PLANS to ban benefit fraudsters from driving and seize money from their bank accounts will create a two-tier justice system that destroys innocent lives, campaigners warned today.

The elderly, disabled and hard-up families would face “totally unprecedented privacy intrusions and punishments” under proposals by the Department for Welfare and Pensions (DWP).

Employment minister Alison McGovern insisted that banning benefit cheats from driving would be a “backstop” used in “extreme” cases ahead of the Public Authorities (Fraud, Error and Recovery) Bill’s introduction to Parliament today.

But director of privacy and civil liberties campaign group Big Brother Watch Silkie Carlo said: “We must be extremely cautious about the government creating a second tier justice system, reserved for people who rely on welfare, that side-steps fair hearings in courts to take away people’s funds and freedoms.

“The public and Parliament will rightly be very sceptical about empowering the government to go directly into anyone’s bank accounts to take our money and even our driving licences, least not to target the elderly, disabled and people on the poverty line whose lives could be destroyed by mistaken punishments.”

Public and Commercial Services (PCS) national president Martin Cavanagh said: "While PCS understands the government's desire to deal with benefit fraud, it should not be their main priority right now, and these proposals will be counterproductive.

"The reality is that is public funds lost to benefit fraud are a drop in the ocean compared to revenues lost through tax avoidance and evasion. This should be the government's focus if they are serious about boosting the economy and bringing monies into the Exchequer.

"PCS is at a loss to understand how taking away driving licenses, thereby reducing opportunities to work, can help achieve their stated aims."

Under the proposed “biggest fraud crackdown in a generation,” those convicted of benefit fraud could be disqualified from driving for up to two years if they refuse to repay the money they owe.

Courts could suspend their driving licences following an application by the DWP if they owe welfare debts of more than £1,000 and have ignored repeated requests to pay it back.

The department will also have powers to get bank statements from people they believe have enough cash to pay back welfare debts, but are refusing to do so.

The DWP insists it will not have direct access to people’s bank accounts and will work with banks to see where claimants have more than the £16,000 limit in their accounts. 

It also seeks its own search powers to get evidence rather than relying on the police.

But Mr Carlo added: “We all want genuine fraudsters to face the law, especially the multi-millionaire tax avoiders and Covid scammers.

“But these extreme powers are not only about fraud but about correcting the government’s own frequent payment errors.

“This is not quite ‘the biggest fraud crackdown in a generation’, but one of the biggest assaults on the welfare system in a generation.

“It’s part of a wider plan that is turning British welfare into a digital surveillance system, with the government also introducing mass bank spying of the population under the same Bill, on the premise of constantly investigating benefits claimants.

“These are totally unprecedented privacy intrusions and punishments that will do more damage to fundamental British values of fairness and justice than to the serious fraudsters.”

Disabled People Against Cuts co-founder Linda Burnip said she was left “almost speechless” by the plans.

She said: “DWP figures show there are almost zero recorded losses to the taxpayer due to fraud in the disability benefit benefits system, new statistics from the DWP showed Personal independence payment (PIP) fraud stood at 0 per cent in the financial year ending 2024.

“I’m sure anyone who commits large-scale fraud wouldn’t hesitate to drive without a licence or insurance so I have no idea why a driving ban is being touted.

“Obviously accessing people’s bank accounts is a flagrant breach of privacy and should never be allowed unless there is evidence to show that they have acted illegally in some way.”

Hannah Dewhirst, Head of Campaigns at Positive Money, said: "Threatening the financial privacy and freedom to drive of welfare claimants isn't just a gross infringement of their civil liberties, it represents a complete misdiagnosis of what's squeezing public finances.

"If the government wants to improve its spending power, it should tax the wealth of Britain's super-rich, and the banks profiting from higher interest rates."

Ministers have vowed to bring forward codes of practice for those who will use the new powers, as well as plans to introduce new oversight and reporting mechanisms to monitor how the measures are used.

The Bill also proposed to give the Public Sector Fraud Authority more powers to tackle Covid-era fraud.