Royal Assent
Thursday 15th May 2025
(2 days ago)
Lords ChamberRead Hansard Text Amendment Paper: Consideration of Bill Amendments as at 31 March 2025 - (31 Mar 2025)
Ex-offenders: Reintegration
(2 days ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
The Lord Bishop of Lichfield
To ask His Majesty’s Government what support they are providing for ex-offenders to support their transition from life in prison and their reintegration into society.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, effective resettlement of prison leavers is crucial to reduce reoffending. This includes making sure that someone has a home, family links where appropriate, access to healthcare, a job or education, and timely access to benefits where needed. We have committed to ensuring that pre-release plans are in place for prison leavers to ensure that needs are identified and addressed appropriately. Community probation practitioners co-ordinate individual rehabilitation, supported by pre-release teams, ensuring that they receive appropriate provision through prison-based and commissioned rehabilitative services.
The Lord Bishop of Lichfield
My Lords, I thank the Minister for his Answer. Although most prisoners will of course be looking forward to their release, there will be those also for whom release will be difficult or even traumatic, particularly some of those who have served many years in prison and who may miss the settled routines of life inside. What work are His Majesty’s Government doing to help such ex-offenders strengthen their sense of belonging, meaning and identity following release?
Lord Ponsonby of Shulbrede (Lab)
I thank the right reverend Prelate for that question. It is a very profound one, because of course some prisoners do get institutionalised when they have served lengthy prison sentences. The answer to the question is putting in place accommodation, something for the prisoners to do with their time when they are released—either education or employment—and, where appropriate, encouraging ongoing family ties. That combination of support needs to be provided by the Probation Service, which I believe is the best way of encouraging long-term prisoners not to reoffend when they are released.
Lord Marks of Henley-on-Thames (LD)
My Lords, does the Minister agree that the problems highlighted by the right reverend Prelate’s Question are compounded by the prison overcrowding crisis? The need to use whatever space is available on the estate, wherever it may be, hampers access to suitable training courses, disrupts family and community ties, of which the noble Lord spoke, and makes it harder to prepare prisoners for release.
Lord Ponsonby of Shulbrede (Lab)
Yes, I agree with the noble Lord’s point, which is why my right honourable friend Shabana Mahmood made the announcement yesterday in which the Government committed to building three new prisons. Those had been announced by the previous Government, but yesterday money was committed to expedite those prisons. It is not because we want to fill those prisons up; it is because prisons need to be run at less than 100% capacity to enable all the rehabilitative activities that can be undertaken in prison to operate to reduce the chances of reoffending. So I agree with the point which the noble Lord made.
Lord Lilley (Con)
My Lords, I congratulate the right reverend Prelate on raising this issue, which is immensely important, much neglected and central to Christian teaching—an innovation from those Benches. I also congratulate the Government on appointing a Minister who has direct expertise in and commitment to this subject as Prisons Minister. I have looked back and I cannot find any occasion when this House or its committees have produced a study of training, rehabilitation and support for prisoners. Would the Minister welcome such a report, should your Lordships’ House decide to ask one of its committees to look into the issue?
Lord Ponsonby of Shulbrede (Lab)
Yes, I would welcome that. There have been numerous attempts to try to tie up the elements of what happens to prisoners as they leave prison. In the previous Government, there was a Through the Gate initiative, which tried to do the same thing. The current Government are trying to overcome this problem. It is very difficult; it is a resource-intensive thing to co-ordinate all the services to try to reduce the reoffending of prisoners. But it is worth pointing out that, when one looks at averages, there has been a slight reduction in the amount of reoffending over the last 20 years or so, which is encouraging. Nevertheless, it is a substantial problem and, although it is not for me to say, if the House were to want to look at this matter, I would welcome that.
Lord Dubs (Lab)
My Lords, I recently had a chance to visit Belmarsh as a member of the Justice and Home Affairs Select Committee. Talking to some of the prisoners there, their plea was that they wanted training so as to have skills to take into the outside world. Does the Minister agree, and would he indicate that there is any way forward with our difficulties in achieving that?
Lord Ponsonby of Shulbrede (Lab)
My Lords, of course I agree with my noble friend. I, too, have visited Belmarsh and I agree with the point he makes about training. In fact, my noble friend Lord Timpson, who has, of course, great experience in these matters, has in his previous business life set up training facilities in prisons. One of the points that my noble friend makes is that now there are many other providers of training within prisons, and what we need is the capacity within our prison system to take advantage of those training opportunities.
Lord Singh of Wimbledon (CB)
My Lords, I declare an interest. I worked for more than 20 years advising the Sikh prison chaplaincy. The Sikh chaplaincy requires Sikh chaplains to liaise with prisoners about to be released and their home community and gurdwara to help find the prisoner work and accommodation on release. It works well, and the chaplain-general has commended the Sikh initiative, which has also been a subject of comment in the Times. Does the Minister agree that, if this initiative were extended to the work of other faiths, it would really help the prisoners and there would be a considerable fall in reoffending?
Lord Ponsonby of Shulbrede (Lab)
I absolutely recognise the point that the noble Lord makes about the importance of the chaplaincy. My understanding of the chaplaincy is that it is multifaith. There are Sikh chaplains, if that is the right expression, but there are chaplains from other faiths as well and they work together, in my understanding, to try to enable resettlement. I know through personal experience some Christian ministers who work in chaplaincies who also facilitate reconnection with communities to try to help resettlement. So I absolutely agree with the point the noble Lord makes and thoroughly commend the work of the chaplaincy.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I ask the Minister about progress on de-bunching prisoner releases on Friday. He will be aware that prisoners who are due for release on Saturday or Sunday are released on a Friday, so three-sevenths of all releases happen under the shadow of the weekend. All parties agree that this is an unsatisfactory way of reintegrating people. Could we please find a way to let the House know exactly what is happening and what progress is being made to resolve this problem?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for asking that question. I am very aware of this issue. I was under the impression that the practice of releasing on Fridays had been substantially reduced. However, if that is not the case, I will write to him, but I understand the point he is making. I thought there had been provisions made in recent legislation to stop this.
Lord Fox (LD)
My Lords, the Probation Service is an important link in this chain, so could the Minister please update your Lordships’ House on progress on recruiting the many more additional probation officers that we need in order to handle the workload and the important job that they do?
Lord Ponsonby of Shulbrede (Lab)
Yes, I absolutely understand the point that the noble Lord, Lord Fox, is making. Last year, the Government recruited 1,000 new probation officers; in the current year, we aim to recruit 1,300 officers and my understanding is that we are on target to achieve that. Of course, it takes two or three years to train probation officers so that they can get the relevant experience and confidence, and that process is ongoing. We absolutely want to revitalise the Probation Service. That is absolutely central to our ambitions for greater use of community sentences in future.
Lord Sandhurst (Con)
My Lords, the most recent Probation Service data showed that around 40% of homeless ex-prisoners reoffend within a year, compared with 19% of those with stable housing. Can the Minister please explain, first, what data-driven adjustments are being made to improve outcomes for ex-prisoners, and, secondly, how the Government intend to track the success of reintegration programmes and collate the data?
Lord Ponsonby of Shulbrede (Lab)
The noble Lord asks an important question and the answer lies in housing and accommodation. At the moment, there are three tiers of possible housing options available to prisoners. Community accommodation services are in either tier 1, 2 or 3. The key to resolving the issue is to get prisoners into one of those tiers of accommodation and then moving out of it as appropriate and, in the case of the third tier, after 12 weeks. Of course, moving out into settled accommodation requires the availability of that accommodation, and that availability varies across the country. Many other parts of society are competing for that accommodation. So we are very aware of the point that the noble Lord has made and the Government are doing their best to address restrictions on the housing that will support offenders when they leave prison.
Artificial Intelligence: Creative Content
Lord Black of Brentwood
To ask His Majesty’s Government what assessment they have made of the potential value of the global market for creative content from the United Kingdom for use in training artificial intelligence models.
Lord Black of Brentwood (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as deputy chairman of the Telegraph Media Group.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
The Government recognise the significant global value of UK creative content in AI development. As part of the AI Opportunities Action Plan, we are exploring how to unlock this value and ensure that creators and rights holders are properly rewarded. We support industry-led licensing models and are considering next steps following the consultation on copyright and AI to ensure that the UK’s copyright framework remains fit for the AI era.
Lord Black of Brentwood (Con)
Does the Minister agree that for AI businesses to flourish here they need access to our world-class content—which will only be produced if content creators have effective copyright protection? This House recognised that on Monday during the passage of the Data (Use and Access) Bill. It is deeply disappointing to learn that, rather than act decisively to give creators transparency, as we voted for—holding AI firms accountable for copyright theft, seeing deals struck and allowing the UK to play that leading role in the global AI supply chain—the Government are manipulating parliamentary procedure arrogantly to dismiss our views. Is it now the Government’s extraordinary position that, if it costs money to enforce the law, we must just let criminals get away with theft? I reject that and will be backing the amendment tabled by the noble Baroness, Lady Kidron, if she brings it back next Monday. This House must hold firm.
Baroness Twycross (Lab)
My Lords, I think the Government should hold firm, in fact. As noble Lords will be well aware, the principle of financial privilege is used frequently by the Commons, as is its right. It was used frequently by the previous Government and has been used a number of times by this Government. This country fought a civil war over taxes and the primacy of the Commons. It is not for this House to criticise the other place for using financial privilege as a reason to reject an amendment.
Baroness Kidron (CB)
My Lords, as we have heard, yesterday in the other place the Government used procedure rather than policy to overturn amendments that could have turbocharged a lucrative market for AI training data, on the premise that the data Bill is not the right vehicle to protect copyright works. What steps are the Government taking right now to enforce the law, which the Minister in the other place was at great pains to explain remains in place until further notice? What timeline has the Minister been given for another Bill that may or may not include the transparency to see what is being stolen? If theft at this scale was happening in pharma, finance, aerospace or the tech sector—which protects its patents so fiercely—would the Government stand by and suggest that the cost of regulation was too great to stop a multi-billion-pound industry from being plundered?
Baroness Twycross (Lab)
As the Government have signalled clearly, we recognise that transparency and getting this right is a key element required to improve the situation for creators, but we simply do not believe that this Bill is the right vehicle to put these measures into law. The amendments tabled by the noble Baroness, Lady Kidron, were well intentioned but have not taken into account the work that needs to be done before we put measures into statute. We want to get this right and for AI to work for everyone. Our aim is to provide certainty and deliver shared growth for our UK creative and AI sectors through a copyright regime that provides creators with real control and transparency and helps them to license their content while supporting AI developers’ lawful access to high-quality material.
Lord Brennan of Canton (Lab)
My Lords, if the Government cannot accept the amendments to the Bill, is it not incumbent upon the Government to give a clear indication that ensuring that transparency is real and available is an absolute priority in the coming months? It is too late if we have to wait for primary legislation some years down the line to enforce copyright by having the correct amount of transparency. What reassurance can the Minister give noble Lords that transparency will be top of the agenda going forward?
Baroness Twycross (Lab)
As I made clear to the noble Baroness, Lady Kidron, we recognise that transparency is a key element required to improve the situation for creators. We ran a 10-week consultation on the impact of AI on the copyright regime. It received over 11,500 responses, mainly from creators. Our genuine aim is to provide certainty for UK creative and AI sectors. I will not apologise for the Government making sure that we get this right and not wanting to use a Bill that is currently going through Parliament.
Lord Foster of Bath (LD)
My Lords, on the value of creative content, the US Copyright Office, in its very recently published report, concludes that:
“The copying involved in AI training threatens significant potential harm to the market for or value of copyrighted works”.
In relation to an opt-out approach, it says that such an approach
“is inconsistent with the basic principle that consent is required for uses within the scope of their statutory rights”.
If the Minister will not listen to the noble Lord, Lord Black, the noble Baroness, Lady Kidron, and many in your Lordships’ House, will she at least listen to our US partners?
Baroness Twycross (Lab)
My Lords, I am listening; I just do not agree with the noble Lords on the points that they have made. We are looking to make sure that we get this regime right. We will look at all the responses to the very wide-ranging consultation that received, as I mentioned previously, over 11,500 responses, mainly from creators.
Baroness Fleet (Con)
My Lords, I declare my interests as set out in the register. As a former newspaper editor, I pay tribute briefly to one of the most outstanding journalists of our generation, who we have just heard has died, Andrew Norfolk. Your Lordships will all know his name from his investigation into the evil of grooming gangs, which must never be forgotten.
Newspapers really do matter, and we must protect investigative journalism. I am sure that Andrew Norfolk would be cheering from the galleries to hear that statement: we must protect investigative journalism. Do the Government recognise that, for generative AI to thrive in the UK, AI models with a huge appetite for content will need the creative sector, including newspapers, to continue producing high-quality work? If so, why not give the creators the transparency that is necessary to enforce their rights and negotiate deals with AI firms, as we inserted into the data Bill on Monday?
Baroness Twycross (Lab)
I wholeheartedly agree with the noble Baroness in her tribute to Andrew Norfolk and on the power of investigative journalism. It is important for us to remember that creative industries are already using AI technologies—38% of creative industry businesses have already used AI technologies, with nearly 50% using AI to improve business operations. I use that as an example to make it clear that this is not an issue of the AI tech giants versus creative industries; it must be about both and about getting the regime right so that we can deliver—and protect our creative industries through the regime that we will bring forward following consideration of the consultation.
The Earl of Clancarty (CB)
My Lords, if the Government feel that our relationship with the American tech companies is so important for the country’s financial stability that they cannot introduce protective legislation for the creative industries, then they must be honest and say so. They must not treat the public like fools.
Baroness Twycross (Lab)
My Lords, I am not treating anybody like a fool, and nor are the Government. We want to get this right and to make AI work for everyone. We are 100% clear that creatives and the creative sector should be properly rewarded. We need to get it right. While I understand that noble Lords want to use the vehicle of the legislation that is going through the House currently to lever in procedure, process and policy now, we want to get this right. We will revert to Parliament in due course on the result of the consultation.
Lord Parkinson of Whitley Bay (Con)
My Lords, on Monday your Lordships’ House voted by a majority of nearly 150 to stand up for the rights and intellectual property of people working in our creative industries. The Minister will have heard the great dismay from across your Lordships’ House about the way the Creative Industries Minister in another place is hiding behind parliamentary procedure to drag his feet while this theft continues from our creative businesses. Does she think this is an acceptable way to treat not just this House of Parliament but the creative businesses which contribute more to our economy than the automotive, aerospace, life sciences and oil and gas sectors combined? Will she please take this frustration back to her colleagues and urge them to engage more faithfully before the Bill returns to your Lordships’ House on Monday?
Baroness Twycross (Lab)
My Lords, I cannot emphasise enough that all Lords in your Lordships’ House need to respect the primacy of the Commons in relation to financial privilege.
Baroness Twycross (Lab)
Noble Lords may disagree with me on that point, but it would be very wrong of this House to reject a principle—it is not a procedure or a procedural tool, but a principle—that the Commons has financial primacy. We genuinely want our creative industries and AI companies to flourish, which is why we have been separately consulting on a package of measures that we hope and intend will work for both sectors. These are interrelating issues; it is not one sector or another. We have always been clear that we will not rush into any decisions or bring forward any legislation until we are confident that we have a practical plan that delivers on each of our objectives.
Planning Reforms: Energy and Housing Costs
(2 days ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Pitkeathley of Camden Town
To ask His Majesty’s Government what assessment they have made of the potential impact of their proposed planning reforms on productivity in the United Kingdom, specifically in relation to the impact of the reforms on the cost of energy and housing.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, my noble friend points to the key role our Government’s steps to unblock a sclerotic planning system will play in delivering our growth mission. The Government continually assess the potential impact of our policies, including the proposed planning reforms. This is backed up by the independent OBR, which has forecast that the Government’s reforms to the National Planning Policy Framework will add around £6.8 billion to GDP in 2029-30 and raise UK housebuilding to its highest level in 40 years. The Government’s other planning reforms, including the Planning and Infrastructure Bill, will help deliver the Government’s clean power 2030 commitment, which, overall, is expected to unlock £40 billion of investment a year in clean energy infrastructure.
Lord Pitkeathley of Camden Town (Lab)
I thank my noble friend for that helpful response, and I refer the House to my entry in the register of interests. Working with not-for-profits, I have seen how vital and often popular projects can be delayed or derailed by the complexity of the planning system, which is often used by small, well-organised local opposition. Larger developers can usually navigate this; smaller organisations, especially those without a profit motive, can struggle. Do His Majesty’s Government consider planning complexity itself a barrier to progress that is worthy of attention as part of the planning system reform?
Baroness Taylor of Stevenage (Lab)
My noble friend is quite right. We have made it a priority of this Government to develop a simplified planning system with a policy framework that is accessible and understandable to all. Our reforms will streamline planning processes to help provide more homes of all tenures and accelerate the delivery of major infrastructure projects. They will modernise the decision-making process and increase local planning authorities’ capacity to deliver that improved service. We have also committed to establishing a clearer set of national policies for decision-making, so the system is clearer and more consistent. All this should help smaller developers.
Lord Geddes (Con)
My Lords, is it not mandatory for all new houses to have on their roofs solar panels or photovoltaics?
Baroness Taylor of Stevenage (Lab)
My Lords, we are developing the future homes strategy, which will point to all the net-zero measures that we want to see. We do not want new houses being built that have to be retrofitted, or that are technology-specific, because the technology is developing at pace and we want to make sure there is enough flexibility in the system for new technologies to be adopted. Things such as solar panels and air source heat pumps are great innovations that are really changing our homes, keeping them warmer and making them more carbon neutral.
Lord Teverson (LD)
My Lords, in future, a number of major planning applications will require environmental development plans, which will be written by Natural England. Yet there is a great scepticism about the efficiency of that, because Natural England does not have the resources, and it is going to be very difficult to recruit them in time to meet the planning targets. Can the Minister assure us that, somehow, these plans and Natural England will be properly resourced to make sure that those efficiencies can happen, and that nature can be protected?
Baroness Taylor of Stevenage (Lab)
My Lords, it is important that, as we go forward with our ambitious target to build 1.5 million homes, we take care of the environment at the same time. Natural England’s role in that, which the noble Lord points to, is key in developing the plans that will protect nature as we build those homes. I understand the concerns that he and other noble Lords have about the resources in Natural England. We are working very closely with it, and we will provide it with additional resources to help it deliver with us what I do not think is a contradiction: the development and infrastructure that we all want to see, while protecting our precious natural environment at the same time.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will hear from the Cross Benches.
Baroness Lane-Fox of Soho (CB)
My Lords, the Minister herself referred to the sclerotic system. I declare my interest as president of the British Chambers of Commerce. One contributor to that system is the chronic lack of planners themselves. We are working on a project with Aviva to try to help build that capacity, but it will only ever deliver a fraction of the Government’s ambition. Is the Minister aware of the project, and what other creative plans do she and her department have to turbocharge the number of planners in the country?
Baroness Taylor of Stevenage (Lab)
I thank the noble Baroness for her question. The Government have announced additional funding to support the recruitment and training of 300 graduates and apprentices for local planning authorities. However, I have worked in local government for a long time, and I am not naive enough to think you can pick planners from trees; they need to be trained. This forms part of a wider £46 million package of investment in the planning system to upskill local planners and ensure they can implement our reforms, including ensuring that everywhere has an up-to-date local plan in place. We need to inspire young people into these careers and make sure that they see the benefit of a career in planning. We are never going to be able to compete with the private sector on salary, but we can compete on the excitement of developing local places and good places for people to live, and I hope that will inspire people.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I invite the noble Lord, Lord Campbell-Savours, to participate remotely.
Lord Campbell-Savours (Lab) [V]
My Lords, do not planning reforms which fail to address land costs for housing development perpetuate a system in which high costs determine affordability of housing for sale? Again, I ask my oft-repeated question: why not examine arrangements in Nijmegen in Holland and Hammarby in Sweden, where housing for sale has been built on land acquired at agricultural prices? Indeed, we could go further by adopting new forms of title which lock in discounted affordable sale prices with occupancy and resale restrictions. We need to think out of the box in this housing crisis.
Baroness Taylor of Stevenage (Lab)
My Lords, I have heard my noble friend speak on this issue many times, and he is quite right to point to the restrictions that the value of land places on the system. Of course, we are always looking at new methods of making sure that the houses we need are viable and will deliver the quantity of housing needed, and we continue to explore all avenues to deliver that properly. I hope my noble friend will look at the Planning and Infrastructure Bill: there is progress in there, and I hope he likes what he sees.
Lord Jamieson (Con)
My Lords, I declare my interest as a councillor in Central Bedfordshire. The benefits to growth and innovation of densifying our cities are well recognised, yet the UK has some of the lowest-density cities in the G7, and this Government are now seeking to facilitate building on the green belt rather than driving densification and regeneration of our cities. Will the Minister confirm that this Government will move forward with the previous Conservative Government’s strong presumption in favour of brownfield development?
Baroness Taylor of Stevenage (Lab)
I am sorry, but the noble Lord is quite wrong in his assumption. We are prioritising building on brownfield sites. I know he has a particular bugbear about London; I was with the Mayor of London just last week and was very pleased to see his review of the use of the green belt in London as part of the work on the London Plan. I was interested to hear that, of the half a million hectares of green belt in London, just 13% is made up of parks and accessible green space. The mayor is making progress on this, and so are we. Brownfield will always be our first choice, but we are looking at grey-belt and green-belt development as well.
Baroness McIntosh of Pickering (Con)
Will the Minister look carefully at the cumulative impact on rural and coastal communities of major infrastructure projects? When an offshore planning application is made for a wind farm, it is causing real distress: before people realise it, they have substations to take the electricity on board, and then lines of pylons. What steps will the Government take to alleviate this situation?
Baroness Taylor of Stevenage (Lab)
We now have a land-use framework from Defra, and we will be producing a long-term housing strategy, which will include information about how we intend to work in rural areas. I hope the noble Baroness will contribute to the consultation on that. It is of course very important that we develop the infrastructure we need as a country and continue our move towards a clean-energy future. That will mean some use of land in rural and urban areas, but that can sometimes be exaggerated. The figure my noble friend the Energy Minister often cites is that, at the moment, our plans mean that 0.1% of land would be used for solar farms. So we have to be careful about over-exaggerating the issue, but the noble Baroness’s point is well made and we do need to protect good-quality agricultural land—that is our intention—as well as making sure we build what we need.
Baroness Hayman (CB)
My Lords, I recognise the Minister’s desire not to be technology-specific regarding the new homes building standards. But I wonder whether she agrees with me that by not laying down a requirement for solar energy when it is applicable to new building, you leave the decision in the hands of the developers, who may well choose not to do something that would contribute to energy security in this country and to lower heating bills for the owners or tenants of those properties?
Baroness Taylor of Stevenage (Lab)
We have made it clear that the drive in the National Planning Policy Framework, which we have just reviewed, is towards renewable energy. The noble Baroness points to just one of the reasons, which is the cheaper energy supply for householders and businesses, but we need to focus on energy security as well as making sure we are not damaging the planet through the energy we use. Importantly, the planning reforms will help to fast-track projects to create homegrown renewable electricity for homes and businesses. The national planning policies we have set out move towards that, but as I said, we have to be careful not to shut off new technologies and to make sure that we leave flexibility for new technologies as they develop.
Pensioners: Shoplifting
(2 days ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Sikka
To ask His Majesty’s Government what steps they are taking to address the reported increase in shoplifting by pensioners.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, all shop theft is unacceptable, and we are taking action to drive down retail crime. However, there is no official data to give an accurate assessment of the age of those who commit shop theft. Today—as we speak—the Home Office is once again hosting the Retail Crime Forum, which brings together representatives from the retail sector, security providers and law enforcement agencies.
Lord Sikka (Lab)
My Lords, poverty is a major cause of shoplifting. The full state pension of £11,973 is less than 50% of the minimum wage and is received by less than 30% of pensioners. Despite benefits, 2 million pensioners live in poverty, and over 100,000 a year die in fuel poverty. The loss of the winter fuel payment, unchecked profiteering and frozen income tax allowances will only worsen matters. The Minister has the power to reduce pensioner poverty by aligning the state pension with the living wage. When will he do that?
Lord Hanson of Flint (Lab)
The survey that has generated this Question was undertaken by one security firm, which found that only 5% of “pensioners” were undertaking shop theft. It defined “pensioners” as people aged over 50. It was complete, false nonsense, so before we go any further, let us just kill right now the argument that pensioners are a particular focus for shop theft. They are not. It is criminal organised gangs and that is where the Government are focused.
My noble friend mentioned a range of issues to do with challenges that pensioners face. We are protecting the poorest pensioners through the winter fuel allowance, ensuring that we can maintain the triple lock, and supporting pensioners generally. Even with all those measures, it is not acceptable for anybody to walk into a shop and steal something off the shelf, because that is a criminal act and it ensures costs go up for everybody else, including pensioners who obey the law. It is not acceptable, and I hope that we can focus in the Crime and Policing Bill on how we tackle shop theft as a whole.
Lord Balfe (Con)
My Lords, I note that the Minister is about to have a meeting with a group of people dealing with this issue. Can he assure me that the trade union movement will be involved in that? I spent some time working for the Co-op many years ago. It is very frightening when people walk into a shop where you are employed and steal—that is what it is—the merchandise. Can I have an assurance that the trade union movement will be included in his consultation?
Lord Hanson of Flint (Lab)
I should declare an interest in that I am a member of the Union of Shop, Distributive and Allied Workers, and have been since 1979. I am fully in contact with the members of that union, who do a great job in supporting shop staff and shop presence. What staff should not face is attacks from individuals when they uphold the law on cigarette sales, alcohol sales or other sales. In fact, I moved an amendment some years ago to ensure that protection was in place. It was defeated by the then Conservative Government. I am very proud to say that I shall be moving the same Motion in the Crime and Policing Bill and that it will be passed by my colleagues.
Baroness Doocey (LD)
My Lords, retailers often choose not to involve police when pensioners are caught shoplifting. Will the Minister discuss this issue with the College of Policing to ensure there is a consistent and fair approach to all offenders; balancing compassion for those who are in genuine hardship with the need for deterrence and public confidence in the justice system?
Lord Hanson of Flint (Lab)
Under the last Government, the National Police Chiefs’ Council produced a retail crime action plan, which is now around two years old. It includes a range of measures on how we can reduce shop theft across the board, but also looking at specific sectors. We have backed that up with a £7 million fund this year to support action on shop theft in town centres in particular.
I accept that there are a range of reasons why individuals undertake shop theft. Some are in criminal gangs, some are fuelling addiction problems, and some, as my noble friend mentioned, do so for reasons to do with poverty. We need to address all those issues but, ultimately, we should have no tolerance of shop theft as a whole, because it costs society, costs us as individuals, and is a crime that is seen as being victimless when it certainly is not. By all means, let us look at the individual circumstances, but our advice to police forces is to focus on this as a serious issue, for growth in the economy and for the impact on our society as a whole.
Lord Davies of Brixton (Lab)
My Lords, I question my noble friend the Minister’s statement that the poorest pensioners have been protected through the winter fuel abolition. The poorest pensioners are the 700,000 entitled to pension credit who do not claim it, and they are not getting the winter fuel payment.
Lord Hanson of Flint (Lab)
My noble friend will know that Ministers in the DWP and the Treasury are very cognisant of the need to ensure we have an uptake by people who need and qualify for the winter fuel payment who currently do not have it. My understanding is that the DWP has written to all those pensioners. There have been some difficult decisions; let us not get away from that. I lost my winter fuel payment. Should I, as a Minister of the Crown, have that additional payment? No. Should millionaires have that additional payment? No. But the Government are determined to support poorer members of the community and poorer pensioners. That is what we are trying to do.
Lord Cameron of Lochiel (Con)
My Lords, it is imperative that those working in shops, and retail workers in general, are protected in the face of significant levels of aggressive behaviour and violence in so-called kamikaze shoplifting raids. I know that the Government plan to bring in a new specific offence of assaulting retail workers. However, new laws like that work only when the police are there to enforce them. Can the Minister confirm that the number of new police officers entering the front line will be sufficient to help tackle the crime of shoplifting in general?
Lord Hanson of Flint (Lab)
I shall say two things to the noble Lord, and I hope he can support the Government on this. We have put in an extra £1 billion of funding into policing this year, over and above what was in last year. We are funding 3,000 extra neighbourhood police officers this year. The plan is to fund 13,000 neighbourhood police officers over the course of this Parliament. I was Police Minister in 2010. In 2011, 20,000 police officers were lost, and that has had a big impact on capacity over that time. I say to the noble Lord that people who undertake violence and ram raids are criminal organised gangs and the police need to focus on that, but neighbourhood policing can also help in improving relationships and highlighting the fact that shop theft, be it one cup of coffee, a jar of coffee or a ram raid full of alcohol, meat and expensive products, is taken seriously by the police.
Lord Hogan-Howe (CB)
My Lords, I think the Government’s plan is a good one; there is nothing wrong with the plan. What has happened over the years is that we used to get reports of shoplifting only when they caught the offender, so the police went, and we had a very good detection rate because the offender was presented. What has happened over time is that CCTV and other devices have captured shoplifters who have left the premises. The determinant is whether the police attend. If they attend, they have a good chance of catching them there or using the evidence that is available. Particularly for shop workers, where violence has been used, somebody follows up. I think that what has happened over time is that there has not been the follow-up. That needs to happen. If it happened to be a pensioner who was the offender, they might actually catch them.
Lord Hanson of Flint (Lab)
I agree strongly with the noble Lord that it is extremely important that all offences are registered. That is a responsibility on shops as well as on the police force and on us as a community as a whole. We need to know the level and scale of the problem. I am pleased to report that there has been an increase in the number of arrests and prosecutions for shop theft over the past six months, and that is a direction of travel that I hope we can continue, because it is important that we address criminal gangs. However, if individuals are stealing because of alcohol or drug misuse or because of not being able to afford to live, those are other issues that we need to register, address and work with the rest of society to resolve.
Lord Harris of Haringey (Lab)
My Lords, there was a lot of public concern about the policy, which it seems that the previous Government were complicit in, that there would be an arbitrary threshold in terms of shoplifting before proceedings would take place. Can my noble friend confirm that that is totally against current government policy and that we will encourage police forces to prosecute in all such cases?
