New Clause 2 - Fraud
State Pension Credit Bill [Lords]
11:00 am
Mr James Clappison (Hertsmere, Conservative)
I beg to move, That the clause be read a Second time.
We now come to the entirely different subject of fraud. The amendment is modest but important. It proposes that the Government set out a report each year before both Houses that contains a statement as to the extent of fraud in state pension credit claims and what measures they are taking to deal with the problem. Fraud is taking place across the range of benefits—in credits, social security payments, credits administered by the Inland Revenue, and so forth. Fraud is an important subject and we need to know what the Government are doing about it, because a substantial amount of public money is at stake.
We have raised the question of fraud throughout the deliberations of Committees on tax credits, especially on the working tax credits in the new Tax Credits Act 2002 and the working families tax credit. We are still waiting for an answer from the Government about the prevalence of fraud in working families tax credit. They initiated a survey—a benchmarking exercise—to discover the extent of fraud within that credit, but it was abolished before we got sight of the survey report. We are still waiting, and the Treasury seems shy about telling us how much fraud there is. We hope that Ministers in the Department for Work and Pensions will do a little better than their colleagues in the Treasury.
Fraud is an important subject. In evidence to the Public Accounts Committee in July 2000, the Department gave its estimate of the level of fraud throughout the social security system as approximately 3 per cent. of benefit expenditure. Estimates vary depending on whether fraud is proven or suspected. One Government Minister said it could be as low as £2 billion or as high as £7 billion, if one took into account cases of suspected as well as proven fraud.
In the course of our deliberations, we have already made observations about the prevalence of fraud within pension credits and benefits for the elderly. It may be less prevalent among elderly people claiming benefits and taking up benefit entitlements, but it is not unknown. However, instances of fraud appear to be low in respect of retirement pension, and the same is true of other universal benefits with age-related entitlements.
Fraud seems to be greatest in means-tested benefits, not least because of their complication, which sometimes encourages people to embark on fraud. If a benefit is complicated, people might commit fraud and then find themselves trapped in fraudulent situations. The pension credit is a means-tested benefit, so we should be on our guard about fraud. We should therefore be grateful if the Minister would tell us what steps the Government will take to ascertain the level of fraud in pension credit. We hope that he can also give us details about who will investigate the fraud, and whether investigations will be made on the same basis as others carried out by his Department.
We would also like to know the Government's strategy for dealing with fraud in pension credit. We seek reassurance that they are doing all that they can, both in the Bill and in secondary legislation, to design out that fraud. We make no apologies for raising the subject, as we think that it is important. We want to save public money, and get it to the people who are properly entitled to it, not those making fraudulent claims.