, who might also take longer to look at the process. The operation is going to be slower. We do not want that from a governance perspective—if you want to oversee things in an effective way, a board would be a much better idea.” ––[Official Report, Public Authorities (Fraud, Error and Recovery) Public Bill Committee, 25 February 2025; c. 13, Q15.]

A board would ensure that the appointment is truly independent and subject to parliamentary scrutiny. We therefore propose that the Minister must consult the relevant House of Commons Committee before making such an appointment. That simple steps would ensure genuine independence and parliamentary scrutiny, and would strengthen transparency and public confidence.

[Rebecca Smith (South West Devon) (Con)]

It is a pleasure to serve under your chairmanship this morning, Mr Western. As we have just heard, Liberal Democrat amendments 37 to 42 would mean that, before appointing an independent person, the Minister had to consult a Committee of the House of Commons nominated by Mr Speaker. Amendments 38 to 42 seek to replace an independent person with an independent board, and therefore to allow the Secretary of State to appoint persons to, and confer functions upon, the board.

I have a couple of questions for the hon. Member for Torbay. What greater independence do the Liberal Democrats think will be gained by changing the requirement, given that both the independent board and the independent person would be appointed by the Secretary of State? What practical difference will the amendments make to improve the review process and ensure that it is high quality?

--- Later in debate ---

[The Chair]

I remind Members to bob if they wish to catch my eye to speak, and to refrain from using the word “you”, which refers to me as opposed to the Minister.

[John Milne]

My colleague has just partially asked my question. While we broadly welcome the clause, we are concerned by the absence of the code of practice. Could the Minister give any indication of the kind of guidance that it might contain? Also, at what stage of the parliamentary process will there be scrutiny of it, given that it will not be during this Committee?

[Siân Berry (Brighton Pavilion) (Green)]

It is a pleasure to serve under your chairship, Mr Western. I want to raise the comments made by the Information Commissioner in relation to the Bill and the updates to the previous Government’s proposals. I understood that they were more content with this Bill than the previous Bill. They were pleased that it brought data protection more tightly within the measures, and that it talked about data protection in a much more consistent way with the law. They said that the Bill more tightly scopes the types of information that can and cannot be shared. I understand that our debate on clause 85 covered some of those improvements.

However, at the end of their comments, the Information Commissioner talked about the review process, and said very clearly that they would like to explore with the Government the role that the Information Commissioner’s Office can play in assisting with the review process. This clause does not set out the different offices and people with whom the independent reviewer needs to liaise in preparing their report. I wondered whether Ministers could comment on their thoughts surrounding that process, and consider setting out in the code of practice or further guidance how the independent reviewer might engage properly with data protection in their review.

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

John Milne Excerpts

Committee stage
Thursday 6th March 2025 Public Bill Committees

In conclusion, while we all want fraud and error to be robustly tackled in the welfare system, these provisions are not proportionate to achieving that aim and we should not undermine the presumption of innocence and fundamental privacy rights in order to achieve it. I urge the Minister to reconsider this part of the Bill. We should be treating people who claim benefits as citizens, not as suspects, and for that reason I will be opposing clause 74 and schedule 3.

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. It is important for us all in this place to remember that, although we make legislation with the best of intentions, it does not always play out perfectly in practice. As a member of the Work and Pensions Committee, I heard evidence a few days ago from a number of claimants who have had a very bad experience at the hands of the DWP. Their overall theme was one of antagonism and hostility from the service, and they described a number of serious problems.

That is the attitude that, unfortunately, many claimants and many people across the country have. They think that the objective of the DWP is to catch them out rather than to help them—rightly or wrongly, that is what they feel. In that context, the title of this Bill covers “fraud and error”, not “fraud and genuine human mistake”—which, frankly, is what goes on a lot of the time.

I say that particularly in the context of our amendment 30 relating to pension credit. As my hon. Friend the Member for Torbay has described, pension credit is an area of relatively low fraud. However, there are more elderly and vulnerable people who are more likely to make an error, particularly in the context of the removal of winter fuel payments. There is a little extra onus on pension credit, and we are trying to push greater take-up. About a third of eligible people do not claim pension credit. Part of the reason is that many of them feel intimidated by the process and the feeling that they are getting something that they should not have. It is fear that holds them back.

A few months ago, the Secretary of State for Work and Pensions, the right hon. Member for Leicester West (Liz Kendall) said she would “move heaven and earth” to try to push that take-up higher, because we never seem to get past that 65% to 66% level. In that context, this feels like a retrograde measure, likely to depress rather than to encourage take-up.

[Neil Coyle]

Could the hon. Member give us the figures on the increase in pension credit take-up for the period during which a Lib Dem held the position of Minister for Pensions?

[John Milne]

That was before my time and I was not even in the country, so I am afraid I cannot answer that question.

It is very important that we should be pushing take-up, not sending it into reverse. For that reason, I ask the Minister to reconsider the need to include pension credit; that the upside—the amount of money that might be recovered from fraudulent claims—is relatively modest compared with the potential downside of putting more people off claiming.

