§ 10.10 p.m.
§ Mr. Roger Sims (Chislehurst)
In drawing attention to the administration of social security and supplementary benefit, I wish to make it clear that it is not my intention to mount an all-out attack on what is colloquially known as the Welfare State. One of the factors which attracted me to Conservative politics was Winston Churchill's statement in Brighton in 1947 when he said:The scheme of society for which we stand is the establishment and maintenaance of a basic minimum standard of life and labour below which a man or woman of good will, however old and weak, will not be allowed to fall".I am asking whether the system which seeks to implement this philosophy is administered as effectively or efficiently as it could or should be. The cost of social security and supplementary benefits is running at about £134 million per week. That is the sum we are talking about.
A small proportion of that amount is devoted to administration. The bulk of it is paid in benefits. These benefits provide comfort and security for the retired, sick and the unemployed. But there is no doubt that there are abuses of the system. Some of them hit the headlines, but very many of them do not.
These abuses not only create general resentment against the whole scheme, but cast a cloud over the genuine recipients of benefits. Strong feelings are caused, for example, when benefits are paid to people only recently settled in this country. They often receive more than those in receipt of benefits who may have been contributing for them throughout their lives. There is a suspicion that the young and able-bodied are simply using the system. Those suspicions are confirmed when one finds that there are many apparently fit and able-bodied men and women attending pop festivals at the expense of social security.
Most hon. Members will have heard stories of the so-called unemployed doing odd jobs and getting a substantial income whilst collecting unemployment benefit and apparently living in a relatively affluent style. There are instances of 1784 very large benefits being enjoyed by other people. For example, publicity has been given to the man with 13 children and receiving no less than £102 a week, and the man with 10 children and receiving benefits of £67 a week.
This sort of thing is objectionable to the ordinary taxpayer. It is offensive to those in our society who feel that they are inadequately assisted by the social security system—the disabled, the mentally ill, epileptics, the blind, the deaf, and, not least, the war widows, who were discussed in the House earlier this evening.
It was only the rules of order that precluded me from supporting my right hon. Friend the Member for Crosby (Mr. Page) in suggesting that we should give far greater recognition to our war widows, who are appallingly treated compared with war widows in the EEC and Commonwealth countries. In his reply to that debate the Minister showed himself very sympathetic, but he gave no help at all to war widows, who now receive £17 a week. One can well understand what their feelings are when they read the sort of cases that I have just described.
What can be done about this situation? The real answer is to replace the whole system with the tax credits scheme, which my party is advocating and which in due course it intends to implement. Meanwhile, I suggest that the Government should completely overhaul the system. If anomalies and abuses such as I have outlined occur, something must be wrong somewhere. It cannot be beyond the wit of man to devise a scheme which is more just and which will ensure that adequate benefit goes to those who merit it, but that no one receives benefit which is excessive by any standard.
The Government should increase both the quantity and quality of investigation. I can understand the natural objection to officials prying into the private lives of individuals, but if money is being paid by the State—your money, Mr. Deputy Speaker, and mine—it is surely reasonable to ensure that those who receive it are fully entitled to it. Spot checks revealed that in over 40 per cent. of suspicious cases there had been overpayments. If there were more investigators, it is almost certain that more such cases could be revealed.
1785 I am not advocating increased public expenditure. Previous experience suggests that investigators pay for themselves. I hesitate to use the words "disgraceful" or "outrageous" about what is, after all, a relatively small proportion of cases in a system which works well in many thousands of instances, but even a small proportion of £134 million a week comes to a very substantial sum.
There are abuses. We know it, the Government know it and the taxpayer knows it. He expects us to do something about it.
§ 10.18 p.m.
§ Lord James Douglas-Hamilton (Edinburgh, West)
I wish to raise a subject covered by Class XII vote 2 on a slightly different theme relating to non-contributory invalidity benefits, attendanace allowances and mobility allowances for blind persons. Recently, I was visited by the Edinburgh branch of the National League of the Blind and Disabled. Its main complaint was that the Government were too concerned with the cause of the disability and not sufficiently concerned with the nature and consequences of the disability.
Apparently, the cause of the disability determines the provision to be made by the Government, not the nature or extent of the blindness. For example, persons who lost their sight in the Armed Forces, or in a industrial accident, or for entirely different causes have exactly the same problems, but there are different levels of aid to help them meet those problems For example, if a young man loses his sight in a factory accident, he receives a pension, but I understand that a child who is born blind does not.
The branch asked me to do everything in my power to ask the Government to launch an investigation into the consequences of blindness so that the effects and not the cause are emphasised. It believes that an investigation of that sort would be an initial step towards recognising that blind and disabled persons should be recategorised and have a disability pension.
It costs a blind person more to live than it does a sighted person. In 1938 blind persons received approximately 50 per cent. of the national average wage. In 1975 they are receiving about 20 per cent., but that figure has been dropping steadily under the pressure of inflation. 1786 They believe that they are not being properly categorised under the present rules. I understand that the United Kingdom and Ireland are the only countries in Europe with no disability pension. Australia gives blind people 10 times as much as we do. It is our hope and their hope that we shall not remain out of line with all EEC countries in this respect.
Blind people face additional expense. When they travel, they often need a guide, and travel may cost twice as much. They need telephones and assistance with writing letters. Blind people may spill things on their clothing and face extra laundry costs. They may have accidents through bumping and burns, and this, too, leads to more expense. There are heating costs: for safety, they need more expensive appliances. There is the difficulty of replacing breakages and doing home repairs, which often makes it necessary for them to call in expert assistance, especially when household services break down.
What impressed me most about the members of the group who came to see me was their tremendous resolve to stand on their own feet and do all they could to overcome their disability. They asked that the Government should be aware of the facts of their situation and the effects of their blindness. If the Minister can assure the House that he will launch an investigation into the effects of blindness, with a view to recategorising these people, and that he will look hard at the problem, that will be a Christmas message of good will to all those concerned.
§ 10.22 p.m.
§ Mr. Robert Boscawen (Wells)
I am glad that my hon. Friend the Member for Chislehurst (Mr. Sims) has brought to the attention of the House the problem of the abuse of social security benefits and has made some suggestions for putting the matter right.
It would have been easy to come to this debate with a lot of statistics showing the most terrible cases of social security benefits being claimed falsely, or showing the hard cases of unfortunate individuals who just fail to meet the criteria for benefits and feel hard done by in comparison with others. It would be easy to raise emotions about this issue, which has caused a great deal of suspicion and 1787 rumour. But we do not have emotional speeches in these debates very often—except when the Minister of State has no case. I hope that this will be a sensible debate. I intend to raise emotions hardly at all.
Everybody knows somebody who knows somebody who knows that his neighbour is falsely claiming benefit. Everybody knows somebody who knows somebody who is desperately in need of some benefit but who, because of some technical reason or because he did not make the necessary contributions, falls through the famous safety net. These rumours remind one of the stories of the Russians coming through England with snow on their boots. Nobody really knew whether they did.
We are living in a sphere of rumour, when a number of people feel betrayed by the Welfare State when they cannot get what they feel to be their due and when others get what they think is too much. It is bad for the system, for the morale of the country and for the incentive of people who want to work hard if they believe that others are slacking, basking in the sun, lying on the safety net, instead of using it for its proper purposes.
The disappointing thing is that we have few facts to go on. The Fisher Report of 1973 is generally agreed not to have been a very thorough investigation of abuse of the social security system. It was rather a superficial report, particularly Chapter 7, which went into the extent of the abuse and relied almost entirely on the cases that came before the courts and the inquiries that were made by the team of special investigators.
