Lord Davies of Brixton (Lab)

First, I welcome the noble Baroness, Lady Spielman, to the House, particularly as a fellow spreadsheet lover. The Public Authorities (Fraud, Error and Recovery) Bill—can I call it PAFERB?—has significant implications for privacy, justice and the rights of vulnerable individuals. I welcome parts of the Bill, but there are significant concerns. I apologise to my Front-Bench friends for highlighting the problems and not the many things in the Bill which are to be strongly welcomed. The concern is that the Bill will introduce an unprecedented system of mass financial surveillance. We should understand that this is something new. It undermines the presumption of innocence that anyone accused should have and it will disproportionately affect people who, by definition, are poor, whether because they have inadequate pensions, are disabled and find it difficult to get a job, or generally struggle to find employment. Attempts have been made to paint a picture of the fraudster. To me, it is the person on a low income who is struggling to cope with their situation. Perhaps they are not as well organised as Members of this House and live in a state of chaos. That is the person I see being affected by this Bill. Clearly, fraud is wrong, but to paint the Bill as dealing only with bad-thinking people is misleading to the House. Who are the fraudsters? Under Part 2 of this Bill, they are people who are already in financial difficulties. Navigating the welfare system is already challenging. Those entitled to benefits will be only further deterred by the threat of surveillance and potential penalties that will exacerbate their difficulties. There is a real concern, which I hope we can address in Committee, that the Bill will create a second-tier justice system for people on the poverty line, treating them differently from the rest of the population. We will no doubt be told of the extensive safeguards being put in place. Unfortunately, for those opposed to the principle of snooping, there is a Catch-22 here: the more safeguards you introduce, the more I worry that those safeguards are required and the proposals are problematic. To the extent that the safeguards weaken the effectiveness of the Bill, it raises the question of whether the measures are required at all. More safeguards clearly mean the Bill is less essential. My first concern relates to the mass financial surveillance—make no mistake, that is what this involves—and the extensive powers being granted to the DWP to assess and monitor the bank accounts of benefit claimants. Such powers amount to what has been described as a “chilling” and “disturbing” level of intrusion, with a surveillance system that treats all claimants as suspects, without any evidence of wrongdoing. Those concerns have been expressed by speakers around the House. My major concern, which we will have to consider in detail—that is why it is so important that we see the codes of practice—is that some of the things that my noble friend said in introducing the Bill are not in the Bill. We need assurances on those issues before we can sign these provisions of the Bill off as acceptable. The key to this is the lack of the need to demonstrate probable cause, which has been widely criticised by civil liberties groups, including Big Brother Watch. They argue, and I agree, that suspicionless financial surveillance treats all claimants as potential fraudsters, infringing their right to privacy without, I emphasise, having to demonstrate due cause. The concern is that this will set a precedent for further unwarranted state intrusion into individuals’ financial affairs in the future. The Information Commissioner’s Office has come back on the Bill and said that some of its concerns have been addressed, but emphasised the word “some”. It still has concerns about the Bill that we have to address. My second concern is about direct deduction orders and the extent to which the legislation will allow the DWP to directly deduct funds from individual bank accounts without a presumption of innocence and what I would regard as proper due process. How can we allow an administrative body to exercise punitive powers without appropriate due practice? Decisions to recover funds or impose penalties should be subject to judicial oversight, to prevent miscarriages of justice. We should remember that the great majority of people who will be affected by the removal of the need for judicial oversight are poor, inevitably in difficult financial circumstances and often in a chaotic administrative state. It is bound to lead to hardship. The Minister said in her introduction that a decision would always be made by a human. I am sorry, but the Bill does not say that. If you read the relevant clause in the Bill, you see that there is no requirement for a human to be involved. Again, this is an issue we must return to in Committee. My third area of concern is the disqualification from driving and the fact that the Bill gives the Secretary of State power to apply to courts to disqualify individuals from holding a driving licence if they have been given too much in benefits and refused to repay the excess. I cannot conceive how anyone thinks this is anything like a good idea, except in trying to achieve a headline in the Daily Mail. Even in principle, how can the ability to drive a motor vehicle be determined by the debts that someone happens to owe to the state? The right to drive a motor vehicle should not be contingent in that way. It is a fact: either you are safe to drive or you are not safe to drive. That is the only criterion that should apply. Even in practical terms, justice should always be applied in an even-handed fashion. Taking away a driving licence will have grossly disproportionate effects on different people. Those who rely on a car to get to work—not for work, but to get to work—will be much worse affected than those who can walk to work. People who run their children to school will be affected much more than those who live round the corner from the school. People who live in urban areas with good transport links, such as we have in London, will be much less affected than those who live in remote rural areas. How can it be just that this form of punishment— and it is punishment—should be handed out in such an uneven fashion? It will also inevitably lead to greater poverty and social problems. The House has to consider this Bill with a precautionary perspective, highlight potential overreach by the Government and identify the risks to individual freedoms and privacy. Someone asked the question: why have the banks not been asked whether they want these obligations? Well, they have been asked. UK Finance, which represents the financial industry as a whole, has provided us with detailed comments on the Bill—as it did on the previous occasion—from which it is clear that the industry does not want to do this. If it has to do it, and it accepts the right of the Government to make the requirement, it sets out a number of criteria that need to be addressed. I am running out of time, even though I have more to say on other issues. The point that really strikes home is that the banks have a duty of care towards their account holders. They tell us that reconciling that duty of care with the obligations under the Bill poses considerable difficulties for them. We have to listen to them: they have been asked and they have expressed considerable practical reservations. My objections are based in principle, but they are still raising practical obligations. Finally, this Bill on fraud and error is currently silent on the errors made by the DWP—I reflect here the remarks made to me by my noble friend Lady Lister of Burtersett, who regrets not being here today. She points out that in 2023-24, almost 700,000 new universal credit official error overpayment debts were entered into the DWP’s debt manager system. Research from the Public Law Project indicates that the DWP’s default approach is to recover all official error overpayments on universal credit, with relief dependent on individuals being able to request inaccessible discretionary measures. The Bill provides an opportunity to correct this unfairness, and my noble friend plans to table an amendment in Committee that would alter the test for the recovery of universal credit official error overpayments so that they could be recovered only where the claimant could reasonably have been expected to realise that there was an overpayment. To conclude, there is much to welcome in this Bill. Public money should be used appropriately, but, ultimately, the measures have to be exercised with greater compassion than we have seen so far.