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Column 947perpetually unemployed was interesting. My son, sad to say, is one of the long-term unemployed. He is 29, and he and his live-in girlfriend of like persuasion draw £150 a week for themselves and two children. He scorns people who go to work and gives this reason : a job at £3 an hour would be less than he gets now, £4 an hour would mean going to work, and £5 an hour would start paying tax." That is the sort of scrounger I am talking about. The letter goes on :
"The rest of us in the family are workers. My wife and I retired recently from a very successful business that we ran. My daughter has simply no time for my son's life style, yet there must be a million like him."
That gentleman is absolutely right.
To help to combat the problem, the Government should offer rewards to people who shop layabouts to the authorities. The potential saving to the British taxpayer is enormous--probably £1,000 million. People up and down the country know of a least one person in their street who dodges work and claims benefit. Rewards would encourage citizens to round up these cheats. In our communities, we should have dole posses as well as neighbourhood watch schemes. That would certainly increase the prosecution rate.
There were only 4,379 prosecutions for social security fraud last year, which represented only one quarter of all the cases detected. These people, categorised as layabouts, should have to report every morning to the local authority for community work before being entitled to benefit. For each year of unemployment over two years, one week's benefit should be stopped. Alternatively, why should we not have identity cards? Why should we not be able to identify those who have a legal right to social security benefits?
The other category of social security criminal is made up of the persons-- there are millions of them--who claim unemployment benefit while working. This applies not only to the black economy but to regular work also.
I believe that £1,000 million a year is stolen by these people. Staff in benefit offices say that these cheats even come to claim their money wearing a suit or overalls, ready to go to their place of work. They prefer to sign on early so as not to disrupt their working day. Instead of requiring claimants to call in at a set time, we should institute spot checks. Social security staff should be able to contact a claimant at a moment's notice.
Greater pressure should also be put on employers who take on people who are obviously working the black economy. In May, a racket was uncovered in Surrey, where gang masters were providing unemployed labour to fruit farmers for £5 an hour. There cannot be a cheat without a collusive employer who allows that person time off to sign on.
At present, 2,658 full-time equivalent staff are employed on duties relating to social security fraud. That number should be greatly increased and more staff should be used to weed out employers who are costing this country a fortune, lining their own pockets by using illegal labour.
Instead of sending cheats, dodgy employers and layabouts to prison--they would probably relish the opportunity to put their feet up--they should be made to undertake unsavoury community service. Alternatively,
Column 948we could make them attend the Labour party conference--perhaps some of them already do. Repeat offenders should be sent to the Liberal Democrat conference--at least there are plenty of available seats. They would then think twice about swindling the taxpayer. The tragedy is that many of the fraudsters are not ashamed of their actions, and many others in our society turn a blind eye to them. If they mugged an old lady for money, they would be condemned, but when they are indirectly taking money from pensioners via the benefit system, many do not bat an eyelid at their fraud. They are sent before magistrates, who administer little more than tea and sympathy.
The mandatory sentence for those committing fraud should be a turn on the good ducking stool in the local river--a good public flogging would be even better. My hon. Friend the Member for Isle of Wight (Mr. Field) has a good suggestion ; he thinks that a ball and chain should be put on offenders-- the larger the offence, the larger the ball and chain.
All things considered, it is little wonder that this country has become the focus of the European Community leisure industry. Forget EuroDisney : London is the place to have fun, all at the expense of the British taxpayer. According to figures produced by the Department of Social Security for 1990-91, some 220,000 foreign citizens came into Britain and registered for social security benefit. How many of them were genuine?
Most of them were from the EC, which is not surprising. Britain is attractive because it is the only place in Europe where claimants are entitled to unemployment benefit for a full year. They draw that benefit while working in the black economy. They can also seek housing benefit amounting to the full cost of accommodation, plus allowances. The total sum can run to considerably more than £150 per person, per week.
In contrast, an Italian claiming in Italy is entitled to 20 per cent. of his average daily wage in the four weeks preceding unemployment for up to six months. If he received no earnings in those four weeks, he gets no money.
The purpose of the single European market was to create free movement of labour. Instead, it seems to have produced free movement of cheats and layabouts, with Britain as the land of milk and honey. In common with the United States, we should refuse entry to all people from the EC unless they can prove that they have a bona fide job or sufficient funds to keep them during their stay. Why should my constituents subsidise Italian playboys on the make in London? I have said it before and I shall say it again : I do not believe that anyone who comes to this country should receive any benefit until he has worked and paid taxes for five years.
