The Labour Government has been accused of introducing “mass bank spying” through new legislation aimed at assisting the Department for Work and Pensions (DWP) cracking down on benefit fraud.
Under the Public Authorities (Fraud, Error & Recovery) Bill, which was introduced in Parliament earlier this week, ministers plan to save £8.6billion over the next five years.
Privacy campaigners have branded the measures “one of the biggest assaults on welfare in a generation” as the bill is set grant the DWP new powers to obtain bank statements from individuals suspected of benefit fraud and require banks to flag potential breaches of eligibility rules.
According to Government figures, the department estimates that benefit fraudsters cheated taxpayers out of £7billion last year.
Big Brother Watch director Silkie Carlo warned the legislation is “turning British welfare into a digital surveillance system” with “unprecedented privacy intrusions”.
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The DWP has been accused of “mass bank spying” by campaigners
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Under the new legislation, the DWP will have powers to recover money directly from bank accounts of benefit fraudsters who are no longer receiving benefits or in PAYE employment. The department will specifically target those who have the means to pay but have refused to do so.
Officials stress that while they will be able to request bank statements, they will not have direct access to bank accounts. The measures are part of what the DWP calls its “biggest fraud crackdown in a generation”.
Banks and building societies will face new requirements to report potential breaches of benefit eligibility rules. The legislation also grants DWP organised crime investigators new powers to apply for search warrants.
This will allow them to support police in searching premises and seizing evidence such as computers and smartphones. Furthermore, the time limit for civil claims against Covid fraud will be doubled from six to twelve years, giving authorities more time to investigate complex cases.
The DWP is is line to be awarded new powers
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Carlo said: “We must be extremely cautious about the Government creating a second tier justice system reserved for people who rely on welfare that side-steps fair hearings in courts to take away people’s funds and freedoms.”
She warned that elderly, disabled and people on the poverty line could have their lives “destroyed by mistaken punishments” and acknowledged that, while everyone wants genuine fraudsters to face justice, the new powers extend beyond fraud to correcting the government’s “own frequent payment errors”.
“These are totally unprecedented privacy intrusions and punishments that will do more damage to fundamental British values of fairness and justice than to the serious fraudsters,” Carlo added.
Big Brother Watch UK expressed particular concern about the Government’s ability to directly access bank accounts and suspend driving licences. Among the most controversial new powers is the DWP’s ability to apply for driving bans of up to two years for benefit fraudsters.
This penalty would apply to individuals who owe £1,000 or more and repeatedly refuse to repay the money. The driving ban measures will specifically target those who have ignored previous requests from the DWP.
As part of the legislation, a comprehensive framework for banks to identify potential benefit fraud is being rolled out. Financial institutions will be required to report suspicious activity that could indicate breaches of benefit eligibility rules.
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The DWP says this proactive approach aims to prevent debts from accumulating and reduce the need for later repayment demands. New investigative powers will also allow DWP organised crime investigators to work more closely with police.
They will be able to apply for court warrants to search premises and seize electronic devices as evidence against suspected fraudsters. Michael Erhardt, campaigner at Disability Rights UK, criticised the Government’s approach to benefit fraud.
“The problem isn’t the social security budget – it is poor Government direction and underfunding of public services that are leading to more and more people becoming physically and mentally unwell,” he said.
He emphasised that supporting people with health conditions should be a societal priority. “When people are unwell or when they have long-term impairments or health conditions, then we as a decent society should give them the level of benefits that they need to live on,” Erhardt stated.
GB News has contacted the DWP for comment.
