Clause 1 - Additional powers to obtain information
Social Security Fraud Bill
12:30 pm
Mr Jeff Rooker (Minister of State, Department of Social Security; Birmingham, Perry Barr, Labour)
I would like the hon. Gentleman to leave the Committee more satisfied than he is. The Bill has not appeared out of the blue. I draw his attention to the report published just over a year ago by Lord Grabiner on the informal economy. I have mentioned the scale of what the Department pays out each week. The amount of fraud is arguable, but we know that there is at least £2 billion. We are not prepared to put up with that. The taxpayers are being defrauded—including low-paid tax-paying workers and small businesses that are struggling to make ends meet. We have a duty to make sure that, in so far as is possible, fraud is eradicated from the system.
We have tried our best to pare the powers in the Bill to the bone. I freely admit that the drafts of the Bill and ideas that we were considering a year ago were much wider. We were not prepared, as Ministers, to defend some of the more extensive powers that we considered with our advisers. We are therefore convinced that the powers in the Bill are justified, and we are prepared to defend them robustly. My hon. Friend the Under-Secretary has made it clear that we do not intend that there will be fishing expeditions against individual citizens. If such expeditions take place, we shall come down on those responsible like a tonne of bricks, because that is not provided for in the Bill. It is to the credit of the Department that we sort out the bad apples rather than trying to cover things up. However, the extra powers are needed.
This Bill is part of the price that the country pays for not having an identity card system. We are virtually unique in western Europe in not having such a system. Other countries do not need this kind of legislation because they can carry out identity checks.
I should like the hon. Member for Northavon to be more content than he is about the issue in proposed new subsection 2C. We have taken the advice of our officials in relation to a person who has committed a benefit offence. Risk analysis is undertaken so that we do not waste the time of our staff. We know that certain people who claim a benefit are more likely to commit a benefit fraud during a particular period than others. Risk analysis allows us to find out when fraud pops up in relation to certain benefits. Some of those frauds are related to a time scale, which allows us to target them. However, if someone has committed an offence, that is no reason for ruling him out, but it must appear to the officer at the time that there are reasonable grounds to investigate. To approach the selected third parties, we must consider the thrust of the powers under the clause. In response to the hon. Member for Northavon, I should say that the power is an investigatory power. People undertaking the checks will not be those who decide whether benefit is paid. That is a different issue. It is not exactly Chinese walls, but there are different staff and rules in the Department for such decisions.
The power relates to section 109B of the Social Security Administration Act 1992. The officer must be investigating an alleged current offence, such as an allegation—whether or not anonymous—or a complaint from someone on the fraud hotline. There must be a reason for the investigation to begin. There must not be a fishing expedition. An investigation cannot take place because someone has a badge on his head, which says, ``I was once done for fraud''. There must be a current alleged offence. The official must then have reasonable grounds for believing that the new offence has been committed. I am confident that the Bill cannot be understood to provide a permanent power simply because someone has committed an offence, as a result of which his accounts will be inquired into ever more. That is not our intention.
The court would usually construe ``has committed'' in the light of the purpose for which the power is given. The power is given to investigate. The courts would take a harsh view if we operated that power in the way outlined by the hon. Member for Northavon. The court would apply the power to the offence under investigation. To be honest, my hon. Friend the Under-Secretary and I were not entirely satisfied with the way in which the hon. Gentleman asked the question and referred to the commas. We must consider the clause as a whole, taking into account how it will fit into the 1992 legislation.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.