DWP shares update on new powers to snoop on benefit claimant bank accounts
One of these new powers - and it's most controversial - will give the DWP access to bank accounts of those suspected of having more money than they say and to recover benefit debts.
The Department for Work and Pensions (DWP) has issued an update on its plans to monitor bank accounts of benefit claimants.
Labour's Fraud, Error and Debt Bill is currently making its way through Parliament and is set to come into force later this year. The legislation is set to give the benefits department new and extensive powers to help it crackdown on fraud within the social security system.
One of these new powers - and it's most controversial - will give the DWP access to bank accounts of those suspected of having more money than they say and to recover benefit debts. Another power would allow the department to freeze driving licences.
Both proposals received the green light at the third reading of the Public Authorities (Fraud, Error and Recovery) Bill on Tuesday, April 29. This means the government is edging closer to officially implementing the measures.
Under the plans, banks and other financial institutions will need to comply with government requests to share data to identify benefit fraud. However, the government has confirmed that DWP will not have access to people's bank accounts and will not share their personal information with third parties.
The legislation has reached the House of Lords, and has received its first reading. The second reading is set for May 15. However, the Labour Party is not all in agreement on the measures, with several voting for amendments aimed at limiting the benefits department's ability to check accounts.
The Liberal Democrats also cautioned that the Bill could lead to "Orwellian levels of mass surveillance of those who have means-tested benefits."
Addressing Parliament during the third reading, Work and Pensions Secretary Liz Kendall stated in the Commons: "Delivering our plan for change means ensuring every single pound of taxpayers' money is wisely spent and goes to those in genuine need.
"That is what this legislation will help deliver, with the biggest ever crackdown on fraud against the public purse."
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During a parliamentary session, Labour MP for Poole Neil Duncan-Jordan pushed for a vote on his amendment, which limited the government's ability to access a claimant's financial records.
The proposed amendment said the government should only investigate accounts of individuals it "has reasonable grounds to suspect has committed, is committing or intends to commit" an offence. Speaking to the Commons, the Labour MP said: "The Bill rightly seeks to tackle organised crime and online fraud, but also worryingly ushers in dangerous new powers compelling banks to trawl through financial information."
He added: "It is the very poorest in our society which are going to be affected most by this legislation. So banks will be able to trawl for financial information even where there is no suspicion of wrongdoing. That's the key point in this debate."
Labour's Work and Pensions Minister Andrew Western argued against the points by stating that the amendment would "undermine" the new power intended to verify individuals' eligibility for benefits.
He explained: "We do require this power because it will enable better data sharing between the private and public sector to help check claimants are meeting the criteria for their benefits and to detect incorrect payments at an earlier stage before any suspicion of wrongdoing has arisen."
He then added: "It is not a power to be used to respond to suspected fraud. Information will not be shared with the DWP under the assumption that a claimant is guilty of any wrongdoing. The DWP must look into why the account has been flagged by the bank and ascertain whether an incorrect payment has been made."
Western reiterated that the DWP would make further enquiries to determine whether a benefit had been incorrectly paid due to fraud or error. Duncan-Jordan's amendment was supported by 10 fellow Labour MPS. However, it was defeated by a 153-vote majority, with 238 votes against and 85 in favour.
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