Labour to be handed ‘spying powers’ on bank accounts in Fraud Bill
Labour is facing fresh questions over its Fraud Bill, which has been slammed for handing the government “spying powers”.
The legislation, which passed in the Commons on Wednesday, bulks up the Department for Work and Pensions’ (DWP) ability to recover money directly from fraudsters’ bank accounts.
The DWP pledged the reforms would deliver “the biggest ever crackdown on fraud against the public purse.”
It claims the bill will save the taxpayer £1.5bn over the next five years, and staff would be trained to use the new powers appropriately.
But Conservative MP David Davis told the Commons it was “almost certain if we go down this route this will end up in court”.
Davis added that “the government will lose” on Article 8 of the European Court of Human Rights, which entitles a person to privacy and the freedom from unwarranted interference by the state.
A fleet of MPs has proposed an amendment to clarify the grounds in which a DWP intervention would be authorised.
Davis said 11 non-governmental organisations had backed this amendment.
Prime Minister Keir Starmer has already faced revolt from over 20 MPs who have backed the tabled amendment.
MPs concerned about ‘Tyranny of the State’
If passed through the Lords, the legislation would require banks to provide data on people not meeting welfare eligibility criteria.
The government would also be able to access bank statements to determine which debtors have sufficient funds to repay what they owe.
This would then grant the DWP powers to recover money directly from the bank accounts of those deemed to be fraudsters. Repeat offenders risk losing their driving license.
During the bill’s committee stage in February, Conservative MP Mike Wood blasted the powers as like “King Henry VIII”. Former Conservative Party leader Iain Duncan Smith said the new powers would create a “Tyranny of the State”.
Former Shadow Chancellor John McDonnell said: “In addition to the mass surveillance, I think the extent of the information that can be sought and can be interpreted from this legislation is extremely wide ranging and open to challenge.”
A spokesperson for the Department for Work said: “We have an obligation to protect public funds, with this Bill set to save the taxpayer £1.5 billion over the next five years, part of wider plans that will save £9.6bn by 2030.
“It is right that we modernise our approach to catching fraudsters and identifying overpayments at the earliest stage. All the powers in the Bill are underpinned by a principle of fairness and proportionality and do not involve mass surveillance of people’s bank accounts.
“The Bill includes an important measure to utilise limited data from banks to help verify entitlement to benefits, helping us detect errors earlier and minimise debts accruing for claimants.”