DWP moves to spy on bank accounts slammed as 'mass surveillance' by Coventry MP

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Zarah Sultana says there are risks that an injustice like the Post Office Horizon scandal would be repeated on an unprecedented scale



A Coventry MP has attacked a tough new fraud crackdown that will give the DWP powers to spy on benefit claimants' bank accounts. The new Public Authorities (Fraud, Error and Recovery) Bill will enable the government to crack down on cheats and scammers in the social security system as well as in the public sector.

Under an Eligibility Verification Measure in the proposed legislation, banks would have to continuously monitor claimants' accounts and report back to the Department for Work and Pensions if any balances were above the level to be entitled to benefits. There is a capital limit of £16,000 if you are claiming Universal Credit, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Income Support, and Housing Benefit.

The Department would also be able to claw back cash directly from accounts if payment deductions weren't possible because someone had since come off benefits, and take away their driving licence if they repeatedly refused to hand over the money. But MP Zarah Sultana (Independent, Coventry South) says the moves amount to "mass surveillance", are "unjust" and "legally questionable" and should be removed from the legislation.

Ms Sultana told the House of Commons during the second reading of the Bill: "I will focus on the powers in the Bill that force banks to trawl through our private financial data, scanning for indicators of fraud and error - indicators that are not publicly disclosed —and flag those individuals to the Government. These powers will allow the Department for Work and Pensions to seize money directly from bank accounts without due process, suspend driving licences and even search properties and personal devices. They are not the hallmarks of a free and democratic society but the tools of an Orwellian surveillance state.

"Let me be clear: we all agree that genuine fraudsters should be held to account, especially multimillionaire tax avoiders, organised criminal gangs and the dodgy companies that exploited Covid funding. However, the Bill goes far beyond that. It will subject millions of innocent people - disabled individuals, carers, jobseekers, pensioners and parents - to unwarranted financial surveillance, treating them as suspects by default, simply because they receive state support. It is deeply unjust.

"The Government already have extensive powers to investigate suspected fraud; under existing legislation, they can access bank accounts where there is reasonable suspicion of criminal activity. However, the Bill removes the need for suspicion altogether. Put simply, this is mass surveillance."

She said there were huge dangers in the measures as people could end up being wrongly targeted. Ms Sultana explained: "There are significant risks. We have already seen the devastating consequences of automated decision-making in the Post Office Horizon scandal, where faulty software led to hundreds of wrongful prosecutions. The Bill risks repeating that injustice on an unprecedented scale, and we should not have to wait for an ITV drama to expose it in the future.

"The DWP has already made mistakes in accusing benefit claimants of debt. Last July, The Big Issue reported that a disabled woman had her disability benefits stopped and was accused of owing the Government £28,000, which the DWP later admitted was its mistake, while a single mother was accused of a £12,000 debt when the DWP actually owed her money.

"Algorithm-driven financial surveillance will inevitably result in errors that will disproportionately affect the most vulnerable in our society: the elderly, the disabled and those already struggling to make ends meet. Even a 1 per cent error rate in the AI system used by banks could lead to thousands of benefit recipients being wrongly flagged, unfairly investigated and forced into lengthy appeals."

And she said the new powers would only tackle a small part of the UK's huge fraud problem. She pointed out: "The Government's own impact assessment suggests that these measures would recover just £146 million annually, which is less than 2 per cent of the estimated annual loss to fraud and error. In contrast, £23 billion in benefits and support goes unclaimed each year, while £3 billion in claims is underpaid. Yet the Bill does absolutely nothing to address those injustices or to build a security system based on dignity and respect; instead, it targets those who can least afford to be wrongly flagged as fraudsters.

"This legislation represents a rushed process with little scrutiny. At 116 pages long, the Bill was scheduled for Second Reading just seven working days after First Reading. It is an attempt to push through mass surveillance powers with minimal debate, bypassing the necessary checks and balances that should apply to any policy, especially one that affects millions of people’s fundamental rights. The powers are also legally questionable, with privacy experts warning they could breach article 8 of the Human Rights Act 1998.

"The Bill risks creating a two-tier justice system - one for the very wealthy, who will never face this kind of intrusion, and another for those on benefits, who will be subject to constant scrutiny, automated checks and the threat of their money being seized, perpetuating harmful stereotypes about so-called benefits cheats. It will therefore also distract attention away from the millions of households that are legitimately supported by a social security system that exists to support every single one of us when we need it.

"Civil society groups including Amnesty International, Big Brother Watch, Disability Rights UK and Age UK have all condemned the powers, warning they will entrench discrimination against the poorest and the most vulnerable. We cannot allow that to happen. We cannot allow the Government to turn our banks into agents of the state, spying on their customers and reporting back to Whitehall; we cannot allow the presumption of innocence to be eroded by a culture of suspicion and surveillance; and we cannot stand idly by while the most vulnerable in our communities bear the brunt of this overreach. This is not the change people voted for. I therefore urge the Government to remove clause 74 and schedule 3 from the Bill [which provides the Eligibility Verification Measure]."

The Bill has now had its second reading in the House of Commons and will need to go through many more stages, including several in the House of Lords, before being passed as legislation.