Lord Hanson of Flint (Lab)
In 2014, the then Government introduced a £200 threshold, which meant that police forces were, in effect, told to disregard shop theft below £200. I was the shadow Police Minister in 2014, and I opposed that measure. I am pleased to say that in the Crime and Policing Bill that will be coming before this House very shortly that £200 threshold will be scrapped. It might have taken 11 years to get to that position, but it is 11 years that have changed because there was an election victory on 4 July last year.
Immigration System
(2 days ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Cameron of Lochiel (Con)
My Lords, there is now a broad consensus that the Government’s immigration system is broken. Too many people are coming into and staying in the United Kingdom. This is affecting jobs. It is affecting people’s communities. It is a serious problem that requires a serious solution. It is disappointing that the White Paper we have before us is not such a solution. Knowing him a little better now, I am sure that in a few moments the Minister will stand up and speak about the legacy of the last Government. Let me save him some time. Let me point to the fact that in the other place, earlier this week, the Home Secretary herself praised Conservative policies when she noted that visa applications are down by 40%. This is a direct consequence of the policies introduced by the last Government, which came into force in April last year.
However, analysing the last Government’s record is yielding less and less for this Government as the months roll by. It is now almost a year since the current Government came into power. The migration numbers we are seeing are manifesting, and have manifested for many months, on their watch. In our view, the White Paper lacks ambition to make the tough decisions needed truly to take a hold on immigration numbers. Now is the time for courage, not halfway-house decisions that do not tackle the problem. Safeguarding British jobs, promoting cohesion in our communities and reshaping our immigration system to be fit for purpose must be prioritised. For instance, there is a refusal in the White Paper to define an annual cap on migration to be set and voted on in this Parliament. It is not enough, in our view, simply to hope that numbers will come down. If the Government are confident that they can get the numbers down in considerable amounts, will the Minister push for a cap to be set out in law?
I am sure we will discuss this in more detail when the borders Bill is debated here in the next few months, but it was disappointing that the Government refused to support our amendments in the other place designed to disapply the Human Rights Act from immigration matters. Does the Minister agree that to tackle this issue properly that needs to happen? The same could be said for changes to visa thresholds. The previous Government planned to increase the visa salary threshold from £29,000 to £38,700. This was due to come into force on 1 April, but the Government delayed this policy, missing the opportunity to bring the numbers down with a measure that was projected to lower immigration numbers by 300,000 people. Will the Minister consider adopting that policy and raising the visa salary threshold for family visas to £38,700?
Immigration matters deeply to people across the country. The proposals we have before us are, I am sure, well intentioned, but they simply do not go far enough. Until the Government start considering the proposals that I have just set out, the White Paper we have before us will not deliver the changes that people across this country want to see and which the Government have a responsibility to bring about.
Baroness Hamwee (LD)
My Lords, immigration—this is not about asylum, which is a separate matter—involves a sort of contract between the immigrant and the host country. Each has a part to play, and each should be positive.
We used to talk more than we seem to now, often in the context of the benefits of overseas students in our universities, about the contribution to soft power played by welcoming people to our country, as well as what immigrants—who included my grandparents—contributed to the UK. I am glad that this was acknowledged by the Home Secretary in the Statement, though I am not convinced that the White Paper entirely reflects that, but I have to say I am shocked by some of the language used by the Prime Minister. Both words and tone are important.
I did not follow the logic of the White Paper. Supporting growth, housing and other construction and hospitality and tourism, for instance, require skills that are not at the highest level and work that can be hard but not skilled. Employers who recruit from overseas would not recognise this as the easy option, given the paperwork involved, and certainly not cheap, with high visa fees and the skills charge. Can the Minister tell us how much is expected to be raised by the increase in that charge and invested in training?
I do not accept that carers are unskilled; rather, their skills are not ones that we have traditionally valued. Better payment—the Minister will be aware of the Liberal Democrat policy of a higher minimum wage for carers—and our respect are due. Although the White Paper acknowledges that, the conclusion that overseas recruitment should end is perverse and damaging to carers and to clients. There is abuse by some employers in this and other sectors, but the response reads too much like victim blaming. Can the Minister tell us the timeframes for the fair pay agreements mentioned? I would also be interested in how the Government respond to concern that more and more pensioners will be exhausting their savings on care.
I look forward to migrant workers being given more control over who they work for, reducing opportunities for exploitation. We hope to explore that through amendments to the forthcoming borders Bill, as well as issues around family reunion, about which we have significant concerns. What consultation will there be regarding changes to family migration? What does proper integration support—to use the terminology—look like? Can the Minister clarify at what point in the immigration process, as distinct from citizenship, English language will be tested?
There is to be a new temporary shortage occupation list, including jobs critical to the industrial strategy, which the Minister may say addresses my earlier point, and to an extent perhaps it does. Does temporary mean a temporary list or temporary for the worker? Is it the list that will apply for asylum seekers when they are allowed to work, which should be much sooner than currently while waiting for a decision?
Indefinite leave to remain will “take account” of the applicant’s contribution. How is that to be measured? Five years is apparently not enough. Is it a matter of salary? How much discretion will there be? What data will the Home Office publish in the interests of transparency?
I return to some of the rhetoric. One gentleman has emailed me about how difficult it is for him and his partner—who he tells me arrived in the UK legally, paid visa fees, paid the NHS surcharge and has no recourse to public funds—to read that she is regarded as causing “incalculable damage”. Regardless of the detail, he says,
“it makes us feel unwelcome in the UK”.
These policies affect UK citizens too.
The White Paper refers to many further policies to come. There is a lot to follow up, with a lot of people uncertain, anxious and feeling threatened about their future, and many having thought that their future was clear. I hope there is a lot of consultation to come before policy is set in stone.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to both the noble Lord, Lord Cameron of Lochiel, and the noble Baroness, Lady Hamwee, for their contributions, and I will try to answer them. I hope I do not surprise the noble Lord by saying that I am not going to go over the previous Government’s record; I will let that speak for itself. We can all make judgments on that. Government is a difficult place, but there are decisions that the previous Government took in all their forms from 2010 that we disagreed with, though there were things that we supported too, and we are where we are now.
We are trying to put a framework around some key decisions that the UK has to take in relation to the points before us in the White Paper. The key principles in the White Paper are that we need to reduce net migration substantially. We are potentially looking the number of visas issued to fall by up to 100,000 a year by the end of this Parliament as a result of the changes.
We need to link immigration to the UK skills strategy. We need to ensure that we create fair, effective and strictly enforced rules, and that includes what I would term good labour values to ensure that we do not have exploitative workforce practices, we do not have foreign-national criminals who continue to commit crime in our country and we do not have people working undercover because of their illegal entry to the UK. They are good values to ensure that we support work and the workforce as a whole.
It is also a good value that we extend the hand of friendship to those who have lived here, come here and worked here, but also we need to support integration and community cohesion. We need to ensure particularly that we empower Parliament to give a clear definition of family life and that the Immigration Rules are clear for all.
The noble Lord, Lord Cameron, has mentioned three particular areas, which I will try to respond to. First, should we place a cap on migration and put that figure in there for the Government to be held to? We have taken the decision that we are not going to put a figure on that cap, but we are going to try to keep reviewing all the time the impact of the policies in this White Paper with the objective of reducing net migration over a period of time. Caps have proved a challenge in the past as an area where Governments have failed to hit targets so, while we can debate it and argue about it, that is the decision that we have taken.
Secondly, should we disapply legislation such as the ECHR and other legislation? The Government will abide by our international obligations. We do not intend to withdraw from those obligations, but we will look at, and will consult on, how we apply those obligations in a UK context. There may be room for us to look at that in detail, but there is no indication whatever that we are going to withdraw from those, nor would we wish to, because those are our international obligations and they should be met.
The noble Lord mentioned the visa changes. There will be consultations. A number of the measures in the White Paper will require legislation in this House, either at SI level, at rules level or in primary legislation, and there will be an opportunity for consultation, discussion and contributions from both Houses of Parliament accordingly.
The noble Baroness, Lady Hamwee, began by talking about the contribution of people who are immigrants to this country. I put on record how much I value those people who have come to this country to make their lives and to contribute. There are a range of services, public and private, where the contribution of people who have come to this country is central to public service, economic growth and business as a whole, and we need to recognise that.
However, we still need to have a system whereby we put some boundaries around migration and around supporting the development of UK society and its needs. There are 9 million people currently economically inactive in this country. What is the skills programme for those individuals? Can we get those people to do some of the work currently being done by people being brought into the country? That is an important issue.
I value very much the contribution of students and universities. We are not stopping students coming to the country, and we are not stopping universities having individuals come to the country. What we are doing is saying, “When you’ve finished your university course, we’re going to review the amount of time you can stay here before you need to make further applications along the lines of the immigration regime that we are putting in place in those areas”.
I know for a fact that we can probably count the number of Presidents, Prime Ministers and business leaders who have been to universities in this country and who value that experience and look back on this country as being the first step on their long road to success. That is important; we are not stopping that. We are simply putting in place an 18-month period after graduation which says that you have to then start look at reapplying, as opposed to being automatically able to stay.
The skills agenda is really important. As I have mentioned, there are a lot of unskilled people who can be brought into the market. Adult social care is important. We will be bringing forward rules to this House about changes in that sphere. However, it is important because a lot of people have abused the adult social care route and we are trying to put some rigour and order into it.
The noble Baroness mentioned exploitation. I am pleased to see the former Prime Minister, the noble Baroness, Lady May. It is important that modern slavery issues, which the noble Baroness, Lady May, championed in the other House in government both as Home Secretary and as Prime Minister, are put into measures that ensure we strengthen that route to avoid exploitation. We need to examine the issues of people coming here illegally, working illegally and being exploited by domestic employment orders, because that undercuts people who are doing legitimate work and legitimate businesses. That is a key issue for the Government.
We will be consulting on the measures the noble Baroness outlined and we will certainly examine in full any representations made. But the Government have to set out a direction of travel. One of the key things we have to do is set out a direction of travel and put some order into the system. Not everybody is going to agree with the direction of travel or the order we put in. But it is important that we have stronger control of our borders and stronger employment and training opportunities for all, that we still attract high level of talent and that we are still open for students to come and for businesses to invest. However, there has to be a framework around that, and the White Paper intends to provide that framework.
Finally, those who have indefinite leave to remain can currently apply for naturalisation after five years, but we have a 10-year proposed ceiling in the White Paper. We are going to look at transition arrangements and make sure we try to give opportunities for further consultation on points to do with naturalisation that we know are important to this House, the House of Commons and, most of all, to people who are here already. That will be subject to further consultation at an appropriate time.
I hope I have answered the questions the noble Lord and the noble Baroness raised, and I await further questions.
Baroness May of Maidenhead (Con)
My Lords, I am grateful to the Minister for his remarks about modern slavery. One way to bring down net migration is to ensure there is no abuse in the visa system. The White Paper touches on this, particularly in relation to student visas. A key way to ensure there is no abuse is to move away from a strict points-based system and give greater discretion to immigration officers. Are the Government doing that? If not, why not?
Lord Hanson of Flint (Lab)
The Government want to try to operate a points-based system, but also to put some more rigour into the student post-graduation approach and to look at the fees around coming to the United Kingdom in the first place. The White Paper includes a shortening of the period after graduation. It includes a points-based system examining what skills are required. It gives a commission to the Migration Advisory Committee to look at what the skills shortages are. At the same, we are putting £625 million into skills and training in England to try to raise levels of skills so that graduates—with due respect to graduates—do graduate-level jobs and do not do jobs that can currently be filled by upskilling those who are currently economically inactive in the United Kingdom.
The Lord Bishop of Lichfield
My Lords, the White Paper rightly recognises the role that successful integration plays in enabling people to realise their full potential and increasing community cohesion. It particularly highlights the importance of language learning. Yet this, though important, is not the sole factor that influences the extent to which someone is successfully integrated in society. Successful integration is multifaceted. It requires, for example, the provision of adequate housing, employment opportunities, social networks and the ability to navigate services. A more holistic approach to integration is needed—one that extends beyond the development of language skills. What consideration are the Government giving to introducing more expansive measures to facilitate successful integration?
Lord Hanson of Flint (Lab)
The right reverend Prelate makes an important point. Integration is about communities reaching out and understanding each other’s differences, but looking at the areas they share and making sure that the pressures on any area of migration do not destabilise the community that those people who have come to this country are part of. That means that we need to make assessments of housing and public services, as well as employment. That is key to the details of the White Paper as a whole.
There will be further examination of the structural needs the right reverend Prelate has outlined and the need for, in our view, better performance on English language for people who are here. By better performance on English language, I am not downplaying the native language of anybody who comes here, but the ability to converse with fellow citizens is critical to integration. That is why we are putting emphasis on that in the White Paper. The points the right reverend Prelate mentioned are also equally important.
Lord Dubs (Lab)
My Lords, I welcome the measured tone my noble friend used in answering the question a few minutes ago. However, there are things about the White Paper which cause concern. Do we still have to include students in our net immigration figures? I know we have debated this before, but it seems that, if we could exclude students, the figures would be a bit more honest. I welcome the emphasis on the English language, but I am concerned about the way in which we have used expressions to describe what is going on. Integration in our local communities is surely helped if we have moderate language—the Minister himself used moderate language—to describe the whole immigration situation. In the last few days things have been said which, frankly, have not helped with the process of integration.
May I make two further quick comments? First, I am concerned about social care. I understand the arguments, but it may well be that our social care system, which is already in a state of collapse, will collapse even further. We need some sensitivity on that issue. Finally, on Article 8 and asylum seekers, I hope the Minister can give us more assurance on how this will work. It is mentioned in the White Paper and I hope he will give us further assurance that there will be no inadvertent knock-on from the White Paper into our policy on asylum seekers and refugees.
Lord Hanson of Flint (Lab)
As I have said—I hope I can say this again for the benefit of the House—students contribute to the cultural, economic and soft power of the United Kingdom. We have welcomed students and we will continue to welcome students. But we also have to look at the impact of students on the migration system. At the moment, many students stay in the United Kingdom beyond graduation. What we are trying to do in the White Paper is reduce the time they can automatically stay on and put in place a number of caveats so people will then have to go through the normal migration system and being a student is not seen as a back-door way of coming to the United Kingdom in the longer term. That is a reasonable proposal, which does not stop our soft power or investment in universities but looks at what students do in the long term.
I take the point that my noble friend made about language, which is important. It is really important that we focus on what the Government are trying to do. The five key principles that I have set out are the direction of travel. We want to see better integration. I am pleased that my noble friend mentioned that language is important to that, but integration is also, to go back to the point made by the right reverend Prelate, about churches and other faiths talking to each other. It is about neighbourhoods being mixed neighbourhoods, and about understanding and respecting differences in our culture. At the same time—and this is where the Government are coming from—it is about trying to put a framework around all that to ensure that there is some level of management and control over how immigration is used and how our skills base is raised. I hope that that reassures my noble friend. I shall look at all the points that he has mentioned and continue to have a dialogue with him, because I know that it is a matter of some importance to him.
Lord Green of Deddington (CB)
I should like to declare an interest as president of Migration Watch UK. Indeed, I have spent 24 years on this subject, but I promise to be extremely brief today.
Much of what the Minister said has addressed the issues that we now face. What this discussion has not faced is the sheer scale of the problems that have emerged in recent years. We had net migration of nearly 1 million in one year, and 700,000 in the subsequent year. These are immense changes, and I welcome the remarks that the Prime Minister made that show some understanding of public opinion on this, which is now becoming very strong.
I make just one point to the Minister, which is that he is going to need a target. I understand very much the breadth of what he has covered and his reluctance to set a target, because it makes life very difficult in future years, but if he wants to persuade the public that he is serious about this, he had better have a target and get very close to it.
Lord Hanson of Flint (Lab)
The Government have made a judgment, and in the White Paper we are trying to make a judgment about a number of issues. There is legal migration and the issues of who comes, how they come and under what circumstances. We are trying to put a framework around that, which also tries to raise the level of skills of English and British-based citizens who are currently economically inactive to try to meet some of our skills shortage. We are trying to put a target around the impact of universities, both on soft power issues and on longer-term investment in skills and what people do in graduate-level jobs afterwards.
We are trying to look at a range of issues around integration and community coherence, which I think resonates with what the noble Lord has said. But I do not think that setting a target would be a good thing. For us, it is the wrong issue; we are trying to ensure that we put a framework in place to manage those pressures, and to look at what the UK economy needs, at how we build those skills and at how we build integration. Outside of that legal migration route, there is the real challenge, which I know the noble Lord is also concerned about, of illegal migration. A whole range of measures will come before this House very shortly, on 2 June, in the immigration and borders Bill around what we need to do to stop illegal migration and put it to one side.
There are immense challenges, but I hope that noble Lords and noble Baronesses can not only look at the White Paper and be critical of it in parts but look at it in terms of how we are trying to develop a framework and contribute positively to it, rather than look at what is not in it.
Baroness Brinton (LD)
My Lords, two years ago, during the passage of the Illegal Migration Bill, the noble Lord, Lord Alton, and I raised the issue that Home Office assessors were muddling up the Hong Kong BNO passport holders with being asylum seekers. I am very grateful to the then Government for correcting that and ensuring that guidance was issued. Yesterday’s White Paper, in simplifying the routes to citizenship, appears to have put the BNO passport holders back in the same group again, as if they were economic migrants and asylum seekers. Given that the status of BNO passports is completely different from that of asylum seekers, will the Minister agree to meet me, the noble Lord, Lord Alton, and Hong Kong Watch as a matter of urgency?
Lord Hanson of Flint (Lab)
I shall certainly meet the noble Baroness and the noble Lord, Lord Alton. Dare I say I have had some correspondence over the past 24 hours on this matter. We will reflect on it and, without any commitment, I shall certainly listen to the noble Baroness’s representations.
Lord Boateng (Lab)
My Lords, the UK’s world-class creative industries require a globally diverse workforce. Will the Minister give the industry and the general public the reassurance that the qualifications required under any future visa regime will take into account the specific nature of the creative industries—because you do not need a degree to be a great dancer or a great violinist? I declare my interest as a member of the boards of the Royal Philharmonic Orchestra and the Ballet Rambert.
Lord Hanson of Flint (Lab)
I take on board what my noble friend said. I am very interested in culture as a whole—you do not need a degree to be a great footballer either. I understand that, but again, we are looking at these issues and trying to put some framework around it. I have heard what my noble friend said. Again, this will form part of an opportunity to consult on how this develops in due course, but he has made a point that is worthy of examination.
Lord Lilley (Con)
My Lords, the White Paper is about controlling immigration. Will the Government have the ability to control the number of visas in each category, and will they exercise that control—and, if not, why not?
Lord Harries of Pentregarth (CB)
My Lords, there is an acute shortage in the social care sector. Will the Minister recognise that the policies in the White Paper will actually make that shortage even worse? We hear some talk about making the social care sector more attractive. Can he give us any kind of indication of when changes will take place to make the wages in social care attractive enough to bring people away from the retail sector, and to provide it with a proper career structure and the proper dignity and respect that it ought to have?
Lord Hanson of Flint (Lab)
We will make changes to the Immigration Rules relating to the social care sector during the course of this year, but we are also putting in place a transitional period. There is a need to ensure that we try to meet any shortfall in social care requirements from within the existing UK workforce—that is the objective of government policy. I am happy to discuss with my colleagues and the social care sector how we improve recruitment and other issues, and we will do that through other government departments. The key thing is that we cannot rely completely on overseas labour to fill the UK social care sector.
Baroness Ludford (LD)
My Lords, the Statement and the White Paper both refer to illegal and irregular migration, which is better than what we have heard recently—lumping them both into illegal. Can the Minister confirm that it is legal to enter a country to seek asylum—although, obviously, if it is refused then the person must leave? Can he also clarify the Government’s understanding of the difference between illegal and irregular migration?
Lord Hanson of Flint (Lab)
The noble Baroness again presses me on that issue, which is absolutely her right. We are trying to ensure that people who have an asylum claim or seek refugee status can have that claim assessed within the United Kingdom or with our partners in the European Union. We are having great discussions as well with the French, Belgians, Dutch and Germans about irregular and illegal migration.
There is a real difference. If somebody claims asylum, that needs to be considered and processed—and, if processed, that needs to be given, if approved. If it is not approved, that person needs to be removed. That is a reasonable and fair thing for Governments to do. Irregular migration, as the noble Baroness will know, is also an issue that the Government will examine, because a whole range of people are seeking refugee status or other things—and there are people trying to enter illegally across the channel. We are having to try to address all those issues.
The Government are putting more rigour into that formal border control at the channel to stop small boats, and we are putting those measures in the Bill that will be before the House very shortly. We are also trying to speed up asylum claims so that they are processed much more quickly to remove people from hotels. At the same time, we are trying to make sure that we continue to meet our international obligations. No one has said that that is easy, but I hope that the White Paper gives some new direction and routes to how we can do it more effectively.
Lord Hodgson of Astley Abbotts (Con)
When the Minister comes to report to the House in a couple of years’ time, what will success for this package of measures look like? With the present policies, the current projection from the ONS is that we will have net migration annually of 340,000 going forward. What number will we hear from the Minister when he says, “We have already pulled it off; this has been really worth while”? If he is not prepared to say that number—and I strongly suspect that he is not—why should anybody in the country, in red-wall, blue-wall or any other seats, believe that this is not just another attempt to kick the can down the road?
Lord Hanson of Flint (Lab)
The noble Lord tries very well and very effectively to tempt me to talk about a cap or a figure that we are putting on success. Success for me is that we have a properly ordered, understood, managed system where people who wish to come to this country to work can understand clearly what the rules are; that we have rules that encourage the development of UK-based skills; that we have rules that do not deter people from enjoying the benefits of UK university education but at the same time put some strictures on when and how they should be employed afterwards or leave; and that we begin to tackle the issue of illegal migration in a fair and effective way, but allow people to seek asylum and have that asylum processed. That way, in three years’ time, I will stand here and be able to say to the noble Lord that, while he may not like the framework, there is a clear framework in place that tries to determine how we control our borders rather than just using rhetoric to try to control our borders.
Lord Alton of Liverpool (CB)
My Lords, yesterday the Joint Committee on Human Rights began its legislative scrutiny of the borders Bill. Among the issues raised is, inevitably, Article 8, which the noble Lord has referred to. Given that this is not about directives from the European court but about differences of opinion between lower and upper-tier tribunals within the United Kingdom, we would all welcome greater clarity about what the Government’s interpretation of Article 8 duties actually is. I hope that the noble Lord will therefore agree that, as part of his consultations, he and his department will engage with the Joint Committee and also clarify for us what will be laid before Parliament that is not in the Bill and what is in the White Paper that will affect our considerations when the Bill comes forward? Do those things not need to be woven together?
May I also endorse what the noble Baroness, Lady Brinton, said? I declare an interest as a patron of Hong Kong Watch. The Minister will have seen the letters and emails sent to him, not least from myself and the noble Lord, Lord Patten of Barnes, deeply concerned about the reports of the backdating to 2020 of the situation of BNO holders in this country. No one could have integrated better. I salute what the previous Government did about the position of people escaping the tyranny of the Hong Kong dictatorship imposed by the CCP. I hope that the present Government will honour the commitments that were given to the BNO holders who arrived in this country legitimately and legally and will not in any way renege on the promises that were made.
Lord Hanson of Flint (Lab)
I hope that I can again reassure the noble Lord that we will continue to operate the resettlement and community sponsorship schemes, such as Homes for Ukraine and the Hong Kong BNO scheme. We will set out how we do that later on. I will agree to meet, as I have said with the Minister, to hear those concerns, but we will set those things out in due course.
On the Article 8 provisions, we want to try to ensure that it is the Home Office that, according to rules agreed by Parliament, determines how we deal with the European Convention on Human Rights while maintaining our membership of it. Therefore, rather than each individual case being subject to a fresh interpretation of Article 8, we will try and set down some general guidance on that as a whole, which I hope helps the noble Lord with his question.
I add one final thing, which is an important thing for our office. Mya Eastwood, who has been my principal private secretary since 4 July, is leaving tomorrow. I just want to pay my tribute to her, because a lot of work that goes on front of House is supported by officials back of House. Mya has done an excellent job, and I want to put that on the record today before I sit down.
Public Authorities (Fraud, Error and Recovery) Bill
Thursday 15th May 2025
(2 days ago)
Lords ChamberPublic Authorities (Fraud, Error and Recovery) Bill 2024-26 View all Public Authorities (Fraud, Error and Recovery) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 96 Running list of amendments - 15 May 2025 - (15 May 2025)
Baroness Anderson of Stoke-on-Trent
That the Bill be now read a second time.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I am proud to bring this Bill to your Lordships’ House with my noble friend Lady Sherlock. I am grateful for the engagement that we have had with noble Lords on the Bill so far and look forward to working with your Lordships as the Bill progresses. I also look forward to hearing the maiden speech of the noble Baroness, Lady Spielman, which I am sure will be excellent—good luck!
There have always been people who commit fraud. Sadly, this is not a new problem, but over the past decade fraudsters have become increasingly sophisticated in the techniques that they use to steal people’s money, using data, technology and a variety of scams. Banks and similar entities have transformed their ability to spot and stop fraud and to protect their customers’ money. They have invested in new technology and changed processes, but this Government believe that the public sector has not proactively followed their lead. In 2023-24, fraud and error against the public sector reached an astonishing £55 billion. That includes: fraud against our public services, including those who abuse the tax system; fraud by dishonest companies that use deception to win public contracts; and benefit fraud by criminal gangs and individuals. In 2024-25, benefit fraud and error stood at a staggering £9.5 billion a year.
Fraud against the public sector is not a victimless crime. It takes money away from vital public services, erodes trust and harms innocent people. It is ultimately public services that suffer, and it is taxpayers who are the victims of this crime. They are rightly incensed when their money lines the pockets of criminals. It is theft from the taxpayer—from every single one of us. Delivering this Government’s plan for change is possible only if we do more to ensure that taxpayers’ money is protected and spent wisely. The Government made a manifesto commitment that they will safeguard taxpayers’ money and will not tolerate fraud or waste anywhere in public services. This Bill is part of our plan for delivery.
I turn to the detail of the legislation before us. Part 1 of the Bill contains measures that gives the Public Sector Fraud Authority—I will refer to it as the PSFA for the rest of my speech—within the Cabinet Office powers for the first time to tackle fraud across the public sector on behalf of government departments and public bodies that do not have the capability, capacity or powers to do so. Noble Lords will know that the scope of the activity of the state is vast.
Fraudsters will attack vulnerabilities wherever they can find them, and the impact is not just on the state but on real people. For example, in a case referred to the PSFA earlier this year, a firm had received £370,000 in funding to provide skills training, having, it is believed, provided false or inaccurate details to create the false impression that the criteria for the funding scheme were met when in fact they were not. Not only does the fraudster gain, but the money is diverted from people who could legitimately benefit from it. In another example, a grant of £125,000 was awarded to a youth group focusing on community activities. It did not go to the intended purpose but was, it is believed, defrauded. That money would have had a direct impact on the ground in the community, but did not, because we were defrauded, as were that community.
At the moment, however, it is difficult for public authorities that have been defrauded, or the PSFA or other authorities, to take the kinds of actions that the public expect against these and other much larger frauds that take place. It is extraordinary that they cannot get the necessary information to prove the offences and do not have the powers to take enforcement action or recover funds.
Part 1 of the Bill puts this right. It builds the foundational structure for a long-lasting change in how public authorities take action on fraud where they cannot do so now. First, the Bill will provide the PSFA with powers to obtain search warrants from the court to enter premises and seize evidence as part of fraud investigations. So in the skills case I mentioned, the PSFA would have been able to go into the so-called provider’s premises and seize payroll and enrolment records to prove whether it was entitled to the funding. These powers will be used only when approved by the courts, and the police will continue to be responsible for arresting suspects if required.
Secondly, the Bill contains measures for the PSFA to compel businesses and individuals to provide information where there is a suspicion of fraud against the public authority, and to penalise them if they do not. In the youth group case, PSFA could have required business records to be provided using these powers. Separately, the Bill also provides powers to allow the PSFA to request communications from telecom providers using the Investigatory Powers Act 2016, authorised and overseen by the Investigatory Powers Commissioner’s Office. When fraudsters conspire to attack the state, this power will enable investigators to connect to their network and show who is involved. The Bill also enables information-sharing between the PSFA and other parties in the course of a fraud investigation, which is vital in tackling multi-agency cases.
Thirdly, the Bill introduces the power to impose civil penalties on behalf of other public authorities against those who have committed or have tried to commit fraud. These penalties can be used as an alternative method of taking action against fraudsters, compared to often lengthy criminal prosecutions. The introduction of civil penalties for fraud means that there can be meaningful consequences for breaking the law, even when criminal prosecution is not appropriate or viable.
Fourthly, the Bill will introduce new debt recovery powers for the PSFA, so that we can get public money back from those who can afford to repay but refuse to do so. This includes powers to recover fraud-related or error-related debt from an individual’s earnings, using a deduction from earnings order, or directly from financial accounts using a direct deduction order. These are broadly similar to existing powers used across government, including by HMRC. I reassure your Lordships’ House that there will be strong safeguards in place for these powers, to ensure that vulnerability is considered and deductions are affordable and fair. The PSFA’s authorised investigators and officers will be highly trained, to the same standards as the police, for the criminal powers in Part 1 and will be members of the Government Counter Fraud Profession, which sets high standards of professionalism, ethics and integrity that members must meet.
Finally, to address some of the fraud we saw over the pandemic, the Bill will double from six to 12 years the time limit for civil claims to be brought in alleged cases of Covid fraud, giving public authorities more time to investigate complex cases relating to those who exploited a national emergency for personal gain. It is an affront that some people used the time of a national crisis to loot the public purse, and this Government are committed to taking action, of which this is the first step.
Part 2 is focused on addressing fraud and error in the social security system. Here, the Bill will modernise, extend and strengthen DWP’s existing counter-fraud powers, bringing it in line with other bodies such as HMRC. It introduces new powers that will improve DWP’s access to important data that can be used to find and prevent fraud and error more quickly and effectively and, crucially, improve DWP’s ability to recover money from taxpayers. Taking each of these in turn, first, there are comparable powers to those I described for the PSFA, which will allow authorised investigators in the DWP to apply for and obtain search warrants to enter premises and seize evidence relevant to fraud investigations. These powers will be used by specialist DWP serious and organised crime investigators. This will reduce DWP’s reliance on the police and, as in the PSFA’s case, these powers will be used only when approved by the courts; the police will continue to be responsible for arresting suspects.
