Fraud

Oral Answers to Questions — Social Security – in the House of Commons at 12:00 am on 23 January 1996.

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Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam 12:00, 23 January 1996

To ask the Secretary of State for Social Security what priority has been given to tackling fraud in his social security reforms. [8791]

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

The fight against fraud is a top priority. Last year, the crackdown on benefit fraud saved a record £717.6 million from fraud detected and stopped. We are well on the way this year to achieving another record-breaking amount.

Photo of Lady Olga Maitland Lady Olga Maitland , Sutton and Cheam

I thank my hon. Friend for his determined effort to crack down on cheating, because cheating is nothing other than stealing. Will he confirm that, among other measures, the Department plans to visit 1 million homes to check that applications are correct? Will he further confirm that, last year, under that system, there were 9,500 prosecutions, with a 95 per cent. conviction rate being achieved? Is that not a success?

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

I confirm the information provided by my hon. Friend. However, there will be not only the 1 million additional visits, but the bar code scanner, data matching, hotlines, data cleansing, the Post Office reward scheme and the new benefit payment card, all of which will provide a tough range of measures to deal with benefit fraud.

Photo of Frank Field Frank Field Chair, Social Security Committee, Chair, Social Security Committee

I congratulate the Government on slowly trying to get to grips with the major issue of social security fraud. [HON. MEMBERS: "Hear, hear."] The operative word was "slowly", but I am grateful for the support of Conservative Members.

Why was it that, when the Government published their report on housing benefit fraud last week, the Department seemed to emphasise fraud by claimants, when most housing benefit fraud is by landlords? Why did the report estimate lost taxpayers' revenue at £1 million when evidence before the Select Committee—which the Treasury Bench is following—estimated it at £2 billion?

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

The housing benefit review published last week was the most detailed study ever of housing benefit fraud, dealing with more than 5,000 cases and involving 52 local authorities. We believe that the estimate of £1 billion for housing benefit fraud is accurate, although clearly the figure may be higher in some areas and lower in others.

The review called for tough measures to deal with fraud, and that is why my right hon. Friend the Secretary of State announced last week £10 million of challenge funding for local authorities, tough new incentives for local authorities to crack down on fraud and a new housing benefit central register to stop people claiming in one area and then going to another area and claiming again. We shall also be working with the Audit Commission to toughen up the procedures for claiming housing benefit so that we have a system that pays the right amount to the right person at the right time.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

Was there not also a serious social security fraud when the Labour party suggested that the Singaporean way of administering pensions was in some way preferable to ours? Will my hon. Friend remind the House of the difference between the two schemes?

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

Using false representations to obtain benefits is an offence, but that does not apply to Labour politicians making false representations to claim votes. One of my right hon. Friend's initiatives to crack down on fraud is data matching, or comparing one claim against another. That is why we believe that it is instructive to look at the claims made by the leader of the Labour party and compare them with what people such as John Monks and the hon. Member for Birkenhead (Mr. Field) have said. Stakeholding means forcing people to take out a second state pension and putting the funds in the hands of the trade unions. We all know that the rate of return from the Singapore scheme—a stateholding scheme—is 2 per cent. over inflation, whereas the rate of return since 1980 of the British pension funds, which administer our private schemes and have £600 billion-worth of assets, is 10 per cent. over inflation.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

More than two years ago, the Public Accounts Committee—chaired by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon)—investigated fraud by employers. Is the Minister aware that the Committee estimated that about £300 million was lost each year because employers were refusing to hand over their employees' national insurance contributions and taxes? In my constituency, a young lad who lost his fingers while working a wood-cutting machine could not claim a single penny piece, because his employer had not handed over his national insurance. As it is more than two years since £300 million was found to be missing, can the Minister tell me how many of those involved have been prosecuted?

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

The hon. Gentleman makes an important point, and it is vital that we have measures that deal not just with claimant fraud, but with fraud by employers, landlords and anyone else. If the hon. Gentleman cares to write to me about the individual case to which he referred, I shall look into it. Nobody must think that collusive employers and landlords are having an easy ride—we are after them as well.

Photo of Mr Michael Stephen Mr Michael Stephen , Shoreham

Is my hon. Friend aware that a favourite racket of those involved in fraud is to sub-let their flat and go and live with friends or relations while continuing to claim housing benefit? What is he going to do about that?

Photo of Oliver Heald Oliver Heald Parliamentary Under-Secretary (Department of Social Security)

My hon. Friend is right, and the measures announced by my right hon. Friend the Secretary of State last Friday will provide substantial help as we try to solve that problem.