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Public Authorities (Fraud, Error and Recovery) Bill 2025-02-03
03 February 2025
Lead MP
The Secretary of State for Work and Pensions
Debate Type
Ministerial Statement
Tags
Migrants & BordersEconomyTaxation
Other Contributors: 45
At a Glance
The Secretary of State for Work and Pensions raised concerns about public authorities (fraud, error and recovery) bill 2025-02-03 in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
Today I am moving the Public Authorities Fraud, Error and Recovery Bill which aims to tackle fraud against the public purse amounting to £55 billion annually. This includes tax system abuse, contract fraud by dishonest companies, and benefit fraud by criminal gangs and individuals totalling a staggering £7.4 billion yearly. The previous government failed over 14 years to update the Department for Work and Pensions' powers to combat benefit fraud effectively. Fraudsters have grown sophisticated in their methods over the past decade, but banks and other firms have become adept at spotting and stopping these scams. In contrast, the last government neglected to improve the DWP's capabilities despite advancements in technology and data sharing. This Bill will grant the Public Sector Fraud Authority (PSFA) new powers for fraud investigations, such as obtaining search warrants, entering premises to seize evidence, compelling information from businesses and individuals suspected of fraud, and enhancing debt recovery and financial penalties. The time limit for civil claims relating to covid-related fraud is doubled to 12 years. Additionally, the Bill will help identify and prevent errors before they occur, ensuring genuine mistakes do not lead to undue repayments or debts.
Richard Burgon
Ind
Leeds East
Question
Does the Secretary of State agree that as we pursue organised criminal gangs, it is really important that we make it clear that there cannot be a hostile approach to disabled people claiming Personal Independence Payment or disabled people more widely who are using the benefits system as they deserve to?
Minister reply
People genuinely entitled to claim benefits have nothing to worry about from this Bill. However, £7.4 billion wasted yearly through benefit fraud must be addressed.
Jim Shannon
DUP
Strangford
Question
Can she give an assurance that if officials in the Department seek out low-hanging fruit, people with genuine disabilities will not be denied their rights and suffer anxiety or physical effects?
Minister reply
The Bill treats individuals equally, allowing no fraud against public purse. It aims to stop such activities and reclaim money for taxpayers.
Ben Maguire
LD
North Cornwall
Question
Will the Secretary of State give way?
Minister reply
The Bill provides PSFA with new powers, including obtaining search warrants, entering premises to seize evidence, compelling information from businesses and individuals suspected of fraud, and enhancing debt recovery and financial penalties.
Meg Hillier
Lab/Co-op
Hackney South and Shoreditch
Question
Will the Secretary State make it clear that people in situations with small errors on their side or big errors by the Department will not have money taken out of their bank account?
Minister reply
The measures aim to spot such errors early and prevent them from happening. This should reduce undue repayments or debts.
Hendon
Question
Can she reassure the House that concerns raised by the Information Commissioner’s Office about third-party data measures have been addressed?
Minister reply
The current measure more tightly scopes information sharing, specifies those in power's scope, requires a statutory code of practice before measures are taken, and includes independent reviews. The letter from the ICO should reassure the House.
Andy McDonald
Lab
Middlesbrough and Thornaby East
Question
Can she reassure the House that an appropriate level of resources will be targeted at recovering tax revenue lost to fraud and error, estimated at £39 billion in the last financial year?
Minister reply
The Government treats every case seriously whether it's large or small. They believe in public services and social security systems where money goes to those in greatest need.
Tiverton and Minehead
Question
Is the Secretary of State concerned that pensioners might be unfairly scrutinised under this blanket approach?
Minister reply
One of the new measures explicitly excludes state pensions from scrutiny.
Shaun Davies
Lab
Telford
Question
Will local authorities be able to work with national Government to pursue fraud in both national and local benefits?
Minister reply
Local authorities can put examples to the Public Sector Fraud Authority for scrutiny.
Sammy Wilson
DUP
East Antrim
Question
Will errors still be treated in the same way as fraud under the Bill?
Minister reply
No, genuine mistakes will not be treated the same way as deliberate fraud. The measures aim to prevent mistakes and use technology effectively while tackling fraudsters.
Question
Has the Secretary of State considered expanding the remit of the Public Sector Fraud Authority?
Minister reply
The Bill focuses on tackling fraud and does not specifically address serious mismanagement by local authorities, though it is about ensuring public funds are protected.
Ben Lake
PC
Ceredigion Preseli
Question
Will the disqualification from driving have a disproportionate impact in remote areas?
Minister reply
The court will consider whether a car is necessary for work, but fraud should not be tolerated anywhere. The measure targets those who repeatedly refuse to engage with authorities and have the means to repay.
Kirsty Blackman
SNP
Aberdeen North
Question
Will DWP be able to request information from charitable organisations or MPs?
Minister reply
The eligibility verification measure is for banks and financial institutions, tightly defined with proper oversight.
