The Labour Party is bringing back DWP bank account monitoring plans

The Department for Work and Pensions has announced a new bill that will see the government have more powers in order to crack down on benefit fraudsters including new bank account monitoring systems

As the Labour Party Conference progresses with debates on the United Kingdom's future after a lengthy Conservative reign, the Department for Work and Pensions (DWP) is making headlines with plans for tougher anti-fraud laws. Critics, however, see this as a ghost of Tory policy past.

Labours rise to governance has been marked by vows to rethink social welfare, emphasising empathy in disability benefit assessments, and treating claimants as "individuals". Yet the fresh legislation touted by the Government echoes previous Conservative ambitions to intensify scrutiny of overpayments to claimants, whether due to mistakes or deliberate deceit.

Among the controversial measures is an enhanced authority for the DWP to monitor bank transactions.

Although these intrusive schemes hark back to the Conservative's discarded Data Protection and Digital Information Bill, culled when then-Prime Minister Rishi Sunak initiated the July election culminating in Labour's emphatic victory, they're resurfacing. With an eye on reclaiming a portion of the purported annual £10 billion lost to overpayments and fraud, the DWP intends to extend its tentacles, enabling house inspections and asset seizures.

The Department for Work and Pensions (DWP) has revealed that the Fraud, Error and Debt Bill will boost their ability to tackle benefit fraud through enhanced bank account surveillance. This move is designed to keep up with the "more sophisticated" nature of contemporary benefit fraud, reports the Express.

The DWP also maintains that search and seizure powers will strengthen its efforts to "take greater control investigations into criminal gangs defrauding the taxpayer."

The introduction of bank account monitoring could help address the problem of accidental benefit overpayments, which has significantly impacted many carers who unknowingly exceed the £150 a week threshold for Carer's Allowance, leaving some thousands of pounds in debt. Under the new system, the government would be notified when earnings surpass this limit, thereby preventing incorrect payments, according to the Manchester Evening News.

The DWP defends the need for these measures, arguing that scrutinising claimants' bank accounts will bring "greater fairness" to the welfare system by allowing it to "recover debts from individuals who can pay money back but have avoided doing so, bringing greater fairness to debt recoveries."

When the Conservative Party first introduced these proposals in 2023, it was believed that approximately nine million UK residents, mainly those on Universal Credit, ESA, and Pension Credit, might be subject to account scrutiny. The Benefits and Work forum has now indicated that this number could be much higher following a surge in Pension Credit claims.

In line with previous laws, banks are set to undertake the monitoring duties, not the Department for Work and Pensions (DWP) itself. Details on how these new powers will function are expected to be revealed when Labour presents its Fraud, Error and Debt Bill to Parliament.

The DWP has sought to alleviate concerns by stating: "The Bill will also include safeguarding measures to protect vulnerable customers. Staff will be trained to the highest standards on the appropriate use of any new powers, and we will introduce new oversight and reporting mechanisms, to monitor these new powers."

"DWP will not have access to people's bank accounts and will not share their personal information with third parties."