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Mr. Frank Field (Birkenhead): Will the Secretary of State give way?
Mr. Lilley: It is becoming rather like Question Time, but I shall give way to the hon. Gentleman as he is Chairman of the Social Security Select Committee.
Mr. Field: While it is important to stress that no serious group in this country would advocate the
Singapore model, in dismissing it, I ask the Secretary of State to be careful about his record. Those who depend on the state pension do not receive a 2 per cent. real-terms increase in their pensions compared with those who are in the state-run scheme in Singapore. On that basis, the figures that he has given show that the Singapore scheme is a better bet for pensioners than the scheme of which he has stewardship in this country.
Mr. Lilley: The hon. Gentleman says that no one serious would advocate the Singapore system. I urge him to read the recent book entitled "The Blair Revolution" by the hon. Member for Hartlepool (Mr. Mandelson)--who is spin doctor and guru to the Leader of the Opposition. He advocates the Singapore system, although apparently the hon. Member for Islington, South and Finsbury (Mr. Smith) has fallen out of love with it since his brief holiday flirtation on that island.
Mr. Bernard Jenkin (Colchester, North) rose--
Mr. Field: The operative word in my intervention was "serious".
Mr. Lilley: I am grateful to the hon. Gentleman for making that point pellucidly clear. I must now make some progress before I give way again--although if future interventions are of the same quality as the last, I shall be very willing to do so.
Last July I announced a five-year security strategy to tackle fraud and abuse in the benefit system--particularly with regard to the benefits handled directly by my Department. My strategy aims to make the whole benefit payment pipeline secure against fraud from the initial claim, through internal processing and the means of payment, to any changes in circumstances affecting entitlement. It then aims to shift the emphasis from detection to prevention and deterrence. As a result,it should reduce substantially the cost of fraud losses to the taxpayer, saving some £2.5 billion in 1998-99 from all the anti-fraud work carried out by the DSS. That figure includes local authority savings.
As to the benefits handled by the Benefits Agency, my strategy contains three main elements. First, the agency will more than double the number of home visits to check new claims for benefit and undertake far more checks on existing claims. I am therefore asking for 600,000 home visits to be undertaken to check new claims for income support and jobseeker's allowance, and for more than1 million reviews and checks of existing claims.
If those visits are targeted properly, they will be a highly effective way of preventing fraud--especially at the outset of a claim. More than 30 per cent. of home visits to new claimants since target visiting was established in July 1995 have resulted in action to prevent incorrect claims from being accepted.
Miss Kate Hoey (Vauxhall):
Will the Secretary of State give way?
Mr. Lilley:
The hon. Lady must permit me to make a little progress.
Secondly, we are using developments in new technology to target our checks and visits better. The Benefits Agency is using one of the most powerful new
computer systems in the world to cross-check the consistency of information that it holds about benefit claims. We plan to extend gradually the range of information from different sources which can be cross-checked by the computer. We are currently piloting a new system to match national insurance data with benefit claims in order to check on fraudsters who are both working and claiming.
Mr. James Couchman (Gillingham):
Will my right hon. Friend give way on that point?
Mr. Lilley:
I have just refused the hon. Member for Vauxhall, so I must make a little progress before I give way to my hon. Friend. We already use information from a number of other Government Departments--for example, we use Home Office data to prevent prisoners from continuing to claim benefits to which they are not entitled while in gaol. We are carefully considering a wide range of other data that we might use without compromising data protection and our duty of confidentiality, such as data from the Inland Revenue on the P46 forms that an employer completes when an employee starts work and does not have a national insurance number.
Mr. Couchman:
On that point, does my right hon. Friend agree that the fact that the P46 does not ask a signatory whether he or she is in receipt of benefit while signing that the job may be his or her main job, is a weakness that encourages those who are working and signing to believe that they can get away with it?
Mr. Lilley:
My hon. Friend makes a valuable point, which I will certainly take into account in the work that we are doing.
Miss Hoey:
I am a bit concerned that the right hon. Gentleman has not mentioned child benefit, and I am especially concerned that there appears to be no method of preventing people who move abroad from continuing to claim child benefit. How is that being tackled?
Mr. Lilley:
I cannot remember off-hand the rules governing how long people are entitled to benefit when they move abroad, but I can write to the hon. Lady with that information and any further information that would elaborate on that point.
Miss Hoey:
Perhaps if I could just--
Mr. Lilley:
If the hon. Lady wishes to answer her own question, perhaps she will do so in a later speech.[Hon. Members: "Give way."] I give way.
Miss Hoey:
It is important that the Secretary of State understands what I am trying to ask. It seems as though, after people move abroad, every year a letter is sent to what was their home, asking them whether circumstances have changed. They do not have to reply to that letter unless circumstances have changed. They may well be living in Greece or Spain--I have gained evidence of that
Mr. Lilley:
As I said, I will follow up that point and respond to the hon. Lady in due course.
The third element of our strategy is virtually to eliminate fraud in the payment system by introducing a benefit payment card to replace order books and giro-cheques for payment through post offices. Invitations to tender were issued to three consortiums on 29 February 1996. I hope to be able to announce the successful supplier of the new system in May 1996, and to see the start of the roll-out of the new system from the autumn onwards.
The five-year security strategy involves the investment of additional ring-fenced resources on top of the money already spent by the DSS on anti-fraud work. In the current financial year, we are investing more than£100 million of extra resources. Even in this first year, the investment is repaying itself nearly fourfold, with extra savings of more than £400 million. That will bring total fraud savings in the Benefits Agency this year to about £1 billion and next year we expect them to rise a further 50 per cent. to reach £1.5 billion.
The hon. Member for Islington, South and Finsbury recently suggested that my plans to achieve a 25 per cent. step improvement in the productivity of my Department would not be achieved, and certainly not without undermining our battle against fraud. I was delighted when the shadow Chief Secretary, the hon. Member for Oxford, East (Mr. Smith), contradicted him, writing in a leaked letter that
Mr. Clifford Forsythe (South Antrim)
rose--
Mr. Lilley:
Would the hon. Gentleman allow me to make progress?
There is no suggestion of sacrificing anti-fraud activity to achieve our efficiency objectives. The extra funds secured for the security programme are ring-fenced and cannot be diverted to other activities. Moreover, the fraud reviews enable us, for the first time, to measure the current level of fraud benefit by benefit, to set targets for reducing it and to measure achievement against those targets. We have no intention of relaxing the target of reducing the level of fraud by 70 per cent. during the five-year security strategy period. The essence of my efficiency programme is to specify objectives and then improve our methods and processes to enable us to meet or surpass those targets.
"the advice I am getting . . . suggests that savings in running costs of this magnitude are perfectly feasible, given the opportunities for efficiency gains and the scale of the investment already undertaken."
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