UK (Parliament Politics Magazine) – The Department for Work and Pensions faces criticism over greater access to bank accounts, sparking fears about privacy and financial surveillance.
A proposed law granting the DWP extensive access to bank accounts raises fears of financial intrusion and mass monitoring.
How will Labour’s new fraud bill impact bank account privacy?
A new Fraud, Error and Debt Bill, backed by Labour, is progressing in Parliament, with implementation expected later this year. The proposed legislation will strengthen the DWP’s ability to tackle benefit fraud by granting broader powers to the department to demand financial data from banks.
A similar bill was introduced under the previous Conservative government but halted after the general election. The new legislation, which will move forward, requires banks to share financial details with the government to crack down on benefit fraud.
What Did Labour and the DWP Say About the New Fraud Crackdown?
Labour has revealed new measures as part of a sweeping anti-fraud initiative, describing it as the “biggest fraud crackdown in a generation.” The party insists the reforms will save £1.5 billion over five years.
The DWP stated that the legislation will include safeguarding measures for vulnerable customers. It added that employees will be trained to ensure the proper use of new powers. The department also committed to implementing oversight procedures to track how these powers are exercised.
What did experts say about the DWP’s new eligibility verification powers?
Experts have raised concerns over the eligibility verification powers outlined in the legislation. Under this provision, the DWP will have the right to demand financial data from banks to detect cases where applicants do not meet the criteria for the benefits they have requested.
Jasleen Chaggar, legal and policy officer at Big Brother Watch, warned MPs at the bill’s committee stage that these powers apply to everyone’s accounts, including yours and mine.
She stated,
“Even if you are a benefits recipient, you can appoint an individual—a parent, a guardian, an appointed person or your landlord—to receive the benefit on your behalf, so those people will also be pulled into the net of surveillance.”
What did Helena Wood say about the DWP’s new powers?
Helena Wood, director of public policy and strategic engagement at Cifas, criticized the powers during a committee session as “very new and incredibly intrusive.” She warned they could function as a “widespread, mass-surveillance tool” generally limited to civil or criminal inquiries.
She added,
“I think that part of the bill requires a little more thought and proportionality upfront,”
reiterating calls from others to introduce a code of practice.
What did the DWP minister for transformation say about delaying the code of practice?
Andrew Western, DWP minister for transformation, justified the decision to delay publishing the code until after the bill was passed. While speaking at the session, he stated, “We are simply not able to bring forward a final code of practice,” adding, “It would not be possible to do that without knowing what is in the bill.”
What did the DWP spokesperson say about the Fraud, Error and Recovery Bill?
In response to the backlash, a DWP representative stated,
“We do not recognise this characterisation of our Fraud, Error and Recovery Bill.”
They added,
“The Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000 which does not involve access to benefit claimants’ bank accounts.”
The spokesperson continued,
“We have an obligation to protect public funds, with this Bill set to save the taxpayer £1.5 billion over the next five years, part of wider plans that will save £8.6 billion by 2030.”
What did Conservative MP Mike Wood say about the bill’s powers?
Mike Wood, a Tory MP, compared the approach to ‘King Henry VIII’ powers, arguing that it allows ministers to amend legislation without parliamentary approval. However, Mr. Western rejected this claim.
What are the key measures of the Public Authorities (Fraud, Error, and Recovery) Bill 2024-25?
1. Public Sector Fraud Authority (PSFA)
- Strengthens fraud investigation outside tax and benefits systems.
- Allows the government to recover lost funds.
- Allows investigators to enter premises and seize proof with a court warrant.
- Enables access to bank accounts for debt recovery.
- Introduces civil penalties for fraud and extends the time limit for fraud cases to 12 years.
2. Department for Work and Pensions Fraud & Debt Recovery
- Targets benefit fraud and errors.
- Allows DWP to check bank accounts for fraud detection.
- Gives DWP officers search and seizure powers with a warrant.
- Allows automatic cuts from bank accounts for benefit overpayments.
- Introduces penalties for fraud and driving license bans for non-payment.