Clause 33 - Offence of fraud
Tax Credits Bill
2:00 pm
Professor Steve Webb (Northavon, Liberal Democrat)
I have some sympathy with the amendment. I believe that we all agree on the importance of tackling fraud, but in some senses working families tax credit fraud has probably not been approached with the vigour that the Department for Work and Pensions would have us believe it accords to benefit fraud. I would not dream of suggesting that the Treasury is less vigorous in these matters than the DWP, but the DWP issues press releases on this subject roughly weekly, so it must be active. I hope that the Treasury is as well.
The amendment would require a report in about a year's time on what the Government have been doing on tax credit fraud, which would be welcome. To be fair, the Government have taken one important step on fraud, which is to make an attempt to produce a baseline figure. As the hon. Member for Hertsmere (Mr. Clappison) suggested, that process is proceeding rather slowly; we do not seem to have got there yet. However, given the many decades in which levels of fraud were not even measured accurately, so that we could tell whether we were making progress, at least we seem to be making some headway.
The hon. Gentleman mentioned an aspect of tax credit fraud which, as he rightly said, I had raised in a written question to the Paymaster General. At that stage she could not give me an assessment of child care tax credit fraud, but is she aware of the relatively recent reports that suggest that child care providers are getting fed up? The scam appears to be that parents who know how to work the system book a child care place for six months or a year, get the provider's signature on the tax credit form, send the form in, get the child care tax credit for a six-month fixed period under the present regime and then do not turn up. The providers are being messed around quite badly and are feeling aggrieved. I suspect that if they had been aware of the child care tax credit fraud hotline, to which our attention was drawn this morning, they might have rung it, but I also suspect that many of them are not aware of it or simply do not bother. Clearly that is both fraudulent as regards the public purse and disruptive for child care providers. What spot checks are undertaken by the Treasury once an award has been made and will they be any more vigorous under the new regime of working tax credits and child care tax credits.
I give the Government some credit for trying to assess the extent of fraud in various parts of the system, although they have not quite got there in relation to tax credits. An annual report of the sort envisaged in the amendment would be a useful prompt and would apply a little more pressure. That would be welcome.