Public Authorities (Fraud, Error and Recovery) Bill

Lord Vaux of Harrowden Excerpts

Committee stage
Wednesday 18th June 2025 Grand Committee

Moved by

[Lord Vaux of Harrowden]

92: Clause 76, page 45, line 7, at end insert—
“(2A) The functions are exercisable only when accompanied by an authorised person from the police force.”Member’s explanatory statement
This amendment seeks to restrict investigators’ powers of entry, search and seizure to situations when they are accompanied by an authorised person from the police force.

[Lord Vaux of Harrowden (CB)]

My Lords, I shall be brief. When we discussed a previous group on Part 1 that was similar to this, I believe the Minister stated that those using search or other powers would always be accompanied by a police constable, so I suppose I am looking for confirmation that that is the same in this case. If it is, I am curious to know why we really need the powers and why it cannot be left to the police to exercise them.

I have one other, more important question. On the powers in Clause 76, under the DWP powers, new subsection (4)(i) refers to

“section 117 (reasonable use of force)”.

Slightly oddly, I have just discovered that that was not included in the powers for the PFSA, so can the Minister explain why the DWP thinks it needs to be able to use reasonable force when the PFSA did not? I beg to move.

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

My Lords, I thank noble Lords for their comments and questions. I will speak first to Amendment 92. The amendment would undermine the policy intent of this part of the Bill, so we cannot accept it. The DWP leads investigations into social security matters and, as a result, our staff are better positioned to search for items relevant to these investigations—the things that they deal with, such as benefit claim packs or documents related to fraudulent identities. Requiring the police to be present for all DWP search and seizure activity, including investigative tasks related to securing criminal evidence, would erode the anticipated obvious benefits of the measure to both the DWP and the police. Crucially, it would divert the police away from focusing on the crime within our communities that only they can deal with and dealing with the human victims of those crimes.

These powers allow the DWP to apply to a court for warrants to enter a premises, conduct search and seizure and apply for and exercise production orders, with or without the police present. That clarifies the point made by the noble Lord, Lord Vaux. They provide the DWP with greater control over its own operations and ensure that police time is not spent undertaking administrative tasks on the DWP’s behalf.

However, I reassure the Committee that safeguards are in place to govern the use of these powers. First and foremost, court approval must be granted for all warrants. The requirements for a DWP warrant application will be as strict as those for a police warrant application. Furthermore, the DWP intends to exercise these powers exclusively in cases involving serious and organised crime. This is not novel. Similar powers are already being used by HMRC, the Food Standards Agency and the Gangmasters and Labour Abuse Authority, which can undertake search and seizure activity without needing to be accompanied by the police.

Amendment 93 would impose unique obligations on the courts that they do not face in respect of other government departments with similar powers. PACE powers do not require the individual exercising them to be appointed by the court and there is no clear reason for the DWP to be any different. DWP-authorised investigators, like others who exercise PACE powers, will be subject to the PACE code of practice relating to search and seizure activity and will be required to follow the same procedures and processes as the police when submitting a warrant application to the court. These are not standards set by the DWP; they are set out in PACE, which all bodies exercising these kinds of law enforcement powers must adhere to. Specialist training must be successfully completed before authorisation is given and only then can an authorised investigator exercise these powers on behalf of the Secretary of State. That approach ensures that the correct responsibilities are attributed to the Secretary of State and the courts.

On the question relating to the PSFA, I am advised that it is not that a constable necessarily has to be present, but somebody with those powers, who may not be a police officer but could be from the National Crime Agency, the Serious Fraud Office, et cetera. As I said, the police do not always have to be there, if it is not necessary. There will be occasions when it will be necessary. For example, the previous Government published a fraud plan in which they recommended that powers of not only search and seizure but arrest be taken. We have decided not to take those powers, so if there needed to be an arrest, we would need to have police officers with us. If there were a risk of serious violence, again, the police would need to be present, but not otherwise.

