HC Deb 08 February 1999 vol 325 cc5-7
3. Mr. Syd Rapson (Portsmouth, North)

What assessment he has made of the responses to the Green Paper on tackling fraud in the benefit system. [68007]

The Secretary of State for Social Security (Mr. Alistair Darling)

The majority of responses supported the direction suggested in the Green Paper. As I announced on 14 January, we shall shortly publish our strategy for combating social security fraud in the light of those responses.

Mr. Rapson

May I congratulate my right hon. Friend on the Green Paper? It is an excellent document, which emphasises that fraud, whether it be a fiddle or an organised gang stealing hundreds of thousands of pounds from the system, robs the poor and the vulnerable. Is my right hon. Friend therefore prepared to set tough targets for his Department, to ensure not only that such crime is detected, but that it is stopped?

Mr. Darling

My hon. Friend is right. Part of the problem that we inherited is that far too much attention was devoted exclusively to the detection of fraud. Clearly, detecting fraud is of the utmost importance, but preventing fraud in the first place is just as important.

With regard to my hon. Friend's kind remarks about the Green Paper, as my right hon. Friend the Member for Birkenhead (Mr. Field) is no doubt thinking, the credit is not due to me, as the Green Paper predates my arrival at the Department. I am sure that my right hon. Friend will have heard my hon. Friend's comments.

Sir Sydney Chapman (Chipping Barnet)

On what basis do the Government state in the Green Paper that there is £7 billion-worth a year of fraud in the benefits system? Can he point to any initiative that the Government have taken in the past 21 months to tackle fraud in the social security system?

Mr. Darling

On the latter point, lots. For example, just two weeks ago, we prevented the Royal Mail from redirecting mail in connection with housing benefit, which is one of the major sources of housing benefit fraud. Just before Christmas, I announced a £100 million initiative to get local authorities to check housing benefit claims properly. There is a list of steps that we have taken.

The hon. Gentleman asks on what basis the Government say that fraud could involve, as the Green Paper stated, anything between £2 billion and £7 billion a year. Over the past few months, we have tried to ensure that we can accurately assess the amount of fraud and error in the system. The Green Paper highlighted the fact that, as a result of the system that we inherited, which was in desperate need of proper assessment, it is not always possible to say accurately how much fraud there is in the system.

As I told the House a few moments ago, we shall publish our response to the Green Paper and set out how we intend to proceed. One of the matters that I shall deal with at that point is how we can accurately assess where the weaknesses are in the system, so that we can tackle them.

Mr. Malcolm Wicks (Croydon, North)

Will my right hon. Friend take this opportunity to comment on the departmental document on family credit fraud, recently published by the Select Committee on Social Security, which shows that the family credit system is wide open to fraud? Although we understand that it was based on a pilot survey, and that statistically there are some doubts, it suggests major family credit fraud. What steps is my right hon. Friend taking to tackle such fraud, and how are we building into the new working families tax credit defences against fraud, as suggested in the Green Paper on fraud?

Mr. Darling

My hon. Friend is right to say that that preliminary study suggested that there were gaps in the safeguards in the family credit system, which have built up over a number of years. The findings were never published because the sample was so small that they were said not to be statistically accurate. Nevertheless, I decided that, as the Select Committee had asked to see them, they ought to be made available.

I was happy to do that because, at the same time as we received the findings of that initial study, we put in the benefit fraud inspectorate to carry out a further check. As a result of that, a report has been prepared which I considered over the weekend and which I intend to publish later this week. It identifies weaknesses in the system, some of which have been dealt with while others will be dealt with.

My hon. Friend is right—it is important that the working families tax credit works properly and that, if there are any difficulties with it, we deal with them now. My hon. Friend the Paymaster General is seeing the report today. I am sure that she will want to address the safeguards that the Treasury is putting in place during the passage of the Tax Credits Bill through Parliament.

Mrs. Virginia Bottomley (South-West Surrey)

Given that one of the most sensitive areas of benefit fraud concerns the application of the cohabitation rules, and in the light of the overwhelming vote to equalise the age of consent, is the right hon. Gentleman considering equalising the effect of the cohabitation rules?

Mr. Darling

I cannot say that we have any immediate plans to do that. I am aware of the difficulty in the cohabitation rule, and the right hon. Lady will be aware of it, too, because there is nothing new in it. Indeed, as I understood it, the previous Government were not inclined to do anything about the cohabitation rule either. This is a difficult issue, and something that we keep under review, but I cannot promise her that there is about to be an announcement. I do not think that there is.