The Government has constructed the entire WCA/ESA process around the basic premise that generally speaking, anyone claiming benefits cannot be completely trusted, so they can take no direct part in it and will simply have to live with the outcome that is decided by people who can be “trusted”. Essentially they are guilty until proven innocent. If they have nothing to hide, they have nothing to fear.
Then there is the question of tax returns and tax avoidance, where the same principles must be applied. The perpetrators cannot of course be trusted to follow the letter let alone the spirit of the law. They too must be treated as guilty until proven innocent and likewise if they have nothing to hide, they have nothing to fear. If new legislation goes too far initially and penalised perfectly honest people, tough luck - they will be able to appeal but it might take a year or so to resolve.
A sad reflection on society perhaps, but at least even-handed. If you cannot hide behind privacy laws with one, you cannot with the other. We are after all in it together.