New DWP powers could allow for further bank and airline data monitoring (Image: Getty Images)
Liz Kendall, the Secretary of State for Work and Pensions, has moved to allay fears in the Commons regarding broad new measures aimed at cracking down on extensive welfare fraud. In response to worries that the Public Authorities (Fraud, Error and Recovery) Bill might be perceived as a “snoopers’ charter”, Ms Kendall has underscored that the additional powers are strictly targeted.
The forthcoming legislation will allow the Department for Work and Pensions () to recover illicit gains directly from the bank accounts of culprits and request clear financial records from individuals suspected of being capable yet unwilling to settle welfare arrears, reports .
Looking to expand its remit for combatting fraudulent activity, the is set to gain authority to obtain pertinent data from an enhanced list of third parties, including airlines, to confirm that social security claims aren’t illegitimately originating abroad. Ms Kendall explained the necessity behind this strategy, saying: “The Bill will update the ‘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.”
She also elaborated on how the establishment of the new ‘Eligibility Verification’ process would equip banks with the means to provide “crucial data to help identify incorrect benefit payments”.
Unveiling a robust crackdown on benefit fraud, Ms Kendall declared new steps to halt wrongful payments as reported by the Daily Record: “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 underscored the effectiveness of this approach in curtailing illegitimate claims, stating: “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 extent of ‘s authority: “The 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 further detailed how the system would work: “Once an alert has been issued, any final decision about someone’s benefits will always be taken by a human being and the will be excluded from the measure (Eligibility Verification).”
Additionally, she promised accountability measures including “independent oversight of this power on the face of the Bill, with a requirement to produce reports and lay them before Parliament.”
The Government’s new measures to tackle welfare fraud have been met with controversy, as the Department for Work and Pensions () may soon be able to enforce driving licence suspensions for individuals who owe over £1,000 in welfare debts and ignore repayment demands. The could seek this action following a court application.
However, the Liberal Democrats are pushing back against the proposed legislation introduced by Ms Kendall, labelling it as excessive state surveillance. They warned that it is “far too much of a Big Brother Bill, it is far too much of a snoopers’ charter” In defence of the legislation, Ms Kendall argued: “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 expanded further, outlining the types of fraud targeted: “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 criticised the Conservative Party for their “complete failure” to update the powers of the to combat fraud effectively. She describes the Bill as “tough” on cheaters but “fair” towards those who inadvertently make errors with their claims.
MP Richard Burgon, representing Leeds East as an Independent after losing the Labour whip for his stance on abolishing the two-child benefit cap, sought clarification on how the proposed powers would impact individuals. While he expressed support for targeting organised criminal gangs, he highlighted the relatively low rate of fraudulent claims for Personal Independence Payments (PIP), citing a written response from the Department for Work and Pensions that indicated only 0.2% of PIP claims were fraudulent in 2022/23.
Addressing concerns about the potential consequences of the new government proposals, Ms Kendall offered reassurance, stating: “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.”
Labour’s Dame Meg Hillier, chair of the Treasury Committee, raised concerns about the potential for unfair penalties on individuals affected by mistakes. In response, Ms Kendall argued: “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 new plans a thorough examination, with confirmation that the proposals have been refined to ensure tighter control over data sharing.
The measures now “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” according to the latest updates.
Liberal Democrat work and pensions spokesman Steve Darling did not hold back in his critique of the government’s proposed benefits crackdown. He acknowledged the wrongdoing in defrauding the benefits system but pointed out the severe impact of underfunding public services, 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.”
Mr Darling further expressed his apprehension about the Bill’s implications, arguing, “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.”
John McDonnell, an Independent MP and former shadow chancellor, recognised the necessity to address benefit fraud but warned against the potential for overreach: “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’.”
Mr McDonnell also cautioned about the dangers of embarking on a path of increased surveillance, saying, “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 for Aberdeen North entered the fray with sharp criticism regarding the costly outcomes of new legislation, asserting: “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.”
While mixed reactions continued, Conservatives showed broad support for the Bill. Tory concern was voiced by Shadow work and pensions secretary Helen Whately, who questioned the potential overreach, saying: “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.”
Despite these concerns, the Public Authorities (Fraud, Error and Recovery) Bill made headway in Parliament, securing an initial approval in the House of Commons with a decisive vote of 343 to 87 at its second reading.