Benefit cheats could lose driving licences in anti-fraud drive

Currently, the department can only request such financial information where it has reason to suspect fraud, and only in individual cases.

The previous government argued broader powers to obtain banking information in bulk would help investigators catch previously undiscovered fraud cases.

But a Tory bill to deliver the scheme failed to make it through Parliament before July’s election.

Under that plan, financial institutions would have been required to send information to the DWP about bank accounts receiving benefit payments that indicated a “potential risk” of fraud or error, or face fines for not complying.

An official assessment of the law said the system would be “fully automated, running within existing banking systems” and be rolled out gradually from 2027.

At the time, Labour attacked the Tory legislation as “poorly delineated” – while Tory ministers argued wide-ranging powers were necessary to ensure they could apply to all types of future banks, including accounts with newer, online-only providers.

Conservative shadow work and pensions secretary Helen Whately said the government’s bill was a “continuation” of work started by the previous government and Labour “must do more to tackle the spiralling welfare budget”.