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Mr. Frank Field: Did the Government think about introducing a clause that would deal specifically with landlords?

Mr. Heald: My point is that the clause does that.

Mr. Field: The Minister has not answered the question.

Mr. Heald: If the hon. Gentleman wishes to, he can make that point, but the clause does deal with landlords as much as with tenants, and provides a powerful new weapon in the armoury. Just as a landlord who is guilty of conspiracy to defraud can be prosecuted for that, he can be prosecuted under the Theft Act 1968 and under other social security legislation. Those offences provide the battery of weapons that we need.

All the penalties that we are introducing and the cautionary system provide a tough new regime, apply to landlords and can be used in the fight against landlord

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fraud, as well as against straightforward tenant and claimant fraud. We should remember that all the informed estimates are that about £150 million of the £1 billion of undetected housing benefit fraud is committed by landlords. It is right to think of that as an important element of fraud, but wrong to go as far as the Labour party in saying that it is going to detect £310 million of fraud because that is twice the amount that there is.

Disclosure is an important weapon in the battle against benefit fraud because it gives us the potential to check claim information against information held by the Inland Revenue relating to earnings and investments, or against value added tax information from Customs and Excise relating to self-employed people. Those are two sectors where the benefit system is susceptible to fraud and where conventional methods of prevention and detection are not always effective. The use of modern technology under carefully controlled conditions will enable quick and effective checks, without putting genuine claimants through any additional effort.

The Opposition have raised the question whether it will be possible to expand the disclosure of information provision to enable us to identify pensioners who may have an unclaimed entitlement to benefit, but that shows a misunderstanding of what is administratively possible. Detecting fraud by data matching means comparing, on a selective basis, small areas of information that, when put together, can identify inconsistencies in a benefit claim and can be investigated by a fraud investigator.

The data matching that the hon. Member for Rochdale suggests involves doing a means test on an individual. That means that we would need to piece together all the information across Government, on all the income and savings of all people, which is a different scale of task. Just to amplify my point to the hon. Lady, we know who the pensioners are and who the people who claim income support are, but just by comparing--

Ms Harman: We can take into account all housing benefit claims.

Mr. Heald: The hon. Lady says, and I am willing to accept, that we could take into account housing benefit claims. We could take into account national insurance contributions. Even with all that information, which is on a much greater scale than that which are envisaging in the Bill and which has its own difficulties, we would still have a very long list of individuals who would have to be contacted individually. Many of them may not have wanted to have had a means test conducted behind their back and we would be giving many of them the idea that they were, perhaps, entitled to a benefit when they probably were not. For example, the reason why somebody may not have any Inland Revenue records to show any receipts of income may well be that that person has granny bonds or some other security for which there is no need to make disclosure. That point was made by my hon. Friend the Member for Bristol, North-West.

Ms Lynne: If the Minister is definitely ruling out such a possibility in the Bill's remit, will he tell the House

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tonight that he will instigate a take-up campaign so that pensioners who are not getting the income-related benefits to which they are entitled will be able to claim them?

Mr. Heald: As the hon. Lady will know, the Government do a number of things to make people aware of their entitlements.

Ms Harman: Like calling them scroungers.

Mr. Heald: The hon. Lady is calling them scroungers--I would never do that.

We send out information about entitlement to a large range of bodies. We send advisers out to meet pensioners groups, and so on. The Department spends millions of pounds on telling people about their entitlement. From time to time, we run campaigns with Age Concern, Help the Aged and all the other bodies to make pensioners aware of their entitlement, and we shall be doing that again in January.

Mrs. Anne Campbell: Is the Minister not aware that the additional information that is needed on the claim for income support is already supplied to local authorities when pensioners apply for council tax benefit and housing benefit? Why on earth is he ruling out a very simple measure, when pension entitlement can be calculated with information that is already on local authority records?

Mr. Heald: I think that I answered that point. Of course, the other point that can be made on the matter is that the regime is different; the capital rules are different. That would affect the exercise.

