Civil servants handed ‘dangerous' power to spy on public's bank records
Privacy campaigners and peers have raised concerns about the legislation, which would give mid-ranking officials powers that are usually reserved for police investigators.
The new fraud Bill will allow civil servants to ask banks to provide personal information about a person's account without a court order, and extract funds if they 'reasonably believe' that money is owed to the taxpayer.
They will also be given the power to ask for a search and entry warrant and to freeze bank accounts, in one of the most significant transfers of enforcement powers to non-police officials on record.
Ministers say the rules will help the Cabinet Office crack down on public sector fraud, but opponents believe that they are an unacceptable breach of civil liberty.
'Chilling effect on freedom'
The proposals follow warnings about similar action against suspected benefit cheats by the Department for Work and Pensions (DWP), as well as a plan for HMRC to gain access to more financial information about taxpayers.
Members of the House of Lords have raised concerns about the 'shocking' level of power that will be given to unelected civil servants, which they warn could have a chilling effect on freedom.
The legislation, which is currently under review in the Lords, does not require officials to seek permission from a minister before requesting access to a bank account. The powers given to the Cabinet Office can be wielded by any anti-fraud official with a civil service rank above 'higher executive officer' – a Whitehall middle manager.
It will apply to members of the new Public Sector Fraud Authority, a new government body designed to crack down on criminal fraud against public bodies after the Covid-19 pandemic.
The organisation will be brought in by other government departments to deal with cases of public sector fraud, which costs the taxpayer billions of pounds each year.
The idea was first suggested by the previous Conservative government, after one of Boris Johnson's ministers resigned over how fraud was handled by government departments.
But Labour ministers have decided to increase the power of civil service investigators. The new body will have powers far beyond most ordinary civil service enforcement teams, and will not operate with an independent chairman.
Banks would be 'agents of the state'
Big Brother Watch, the civil liberties campaign group, told The Telegraph that the 'dangerous new bank spying powers' would 'effectively turn banks into agents of the state, tasked with spying on everyone's bank accounts and reporting back to the Government'.
Lord Vaux, a crossbench peer, has told colleagues that the measures would give severe police powers to 'relatively junior civil servants in the Cabinet Office'.
Speaking last month, he said: 'If handing police powers to civil servants was not chilling enough, here are powers that facilitate the state raiding bank accounts.'
Peers have put forward amendments to the Bill that would increase the level of accountability in the new system, including requiring banks to inform individuals whose accounts have been accessed, and would make officials accountable to Parliament when the powers are used.
No duty to inform customers
As it stands, the legislation would prevent a bank from telling its customers if the Government has asked to see what is in their account. A user might only become aware of what had happened when their account was frozen, or money disappeared.
Baroness Finn, who has opposed the Bill in the House of Lords, said it would give civil servants police powers 'without public record or the consent of Parliament'.
She said: 'We have heard a great deal about the importance of tackling fraud, but powers alone do not constitute a policy. What matters is how these powers are used, by whom and under what form of oversight.'
Similar concerns were raised after the Spring Statement, when consultation documents revealed that HMRC could be given powers to demand more personal information from banks about their savers.
This could include National Insurance numbers, which would make it easier for HMRC to match taxpayers to the money in their savings accounts.
A DWP spokesman said: 'We are bringing forward the biggest fraud crackdown in a generation, as part of wider plans that will save £9.6 billion by 2030.
'It is right that we modernise our approach to catching fraudsters and identifying overpayments at the earliest stage. All the powers in the Bill are underpinned by a principle of fairness and proportionality and do not involve mass surveillance of people's bank accounts.
'We are absolutely clear we will not tolerate any waste as we protect taxpayers' money, ensuring people get the money they are entitled to, and we invest in our public services as part of our Plan for Change.'
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