Baroness Fox of Buckley (Non-Afl)

My Lords, I am sympathetic to the Government’s aspirations to tackle fraud and to reclaim money, in effect, ripped off from the public purse. Whether it is those grants for fake community schemes mentioned by the noble Baroness, Lady Anderson of Stoke-on-Trent, at the beginning or the more mundane benefits cheats, there is nothing more galling for the public than people who exploit the system. For those who work their guts out and struggle to make ends meet to see a minority claiming benefits that they do not have a right to and yet seeming to have a better standard of living than the people who are working so hard, it can be and is infuriating. Yet I have some serious reservations about how the Government are approaching this, and parts of the Bill, at least, feel like a sledgehammer to crack a nut. There is a nagging feeling that the Government are going after low-hanging fruit and that it has become a distraction from the real culprits and deeper problems—indeed, some dodgy schemes created or allowed by the DWP. In the recent furore about the apparent ease with which some could use the Motability scheme to access fancy cars, for example, and to get state-paid insurance, excise duties, servicing and breakdown cover, the upset was, of course, not about a scheme that allows those with disability to access transport to aid their independence—the British public are fair like that; they want that. Rather, it seemed to me that the upset was because legitimate systems were set up by the private company that ran Motability that were there to be played. It was not fraud, but there were lax assessments and a management who never queried why its customer base swelled by 14.7% in the last year, and executives who were awarded eye-watering pay bonuses and who boasted that their scheme was the largest car buyer in UK and doing a public service by promoting electric vehicles to help deliver the transition to greener transport. Maybe that is why the Government turned a blind eye to what obviously needed to be tightened up. I therefore think that there is more going on when it comes to welfare being exploited than this Bill sometimes allows. When I first heard about the Public Authorities (Fraud, Error and Recovery) Bill, no disrespect, but it sounded a bit dull, technical, workmanlike, and I thought, “I won’t bother with that; I’m not going to get involved.” The problem was that I then read it. There is a good reason why it has been labelled a Big Brother deal, a snoopers’ charter allowing mass surveillance of those who get means-tested benefits—we heard some of the concerns from the noble and learned Lord, Lord Garnier. I agree that one of the most contentious parts of the Bill, as we have heard from other noble Lords, is the eligibility verification measures, which, frankly, I find quite worrying. The Government seem, however, to be quite matter of fact about this new requirement ensuring that banks and financial institutions trawl through their datasets to highlight where someone may not be meeting the specific eligibility criteria for certain benefits. Apparently, the attitude is that if it helps the DWP identify incorrect payments and verify or otherwise claimants’ entitlement to public money, it is okay—that is the justification—but I feel queasy. I also think that it is peculiar that we think it is okay for the DWP to outsource the dirty work to private third parties that are, first, unaccountable to the public but also being forced to do a job the DWP should be doing itself. Coercion is involved; the banks do not have a choice. They are not being asked whether they want to do this. They will be served with a special eligibility verification notice setting out the specific information that the DWP requires, and there will be penalty notices for non-compliance. This seems an example of huge state overreach. It will also mean that banks, building societies, et cetera will have to trawl through all account holders’ databases to identify which match search criteria supplied by the DWP—criteria, by the way, which are not available to us as legislators to scrutinise, nor, in fact, to the banks. Therefore, I understand why Big Brother Watch, Privacy International and other civil liberties organisations have invaluably raised the alarm about what have been labelled “bank spying powers”. Ministers have responded by suggesting that this is alarmist hyperbole—a kind of “Nothing to see here”. I appreciate that this Labour Government have drafted this Bill more tightly than the previous Conservative Government’s version. Yes, it is good that the Bill limits the powers of eligibility verification notices to request only information about accounts in receipt of three named benefits—that is good. However, from reading the Explanatory Notes it is clear that, while initially only those benefits will be looked at, the Bill contains the authority for the Secretary of State to expand the range of benefits covered at any time in the future, with Parliament reduced to a nodding-dog status rather than us being able to debate it. I am sure that all these details will be