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The UK data watchdog has warned that government plans to combat benefits fraud by probing the bank accounts of welfare recipients would allow “significant intrusion” of privacy rights.
John Edwards, information commissioner, told MPs that ministers had yet to provide “sufficient evidence” that proposed inspection powers were proportionate to tackling fraud.
The commissioner was responding to proposals tabled within the government’s data protection and digital information bill, which would allow the Department for Work and Pensions to obtain data from banks and building societies to help detect breaches of eligibility rules for benefits, such as universal credit.
“This [Information Commissioner’s Office scrutiny] is particularly important given the significant intrusion that this measure allows. While I agree that the measure is a legitimate aim for government, given the level of fraud and overpayment cited, I have not yet seen sufficient evidence that the measure is proportionate,” Edwards said to parliament this week.
Ministers have said the proposals to enable the inspection of bank accounts are a necessary step to reduce fraud and error within the welfare system, currently estimated to cost in excess of £8bn each year.
Work and pensions minister Mel Stride told MPs in early December the new inspection powers would help raise approximately £500mn over the next five years.
The bill is part of the government’s bid to reform and simplify data protection laws and loosen restrictions placed on businesses and law enforcement.
The DWP can currently obtain individuals’ data when there is a “reasonable suspicion” of benefit fraud and error. The new powers would allow it to access anonymised data for a large number of accounts without prior suspicion, enabling it to probe individual accounts in some cases.
The latest provisions have prompted concerns from the UK fiscal watchdog and opposition MPs. The Office for Budget Responsibility said in its November forecast that the estimated savings from the DWP’s measures were highly uncertain due to limited data. The government has carried out two “proof of concept” pilots, in 2017 and 2022.
Sir Stephen Timms, Labour MP and chair of the House of Commons work and pensions select committee, charged with scrutinising the policy, recently wrote to Stride outlining concerns over the “last minute” proposals.
Timms said that certain measures, including ministers reserving the right to apply powers to state pension and personal independence payment recipients, represented a “significant increase in state surveillance”.
Edwards also said the proposals required “adequate safeguards” to protect against any “arbitrary interference”. He added that parliament would ultimately have to “satisfy itself that this measure is necessary and proportionate”.
“I am concerned that the bill is not currently sufficiently tightly drafted to satisfy these requirements,” he said.
The bill has passed through the House of Commons and will be debated in the House of Lords on Tuesday, with amendments tabled at a later stage.
The DWP said: “These changes will not allow DWP direct access to bank accounts but will require third parties to share data signalling fraud with us so it can be considered further. It will also help identify people who have made a genuine mistake with their claim, preventing them from potential debts.”
