HL Deb 18 January 1993 vol 541 cc718-9

2.45 p.m.

Lord Benson asked Her Majesty's Government:

In the light of the announcement by the Secretary of State for Social Security on 9th December 1992 that he expected to save about £1 billion next year by the elimination of fraud, for how many years has fraud on this scale existed.

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

My Lords, fraud appears to have been increasing in recent years. Benefit savings achieved by our fraud investigators have trebled over the past six years. We hope to reach a target of £460 million in the current year. We believe total fraud to be still higher which is why we have a new target of savings of £1 billion for 1993–94.

Lord Benson

My Lords, does the Minister agree that the individuals in the DSS who have acquiesced in that enormous misuse of public funds should now be identified and prevented from holding office under the Government in future?

Lord Henley

My Lords, I do not accept what the noble Lord has to say. What I am trying to make clear is that we place a very high priority on the detection of fraud, the deterrence of fraud, the recovery of overpayment of fraudulently paid money and prosecution where it is relevant. It is very, very difficult ever to estimate the extent of fraud within the social security system. While we place a high priority on deterring it and detecting it, we also wish to administer the benefits system in the best manner possible to make it accessible to all those legitimately entitled to their benefits.

Baroness Faithfull

My Lords, I agree with the noble Lord, Lord Benson, about fraud. Is my noble friend sure that social security offices are staffed adequately, with people adequately trained to do the job?

Lord Henley

My Lords, yes. We had some 2,853 people in the year 1991–92 employed on fraud work in our local offices up and down the country. We certainly intend to offer more specialist training to those fraud staff and greater training to people, for example, within the Post Office who help to administer benefits on our behalf. We hope by that means to increase quite dramatically the amount of money to be recovered.

Baroness Hollis of Heigham

My Lords, none of us condones fraud. But following what the Minister has just said, the number of people prosecuted last year for DSS fraud fell by almost a half. We all know that the social security legislation is complex and that both benefits staff and claimants make innocent mistakes. How much of last year's putative savings of £427 million were due to the recovery of payments made as a result of innocent error as opposed to overpayments made as a result of fraud? Secondly, does he agree that the latest government figures suggest that in 1988–89 some £1.6 billion of benefit money went unclaimed? In the light of that, while the Minister rightly pursues those who claim what they are not entitled to, will he pursue with equal vigour those who do not claim that to which they are entitled?

Lord Henley

My Lords, the take-up of benefits is entirely another question. In passing, I should point out to the noble Baroness that £9 out of £10 gets through to individual claimants. We certainly intend, as I said earlier, to deal with fraud as an important priority. We intend to see that taxpayers' money goes to the right people. We intend to ensure that benefit gets to the appropriate claimants. As I said, £9 out of £10 already does.

The noble Baroness asked how much of the £427 million was money actually recovered. I am afraid that we do not have figures on the amount of money recovered, but we intend, as I said earlier, to continue to pursue fraud with the utmost vigour. We think that we have enough staff to do that.

Baroness Hollis of Heigham

My Lords, will the Minister amplify his answer? How much of the £427 million recovered was money obtained by fraud as opposed to overpayments made as a result of innocent errors by staff and claimants?

Lord Henley

My Lords, all that money is fraud. We do not give separate figures for money recovered. I cannot give separate figures showing whether money is fraudulently overpaid, innocently overpaid or the result of official error. The £427 million is largely a notional figure produced as a result of multiplying the weekly benefit savings identified by the number of weeks it is estimated that people would have been overpaid.

Baroness Hollis of Heigham

My Lords, does the Minister accept that of that £427 million he cannot tell how much relates to fraud and how much relates to honest mistakes?

Lord Henley

My Lords, all that figure relates to fraud. I am not giving a figure for the recovery of moneys which were overpaid as a result of official error or an innocent error by the individual concerned.

Lord Stoddart of Swindon

My Lords, bearing in mind that it is estimated that more than £4 billion is lost as a result of tax evasion, will the Minister assure the House that the Government will also pursue tax evaders with the utmost vigour?

Lord Henley

My Lords, the noble Lord will accept that that is a totally different question and one to which he knows the answer. Clearly the Government pursue those who evade taxes in the same way as they pursue those who try to gain benefits fraudulently.