subject to debate and amendments in Committee, but for now we should take a step back and note that, whatever smoke and mirrors the Government deploy, the fact is that some people on benefits—as well as, by the way, people with associated accounts, who may be their carers or guardians; that is, account holders who are not even on benefits—will be subject to having their private financial data pre-emptively monitored, intruded on by banks and other financial institutions, in case they are involved in fraudulent activity, all without their knowledge and all because of coercive orders given out by the state. In the other place, there was an interesting amendment tabled by Labour MP Neil Duncan-Jordan. He sought to limit the exercise of an EVM to cases where the welfare recipient was suspected of wrongdoing and expressed concerns about “the slippery slope of compelling banks to act as an arm of the state”. The Government’s rebuttal of that amendment was revealing. Mr Duncan-Jordan was told that this would “undermine the measure entirely”, as powers in the Bill are not intended to deal with suspected fraud but to “help check that claimants are meeting the criteria for their benefit and to detect incorrect payments at an earlier stage before any suspicion of wrongdoing has arisen”.—[Official Report, Commons, 29/4/25; cols. 243-251.] This is suspicionless surveillance, which I do not think is a good answer to the problems that we are trying to tackle. I argue that the Government should note that, on principle, we should not intrude on citizens’ bank accounts without very good reason. It risks an important commitment to the “innocent before proven guilty” point by treating all those on certain benefits as would-be criminals by default. Some might say, “Civil liberties be damned: it is all worth it to crack down on cheats and reclaim all that misappropriated money”. However, we must remember that, even by the Government’s own analysis, if this measure works—this unprecedented bank intrusion—it is expected to recover less than 3% of the estimated annual loss to fraud and error. Beyond bank spying, there are parts of the Bill that also make me gulp. I will not go into most of them, but does the Minister think that boasting about the use of non-criminal penalties is appropriate? It is explained as a benign way of reducing the burden on the courts, which can be costly and time-consuming, and that civil penalties will show that there are meaningful consequences for breaking the law, as we heard at the beginning, even when criminal prosecution is not achievable—that is, there is not sufficient evidence to get a conviction. Should we be welcoming this non-optional use of civil penalties because they have a lower burden of proof, being on the balance of probabilities rather than beyond reasonable doubt? It is easier to convict and find someone guilty if due process is sidelined. Other people have mentioned the danger of aligning fraud and error. Even though the Government go to great lengths to distinguish between them, when it comes to detection and recovery they are indistinguishably punitive. Also, too often, as we have heard from others, overpayment errors are the fault of the DWP, yet little attention is paid to this failure in the Bill. A freedom of information request has revealed that, in 2023-24, nearly 700,000 of the new universal credit overpayment debts entered on to the DWP’s debt manager system were caused by government agency mistake. Yet this Bill’s powers focus on making claimants pay the price. In an insightful article, Siân Berry MP quotes—someone whom I do not usually agree with—the CEO of the Public Law Project: “No one is expecting the DWP not to make any mistakes. However, it is incumbent on the department to take responsibility for those mistakes, rather than pushing that burden onto people it should in fact be supporting”. While this Bill is keen to punish even those who make unintended errors—perhaps not supplying the correct paperwork or missing deadlines—the Government could be accused of equal negligence. In reply to lots of the issues raised today, the Government will tell us that much of the detail on safeguards, procedures, appeals and fines will be contained in three key codes of practice, yet not even drafts of those codes of practice were published before the Bill finished in the other place, and we will not get them—if we do—until Committee. This breaches the spirit of the official Guide to Making Legislation, which sets out the procedures by which a code of practice should be made available in order to properly consider the appropriateness of statutory provisions. We do not have them. I say to look to ourselves before we start overpunishing the most vulnerable. I hand noble Lords over to someone far more edifying. I am delighted that I will be followed by the noble Baroness, Lady Spielman. I have long admired her and often agreed with her from afar. I hope that her credibility will not suffer from my endorsement, by the way—she may feel free to distance herself. I look forward to hearing her maiden speech and many speeches that she will make in the future.