The Department for Work and Pensions (DWP) has been granted seven significant new powers under the recently enacted Public Authorities (Fraud, Error and Debt) Bill, aimed at enhancing the fight against benefits fraud. This legislation, informally known as the ‘bank spying bill,’ enables the government to take more decisive action in identifying and recovering fraudulent claims.
Labour Party Minister for Transformation, Andrew Western MP, stated, “As fraud against the public sector evolves, it is right that the government responds with robust and resolute measures. These new powers will help us better detect, prevent, and deter fraud while ensuring that debt owed to taxpayers is repaid. A benefits system built on trust benefits both claimants and taxpayers.”
A central feature of the bill is the Eligibility Verification Measure, which compels banks and financial institutions to comply with requests from DWP agents for financial information relating to benefit claimants. This allows the DWP to verify eligibility and identify discrepancies more effectively.
Another notable power introduced is the Direct Deduction Order, which authorizes the DWP to directly withdraw funds from an individual’s earnings or bank accounts to recover debts. This controversial measure has raised concerns among disability and civil rights groups.
Mikey Erhardt, Policy Lead at Disability Rights UK, warned that the bill “poses serious risks to Disabled and marginalised people.” He criticized the government’s approach, arguing that it reduces individuals to mere statistics rather than recognising their real-life struggles.
The government initiates enforcement by sending legally binding letters that require recipients to provide specific information or face legal proceedings. These include notifications about impending legal action and financial penalties, designed to expedite debt recovery.
However, the bill has met with opposition across the political spectrum. Labour MP Debbie Abrahams expressed concern that the legislation might discourage vulnerable people from engaging with the DWP, stating, “This bill could be viewed as further evidence not to trust the DWP.” Similarly, Liberal Democrat MP Steve Darling criticized the short legislative scrutiny period and called the bill a “Big Brother bill,” demanding more safeguards.
Civil liberties group Big Brother Watch cautioned against creating a “second-tier justice system” for welfare recipients, while a public petition condemned the expansion of government powers as an unprecedented invasion of financial privacy and a threat to the presumption of innocence.
Shadow Work and Pensions Secretary Helen Whately acknowledged support “in principle” but highlighted the need for thorough testing of the system, reminding of past system failures like the Horizon scandal.
In summary, the bill empowers the DWP to conduct extensive bank account checks, issue direct deduction orders from salaries or accounts, and impose financial penalties. Its introduction has sparked a heated debate balancing fraud prevention with civil liberties and privacy rights.