Government ‘sneaking through’ new bank data powers, campaigners warn

Privacy campaigners have warned that the UK government is slipping through new laws with “minimal debate” as it looks to crack down on benefit fraud by accessing people’s bank data more regularly.

The government will soon be able to check the bank accounts of those claiming out-of-work benefits every month, under new plans to torch out rising numbers of fraudulent claimants.

“The government’s amendments aim to police the spending of the poorest in our society,” Susannah Copson, legal and policy officer, at privacy campaign group Big Brother Watch, told City A.M.

“This isn’t about fraud prevention; it’s a potential audit of people’s spending choices, a total overstep of state power and would greatly expand surveillance capabilities,” she continued.

In his Autumn Statement, Chancellor Jeremy Hunt announced the government will increase its own access to data on benefit claimants, held by banks.

The government said it will enable the Department of Work and Pensions (DWP) to “better identify fraud in the welfare system”.

It estimates the extra powers will save around £300m per year by 2028-29.

Under current rules, the DWP only has the right to request each claimant’s bank account details if it suspects fraud.

But, as early as next year, those claiming benefits will have their bank accounts checked monthly as the government looks to clamp down on fraud.

A spokesperson for Privacy International told City A.M.: “The move towards the use of bank data is extremely alarming from both a privacy and dignity perspective. A person’s outgoings and expenses as revealed from their bank transactions can reveal highly intimate information about them, which would make this new power extraordinarily intrusive.

“This is all the more concerning as it has not been shown that a blanket power to pre-emptively access bank data for all claimants in all cases is a proportionate, or even necessary measure. This move is a step in the wrong direction and a disappointing departure from current DWP guidance, which stipulates that requesting information from banks is ‘a power of last resort’ and only exerciseable on a case-by-case basis, where there are reasonable grounds to suspect fraud.”

Copson added: “The impact will be felt most by some of the most vulnerable, including people on low income or with disabilities, putting them on trial through intrusive bank surveillance.

“Slipping in this amendment at this stage of the Bill signals a concerning desire to sneak these new powers through with minimal debate.”

According to the DWP, the number of people claiming incapacity benefits has increased by 0.7m, to around 2.4m, since May 2019 when the Covid-19 pandemic pushed many out of work.

The government plans to spend an extra £165m on the new fraud powers by 2027-28.

A spokesperson for banking trade body UK Finance told City A.M.: “Tackling fraud is a key priority for the banking sector and data sharing is an important tool. Any new data sharing measures need to be mindful of protecting potentially vulnerable customers and, as the government notes, take account of privacy concerns.

“The changes will need to be worked through in a consultation process, and ensure they align with the work the financial services industry is already undertaking to tackle fraud.” 

A DWP spokesperson commented: “We are cracking down on fraud with new powers which will root out those who try to steal from the most vulnerable while saving the taxpayer £600m over the next five years.”