Secondly, the Bill will update DWP’s information-gathering powers for investigating fraud. At present, DWP has the powers to require information from only a limited list of third parties. This does not include key organisations and sectors that could help to prove or disprove suspected fraud—for example, airlines, which might hold travel records that are relevant to investigations of fraud conducted overseas. To add to that, there is limited ability to require responses to requests to be sent electronically; currently, DWP cannot make someone provide this information digitally. This approach is somewhat outdated in a digital age and underlines that the changes in the Bill are long overdue. The Bill widens who the DWP can compel information from, and it will enable us to require the information to be provided digitally by default. This is comparable to the information-gathering provisions I described for the PSFA earlier.
Thirdly, the Bill makes provisions for the DWP’s new eligibility verification measure, which will enable the department to require banks and other financial institutions to provide crucial data to help identify incorrect benefit payments that people might be getting as a result of not meeting the rules for their benefit—for example, if someone has too much in savings, which could make them ineligible for a benefit, or if they are fraudulently claiming benefits while living abroad when they should be living in the UK. This data will mean that we can identify potential incorrect payments much sooner for key eligibility criteria.
We know that people lead busy lives and sometimes genuine mistakes happen. That is why this measure is so important, as it will help to identify not only potential fraudulent cases that require further investigation but errors too, ensuring that the DWP can correct errors quickly, and preventing people building up large debts that they then need to repay. In response to considerable misinformation about this measure, I want to stress to your Lordships’ House that under the eligibility verification measure, the DWP will not be able to access people’s bank accounts or look at what they are spending, nor will it be able to share any personal information with banks. Furthermore, this data will be considered without the presumption of any wrongdoing. No decision about benefit entitlement will be made from the data gathered through this measure alone; and, crucially, any final decision about someone’s benefit entitlement will always be taken by a human being. The Information Commissioner has noted that this proposal addresses many of the concerns the commissioner held about the previous Government’s proposals.
The fourth element of Part 2 is about broadening DWP’s abilities to punish fraudsters using a financial penalty as an alternative to seeking prosecutions. At the moment, DWP can give financial penalties only in cases of benefit fraud. Part 2 extends our ability to use them in the cases of fraud against any type of DWP payment. For example, if we have a future grant scheme similar to the Kickstart employment scheme, we will be able to ensure that that money could be recouped. This will ensure that more fraudsters committing a wider range of fraud can be dealt with swiftly without going to court.
Finally, the Bill contains new debt recovery powers for DWP. These powers will enable the DWP to recover money in cases where a person owes the department money but is not in receipt of a benefit or in Pay As You Earn employment, where there are existing powers. This will be used only where people repeatedly refuse to agree to affordable voluntary repayment terms with DWP. In these cases, the Bill will enable DWP to obtain from banks the bank statements of these debtors, to verify that they have sufficient funds to pay. Having considered this information, DWP debt enforcement agents will determine what is an affordable deduction, with maximum limits for regular deductions set out in the legislation. DWP can then recover the money from their bank accounts, through either a one-off lump sum or regular deductions. This will be done in a fair and manageable way, with time for the person to make any representation, and the right to appeal. No one will be pushed into hardship because of this action.
As a last resort, if someone owes DWP more than £1,000 and puts their money out of reach of our other recovery methods, DWP can apply to the court to disqualify that person from driving for up to two years. This is similar to the powers the Child Maintenance Service has been able to use for the last 25 years in cases where a parent repeatedly refuses to make payments to support their child, and it has proved somewhat effective in encouraging debtors to engage with the process. A court will not be able to make a DWP disqualification order if it considers that the person needs a driving licence for work or for another essential purpose, such as if the person is disabled or a carer. This disqualification order will always at first be suspended, and repayment terms will be set by the court. A person will be disqualified from driving by the court only if the repayment terms the court has set are not met without good reason. This measure is for people who have repeatedly refused to engage with DWP’s debt management system and have actively frustrated the process of debt recovery. It is an important power that is designed to bring debtors to the table to agree voluntary, affordable and sustainable repayment plans with the DWP.
We are clear that an individual keeping money to which they are not entitled is serious and will result in serious consequences. These powers ensure fairness in debt recovery, seeking to guarantee that those who are no longer on benefit or in paid employment are not treated more favourably and able to evade repayment of money owed to the public sector.
Parts 1 and 2 come with strong new safeguards, including provision for independent oversight and reporting. The Cabinet Office and the DWP will commission His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services to undertake inspections on the use of the new investigations powers that both departments are using. The DWP will make a similar arrangement with His Majesty’s Inspectorate of Constabulary in Scotland and the Independent Office for Police Conduct will handle any serious complaints that arise from the use of the new powers of entry, search and seizure for the PSFA and the DWP. The Police Investigations and Review Commissioner will deal with similar matters for the DWP in Scotland.
Separately, the Minister for the Cabinet Office will appoint an independent person to inspect the PSFA enforcement unit’s use of the powers in the Bill. Their work will complement and build on the oversight provided by the inspectorate. The Secretary of State for Work and Pensions will also appoint an independent person to oversee the use and effectiveness of the DWP’s new eligibility verification measure in line with the legislation and the code of practice. Both independent persons are required to provide reports to respective Ministers which must be published and laid in Parliament.
Codes of practice will accompany relevant parts of the Bill and, where appropriate, will be consulted on. Drafts of relevant codes will be made available to noble Lords ahead of Committee. Across the Bill, provision is made for persons subject to the powers to make representations, request reviews or appeal against decisions. These routes will be clear and provide opportunities to challenge the Government’s approach.
Many of the measures in this Bill are not novel to government. Instead, they modernise existing powers and bring the DWP and the PSFA in line with other public bodies, such as HMRC. Overall, this Bill will help deliver the biggest crackdown on public sector fraud in a generation. It is expected to save £1.5 billion over the next five years as part of wider action in the DWP’s efforts to save £9.6 billion.
The Bill delivers the biggest upgrade to the DWP’s counterfraud powers in more than 14 years. It brings in new powers to tackle fraud right across the public sector by empowering the Public Sector Fraud Authority, and not before time. Our approach is tough but fair. It is tough on criminals who cheat the system and steal from taxpayers, and tough on people who refuse to pay back money, but fair on claimants, by spotting and stopping errors earlier and helping people to avoid getting into debt. It is fair on those who play by the rules and rely on the social security system, and it is fair on taxpayers, by ensuring that every pound is spent wisely, responsibly and effectively on those who need it. I beg to move.
Baroness Finn (Con)
My Lords, it is both a pleasure and a privilege to open my remarks by looking forward to and welcoming the maiden speech of my noble friend Lady Spielman. Throughout her career, she has embodied the highest ideals of public service: courage in the face of complexity, integrity under pressure and an unswerving commitment to the public good. We are fortunate to have her voice in your Lordships’ House.
The Public Authorities (Fraud, Error and Recovery) Bill arrives with a plain but powerful ambition: to protect public money from fraud. On this side of the House, we welcome that ambition, support it and wish to see it succeed. I have a note here to thank both Ministers, but I genuinely mean it when I say how wonderfully constructive they have been and how massively informative in the briefing sessions. I also thank the officials, who have patiently responded to numerous queries and questions posed.
But let me be clear: support for the goal must not mean silence about the means. As the Minister said, fraud is theft from the taxpayer and an insult to every citizen who plays by the rules. Every pound stolen is a pound denied to pupils in our classrooms, patients in our hospitals and families in need of homes. To tolerate fraud is to tolerate contempt for those who entrust us with their hard-earned money. We must act, but we must act wisely.
Before I entered your Lordships’ House, I worked across several departments of government, including the Cabinet Office during the coalition years when my noble friend Lord Maude of Horsham led vital reforms to introduce efficiency savings in government. We learned then what remains true now: fraud is not merely a technical failure; it is a cultural one. We encountered resistance. It was not indifference exactly, but something worse: a quiet preference for ignorance; a fear that exposing long-running frauds might implicate those who should have stopped them; a culture in which it was safer to overlook than to uncover. Ambition became cautious and initiatives dwindled to a timid “proof of concept” exercise. Today it is called “test and learn”, yet 15 years later one wonders how much more learning we really require.
What of the Cabinet Office’s role in this Bill? The Government propose granting expansive new investigatory and enforcement powers to the Public Sector Fraud Authority within the Cabinet Office. These powers include the authority to compel sensitive financial disclosures, seek court warrants to enter premises and seize evidence, access personal bank records without any duty to inform those whose accounts are being accessed and impose substantial penalties. All such powers are to be exercised administratively by officials ranked no higher than higher executive officer and without explicit ministerial authorisation.
Clause 3 permits officials to compel citizens to reveal extensive financial details. Clause 7 grants powers akin to those of police to seek warrants for searches and seizures. Clauses 50 and 53 enable officials to impose civil penalties without sufficient scrutiny. Yes, the Bill proposes an independent reviewer under Clause 64 to oversee these powers, but a closer look reveals that this reviewer possesses no statutory authority to halt or reverse potentially abusive or inappropriate decisions. Even more concerningly, their terms, resources and remit are entirely controlled by the Minister whose decisions they are tasked to oversee. Such arrangements risk creating oversight in name only—an illusion of accountability rather than genuine scrutiny. The Cabinet Office’s enforcement unit, we are told, will lead this charge. But who are they? How many officials are there in this unit? To date, we have been told it is 25, but will this information be published? What expertise do they possess and what data will they use? These questions remain unanswered.
It remains entirely unclear precisely what types of fraud these sweeping new powers will enable the Cabinet Office to investigate. The Government’s Explanatory Notes suggest that the Public Sector Fraud Authority will focus on fraud beyond the traditional domains of HMRC and the DWP. Yet this raises an immediate bureaucratic contradiction. If departments currently lack the powers or resources to tackle such fraud effectively, surely the logical step would be to empower them directly. Conversely, if departments already possess sufficient powers but prefer not to use them, we risk creating a perverse incentive for them to keep straightforward fraud cases in-house while transferring politically sensitive, legally complex or reputationally hazardous investigations on to the Cabinet Office—effectively outsourcing responsibility for difficult decisions.
Even more troublingly, the Cabinet Office is under no statutory obligation to accept cases referred by other departments, and the Government have provided no clarity at all regarding which types of fraud the Cabinet Office intends to investigate or decline. Compounding this confusion, the Cabinet Office has recently announced significant staffing cuts. We therefore face the surreal scenario of departments attempting to offload their most complicated and resource-intensive fraud cases on to another department that is undergoing headcount reductions and will therefore be ill equipped to pursue them. The inevitable outcome will be bureaucratic gridlock, with challenging cases bouncing endlessly between departments, responsibility blurred, accountability evaporating and serious fraud quietly slipping into administrative oblivion.
The scale of the problem we face is staggering. The National Audit Office reports that detected public sector fraud amounted to £3 billion last year, with the true scale estimated at possibly £28 billion. Benefit payments alone lost £10.2 billion to fraud and error, while temporary Covid schemes were exploited to the tune of £10.5 billion. Yet the Bill’s impact assessment forecasts just £22.8 million as a best-case scenario in financial return from the Cabinet Office’s new powers. We cannot allow a situation where the Cabinet Office is allowed to act like a second-rate bailiff, extracting modest sums through draconian means while ignoring the massive haemorrhage of taxpayer funds that continues in plain sight.
This side of the House supports the fight against fraud, but we will not support it blindly. Our goal must be a lean, sharp, just system that deters dishonesty, recovers stolen funds and never forgets the dignity of the citizens it serves.
I look forward to today’s debate and to Committee, where this House can do what it does best: improve legislation, ensuring that it not only sounds good in a press release but works effectively in the real world. We share the Government’s ambition and we welcome the Bill’s purpose, but we owe taxpayers something far better than good intentions. We owe them a system that truly works.
Baroness Kramer (LD)
My Lords, this is not my usual field, so I shall be listening with great interest to the various speeches, including the maiden speech of the noble Baroness, Lady Spielman. Stamping out public sector fraud, including public authority and welfare fraud, is clearly a priority. These are despicable crimes that undermine our public services and, in the end, hurt the most vulnerable. However, this Bill, at least to my eyes, has some serious flaws.
Part 1 focuses on investigation of fraud outside the tax and benefits system. As I read it, I was surprised to find that it has nothing to say on whistleblowing. I am certain that, without a powerful whistleblowing framework that keeps whistleblowers safe from retaliation and leads to investigation, most bad actors will escape investigation. If the Minister doubts me on the importance of whistleblowing, I ask her to look at the speeches by Nick Ephgrave, director of the Serious Fraud Office, who is even willing to incentivise whistleblowers because they are so vital. In April, he told the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax that his number one need from parliamentarians is to get him more whistleblowers.
Whistleblowers identify where in the haystack wrongdoing is hidden and provide vital evidence. The noble Lord, Lord Livermore, is more frequently the Minister engaged in debates in which I am involved. In response to a question from me in February, he said:
“I met Tom Hayhoe, the Covid Counter-Fraud Commissioner … he told me that he is considering a whistleblowing mechanism to enable the public to draw attention to abuses they are aware of”.—[Official Report, 5/2/25; col. 690.]
I ask the Minister to go back and look at this issue, because, if she talks more broadly to investigators, she will discover this is a critical area which needs to be seized upon immediately.
On the second part of the Bill, I take on board the concerns of UK Finance that the Bill risks not achieving its objectives. The role given to banks to verify eligibility for benefits and recover money seriously needs a rethink to provide proper customer safeguards. It makes no allowance for people of low financial capability, for example, nor even for those hiding funds to escape domestic abuse. I am really concerned that it creates two classes of citizen: those with full rights in our society, protected by the FCA’s consumer duty, for example, and a lower class, defined as benefit recipients, who are investigated without cause and treated as a suspect class.
Listening to the finance industry, it is absolutely clear that bad actors, especially the gangs, will have no difficulty at all working around all the new rules and programmes. The Minister must be aware that any serious crackdown on fraud has to tackle the organised crime gangs who conspire to commit welfare fraud on an industrial scale. Last year, one gang alone was convicted of defrauding £53 million of universal credit. That was a very rare success, unfortunately. Since I cannot find it anywhere, can the Minister say today what percentage of welfare fraud is the work of these organised gangs? I suspect that the number is very large.
The main tool in this Bill is to initiate fishing expeditions and, from wide experience across the fields of investigation and fraud, they are the laziest and most ineffective way of fighting wrongdoing. If anyone doubts the capacity of the DWP to get schemes such as this one wrong, look at the carer’s allowance scandal, which particularly exercises my colleagues. My noble friend Lord Palmer of Childs Hill will elaborate, but 136,730 people are at present caught in outstanding debt for carer’s allowance overpayments which were not their fault, but for which their lives are being devastated. I fear that, in the way this Bill is crafted, they and people like them will be among the primary targets, even though they never actually committed fraud; they just failed to understand impossibly complex rules or to identify the DWP’s mistakes.
The DWP must of course crack down on fraud, but it needs to be informed by best practice. On that basis, I believe this Bill needs a significant rethink.
Lord Vaux of Harrowden (CB)
My Lords, it is always a pleasure to follow the noble Baroness, Lady Kramer, who I think was rather underplaying her expertise in her comments. There is a certain level of déjà vu about this Bill, as has been mentioned. Many of us spent a lot of time debating its predecessor, under the previous Government, and it is nice to see at least some of the band getting back together.
I acknowledge that this reincarnation has been significantly improved from the last version, and the changes go a long way towards dealing with many of the issues that Members from across the House raised last time round. I hope that my desire to clamp down on fraud is well known, and I completely understand the need to try to reduce the roughly £10 billion in annual losses to fraud and error that arise in the social security system. So I broadly support the strengthening of the powers set out in Part 1, although I share some of the concerns raised by the noble Baroness, Lady Finn.
I cannot help but suspect that concentrating on the capabilities and competence of the agencies that should be investigating and recovering fraud losses would be likely to achieve more. The utter uselessness of the National Investigation Service in recovering Covid fraud losses is a good example. It seems to have cost more to run than it has recovered, and I note from today’s Times that it is about to be closed down.
Most of my comments will concentrate on Part 2, which relates to the social security aspects. First, there is the question of the proportionality of the measures. I have been struggling to understand the impact assessment; like most of these things, it is an awful lot of pages and not a lot of information—it really is time the Government got their act together on impact assessments. As I understand it, the measures will initially raise less than £180 million a year, rising to £500 million after 2030. I would be grateful if the Minister can confirm the actual number, if I have got that wrong. Set against that are the direct costs to the department of around £42 million per year, and the costs that the measures will impose on the banks that will have to provide the information, which the impact assessment makes no attempt to quantify. Can the Minister provide any update on what those costs are expected to be and whether the banks will be reimbursed for them?
That net recovery is a very small proportion of the estimated losses: 2% to 5% recovery is a very small return when set against the imposition of what is a very intrusive power that will force banks to scan all their accounts for benefit payments and eligibility indicators. It is worth pointing out that this scanning requirement is not a one-off; it is potentially effectively continuous for periods of up to 12 months, which can be extended as and when. Let us be clear that, while the banks will provide information to the DWP only on those accounts and connected accounts which meet the criteria set out, in order to achieve that the banks will have to scan all accounts to find the information. The Government already have significant powers. What assessment have they undertaken of what could be achieved if those existing powers were used more effectively?
It would be much better to prevent fraud and error in the first place, rather than after the event. Is the Minister satisfied that the DWP is doing everything reasonable to that effect? Levels of fraud and error seem extremely high. Surely there is more we could do up front, which might remove the need for some of these changes. A redesign of benefits and claim processes, such as removing cliff edges—the carer’s allowance is a good example of that—or making the process clearer and easier could go a long way to reducing claimant error. For example, we know that the pension credit forms are so long that they put people off even applying.
Then there is the philosophical question of carrying out blanket surveillance without suspicion. This raises the danger of making benefit claimants feel like second-class citizens and spied on, and that we inherently distrust them. Disability groups have already raised this concern, and today’s report from the Work and Pensions Select Committee reinforces it. According to its chair:
“We heard evidence that the process … of engaging with the DWP … too often led to mental distress … Deep-rooted cultural change of the DWP is desperately needed to rebuild trust”.
It is quite hard to see how the measures in this Bill will contribute to rebuilding that trust. Another philosophical question is whether it is right to treat fraud and error in the same way, particularly when the error is by the DWP and not by the claimant.
The Minister rightly referred to some of the new safeguards that have been introduced into this incarnation of the Bill, and I will probe a few of them. A number of codes of practice must be issued under the Bill before actions can be taken. I was going to ask, “When can we see those?”, but I am very grateful that the Minister has confirmed that we will see them before Committee. Instead, I just ask: can they be sent directly to those of us taking part in this debate, and as soon as possible before Committee, so that we have time to digest them?
The Minister has explained that only very restricted information can be requested from the banks, and I agree that that is a significant step forward from what we had before. However, that could be undermined by the enhanced investigatory power clauses, which will allow much more intrusive information to be to be obtained if DWP has reasonable grounds for suspicion that a person has committed an offence. Does the existence of an eligibility indicator under the verification processes constitute reasonable grounds for suspicion? If that is the case, it would drive a coach and horses through the safeguard of restricting the information in the first place.
Related to that, what are the consequences of an eligibility indicator being raised? What further investigations need to be carried out before, for example, a benefit is put on hold? I have heard a number of times—it was repeated earlier—that a human must be involved in any such decisions, but I can find nothing that says that in the Bill. Can the Minister point me to where that is? I have also heard nothing about what level of human interaction that will constitute and what level of seniority and qualification is required.
I also welcome the introduction of the independent reviews of the exercise of these new functions. However, the provisions for these independent reviews are somewhat lacking: they do not set out the timings, they are very limited in scope and there is no definition of what would constitute an “independent person”. In particular, the independent reviewer will not be required to opine on the proportionality of the powers and their use, which is a very serious omission. I am sure that we will revert to those matters later in the process.
The eligibility verification rights are limited to three specific benefits—universal credit, employment and support allowance, and pension credit—which, again, is another improvement on the previous version. I was quite surprised by the inclusion of the last one, as the main issue with pension credit is that it is woefully under claimed, rather than there being too much money being paid out. I am interested to understand why that was included. Those three can be added to by regulation, so are there any plans for them to be added to?
There is also an obvious loophole in the eligibility verification process, because it applies only to linked accounts within each single bank. A fraudulent claimant can easily avoid that by having accounts in different banks. Does that mean that deliberate fraud is unlikely, in practice, to be identified under this Bill? That would somewhat reduce its point. Has that loophole been taken into account when calculating the expected savings?
As the noble Baroness, Lady Kramer, mentioned, the banking industry has also raised some concerns about the Bill, including—among other things—potential conflicts with its existing financial crime duties; possible tensions between the Bill and firms’ existing consumer duty and vulnerability guidance; the diversion of resources from wider economic crime capacity; and issues around safeguards for bulk data access. I would be interested to understand what meetings the Minister has had with organisations such as UK Finance to ensure that such concerns have been, and will be, addressed.
There are lots of other matters that I could raise, but given the time, I will raise just one more: the driving licence disqualification clauses. That seems extremely arbitrary, so I would like to understand more about the logic that was applied to that and what other measures might have been considered.
I acknowledge that the Bill has been greatly improved from its previous incarnation, but quite a lot of issues remain. The Minister has been generous with her time and, as always, constructive in her approach, so I very much look forward to further discussions and debates as we go through the next stages, as well as to the maiden speech from the noble Baroness, Lady Spielman.
The Lord Bishop of Lichfield
My Lords, I am very glad to see the name of the noble Baroness, Lady Spielman, on the speakers’ list for this debate; I look forward to her maiden speech and her future contributions to this House.
We all need to acknowledge the understandable frustration, felt from government downwards, about waste in public spending and fraud perpetrated at the public’s expense. It is right that expenditure be managed carefully, ensuring that people receive support when they need it, and eliminating fraud and error within the system as far as that is possible.
At the encouragement of my right reverend friend the Bishop of Leicester, who much regrets that he cannot be in his place today, I will focus on the second limb of this Bill, which concerns individual claimants of social security. This is a matter of morality. To support people into work, where they are able; to ensure that people can enjoy an acceptable standard of living when they cannot work or to top up their low income; and to deliver a fair and sustainable social security system now and in the future: these are all moral imperatives. Addressing fraud and error—ensuring that government can recover money when required—is also a morally vital matter of maintaining public consent, which should be a welcome outcome of this proposed legislation. Put simply, our social security system must both be fair and be perceived as fair by the public.
There is clearly work to do to rebuild trust in the system, which includes the trust of claimants that support will be there for them when they need it, and that they will always be treated with dignity. As one ingredient of a fair system, we need to ensure that people receive the benefits to which they are entitled. The Government’s efforts to encourage take-up of pension credit is a good recent example of that.
There may be circumstances when benefits are left unclaimed for good reasons, but most often this occurs when people do not realise there is support available to them. If this is about access to information, we must do more to inform. If it is about stigma, we must state clearly that our social security system, like our schools or our health service, is a public good on which people should not be ashamed to draw when required.
I welcome the department’s plans to review and improve its safeguarding practices through wider reforms on disability benefits. Ensuring that people are always treated with respect is a necessary step towards earning trust, and it is particularly timely—as the noble Lord, Lord Vaux, pointed out—that this debate coincides with the publication of the Work and Pensions Select Committee report on safeguarding claimants. Fraud, error and recovery will inevitably overlap with the department’s safeguarding responsibilities, and that committee’s report highlights some of tragedies that have happened to people—made particularly vulnerable by their circumstances—who interact with a system that can often feel complicated and impersonal. I wish the Minister and her department well in reviewing safeguarding and in making the important changes needed for the sake of those people.
The expansion of social security means that millions of people are potentially within the scope of this Bill. Half of all children live in a family that interacts with the system in some form, and there is concern that expanding the DWP’s recovery powers through direct deduction orders might risk affecting children at risk of poverty. It would be good to have the Minister’s reassurance about the affordability assessments to be made before recoveries occur.
There is considerable concern too, already voiced in this debate, about removing driving licences and the comparatively low threshold at which this could happen, even if court approval must be sought. This too could impact children who are not at fault for the actions of their parents, as they might miss out on activities, opportunities and vital services if their parents are no longer able to drive—this is particularly an issue in rural areas.
At a time of competing priorities and limited financial resources, a Bill that focuses on cracking down on fraud has arrived in this House before the publication of the child poverty strategy. In the diocese where I serve, I hear more about the latter than the former, and the Government should be wary that the Bill does not inadvertently limit their room for manoeuvre in reducing child poverty.
I also wish to express some concern or caution about the risk of overreliance on automated algorithmic systems to monitor the bank accounts of welfare recipients. With any reliance on automated systems, we know that there is a chance for error, presenting a risk of false positive matches. Errors resulting in wrongful benefits investigations would have profound consequences for some of the poorest people in society, disproportionately impacting disabled and elderly people, carers, single parents and those seeking work. While occasional human error is inevitable in the maintenance of a complex system, there is a need to ensure that we harness technology appropriately and always involve people in potentially sensitive decisions affecting them.
The Government have included in the safeguards for the Bill that there will be human intervention in further investigations—of course, I welcome that—but I urge them to clarify how they will ensure that there is indeed human oversight and whether a human being will be involved in the initial decision on whether to investigate an individual.
At their heart, the issues we are considering today are not only about money, they are about people. The Bill presents an opportunity to deal with one challenge facing the social security system, and I look forward to hearing how it ties in with other important issues in that area that the Government are seeking to address.
Baroness Alexander of Cleveden (Lab)
My Lords, I too look forward to the maiden speech of the noble Baroness, Lady Spielman, and I congratulate her on her having a debate to herself in that regard.
My antecedents rather precede me: I am a Scot, and we worry about money. I am a Presbyterian Scot, and we worry even more about money. Finally, I have endured more audit committees than I care to recall. I say to the noble Lord, Lord Vaux, that I was not here the last time he got the band together. As a newbie, I am glad to come to this debate.
I concur with the right reverend Prelate, who we have just heard from, on the underlying rationale of the Bill: the importance of fairness, building trust and upholding the integrity of the system. I want to explain why I think that has come into question. The public want prudence from the Government, an attention to waste and a tackling of the criminal gangs. The Bill is not the performative legislation that we have perhaps seen too much from all sides over the years. It is about modernising the legal framework, tackling the criminals and building confidence in the system and reliability and fairness into our social security system.
I concur with the noble Baroness, Lady Finn, that tackling fraud is as much a cultural issue as a legislative one, but I also disagree with the noble Baroness, Lady Finn, that we should not concentrate power in the Cabinet Office. It is not an error to build specialist expertise to support cross-government action. Indeed, building specialist expertise is an enabler of broader action.
It has to be right that all of government has access to the powers that the DWP and HMRC already have. It has to be right that the PSFA—I will not trouble your Lordships with the full acronym—should have the statutory powers and not be reliant, as it is now, on whoever brings information to its attention.
It is also right—and it has not been mentioned much today—that the Bill strengthens the specific enforcement powers for the £10 billion lost through Covid-related fraud. I will share just one anecdote with the House on this matter. I am, as declared in my register of interests, the British Council’s vice-chair. In Covid, when our teaching exam centres were closed, the FCDO provided a Covid-related liquidity loan of £200 million. The Treasury now wants it repaid in full, and the British Council happens not to have the resources to repay. So at this week’s board meeting we authorised cuts, closures and a VS scheme to help pay back that Covid-era loan. Those British Council employees who last month applied for the VS scheme want to know that the Government are being equally assiduous in chasing down the dodgy companies which deliberately mis-sold PPE to a nation at the heart of a national emergency.
I turn to Part 2 of the Bill, which I had assumed would be the most controversial. I want to address the issues we have heard about concerning the scale of fraud. The key insight, as others have said, is that fraud is low for most benefits: for personal independence payments it is zero; for attendance allowance it is zero; for the state pension it is 0.1%; for incapacity benefits 0.3%, and so on. The fraud rate for every benefit sampled is below 4%, with the exception of universal credit: for universal credit, the fraud rate is 11%. There is limited fraud in the system, but universal credit stands out. The overall scale of overpayment each year is £10 billion: three-quarters relates to fraud and 88% relates to universal credit. That is the issue that needs to be addressed. It has to be right to bring enforcement into the 21st century and not require the DWP, as the Minister has said, to rely on 20 year-old regulations that simply are not fit for purpose in a digital age.
They are also not fit for tackling organised crime. Here, I talk about the benefit gangs. This time, I turned away from the dry DWP statistics, and I turned to the court reports, and they are both frightening and illuminating. In May last year, just after Rishi Sunak announced the election and when the business managers in this place and in the other place were horse-trading which legislation would make it onto the statute book, in that very week, at Wood Green Crown Court, there was the case of five defendants who admitted stealing over £50 million from the taxpayer. It involved 5,000 to 6,000 fraudulent universal credit claims, with some people living, as we have heard, in Bulgaria. The putative claimants received the money for just two months, and then the gang kept the rest for themselves. These false claims were backed by an array of forged documents, burner phones and photoshopped pictures. The raids on one of the defendants’ flats turned up £750,000 in cash. It was billed as the UK’s biggest ever benefit scam.
However, this was not an isolated incident. In 2022, there were similar court reports and more bogus benefit claims and money laundered through cryptocurrency transactions. In fact, in late 2022, the Public Accounts Committee was demanding action—finally, here we are.
I will sum up the concerns that have been raised about the specific enforcement measures in the Bill. It is common ground that the DWP needs to harness data. It is almost common ground that the investigative legwork should not fall primarily to the police but to trained investigators. It is largely common ground that we need to move away from self-reporting by claimants as the basis for eligibility. I say to the noble Lord, Lord Vaux, that, quite simply, the public want the Government to check claimants’ eligibility.
