DSS gets tough powers to fight the benefit cheats

Fraud

Social security investigators will be given unprecedented powers to obtain confidential information from banks, building societies and credit agencies in a crackdown on suspected benefit cheats.

Social security investigators will be given unprecedented powers to obtain confidential information from banks, building societies and credit agencies in a crackdown on suspected benefit cheats.

The Social Security Fraud Bill will allow DSS and council officers to access the private files of private and public organisations. The powers will be strictly defined and apply only "where reasonable grounds for suspicion exist", but the move is bound to infuriate civil liberties campaigners.

Ministers have been baffled why investigators were barred from accessing bank and credit details, most of which can be invaluable in a prosecution.

Alistair Darling, the Secretary of State for Social Security, led the moves to change the law, but Jack Straw, the Home Secretary, and Tony Blair have made the issue of tackling fraud a main electoral issue.

The other main measure in the Bill is a commitment to a tough "two strikes and you're out" sanction that will remove benefit from anyone convicted twice in three years.

The Bill would enact recommendations from Lord Grabiner's report, The Informal Economy, published earlier this year, with a series of measures to tackle fraud in the tax and benefit systems.

In line with the report, the DSS will exchange information with overseas social security departments to combat international fraud rings.

In less serious cases of employers colluding with staff in benefit fraud, the DSS will offer a fine of up to £5,000 instead of prosecution. Professor Steve Webb, the Liberal Democrat social security spokesman, said Labour was clearly rattled by the Tory pledge to find £2bn in benefit fraud. "More thorough investigation of fraud is laudable," he said. "But the 'two strikes and you're out' proposal is unacceptable.

"Benefit fraud is a criminal offence and there is a justice system in place to deal with it. Fraudsters - not their families - should pay for their crimes in the courts. Benefit fraud is fast becoming another Dutch auction. Labour are proposing savings of £1bn. The Tories, who never managed to measure benefit fraud, let alone tackle it, have pledged to double that.

"This is a meaningless war of words from a Government which has run out of steam and a Tory Party who can't make their tax plans add up."