Nevertheless, although there is not a great deal of evidence, we are concerned about the findings in that chapter, particularly the inquiries by the special investigators, because of the comparatively large percentage of cases in which abuse was discovered. It is true that the special investigators were looking for trouble. It is true, as this dry report says in a remarkable sentence:They have thus seen themselves as practical fishermen concentrating on the immediate catch rather than as marine scientists establishing by statistical research the probable extent of the shoals to be caught.1788 In other words, they were looking for the obvious sharks and not for the shoal of sprats. If hon. Members study the report, they will realise that there is room for a wide measure of concern about the situation.
I want to quote two sets of figures, first, the 1971 figure for the total number of cases investigated and, secondly, the number of allowances withdrawn or reduced. A total of 22,000 cases were investigated of which in 8,900 benefits were withdrawn or reduced, that is, 40 per cent. That shows a fairly large area of abuse in, admittedly, a small sample taken in one period several years ago.
However, the level of abuse is sufficiently high to cause concern and to lead people to inquire of the Minister of State what his Department is doing to overcome this problem. The right hon. Gentleman owes it to the whole country to be forthcoming on this matter. How much is known of the number of abuses? Do we need more special investigators, not so much to catch people or to snoop on them—no one likes that idea—but to re-establish confidence among ordinary people that the level of abuse is nothing like as high as they believe it to be?
We have all heard rumours of television sets or hi-fi equipment being carried into people's homes the morning after they have drawn supplementary benefit. It is very difficult to catch people, but the whole system suffers if improper practices are allowed to continue and if rumours continue to circulate without the Department taking much more trouble than it has to catch those who abuse the situation.
I hope that the right hon. Gentleman will reply in the spirit that I have endeavoured to bring to this debate. I want to improve the system. We want to remove the wave of cynicism about the whole social security system that exists today. Numbers of people believe that the system is corrupting the nation, encouraging too many young men not to work hard and too many individuals to skive off the State and get everything they can for the minimum of effort. There is a job of education to be done by the Department, and I hope that we shall serve some of that purpose tonight.
§ 10.30 p.m.
§ Mr. Dudley Smith (Warwick and Leamington)
I am sure that those who 1789 have listened to his speech will echo the words of my hon. Friend the Member for Wells (Mr. Boscawen) in calling attention to the abuse and misuse which take place. I do not want to over-exaggerate it. I am glad to see the Minister of State on the Government Front Bench. Although I disagree with him politically, I know that he is a most conscientious man. He will know that this is a thorny problem for his Department and for my old Department, the Department of Employment.
There are many allegations and it is always extremely hard to substantiate them. From my experience at the Department of Employment I know that the investigators, although limited in number, do a good job. They have exposed some bad abuses and there has been valuable local publicity. However, the trend of abuse is on the increase.
This is not a party-political matter. It is of common concern to both major parties. It is very much in the interests of the Government of the day that they should stamp down as hard as they can on any kind of misuse of social security benefit.
We know that there are people who abuse the system and that it is extremely hard to prove it. That is particularly so in regard to unemployment benefit where the man unemployed is "moonlighting"—doing gardening, painting, or other things—and so adding substantially to the income that he receives from the State. I do not criticise the Department necessarily for not pursuing this abuse as strongly as it can. Like my old Department, the Department of Employment, and all Government Departments, it has limited resources. It does the best that it can in the circumstances. Nevertheless, there is this problem, and it is a growing problem. It is absolutely right that it should have been spotlighted tonight.
I want to talk briefly about an allied subject, although I must stress that I have no evidence whatever that this is a case of abuse or misuse. I raised the matter at Question Time the other day, and the right hon. Gentleman was good enough to reply, but, as I had not given him notice, I could not expect a full reply. Even though he may not have the answer tonight, I hope that he will be prepared to look into the matter. It crystallises the 1790 extent of feeling of many members of the community.
There is a particular person in my constituency. I have no intention of mentioning this man's name or address. I have not revealed it, because I have had consultations with this constituent over a period of years. His name has been revealed by newspapers and on television, but until now I have never mentioned it in any of the interviews that I have given, or in any comment in the House.
This constituent is an immigrant. He has lived in this country for about seven years. As the Minister will know from recent publicity, this man receives £102 a week tax free in social security benefits. He is in his early or middle forties. He has 12 children—which is unusual, I admit. None the less, he is entitled, as far as I can gather, to the stipend which reaches him. But this has caused the most tremendous affront to hundreds of people in my constituency and to thousands of others.
These are people who are not just jealous. They work hard and, within the limits of their ability, some probably can earn only £25, £30 or £40 a week. They are people who strive hard to maintain a good standard of living and who do the best they can by the country of which they are citizens. They are people on low earnings. They are pensioners who have no income other than the State pension and perhaps some extra social security benefit. They are proud people who wish constantly to pay their way and not get into debt. They are sick if they find their electricity bill or the rates rising, and they come to me or to other right hon. and hon. Members to ask for guidance.
These are the people who write saying "Goodness gracious: here we are and the Government have not given us our extra £10 this year."—I do not criticise the Government necessarily for that—"We have had three rises in the pension, but the rising cost of living always eats its way into it. We have only so much money. Christmas is coming. In the New Year prices will carry on rising. But we read about one person who gets over £100 a week net in cash."
These are the people concerned, together with those who may be entitled to supplementary benefit but who find that 1791 they are marginal cases and who argue the matter out with their social security authorities and who perhaps come to their Members of Parliament. Sometimes they are lucky and find that their claim is allowed; sometimes they are unlucky and it is disallowed. But, judged by the kind of standards the Minister and hon. Members on both sides apply, they will generally be regarded as having a fairly small income, as people who are up against it.
Because of this case, which has been highlighted by other people, there is reason to look into the rules and regulations governing the whole of our social security provisions. Unless we look into them, there is a great danger that the provisions will be made a mockery. More and more people, whichever party is in power, will say "This is wrong and immoral. We cannot go on like this." I hope that the Minister will examine the case, apart from any others, to make sure that nothing is wrong. I hope that he will determine that no man or woman should be entitled, through illness, through having too many children, or through other circumstances, to draw more than £100 a week in cash.
The man concerned has a wife and 12 children. I understand that a 13th child is on the way. His income is made up of invalidity benefit for him of £16.10 a week; benefit for his wife, £7.90; benefit for the first child, £6.50; and benefit for 11 children at £5 a week, making £55; and family allowances of £16.50. That is a total of £102.
This gentleman, whom I have met many times, is not satisfied with that sum. He applies for free school meals in the autumn, but his application was rejected by Warwickshire County Council, probably rightly, on the ground that his income was too high. I believe that the Minister and I would have had the same response if we had applied.
I understand that he also rejects any social work intervention from the Leamington office of the Warwickshire County Council social services department. The Warwickshire County Council gave the former Leamington Borough Council the mortgage guarantee of this man's house in October 1970, and the district council is now responsible. The arrears on the house stand at £441.56, if 1792 the Press is to be believed, and the gentleman concerned is asking the county council to pay off those arrears.
With great respect to both Front Benches, this is cloud-cuckoo-land. I do not feel unsympathetic to this individual, an immigrant, who is probably one of the deprived people of our nation. He needs looking after, but not in a way that will exacerbate the situation and make so many others, who are trying to live within their means, sour about the State system. A prime principle with the State system should be that it is fair and that all people are receiving their dues.
This is no criticism of the Minister, because it is not his fault, but sometimes when one writes to the Department of Health and Social Security or the Department of Employment, the reply is "This is not really for us. We are passing this over to the other Department." These benefits go right across the board and it is important that the appropriate Departments should get together.
I do not say anything against this individual and his right under the rules as they stand to draw the sum that has been mentioned, but I ask the Minister of State, in the interests of all my constituents and in the interests of everyone in the country, to say that there should be an independant medical examination, if one has not already taken place.