So the question is whether we can be assured of the proportionality and effectiveness of the eligibility checks. Many of the fears that have been raised can properly be allayed, but there are one or two that I want to touch on. The DWP will not be able to access bank accounts, yet we must tackle the gangs. I disagree with the fatalism of the noble Baroness, Lady Kramer, that the gangs will evade anything that we do so we should not bother with deeper investigatory powers. The reality, as we all know, is that fraudsters have, in recent years, become increasingly sophisticated in the ways that they steal people’s money. The banks have risen to that challenge when it comes to their own customers, and we are simply asking them to step up in the same way on behalf of the taxpayer.
I urge the Government—this has come up—to be careful in the selection of the individual who oversees eligibility verification measures to ensure that they are independent. All noble Lords know that it is not easy to criticise a government department from the inside. Look at the experience of prison inspection over two decades: it is a challenge to speak up. I suggest that it is a role for a courageous leader, and I encourage the Minister, my noble friend Lady Sherlock, who will sum up, to look for someone like herself. In her former life, on the advocacy side, she was a fearless champion of fairness. In her summing-up remarks, I would welcome her assurance, as we have heard today, that the independent person’s annual report will be laid before the House and properly debated.
In conclusion, it must be right that fraud in the public sector is an evolving challenge and that legislation needs to keep pace. It is right to enable better recovery where public money has been stolen or overpaid. People want to see us tackle fraud, waste and criminality. By tackling those who exploit the system and recovering the money for those who need it, we will, as the right reverend Prelate said, uphold the integrity of the system and trust in government. I commend the Bill to the House.
Lord Garnier (Con)
My Lords, it is a pleasure to follow the noble Baroness. I hope I match some of her enthusiasm, but she may be disappointed.
I begin by drawing attention to my practice at the Bar, which includes acting for and against the Serious Fraud Office. It additionally involves advising on civil fraud matters. I am also the patron of the Fraud Advisory Panel—a charity with offices at and financially supported by the Institute of Chartered Accountants in England and Wales, and supported by a number of law, accountancy and forensic investigation firms, and related professionals and academics. In essence, it exists to improve professional and public awareness of fraud and what can and should be done about it.
Last month, the Home Office Minister, the noble Lord, Lord Hanson of Flint, kindly gave the keynote address at the FAP’s annual fraud conference and I am very grateful to him. I hope that noble Baronesses on the Treasury Bench will pass on my thanks for his taking the time and trouble to set out the Government’s thinking and intentions on tackling fraud.
I will not do much more today than express a few platitudes and then, in agreement with my noble friend Lady Finn, remind us to be careful what we wish for. As the noble Baroness, Lady Alexander, indicated in her powerful speech, fraud is an insidious crime. Because there are no broken bones or blood on the carpet, because it frequently requires a high degree of ingenuity and because, as often as not, the fraudster is mysterious—perhaps hiding in plain sight or far away behind a computer screen—the crime of fraud does not seem to attract public disapproval in the same way as crimes of violence. I regret that, sometimes, fraudsters are admired for their brains while their criminality is forgotten or ignored. In short, fraud is a nasty and brutal crime that can ruin lives, hurt the vulnerable and cause untold economic misery. Whether it is committed, and its consequences felt, here or abroad, it is universally to be condemned, as are the dishonest spivs and criminals who carry it out. Fraud accounts for 40% of crime in this jurisdiction.
In welcoming my noble friend Lady Spielman and in looking forward to her maiden speech, I warn her that I have, over the years, become something of a cracked record on the subject of economic crime and the need to increase the weapons that this jurisdiction has at its disposal to deal with it. I have argued long and hard, but not always successfully, for the increase in the ambit of the criminal “failure to prevent” regime. The Economic Crime and Corporate Transparency Act 2023 introduced provisions relating to the corporate failure to prevent fraud offences. Those provisions will come into force this coming September, so no one could accuse this or the previous Government of undue haste.
However, those provisions will affect only large organisations, defined as those meeting at least two of three criteria: a turnover of over £36 million, a balance sheet of over £18 million, or more than 250 employees. That, as I have never been slow to point out, covers only 0.5% of the United Kingdom’s corporate economy and is the equivalent of prosecuting only burglars taller than six feet six. I apologise to the noble Lords, Lord Vaux and Lord Cromwell, and to the noble and learned Lord, Lord Thomas of Cwmgiedd, because they have heard me make this tired joke endlessly, particularly during the Committee and Report stages of the Economic Crime and Corporate Transparency Bill. I am sure that they are heartily sick of it, but I am still unconvinced that that limitation was either necessary or sensible.
There are many large artillery pieces before us in the Bill, which are designed to smash fraud in the welfare system, in government more widely and in other sectors. But do those guns come with gunners and shells? In imperial China, the warlords who fought their local rivals knew that they could succeed because they had no fear of an empty cannon. If their revolt was against the Emperor’s rule, they could comfort themselves with the thought that heaven is high and the Emperor is far away. Local and effective action is required to defeat fraud. Is this Bill, like most criminal justice Bills, far too long, overcrowded with extraneous provisions and designed for its rhetorical effect rather than to improve the investigation and prosecution of fraud?
Until the police outside the City of London Police are once again resourced, staffed and trained to understand and deal with fraud—to gather the evidence and to present it coherently to the Crown Prosecution Service for it to prosecute—the types of fraud that do not currently attract the attention of the SFO, which is concerned with large and complex financial crime, will, I fear, continue to go largely ignored or be brushed aside. The duty officer at the police station will continue to sigh sympathetically and simply tell the poor victim to see a solicitor. If a large proportion of the 40% to which I have referred is beyond the capacity of the police to cope with, we will have a problem and your Lordships’ House should require some convincing that the measures in the Bill, well intended as they may be, will hit the target. Have the Government audited the work of the Public Sector Fraud Authority and do they have any empirical evidence that increased Cabinet Office involvement will achieve what is promised by the Bill?
The noble Lord, Lord Vaux, in his delightfully quizzical way, made some highly important and effective points, wrapped up in questions that this Government must answer. We all look forward, either later today or in Committee, to his receiving the answers.
Finally, I refer to some arguments raised in the other place about state interference in the private affairs of others without adequate due process. To take just one example, the now Independent but former Labour Member of Parliament, Zarah Sultana—so no political ally of mine—complained when the Bill was being discussed there that there are
“powers in the Bill that force banks to trawl through our private financial data, scanning for indicators of fraud and error—indicators that are not publicly disclosed—and flag those individuals to the Government. These powers will allow the Department for Work and Pensions to seize money directly from bank accounts without due process, suspend driving licences and even search properties and personal devices. They are not the hallmarks of a free and democratic society but the tools of an Orwellian surveillance state”.—[Official Report, Commons, 3/2/25; col. 611.]
Whether that Member of Parliament is exaggerating or not and whether she is right or wrong, the Government must meet those arguments with seriousness and persuade us that they are behaving in a proportionate and humane fashion in putting those measures into the Bill.
Like my noble friend Lady Finn, I am concerned that Ministers are giving themselves powers to take punitive actions without the intervention of the courts or adequate ability for respondents to make representations on their own behalf. This is not just a question of process but of constitutional propriety.
Finally—this question has been raised on a number of occasions this afternoon—will the Department for Work and Pensions’ driving disqualifications affect the cost of drivers’ post-disqualification vehicle insurance? We need clarification on this so that we are not double penalising those who fail to pay their DWP debts.
Lord Rook (Lab)
My Lords, I support the Bill and thank my noble friend Lady Anderson for her opening remarks. I am grateful also to other noble Lords for the sizeable support for the urgency of our situation and the aspirations of the measures in the Bill. I also look forward to the maiden speech of the noble Baroness, Lady Spielman, in just a few moments.
A hero of mine once pointed out to me that all financial documents are moral documents, and all financial policies are moral policies. While the measures that this Bill seeks to address are clearly fiscal, the motivations are rightly and justly moral. In the time available I will limit my remarks to the first part of the legislation.
I spent much of the Covid pandemic working with charities and churches, faith communities and local community groups, supporting the most vulnerable members of our community. While these organisations spent huge amounts of time and money to ensure that neighbours had food and pharmaceuticals, and worked to reduce loneliness and isolation and increase take-up of the Covid vaccines—among other heroic acts of service—other, unscrupulous actors took every opportunity to pick the public pocket, fraudulently redirecting essential emergency funding, purposed for the most vulnerable, into their own get-rich-quick scheme.
In a tragic turn, some of the same charities and community groups that saved lives in the pandemic have not themselves survived the Covid recovery. While these groups faced increased costs and diminishing donations, even greater demand for their services and near devastating cuts in government funding, the vast majority of those who defrauded the Government continue to enjoy the benefit of their ill-gotten gains, collectively to the tune of almost £10 billion.
Although, according to the NAO, more than £4 billion was lost through fraud and error through the Bounce Back Loan Scheme, and almost the same amount through the Coronavirus Job Retention Scheme, for many charities bouncing back has been altogether more difficult, and in some cases, impossible. In the longer term, many former employees in voluntary sector and civil society organisations have not retained their jobs and have been subject to redundancy. More worrying still, as the noble Baroness, Lady Finn, remarked, a criminal culture of fraud has been cultivated during and since those Covid years. The National Audit Office cites that this type of fraudulent activity has only grown in the four years since, and without action, it will clearly continue to do so for some time.
Decisive action is clearly needed, and the measures outlined in the Bill are precisely what is needed. I agree wholeheartedly with my noble friend Lady Anderson when she says that this legislation is both “tough and fair”.
The measures in the Bill are timely and necessary. They will enable the Cabinet Office to deal more effectively with cases of fraud and error outside of the benefits and tax systems. I agree with the noble Baroness, Lady Alexander, that it makes a great deal of sense to give these powers to the Cabinet Office, and to develop the necessary expertise to deliver them. These powers and processes, readily available to certain other government departments, will provide the Cabinet Office and Public Sector Fraud Authority with the capacity they need to pursue those who perpetrated Covid fraud, along with other instances in the future.
I hope that, at a time when all noble Lords are anxious to protect the public purse, this legislation offers a route towards effective action and an efficient means of redress. By providing the Cabinet Office and the PSFA with the necessary powers for information-gathering, dissemination of information, search and seizure and the collection of communications data, we will enable the Government rightly and fairly to identify where significant fraud has taken or is taking place.
By providing the rights and approving the methods by which to recover these moneys lost to fraudsters, and by providing a framework for Ministers to impose civil penalties, we empower the Government to take action to recoup losses and ensure that justice is done. Furthermore, as has already been pointed out, if banks are using ever more sophisticated digital resources and capabilities to reduce the painful impact of fraud on individual members of the public, it follows that government should work with banks to reduce the negative impact of fraud on the public more broadly.
By prolonging the timeframe within which Covid fraud can be investigated and the perpetrators dealt with, we can maximise the moneys returned to the public purse, bring to book those who continue to benefit from a crime against their country and their neighbours, and send a clear message that a toxic culture among some, whereby fraud is considered a lesser crime, will not be tolerated—without breaking bones or spilling blood, as the noble and learned Lord just said. As I understand it, only £1.5 billion of the Covid fraud moneys has so far been recovered, which means that there is a lot more to be done and a lot more time is needed.
Finally, as already stated, these measures are tough and fair. The Government’s insistence on oversight and safeguarding requirements is welcome and necessary. It clearly makes sense to use legislation such as the Police and Criminal Evidence Act and models of investigation and action that are established in law and already effective in practice. The proposal to use the HMICFRS as a specialist inspectorate, along with the appointment of an independent chair and oversight team in the PSFA, should provide proper oversight to ensure that the Bill is implemented effectively and fairly.
At a time when millions rely on food banks and wider social support from the kind of charities and civil society organisations that we have mentioned earlier—and which served so faithfully through the pandemic—every penny stolen from the Government is a penny that cannot be used to help the most disadvantaged to escape poverty. Those who have defrauded the public purse are not simply stealing from the Government’s bank account; they are stealing from their neighbours, from those most in need, from those who are more deserving of our support and most in need of our care. This Bill seeks redress at least some of the damage done by those who have all too easily defrauded the public in years gone by; puts vital measures in place to confront a worrisome criminal culture which has become all too prevalent in our country; and provides a means by which to deter and deal with such behaviour in future.
With this, we return to the start. Financial documents are moral documents, and financial policies are moral policies. As noble Lords together, I hope that we will provide moral leadership in passing this Bill. I commend it to the House.
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.
Baroness Spielman (Con) (Maiden Speech)
My Lords, like so many who have stood up here for the first time, I am profoundly aware of the privilege it is to speak here and of the importance of using that privilege responsibly and well, for the public good. I have much to learn from all noble Lords.
I am especially grateful to my supporters and my mentor—the noble Baroness, Lady Wolf of Dulwich, and my noble friends Lord Finkelstein and Lady Bloomfield of Hinton Waldrist—and many other noble friends. I am beginning to understand the strength of collegiality and mutual support that characterises this House, and I hope that I will succeed in upholding this.
I sound very English, and I bear a German surname, but I come here with connections to many parts of the UK. My father was English, from the Midlands, and my mother is Irish. I was brought up in Glasgow, though I lost my childhood accent when I came south to study. I also came to know something of Wales over seven fascinating years on the board of the Wales Millennium Centre.
I am here because I have spent over 20 years working in the interests of children and young people. After some years in investment banking, I recognised—slightly belatedly—that my real interests lay in education above all else. I spent seven years as part of the founding management team at Ark Schools, an excellent academy trust, then nearly seven years as chair of Ofqual, the exam regulator, overseeing a full programme of qualification reforms. Most recently, I served for seven years as Ofsted chief inspector, where we made an inspection model based on professional dialogue, grounded in evidence and emphasising educational substance and integrity.
It may be a surprise that I am making my maiden speech on this Bill, but Ofsted inspects many services for children and young people and, in some cases, regulates them too. In its work, Ofsted sees many excellent things: often great services run by principled and highly skilled people, but also things that we would all wish did not happen and tend to avoid talking about, including fraud. More generally, Ofsted does sometimes have to report findings that are profoundly uncomfortable for those whose failings are exposed.
Incompetence is one dimension; ethical slippage is another. I use that term because fraud, which is the main focus of this Bill, sits at one end of an ethical spectrum. Some behaviour can be considered unethical to a greater or lesser extent. For example, it is worrying when the interests of children are subordinated to those of adults, contrary to the principles that underlie the policies of successive Governments. It is not criminal, but it can harm children. It is shocking that there are a few people in control of children’s education and welfare who choose to operate outside the law, sometimes even after a criminal conviction for the same offence. When ethical slippage is normalised, it becomes harder for other adults to sustain their own purpose and integrity. Cultures are corroded, and actual fraud becomes more likely.
To spell it out, when people see others around them successfully cheating a system, at least three bad things happen. First, and most immediately, it gives people an incentive to join the cheaters. This costs the public purse and the taxpayers who fund it.
Secondly, it corrodes mutual trust in communities. A sense of community derives in large part from a social contract founded in reciprocity: if we no longer believe that those around us will contribute to mutual support when they are able and draw on support only when they need it, we lose some of our sense of community. My noble friend Lord Finkelstein wrote very well about the importance of reciprocity in the Times this week.
Thirdly, we become cynical about public authorities if we see them as incompetent and ineffective at preventing, detecting or sanctioning the behaviours that are undermining our sense of community. A loss of confidence in public authorities is destabilising for government and hard to redress. Low mutual trust in communities and in government is not conducive to individual happiness.
All this makes it important to address fraud and error promptly and effectively, and I welcome the efforts of successive Governments to strengthen this work. Deterring fraud requires a high likelihood of detection, as well as meaningful sanctions where fraud is found.
I will not repeat what has been said by others today, but important points have been made. I will make a few observations from my own experience, having had ultimate responsibility for the regulatory sanctioning process in a range of cases.
The protections for individuals are, of course, very important, but they must be proportionate and properly balanced with a legitimate public interest of deterring and sanctioning fraud. Where protections are extensive and elaborate, the complexity and cost of taking a case of suspected fraud through to its conclusion are high. This can contribute to the creeping inertia highlighted by my noble friend Lady Finn.
For individuals, those strong protections can mean longer processes, and protracted processes are in themselves more stressful at the receiving end. If it becomes even more expensive to investigate a case, public authorities are forced to prioritise the most blatant and expensive cases over lesser and more marginal cases. For example, where the total loss from a fraud is small in absolute terms and where any meaningful recovery is unlikely, it is harder for a public body to justify the cost of investigation and lesser cases are pushed down the queue. Yet inaction in the lesser cases—the broken windows, if you like—still triggers the undesirable social and economic consequences that I have already talked about.
The aggregate benefits and costs of embedding strong individual protections must therefore be regularly reviewed and weighed against the wider public interest, not just in financial terms. This should, of course, include regular system-level sense-checking, and swift adjustment of schemes and processes where needed.
The agencies and bodies that do this difficult work have to be well supported. Among the millions of decisions made by public authorities, there will always be difficult and borderline cases. Where, say, a claim in such a case is properly refused, it can be easy for a disappointed claimant to paint the public body and the individual decision-makers as soulless and unfair. Yet that authority and its staff should not be casually vilified. True fairness to all citizens, young and old, and maintaining that all-important social contract, depends on those people having the skills and confidence to make those difficult calls—humanely but without partiality.
I emphasise to noble Lords that the success of these well-intended reforms depends on collective support for the people who carry them through. Without this, the reforms could come to little.
To end, I thank your Lordships for listening to me. My watchwords in my previous life were “substance and integrity”, and they will continue to be my watchwords here.
Baroness Coffey (Con)
My Lords, it is a huge privilege to follow my noble friend Lady Spielman after her exceptionally thoughtful, insightful speech to the House, indicating very clearly the experience she will bring.
It is no surprise that somebody obviously very bright who did a mathematics degree at Cambridge University became a chartered accountant. I understand she is super-fabulous at XL spreadsheets, a skill I am sure we can use to interrogate all sorts of statistics coming out. After a successful career in finance, she saw that particular moment that called her to try to improve lives, particularly those of young people. She took on a master’s, I think it was at the University of London’s Institute of Education.
Most people will know my noble friend Lady Spielman from her role as the chief inspector at Ofsted, but she also spent five or six years as chair of Ofqual. Speaking to people who worked with her at that time, one of the things that they particularly valued about her was her ability to bring together a top-class board to try to help through some of the challenging times and to make sure that Ofqual continued to be there, focused on the quality of education and, importantly, the young people it was there to serve—substance and integrity coming through again, as we saw in her role at Ofsted. My noble friend said to me that, in essence, making sure that children got the best start in life was key, and she believed that the way to achieve that, as we saw, was substance and integrity in the education they had, so that they were well prepared for the future.
We saw this in a different way because, before then, my noble friend had been a founding member of the Ark Academy. Anybody who has been to an Ark Academy school will know how brilliant they are, so that is a lifelong legacy of which she should be rightly proud. Perhaps going to Ofsted may have seen a slightly different approach on perhaps the harder side of some aspects of education, but I think that experience of what could be done is why we have seen the number of schools that are now excellent rise significantly. We have seen the educational attainment of children rise, which is not solely due to my noble friend, but, as a previous colleague of hers said, nobody knows education better in the round than my noble friend Lady Spielman.
I think it is fair to say that I had limited interaction with my noble friend when I was a Minister. I remember a couple of discussions and all I will say is that she had certainly acquired the teacher’s look. My parents were both teachers. She had a warm smile, as we have seen today, but she knew her stuff and she also knew how to get her point across.
Outside this House, my noble friend is currently a trustee of the Victoria and Albert Museum. She is obviously a lady of culture, but there is another element that I appreciate. My former MP is in this House as my noble friend Lord Young of Cookham. He used to be known as “the Baronet on a bike”. Well, we now have a Baroness on a bike. There is almost nowhere that my noble friend will go without it involving two wheels rather than four.
We saw in the quality of the debate today how my noble friend will contribute to many issues, and it is now to that that I turn. This Bill is important and I welcome the fact that we finally have something to get going. I say that with genuine passion and I congratulate the Government on getting under way. I am conscious that, under my Government, while I set out a strategy three years ago in May 2022, it contained the classic phrase “when parliamentary time allows”, and it was a frustration of mine that we did not get it going until quite late on and, as I will explain, in my view some of the measures had changed since I was in office as Secretary of State for Work and Pensions. It felt somewhat, to be candid, as if they had been watered down. That might be in recognition of some of the issues raised across this House, but, as the tone of my speech I hope will show, I do not think this Bill goes far enough, and I will be encouraging the Minister to look again at what they could perhaps do.
Let us get some statistics right. It has been well said by the noble Baroness, Lady Fox of Buckley, that we should think about where the DWP has not made sure that people have the money they are entitled to. I think that is in the region of £1 billion per year, 0.4% of the £292 billion that DWP paid in the last financial year. The figures are stark. I congratulate all the people at DWP; I am sure Ministers will take credit for it, and that is okay, but I know there is a great legacy of activities that we got under way, recognising that it was simply unacceptable to have fraud in our system of well over £7 billion. The figures that came out this morning show that fraud is estimated to be £6.5 billion, of which claimant error is £1.9 billion and official error for overpayment £1 billion. That fraud has come down from the previous financial year, from £7.3 billion for fraud and £1.6 billion for claimant error, so, unfortunately, claimant error appears to have gone up, as indeed has official error, in cash terms.
It is easy to get into stats about percentages and similar, and I understand why, but cash is real. When I was at the department, I probably got some of the policies that were presented to us today and I said, “We have to go further, because this is real money”. It is the difference about whether you build a hospital or not. It is the difference about the policy that has now happened about winter fuel payments. It is the difference about aid overseas. It is the difference—call me a traditional Conservative—about actually not spending that money but reducing our debt mountain and therefore some of the interest that we pay. Of course, it could then lead to other uses of spending, but it is important that we recognise that this is real cash.
That is why I am keen to point out that I understand why people have concerns about the variety of powers. I do not intend to comment so much on PSFA, but I hope the Government will take the opportunity to make it a slightly better, snazzier snap, as it were, in terms of making sure that the public know that we are actually serious as a Parliament about recovering money from criminals. Some of the powers that I have heard about seem somewhat draconian. However, given what I am about to say, perhaps I will not be quite so sceptical when we go through Committee.
With regard to the other significant amount, that is where the proposals—as has already been caught by the noble Lord, Lord Rook, and the noble Baroness, Lady Fox of Buckley—are actually about trying to avoid claimants making errors in the first place, although the definition of claimant “error” can sometimes be a bit generous, rather than being “fraud”. Nevertheless, we should do whatever we can to prevent people not necessarily having the right claim and make it easier to make sure that their records are up to date, otherwise we end up with the uncomfortable situation with, for example, carer’s allowance overpayments and people being expected to pay back a lot of money for not realising some of the changes. If there are ways that we can do more of that, that will be helpful.
I know the DWP already has the powers to go into HMRC and PAYE, and that has helped to tackle some of this, but powers are necessary to go further. As I say, even just the debt owed at the end of the last financial year was nearly £10 billion, and that is still a substantial amount of money that is owed from benefits.
In terms of thinking through, I could go on about, frankly, callous criminals trying to use the welfare system as a cash machine rather than thinking of the most vulnerable, whom it is there for. We need to make sure that this money is well spent and reaches the people that it is supposed to.
I know that Covid was particularly difficult. I am not going to go back over Covid history, but I will point out that the DWP has been good at trying to absorb and use technology. For example, over just one weekend we managed to stop £1.9 billion going to organised criminals—money we would never have got back. The DWP successfully prosecuted a gang for fraud that involved only—sorry to sound glib about it—£68 million. Nevertheless, it is that sort of sophisticated approach that has led to the DWP upgrading its powers and use of technology to make sure that taxpayers’ money goes to the people Parliament has decided deserve, need and should have that money. It is vital we keep that in mind.
There are a variety of things that could be done to identify and stop abuse of the system through retrospective claims and similar. It is important we continue with that.
On some of the powers people may not be aware of, we—sorry, I mean the DWP; it is still in my heart and my DNA—have the powers to go after named individuals, but it is a very time-consuming process. This is approach is intended to be somewhat more comprehensive, and this is why we need to go further.
Government technology has evolved so much, but the same is true for the criminal. The banks have written to us with their concerns about potential conflicts. I can assure the banks that there is no conflict concerning a Government and a Parliament that want to stop criminals getting money to which they are not entitled—money that has the potential to improve people’s lives.
There is one thing I agree with the banks on. The risk with the legislation as it stands is that could be too easy for criminals to quickly find a workaround that may not necessarily be obvious. One of the gaps in the legislation is that it tends to go after the bank accounts that benefits such as universal credit are paid into. I do not know about other noble Lords, but I have at least four bank accounts, and I can move money between them within seconds. These are issues we were looking to address, and I am not sure if they are covered in the Bill. You would be surprised to learn how many people—British citizens and others—are getting benefits in this country but are not living here and spending that money abroad. The Government should have access to such approaches, so that they can deal with this issue comprehensively.
As the noble Baroness, Lady Anderson, said, this is not about presuming someone is guilty. The issue at the moment with getting these extra bits of information is that you have to demonstrably show that you think the person is guilty. There is a mixture of issues at hand. There may be concerns from the ICO but, as I say, this is about taxpayers’ money that could be used better.
There is also a gap. I do not know why the DWP is not being given arrest powers, like HMRC. A lot of this legislation is supposed to be aligning the powers available to everybody, so I hope we can address that.
I am probably out of step with many others in the Chamber in this regard, but let us think in a different way. The British Crime Survey is about how people perceive crime—how they feel that they have endured crime—and 40% of crime now is fraud. We have done something to address that by making banks pay back money that perhaps should not have gone out of people’s accounts. Nevertheless, do not be surprised that fraud happens, but be pleased to some extent that the figure for fraud and error is now 3.3%. I would like to see it a lot lower, and a cash figure put on it, but we should be careful. There is a lot of scaremongering, but I genuinely believe that the British public want to make sure that fraudsters and criminals do not get a penny, and that the money goes to the most vulnerable.
Lord Sikka (Lab)
My Lords, it is a pleasure to follow the noble Baroness, Lady Coffey, and I take this opportunity to congratulate the noble Baroness, Lady Spielman, on her splendid and insightful maiden speech. I look forward to hearing more from her in this House.
A focus on fraud detection, prevention and recovery is most welcome, but I seek some clarity in this Bill. Since the abolition of the Audit Commission, the focus on efficiency and effectiveness of local government spending has been diluted. If we have not got the appropriate regulatory structure for public bodies, it is very difficult then to impose another structure and say that we are somehow going to deal with fraud. We have to remember that the public sector is not hermetically sealed from the private sector, and that the proceeds of fraud always go through financial institutions. When we look at those, we find that the regulator’s public interest duties are increasingly eclipsed by a duty to promote industry, growth and competitiveness.
The experience of tackling fraud in this country shows us that that is secondary to political conveniences. For example, existing laws are not really enforced, and successive Governments have gone out of their way to protect crooks. We are still waiting for an investigation into the 1991 closure of the Bank of Credit and Commerce International. It has not even begun.
In 2012, HSBC was fined $1.9 billion in the US for money laundering. The then Chancellor, George Osborne, and regulators combined to urge the US authorities to go easy on the bank. There has been no UK investigation into that to date. Despite requests which I made ever since I have been in this House, no statement has been made to explain the cover-up by Governments and why they tolerated criminal conduct by HSBC.
Frauds at HBOS going back over 20 years have yet to be investigated. The FCA, the SFO, the police and the Treasury passed the buck to Lloyds Bank, which promised a report by 2018. To this day, no report has bene published. In Written Answers to me in this House, successive Ministers have excelled at doing absolutely nothing.
There were fewer than five prosecutions of the enablers of tax evasion in 2023-24. Big accounting firms that advise the Treasury and the Government never get investigated for crafting tax abuse schemes. The Criminal Finances Act 2017 was introduced to tackle corporate tax evasion, but to this day no prosecution has taken place.
In December 2022, the Government sued PPE Medpro for alleged fraud, but the case has yet to be heard in the courts. England and Wales have a backlog of 75,000 Crown Court and 310,000 magistrates’ court cases. It is extremely unlikely, I am afraid, that we will be able swiftly to prosecute fraud.
Nothing in the Bill curbs the political expediency of cover-ups. Perhaps the Minister would like to comment on that.
The second part of the Bill, dealing with benefit fraud, grants the Government draconian powers to snoop on the bank accounts of the poor, old, sick and disabled. The Bill assumes that all recipients of benefits have criminal tendencies and must therefore be denied financial privacy. It empowers the DWP to compel banks and financial institutions to examine accounts of benefit claimants and provide specified information to help it verify the eligibility of benefits claimants.
The banks are required to develop algorithms to search and report information. The cost of developing these algorithms will be borne by banks and ultimately passed on to customers. Can the Minister say what the initial set-up costs and the annual operating costs for the banks, which will be passed on to customers, will be?
For the new unrestrained surveillance, no court order is needed, the affected individuals will not be told and there is no right of appeal against the surveillance. What information the DWP will require has not yet been specified. The Government have promised a code of practice but, as the Minister indicated earlier, that has not yet been published and will possibly not be capable of being fully amended in Parliament, if I understood the Minister correctly. It is likely to be presented as a fait accompli. The requested information probably would relate to some thresholds which, if exceeded, may generate suspicions of fraud. That is itself highly problematic. Suppose you give a loved one a large sum to buy a piece of furniture and that money lingers in their bank account for a while. Will they now be construed as having extra savings and therefore be denied universal credit? Will they be called fraudsters or whatever?
A mistake by the reporting bank could have severe consequences for wronged individuals. There are nearly 7 million claimants of universal credit, and an error rate of 1% could cause 70,000 people to lose universal credit. Can the Minister explain who will compensate the innocent people? Bearing in mind the recent Post Office scandal, the idea that computer systems are utterly reliable is simply unacceptable in this case.
The Bill does not promise legal aid to enable anyone who is negatively affected by the DWP’s actions to seek advice or represent themselves in the court. How are the poorest people then to get any justice? The DWP can apply to the court to disqualify a debtor from driving, which is absolutely bizarre—why driving licences but not, say, the ability to buy a mobile phone or even join a political party? It is bizarre.
The legislation would initially apply snooping powers to recipients of universal credit, pension credit and employment support allowance, but ultimately it is likely to be extended to all benefit claimants. At the moment, the Bill exempts recipients of the state pension, but it does not follow from that that the pensioners will in fact be exempt. For example, 1.6 million pensioners receive pension credit, which opens the door to winter fuel payment and housing and other benefits. Their bank accounts will come under scrutiny. Pensioners are not exempt, contrary to what some are saying. We are all one serious illness or accident away from possibly relying upon social security benefits. Ultimately, all of us will be affected, so it is no good selling the Bill by saying that we are targeting a minority—it targets everybody.
