The Department for Work and Pensions (DWP) chief has stated 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.
She declared in September: “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 emphasised that her proposed legislation would not only grant the power to deduct money directly from the wages of individuals who have overclaimed benefits but also enable investigators to demand information about suspected fraudsters from all private companies, extending beyond just banks, utilities, and employers. However, the Bill will exclude the state pension which Ms Kendall explained wouldn’t have been “proportionate”.
She advocated that the new information-gathering abilities will empower the state to effectively “stop serious fraud in its tracks by making sure people really are who they say they are”.
This legislation will give DWP powers to:
- Better investigate suspected fraud and new powers of search and seizure so DWP can take greater control investigations into criminal gangs defrauding the taxpayer.
- Allow DWP to recover debts from individuals who can pay money back but have avoided doing so, bringing greater fairness to debt recoveries.
- Require banks and financial institutions to share data that may show indications of potential benefit overpayments
However, these plans have caused concern amongst privacy advocates; Big Brother Watch condemned the proposals as “Orwellian” and criticized them as “a major expansion of government power”, arguing they undermine the presumption of innocence. Ms Kendall rebutted assertions that the Government would engage in “snooping” on bank accounts as “nonsense” and reassured there would be human review of any automated systems flagging possible fraud.
Previously presented proposals from the last government were passed through the House of Commons but didn’t make it past the Lords before Parliament dissolved for the General Election. The Government alleges that fraud and error in the welfare system are costing the taxpayer around £10 billion annually.
Meanwhile, tax hikes and spending reductions amounting to £40 billion are reportedly being considered by the Chancellor at this month’s Budget, hoping to sidestep a return to austerity measures. As per the latest plans from the Government, expected savings equate to an average sum of £320 million each year.
Silkie Carlo, director of Big Brother Watch, expressed 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 said: “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. “