Regarding amendment 29, tabled by the Liberal Democrats, we have heard from many witnesses, such as Big Brother Watch, about the risk of mission creep and these powers being extended in too many directions. It seems to me completely unnecessary to simply give the Minister of the day the power to add whatever benefits he or she feels like at that time. There is no need for it. Excluding that now does not affect the tax take or the potential benefit for the Government, and it seems an unnecessary and disproportionate power. I urge the Minister to reconsider the inclusion of that measure.

[Damien Egan (Bristol North East) (Lab)]

I want to make a few points, because I am worried that some Members are underestimating the level of fraud and the direction of travel, because it is only going up.

The hon. Member for Brighton Pavilion is correct in a sense in saying that people voted for change and that fairness in the welfare system is one of the things they voted for, but part of that is about having confidence in the welfare system. People can see the level of fraud, and they want the Government to restore the balance so that it is less in favour of people committing fraud.

I encourage those Members who are apprehensive about these elements to visit their local jobcentre. I did two visits at my local jobcentre in Kingswood; I had to go back because the work coaches had so many stories to tell. Members of the Work and Pensions Committee will have heard me say this before, but I spoke to two women: one had been there for 45 years and the other 41 years. They said the level of fraud is something that they have never seen before. I wish they were here now, because everything that they said about how we deal with it was about getting information from banks and other agencies and sharing that information on eligibility and combating fraud. I wanted to make those points and I encourage Members to speak to them.

Social Security Benefits

John Milne Excerpts

Tuesday 4th February 2025 Commons Chamber

[Sir Stephen Timms]

The hon. Gentleman is quite right; it is important that applications are processed speedily, and I am pleased with the number of applications. I can confirm—I think he knows this—that everybody who applied before 21 December will receive, if they are successful, their winter fuel payment. We have also moved extra staff on to pension credit processing. However, the hon. Gentleman is quite right to raise that point.

Universal credit and the legacy means-tested benefits that it replaces provide support for people of working age. We have committed in our manifesto to reviewing universal credit, so that it makes work pay and tackles poverty, and we will set out shortly how we plan to fulfil that commitment. For those below state pension age, the order increases the personal and standard allowances of working-age benefits, including universal credit, by 1.7%, in line with the increase in prices in the year to September 2024. In the Budget last November, the Chancellor announced that the maximum repayment deduction from universal credit payments will be reduced from April, from 25% of the universal credit standard allowance to 15%—the fair repayment rate—and 1.2 million households are expected to benefit from that change by an average of £420 per year.

In addition, the order increases statutory payments by 1.7%. That includes statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay. Benefits for those who have additional costs as a result of disability or health impairments will also increase by 1.7%. That includes disability living allowance, attendance allowance and personal independence payment. The order will also increase carer’s allowance by 1.7%. The Chancellor announced in the Budget that, from April, the weekly carer’s allowance earnings threshold will be pegged to the level of 16 hours’ work at the national living wage. That means that, from April, unpaid carers will be able to earn up to £196 per week net earnings and still receive carer’s allowance, compared with £151 now. I am pleased to say that that move has been very widely welcomed, and we expect it to bring an additional 60,000 unpaid carers into eligibility for the benefit, and, crucially, to reduce the likelihood that carers who manage to combine some work with their caring responsibilities will inadvertently fall foul of the earnings limit, because, in future, that threshold will keep up with changes in the national living wage.

On disability and carer’s benefits, we will continue to ensure that carers, and people who face additional costs because of disability or health impairment, get the support that they need, and we will set out proposals for reform of health and disability benefits in a Green Paper in the spring.

[John Milne (Horsham) (LD)]

In my constituency of Horsham, food bank usage increased by 25% last year, and it has increased by 700% over six years. In the light of that evidence of the pressures, will the Government consider putting a minimum level on universal credit?

[Sir Stephen Timms]

I have seen representations along those lines. It is not something that we are considering at the moment, but we are, as I have mentioned, committed to reviewing universal credit, and we will do so over the course of this year. I imagine that we will be looking at a very wide variety of representations, and the hon. Gentleman and others will be very welcome to make submissions to us along those lines. Lastly, let me say a word about the draft Guaranteed Minimum Pensions Increase Order 2025.

Public Authorities (Fraud, Error and Recovery) Bill

John Milne Excerpts

2nd reading
Monday 3rd February 2025 Commons Chamber

[John Milne (Horsham) (LD)]

I am sure that I speak for all hon. Members when I say that putting a stop to fraud of any kind is welcome, especially at a time when public money is scarce. However, many of my Horsham constituents have contacted me to say that the powers outlined in the Bill are very far-reaching and, if abused, could have hugely detrimental effects on benefit claimants through no fault of their own.

As my hon. Friend the Member for Torbay (Steve Darling) said, the carer’s allowance repayment scandal shows exactly what can go wrong when the state has high-level powers over debt recovery. Due to departmental error, not the claimants’ error, there were more than 250,000 cases of overpayment to carers in the last five years of the Conservative Government. That is an enormous number. What would have happened to those carers, who are paid very little for the huge service to society that they provide, if the powers in the Bill had been in place during those five years? They would probably have faced forced withdrawals from their bank account, the possible removal of their driving licence or even forced entry to their home by the DWP.

