Public Authorities (Fraud, Error and Recovery) Bill

Jon Trickett Excerpts

2nd reading
Monday 3rd February 2025 Commons Chamber

[Jon Trickett (Normanton and Hemsworth) (Lab)]

I wish to make a few points. First, it would have been impossible not to note the zeal of the Secretary of State when she was banging on the Dispatch Box and talking about fraud and loss to the taxpayer, and she is right to do that. We, on this side of the House at least, believe in public expenditure, and therefore there is a duty on us to ensure that every single penny is spent in an appropriate manner. So where it is wasted or stolen or fraud is going on, we should bear down on it.

However, although the Secretary of State started off with that zeal and passion in talking about the gangs and others, she talked most about benefit claimants. Although the Bill sets up powers for the fraud authority, it deals largely with the question of fraud in the benefit system. But the title of the Bill mentions both fraud and error, and not enough time has been spent in this debate on the nature of error, which is far bigger than can be easily acknowledged.

I looked at the figures for PIP. Between 2019 and 2024 some one in four cases for alleged fraud by PIP recipients were dropped before reaching appeal, indicating the decision had lapsed because the Department had decided in favour of the appellant. That indicates the scale of the error that this Bill also wants to address. I am going to refer to a couple of cases in a moment or two, but at the core of this Bill is the creation, effectively, of a partnership between the state and the private banks, and the Bill does not make clear what that partnership will look like. I hope that we get some clarity on that before the Bill reaches Committee.

The banks themselves have said that they are very worried about this Bill, because they have a statutory duty, imposed by this House, to make sure that they deal properly with vulnerable clients. The banks have said there is a contradiction between the contents of this Bill and the obligations that fall on them and their duty to treat people who are vulnerable in a proper way. I want to reflect on that briefly.

Let me give the House a case from my own constituency that is symptomatic of a wider problem. A couple were referred to my office. They both had learning difficulties, both were illiterate and innumerate, and they found it impossible on their own to fill in the dozens and dozens of questions which the forms require people to fill in to get access to the benefits. So they were helped to put the form together by people employed to look after such people. The DWP then decided, years later, that it had made an error and had overpaid the couple by a large amount. This error came to light as a result of a review of some kind in the Department. So here is a very poor and vulnerable couple who were unable to fill in the form on their own and who had been helped by professionals, and what did the state do? It sent them a bill for £20,000.

All Members will have a great deal of empathy—they would not be in this job otherwise—so we can imagine the state that couple were in when they received a bill from the state to repay £20,000. It was discovered after they came to my office that they had in fact filled in all the forms correctly; this was a computer error caused by someone failing to key in some of the information that had been provided to the DWP. Neither the council which was helping them nor their support workers spotted the fact they were being overpaid; nobody spotted it, so this went on for a number of years and the sum reached £20,000. A deeply vulnerable couple were left in that situation.

Eventually they encountered a local councillor in my constituency who referred them to me. We went through the whole thing and managed to make an appeal on their behalf. But this Bill gives people only 28 days once they have received an order to pay. It took us longer than 28 days to resolve this once it had got into my office. I just say to the Secretary of State that 28 days is not long enough in these complicated cases for people to produce the evidence to show they are a victim of error rather than they have committed a fraud. There was a presumption by the state that they had committed a fraud of £20,000, totally incorrectly, it turned out.

I worry that the Bill will put people like my constituents, and I imagine constituents of every Member in this House, in the same position. My constituents were fortunate to find an MP, but many people in that situation would not know how to find their way through the system.

That raises the question I have referred to about the banks. The banks have a statutory duty to protect vulnerable customers. How will they exercise that duty when they are being required to provide information to the DWP about the financial activities of various individuals banking with them?

On the subject of vulnerability, Disability Rights UK tells us that one third of all claimants of legacy benefits have mental health problems. I imagine that most of those people would be regarded as vulnerable by the banks and by every humane person in this House. One therefore wonders just exactly how we will reconcile the statutory duty on the banks with what they are required to do in relation to this Bill.

We are giving powers to this fraud authority. I personally am in favour of tackling fraud, as I have said—I am a Yorkshireman, and I do not like spending money. I do not like money being spent wastefully by the state either, and when I was the leader of Leeds city council, everyone knew I was strong on waste.

Finally on vulnerability, have the Government commissioned and received an equality impact assessment? If they have, can that be placed in the Commons Library, because the Bill will clearly have an impact on people who are extremely vulnerable? I think something somewhere in the Department will refer to that impact assessment.

I will make a couple of final points. It is suggested that the Bill will save £300 million a year by tackling benefit fraud. That is a large amount of money, but we can compare it with the £10 billion of fraud on personal protective equipment provided during covid, the £16 billion lost to the taxpayer in fraudulent covid schemes, the £5.5 billion a year of tax evasion, or the £6 billion of other illegal activities against HMRC. The £300 million is important, but it is not the largest amount of fraud that is taking place. The fraud authority is getting new powers and will be staffed up. How will it choose among the disproportionate amounts by which the state is being defrauded by various different agencies, by private individuals and, frankly, by some gangsters, too? Will the staffing be allocated according to the prejudices of politicians—whichever politicians are then in charge—or will it be allocated proportionately to the loss to the taxpayer incurred through different forms of fraud?

My final point is on the Information Commissioner. The Secretary of State suddenly announced that she received a letter today—it would be interesting to read it—but the Information Commissioner had been suggesting that the powers were disproportionate. We need to see the letter, and hopefully it will go into the Library or somewhere.

Clause 74, which empowers schedule 3 to the Bill, goes right to the kernel of the problems with this Bill, which could not be clearer. I am worried that it is not apparent how the intervention of banks will be invoked. Schedule 3 allows the banks to be invoked and then for action to take place. Will the bank account of every single citizen in the UK be looked at? That is the view of some campaign groups in society. If so, that is a massive incursion into the liberty that the British people hold dear. If not, how will the banks be asked to identify particular individuals? What process will be gone through? That is not clear, and the Bill does not explain it. I have read clause 74 two or three times, as have many other people.

Finally, can we be assured—not necessarily now, but as the Bill progresses through its various stages—exactly how that right of appeal will work? I have just referred to the 28-day cut-off, but will the Secretary of State look again at that? It seems to me that it is slightly too tight.