There seems to be some dubiety as to whether this man is entitled to the payments that he has been receiving. He has been unemployed for six or seven years and, as far as I know, he is able and mobile. However, there seems to be some dichotomy of view between the various medical people. I hope that the Minister of State will ensure that this man is properly medically examined. If it turns out that he has an entitlement, let him receive his dues.
I urge upon the right hon. Gentleman that his Department considers the whole subject of social security benefits and all the various parts that make up the whole. I believe that for the good name of Parliament and of Government the time has come for a searching survey of the kind of help we need to give to people in distress.
I appreciate that these matters are difficult. I know that a man faces extreme difficulties if he is unable to work through 1793 disablement and has a large family and many commitments. Very few of us do not meet cases where those concerned should not receive more money, but there are special cases which arise from time to time and which require special consideration. There are the scroungers and the moonlighters who cheat the system and there are those who operate under the rules as they exist and who get a prince's ransom compared with those who are working. There are others who do not receive their full entitlement.
In all the circumstances, I hope that the right hon. Gentleman will be able to tell us that he is prepared, through his Department, to have a new inquiry into the whole subject of social security benefits so that we are not long in a position in which certain individuals are spotlighted as receiving vast sums which exacerbate the current difficulties and make hundreds and thousands of people discontented. We recognise that social benefits are desirable. That is a view to which both sides of the House subscribe.
§ 10.43 p.m.
§ Mr. Peter Bottomley (Woolwich, West)
I am glad that I am not sitting on the Government Front Bench with the task of dealing with this case. All of us would recognise that it is an unusual case requiring special attention. It is not an example of the sort of person who normally receives social security benefits. The more often that is stated, the easier it will be to establish that only a small number of people are involved in cases of maladministration or fraud.
I think that there has been a change of attitude to social security benefits since the reforms of about nine or 10 years ago. Part of that change stems from the greater number of people who now receive social security benefits and supplementary benefits.
In an earlier debate, reference was made to some of the worst bottlenecks in the United Kingdom. I have to contend with one of the worst when I visit my constituency DHSS office. Perhaps the Minister of State will help in getting the A2 Rochester Way through the middle of Eltham by having some conversations with his colleagues. I should then find it much easier to get to the local office.
§ Mr. Bottomley
The difficulty is that there are too many people on means-tested benefits. The only answer is to have a Beveridge Plan. We have proved that we are not capable of dealing with the five areas of want as the system has developed.
Secondly, it is obvious that the new plan must contain the essential elements of the tax credit scheme.
§ The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)
The hon. Gentleman and I are at one in believing that there are too many means tests and too many people on means-tested benefits. However, it is a delusion to believe that we can drastically and overnight reduce the number of people on means-tested benefits simply on the basis of cost. The hon. Gentleman will recognise that the social security pensions legislation will have the effect over a period of years of reducing the number of retirement pensioners on supplementary benefits.
The difficulty is that to introduce the type of tax credit scheme referred to earlier would mean a figure in public expenditure terms of well in excess of £2,000 million a year. Therefore, we can agree on the hon. Gentleman's proposition, but we should not assume that it is an easy or cheap matter, or something that can be achieved overnight, to bring about the kind of reduction in their numbers that both the hon. Gentleman and I agree is desirable in society.
§ Mr. Bottomley
I assume that that is not the Minister of State's last word on the subject and that he will be replying to the debate a little later.
The Minister has outlined—and I am grateful for his intervention—one of the two major areas that put so many people on social security. The first involves those with dependants—families and children—and it is a clear group for which Beveridge would have created a special benefit. We have debated Finer on earlier occasions, and I hope that we shall do so again. It is one group that should not be dealt with by conventional means-tested benefits. There should be a floor for one-parent families 1795 above which one would top up in necessary cases.
The second group the Minister must have in mind is retired people. It is not just through tax credits that we should help to reduce the number of retired people on supplementary benefit, or through allowances or other forms of social security. We should also be able to help them by allowing more people to pay for their housing costs during their working lives.
One important reason why so many retired people need social security benefits lies in the fact that they have to meet housing costs. Owner-occupiers should be encouraged to meet their housing costs in the earlier years of their lives. This would make a significant difference to the number on social security. It should make it easier to detect abuse, and it should make administration simpler. Therefore, I repeat that it is not just a question of tax credit assistance.
We should be able to look at these matters in the round and to identify these groups. We should not seek to deal with the problem by making available more and more public funds, but we should make it possible for more people to make themselves better off by paying for things in the years when they can afford them.
One crucial factor is to reduce the level, frequency and incidence of high inflation rates. I am trying to look at the situation from my own point of view at the age of 31 and how I shall view the situation in 40 years' time. Provided that I do not retire from this House too soon, I hope to put by something for the years in my life when I shall be retired. We must also ask what will be the effect on this situation of an inflation rate of 25 or 30 per cent. If we can maintain the value of money across the generations, obviously many fewer people will fall into categories that need help.
We are often told that people are poorer now than they were in earlier periods. Certainly there are more people drawing supplementary benefits and on social security. However, I find it curious that when the rates of benefit are increased, the allocation rates suddenly rise, and one then sees the number of the 1796 poor increase by 30 per cent. But surely we in this House are wise to that consideration. When the needs allowances rise, it does not mean that there are more poor people: it means that we are giving more help to the same people.
An example cited earlier in the debate shows the disincentive for people with large families to work. A father at work gets no financial help in respect of the first child and £1.50 for each subsequent child. The disparity between what people at work automatically receive for their children and what is received automatically, after application, by those not at work is far too great.
If the Minister of State's wife were at work, he and she could receive an extra £12 a week for two people under the Government's pay policy. But if the Minister had a brother, with a wife and two children, that family could receive only £6 a week for four people. So one sees the transfer of resources away from those people with family responsibilities.
This is seen at its worst now, but it has been going on for years and until there is a widespread recognition of this fact in the House and the country and by the Chancellor of the Exchequer when he is cooking up his Budget, the situation will not get any better and the number of people on social security will remain high.
The larger the number of people that DHSS offices have to deal with, the larger the number of frauds and mistakes. The incentive to work and to take a family above the levels of social security is crucial. The Government could do much more to resolve the present situation. There are too many means tests and they often do not reach those in greatest need.
The economic situation is putting more of the less able people off the list of those who have jobs and on to the list of those who do not. The number of people on social security is similar to the number of unemployed. Many people are receiving benefits when they should not be getting them and many people are counted as unemployed when they should not be. But there are many more people who are not receiving the benefits to which they are entitled and many potential workers who do not feature in the unemployment lists.
The European Parliament Working Document 382/75 is a motion for resolution tabled by my hon. Friend the 1797 Member for Kensington (Sir B. Rhys Williams) concerning a Community social security system. I believe that this idea is worth while and could form part of a new Beveridge Plan. Can the Minister assure us that, if the Government consider it to be worth while, they will support it?
Until we get automatic incentives for people to get out of the social security system and automatic benefits for those who need them, we shall have a system that provides too many opportunities for fraud by a significant number of people—even though it is small in relation to the total number of recipients—and that creates so much distress and makes the lives of so many people miserable.
§ 10.55 p.m.
§ Mr. Nicholas Winterton (Macclesfield)
I hope that my hon. Friend the Member for Woolwich, West (Mr. Bottomley) will forgive me if I do not follow his argument. I respect his knowledge of the subject and the great care he has taken in studying so many aspects of social security. I certainly shall not follow him down the path to motherhood, save to declare an interest in three wonderful children.
This is a fascinating debate, and it is a pity that more hon. Members are not here to participate. The case referred to by my hon. Friend the Member for War, wick and Leamington (Mr. Smith) filled my postbag. Many indignant people asked me how it was possible for a person to draw £102 a week of taxpayers' money and to go on doing so week after week Representing as I do a basically low-wage area, I share the frustration and dissatisfaction that was expressed by many of my constituents.