I recognise that the Government have made considerable strides in combating fraud. I was delighted to learn that anti-fraud staff saved £416 million from fraud last year, and have set a target of £460 million this year. So my figure of £1,000 million is not too far adrift. Ministers have clearly realised that investing in detection provides a high rate of return, which is why more resources must be committed to it.
The huge army of scroungers out there must be brought to book. We owe it to the taxpayer, the staff who are abused daily in benefit offices and, above all, those who
Column 949genuinely require state assistance. If somebody genuinely needs our help, we shall help them. But those who work the system--no way. I hope that the Minister will assure the House that she is aware that a social security fraud problem exists and will do even more than has been done already.
The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe) : I congratulate my hon. Friend the Member forWelwyn Hatfield (Mr. Evans) on obtaining this Adjournment debate and I welcome the opportunity to talk about the Government's approach to tackling social security fraud [Interruption.] The frivolity with which Opposition Members have greeted this subject would not be shared by their constituents.
My right hon. Friend the Secretary of State said in the debate on public expenditure-- [Interruption.]
Miss Widdecombe : Thank you, Madam Deputy Speaker. I hope that I shall make no further impositions on their fragile self-control. My right hon. Friend the Secretary of State said in the debate on public expenditure on 7 May that one of his key priorities was to bear down on fraud and abuse. It is an important subject and an essential element in any social security system, but it attracts too little serious attention and perhaps occasionally attention of the wrong sort.
Why is it one of our top priorities? It is not out of any sense of suspicion towards genuine social security beneficiaries, but because social security fraud and abuse harm the very people whom social security was designed to help--people on low incomes, people in genuine need and people who have spent their life working and paying national insurance contributions in the expectation that when they retire they will receive a decent pension. Fraud and abuse harm those people by stealing the money that they pay or have paid in taxes and national insurance, reducing the resources which can go into social security, bringing social security into disrepute, and making people in genuine need think twice about claiming.
Fraud comes in any number of guises. At one extreme are the people who drift into fraud out of the misplaced belief that perhaps one small lie does not matter. Then there are determined fraudsters who work while signing on as unemployed, invent extra children, discover how to invent a fictitious identity for themselves, or fail to disclose an earning partner.
At the farthest extreme are the so-called professional criminals, who burgle offices to steal blank order books, counterfeit instruments of payment, and run rackets involving multiple false identities and many different benefit claims. Their numbers are not great, but they represent a worrying element which calls out for tough action. Increasingly, we are beginning to see violent
Column 950criminals involved in that type of fraud. They prey on the naive and vulnerable by using them as runners to cash order books and take the risks.
Fraud is also a constantly changing field of action and counter-action. When we erect one barrier to fraud and abuse, the determined fraudsters will try to find a way round it. When we counter that new technique, they think up something else. So how do we bear down on fraud and abuse? There are four planks to our strategy. There is deterrence--stopping fraud from happening in the first place ; detection, to which my hon. Friend referred- -finding it and stopping it when it does happen ; recovery, so that we get back the money that people have stolen ; and, in certain cases, prosecution --we take the most serious cases to court.
Deterrence is obviously crucial : its importance cannot be overrated. It is the most effective way of controlling fraud. We need constantly to improve our defences. By introducing the new income support computer system, we closed one avenue to fraud. People would claim income support at several different offices simultaneously ; now, because the system is automated, they have to use more ingenuity and take more risks to create and maintain false identities. More recently, we introduced a staff awareness package, "Fraud in Focus", to train staff in what to look out for and how to identify suspicious claims. My hon. Friend will be glad to know that we are working with the Post Office on a similar fraud awareness package for its counter staff, to teach them how to spot false or amended order books and giro cheques and to ascertain what evidence will verify a genuine identity.
However, as with many decisions on fraud, a balance must be struck between deterring fraud and running a social security system which allows people with genuine need to gain access to it. However strongly my right hon. Friend may feel, I am sure that he will agree that, if we turn ourselves into Fort Knox, we shall defeat the whole object of social security. Our strategy, therefore, is to put in sufficient checks and levels of verification to deter fraud, but not to be so intrusive as to deter genuine claimants.
Inevitably some people will slip through the net, and that is where detection comes in. We employ around 2,800 people to work against fraud, and most of them work on finding it and then stopping it. We have recently reorganised them to make them as well trained and effective as possible. Most fraud staff are now organised into sector teams, which are managed separately from benefit-paying operations but have a local presence. We also run regional fraud teams, which specialise in the most serious cases of social security fraud. We are developing new performance measures for our fraud staff to make what they do as effective as possible.
