The bill will require banks and other financial institutions to share data that may help identify benefit fraud. The Government said the proposed new laws will give the Department for Work and Pensions (DWP) more powers to catch fraudsters faster, and prevent customers from getting into debt sooner.
But the move has been dubbed a “snooper’s charter” by campaigners.
The Government said the bill is expected to save £1.6bn over the next five years and “will extend and modernise DWP’s powers to stop fraud in its tracks, recover money lost to fraud and protect vulnerable customers from racking up debt”.
Fraud and error in the social security system currently costs the taxpayer almost £10bn per year.
The Government said the nature of fraud has become so sophisticated that without new legal powers, the DWP cannot tackle it robustly.
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The legislation will give the DWP the power to require banks and financial institutions to share data that may show indications of potential benefit overpayments. It will also allow the DWP to recover debts from individuals who can pay money back but have avoided doing so. However, the Government denied that the DWP will have access to people’s bank accounts.
The new powers will also give officials new powers of “search and seizure” so the DWP can take greater control over investigations into criminal gangs.
The new bill resembles the previous Government’s Data Protection and Digital Information Bill, which had similar anti-benefit fraud aspirations. Both bills have been slammed as an invasion of privacy likely to disproportionately affect older and disabled claimants.
Silkie Carlo, Big Brother Watch’s director, said: “Starmer’s benefits bank spying proposals sound alarmingly similar to the powers Labour fought just a few months ago in opposition.
“Everyone wants fraud to be dealt with, and the Government already has strong powers to investigate the bank statements of suspects.
“But to force banks to constantly spy on benefits recipients without suspicion means that not only millions of disabled people, pensioners and carers will be actively spied on, but the whole population’s bank accounts are likely to be monitored for no good reason.
“A financial snoopers’ charter targeted to automate suspicion of our country’s poorest is intrusive, unjustified and risks Horizon-style injustice on a mass scale. This is yet another insult to pensioners, an attack on Britain’s poorest people, and an assault on the presumption of innocence.”
