Supplementary Benefits (Payment)

Schedule 2 – in the House of Commons at 12:00 am on 20th October 1969.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

11.32 p.m.

Photo of Mr Roger Cooke Mr Roger Cooke , Twickenham

For some time I have had doubts about the control exercised over supplementary benefits which are paid out. One or two cases have come to notice in my constituency in which people as well as receiving supplementary benefits have been found to have jobs on the side.

My doubts were brought to a head earlier this year when a well-spoken man with an Irish brogue went to my constituency office and produced a hard luck story about not having fair treatment from the social security office. I put forward his case for sympathetic treatment, as a result of which he was paid £39 over 14 days. Further inquiries were made into his position, and it was found that he did not live in my constituency at all. He purported to come from a respectable address, but in fact he had only an accommodation address for which he paid a pound or two.

I arranged for him to be interviewed by the social security office. When he turned up at my office in a van, he must have smelt a rat that something was to happen because he disappeared and has not been seen from that day to this.

The doubts raised in my mind over this matter were confirmed by a startling article in the Spectator on 6 September by an official of the Supplementary Benefits Commission, an article which, I hope, was read by the Minister. It told a horrifying story of widespread frauds and "fiddling" and such abuse of the system to make it almost a mockery.

Expenditure on supplementary benefits in the last four years has risen in a startling way. Four years ago it was £274 million. I understand that today it is £487 million, a rise of about 80 per cent. Unemployment pay has risen from £55 million to £137 million.

Since the Government conducted a widespread advertising campaign on supplementary benefits, 750,000 new claimants have come forward. Naturally, I am delighted that genuine new claimants have been satisfied and that many people have become entitled to these benefits. But, with £213 million more being paid out than four years ago on hundreds of thousands of new benefits, laxity has come into the system. I believe that Social Security offices are swamped, and there is insufficient investigation into cases.

Let us look for a moment at the swamping of offices. As the Report of the Supplementary Benefits Commission shows, continuing awards have risen by 50 per cent. since 1965—the old days of National Assistance—immediate payments have gone up by 80 per cent., and the number of callers at offices by 50 per cent. The commission deals with half as many people again as three years ago, and on Fridays things are a mad rush. One civil servant said on the radio that he believed that frauds were not 1 per cent., as the Government said, but possibly 5 per cent.

of the amount paid out. That is equal to about £24 million of taxpayers' money going down the drain.

The morale of the officers in these offices is low. I quote from a letter which I have received from the North of England. It says: I can assure you that incredible abuses are practised and, as a result of Government and departmental attitudes, the morale and interest of the staff, of which I have been one for 12 years, is at an all time low. There is connected with every social security office a hard core of individuals who intend to and do live well on State benefits, and their number is growing. The general attitude to the department now seems to be, 'Give them what they ask for, rather than have trouble or have them writing to their M.P.s.' If the Government are giving those instructions, I hope that it is not for any reason of electoral popularity.

This is not a class matter. The middle classes are just as much against their own kind as are manual workers. A few weeks ago, I announced that I would try to raise a debate on this subject. My intention was reported only in the Daily Telegraph, the Sun and the News of the World, but I have been inundated with letters about it from all parts of the country.

To illustrate the strong feelings, let me quote a few of them. The first is from what I take to be a middle-class address in Middlesex. It says: As an example, a friend of mine, married but with no children, has not worked since mid-June, and his wife has not worked since the end of July. In the two years that I have known them, they have never saved a penny, and just scraped through each week. I don't know what story they are spinning down at the Social Security office, but they can afford to go down the pub three times a week and now he tells me he's thinking of buying a car shortly. He claims that he is not draining the country's resources but merely receiving back what he has paid in, as he is entitled to. Another letter, from Harpenden, says: My sister has found herself in a most unfortunate situation. She has occupied a flat for 14 years, paying rent to her landlady, who has recently died. This lady, it is now disclosed, was a tenant, not permitted to sublet, and has been drawing National Assistance, not disclosing that she has been subletting and receiving rents. A working man writes from Carmarthen: I am a working man, honest and hard working, looking at these scoundrels around a small place like Carmarthen town, about the place, doing nothing, strong and healthy as they are. They have been at it for years. There was a brother and sister, and this is only one instance. They spent five years in a caravan on the outskirts of the town, doing absolutely nothing, and going down twice a week for their social money… I have a letter from Hastings saying: There are many scroungers and swindlers in the town. A well-known man writes from Luton, saying: One of my staff wished to draw a benefit for his mother-in-law, who was seriously ill and has since died. Instead of going to the Supplementary Office he went to the wrong building and had to be redirected, but in this office, Phoenix House, Mill Street, Luton, which is newly constructed, he found the staircase blocked up by young men drinking beer and wine with numerous empty bottles everywhere. On reaching the reception, the room was thick with smoke and cigarette ends were scattered all over the floor in spite of a notice saying, 'No Smoking'. When the applicants were called they made little attempt to move, but remained talking and smoking obviously enjoying an idle day. Luton has always had a very low quota of unemployed, probably one per cent., and there are today many unfilled jobs in industry here. I quote that to show the sort of discontent that there is over this matter.

