76: Clause 72, page 40, line 12, at end insert—
“(6) P is liable for all errors arising from the information provided.”Member's explanatory statement
This amendment seeks to clarify which party is liable for the consequences of providing incorrect information.
My Lords, there are four amendments in this group. Three are mine; the fourth belongs to the noble Lord, Lord Vaux, and is of a different kind altogether, so I shall let him address that one. I shall just speak to Amendments 76, 78 and 79.
Amendments 76 and 78 seek a statement from Ministers about liability for errors. The Government will be demanding information from banks about the transactions, income and wealth of individuals who have never committed any crime or misdemeanour. Such individuals should have the right to know that they have been targeted and treated as second-class citizens. They would be denied financial privacy simply because they are poor, old, sick, disabled and unfortunate. They may wish to lobby their Member of Parliament against what they might regard as unjust law.
Amendment 79 asks that all the parties affected by the information notice must receive a copy of that notice. If the measure about curbing fraud on the public purse is really appropriate, because the Government are really concerned about how the public purse is being depleted, perhaps it should have been applied first to Members of this House and the other House. After all, who can forget the expenses scandal? Yet this idea of surveillance of bank accounts is applied not to Members of this House or the other House but only to those who receive benefits. Again, that indicates that something is not appropriate.
Throughout the passage of this Bill, Ministers have said little about who will be liable for the consequences arising from any errors in the information notices issued by DWP or in the information supplied by banks to DWP or about the erroneous assessments and decisions that might be made by DWP’s reliance on that information. Who would be liable for this new flood of errors? Unlike in the past, this time millions of people would be subject to surveillance; it is not on a case-by-case basis but en masse. If erroneous assessments are made, what compensation would they be entitled to, especially as those affected will not be able to afford legal advice? The Bill does not provide free legal advice to the victims who may be affected by errors made by DWP or the banks.
My Lords, my Amendment 77 is, as the noble Lord, Lord Sikka, has just said, slightly different from the others. I thought about degrouping it, but I decided that life was too short.
Amendment 77 would introduce a reasonableness test—a discussion we have had before—so that an authorised officer must “reasonably” consider that it is
“necessary and proportionate to require the specified information”,
rather than just “consider” that it is necessary and proportionate. We have had a number of debates about a reasonableness test as we have gone through the various days in Grand Committee. Ensuring that an authorised officer should “reasonably” consider, rather than just arbitrarily “consider”, is an important safeguard against misuse of these powers.
Last Monday, the Minister, the noble Baroness, Lady Anderson, argued against a similar change in Amendment 29, saying:
“In addition, having thrilled the Committee with my recitations from Managing Public Money last Wednesday, I am excited to be able to quote from another government page turner, TheJudgeOver YourShoulder. All ‘public law powers’ must be exercised with
‘reasonableness or rationality—following a proper reasoning process and so coming to a reasonable conclusion’.
Making a Minister’s belief a ‘reasonable’ belief therefore has no effect, because they are already subject to it”.—[Official Report, 9/6/25; col. GC 159.]
The Judge Over Your Shoulder—known by the rather inappropriate acronym JOYS—was a new one on me, so I looked it up. The Government describe this exciting publication as:
My Lords, it is a pleasure briefly to follow the noble Lord, Lord Vaux, who made a typically powerful case. I echo his comments, particularly on the need for safeguards on the face of the Bill. We need only look across the Atlantic to see how badly things can go wrong and how important it is that there are laws on which future Governments—I am not at all referring to this Government—can be held to account.
I support all the amendments in this group, but I will focus particularly on Amendment 79, in the name of the noble Lord, Lord Sikka, which would insert:
“A copy of the information notice must be sent to the parties affected by the notice”.
In considering that amendment, I looked at reports today from the horrific case of Nicola Green, the mother of a teenager with cerebral palsy, who was pursued by the DWP for more than a year, having been accused of fraudulently claiming nearly £3,000 in carer’s allowance. The DWP—this is the point of the story that is relevant to this amendment—wrote to her employer without her knowledge to try to take money from the pay of this part-time college worker who works less than 14 hours a week. That is a demonstration of how people need awareness so that they can know what is going on. To finish the story of Ms Green, last month the tribunal judge ruled in her favour and said that she had done absolutely nothing wrong. The DWP did not attend the hearing and then said that it was planning to appeal against the judge’s ruling. A few days ago, the Guardian got involved and Ms Green has now been told that she will not be pursued and she will receive information on how she can claim for compensation.
That is one case, but what we are looking at here is when a case is getting started, if we assume that there are reasonable grounds, as the noble Lord, Lord Vaux, has outlined should be put on the face of the Bill. If the DWP asks for this information and it has got something horribly wrong and has misunderstood the whole situation, as we know happens all too often, the claimant who knows about the information request will be in a position—hopefully, without going through the year of turmoil that poor Ms Green has gone through—to be able to stop the matter at that point.
