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The DWP has been warned against “intrusive” measures which could permit agents to spy on “everybody’s bank accounts” when new legislation passes.
Labour’s new Fraud, Error and Debt Bill is currently making its way through parliament, and is set to come into force later this year. It forms a central part of DWP plans to crackdown on benefit fraud, with new powers for the department to request information from claimants’ bank accounts.
The bill will revive a similar plan that was introduced by the Conservative government but placed in limbo but held back due to the general election. It will require banks to comply with government requests to share data to identify benefit fraud.
But “it is not just benefits claimants who will be targeted,” Jasleen Chaggar, legal and policy officer at Big Brother Watch told MPs at the bill’s committee stage, “it is everyone’s accounts, including yours and mine.”
“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,” she explained.
The new powers have been introduced as part of a raft of measures Labour say will form the “biggest fraud crackdown in a generation.” The party adds that, combined, the plans will save £1.5 billion over the next five years.
The bill will be bolstered by safeguarding measures to protect vulnerable customers, the DWP says, adding that staff will be trained to use new powers appropriately. The department has also pledged to introduce new oversight mechanisms to monitor how the powers are being used.
But several experts have taken issue with the ‘eligibility verification powers’ brought forward in the bill. This will give DWP the power to require banks to provide data to help identify when an applicant is not meeting the eligibility criteria for a benefit they have applied for.
For instance, to be eligible for Universal Credit, an applicant must have no more than £16,000 in savings, except in exceptional circumstances. Initially, the measure will focus on Universal Credit, Pension Credit and Employment and Support Allowance, for which levels of incorrect payments are highest.
Speaking at a separate committee session, director of public policy and strategic engagement at Cifas, Helena Wood, called the powers “very new and incredibly intrusive.” She added that they could become a “blanket, phishing-style power” which would usually be confined for use in civil or criminal investigations.
“I think that part of the Bill requires a little more thought and proportionality pulling up front,” she said, reiterating calls of others for a code of practice to be brought forward.
Defending the decision to not publish the code until after the bill Andrew Western DWP minister for transformation told the session that “we are simply not able to bring forward a final code of practice,” adding that “it would not be possible to do that without knowing what is in the Bill.”
Conservative MP Mike Wood argued that the approach was similar to “King Henry VIII” powers, where bills contain clauses that allows ministers to change the legislation without needing to go through parliament. This was rejected by Mr Western.
Responding to the criticisms, a DWP spokesperson said: “We do not recognise this characterisation of our Fraud, Error and Recovery Bill.
“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.
“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 £8.6billion by 2030.”
