Social Security Fraud

HC Deb 16 February 2000 vol 344 cc203-24WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mrs. McGuire.]

9.30 am

Mr. David Davis (Haltemprice and Howden)

This is my first visit to this institution; I am fortunate to have found it. I crave your indulgence, Mr. Deputy Speaker, for any parliamentary solecisms that I may commit this morning, but I am not used to the Chamber's procedures. I assume that they are the same as on the Floor of the House.

The matter before us today is the Government's counter-fraud strategy. The Public Accounts Committee has made a number of reports on the subject, but I do not wish to speak about them. Many of the questions that I want to raise today are relatively new and have not yet been debated by the Public Accounts Committee. Some of them cover elements of policy, on which the Committee conventionally does not comment. I am not speaking on behalf of the Conservative party; what I have to say today will be said entirely as an ordinary Member of Parliament.

I shall put the subject in context by considering the level of fraud. First, it is almost impossible accurately to measure social security fraud. If we knew where all the missing money was going, we would, at least in theory, be able to get it back; we would not then have a problem. Every estimate made of fraud is just that—an estimate. I believe that it is often an underestimate. Social security fraud is estimated to be between £3 billion and £7 billion. Departmental estimates allocate sums to individual categories of fraud, which add up to as much as £2.5 billion. The primary figures within that estimate are as follows. Income support and income-based jobseeker's allowance fraud costs about £1,530 million. The jobseeker's allowance fraud costs about £47 million; child benefit costs £184 million; instrument of payment fraud costs £119 million, and housing benefit fraud costs £600 million. Hon. Members may have noticed that I did not include disability living allowance fraud, but that is because I believe that the Department has lost confidence in its figures. It does not mean that there is no fraud, it is simply an underestimate. More accurately, the total is between £3 billion and £7 billion. During the past two years, the Prime Minister has spoken of a total of £5 billion.

No one can imagine such sums. Billions of pounds is a meaningless phrase, but here it is equivalent to between £300 and £500 per family per year. That money is ripped off, stolen, by fraudsters. It is equivalent to between £100 and £300 per taxpayer per year. More important, it is a massive loss to the public accounts. I am that peculiar person—a right-wing Conservative who believes in high levels of public service delivery—and I see it differently. The minimum estimate of £2.5 billion would pay for 100 district hospitals a year, or for 5,000 teachers, nurses, policemen and firemen, who are sorely needed. The £5 billion estimate of the Prime Minister would pay for both. The highest estimate would pay for both and leave money over to make massive improvements in all our public services. It is enormously important.

The next question is: in what direction are we going? The Government obviously take the matter seriously, as did the previous Government, but how effective is their strategy? To be fair to the Government, it is too early to judge. The problem with social security and Benefits Agency accounts is that they are published fairly late; we have only just received the two sets of accounts for the first two years of the Government's tenure, which show little sign of improvement.

We must be wary of some of the figures; as I said earlier, they are estimates and bigger changes in the apparent fraud figures result from changes in estimating procedure than from changes of policy. To say that there is no apparent change is to say that there is no change in the estimate, not in the outcome. The numbers as published do not show a material improvement.

A better indicator from the point of view of the House is to consider the number of errors, which are more accurately assessed by the National Audit Office. Errors are important because the drivers that lead to an increase in errors in social security—weaknesses in control systems, poor administration, high levels of complexity and so on—lead to fraud. The estimate of error in income support and jobseeker's allowance rose by £80 million to £637 million in 1998–99.

The right hon. Member for Birkenhead (Mr. Field) will be considering in more detail the administration of local government expenditure. The Audit Commission's figures show significant increases in some areas of local government-related housing fraud, which led to contention in recent evidence to the Public Accounts Committee. There is no reason to be complacent; the issue is massively important and, at present, there is no sign that we have got a grip on it. It is not that the Government do not take it seriously, or that they are not trying to do something about it, but we have not yet made a bite into it.

To assess the problem properly, we must consider what it consists of. It is easy to talk about billions of pounds; it is also easy to pick off individual cases, such as the ram raider who made £46,000 in addition to millions of pounds of criminal income out of the disability living allowance, despite the fact that he was a scuba diver, skier and private pilot with a variety of other interesting physical pursuits. What is important is to focus on how such fraud comes about.

The most serious cause of fraud is the complexity of the regulations. More than 150 statutory instruments have been made under the social security banner in this Government's Administration. That does not tell us anything itself, but it is indicative of the complexity involved. The Benefits Agency admitted that, without simplification of the regulations for income support, about 10 per cent. of all payments will be wrong. That is a huge sum of money. It is not just fraud but poor administration that creates confusion and uncertainty for those most in need. It results in extra costs and high levels of debt, much of which is not collectable and thus makes fraud easier to execute and the perpetrators much harder to catch after the event.

The award of housing benefit is beset with problems of the same complexity as the regulations, as the right hon. Member for Birkenhead will explain later. I shall deal with complexity in the working families tax credit, which will come into effect this year.

Technology is also a difficult matter. The Department has admitted the inadequacy of its computer systems, which is a key constraint on the detection of fraud. The matter will arise again and again in my speech. Insufficient capacity, poor programme design, lack of state-of-the-art processing procedures and the inability of systems to interact all contribute to the problems.

The Department tells us that it is making progress with data sharing and with the insulation of remote access terminals in local authorities. I hope that that is progressing, as it will assist in the fight against housing benefit fraud. Under the Social Security Administration (Fraud) Act 1997, data matching will be extended where possible to include information held by the Inland Revenue. That should assist in identifying working benefit claimants. I do not, however, hold my breath on the prospect of a Department of Social Security computer helping to solve the problem. The Department's past record with information technology has had all the elegance and effectiveness of a horse-drawn hang-glider, and I should not like to rely heavily on it. The Department is clearly making its best efforts and we hope that it succeeds, but I doubt whether the new system will solve the problem.

The Government have recognised the problem of benefits as passports. A claimant who has fraudulently or erroneously been awarded a benefit such as income support can use it as a passport for a range of other benefits, including housing benefit, council tax and relief from national health charges. Such activities create a ripple effect throughout the system that is funded by the public purse. Methods of payment also create problems. Paper-based systems of delivering social security benefits are not especially secure against smaller frauds. I hesitate to call those frauds amateur; non-organised fraud is perhaps a better expression. They are evidenced by the more than £100 million a year that is lost to the fraudulent encashment of order books and giro cheques.

