Mike Wood MP: speeches

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Speeches

25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q But Andrew, you will be aware that new statutory instruments can be introduced and passed in Parliament in the space of six weeks. It is not an obstacle to an iterative approach if you choose to have the codes of practice introduced through statutory instruments, as happens in some areas, and take an approach that actually has a formal role for Parliament and the democratic scrutiny that the Government were so keen on when they were in opposition. Andrew Western: I would be very happy to have that conversation, should you want to table any amendments in that regard.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Are there any other areas where you think the Bill could approach things differently? Is anything missing that you think should be in the Bill? Daniel Cichocki: Given that the eligibility verification measure is one of the more extensive powers in the Bill, we think that it may be appropriate to require the Minister to attest that its use is proportionate, as is required with the other measures in the Bill. That is just because of that particular power’s scale in requiring banks to share information on both potential fraud and potential error. As it includes the sharing of information of customers who may not be suspected of any crime whatsoever, we think that it would be helpful if the Government were to articulate that their use of the measure is proportionate, as is the case with the others. It would also be helpful if the Bill were to replicate the very effective Proceeds of Crime Act 2002 exemption, which exists within the eligibility verification measure, in the other measures across parts 1 and 2 of the Bill. That is simply because we do not think that it is necessarily proportionate or helpful for banks to be considering, in complying with legislation, whether they should also be undertaking a suspicious activity report for the authorities. One of the constructive conversations that we have been having with Government is how we delineate our responsibilities to comply with this legislation and our responsibilities to comply with financial crime measures. We will be writing on this in more detail, but we suggest that the exemption under the eligibility verification measure, which is very helpful, should be replicated in other elements of the Bill.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q The provisions in the Bill are fairly vague about who can exercise those powers directly. Compared with the investigatory powers created and set out in other legislation, should we be a bit more specific about what that experience, those qualifications or that seniority looks like? Mark Cheeseman: The Bill currently lays it to the authorised officers. One of the transformations that has been going on in Government is the professionalisation of counter-fraud work. We now have a counter-fraud profession. There are now professional standards where, a while back, there were not, for a lot of investigations in the public sector. There are professional standards and practices, and a code of ethics for people who work in the sector. That sets a standard for the knowledge, skills and experience that the authorised officers exercising the powers would have. As to what level they are, that aligns with current practice and what you would see across the public sector.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q The document goes on to say that “the drafting of the code ought to begin early enough to enable a decision as to whether statutory provision is required”. Has that drafting been done early enough? Andrew Western: As I said, we will debate this in more detail as we come to the relevant stages. I think that we have done this in sufficient time to enable us to consult, as we are required to do, on the statutory code of practice and to ensure that both Houses can see it as it makes its way through the process.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Following that, the document states that “if Parliament is to be asked to enact statutory provisions relating to a code,” which appears to be the case in this instance, “a draft of the proposed code should if at all possible be made available so that the appropriateness of the statutory provisions can be properly considered.” Obviously, that is part of the legislative process. Should we not have that information? Why should only the House of Lords be provided with that? Andrew Western: I suspect that at that point you are asking a procedural question, so I am not best placed to answer it.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q The provisions of the Bill are not confined to financial institutions, are they? John Smart: They are not, no. I do not know which institutions are likely to be required to provide information. There will be individuals and institutions. Other institutions might find it more difficult, but there is an appeals process, which they can apply to use, in relation to provision of information. If it is unreasonably onerous, I suspect it will mean that the timescale will be varied.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q The legislation sets out a specific period of time for a lot of those powers, so would it be logical to assume that for some smaller businesses, it may take longer to comply than for multinational banks that are doing it regularly? John Smart: That is true. I have spent 35 years investigating fraud, and the challenge is that there is a need to be reasonably speedy in doing those investigations because, as we heard earlier, any recoveries are going to be much reduced if there is a significant delay in carrying out the investigation and applying for either criminal or civil proceedings to take place. Therefore, speed is important in any investigation. Otherwise, you are spending a lot of time and effort without getting the result you need.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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We saw this in other legislation under the previous Government. It is not uncommon for Ministers to give an undertaking that at least a draft code might be published before legislation returns to Parliament for final decisions to be made. I know this is, perhaps, a question to ask of Ministers in a future session, but what are your thoughts on developing a draft code that parliamentarians might be able to look at whilst making those decisions, given that the legislation is now well under way? Is that something that you feel is a long way away, or would it be possible to have at least an outline of a draft code in a reasonably short period of time? I accept that there will be developments as we learn with experience. Mark Cheeseman: I will leave Ministers to answer that question later, but we are developing the codes of practice now. The reason I talked about who has come into the Public Sector Fraud Authority to think about this is because it is not from scratch; we are basing it off current practice elsewhere. We are now developing those and they are under way, but I will leave it for Ministers to respond on the timescale.