DWP to get powers to check bank accounts?

Remember the days when your financial affairs were your own business? They seem a long way away these days. HMRC already has advanced technology to scrape your financial details from bank records, savings and investments, credit card transactions, online activity and more. Now, almost unnoticed, the government is trying to give the Department of Work and Pensions (DWP) powers to check bank accounts.

What are the new powers to check bank accounts?

In November 2023, the government tabled a large number of amendments to the Data Protection and Digital Information Bill.

One of these amendments added a new clause to the Social Security Administration Act 1992. It reads: “Schedule 3B makes provision about a power for the Secretary of State to obtain account information.”

What is striking about this proposed power is that it’s not simply available if DWP has good reason to believe someone is claiming money fraudulently. It actually empowers DWP to demand bank account information of large numbers of benefit claimants.

Whose bank accounts will DWP be able to check?

If the legislation becomes law, DWP will be able to check the bank account of any benefit claimant. This includes people who receive the state pension. It may even include people who receive child benefit.

The upshot of this is the DWP will be able to scrutinise the bank accounts of millions of people. It has been suggested that DWP would ask banks for data every four weeks. It could then use artificial intelligence to analyse vast amounts of financial information.

What response has there been to the proposed new powers?

Some MPs have pushed back against the proposed powers to check bank accounts. Labour MP, Sir Stephen Timms, said in a debate:

“[The clause] will give the Government the right to inspect the bank account of anyone who claims a state pension, which is all of us. 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. The Minister said earlier that the powers of the state should be limited to those absolutely necessary, and I have always understood that to be a principle of the Conservative party. Yet on the power in the new clause to look into the bank account of everybody claiming a state pension, he was unable to give us any reason why the Government should do such a thing, or why they would ever need to look into the bank accounts of people—everybody—claiming a state pension. What on earth would the Government need to do that for? The entitlement to the state pension is not based on income, savings or anything like that, so why would the Government ever wish to do that?”

Will the power to check bank accounts become law?

It’s not possible to predict at this stage whether the DWP will get the power to check bank accounts. At the time of writing, the Bill is undergoing its second reading in the House of Lords. It is certainly feasible that the Bill will be amended to restrict or deny the new powers.

That said, when it comes to the state’s interest in your financial affairs, the direction of travel is clear. If you pay tax or claim benefits, the government wants access to your financial information. Fraudsters may have fewer places to hide. But for the rest of the law-abiding majority these powers are a major intrusion of privacy.