The conventional wisdom is that automatic credit transfer will be much more secure. I am not entirely convinced by that view. I think that it is perfectly possible that automatic credit transfer will make organised fraud much bigger, once the system is penetrated. We have only to consider the West African gangs and others who work as cleaners in offices to gain access to security codes to wonder whether our bank security arrangements would stand up to such assault. I have some doubts about that. The proposals may deal with unorganised fraud, but they may also open up the risk of mega frauds, about which we must also concern ourselves.

The benefits system clearly offers opportunities to those intent on defrauding it and the lack of a stringent prosecution policy makes the risk of defrauding the system much more attractive. Ineffective recovery legislation and visibly poor debt management and recovery will add to that attraction. When the Public Accounts Committee considered housing benefit fraud in local government, it found that the risk of prosecution for identified and proven fraudsters was less than one in 100; fewer than one in 100 cases were pursued. The Government are addressing the issue, but to what extent? I have heard of improvements of between 30 per cent. and 40 per cent. Okay, so the Minister is thinking of a one in 60 chance of prosecution, but that is not a deterrent.

Culture is another important issue. I am concerned about the culture in modern society, some of whose members see the system as a legitimate target. In some respects, it is easy to understand that attitude, as it feels less bad to steal from a big organisation than from the corner shop, and so on. It is, however, still stealing. At the end of the day, the victims are the people who do not receive the services about which I spoke at the beginning of my remarks, which could include schooling, proper welfare support or proper health treatment. The fact that the target is diffuse does not make such stealing any less immoral.

I shall comment briefly on types of fraud before I move on to the two main strategic issues that the Government face. I have mentioned the west African gangs, but they are not by any means the only ones. Fraud can take a variety of forms, the most obvious of which are multiple claims, hijacked identities, massive theft of instruments of payment and organised counterfeiting or alteration of documentation. Very serious amounts are involved, running into millions. That must be stamped out.

A rather more systemic problem is collusive fraud, involving, for example, landlords and tenants or employers and employees. Similarly, landlords can create bogus tenants and claim for them, or tenants can create fictitious addresses at which they purport to live.

Identity fraud is another category. Lack of security over national insurance numbers can lead to their being misused to make claims under several guises at different locations. Frauds involving forged or stolen birth certificates are not uncommon in relation to claims for family benefits. The right hon. Member for Birkenhead has made a major issue of that in the past and may want to comment today.

Fraud involving residency and attendance particularly affects claims for child benefit. Residency is a key qualifying condition for the benefit, as it is payable for at least 16 years, often by automatic credit transfer, and claimants or their children can leave the country and still receive benefit. Each year, £184 million or more in child benefit is lost. More than half of that is for children over 16 who are falsely claimed to be in further education.

Working while claiming is perhaps the best known kind of benefit fraud. It is one of the main kinds of fraud in regard to income support and jobseeker's allowance. Claiming as a single person while living with someone is a key component of the loss to public funds from income support and jobseeker's allowance fraud.

Fraudulent claims for disability benefits are also an issue. As I said earlier, the relevant figure was not included in the estimate of £2.5 billion, but the fraud is serious. The detail of some of the frauds that I am concerned about shows that they are carried out ruthlessly. They are an offence against all people who are properly entitled to disability living allowance.

The first of the general issues that I want to discuss is that benefits should be simpler to understand and administer. Complex cases cause confusion and error. They deny proper benefits to deserving cases and open the door to fraud. They are morally wrong on all counts. Dealing with that problem has become known in the parlance as designing fraud out of the system. I remember an exchange that I had with the right hon. Member for Birkenhead on that when he was a Minister. He took a measured and sensible approach.

The second issue is the design of effective anti-fraud mechanisms to catch and punish offenders. I propose to review the Government's reaction to the Scampion report as an example of that. I shall not discuss the third important issue, as I believe that the right hon. Member for Birkenhead will do so, but it relates to the standards of administration and co-operation in the system, particularly the introduction of targets and incentives to reduce error and fraud.

The best written example of what I am talking about is, I say immodestly, the Public Accounts Committee's report on housing benefit, to which the Government responded reasonably constructively. The aims that have been set out may reap benefits if the relevant design and execution is good. That deserves debate.

Working families tax credit, like its predecessor, family credit, is means tested. Critics of means testing argue with some force that such benefits are inherently susceptible to fraud. As working families tax credit has increased the eligible numbers, and as the awards are more generous—both direct policy intentions of the Government, with good reason—it is argued that the number of fraudulent claims will increase. From April 2000 onwards, employers will pay working familes tax credit and offset the amount paid against tax and national insurance liability. That has led some—the most eminent of whom is the right hon. Member for Birkenhead—to argue that employers and claimants may collude. Shortly after he ceased to be a Minister, which gave him a great deal of internal knowledge of the system, with his usual authority he said: But the whole of the working family tax credit is fraught with great dangers…It offers huge bonuses for dishonesty for both employers and workers…It strengthens the employers hold over people—`these are the conditions: cheat and both of us will be better off' … It thereby pulls employers into a spider's web of corruption … It rewards employers paying low wages. That is a perceptive insight into what might happen if the system is allowed to get out of control.

In addition, we have the experience of the earned income tax credit in the United States, on which the working families tax credit is based. An article in Fiscal Studies based its criticism on a study by the Internal Revenue Service—the American Inland Revenue—that was released in early 1997. It found that taxpayers claimed $4.4 billion more in EITC funds than they were eligible to receive.

The counter-argument is that the United Kingdom proposals were developed to be aligned with the pre-existing in-work benefit system rather than the tax credit system in the United States. For example, eligibility for the EITC was originally checked retrospectively, in line with the policy on tax measures. The IRS now verifies eligibility before payment. Such a process is built into the UK proposals because they are based on existing structures for in-work benefits.

The Minister might say that we need not worry about the evidence on the EITB, but he would not be correct. The Social Security Committee examined the potential for fraud. Although it acknowledged the differences between the systems in the UK and the United States, it was concerned that the increased generosity of the tax credits could exacerbate existing problems of fraud in family credit and that the transfer of functions to the Inland Revenue would create new problems. In particular, the Social Security Committee criticised the decision of the Benefits Agency to abandon a full review of family credit to estimate the level of fraud.

