Labour’s DWP fraud bill ‘will be recipe for abuse and miscarriages of justice’

Disabled campaigners have warned that plans to give the government sweeping powers to carry out financial surveillance on benefit claimants are “a recipe for abuse and miscarriages of justice”.

Prime minister Sir Keir Starmer told the Labour conference in Liverpool on Tuesday that his government would “legislate to stop benefit fraud”.

The Department for Work and Pensions (DWP) confirmed the same day that this referred to plans to bring forward a new fraud, error and debt bill that would “crack down on fraud in the social security system”.

It said this would “require banks and financial institutions to share data that may show indications of potential benefit overpayments”.

But it is believed that – as with powers proposed by the last Conservative government – this will mean giving DWP powers to force banks to scan their accounts to find account-holders receiving benefits, as well as people connected with those accounts.

They would then have to report anyone who triggers what are seen as potential indicators of possible 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.

The bill will also give new powers to DWP fraud investigators and – if, again, it follows plans put forward earlier this year by the last Conservative government – could also introduce a new civil penalty for benefit fraud with a “lower burden of proof”.

Labour’s plans on financial surveillance have been heavily criticised this week by disabled people’s organisations.

Rick Burgess, a spokesperson for Greater Manchester Coalition of Disabled People (GMCDP), which campaigned against the last government’s proposals, said the announcement of the new bill was “disappointing” but “not surprising”.

He said: “Labour promised change, but we find ourselves having to fight the same unfair policy that we previously opposed under the Tory government of Rishi Sunak.

“Just because you receive a benefit from the DWP does not mean you should have fewer rights; our financial affairs should not be spied upon by the DWP.

“The DWP should not get greater powers, as this department has already shown it does not exercise its existing powers humanely, transparently, or honestly.

“This is a recipe for more abuse and potential miscarriages of justice that would make the Post Office Horizon scandal look tiny in comparison.”

Mikey Erhardt, policy and campaigns officer for Disability Rights UK, said the bill would subject millions of claimants to “untested, unscrutinised, and potentially unlimited powers”.

He said: “The government’s latest plans are essentially a digital sledgehammer to crack the tiniest nut.

“These new powers would see millions deprived of the presumption of innocence, adding to the criminalisation we already face in a punitive welfare system that often seeks to sanction people into work, whether we are able to or not.”

He added: “This speech could have been a moment to announce a social security system built on respect, dignity, and support that enables us to live the lives we deserve – not spending millions to create an uncontrollable digital panopticon.”

A spokesperson for National Survivor User Network (NSUN) said: “Many people – particularly those who are racialised – live with trauma related to surveillance.

“This will only be exacerbated by the knowledge that the DWP may soon be able to access banking records without account holders’ knowledge.

“Money management is also a source of great distress for many, and an area in which people who experience mental ill-health are often infantilised through lack of control over their own finances.

“The threat of financial surveillance would be yet another obstacle to contend with.”

And Caroline Collier, from Inclusion Barnet’s Campaign for Disability Justice, said the announcement was “very concerning” and that the plans were “both intrusive and unnecessary” and would have a “disproportionately large effect on disabled people”.

She said: “It is inevitable that automated surveillance will throw up erroneous overpayment or fraud alerts, causing possibly lengthy benefit suspension while things are sorted out, with all the associated hardship, debt and stress that entails.

“It also disregards people’s basic right to privacy, which should be respected unless there are reasonable grounds to think that an offence has been committed.

“This is a miss-step, and I very much hope government will reconsider.”

A DWP press release about the new bill insisted that it would include safeguarding measures to “protect vulnerable customers”, that DWP staff would be “trained to the highest standards on the appropriate use of any new powers”, while there would be “oversight and reporting mechanisms, to monitor these new powers”.

It added: “DWP will not have access to people’s bank accounts and will not share their personal information with third parties.”

The new bill is likely to be based on two sets of proposals put forward by the last Conservative government.

The first is the data protection and digital information bill, which the last government failed to get through parliament before July’s election, and which was hugely controversial.

It is also likely to be based on a DWP policy paper released in May – Fighting Fraud in the Welfare System: Going Further – which led to DWP facing questions over why it ignored concerns raised by a coroner about a disabled woman who died following a “targeted” review of her universal credit claim.

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