DWP to be given powers to ‘spy’ on bank accounts as Labour revives Tory benefits policy

Labour says it will save £1.6bn over five years in a new crackdown on benefit fraud

Keir Starmer has said he wants to crackdown on welfare fraud (Anadolu via Getty Images)

The Department for Work and Pensions (DWP) will be given new powers under Labour’s crackdown on benefit fraud, allowing them to request information from claimants’ bank accounts.

The new Fraud, Error and Debt Bill will revive a similar plan that was introduced by the Conservative government but placed in limbo but held back due to the general election. It will require banks to comply with government requests to share data to identify benefit fraud.

The DWP said: “Staff will be trained to the highest standards on the appropriate use of any new powers, and we will introduce new oversight and reporting mechanisms, to monitor these new powers. DWP will not have access to people’s bank accounts and will not share their personal information with third parties.”

“This legislation delivers on the government’s manifesto commitment to safeguard taxpayers’ money and demonstrates the government’s commitment to not tolerate fraud, error or waste anywhere in public services, including the social security system.”

DWP secretary Liz Kendall talks at fringe event at Labour’s 2024 conference (AFP via Getty Images)

Called a “snooper’s charter” by critics, the new powers come alongside a raft of other measures designed to “catch fraudsters faster” and save £1.6 billion over the next five years. The DWP adds that almost £10 billion a year is lost to fraud and error in the social security system a year.

Sir Keir Starmer has also suggested that more money is likely to be pulled back from social security spending as he shared his plan to “get the welfare bill down” at his keynote Labour conference speech. This will likely take the form of changes to sickness benefits to be announced by Rachel Reeves at her first budget on October 30.

The “snooper’s” measure was previously criticised by campaigners for being an invasion of privacy, disproportionately affecting older people, and treating benefit claimants like criminals.

Responding to Labour’s plans, Silkie Carlo, director of Big Brother Watch’s director, said: “Everyone wants fraud to be dealt with, and the government already has strong powers to investigate the bank statements of suspects.

“But to force banks to constantly spy on benefits recipients without suspicion means that not only millions of disabled people, pensioners and carers will be actively spied on but the whole population’s bank accounts are likely to be monitored for no good reason.”

The bill will also introduce “new powers of search and seizure” which will allow the department to take control of investigations into criminal gangs committing benefit fraud. This comes alongside allowing the DWP to recover debts from individuals who are able to pay.

The announcement comes just months after a criminal gang was jailed for committing the largest ever case of benefit fraud in May, stealing more than £50m from taxpayer funds. Three women and two men of Bulgarian origin were jailed for up to eight years for regular fraud committed between 2016 and 2021.

The department says that more detail on the legislation will be revealed when the Bill is introduced.