The agency undertook a pilot study on the operation of family credit with the intention of generating a larger and statistically more significant study. The results of the pilot study showed that the Social Security Committee was right to be concerned. In its report that accompanied the pilot study, it said that of the 300 cases that were sampled, 20 were selected at random in 1997 from each of 15 centres from Dunfermline to Penzance, which were closely examined by trained investigators. Several of the cases had more than one 'outcome', resulting in 326 'outcomes' from the 298 cases actually examined. The raw sample results showed that there were only 141 `outcomes' in which no frauds or errors were found as a result of the visits, interviews and adjudication reviews. Less than half of the family credits evaluated were free of fraud or error. It continued: Confirmed fraud was found in 32 'outcomes' and…suspicion of fraud in another 91 'outcomes'. It can be seen therefore that in a careful pilot study conducted of this very small sample, 123 out of 326 'outcomes' involved possible or actual fraud. The results from the pilot study are too small to be extrapolated, so they could equally be an under-estimate as an over-estimate of the amount of fraud in the full Family Credit caseload", in which more than 750,000 cases amounted to expenditure of £2.5 billion in that year.

The Social Security Committee went on to list the problems that were raised by the examination of cases in the sample study. They were: failing to delcare capital above limits allowed… a child having left full-time education…incorrect declaration of own earnings…incorrect declaration of partner's earnings…living together as husband and wife…but claiming as a lone parent receiving other income. It remained concerned that these indicative findings did not lead on to a full Review, which could have analysed the probable extent of each of these types of fraud. I could not agree more with that conclusion.

As the working families tax credit is based on family credit, all the Committee's examples of ways in which claims had been identified as potentially false could apply under the new system. Claimants must still record details of the family's income and capital, the number of adults in the household, and the age and status of each child. False information about any of those variables could lead to an incorrect working family tax credit award.

I worry that, in introducing a new policy, with clear aims with which I do not disagree, such as creating an escape from the poverty trap, that survey was not carried further to enable us to design fraud out of the system. We know that the returns to individuals are much larger, and that more than a million additional individuals are eligible for the working family tax credit than were eligible under the previous system. Further, the mechanism is operated by employers and not directly by benefits offices.

The result is a potentially problematic system—we do not know whether it will be because it has not yet been implemented—which could lead to serious increases in fraud, above and beyond those of which I have already spoken. As an indicator for hon. Members, I have picked out a newspaper article from late last year. It states: Fewer than one in 10 tax inspectors would be capable of correctly filling in the form that many of those claiming the working families' tax credit will have to complete, the profession's main umbrella group claimed yesterday. In a rare public attack on ministers, the Chartered Institute of Taxation—the leading body for tax experts, including inspectors—accused the government of breaking promises over consultation and repeating many of the errors that dogged the Child Support Agency. That is possibly one of the most frightening things that I have ever heard about a prospective policy. I worry about the matter, and would be interested to hear what the Minister has to say about the way in which he will deal with what will be a serious matter during the many years for which the system will, no doubt, stay in place.

Secondly, I wish to deal with the assault on the fraudsters—the Government's approach to catching and dealing with them. I applied for the debate because of the Government's apparent treatment of the Scampion report, written by John Scampion, a social services commissioner. The inquiry was official, Government ordered and independent, but the report appears to have been shelved. I hope that the Minister will tell me that that is not true. The report came out on 24 January and we have heard little about it other than one thing to which I shall refer in a moment.

I can understand Ministers being uncomfortable with the comments in the report, and I shall give hon. Members about 10 quotations from the report so that they can understand why. First, it states: The fact is that BASIS (Benefits Agency Security Investigation Service) is not resourced to do all the work it is called upon to do". Secondly, it states: There is insufficient flexibility in the total response to serious frauds". Thirdly, it states: There is an unevenness of response to serious and organised fraud in different parts of the country". Fourthly, it states: There are no strategic discussions between BFIS (Benefit Fraud Investigation Service) and BASIS. Their work is fragmented resulting in organised frauds not being pursued". Fifthly, it states: One immediate issue is the provision of a basic hands-on information system dealing with actual or live frauds. Investigators both in BASIS and BFIS do seem handicapped by a reliance on exchanges of information derived manually". Sixthly, it states: The amount of data that is held within the benefits system is immense. It is at present being garnered and assessed by a number of discrete organisations without a readily observable strategic framework". The report went on to comment on some of the local organisational effects. It states: Each of the 400 or so [local] authorities is autonomous—lessons learnt by one may never be passed on to another … there is obviously no obvious route by which … practical use of good preventative intelligence may be disseminated more widely". It also states: Equally there appears to be little intelligence interchange between local government and the BA. WBS [Weekly Benefit Savings] stifles initiative, and creates a culture in which easy hits are encouraged to the detriment of professional investigative work". It goes on: Against Housing Benefit fraud they [local authorities] are much less focused. Many authorities do not recognise it as a serious problem for them and others are not impelled by the financial regime or indeed enabled by the appropriate skills to actively pursue it as a matter of high priority". Finally, it states: Organised fraud, especially the most serious is not a current priority of local government and in any revised system needs to become one. There is inconsistent and insufficiently co-ordinated practice on the use of intelligence to support the pursuit of organised fraud". Those last half dozen quotes overlap with some of the Government's ideas, as the Minister will no doubt confirm later, but I thought that the first half dozen or so probably showed why the Government are uncomfortable with the report.

The thrust of the report's recommendations are aimed at consolidating fraud intelligence and investigation activities in a national structure, reporting to the Department of Social Security fraud strategy director rather than to Benefits Agency management. Such a co-ordinated approach to the fight against fraud should be seen as a welcome innovation, as under the current arrangements, potential frauds are often cross-referred between fragmented units of the Benefits Agency, with little or no action being taken due to conflicting priorities. That supports the recommendation that fraud intelligence should be removed from the Benefits Agency because that would permit national priorities to be set. Those are eminently sensible aims. To that purpose, the Scampion report's principle recommendations were as follows.

First, the report recommends the establishment of a single benefit investigation agency for Great Britain. The BIA would be created by merging the existing complement of BASIS with part of the existing complement of BFIS.

Secondly, the report recommends the establishment of a benefits intelligence directorate to bring together the intelligence work carried out within the Benefits Agency. The Secretary of State's response to that was to announce that a national intelligence unit was being created, but I understand that that is only a pilot body in the north west of England. It is difficult to see how the real benefits of a national intelligence unit will be achieved, or even tested, on a pilot basis in one part of the country. It will be interesting to hear what the Minister has to say about that.

Thirdly, the report calls for the establishment of regional anti-fraud partnerships between local authorities, the BIA and the BID. The Minister's original response to the Public Accounts Committee report touched on only a fraction of those ideas.

