The UK government is advancing a bill that would grant the Department for Work and Pensions (DWP) greater authority to tackle fraud in the welfare system. The proposed measures include bank account checks and broader access to third-party data to verify benefit eligibility. While ministers argue this is a necessary step to recover lost public funds, critics warn of potential overreach and privacy concerns.
Expanding DWP’s Fraud Detection Capabilities
Under the Public Authorities (Fraud, Error and Recovery) Bill, the DWP would be able to collect financial data from banks and other institutions to identify incorrect or fraudulent benefit claims. This could include cases where individuals have savings exceeding the eligibility threshold or are claiming benefits while living abroad.
Secretary of State for Work and Pensions, Liz Kendall, emphasised that those who are legally entitled to claim benefits “have nothing to worry about.” However, she confirmed that banks would be required to provide financial data to help detect fraudulent claims.
A key aspect of the plan is an “Eligibility Verification” system, where alerts would be triggered if a claimant’s financial activity suggests ineligibility. However, the DWP would not have direct access to bank accounts and would not monitor individual transactions.
Concerns Over Surveillance and Fairness
The bill has been met with opposition from civil liberties groups and opposition MPs, who argue that it grants excessive excessive power to the UK Government. Critics, including Liberal Democrat work and pensions spokesman Steve Darling, describe it as “a snoopers’ charter”, raising fears about privacy and state overreach.
Some of the main concerns raised by critics include :
- Privacy risks – Critics argue that increased access to financial data could lead to mass surveillance, even if the DWP insists it will not directly monitor bank accounts.
- Potential for wrongful accusations – Mistaken alerts could lead to benefits being wrongly suspended or withdrawn, impacting vulnerable individuals.
- Targeting minor infractions – Many argue that the focus should be on large-scale fraud and criminal gangs rather than small errors made by individual claimants.
- Legal implications – Some MPs worry the bill may violate due process laws if it allows the government to reclaim funds directly from accounts.
- Impact on trust in the welfare system – The measures could discourage people from claiming benefits they are entitled to, out of fear of government scrutiny.
Independent MP John McDonnell expressed concerns that the measures could lead to “mass surveillance”, warning that the bill “sets a dangerous precedent.” Meanwhile, Labour MP Richard Burgon pointed out that fraud within Personal Independence Payment (PIP) claims remains low, at just 0.2% in 2022/23.
Additionally, some MPs worry that the new powers could unfairly penalise individuals who make genuine mistakes, such as misreporting income or savings. Kendall responded that the bill is designed to prevent errors before they lead to debt accumulation.
A Response to Rising Fraud and Public Funds Misuse
Proponents of the bill argue that fraud within the welfare system must be addressed. The UK government estimates that benefit fraud accounts for £7.4 billion annually, contributing to an overall £55 billion in public sector fraud.
Kendall criticised previous Conservative governments for failing to modernise fraud detection measures, calling the bill a “tough but fair” approach to cracking down on abuse of public funds. She reassured MPs that state pension payments would be excluded from the eligibility verification process.
The bill also includes additional enforcement measures:
- Suspension of driving licenses – Courts could revoke the driving licenses of individuals who owe over £1,000 in welfare debt and refuse to cooperate with repayment plans.
- Access to airline data – The DWP would be able to check travel records to identify claimants living abroad while receiving UK benefits.
- Expansion of third-party information access – The department would gain powers to request financial records from a wider range of institutions.
Parliamentary Approval and Ongoing Debate
Despite the controversy, the bill has passed its second reading in Parliament with a vote of 343 to 87. While the Conservatives generally support the initiative, Shadow Work and Pensions Secretary Helen Whately expressed concerns over potential legal issues regarding the state’s power to reclaim funds.
The Information Commissioner’s Office (ICO) has reviewed the bill and confirmed that privacy protections have been tightened to limit data-sharing to specific circumstances.