The Bill will give increased powers to access private bank accounts. This requires careful consideration from a civil liberties perspective. However, the DWP already has the power to compel third parties to share data where criminal activity is suspected. The new powers appear to reduce the need for prior evidence and simply grant access at will. Given that access to banking information is estimated to recover just 1.4% of the Government’s annual loss to fraud and error, do these powers of forced withdrawal represent a proportionate action? Before introducing new powers, it might make more sense for the Government to increase the efficacy of existing requirements on third parties to report suspicious activity, and for HMRC to share banking data on an annual basis.

The Government have asserted that the Bill will save the public purse £1.5 billion, but in the absence of an impact statement, how do we know? If the DWP is to have the power to take people’s money, suspend driving licences and enter homes, we should at least be very confident that it is worth it. In particular, we need to be sure that the savings predicted do not come from the blameless victims of departmental error, as happened with the carer’s allowance overpayment scandal. It is of huge importance that fraud be reduced, but until we are sure that we have learned the lessons of the past, we run the risk of damaging people’s lives for insufficient benefit. We are at risk of making the same mistakes again, but with fewer checks and balances.

The sentiment of the Bill is welcome, but there are risks attached. I am concerned that it builds a narrative that assumes that the claimant is the guilty party, when it could be the Department that is at fault. I therefore call on the Government to apply all possible care before launching new regulations that, at present, would amount to a matter of trial and error.

Women’s State Pension Age Communication: PHSO Report

John Milne Excerpts

Tuesday 17th December 2024 Commons Chamber

[Liz Kendall]

I understand the concerns that my hon. Friend raises, but I reiterate the findings from the ombudsman’s report that there was no direct financial loss. We agree that those letters should have been sent out earlier. We will learn all the lessons needed to put that right. I am more than happy to discuss precisely how we will do that with the all-party parliamentary group, so that that kind of maladministration of sending out letters never happens again.

[John Milne (Horsham) (LD)]

Last month, the word “WASPI” made it into the Collins English Dictionary, which is a credit to the campaigners behind it. Does the Secretary of State agree that she has gone through the ombudsman’s report with, to use her own words, a fine-toothed comb, in order to get the answer that she always wanted to find in the first place?

[Liz Kendall]

No, I do not agree with that. It was only when we got into government that we were able to see all the information and advice provided by the Department. I did not go into it in the way that the hon. Gentleman suggests; that is not correct. This report is not about the policy decision and women against state pension age increases. That decision was taken in 1995, agreed to by subsequent Parliaments and deemed lawful by the courts in 2020. The ombudsman’s report is not about the state pension age increases; it is about how they were communicated. I take responsibility for that and will make sure that we do everything possible to put it right.

Income Tax (Charge)

John Milne Excerpts

Monday 4th November 2024 Commons Chamber

[John Milne (Horsham) (LD)]

This Budget was strongly promoted as a blueprint for growth, so it has come as a considerable surprise to find that the growth forecast for the second half of this Parliament has actually gone down. Somewhere hiding here is a much better Budget trying to get out. The Government have tried to target what are supposed to be bastions of wealth and privilege, but caught in the crossfire are all kinds of people they never meant to touch. The winter fuel payment cut is supposed to fall on wealthy pensioners who do not really need the money, but it will also hit vulnerable people on a basic £11,500 state pension. VAT on private schooling is supposed to tax the Etons and Harrows of the world, but it also hits hundreds of small schools such as Pennthorpe preparatory school in my constituency, which plays a key role in providing for SEND children, and Christ’s Hospital, a remarkable school that takes 70% of its pupils from disadvantaged backgrounds. The changes in inheritance tax are aimed at wealthy farmers, but also threaten to wipe out a fantastic tradition of family farming that has literally shaped our countryside over generations.

Wherever we look, there is just too much collateral damage, but the biggest rise, the one that is doing all the heavy lifting, is the jump in employers’ national insurance. Surely it was not the Chancellor’s intention to undermine GP surgeries, hospices, independent care homes and growing businesses, yet that is exactly what is set to happen. I realise that the last Government left so many public services in crisis that it would be impossible to fix everything at once. They raided vital investment funds for day-to-day spending. They never understood that strong public services are just as essential to economic growth as business-friendly regulations. The last Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), behaved recklessly when he twice cut employee national insurance rates in the teeth of warnings from the International Monetary Fund. He dug the hole, and now the country has slid gently into it.

However, swinging from one ideological extreme to another is not the solution. This Budget feels suspiciously like Labour circa 2000, but at that time the country was in better shape, and the same plan will not work twice. This Budget is a serious attempt to deal with the crisis in public services, and I respect that, but the original vision has been lost in translation. This is a growth Budget, but without the growth. I urge the Chancellor to refocus around her original first principle: growth.