Fourthly, partnerships would be required, within a given time scale, to submit proposals to the DSS for dealing with organised fraud. Again, it will be interesting to hear what those proposals are.

The report then lists several supplementary recommendations, which are sensible and practical, so I shall put them on the record because it would be interesting to know the Government's opinion on them. It suggests that details of payee, amount and personal identifier should be added in coded form to girocheques, unless there are compelling reasons to the contrary. That seems to be a sensible idea. It suggests that a common baseline application form for council tax and housing benefit should be introduced. I know that some simplification of those forms is being undertaken, so perhaps the Minister will say something about that.

The report also recommends that a debate should be started on the balance between people's right to privacy and the state's need to protect public funds. Both this and the previous Government sidestepped that knotty issue. As something of a civil libertarian, I do not think the issue easy to resolve, but it is a great shame that the card system that the Government were to introduce crashed, and we were unable to have at least a voluntary smart card for benefits claimants. I would not force anyone to carry a card, but such a card would provide many honest people with a simpler, more straightforward mechanism for collecting their benefits, and it would have the added advantage of eradicating some fraud.

The report goes on: Investigation should be carried out into the possiblity of the DSS/BA joining the Credit Industry Fraud Avoidance Scheme. That is a simple, sensible idea. After all, fraud is not confined to government or to welfare systems, and many private sector techniques, driven by englightened self-interest, may be of use in the public sector. The report also advocates a common prosecution policy between the Inland Revenue and DSS following the introduction of the Working Families Tax Credit. I suspect that it would be rather a shock to the DSS to have an Inland Revenue style prosecution policy, as the latter is not known for its leniency. The final recommendation is that Consideration should be given to the expansion of asset recovery and confiscation of crime proceeds. That seems sensible, although I am not sure of the Government's view.

Finally, I shall pre-empt one argument that the Government might put forward. The matching of Scampion's recommendations for a benefit investigation agency and a benefits intelligence directorate with the existing role of the Benefit Fraud Inspectorate is at issue. The Scampion report makes little reference to the work of the BFI, but I do not believe that its recommendations, if adopted, would result in a duplication of effort. The BFI was created to undertake inspections of social security benefit adminstration and counter-fraud activity, and to identify, encourage and promote good practice. The proposed benefit investigation agency would provide a single institution dedicated to investigating all forms of fraud against benefits administered by the Benefits Agency. The benefits intelligence directorate would have responsibility for supporting prevention and detection of fraud through the collection, analysis and dissemination of intelligence across the Benefits Agency.

Although there is some scope for exchange of information between the BFI and the two proposed new bodies, the BFI's predominant focus is on local authorities, rather than on the Benefits Agency. Under these proposals, the three organisations would complement one another, rather than duplicate functions. I hope that the Government will not argue that there will be duplication.

I thought it a good thing that the Government initiated the Scampion inquiry. The outcome, uncomfortable as it may be, is a rather good report. I hope that the Department will show a willingness to take on board those issues. Some of the proposals involve quite serious reorganisation, with parts of the Department and agencies losing some of their empires to other parts. As an ex-Minister, I know how hard such battles can be fought in Whitehall.

I ask the Minister, for whose forthright and practical approach to these matters I have great respect, to take these recommendations on board and to try to ensure that the best parts of the Scampion report—that is, most of it—comes into being. This is a big issue; it frustrated the previous Government, and will frustrate the present Government and many in the future. Initiatives have not always worked. However, that is not a reason to give up trying or applying pressure, because the benefit of succeeding will be better public service throughout, which we should all support.

10.8 am

Mr. Frank Field (Birkenhead)

It is a pleasure to follow the hon. Member for Haltemprice and Howden (Mr. Davis). Now that he has found this Chamber, I hope that debates examining the evolution of the Government's counter-fraud strategy will be a regular feature of the rest of the Parliament.

I begin by recording my thanks to the Chairman and members of the Public Accounts Committee for the information that they regularly provide to Parliament on the administration of public moneys, and to Sir John Bourn and his staff for the role that they play with the PAC in making that information available. For proof of their assistance, one would have only to consult tomorrow's Hansard to see how dependent we have all been in our contributions on the information that the Public Accounts committee has made available to the House of Commons and the wider public.

I join in the debate for the same reason as the right hon. Member for Haltemprice and Howden and other hon. Members who wish to catch your eye, Mr. Deputy Speaker—because it is not a simple debate about those who are in favour of people claiming benefits as opposed to others who are against people claiming benefit and try to focus all their attention on the question of fraud. The British attitudes survey revealed that the vast majority of the electorate think that a considerable number of people who are eligible to claim benefit are not doing so, and are concerned about that, while almost an equal number believe at the same time that in large parts of the system it is too easy to defraud taxpayers. Like the right hon. Gentleman, I not only believe in public services, but believe that unless one garners taxpayers' support by assuring them that their hard-earned money is not being squandered, wasted or fraudulently claimed, one allows attitudes to rock the very basis of the welfare state.

I welcome the fact that the Minister of State will respond to the debate, because in previous Parliaments he and I raised the issue of countering fraud. While it is, of course, good for people to change their views and join what is now the majority position—that countering fraud is a major issue—he is one of those who raised it when it was not fashionable and sought to strengthen the previous Government's counter-fraud strategy. The Minister may not always be supported by the Department in the way that he should be. He is nothing but a total professional as a Minister, and will of course deny that and say what wonderful support he has from his officials. However, the recording of certain views in public debate can help strengthen the position of those whose position we wish to see strengthened.

With that in mind, I shall refer to the Green Paper on countering fraud—"Beating Fraud is Everyone's Business"—in which the Government signed up to four benchmarks. I hope that the Minister, if he cannot reply to my questions immediately, will give a public reply at a later stage. The four benchmarks in the Green Paper were as follows. First, it stated that the Government would be committed to measure fraud to a high degree of accuracy and report annually. I and many taxpayers would be interested to hear from the Minister what progress has been made on that front. Secondly, it gave a commitment to check and to clear bogus national insurance numbers. What is the timetable for the completion of that benchmark? Thirdly, it stated that the Benefit Fraud Inspectorate and the Audit Commission would ruthlessly work together to counter fraud. What progress has been made on bringing together those two important organisations in furthering the Government's counter-fraud strategy? Fourthly, it promised a review of the criminal and civil law and the extent to which it helps or hinders tackling fraud. The White Paper was totally silent on that, as on many other of the benchmarks in the Green Paper. What progress can the Minister report in that respect?

