Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Fox of Buckley and Lord Vaux of Harrowden

Committee stage
Wednesday 25th June 2025 Grand Committee

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I too rise very briefly. A number of us have raised this scandal throughout Committee and the Minister has rightly said, “Well, there’s an independent review, I really can’t comment until we get the findings”. I say, “If we can’t comment until we get the findings of the independent review, the Government shouldn’t be taking money from the carers. That would seem obvious to me. Let’s wait until we’ve got the findings of the independent review”.

However, this speaks to the moral dilemma that was very well articulated by the noble Baroness, Lady Lister of Burtersett. It is something that has been troubling many of us throughout Committee: the Bill fails to distinguish between the ways people are treated for error and for fraud. Through no fault of their own, they end up in some instances being criminalised and certainly subject to some quite severe powers. That has always felt morally unjustifiable.

Another point this raises is that, although we constantly say that the moral case for this is that the money must be reclaimed, many instances of error seem to be due to errors made by the DWP, yet there is never any clarity about how, morally, it might be asked to pay. I am not suggesting that it pays financially, but if we are saying that those who make an error must pay, I do not understand why the DWP has not, as part of the Bill, made it clear which errors made by the department or state bodies the public will be able to hold them to account for when they are made. The scandal of the carers has cut through with the public: people know about it and are discussing it, and they in no way think that these people are welfare scroungers, frauds or doing anything wrong. So I urge the Government in this instance to be very clear that they will not act, as this amendment rightly argues, at least until the inquiry has brought its conclusions into the public arena.

[Lord Vaux of Harrowden (CB)]

My Lords, I hope to be even more brief. I have sympathy for this amendment, but it is backward-looking, as it relates to situations that have already happened. We also need to stop them happening in the future. These problems have arisen because of a very badly designed benefit. It has a cliff-edge threshold. Cliff-edge thresholds will always be the ones that cause problems, so I really hope that we learn the lessons from this situation and stop applying cliff-edge thresholds to benefits. It does not work and is almost guaranteed to create problems of this nature.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Fox of Buckley and Lord Vaux of Harrowden

Committee stage
Monday 16th June 2025 Grand Committee

[Lord Vaux of Harrowden (CB)]

I have just answered my own question.

[Baroness Fox of Buckley (Non-Afl)]

I apologise for jumping up and down. This is the confusion I have in relation to this area: if you are a fraudster and you are watching this Committee very carefully, as the Minister indicated they are doing—I am sympathetic to the idea that I am perhaps being naive in publishing, “Here you are, fraudsters, this is what you should do”—it seems to me that what you would do is set up multiple bank accounts. In fact, I think it was the Minister for Transformation, Andrew Western MP, who conceded

“that we will not have full sight of somebody’s accounts if they bank with more than one institution”.—[Official Report, Commons, Public Authorities (Fraud, Error and Recovery) Bill Committee, 6/3/25; col. 237.]

So it seems to me that the fraudsters are over there playing the system.

This is a Bill that gives enormous powers, about which I worry. It seems that the eligibility criteria should be known in order for them to be accountable. I do not want to be naive, but the people who actually need the eligibility criteria are those people who might, by error, breach the eligibility criteria, but also, democracy requires it because we need to know how to hold this legislation to account. The fraudsters—the people who are deliberately going out of their way to rip off the welfare system—already know how to play this, if that makes any sense. Even as I was tabling the amendment, I was aware of the fact that I am not saying, “Let’s give the game away completely”; however, we cannot just say, “We can’t tell you anything in case the fraudsters find out”, when there are real loopholes here that the fraudsters are going to exploit anyway.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Fox of Buckley and Lord Vaux of Harrowden

Committee stage
Monday 9th June 2025 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, I have amendments in later groups on the EVM section of the Bill with a similar effect to these, looking at the costs to the banks. This is not just about the impact on the banks, however. As many of us know from the experience of being politically exposed persons, when you put onerous responsibilities and costs on the banks that relate to a particular class of customers, you can create a disincentive for the banks to provide services to them. Most of us have probably had the experience of being PEP-ed, and it is not terribly pleasant. Here, if we are putting a load of costs on the banks that relate to benefit recipients, we make it less likely that those vulnerable people will be able to access banking services. The Government need to think about this quite carefully.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I was going to make a very similar point. We have to consider the serious consequences of the Government, in effect, turning banks into de facto government inspectors, as well as the unintended consequences such as those for politically exposed persons. Goodness knows that that has not gone well. It has created all sorts of chaos. I am very anxious about private institutions, in effect, being asked to do the Government’s dirty work in many instances.

I want to query, though, banks being able to charge for the hard work they do via new paragraph 8 in Schedule 5, in which there is a provision for the bank to be able to deduct a fee from the debtor’s account to meet its reasonable costs in complying with the order, which is a ridiculous situation. It amounts to state-backed approval of funds being taken directly from the bank accounts of private customers to deal with administrative retrieval of overpayments. By the way, the maximum amount that banks could charge would be set by the Secretary of State via regulations, which is also not reassuring. Although I do not want the banks to be used, I also do not want them to be able to charge their own clients to do the job that the Government have demanded they do. I feel very queasy about all this.

On the discrimination point, if these measures identify a range of types of bank clients who are causing more trouble than they are worth, the obvious decision will be to debank. It makes perfect sense that they would think, just like every other private sector organisation, “Do I really want people on benefits living in my house?” We have seen this discrimination time and again. There is a serious danger of unintended consequences here that the Government have to take seriously.