Many correspondents point to immigrants who are allowed benefits on arrival—I suppose until they get a job, if need be. One health visitor has drawn my attention to a number of cases.

What is the position about Irish immigrants? An insurance investigator writes: I am an insurance investigator. While waiting to see the head clerk"— when he visited a local social security office— I overheard three Irish women. They had been here two days and were Irish immigrants with four children between them. What is the position about Irish immigrants? Are they entitled to social security on coming to this country?

What are these frauds that people write about? Among some of the unemployed I am told that the abuse is particularly marked, and genuine old-age pensioners are reduced to tears by pushful young men elbowing them on one side, some with bulging wallets. But the main cases brought to my notice are those people who conceal that they are working on the side at fruit picking, scrap dealing, doing builders' subcontracting work, house decorating, and so on.

Then there is a certain amount of forgetting or concealing, if a man is franker, that his wife is working. The new rule brought in by the Ministry recently concerning those under 45 years of age, that the benefit is withdrawn after four weeks if a job is offered to them and not taken, should, I claim, be extended to all classes of unemployed. It seems to have had a salutary effect. I understand that six out of 10 of those interviewed have found jobs. I understood the Minister to say today that 80,000 of these people had gone back to work. If so, surely if that was extended over all classes of unemployed, it would have a very satisfactory effect.

Another matter complained about is the fictitious case of desertion by a husband. I instance the extraordinary story of the wife who claimed that she was living with an identical twin of her husband who reappeared again, and so on. There are other stories about husbands who are found hiding in cupboards when people call.

There are cases of camp followers who live in caravans around American air force bases—a motley collection of single women, separated wives and prostitutes, who seem to live in some comfort and luxury and get their supplementary allowances.

What are the remedies? First, I suggest that as a long-term remedy employment offices should in future be in the same building as social security offices to ensure close liaison between employment and productivity and social security officials. In my area they are quite separate. In fact, the employment and productivity office is in another constituency.

Secondly, I suggest that there should be an investigator attached to every social security office—an ex-policeman, ex-military policeman, or retired detective. Such a man, on a bicycle, could follow up some of these cases. He could get around the whole area. For instance, the Irishman who took his £39 was only interviewed on the doorstep. If he had been followed into his home, no doubt more would have been found out about him.

It is suggested to me by a landlord in Southampton that the rent allowance, when paid, should be paid on a receipted rent book. He points out that the Government are losing twice over. They are losing when a rent allowance is paid and then spent on something else and then the landlord, when the rent is not paid, claims the arrears against his income tax.

My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) has made a deep study of this matter. He has suggested that independent medical certificates should be asked for in cases of back-ache and minor diseases of that kind and that young, single men living with their parents should have their parents' income investigated as well as their own.

Lastly, I should like to get down to the truth about the payment of supplementary benefits to strikers. The Parliamentary Secretary told me at Question Time today that about 3,300 supplementary benefits payments totalling about £22,300 were made to the dependants of strikers in the South Wales blast furnace dispute, an average payment of £6 15s. During the strike at Ford's in March about 15,000 men were paid an average of £6 a week, and at Vauxhall's, at Ellesmere Port, teams of social security men were brought in to pay out the benefits.

In that case an article in the Spectator said: All tax refunds were completely ignored in calculating their requirements, which meant that even people with refunds up to £20 a week, and with few commitments still received money. Perhaps the Minister will tell us a little more about that.

The Daily Telegraph went into this at some length and took the matter up with officials of the Ministry. It quoted one official as saying that the rules were not as clear on this point as they might be. A striker could claim that tax refunds were refunds of capital not to be taken into account in calculating benefit. If the striker digs his heels in, he will get away with it. If strikers are being paid strike money, plus refund, plus social security supplementary benefits, it seems to me that that is really an inducement to keep on striking.

In his statement today the Minister of State was not quite clear, to us anyhow, about the matter. He first said that these refunds were taken into account, and then I understood him to say that they were only partially taken into account. Perhaps he will tell us what the truth is.