When, as a Minister, I discovered that there was not to be a benefit review of family credits, on the basis that the Department was getting shot of the benefit and the Treasury would be assuming responsibility, I counter-ordered that decision and asked that the benefit review take place. When I appeared before the Social Security Committee, I realised that that decision had been countermanded. Was the matter brought to the Minister's attention? Did he take that decision, or was it taken by officials without his knowledge? On leaving office, I assumed that the review would take place for the very reasons that the right hon. Member for Haltemprice and Howden listed.

Reports from counter-fraud officers demonstrated the problems associated with family credit fraud. In respect of new benefits, the Government aimed to design out opportunities for fraud. To prevent working families tax credit fraud, it was important to discover the extent of family credit fraud and the means by which it was being conducted.

I was closely involved with the security of the national insurance number system, so I asked that we should check the references and identity of some key members of staff. Has that programme begun? Did the Minister know of that decision, or was he bypassed? Although it is important to engage people to shop cheats, and so on, I hope that the Government do not think that merely starting another such campaign in the months ahead would constitute a proper counter-fraud strategy.

I realise, Mr. Deputy Speaker, that many others wish to catch your eye, so I shall deal briefly with the question of housing benefit. Thanks to the efforts of the Public Accounts Committee, it is estimated that fraud costs £840 million, but that estimate may be 30 per cent. out in either direction. The Government promised to report on fraud annually and measure it accurately, but the error rate has increased from 16 to 29 per cent. Two thirds of local authorities do not make proper efforts to recover wrong payments, and one third make no effort at all. For example, 161 authorities have yet to participate in the "do not redirect" service for housing benefit cheques. According to the Public Accounts Committee, perhaps as many as £50,000 a week per local authority could be saved if a non-redirect policy were implemented, which could constitute a saving of as much as £400 million a year. What progess have the Government made on that?

In respect of housing benefit forms, the BFI states: We also found examples of more serious problems, such as claim forms not being designed to record a national insurance number, claimant's income or liability to payment. We are talking about a means-tested benefit, yet local authorities are issuing forms that do not record the income of those who will be paid benefit. That beggars belief. We know that 143 local authorities made no prosecutions for housing benefit fraud during the year on which the Public Accounts Committee reported. Of those, 57 could not be bothered to tell the Government whether they had a prosecution policy. There is also evidence of councillors or workers in another 57 authorities fraudulently claiming housing benefit, not one of whom was prosecuted. If that does not send out a powerful message that the Government are not serious about countering fraud, what does?

I end by suggesting nine reforms, simply on housing benefit, that I would like to see. First, time has run out for local authorities voluntarily to sign up to the policy of not redirecting to safe addresses fraudulently claimed housing benefit cheques. Either a tough national policy should be implemented within a couple of months or the Secretary of State must ask district auditors to surcharge councils that continue to send on cheques to fraudsters.

Secondly, how long will the Government allow local authorities to administer a means-tested benefit such as housing benefit without being sure that we are properly collecting income from those claiming the benefit?

Thirdly, will the Government give a timetable in which they expect every council seriously to recoup overpayments? Again, will the Secretary of State ask district auditors to surcharge councils if no policy is in place to recoup taxpayers' money on that front?

Fourthly, we know that local authorities have limited time in which to follow up some of the overpayments. What progress are the Government making to ensure that the private sector is used to help to recoup taxpayers' money that should not have been overpaid?

Fifthly, will the Government give a commitment that councillors or council workers found to be fraudulently claiming housing benefit will automatically be prosecuted?

Sixthly, the BFI's recommendations are not fully implemented in regard to housing benefit contracts. Where they are not, will the Government ask the Secretary of State to consider taking the operation of housing benefit away from those local authorities and putting it out to tender? The Government are, thankfully, developing public service agreements in national government. Is there not a case for trying to build on that success to ensure that there is a public service agreement with local authorities about the running of housing benefit?

The eighth suggestion is to make landlord benefit fraud a key fight. When the permanent secretary appeared before the Public Accounts Committee, she said that Scampion would deal with that. He does not make the sort of recommendations that are required. The Green Paper made three. It suggested, first, that there should be a register of landlords, secondly, that the Government should report as part of their annual audit measuring landlord fraud and, thirdly, that specialist teams should be set up to tackle landlord fraud. Will my right hon. Friend be able at some stage to report progress on that?

My last suggestion is this. My right hon. Friend is one of the most able of our Ministers at judging the public mood. Does he agree that a way to gain further support from the public would be to link specific gains from countering fraud to public programmes that taxpayers wish to see advanced? If that is his view, will he soon make progress in public on that front?

I look forward to the contribution of other hon. Members and the reply of my right hon. Friend the Minister.

10.24 am

Mr. Steve Webb (Northavon)

It is a privilege to follow the right hon. Member for Haltemprice and Howden (Mr. Davis) and the right hon. Member for Birkenhead (Mr. Field), who are distinguished parliamentarians and experts in this area. The Chamber is grateful to the Chairman of the Public Accounts Committee for raising this matter in his personal capacity.

I want to deal with some of the broader issues that are prompted by the detailed comments that we have heard. The right hon. Member for Haltemprice and Howden is right to draw attention to the scale of the problem. The alleged size of benefit fraud is larger than the entire budget of some Government Departments. One can imagine that some of the Minister's colleagues would kill for a share of the fraud money. It is therefore right to stress the urgency of the issue. Although the Government talk a good game, they are not delivering. Year after year, the accounts are not wholeheartedly accepted. While it would be wrong to say that nothing is being done, little is being achieved.

The right hon. Gentleman referred to designing out fraud, and cited the working families tax credit. If the Government cannot reduce the risk of fraud when they introduce a new, renamed or slightly restructured benefit, what hope is there? It is hard enough to get rid of existing benefit fraud. Apart from the fact that working families tax credit is paid through the employer's payroll —an open invitation to fraud—the child care tax credit element poses an additonal problem. Whereas it used to go to a handful of people on family credit, it will now go to many thousands of people. That opens up a whole new vista of unexplored fraud. Up to £150 a week of child care costs can be allowed in the benefit calculation, and the claimant can benefit by up to £5,000 a year. That is a whole new burgeoning industry, with which the Government have not got to grips.

