DWP new 'snooping' powers explained - what it means for you and how it could affect your money
Liz Kendall, the Secretary of State for Work and Pensions, has offered reassurances to Parliament that those with legitimate benefit claims have "nothing to worry about" as new measures are introduced to combat fraud in the welfare system. Addressing concerns from MPs who feared the Public Authorities (Fraud, Error and Recovery) Bill might act as a "snoopers' charter", Ms Kendall outlined the scope of the proposed changes.
The legislation will grant the Department for Work and Pensions (DWP) the power to directly recover funds from the bank accounts of fraudsters and to request financial statements from individuals suspected of having the means to repay welfare debts but are not doing so. The DWP head is also seeking the authority to access information from a wider array of third-party organisations, including airlines, to check if benefits are being claimed fraudulently from abroad, reports the Daily Record.
Ms Kendall explained: "The Bill will update the DWP's information-gathering powers for investigating fraud. At the moment, we have the power to require information from only a limited list of third parties. This does not include key organisations and sectors that could help to prove or disprove suspected fraud, such as airlines."
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She went on to describe how the new 'Eligibility Verification' process would allow banks to provide the DWP with "crucial data to help identify incorrect benefit payments".
Ms Kendall detailed fresh measures to combat benefits fraud, stating: "Our new eligibility verification measure will enable us to require banks or other financial institutions to provide crucial data to help identify incorrect benefit payments people might be getting, including fraudulently, such as if someone has too much in savings, making them ineligible for a benefit, or if they are fraudulently claiming benefits abroad when they should be living in the UK."
She highlighted the aim of these measures, saying, "People should not be getting benefits they are not entitled to, and the alerts will make the process of identifying potential fraudsters much simpler, quicker and easier."
Addressing privacy concerns, Ms Kendall clarified: "The DWP will not be able to access people's bank accounts or look at what they are spending, we will not share any personal information with banks."
She went on to explain the decision-making process: "Once an alert has been issued, any final decision about someone's benefits will always be taken by a human being and the State Pension will be excluded from the measure (Eligibility Verification)."
To ensure accountability, she added: "There would be independent oversight of this power on the face of the Bill, with a requirement to produce reports and lay them before Parliament."
Additionally, she pointed out that courts could revoke the driving licences of fraudsters with welfare debts exceeding £1,000 who ignore repayment demands, upon a request from the DWP. The Liberal Democrats have called on Ms Kendall to withdraw the proposed law, warning that it is "far too much of a Big Brother Bill, it is far too much of a snoopers' charter".
In defence, Ms Kendall stated: "This Bill will help deliver the biggest ever crackdown on fraud against the public purse, which has now reached an astonishing £55 billion a year."
She further explained: "This includes fraud against our public services, like those who abuse the tax system; dishonest companies who use deception to win public contracts and manipulate invoices; and benefit fraud by criminal gangs and individuals, which now stands at a staggering £7.4 billion a year."
Ms Kendall also condemned the Conservatives for their "complete failure" to update the DWP's capabilities in combating fraud, branding the Bill as "tough" on those trying to "cheat" the system but "fair" towards claimants who commit "genuine mistakes".
Richard Burgon, the independent MP for Leeds East who lost the Labour whip due to his stance on abolishing the two-child benefit cap, sought clarity on how new powers would be used against individuals. He acknowledged the importance of addressing organised crime, sharing: "I put in a written question to the Department for Work and Pensions asking about the amounts lost in Personal Independence Payments (PIP) fraud and the answer came back that in 2022/23 only 0.2 per cent rate was fraudulently claimed by PIP claimants."
In the face of concerns regarding the possible effects of fresh government strategies, Ms Kendall has offered reassurances: "People who are genuinely entitled to claim benefits have nothing to worry about from this Bill, but we do believe that £7.4 billion wasted every year on benefit fraud must be cracked down on."
Dame Meg Hillier of Labour, who chairs the Treasury Committee, probed if honest individuals might end up unfairly penalised by errors. In response, Ms Kendall asserted: "I think that the measures introduced in this Bill will actually help us spot and then prevent those errors in the first place because people make genuine mistakes and we do not want them to build up errors and debt that they have to repay."
The Information Commissioner's Office has given the UK Government's plans a thorough examination, with confirmation that they are "very clear the measure now more tightly scopes the information that can and cannot be shared, specifies much more clearly those in the scope of the power, requires a code of practice that will be a statutory code of practice before measures are taken". Liberal Democrat work and pensions spokesman Steve Darling voiced his criticism of the proposed benefits crackdown, stating: "Clearly, defrauding the benefits system is wrong. One only has to reflect on the level of disinvestment that we've seen under the previous government of many of our public services to know how this can bleed the system dry."
He further highlighted his concerns by saying: "Whilst one understands the aspirations of this Bill, it is far too much of a Big Brother Bill, it is far too much of a snoopers' charter, and I would suggest to the minister that they withdraw this Bill."
Independent MP John McDonnell, the former shadow chancellor, recognised the need to address benefit fraud but approached with caution, remarking: "This is a step towards a mass surveillance exercise and the problem I have with it is it's that phrase, 'The road to hell is paved with good intentions'."
McDonnell also cautioned against the potential for a slippery slope in surveillance, adding: "I fear once you start down this path of surveillance in this way then others will come back with further proposals where we go further."
MP Kirsty Blackman of the SNP, representing Aberdeen North, entered the discussion, bringing attention to the financial implications of the suggested policies: "All of this legislation, all of this work that's being done, is to recoup a fairly insignificant amount of money. It's going to put people through absolute hell."
On the other hand, the Conservatives expressed their general approval for the proposed bill. Helen Whately, the shadow work and pensions secretary, remarked: "Of course the Government should go after fraudsters, but I do also worry that some of this power could be abused and, in its current form, it may breach laws on the state taking someone's property without due process, so I would be interested to hear if experts within the legal sector have been consulted on the legislation as drafted."
The Public Authorities (Fraud, Error and Recovery) Bill received initial support from MPs, with 343 in favour against 87, at a majority of 256, during its second reading.