Outgoing Prime Minister Sir Keir Starmer has confirmed a crackdown on three Department for Work and Pensions (DWP) benefits—Universal Credit, Employment Support Allowance (ESA), and Pension Credit—as he steps away from office. The measures target the highest fraud rates among these benefits, introducing tough new consequences including direct deductions from bank accounts for fraudsters and debtors who refuse to pay.
The crackdown was announced on Wednesday, June 24, three days after Starmer resigned as Prime Minister amid a ballooning welfare bill. The new laws, part of the PAFER Act, will initially target bank accounts linked to Universal Credit, Pension Credit, and ESA, with the potential to expand to other benefits in the future.
PAFER Act Powers and Debt Recovery
The DWP explained: 'Other powers under the PAFER Act, which will be operational in future, include the Eligibility Verification Measure, which will allow DWP to require limited data held by banks and financial institutions to help identify incorrect benefit payments, ensuring claimants are paid accurately and allowing errors to be found and resolved sooner.'
This is part of the Government's commitment to savings of £14.6 billion over the next five years from fraud, error, and debt activity, which includes investment to deploy up to 3,000 additional staff, and strengthening our data, analytics and investigative capability.
Impact on Welfare Bill and Succession
The skyrocketing welfare bill will be a top priority for Starmer's successor, with all eyes on Andy Burnham, who becomes the new MP for Makerfield. Chancellor Rachel Reeves said it was clear that Burnham would keep her fiscal rules, describing that as 'a good thing.' Asked if she wanted to be Burnham's chancellor, Reeves said that was a decision for him on Thursday.
Ms Reeves said: 'Those are the choices that the new prime minister, I hope Andy Burnham, will get to make in a few weeks time. I'm not going to pre-empt those. It is his prerogative as prime minister to make those appointments.'