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Have you read it? Andrew Western: Not recently, but I did when I first became a Minister.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Yes. Andrew Western: Because they are iterative documents that will change as we go through the test-and-learn phase. In particular, we are looking to introduce the eligibility verification measure in quite a cautious manner initially to check that it works, and to check that we do not have the sort of overreach that some witnesses have suggested may be the case. We want to be certain that the false positives that we have talked about and that witnesses have raised are minimised as best as possible. It is to enable flexibility so that we have the maximum potential to make any changes that we require, but obviously we would update the House as and when we were to do that.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q That independence is balanced with many of the provisions in the Bill, particularly around the information notices and the other Cabinet Office parts of the Bill, which come down to decision making by the Minister for the Cabinet Office. How does the independence of the PSFA interrelate with the personal sign-offs required by a specific Minister? Mark Cheeseman: In the Bill, the Minister passes the powers to authorised officers. The authorised officers could be in that statutory body, and the authorised officers would be the ones who use the powers to do that. Those authorised officers would be people who have experience working in fraud and are part of the Government counter-fraud profession.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q For those of us who have been asked to make a decision on whether the powers in the legislation before us are reasonable and proportionate, as we have heard from one witness after another today, it is very difficult to make that decision without knowing how they will be carried out in practice. That obviously means knowing what will be in such a code. Mark Cheeseman: Absolutely. The code of practice will be developed alongside the legislation, as is standard practice.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q I want to go back to a question that I asked Mr Smart earlier. One of the main measures in the Bill is to move the PSFA from the Cabinet Office to make it an independent body. What do you see as the practical benefits? How will the public sector benefit from that new status? Mark Cheeseman: The practical benefit to consider is that the place from where these powers are operated will have some degree of independence and separation from Ministers. That is a practice you would see in other circumstances as well, so it may give Parliament some assurance. That is balanced up against the cost.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Based on your experience with the PSFA so far, is that consistent with the length of time that, in most cases, it takes such organisations to reply to requests for information? John Smart: The consistency question is an interesting one. I think a lot of those powers are likely to be applied specifically in relation to banks and telecoms companies. They already have procedures in place to respond to requests for information, and therefore, in the majority of cases, my suspicion is that those short timeframes will be consistent with what they normally deal with, so there will not be a big onus on them to change the way they normally operate.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Does a review of the Minister’s decision also then go back to the original decision maker? Mark Cheeseman: It is slightly different—it goes back within the structure, but the review of that decision is done by a separate authorised officer from the original authorised officer who did it.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q If I may continue, and I am drawing to a conclusion, the Cabinet Office has a document, “Guide to Making Legislation”. Are you aware of it? Andrew Western: Is that to me or Georgia?
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Is there a reason why it is not possible to refer to those standards in the legislation, if that is the accepted norm? Mark Cheeseman: I am not sure whether one would refer to it in the legislation. It could be in the code of practice, and aspects like that.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q How close do you feel we are to having at least an idea of what a code of practice would look like, based on the PSFA’s experience in its current form? Mark Cheeseman: The Public Sector Fraud Authority has been created by bringing together people from other spaces. These powers are designed by His Majesty’s Revenue and Customs. We heard from Richard Las earlier about the powers that HMRC uses to take action on suspected fraud where it has reasonable cause to do so. It is some of those experts who have come and developed these powers. I feel that that capability will come into the organisation, through which the organisation will be able to use the powers.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q A lot of the questions to witnesses today have revolved around the code of conduct. There are several parts of the Bill that refer to a code or codes of conduct. Can you give us an idea of how those will operate? Are we looking at a single code or multiple documents? What will their status be? Andrew Western: For the DWP part of the Bill, there will be three individual codes of practice: one for the eligibility verification measure, one for the debt recovery measure and one for the information gathering measure. As for exactly how they will work, you will appreciate that we are able to talk only in general terms at the moment, because that will depend on what the final version of the Bill looks like. That is why we do not currently have a code of practice that we can share. Perhaps it will be helpful if I say a bit about how we intend to engage both Houses on the content of the codes of practice. For the Bill Committee, I will provide an outline of what will be covered by the draft codes of practice as we come to each of the relevant clauses, allowing the Committee