I have also received letters from Merseyside, because I have spoken out on this subject. That brings me to another case that hit the headlines, a case in Merseyside concerning an Irish citizen. How is it possible for persons from the Republic of Ireland to receive social security payments virtually from the moment they arrive in this country, at the expense of our hard-pressed taxpayers? Those people have paid not one national insurance contribution or a penny in tax. Yet when they arrive here, they are housed, often as priority cases, and go 1798 straight on to the top level of social security or supplementary benefit. The people of this country, who are among the most generous, just and reasonable in the world, need an explanation for this abuse of the social security system.
I accept that the number of people who abuse the system is small in comparison with the number who are entitled to benefit. Our system is basically sound and progressive. No hon. Member on either side of the House does not believe that assistance should be available to anyone who genuinely needs it. Our system is the envy of many countries, but it is abused by too many people. If 1 per cent. of all those who draw social security benefits abuse the system, that rate of abuse is far too high.
I have received 50 or 60 letters about the case mentioned by my hon. Friend the Member for Warwick and Leamington. I have also received many letters about the citizen from the Republic of Ireland who draws not £102 but £67 plus a week. Those figures do not include other benefits that are received. School meals, for instance, are not included.
Perhaps I should declare an interest as an ex-member of Warwickshire County Council. I fully support the decision of the council not to grant free school meals to the family concerned. At least the Warwickshire ratepayers can be assured that the county stands behind them in wanting to ensure that unnecessary expenditure is not incurred.
The Minister is known for his great humanity and for the great interest which he takes in this subject. Will he tell us how people are entitled to come to this country and to bleed the British taxpayers dry? That is what is happening in too many cases. It is a bad state of affairs and it is spoiling what is, in the main, an exceptional system of benefit to help those who genuinely need help.
I shall fight as hard as any Labour Member to ensure that my constituents get the benefits they deserve. It is a pity that more hon. Members have not participated in this debate, because this is an area of government where, with a little more thought and determination, a great many abuses which take place today could be rooted out. The system would then receive better and more wholehearted support from the British people, who are 1799 paying the money to enable benefits to be provided.
§ 11.0 p.m.
§ Mr. Kenneth Clarke (Rushcliffe)
I share my hon. Friend's concern about the fraud and abuse of the social security system to which they have drawn attention. I believe that the concern shown by all hon. Members who have taken part in the debate, from my hon. Friend the Member for Chislehurst (Mr. Sims) to my hon. Friend the Member for Macclesfield (Mr. Winterton), need in no way be interpreted as any hostility on their part to our welfare system. We are primarily motivated by a desire to improve the system. As my hon. Friend the Member for Woolwich, West (Mr. Bottomley) and other hon. Members reminded us, the primary purpose and role of our system is to alleviate the genuine poverty and hardship which is suffered, and to ensure that beneficiaries receive help to which they are entitled.
The national insurance system has basically a genuine insurance function. Our working people pay contributions throughout their lives in order to protect themselves against the risk of unemployment or temporary difficulty. They are fully entitled to draw those insurance benefits when the time arises.
As my hon. Friend the Member for Wells (Mr. Boscawen) mentioned, one of the difficulties is that sometimes genuine poverty is missed by our present system, or the complicated rules which we have about national insurance mean that a failure of contribution records deprives a deserving case of help. Therefore, we must bear in mind that under our present system some people do not receive the money which they should receive.
Some of the errors of the system deprive genuine people of assistance. Estimates vary about the amount of human error made in paying supplementary benefit, but it is normally calculated that between about 8 per cent. and 10 per cent. of supplementary benefit payments are made inaccurately, and that must include some under-payment of benefit to some people as well as overpayment to others. However, we are all agreed that sometimes—even now—money does not go to those who genuinely need and deserve it. What makes it an 1800 even greater scandal is that at the same time considerable sums of money are going to those who do not deserve it and who are getting it either by fraud or mistake.
I believe that a great deal of money is going out of the system by fraud, abuse or rather peculiar payments. I know that one is not meant to say that there is a great deal of abuse because there is a fear among those who have a genuine concern for our welfare system that the public are frightened by that suggestion into believing that our welfare system has failures. That helps to put a stigma on the genuine claimants of benefit by implying that a large number of them are fraudulent.
In order to protect the worthy cases, it is usual to insist that only a tiny fringe of claimants are involved in fraud and abuse. I am not sure that we can maintain that view as complacently as we sometimes do. The public do not believe it and they are quite insistent that there is a great deal of fraud and abuse. Many members of the public one meets know perfectly well that there is a great deal of fraud and abuse.
The fact that people believe it takes place tends, at the moment, to put a stigma on genuine claimants. Often genuine claimants have almost a feeling of guilt when they have to apply for supplementary benefits, unemployment benefit, or the other benefit to which they are entitled. We could help the genuine claimants and take the stigma from them if only we could reassure the public that we were actively chasing and reducing the number abusing the system. In that way the public will be reassured once more that their money is going where they are perfectly prepared to see it go.
My hon. Friend the Member for Wells said that there was a regrettable lack of information. Therefore, I must accept that limitation on the statistics on which I base my assertion that there is a great deal of fraud and abuse. I base my assertion not only on public belief, which may be based on rumour, but on the fact that, although we have limited resources being devoted to detection, where detection goes on it is highly successful. When we have "fraud drives" carried out by special investigators, 40 per cent. of the suspicious cases into 1801 which they look—cases which hard-pressed counter staff have not had the time to check—prove to be cases of over-payment needing correction. The high success rate of detection, where it goes on, indicates that if we had detection on a wider scale and more resources devoted to it we should uncover more fraud than we are aware of.
What also impresses me is that the fraud which is uncovered is often easy, straightforward abuse carried out with naive simplicity by claimants who have managed to get away with it because no one has had time—officials are trying to help the genuinely needy—to get around to catching them. The fact that a lot of fraud is easy and is not carried out with any great sophistication and yet escapes detection for a long time indicates to me that a great deal of abuse is going on. If so, we must endeavour to reassure the public about this matter. The public attitude is that they are prepared to pay for genuine welfare, but they are outraged by cases of fraud.
We have already heard about the gentleman in Warwick who is getting £102 a week. Mr. Patrick Keane, of Liverpool, has also graphically described his life style to the newspapers. The News of the World—that great journal of our times—has on this occasion performed a valuable service by devoting a lot of effort recently to a series of articles which it describes as discovering "the scrounger of the week". We must give credit to the News of the World for devoting some of its resources to seeking out fraud and abuse. It has discovered spectacular and blatant cases of abuse. Its readers have every right to be outraged when they read of such cases.
These cases of abuse are an affront to people who work and pay taxation and national insurance contributions to assist those whom the News of the World is discovering and interviewing. Such cases are also an affront to the needy who look to our welfare system for help. I refer to war widows, to whom reference was made earlier by my right hon. Friend the Member for Crosby (Mr. Page), to the disabled and to others who receive only very modest welfare help.
The Minister must get down to the brass tacks of what can be done about this problem. He must tighten up the system and reassure the public that the 1802 scroungers are being caught and that the money is being paid to genuinely needy people for whom we all have sympathy.
There are two distinct categories of case between which we must begin to distinguish. The first is the cheat—the claimant who, by criminal fraud, gets more money than he would be entitled to receive if he were not breaking the rules. The second category—my hon. Friend the Member for Warwick and Leamington (Mr. Smith) has a classic example in his constituency—concerns the honest claimant who is getting money to which he is entitled and who is not breaking any law, but where the system is mad. This is where more money is made available to a particular category through the social security system than the unfortunate claimant could conceivably get by working and trying to provide for himself.
