Labour 'abandons plan to snoop on welfare claimants' bank accounts to block them from fraudulently claiming benefits'

Published: 05:45 EDT, 9 November 2026 | Updated: 05:48 EDT, 9 November 2026 Labour has abandoned plans to snoop on welfare claimants' bank accounts to block them from fraudulently claiming benefits, it has emerged.Ministers are reported to have scrapped a proposal to allow the Department for Work and Pensions to see the savings of people trying to claim Universal Credit.Those who receive Universal Credit must usually have no more than £16,000 in money, savings and investments.Rachel Reeves, the former Chancellor, announced plans at her spring statement last year to introduce more ways to 'verify' the amount of savings that claimants hold.The Treasury estimated this would save £200million a year by tackling some of the £1billion of overpaid Universal Credit that occurs through incorrect declarations.In total, the Department for Work and Pensions (DWP) is estimated to overpay almost £10billion a year in welfare due to fraud and error.Under Ms Reeves' proposals, DWP would have used 'Open Banking' - a system that allows banks to report the contents of bank accounts with the consent of customers - or 'face-to-face checks' to monitor claimants' savings.But her successor John Healey has scrapped the scheme with DWP instead asking banks to conduct checks on claimants' accounts after they have received Universal Credit, according to The Telegraph. Chancellor John Healey is reported to have scrapped a proposal to allow the Department for Work and Pensions to see the savings of people trying to claim Universal CreditIt comes after Prime Minister Andy Burnham last week admitted cutting the costs of Britain's ballooning welfare bill will require the Government to spend more in other areas.He suggested Labour would have to first 'invest' to tackle the almost one million young people not in education, employment or training - so-called NEETs.The PM is not expected to bring forward welfare reforms until next year, following the publication of a major report - expected before Christmas - on the NEETs crisis by ex-health secretary Alan Milburn.Mr Healey's apparent decision to scrap Ms Reeves's welfare fraud policy was criticised by the Tories, who said Labour had 'completely surrendered on welfare'.Helen Whately, the shadow work and pensions secretary, said: 'There will be no savings in this Parliament and they don't even want to make savings over the next decade.'Millions of people are trapped on benefits and hardworking taxpayers are being forced to foot an ever-growing bill.'We desperately need a Government with the backbone to tackle our broken welfare system.'A DWP spokesman told the newspaper that Ms Reeves's scheme had been abandoned because it would have relied on the consent of benefit claimants for the Government to access their bank accounts. They added: 'This Government is determined to crack down on fraud and error and protect taxpayers' money.'The previous Open Banking proposal relied on claimant consent and could not be used in every Universal Credit claim.'We are instead introducing the Eligibility Verification Measure (EVM), which will require banks and financial institutions to provide information where accounts meet specified criteria, giving DWP a more consistent way to identify incorrect payments and tackle fraud and error.'This is just one part of a comprehensive programme to tackle fraud, error and debt and EVM is expected to save £1.2billion by 2030-31.'