Kendall’s comments show new bill to order banks to ‘spy’ on benefit claimants will be based on Tory plans

Comments by Labour’s work and pensions secretary have confirmed that “farcical” and “prejudicial” plans for a new fraud bill – ordering banks to “spy” on the bank accounts of benefit claimants – will be based on draft laws prepared by the last government.

A comparison between a written statement on anti-benefit fraud measures made this week by Liz Kendall (pictured), and a press release issued by the Conservative government in November 2023, shows striking similarities.

Disabled activists warned yesterday (Wednesday) that the government’s plan “upends presumption of innocence and our privacy rights” and “does not respect the privacy of benefit claimants”.

They warned earlier this year that the Conservative plans would treat disabled people like criminals and further erode trust in the Department for Work and Pensions (DWP).

Those measures – which would almost certainly have involved the use of artificial intelligence – would have given DWP powers to force banks to scan all their accounts to find people receiving benefits.

The banks would then have had to report anyone who triggered what were seen as potential indicators of fraud to DWP.

Under current rules, DWP can only request details of a bank account holder’s transactions if there are reasonable grounds to suspect them of fraud.

Kendall told MPs this week in a written statement of Labour’s plans for a new fraud, error and debt bill.

This statement appears to confirm fears by disabled activists and allies such as Big Brother Watch that Labour’s plans would replicate those of the last government.

Kendall told MPs that the new bill would “require banks and financial institutions to examine their own data sets to highlight where someone may not be eligible for the benefits they are being paid”, which would “help DWP identify incorrect payments, prevent debts from accruing for the claimant and help identify where there may be fraudulent activity”.

And she insisted that banks “will only share very minimal information, and this will only be used by DWP to support further inquiry, if needed, into a potential overpayment”.

Last November, a Conservative-led government’s press release said its legislation would “allow regular checks to be carried out on the bank accounts held by benefit claimants to spot increases in their savings which push them over the benefit eligibility threshold”, which would “help identify fraud [and] take action more quickly”.

The government insisted then that “only a minimum amount of data will be accessed and only in instances which show a potential risk of fraud and error”.

Kendall also said this week that the measures would be “legal, proportionate and targeted” and would “safeguard taxpayers’ money”.

Last November, Sir John Whittingdale, the minister for data and digital infrastructure, told MPs that the Conservative proposals were “targeted and limited” and would enable DWP to “save the taxpayer a significant amount of money”.

Yesterday, Rick Burgess, a spokesperson for Greater Manchester Coalition of Disabled People (GMCDP), which campaigned against the last government’s proposals, said: “We reject the idea that mass algorithmic spying on people receiving benefits is proportionate.

“It also upends presumption of innocence and our privacy rights.

“It is treating disabled people on benefits as an already suspect population which is clearly a prejudicial perspective.

“The DWP remains an unsafe institution; that is the prime issue the secretary of state should be addressing.”

Caroline Collier, from Inclusion Barnet’s Campaign for Disability Justice, said Kendall’s statement “seems to confirm our earlier concerns”.

She said: “It does not respect the privacy of benefit claimants, who are disproportionately likely to be disabled.

“It is an intrusive and unnecessary measure – and bound to be error-prone, causing benefit suspension, hardship and debt.

“The basic right to privacy expected by people in the UK should be respected unless there are reasonable grounds to believe that an offence has been committed.

“Random fishing expeditions are unacceptable.”

The civil liberties campaign organisation Big Brother Watch, which has led opposition to the proposals of both the Conservative and Labour governments, said it appeared from Kendall’s statement that Labour’s plans would closely mirror those of the last government.

Susannah Copson, legal and policy officer for Big Brother Watch, said: “Liz Kendall’s statement does nothing to assuage concerns over Labour’s resurrection of Tory plans to spy on the nation’s bank accounts – plans they resisted in opposition just months ago.

“However, this U-turn puts Labour on course to decimate privacy rights in the UK.

“Millions of innocent people will be dragged into the net of algorithmic surveillance but it’s particularly disabled people, carers and countless others on the poverty line that will face the threat of intrusive investigations and even wrongful benefit suspension when these systems go wrong.

“The government should learn lessons from the Horizon scandal, not risk replicating it with those in our social security system – they must drop these surveillance plans for good.”

Mikey Erhardt, policy and campaigns officer for Disability Rights UK, said it was “farcical for the Labour government to be resurrecting Conservative legislation that was roundly defeated during the last parliament.

“The minister’s statement confirms that yet again, we are living under a government pursuing ever more surveillance of our lives, another government happy to gamble [with] our lives by subjecting us to increased benefit sanctions and reduced rights.

“Disabled and working-class people deserve better than the risk of our vital support being wrongfully suspended, forcing us to deal with laborious appeals processes.

“The problems with this new bill go far beyond the reach of any new technology – they come directly from how those working in Westminster look at our social security system.

“Instead of seeing the social security system as an essential public service they see costs that, unlike disabled people, they can avoid paying.”

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