My hon. Friend the Member for Woolwich, West said that the disincentive was overwhelming and that the outrage to members of the public who could not earn that amount of tax-free money by honest endeavour was considerable. The main problem with persons in the cheating category—the straightforward criminal case which results in a slightly increased number of prosecutions each year—is detection. I hope that the Minister can reassure us about that. It is a question of putting more effort, not particularly in terms of public expenditure, into the investigation of cases of abuse.
Following the previous Government's commissioning of the Fisher Report, there has been a steady increase in the number of special investigators employed by the Department. In answer to a Question, the Minister said that there were now 381 special investigators. In reply to a supplementary question of mine, when I urged that the number should be doubled, he said that there were public expenditure implications to be considered. There is no public expenditure involved. A reply to a question on 1st December revealed that special investigators saved money. The cost of investigation is a little less than half the amount saved. Will the Government therefore make a target of doubling the number of investigators? I recognise the training problems, but could this be the target?
There are problems with the work-shy who have no intention of working and 1803 who are content to rely on the system. I accept that most of the long-term unemployed are a social problem because of their inadequacy and deserving of help not stricture and that the genuinely idle are a tiny fringe minority. One must also be very careful, when there is mounting and continuing genuine unemployment, that the large numbers of decent hard-working people receiving unemployment benefit at the moment are not suddenly harassed.
What are employment review officers doing to try to catch the limited number of work-shy people? Are they stepping up their work and are they calling in for interview an increased number of dubious claimants who seem to have been unemployed for a long time? It has been found that about 40 per cent. of those called for interview stop drawing supplementary benefit either before their interview or shortly afterwards. To get on to them seems to be enough. Can we therefore have more interviews?
Changes in employment policy, the setting up of the new Employment Services Agency, for instance, may have created additional difficulties. Fortunately, the old Labour Exchanges have gone, but I have the feeling that our new agencies are a little more reluctant to send difficult customers to an employer, because they feel that that might give them a bad reputation and they prefer to send their better clients to a potential employer. Therefore, the pressure on the work-shy might have been reduced.
§ Mr. Dudley Smith
If a man who is not too advanced in years has been unemployed for several years and is not bedridden or obviously disabled, should there not be an independent medical review of that person's case?
§ Mr. Clarke
There should be a medical review. There is power to call for one, but the number of reviews remains static and there is an argument for increasing them. The employment review officers should also use their skill to find jobs and talk to the man about why he has not managed to get a job. But there are instances where a man says that the job offered to him is not suitable, not on the right bus route, or that he cannot stand the hours, and the Department should be less reluctant to use its powers to stop benefit in these instances.
§ Mr. O'Malley
The hours in the House are not always very good. I am not clear what the hon. Member for Warwick and Leamington (Mr. Smith) is suggesting. Where there is an invalidity pensioner or a man who has not been in work for a long period, he can be asked to appear periodically before the medical officer of the Department. It is not clear whether the hon. Members for Rushcliffe (Mr. Clarke) and for Warwick and Leamington are asking for something different, but perhaps they are overlooking that this kind of examination takes place.
§ Mr. Clarke
I was agreeing that it happens—that was my response before—but it is done in only about 5,000 cases a year, if I have the right category of claimant. That figure has been static for years: if anything, it has gone down a little. It is difficult to arrange these medical reviews, but there is a case for increasing the present number. I hope that the Minister will consider the prospects for calling more people in.
I return to the methods by which people abuse the system and the detection of them. Undisclosed earnings remain the major problem—the man who is "moonlighting", who has a job that he is not disclosing to those from whom he is drawing benefit. I suspect that at least one of the highly publicised cases recently—the one on Merseyside—was just such a case, considering the man's life style, even compared with the level of benefit he received.
This is one of the most difficult abuses to find. Fisher made many recommendations and indicated the fields of employment where it was easiest to go in for undetected employment over and above the disregard levels. The abolition of insurance cards may have made the whole situation much more difficult. Now that there are no national insurance cards, it is much easier to keep employment secret, not to reveal to the employer, for instance, that benefit is being drawn, and still find it easy to draw benefit while in work. Disregards have only risen to £4 a week—I give the Government some credit for that—but there is still an incentive for people with modest incomes above that level to try to avoid disclosing them.
I couple this with my request that the number of special investigators be 1805 doubled. This is an area where they must step up their inquiries. Even the Fisher Report, with its rather tame conclusions, concluded that there was no doubt that in this area many other cases remained undetected. Although the figures of detection are rising slowly, they are still well below what goes on, particularly in the building industry, where it is so easy to get benefit on the side while working on a building site.
Sick pay is another area of abuse which has long concerned people interested in this field, but where, I accept, it is difficult to do much. But, again, this Government must consider beginning to do something more about it. The figures for claimants of sick pay, particularly for short periods of sickness, continue to increase. It is not that the health of the nation is deteriorating: it is that sick pay is easy to abuse and is widely abused.
The doctor's certificate has proved to be very little protection against abuse; and very few doctors would deny that. Doctors normally hate the process of having to give these certificates. They find it impossible to refuse their own patients. They are in a difficult position when it comes to declining to give a certificate to a man who insists that he will not go to work. It is no adequate protection for public funds at all.
Is there any possibility of a second certificate being required? That would require taking the views of the medical profession into account. The doctors are reluctant to have other doctors dealing with their patients, however much they dislike the certification system, but a fur-their certificate from an independent doctor would be valuable.
But our main defence is the regional medical officer. Would it not be possible to have far more cases of recurrent claims for sickness benefit referred to them? These officers handle the supplementary benefit claims that my hon. Friend spoke about, and they are doing a steady 5,000 a year of those. Could the regional medical officers handle more cases of doubtful claims for sick benefit? As one is dealing with comparatively short periods of sickness, has the system of interview by these officers been speeded up so that they can properly deal with a man who keeps having two or three weeks 1806 off work for comparatively trivial or unexplained reasons?
I have spent more than enough time, perhaps, on the ways in which people abuse the system. I want to seek an assurance that more effort and resources will be put into detection, which is the important point.
The second category of case to which I referred is that where the system itself is mad. More and more, one finds that it is a great disincentive to people, particularly with children, to find work. Large tax-free benefits go to some startling cases. The great problem is the relationship between those untaxed short-term benefits at their generous levels, with particularly generous provision for children, and the low tax thresholds and heavy tax penalties on low earnings.
Unfortunately the family man going to work has to pay tax out with one hand even when he is drawing the family income supplement to raise his earnings with the other. If he increases his earnings, he loses his rates rebate, his rent allowance, and his means-tested benefits. If he is on benefit, it is tax-free. The tax thresholds are now so low that for anyone with a family of any size and possessing a low degree of a skill which might make him valuable on the job market it does not pay to work.
One of the few things said by one of the News of the World "scroungers of the week" which made any sort of logic was the statement of a Mr. Hallett who was receiving £48.90 for himself and his five children. He said:I wouldn't look at a job that paid less than £50 a week after deductions and without overtime.Others can work for less than the Government will hand out if they like. More fool them. They want their heads examined.On that he is right. Mr. Hallett was an unattractive character in many ways, but if he is getting £50 tax-free from the State, he cannot be criticised for refusing to take a job paying less than £50 a week after deductions. To do so would mean lowering the living standards of his family. After taking into account the costs of getting to work and other costs, he needs to be offered a substantial income before he can even contemplate going to work.
The situation, however, has grown even worse. We have no lower rates 1807 of income tax and everyone goes straight into the standard rate. There are 50,000 people in work who would be worse off when they increase their earnings as for every extra £1 they lose their FIS, rate rebate and rent allowance. But they are only the tip of the iceberg, and, as the Child Poverty Action Group pointed out, the working poor are getting poorer all the time and the system is producing more and more people who find themselves driven into social security where they are paid more than if they stay at work.
