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The Secretary of State for Social Security (Mr. Peter Lilley): For the record, my remark about assertions did not relate to the Haringey survey--which sounds extremely interesting. My only remark about the survey was that it involved 15 landlords and, obviously, we will investigate it and study the findings. We have absolutely no vested interest in understating the level of fraud.We are simply here to detect fraud, and to prevent and to deter it in the future. As such, we are at one with the Chairman of the Select Committee on Social Security.
Mr. Field: I have no wish to score points, to be accused by hon. Friends who serve on the Committee of being vicious in the debate or even to be welcomed as crossing the Floor by my own side, as happened in our previous debate. I merely wish to place the evidence on record.
The Secretary of State made a very important contribution to our Select Committee hearing. He said that anti-fraud officers see fraud everywhere--I wish that that were true of all anti-fraud officers, but let us take that statement as being true--and that the important implication of that is that those people should be in the driving seat when we design programmes to combat fraud. He said that they know more about the subject than us and even some officers in the Department, because they are up against it every day. I shall return to that.
It is correct that I have cited only 15 of the 16 cases of which the Secretary of State has heard, and Haringey's survey will be a total survey of all those larger landlords in Haringey, but 1,300 visits have already been made in that borough. That contrasts with a national survey of only 4,500 inquiries by the Department.
I emphasised that in the Haringey survey, national insurance records, utility bills and council tax payment records have been checked and checks have been made with other boroughs, to verify whether claimants exist or are a creation of the landlord. That is a very different exercise from the memory test, which is what I suggest that the Secretary of State was undertaking when he inquired into housing benefit fraud.
I do not oppose memory tests. I merely suggest--I hope that the Under-Secretary of State for Social Security, the hon. Member for Gedling (Mr. Mitchell), will consider this argument when he replies, or at least convey it to the Department--that the type of inquiry that Haringey has conducted needs to be done throughout the country, so that we do not test claimants' memories but examine what landlords are doing.
Some landlords draw very substantial sums from public funds. They are in a unique position, because they receive a large benefit now, which, even if it is not paid directly into their bank account, goes into their bank account. Every other benefit that the Secretary of State for Social Security pays on the taxpayer's behalf goes to claimants for them to spend. This is a direct transfer payment to a specific group, so it is a very special group. Therefore, a survey similar to the work that Haringey has done should be conducted for the entire country.
Had Westminster, not Haringey, been mentioned in the Select Committee, I would have telephoned Westminster city council and asked for equivalent information to that which Haringey has given us. Both authorities are outstanding in London in combating fraud.
Mr. Tim Smith (Beaconsfield):
On the basis of the sample that the hon. Gentleman mentioned, will he estimate housing benefit fraud throughout the country?Is that fraud perpetrated only by the landlord, or is there a conspiracy between landlord and tenant?
Mr. Field:
I am doubly grateful for the hon. Gentleman's intervention because it gives me the opportunity to make it clear that I am not suggesting that fraud is a one-way traffic, undertaken only by landlords. I am saying that it is important that the limited resources that at any one time the Treasury will allow the Department to have to counter fraud are deployed as effectively as possible and that, if we are interested in reducing the social security budget, especially the part boosted by fraud, our efforts should primarily go into areas where the gains will be quickest and biggest; andI am suggesting that the biggest gains would be from landlords. It is difficult for claimants to run a housing benefit fraud racket for any length of time. That is not to say that some of us do not have clever constituents who manage to do that, but it is difficult to do so without the landlord's help. Haringey is finding that many of the tenants whom it checks up on do not exist: they are fictitious tenants created by the landlord or previous tenants who have been recycled by the landlord.
That issue takes me neatly on to my second point.I gained a mere inference from what the Secretary of State said during our discussions last Wednesday that concerned me. I questioned the extent of child benefit fraud.
Mr. Jeremy Corbyn (Islington, North):
Before my hon. Friend leaves the subject of housing benefit, I wish to make a further point. He will recall that during the interview that we had with the Secretary of State last Wednesday, I asked a question about the public spending consequences of the deregulation of rents. Typically, a former council-owned property could be rented for £150 a week in London, whereas the council rent would be about £50 a week, both of which rents might well be paid with housing benefit. The Secretary of State seemed unconcerned by that and unwilling to examine the public spending consequences of rent deregulation. Would it not be appropriate for the Secretary of State seriously to consider that issue?The public purse seems to be creating a large number of millionaire landlords through a process of rent deregulation and the open-ended payment of benefit for whatever rent the landlords choose to set in areas of great poverty and high levels of housing benefit.
Mr. Field:
I congratulate my hon. Friend on making his point again in today's debate. I look forward to the Secretary of State rising at the Dispatch Box and shall be happy to give way to him. I also noticed that, when the Secretary of State was replying to my hon. Friend, he raised the important consideration of whether there could be any meaningful market rents in areas where the amount of rented housing stock was still so dependent on one landlord--the public sector. The public owner--the public landlord--could fix the market rate in the area and, by so doing, could determine the extent to which taxpayers would have to foot an increasingly large part of that bill.
Both my hon. Friend's question and the Secretary of State's response to it were intriguing. We did not receive an answer to that question in the Select Committee and have not yet done so today--perhaps the Secretary of State will respond to that question later. If the monopoly landlord is allowed to set the market rent in his area, the Government, and therefore taxpayers, seem to be over a barrel because we taxpayers have to foot the bill.
Mr. David Winnick (Walsall, North):
If what my hon. Friend has said is true--all the evidence sent to him shows that a number of landlords are doing their best to swindle money out of the public purse--what confidence can we have that landlords in the private sector will not swindle their tenants? Does that not demonstrate how right many of us are when we say that people should not be subjected to private landlords when they have no choice? When people cannot buy and cannot obtain local authority accommodation, they are forced to become tenants of landlords such as those whom my hon. Friend has described.
