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Clause 4 - Unlawful profit orders: criminal proceedings

Prevention of Social Housing Fraud Bill – in a Public Bill Committee at 9:00 am on 24th October 2012.

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Photo of Brandon Lewis Brandon Lewis The Parliamentary Under-Secretary for Communities and Local Government 9:00 am, 24th October 2012

I beg to move amendment 11, in clause 4, page 4, line 1, after ‘offence’, insert ‘in relation to an offence under section 1 or 2’.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss the following:

Government amendments 12 to 21, 46, 22 to 24, 27 to 29, 34 to 37.

Government new clause 1—Regulations about powers to require information in connection with housing fraud.

Government new clause 2—Regulations about related offence.

Government new clause 3—Regulations: supplementary.

Government amendments 39 to 45.

Photo of Brandon Lewis Brandon Lewis The Parliamentary Under-Secretary for Communities and Local Government

If the Committee will bear with me for just a few minutes, I may take just a little longer over this collection.

Although the Bill contains important provisions that would help to reduce the prevalence of fraud in social housing and would impose proper penalties on those who are found guilty of illegally using valuable social homes, it does not yet include powers that would increase social landlords’ access to data to help them detect and prosecute instances of fraud. Landlords often cite their  lack of access to data as being a significant obstacle that prevents them recovering as many homes as they otherwise could.

The power to require information will be subject to affirmative resolution. While there will, therefore, be ample opportunity in the future to fine-tune the detail, I would like to set out our current thinking and put on record how we would seek to ensure that proper safeguards are in place.

The regulations will determine who may use the power to require information. At present, we intend that only persons authorised by local authorities will be able to use the power to require information. The Bill would require persons using the power to have regard to guidance issued or approved by the Secretary of State. Only organisations specified in the regulations would be required to comply with an authorised person’s request for information. Discussions with social landlords have suggested that the key private sector holders of data they need to access for the purpose of building up strong evidence of fraud are banks, building societies and utility companies. We intend those bodies to be on the list of organisations that are compelled to supply data.

When conducting social housing fraud investigations, it is important to be able to link the tenant to another address, which can provide evidence that, for example, the tenant is sub-letting the social home they have been allocated, or that they own a home that they didn’t declare when applying for social housing. Banks, building societies and utility companies hold information that can indicate that the named tenant has an account registered at another address, and in the case of banks and building societies, account statements can provide evidence of receipt of payments suggesting they are sub-letting for money, and of expenditure suggesting the tenant is making monthly mortgage payments, thereby denoting they own a property. We do not currently intend to add any other organisations to the list, but, as suggested by the Information Commissioner’s Office, we would able to amend the list by regulation to ensure that it is no longer or shorter than necessary.

We will consider other safeguards that should be included in the regulations. For example, we will consider whether the regulations should specify when requests to a listed body may be made, whether the number of persons that a local authority may authorise should be limited, and whether only persons believed to have committed an offence should be subject to having their data accessed. We do not intend for sensitive personal data to be accessible. To ensure that organisations comply with requests for information, new clause 2 allows the creation of an offence for non-compliance with a request for data. We intend to create a defence in cases where all reasonable efforts have been made to comply with the request.

Photo of John Healey John Healey Labour, Wentworth and Dearne

Many would welcome this strengthening of the information provision and mandatory requirement to co-operate with local authorities investigating potential social housing fraud. Will the Minister make clear that the offence for non-compliance in information sharing that the new clause will create will be a criminal offence? He consulted on that matter during the Government’s consultation on strengthening these provisions.

Photo of Brandon Lewis Brandon Lewis The Parliamentary Under-Secretary for Communities and Local Government

I thank the right hon. Gentleman for his intervention and the chance to clarify the matter. Yes, it will.

New clause 3 makes it clear that the Secretary of State will make regulations for England, Welsh Ministers will do the same for Wales and regulations will be subject to the affirmative procedure. My officials will have further discussions with the Information Commissioner’s Office and we will, of course, take on board any comments and suggestions they have to ensure that the regulations we make follow best practice on data protection.

Photo of Steve Pound Steve Pound Shadow Minister (Northern Ireland)

Like most people here, I am very sympathetic to the aims and ambitions of the Bill. However, in my authority we have found that the single most useful source of information—although I do not wish to bring Murdoch into this matter—is Sky television. We find that we get more data from Sky subscription channels than from any other source; in particular, we get an extraordinary amount of data from sports channels, which probably says a great deal about my constituents. Has the Minister thought about extending the measure in that direction? If he has, will there be any limits, or will the bounds extend until every source of information in the world is in it?

