Vulnerable individuals in the UK are at risk of having their bank accounts targeted by drastic new powers that have sparked outrage for their “dystopian” nature. Hidden within a new government bill, ministers aim to grant the Department for Work and Pensions (DWP) the authority to directly withdraw funds from personal accounts, citing overpayments in benefits, even if the mistake wasn’t the claimant’s fault.
A watchdog has voiced its opposition to the proposed measures, accusing the Government of understating the profound consequences they could unleash on the nation’s poorest families. The bill, warned by detractors as granting the DWP formidable powers with little oversight, would force banks to provide three months’ worth of statements and retrieve money from claimants’ assets without requiring a court order.
Moreover, banks will have the liberty to impose additional ‘admin fees’ when executing these deductions. Ministers have yet to declare what these extra costs might entail. The Regulatory Policy Committee, which evaluates new legislation, suggested the DWP had underrated the adverse effects expected from these planned incursions, particularly for vulnerable households already struggling financially.
“The statement does not sufficiently take into consideration the potential impact on the poorest members of society,” was the committee’s severe judgement.
Campaigners have slammed the proposed measures as “nothing short of dystopian” pointing out that a vast majority of benefits claims flagged for issues are later proven to be completely without error.
Jasleen Chaggar from the civil liberties group Big Brother Watch told the Guardian: “Navigating the welfare system is a bureaucratic nightmare and innocent people can be left owing money to the DWP through oversight or error. We should not be giving the government powers to go behind our backs and pilfer through our bank accounts, especially when the purpose is not just to tackle serious fraud but to correct accounting errors.
“The chilling powers to secretly request three months of bank statements from a welfare recipient’s bank to decide whether they can afford to have the funds removed are paternalistic and nothing short of dystopian. Decisions about whether to seize funds directly from bank accounts should be made by courts, not unaccountable officials in Whitehall.”
Banks themselves are sounding the alarm, cautioning that the new laws might compel them to violate consumer protections and disclose confidential information without sufficient grounds. The legislation targets former benefit recipients who, according to ministers, can afford to repay but are “refusing” to do so.
Yet, there’s a growing concern that regular claimants, especially those affected by simple clerical mistakes, will be ensnared by these policies. The Department for Work and Pensions (DWP) maintains that the changes could recover up to £500 million annually, referencing an astonishing £9.7 billion in overpayments last year, attributed partly to fraud but also to official blunders and outdated systems.
The department currently holds the authority to make deductions from benefits or wages, but the proposed legislation takes a bolder approach by permitting direct deductions from individuals’ accounts, triggering outcry from charities and consumer advocates.
Citizens Advice has raised an alarm, suggesting these powers could disproportionately impact the most vulnerable in society, while legal experts argue they challenge fundamental tenets of justice. Amidst criticism, Welfare Secretary Liz Kendall defends the measures as “necessary” for shielding taxpayer interests.
A spokesperson for the DWP said: “We are targeting those with the financial means to repay but who refuse to do so. The bill includes safeguards to protect vulnerable customers.”
At Reach and across our entities we and our partners use information collected through cookies and other identifiers from your device to improve experience on our site, analyse how it is used and to show personalised advertising. You can opt out of the sale or sharing of your data, at any time clicking the “Do Not Sell or Share my Data” button at the bottom of the webpage. Please note that your preferences are browser specific. Use of our website and any of our services represents your acceptance of the use of cookies and consent to the practices described in our Privacy Notice and Cookie Notice.
