The Department for Work and Pensions (DWP) chief has announced that new powers to directly deduct money from people’s wages and bank accounts will not apply to one type of benefit. As part of a crackdown on fraudsters, welfare fraud investigators will be granted the power to take money straight from pay slips, but Liz Kendall, the Work and Pensions Secretary, said it wouldn’t be ‘proportionate’ to target state pensions in this crackdown.
This measure is among several extensive powers likely to be included in the Government’s upcoming Fraud, Error and Debt Bill. Announced by the Prime Minister at the Labour Party conference in September, the Bill aims to tackle benefit fraud by “modernising” the DWP, with the goal of saving £1.6 billion over the next five years.
At present, investigators must obtain a court order before they can deduct money from someone’s wages or bank accounts. Ms Kendall, the Work and Pensions Secretary, previously labelled it as “absurd” that investigators’ powers hadn’t been updated in the past 20 years.
Last year, UK taxpayers lost £7.3 billion to benefit fraud, and the DWP is set to receive new powers to reduce this figure by investigating suspected false claimants and recouping the money.
In a statement made in September, she announced: “My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to a snail’s pace when they could be shutting down serious fraud cases. Our bill will give them similar powers as HMRC to investigate fraudsters – it’s time we give them the tools they need for the fight.”
She underlined the intent of her proposed bill to empower investigators with not only the ability to deduct overclaimed benefit payments directly from individuals’ wages but also the authority to demand information from all private sectors, not just limiting to banks, utilities, and employment records. However, the Bill will deliberately exclude the state pension, which Ms Kendall justified by stating that including it would not have been “proportionate”.
She argued that granting new information-gathering powers would enable authorities to “stop serious fraud in its tracks by making sure people really are who they say they are”. The legislation aims to arm the DWP with extensive abilities to clamp down on fraudulent claims.
Nevertheless, these vigorous plans have sparked alarm among privacy campaigners; Big Brother Watch has branded the proposal as “Orwellian” and a “a major expansion of government power”, contending that it chips away at the presumption of innocence. In defence, Ms Kendall dismissed as “nonsense” the notion that the Government would indulge in indiscriminate “snooping” into bank accounts and assured that there would be a human review element in any automated systems that raise fraud alerts.
Proposals from the previous government were passed through the House of Commons but failed to make it past the Lords before Parliament dissolved for the General Election. The Government claims that fraud and error in the welfare system are costing taxpayers around £10 billion a year.
Meanwhile, the Chancellor is reportedly considering tax increases and spending cuts totalling £40 billion in this month’s Budget, in an attempt to avoid a return to austerity measures. According to the Government’s latest plans, expected savings amount to an average of £320 million per year.
Silkie Carlo, director of Big Brother Watch, voiced concerns: “This blank cheque to force private companies to snoop and report on the country’s poorest citizens to the state is intrusive, excessive and will create a culture of fear among millions of people claiming benefits.
The DWP has stated: “The Bill will also include safeguarding measures to protect vulnerable customers. 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.”