HC Deb 24 October 1994 vol 248 cc611-3
2. Mr. Waterson

To ask the Secretary of State for Social Security what further measures he is proposing to combat fraudulent benefit claims.

11. Mr. Dykes

To ask the Secretary of State for Social Security if he will set out his Department's objectives in pursuing fraudulent claims for social service payments.

The Parliamentary Under-Secretary of State for Social Security (Mr. James Arbuthnot)

Many measures are being developed to improve the security of the entire benefit system. They include strict checks to help discover cheats when they first try to make a false claim and more use of computers to weed out frauds already in the system. My right hon. Friend the Secretary of State for Social Security has reinforced his commitment to crack down on fraud by appointing a senior official to head a special security branch within the Benefits Agency.

Mr. Waterson

I am grateful for that answer. I take this opportunity to give my hon. Friend a warm welcome to the Dispatch Box. Will he confirm that he has already clamped down on fraudulent claims by benefit tourists and by new age travellers? When will he do the same for payments of housing benefit to convicted prisoners and yuppies who try to avoid national insurance contributions?

Mr. Arbuthnot

I am grateful to my hon. Friend for his kind remarks. I confirm that we have introduced an habitual residence test because it is quite wrong to allow tourists to claim benefits when they have no intention of looking for work in the United Kingdom. We are also introducing changes for new age travellers. It will be impossible for the unemployed to claim benefit unless they can prove that they are both available for, and actively seeking, work. As to prisoners on housing benefit, subject to certain conditions, single prisoners get housing benefit for up to a year for rent on empty houses. In response to genuine public concern about that being over-generous, we intend to limit the period to 13 weeks from next April. My right hon. Friend the Secretary of State for Social Security has also announced that he intends to put an end to scams involving the use of diamonds and wine to fiddle national insurance claims.

Mr. Frank Field

I also welcome the Minister to the Dispatch Box. I hope that he takes a lot more action on that front than his colleagues have over the past 15 years. Would not the most effective way to deal with gang attacks on the benefits system be to give everyone a free giro account? Why was such a step, which would have saved taxpayers billions of pounds, not taken 15 years ago?

Mr. Arbuthnot

For a long time, the Government have given high priority to attacking fraud, and the year-on-year savings show that that is the case. This year we have made the highest ever saving—£654 million, which is up 17 per cent. on last year's figure. As regards the hon. Gentleman's other point, we are introducing an automated benefit payments system, which will probably take the form of a card. It will stop fraudsters, help taxpayers and be good for rural post offices.

Dame Elaine Kellett-Bowman

I also welcome my hon. Friend to the Front Bench. May I ask him to commend the fraud squad at my local DSS office, which covers Lancaster and Morecambe? Although it is a small squad, it is extremely efficient and has saved a substantial sum since it was set up, all of which can be devoted to helping those who are in real need.

Mr. Arbuthnot

My hon. Friend is right, and I certainly commend her local fraud squad. Everyone in the system must remember that every pound that is wrongly claimed in benefit is a pound that is not available to those in genuine need. I congratulate my hon. Friend on bringing that to our attention.

Mr. Skinner

Is the Minister aware that, a couple of years ago, a House of Commons Committee found that more than £200 million was lost to the Exchequer as a result of firms not passing on the tax and insurance that they had taken out of the pockets of many low-paid employees? There have been hardly any prosecutions as a result of the loss of that enormous amount of money. What steps are the Government now taking to recover that?

Mr. Arbuthnot

I am grateful to the hon. Gentleman for what I take as his support for the Government's strategy on preventing fraud. We have a strong strategy, which depends on prevention, detection and deterrence, and we are now concentrating on the prevention of fraud. We shall introduce new electronic measures, more home visits and computer data matching and automated benefit payments systems. Those measures will ensure that the social security system will not be seen as a soft touch, as it has been in the past.