The Secretary of State for Work and Pensions, Liz Kendall, has reassured Parliament that individuals entitled to claim benefits have “nothing to worry about” with the introduction of new powers aimed at tackling multibillion-pound fraud within the welfare system. Addressing MPs’ concerns that the Public Authorities (Fraud, Error and Recovery) Bill could be seen as a “snoopers’ charter”, Ms Kendall clarified the extent of the proposed changes.
The legislation is set to empower the Department for Work and Pensions (DWP) to directly reclaim funds from the bank accounts of fraudsters and to demand financial statements from those suspected of having the means to repay welfare debts but are choosing not to. Additionally, the DWP chief is seeking authority to access data from a broader range of third-party entities, including airlines, to verify if benefit claims are being made from outside the UK, reports the Daily Record.
Ms Kendall stated: “The Bill will update the DWP’s information-gathering powers for investigating fraud. At the moment, we have the power to require information from only a limited list of third parties. This does not include key organisations and sectors that could help to prove or disprove suspected fraud, such as airlines.”
She further detailed how the new ‘Eligibility Verification’ process would enable banks to supply the DWP with “crucial data to help identify incorrect benefit payments” being made.
Ms Kendall outlined new measures saying: “Our new eligibility verification measure will enable us to require banks or other financial institutions to provide crucial data to help identify incorrect benefit payments people might be getting, including fraudulently, such as if someone has too much in savings, making them ineligible for a benefit, or if they are fraudulently claiming benefits abroad when they should be living in the UK.”
She emphasised the importance of ensuring that: “People should not be getting benefits they are not entitled to, and the alerts will make the process of identifying potential fraudsters much simpler, quicker and easier.”
She later clarified that the Department for Work and Pensions (DWP) would not have direct access to individuals’ bank accounts, stating: “The DWP will not be able to access people’s bank accounts or look at what they are spending, we will not share any personal information with banks.”
Ms Kendall further explained that “Once an alert has been issued, any final decision about someone’s benefits will always be taken by a human being and the State Pension will be excluded from the measure (Eligibility Verification).”
She also assured that there would be “independent oversight of this power on the face of the Bill, with a requirement to produce reports and lay them before Parliament”.
Additionally, she mentioned that courts could suspend the driving licences of fraudsters owing welfare debts over £1,000 who have not responded to repayment requests, following an application by the DWP.
The Liberal Democrats have urged Ms Kendall to retract the legislation, cautioning that it is “far too much of a Big Brother Bill, it is far too much of a snoopers’ charter”. Ms Kendall responded: “This Bill will help deliver the biggest ever crackdown on fraud against the public purse, which has now reached an astonishing £55 billion a year.”
She added: “This includes fraud against our public services, like those who abuse the tax system; dishonest companies who use deception to win public contracts and manipulate invoices; and benefit fraud by criminal gangs and individuals, which now stands at a staggering £7.4 billion a year.”
Ms Kendall criticised the Conservatives for their “complete failure” to modernise the DWP’s powers to fight fraud, describing the Bill as “tough” on those attempting to “cheat” the system but “fair” to claimants who make “genuine mistakes”.
Independent MP Richard Burgon (Leeds East), who lost the Labour whip after rebelling in favour of abolishing the two-child benefit cap, sought assurances about how the powers would be used against individuals. He welcomed efforts to target organised criminal gangs, stating: “I put in a written question to the Department for Work and Pensions asking about the amounts lost in Personal Independence Payments (PIP) fraud and the answer came back that in 2022/23 only 0.2 per cent rate was fraudulently claimed by PIP claimants.”
After reviewing concerns about the potential impacts of new government proposals, Ms Kendall reassured: “People who are genuinely entitled to claim benefits have nothing to worry about from this Bill, but we do believe that £7.4 billion wasted every year on benefit fraud must be cracked down on.”
Labour’s Dame Meg Hillier, chairing the Treasury Committee, questioned whether individuals affected by mistakes would find themselves penalised unfairly. To this, Ms Kendall responded: “I think that the measures introduced in this Bill will actually help us spot and then prevent those errors in the first place because people make genuine mistakes and we do not want them to build up errors and debt that they have to repay.”
She also confirmed that the Information Commissioner’s Office has scrutinized the UK Government’s plans, stating they are “very clear the measure now more tightly scopes the information that can and cannot be shared, specifies much more clearly those in the scope of the power, requires a code of practice that will be a statutory code of practice before measures are taken”.
Liberal Democrat work and pensions spokesman Steve Darling criticised the proposed benefits crackdown, saying: “Clearly, defrauding the benefits system is wrong. One only has to reflect on the level of disinvestment that we’ve seen under the previous government of many of our public services to know how this can bleed the system dry.”
He continued to emphasise his concerns: “Whilst one understands the aspirations of this Bill, it is far too much of a Big Brother Bill, it is far too much of a snoopers’ charter, and I would suggest to the minister that they withdraw this Bill.”
Independent MP John McDonnell, the former shadow chancellor, acknowledged the importance of tackling benefit fraud, but expressed caution: “This is a step towards a mass surveillance exercise and the problem I have with it is it’s that phrase, ‘The road to hell is paved with good intentions’.”
Mr McDonnell further warned about the potential slippery slope of increased surveillance: “I fear once you start down this path of surveillance in this way then others will come back with further proposals where we go further.”
SNP MP Kirsty Blackman (Aberdeen North), also weighed in on the debate, highlighting the cost of the proposed measures: “All of this legislation, all of this work that’s being done, is to recoup a fairly insignificant amount of money. It’s going to put people through absolute hell.”
Meanwhile, the Conservatives indicated their general support for the Bill.
Shadow work and pensions secretary Helen Whately raised concerns, commenting: “Of course the Government should go after fraudsters, but I do also worry that some of this power could be abused and, in its current form, it may breach laws on the state taking someone’s property without due process, so I would be interested to hear if experts within the legal sector have been consulted on the legislation as drafted.”
Meanwhile, MPs have given their initial nod to the Public Authorities (Fraud, Error and Recovery) Bill, with a majority vote of 343 to 87, a majority of 256, at its second reading.