Regulator wades into row over 'data snooping' by DWP

Information Commissioner John Edwards has stepped into the row over plans to give the Government powers to snoop on benefit claimants’ bank accounts to fight fraud, amid concerns the proposals ride roughshod over consumers’ data protection rights.

The change is one of the 240 last-minute amendments to the Data Protection & Digital Information Bill (No 2) waved through on the third reading of the Bill in November.

It will give the Department of Work & Pensions powers to force banks to hand over personal information for any benefit claimant, from universal credit to child benefit and pensions.

The plans, widely criticised by privacy organisations and Opposition MPs, have now sparked a letter from Commissioner Edwards to The Times, questioning whether ministers have shown the new powers are “proportionate”.

Edwards added that he has “concerns” that the plans provide “appropriate safeguards”.

He wrote: “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.”

The DWP will use the new powers to require banks and financial organisations to identify benefit claimants with more than £16,000 in savings or who claim from abroad for more than the four-week limit, without needing to show any suspicion of wrongdoing by individuals.

Ministers estimate that the proposals will save £300m a year by 2028-29 by reducing benefit fraud and overpayments to people claiming benefits over the next five years. They estimate the programme will lead to 74,000 prosecutions and 2,500 custodial sentences over the course of 10 years.

Arguing that the Bill has not been “sufficiently tightly drafted” to protect individuals against “arbitrary interference”, Edwards said the Government must be “transparent” about the evidence for introducing the new powers and their effectiveness at addressing fraud.

“I am therefore unable, at this point, to provide my assurance to Parliament that this is a proportionate approach. Parliament will need to decide whether this measure is necessary and proportionate, given the level of fraud and error in relation to benefits and the predicted savings this intervention could produce.”

MPs have already raised concerns that the legislation could allow the DWP to investigate the bank accounts of a significant proportion of the population.

Labour MP Stephen Timms, claimed the Government will have the right to inspect the bank account of anyone who claims a state pension. “It will give the Government the right to look into the bank account of every single one of us at some point during our lives, without suspecting that we have ever done anything wrong, and without telling us that they are doing it.”

Meanwhile, Labour peer Lord Bassam told the Lords in December that the DPDI would require banks and financial institutions to provide data on an estimated 40% of the population that receive benefits, including working tax credit, child tax credit, child benefit, pension credit, job seekers allowance and personal independence payments.

Privacy groups have also joined the growing criticism of the proposals. Big Brother Watch insisted that people who are disabled, sick, carers or looking for work “should not be treated like criminals by default”.

The organisation added: “Such proposals do away with the longstanding democratic principle in Britain that state surveillance should follow suspicion rather than vice versa, and it would be dangerous for everyone if the government reverses this presumption of innocence.”

And the Open Rights Group maintains the proposals could lead to some of the most vulnerable people facing unjust accusations of fraud and potentially having their lives destroyed.

However, the DWP claims its new powers do not amount to surveillance and will not give investigators direct access to bank accounts.

A spokesperson said: “These changes 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.”

In its third reading in the Commons, Labour MP for Rhondda Sir Chris Bryant urged the House to re-commit the Bill to a public committee due to the huge number of amendments tabled at the 11th-hour.

However, this was voted down. As Bryant concluded: “I feel ashamed to say it, but I hope the Lords are able to do the line-by-line scrutiny that we have been prevented from doing today.”

The Bill is now making its way through the House of Lords, having its “second reading” just before the Christmas recess. It will now face greater scrutiny in the Committee Stage, although a date for this to begin has yet to be announced.

Even so, many believe the Bill could then “ping-pong” between both the Commons and the Lords for months.