The right hon. Gentleman rightly mentioned the need for simplicity, which, one feels, is anathema to the Department of Social Security. Consider what the Department has done with regard to support for children, which used to be relatively straightforward. In addition to child benefit, there is now the working families tax credit, with its various credits, including child care credits. There will now be a children's tax credit, which is different from the child care tax credit and the working families tax credit. That is on top of child benefit. Apparently, all that will be streamlined in the future. The Government have introduced a more complex system, which, allegedly, they will simplify later. It will be interesting to see if they ever get round to simplification.

Some of the benefit fraud statistics are interesting. Pensioners are included among those reported as fraudulent claimants, and the Government are increasingly using means-tested approaches to support pensioners. If the Government want a simplified approach, they might adopt one of the policies that the right hon. Member for Birkenhead and I have advocated—the targeting of pensioners through age additions on the state pension. The attraction of that method is that the only way people could commit fraud would be by falsifying their age. Intelligent targeting would be possible without the palaver of means testing, and using universal benefits. That kind of thinking is anathema to the Government, who say, "That's not well targeted enough," and then pay £100 to every pensioner in the land. That is not a joined-up strategy.

The right hon. Member for Haltemprice and Howden mentioned the issue of data matching, and the fundamental conflict in having one big computer that contained all our information, which might be an effective deterrent to fraud, but gave rise to certain worries. I probably stray well beyond the party line by being sympathetic towards the idea of one big computer. It is astonishing that information of the same kind is gathered all over the place but never brought together. Most people would feel that the scale of the problem and the sums that we are talking about require desperate solutions. I sometimes feel that data protection legislation has gone too far. It has prevented many developments that it was not intended to affect. I would be interested to hear the Government's thoughts on that issue.

My overall perspective on the matter is that the Government make grand claims but achieve little. One can always tell when the Department of Social Security is achieving nothing because it issues lots of press releases. On benefit fraud, there were three press releases in the second half of January, including one on the area benefit review, which was issued on 28 January. It said: The percentage amount of benefit overpaid"— on income support— due to fraud and customer error has fallen by 0.4 per cent. between the periods October 1997–September 1998 and April 1998 to March 1999. This reduction is not statistically significant. The hon. Member for Havant (Mr. Willetts) drew attention to that in the House the other day. In relation to the jobseeker's allowance, the press release states: The percentage of benefit overpaid … due to fraud and customer error has fallen by 0.2 per cent.… This reduction is not statistically significant". On the same day, the Secretary of State said: We are winning the battle against fraud". "Not statistically significant" could mean that the figures have gone up—we cannot be sure that they have gone down. There is a discrepancy between the Government's rhetoric on fraud and their delivery—or lack thereof.

I draw attention to a telling paragraph in the Public Accounts Committee report. Every year the Government announce that several billion pounds have been saved on fraud, but each year the figures for fraud never appear to go down. A marvellous paragraph in the report states: We asked the Agency why, given savings … of £2.5 billion over 3 years, the level of fraud on income support and jobseeker's allowance remained at over £1.5 billion". The agency gave a rather coy answer—it said that it viewed the stock of fraud as the better and more important figure on which to target their actions. That is a euphemism. One wearies of hearing grandiose claims about the sums that will be saved. The estimates of stock of fraud are relentless and do not go down. We should target that matter.

I conclude by proposing a way forward to the Minister. The right hon. Member for Birkenhead mentioned public service agreements. In relation to the Department of Social Security, I regard those agreements as toothless. In view of the Government's attachment to performance-related pay, will the Minister agree to tie his salary to his ability to make a concrete achievement in cutting benefit fraud?

10.31 am

Mr. Eric Pickles (Brentwood and Ongar)

I am grateful to follow three such distinguished hon. Members. The concluding suggestion of the hon. Member for Northavon (Mr. Webb) might be a little unfair—the Minister may be drawing his pension by the time that we know whether we have been successful in this regard, and it would be wrong to rob a pensioner of his income.

I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) on raising this important matter in this Chamber. I agree with the right hon. Member for Birkenhead (Mr. Field), who commended the Public Accounts Committee's report. I appreciate that my right hon. Friend the Member for Haltemprice and Howden was speaking in a personal capacity, but the report is a welcome and helpful addition to our efforts to fight fraud.

The report arrives at an appropriate moment. Since early December, there have been four reports on fraud: the National Audit Office appropriation accounts for 1998–99; the Audit Commission's "Protecting the public purse: ensuring probity in local government", to which the right hon. Member for Birkenhead referred; Sir John Scampion's report on organised benefit fraud—my right hon. Friend the Member for Haltemprice and Howden discussed its 19 recommendations—and the Public Accounts Committee report.

As has already been said, no one really knows the true extent of fraud in the system. My right hon. Friend referred to estimates of between £3 million and £7 million, but the right hon. Member for Birkenhead suggested that the figure might be a little higher than that. Whatever the figure, fraud is rife and endemic in the system.

The National Audit Office report found that there was an increase of £636 million in the 1998–99 accounts, which represents 5 per cent. of the total expenditure on income support. Our first task should be to admit that the situation is deteriorating. I endorse the comments of the hon. Member for Northavon, who said that there was too much short-term spin in the system and that we needed a strategy to ensure that the tough rhetoric matched reality.

I, too, was struck by the press release of 28 January, which was headed "Darling welcomes successes in fighting benefit fraud". It states: Today's figures show that our tougher anti-fraud measures are beginning to bite … we are winning the fight against fraud. However, as the hon. Gentleman pointed out, the Office for National Statistics said that reductions in both areas were not statistically significant. He is therefore right to say that matters could have gone either way. It is no use pretending that things are happening when they are not, as that makes the service look ridiculous and undermines attacks on organised fraud.

There are two main problems: complexity and hands-off approach to the strategy. The Public Accounts Committee referred to complexity in its report published on 13 January. Paragraph 8.2 on page vi states: A key cause of error and fraud in income support is the complexity of the regulations, and the Benefit Agency told us that without simplification 10 per cent of payments would always be wrong. This is poor administration, which creates confusion, uncertainty for those most in need, extra costs and high levels of debt, much of which is not collectable. Leaving complexity to one side, I shall now tackle the absence of a hands-on approach. My right hon. Friend the Member for Haltemprice and Howden talked about John Scampion's report, which deals with the lack of a sensible, practitioners' approach to the problem. I shall not go through the recommendations in detail, as my right hon. Friend did that extremely well. However, I shall emphasise a few points made in the report.