The long-term answer is the tax credit scheme. I thought from his intervention a moment ago that the Minister of State was accepting the idea as a long-term aim while saying that it was a bit expensive. We have argued the figures, but figures are debatable. It seems to depend entirely on the level at which the system is established and when it is introduced.
Given that the tax credit system would be administratively difficult to set up, in the meantime the taxation of short-term benefits would be a great improvement and the Minister will no doubt say that it is impossible. But, as that advice has been given year in, year out, I believe that it should be re-examined searchingly.
The overseas claimants keep coming in to cloud the picture. I am anxious not to exaggerate on this score. People get excited when someone from overseas turns out to be one of these cases, even an honest case such as the constituent of my hon. Friend the Member for Warwick and Leamington. There are particular problems here. I do not think that they arise with Commonwealth citizens. It is not possible to show greater dependence on the social security system among them than among the native English population. Strict immigration control prevents them coming in to abuse the system on any scale. The EEC is said to give rise to loopholes, but these people come to look for work and they do not have an unlimited right to our social security system.
The problem arises with the Irish. I tread here with particular care—not just out of deference to the Minister of State's ancestry. This is a difficult time to raise 1808 this problem, because one does not want to start arousing any anti-Irish feeling in this country. The Irish resident community are hard-working and well-established members of the community. They give rise to no more problems than anyone else. But they are in a special category because of the totally free access of Irish citizens to this country.
It goes back to the old treaties, to the Ireland Act 1949, to the common travel area of the Immigration Act 1971. It is militarily impossible and politically undesirable to close the border, and that means completely free access both to this country and to our social security system for Irish citizens. No one wants to start severing good relations with our Irish neighbours and all these arrangements are reciprocal.
However, it raises particular problems in the social security area. An Irish national is the only foreign resident who can come here for the express purpose of getting social security benefits. He or she can legally and honestly move in and, having found somewhere to live, begin to claim social security benefits in full. There is no power whatever to stop that.
In those circumstances it is sometimes remarkable that there are still 3 million residents in Eire. A deserted Irish wife with a large family is probably best advised to raise the boat fare from friends and relatives. Once she has a roof over her head here, she can at once draw supplementary benefit and continue to do so for as long as she likes.
At some stage—perhaps politically this is far from the ideal time, given other political problems in Ireland—we must look again at the basis of free access to and from the Irish Republic and decide whether treating Irish nationals as British subjects for most practical purposes and keeping open free access need necessarily also mean total access to social security on this scale. It is available to no other foreign nationals. I wonder whether the Dublin Government would object to a change in practice here whereby officers could suggest that the fare back home might be offered to a family which looked like arriving and taking up full-time residence. That might dispense with the obligation to pay further social security benefit thereafter.
I could talk about cases of the kind raised by my hon. Friend the Member 1809 for Warwick and Leamington, especially the huge amount given in that case. Although the £102 is outrageous, the figure is misleading. As I understand the situation, the £102 includes family allowances. It is true that the working residents of Warwick and Leamington also receive family allowances, as does this nonworking resident, so that in making comparisons between the two, we have to deduct the family allowance and look at the remaining income.
§ Mr. Dudley Smith
What my hon. Friend says is quite true, but very few of my constituents, who number between 82,000 and 84,000, receive £102 net per week.
§ Mr. Clarke
Just so. Very few constituents, whether they work or not, receive so much in family allowances as this particular gentleman.
We abolished the wage stop, which might have applied in this particular case, because so few cases were involved and because it was causing hardship to some large families. Have we erred too far in the other direction? Consideration should be given to a possible ceiling on benefits in cases of this kind.
§ Mr. Nicholas Winterton
Is it not worth drawing attention to the fact that what the gentleman in Leamington draws in a year is not far short of that which a Member of Parliament gets by way of remuneration? Many people believe that Members of Parliament are paid too much because of the part-time nature of their work. Here is someone who is paid far too much and who does not work at all.
§ Mr. Clarke
I do not know what rate of tax my hon. Friend pays on his parliamentary salary, but most of us are paid substantially less than the gentleman in Leamington in take-home terms.
§ Mr. Clarke
Just so. My hon. Friend will find, on reflection, that he is paid substantially less than that resident of Warwick and Leamington.
We have, quite rightly, abolished the wage stop and we have worthily improved the children's benefits. We now have to examine whether this kind of absurdity 1810 was what we had in mind when we modified the system.
I hope that in his reply the right hon. Gentleman will deal with as many of these points as possible and that he will not react, as people have in the past, to comments about fraud and abuse, and insist that they are over-done, unnecessary and should not be made. I hope that he will not be complacent in dealing with this problem.
We are in no way complacent. We set up the Fisher Committee to inquire into this subject when we were in office. We acted on most of its recommendations. However, we remain dissatisfied with the progress that has been made so far.
The time has come for a drive to be made on fraud and abuse in the welfare system so that the public can be reassured that their national insurance contributions and their taxation are going mainly to worthy recipients.
§ 11.29 p.m.
§ The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)
As a number of those who have spoken tonight have participated with me in debates on social security and pension matters throughout the whole of 1975, and indeed in previous years, I wish them and all other hon. Members now present, including yourself, Mr. Deputy Speaker, a merry Christmas.
My constituency of Rotherham is a steel and coal town where men work in extremely arduous conditions in coal mines, steel works, and heavy engineering. I know that the people in my constituency are willing to pay, through taxation and contributions, for good levels of retirement pensions and of benefit for those who are sick, ill, or chronically disabled and genuinely unable to get employment. They are not prepared to tolerate those who seek to abuse the system, to scrounge, to avoid working for a living, those who prefer to take the soft option.
The hon. Member for Warwick and Leamington (Mr. Smith) said that we were not discussing a party political matter. I have spoken for the Labour Party on social security matters since 1969. I have heard successive Ministers in three Governments—two Labour and one Conservative—describe the difficulties of the Department of Health and 1811 Social Security and the attempts it makes to combat abuses of the system by every possible means.
I think that at the outset I should set out the Government's general attitude on this matter. I have greatly appreciated the manner in which hon. Members have put the problems fairly and impartially. No hon. Member has attempted to make party political capital. We must operate a system which does not deter the honest claimant. We do not want there to be a situation in which people will not claim supplementary benefit because of the way in which the system is administered.
I come from an area where the tales are still rife of officials insisting in the early part of the twentieth century that, for instance, a person who possessed a piano should sell it before he could claim any assistance money. There are long memories in the mining valleys about the operation of means-tested benefits in past decades.
Successive Governments have agreed that means-tested benefits exist as of right: this is built into our social security system. Successive Governments have also been concerned about the problem of take-up. It is still a cause for anxiety that there are substantial numbers of retirement pensioners who are entitled to supplementary benefit—admittedly, in many cases it might be only a small sum—but who prefer not to claim it. As the hon. Member for Woolwich, West (Mr. Bottomley) said, the aim of the Government in the closing decades of the twentieth century should be to push back as fast and as much as possible the area of means-testing.
Not only retirement pensioners but some of the unemployed and other younger people have paid contributions and taxes, and having thus made a contribution to society, resent the fact that their benefits are means tested and that small resources that they have been able to build up must be taken into account at a time when they most need help. It is clearly important that in the operation and administration of the system we take into account the interests of the overwhelming majority of claimants and run the system efficiently, but also humanely and in a manner not calculated to deter people from applying for and receiving their entitlement.
1812 It is also the case that we must deal firmly and effectively with abuse. Abuse discredits the Welfare State. The hon. Member for Chislehurst (Mr. Sims) said that he was not attacking the Welfare State, and that was echoed by other hon. Members. I accept that and subsequent statements in the spirit in which they were made. It is essential to do everything possible to combat and minimise the area of abuse of the social security system because, as I said a moment ago, such abuse brings the Welfare State into disrepute.
