The Secretary of State for Work and Pensions (Liz Kendall)
I would like to advise the House that the Government will bring forward a new Fraud, Error and Debt Bill in this Parliamentary session to be tough on criminals, fair for claimants and provide confidence to the taxpayer.
Fraud and error in the social security system currently costs the taxpayer almost £10 billion a year and, since the pandemic, a total of £35 billion of taxpayers’ money has been incorrectly paid to those not entitled to the money—including to criminal gangs. Just as we do not tolerate tax evasion, this Government will not tolerate those who defraud the social security system. We will ensure that every pound of taxpayers’ money is spent with the same care with which working people spend their own money.
The measures in this Bill are expected to save up to £1.6 billion over the next five years and will extend and modernise the DWP’s powers to stop fraud in its tracks, recover money lost to fraud and, crucially, help protect claimants who may already be on the edge financially from racking up debt.
The Government are determined to prevent incorrect payments where we can, so the DWP will be given new powers to better identify and prevent potential overpayments. These will help officials to ensure eligibility criteria are being met—including being able to see sooner where they are not—which will mean fewer claimants accruing debts and getting into financial difficulty. This will also serve to ensure every claimant is treated fairly.
We will ensure that these powers are proportionate. We will introduce safeguarding, reporting mechanisms and independent oversight, to give greater confidence to claimants that the powers are being used fairly and effectively. DWP staff will receive training on the use of any new powers. We will rely on codes of practice where they already exist and, where they do not, we will consult on and produce new codes of practice to provide further reassurance on the safe use of the powers.
Some of the DWP’s fraud powers have not been updated for over 20 years and we are currently misaligned with other Government Departments and public bodies such as HMRC.
The measures in this Bill will remedy that, giving the DWP powers to:
Better investigate suspected fraud and new powers of search and seizure, so the DWP can take greater control of investigations into criminal gangs defrauding the taxpayer.
Make changes to the penalties system, so that no one found to have committed fraud against the social security system avoids punishment, bringing increased fairness for claimants who do the right thing.
Allow the DWP to recover debts from individuals who can pay money back but have avoided doing so, bringing greater fairness to debt recoveries.
Through our eligibility verification measure, require banks and financial institutions to examine their own datasets to highlight where someone may not be eligible for the benefits they are being paid. This will help the DWP identify incorrect payments, prevent debts from accruing for the claimant and help identify where there may be fraudulent activity. Banks will only share very minimal information, and this will only be used by the DWP to support further inquiry, if needed, into a potential overpayment.
The powers in this Bill will be legal, proportionate and targeted to reduce overpayments, detect and prevent fraud, ensure prompter investigations and bring greater fairness to the system.
The eligibility verification measure will not give the DWP access to any bank accounts, nor any information on how claimants spend their money. The proposed new power instead helps verify benefit eligibility, using very limited information from banks and financial institutions. A human being will always be involved in any investigations and any decisions taken afterwards that affect eligibility or benefit awards, as they do now. This measure will not be used on the state pension.
This legislation will support the delivery of the Government’s manifesto commitment to safeguard taxpayers’ money and demonstrates the Government’s commitment that they will not tolerate fraud or waste anywhere in public services, including the social security system.
Further details on the legislation will be set out when the Bill is introduced to Parliament shortly.
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