Clause 33 - Offence of fraud
Tax Credits Bill
3:30 pm
Mr James Clappison (Hertsmere, Conservative)
My hon. Friend is absolutely right. We are worried that insufficient numbers are being prosecuted. The Paymaster General says that we have a select system of prosecutions, but it must be extremely selective to generate such a small number. We find it hard to credit that a vigorous prosecution policy lies behind that. Fraud is a criminal matter and should be treated as a crime.
On the question of investigations that precede prosecutions, I hope that I can clear up the conflict between myself and the Paymaster General on the figure of 1.5 per cent. As I said, that figure came from the Inland Revenue's annual report, which is the only source of information that we have. It states:
''During our first full year, our aim was to open inquiries into 1.5 per cent. of applications. The process is supported by a risk-based scorecard, matching of data with other Government Departments and allegations from the public.''.
It goes on to set out the number of inquiries that have taken place:
''We found non-compliance in 28 per cent. of cases''.
From that report, I understood that the system of risk assessment, which the Paymaster General took us through at some length, had generated the figure of 1.5 per cent. She is shaking her head but given that that figure was in the report, can she tell us what proportion of cases were in fact investigated? We would be grateful to know the figure that was generated by the risk-based assessment, whether or not it was 1.5 per cent.
It is striking that the risk-based assessment led to a finding of non-compliance in 28 per cent. of cases. That is a high figure. The figure for cases of lower risk may be less than 28 per cent., but that could still generate a substantial figure across the tax credit framework. We need more information on how many claims, as a proportion of cases, have been investigated.
We should also like to know about penalties—the Paymaster General did not answer the point that was made by my hon. Friend the Member for Fareham. Given that there are so few prosecutions, and that the only other way in which cases are dealt with is by civil penalty, what proportion of penalties were imposed for fraud and what proportion related to negligence? We know that information systems have not been
good in the past so the Government have hardly any record of how much has been generated by penalties. In a parliamentary answer, the hon. Lady said that it was £50 over two months, but the information-keeping system has not been good and we need better information.
We also need more information on the ballpark question of how much fraud is in the tax credit system. What is the Government assessment of the amount and extent of fraud? That remains unanswered thus far, so I will study the hon. Lady's remarks carefully. Can she tell me about the outcome of the benchmarking exercise and what will be made public? We do not want anything that would encourage or enable people to commit fraud to be made public, but the Department for Work and Pensions has given its assessment of fraud across the benefit system, and we cannot see how a simple assessment could generate more fraud. As the Government have said in the past in their Green Papers on fraud, it is essential to know how much fraud there is in a system before one sets out to tackle it. We believe that the Government's assessment of the amount of fraud in the tax credit system should be put in the public domain.
I made that the starting point of my opening remarks this morning. I reach my concluding point, and the question remains unanswered. I shall study carefully what the Paymaster General has said and reflect on it, but I am unsatisfied. Although I shall not press the amendment to a vote, it raises an important subject that I want to think about carefully. Having done so, I may well want to return to it on Report, but, for today, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 33 ordered to stand part of the Bill.