On the question of force, the provisions set out in Clause 76 provide powers under PACE to enable DWP serious and organised crime investigators to apply for a search warrant to enter a premises, search it and seize items, with or without police involvement in England and Wales. The clause also enables authorised investigators to apply to a judge for an order requiring an individual suspected of social security fraud to provide certain types of sensitive information when relevant to the criminal investigation. It also provides for the use of reasonable force to conduct a search, such as breaking open a locked filing cabinet to search for materials. The clause provides that these powers can be used by an authorised investigator who is authorised by the Secretary of State.

To be clear, a warrant provides for the powers that can be deployed when that warrant is exercised. Our authorised investigators in DWP will not use reasonable force against people, although they may use it against property, such as breaking open a locked filing cabinet to retrieve a laptop or other evidence. However, the reason it has to be here is that, when the DWP applies for a warrant, that warrant must cover any activities that may need to be undertaken by either the DWP or the police, so although our investigators will not use reasonable force against people, it may be necessary for the police to do so when they are accompanying the DWP. That is why the legislation is drafted that way. If it were not, police out there on our warrant would not be able to use reasonable force and there may be occasions on which they need to do so. I hope that that clarifies matters for the noble Lord.

[Lord Vaux of Harrowden (CB)]

Can the Minister explain why the DWP needs that power but the PSFA does not? The two clauses in the Bill are otherwise identical and differ only in respect of the reasonable force element. If the PSFA does not need it, I do not understand why the DWP does.

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[Baroness Sherlock (Lab)]

As I said, the police might need to be present if we felt there was a risk of any serious violence. If it was felt there might be a need for arrests or, as the noble Viscount has suggested, there was a possible risk of violence, the police would be asked to accompany DWP officers. I have given those assurances, so I hope the noble Lord will withdraw the amendment.

[Lord Vaux of Harrowden (CB)]

My Lords, I thank everyone who has taken part in this short but, I hope, illuminating debate. I have concerns about these police powers being given to civil servants and I do not think I am alone in that respect. I am comforted, to some extent, by the fact that these will be used only in the cases of serious and organised crime. I wonder whether the solution, therefore, is to put that in the Bill and put that safeguard in place, because I think that would comfort most people who have the concerns that we have. Perhaps that is something that the Minister might be willing to discuss between now and Report. That said, I beg leave to withdraw the amendment.

Amendment 92 withdrawn.

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[Baroness Finn (Con)]

My Lords, Amendments 99A to 99C have been tabled, as ever, in the spirit of constructive scrutiny and with the aim of strengthening one of the more significant accountability provisions in the Bill: the independent review process set out in Clause 88.

These amendments are modest, reasonable and necessary. They are not designed to undermine the intention of Clause 88 but quite the opposite: to give that clause the clarity, independence and rigour that an effective review mechanism surely must demand. Fundamentally, they seek to correct the text in the Bill as drafted, as this would not provide for a proper independent review process of the exercise of powers under this part of the Bill. As we have been clear throughout these days in Committee, having a proper, full and independent review mechanism is an essential requirement to balance the powers granted.

Let me begin with Amendment 99A. As currently drafted, new Section 109J, to be inserted by Clause 88, allows the Secretary of State to direct the independent person to review only certain timeframes, saying in subsection (1):

“The Secretary of State may give the independent person appointed … directions as to the period to be covered by each review under section 109I”.


This, in our view, strikes at the heart of the independence that the clause is meant to enshrine.

If the Secretary of State can determine the scope of the review in such a narrow and discretionary fashion, deciding what is in and what is out, we risk reducing the entire review process to something partial and predetermined. An independent reviewer must have the freedom to examine the full timeline of events, decisions and outcomes as they see fit, not just the periods that a Minister deems relevant. This amendment would remove the power for the Secretary of State to constrain that scope. It would ensure that the independent person can review what needs reviewing, not merely what it is convenient to review.

Further to this, Amendment 99B addresses another area in which we believe the clause falls short of its intended purpose. As present, new Section 109J(3) states:

“The Secretary of State may disclose information to the independent person”.