What is the extent of fraud that the Government refer to? The 2023-24 figures suggested that benefits were overpaid by about £9.7 billion, of which about £7.4 billion related to alleged fraud, which is based on extrapolation from a sample. That amounts to about 2.8% of welfare spending. The actual percentage of claimants who indulge in fraud is very, very small: 3.9% for housing benefit and 3.9% for pension credit. These small rates do not, in my view, justify powers for suspicionless snooping on the bank accounts of all claimants.
One has to ask whether the Bill is even necessary. For example, the DWP currently has the power to compel prescribed information holders to share data on individuals if fraudulent activity is suspected. HMRC already shares banking data with the DWP. Under the Proceeds of Crime Act 2002, financial institutions too must notify law enforcement agencies of suspicious activity.
Overpayment constituting fraud and error may also arise from the DWP’s own shortcomings. For example, the form to claim pension credit, which opens the door to winter fuel payment and other benefits for pensioners, is 22 pages long and asks 243 questions. The form to claim PIP is 50 pages long and has intrusive questions about matters such as bathing and personal cleaning. Many people would be embarrassed to answer those intrusive questions and then discuss them with absolute strangers. At what point does an incorrect answer become fraud? I hope the Minister will be able to tell us, because it is a vital question.
In principle, anyone receiving public money can commit fraud, but the Bill removes financial privacy only from the poor, old, sick and disabled. It is discriminatory. The normal assumption in law is that people are innocent until proven guilty. The Bill reverses that presumption. It makes a mockery of equality laws and is likely to fall foul of Articles 8 and 14 of the European Convention on Human Rights. Benefits can be received by Britons residing abroad and paid into a foreign bank account. The UK can never acquire the power to snoop on bank accounts subject to another country’s regulatory laws. Will the Minister confirm that anyone who puts money in a foreign bank account will be beyond the reach of the UK Government’s new snooping requirements? Could this encourage some people to deposit their money in foreign bank accounts and thus develop an avoidance strategy?
Under the Bill, banks become a de facto arm of the state and can no longer be relied upon to provide confidentiality to their customers. I think that that is a bad thing. As banks bear the cost of surveillance, they might be tempted to refuse bank accounts to recipients of benefits. That too would be a bad development. What safeguards exist to ensure that banks cannot do this? To avoid snooping, landlords might refuse to have benefits paid directly into their bank accounts, a policy that has been pushed by successive Governments, so will the Bill increase homelessness among the poor? Will the Minister publish a list of possible unforeseen consequences and how the Government are going to deal with them?
As an academic, whenever I did research and came to some policy recommendations, we always asked what might be the 20 or 30 arguments against our policy, and weighed up the options in light of that. Will the Minister help us to do that? The surveillance initiated by the Bill will not apply to thieves, tax dodgers, money launderers, scammers or company directors disqualified from holding office by malpractices. No one robbing a bank or committing identity theft is to be deprived of a driving licence, but those accused of benefit fraud will be. The Bill seems fairly unfair—at least it looks that way to me—and I urge the Government to rethink parts of it.
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.
Lord Palmer of Childs Hill (LD)
My Lords, I congratulate the noble Baroness, Lady Spielman, on her maiden speech, and we welcome her to the House.
I rise as a Liberal Democrat to speak in firm opposition to the Public Authorities (Fraud, Error and Recovery) Bill. While we all share a goal of preventing fraud and ensuring the integrity of public funds, the Bill, under the guise of fraud prevention, risks entrenching mistrust, undermining civil liberties and further marginalising our most vulnerable citizens. The Minister said that the Bill seeks to challenge the fraud that lines the pockets of criminals—but it goes well beyond that. This legislation should concern anyone who values fairness, proportionality and compassion. My noble friend Lady Kramer spoke about whistleblowing, and I trust that the Minister will also focus on that in her reply.
I turn to those in receipt of carer’s allowance. Many of us in this House will have heard the harrowing stories of carers, often quietly heroic individuals, who face harsh penalties for minor and often unintentional administrative errors. They are not fraudsters; they are parents caring for disabled children, spouses supporting terminally ill partners or elderly people looking after loved ones with dementia. The reality is that carer’s allowance rules are notoriously complex: just a few extra hours of work or a slight rise in income can lead to an overpayment, which many do not even realise until months later, when they receive a demand to pay thousands of pounds.
Under the Bill, such individuals would face expanded surveillance, automatic bank deductions and potentially public shaming, all without clear distinctions being made between honest mistakes and intentional fraud. This is not justice—this is cruelty wrapped in bureaucracy. The Bill proposes sweeping powers to access banking data, as many noble Lords have suggested. Let us be clear: these are bank spying powers that would allow the Department for Work and Pensions to trawl through the bank records of millions of people, not because they are suspected of a crime but because they receive support they are legally entitled to. At a briefing with the Minister, I raised that in this Bill there is no mention of things that all accountants know about, such as the garnishing of bank accounts, which already exist for the collection of debts.
The powers constitute a fundamental assault on the right to privacy. They normalise mass surveillance of the poor, while doing nothing to address the significantly larger issue of tax fraud, which costs the Treasury nearly six times more than benefit fraud but receives a fraction of this attention. The noble Lord, Lord Sikka, referred to this. The problem is that the fine line between tax avoidance and tax evasion is sometimes a grey line. It is also how HMRC and its predecessor, Inland Revenue, tackle the problem when they find that someone has evaded tax. It is generally done by a financial penalty. I am reminded of the anecdotal story of the person told of the financial penalty for his unaffordable error who said, “Could I pay in cash?”.
Where is the proportionality that the noble Lord, Lord Vaux, pointed out earlier in this debate? As the right reverend Prelate said, affordability assessments are needed. Furthermore, the Bill dangerously conflates fraud with error. According to the DWP’s statistics, fraud accounts for just 2.8% of benefits expenditure, yet the narrative pushed by this legislation implies widespread deceit among claimants. In truth, many overpayments arise from the bewildering complexity of the system or administrative mistakes by the DWP itself, mistakes which cost the public £800 million last year. Is it right that someone with a disability who disclosed all their financial details in good faith can be told months later that they owe thousands due to a departmental oversight? Is it right that a carer on the brink of burnout is treated as a criminal because of a minor miscalculation?
One case shared by Turn2us was that of a woman in her 60s, housebound with several disabilities and complex mental health needs. After disclosing her private pension when applying for universal credit, she was told she had been overpaid and faced monthly deductions, even from her personal independence payment and non-means-tested benefit. Her crime was being honest in a broken system. Her punishment was perpetual financial stress and a complete loss of trust in the very institution meant to support her.
I understand the purpose of the Bill, but it is focused on those who can least afford it, and very often, those who can afford it are still going to get away with cheating the system. The Bill does not fix that system; it weaponises it.
Baroness Stedman-Scott (Con)
My Lords, I thank the Minister for her opening speech in outlining the purpose of and some of the details contained within the Bill, and for all the engagement from her and the noble Baroness, Lady Sherlock, who I think is in the running for a new job, closely followed by the noble Baroness, Lady Alexander. My noble friend Lady Spielman is hot on the heels. We greatly appreciate the engagement we have had, and it has been very helpful.
I also pay tribute to my noble friend Lady Spielman on her maiden speech. It was excellent, and I know that others in the House will join me in welcoming her to these Benches. I hope that my noble friend has got the message loud and clear: we are pleased to see her. The words that describe her—substance and integrity—are absolutely accurate.
I will be clear from the outset: this side of the House supports the principle of this Bill. Fraud against the state is unacceptable and tough measures that we can legislate for in this place to crack down on disreputable people and fraudsters who steal from the public purse are not just welcome but essential. We have a moral and fiscal duty to address this, and I echo the point raised so eloquently by the noble Baroness, Lady Alexander. The moral aspects of the Bill were also well referenced by the noble Lord, Lord Rook.
The proposals before us were, broadly, introduced to Parliament by the previous Government. I was disappointed that, in the other place, the Minister refused to acknowledge our shared ambition on this Bill. Although we are on the same page as the Government when it comes to preventing fraud, we have some serious and genuine concerns, and many questions about how this objective can be achieved, given the Bill before us.
One key question that these Benches have is on the level of ambition the Government have to combat fraud. Fraud is a very serious matter, which needs to be addressed robustly. We lose a total of £55 billion a year to fraud across the public sector, but the Bill before us is set to recover only £1.5 billion. This is 2.7%. Can the Minister tell us why the anticipated returns, as a target number, are so low? Perhaps His Majesty’s Government would like to go away, rethink the target and up their game.
The Government seek to target three forms of welfare benefit through the provisions set out in the Bill. Can the Minister tell us how much each of these benefits contributes to the overall figure for public sector fraud? Can she also provide a breakdown of these figures, covering all welfare streams, to the House for our review and in preparation for Committee?
Another question we have is why certain aspects of the Bill are not ready, notably the Cabinet Office proposals. We have seen this already with the Employment Rights Bill, to which literally hundreds of government amendments have been added to try to correct errors in the drafting of the legislation.
I could not have put it better than the noble Lord, Lord Vaux: His Majesty’s Government need to get their act together on impact assessments. Do we really think that it is a good idea to lose his skills and that of other hereditaries, on such important legislation? I leave that with your Lordships. The Bill is being introduced without key impact assessments being available. We have no impact assessment measuring the cost to banks or to the DWP, the projected return on investment or the cost per head throughout the entire process. As we do not have these assessments, we will be discussing proposals with much of the relevant information unavailable.
It would also be incredibly helpful for noble Lords to have a breakdown of the fraud figures that the Government referenced throughout the passage of this Bill in the other place. Knowing the details of the challenge we face will allow us to make a better assessment of where this Bill can be improved to better meet that challenge. I hope that the Minister can provide this information to the House soon. Having it to hand is vital in allowing us to do our jobs properly. It simply is not good enough that we should scrutinise these proposals without the information that we need to make an informed decision. I reiterate to the Minister that we want to work collaboratively with the Government to improve the Bill.
I will start by covering the chapter of the Bill that relates to the Cabinet Office. The intention of the Bill to combat fraud in government departments is noble, and we have already had unanimous support from across the House. However, we are concerned that these proposals do not go far enough, for reasons that I shall now outline.
The changes to the Public Sector Fraud Authority—like others, I will jump on the bandwagon and call it the PSFA—are a concern for us. This enforcement unit currently has 25 staff. The authority is rightly tasked with investigating fraud across every department—a massive undertaking. As the noble and learned Lord, Lord Garnier, raised, is the Minister confident that the PSFA’s resources are sufficient? I mentioned returns of 2.7% earlier; as my noble friend Lady Finn said, the returns specifically expected from the PSFA are far lower than that—around 0.002%. How much resource would the PSFA need to make returns of 25%? The Minister said that the Government will scale this operation, but we need to know how this will work if we are to approve the proposals now.
My noble friend Lady Coffey made the point that the Bill does not go far enough. Her point about percentages and cash is real, and we need to address it. If the PSFA is to be expanded to meet the increased workload it will soon encounter, can the Minister tell us how this appointment process will work and who will oversee it? Can she please outline the timelines we can expect for when she anticipates the PSFA will be scaled up, and how quickly it will be fit for purpose, effective and achieving results?
Furthermore, we have some serious questions over the independence of the PSFA. It is right that the Government are incorporating a provision in the Bill to make it an independent body. However, it is still subject to powers that go up to the Minister responsible in the Cabinet Office. Government departments are marking their own homework, and we have no actual guarantee that the PSFA will be independent. This should be in the Bill from the start and not down to the arbitrary discretion of the Minister. Can the Minister confirm that the PSFA would become independent from the Cabinet Office?
It is unacceptable, in our view, that the process of recourse for those who want to appeal should be in a straight line back to the Minister. As my noble friend Lady Finn said, recourse processes should be independent, and we want to again emphasise that recourse should be through an independent tribunal mechanism and not back to a politically appointed person—someone, clearly, with vested interests.
This all relates to a wider point about the ultimate purpose of the authority. The PSFA has an important task to perform, and we on this side of the House support the Government’s intention to introduce a six-year extension up to 12 years, but can the Minister give a timeline as to when it is expected to conclude its work? I wonder how the Government would react to a proposal of a sunset clause to the authority, so that there is no risk that these powers are held indefinitely beyond the period for which they are reasonably required.
Points were raised on whistleblowing protections by the noble Baroness, Lady Kramer, and the noble Lord, Lord Palmer of Childs Hill. As my noble friend Lady Finn has already made clear, the Bill relates to situations where people could be asked to make very difficult, stressful and worrying decisions. It is easy for us to talk about this in academic terms but whistleblowing is far from easy, and we need to do all we can to support those who stick their necks out to do the right thing.
The Government have made it clear that they believe that existing protections are enough, although a recent National Audit Office investigation into whistleblowing in the Civil Service highlighted serious shortcomings, showing that it is even harder than it has been to call out wrongdoing. The NHS has rightly strengthened its whistleblowing safeguards, and these issues are being addressed elsewhere in our state system. We on these Benches believe that the same support needs to be given to civil servants working in this sensitive area, covering both the Cabinet Office and DWP aspects.
I turn to the part of the Bill which relates to the Department for Work and Pensions. We on these Benches also firmly support measures to crack down on those people who abuse the welfare system. For some people in our society to steal from a system that is designed to support the most vulnerable is a truly despicable act, and we need to stop those who do that as a matter of urgency.
I have no desire to upset the noble Lord, Lord Davies, but I must say that the Minister the noble Baroness, Lady Anderson, mentioned driving licences; what about passports, too? The noble Baroness looks after child maintenance; I looked after it, under the guidance of my noble friend Lady Coffey, and we took away driving licences and we took away passports. How many do you think we took away? Less than five, because it was a deterrent. So, please, think twice before everybody knocks this. I want to make myself available to the Minister, because I have got a load of other ideas for deterrents, and I am telling you they will work.
The Bill proposes a substantial increase to the DWP’s workload and, from what I understand of the detail that the Government have outlined, the DWP can expect to receive thousands on thousands of signals from banks flagging potentially fraudulent activity. These will then have to be individually checked by a human being. The Government have rightly said that they will approach this with a deep attention to vulnerability. We must welcome this. This was also raised by the right reverend Prelate the Bishop of Lichfield, but does this mean that DWP civil servants will be checking not only the movement of money into an account but also whether the person in question is someone with a disability—in other words, perhaps someone with reduced capacity or someone who is at risk of being coerced? None of this detail is clear, and the Government have failed to publish an impact assessment showing the cost of this additional work.
It is vital that these wider considerations are taken into account. We need to distinguish between those who are committing fraud intentionally and those with reduced capacity and additional needs who may not realise that what they are doing is fraudulent. We also need to consider wider circumstances. If a suspected fraudster is in fact a woman trying to save money to escape an abusive relationship, we will be doing far more harm than good by stripping this money away. How can the Government ensure, under the provisions in the Bill, that vulnerable people will be supported and not debanked?
If the Government in fact intend to proceed in the way that I have outlined, we are talking about literally thousands of hours of additional work. Can the Minister please tell us how the DWP intends to meet this increased workload, how much it will cost and whether she is certain that the additional cost of meeting this demand will be worth the revenue we save by tackling fraud in this way? We shall be paying close attention to this as we progress to Committee.
I now want to say something about the use of artificial intelligence to improve investigatory performance—this was raised by the right reverend Prelate—and about technology, a point that was raised by other noble Lords. We would support the use of new techniques to improve efficiency, but they should be subject to close oversight. We are talking about personal, confidential financial information. Can the Minister assure the House that any use of AI will be subject to rigorous safeguards, and will she commit to coming before the House again to set out how these will work and how the Government will guarantee security to the owners of that data?
Many of the same questions remain over the role of banks. The Bill places a significant burden on banks, which, it appears, are being asked to devote resources to this system out of a sense of moral duty, as, in dedicating staff and systems to the Government’s plans, they forego considerable opportunity costs which will not be recovered. This may be right in principle, but for financial institutions the bottom line is always the determinant factor. Can the Minister please update the House on how much these new responsibilities will cost banks? I know that the figure will ultimately depend on demand, but can the Minister tell us the cost per head, which the department will, I hope, know? Do the Government have an impact assessment prepared for banks, showing them how much this will cost them? If more work than anticipated emerges, what arrangements are made for paying for this?
I am greatly concerned that these proposals are being put before the House while talks with banks are still ongoing. The Government have not come into this as prepared as I believe they should; we should know what the settlement is before we start discussing the Bill; and the fact that it is still a moving picture is deeply worrying when we are being asked to enshrine this in law. These are important questions, and I hope that the Minister can shed some light on them for the sake of business and, fundamentally, the taxpayer. We will be testing the Government in Committee on all these aspects.
Arguably, the most fundamental provisions in this Bill relate to enforcement. People need to know that, if they commit fraud, they face a genuine and real risk of retribution. One of the issues that we have identified is that the DWP will be able to assess activity only in one bank account—this point has already been raised—which is the bank account that benefits are paid into. As soon as the Bill is passed, fraudsters will realise that all they need to do is open a new bank account and move the money over; then they are completely safe. Bank accounts can be set up in minutes from a smartphone, as highlighted by my noble friend Lady Coffey, so a fraudster could circumnavigate the DWP and all the measures in this Bill on their phone in the space of a single Tube journey. They would be completely safe in the knowledge that the DWP legally cannot pursue them any further.
This brings me back to pilot schemes. Can the Minister please publish the results of these important schemes? I have a hunch that they might highlight some of these issues. Closing this loophole is the only way to make sure that the Bill works at all, which is another subject for debate in Committee.
Finally, on a very serious matter that is a plague on society, I turn to so-called “sickfluencers”. These are people who use social media sites to spread information on how to defraud the benefits system. This sort of behaviour simply has to stop. People across the country are gaining substantial online followings. People consume their videos instructing them on how to defraud the benefit system. Sickfluencers provide model-aware answers, highlight keywords and openly boast that their script will win a claimant the maximum number of points in their welfare assessment. We need to be clear that this sort of behaviour is designed to circumnavigate the rightful checks that are in place and enable fraud.
The Fraud Act 2006 and the Serious Crime Act 2007 provide a useful framework for tackling this, but we are concerned that those measures are not sufficient to police this sort of behaviour adequately. The Government have said that they want this Bill to modernise powers, and we believe that this is an area where modernisation needs to take place. We will therefore be paying close attention to this Bill in Committee and seeking cast-iron assurances from the Government. We simply want to ask what the Government will do to tackle this threat. How many sickfluencers have been detained under the current legal regime? Either the current legal framework is inadequate, or the powers are not being used.
In conclusion, I reiterate our intention to work with the Government to ensure that this Bill is fit for purpose. I look forward to hearing the Minister’s answers to the points that I have raised. We believe that the issues that we have highlighted are fundamentally important to making this Bill a success, and we shall be pressing them in Committee if needed. I can see why the noble Baroness, Lady Fox, concluded that this Bill was not so dull after all. I thank all noble Lords who have contributed to the debate thus far. We genuinely look forward to engaging with Peers, the Minister and her team as the Bill progresses.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I thank all noble Lords who have contributed to today’s thoughtful and decidedly not-at-all dull debate. Committee will be some fun indeed. It was a particular pleasure to hear the maiden speech of the noble Baroness, Lady Spielman, whom I welcome to the spreadsheet fan club. Frankly, I could have done with one of her spreadsheets to keep track of all the questions that I have been asked today. In the absence of that I am bound to miss some, for which I apologise in advance, but I will do my best. It is good to have her among our number, and I look forward to hearing more from her in future.
Perhaps we should start briefly with the challenge that the Bill is designed to address. As my noble friend Lady Anderson made clear at the start, public fraud is simply not acceptable—as the noble and learned Lord, Lord Garnier, said, fraud is not acceptable generally, but public sector fraud is also not acceptable. Fraud does not become a victimless crime because it is directed at the state: it will cheat the public purse of money that could be spent on public services, which could help this Government deliver an NHS fit for the future or invest in our children to give them the best start in life.
Listening to some of the examples given by my noble friends Lord Rook and Lady Alexander, it is so shocking that, during Covid, when people and charities were out there breaking their backs trying to serve people who were in desperate need, others were out there lining their pockets. It is a disgrace. It was very moving to hear from my noble friend Lady Alexander about what is happening when people are doing all that they have had to do in the British Council to pay that back when others do not want to pay back the money that they should be paying back to the state. That cannot be right.
I also think that fraud in our social security system is damaging in a different way, whether it is undertaken by individuals or organised criminals. I think the noble Baroness, Lady Kramer, asked what the breakdown of that was. I can tell her that, in 2023-24, of the £7.3 billion lost in fraud in social security, 6% was taken by organised gangs and the rest was taken by individuals.
Baroness Kramer (LD)
My Lords, is that the number of cases that were identified because there was enough evidence and people were arrested, or does she believe that that is an estimate of the total amount of organised fraud in the system?
Baroness Sherlock (Lab)
It is a percentage of the amount of fraud that was recognised. Clearly, we do not have figures for the amount of fraud of any kind that has not been identified or recognised. That was the figure for the amount we have on our books as organised fraud.
The reality is that, whether it is done by organised criminals or by individuals, this is not okay. It is not fair to taxpayers who fund social security, nor to the vast majority of people who claim only the benefits to which they are entitled. In my job, when money is as tight as it is now, I want every penny available for social security to go to the people who need it most.
This Government are determined to tackle the issue head-on with a Bill that will provide the right tools to protect public money and fight modern fraud, coupled with the right safeguards. The Bill is tough on those who commit fraud against our public services or our welfare state. In doing so, it gives reassurance to taxpayers. One of the side effects is that it will be helpful to DWP claimants who make genuine mistakes, by helping to spot errors earlier so they can avoid getting into lots of debt.
I thought the point made by the noble Baroness, Lady Spielman, about reciprocity was there. If people do not have confidence in our welfare state and the underpinning mutual shared obligations, that challenges our ability to maintain confidence and carry on supporting people in the future. We need to get this right, but we do not need to demonise people to do that. We just need to make it clear that people should get what they are entitled to, and, if they are not getting that, we should address it.
We believe this Bill strikes the right balance, giving the Government new powers proportionate to the problem we are tackling while ensuring that those powers are wrapped around with effective safeguards and protections to give confidence to Parliament and the country. Having said that, and having listened to the debate, I recognise that it is just possible that not everybody agrees with us—or, at least, not yet. We have some way to go. I have every confidence that, once I have fully explained this, there will be unanimity across the House—or near-unanimity at least, being a realist.
Having listened to the debate, it seems to me that there are a number of challenges. First, I offer a couple of truisms. There is no silver bullet to fraud. If there were one single thing to do, the previous Government would have tackled this, or some other Government would have done it. Tackling fraud is an accretion of a series of small decisions which, between them, add up to make a difference. Therefore, this Bill does what it does and does not do other things: it does not tackle bank robbers or tax evasion. It is a contribution, and I think it is an appropriate one.
Secondly, we have to be a bit careful that the best is not the enemy of the good. What is in front of us is action that this Government will take that has not been done before, and I commend it to the House. The challenges that we have seem to come in three broad categories: we are not going far enough, we are going too far, or there are some challenges in the way that we are doing this. I will briefly look at each in turn.
I start with the challenges that we are not going far enough, which have come from a number of noble Lords. The noble Baroness, Lady Stedman-Scott, and I have great respect for one another, but I say very gently that some of the critiques she has made of the Bill strike me as a little ironic, given that the last Government were in for 14 years and had all that time to take action. What did we get? We got one predecessor of one of these measures, which was put in at the fag end of the last Government and dropped into the other place after Committee, with none of the information that the noble Baroness is demanding from me—nothing at all, not even a requirement to produce a code of practice, never mind actually producing one, and absolutely none of the safeguards or protections. Now she is in opposition, I fully respect that it is the job of the Opposition to demand things of the Government, and she does a fine job of doing that. She also will not mind if, in turn, I occasionally throw back at her what her own Government failed to do. In this area, I think we are doing rather better.
Having got that off my chest, let us move on. It is worth saying that this Government are actually doing something. We committed to the biggest-ever savings package on fraud, error and debt at the Autumn Budget. Along with the Spring Statement, DWP fraud and error measures are estimated to achieve £9.6 billion of savings by 2029-30, of which up to £1.5 billion will be generated by this Bill. So this Bill is not all that we are doing, but it is an important thing that we are doing.
The noble Baroness, Lady Stedman-Scott, asked about cost. In the end, the costs of DWP working through these measures will be dependent on the munificence of the Treasury at the spending review, which I am not allowed to pre-empt. The impact assessment sets out our estimate and shows that around four times the benefit of every pound of our departmental spending will come back on scored measures to 2029-30.
On not doing enough, the noble Baroness asked about “sickfluencers”. She is right—it is the view of this department that we have the powers to deal with these crimes at the moment. We think the Bill will help the PSFA to do that at the same time. But, if she has ideas about other ways in which that could happen, I look forward to hearing them, along with her many other ideas for tackling fraud, which I have no doubt Committee will give us every opportunity to discuss.
While I am on the point, the noble Baronesses, Lady Kramer and Lady Stedman-Scott raised the question of whistleblowing. We absolutely agree; we want people to pass on information about fraudsters who are taking from our public services. We are open to keep looking at the best way to do that. We are working with partners such as Action Fraud to make it simple and easy for the public.
In the case of DWP, benefit fraud can be reported by the public online, by phone or by post—and, trust me, it is. But also, DWP staff have clear channels to report. On top of that, the PSFA will look into the possibility of being listed by the Department for Business and Trade as a body with which individuals can raise concerns around public sector fraud. That will help on that side.
While we are on the PSFA, concerns were raised by the noble Baroness, Lady Finn, the noble and learned Lord, Lord Garnier, and others about whether it is doing enough and about the scale. The PSFA’s enforcement unit is relatively new in what it does. The noble Baroness, Lady Finn, was a little a little bit harsh on test and learn. When the enforcement unit is as new as it is and will only with the passage of the Bill get the powers it needs to do any of these things, surely testing and learning is the right thing to do. If it can demonstrate clearly that results come from that, the possibility for scaling will be significant. I promise I am not making any assumptions of the Treasury.
The noble and learned Lord, Lord Garnier, asked whether the Government audit the work of the PSFA and whether the powers in the Bill will add anything. The PSFA publishes annual reports and has benefits audited by the Government Internal Audit Agency. Examples were given in my noble friend’s opening speech of where the PSFA currently cannot make the desired progress because it has not got the powers it needs. The Bill will give them to it.
That is, briefly, the case for not going far enough. Let us now do the going too far case. A number of noble Lords, including the noble Baroness, Lady Fox, to a degree, the noble and learned Lord, Lord Garnier, my noble friends Lord Davies and Lord Sikka, and the noble Lord, Lord Vaux, are concerned about possible infringements on the right to privacy or other aspects of the reach of the Bill. I am grateful to the noble Lord, Lord Vaux, for acknowledging the improvements made by the Bill. I raised a number of reservations when the last Government introduced their third-party data measure, because I felt that the powers were simply not proportionate and that there were not enough safeguards around them.
While I am here, I say to my noble friend Lord Davies that the fact that that we provide safeguards does not mean the powers are wrong. That is what safeguards are for. There are safeguards in all aspects of life. I will come back to that. It means that we want to be transparent and show people that powers the state is taking are used appropriately. That is what they are for. The noble Lord explained the limitations.
We are now limiting the benefits in scope. For all the measures there will be clear limits about what information can be requested, for what purpose, and how the PSFA and DWP will use it. That is all new, and the Bill introduces considerable oversight and reporting requirements.
I believe the Bill strikes the right balance and, in answer to my noble friend Lord Sikka, I am confident that it is complying with the Government’s duties under the ECHR. The Government’s detailed analysis on compatibility is set out in the published ECHR memorandum.
I need to take on a couple of noble Lords who have suggested that this is a sort of broad trawling expedition. It has been described as DWP going out there and trying to have access to everybody’s bank accounts—suspicion-snooping. That is a simple misunderstanding of the nature of the powers. Let me try to explain why. DWP will not be given access to people’s bank accounts by this measure, which is about banks being asked to examine their own data, which they already have and can already look at. They have been asked to provide DWP with the minimum amount of information necessary to highlight whether there is a possibility that someone may not be meeting a specific eligibility rule for a specific benefit. At the point the information is shared with DWP, no one is suspected of having done anything wrong. The presumption of innocence is still there.
Baroness Fox of Buckley (Non-Afl)
It is clear that the DWP does not want to see that data, but it will be telling the banks to trawl for the data. The Minister says that they already have the data, and that they would not be trawling for a government-mandated outcome before the DWP told them to do it. As the Minister was about to say, and I have stressed this before, it is true that there is no suspicion of anyone. The only reason the bank would be doing it is that a person is in receipt of a particular benefit. The bank therefore has to check whether the person is in receipt of that benefit—because it does not necessarily know that—by going through its databases on the eligibility criteria the Government are going to give it. So no one is saying that the Government are spying, but the banks are being asked to “spy”—it is a phrase, just a slogan. We understand the point; we just do not think you are satisfying us.
Baroness Sherlock (Lab)
I have heard accounts of people saying that disabled people will worry that DWP will know that they go to Pret and therefore cannot really need the money, et cetera, so it is important to make it clear that DWP will not have access to their bank accounts through this EVM.
DWP knows the bank accounts into which benefits are paid, so DWP will tell the banks to look specifically at the bank accounts into which those benefits are paid. It will tell them specifically the criteria they are looking for, and all they are being asked to provide is enough information to identify accounts which may, on the face of it, be in breach. Then, that information will be used along with other information that DWP holds, and it will be examined by—to reassure the right reverend Prelate the Bishop of Lichfield—a human being, who will make a decision on whether to investigate. There could be a number of outcomes. The outcome could be that the person may have had, for example, more money in their account than the benefit allows, but for one of the many acceptable reasons. There could be a perfectly good reason. The person may have made a genuine error, and that will be dealt with in a different way, or in some cases there may be evidence of fraud, and that might move into a fraud investigation.
