Benefit Fraud (Hansard, 20 May 2002)

§ 9. Mike Gapes (Ilford, South)
If he will make a statement on new measures he plans to combat benefit fraud. [55495]

§ The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)
In April, we introduced a range of measures using powers taken in the Fraud Act 2001 which will help us to tackle the fraudster. Investigators can now request information from banks and utilities to find evidence of fraud. They also have stronger 17 powers to tackle employers who collude with their staff to defraud the benefit system. We now also have the power to remove benefits from those people who persistently abuse the system. That shows the Government's determination to crack down on the fraudster.

§ Mike Gapes
I welcome that reply, and those measures are long overdue. Previous Governments allowed far too much fraud by employers and unscrupulous people and it is good that this Government will put that right. Can the Minister give us some indication of the effectiveness of the measures that have been taken so far? Will he give consideration to further measures in the future, including perhaps biometric cards or other technological means to ensure the effectiveness of identity checks?

§ Malcolm Wicks
My hon. Friend is right to draw attention to the possibility of identity fraud. We have systems and technologies enabling us to identify it wherever possible, and we are beginning to win the war against the social-security fraudster. Between 1999 and March 2001 we reduced the amount of fraud and error in income support and jobseeker's allowance by 18 per cent., nearly double our first milestone of 10 per cent. Moreover, that was achieved a year ahead of schedule.

§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I acknowledge that much has been done, which is right and proper, but will the Minister turn his attention to housing benefit fraud and to the verification framework in particular? According to recent written answers and departmental research, central Government expenditure on the framework has amounted to nearly £1 billion, for a net win of £100 million annually. Bearing that in mind, along with some of the administrative delays caused by the framework, will the Minister ask his officials to conduct a cost-benefit analysis?
Am I not right in thinking that last April, more than a year ago, the Department decided to undertake a housing benefit review? I do not think we have heard any more about that to date.

§ Malcolm Wicks
We are conducting a research exercise to produce an up-to-date figure for the amount of housing benefit fraud. We are not complacent, but we feel that the money we are spending will prove cost-effective. More and more local authorities are safeguarding the system by adopting the verification framework. They can now adopt chunks at a time, by means of a modular approach.
As with fraud related to income support and jobseeker's allowance, we are confident that we are beginning to win the war—but yes, much more needs to be done.

§ Mr. Michael Jabez Foster (Hastings and Rye)
Does my hon. Friend agree that employers frequently know that their employees are cheating the system? Subject to evidence, should such employers not be prosecuted for aiding and abetting?

§ Malcolm Wicks
Yes. There is capacity in the system for employers to collude with employees, but we are on to the problem. It should be tackled, and it is being tackled.

§ Mr. David Willetts (Havant)
How many national insurance numbers are there in the country? Will the Minister give us the latest figure, and tell us how much greater it is than the entire British population? Will he also tell us what measures he has taken to tackle abuse of national insurance numbers, one of the most rapidly growing forms of benefit fraud?

§ Malcolm Wicks
We are tackling the abuse of national insurance numbers. We now employ rigorous processes when people apply for them, and a number of people are turned down every week and every month.
I realise that there is some confusion about the total amount of national insurance numbers. We are conducting an analysis in the Department, so that everyone knows what we have already made clear in parliamentary answers—that there is a difference between those of working age with national insurance numbers and those who have retired, but must still have numbers for obvious social-security purposes.

§ Mr. Willetts
Is the Minister aware that there are more than 80 million national insurance numbers, 20 million more—

§ The Secretary of State for Work and Pensions (Mr. Alistair Darling)
rose—

§ Mr. Willetts
It seems that the Secretary of State is going to answer my question. I look forward to hearing his answer.
Is the Minister aware that, according to the most recent parliamentary answer, there are more than 80 million national insurance numbers, over 20 million more than the entire British population? Whatever ingenious explanations the Minister offers, in terms of national insurance numbers for the deceased husbands of widows and suchlike, we still have a problem: far more national insurance numbers are being issued than there are people who legitimately need them.

§ Malcolm Wicks
Unlike a previous Administration, we are being rigorous about the issuing of national insurance numbers. As I have said, we turn down numerous people every week and every month. We are conducting an exercise so that we can explain fully to the House why the numbers in existence are in existence, but when someone dies, the widow or widower's entitlement is an issue. Common sense suggests that the national insurance number should therefore be retained.