Public Authorities (Fraud, Error and Recovery) Bill

John McDonnell Excerpts

2nd reading
Monday 3rd February 2025 Commons Chamber

[John McDonnell (Hayes and Harlington) (Ind)]

I do not want to repeat what has been said by others, but I will share my perspective on the Bill. It is in two parts, and there is almost unanimity about the first part, which deals with how we tackle fraud carried out through contracts and so on. I thank the hon. and learned Member for North Antrim (Jim Allister) for pointing out some of the elements of real concern in that part of the Bill, which, to be frank, I missed. The Bill has been published for only a week, and it has been difficult to go through it. I have been somewhat distracted by the Government trying to concrete over a quarter of my constituency with a third runway at Heathrow, and elements of the Bill need further examination. To be frank, I think it will face legal challenge in some form.

I cannot welcome the first half of the Bill enough, which deals with tackling overall fraud. I was the first MP to raise with the then Chancellor the corruption that was taking place with covid bounce back loans. I raised it a number of times in the House, and I wrote to him twice. I received a standard letter that was almost identical to the response I got from the banks, which said they were going through their usual investigatory process, and then we eventually discovered that fraudulent claims for bounce back loans amounted to at least £5 billion. I welcome the first half of the Bill, because we need to be ruthless on the corruption and fraud that takes place.

However, the second part of the Bill, particularly clause 74 and schedule 3, is where we are straining, to be frank. Some hon. Members have mentioned the context already. There is real fear out there among people who claim welfare benefits, particularly disabled people. It is a result of their being targeted, and of careless language in this place and elsewhere. That is then exaggerated even further by the media, and benefit claimants become targets.

I echo what the hon. Member for Strangford (Jim Shannon) said, because I have the same problem in my constituency. Sometimes it is about telling people to claim what they are entitled to, because they are terrified of the stigma around claiming benefits at the moment, particularly older people. The atmosphere that we now have is a climate of fear, and I am worried that this debate will add to that climate of fear.

The Secretary of State said that any proposal has to be proportionate, safe and fair, but there are real concerns about the proportionality of this Bill. As other Members have said, it is a mass surveillance exercise. The road to hell is paved with good intentions, and I fear that once we start down the path of surveillance in this way, others will come back with proposals for where we can go further. As Members have said time and again, there is an issue with safety. How many lessons do we have to learn about the way that computer systems and the use of algorithms have destroyed people’s lives? My hon. Friend the Member for Normanton and Hemsworth (Jon Trickett) said that the banks are gearing up, but they have expressed concern that the Bill is almost an exercise beyond their abilities. As a result, there will be errors, which will reinforce the climate of fear around benefits.

[Jim Shannon]

I apologise for omitting this issue from my speech. Does the right hon. Gentleman agree that the Government have decided to penalise those who have been charged with alleged fraud? Does he feel that there should be a system in place so that they can appeal?

[John McDonnell]

That is why the code of practice is going to be interesting. The code of practice needs to be published as rapidly as possible to see what mechanisms will be available for us to protect our constituents.

I have one area of experience with regard to the flagging up of sums of money that raise concerns: in the debates that we had on tax avoidance, we talked about suspicious activity reports. There is a record of real faults and a high number of errors in that process. As a result, people have been not just penalised, but penalised unfairly and exposed unfairly. It is not that I am in any way a defender of tax avoidance or anything like that, but if we are to introduce a system, we need to make sure that it is secure and effective, and does not penalise people unfairly.

The Bill is supposed to be proportionate, safe and fair. The reason why people will feel that it is unfair is that it specifically targets people who are often in desperate need. If there was a group of people whose accounts we would want to monitor because there has been a history of fraud, and who have had to pay money back—some have gone to prison—it would be MPs. I was here during the expenses scandal. Following that experience, are we really not monitoring our accounts for undue payments and so on? Why is it always the poor who we target in this way?

As I said, I am really worried about the climate of fear, particularly among people with disabilities, which the hon. Member for Torbay (Steve Darling) mentioned. We know about 600 suicides that are related to DWP activity. We circulated John Pring’s book “The Department”, which looks at the DWP’s role in those deaths, to all MPs, and it was starkly obvious that it had made a significant contribution, if not caused them. I remember a case in Scotland in which a poet in Leith committed suicide but did not leave a suicide note; he just left a letter from the DWP beside him.

My view is that whatever steps we take in exercising the powers in the Bill, we have to be extremely careful. One of the things I want to raise—if I can crowbar it into this legislation through an amendment, I will—is that a number of us, on the basis of the work of Mo Stewart, who does research on poverty and welfare benefits, have said that we must give people assurances that they will be protected and that we will do everything we can to cause no harm, and certainly not cause any further suicides, but we must also learn the lessons of what has happened in the past.

One of Mo Stewart’s proposals is for an independent advisory panel for DWP-related deaths. We have exactly that system in place for deaths in custody. We have an advisory system at the moment for the DWP but, to be frank, it is not working. The minutes of the panel’s meetings are cursory, and it does not do detailed reports in the same way as the deaths in custody panel. If we are to reassure people out there that we really are looking after their interests, that is one small step that we could include in this legislation. I am not sure that we will be able to crowbar it into the title of the Bill, but I will do my best and would welcome other Members’ creative drafting to help me. Such a measure would send out the right message. The Secretary of State has tried to do that tonight with her assurances about the processes, but I am not sure whether that will be enough, given the climate of fear that we now have.

