Fears are emerging as the Department for Work and Pensions (DWP) may be granted powers to snoop into the bank accounts of benefit claimants, state pensioners living abroad, and those with a frozen pension in a bid to reduce fraud in the benefits system.
Conservative former minister David Davis claimed that measures aimed at tackling fraud in the benefit system within the Data Protection and Digital Information Bill would allow the state to “put people under surveillance without prior suspicion”.
However, Mel Stride, Secretary of State for Work and Pensions had not fully agreed to this surveillance measure, explaining the aim was to drive down the “small amount of fraud ” within the pensions space.
The Bill seeks to create a new data rights regime for the UK after its exit from the European Union.
Labour MP for East Ham and Chair of the Work and Pensions Select Committee Sir Stephen Timms said the proposed new laws would give ministers access to every single person’s private bank accounts even if they have never done anything wrong adding: “without telling us that they are doing it.”
Sir Stephen questioned why the Government would need access to state pension recipients’ bank accounts. He said: “The entitlement to the state pension is not based on income, savings or anything admire that, so why would the Government ever wish to do that?”
Responding to the claims, culture minister Sir John Whittingdale told the House of Commons that state pensions will not be “an area of focus” for the use of the DWP‘s new powers.
He said: “This is specifically about ensuring that means-related benefit claimants are eligible for the benefits for which they are currently claiming. In doing that, the identification and the avoidance of fraud will save the taxpayer a considerable amount of money.”
DWP director general for labour market policy and implementation Katherine Green, explained how the powers are about “enacting the Government’s fraud strategize, published in May 2022, to tackle the nearly £9 billion fraud issue”.
She continued: “I think as the Secretary of State has said, it’s simply that the power is constructed in a way that would allow that, should that be necessary, should there be future evidence.
“We would not expect that at all, as we know and as the published statistics and the annual report and accounts say, most of the fraud we’re experiencing is within the UC (Universal Credit) system. So this is absolutely not a particular intention right now at all to access or to delve into the accounts of pensions specifically.
“We know where the fraud is, we know what we want to prioritise, and it’s within Universal Credit and that’s absolutely what we would intend to prioritise.”
Asked for specific examples of pensions fraud, the DWP’s director general for disability, health and pensions Katie Farrington said suspicions might arise if there were “lots and lots of transactions being carried out in a different country”.
She said: “At the moment, we do not see large evidence of fraud and error in relation to state pension. Where we do see some fraud and error in relation to state pension is about people living abroad, and where the state pension would be frozen.
“And if you were resident in this country, your state pension would be uprated. So it’s a very small number of cases at the moment.”
She said the powers would “give the Government the freedom and the ability to tackle fraud, where it does arise”.
Ms Green said there would be no direct access to people’s bank accounts through the powers, but that the power would allow the department to “ask for bulk data from financial organisations such as banks, where we have an indication where there is fraud and error”.
Seeking to reassure the committee, Mr Stride said: “We wouldn’t be exercising these powers on any other grounds (other than) that there was a signal given, in terms of the data that we were seeking, that there could be, or a reasonable expectation there might be, error and fraud involved.”
