Benefit Fraud (Hansard, 28 January 2002)

§ 2. Mr. Bill Wiggin (Leominster)
If he will make a statement on the level of benefit fraud. [28138]

§ 6. Patrick Mercer (Newark)
What targets his Department has set local authorities for benefit fraud prosecutions for 2001–02. [28143]

§ The Secretary of State for Work and Pensions (Mr. Alistair Darling)
We estimate that £2 billion is lost annually owing to confirmable fraud across all benefits.
3 Latest results show that in the two and a half years to March 2001 we have reduced the level of fraud and error in income support and jobseeker's allowance by 18 per cent. We expect that good progress to continue.
Today I shall lay before the House a code of practice which governs the use of new powers to obtain information from banks, insurance and utility companies about suspected fraud. Those measures, along with new powers to punish persistent offenders and tougher penalties for collusive employers, will begin to be implemented in April.

§ Mr. Wiggin
Will the Secretary of State confirm that, according to his own figures, only 1,100 of the 460,000 cases of suspected fraud were successfully prosecuted? That is a success rate of some 99 per cent.[Interruption.] I mean a failure rate of 99 per cent. The exact figure is 99.75 per cent. Does the Secretary of State agree that that figure reflects his Department's lax attitude?

§ Mr. Darling
I was going to say that 99 per cent. sounded all right to me.
As the hon. Gentleman has raised the issue, I will tell him that nearly 27,000 prosecutions, cautions and administrative penalties were applied last year. As I said in my initial answer, the level of fraud and error in the system remains unacceptably high, and we are introducing a number of measures to lower it. As a result of changes we have made to tighten up the system, there has been an 18 per cent. drop in fraud and error in income support and jobseeker's allowance, two of the main benefits. That is encouraging. We must now go on tightening up the system. Under the new Jobcentre Plus regime, we will see people more regularly so that we can check their circumstances, and the information technology replacement programme will mean a steady improvement, year on year, in an inheritance that I regard as thoroughly unacceptable.

§ Patrick Mercer
In 1999–2000, 50 per cent. of local authorities failed to prosecute a single person for council tax benefit fraud or housing benefit fraud. My local authorities in Newark and Retford tell me that, with changes in housing benefit administration occurring nearly every fortnight, the delivery of the benefit—let alone detection of fraud—is almost impossible. Would the Secretary of State care to comment?

§ Mr. Darling
Successive Governments have tried to tighten up the regime for administering housing benefit. One of the problems is that it is run by just over 400 local authorities. Interestingly, while some authorities can run it quite well and have a good record, others do not. In some cases, the record has been truly appalling. That is one reason why we sent action teams to improve the performance of a number of authorities, which has resulted in a significant improvement in the administration of housing benefit.
It is up to local authorities whether to refer cases for prosecution; central Government do not control that. I am, however, determined that we should bear down on housing benefit fraud as vigorously as we are bearing down on fraud in JSA and income support. As I said a 4 moment ago, there has already been an 18 per cent. reduction in fraud—something that was never achieved in the past.

§ Mr. Frank Roy (Motherwell and Wishaw)
The Secretary of State will be aware that the only way to tackle benefit fraud is through the hard work of Jobcentre Plus staff, and that today many thousands of those staff are on strike because of fears for their safety at the workplace. Will he do whatever he can to bring both sides together to resolve that serious dispute before it escalates any further?

§ Mr. Darling
From the figures we have as of lunchtime, fewer people are on strike today than during the previous so-called national strike in December, and significantly fewer offices have closed. The problem that the PCS—the Public and Commercial Services union—has to face is that it does not have the support of anything like a majority of staff in its campaign to retain screens in benefit offices. Today, nearly three quarters of department staff are in work. Critically, the vast majority of staff working in the new Jobcentre Plus offices—the offices that are predominantly unscreened—have been in work since they opened last year.
My hon. Friend is right. The evidence so far shows that with Jobcentre Plus, we see people more often, we can check facts more easily, and we can make benefit payments more accurately than in the past. I want to be clear. The Government intend to roll out the Jobcentre Plus offices throughout the entire office network. We do not believe that the strike is justified. Indeed, the fact that most of the staff in these offices have been in work since they opened tends to suggest that our approach is the right one.

