My Lords, I thank all those who have spoken today. I have been made well aware of the strong views expressed about this measure in Committee. I thank the noble Baroness, Lady Sherlock, for her kind remarks. She is right: I take all these matters extremely seriously. I have listened carefully to all the speeches, although I might not agree with them. Many questions have been asked. I will attempt to cover them all, of course; I doubt that I will be able to but I assure noble Lords that it is likely that a long letter will be required after this. Obviously, I will reflect on all the speeches made in Committee today.
I start by talking about the timing of the introduction of this measure. The noble Baroness, Lady Sherlock, said that the measure was introduced, in her words, “on the late side”. As she alluded to, the DWP published the Fraud Plan in May 2022, where it outlined a number of new powers that it would seek to secure when parliamentary time allowed. In answer to her question and others, in the parliamentary time available, the DWP has prioritised our key third-party data-gathering measure, which will help it tackle one of the largest causes of fraud and error in the welfare system. We will not sit back and ignore an opportunity to bring down these unacceptable losses and better protect taxpayers’ money. I will expand on all of that later in my remarks.
Before attending to the themes raised and addressing the amendments, it is important to set out the context for the power for which we are legislating. Fraud is a serious and damaging UK-wide issue, accounting for more than 40% of all crime. To be fair, many speeches
alluded to that. The welfare system is also a target for fraudsters, and we are seeing increasingly sophisticated attacks occur on a scale that we have not seen in the past. We all have our own experiences at home of fraudsters who try completely different methods, not linked to the benefits system at all, to try to gain money through ill-gotten uses and methods.
In 2022-23, the DWP paid out more than £230 billion in benefits and payments to people across Great Britain. I very much took note of the figure that my noble friend Lady Buscombe raised. I say to the Committee that this figure is forecast to rise to nearly £300 billion by 2024-25, in quite short order, so this is a really serious issue to address. However, more than £8 billion has been overpaid in each of the past three years because of deliberate fraud against the state or because genuine errors have been made.
To assist the noble Baroness, Lady Lister, to whose speech I listened carefully, fraud, not error, is the biggest cause of welfare overpayments, totalling £6.4 billion of the £8.3 billion overpaid last year. The noble Lord, Lord Vaux, also asked about the figures. These losses are largely because people are intentionally and knowingly taking money that they are not entitled to. This is not organised fraud either; the vast majority comes from individuals who are not entitled to the money. We cannot underestimate the lengths to which some will go in order to take money they are not entitled to or promote ways to defraud us to a wider audience. This new legislation is not just about protecting the taxpayer; it will help those who make genuine mistakes in their claim, and our swift action will avoid them building up large overpayments.
Some people have said that the department has the powers that it needs to fight fraud and error—I think that was alluded to even today. However, some of the current powers that we have to ensure benefit correctness are over 20 years old—a point that I think my noble friend Lady Buscombe made. In this time, fraud has evolved and become increasingly sophisticated and we must keep pace with the fraudsters. It is for this reason that the Government are bringing these new third-party data powers, as set out, as said earlier, in the fraud plan.
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The change will modernise and strengthen DWP’s legislative framework; will ensure that we remove fraudsters from the system; and—to answer a question from the noble Lord, Lord Vaux—will save up to £600 million over the next five years and provide a £1.9 billion net benefit over 10 years. There is public support for this approach, too, which again came out in some of the speeches. In public perceptions survey of fraud, error and debt, conducted in 2023, 64% of respondents thought that this measure was an acceptable way to tackle fraud and error in the welfare system.
I would like to move on to a very important area, namely how the power will work and addressing misconceptions. My noble friend Lady Buscombe is right; there are misconceptions, and I hope that I can go some way to help on many of the points raised by Peers, including the noble Baronesses, Lady Chakrabarti and Lady Kidron. I suspect that I may not, but I will do my best. There has been a lot of interest in this power, as I understand today, outside Parliament. Much of
this has fuelled misconceptions, which I would like to address by placing on record how the power will work and what it will and will not do. The power will work by requiring designated third parties to look within their own existing data and provide relevant, limited data to DWP only—I repeat, only—where it signals that someone might not be eligible for the payment that is being made.
To address another misconception, it is not a surveillance or investigations power, as was alluded to by the noble Lord, Lord Vaux. This measure does not meet the legal definition of surveillance, as the data gathering will be neither covert nor the purpose of an investigation. This is solely a data-gathering power that will help us to check whether individuals appear to meet the eligibility rules for the benefit that they are receiving. This should not be confused with powers that the DWP already holds under the Investigatory Powers Act 2016 to investigate individual cases where there is a suspicion of criminality.