My Lords, these amendments in the names of the noble Lords, Lord Sikka and Lord Vaux, on the information-gathering powers of the DWP, provide greater clarity and safeguards regarding the collection and consequences of information requests under the Bill.
Amendments 76 and 78 both address liability and aim clearly to establish which party is responsible for any consequences arising from the provision of incorrect information. This clarification will, I hope, be important in ensuring that all parties understand their responsibilities and the potential implications of their actions, thereby promoting fairness and reducing uncertainty.
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Amendment 77 would introduce a reasonableness test requiring authorised officers to consider whether the information requested is necessary and proportionate. In my view, this test would be a valuable addition to ensure that the exercise of powers remains balanced and does not impose undue burdens. Meanwhile, Amendment 79 aims to enhance transparency by requiring that affected parties be informed when information is requested. Together, these amendments focus on improving accountability and protecting the rights of individuals and organisations involved in information gathering.
The speeches from the noble Lords, Lord Sikka and Lord Vaux, and the noble Baroness, Lady Bennett, have added more information. What the noble Lord, Lord Sikka, and others are aiming to stop is a comedy of errors. Indeed, these amendments would help to stop that in the information-gathering powers being given to the Department for Work and Pensions. I commend these amendments in the names of the noble Lords, Lord Sikka and Lord Vaux.
My Lords, I offer my support for most of the proposals in this group of amendments, which strike me as largely thoughtful, proportionate and consistent with the principles that we have returned to time and again throughout this Committee stage: clarity in law; accountability in process; and fairness in the exercise of power. As we know, we have spent three days carefully scrutinising the powers set out in this Bill—powers that are, by any measure, significant. In that context, it is right that we continue to ask whether the safeguards accompanying these powers are sufficient and, where they are not, how they could be strengthened in a practical, proportionate and legally coherent way. We believe that these amendments are consistent in furthering that principle.
First, I have taken note of the cautionary tale arising from the Australian experience, as raised by the noble Lord, Lord Sikka. Amendments 76 and 78, which seek to clarify liability for errors or omissions in information provided under Clause 72, are rooted in a basic but essential legal principle: parties need to know where responsibility lies. If someone is being compelled to provide information under threat of penalty, it must be clear whether they or a third party acting on their behalf will be held liable for any inaccuracies. Without clear statutory guidance, we risk confusion and, worse still, unjust outcomes where individuals may be penalised for honest mistakes or information errors outside their control. These amendments would address that problem in a measured way by introducing transparency and clarity into the process.
Amendment 77 addresses a slightly different but equally important concern. As the noble Lord, Lord Vaux, outlined so eloquently, we are focusing on proportionality and reasonableness in the exercise of investigatory powers. The amendment would insert a reasonableness test requiring that an authorised officer must reasonably consider the request for information to be necessary and proportionate. To my mind, this is simply good law. It reflects what is already expected in broader public law standards, but writing it clearly into the legislation would give both officials and the public confidence that such powers are bound by objective legal norms. It would strengthen decision-making, improve accountability and, perhaps most important, provide a clearer basis for redress if powers are exercised in an overly broad or inappropriate manner. However, I note from the remarks made by the noble Lord, Lord Vaux, that we cannot—or should not—say, “Oh, joy of joys”, in respect of the guidance provided.
My Lords, I thank all noble Lords who have contributed to this short debate and I welcome the Committee to Part 2 of the PAFER Bill. We are on to the DWP and it will be a joy to travel in this ship together with my happy fellow travellers. Before answering the specifics of the amendment, I want to reflect on some of the comments made by my noble friend Lord Sikka, because he helpfully highlighted a couple of the confusions that have permeated some of the discussion around the Bill.
The Bill contains a number of different measures and, in most cases, they apply to different people. In his speech, my noble friend spoke as though these information-gathering powers applied to all those people to whom, for example, an eligibility verification notice will be sent. In fact, that is not the case at all. A number of the amendments coming up next are about the eligibility verification measure, so I will return to any comments about it then. These information-gathering powers are quite different. They are specifically aimed at people of whom there is a reasonable suspicion of fraud by a named individual. This is a particular category of person.
Clause 72 makes provision for expanded information-gathering powers. There are existing powers in the Social Security Administration Act 1992, but they enable DWP to compel information only from a set list of organisations. That approach is restrictive and can delay or prevent the gathering of information that is relevant to proving or disproving a criminal benefit fraud investigation. So new Section 109BZB, inserted into the 1992 Act by this Bill, will update those powers to enable DWP to obtain relevant information from any information holder in respect of a DWP criminal investigation. That kind of information can be vital in proving or disproving an allegation of fraud.