We want a frank and open discussion on this whole question of fraud and fiddling of the supplementary benefits. We want an admission that frauds go on. There were 6,000 prosecutions last year, and I believe that that is only the tip of the iceberg, because about £600 million a year is being paid out in supplementary benefits and unemployment benefits. How much is misapplied? I believe that tens of millions of pounds are involved. The Government are responsible for that, and they must come clean and make a statement on the whole position.

11.47 p.m.

Photo of Mr Tim Fortescue Mr Tim Fortescue , Liverpool, Garston

I agree with a great deal of what was said by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). One thing that he did not say, but which I am sure that he would want to say, is that nothing he said, or that I have said, implies any criticism of those who work behind the counters in social security offices. I have seen them at work, and I have worked alongside them. They do a first-class job. The criticism is not of them, but of the rules which they are expected to apply.

11.48 p.m.

Photo of Mr David Ennals Mr David Ennals , Dover

I am aware that there is a good deal of public concern about the sort of allegations made by the hon. Member for Twickenham (Mr. Gresham Cooke). They have been repeated in a number of newspapers, and they were published in an article in the Spectator.

The Spectator article to which the hon. Gentleman referred gave some examples of the ways in which there can be an abuse of the social security provisions. What it could not do—and what no one can do—was to produce some firm estimate of what proportion, either of benefits paid or of recipients, is in any way involved in abuse. My estimate is that it is a very small proportion indeed, but that does not mean that one should not be concerned about this.

The important thing is to get this problem into proportion. A great deal of damage can be done to the social security system, to the officers who administer it, and to those genuine people who wish, and need, to take advantage of it, if it can be brought into disrepute. There are certainly some scroungers who take advantage of National Insurance and supplementary benefits—the anti-social minority who pretend that they are unable to obtain employment when they have made no real effort to find it, and some who exploit the sickness benefit provisions. There is scope for abuse among the so-called deserted wives, and some who have retired early on generous occupational pensions yet claim unemployment benefit when they are not genuinely seeking employment. These are forms of misuse of the system.

But we must keep the matter in proportion. These cases represent a small proportion of the population and of the beneficiaries. The vast majority of those who receive benefit from the Supplementary Benefits Commission—about 2¾ million people—are old people, the retired, the sick, widows, the disabled, or deserted wives. There is an element of abuse, about which we must be very careful and with which we must seek to deal.

I do not think that the public is fully aware of just how much is being done and it is a good thing that we should put on record what is being done—because although I much appreciate the intervention of the hon. Member for Liverpool, Garston (Mr. Fortescue), who said that nothing that he or his hon. Friend said reflected upon the efficacy or efficiency of the work of the Supplementary Benefits Commission officers, he must accept that this point is not taken in the country, and that the more criticisms that are made of the way in which the system works the more it would seem to reflect, quite unfairly, on the way in which the commission's officers do their work. They have a difficult job to do. They have to sort out each claim and reach a judgment on the question whether it is a fair or unfair one. It would be easy for them to take instructions which would require them to be so rigid and unbending in their approach that some people would go to the wall and those genuinely in need would not have their needs met.

A great deal of work is being done to counter abuse, and I want to give some examples. The hon. Member mentioned the workshy. Perhaps that category applies especially to young people who may be unwilling to work and would prefer to live on benefits. Last year, we took a very important measure to try to deal with this. The hon. Member quite rightly gave the figures. From October last year to August this year 80,000 cases of young single men—aged 45 and under —in areas where there was employment were told that they could have benefit for four weeks and no more; it would then be expected that they would be in employment.

But it would be wrong to assume that all the 80,000 were work-shy; many of them had not yet obtained a job, and did afterwards obtain a job. But the fact that this system has worked so successfully is a tribute to those who have administered it. The hon. Member said that it should be extended to all categories of claimant. We must be careful. We might be dealing with a married man, and we would not want to impose hardship upon his wife and children because he might not be able to obtain a post. We have to consider the cases very carefully.

Those who were prosecuted for committing the offence of obtaining unemployment benefit while in employment last year numbered 737. We also have to be careful about other forms of fraud. The hon. Member referred to deserted wives. This is a serious problem, where a wife has been deserted, or an unmarried mother has responsibility for her children. We must see that their needs are met. There is scope for abuse, which we have to watch very carefully. Again, we had to bring a number of prosecutions last year for fictitious desertion and undisclosed cohabitation. There were 580 prosecutions in 1968, partly as a result of the work of the special investigators, who look into suspected cases of fraud.

