Welfare fraud investigators will be given the power to take money directly from pay slips as part of plans to crack down on fraudsters, it has been reported.

The measure is one of several far-reaching powers set to be included in the Government’s forthcoming Fraud, Error and Debt Bill, according to the Sunday Telegraph.

The Bill, announced by the Prime Minister during the Labour Party conference in September, is intended to target benefit fraud by “modernising” the Department for Work and Pensions (DWP) in an effort to save £1.6 billion over the next five years.

Currently, investigators must secure a court order before deducting money from someone’s wages or bank accounts.

Writing in the Sunday Telegraph, Work and Pensions Secretary Liz Kendall said it was “absurd” that investigators’ powers had not been updated in the last 20 years.

Cabinet meeting
Liz Kendall said concerns that the powers would allow ‘snooping’ on people’s bank accounts were ‘nonsense’ (Ben Whitley/PA)

She said: “My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to a snail’s pace when they could be shutting down serious fraud cases.

“Our bill will give them similar powers as HMRC to investigate fraudsters – it’s time we give them the tools they need for the fight.”

As well as the power to deduct money directly from the wages of people who have overclaimed on benefits, the Bill is reported to give investigators the ability to compel information about suspected fraudsters from all private companies, not just banks, utilities and employers.

But it will not extend to the state pension, which Ms Kendall said would not have been “proportionate”.

She said the enhanced information-gathering powers would allow the state to “stop serious fraud in its tracks by making sure people really are who they say they are”.

But the plans have sparked alarm among privacy campaigners, with Big Brother Watch describing them as “Orwellian” and “a major expansion of government power” that threatened the presumption of innocence.

Ms Kendall dismissed claims that the Government would be “snooping” on people’s bank accounts as “nonsense” and insisted there would be human oversight of automated alerts flagging potential fraud.

Similar proposals put forward by the previous government passed the House of Commons but were unable to pass the Lords before Parliament was dissolved for the General Election.

The Government claims fraud and error in the welfare system costs the taxpayer £10 billion a year, while the Chancellor is reported to be considering tax rises and spending cuts worth £40 billion at this month’s Budget in order to avoid a return to austerity.

The expected savings delivered by the Government’s latest proposals amount to an average of £320 million per year.