Amendments 76 and 78, tabled by my noble friend Lord Sikka, concern liability for incorrect or incomplete information provided by an information holder in response to an information notice. The Bill is clear that information providers must comply with the information notice and should also be aware of their own data protection obligations in doing so. Information about those obligations will be included in the code of practice, and the information notice must specify the potential consequences for failing to comply.
I understand the noble Baroness’s point. It was because it said “reasonable grounds” in the first half that the fact that it was missing in the second half—paragraph (b)—stuck out: you have to have reasonable grounds, but then you just have to consider. But my point is more than that. Let us imagine the worst-case scenario, where a future Government decide to go for an all-out DOGE approach to whatever. I have no doubt, as I said, that the noble Baroness and the department at the moment will follow the guidance, et cetera, that she laid out, but that is just guidance and it can be torn up on a whim. If a new Government decide to go all out, there is no reasonableness safeguard; they can just say, “We consider it necessary”, and there does not need to be any reasonableness attached to that. That is the concern. It is not about now; it is about where we might be in a year or five years’ time that worries me.
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The Government have yet to say how many bank accounts would be subjected to surveillance. If people have half a dozen bank accounts, that could be 60 million-plus bank accounts. If those accounts have just 10 transactions a year, that is 600 million transactions. How many transactions are banks going to trawl through, and what sense will they make of it? I am sure that the Minister will give us that information today.
In view of the large volume of notices, bank accounts and transactions, errors are inevitable. The DWP already makes thousands of errors every year, and now it will be issuing even more information notices, which means inevitably more errors. It will be issuing information notices without any personal knowledge of the affected benefit claimants or their exact personal circumstances before it reaches a judgment. A 1% error in matters relating to universal credit could affect 75,000 people and ultimately have life-affecting consequences for thousands of individuals. Banks make errors too in the normal course of their business. The Post Office scandal shows that no computer system or algorithm is ultra safe. So, the Government must be prepared and have some idea of what errors will be made, how many will be made, how many people will be affected and what kind of compensation may be payable.
There is a warning about things to come from Australia, where what has become known as the Robodebt scandal happened against a background of scapegoating welfare recipients. People received letters saying they owed thousands of dollars in debt for wrong claims relating to benefits. Those so-called wrong claims were made because the algorithm used by the government departments and the banks was considered to be error prone. More than 500,000 Australians were affected by the policy and were forced to repay amounts by taking out loans, selling their property and using their savings. Just like in the Post Office scandal, many were named and shamed. People were made to feel like criminals. Eventually, the courts declared the policy to be illegal, and billions of dollars have been paid in compensation. Is that the fate that awaits this country too?
I am sure that the Government have been ultra careful with the Bill, but no matter how careful they are, errors will happen. Given the DWP’s record, people will be wrongfully prosecuted, moneys will be wrongfully clawed back and people will be scarred and will suffer. Banks will make errors too in the provision of information. So, each party needs to be aware of the liability position, and that is exactly what my amendment seeks to ensure. I beg to move.
“Guidance to help you navigate the legal frameworks within which public bodies, particularly Government, make decisions … Currently in its 6th edition, it is used to communicate with clients on what to expect when working with government lawyers, allowing for effective collaboration and lowering the risk of legal challenge. The guidance is highly regarded across the legal profession”.
Most importantly, it goes on to say:
“The guidance remains a lay person’s guide to Administrative Law”.
So I am afraid that the noble Baroness’s argument does not hold up to scrutiny. The document is not even official guidance for civil servants; it is merely a lay person’s guide, has no legal status whatever and cannot be used as evidence that public law powers must be exercised with reasonableness or rationality. Unless the Minister can come up with something that actually has some legal force on civil servants and Ministers, the need for these reasonableness tests, which we have been debating throughout this Bill, remains.
As I have said before and will keep repeating, the noble Baroness will not always be in her position. While I completely believe that she would ensure that these powers are exercised reasonably, that may not always be the case for future Ministers or future Governments. We need to legislate for the future, not just for the present situation, so safeguards should be on the face of the Bill to be effective. In my view, a requirement to act reasonably is a very important safeguard.
Amendment 79 is, therefore, a terribly important amendment. I hope that we might hear from the Minister an ironclad, watertight statement that this will happen anyway, but if that is not what we hear, I will encourage the noble Lord, Lord Sikka, to bring the amendment back on Report, because it is an absolutely crucial issue.
With clarity established as to where responsibility lies, by necessity a process will have to be put in place and be tested to make sure that there is oversight and sign-off. If the Minister is not minded to accept Amendments 76 and 77, can she outline in detail what the process is? If she cannot do so, I ask her to write to me and to copy in all those noble Lords who are involved in today’s Committee. The Minister may say that this is all part of the as-yet-unfinished “test and learn”, but a full answer is requested. I think I have picked up that she may be able to enlighten us in this respect at the beginning of this fourth day in Committee. I hope so.
