When Labour swept to power last July, it promised a break from the Conservatives’ punitive approach to welfare—a government that would, in Keir Starmer’s words, "tread more lightly on our lives." Yet barely a year later, the party is resurrecting one of the most draconian Tory policies: mass financial surveillance of benefit claimants, hidden in the Public Authorities (Fraud, Error and Recovery) Bill.

What the Bill Actually Does

Algorithmic Spying on the Poor

Banks will be forced to scan millions of accounts belonging to welfare recipients—without suspicion of wrongdoing—using automated systems to flag "irregularities."

Errors (or false positives) could trigger DWP investigations, forcing vulnerable people to prove their innocence.

Driving Licences Held to Ransom

The DWP can secretly request three months of bank statements to assess if debt recovery would cause hardship.

If deemed "non-compliant," individuals face losing their driving licence—a devastating blow for those in rural areas or with mobility needs.

A Reckless Expansion of DWP Power

Despite already having real-time earnings data, the DWP failed to prevent the carer’s allowance scandal, where unpaid carers were wrongly pursued for overpayments.

The bill does nothing to stop sophisticated fraudsters, who can split assets across accounts to evade detection.

Why This Is a Historic Betrayal

Labour won on a mandate to restore dignity to the welfare state, not to deepen the presumption of guilt around poverty. Yet this bill:

Treats all benefit claimants as suspects by default

Relies on flawed algorithms, risking a Horizon-style miscarriage of justice at scale

Punishes hardship, stripping mobility from those already struggling

Who Pays the Price?

Disabled people (facing £1,200-a-year benefit cuts)

Unpaid carers (already hounded by DWP errors)

Pensioners and low-income families (least able to fight wrongful accusations)

Many live with mental health conditions or cognitive impairments, making bureaucratic compliance near-impossible. Non-engagement is often a symptom of crisis—not criminality.

A Path Forward

Labour backbenchers have proposed critical amendments:

Limit surveillance to suspected fraudsters only

Scrap the driving licence penalty

Strengthen safeguards for vulnerable claimants

The party must decide: Will it govern as a progressive alternative to Tory cruelty, or outsource welfare policing to banks and algorithms?

Conclusion: The Welfare State Should Protect—Not Punish

This bill risks corrupting social security into a surveillance trap, where the price of support is living under permanent suspicion. Labour was elected to rebuild trust in government—not to automate austerity.

As one MP warned:
"If we forget what makes us different from the last government, we betray the people who put us here."