Helen Whately
Con
Faversham and Mid Kent
Question
Questions the extent of new powers given to Cabinet Office Ministers, highlighting concerns about lack of oversight and potential breaches of legal principles. She inquires about consultations with legal experts.
Minister reply
Acknowledges the need for rigorous scrutiny but emphasises that robust safeguards are in place to prevent misuse of authority. Indicates that discussions have been held with relevant legal bodies to ensure compliance.
Debbie Abrahams
Lab
Oldham East and Saddleworth
Question
Acknowledges the need for fraud detection and recovery but points out additional areas of risk, such as procurement fraud and regulatory fraud. She questions the Government’s lack of a comprehensive plan to address these issues.
Minister reply
Responds by reiterating the primary focus on strengthening anti-fraud measures within DWP while acknowledging broader risks across public sector procurement and regulation.
Torbay
Question
I thank the hon. Member for Oldham East and Saddleworth for laying out very concisely some of the challenges in ensuring that the Bill does the right thing without going too far and breaking the things that people want fixed... I challenge the Minister: why not wait for that review’s findings before we push hard on these proposals, so that we can ensure that lessons are learned?
Robin Swann
UUP
South Antrim
Question
Does the hon. Member agree that this legislation would see more unpaid carers or their like come under far harder and harsher penalties?
Oliver Ryan
Lab/Co-op
Burnley
Question
I thank the Secretary of State for introducing this important Bill. Fraud is a serious issue, and we simply cannot tolerate the level of fraud that the previous Government left us with... I believe in doing what is right to protect taxpayers and hard-working people in business, which is why I will not stand by while fraudsters take advantage of the system.
Peter Bedford
Con
Mid Leicestershire
Question
While supporting the Bill's intent, I seek clarification on several key points. Firstly, can you guarantee that this Bill will not distract from reforms to benefit conditionality and health assessments?
Minister reply
The measures in the Bill are essential for tackling fraud effectively without distracting from wider welfare reforms such as those related to benefit conditionality.
Lewis Cocking
Con
Broxbourne
Question
Does the Bill address both reducing benefit fraud and encouraging people back into work, with a well-paid job being the best form of welfare?
Minister reply
Absolutely, while tackling benefit fraud is crucial, ensuring that individuals have access to work also forms part of our broader strategy for economic recovery.
Gill German
Lab
Clwyd North
Question
How will the Bill differentiate between intentional fraud and accidental overpayments due to system complexity?
Minister reply
The Bill ensures that powers are used appropriately, distinguishing between fraudulent criminal activity and genuine mistakes. Measures include safeguards to protect individuals while effectively recovering funds from those who commit fraud.
Jon Trickett
Lab
Normanton and Hemsworth
Question
While acknowledging the need to tackle fraud, Mr. Trickett questioned whether enough attention has been given to addressing errors in welfare claims and raised concerns about potential conflicts between banks' duty to protect vulnerable customers and their new obligations under the Bill.
Minister reply
The Government recognises the importance of balancing the need for robust anti-fraud measures with protecting those who are genuinely at risk of being treated unfairly. We will ensure that there is a clear framework in place to address concerns raised by both the banks and vulnerable claimants, including provisions for appeals and clarification on partnerships with private entities.
Jon Trickett
Lab
Normanton and Hemsworth
Question
I am worried about how the intervention of banks will be invoked under this Bill. Will every citizen's bank account be looked at? If not, what process will identify particular individuals?
Brecon, Radnor and Cwm Tawe
Question
How does the Bill fit with our data protection laws and agreements with the EU? What is the process for asking banks to provide information in a digital format?
Hendon
Question
Why do we need this Bill? It tackles fraud that spread under the last Government, costing every family £800 a year. The DWP loses almost £1 million an hour to fraud and error.
Kirsty Blackman
SNP
Aberdeen North
Question
Ms Blackman raised concerns about the Bill's prioritisation and its potential impact on social security dignity, co-production with disabled people, fraud prevention in other systems such as tax, and human rights issues regarding intrusive surveillance and eligibility checks. She questioned the necessity of introducing this legislation before addressing child poverty.
Minister reply
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western) responded by confirming that the Information Commissioner’s Office letter supporting the Bill's safeguards was available on their website.
Jim Allister
TUV
North Antrim
Question
None of us has empathy with fraudsters. However, a Bill proclaiming itself to have the purpose of pursuing fraud should be rigorously examined. There are troubling aspects in the equivalence between investigating fraud and overpayment. Clause 50 allows the Minister to decide whether someone is a fraudster on the balance of probabilities rather than beyond all reasonable doubt.
Sally Jameson
Lab/Co-op
Doncaster Central
Question
The Bill sets out a clear agenda that this Government will be tough on fraud. It will ensure fairness for benefit claimants and offer confidence to the taxpayer.
Jim Shannon
DUP
Strangford
Question
Welcoming the Government’s actions on benefit fraud, Jim Shannon expressed concern about the impact of new measures on those who make honest mistakes and highlighted cases where constituents’ bank accounts might be scrutinised. He questioned how the Department will balance pursuing fraud while protecting individuals with disabilities or mental health issues from overreach.