In 1968, 13,000 cases were investigated by our investigators and of those 6,000 had their allowances terminated or reduced. The interesting point is that it was found that the allegations against the remainder were unfounded. We also have false claims over the counter. The hon. Member for Garston, who has seen something of counter work, knows that some people will try their luck to see if they can get away with it. Often they do not do so because it is proved that statements they have made have been untrue. In 1968, there were 1,460 prosecutions for false claims made over the counter.

We also have to deal with the failure to pay contributions. This is a form of abuse, and is found particularly, as the hon. Gentleman said, in the building industry, where some people claim to be self-employed when, in fact, they do so simply to avoid paying National Insurance contributions and S.E.T.

It is true that there has been an increase in the number of our investigators. We could do with more, but I would be very averse to our having an army of snoopers to deal with a minority of people who practise fraud or abuse, and having too many people prying into the affairs of others. However, we have to have a certain number of them, and I think that those who urge that the Government should administer public funds responsibly must be aware that if we are to do this there have to be investigators.

I sometimes find some dichotomy among those who, on the one hand, are aware of abuse and, at the same time, and sometimes in the same breath, criticise us when indelicate questions have to be answered. I think that the hon. Member for Garston is one who might be guilty of speaking with two voices on this subject.

The public ought to know what is being done to try to deal with the whole area of abuse, but I think that we ought to advise against the sort of rumour-mongering which is going on at present. Many people are saying, "Oh, yes, I have heard the story of someone living off supplementary benefits", and so on. Some of this rumour-mongering is very unfair to the social security officers who have a difficult and responsible job to do. The implication of some of these rumours is that the officers are being soft, and this is very unfair to them. If members of the public believe that they have evidence that there is a form of abuse in relation to supplementary benefits, they have a responsibility to report it.

I do not think that they have a responsibility to spread unproven stories, but if they have reason to believe that they have some evidence they should report it to the manager of the social security office or to their local advisory committee or to their Member of Parliament—not just a generalised rumour, but facts which they think should be brought to our attention. If this is done we will examine the evidence. It is wrong that we should act on the basis of a hunch and take arbitrary decisions because they do not like the appearance of some person. We have to be wary not to fall into the danger of being obsessed by the thought of scroungers.

I recognise the tremendous work which is done by the Supplementary Benefits Commission. We should all be proud of its achievements. The degree of great hardship which has been relieved, particularly since the 1966 Act, is something of which I am very proud. They are relieving genuine poverty and hardship. This has resulted in considerable pressure on local offices. We are seeking means of ensuring that queues are shorter and that people have to wait a shorter time, and this has certainly worked. It has meant a great deal of reorganisation of local offices, in improving the buildings, integrating supplementary benefit offices with National Insurance offices, and other internal arrangements to try to cut down the time that people have to wait. This has concerned us very much and I am very anxious, in all the visits to offices that I make, to deal with this aspect.

One method that we are trying to shorten or prevent queues is by experimenting with payment by Giro order instead of by cash over the counter to people who make a claim for an immediate payment. Entitlement to benefit does not entitle them to payment over the counter, and in some offices we are experimenting with a system which means that people do not have to wait so long for a determination to be made. This also discourages people from flitting from office to office hoping that they can induce someone to make a grant to them.

The last point I want to make concerns morale. I do not accept what the hon. Gentleman said, that morale in the service and among the officers of the Supplementary Benefits Commission is at its lowest. I have been asking this question week after week as I have visited a large number of offices in different parts of the country. It is true that some are aware of pressure of work and some are aware of the need for increased training of our staff. I, too, am aware of this. There was a time when offices were acutely conscious of the pressure of work, particularly following the 1966 legislation with the great build-up of claimants. Today, morale is improving. I believe that the situation that existed six months or a year ago has been greatly improved. I want to end by paying my own tribute, as the hon. Gentleman has done, to the extraordinary work that is done in difficult circumstances, sometimes with difficult people, trying to ensure that those genuinely in need have their needs met and that those who seek to exploit the generous provisions of the State should not get away with it.

Finally, not only am I aware of the concern about abuse and its extent, but I am not satisfied that the situation should stay as it is. There are probably additional measures that need to be taken. We are looking, in the whole field of supplementary benefits and National Insurance, at whether there are any further measures, administrative or otherwise, which can help to deal with a situation which I believe relates only to a small minority of those who receive benefit from the Supplementary Benefits Commission.

Question put and agreed to.

Adjourned accordingly at two minutes past Twelve o'clock.