Fraudsters need to be the most worried about this new law (Image: skynesher via Getty Images)
The Department for Work and Pensions (DWP) is one step closer to being able to carry out “biggest ever crackdown on fraud against the public purse”. New reforms have been approved in Parliament that could grant extra powers that will make ill-gotten gains harder to hide.
The Public Authorities (Fraud, Error and Recovery) Bill aims to tackle the issue of multibillion-pound benefit fraud. It includes provisions that would allow the DWP to recover funds directly from the bank accounts of those found guilty of fraud.
Additionally, the Bill would empower the DWP to obtain bank statements from individuals believed to have sufficient funds to repay welfare debts but who are refusing to do so. However, it would not permit direct access to accounts or visibility into how claimants spend their money.
Courts could also suspend the driving licences of fraudsters, following an application by the DWP, if they owe more than £1,000 in welfare debts and have repeatedly ignored requests for repayment. Despite this, a faction of Labour MPs backed an amendment aimed at limiting the UK Government’s powers to verify a person’s eligibility for benefits.
The Liberal Democrats’ Work and Pensions spokesman Steve Darling voiced several “major concerns” from his party. They included fears of “Orwellian levels of mass surveillance of those who have means-tested benefits”, reports the Daily Record.
Former Brexit secretary and Conservative MP David Davis warned that the measures could potentially expose over nine million people to “unnecessary” surveillance. John Milne, the Liberal Democrat MP for Horsham, has voiced concerns that “the innocent and the accidental claimants who fall into the trap” would be the ones ensnared, rather than intentional benefit fraudsters.
He argued: “The implicit assumption is that we should trust in the DWP as a completely error-free organisation across the entirety of its massive operation, but they do make mistakes – they make mistakes all the time. Even when they know they’ve made a mistake, and they’ve been told so, they’re very capable of making the same mistake again.”
Work and Pensions Secretary Liz Kendall, speaking at the third reading, assured MPs: “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.”
The Bill would empower the DWP to obtain bank statements (Image: Getty )
Labour MP Neil Duncan-Jordan (Poole) attempted to limit the UK Government’s powers to scrutinise benefit claimants’ accounts by proposing an amendment to the Bill. The proposed change would have restricted the Government’s access to only those accounts belonging to individuals who are reasonably suspected of committing or intending to commit an offence.
Despite receiving the backing of 10 Labour MPs, Mr Duncan-Jordan’s amendment was dismissed by a majority of 153 votes, with the final tally standing at 238 to 85. Prior to the parliamentary vote, Mr Duncan-Jordan voiced his concerns, stating: “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 further emphasised the impact on vulnerable citizens: “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.”
Our community members are treated to special offers, promotions, and adverts from us and our partners. You can check out at any time. Read our Privacy Policy
DWP Minister Andrew Western countered by arguing that Mr Duncan-Jordan’s amendment would weaken the intended effectiveness of the new authority aimed at confirming an individual’s eligibility for benefits. He said: “We do require this power because it will enable better data sharing between the private and public sector to help check that 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 clarified the purpose of the power was ” to respond to suspected fraud”, adding that information “will not be shared with the DWP under the assumption that a claimant is guilty of any wrongdoing”.
Mr Western also mentioned that the DWP would conduct additional investigations to determine if a benefit was wrongly paid and whether this was due to fraudulent activity or a mistake. Shadow Work and Pensions Secretary Helen Whately criticised the Labour Government for rejecting Conservative amendments to the Bill, expressing her disappointment.
The Tories had put forward measures to combat “sickfluencers” who encourage benefit fraud on social media. Ms Whately questioned the current state of affairs, asking: “Why should we tolerate people using social media platforms to help others commit fraud, helping people cheat the tests which are there so support goes to those who need it?”
She further challenged the system’s leniency towards fraudsters, stating: “Why should someone who has committed fraud be able to keep their high-end television or luxury car just because they’ve spent their ill-gotten gains before the department gets to them? We’re clear that both of those things should be tackled but sadly Labour has shown themselves to be on the side of the fraudsters instead.”
Eligibility Verification Measure:
It is crucial to note that the Department for Work and Pensions (DWP) will not directly access the bank accounts of individuals receiving means-tested benefits such as Universal Credit, Pension Credit, and Employment and Support Allowance. Instead, the DWP will collaborate with banks to pinpoint claimants who may have surpassed the eligibility criteria for means-tested benefits, like the £16,000 income limit for Universal Credit.
This partnership aims to gather information necessary for investigating claims to avert potential overpayments and fraud cases. The new regulation confines banks and other financial organisations to sharing strictly limited data, keeping transaction details away from the Department for Work and Pensions (DWP) purview, guaranteeing that spending habits of benefit recipients remain private.
Furthermore, according to a detailed factsheet, institutions could face penalties for oversharing, particularly involving transaction data. It notes: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”
