DWP minister gives update on ‘bank spying' plans which will hit millions
Labour's new Fraud, Error and Debt Bill is currently making its way through parliament. 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.
Currently being debated in the House of Lords, more details on how these powers will work have been revealed by Baroness Maeve Sherlock, a minster of state for the DWP.
The key power that will enable to DWP to request banks to share financial information with its agents is called the Eligibility Verification Measure. It means that when a new Eligibility Verification Notice is sent to a bank or financial institution, it must comply with the request.
Baroness Sherlock outlines that the information the institution can be asked to share includes information about the account holder, including their name and date of birth. Agents can also ask for the bank account's sort code and account number, as well as details about how the account meets eligibility.
Ministers say the government is introducing these powers to be able to determine if an individual is eligible for a benefit they are claiming or have applied for based on their financial position.
For example, holding over £16,000 in savings generally will render someone ineligible for Universal Credit, except in certain limited circumstances.
The measures will be implemented over 12 months in a 'phased approach,' working with a smaller number of banks initially, the Baroness Sherlock added.
The Lords peer also addressed controversial new powers the DWP will be gaining to directly deduct money from an individual's earnings or bank accounts using a 'Direct Deduction Order'.
Based on its usage by HMRC and the Child Maintenance Service – both of which already can use the power – Baroness Sherlock says DWP estimates it will make between 5,000 and 20,000 Direct Deduction Orders every year.
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.
But campaigners have criticised the measures as 'intrusive,' with civil liberties watchdog Big Brother Watch warning it 'threatens to usher in an unprecedented system of mass financial surveillance.'
The DWP has been approached for comment.
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