Ministers have faced questions about whether new data powers could be used to snoop into the bank accounts of state pensioners.

Conservative former minister David Davis claimed that measures aimed at tackling fraud in the benefit system within the Data Protection and Digital Information Bill would allow the state to “put people under surveillance without prior suspicion”.

The Bill seeks to create a new data rights regime for the UK after its exit from the European Union.

But MPs across the Commons raised the alarm about newly introduced proposals, which would allow the Department for Work and Pensions (DWP) to view benefit claimants’ bank accounts for “social security purposes”.

Sir Stephen Timms, the Labour chair of the Work and Pensions Select Committee, suggested its remit would go further, allowing ministers to view the banking details of any state pension recipients, whose payments are administered by the DWP.

Culture minister Sir John Whittingdale told the Commons that it was “not the case the DWP intends to focus on the state pension”.

He added: “It is specifically about means-related benefit claimants, to ensure they are eligible for the benefits they are currently claiming. In doing that it will save the taxpayer a considerable amount of money from the identification and avoidance of fraud.”

But MPs were not convinced, with Mr Davis pleading with the minister to ensure the measure was “more targeted”.

The Haltemprice and Howden MP said: “I think everybody in the House understands the importance of getting it right, we all want to stop the fraud that takes place in the current state system. That being said, this is the only time that I am aware of where the state seeks a right to put people under surveillance without prior suspicion.

“Therefore this has to be restricted very carefully.”

The minister replied: “I share his principled concern that the powers of the state should be limited to those which are absolutely necessary.

“We do believe that those who are in receipt of benefits funded by the taxpayer do have an obligation to meet the terms of those, and this is one way of ensuring that they do so.”

Speaking for the SNP, Patrick Grady said the Bill would grant the DWP powers to “proactively, regularly, and at scale, and on a speculative basis carry out checks on the bank accounts and finances of claimants”.

Labour former minister Sir Stephen meanwhile said: “This measure will give the Government the right to inspect the bank account of anyone who claims a state pension.

“So all of us actually, every single one of us, this measure will give the Government the right to look into our bank account at some point during our lives without suspecting that we have ever done anything wrong, without telling us that they are doing it.”

He added: “What on earth would the Government need to do that for? The entitlement to the state pension is not based on income, or savings, or anything like that, so why would the Government ever wish to do that?”

Sir Stephen suggested that ministers had attempted to rush through the new measures “without an opportunity for proper scrutiny” in order to avoid a revolt from Tory MPs who may be unhappy about the proposals.

“It is very difficult to understand why it is being done in this way otherwise,” he added.

This measure will give the Government the right to look into our bank account at some point during our lives without suspecting that we have ever done anything wrong

Sir Stephen Timms

Labour frontbencher Sir Chris Bryant had attempted to see the Bill returned to a committee for further scrutiny due to concerns about a large number of additions the Government had made to it.

But the Commons rejected this 275 to 209, majority 66.

Elsewhere in the debate, shadow culture minister Sir Chris said he was worried the Government was trying to introduce changes that would allow them to “mine people’s information for votes”.

“The Bill introduces several changes to electoral practices under the guise of what they call democratic engagement,” he said, adding it would allow the Secretary of State to “make any future exemptions and changes to direct marketing rules for the very unspecified purposes of democratic engagement.”

Senior Tory Mr Davis meanwhile said he wanted to see a protected right for people to use non-digital verification services.

The Bill will introduce a verification system to make sure digital ID documents can be used with the same confidence as paper copies, but Mr Davis said it was important people could still choose to use physical copies.

He told the Commons: “What matters is that people have a choice and are not coerced into providing their data through digital means for whatever reason, whether it’s concern about their privacy or other reasons.”

The Bill later received a third reading by 269 votes to 31, majority 238, and will undergo further scrutiny in the House of Lords at a later date.