Government proposals to curb multibillion-pound benefit fraud involve “tools of an Orwellian surveillance state” and could put people through “absolute hell”, MPs have warned.
The Public Authorities (Fraud, Error and Recovery) Bill seeks to allow the Department for Work and Pensions (DWP) to recover money directly from fraudsters’ bank accounts and have the power 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 following an application by the DWP, if they owe welfare debts of more than £1,000 and have ignored repeated requests to pay it back.
Work and Pensions Secretary Liz Kendall said people entitled to claim benefits have “nothing to worry about” from the new powers contained in the Bill, which MPs voted to approve at second reading by 343 to 87, majority 256.
But some Labour MPs raised concerns about the proposals as currently drafted, while those sitting as Independents after losing the party whip strongly criticised the Bill.
Liberal Democrat work and pensions spokesman Steve Darling also urged Ms Kendall to withdraw the legislation and warned it is “far too much of a Big Brother Bill, it is far too much of a snoopers’ charter”.
Independent MP Zarah Sultana (Coventry South), who lost the Labour whip after rebelling to support moves to scrap the two-child benefit cap, told the Commons: “These powers allow the Department for Work and Pensions to seize money directly from bank accounts, without due process, suspend driving licences and even search properties and personal devices.
“These are not the hallmarks of a free and democratic society, but the tools of an Orwellian surveillance state.”
She added: “The Government already has extensive powers to investigate suspected fraud. Under existing legislation it can access bank accounts where there is reasonable suspicion of criminal activity, but this Bill removes the need for suspicion altogether. Put simply, this is mass surveillance. There are significant risks.”
Labour MP Paula Barker (Liverpool Wavertree) said any automation in the benefits fraud detection process could lead to Horizon-style injustices, a reference to problems with the Post Office computer system which led to subpostmasters being convicted of fraud, theft and false accounting offences.
She said: “I have serious concerns that assertions and decisions on individual cases if automated could lead to Horizon-style injustices, if necessary steps aren’t taken to put in the right safeguards, alongside measures to guarantee some level of transparency and accountability when mistakes arise.”
We must ensure that the financial processes in this Bill don’t accidentally or inadvertently work against victims of domestic abuse in these scenarios, which is a point I am sure ministers are aware of.
Labour MP Luke Charters
Labour MP Luke Charters (York Outer) said the benefit fraud recovery measures could put at risk escape plans for domestic abuse survivors.
He said: “A victim of domestic abuse, let’s call her Jane, is quietly saving money to escape and then an account information notice is issued.
“Based on three months of bank statements, a debt recovery notice follows. Jane has 28 days to appeal but no access to legal advice.
“Worse still, her abuser intercepts the letter and her savings, her lifeline to escape are seized. Her escape plan is exposed, putting her at risk.
“We must ensure that the financial processes in this Bill don’t accidentally or inadvertently work against victims of domestic abuse in these scenarios, which is a point I am sure ministers are aware of.”
Work and pensions minister Andrew Western said the issue is something the Government is “looking at closely”.
I fear once you start down this path of surveillance in this way then others will come back with further proposals where we go further.
Independent MP John McDonnell
Former shadow chancellor John McDonnell, currently sitting as an Independent after losing the Labour whip, backed efforts to tackle fraud but warned of a “real fear” among people who claim benefits.
He said: “This is a step towards a mass surveillance exercise and the problem I have with it is it’s that phrase, ‘The road to hell is paved with good intentions’.
“I fear once you start down this path of surveillance in this way then others will come back with further proposals where we go further.”
SNP MP Kirsty Blackman (Aberdeen North) said: “All of this legislation, all of this work that’s being done, is to recoup a fairly insignificant amount of money. It’s going to put people through absolute hell.”
Opening the debate, Ms Kendall said: “This Bill will help deliver the biggest ever crackdown on fraud against the public purse, which has now reached an astonishing £55 billion a year.
“This includes: fraud against our public services, like those who abuse the tax system; dishonest companies who use deception to win public contracts and manipulate invoices; and benefit fraud by criminal gangs and individuals, which now stands at a staggering £7.4 billion a year.”
The DWP will not be able to access people’s bank accounts or look at what they are spending, we will not share any personal information with banks.
Liz Kendall
Ms Kendall sought to ease concerns over the Bill’s powers.
She said the Information Commissioner’s Office has reviewed the Government’s proposals and is “very clear the measure now more tightly scopes the information that can and cannot be shared, specifies much more clearly those in the scope of the power, requires a code of practice that will be a statutory code of practice before measures are taken”.
In further remarks on the “eligibility verification measure”, Ms Kendall also said: “The DWP will not be able to access people’s bank accounts or look at what they are spending, we will not share any personal information with banks.
“Once an alert has been issued, any final decision about someone’s benefits will always be taken by a human being and the state pension will be excluded from the measure.
“There will also be independent oversight of this power on the face of the Bill, with a requirement to produce reports and lay them before Parliament.”
