Benefit cheats could be stripped of driving licenses.

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 Benefit cheats could be stripped of driving licenses. Convicted benefits cheats who fail to pay back the taxpayer could be stripped of their driving licenses under government plans to crack down on fraud.

Those who repeatedly cheat the system and have debts of £1,000 or more could be punished with a driving ban of up to 2 years. Frauders can already be jailed in the most serious cases.

Work and Pensions Minister Allison McGaven said it would provide an additional tool in the box to chase repayments.

The plans also include new powers to force banks to hand over account information about benefit claimants to help target investigations, echoing a scheme announced by the previous Conservative government.


This is likely to face strong opposition from the banks and privacy campaigners. Providing false information to obtain benefits can see fraudsters hit by fines, while serious cases of conspiracy to defraud can attract prison sentences of up to 10 years under current laws.

Pressed on whether the power to disqualify drivers would provide an additional deterrent, McGovern told BBC Breakfast it would provide a backstop to chase repayment from those determined to evade collection. She added that the department already tries to collect fraudulently claimed benefits via banks or the pay system, but the license powers could help with those who still don’t want to cooperate.

According to the latest annual figures, overpayments due to fraud amounted to £7.4 billion last year, around 2.8% of total welfare spending. A further £1.6 billion (0.6%) was overpaid due to inadvertent errors by claimants, with £0.8 billion (0.3%) overpaid because of errors by the DWP.

Ministers have estimated greater access to banking data could save taxpayers £1.5 billion over 5 years by helping DWP investigators identify suspect claims more effectively.

But campaign groups have warned that it will invade claimants’ right to financial privacy and could lead to legitimate claimants being wrongly investigated.

In a letter to Kendall in September, the directors of Big Brother Watch and Age UK described the plans as mass financial surveillance powers, which they said would represent a severe and disproportionate intrusion into the nation’s privacy.

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.


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