Should benefit claimants risk having their bank accounts spied upon and driving licences revoked? I don't think so

The Guardian

25-04-2025

Labour won last year's general election on a promise to reverse the damage done by the previous Conservative governments, offering a politics that would, in the memorable words of the prime minister, 'tread more lightly on our lives'. I won a historic victory in Poole for Labour last July on the basis that things would change – and change for the better.
But my constituents, already fearful of plans for the largest cuts to disability support in a generation, have been getting in touch with me about new legislation that might be news to you: the government is resurrecting Tory proposals for mass spying on people who receive state support.
The powers contained in the public authorities (fraud, error and recovery) bill quite rightly seek to tackle organised crime and online fraud, but they also usher in new powers for the banks to trawl through bank details of individuals – even where there is no suspicion of wrongdoing.
This legislation would compel banks to carry out financial surveillance of welfare recipients. Given the volume of accounts involved, this will be completed by an algorithm. If the software flags a possible overpayment, whether due to fraud or error, the bank will report the individual to the Department for Work and Pensions (DWP) for further investigation.
Why should someone in receipt of benefits have fewer rights to privacy? And why are we asking banks to become an arm of the state?
These new powers strip those who receive state support of a fundamental principle of British law: the presumption of innocence. By default, welfare recipients would be treated as suspects, simply because they need support from the state.
The risk of a Horizon-style scandal on a massive scale is glaringly obvious when millions are being monitored. It will be disabled people, carers, pensioners and the very poorest people who are impacted by wrongful investigations and forced to endure burdensome appeals to prove their innocence.
It has been suggested that the powers would help identify overpayments more quickly, but the DWP already has ample data-sharing and data-matching powers at its disposal. The carer's allowance scandal, when unpaid carers were plunged into debt and prosecuted for fraud because of the DWP's own overpayments, provides an example of where the department was failing to use the access to real-time alerts of carers' earnings they already had to stop overpayments. The government admits that if fraudsters spread assets across multiple accounts, they won't be flagged.
The bill also grants the DWP draconian powers to apply to a court to have people stripped of their driving licences if they have outstanding debt, where all other attempts at recovery have failed. The government claims this will be a last resort where the debtor fails to engage with the DWP. In practice, it means officials will first attempt to deduct funds directly from their bank account. To do this, they must secretly request at least three months of bank statements from a bank without informing the individual, to assess whether the deduction would cause 'hardship'. If it would, the person would eventually face the threat of losing their licence. That's not justice – it's a poverty penalty.
The so-called safeguards for vulnerable debtors are also inadequate, relying heavily on court oversight and the ability of individuals to make personal representations. This overlooks the fact that these powers only apply to those deemed not to have 'engaged' with the DWP – a standard that fails to recognise how non-engagement is often a symptom of genuine hardship and the circumstances in which people find themselves, rather than any wrongdoing.
Many benefit recipients live with mental health conditions, disabilities, or have caring responsibilities that make navigating complex bureaucracy extremely difficult. All these challenges will only be made worse if the government proceeds with its planned cuts to disability benefits, which will affect over 3 million families and force many disabled individuals into crisis and destitution.
I have proposed amendments to this bill to ensure that only those suspected of fraud are subject to surveillance, allowing the government to target criminality without monitoring the public. I have also proposed removing the power to apply to a court to strip people of their driving licences due to debt. There are fairer and more effective ways to enforce the law.
We must prevent the corruption of our welfare state into a punitive system, where the price of accessing support is the sacrifice of privacy and exposure to the uniquely cruel sanction of being stripped of mobility.
The welfare state needs to wrap its arms around those who need it. It should be there for everyone, but this approach undermines public trust in the system. The change we promised must mean a more compassionate and caring society, one that enables rather than penalises. These values are what makes us different from the previous government – and we shouldn't forget that.
Neil Duncan-Jordan is the Labour MP for Poole