§ Andrew Mackinlay (Thurrock)
How extensive is fraud in relation to adopting the national insurance number and the name of another person? What measures are there to combat that? What measures are taken to inform other agencies when it is discovered, such as the police national computer, the Child Support Agency and credit agencies? This is a serious problem facing one of my constituents and, I understand, the constituents of many other people.

§ Mr. Darling
No matter where it occurs in the system, fraud is extremely serious, although in the scale of things, national insurance fraud is a lot less of a problem than, for example, people who falsely represent their circumstances. None the less, we take it seriously. My hon. Friend may be interested to know that about two years ago, during a pilot project in the Balham office in south London, we carried out far more extensive checks into people's identity. That resulted in a number of false claims being found, people being referred for prosecution and one or two people being deported.
We are ensuring that we tighten up the system across the country. There are more checks, which means that some cases are taking longer to process, but that is inevitable.
On swapping information across departments, we are looking at that. It is not straightforward. There are data protection and legitimate privacy issues to consider but I think that most of us and most members of the public take 5 the view that if one arm of government knows something about someone, it is not unreasonable to expect another arm of government to know the same thing.

§ Sir Sydney Chapman (Chipping Barnet)
The Secretary of State will know that the local government ombudsman for London has said that the housing benefits administration system is in chaos. Can he give an assurance that that administration will be radically improved, particularly in many London boroughs? Without that, there is no question but that the tackling of fraud will not be at its most effective.

§ Mr. Darling
As I said earlier, what is striking—this applies to London as much as to the rest of the country—is that some local authorities administer housing benefit well and others, in administration is appalling. I am determined to ensure that we drive up standards in those local authorities where standards are way below an acceptable level. That is the best way to bear down on fraud and error.

§ John Robertson (Glasgow, Anniesland)
Does my right hon. Friend agree that not all cases of benefit fraud are due to the Conservative party, although we have tried to blame it for everything? Does he agree that perhaps the time has come for us to look at benefit fraud and at what happened in years gone by when the Opposition manipulated the figures and put people on benefit? It is time to get them off.

§ Mr. Speaker
Order. The policy of the Opposition is nothing to do with the Secretary of State.

§ Mr. David Willetts (Havant)
I shall try to attack the Secretary of State as effectively as his own colleague, the hon. Member for Glasgow, Anniesland (John Robertson), did.
Will the Secretary of State confirm that two reports from his own Department have shown that the targeting fraud advertising campaign that he launched has succeeded in persuading people that benefit fraud is "easier to commit"? He has spent £16 million on an advertising campaign, the main effect of which has been to persuade people that they can get away with fraud. Unusually for the Government, this an accurate advertising campaign because people are getting away with it, as questions from my hon. Friends have shown. Also, we know that, after all the hype about the targeting fraud website, it has led to just one successful prosecution, and that national insurance fraud—which he dismissed as being not very big in the scale of things—is estimated to be running at £400 million a year.
Why are Ministers making the system so complicated? Would it not be better to get to the root of fraud by simplifying the system so that error does not lead to fraud, instead of having the Government's remorseless preoccupation with making all benefits more complicated, more prone to error and more prone to fraud?

§ Mr. Darling
The hon. Gentleman's argument would have more force were it not for the fact that no serious attempt was made to even measure fraud in the social security system until 1995, about 15 years after the Conservative party was elected to government. Also, there was no systematic measuring of fraud until after 1997, 6 following the general election in that year. In that time, we have put in place a number of measures that, as I have said, are now beginning to bear fruit. The fact that I can tell the House that fraud and error in income support and jobseeker's allowance are down by 18 per cent.—something my predecessors could never have said—shows that our efforts are getting results.
The hon. Gentleman asked about the advertising campaign. The campaign was designed to raise people's awareness of benefit fraud, just as the drink driving campaigns have raised awareness over the years. The research also shows that the public is becoming less tolerant of benefit fraud. It is important that we win people's hearts and minds on this matter because we need public support.
Lastly, on the simplification of benefits, the hon. Gentleman and his predecessors who served in government will know that there is a superficial attraction to standing up and saying that we should simplify the benefits system. However, once it is discovered that such simplifications would involve removing people's right to support, we see—as I hope that he would accept—that the task of simplification is not as straightforward as he makes out. We do not want to end up by taking money away from people who should be getting it. However, we want to maintain our drive to tighten up the system to cut fraud and error, which is precisely what we are doing.