HC Deb 12 November 1996 vol 285 cc139-41
3. Ms Eagle

To ask the Secretary of State for Social Security what plans he has to tackle organised benefit fraud. [1700]

4. Mr. Rathbone

To ask the Secretary of State for Social Security what recent review he has made of measures to ensure the reduction of benefit fraud. [1701]

The Secretary of State for Social Security (Mr. Peter Lilley)

The Government have introduced a comprehensive strategy to prevent, deter and detect benefit fraud—especially organised fraud. Nearly 300 officers are employed in tackling organised fraud. I recently introduced the fraud hotline and the fraud Bill will be introduced shortly.

Ms Eagle

After 17 years of this Government's stewardship of the social security system, is it not a disgrace that £2 billion is lost yearly through housing benefit fraud? Why do the Government not give local authorities more power to check that landlords are bona fide and are entitled to the money that they claim?

Mr. Lilley

It is extraordinary that the hon. Lady refers to the one type of fraud that local authorities are responsible for pursuing. It will not have escaped her notice that most local authorities are controlled by the Labour party. They took very little, if any, serious interest in the matter until I introduced incentives and penalties to force them to do so—and, even then, the response was not sufficient. That is why I am introducing in this Session the fraud Bill, which will establish an inspectorate of local authorities and give me the powers to galvanise local authorities into action.

Mr. Rathbone

I congratulate my right hon. Friend on what he has done, and is planning to do, to solve the problems caused by increasing numbers of people working the system, either through sophisticated gangs or systematic individual fraud. Will he consider taking further steps to move from the present unsatisfactory method of using the national insurance number as the basis for social security payments to something more sophisticated?

Mr. Lilley

I am grateful to my hon. Friend for his support for our actions. I believe that the national insurance number is a sound basis for the administration of social security. We shall introduce measures in the fraud Bill to make it an offence to seek to secure a national insurance number falsely, even if it has not yet been used to abuse the system.

Mr. Frank Field

How seriously should the House regard the Government's hotline approach to fraud? Is it not true that 90 per cent. of calls to the hotline cannot be followed up, largely because most of those who answer the telephones are untrained, temporary staff? When will the Government implement a serious programme to tackle fraud and be as serious as the Opposition in seeking to protect taxpayers' money?

Mr. Lilley

Very unusually for the hon. Gentleman—who is normally well informed—his allegations are not correct. The benefit fraud hotline has so far received more than 100,000 calls, a significant number of which are proving successful.

Mr. Field

How can the Secretary of State say that?

Mr. Lilley

It takes time to follow them up. The quality of information is extremely good. In some cases, the calls refer to the same individual as he or she is well known in a locality for committing fraud and abusing the system. The staff use a systematic procedure to extract information from callers which is proving successful not just in extracting good information but in weeding out the small number of malicious calls that may concern some Opposition Members. The hotline has proved a great success and I am astonished that Labour Members should attack and criticise it.

Mr. Jacques Arnold

Can my right hon. Friend confirm that, last year, his Department saved £1.4 billion as a result of anti-fraud measures? Is he aware that fraud against the taxpayer enrages my constituents, which is why they are delighted that he is taking steps to deal with it?

Mr. Lilley

I can certainly confirm the point that my hon. Friend makes: that the savings last year through fraud detected and stopped amounted to nearly £1.5 billion. He is also right to say that the people who resent fraud most are the vast majority of honest claimants and decent working people, who resent seeing other people ripping off the system and ending up nearly as well off as they are but not doing a full day's work.

Mr. McLeish

Will the Secretary of State explain why he is unwilling to crack down on the scandal of organised landlord fraud in housing benefit? Is it because private landlords have an opt-out from Tory fraud scrutiny? Is he aware that, in real terms, housing benefit has doubled in a decade from £5.2 billion to £11.1 billion, and that in the private rented sector it has trebled over the same period?

The real alarm is the fact that the Government have simply ignored the findings of the Social Security Select Committee, which suggested that £1 in every £5 of housing benefit was fraudulently claimed. That is a £2 billion burden on British taxpayers. Will the Secretary of State now accept Labour's view that we have to wage a war against organised landlord fraud in housing benefit? This afternoon, in the spirit of co-operation, I invite the Secretary of State to meet Labour Members to discuss our proposals for an assault on landlord cheats.

Mr. Lilley

The hon. Gentleman's opening suggestion would be monstrous if it were not simply silly. Of course no fraudster has any exemption. We have cracked down harder on all forms of fraud, not least landlord fraud. Until we took action to galvanise local authorities into doing their duty in that respect, they were not taking the matter seriously.

As for taking seriously the Labour party's proposals, Labour proposes that there should be a programme of visits to landlords and tenants and that there should be eight minutes between each person visited, including travelling time. Is that a serious investigation of those who are fraudulently making claims? Our inquiries of those whom we suspect of that take an hour and a half. Ours is surely a much more thorough system than anything that Labour is proposing.

Sir David Madel

People being pursued for maintenance by the Child Support Agency often report to the CSA that they believe that their ex-partner is fraudulently claiming benefit. Will my right hon. Friend see that, when such an allegation is made, the Benefits Agency tells that person that his or her allegation is being properly investigated?

Mr. Lilley

I try to ensure that all allegations, particularly those received via the CSA, are passed on and followed up by the Benefits Agency. However, we cannot, for reasons of confidentiality, report back on the inquiries that are made to those who make the original allegations. It would be wrong to do so. I hope that my hon. Friend will recognise that, although we can give the assurance that those inquiries are followed through, it would be wrong to report back to those who made the original allegation on the guilt or innocence in, or the findings of, every investigation.