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5.47 pm
Ms Liz Lynne (Rochdale): I welcome the chance to discuss benefit fraud again, even though we debated it a short while ago. It is a matter of such significance that it warrants another debate.
Benefit fraud undermines confidence in the welfare state. We should not just discuss it; we must take action to prevent it. Housing benefit fraud is a responsibility of local authorities. Whether it amounts to £1 billion or£2 billion, the amount of fraud is still immense. I should like to dwell on the survey done by the Department of Social Security which states that one in five claims is fraudulent or incorrectly based; and that housing benefit errors and frauds are worth £840 million a year. That is immense, even if we take those figures. Fraud was£730 million. As I said, that is bad enough, but when we take into account housing benefit fraud when it is linked to the payment of income support, the figure goes up. The Government have quoted the figure of £1 billion. Of that, £900 million is fraud. As we have heard today, the Social Security Committee said that it could be as high as£2 billion. Whatever the figure, we have to do something to combat that fraud.
Let us look at what local authorities are actually doing. Last month, there was a report--an academic study--by the unit for the study of white collar crime at the Liverpool business school at John Moores university.It sent out survey questionnaires to 360 district, metropolitan and London boroughs. The return rate was
40 per cent., which I believe was quite good. The report said what the savings were. I would like to blow the trumpet of Liberal Democrat authorities here--Liberal Democrat savings were 2.3 per cent.; the Conservatives' 2.2 per cent.; and Labour's 1.44 per cent.
It was also said in the survey that the fraud investigators in Liberal Democrat authorities actually performed better. The weekly benefit savings were per investigator. In Liberal Democrat authorities, the weekly benefit saving was £209,755; in Labour authorities it was £191,248; and in Conservative authorities it was £179,010. I would like to look at the reasons why this could be the case. One of the main reasons is that Liberal Democrat authorities have employed fraud investigators for longer.
Mr. Bernard Jenkin:
It could be that there is less fraud under Conservative authorities. I am not saying that that is any particular credit to Conservative authorities--it could be a reflection on the areas concerned. It could be a reflection on all manner of things. There could be less fraud in Conservative authorities--although I admit that there is only a small number of them at the moment.
Ms Lynne:
Yes, there is a very small number of Conservative authorities at the moment--and I am glad that the hon. Gentleman accepts that fact. I was quoting figures for the amount of housing benefit paid within that area. For the Liberal Democrats, it was 2.3 per cent. of the amount of housing benefit paid within that area, and for the Conservatives it was 2.2 per cent--the hon. Member cannot get away with that argument.
Tackling benefit fraud is not just a matter for local authorities; it is a matter for Government Departments as well. I believe that there should be greater co-operation between Government Departments and local authorities. Perhaps if there was greater co-operation, we would get away from the large-scale fraud that we have at the moment. If more fraudsters--I am talking about landlord fraudsters--ended up with convictions, it might be an actual deterrent.
We are not talking about some small-time crime, we are not talking about the individual who defrauds housing benefit--even though that is serious--we are talking about landlords on a large scale who are ripping off the taxpayer by overstating rents, by claiming on empty properties and by creating fictitious tenancies. The book must be thrown at them--and there is little evidence that that is happening.
Prosecution of landlords is often neglected, partly because it would take council staff away from detecting new fraud--because they have to meet Government targets. The only thing that happens to these fraudsters is that the benefits stop, the pay cheques stop. They do not actually get prosecuted. I believe that the lack of prosecutions leads to a climate of acceptance.
I asked a written parliamentary question to the Home Office not so long ago and I got a depressing reply. I asked whether the Home Office looked at the correlation between the number of criminal prosecutions and housing benefit fraud. I also asked whether it looked at the level of housing benefit fraud. I also asked whether there were any joint initiatives between the Home Office and the Department of Social Security. I was told in the reply that it does not know how many offences of housing benefit fraud there have been, and no, it is not working with the Department of Social Security. That is not good enough. We must ensure that fraudsters are prosecuted.
In the debate in March, we spoke about other fraud--I will not go into the detail of what was said then, except to say that I welcome the home visits being restored. I was worried when the Government cut them, but now they have been reinstated, that will cut down on a lot of benefit fraud.
I now turn to the Child Support Agency and the way that fraud is perpetrated. It is often said that the CSA is effective in detecting benefit fraud. In April, the Chairman of the Social Security Committee, the hon. Member for Birkenhead (Mr. Field), said in The Independent on Sunday:
Ms Lynne:
I take the hon. Gentleman's point, but we will obviously disagree on the Child Support Agency. I happen to believe that it ought to be scrapped and replaced with a fair and unified family court system. It could address the problems of fraud that we have here.
Under the current system, it is easy to defraud the system. Prevention is far better than detection. The problem is that, even if fraud is detected, there is such a backlog with the Child Support Agency that it takes months and months for fraudulent claims to be investigated and for questions to be asked.
Mr. Bernard Jenkin:
The Social Security Committee was most impressed by--I mean that in a technical sense--the number of single parents who received maintenance application forms and then simply dropped off the benefits system. They ceased to claim because they did not want their circumstances, or the circumstances of
Ms Lynne:
A tremendous amount of fraud is occurring at present, and the old liable relatives unit was able to detect fraud better. Fraudulent claims cannot be dealt with because the Child Support Agency has such a backlog. Our argument with the Child Support Agency and our argument today sums up what is wrong with the benefit system generally. Too many people do not look at the facts about benefit fraud and the extent of that fraud both within the Child Support Agency and across the board.
"By sheer accident we have created a most efficient anti-fraud unit."
I am afraid to say that that is far from the case. The Child Support Agency presented to the Minister a report on "good cause" provisions. The report stated:
"Prior to the setting up of the CSA, the question of maintenance was dealt with as part of the consideration of a benefit claim by the local DSS office. Liable relative officers were charged with the duty to arrange maintenance payments where this was appropriate and possible."
The report went on to say:
"One apparent benefit of their work, often claimed, was the fact that questions were asked about the other parent at a very early stage prior to benefit being awarded, or just after, leading to the deterrence of collusive desertion claims (where couples fraudulently claimed to have split up), or leading to early reconciliations."
The report continued:
"It therefore must be of concern that any part of the claims process which apparently had been effective in deterring some fraudulent claims should not now be used."
Mr. Frank Field:
The last time we debated this point, the hon. Lady was being cheered and I was being hissed by campaigners against the Child Support Agency. I accept the validity of the point that she is making. The Government could respond by suggesting that all people begin the CSA proceedings when they make their initial claim for benefits, in which case the questions that were asked in the old days about who the father is and who the husband is would be asked immediately, instead of almost a year down the line. I see the hon. Lady's point but, unlike her, I still support the CSA. The point that she made at the meeting and today is valid. Although the CSA is an agency against fraud, it is not as effective as it could be. This is a reform that we should have.
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