What are the next steps? I hope that there will be sufficient time in Committee for us all to get our head around the detail of the Bill. I hope that there will be more consultation; it would be better to delay Report to enable that. I also wish to raise the same issue as the hon. Member for Brighton Pavilion (Siân Berry): we were given assurances that the proposals would be implemented by co-production rather than announced from above.

It would be an example of good governance if there were a process of proper consultation. After the Ellen Clifford case, in which the High Court ruled against the previous Government on their consultation, the spirit of the Government’s response was that there would then be proper consultation, hopefully on the principle of “Nothing about us without us”. Consultation on the detail of the Bill throughout its passage would be the best example that this Government could give of that process working productively so that we get it right and we do not endanger any more people, as unfortunately has happened in the past.

Public Authorities (Fraud, Error and Recovery) Bill

John McDonnell Excerpts

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

In conclusion, it is ironic, is it not, that a massive state overreach and the draconian legislation used for lockdown led to high levels of fraud, error and millions more people on benefit? It will, supposedly, now be solved and corrected by yet another massive state overreach and draconian legislation. It was wrong then and it is wrong now.

[John McDonnell (Hayes and Harlington) (Ind)]

Sometimes in these debates, we are trying to influence those on the Front Bench; to be honest, on this legislation, I have given up on that. I just want to get on the record, for my constituents, why I am concerned about this piece of legislation and why I support amendment 11.

We have all prefaced our speeches by saying that we all want to tackle fraud. To follow on from the speech by the right hon. Member for Tatton (Esther McVey), in that process during covid, I think I was the first MP to raise the issue of the massive fraud that was going on with bank loans. When I wrote to the then Chancellor and to various Ministers, I received responses that had almost been dictated by the banks, saying that all the security measures had been put in place and that it was being administered effectively; we then discovered that it was, I think, £13 billion, although we recovered an element of that, so I am very wary about ensuring that public expenditure avoids the levels of fraud that we saw during that time.

I am concerned about this Bill, which takes huge steps constitutionally, legally and on civil liberties. Others have made similar points. Our tradition is that someone is innocent until proven guilty—that has been the legal principle from Magna Carta onwards. The investigation powers are usually triggered by some element of suspicion. This legislation rides roughshod over that long 1,000-year tradition.

On privacy, whatever assurances we are given about the Bill’s compliance with human rights legislation— I have my doubts—it introduces, for the first time that I have seen in this country on an issue like this, mass surveillance.

[David Davis]

The right hon. Gentleman goes right to the point I tried to make with the Minister. There are 25 NGOs supporting amendment 11. It is almost certain that if we go down this route, it will end up in court. I think the Government will lose on article 8, on the question of individual privacy.

[John McDonnell]

Following the right hon. Gentleman’s track record on issues like this—he has been proved right on virtually every occasion—I agree. In addition to the mass surveillance, the extent of the information that can be sought and interpreted from the Bill is extremely wide-ranging and open to challenge.

What has annoyed me is that we are now introducing legislation in advance of what we were promised by way of codes of conduct and operation. We have no idea how this will work out in practice without those codes. Members may recall that the codes set out detail on how the system would operate at every level, with the information seeking, investigatory powers and so on. We do not have those, but we are being told not to worry, because the other place will receive them—well, that is not our responsibility as MPs. Our responsibility is to deal with the matter here.

We also do not know how the “independent persons”, as they are described in the legislation, are to be appointed or how they are going to operate. The hon. Member for Brighton Pavilion (Siân Berry) raised the question of how their reports and recommendations will then be implemented. There is also the question of whom they will be accountable to and whether there is any accountability for those independent persons to this House.

Time and again, when we have introduced legislation like this in the past that has short-circuited the traditional protective constitutional and legal mechanisms, it has led to debacles and miscarriages. I warn Ministers that that is exactly what we are facing here. Reference has been made to issues with regard to the use of computers, models and algorithms. We seem to have learned nothing from where we have made those errors.

As I also raised on Second Reading, what is happening here is discriminatory. We are choosing a class of people—largely working-class people—who are claiming benefits, and we are targeting them. If there is a class of people we should be targeting who have a record of fraud and of claiming things that they should not, well, here we are. As the expenses scandal demonstrated, if there is one group of people we should be examining more closely, it is Members of Parliament.

I want to talk very briefly about the impact of these measures from a constituency point of view. As an MP for 28 years and a councillor for over 12 years—40 years in total—I have met lots of people who do not claim benefits to which they are entitled. They are often older people, but there are others as well. Why do they not claim? In my experience, it is because of the stigma attached to claiming benefits. With this Bill, we are adding a bit more stigma, which will act as a disincentive to those who genuinely qualify for benefits and should be coming forward. It is that terror of making an error, that fear of risking being penalised for claiming a benefit they may not be entitled to—or of being paid too much. There is a real fear among my constituents about such miscarriages.

Most of the constituents who come to our constituency surgeries have tried everything else by the time they get to us. They are the ones with the most chaotic lives. And they are the ones who get sanctioned time and again, not because of any deliberate act, but often because they have mental health issues, or because something in their life, prevents them from attending that interview, or from applying for enough jobs in time. What will happen to them? They will be dragged into this system again. At the moment, they come to us—this is largely the case in my constituency—because most of the advice agencies have been closed down thanks to the cuts that have taken place, and they come to us in desperation. This Bill will make people even more desperate. It will deter people who qualify for benefits from claiming, and it will cause real hardship and impose severe penalties on those who least deserve it. That is why I think this is a poor piece of legislation, and it will not be long before we are back here again to amend it, to restore some elements of civil liberties and protection for the poorest in our society.

[Madam Deputy Speaker (Caroline Nokes)]

I shall impose, with immediate effect, a four-minute time limit.