to provide feedback on what they feel should be in there. Beyond that, we intend—there are ongoing engagements, as you heard earlier from, for instance, UK Finance—to publish a draft version of the codes of practice as they pertain to the DWP in time for the House of Lords Committee stage, so it will also have the opportunity to play into the conversation on that. Ultimately, there will be a final statutory public consultation on the content of the codes of practice. It is difficult to say with any sort of exactness or precision what the codes of practice will look like at this stage, without knowing what amendments, if any, will be made to the Bill. But I know that Georgia has a code of practice on her side as well. Georgia Gould: I do, and the same applies. As we go through the clauses, I will share with the Committee where we are on the codes of practice in relation to those clauses. We are working on the same timeline set out by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stretford and Urmston. For the PSFA, within the Bill, it requires a code of practice that is particularly focused on penalties, in clause 60. Beyond that mandatory content, the intention is that the code of practice will also include information on safeguards and vulnerability assessments when it applies to the PSFA powers for investigating individuals, and more detailed information on the various reviews and appeals.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q This is very much a Bill of two halves, and many of the powers that will be given to the PSFA are equivalent to those that are being given to DWP investigators. The obvious difference is the use of reasonable force. Do you think that the nature of PSFA investigations means that that power will not really be required, or do you think that your powers should also include reasonable force? John Smart: As you say, the nature of the investigations that will be carried out by the PSFA will be quite different from those being carried out by the DWP. Certainly, the proposal in the Bill is that investigations that require some form of search warrant will be carried out with a police officer present, and therefore the powers that are being given to DWP in relation to this Bill will already sit with the police that will accompany any investigators that are doing work on behalf of the PSFA. That is my understanding.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Presumably you agree with the previous witness that, in general, banks are reasonably well adapted to responding to such notices. Do you think that 10 days is reasonable for them? Daniel Cichocki: Certainly. The banks share very significant amounts of information with Government Departments and law enforcement to ensure compliance with measures to tackle economic crime. We take that very seriously. We also continue to share extensive information with the Director of Public Prosecutions where there is suspicion of fraud. There is certainly an existing set-up to respond to information requests. There is a difference with this particular measure, though, and we are keen for it be considered. This request is for information to tackle both fraud and error. A lot of the information sharing that we as an industry currently do with elements of law enforcement is very much focused on suspected fraud, economic crime and serious and organised crime. This is a slightly broader measure, so we are keen to see in the code of practice a very clear set of requirements for banks to comply with. The infrastructure is certainly there.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q In appendix E, which relates to codes of practice and legislation, the first paragraph says: “Where it is proposed to introduce a code of practice in a way or for a purpose which departs from the guidance below, Ministers should be aware that this is likely to be controversial, particularly in the House of Lords.” Have officials brought that to your attention? Andrew Western: As I said earlier, we hope to have a draft code of practice by the time we reach the House of Lords Committee Stage. Clearly, alongside consideration of that guidance, as I said—and it was reiterated by Mr Coyle—this has not been unusual practice in recent years, as I understand it.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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It is to you both as Ministers. It is the Government’s “Guide to Making Legislation”. Andrew Western: Yes.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q In terms of the obligations on organisations that are issued with information notices, based on your current experience, how many of the organisations that you approach asking for information typically respond within 10 days? Mark Cheeseman: It is important to remember that the 10 days in the legislation is a minimum. It is the lowest that would be used. It is not saying that it will always be 10 days. One of the witnesses earlier highlighted that some of the organisations will have standard practices where they could respond in that time—they will be set up to do so. The time that is given will be dependent on the organisation you are interacting with, the individual you are interacting with and what is reasonable. Our fraud investigators are trying to balance the expediency of doing the investigation with making sure that people can respond, and that it is a fair and reasonable time to respond. The balance is there, and we should remember that that timescale is a minimum.
25 Feb 2025 · Public Authorities (Fraud, Error and Recovery) Bill (Second sitting) · Hansard source
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Q Andrew, you have just come out of a period in opposition. You will understand the difficulty that this puts on Committee members being asked to consider legislation, fundamental aspects of which will depend on details in the code of practice. You seem to be suggesting that we will not see them until the House of Commons has completed all its stages. Andrew Western: That is the route we are taking. Obviously, Members have an opportunity to suggest what they would like to see in the code. The code is primarily an operational document rather than one on the general principles in the Bill and what we are trying to achieve through it. I absolutely understand that Members will want to see that, but we are simply not able to bring forward a final code of practice. It would not be possible to do that without knowing what is in the Bill. We can commit to sharing a draft as soon as we are able, but even that would be subject to change. It is not unusual, as I understand it, for this to be the case.

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