Fraudulent Claims (Hansard, 26 October 1976)

§ 10. Mrs. Knight
asked the Secretary of State for Social Services how many cases of social security fraud were investigated in 1971 and in 1975, respectively.

§ Mr. Orme
No record is kept of the number of investigations of suspected fraud, but the number of cases of fraud discovered was about 39,000 in 1971 and about 46,000 in 1975.

§ Mrs. Knight
Is the Minister aware that thousands of people at present receiving unemployment benefit are actually working? Is he aware of a recent case in which a builder applied to the local employment exchange for plasterers and was given 10 names, eight of whom already worked for him? Will the Minister make unemployment benefit conditional on claimaints regularly signing a form, on receipt of benefit, to the effect that they have not received any income in the period in question? Would not this act as a deterrent to fraudulent claims?

§ Mr. Orme
Blanket assertions like these do a great deal of harm. [HON. MEMBERS: "Hear, hear."] The hon. Lady does not talk about the millions of people who justifiably claim benefits and who are entitled to them. In cases where people are found to be defrauding the 264 system, action is taken, and the proof is there for all to see. We pay £10 billion a year in benefits to people. Last year we know that £2.6 million of these claims was fraudulent by the cases we took through the courts. I would like to see the hon. Lady and her hon. Friends take action on tax evasion on the same level as they do on social security frauds.

§ Mr. Ward
Can my hon. Friend say how many cases were brought to his notice from the hon. Member for Aberdeen, South (Mr. Sproat) to support his allegation that social security frauds cost the country £500 million a year?

§ Mr. Orme
The hon. Member for Aberdeen, South has been sending me quite a lot of letters and I am having them analysed. They do not all deal with fraud, and many of them have to be investigated. No one is more opposed to fraud and abuse than my right hon. Friend and myself. There are many people who on the surface appear to be defrauding the system, but on closer examination it is found that the facts are entirely different.

§ Mr. Sproat
Will the Minister accept that I am grateful to him for making clear that he has received many hundreds of cases from me? Does he agree that legal abuse is just as bad as illegal fraud, and will he take steps to introduce residential qualification for benefit in order to end the situation in which families come here from overseas and, without having done one day's work or having paid one day's contribution, can claim benefits in the same way and, in fact, get more in taxable benefits than people who have lived and worked here all their lives?

§ Mr. Orme
That is just another blanket assertion. The hon. Gentleman would do well to remember that many people are entitled to benefit here under our EEC obligations and through reciprocal arrangements with other countries. Where cases of fraud are brought forward, they are dealt with. However, in spite of the number of letters that the hon. Gentleman has sent me, he has failed to come up with any proposal which would improve the system.

§ Mr. Madden
Will my right hon. Friend compare the latest available figures 265 for the cost of social security fraud with the £300 million-plus of tax unrecovered last year? Will he also confirm that Labour Members will not tolerate generalised and unspecific attacks on the social security system which are designed to bolster up racism or achieve the destruction of the Welfare State?

§ Mr. Orme
I can express unqualified acceptance of that point of view. There was a headline in yesterday's Daily Express dealing with the increase in unemployment pay. I think that the figure quoted in that newspaper was £9.12. It suggested that this was a violation of the recent pay agreement. As usual, the Daily Express got it wrong. The figure is £5.95. The Government, however, are determined to ensure that people who are unemployed and disabled shall get the benefit to which they are entitled and that people who need supplementary benefits and pensions get those, too.

§ Mr. Patrick Jenkin
Has not a new dimension been introduced into this subject recently? Did the right hon. Gentleman see the report in Saturday's Daily Mail suggesting that some of the social security frauds are now being organised to provide funds for the IRA? Will he take seriously any recommendations which are put to him by the police to stop this deplorable traffic?

§ Mr. Orme
I am aware of those allegations. Obviously, my Department works very closely with the police. I would prefer not to comment on the case that the right hon. Gentleman has mentioned. We are aware of it and we shall examine the facts. There is, however, no doubt that organised crime has come into the system. We are trying to root it out. It is responsible for possibly more abuse than any other factor.

§ Mrs. Knight
On a point of order, Mr. Speaker. In view of the extraordinarily unsatisfactory nature of the Minister's answer, I give notice that I shall seek to raise the subject on the Adjournment at the earliest possible moment.

§ Mr. McNamara
On a point of order, Mr. Speaker.

§ Mr. Speaker
Perhaps the hon. Gentleman will be kind enough to present it 266 after Questions. Questions to the Prime Minister are soon to begin.

§ Mr. McNamara
But you allowed the hon. Member for Birmingham, Edgbaston (Mrs. Knight) to raise a point of order, Mr. Speaker.

§ Mr. Speaker
Yes, but that was to enable her to give the customary notice.

§ Mr. McNamara
I too wish to give notice, Mr. Speaker. I wish to draw attention to the fact that many people are not getting what they are entitled to under the social security system.

§ Mr. Speaker
Order. The hon. Member has been here long enough to know the difference between a point of order and a point of view.