§ 38. Mr. Davidson
To ask the Secretary of State for Social Security if she will make a statement on the available penalties for fraud in the benefit system. 
§ Mr. Denham
We are determined to make the benefit system more secure and to penalise those who set out to defraud the taxpayer. As a result we are re-examining the policy and objectives with regard to enforcement. For too long defrauding the benefit system has been seen as a low risk, low punishment option and very often the only punishment suffered by fraudsters was to have to repay the overpayment they had fraudulently obtained.
To ensure that more fraudsters face up to the consequences of their actions we have from 18 December 1997, under provisions in the Social Security Administration (Fraud) Act 1997, introduced administrative penalties. In future persons who fraudulently obtain benefit by deliberately falsifying or omitting information, may be offered the opportunity in addition to repayment of the overpayment, to pay a penalty set at 30 per cent. of the amount overpaid as an alternative to being prosecuted.
We will continue to prosecute cases through the criminal courts where serious or persistent fraud is involved, or where a penalty offer is declined.