We do not think this is adequate. For a review to be meaningful, the reviewer must be empowered to access all relevant material. It cannot be left to the Minister to determine what relevant information may or may not be disclosed to the independent person for review. By replacing “may” with “must”, this amendment would impose a basic but essential duty for the Government to co-operate with their own independent review mechanism. This should not be controversial. If the review is to be credible both in substance and perception, the provision of relevant documents, data and records must be a legal obligation, not a voluntary gesture. Our amendment would ensure that the independent reviewer could operate with true independence and without the bias that the discretionary drafting currently in the Bill implies.

We must appreciate that if the Secretary of State can direct the scope and scale of these independent reviews, they cannot truly be called independent. As noble Lords across the Committee will know, the outcome of such a process is only as good as the information that is put into it. I am sure that this Minister would not allow biased information or timeframes or seek to direct the independent reviewer. But, as noble Lords have previously made clear in Committee, we must legislate for the future and future Ministers. This cannot be done on the basis of guarantees alone. I trust the Minister implicitly, but I do not know—indeed, none of us in this Committee knows—that we could always say the same about her successors. It is important that we ensure that this independent review process is independent from day one and there is no risk of it becoming a rubber-stamping body used to sign off favourable reviews on the back of limited information and narrow timeframes.

Finally, Amendment 99C would compel the appointment of independent persons to carry out reviews in England, Wales and Scotland. The Bill in its current form allows the Secretary of State to do so but does not require it. We think that is a mistake. Public sector fraud is not a phenomenon confined to one part of the United Kingdom. If we are serious about building a coherent and credible national response, it follows that there must be consistent independent scrutiny across all three nations. Leaving this to ministerial discretion opens the door to uneven practice and potential political selectivity. By making the appointment of independent reviewers mandatory across the nations, we would create a consistent framework for accountability —one that reflects the devolved landscape while still holding the centre to account.

Taken together, these three amendments seek to reinforce what I believe the Government want to achieve: an independent, well-informed and effective review mechanism. They would ensure that reviews are not unduly limited, that reviewers are not kept in the dark and that all parts of the UK are covered by the same standards of transparency. In short, these amendments would close the gaps that could otherwise turn an accountability provision into an optional exercise. I hope the Minister will reflect carefully on their intent and consider how they might help deliver a stronger, fairer and more credible oversight process. I beg to move.

[Lord Vaux of Harrowden (CB)]

My Lords, I rise briefly to add my support to the first two amendments in this group. While I agree with removing the discretion of the Secretary of State, Amendment 99A does not say what the period of the review should be. I suggest that it should be the same as the period of the review for the eligibility verification notices, which is annual, and that that is what should be in the Bill. It would be useful to hear from the Minister what the Government are proposing in that respect.

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise briefly to support the amendments so powerfully, and with considerable detail, explained by the noble Baroness, Lady Fox of Buckley. I want to cross-reference a couple of things. I was unable to be here for the whole discussion on the last group in this Committee but I came in and heard the Minister reassuring us that there are layers of support in the DWP for identifying the vulnerable and that there is regular vulnerability training.

I have to contrast that with one of my last contributions in this Committee and this Room, talking about the horrendous case of Nicola Green. I try to share as much as I can of what I am doing in the Chamber so that it is available to the world. I have to say that the little parliamentary video of that exchange, with its less-than-ideal lighting—no offence to anyone who is doing their best they can with the television—has, you could reasonably say, gone viral, because there is a flood of comments of people saying what the DWP has done to them. I cannot attest, of course, to the truth of every one of those comments, but there is a profound problem of trust with the DWP.

I fully acknowledge that the Minister, when she was on the Opposition benches, and I have often spoken out strongly on this matter. The Government actually called an inquiry into the DWP’s treatment of disabled people after the EHRC expressed concern that equality had been breached. That is the context in which we are looking at these amendments.

The noble Baroness is calling for people to have a day in court—to be able to have a genuinely independent voice in our greatly respected courts and put the case. If they indeed have committed fraud and can afford the repayments, or it is not a complete error by the DWP, or the DWP is at fault or is not being realistic about how much people need to eat and live, the court will make a ruling. That, surely, is regarded as a basic principle and right in our law.