I accept that some noble Lords may not think this proportionate. We believe it is proportionate, with those safeguards wrapped around it, but I want to be clear that we are arguing about the same thing, not about different understandings of what is going on at the time.
Lord Davies of Brixton (Lab)
My noble friend referred to an acceptable reason. Who ultimately decides what constitutes acceptability?
Baroness Sherlock (Lab)
This may be a matter that we might more usefully explore in Committee, but I shall give my noble friend a simple example. There are certain compensation payments that are not taken into account in terms of eligibility for benefits. They are excluded from the capital limits. So it may be that somebody has received a compensation payment. There is guidance about circumstances in which people may have money in their account. The point is that cases will be looked at individually before they are pursued. There is a requirement on fraud investigators to look at all information and chase down all avenues of information, so they will do that and make an appropriate decision.
Just to be clear, on benefits in scope, the initial use of the power is focused on three benefits: universal credit, employment support allowance and pension credit. The reason why is that that is where the highest levels of fraud are at the moment. The noble Lord, Lord Palmer, will have noticed that carer’s allowance is not on the list for the EVM. The two types of fraud and error we are targeting initially—breaches of capital and the living abroad rules—are significant drivers of fraud and error in those benefits. For universal credit, nearly £1 billion was overpaid last year as a result of capital-related fraud. Once fully rolled out, that measure alone will save £500 million a year. The state pension is expressly out of scope and cannot be added even by regulations, and that is sensible given that the rate of state pension overpayment is just 0.1%.
Somebody asked me whether we plan to add any other benefits. The answer is no. We cannot rule them out because fraud may change in the future and different benefits may be subject to different levels of fraud.
A number of noble Lords, including the noble Lord, Lord Vaux, the right reverend Prelate the Bishop of Lichfield and the noble Baroness, Lady Stedman-Scott, raised the use of AI and automated decision-making. To be clear, we are not introducing any new use of automated-decision making in the Bill, so no such new use will happen as a result of it. The DWP and the PSFA will always look at all available information before making key decisions about the next steps in fraud investigations or inquiries into error. Fraud and error decisions that affect benefit entitlement will be taken by a DWP colleague, and any signals of potential fraud or error will be looked at comprehensively.
Given the arguments made by those who think we are not going far enough, and by those who think we are going too far, we appear to be Goldilocks in this. I think we have got the balance right now. Goldilocks is not always right, I accept that, but I think we have landed in the right place because of the safeguards the Bill includes to ensure that its measures are effective and proportionate. Those safeguards provide protection but also accountability and transparency.
I will not go back over all the different kinds of oversight, but on the appointment process, I assure the House that the process for the independent people who will oversee EVM and the PSFA’s measures will be carried out under the guidance of the Commissioner for Public Appointments and will abide by the Governance Code on Public Appointments throughout.
I am grateful for my noble friend Lady Alexander’s compliments. I would suggest that she herself apply, but she might not qualify for the independence threshold entirely, as one might hope.
I shall say a brief word on safeguards. The Bill includes new rights of review and appeal. The DWP will still provide routes for mandatory reconsideration of decisions relating to overpayment investigations, followed by the opportunity to appeal to the First-tier Tribunal. For direct deduction orders, again, there are new routes for representation and review, followed by appeal to the First-tier Tribunal, while the court’s decision in relation to a disqualification order can be appealed on a point of law.
On driving licences, I take the point made by my noble friend Lord Sikka: why driving licences and not membership of a political party? I hate to break it him, but it is just possible that not being allowed to join a political party does not have the same deterrent effect as losing a driving licence—not for us, obviously, but we are not typical, although it is touch and go. I assure the House that this measure has been used for a long time in the Child Maintenance Service. As the noble Baroness, Lady Stedman-Scott, said, its effectiveness is shown in that it almost never needs to be used.
As a final reminder, this is about debt recovery. It is about people who, by definition, are not on benefits and not in paid employment. The reality is that if you owe DWP money and you are on benefits, the DWP can already deduct it from your benefits, and if you get a wage packet the DWP can deduct it from your wages. However, if you are none of those things—if you are privately wealthy, self-employed or paid through a company—and you owe the DWP money, the department does not have the same ability to go after that money as it does for those who are on benefits or in PAYE. The Bill gives the department the opportunity to use measures such as deduction orders and other tools to try to bring people to the table. If someone comes to the table to have a conversation, we will begin to arrange a payment plan. The other measures are there only if people refuse to engage and simply will not come along and do what they ought to do.
Lord Sikka (Lab)
Since my noble friend mentioned me, I think I am honour-bound to ask her a couple of questions. Will she confirm that foreign bank accounts will not be covered by any of the measures in the Bill?
Baroness Sherlock (Lab)
I think we should come back to the detail of how bank accounts are dealt with in Committee. I am meant to stop at 20 minutes and the clock is saying 19 minutes and 38 seconds.
Baroness Sherlock (Lab)
I will keep going for a bit.
A number of noble Lords asked whether the banks want to engage. We have been engaging very much with the banks. Meetings have been held by the DWP and Cabinet Office Ministers, some of which I have attended, with senior representatives of the finance industry, including UK Finance, individual banks, building societies and the FCA, and we continue to work closely with banks on the design and implementation of the relevant measures. We have set out the expected cost to banks where possible, and an impact assessment of the business costs of the EVM will follow, but that will depend on how the measure is designed and the way in which it will work.
On potential conflict with financial crime duties—this is important—the Government are working closely with UK Finance and the FCA to make sure the measures align appropriately with wider financial crime duties. That includes work on the development of the PSFA’s guidance and the DWP’s codes of practice for debt recovery and the EVM. We will make sure that works appropriately.
I think I am running out of time, but I will just say a word on carers. I absolutely agree with the noble Lords, Lord Vaux and Lord Palmer, and the noble Baroness, Lady Kramer, who mentioned the important contributions of carers. This Government are absolutely behind carers. We introduced the largest ever increase to the earnings limit in carer’s allowance. Crucially, this Government introduced a review. We commissioned Liz Sayce to lead an independent review into earnings-related overpayments of carer’s allowance. The review is expected to reach its conclusions this summer and we are looking forward to learning from that to make sure that any learning can be fed back into the way the department works.
Finally, I will say a word on safeguarding. I am sorry to say I have forgotten which noble Lord mentioned that the DWP Select Committee put a report out on this subject. We will look at it very carefully and, obviously, take close account of its recommendations. Long before that happened, we put out our Green Paper, Pathways to Work. The Secretary of State is very keen to make sure the DWP gets safeguarding right. We committed in that Green Paper to introducing a new department-wide safeguarding approach. It will be a very significant departure from the way things are done. We are going to work with stakeholders and consult to make sure we get that right.
To reassure noble Lords, the DWP looks carefully all the time at how we support vulnerable people. Decisions are taken individually and that is taken into account. Of course mistakes will be made on occasions, but as a department we place a huge store on making sure we understand the circumstances people are in and support then when they need help, and try to find the best way through for each individual.
Lord Davies of Brixton (Lab)
I am annoying the Whip. Does my noble friend have a response to the point I raised on behalf of my noble friend Lady Lister about the position of people who reasonably assume that the money received in error was rightfully theirs?
Baroness Sherlock (Lab)
I have a wodge of answers to questions asked by a lot of noble Lords, and I am afraid time has run out. But to be clear, we need to not ally fraud and error. This is just a data pull. If data comes from the banks to the DWP, it will be used with other data to make an individual assessment of someone’s position and appropriate decisions will be made at that point about how to deal with it. It may be an overpayment, a genuine mistake, an act of fraud, or there may be no problem. Cases will be looked at individually.
This Bill delivers on our manifesto commitment. It is expected to save £1.5 billion over the next five years as part of wider action at the DWP to save a total of £9.6 billion. The Bill will bring in new powers for the PSFA to tackle fraud and it will deliver the biggest upgrade to the DWP’s counterfraud powers in over 14 years. We believe it is proportionate and demonstrates that we will take action against those who willingly defraud our public services, providing the right tools so that we can step up to prevent, detect and deter criminal activity. I very much look forward to working with so many noble Lords across the House—it says here—during the passage of this important Bill. I look forward to seeing many of them in Committee. I beg to move.
Renters’ Rights Bill
(2 days ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, before we start the debate on the first group, it may not surprise noble Lords that, in place of my noble friend Lord Wilson of Sedgefield, today I remind noble Lords, for the final time in Committee, of the protocol around declaring interests. Noble Lords should declare relevant interests at each stage of proceedings on a Bill, which means that relevant interests should be declared during the first group in which a noble Lord speaks in Committee. If today is a noble Lord’s first contribution, any relevant interest should be declared when they first speak.
Amendment 275B
Baroness Coffey
“Designated rural areas: revocation(1) Within six months of the day on which this Act is passed, the Secretary of State must, by regulation, revoke the designation of parishes as rural areas for the purposes of Right to Buy if they meet the condition in subsection (1).(2) The condition is that the population of the parish exceeds 3,000 people, according the 2021 United Kingdom census.”Member’s explanatory statement
This amendment seeks to ensure that the Secretary of State updates the designation of rural areas for the purposes of Right to Buy, so that parishes which now have a larger population (such as Colden Common or Rendlesham, in Suffolk) are no longer designated.
Baroness Coffey (Con)
My Lords, I am continuing the discussion that I brought to the Committee with Amendment 182. At the time, I referred to the fact that there were other amendments that were relevant to that debate but, because they were not before your Lordships, I could not speak to them. That was because there was a bit of a dispute about whether this amendment was in scope. It comes back to the issue of people in social housing and whether they have the right to buy or to acquire, which we discussed at length on Monday. I recall that one of your Lordships expressed some damning doubt about all this, but the whole point of this amendment is to address the question: “what is rural?”
One thing that noble Lords may not be aware of is that, when these powers were set up, what actually happened—particularly on right to acquire—was that in 1997 a whole bunch of statutory instruments were put into place naming individual parishes and parish areas. County by county, right across the country, whole lists were put in place. Curiously, some of the places not included were perfectly rural and below that so-called 3,000 threshold, used generally by government to consider the difference between somewhere considered rural and not.
With reference to this amendment, what has happened over the years is that places have grown. Some of these villages have deliberately become areas of growth. I will mention a couple. I happen to know parts of Suffolk and Hampshire reasonably well, having lived there for many years. There are places such as Four Marks, near Alton, in Hampshire, or Colden Common near Winchester. I was particularly inspired by the story that I told the Committee about my discussions with residents of Rendlesham in Suffolk—but there are more and more.
Instead of trying to get into some kind of hybrid situation, I thought that it would be worth while to not deprive people due to the fact that, if they lived in a different place where the population was over 3,000, they would not have that arbitrary rule—because then they would be able to have that, if we did it by the threshold of what is considered rural rather than what is named, or not. To that end, this was supposed to be a combined debate, as I still feel that it is somewhat unfair that many people cannot acquire their house from social housing, particularly in the countryside, and I still think that the issue needs redressing. This is a mechanistic way of making sure that the threshold applies for rural social housing—if it is still in a genuinely rural area—but if it is no longer realistically a rural area people should be able to acquire the right.
Baroness Scott of Bybrook (Con)
My Lords, the amendment tabled by my noble friend Lady Coffey raises an important and timely issue: the need to revisit and update the designation of rural areas for the purposes of the right to buy. The proposal is clear. It would require the Secretary of State, within six months of the Act passing, to revoke rural area designations for parishes where the population now exceeds 3,000 people, based on the 2021 census. The rationale is that, as we have heard, some areas that were once small villages have grown significantly and may no longer meet the criteria originally used to justify rural protections under the scheme.
We recognise the logic behind this approach. Designations made years ago may no longer reflect the current character of certain parishes, and it is only right that we review such classifications to ensure that they are based on accurate and up-to-date information. However, while we understand the intention behind the amendment, we believe that a more considered and locally informed approach is needed. First and foremost, this should be done in consultation with local authorities, which are best placed to assess not just the population figures but the broader housing context within their communities. A numerical threshold alone does not tell us whether a parish still functions as a rural settlement, nor whether it has the capacity to replace any lost social housing.
Indeed, we would argue that the conversation should be based not solely on population size but also on the number of homes in the settlement, specifically the number of affordable or social homes available, and the prospects for building more. In many villages, even those with more than 3,000 residents, the opportunity to build new homes, let alone new affordable ones, is extremely limited. Planning constraints, infrastructure challenges and community sensitivity all contribute to a situation where, once a home is sold under right to buy, it is unlikely to be replaced. That is why the protection of the existing social housing stock is so vital in these areas. Without it, we risk hollowing out rural communities, pricing out local families, draining the workforce and diminishing village life.
While we support the principle of ensuring that designations are kept up to date, we believe that any such change must be grounded in a wider understanding of rural housing dynamics. This means not just reviewing census data but supporting councils to update and verify housing data and allowing for flexibility where a parish may meet the population threshold but still faces acute rural housing pressures. This is not simply a technical matter of numbers; it goes to the heart of how we preserve the character and sustainability of rural communities. Let us ensure that any change to rural designation is made with care, with consultation and with full awareness of its consequences.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, before I make my comments on the noble Baroness’s amendment, I hope that the House will indulge me for a few brief moments as we start our final day in Committee on the Renters’ Rights Bill. First, let me say how noticeable it has been that, while we may have debated and occasionally had our differences on the detail of the Bill, there has been a great deal of consensus across the House on the need to improve the renting landscape for tenants and for the vast majority of good landlords. Those landlords who choose to exploit their tenants and game the system not only make their tenants’ life a misery but undercut and damage the reputation of others. It is time that we took the steps in this Bill to put that right.
The Bill has shown the best of our House, with noble Lords providing their expertise, knowledge, wisdom and thoughtful reflection to improve the legislation before us. I am most grateful for the engagement before and during the passage of the Bill. We have had some unusual and difficult sitting hours on the Bill, largely because of other business of the House and in no way because of unnecessary or lengthy contributions to our deliberations. I therefore thank all noble Lords for their patience and good humour during late sittings. I am very grateful to the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, on the Opposition Front Bench, the noble Baronesses, Lady Thornhill and Lady Grender, the noble Earl, Lord Kinnoull, and the right reverend Prelate the Bishop of Manchester, not to mention noble friends on my own Benches for a deal of passion and enthusiasm.
I thank the Bill team, my private office and the doorkeepers and staff of the House, including the clerks and catering staff, who have stayed, sometimes into the early hours, to make sure we are all safe and looked after, and the Hansard team, of course, doing their brilliant work. I thank the usual channels, which have been negotiating to make sure we complete Committee in good time. Last, and by no means least, I thank my Whip, my noble friend Lord Wilson, who is not in his place today but who has sat patiently beside me, sometimes carrying out extreme editing of my speeches. I forgive him for that—he did not get his hands on this one—and I am very grateful to him.
There are millions of renters and landlords out there who are awaiting the passage of the Bill to ensure that the renting minefield is fairer, safer and more secure. As we move forward to Report in early June, I look forward to continuing to engage and work with your Lordships to make sure that this is the best Bill it can be. In the meantime, thank you for making my first time taking a Bill through the House such a collaborative and positive experience.
I thank the noble Baroness, Lady Coffey, for her Amendment 275B to revoke the designation of parishes as rural areas for the purposes of right to buy where the population exceeds 3,000 people. The amendment would require the Secretary of State to revoke the rural designation of any parish with over 3,000 inhabitants for the purposes of right to buy. It would not have any impact on the right to acquire housing association property in rural areas. I have to say that this amendment is a bit of a stretch for the scope of the Bill, but it is important that I should respond to the noble Baroness’s concerns.
Under Section 157 of the Housing Act 1985, the Secretary of State has the power to designate by order certain areas as rural—typically, settlements with populations under 3,000. A landlord in a rural area may impose restrictions on the buyer of a right to buy property, to prevent the property being sold again, without the former landlord’s consent, other than to a local person or back to the landlord. The noble Baroness’s amendment would remove the ability of landlords to include resale restrictions on properties sold under right to buy in those designated rural areas where the population was above 3,000, which currently helps preserve homes for local people in perpetuity. The noble Baroness, Lady Scott, is quite right to say that, if we were going to make any changes to this, it would have to be done very carefully, and definitely in consultation with local people and local authorities.
These exemptions are in place to help retain affordable housing in communities where replacement can be unfeasible due to high build costs, planning limitations and land availability. We have heard much about that in the discussion on this and other Bills and the Government do not intend to remove these protections. On this basis, I ask the noble Baroness, Lady Coffey, to withdraw her amendment.
Baroness Coffey (Con)
My Lords, I have heard from both Front Benches and there is clearly no appetite for this. I am just very conscious that there are some areas that have grown substantially over more than 25 years. There is a substantial amount of new housing going in, including new social housing, but, because of the designations set in stone in 1997, some people are being denied the opportunity they expected to participate in owning a home that they might not be able to afford initially but might in time. It is something I had hoped would be considered a little further, but I understand where both Front Benches are coming from and I beg leave to withdraw.
Baroness Coffey
“Right to mobility aids(1) A relevant person must not, in relation to a dwelling that is to be let on an agreement which may give rise to a relevant tenancy, decline a reasonable request from a tenant to install mobility aids in the dwelling.(2) The provision in subsection (1) applies only where the tenant is able to arrange for the payment and installation of the aid themselves.(3) For the purpose of this section, a “mobility aid” is a device or piece of equipment installed in the property to assist in the occupier’s mobility around the property.”
Baroness Coffey (Con)
My Lords, the reason for this amendment is that I looked carefully at some of the previous debates on the broader issue of trying to help people stay in their home, even though they might be in pretty long tenancies. I myself was a tenant of one landlord in this city for 11 years. I did actually suffer a Section 21 eviction—but there we go. Nevertheless, I think that there were some gaps in the suggestions put forward. In particular, I am thinking about amendments we debated that would have required a local authority assessment to have been undertaken in advance of any installation of equipment.
Another amendment would have capped the cost allowed to an unknown figure. That also did not extend to social housing. I am very conscious that that is the case for a lot of legislation. One part of the Bill tries to bring standards from social housing into the private rented sector, but I am learning during this process quite how many things do not apply to social housing that we expect in the private rented sector. This is a good example.
I am conscious that, for many people, it would be far easier to help them stay in their homes, which is one of the key elements of health and care strategies put out by a variety of Governments over many years. Instead of having to go through quite an awkward process, if a tenant wanted to make changes to their home—which they would pay for—in regard to what is a protected characteristic, they should be able to do so without having to go through all sorts of hoops. My intention is to make it a lot easier for people to continue to enjoy their lives in the place they call home. I beg to move.
Lord Shinkwin (Con)
My Lords, I support Amendment 275C in the name of my noble friend Lady Coffey. I apologise to noble Lords that this is the first time I have spoken on the Bill. I thank my noble friend for tabling this amendment, for a number of reasons: first, as someone who, as a result of injury, has had to be far more reliant on the mobility aid that is my wheelchair than is usual; secondly, because I recognise that one’s disability and resulting need to use a mobility aid, such as a wheelchair, does not change simply because one happens to be a tenant; thirdly, and perhaps most importantly, because it gives me the opportunity to bring to the House’s attention a real-life example which I hope will underline the amendment’s importance.
I should declare an interest. The example I give concerns a person I know—an eminent solicitor with an international law firm who has become severely disabled in adulthood as a result of a condition called Stickler syndrome. For those noble Lords not familiar with this condition—I confess that I was not—common symptoms include vision problems such as near-sightedness and retinal detachment, hearing loss and joint problems such as hypermobility and arthritis. In this individual’s case, it is extremely painful and debilitating and has required extensive surgery, including within the last six months. Remarkably, she is still holding down a demanding job.
However, her suffering is being unnecessarily and even gratuitously compounded by the concerted and blatant disability discrimination she is encountering from HAUS Block Management and the right-to-manage company covering the development in which she lives. This disability discrimination relates directly to her use, as a long-term tenant, of her mobility aids in her rented dwelling, which includes a courtyard garden that she shares with other residents. The amendment refers to a reasonable request from a tenant to install mobility aids in the dwelling. Her request is undoubtedly reasonable, but the irony is that she is not asking for an installation. All she is asking for is the right to use her mobility aids in a courtyard garden, which is part of the dwelling.
There are two aids on which she depends for her mobility to live independently and get to work. Recent deterioration in her condition has necessitated the increased use of a wheelchair and increased visual impairment has required the use of an affectionate, intelligent and furry mobility aid. I refer of course to her adorable, but ageing, canine companion, without which she would immobile and could not function: her guide dog.
The amendment is so important to this individual and other disabled people in her situation—perhaps to an even greater degree than my noble friend appreciated when she tabled it—because despite my friend being a lawyer and having engaged in writing with HAUS and the RTM to explain her legal rights in relation to step-free access to the garden for her guide dog and her wheelchair, all her appeals for kindness, help and basic human empathy have been met with disdain. I know this because I have here in the Chamber a copy of her email correspondence with HAUS and the directors of the RTM. It is a damning indictment of how the rights enshrined in disability discrimination and equality legislation—on which your Lordships’ House has done so much brilliant work over the years to pass—are being traduced by organisations such as HAUS and the RTM. What a sad reflection on society that this could happen in plain sight in 2025, the 30th anniversary of the Disability Discrimination Act. It is heartbreaking—quite literally, in the case of this individual. Her condition is by its very nature isolating. HAUS, her RTM directors and her neighbours know that, and yet they give the impression that they are waiting for her to die, and their callous indifference adds to that sense of isolation.
What is to be done? It would be so easy for the chief executive of HAUS, Gareth Martin, to facilitate the speedy resolution of this situation by ensuring that the RTM directors act in accordance with her rights and with compassion, and that a key was provided, on a permanent and unrestricted basis, to the courtyard garden—which happens to be next to my friend’s apartment—so that she could use her mobility aids in it. As Guide Dogs has explained to in an email to HAUS and the RTM directors, this is vital for the welfare of both her ageing service dog—her mobility aid—and the individual herself.
She is being undeniably persecuted for having the temerity to assert her rights, in a way that would be totally unacceptable were it to be carried out on the grounds of race, for example. Incredibly, as if to add insult to injury, the individual has also been told that a few flowerpots, which contain plants for sensory stimulation and provide her with the very few flashes of colour she can still just about discern, must be removed.
In conclusion, will the Minister meet me so that we can explore how we might persuade HAUS and the RTM to respect this individual’s rights with regard to her mobility aids, in line with the spirit of this amendment? Can directors of companies be struck off, for example, for engaging in what is obviously wilful disability discrimination? If not, how can we ensure that they are? Perhaps their appalling behaviour could be brought to the attention of the relevant regulators—I cannot imagine their clients would be impressed. I look forward to the Minister’s response, and I reiterate my deep gratitude to my noble friend for tabling such an important amendment.
Baroness Scott of Bybrook (Con)
My Lords, I thank my noble friend Lady Coffey for tabling this amendment. I also pay my heartfelt thanks to my noble friend Lord Shinkwin; he always brings enormous knowledge and so much personal experience to any debate, as he has done today.
We briefly discussed support for disabled tenants in an earlier group, and we on these Benches firmly support steps to help disabled tenants access the homes and services they need. With the appropriate support, disabled people can live more fulfilled lives and thrive. We have come so far in recent years on support for disabled people to live full and happy lives in their own homes, so I am grateful to my noble friend for moving this important amendment today.
Amendment 275C seeks to prevent landlords and agents declining reasonable requests by tenants who need mobility aids to have them installed. It is a limited amendment that applies only where a tenant can arrange for the payment and installation of the aids themselves. This is an excellent challenge to the Government and we hope that the Minister will seriously consider this proposal and work with my noble friend to deliver the protections we need for disabled tenants. Perhaps this is something that we could revisit on Report.
We also wish to work constructively with my noble friend on how we might consider broader plans to ensure that the removal of mobility adaptions is deliverable, affordable and—crucially—even possible in practice. This is a vital area that demands serious attention from the Government, and the onus is on everyone across the Committee to put forward practical and compassionate solutions that recognise the real-world challenges faced by landlords and tenants alike around adapted homes. We need to look further at who would be responsible for covering the costs of restoring the changes to the original condition of the property. There is some more work to do, but I am sure that we can all do it before Report, and I look forward to working with the other parties to see whether we can find a sensible solution to the issue. We must ensure that any policy in this area supports accessibility, while remaining realistic and fair to all parties concerned.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Coffey, for her Amendment 275C, which seeks to prevent landlords, or any other relevant person in relation to a tenancy, unreasonably refusing a tenant request to install a mobility aid in their home. I also thank the noble Lord, Lord Shinkwin, and the noble Baroness, Lady Scott, for their contributions.
We debated in detail similar amendments on home disability adaptations last week. As I stated then, I absolutely agree that we should take steps to remove barriers that unreasonably prevent disabled renters getting the home adaptations they need—a need so powerfully described by the noble Lord, Lord Shinkwin; I will write to him about the routes to redress in cases such as the one he raised.
However, I do not believe that this amendment is the right way to do this. The Equality Act 2010 already provides protections for disabled tenants, and that applies whether they are in social rented or private rented housing. This includes providing a procedure under which they can request permission in writing from their landlord to make adaptations, including additions to or alterations in the fittings and fixtures of the home, such as mobility aids.
Landlords cannot unreasonably refuse such requests. Creating a new specific obligation in relation to mobility aids in particular would increase the complexity of the system unnecessarily, making it more difficult for tenants to navigate. We also wish to avoid creating a two-tier system in which people with impaired mobility have different rights from people with other disabilities or impairments.
I am very grateful to the noble Baroness, Lady Coffey, for introducing this amendment, because it gives me an opportunity to update noble Lords. There was a lot of discussion about this in the other place during the passage of the Bill. There have been some further commitments, and these were set out in a recent letter from the Minister of State for Housing and Planning to the MPs who tabled amendments in the other place. The letter stated that the Government would take the following actions to address known barriers to disabled tenants accessing the home adaptations they require.
With the leave of the Committee, I will update Members on that now. As highlighted in research carried out by the Equality and Human Rights Commission and the National Residential Landlords Association, a major challenge to the operation of the current system is the lack of knowledge among landlords, tenants and agents. The Renters’ Rights Bill includes the power to require landlords to provide a written statement of terms to new tenants. It is our intention, subject to drafting and scrutiny of the secondary legislation to mandate that this statement sets out the duty on landlords under the Equality Act 2010 to not unreasonably refuse disability adaptation requests from tenants. This will ensure that parties are aware of rights and obligations in relation to adaptations when they enter into a tenancy.
Baroness Coffey (Con)
My Lords, one of the things I am learning about this place is that by tabling amendments to legislation you get to discuss aspects of policy. I was not here for the other debate, but I thought there were some deficiencies in what was being proposed.
I am very pleased to hear about the actions taken by Matthew Pennycook, the Minister. That is welcome news, and I think that will be welcomed right across the country. I would be grateful if the Minister could put the letter in the Library so that everybody can see this. With that, I beg leave to withdraw.
Member’s explanatory statement
This amendment is consequential on the omission of clause 3.
Member’s explanatory statement
This amendment is consequential on the new Part 2 that would be inserted into Schedule 6 by the amendment in my name
“(1) Subject to the exceptions set out in this section, this Act comes into force on the day on which it is passed.(2) Parts 2 and 3 of this Act come into force on such day as the Secretary of State may by regulations made by statutory instrument appoint.” Member's explanatory statement
This amendment and others in the name of Lord Bird would bring the majority of the Act into force on the day that it passes, with the exception of some areas where regulations or consultation are needed.
Lord Bird (CB)
I declare my interests in the register in and around housing and things in that area. I will speak to Amendment 278 and the other amendments in my name—Amendments 282, 286 and 291—as they all work together. My amendments would bring the majority of the Bill and the new tenancy regime into force on the day that it passes, with the exception of some areas where regulations or consultation are needed. The purpose of this is to end Section 21 evictions at the earliest possible moment.
I have some interesting research, which I would like to give. No-fault evictions are currently at an eight-year high. Since the previous Government pledged to end no-fault evictions in 2019, 1 million renters have been served a Section 21 eviction notice. Over 100,000 households have been threatened with homelessness due to one of these evictions. Any delays in ending Section 21 will lead to more renters facing an unwanted move, potentially causing hardship and, in some cases, homelessness. Section 21 has meant that privately renting is considered to provide instability. A quarter of all renters have lived in three or more homes in the last five years. I could go on reading like this, but it is not my style, so I will end there.
It was 2,222 days ago when then Prime Minister May said that we were going to get rid of Section 21. The reason that I have brought forward these amendments is that they would not allow ending Section 21 to be kicked into the long grass, as it has been over the last six years. Michael Gove and everybody in the last Government whom I spoke to said, “Yes, yes—we ought to do something about it”. I am very concerned that what will happen is that we will say that Section 21 needs to go through some more debates and that we need to wait for the legal process, but then even more people will end up being thrown out of their homes.
I raise another question, which I find very frightening. I am the product of a slum house and slum landlords. I was born in 1946; when in 1951 we did not pay the rent, we were thrown out in the streets, and all our goods were put out there. This would really upset people in the Labour Government at the time, but they did not do an awful lot about it. The Conservatives came in, and they did not do an awful lot about it—the fact that a family could be laid out on the streets without the law becoming in any way involved.
When the Conservatives came in, they passed a rent Act—I think it was in 1955—which changed things; when Labour came in, in 1965 it was changed again. You could look at it as the goodies and the baddies: for a Conservative Administration, the goodies are the landlords and the baddies are the tenants; for the Labour Party or a Labour Government, the landlords are the baddies and the tenants are the goodies. I have watched this and been involved in this process for decade after decade. From my experience, I feel that we need to arrive at a situation, but we are not going to unless we really rethink how we deal with tenancies, landlords and tenants. The important thing to me is that we stop this coming and going, this balancing—this seeking of who is in the wrong and who is in the right. Both sides of the argument must get together, and this is where I want the work to be done, where tenants and landlords are advantaged by the stability that comes, and it is not engined by the fact that it depends on which Government are in as to who are the goodies and who are the baddies.
This has been a major problem for me over many years. In 1965, when the Labour Government under Harold Wilson brought in the Rent Act, it meant in fact that you had this peculiar situation where all the support went to the tenant, and for hundreds of thousands of people who were landlords and had property, it was removed, and enormous pressure was put on social housing. So for social housing, the local authorities—it was not housing associations—had to keep raising the bar. My brothers, who were on the council housing list in Hammersmith and Fulham in 1965 and were number 101 and I think 105, were scratched because the pressure on social housing was so enormous. Social housing ended up largely with people who were incredibly troubled, not ordinary working-class people, often single mothers with a number of children, and you had this development of the creation of almost ghettos of people who were living in social housing rather than the social mix of the social housing I moved into at the age of 10.
