§ 8. Mr. Andrew Robathan (Blaby)What recent assessment he has made of the amount of money fraudulently obtained from the benefits system since 1997; and if he will make a statement. [136113]
§ 15. Mr. John Randall (Uxbridge)If he will make a statement on the amount of benefit fraud since May 1997. [136122]
§ The Minister of State, Department of Social Security (Mr. Jeff Rooker)The estimated loss due to fraud is £2 billion per year. That figure refers to the fraud we know about. We have now increased the targets for reducing the amount of fraud and error in the system. We are aiming to reduce the losses from fraud and error in income support and jobseeker's allowance—the two most vulnerable benefits—by 25 per cent. by March 2004, and by 50 per cent. by March 2006.
§ Mr. RobathanDespite all the rhetoric, according to a study by the Department, which was revealed in The Sunday Times in May, the cost of fraud in benefit may be as high as £7 billion—although, according to the Public Accounts Committee, it is £4 billion. Will the Minister confirm that, under the Labour Government, successful prosecutions for housing benefit fraud have halved since May 1997? Will he also confirm that, according to figures that he released to the right hon. Member for Birkenhead (Mr. Field), there are about 20 million more insurance numbers than there are people in this country?
§ Mr. RookerMay I deal with the last point first, as it is part of a myth? There are indeed more national insurance numbers on the system than people in this country, and a good example will suffice for hon. Members to understand why that is so. To pay a widow's pension based on her husband's contributions, we need to maintain the national insurance number for the deceased. We must also maintain numbers for people who leave the country, because we do not know whether they will come back. There is an extensive programme for managing the national insurance number system because, clearly, there can be problems with it. However, the system is not operated willy-nilly and it is not right to say that, because there are more numbers than people in the country, 20 million of them are open to fraud.
I dispute the point. What I said was: "fraud we know about". By definition, we cannot count the exact amount. There are estimates given—the hon. Gentleman has given the PAC's estimate, and the higher figure that appeared in a newspaper report this year—but may I explain? Changes that we have made in income support alone since 1997 will save £1 billion in this Parliament. One in three payments of income support was made in error when we came in, so we can save £1 billion.
There is now much more cross-checking than ever before of Department of Social Security records with other Government records—I have said it before at the Dispatch Box—for data-matching purposes, to find out where people are on the fiddle. So far, we have saved £150 million. We will soon cross-check benefit and tax records to flush out benefit cheats in the building industry.
We have continued the prosecution policy. There are some 200 prosecutions a week in respect of the Benefits Agency. I make a final point as an example. By March 2001, specialist identity checks will be introduced 639 nationally. Those have been piloted in the Balham area of London since June 1997. The pilot projects alone have led to more than 200 arrests.
§ Mr. RandallHow many initiatives does the Minister think his Department has launched to cut fraud since the Government came to power in 1997?
§ Mr. RookerI would not dream of counting them. The main one is to get a strategy for dealing with fraud—that is, to get the benefit right, paid to the right person and maintained properly in the system. If we do not do that, it gets out of control. Therefore, we have taken that strategic step.
All the other measures relate to a myriad different benefits, some means-tested, some contributory—we must still watch fraud on those—and others are neither; those include disability benefits. We must have action on that. We have strengthened the fraud investigator's powers. As time permits in the House, we will take steps at an early opportunity, for example, to introduce measures relating to those who have defrauded the Benefits Agency twice—two strikes and they are out of benefit.
§ Mr. Tam Dalyell (Linlithgow)Is it not a generalised truth that rumour, hearsay and sometimes malice exaggerate the amount of fraud?
§ Mr. RookerThe answer is yes, but we must accept that we pay in benefits a total of £2 billion a week—dozens of benefits to millions of people. For example, we issue 1 million order books a week. Our system is under attack by organised crime—organised criminals. I am not on about someone who is working and claiming, although I am not condoning that. I am on about organised crime.
We have measures to deal with that. There are attempts at multi-million pound scams on our benefit system, so we have to take steps. One of them, which has been suggested many times in the House as a step towards stopping that, will be the payment of benefits via credit transfer to stop fraud on instruments of payment: the benefit books, which are thieved, manipulated and changed so that the public are defrauded. So we must take the matter seriously; but we must also accept that there is rumour, and malice on the part of people who want to undermine the system.
§ Mr. Jim Cousins (Newcastle upon Tyne, Central)Protection against fraud is extremely important—the Minister is right to point that out—but so too is common humanity. I have in my hand a letter to one of my constituents who was declared dead while living in a homeless persons hostel. His income support was stopped, his housing benefit was stopped and his community care resettlement grant was stopped. He was not dead, however. As a result of an anti-fraud protection measure, he now finds himself living in a council flat in my constituency without the benefit of his community care resettlement grant of only £285; and it cannot be reissued to him for a further six weeks.
640 Later this afternoon, I will contact the Department of Social Security in Newcastle upon Tyne about the matter. I hope that I have the Minister's support in saying that such an anti-fraud measure does not display common humanity and must be corrected.
§ Mr. RookerClearly, a gross error has occurred. I hope that my hon. Friend is not going to wait to contact Newcastle, but will give me the information immediately after Question Time.
§ Mr. Eric Pickles (Brentwood and Ongar)The Minister of State has just said, to use his exact words, that he is concerned about stopping people "on the fiddle" in relation to benefits. He has also talked about the need to tackle organised crime, and for co-operation between various Departments and agencies. Can he therefore explain the extraordinary guidelines given to the Department's staff telling them not to supply information to police in cases involving car theft, muggings or burglary? Does he realise that the Department's guidelines suggest that those are minor crimes and that it is more important to protect customer records? Is he surprised, therefore, that Mr. Glen Smyth of the Police Federation has described the new guidelines as a "criminals' charter"?
The guidelines are not the best way to start an anti-fraud strategy—which, as we have already had 42 initiatives, must be the 43rd. Will the Minister take this opportunity to repudiate the new guidelines and to issue instructions for them to be torn up?
§ Mr. RookerThey are not new guidelines—they are exactly the same as those issued by the previous Government. Nothing has changed whatsoever, except that the Police Federation has an axe to grind. I do not know what number initiative we are on now—
§ Mr. PicklesIt is 43.
§ Mr. RookerThen let us have 44 initiatives. We are taking the issue so seriously that senior staff in my Department are being joined by the former head of investigations at Customs and Excise and by the former deputy director of MI5.
§ Ms Rosie Winterton (Doncaster, Central)Are not some of the worst examples of benefit fraud committed by predatory private landlords who exploit some of the most vulnerable and poorest members of our society and milk the benefits system for all it is worth? What action is my right hon. Friend taking to improve the benefit system, so that not only is better housing provided, but fraud by those latter-day Rachman landlords is cut?
§ Mr. RookerWe have—at the risk of adding to the number of initiatives—a verification framework to ensure that those who are claiming housing benefit are who they claim to be; that they have legitimate reasons for giving the address that they give; and that there is no collusion with landlords to fiddle the rent amount. We have also provided local authorities with remote access terminals so that they can cross-check with the Benefits Agency on the matters that have to be checked. We have also set up the Royal Mail "do not redirect" service, as a way of stopping giro drops. Although I know even from my own 641 constituency that there have been complaints about how those measures have slowed down claims, they are a way of cutting fraud.
Some landlords and other people are willing to exploit the system. Sometimes landlords collude with tenants. We have to take the action we can to get those people out of the system and to prosecute when possible.