Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch & Strathspey, Liberal Democrat)

I want to take this opportunity to probe the Government’s thinking on this change. In previous debates in this Committee in which we have discussed benefit sanctions or conditionality, I have been keen for information from Ministers about the evidence on which the proposed change is based.

As I understand it, the clause will extend from three years to five years the period in which benefit may be sanctioned or lost if a second benefit fraud conviction takes place. Will the Under-Secretary tell the Committee on how many occasions the power has been used since it was introduced with a three-year limit? When it has been used, on how many occasions has it resulted in benefit being withdrawn entirely, and in how many has benefit been withdrawn partially?

In the no doubt detailed assessment that the Under-Secretary and her officials carried out before proposing the change, in how many cases would the power have applied since it was introduced if the five-year time limit had been in place rather than the three-year time limit? It is important for the Committee to understand, looking back, what difference the extended power would have made in practice in evaluating the judgments that Ministers have made in advancing the clause. I look forward to her explanation of that evidence base.

Anne McGuire (Parliamentary Under-Secretary (Disabled People), Department for Work and Pensions; Stirling, Labour)

It may not be possible to give the detailed analysis of the number of cases per year, for which the hon. Gentleman asked. However, I can give him some information, which I hope will be useful, on the number of cases that we anticipate, based on current trends. That may go some way to deal with the issues.

The clause is about deterring benefit fraud, rather than punishment. We are determined to tackle benefit fraud. When a person is convicted of a second benefit fraud within a specified period—we are asking the Committee to accept that the current period of three years should be extended to five—that allows us to reduce benefit entitlement or to remove it. The Department already uses that process to reduce benefit fraud, but it is especially aimed at deterring those who offend persistently and have been given repeated warnings to the effect that a further conviction would have an effect on their benefit. The current legislation works. We want to maximise the deterrent effect, without it running contrary to other legislation relating to re-offending, such as the Rehabilitation of Offenders Act 1974, under which some offences are spent after five years.

The hon. Gentleman asked for the number of cases that we would expect to capture by extending the legislation. We anticipate that, based on current trends, there will be somewhere between 30 and 50 additional cases per year. However, we should hope to see a  reduction in the number of cases. If people realise that there could be a removal or a reduction of their benefit, that in itself will, hopefully, be a deterrent.

Tim Boswell (Daventry, Conservative)

The Under-Secretary is giving a satisfactory response to the queries that have rightly been raised. Will she confirm that there has been no historic difficulty with the three-year rule in respect of the Human Rights Act 1998 and that there have been no successful defences of the allegedly fraudulent claimant on the grounds that, somewhere, the process has been unfair? Bearing in mind that Ministers have given their certificate about compliance, will she confirm that a five-year period is within those principles? I have no difficulty with them.

Anne McGuire (Parliamentary Under-Secretary (Disabled People), Department for Work and Pensions; Stirling, Labour)

The hon. Gentleman identifies specific circumstances where an individual may wish to pursue a case under human rights legislation. I assure him that the five-year period does not run counter to that. As my hon. Friend the Minister of State has said, the Secretary of State for Work and Pensions has made a statement under the Human Rights Act, which is at the front of the Bill.

I have talked about the cases that we hope to catch in future, based on our current analysis. Currently, there are 320 cases per year where two strikes have encouraged us to see whether there should be a sanction, and the sanction was applied in 190 cases. There are no details about how many people were in hardship or partial award. I hope that that is a satisfactory explanation for the hon. Member for Inverness, Nairn, Badenoch and Strathspey.

The penalty applied on the two-strikes cases will not change. I hope that that gives some comfort to the Committee. It remains a fixed 13-week period, during which a customer’s benefit ceases or may be reduced. It is not necessarily removed; it can be reduced. Most importantly—this links into what is behind the hon. Member for Daventry’s question about safeguarding rights—those first convicted of a benefit fraud will receive a written warning telling them about the two strikes provision. Therefore, people will be under no illusion: if they continue to defraud the benefits system there will be a penalty with the two-strikes approach. Any right of customers to request hardship payments will not change either. I hope that gives some comfort to the hon. Member for Inverness, Nairn, Badenoch and Strathspey.

These payments will help to ensure that the basic needs of vulnerable customers or those with families continue to be met. No deductions are made from retirement pensions, benefits paid for children, or disability living allowance, while an underlying entitlement remains to passported housing benefit and free school meals.

I hope that members of the Committee will appreciate that we are extending the time for very good reason. We want to root benefit fraud out of the system. We have also built in safeguards so that those who are vulnerable will have protection under the new system. Most of all, we will make clear to customers who have a tendency—as I say, we are talking about  very small numbers here—to defraud the system what the penalties are for that action. With that explanation, I trust that the Committee will accept the clause.