Having raised a number of practical points, I do not think that we should ignore the fact that there are considerable difficulties under the European convention on human rights about the form of data matching that impinges on the privacy of an individual who may not want to be means tested despite the obvious attractions.

Mr. McLeish: I have two points. First, does the Minister accept that it is totally unacceptable that 1 million pensioners are living below the poverty line? Secondly, will he allow the Committee to pursue further the issue so that the difficulties as well as the opportunities that may be provided can be explored?

Mr. Heald: As you, Mr. Deputy Speaker, will know, I would never interfere with the role of the Chairman. The scope of the Bill is an issue not for me but others. As I have said, the Department does a great deal to try to make people aware of their entitlement, but it is ultimately up to them whether they claim them.

Ms Lynne rose--

Mr. Heald: I will not give way again because I want to say a little more about landlord fraud.

The new offence that I mentioned is one measure to help in the battle against landlord fraud, but there are others. The power to pass information between local authorities and between a local authority and the Department will make multiple claims--one of the most common frauds involving landlords along with tenants--much more difficult and allow local authorities to share

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information on suspect landlords. If a local authority wished to have a register of landlords--an idea that I know that the Opposition have pursued--and a neighbouring authority wished to exchange such information, it would be possible.

The extension of powers of local authority investigators by analogy with Benefits Agency investigators will enable them to enter landlords' business premises and inspect records. If the records are not held at the business, a requirement can be made by the local authority investigator that they should be supplied to him. There is also a new provision to improve the recovery of overpayments of housing benefit from landlords who receive the original payment directly. The new powers to inspect will ensure that local authorities take appropriate action to prevent and detect fraud, including landlord fraud.

I shall now deal with some of the points raised in the debate. The hon. Member for Peckham (Ms Harman) asked why local authorities do not have powers to refuse direct payments other than in exceptional cases. They are able to refuse direct payments and local authorities have a discretion on direct payment to landlords. It is only in circumstances in which there are substantial arrears that that changes.

In an intervention, my hon. Friend the Member for Bristol, North-West asked whether the penalty was a fixed 30 per cent. or was variable. The penalty is fixed and there is no variation. The hon. Member for Peckham asked whether article 8 would stand in the way of data matching--although she agreed with it. It is right that the data matching must be necessary to achieve the interest in question. The hon. Lady also raised a point about whether local authorities should automatically provide details of direct payments to landlords to the Inland Revenue. We have consulted the Revenue, which is satisfied with its existing powers.

My hon. Friend the Member for Westbury asked about the cost and benefit of the benefit fraud hotline. I can confirm that the fraud hotline is showing value for money. It costs £1.5 million pounds a year to run the line and so far it has saved at least £15 million. I am certain that that financial return will be maintained. My hon. Friend also asked whether the benefit-payment card used the chip technology that has recently been cracked. That point was also taken up by the hon. Member for Cambridge (Mrs. Campbell). The answer is no, because the card uses a different technology and the security of the system does not rely solely on the security of the card itself. It is ironic that many pushed us to use the smartcard technology and we resisted for good security reasons. We have been proved to be right about that.

My hon. Friend the Member for Westbury also asked why the Bill will prevent inspectors from entering residential premises in which a business is being carried on. I have already made the point that the investigator will be able to demand the necessary documents. My hon. Friend also asked whether local authorities could have access to the departmental central index. The Bill will enable such access, but with strict security conditions. He asked whether strict verification would take place before a benefit-payment card was issued. The answer is yes, because the cards will be delivered to the post office and only then to the customer, who has to produce evidence of identity for the card to be activated. Strict conditions will be applied.

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The hon. Member for Birkenhead asked a number of questions. I have dealt with the question of collusive employers. He also asked about the hotline and what percentage of calls led nowhere. He said that 90 per cent. led nowhere, but that is not correct. Some 80 per cent. of the calls have been referred to investigators and many are still being investigated. We believe that overall it is a worthwhile exercise and we shall produce the figures in due course. I have visited Preston and I have met the staff who are trained.

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