As my hon. Friend has pointed out, these measures are working. Last year, as he said, our fraud staff stopped some £416 million-worth of fraud-- an increase of £83 million on the previous year. As he also said, this year's target is the best part of half a billion pounds, and in the first three months we are well on the way to achieving it.
When we find and stop fraud, we aim to recover the money that has been overpaid by deducting it from the fraudster's remaining benefit, or by civil recovery action. In a proportion of cases, we prosecute. We do not aim to prosecute everyone ; it is a very labour-intensive exercise, and it would tie up manpower which could be used more
Column 951effectively in detecting and stopping more fraudsters. Nor would universal prosecution be necessary for its deterrent effect. The real possibility of being taken to court is the deterrent, and we are grateful to local papers which cover social security cases and ensure that word gets around.
In many cases of petty fraud, there would be little point in prosecution. Fines do not work well when a fraudster is on a low income and cannot pay them. Gaol sentences would often not be given because of the pettiness of the offence, and would in many cases leave the family on social security. We therefore aim to prosecute serious cases of fraud--taking the social, domestic and medical circumstances of the offender into account, rather than small-scale fraud. We do not, however, rule out prosecution as a last resort, if the circumstances warrant it. Last year, we took nearly 4,500 cases to court--a quarter of the confirmed fraud cases discovered--and our prosecution success rate was around 95 per cent.
As I have said, fraud is constantly changing its nature and there are always more areas to tackle. An example in the past few years has been the upsurge in abuse of the social security system by bogus asylum seekers. We have worked with the Home Office on better ways of identifying and controlling claims for asylum seekers, and we have reduced the order book period for asylum seekers from 20 to six weeks. We have also put resources into detecting multiple false claims by people masquerading as asylum seekers. We believe that, with the Home Office, we are now getting the problem under control. There will, however, be other problems to tackle. Determined fraudsters can be very resourceful. The answer to this lies in effective ties between all the agencies involved in countering fraud--our own fraud staff, local authorities, the Department of Employment, the Home Office, and the police, with whom we enjoy an excellent relationship. It lies also in constantly learning from experience and ploughing back the lessons into training and new procedures ; and it lies increasingly in information technology. We already make substantial use of our computer systems to pick up and track fraud. The departmental central index, which holds details of claims to most social security benefits, is a very valuable resource. However, we believe that we can do a lot more to tap the full potential of this most potent asset within the letter and the spirit of the Data Protection Act 1984. In the coming years, we shall be using information technology more and more to deter fraud and to help detect it, by making it easier to cross-check details of claims and to identify suspicious claims.
My hon. Friend has spoken about abuse of the system, where people are not claiming fraudulently but neither are
Column 952they making serious efforts to find work. I well understand my hon. Friend's concern. We take all abuse of social security seriously. That is why we have made it a condition of getting unemployment benefits that people must be actively seeking work. It is not enough merely to sign on every fortnight. The Employment Service interviews every new claimant in depth. It reviews all claims for claimants who have been unemployed for more than 13 weeks, and it interviews at this stage all claimants who appear to need an in-depth discussion about their efforts to get back into work.
We introduced the restart programme in 1986 to guarantee an advisory interview every six months and ensure that claimants know and get a fair share of the employment and training opportunities available in their locality. After two years, everyone has to attend a restart course. An unemployed person who refuses a job offered or refuses to go for an interview can be disqualified from receiving unemployment benefit for up to 26 weeks.
The signs are that we are winning the battle. Twenty years ago, people thought that it was smart to drink and drive. Now they do not, and even young people believe that it is morally wrong to put lives at risk in that way. A similar shift, although it is hard to detect in the attitude of Opposition Members tonight, is occurring in attitudes to social security. During the 1960s, some people began to think there was nothing wrong with abusing social security--that it was their right to live off the taxpayer if they so chose. I believe that that attitude is now far less prevalent. Since the Conservatives have been in power, our unambiguous approach to abuse has had its effects. However, there are still those who believe that they can expect the taxpayer to support them. We need effective controls to stop those people exploiting a system designed to help genuine need.
In summary, the message that I should like to get across tonight to the vast majority of genuine social security beneficiaries and the small number of fraudulent ones is as follows. We are not a soft touch. People who are honest and in genuine need have nothing to fear and should exercise their right to claim benefit. The system is here to meet their needs. But those thinking about claiming benefit fraudulently should not do so, because we shall find them, catch them, and make them repay what they have stolen, and they risk being taken to court and fined, or being sent to prison.
I commend the measures to my hon. Friend and to the House. Question put and agreed to.
Adjourned accordingly at thirteen minutes past One o'clock .
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