The report says that there was no strategic discussion between the benefits fraud investigation and the Benefits Agency security investigation service. Fragmenting resulted and organised frauds were not pursued. Page 16 states: There is insufficient flexibility in the total response to serious frauds. It also states: There is an unevenness of response to serious fraud and organised frauds in different parts of the country". Summing up the position, on page 18 it states:

One immediate effect is the provision of a basic … information system dealing with actual or live frauds. Investigators both in BASIS and BFIS do seem handicapped by a reliance on exchanges of information derived manually". The report paints a frightening picture of organised fraud, drawing attention to the fact that organised fraud is not being pursued. It also demonstrates something that I have discovered in visits to housing benefit offices and the Benefits Agency—local authorities rarely exchange information between themselves or with the Benefits Agency. Different housing benefit forms are used by different local authorities. Consequently, when one authority finds a loophole and closes it by changing its form, that is not necessarily passed on to other authorities.

Attempts to tackle fraud include the recent Fraudweb conference. However, there is no systematic method for exchanging information. My right hon. Friend pointed out that we must be careful how computers exchanged information between various groups. That is right. It is not just a question of computers. Much of the investigation of housing benefit fraud is done manually. It is recorded manually. There is no exchange. It is a question of chasing paper around, which is quite a problem in the system. Even at the very top there is, in the words of Scampion, an over-reliance on manual systems.

It is amazing that the Government accepted only one of Scampion's recommendations and, as my right hon. Friend pointed out, it is only a pilot in a region. There are good and compelling reasons for having a national intelligence unit. I join my right hon. Friend in saying that the benefits of a national system cannot be understood by looking at it purely regionally. National fraud is precisely that. The Minister kindly organised an interesting and helpful seminar for spokesmen on social security at which we saw some of the instruments of fraud and the ways in which people went around the system. They were ingenious, and it was clear that there is quite a lot of national fraud. People organise in several districts. Without a national organisation exchanging information on fraud, there is no real possibility of tackling the problem.

We believe that we should go further. Indeed, my hon. Friend the Member for Havant (Mr. Willetts) recently announced a change in Conservative policy. We would institute a single benefits investigation squad in conjunction with the national intelligence unit and we would look towards a dedicated anti-fraud partnership between local authorities, the Benefits Agency, the intelligence unit and the squad to ensure coordination. The chances are that, if someone is committing a fraud on one benefit, he will commit it on another benefit controlled by the agency.

It is important to ensure that there is still prosecution. It is also important to guard the gateways to benefit. Not everyone who gets involved in fraud starts out with that intention. Sometimes they just fall into temptation. They may delay the announcement of a bereavement or the fact that a son or daughter has reached a certain age. Each week they find it increasingly difficult to admit that they have committed a fraud. That is why the points that the right hon. Member for Birkenhead made about the working families tax credit are so important. Unless we are careful, we will have a system in which, to use his words, people are caught in a spider's web of corruption.

Fraud takes away valuable resources that can be better spent on those in need. It creates a climate of distrust among those receiving benefit. It robs the Government, the taxpayer and the poor in equal measure. It is time to hear how the Government plan to build an effective, hands-on anti-fraud strategy.

10.44 am

The Minister of State, Department of Social Security (Mr. Jeff Rooker)

I hope that right hon. and hon. Members will accept that I cannot do justice to the points that have been raised this morning in 16 minutes. Unusually for me, I undertake to write to them on the points that I do not cover. It places a burden on the Department, but I shall not leave anything unanswered. One is always warned as a Minister not to make too many commitments to write, but anything that I cannot answer today will be answered in correspondence.

I welcome the debate on our strategy for tackling fraud and I will outline the action taken by the Government so far. No single initiative or decision can assist in solving the whole problem. The operation needs to cover a wide front. We have to tackle instrument of payment fraud involving giro cheques, or the benefit books, which is similar in design to, and reminiscent of, the ration book of the early 1940s, although that did not have a bar code. Both are open to the same sort of fiddling that I have seen myself. My right hon. Friend the Member for Birkenhead (Mr. Field) may know of cases in which no one has bothered to check information simply because a part-used payment book has been presented. That is one reason for changing to automatic credit transfer.

There is no point being wishy-washy about this. When ACT becomes the main method of payment, it will open up avenues of fraud not necessarily prevalent today. We must design and build in for that when we make the change. This is part of the current planning process. Instrument of payment fraud is serious. I do not wish to fall out with anyone, but we have enough problems with some of the porkies being told by some subpostmasters. I have been at the Department of Social Security for only seven months, less than half the time that my right hon. Friend was there, and I have just had drawn to my attention prosecution cases that made the press the previous day. Not a month has gone by without my being told of matters involving post office employees, the subpostmaster or his family, relating to instrument of payment difficulties—or fraud—that have led to prosecution. Those 18,000 cases are a tiny percentage, but the scope for such fraud is enormous among organised crime and what the right hon. Member for Haltemprice and Howden (Mr. Davis) might term amateur crime. Both are bad, but I understand the right hon. Gentleman's point.

In 1997, two out of five income support claims—40 per cent.—were paid without sufficient evidence of identity. We estimate that the proposed changes—some of which were initiated by my right hon. Friend the Member for Birkenhead—will save more than £1 billion during the life of this Parliament because of strengthened checks before money is paid. The national benefit intelligence unit will help combat organised fraud. There seems to be some misunderstanding, the reason for which I shall discuss with colleagues. We have not promulgated the totality of the Scampion report, nor have we dismissed it; far from it. I feel sure that the generality of John Scampion's suggestions will become a reality, although perhaps not all in precisely the way he suggested because government machinery issues are involved.

There was a reference to a pilot in the north-west. There is no piloting of the national benefit intelligence unit. There is nothing to be done. That was a misunderstanding. The pilot due to be held in the northwest is effectivley an exercise to discover how we can change public attitudes to benefit fraud. It is not the hotline, which is a separate exercise, but an attempt to change attitudes. Drink driving was socially acceptable 10 or 20 years ago; today it is not. Public attitudes have changed. But that pilot has nothing to do with the Scampion report.

The Department is training staff to counter fraud. I was present the other week at what I might call the passing-out parade of the first 87 accredited DSS counter-fraud officers, who underwent a course accredited by one of the universities, involving separate trainers and individual anti-crime companies. A further 1,000 are due to come through the system. The grand total is approximately 3,000. Those officers are given proper training in a part of their profession. Part of the Scampion proposals were for a professional head of counter-fraud activity. We need to invest in this important element and take it forward.

