21 July 2000
The new powers, proposed by Social Security Secretary Alistair Darling, will be by far the most extensive granted to fraud investigators. The police, Inland Revenue and Customs & Excise will still be bound by court warrants.
Under Darling's plans, launched in a consultation document on July 17, banks, utilities, colleges, universities, pension funds and insurance companies will be compelled to share information on suspected benefit cheats.
He said the new powers were essential in combating social security fraud, estimated to cost the government between £2bn and £4bn a year.
'We need tougher powers to cross-check claims,' Darling said. 'Much has been done to make the benefits system more secure and we are determined to do all we can to drive fraud out of the system.'
The initiative may extend to searching local newspapers to ensure claimants are not advertising for work, and checking gas and water connections against housing benefit claims. Local authority benefit investigators tackling fraud could also receive the new powers.
But the proposals have already sparked controversy, indicating that any future legislation will not have an easy ride.
The Data Protection Commissioner has expressed concern that the proposals would contravene the Human Rights Act, which protects individuals' right to privacy.
'We have always had strict confidentiality rules on personal data and it is of concern as a country that we are going to break these,' said Jonathan Bamford, assistant data protection commissioner.
'We need to make sure that government's access to the public's records is proportionate to the threat of fraud and complies with the new Act.'
But Darling said that the public's right to privacy 'can be limited' in the interests of crime prevention, although additional safeguards governing fraud investigators will ensure that no data protection rules are broken.
The private sector is also likely to object to the proposals, with Darling conceding that the checks may cost businesses between £2.8m and £8.3m a year.
PFjul2000
