LABOUR have voted to give ministers powers to snoop on benefit claimants' bank accounts in a move branded “Orwellian levels of mass surveillance”.
MPs approved the Public Authorities (Fraud, Error and Recovery) Bill at third reading on Tuesday evening and it will now progress to the House of Lords to undergo further scrutiny.
The UK Government says that the bill seeks to curb multi-billion-pound benefit fraud by allowing the Department for Work and Pensions (DWP) to recover money directly from fraudsters’ bank accounts, among other powers.
It would also allow the DWP to obtain bank statements from people they believe have enough cash to pay back welfare debts but are refusing to do so.
Courts could also suspend fraudsters’ driving licences after an application by the DWP, if they owe welfare debts of more than £1000 and have ignored repeated requests to pay them back.
But a group of Labour MPs rebelled to support an amendment designed to curb Government powers to verify a person’s benefit eligibility – and the LibDems warned the bill could result in “Orwellian levels of mass surveillance of those who have means-tested benefits”.
Speaking at third reading, Work and Pensions Secretary Liz Kendall told the Commons: “Delivering our plan for change means ensuring every single pound of taxpayers’ money is wisely spent and goes to those in genuine need.
“That is what this legislation will help deliver, with the biggest ever crackdown on fraud against the public purse.”
Labour MP Neil Duncan-Jordan forced a vote on one of his amendments to the bill in a bid to curb Government powers to look at benefit claimants’ accounts.
Duncan-Jordan received the support of 10 Labour MPs in the division lobby but his amendment was rejected by 238 to 85, majority 153.
Before the vote, Duncan-Jordan said: “The Bill rightly seeks to tackle organised crime and online fraud, but also worryingly ushers in dangerous new powers compelling banks to trawl through financial information.”
He added: “It is the very poorest in our society which are going to be affected most by this legislation. So banks will be able to trawl for financial information even where there is no suspicion of wrongdoing. That’s the key point in this debate.”
Work and pensions minister Andrew Western had said Duncan-Jordan’s amendment would “undermine” the proposed new power designed to help verify a person’s benefit eligibility.
Western said: “We do require this power because it will enable better data sharing between the private and public sector to help check claimants are meeting the criteria for their benefits and to detect incorrect payments at an earlier stage before any suspicion of wrongdoing has arisen.
“It is not a power to be used to respond to suspected fraud. Information will not be shared with the DWP under the assumption that a claimant is guilty of any wrongdoing. The DWP must look into why the account has been flagged by the bank and ascertain whether an incorrect payment has been made.”
Western said the DWP would also make further enquiries to determine whether a benefit has been incorrectly paid and whether this was due to fraud or error.
After the vote passed, former Labour shadow chancellor John McDonnell said: “Not long ago under Keir Starmer we opposed the Conservatives plans for the mass surveillance of people’s bank accounts if they were claiming benefits. Today Labour voted for exactly that.
“I didn’t because it’s another stigmatising attack on the poorest.”
What does the Labour bill mean for me?
The Public Authorities (Fraud, Error and Recovery) Bill is divided into two parts, the first of which relates to the Public Sector Fraud Authority (PSFA) and only applies in England and Wales.
The second part of the bill also covers Scotland, and would give the DWP powers to snoop on Scottish benefit claimants.
These powers include:
- The ability to compel banks to hand over all of the information about a person’s bank accounts. Joint accounts are included.
- Issue a “deduction from earnings orders” to take funds directly from people’s pay cheques.
- allowing the DWP to recover debts from individuals not on benefits or in PAYE employment by direct deductions from their bank accounts without having to go to court.
- expanding the range of third parties the DWP can compel to provide information in support of criminal investigations.
- providing “eligibility verification” powers to allow the DWP to require banks and other financial institutions to examine their data to help identify benefit fraud.
- extending the scope of “Administrative Penalties” to include fraud involving a wider range of DWP payments, not just benefits.