However, I must express my concerns and ultimately oppose Amendment 79 in the name of the noble Lord, Lord Sikka, on the grounds that it risks undermining the effectiveness of the very system that we are seeking to strengthen—although I note the example given, the sad story of Ms Green, highlighted by the noble Baroness, Lady Bennett. The amendment would require that a copy of every information notice issued under Clause 72 be sent to all parties affected by that notice, including, crucially, the individual who is the subject of the investigation.
Fraud investigations, particularly in the social security context covered by Clause 72, often rely on timely access to accurate information before the subject of the investigation is made aware. This is not a matter of secrecy for secrecy’s sake; it is a matter of preserving the integrity of the evidence and preventing interference with the process. If a person suspected of fraud is notified that they are under investigation or even that information about them is being requested from a third party, there is a very real risk that they may destroy or tamper with evidence, close accounts, alter records or otherwise act to frustrate the inquiry before it has a chance to develop properly. This is not speculative; it is a well-established principle in law enforcement and regulatory practice. It is not clear when this notice would be sent, but there is an assumption in the amendment in the name of the noble Lord, Lord Sikka, that it would be sent immediately—perhaps he could clarify that when he winds up—in which case, I rest my case.
There is a reason why investigators, whether in HMRC, the police or other regulatory bodies, are often permitted to conduct inquiries without giving advance notice to those under scrutiny. To do otherwise, as I said, would be to tip off the very individuals whose conduct is in question and, in doing so, jeopardise the ability of investigators to properly undertake their duties. Investigators would be hampered at the outset, fraudsters would have an early warning and those operating within the system in good faith, including civil servants, local authorities and partner organisations, would find it significantly harder to detect and prevent abuse. This is particularly true in cases of organised or sophisticated fraud, where timely access to third-party data may be the only way to build a case before the trail goes cold. It is also true in cases where vulnerable individuals, perhaps manipulated by others, may be at risk of harm if alerted prematurely. I will return to that theme later today.
Of course, we must always strive for fairness and accountability, but there is a distinction between eventual transparency and instant notification. There are appropriate points in the process when the subject is made aware of action against them and can engage in a process of review, but to mandate notification at the earliest investigative stage before facts are even established would, I believe, give potential wrongdoers an unearned advantage. Therefore, I respectfully suggest that the practical consequences of this amendment would be counterproductive and potentially damaging to the very goals of the Bill. We need a fraud enforcement system that is lawful, proportionate and fair but also capable of operating effectively in the face of growing and increasingly complex threats to public finances. That is why I cannot support this amendment.
To conclude, a balance must always be struck between individual rights and the broader public interest. In this case, that balance lies in ensuring that information requests are reasonable, that liability is clear and that powers are used with restraint and purpose but not in mandating disclosures that could derail legitimate investigations. I therefore welcome Amendments 76 to 78, but I am afraid that I urge caution about and ultimately oppose Amendment 79.
Section 111 of the Social Security Administration Act 1992 sets out offences for intentionally failing to provide required information, as well as delaying or obstructing an authorised officer. In those circumstances, DWP can take action. So introducing a separate statutory liability for all errors is not necessary and would, in my view, actually place an unfair burden on information holders, particularly when mistakes are unintentional or minor.
Amendment 77, tabled by the noble Lord, Lord Vaux, would insert “reasonably” into subsection (1)(b) of new Section 109BZB. I hope to persuade the noble Lord that we in fact have a very good case here. I think that it will be easier to write. There may be some disagreement about his comments about JOYS—this will be another theme, I think; I suspect that “Ode to Joy” jokes and other joy jokes will abound. But I will write, because I want to talk specifically about the amendment that he has tabled today and how that affects the DWP parts of the Bill.
The current drafting of subsections (1)(a) and (1)(b) of new Section 109BZB in Clause 72 sets out that, prior to issuing an information notice, an authorised officer must have “reasonable grounds to suspect” that a DWP offence has been committed and must consider it “necessary and proportionate” to require the information. Both those steps have to happen, so I would argue that the drafting already captures the intent of the amendment. We have been doing this for some time. The department already has these information-gathering powers, with well-established training and guidance in place to ensure that they are used appropriately and in line with the existing law.
Authorised officers are trained and accredited before they can use those powers and they have to adhere to the code of practice. The existing guidance makes it clear that they have to consider all the facts, justify their decisions and record their reasoning. That will apply in the same way to the new expanded powers as it does to the current powers. For those reasons, we are confident that the principle of reasonableness is clear in the drafting of Clause 72 and we further support it. I can see that the noble Lord is itching to get to his feet.