If hon. Members were to ask me whether I believe that it is possible and practicable for a system to be administered in such a way that any Minister under any Government could stand at this Dispatch Box and say that abuse had been completely stamped out, I should have to answer that I did not believe that it was possible. I believe that when one is dealing with the large number of claims with which my Department deals weekly, there will always be the tiny minority who will try to abuse the system. That is the cost that has to be accepted of operating the Welfare State.
At the same time, however, one has to ask how we can most effectively minimise abuse of the Welfare State so that it and the system are not discredited, so that we do not have widespread resentment amongst taxpayers. If taxpayers and people who pay contributions into the national insurance system believe that their money is being spent on genuine cases, they will pay, but if they believe that people are getting away with murder within the system, there will be resentment, and if that happens, it becomes infinitely more difficult for any Government to attempt to build up the resources of the social security system to give further help to those who need it most. It is also important to minimise abuse because every pound, or one hundred pounds, or thousand pounds or million pounds distributed to people who should not receive the money means that there are fewer resources available to distribute to those in genuine need.
We have to put this matter into context. We all know that there are tides in this affair when there is a great upsurge of accusations and statements about abuse and scrounging on the social 1813 security system. We are nearing high tide on this matter now. Those who have detailed knowledge of these matters, and Members of Parliament generally, have a responsibility to put the matter into context. That does not mean turning one's back on the problem. It does not mean that one should be complacent. I should be the last person to be complacent about that kind of thing, because I know too well the attitude of my voters. Indeed, a Minister who was complacent about the misuse of public resources would not be fit to stand at the Dispatch Box.
What needs to be said is that the Department deals with about 18 million claimants a week, and about 500,000 new claims a week. I think that there is no argument but that the overwhelming majority of the payments to 8 million retirement pensioners, to the 4½ million families in receipt of family allowances, and payments to 500,000 widows are genuine payments to people who are properly receiving their entitlement.
The hon. Member for Rushcliffe (Mr. Clarke) mentioned sickness benefit. What is noticeable is that in the social security systems of the developed world, and particularly of Western Europe, there has been an upward movement in the number of short-term claims for sickness benefit per thousand of the population in recent years. Perhaps one of the reasons for that is that in the past certainly some people went to work when they were not fit to go to work but did so because of the economic pressures of earlier times, which were far more difficult than we have seen in the 'fifties and 'sixties and, so far, in the 'seventies. We must take that into account. Nevertheless, I am as concerned as the hon. Gentleman about abuse of sickness benefit.
We all know the problems for local offices when fortnight holiday periods come, and we know the controls which need to be operated by these offices, which are now far tighter than ever before. I understand the hon. Gentleman's point. I have a note of the other points that he has raised, too.
On the four main points, I am very pleased to have his views in some detail on the subject. The hon. Gentleman will recall that I wrote to him on 16th December 1974 and on 4th August 1975. I 1814 quote from my letter to him of 16th December last year:I attach great importance to the prevention of fraud and abuse, and we should be happy to consider any specific suggestions for improving the Department's present performance. Or, if you would like to discuss the subject I should be very willing to arrange it.That offer was made in December 1974. It stands this evening. I am pleased that this evening the hon. Gentleman has been able to put to me, after my invitations of a year ago and about six months ago, his considered views on the situation. I say that kindly; it is Christmas time.
In 1974 my Department uncovered more fraud than ever before and prosecuted more cases than ever before. With the Department of Employment, we established 40,000 cases of fraud and there were 13,700 prosecutions—nearly twice the number of prosecutions that occurred in 1970—and we secured convictions in about 98 per cent. of those cases.
I thought that the hon. Member for Wells (Mr. Boscawen) was unfair to the Department—although not to me—in one respect. I do not make a lot of it. He said that he hoped that we would take more trouble on these matters than we had in the past. Perhaps I may say to him—defending his own Government in doing so—that I believe that the previous Conservative Secretary of State, the right hon. Member for Leeds, North-East (Sir K. Joseph), took very seriously indeed the problems of abuse within the system. The hon. Gentleman would be taken to be criticising his own previous Secretary of State if his remarks were quoted out of context. Perhaps on reflection the hon. Gentleman will think that they were not reflecting the situation accurately and were not fair to the previous Secretary of State.
However, certainly we are building up our resources in the Department in order to counter and deal with fraud and abuse. This has taken place under successive Governments. But there is one important development that has taken place within the last six months and to which I attribute considerable importance. During the course of this year, we have set up a specialist branch at headquarters to tackle the problem of social security fraud and abuse in a unified and systematic way by looking at every aspect of the Department's work.
1815 I met the principal officials connected with that specialist branch within a brief period of its being set up. I was very impressed, indeed, by their work and I immediately said that their numbers should be doubled. Already, within the space of a few months, they have proved their worth. What they are doing is, for example, looking at local office and regional performance before making comparisons between the performance on fraud and abuse detection as between local offices and as between regions.
The officials concerned are adopting the different techniques of examination, including fraud drives, to which the hon. Member for Rushcliffe referred, and the use of special investigators. They are co-operating with the police, and have already secured major successes against organised criminals. In one case alone they helped the police put a group of individuals in gaol for up to seven years. I do not want to say too much about this type of specialist organisation, of which I have high hopes, because there are security problems. I believe that it is an important development within the Department.
During the past year, 162,000 people claiming unemployment benefit were interviewed by the UROs, and about half went off benefit as a result. That process is continuing, although there are inevitable difficulties at a time of high levels of unemployment. As one case among a number has been referred to in particular, I wish to say something about it.
As a Minister, I am properly bound by the rules of confidentiality on the benefits payable in an individual case. This has been accepted by successive Governments. But detailed statements have been made in the Press as a result of open interviews with the people concerned. It is not for me, within the rules of confidentiality, to discuss the details of an individual's claim, but I think that, in view of the public concern generated by such cases, it in no way represents a breach of that confidentiality to mention significant changes in the general circumstances of a claimant, without discussing any personal aspects of the case. I think that the House has a right to expect Ministers to say something on such matters.
In the case of Mr. Patrick Keane—
§ Mr. Dudley Smith
Those of us who have been in office understand the difficulties, but there is great public concern. I deliberately did not mention this man's name and address, but others have revealed it. That is not my fault. Having heard the genuine concern expressed in the House tonight, will the Minister look into the case in some detail? If he wants further particulars, I shall let him have them. Will he see that, in the public interest, the matter is examined to make sure that the rules are being observed?
§ Mr. O'Malley
I have a standing instruction within the Department that when a case is reported in the national Press, I should have a report on it on the file in front of me as a matter of urgency, because I have a responsibility to examine such cases.
I understand that Mr. Keane has reasonable prospects of employment in the very near future, and that if he is not successful in obtaining that employment, a place in a rehabilitation centre will be available to him by 6th January.
§ Mr. Kenneth Clarke
One does not want to go further in Mr. Patrick Keane's case, but will the Minister confirm that if a claimant refuses a rehabilitation place for no apparent reason, having previously had offers of employment, that would be likely to affect his entitlement to benefit? What powers has the Minister in the event of someone's refusing to take up such a course?
§ Mr. O'Malley
I should make it plain that I do not have those powers. That is a matter for the Supplementary Benefit Commission. I understand that Mr. Keane has said that he is prepared to accept a place in a rehabilitation centre if he is unsuccessful in finding employment by 6th January. I am not discussing individual cases but answering the hon. Gentleman's question in general terms. If a man refused to accept such a place, the Commission has the power to take the case before the appeal tribunal. The tribunal—
§ Mr. John Stonehouse (Walsall, North)
On a point of order, Mr. Speaker. May we know under what authority the public seats have been cleared?
§ Mr. Peter Bottomley
Further to that point of order, Mr. Speaker. Is it that 1817 the public are being moved towards the front row?
§ Mr. Speaker
I am not aware that anything untoward is happening. I shall consider the point that has been made.
