DWP confirms bank account checks but dismisses 'snooping' claims as nonsense

The head of the Department for Work and Pensions has confirmed a new crackdown on fraud that will include taking money straight from people's wages if they have falsely claimed benefits such as Universal Credit. But campaigners' assertions that it will involve "spying on all of our bank accounts" with "secret criteria" have been dismissed as nonsense.

The Government's forthcoming Fraud, Error and Debt Bill is to give investigators the power to take money directly from people's payslips. It is also set to require banks to monitor balances in claimants' accounts to ensure they don't have too much to be receiving benefits. Universal Credit entitlement stops if a person's total savings are £16,000 or more

The Bill, announced by the Prime Minister during the Labour Party conference in September, is intended to target benefit cheats by "modernising" the DWP's arsenal of anti-fraud capabilities in an effort to save £1.6 billion over the next five years. Currently, investigators must secure a court order before deducting money from someone's wages or bank accounts.

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Work and Pensions Secretary Liz Kendall said it was "absurd" that investigators' powers had not been updated in the past 20 years. Writing in the Sunday Telegraph, she said: "My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to a snail’s pace when they could be shutting down serious fraud cases. Our bill will give them similar powers as HMRC to investigate fraudsters – it's time we give them the tools they need for the fight."

As well as the power to deduct money directly from the wages of people who have overclaimed on benefits, the Bill is reported to give investigators the ability to compel information about suspected fraudsters from all private companies, not just banks, utilities and employers. But it will not extend to the State Pension, which Ms Kendall said would not have been "proportionate."

She said the enhanced information-gathering powers would allow the state to "stop serious fraud in its tracks by making sure people really are who they say they are."

But the plans have sparked alarm among privacy campaigners, with Big Brother Watch saying: "These Orwellian new powers will force banks to flag people who meet secret criteria to the government. Everyone wants fraudulent uses of public money to be dealt with, and the government already has strong powers to check the bank statements of suspects. But this is a major expansion of government power.

"It takes away our financial privacy like never before and does away with the presumption of innocence - the democratic principle that you shouldn't be spied on unless police suspect you of wrongdoing. People who are disabled, sick, carers or looking for work should not be treated like criminals by default. None of us should. We must resist these new powers."

Ms Kendall dismissed claims that the Government would be "snooping" on the ins and outs of people's bank accounts as "nonsense" and insisted there would be human oversight of automated alerts flagging potential fraud.

The Government claims fraud and error in the welfare system costs the taxpayer £10 billion a year, while the Chancellor is reported to be considering tax rises and spending cuts worth £40 billion at this month’s Budget in order to avoid a return to austerity. The expected savings delivered by the Government's latest proposals amount to an average of £320 million per year.

Previous attempts under the Conservatives to monitor benefit claimants' bank accounts as part of the Data Protection and Digital Information Bill did not come into effect. The Bill had reached the committee stage in the House of Lords before being set aside when a General Election was called.

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