Photo of Brandon Lewis Brandon Lewis The Parliamentary Under-Secretary for Communities and Local Government

Without commenting too much about the hon. Gentleman’s Sky subscription choices, we do not want the list to be any longer or shorter than is absolutely necessary, as I said earlier, but I take his comments on board and we will take a look at whether satellite TV subscriptions can play an important part. However, I would be wary of making the list too long and too wide, for the very reasons that I suspect he was alluding to.

My officials will have further discussions with the Information Commissioner’s Office and we will, of course, take on board any comments and suggestions it has to ensure that the regulations we make follow best practice on data protection.

There are a number of other amendments that I have not commented on. If Members have particular queries about amendments 12, 13 and 14, I will comment on them, but I think that I have dealt with the issue that arose in yesterday’s debate on the money resolution. The provisions will be welcomed by social landlords and I firmly believe that they will improve the Bill.

Photo of John Healey John Healey Labour, Wentworth and Dearne

I had not intended to speak but I was too slow to respond to the Minister’s invitation to deal with any other queries. Will he reflect on and respond to the fact that, in recent years, one of the most effective programmes against fraud has been the Audit Commission’s national fraud initiative? He will be aware that his Department is in the process of axing the Audit Commission; there is a draft Bill that will do just that.

In some senses, the national fraud initiative makes up for a gap in the present system, highlighted by the debate on this clause and the other new clauses and amendments: the problem of data matching. When personal data and financial data held by a range of organisations and agencies are put together they can show discrepancies that help to detect and stamp out fraud. Since its introduction, that initiative has highlighted fraud and overpayment of around £664 million.

In the proposals for the Audit Commission—this relates clearly to the matter before the Committee today—the Government say that the national fraud initiative is to be transferred but they have disclosed no details about to whom it will be transferred, whether the commitment to national data matching and the anti-fraud programme will remain, and if so, how it will be carried out.

The other element that relates to our concerns about data matching, data sharing and the provisions to deal with social housing fraud in the Bill, is that the Audit Commission also produces an annual fraud survey. That is extremely useful not only to local government, but to agencies that work alongside local government in similar fields. Will the Minister respond on whether the survey will continue, and whose responsibility it will become in the future? The survey provides an important function, which we risk losing in the wider changes that will continue to help the housing associations and councils responsible for the social housing that the Bill addresses, to deal with the fraud that we are determined to stamp out.

Photo of Brandon Lewis Brandon Lewis The Parliamentary Under-Secretary for Communities and Local Government

I am happy to give the right hon. Gentleman some good news; there is some bad news. The good news is that the national fraud initiative will continue, and as he rightly said, we have made it clear that it will be moved to another body. I do not want to move outside the scope of the Bill, but an announcement on where it will be moved has not yet been made.

Amendment 11 agreed to.

Amendments made: 12, in clause 4, page 4, line 15, leave out ‘, (7) and (8)’ and insert ‘and (7)’.

Amendment 13, in clause 4, page 4, line 20, after ‘offence’, insert

‘(or the best estimate of that amount)’.

Amendment 14, in clause 4, page 4, line 35, leave out subsection (8).

Amendment 15, in clause 4, page 4, line 41, leave out from ‘appropriate’ to ‘to’ in line 42.

Amendment 16, in clause 4, page 4, line 43, leave out ‘(or to do both)’.

Amendment 17, in clause 4, page 4, line 46, leave out

‘an appropriate sum under a compensation order or’.

Amendment 18, in clause 4, page 4, line 47, leave out ‘(or both)’.

Amendment 19, in clause 4, page 5, line 2, leave out

‘, make a compensation order or do both’.

Amendment 20, in clause 4, page 5, line 2, at end insert—

‘(10A) If the amount required to be paid by a person under an unlawful profit order is not paid when it is required to be paid, that person must pay interest on the amount for the period for which it remains unpaid.

(10B) The rate of interest is the same rate as that for the time being specified in section 17 of the Judgments Act 1838 (interest on civil judgment debts).’.

Amendment 21, in clause 4, page 5, line 6, after ‘order’, insert ‘(subject to paragraph (e))’.

Amendment 46, in clause 4, page 5, line 7, leave out ‘in section 131’.

Amendment 22, in clause 4, page 5, line 10, leave out paragraph (c).

Amendment 23, in clause 4, page 5, line 12, leave out ‘133(3)(b)’ and insert ‘133(3)(a) and (b)’.

Amendment 24, in clause 4, page 5, line 12, at end insert ‘, and

(e) the reference in section 133(3)(c) to a confiscation order under Part 6 of the Criminal Justice Act 1988 or Part 2 of the Proceeds of Crime Act 2002 or an unlawful profit order (or both) were to such a confiscation order or a compensation order under section 130 of the Powers of Criminal Courts (Sentencing) Act 2000 (or both).’.—(Brandon Lewis.)

Clause 4, as amended, ordered to stand part of the Bill.