Peers have rejected proposals for an inquiry into whether the Department for Work and Pensions sanctions regime specifically covers whether jobcentre managers are given targets to get people off benefits or sanctioned.

The vote took place at 12.54 am on Tuesday, as the Lords rushed through emergency legislation overturning an appeal court ruling on mandatory work activity.

Lord Freud, the work minister, said he was happy to discuss the terms of the sanctions review with the opposition, but it would be wrong to lock down the terms of the review at this stage. He also rejected publishing an interim report since it was likely to be misleading.

He said there was no clear trend in the proportion of the caseload which receives sanctions, pointing out that prior to 2007, the rate was running at around 4% and since then it has fluctuated between 3% – 5%. "There is not the clear trend in the growth of sanctions which some people have been claiming," Freud told peers in a debate on the emergency jobseekers bill.

He also denied that the government or the DWP managers set staff targets for the rate at which claimants are sanctioned in particular offices. In a carefully worded response, he said "we have internal management information. It is vital that we keep it, and we publish a lot of it.

"We need to understand why some areas, some jobcentres, have higher rates than others and why some have lower rates. Some may have very good reasons for having lower or higher rates, while others may not. We therefore need this information to correct the anomalies, and that is normal business practice."

He went on: "It may be that in particular cases a jobcentre manager is told" 'You are running very high or very low figures, and you cannot justify the reason for that, so you need to get more into line'. It may happen. I have not got the particular details." He denied it was policy to threaten managers that were not meeting targets.

Freud easily fought off a Labour attempt to include a reference to the use of targets by jobcentre managers in the terms of reference of the proposed inquiry into sanctions.

But Lord McKenzie the Labour employment spokesman, said: "Recent revelations about targets and league tables are deeply worrying and reinforce concerns that the sanctions regime is being used to control benefit expenditure rather than for its proper purpose of supporting conditionality and changing behaviour. Ministerial denials will cut no ice until these matters have been fully and speedily investigated.

He continued: "We should be appalled if the reports of the suggested behaviour are true, as it demonstrates not only that a climate of fear is being created within jobcentres but that staff are being actively encouraged to refer customers for sanction, especially to fine customers that they can claim are not fully available for work if they make mention of looking after a grandparent or having informal arrangements sharing custody of children. Jobcentre Plus is supposed to support vulnerable people not try to trip them up on technicalities."