The proposed bill aims to address multibillion-pound benefit fraud and includes measures allowing the DWP to recover money directly from fraudsters’ bank accounts. It would also empower the DWP to obtain bank statements from individuals they suspect have adequate funds to repay welfare debts but are refusing to do so, reports the Daily Record.

Fraudsters’ licences could be suspended

Fraudsters could face suspension of their driving licences under new proposals. Courts may have the power to suspend fraudsters’ driving licences following an application by the Department for Work and Pensions (DWP) if they owe welfare debts exceeding £1,000 and have consistently ignored requests for repayment.

However, it is a legal requirement that an independent person be appointed to ensure that ministers and banks are complying with the Bill.

Peers attempted to expand the independent person’s duties, to scrutinise the cost of the new procedures to the UK Government and financial institutions, and their potential “adverse effect on vulnerable people or on the ability of benefit claimants to access banking services”. Liberal Democrat work and pensions spokesman Steve Darling expressed: “We still have concerns that there is a blanket approach to this, and effectively, mass fishing will occur with the proposals as before us.”

He argued for “more responsibility” to be given to the independent reviewer “around proportionality and fairness”. Neil Duncan-Jordan, who had the Labour whip suspended following breaches of party discipline, voiced his concern that while the reviewer would need to assess compliance under the UK Government’s plans, they were not required to consider whether the “Eligibility Verification measure (EVM) is being used proportionately”.

The MP for Poole addressed the Commons, stating: “It is essential that any consideration of the proportionality of the EVM takes into account the potential harm to individuals.”

Mr Duncan-Jordan further commented: “If the algorithms are scanning the bank accounts of 10 million people, an error rate of just 1 per cent will result in 100,000 cases where innocent people are wrongly investigated.”

Concerns over the bill creating ‘second-class’ citizens

He told MPs: “I’m concerned about what this Bill says about our welfare state, the danger of creating a second-class citizenship where welfare recipients have less civil liberties than the rest of us. It turns banks into an arm of the state empowered to trawl through personal data, even when there is no suspicion of wrongdoing, and this strips away a fundamental principle, I believe, of British justice – the presumption of innocence.”

The Conservatives voiced their “disappointment” that the UK Government did not back the Lords’ proposal. Speaking on behalf of the party, South West Devon MP Rebecca Smith said that the amendment “tasks the independent reviewer of the mechanism to assess how the system is taking into account the additional needs of vulnerable people, whether it risks benefits claimants from being prematurely de-banked, and the costs to banks and financial institutions of complying”.

She went on to say: “Throughout the passage of this Bill, members, including those on the Conservative benches, have emphasised the need to protect those who may be more vulnerable, including people facing financial hardship and those with disabilities. While we are disappointed that the Government is not today backing the amendment, it is reassuring that they have committed to ensuring that all the points made in both Houses are fed directly into the work of the independent reviewer.”

Mr Western declared: “We’re very clear that nobody vulnerable or otherwise should be de-banked as a result of this Bill. That was made clear in the code of practice and in amendments we are considering today.

“There are many existing layers of protection in our existing processes.”

The DWP minister added: “We are baking in a human decision-maker at all points throughout the process. We cannot take a decision based on EVM information in isolation. We must consider all other relevant information.

“Practically, that means that we must look at a benefit claim and check for disregards or, for example, for any other reason that someone may perhaps have capital in exceedance of £16,000 before taking any action.”

Mr Western disclosed his officials had held talks with “the finance industry, who acknowledge that this may place a significant burden on financial institutions, if they are asked to report on costs every year”. He went on: “There is no reason for individuals to lose access to banking services solely because of information shared under EVM. We have been clear that this information does not imply any wrongdoing, and this measure simply provides a source of data that feeds into long-standing processes in the Department for Work and Pensions, where layers of support and specialist staff already exist to support those who are vulnerable or have complex needs.”

Eligibility Verification Measure

It’s vital to grasp that the DWP will not have direct access to the bank accounts of millions of individuals receiving means-tested benefits, including Universal Credit, Pension Credit and Employment and Support Allowance.

The DWP will work with banks to identify individuals who may have breached the eligibility criteria for means-tested benefits, such as the £16,000 income threshold for Universal Credit – and use this information to investigate potential overpayments and possible fraud cases.

The legislation only allows banks and other financial institutions to share limited data and forbids the sharing of transaction data, meaning the DWP will not have insight into how benefit recipients spend their money.

Banks and other financial institutions could face penalties for oversharing information, such as transaction details. The guidance on GOV.UK further clarifies: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”