Minister reply
The Minister assured that the tough measures introduced would target benefit fraud without penalising genuine claimants, stressing the importance of ensuring fairness for those who need benefits.
Jim Shannon
Member for Strangford
Question
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?
Minister reply
That is why the code of practice needs to be published as rapidly as possible to see what mechanisms will be available for protecting constituents.
John Milne
Member for Horsham, Liberal Democrats
Question
Putting a stop to fraud is welcome but many constituents are concerned about far-reaching powers that could have detrimental effects on benefit claimants. The carer’s allowance repayment scandal shows what can go wrong with departmental error. Does this represent a proportionate action?
Paula Barker
Member for Liverpool Wavertree, Labour Party
Question
I recognise the need to tackle fraud but I hold deep reservations about the unintended consequences of the Bill in its present form. The Secretary of State has been willing to listen and address some concerns.
Jo White
Lab
Bassetlaw
Question
In Bassetlaw, constituents are angered by benefit fraud and welcome this Bill. The proposed new powers will address the issue and bring DWP in line with HMRC’s investigative capabilities.
Minister reply
The Bill introduces new search and seizure powers, allowing DWP to pursue fraudsters more effectively. It also includes safeguards to protect vulnerable individuals while ensuring that those who defraud the system face consequences.
Luke Charters
Lab
York Outer
Question
This Bill tackles industrial-scale benefit fraud, with £7 billion lost last year. It aims to save taxpayers' money and ensure it reaches those in genuine need.
Minister reply
The Bill will enhance PSFA powers, extend the time limit for historical fraud investigations, and support public-private partnerships to combat organised crime groups involved in benefit fraud.
Rebecca Smith
Con
South West Devon
Question
The shadow minister highlighted the previous government’s efforts in tackling fraud and emphasised the need for a comprehensive plan from the new Government. She also criticised the lack of action since July 2024.
Kirsty Blackman
SNP
Coastal West Sussex
Question
I appreciate that the Government have made changes around affordability, but they still do not assess either benefit clawbacks or the deductions on the basis of whether they are actually affordable for the people having to pay them back. Are the Government planning to put that in place at some point in future?
Minister reply
The hon Lady will forgive me if I have not understood her correctly, but there is specific provision in the Bill on the debt recovery powers to limit the amount that can be clawed back to 40% of anybody’s capital.
Andrew Western
Lab
Oldham East and Saddleworth
Question
The hon. Member for Torbay raised the use of AI, as did my hon. Friend the Member for Oldham East and Saddleworth. There will always be a human decision maker on each of these powers, so where decisions are made, a human—not AI—will make that call.
Minister reply
For EVM, a flag would be passed to a human to establish benefit eligibility. For debt recovery, it would be passed to a human to assess vulnerability and the ability to pay.
Torbay
Question
The hon Member for Torbay highlighted the carer’s allowance review which will report this summer, not next. We are already learning lessons from that.
Minister reply
We have secured funding to extend the verify earnings and pensions service system of alerts from HMRC to 100% of claims.
Zarah Sultana
Coventry South
Question
Suggested that the Bill subjects millions of people to unwarranted financial surveillance. Asked about clarity on whether transactional information from banks will be accessed.
Minister reply
Clarified that we will not receive transactional information directly, nor will banks make decisions regarding benefit eligibility; human decision-makers within DWP will conduct investigations.
Jim Allister
North Antrim
Question
Asked what constitutes fraud and raised clause 91 on the removal of driving licences.
Minister reply
Clarified that powers to remove driving licences are an existing authority held by the Child Maintenance Service, requiring a judge's decision after repeated attempts at securing repayment.
Jim Shannon
Strangford
Question
Asked about the right of appeal and concerns regarding appointees.
Minister reply
Confirmed that rights of review and appeal against rulings in debt recovery are included, and assured that systems will remove appointees unless they receive benefits themselves.
Question
Asked about the appointment process for individuals conducting independent assessments.
Minister reply
Clarified that appointments will be made through a proper recruitment process and annual reports to Parliament will ensure independence.
John McDonnell
Hayes and Harlington
Question
Expressed concerns about potential errors in the system and the role of banks.
Minister reply
Acknowledged that it is a new power and proposed a gradual scaling-up to ensure accuracy, addressing £7.4 billion in DWP fraud annually.
John Milne
Horsham
Question
Asked about carer’s allowance overpayments and existing powers for information request.
Minister reply
Clarified that we will not access bank accounts directly but gather data through a digital compulsion process, excluding specified organisations.
Paula Barker
Liverpool Wavertree
Question
Raised concerns about legal advice and Article 8 of the European Convention on Human Rights.
Minister reply
Confirmed that measures are compatible with ECHR due to narrower third-party data powers and additional safeguards.
Rebecca Smith
South West Devon
Question
Questioned effectiveness of Conservative plans in tackling fraud.
Minister reply
Disagreed on the extent to which previous measures were abandoned, highlighting actions taken to claw back public money as part of their own initiatives.
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