Public Authorities (Fraud, Error and Recovery) Bill

Neil Coyle Excerpts

Report stage & 3rd reading
Tuesday 29th April 2025 Commons Chamber

[Rebecca Smith]

I echo my hon. Friend’s concern that the existing powers are not being used enough. I ask the Minister to give us further information on how those powers are being used and an assurance that they will be used further should our new clauses be unsuccessful.

We believe that creating a specific offence to target such online fraud would send the clear message to sickfluencers that what they are doing is not only morally wrong but illegal—something that clear gives them no alternative than to realise that they will be caught. If the Government continue to oppose our amendments because they believe the powers already exist to tackle such crime, I would be grateful if the Minister set out, at the very least, how the Government will ensure that that legislation is used to the fullest, particularly with regard to the DWP, given that Government amendments 75 and 76 refer to the PFSA specifically. We are keen to see how those powers can be used fully used as the deterrent we need to tackle DWP claims. I want to know that, after today’s debate and vote, sickfluencers will be left in no doubt that the full weight of the law will be used against them, as they actively defraud the state.

Our new clause 9 is on powers of arrest. We welcome measures in the Bill—first announced by the previous Government—to give DWP investigators greater powers to aid with their investigations, such as search and seizure, and there must be appropriate safeguards around that. This will bring benefit fraud investigations into line with tax fraud investigations in His Majesty’s Revenue and Customs, which is very welcome, but we want to go further and address other shortfalls in the DWP powers. New clause 9 would add the power of arrest to the powers given to DWP investigators and resolve the seemingly illogical current position: the Government want to give DWP investigators the power to enter and search a premises, seize, retain and dispose of material, obtain sensible material and use reasonable force, but not to arrest someone if the evidence shows that it is necessary.

In Committee, the Minister highlighted that the police would be able to carry out the arrest function on behalf of the DWP should it ever be necessary, but we question whether that is a sustainable position and believe that our new clause would ensure we do not place an additional burden on the police. This is not without precedent and would bring the DWP into line with the approach taken to serious and organised crime across Government, such as at HMRC and the Gangmasters and Labour Abuse Authority.

Our new clause 10 is on liability orders, because we are concerned about the seizure of assets. We want to ensure that the DWP does everything it can to recover funds fraudulently claimed, even when that money is no longer sitting in a bank account. It cannot be right that someone can use that money to buy expensive cars, flat-screen TVs or other luxury assets, which the state cannot then recover from them. Our new clause 10 would give the Secretary of State powers to apply to the courts to seize assets where someone has been found guilty of fraud and the funds have not been recovered in order to repay the state. In a similar vein to our sickfluencers new clause, we believe these additions are needed to send the strongest message to those who are knowingly defrauding the system that they will be caught and will have to pay.

New clause 10 does not just give powers to seize assets to the Secretary of State; it says that she must use them. The DWP has said that it can already do this, but we know through written parliamentary questions that those powers have not been used in the last five years, albeit the DWP could make use of the Proceeds of Crime Act 2002. We believe there must be an explicit expectation that assets will be seized, and we need new clause 10 to ensure this is achieved.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

It is great to hear that the hon. Member’s party is committed to taking tougher action against benefit fraud after 14 years of failing in office. Does she also welcome longer sentences for fraud in other areas of Government such as covid corruption, including for those Tory donors who committed the crime?

[Rebecca Smith]

I thank the hon. Member for his intervention, but that is not what we are debating; it is certainly not part of my speech.

Our new clauses 11, 12 and 20 are on the impact on banks. We have concerns about the lack of detail in the Bill when it comes to the eligibility verification mechanism and the requirements that will be put on banks and other financial institutions. We do not have the statutory code of conduct. We do not know what it will cost banks. We do not know the results of any pilot schemes, and we do not know whether the amount recovered will be more than what it costs to administer. Madam Deputy Speaker, had you been in our Committee, you would know that the code of conduct was probably the thing most frequently commented on, and the Ministers did a huge amount to reassure us that it was forthcoming—

[Neil Coyle]

And cheesecake!

[Rebecca Smith]

And cheesecake as well—I did not want to say it from the Front Bench, but I have now. Madam Deputy Speaker, you will have to look back at Hansard, but I will never look at a cheesecake in the same way.

The code of conduct was regularly raised in Committee, and we got assurances continually from the Ministers, but we still lack that detail. We have therefore tabled a number of amendments to get clarity, including to require the Government to publish their statutory code of conduct, information on the testing completed to date and an impact assessment on the cost implication of the Bill for banks, as well as an amendment to allow banks to challenge the expansion of these powers if the costs that would be incurred exceed a pre-agreed amount. We know that banks and financial institutions want to help tackle fraud, but measures must be proportionate and not unduly burdensome, or they risk diverting resources from tackling other types of financial crime to meet these requirements. We cannot simply assume that the banks and financial institutions will do what is right; we need to give them an incentive to do it, too.

Our amendments 16, 17, 18 and 19 refer to the need for a first-tier tribunal. The Bill takes significant powers for the Secretary of State, giving them the power to review decisions that they, the Cabinet Office or the Public Sector Fraud Authority made. Amendments 16 to 19 change the appeal body from the Minister for the Cabinet Office to the first tier tribunal, ensuring that there is not just independent oversight but an effective independent channel of appeal against information notices that does not just lead back to the organisation that issued the notice.

--- Later in debate ---

[Neil Duncan-Jordan]

I thank my hon. Friend for his intervention. I will cover the connection between this piece of legislation and the Green Paper shortly.

[Neil Coyle]

Will the outcome for the individual disabled people my hon. Friend is concerned about—the vast majority of whom commit no fraud—be any different if these measures are implemented? They will not be affected, because they are not committing any crime.

[Neil Duncan-Jordan]

As I have tried to explain, the Bill introduces fundamental changes to the nature of our welfare system and its use.