HL Deb 04 February 1993 vol 542 cc345-7

3.9 p.m.

Lord Benson asked Her Majesty's Government:

In the light of the Answer given by Lord Henley on 18th January 1993 (Official Report, col. 718) concerning large losses suffered over a term of years by fraud in the Department of Social Security, whether improvements should be imposed in the financial administration of the department.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, the department constantly seeks ways of improving efficiency in the administration of social security. From April we plan to introduce new financial incentives to encourage local authorities to clamp down on housing benefit fraud. We shall make greater use of technology to weed out false claims, and allocate a further £10 million over each of the next three years to help the Benefits Agency step up its flight.

Lord Benson

My Lords, a few moments before the session began the noble Lord was kind enough to explain some of the difficulties facing the Department of Social Security. Can he help on this point: would it not have been possible to have introduced a better system of financial administration some years ago which, on the department's own showing, would have saved a great sum of money which has drifted away because of fraud?

Lord Henley

My Lords, there always has been fraud and I suspect that there always will be an element of it in a social security system that costs Her Majesty's Government something of the order of £80 billion. We are determined to do as much as we possibly can to stamp out fraud. As I said in my original Answer, we have made considerable progress and will continue to look at various other improvements we can make. We have to be aware that while wanting to clamp down on fraud, it is necessary that we have a benefits system that is accessible to those who have genuine claims. We would not want to go so far as to deny benefit to those who have a legal entitlement.

Lord Clark of Kempston

My Lords, does my noble friend agree that if a workfare scheme were introduced, that would help to cut down the amount of fraud in social security benefit payments?

Lord Henley

My Lords, I would rather not speculate on the subject of workfare. As my noble friend said earlier in some of his responses, it goes somewhat wide of the Question on the Order Paper.

Baroness Hollis of Heigham

My Lords, we welcome the tone of the Minister's reply to the supplementary question of the noble Lord, Lord Benson. It was helpful. We on this side of the House certainly condemn fraud; it is clearly intolerable. However, does the Minister accept the recent findings of the National Audit Office that some 30 per cent. of sickness and maternity claims made by employers upon the DSS were found to contain monetary errors —that is, fraud—because the employer either claimed excessive sums or kept the payments that had been claimed and failed to pass them on to staff? I repeat that that happened in some 30 per cent. of cases. Will the Minister please crack down on employer fraud which plunders the taxpayer and denies sick and pregnant staff their financial rights?

Lord Henley

My Lords, I accept that there was some criticism of the department in the National Audit Office report. I would not like to comment in any detail on that in advance of my department appearing before the Public Accounts Committee. But the noble Baroness should, I think, have pointed out that the Comptroller and Auditor General did recognise that the department had already made considerable improvements and was working hard to improve oversight of the statutory sick pay and statutory maternity pay schemes. As regards the 30 per cent. error rates that the noble Baroness alleges, those error rates are not in fact representative. Checks were focused by my department—not by the NAO —on the employers considered more likely to make mistakes.

Lord Ashley of Stoke

My Lords, is the noble Lord aware that I welcome the fact that he evaded the question about workfare? However, now that it has been raised, will he tell the Prime Minister that, notwithstanding the support shown for the idea in this House, there would be very strong resistance if he tried to bring in any possible system involving cheap labour?

Lord Henley

My Lords, I am not aware that my right honourable friend the Prime Minister made any remarks about workfare. What my right honourable friend was talking about was keeping those who are unemployed and the long-term unemployed in touch with the labour market. We already have considerable schemes within social security to do just that.

Lord Jenkins of Putney

My Lords, now that the Minister has answered a question which is wide of that on the Order Paper, will he say how many times income tax fraud and other taxation frauds are in excess of the particular fraud which is referred to on the Order Paper? Is it 100 times or 1,000 times? How many times?

Lord Henley

My Lords, that is completely and utterly wide of the Question on the Order Paper, as was the question asked by the noble Lord's noble friend on the previous occasion when I dealt with questions about fraud. As I said on that occasion, Her Majesty's Government will continue to clamp down on fraud whether it be in the social security system or in taxation.

Lord Stoddart of Swindon

My Lords, does the noble Lord not agree that the best way of keeping the unemployed in touch with the labour market is to adopt economic and social policies that give them jobs?

Lord Henley

My Lords, the noble Lord is now going completely and utterly wide of the Question.

Lord Bruce of Donington

My Lords, I support the Minister's resolution to clamp down on fraud wherever it may occur, but will the Government bear in mind that the incidence of fraud depends to some extent on the social climate within the country as a whole and that, generally speaking, fraud is the only growth industry at the moment?

Lord Henley

My Lords, I reject the remarks of the noble Lord, but I certainly accept what he said about the social climate of the country. The only way we can win the battle against fraud is if we have the support of everyone in the country and if they let us know who is claiming benefits illegally.