**DWP Moves Closer to Gaining Legal Powers to Investigate Benefit Claimants’ Bank Accounts**
The Department for Work and Pensions (DWP) could soon enjoy unprecedented powers to request information about benefit claimants’ bank accounts under proposed UK legislation. The move, which has sparked considerable political and public debate, is part of a wider government effort to tackle fraud in the welfare system amid ongoing concerns over public expenditure and the cost of living crisis.
The measure forms a central plank of the Labour Party’s Fraud, Error and Debt Bill, which is now navigating its final stages in Parliament. Notably, the bill cleared its critical third reading in the House of Commons on 29 April, bringing it one step away from implementation. If approved by the House of Lords, the new law would require banks and other financial institutions to share certain data with the DWP when investigating alleged benefit fraud.
Under these proposals, the DWP would not have direct, open-ended access to individual account details. Instead, financial firms would respond to targeted information requests relating to claimants whom the department suspects may possess undeclared funds or those believed to owe repayments due to overpayments or error. The legislative intent, the government says, is to ensure taxpayer money is safeguarded and directed towards those in genuine need, rather than lost to fraudulent claims.
Additionally, the legislation seeks to empower ministers to suspend driving licences as a separate tool in the crackdown against welfare fraud. Both the data-sharing power and the licence suspension provision are designed as deterrents and enforcement mechanisms—measures the government claims are necessary in today’s climate of increased financial fraud and online crime targeted at public funds.
However, the prospect of such sweeping authority has not gone unchallenged. Some within the Labour Party, including MPs like Neil Duncan-Jordan, have voiced strong concerns about the breadth of the bill. Duncan-Jordan tabled an amendment, supported by a minority of MPs, arguing that the government’s ability to check bank accounts should be limited to cases where “reasonable grounds” exist to suspect wrongdoing. His warning was unequivocal—he suggested the rules could “see the poorest in society exposed to intrusive checks even where no suspicion of misbehaviour exists.”
These sentiments echo those of the Liberal Democrats, who have cautioned that the provisions might amount to “Orwellian levels of mass surveillance” for people reliant on means-tested benefits. Concerns have also been raised around data privacy and the potential for stigmatising vulnerable groups, given the proposed scale and reach of the DWP’s new tools.
In defence of the bill, Labour’s Work and Pensions Minister Andrew Western attempted to provide reassurance both to MPs and the public, stating that the DWP’s intention is not to presume guilt or carry out blanket surveillance. “This power will enable more effective data sharing between public and private sectors, ensuring claimants meet eligibility criteria and detecting overpayments sooner—before there’s even suspicion of fraud,” he noted. Western emphasised that the DWP would further investigate any accounts flagged by banks, and only pursue recovery or correction where evidence of error or misconduct was established.
Despite these assurances, the bid to restrict the new powers, as proposed by Duncan-Jordan, was firmly defeated in the Commons—85 MPs supported the amendment, while 238 voted against, handing the government a clear mandate to press ahead with the bill as originally drafted.
The legislation is now set for its second reading in the House of Lords on 15 May. Here, it will again be scrutinised for its implications regarding privacy rights, inequality, and the ethical limits of government intervention in the lives of welfare recipients.
As the debate continues, questions remain regarding the practical impact of these provisions and the potential for unintended consequences. For many, finding the right balance between preventing fraud and protecting the dignity and privacy of benefit claimants is likely to be an enduring challenge—one that goes to the heart of how the UK manages its social safety net in turbulent economic times.