[Lord Vaux of Harrowden (CB)]

My Lords, I will speak briefly to Amendments 102 and 122, which would require the Secretary of State to apply to the court for a direct deduction order—a DDO. I confess that I am struggling a bit to understand the circumstances in which the Secretary of State would be able to make a direct deduction order, as the Bill is drafted. I hope the Minister will be able to help me.

When we discussed the DDOs in relation to Part 1 of the Bill, the noble Baroness, Lady Anderson, correctly pointed out that a direct deduction order could be made only in circumstances where either there had been a final determination of the amount of the liability by a court or the person concerned had agreed that the amount was payable. I agreed then that that was an important safeguard, as it is a significant restriction on when the DDO process could be used under Part 1. I asked why, if the court was making the determination of liability, we did not just leave the court to determine the way in which it should be repaid, rather than requiring new powers for the Minister to make that decision. The noble Baroness was kind enough to offer to write to me on that, and I very much look forward to receiving her letter.

However, I think the same issue may arise here, except that I am struggling to find the definition of the amount recoverable described in paragraph 1(1) of new Schedule 3ZA, inserted by Schedule 5 to the Bill. Can the Minister please explain how the amount recoverable is determined, and by whom? Does this part have the same safeguard as Part 1, which is either final court determination or agreement by the person concerned, or is it at the discretion of the Secretary of State? I can see, in Clause 89, that the person must have been convicted of an offence or agreed to pay a penalty. That raises the question: does this DDO regime apply in cases or error, or not? Presumably, in cases of error there will not be a conviction or a penalty, so it does not apply in the case of error, but I am confused.

I cannot find anywhere the amount being determined by a court; that is where I am struggling a bit. If the recoverable amount has not been decided by the court, then the amendment in the name of the noble Baroness, Lady Fox, is likely to be necessary. That is particularly important because, just as it does in Part 1, for understandable reasons, the appeal process to the First-tier Tribunal against a DDO prevents a person appealing with respect to the amount that is recoverable. If that is the case, and the amount recoverable has not been determined by a court, I think there is an issue here.

[Lord Palmer of Childs Hill (LD)]

My Lords, I am proud to support Amendments 102 and 122, which I tabled alongside the noble Baroness, Lady Fox of Buckley. Amendment 102 proposes that the power to make direct deduction orders should rest with the courts following an application from the Secretary of State, rather than allowing the Secretary of State to impose such orders directly. This change would introduce an important layer of judicial oversight, ensuring that deductions from individuals’ bank accounts are made only after careful, independent consideration of the evidence and the circumstances.

Although the Bill includes safeguards such as affordability and vulnerability checks, as enumerated by the Minister, and rights to representation and appeal, placing the final decision in the hands of the court would further strengthen public confidence in the fairness and proportionality of the debt recovery process. Amendment 122 is consequential on this approach, ensuring consistency throughout the Bill. By requiring court approval for direct deduction orders, we uphold the principle that significant intrusions into personal finances should be subject to the highest standards of scrutiny and due process. This is particularly important given the potential for hardship and complexities that can arise in cases involving joint accounts or vulnerable individuals. I hope the Minister can address that when she replies.

These amendments do not seek to undermine the Government’s legitimate efforts to recover public funds lost to fraud or error but rather to ensure that such efforts are always balanced with robust protections for individual rights. I urge fellow noble Lords to support these amendments as a constructive step towards a more transparent and accountable system, and I am very pleased to have signed this amendment in the name of the noble Baroness, Lady Fox.

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So the noble Baroness makes an important point, and I hear it, but the job of this Committee is therefore to make sure that we have the appropriate safeguards when we do that to try to make sure that we are protecting those at the heart of this. I hope that, with those reassurances, the noble Baroness, Lady Fox, will be able to withdraw the amendment.

[Lord Vaux of Harrowden (CB)]

The noble Baroness has not answered one question that I had. My understanding from Clause 89 is that these DDO rights—or however one describes them—can be used only where a person is convicted of an offence under this Act or any other enactment, or agrees to pay a penalty under Section 115A of the 1992 Act. Does that mean, therefore, that this does not apply to situations of error and that it is only fraud?