I use this opportunity to say that I want to get rid of Section 21 because it legalises insecurity. But overall, I also want us to be looking carefully at how we can begin a process of balance and equilibrium between tenant and landlord, because they both need each other. How many tenants are paying for people to buy houses? How many tenants are helping landlords put money aside for their pension? How many tenants are putting the children through university, because it is one of the few places where you can get prosperity? Unless we get to a situation where we get the equilibrium, then over the next 10, 20 or 30 years, as politics change and as Governments change, we are going to be having this kind of arsy-versy sort of world of one being the bully and the other being the hero or victim. I beg to move.
Lord Deben (Con)
There is a point here which I hope the Minister will listen to carefully: the speed with which legislation is put into operation. I make this point only because it has been true over a whole range of issues. It is true on new housebuilding: we change the building regulations, and it is five years before they actually come into operation, because of the way in which we deal with our legislation.
Let us take the disgraceful situation of successive Governments, of both parties, on Dalits. We passed the change so that Dalits could claim compensation for the way they were treated because of their caste. We changed the law in this House. It still has not come into operation—it has been put off and put off because of the way the legislation works.
I hope the Minister will recognise that what has been so ably introduced is two things. First, I entirely agree that we want a proper balance and a way forward. Tenants need landlords and landlords need tenants; that is obviously so. But I hope she will also take on board the fundamental issue of how quickly changes in legislation go through, and how often you are left with continuing delay. It is not just in this Bill—and she is not responsible for other Bills—but I hope she will take back the genuine concern of many of us about the length of time it takes for decisions that we make to affect ordinary people, which is, after all, why we make them.
Lord Jackson of Peterborough (Con)
My Lords, I shall contribute very briefly to the debate on this important amendment. I say at the beginning that I defer to no one in my admiration for the noble Lord, Lord Bird, and his heroic battle over many years to raise the issue of homelessness and those less fortunate people who do not have access to good housing. Sometimes, you come upon an amendment and you have to make a decision between your heart and your head. Your heart is very much taken with the sincerity of the noble Lord’s argument about the need to be fair—principally to tenants, but also to landlords—in the way you put legislation together.
I absolutely and fully take that view, but the noble Lord will understand that one of the reasons I do not support his amendment is that the Government, rightly or wrongly, have brought the Bill to this stage. I believe that Section 21 will have unintended consequences. It will reduce the amount of rental stock, and mean that people who own capital will sell it to other people who own capital—landlords—and they will not put that property back on the market for those in the most desperate need, mainly young working families, but also others in the market. The noble Lord will know—it is a wider issue, I accept—that rent controls very rarely work, whether it is in Barcelona, New York, Scotland or other places in the world. So that is the head part. On the heart part, I absolutely agree with what he is saying.
My point is that the Government have reached this juncture, and we are about to go into Report, the Bill is going to happen and there is a consensus, whether I like it or not. Given that we have some enduring concerns about court capacity and the ability of the court system to deal with any concomitant legislation which might arise from the Bill—which will become an Act in the not-too-distant future—I feel that his amendment, while extremely well-meaning and very sincere, will not help deliver what we want, which is fairness and equity for tenants and landlords. It is only on that basis that I respectfully say that I do not support the amendment, and I suspect that the Government will take a similar view. I applaud the noble Lord for everything that he has done in raising these very important issues over many years.
Lord Hacking (Lab)
My Amendment 281 has not been formally called, but if it is the wish of the House, I will address it. The other amendments, Amendments 279 and 280, have already been debated.
I was rather surprised to be asked again to declare my interests, because I have done so on several occasions already during the passage of the Bill. Oh, I am now being released. Anyway, my interests are disclosed in the register.
I therefore move on to a very responsible role that the noble Lord, Lord Bird, and I have, and that is of moving the last group of amendments in this Committee. It has been a long journey to get to this point, involving a lot of hard work by many Members of the House, but none more so than my noble friend the Minister, who has worked extremely hard throughout all the Committee sittings.
As usual, the noble Lord, Lord Bird, gave a very spirited speech. He spoke with great passion. It is always delightful to hear him, and I welcome him back. He was not here last night but he has given the spirited speech today. I am afraid that I do not agree with his rather simplistic description of the Conservative Party as running their policies based on baddie tenants, or that my party is running policies on baddie landlords. I know from debates in the House and discussions with the Minister that there has been a great effort by my party to produce a Bill which is fair and balanced. I am looking at the noble Baroness, Lady Scott, but she is not quite coming with me on this proposition. However, I believe that my noble friend the Minister largely has achieved that.
We have heard the noble Lord’s reasons for different commencement dates under the Bill. All my amendments go to Clause 145, on commencement. I have tabled Amendments 281, 287, 288 and 289. They all seek to give more time for the commencement of certain parts of the Bill. I draw attention to Amendment 288, which seeks to give more time, and different times for new tenancies, suggesting increasing the times to six months and, for existing tenancies, 12 months.
This is a problem that has been presented to me by estate agents. We all should understand how impactful this Bill is. Clause 1 of the Bill states that it applies to all tenancies—existing tenancies and new tenancies. In so far as it applies to existing tenancies, it applies to a great number of tenancies that are fixed term, many of which are shorthold. My wife and I use a 12-month fixed-term tenancy.
Estate agents have now got a very different role. Concerning new tenancies, that is okay. A new tenancy will be set up as a periodic tenancy with, ab initio, a new tenant. However, the existing tenancies produce different work for the estate agent. Under the present system of shorthold tenancies, the agent contacts the tenant and the landlord about three months before the expiration of the tenancy and checks whether the tenant wants to go for another period of tenancy and whether the landlord is agreeable to that. He also checks the position on the amount of rent. I do not know, and neither do many estate agents, what the new requirements will be. Is it proper for the estate agent to contact the tenant and ask, “How much longer do you want?” It is a periodic tenancy; there is no end date. Would it be proper for the estate agent to then engage the tenancy on the amount of rent? These are difficult decisions that have to be made.
In this modern age, these things have to be set up with software and the like, which is why I am asking my noble friend the Minister to give more time. All that has been asked of me, which I am now asking of noble Lords and, more directly, the Minister, is this: can we have more time, so that all the right procedures are set up and it does not end up being a scrambled egg?
Baroness Grender (LD)
My Lords, I rise briefly on this group, which concerns commencement. I particularly thank the noble Lords, Lord Hacking and Lord Bird, for ensuring that this debate took place, and the noble Lord, Lord Deben, for his wisdom and experience in implementation. I know that my noble friend Lady Thornhill will regret not being here for day 7 of the Committee but, as she explained to the House last night, she had an appointment that she could not change, because this day was unexpected. I add my words of thanks to everyone who has been here all the way through these seven days of Committee. I feel that it has been a quality experience and debate. In particular, I thank the Minister.
There is no doubt that the central aim of this Bill, the long-overdue abolition of Section 21, must be delivered swiftly. This abolition will ensure that renters no longer live under the threat of no-fault evictions. This was a promise that the last Government failed to deliver over a shocking six-year period. Indeed, we have already heard the devastating consequence of that broken promise, with over 120,000 households served with no-fault eviction notices since it was first made in 2019, when the noble Baroness, Lady May of Maidenhead, was Prime Minister.
Lord Hacking (Lab)
My Lords, I am sorry to interrupt the noble Baroness. This should be directed also to the noble Lord, Lord Bird. As I read in Clause 1 of the Bill that all existing tenancies are made periodic tenancies, that must involve the ceasing of the use of Section 21.
Lord Cromwell (CB)
That is what the noble Baroness is saying.
Baroness Grender (LD)
Yes, that is exactly what I am saying: this will bring about the abolition of Section 21.
That failure has rightly eroded trust. It now falls to this Government to deliver what was promised without further delay. Renters should not be asked to wait any longer for the basic security that this legislation is intended to provide. At the same time, we on these Benches recognise that proper implementation matters. Noble Lords would not find that surprising, given that every other member of this Bill team is a former or current councillor, with the exception of me.
The changes this Bill brings are significant and must be supported by clear guidance, well-prepared systems and proper resourcing, not least for the courts and local authorities. Yes, we need preparation time, but that preparation must not become an excuse for indefinite delay. There is a question of balance. Where regulation or consultation is needed, that work must of course be done, but it should be carried out with urgency and to a clear and published timetable. Renters deserve certainty about when these protections will come into force, but so too do landlords. Those operating in good faith need to understand the new framework that they will be working within and to have time to prepare for it, but they should not be left in limbo. The entire sector needs clarity and consistency. Delays would only undermine confidence in this long-awaited reform.
I have only one central question for the Minister. The Government publicly stated that Section 21 would be abolished “immediately” in their 2024 manifesto. However, Clause 145(5)(a) indicates that the abolition will take effect two months after the Bill is passed. The Bill also says that this is a decision for the Secretary of State. Can she please use this opportunity to clarify—my apologies if she has already explained this endlessly, but I am still slightly confused on this question—which timeframe is correct? It would be helpful, for instance, to understand the time lapse between the amendments from the noble Lord, Lord Bird, and the commencement date of the abolition of Section 21.
Finally, many of us were here until 1 am on Tuesday and until midnight last night, and this is now our seventh day. I am certain that there are many Peers who would do that again and again to get to the abolition of Section 21—to get to, at pace, that long-promised, much-needed change in the law. I look forward now to hearing when.
Lord Cromwell (CB)
Perhaps I may offer the briefest of comments. At the risk of being struck by lightning: on the seventh day, the Lord rested. Let us hope we all get some rest soon.
I mention two words: equilibrium and scramble. Equilibrium is what we all seek, but it is a fact of life that one woman’s equilibrium may be different to another woman’s equilibrium. The perpetual life of politics is trying to find an equilibrium between different viewpoints. Regarding scramble, there will be a scramble whenever this comes in, and that is not a reason to put it off.
We touched on the database yesterday. There are bits of the Bill that will come in more slowly, but Section 21, to echo the point from the noble Lord, Lord Bird, will definitely go. If the Bill achieves nothing else, Section 21 will go.
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Lord, Lord Bird, who, as always, so passionately opened this group. I thank him for all his knowledge and particularly the passion that he brings on anything to do with homes, homelessness and vulnerable people.
The noble Lord’s Amendments 278, 286 and 291, along with others in his name, would bring the majority of the Act into force on the day it receives Royal Assent, save for a few areas requiring further regulation or consultation. We on these Benches have consistently urged the Government to not take this approach. We have called on them to reaffirm their long-standing commitment to prospective lawmaking by providing clear commencement dates and reasonable transition periods for all new obligations. This is essential to protect both tenants and landlords from abrupt and potentially unfair changes.
A phased approach would allow landlords, tenants and letting agents time to understand and adapt to the new legal framework. Commencing the Act immediately upon passage does not provide sufficient time to do this. We simply cannot expect landlords to react and comply with significant new requirements on day 1. Indeed, the evidence bears this this out. In a recent survey conducted by Paragon, 57% of landlords said they had heard of the legislation but did not fully understand its implications, and a further 39% said they knew little about it. Those statistics point clearly to a knowledge gap in the market—one that we must not ignore. Therefore, we believe that a clear transition period is necessary.
Amendments 281, 287, 288 and 289, tabled by the noble Lord, Lord Hacking, present a credible and constructive challenge to the Government’s current position. They propose a model that echoes the approach taken by the predecessor to the Bill—an approach grounded in prospective lawmaking. Phase 1 in that Bill would have applied the new rules only to new tenancies with at least six months’ notice, and phase 2 would extend the rules to existing tenancies no less than 12 months later. This two-phase model provides a reasonable and practical path forward, allowing time for proper education, preparation and implementation. I urge the Government to reflect carefully on these proposals and to recognise the importance of a fair and orderly transition.
We all agree that tenants deserve safe, secure and decent homes at a fair price, but to deliver that we need a functioning rental market with enough good-quality homes to meet growing demand. We need more homes in the right places. This Bill, regrettably, puts that in danger. Rather than boosting supply, it risks driving landlords out of the market, shrinking the number of available homes and pushing rents even higher. If we get this wrong, renters will pay the price. Balance is essential. At present, we believe this Bill does not strike that balance.
Before I sit down, I thank and congratulate the noble Baroness on how she has conducted the first Bill that she is taken through Committee, and all noble Lords who have taken part in excellent, well-informed debates over the past seven days. I look forward to Report.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Bird, and my noble friend Lord Hacking for their amendments relating to the commencement of measures in the Bill. I thank the noble Lords, Lord Deben and Lord Cromwell, and the noble Baronesses, Lady Grender and Lady Scott, for participating in this group.
I turn to Amendments 278, 282, 286, and 291 in the name of the noble Lord, Lord Bird. I add my tribute for all the work he does to tackle homelessness. He is a great hero of mine, and it is a great privilege to work with him. The noble Lord rightly notes the importance of ending Section 21, which is a major contributor to homelessness levels in England and a major cost to councils, which now spend more than £2 billion a year on temporary accommodation. That was the last full year’s figure. I heard that £4 million a day is currently spent on homelessness in London. Much of that is driven by Section 21 evictions. As well as the misery created for individuals and families, these evictions put pressure on the public purse and costs that would be much better spent on other public services.
These amendments seek to bring most of the measures in the Renters’ Rights Bill forward to Royal Assent. The Government agree with the noble Lord that the measures in this Bill are urgently needed, which is why we moved swiftly to introduce it early in our first legislative programme for government. To end the scourge of Section 21 evictions as quickly as possible, we will introduce the new tenancy for the private rented sector in one stage. On that date, the new tenancy system will apply to all private tenancies. Existing tenancies will convert to the new system, and any new tenancies signed on or after that date will be governed by the new rules. There will be no dither or delay, and the abolition of Section 21, fixed-term contracts, and other vital measures in the Bill will happen as quickly as possible.
However, we must do this in a responsible manner, as noble Lords have mentioned. We are therefore also committed to making sure that implementation takes place smoothly. As such, it is essential that wider work around the Bill is allowed to conclude before implementation takes place. That includes the production of guidance, updating court forms and making secondary legislation. For example, the information that landlords are required to give tenants in the written statement of terms will be set out in secondary legislation. Work is already under way on these matters. We need to get it right. We will appoint the date of implementation via secondary legislation, which is typical when commencing complex primary legislation. This will allow us to give the sector certainty about when the system will come into force. Relying on Royal Assent would create significant uncertainty around the specific date, and it is important that we do not do that.
I say to the noble Lord, Lord Bird, that I was lucky enough to benefit from the post-war Labour Government’s drive to build social housing so, although I could have done, I did not grow up in the kind of housing that he described. Our social housing was built in new towns, and that was the last time that social housing was built at any scale in this country. We have promised that again, and have committed £2 billion to social and affordable housing. So the noble Lord has my personal commitment that we will move this forward as quickly as possible.
The noble Lord, Lord Deben, talked about the speed of legislation. I have been a Minister for only a few months but I am already learning the frustration of time lags. I thought that councils move a bit too slowly at times, but we certainly need to move things forward more quickly. Of course, this is not just about legislation; we are trying to move on housing at some speed. We have already provided funding to improve construction skills, funding for planning officers, a new National Planning Policy Framework, over £500 million for homelessness and the social housing funding that I have already mentioned. We understand that this needs to be moved forward quickly. We will work as quickly as we can on that. As such, I ask the noble Lord not to press his amendments.
Lord Jackson of Peterborough (Con)
I concur with the comments across the Chamber about what a professional job the Minister has done in piloting the Bill and engaging with Members. At Second Reading, she made specific reference to working closely with the Ministry of Justice on court digitalisation and extra funding for court costs. Is she in a position to update the Committee on what progress has been made on that? There are still people across the Committee who are concerned about the likely ramifications of the abolition of Section 21, whenever it happens.
Baroness Taylor of Stevenage (Lab)
I understand the noble Lord’s concern. There is ongoing dialogue with the Ministry of Justice, and I hope to be able to update Members before Report on where that has got to as soon as we are able to. I do not think it would be helpful to have a running commentary on it but my honourable friend the Minister for Housing is in dialogue at the moment with the MoJ. I will update noble Lords as soon as we get to the end of those discussions.
I turn to the amendments tabled by my noble friend Lord Hacking. Amendment 281 seeks to delay a number of provisions coming into force. The Bill currently provides that these provisions commence two months after Royal Assent. Two months is a well-established precedent, and I see no reason why commencement of these provisions should be delayed. For example, the provisions include important protections for tenants and provide local authorities with better powers to enforce housing standards.
Amendment 287 would set a time limit of 12 months between Royal Assent and the implementation of the Bill’s tenancy reforms in the private rented sector. Amendment 288 would change the approach to tenancy reform implementation in the Bill. It would require that the measures were applied to new tenancies no earlier than six months after Royal Assent and to existing tenancies no earlier than 12 months after Royal Assent. Amendment 289 would require that the conversion of existing tenancies to assured tenancies under the new tenancy reform system took place no earlier than 12 months after Royal Assent. As I have set out previously, we will end the scourge of Section 21 evictions as quickly as possible, and we will introduce the new tenancy for the private rented sector in one stage.
I assure my noble friend that this Government will ensure that the sector has adequate notice of the system taking effect but, in order to support tenants, landlords and agents to adjust, we will allow time for a smooth transition to the new system while making sure that tenants can benefit from the new system that they have waited so long for as soon as is realistically possible. We are planning a wide-ranging campaign to raise awareness of our reforms, supported by clear, straightforward and easy-to-read guidance to help landlords to prepare for change and to help tenants to be ready for it. On that basis, I ask my noble friend not to press his amendments.
Lord Bird (CB)
Unfortunately, I was not in a position to sit up last night or the night before because I have a full-time job. Yesterday, I was in Cardiff working with people in the Government there. We had a big event around the Big Issue. It was wonderful to be there and to be given the opportunity, I hope, to work with the Welsh Parliament on the idea of social housing, social justice and all that. So I hope noble Lords will forgive me for not being here last night to see all their noble work.
I want to say a few things. I think one of the real problems is that people do not understand the role of a tenant. They know the role of a landlord: the landlord owns a piece of property, and they rent it out to somebody. But the role of the tenant over the last 50 years has been to enrich the landlord. If you look at what has happened to the property market over the last 40 or 50 years, the role of the tenant has been to make sure that the landlord gets richer and richer, because we know the way the property market has been going. It has been going in a direction where people can buy a house in one decade—my ex-wife did so—and sell it later in the decade for maybe two or three times as much. The landlord would often have done not much more than rent the property out and keep it going.
Lord Bird (CB)
I am telling the noble Lord that, from my experience, it is. From my experience, what has happened is that tenants have made a very large section of the population who are small landlords much wealthier.
Member's explanatory statement
This amendment is consequential on the new Part 2 that would be inserted into Schedule 6 by the amendment in my name
3 “(1) This paragraph applies where—(a) before the commencement date—(i) a valid notice under section 21 of the 1988 Act has been given, and(ii) the claimant in possession proceedings has requested the court to issue the claim form for those proceedings, and(b) immediately before the commencement date, possession proceedings have not begun or have not been concluded.(2) The notice under section 21 remains valid until possession proceedings are concluded.(3) The amendments made by Chapter 1 of Part 1 do not apply in relation to the tenancy until the notice under section 21 ceases to be valid by virtue of sub-paragraph (2) (and accordingly the tenancy remains an assured shorthold tenancy until then).(4) In relation to a tenancy to which sub-paragraph (3) applies, section 146(3) (except in its application to this paragraph) has effect as if the following were substituted for the definition of “commencement date”—““commencement date” means the date on which, by virtue of paragraph 3 of Schedule 6, the amendments made by Chapter 1 of Part 1 apply in relation to a tenancy;”.(5) In this paragraph “possession proceedings” means proceedings for an order for possession under section 21 of the 1988 Act in reliance on a valid notice given under that section.Section 2: claim form for section 21 possession proceedings not already requested
3A (1) This paragraph applies where, before the commencement date—(a) a valid notice under section 21 of the 1988 Act has been given, and(b) the claimant in possession proceedings has not requested the court to issue the claim form for those proceedings.(2) Section 21 of the 1988 Act has effect as if the following were substituted for subsections (4D) and (4E)— “(4D) Subject to subsection (4E), proceedings for an order for possession under this section in relation to a dwelling-house in England may not be begun if the claimant in the proceedings requests the court to issue the claim for the proceedings after the end of the applicable period.(4DA) For that purpose the “applicable period” is—(a) the period of six months beginning with the date on which the notice was given under subsection (1) or (4), or(b) the period of three months beginning with the commencement date, if this three month period ends before the six month period mentioned in paragraph (a).(4E) Where—(a) a notice under subsection (4) has been given in relation to a dwelling-house in England, and(b) paragraph (b) of that subsection requires the date specified in the notice to be more than two months after the date the notice was given,proceedings for an order for possession under this section may not be begun if the claimant in the proceedings requests the court to issue the claim for the proceedings after the end of the applicable period.(4EA) For that purpose the “applicable period” is—(a) the period of four months beginning with the date specified in the notice, or(b) the period of three months beginning with the commencement date, if this three month period ends before the four month period mentioned in paragraph (a).(4EB) In subsections (4DA) and (4EA) “commencement date” has the meaning given by section 146 of the Renters’ Rights Act 2025.”(3) The notice under section 21 remains valid—(a) until the end of the applicable period, except where the claimant has requested the court to issue the claim form for possession proceedings before the end of that period;(b) until possession proceedings are concluded, if the claimant has requested the court to issue the claim form for those proceedings before the end of the applicable period.(4) The amendments made by Chapter 1 of Part 1 do not apply in relation to the tenancy until the notice under section 21 ceases to be valid by virtue of sub-paragraph (3) (and accordingly the tenancy remains an assured shorthold tenancy until then).(5) In relation to a tenancy to which sub-paragraph (4) applies, section 146(3) (except in its application to this paragraph) has effect as if the following were substituted for the definition of “commencement date”—““commencement date” means the date on which, by virtue of paragraph 3A of Schedule 6, the amendments made by Chapter 1 of Part 1 apply in relation to a tenancy;”.(6) In this paragraph—“applicable period” , in relation to possession proceedings, has the same meaning that it has in relation to those proceedings in section 21 of the 1988 Act as modified by sub-paragraph (2);“possession proceedings” means proceedings for an order for possession under section 21 of the 1988 Act in reliance on a valid notice given under that section.” Member's explanatory statement
This restructures the provision in paragraph 3 and clarifies that the application of that provision depends on whether the landlord has requested the court to issue the claim form in possession proceedings (instead of depending on whether the court has actually issued the claim form).
15 “(1) This paragraph applies where—(a) before the commencement date—(i) a valid notice under section 8 of the 1988 Act has been given, and(ii) the claimant in possession proceedings has requested the court to issue the claim form for those proceedings, and(b) immediately before the commencement date, possession proceedings have not begun or have not been concluded.(2) The notice under section 8 remains valid until possession proceedings are concluded.(3) The amendments made by Chapter 1 of Part 1 do not apply in relation to the tenancy until the notice under section 8 ceases to be valid by virtue of sub-paragraph (2) (and accordingly the tenancy remains an assured shorthold tenancy until then).(4) In relation to a tenancy to which sub-paragraph (3) applies, section 146(3) (except in its application to this paragraph) has effect as if the following were substituted for the definition of “commencement date”—““commencement date” means the date on which, by virtue of paragraph 15 of Schedule 6, the amendments made by Chapter 1 of Part 1 apply in relation to a tenancy;”.(5) In this paragraph “possession proceedings” means proceedings for an order for possession under section 8 of the 1988 Act in reliance on a valid notice given under that section.Claim form for section 8 possession proceedings not already requested
15A (1) This paragraph applies where, before the commencement date—(a) a valid notice under section 8 of the 1988 Act has been given, and(b) the claimant in possession proceedings has not requested the court to issue the claim form for those proceedings.(2) The notice under section 8 remains valid—(a) until the end of the applicable period, except where the claimant has requested the court to issue the claim form for possession proceedings before the end of that period;(b) until possession proceedings are concluded, if the claimant has requested the court to issue the claim form for those proceedings before the end of the applicable period.(3) The amendments made by Chapter 1 of Part 1 do not apply in relation to the tenancy until the notice under section 8 ceases to be valid by virtue of sub-paragraph (2) (and accordingly the tenancy remains an assured shorthold tenancy until then). (4) In relation to a tenancy to which sub-paragraph (3) applies, section 146(3) (except in its application to this paragraph) has effect as if the following were substituted for the definition of “commencement date”—““commencement date” means the date on which, by virtue of paragraph 15A of Schedule 6, the amendments made by Chapter 1 of Part 1 apply in relation to a tenancy;”.(5) In this paragraph—“applicable period” , in relation to possession proceedings—(a) the period of twelve months included in the notice under section 8 of the 1988 Act in accordance with subsection (3)(c) of that section, or(b) the period of three months beginning with the commencement date, if this three month period ends before the twelve month period mentioned in paragraph (a);“possession proceedings” means proceedings for an order for possession under section 8 of the 1988 Act in reliance on a valid notice given under that section.”Member's explanatory statement
This restructures the provision in paragraph 15 and clarifies that the application of that provision depends on whether the landlord has requested the court to issue the claim form in possession proceedings (instead of depending on whether the court has actually issued the claim form).