As members of the Committee have said, housing benefit is a separate issue. It beggars belief that each local authority designs its own claim form. I regret to say that I served on the Standing Committee which scrutinised the legislation setting up housing benefit all those years ago. The attitude of some local authorities is that it is not their money, so it does not matter, all they are doing is administering Government money. They must get their act together with council tax benefit and housing benefit. We are about to screw them down even more with severe financial penalties for not following through the Benefit Fraud Inspectorate reports and for not following the housing benefit rules, and not even following the law on housing benefit, which came in last September, which makes it a statutory requirement to obtain a claimant's national insurance number. Local government is at risk of losing that role. That is not a threat, it is inevitable, because the House will not stand for it. About £11 billion of taxpayers' money is being paid out, but some authorities are not taking it seriously because it is not local taxpayers' money and therefore not part of their budget. We have a series of measures, some of which we have already introduced and some of which we are about to bring forward, which will put the screws on those parts of local government that are not taking this seriously.

It is also unacceptable that we are not being given sufficient information about details of prosecution. At the moment, the Royal Mail "Do not redirect" service is still voluntary, but it is paid for by the DSS. Some local authorities said that they were not doing it because they had to run down their stock of envelopes. That is a pathetic excuse from professional local government officers. All they have to do is reprint the front of the envelopes; there is no problem with that. They must take that and other matters much more seriously.

Data sharing is a sensitive issue. I do not see it as difficult. The Data Protection Act 1998 must be followed at all times. I do not think that fraudsters, the public or even hon. Members fully appreciate the scale of data sharing that is going on within government, between the Department of Social Security, the Inland Revenue and local authorities. However, it needs to be extended and that is under active consideration, even to the extent of making statutory changes.

Data matching is dependent on comupters and, as was suggested, the computers in the DSS are rubbish. They were bought off the shelf and use old technology, so they did not do the job that they were intended to do. Nevertheless, there are data matching programs. We have supplied local authorities with 400 remote access computer terminals so that they can see what benefits we are paying to a claimant and thus whether they can verify the claim that is being made. That is an important element. We are also getting full reports from the Inland Revenue, particularly on the working families tax credit, an issue to which I shall return in correspondence. National data matching referrals were issued from 31 January and we began to retrieve the DSS Inland Revenue data shortly after the transfer of responsibilities last October.

My right hon. Friend the Member for Birkenhead asked about the family credit review decision. It looks as though it was made without ministerial clearance, but I am not sure when. One must remember that there were two other Ministers between my right hon. Friend and me. I personally do not recall that decision, but my officials are checking on it. Let us be clear. The working families tax credit is a matter for my right hon. Friend the Chancellor of the Exchequer. It is not classed as a benefit; it is wholly within the Treasury. Nevertheless, we are obtaining that information to cross-check with DSS benefits because that is important. P46 data—that is the form for new employees who cannot provide their new employer with a P45—is also being transferred from the National Insurance Contributions Office, which is another crucial factor, and the Inland Revenue is passing on details of the new construction industry scheme. We will have the first batch of data from that this summer.

My right hon. Friend the Member for Birkenhead and the right hon. Member for Haltemprice and Howden mentioned identity fraud. When I arrived at the DSS last summer from the Ministry of Agriculture. Fisheries and Food, I was distressed to learn that fraud based on "The Day of the Jackal" had not been dealt with. That was recommended in a White Paper on registration in 1991, if I remember correctly. Everything in that White Paper was accepted and implemented, including new rules for getting married down a coal mine.

I had personal constituency experience of a "The Day of the Jackal" fraud. Twins who were born 30 years ago lived for only a day, and 27 years later, someone knocked on the parents' door saying that someone claiming to be their daughter was being held in a detention centre. One can imagine how the parents felt. That fraud followed the book exactly. I went through that episode chapter and verse with the previous Conservative Prime Minister. Internal discussions are still proceeding and I am pressing to have the matter settled. It is a gap in our identity fraud countermeasures.

I shall not have time to deal in detail with all the issues raised. I can tell my right hon. Friend the Member for Birkenhead that we are spending considerable time scrutinising the management of the national insurance number system—both in the Department and in government with senior colleagues. Some problems are not clear cut, but we have reduced by half the number of people who issue national insurance numbers. I shall have to write to my right hon. Friend about checking individuals. Issuing numbers is now tightly controlled in local offices and it is half of what it was in terms of physical access.

As I said earlier, local authority claim forms were required by law from September last year and we are financially penalising those who failed to meet that requirement. It will not look good for the local authorities, their leaders or chief executives if their act is not cleaned up ethically, especially when the legislation currently in another place comes into force. Information on income must be obtained unless the local authority can acquire it from the DSS via remote access terminals. Otherwise, there is no legal authority to pay a means-tested benefit—it is as simple as that. Authorities will leave themselves open to financial penalties from the Government. Currently, around 250 authorities have adopted the verification framework. That is not good enough: they all should.

All Benefit Fraud Inspectorate reports are published. Only the odd sentence about how to commit a fraud is omitted, for obvious reasons. They are all published on the internet as a guide to good practice for local authorities. Late last year, we requested the Benefit Fraud Inspectorate to investigate the 30 top-spending authorities on housing benefit as a special one-off, which will be completed by this summer.

Insufficient action has been taken on published reports, which is distressing. We have to be careful to follow legal procedures in taking action against local authorities. When the benefit fraud inspection report has been published, authorities can comment on it and we can check whether they are actually carrying out their action plan. We have to go through those stages, after which some legal sanctions are available to us. We are now close to implementing action in that respect.

We wish to work with local authorities as partners, but we must make it clear that we are talking about our money—the Government's money—for which Ministers are accountable to this House of Commons. Local government is not responsible for it; we are, and quite right too. We have to remind authorities that, if the system is not working properly, they stand a good chance in the long term of losing that element of their finances.

Some hon. Members mentioned global figures. There is fraud, official error and claimant error—and we must try to separate them. Some fraud is organised and we are spending £2 billion a week on benefits. That money is open to systematic attack by organised criminals. The Department is carrying out a massive operation to buttress and secure the sytstem against that.

As I said to my right hon. Friend the Member for Birkenhead, we shall report back to the House of Commons on what we have been able to achieve. I am more than happy to ensure that every question that has been asked this morning is answered in writng. I know that colleagues will come back to me if they are not satisfied.

Mr. Deputy Speaker (Mr. Frank Cook)

In the absence of the Minister for the next debate, I shall suspend the sitting until he arrives.

11 am

Sitting suspended.