Mr. Field:
It is intolerable for our constituents to be in a market where they have no choice because there is only a limited supply of private rented accommodation. If the market was working well, the choice would be greater and the pressures of the market would be applied against the landlords. As my hon. Friend says, our constituents often face Hobson's choice and the more vulnerable they are, the more likely they are to be subjected to that form of aggression by landlords.
I suspect that many hon. Members read the survey in The Sunday Times of housing benefit millionaires--landlords who are in such profitable areas that they draw more than £1 million a year in housing benefit.The survey showed that the treatment of many tenants who existed was undesirable, while other tenants for whom claims had been made did not exist. When pressed to identify the accommodation to which certain claims related, landlords specified, for example, the space under a sink and part of a garage. We should have no illusions about landlords who, up to now, have been able to make easy pickings from the public purse.
As the Select Committee has pointed out, if we are to deal with fraud, we should do so where the gains will be easiest. I do not suggest that fraud of other kinds does not take place--indeed, we may have time to discuss some aspects today--but, for the moment, I wish to concentrate on landlord fraud.
Before that bevy of interventions, I was saying that more child benefit fraud may take place than the Department would like to think. I asked Haringey council whether it had carried out any surveys in relation to fictitious children. As the council is not responsible for the administration of such matters, it had conducted no surveys on child benefit fraud as such, but it checked whether landlords whom it was investigating had included children in their claims for housing benefit. Where children were included, it investigated whether they attended schools and had health records, and whether child benefit was being claimed.
The results of that investigation were staggering. More than 50 per cent. of the children for whom one landlord was claiming housing benefit were found not to exist, and a substantial number of such children in general did not exist. I know that my hon. Friend the Member for Vauxhall (Miss Hoey) is concerned about women from other European Community countries who come here in the late stages of pregnancy, register the birth of their children here, disappear back to their own countries and then claim child benefit for the next 18 years. That may happen more than the Secretary of State thinks, and it may involve people from outside the European Community as well. We should concentrate anti-fraud campaigns on where fraud is greatest.
After listening to the Secretary of State's speech,I feared that the Department might be rather more interested in the photo-opportunities provided by the local spot checks of which he spoke than in any other aspect, and that the whole campaign might be merely a lead-up to the general election. It would be advantageous for one party to concentrate on claimants, and for the other to concentrate on landlords. I hope that we shall achieve a proper balance in future surveys, and will pay most attention to how we can retrieve the most money for taxpayers when wrongful claims are made.
I have managed to cover quite a few of the topics with which I wanted to deal, but my contribution would not be complete if I did not refer to national insurance numbers. Up to now, the emphasis in debates in the Chamber and in Committee has been on whether the right number of national insurance numbers are being issued. I do not for one moment disagree with the need to make the system secure, but I should like to suggest to the Governmenta rather different tack on how to accomplish it.My comments are based on events that occurred last Friday: the first happened in my surgery, and the second
is from the experience of an anti-fraud officer in London. Neither event relates to whether there are 3 million or10 million extra numbers floating around the system, but each emphasises how easy it is for national insurance numbers to be used by people other than those to whom they were allocated in the first place.
The anti-fraud officer, while looking for other information on a computer file, found a person's surname with two addresses listed for it, and the two addresses showed two national insurance numbers for the same name. The date of birth was the same for each of the names. The anti-fraud officer came across that information by accident, which suggests--leaving aside the issue of how many spare numbers are floating around the system--that the Government have yet to perform a data-matching exercise on the information that they have. If they had performed such an exercise, that piece of information would have been spat out and made available immediately.
The other example concerns a person who came to my surgery on Friday. He was not my constituent, but the constituent of my right hon. Friend--I rightly call him that--the Member for Wirral, West (Mr. Hunt).The constituent had been in employment all his life.He had one short period of self-employment because he lost his job, although he is now again working for an employer. He phoned the Contributions Agency in Newcastle because he wanted to pay, I believe, his class V contributions, which are made by self-employed people. He was asked to hold while his file was pulled up.He was then told, "You don't owe any money; you're in prison." He said, "I'm not in prison. I want to pay.I've been self-employed."
The man clearly did not realise the significance of the information he was giving me. It suggested that his national insurance number had been used--for how long we do not know--by someone else who had then been imprisoned. His national insurance contribution had been credited while the other person was in prison so that, when he called wishing to make his contributions to the fund for the period in which he was self-employed, he found that his contribution was complete.
A number of people, particularly anti-fraud officers, have suggested that "piggybacking" is much more substantial than we think. The Government, therefore, have a dual task. The first task will be to achieve a secure national system, which will take longer and will be very difficult because of the state of the numbers game, if I can call it that. In such a system, social security numbers should relate only to real people, and numbers that are spare because people die or stop making contributions should be held securely.
The stage beyond that is to decide how we make sure that people do not misuse the system, even if we could secure the safety of the current system of numbers.I previously suggested to the Secretary of State that, just as we are now going to receive notification of our pension contributions each year--what we have paid and what the charges are if we have a personal pension--should not we also be thinking about issuing a national insurance statement each year, showing what we have paid and what benefits we have received?
If we had such a statement, every incident of piggybacking would be reported to the genuine national insurance number holder, and the constituent whom I met on Friday would have received a statement informing him that he was registered as being in prison. It would have been clear that his number had been misused. We hope that his number is not still being used by the person in prison, but we do not know whether the prisoner's family is putting the number to good use.
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