“Part 2Existing instruments which permit or require letting etcKey definitions
17 (1) “Residential premises” are premises that consist of or include one or more dwelling-houses in England.(2) A lease of residential premises (whether or not in writing) is a “relevant pre-application instrument” if it was entered into—(a) before the commencement date, or(b) on or after that date under a contract entered into before that date.(3) A mortgage arrangement which relates to residential premises is a “relevant pre-application instrument” if it was entered into—(a) before the commencement date, or(b) on or after that date by the acceptance of an offer made before that date.(4) A contract of insurance which relates to residential premises is a “relevant pre-application instrument” if it was entered into—(a) before the commencement date, or(b) on or after that date by the acceptance of an offer made before that date.(5) A section 106 obligation is a “relevant pre-application instrument” if it was entered into before the commencement date.(6) In relation to a relevant pre-application instrument, “affected dwelling-house” means—(a) if the relevant pre-application instrument is a lease, the dwelling-house, or each dwelling-house, let by the lease;(b) if the relevant pre-application instrument is a mortgage arrangement, the dwelling-house, or each dwelling-house, to which the mortgage arrangement relates; (c) if the relevant pre-application instrument is a contract of insurance, the dwelling-house, or each dwelling-house, to which the contract of insurance relates;(d) if the relevant pre-application instrument is a section 106 obligation, the dwelling-house, or each dwelling-house, to which the section 106 obligation relates.(7) In relation to times before the commencement date, an assured tenancy is a “relevant” assured tenancy if—(a) it is not an assured shorthold tenancy,(b) it is a periodic tenancy, and(c) each period of the tenancy is—(i) a period of 28 days or shorter, or(ii) a monthly period,including where there are different periods at different times, each of which falls within sub-paragraph (i) or (ii).(8) In relation to times on or after the commencement date, an assured tenancy is a “relevant” assured tenancy if—(a) it is a periodic tenancy, and(b) each period of the tenancy is—(i) a period of 28 days or shorter, or(ii) a monthly period,including where there are different periods at different times, each of which falls within sub-paragraph (i) or (ii).Saving for existing powers to vary
18 Nothing in this Part of this Schedule prevents a relevant pre-application instrument from being varied or modified by the parties to it (and accordingly paragraphs 19 to 24 and paragraph 26 are subject to any such variation or modification).Relevant pre-application instruments that permit letting on tenancies that are no longer possible
19 (1) This paragraph applies to a relevant pre-application instrument if either or both of conditions A and B are met in relation to the affected dwelling-house.(2) Condition A: immediately before the commencement date, the relevant pre-application instrument—(a) permitted the affected dwelling-house to be let under an assured shorthold tenancy, but(b) did not permit the affected dwelling-house to be let under a relevant assured tenancy.(3) Condition B: immediately before the commencement date, the relevant pre-application instrument—(a) permitted the affected dwelling-house to be let under an assured tenancy (other than an assured shorthold tenancy), but(b) did not permit the affected dwelling-house to be let under a relevant assured tenancy.(4) The relevant pre-application instrument has effect on and after the commencement date as if it permits the affected dwelling-house to be let under a relevant assured tenancy.(5) That power to let under a relevant assured tenancy is exercisable in the same circumstances, and on the same terms, as the pre-commencement power to let was exercisable immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.(6) In this paragraph “pre-commencement power to let” means—(a) if only condition A is met, the power to let mentioned in sub-paragraph (2)(a); (b) if only condition B is met, the power to let mentioned in sub-paragraph (3)(a);(c) if conditions A and B are both met, the power to let mentioned in sub-paragraph (3)(a).Relevant pre-application instruments that permit letting on tenancies that continue to be possible
20 (1) This paragraph applies to a relevant pre-application instrument if, immediately before the commencement date, the relevant pre-application instrument permitted the affected dwelling-house to be let under a relevant assured tenancy.(2) That power to let under a relevant assured tenancy continues to be exercisable in the same circumstances, and on the same terms, as it was exercisable immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.Relevant pre-application instruments that require letting on tenancies that are no longer possible
21 (1) This paragraph applies to a relevant pre-application instrument if either or both of conditions A and B are met.(2) Condition A: immediately before the commencement date—(a) the relevant pre-application instrument required the affected dwelling-house to be let, and(b) that requirement—(i) would have been complied with by letting the affected dwelling-house under an assured shorthold tenancy, but(ii) would not have been complied with by letting the affected dwelling-house under a relevant assured tenancy.(3) Condition B: immediately before the commencement date—(a) the relevant pre-application instrument required the affected dwelling-house to be let, and(b) that requirement—(i) would have been complied with by letting the affected dwelling-house under an assured tenancy (other than an assured shorthold tenancy), but(ii) would not have been complied with by letting the affected dwelling-house under a relevant assured tenancy.(4) The relevant pre-application instrument has effect on and after the commencement date as if it requires the affected dwelling-house to be let under a relevant assured tenancy.(5) That requirement to let under a relevant assured tenancy must be complied with in the same circumstances, and on the same terms, as the pre-commencement requirement had to be complied with immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.(6) In this paragraph “pre-commencement requirement” means—(a) if only condition A is met, the requirement to let mentioned in sub-paragraph (2)(b)(i);(b) if only condition B is met, the requirement to let mentioned in sub-paragraph (3)(b)(i);(c) if conditions A and B are both met, the requirement to let mentioned in sub-paragraph (3)(b)(i).Relevant pre-application instruments that require letting on tenancies that continue to be possible
22 (1) This paragraph applies to a relevant pre-application instrument if, immediately before the commencement date— (a) the relevant pre-application instrument required the affected dwelling-house to be let, and(b) that requirement would have been complied with by letting the affected dwelling-house under a relevant assured tenancy.(2) That requirement to let under a relevant assured tenancy must still be complied with in the same circumstances, and on the same terms, as it had to be complied with immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.Pre-commencement s.106 obligations with provision relating to letting on terms that are no longer possible
23 (1) This paragraph applies to a pre-application section 106 obligation if, immediately before the commencement date, it prevented or restricted the taking of particular action unless or until the affected dwelling-house was let under a superseded tenancy.(2) On and after the commencement date, the pre-application section 106 obligation has effect as if it prevents or restricts the taking of the particular action unless or until the affected dwelling-house is let under a relevant assured tenancy.(3) Any such letting under a relevant assured tenancy is to be made in the same circumstances, and on the same terms, as a letting under a superseded tenancy immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.Pre-commencement s.106 obligations with provision relating to letting on terms that continue to be possible
24 (1) This paragraph applies to a pre-application section 106 obligation if, immediately before the commencement date—(a) provision of the pre-application section 106 obligation prevented or restricted the taking of particular action unless or until the affected dwelling-house was let, and(b) that provision would have ceased to prevent or restrict that action if the affected dwelling-house was let under a relevant assured tenancy.(2) Such a letting under a relevant assured tenancy must still be made in the same circumstances, and on the same terms, as a letting under a relevant assured tenancy immediately before the commencement date, except so far as that would be inconsistent with any provision made by or under this Act.Requirements under the Community Infrastructure Regulations 2010
25 (1) This paragraph applies where—(a) a planning permission is granted before the commencement date on a relevant determination,(b) the planning permission was granted on the basis of a pre-application section 106 obligation, and(c) at the time the planning permission was granted, the pre-application section 106 obligation met the requirements under regulation 122(2) of the Community Infrastructure Regulations 2010.(2) On and after the commencement date any effect of this Part is to be disregarded when considering whether the pre-application section 106 obligation continues to meet those requirements.(3) In this paragraph “relevant determination” has the meaning given by regulation 122(3) of the Community Infrastructure Regulations 2010.Leases which cannot be returned at end of term free of sub-lease
26 (1) This paragraph applies to a lease if— (a) the lease was entered into before the commencement date or under a contract entered into before that date,(b) the lease is—(i) periodic, or(ii) a fixed term lease of a term certain not exceeding 21 years,(c) the lease is modified by paragraph 19 or 21,(d) a dwelling-house is sub-let under the lease on a tenancy (entered into before or after the commencement date) which is (or becomes on or after that date, by virtue of this Act or otherwise) a relevant assured tenancy, and(e) the tenancy was entered into in accordance with the terms of the lease as they stood when the tenancy was entered into (or, if it was not, the breach has been waived by the landlord).(2) The lease has effect as if it provided that a failure by the lessee at the end of the lease to return the premises to the landlord free from the relevant assured tenancy does not constitute a breach of the lease.Application to agreements etc relating to leases, mortgage arrangements or contracts of insurance
27 In this Part of this Schedule references to a lease, mortgage arrangement or contract of insurance, and references to the terms of a lease, mortgage arrangement or contract of insurance, include references to—(a) the terms of any agreement relating to the lease, mortgage arrangement, or contract of insurance, and(b) any document or communication from a party to the lease, mortgage arrangement, or contract of insurance, which gives or refuses consent for letting in relation to a category or description of tenancy.Application to sub-letting
28 (1) In a case where the relevant pre-application instrument is a lease, a reference in this Part of this Schedule to a letting of the affected dwelling-house is a reference to a sub-letting of those premises under that lease or any inferior lease.(2) In the case of any other relevant pre-application instrument, a reference in this Part of this Schedule to a letting of the affected dwelling-house includes a reference to a sub-letting of those premises under any lease or inferior lease of those premises.Application in certain circumstances
29 (1) In a case where a relevant pre-application instrument—(a) gave, or gives, a discretion whether to let an affected dwelling-house, but(b) required, or requires, the affected dwelling-house to be let under a tenancy of a particular description if it is let,the instrument is to be regarded as permitting (and not as requiring) the dwelling-house to be let under that description of tenancy (and this Part of this Schedule applies accordingly).(2) The following provisions of this paragraph apply if there are two or more affected dwelling-houses in relation to the relevant pre-application instrument.(3) This Part of this Schedule applies separately in relation to each of those dwelling-houses.(4) But, if any term of the instrument is such that it gave, or gives, a discretion as to which particular dwelling-house or dwelling-houses the term applies to, this Schedule does not affect that discretion (but the term otherwise has effect subject to this Part of this Schedule).Power to disapply or modify this Part
30 (1) The Secretary of State may by regulations disapply or modify the effect of this Part of this Schedule in relation to relevant pre-application instruments of a specified description.(2) Where the Secretary of State makes regulations under this paragraph disapplying the effect of this Part, the fact that this Schedule has previously applied in relation to a relevant pre-application instrument does not prevent the exercise of the powers in section 148(6)(b) in relation to the relevant pre-application instrument.Meaning of “permitting” letting
31 A relevant pre-application instrument permitted, or permits, the affected dwelling-house to be let under a tenancy of a particular description if letting the affected dwelling-house under a tenancy of that description would not have breached the terms of the relevant pre-application instrument.Interpretation
32 In this Part of this Schedule—“affected dwelling-house” has the meaning given in paragraph 17(6);“assured shorthold tenancy” is to be read in accordance with Part 1 of the 1988 Act as it had effect immediately before the commencement date;“assured tenancy” , in relation to a time before the commencement date, is to be read in accordance with Part 1 of the 1988 Act as it had effect at that time;“the commencement date” has the meaning given by section 146(3);“contract of insurance” has the meaning given by article 3(1) of the Financial Services (Regulated Activities) Order 2001;“dwelling-house” has the same meaning as in Part 1 of the 1988 Act — see section 45 of that Act);“mortgage arrangement which relates to residential premises” or “mortgage arrangement” means an arrangement under which—(a) credit is or continues to be provided to a person, and(b) the obligation of the person to repay is secured by a legal or equitable mortgage or other charge on the residential premises;“pre-application section 106 obligation” means a section 106 obligation that was entered into before the commencement date;“relevant assured tenancy” has the meaning given in paragraph 17(7) and (8);“relevant pre-application instrument” has the meaning given in paragraph 17(2) to (5);“residential premises” has the meaning given in paragraph 17(1);“section 106 obligation” means a planning obligation under section 106 of the Town and Country Planning Act 1990;“superseded tenancy” means—(a) an assured shorthold tenancy, and(b) an assured tenancy (other than an assured shorthold tenancy) that is not a relevant assured tenancy.” Member's explanatory statement
This makes transitional provision about existing “relevant pre-application instruments” whose terms permit letting or sub-letting under leases of kinds which are abolished by the Bill. It replaces clause 3 (about leases) and then also deals with mortgages, insurance contracts and obligations under section 106 of Town and Country Planning Act 1990.
Member's explanatory statement
This ensures that regulations making transitional and saving provision can make provision in substitution for as well as in addition to provision made by the Act.
“(5A) The power to make regulations under subsection (3) includes power to amend or repeal any provision made by Part 2 of Schedule 6 to this Act.”Member's explanatory statement
This enables regulations making transitional or saving provision to make such provision by amending or repealing any provision in Part 2 of Schedule 6 to the Act.
(i) before the commencement date, or(ii) on or after that date either under a contract entered into before that date or by the acceptance of an offer made before that date;”Member's explanatory statement
This brings the wording in clause 148(7)(a) into line with the wording used in the new Part 2 that would be inserted into Schedule 6 by the amendment in my name.
Member's explanatory statement
This amendment is consequential on the new Part 2 that would be inserted into Schedule 6 by the amendment in my name.
(a) fall within subsection (6)(b), or(b) amend or repeal provision made by Part 2 of Schedule 6 to this Act,”Member's explanatory statement
This provides that regulations made under section 148(3) which make transitional or saving provision by amending or repealing provision in Part 2 of Schedule 6 to the Act are subject to the affirmative procedure.
Sanctions Implementation and Enforcement
(2 days ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place. The Statement is as follows:
“With permission, Madam Deputy Speaker, I will make a Statement on the cross-government review of sanctions implementation and enforcement. I promised to update the House on this issue at the earliest opportunity, and I am glad to have the chance to do so today. For those Members who want to get into the full details, they are being published on GOV.UK.
Sanctions are a powerful tool in our armoury and a vital foreign policy and national security tool. They are used to deter and disrupt threats and malign behaviour and demonstrate our values. Our sanctions support UK interests, protect our citizens and defend international peace and security.
Maximising economic pressure on Russia is key to securing a just and lasting peace in Ukraine, as we debated in the House yesterday. As I said then, the UK has sanctioned over 2,400 targets under our Russia regime and international sanctions have deprived Putin of $450 billion since the invasion began, an amount of money that would have allowed him to prosecute his terrible war for many more years.
Since July 2024, this Government have introduced more than 500 new sanctions designations against individuals, entities and ships. Just last Friday, the Prime Minister announced a major package of sanctions to target the decrepit and dangerous shadow fleet carrying Russian oil. This is the largest package of sanctions against the shadow fleet, with 110 targets. According to some estimates, sanctions have crippled 200 ships—almost half of Putin’s entire fleet.
President Zelensky is serious about peace, agreeing in principle to a full, unconditional and immediate ceasefire. His readiness for that peace is demonstrated by his being in Turkey. Meanwhile, Putin has dodged and delayed, all the while raining down terror on Ukraine. If Putin does not engage seriously on peace, the UK and our allies will have no choice but to ramp up this economic pressure even further, forcing him to the table.
Alongside taking measures against Russia, we are using designations to uphold human rights and promote democracy around the world. Just last month, we targeted pro-Kremlin operatives responsible for destabilising Moldova and we sanctioned corrupt officials in Georgia and Guatemala for undermining democracy and the rule of law. But we will not stop there. We will continue to expose malign activity wherever we find it, using the full range of sanctions tools at our disposal to shape the world for the better.
Sanctions play a crucial role in the Foreign Secretary’s mission to tackle corruption and dirty money, which is vital to protect the UK from criminals and safeguard our democracy. In January, the Foreign Secretary announced our new, world-first legislation to use sanctions to crack down on those fuelling irregular migration.
This Government are committed not only to using sanctions effectively but—this is the main focus of the Statement—to ensuring that they are enforced rigorously. This means punishing serious breaches with large fines or criminal prosecutions. In opposition, we recognised that there was a need for greater focus on sanctions enforcement. Since Labour came to office, we have been working across government on this, as well as liaising with law enforcement partners and industry. In October, we launched the Office of Trade Sanctions Implementation, with new civil enforcement powers to crack down on those seeking to soften the blow of our sanctions. At the same time, we introduced civil powers for the Department for Transport to enforce transport sanctions.
We have reinforced the Office of Financial Sanctions Implementation in His Majesty’s Treasury—known as OFSI for short—and the multi-agency Joint Maritime Security Centre, enabling them to better tackle evasion and develop new tools targeting the Russian shadow fleet, including in the English Channel. The investments and improvements we have made are already paying off. Last month, OFSI imposed a penalty of £465,000 on a major law firm’s subsidiary for breaches of sanctions linked to Russia’s invasion of Ukraine. We also saw the UK’s first successful prosecution under the Russia financial sanctions regulations, thanks to the excellent work by the National Crime Agency. I commend it and its teams for the incredible work they have done. I expect to see more enforcement action in the coming year. I obviously cannot go into the details of that in the House, but we should be assured that our teams are working effectively in a range of agencies and across government.
Funding from the Economic Deterrence Initiative has been critical to strengthening our capabilities and maintaining the UK’s reputation among its allies. This initiative is bolstering sanctions work in the overseas territories and Crown dependencies; for example, in the British Virgin Islands, it has enabled the NCA to support enforcement and combat potential circumvention. Excellent work has been going on in that regard, and we hosted OTs and CDs at Lancaster House just a few months ago, to collaborate and ensure that we are improving capability across those territories.
I turn to the enforcement review. I am determined to go after those who try to evade our sanctions. In October, I launched a cross-ministerial review to look at how we can improve UK sanctions implementation and enforcement. A strong sanctions regime is crucial for achieving our foreign policy goals and, in turn, building a secure and prosperous UK. This forward-leaning review had three goals: first, to make it easier to comply with our sanctions, which will help businesses to support us in our shared goals; secondly, to increase the deterrent effect of enforcement and make it clear that avoiding sanctions does not pay; and, thirdly, to enhance our ability to take robust action against those seeking to evade our measures. We are publishing the report on the conclusions today, and I am glad of this opportunity to set out how we will ensure that the UK’s approach continues to set a gold standard.
We know that the vast majority of businesses agree with our sanctions and are keen to work with us to make sure that they are enforced. To simplify compliance, we have launched a new email alert system to keep UK businesses updated on designations, legislation, licences and other related topics. We are making our guidance clearer and easier to access, providing further clarity to UK industry on ownership and control and introducing a single sanctions list for all designated persons. We will also assess the benefits of creating a single reporting point for suspected breaches. To give our sanctions extra bite and deter evasion, we will publish a new enforcement strategy, making clear the consequences of non-compliance. We will look at new options to accelerate civil penalties for financial sanctions breaches, including via an early settlement scheme. We are dedicated to strengthening our enforcement tools and ensuring that we have the necessary powers, capabilities and intelligence.
We have already taken action. Last month, we introduced measures to prevent designated individuals from holding director roles in the UK, protecting our brilliant British businesses. The Department for Business and Trade is updating laws to protect workers who report breaches of financial, transport and certain trade sanctions, giving them crucial whistleblower protections. Those actions, taken together and at pace, will further improve our world-class sanctions regime, allowing the UK to project strength and promote the rule of law across the world.
But we are not satisfied with just those measures. We are committed to exploring other areas, so that we can go even further and deeper to improve enforcement. A number of those areas will take longer to scope, and I will be able to update the House on them in due course. We will explore options for more effective join-up on intelligence, including the merits of a new joint sanctions intelligence function. We will consider the introduction of sanctions end-use licensing controls for exports with a high risk of sanctions diversion.
We will continue to support the British Overseas Territories and Crown dependencies in enhancing their enforcement capabilities and will explore enhancing transport powers to target specific aircraft with sectoral sanctions. As appropriate, we will update Parliament when additional outcomes have been scoped, including those that require new or amended legislation. We have brought forward a number of pieces of sanctions legislation recently; in addition, we expanded our Russia regime this week into a range of areas and varied our Syria regime in the light of changed circumstances there.
Let me conclude by reiterating the Government’s commitment to strengthening the implementation and enforcement of UK sanctions. As we deliver the actions set out in the review, we will continue to engage across departments and with industry, wider stakeholders and international partners to maximise the effectiveness of our work. I commend this Statement to the House”.
Lord Callanan (Con)
My Lords, let me first thank the noble Baroness for repeating the Statement and say that we on these Benches welcome measures to bear down on Putin’s regime and undermine his ability to wage this barbaric, illegal invasion of Ukraine. The refusal of Putin to attend today’s talks in Turkey is yet another sign that Russia really is not interested in peace. Putin could end the war today, but he has refused time and again to consider an end to the violence he has inflicted on the maligned people of Ukraine.
The toll we have exacted on Russia and its war-making capacity is something that I am proud of, and it stems directly from the sanctions regime that we formed when in government and that the current Government, to their credit, have continued. Working with allies, we imposed the largest and most severe set of sanctions that Russia had ever seen. We sanctioned around 2,000 individuals, companies and groups. None of us should be in doubt that the economic pressure that we and allies have been exerting means that Russia can no longer afford to sustain the cost of this illegal invasion. Russia’s interest rates are at levels not seen for decades; welfare payments are being cut; and, as the noble Baroness said, our collective sanctions have stripped Putin of $450 billion of benefits since February 2022—money that Russia could otherwise have spent on that war in Ukraine.
We on these Benches broadly welcome today’s Statement from the Government, which is part of an effort to better co-ordinate the sanctions regime in place against Russia. It is vital that the current Government do all they can to crack down on those who violate this regime, and we must remain firm in our resolve to stop the flow of resources into Russia and utilise assets in a way that supports the fight against Russia. However, some questions remain over the current sanctions regime and what more we can do with it to oppose Putin and this vile invasion. First, will the Minister confirm whether her department is currently looking into wider secondary sanctions against Russia? What kind of engagement are the Government having with countries whose economies are being used to cheat the international sanctions response, and what measures are the Government considering to stop this? Those countries include some with which we have just done trade deals.
Can the Minister update the House on the Government’s internal deadline for getting the proceeds from the sale of Chelsea Football Club? Can she update us on the Foreign Secretary’s engagement with trustees, the Government of Portugal and the European Commission on this issue? The sums we are talking about are in excess of £2 billion—a substantial amount of money, which we could unlock to support those in need in Ukraine. It is important that the Government do all they can to work at pace on this issue.
I hope that, in considering the outcome of this review, the Government will also give thought to how they communicate the purpose of the sanctions regime. Activity that violates the regime supports a murderous, brutal dictatorship. People should be left in no doubt that this regime is more than an expression of support for Ukraine; it is one of the primary weapons we have to oppose Putin and, as we have seen, it can exact substantial damage on the Russian war effort. What practical steps are the Government taking to keep UK-based businesses well informed of changes to sanctions legislation and its purpose?
There has been much coverage and discussion in recent weeks of initiatives to secure peace. That is welcome, but we must not be blinded by the headlines which hail “coalitions of the willing” and multilateral intent. For all these words, which are welcome in principle, we cannot forget that the reality of the situation for people in Ukraine remains unchanged. Ukrainians are still fighting on the front line, facing airstrikes on their towns, villages and cities and suffering death, horrendous loss and injury. We on these Benches continue to urge the Government in the strongest possible terms to leverage Britain’s influence in every way that they can to help ensure that peace is secured on terms acceptable to Ukraine. It is right that Ukraine must decide its own future. It is incumbent on us, as one of its closest allies, to support it in this desire.
Lord Purvis of Tweed (LD)
My Lords, I am impressed by the Minister’s efficiency. She replied positively to me on Monday when I asked for an opportunity to have a wider discussion on sanctions enforcement; I did not quite appreciate that she would deliver that three days later. It is very impressive indeed.
I have had the opportunity of debating every sanction that the previous Administration and this one have put in place since the establishment of the post-Brexit regime. These Benches have supported them at each step, but we have made the case that the sanctions tool should be used more impactfully, especially on occasions where we do not believe the sanctions go far enough, such as on the repressive actions of the Georgian regime, as referenced in the Statement, and individuals within it. On Israel and Gaza, we have repeatedly called for a widening of sanctions against those within the Netanyahu Administration, who are inflicting and facilitating the infliction of a great humanitarian crisis in Gaza and the West Bank.
I made it my mission to see the Wagner Group proscribed and was very grateful when the previous Government did it. However, our sanctions should be chasing after Russia and, for any organisation sanctioned or proscribed by the UK, there will have to be continued action.
Overall, we welcome the Statement and the review, which I had the opportunity to look at online. Fundamentally, I think it found that there was nothing wrong, but there were a number of areas where it wanted to go ahead. There was a curious line saying that the fundamental principle was
“to secure international agreement across all 193 UN Member States”
for sanctions. That is rather impossible when we are sanctioning quite a chunk of them. There was also a wee bit of Whitehall verbiage: we are to expect an invigorated toolkit of
“capabilities, capacity, powers, and actionable intelligence to take robust enforcement”
and
“user-friendly guidance to a new enforcement strategy”.
I look forward to them. No doubt we will debate what that means when we get them.
We are promised an early settlement scheme. This is an area that has raised a slight alarm signal with me. How will this interact with what the review has said about the need to increase deterrence? It is not necessary to have deterrence if we have an early settlement scheme for those who are breaching financial sanctions. If not today, perhaps the Minister might be able to say more at a later date.
The Minister referred to the £465,000 penalty for Herbert Smith Freehills for making funds available for the benefit of a designated person without a licence. This is welcome, but it is only one of five penalties since 2023, with a total amount of just £485,000. Without that £465,000, there have been only £20,000 of penalties. Is this a lack of enforcement or a stunning level of adherence to the UK sanctions regimes?
I had the opportunity to look at the excellent OFSI threat assessment report, which goes into a little more detail about some of the context. I have a couple of questions, one of them linked to the point raised by the noble Lord, Lord Callanan.
We have a number of frozen assets within the UK. On Monday, we discussed new rounds of Syria sanctions. We have £157 million in frozen Syrian assets. Given what the Minister said on Monday and what President Trump has been saying about the new Syrian President, can the Minister write to me on the status of that amount, identifying the ultimate legal beneficial owner of the frozen assets? If it is the former Assad regime, or those linked to it, then presumably we should not be offering them back. Why have we not seized those assets, which can be used for the benefit of the Syrian people, who desperately need it?
On the Russian assets, we now have, as reported by OFSI, £25 billion. We on these Benches would like to see a draft Bill on what would be required under UK law to seize those assets. We do not need to wait on others, either in the G7 or elsewhere, or act at their slow pace. These assets have been frozen under UK legislation and the power to seize them will be under UK legislation, so if there need to be any changes to UK legislation, we should see what the context is, because obviously these Benches believe that Putin should not be rewarded by getting money back at the end of this process.
The threat assessment report also highlighted what it said was a growing number of enablers and enabling countries. It singled out some, including, at the highest level of growth, the UAE. What diplomatic tools are we using for those countries which we know are the source of enablers who circumvent UK financial sanctions? As OFSI said, that is growing.
The threat assessment report also says that there are almost certainly enablers using crypto assets to breach UK financial sanctions. Can the Minister write to me on the estimated scale of this? Have we the same approach to co-ordination with our allies to ensure that this is the case, given the very dubious means by which President Trump is using crypto assets, and the difficulty in understanding the source of the crypto assets?
On China, we believe our sanctions should go further with regard to those in the Chinese Government who restrict the rights of people in Hong Kong and, in particular, those here in the United Kingdom who are operating transnational repression. It is utterly unacceptable, and I will be pursuing this further in this Chamber.
Many of us had the great privilege today of meeting former President Tsai Ing-wen, when welcoming her to Parliament. She is the highest-level official of the Taiwanese Government—both current and previous Governments—who has ever visited the UK Parliament. I pay credit to the noble Baroness, Lady D’Souza, and others who have worked so hard and tirelessly over a number of years. The former President’s lecture to us was an inspiration, because it was about democrats fighting against repression, building up resilience and ensuring that they have support here in the United Kingdom. Our sanctions regime should help people such as her, with her great leadership, and it was a real privilege to have her in Parliament today.
Baroness Chapman of Darlington (Lab)
My Lords, I thank the noble Lord, Lord Purvis—yes, this Government like to deliver promptly. I similarly did not anticipate being back here discussing this Statement quite so soon, not least because I had it down at 6 pm in my diary, so I ran very fast in heels from the department.
I welcome the fact that noble Lords have encouraged us to go further, and I note the comments that were made on different sanctions, including on China and others. Obviously, we do not comment on future designations—we have rehearsed that line many times in this Chamber—but we do listen when noble Lords make these kinds of observations and encourage the Government. We take these things on board and listen to what is said, but we obviously do not comment ahead of time.
I take the point made by the noble Lord, Lord Purvis, on verbiage; that is entirely fair. We try our best with these things. I believe that what the report is saying is clear, but we should be open to improving specific language where we can.
I understand the point on early settlement. All I will say is that it is just an additional tool: sometimes it is appropriate, sometimes it is not. It is important that we use it only when it is the right thing to do, when it has the effect that we want and it is not a less impactful option. I understand the concern—it is legitimate to raise it—but it is important to have that as another way of tackling this issue.
We continue to look at the Syrian and Russian frozen assets. There is an issue around frozen assets, as we have explained many times. There are legal concerns as well as potential consequences for British assets in other parts of the world. We hear the argument, and we will continue to look at this.
On the point about enablers, we have regular and detailed engagement with partner countries, where appropriate. This is an important point, and the Government are mindful of making sure that we use our levers to address it.
I thank the noble Lord, Lord Callanan, for his welcome of this report, and I completely agree with every word he said about Putin, Ukraine and Russia. I am happy to acknowledge the work that the previous Government did on this. We are building on that, as he would want us to do.
I do not have anything new to say on the Chelsea Football Club issue; I wish I did. I wish we could get this resolved and get the money where it needs to be. We are continuing to work on this at every level, and I hope that we will be able to come back to the House with a different answer very soon.
The noble Lord, Lord Callanan, was absolutely right about communication with business and making sure that the rules and updates are as widely known as possible. Measures are suggested in the report that we will implement, including email alerts, and we will continue to work through the DBT and take other opportunities to make sure that that happens.
The noble Lord asked whether we will leverage our influence. The answer to that is absolutely yes. Generally, this work is ongoing. This is not something where you ever complete the task and say, “We’ve done all the work we’re ever going to do on sanctions, and we’ve got it completely right”. We are in competition with criminal gangs and with different ways of working, so we need to keep this evolving. We need to keep it under review, keep challenging ourselves and keep changing and innovating. I am grateful to the parties opposite for their support for that work.
Lord Northbrook (Con)
My Lords, I congratulate the Minister on the cross-government review and on adding a little bit extra to the Statement, which was most welcome. I have a couple of queries. I welcome both the Government’s and the Opposition’s actions on this. First, one problem with Russia is that it is able to evade sanctions by exporting oil through India and doing trade with China. I wonder if I could have the Minister’s comments on that. Secondly, I welcome the sanctions actions on the overseas territories, which, I hope, are generally well regulated. I wonder if the Minister could say a bit more about the BVI, which seem to be a slight exception to this?
Baroness Chapman of Darlington (Lab)
Yes, we discuss our concerns with all partner countries—where we have them—on Russian oil. On the OTs and BVI, we are working very closely with them on trying to make sure they have what they need to enable them to do the job we want them to do. I think we are getting there, and we speak to them very regularly. We are hopeful. The Minister for the Overseas Territories meets with them very regularly. He is deeply concerned about this. We had long discussions with them earlier this year, and we will keep the House updated if we need to.
Lord Deben (Con)
I wonder whether I could refer to yesterday’s implementation of the additional sanction arrangements on letting agents and the like. This is very welcome, because there is no doubt that there has been a very considerable use of housing and the like as a means of establishing funds in this country by people who should not be doing that.
I am concerned about whether the Government can do more to help the letting agents and others explain this to the people who are not really affected, but who have to give all sorts of information which they would not have had to give before. It is very important to overcome the natural irritation which, for example, we have now when you want a bank account and difficulties arise. Because of this, I hope there can be discussions between the Government and the real estate industry across the board as to the form of words that could be used, so that when people are faced with this additional burden, they can say to themselves, “I am doing something useful. I am doing something because of what is happening in Ukraine”, and make it into a positive action. I have just read the documents that have gone out from letting agencies, and I fear that it just looks like another burden on people’s shoulders. I want to make this a success. Can we get the language right, and can we use it as a positive mechanism?
Baroness Chapman of Darlington (Lab)
That is a really interesting question. I had not thought about that, but I will speak to colleagues at MHCLG to see if we can do something along the lines the noble Lord describes, because compliance is enhanced when people understand why they are being asked to do things. It is a really interesting comment, and we need to work very closely across government on this.
The Earl of Effingham (Con)
My Lords, I quote David Lammy, who correctly said that we have to act quickly, and that
“I believe we should move from freezing assets to seizing assets”.—[Official Report, Commons, 25/2/25; col. 626.]
That was in February of this year. The noble Lord, Lord Purvis of Tweed, correctly asked, “What are we doing to start using these assets”? We have £25 billion. The Minister said that we are continuing to look at this. I appreciate that, clearly, we have to respect the law, but that is a lot of assets and a considerable amount of time has already passed since David Lammy made those comments. Are the best legal minds—and we have many of those in this country—looking at this? What are the real barriers? Surely, that would help the Ukrainians, who need the funding.
Baroness Chapman of Darlington (Lab)
I do not think the noble Earl will find any disagreement on this side of the House. I take his encouragement to move at a faster pace.
Viscount Chandos (Lab)
I add my thanks and support for the Statement that my noble friend the Minister made, and raise a specific issue about this prospective use of frozen assets, whether the assets themselves or the income derived from them. A massive reconstruction challenge faces us in Ukraine, but there is also the important issue of sustainable media. I declare my interest as chair of the Thomson Foundation. I was privileged to be at the launch of the FCDO media freedom exhibition presided over by my right honourable friend the Foreign Secretary. I just put in a plea that some part of the assets and the income from them be added to the modest but invaluable budget that there is to support media freedom.
Baroness Chapman of Darlington (Lab)
I hear my noble friend, who also wants us to move on frozen assets. It is something on which we all agree. Along with our partners, we have managed to release the $50 billion in the ERA, but I completely hear that noble Lords want us to do more.
Lord Bruce of Bennachie (LD)
My Lords, I very much welcome what the Minister said and I am glad that we have cross-party support for this. I wonder whether I could inject a question relating to some of the comments that have been made by the American Administration about the possibility of easing sanctions against Russia, which President Trump has said on more than one occasion. Can I seek clarification and assurance from the Minister that our sanctions regime is under our control and subject to Parliament’s approval or disapproval for any change?
Baroness Chapman of Darlington (Lab)
Our sanctions regime is the UK’s and we make our decisions in accordance with our laws. Although we do not comment on future designations or lifting designations, I have no reason to think that it is the UK Government’s intention or that we have any plans, until there is peace between Ukraine and Russia, and Putin withdraws his troops—as he could today—and stops this illegal war, to change our general approach to the use of sanctions on Russia.