§ Mr. O'Malley
We have probably driven them out, Mr. Speaker.
The Commission can take a case to the appeal tribunal and the tribunal has the power to give the instruction that unless the individual accepts a place at a reestablishment centre, his supplementary benefit shall cease to be payable.
Hon. Members will know that there was a considerable increase in the number of special investigators between 1969–75. They carried out 27,000 investigations in 1974. I understand that the principal practical constraint upon the number of special investigators is that we require highly trained people. They are made up entirely of volunteers.
§ Mr. Speaker
Order. I understand that nothing abnormal happened. The rearrangements which took place were for the convenience of those who attend upon our needs.
§ Mr. O'Malley
I shall consider all the detailed points that have been raised on the anatomy of administration.
§ Mr. Kenneth Clarke
I promise that this will be my last intervention.
The right hon. Gentleman knows that we have made a special point about special investigators. Is he saying that there is no ceiling on the number who are employed and that the only restraint is the recruitment of adequate volunteers and their training? When he talks of accepting in principle a doubling of the inspectorate, does the right hon. Gentleman accept that in principle if it proves possible to recruit and train that number of volunteers?
§ Mr. O'Malley
No, I am not saying that. The hon. Gentleman will be aware that within the Civil Service—and this is a matter for the Civil Service Department—there is an establishment that restricts the number of civil servants that we can have in a particular job. There is an agreed establishment within the Government. I am saying that, at the hon. 1818 Gentleman's request, I shall consider the whole question of special investigators.
Reference has been made to special drives. This is a matter on which we must be guided by the specialist branch that we now have at headquarters. We shall be guided as to the most effective ways of using the staff that we have.
I turn to one or two points mentioned by the hon. Member for Warwick and Leamington. One of the problems rests with a tiny number of very large families. This is the difficulty. The amounts of money are high for two reasons. The first relates to the fact that short-term benefits are tax-free. It has been estimated that one would require thousands of extra civil servants to make those short-term benefits subject to tax. Successive Governments have faced this problem, but I assure the hon. Gentleman that I have examined in considerable detail the case to which he referred. If the hon. Gentleman would like to approach me on a constituency basis, I shall be pleased, within the bounds of confidentiality, to discuss the matter with him.
§ Mr. Dudley Smith
I am grateful to the Minister and I know that he will look into the matter with great care. I appreciate what he is doing. I agree with him that the problem lies in a small number of cases, but does he not agree that such cases are an affront to thousands of hardworking people on comparatively low incomes?
§ Mr. O'Malley
I agree with the hon. Gentleman. The problem arises from two causes. The first relates to the non-taxability of short-term benefits. The second relates to the low rate of child or family allowances compared with the situation in some European countries.
§ Mr. Boscawen
I agree with the Minister, but does he not agree with me that it is a matter of presentation? If a large family is receiving £5,000 a year in benefits, that family in this context is equal to three-and-a-half "normal" families. If one divides the total figure by three or three-and-a-half, it appears a little more reasonable?
§ Mr. O'Malley
I understand that point, but I am saying that it was agreed by both major parties that we should abolish the wage stop since it was affecting a tiny 1819 number of individuals and causing an enormous amount of irritation in the administration of the system. I am going no further than saying that these problems arise with only a tiny number of families who have large numbers of children, as in the case of the hon. Gentleman.
§ Mr. Dudley Smith
Since all this is going on the record, I should confess to being the father of three children, not of 12.
§ Mr. O'Malley
I am sorry. I should have referred to the children of the hon. Gentleman's constituent.
We are making detailed inquiries into the other two cases that have received Press coverage. I can tell the House that in one case Mr. McDermott was interviewed on Monday. He denied categorically earning while drawing benefit. He also denied saying what was attributed to him by the News of the World. He has also sought legal advice on the matter. In view of what I have said about confidentiality, I do not think I can refer any further to the case.
I turn to the broader issues. Tax credit was mentioned by the hon. Member for Woolwich, West. If we are to push back areas of means testing, we must be selective. If we are to be selective, we can be selective by means tests or by adopting the group method suggested by the hon. Member. He has suggested one way forward. It is not the only way of furthering social policy, but it is one of the considerations open to us for the future. I have not seen the European Parliament document to which the hon. Member referred. Apparently it was written by the hon. Member for Kensington (Sir B. Rhys Williams) and I suspect it contains his ideas, which we have heard on a number of occasions in the House. However, I shall look at the paper.
The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) spoke movingly and persuasively about the blind. As disability policy has developed within the two major parties during the 1970s, we have been increasingly concerned with a whole range of disabilities which previously received no attention and with the disability itself rather than its causes.
A person who suffers an accident at work can be covered by industrial injury 1820 and compensation schemes while a person who has an accident outside work is in a totally different position. The Pearson Commission has this matter under review and we should await its report before deciding how to move. Conventional thinking in this country on disability benefits, including help for the blind, is evolving slowly.
§ Mr. Nicholas Winterton
Could the Minister say a few words about Irish citizens coming here and claiming social security? This matter has aroused a great deal of interest.
§ Mr. O'Malley
I have no doubt that the hon. Member and I could have a lengthy quarrel on this matter—the only intemperate language in the debate was used by him—but it would not be useful for me to do that. I do not think I should pursue the line which the hon Member for Macclesfield (Mr. Winterton) and, much more cautiously, the hon. Member for Rushcliffe began formulating on relations with Southern Ireland. I am not looking for a confrontation, though I enjoy confrontations as much as anyone else, and I think that the hon. Members should consult their Shadow Cabinet colleagues with responsibility for Northern Ireland and Home Office matters to see where they are going. The hon. Members were moving into very deep waters tonight and enormous consequences could follow. If they want to deal with this subject, they must say how they want the situation changed. I know the attitude of the hon. Member for Macclesfield, but that has never been the attitude of the Conservative Front Bench, whether in office or opposition.
§ Mr. Peter Bottomley
The Republic of Ireland is the only country within the Community that has a worse social provision than we have. I refer the Minister to Document No. 382/75, which deals with the Community social security system. The answer must come from getting the same high social provision throughout the whole European Community, which includes all of Ireland and Great Britain.
§ Mr. O'Malley
It is not true that all European Countries have a much bigger provision than we have. For example, in some parts of Western Europe the provision of health care for the self-employed is inferior.
1821 It would be easy for me to react to the implications of what the hon. Members for Macclesfield and Rushcliffe said about Southern Ireland, but it would not be helpful to do so. By pursuing that I should not be doing the House, the Opposition, or the Irish dimension a service.
I close by thanking the hon. Member for Chislehurst for giving us the opportunity of this debate and for the manner in which he discussed and laid open this subject. I also thank hon. Members for their useful contributions and suggestions. I undertake that all the suggestions made on the administration of the system will be fully considered.
§ Mr. Kenneth Clarke
Before the Minister sits down, may I refer to his observations on the official Opposition policy on Irish citizens? This is a politically difficult time to do something about it, for reasons which go far outside social security policy. Will the Minister explore the possibility of discussions with the Dublin Government—with whom we have a reciprocal agreement on social security—on the possible practice within the treaties and arrangements for dealing with people who travel to this country for the express and only substantial purpose of taking advantage of our social security system? That need not cause problems about the Irish dimension in more significant areas of policy.
§ Mr. O'Malley
If the Opposition, after detailed consideration—not at ten minutes past twelve in the morning—have any proposals or suggestions, they would be better put in writing from the Leader of the Opposition to my right hon. Friend the Prime Minister. I ask the House and the hon. Gentleman to be cautious about dealing with a major subject with serious implications. I note the views which have been expressed, but I should be doing the House and the country a disservice by jumping in and reacting off the cuff to remarks which have been made about the free movement of Southern Irish citizens in and out of this country.