Last year, I announced plans to automate the payment of benefits at post offices. Order books and girocheques will be phased out and replaced by a benefit payment card for all claimants who wish to be paid via a post office. That will help to eliminate fraud, reduce costs for taxpayers, be more secure for customers and support the future of the post office network.
Can my right hon. Friend confirm that, over the next three years, he will be spending £300 million to help to combat fraud? Can he also confirm that combating fraud effectively will help to ensure that benefits can continue to be paid through post offices?
My hon. Friend is correct. I have obtained agreement from the Treasury to spend extra money on preventing fraud. We believe that that will save substantial amounts of money for the taxpayer and ensure that the money goes where it should—to those in genuine need. That is in addition to the investment that we hope for in the new payments system, which is of the order of £130 million. We hope to involve private finance in developing that operation.
What is the point of issuing the new cards when large numbers of people, often working in gangs, are wrongly claiming benefit? How many spare national insurance numbers are there? What action is the right hon. Gentleman going to take to prevent the use of any of the millions of spare national insurance numbers for fraudulent claims?
The cards will, I hope, directly eliminate the sort of fraud that the hon. Gentleman mentions. He is correct to say that gangs of people steal order books and then impersonate their owners. Order books are one of the least secure means of payment.
Once we have a payment card and post offices are directly linked to the central source of information, this form of fraud and abuse will be virtually eliminated, with a saving of about £150 million to the taxpayer. We are in the process of cleaning up the national insurance number system to make it more effective. It is true that a number of people who have emigrated or died still have their numbers on the system, but they are not, for that reason, available for anyone to use.
Would my right hon. Friend care to commend my local office, which spotted a slight inconsistency about a gentleman who claimed to be incapacitated but who managed to drive up in a jazzy sports car to collect benefit? He was today convicted in Preston Crown court of defrauding the system of £60,000.
I am sure that the whole House will welcome the detection of that abuse of the system. We are introducing a more objective system of evaluating whether people are fit to work. If they are fit to work, they will be helped back into work through back-to-work benefits; if they are unfit, they will receive the new incapacity benefit, which we want to go to those who are genuinely medically unable to work.
Given the large number of people whose credit cards are stolen, what steps will the right hon. Gentleman take to enable people who lose their cards to get their payments quickly without having to go through a bureaucratic process that will cause them further distress?
That is an important aspect. The consortia competing to bring in the system have been narrowed down to five. They are making their detailed proposals. One aspect for which they have to ensure that they have the best possible arrangements on offer is coping with people who lose their cards or who are unable to go to the post office and want to nominate a relative or friend to go in their place. All these things have to be done, and done securely.