The Chancellor has announced new measures to tackle benefit fraud in her Budget, including giving the Department for Work and Pensions (DWP) direct access to bank accounts.

Chancellor Rachel Reeves said she will crack down on fraud in the UK’s welfare system, as part of reforms to ensure welfare spending is “more sustainable”.

She told the Commons: “Today, I am also taking three steps to ensure that welfare spending is more sustainable.

“First, we inherited the last government’s plans to reform the work capability assessment. We will deliver those savings as part of fundamental reforms to the health and disability benefits system that the Work and Pensions Secretary (Liz Kendall) will bring forward.

“Second, I can today announce a crackdown on fraud in our welfare system often the work of criminal gangs. We will expand DWP’s (Department of Work and Pensions) counter-fraud teams using innovative new methods to prevent illegal activity and provide new legal powers to crackdown on fraudsters, including direct access to bank accounts to recover debt. This package saves £4.3 billion a year by the end of the forecast.

“Third, the Government will shortly be publishing the “Get Britain Working” White Paper tackling the root causes of inactivity with an integrated approach across health, education and welfare.

“And we will provide £240 million for 16 new trailblazer projects targeted at those who are economically inactive and most at risk of being out of education, employment or training to get people into work and reduce the benefits bill.”

Addressing the Fraud, Error and Debt Bill last month, the DWP said: “Staff will be trained to the highest standards on the appropriate use of any new powers, and we will introduce new oversight and reporting mechanisms, to monitor these new powers. DWP will not have access to people’s bank accounts and will not share their personal information with third parties.

“This legislation delivers on the government’s manifesto commitment to safeguard taxpayers’ money and demonstrates the government’s commitment to not tolerate fraud, error or waste anywhere in public services, including the social security system.”

However, campaigners have previously criticised the plans, saying they “deprive millions of the presumption of innocence” and add to the “criminalisation” of benefit claimants.

Silkie Carlo, of Big Brother Watch, said: “Everyone wants fraud to be dealt with, and the government already has strong powers to investigate the bank statements of suspects.

“But to force banks to constantly spy on benefits recipients without suspicion means that not only millions of disabled people, pensioners and carers will be actively spied on but the whole population’s bank accounts are likely to be monitored for no good reason.

 “A financial snooper’s charter targeted to automate suspicion of our country’s poorest is intrusive, unjustified and risks Horizon-style injustice on a mass scale.”