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Mr. Peter Lilley (Hitchin and Harpenden): Will the Secretary of State confirm that the latest benefit fraud review measuring the level of fraud in income support and jobseeker's allowance shows that the level of confirmed fraud is higher this year than last year?
Mr. Darling: It shows that there has been the first ever significant fall in fraud in the payment of income support and JSA. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) was never able to say that during the previous Parliament in all his time as Secretary of State for Social Security. As I have made it clear to the House on many occasions, I do not say that we have beaten fraud and error in the system. We have not, but we have begun to turn the corner. The 6.4 per cent. reduction
in fraud in JSA and income support is the first significant fall that we have ever seen in those two benefits in the social security system. That is a significant achievement, and we need to build on it as we move towards meeting our target of halving the amount of fraud and error in the system in the next five to six years.
Mr. Lilley: I have just checked the Secretary of State's claim. The Library confirms that the level of confirmed fraud has not fallen. It is only by including errors that the right hon. Gentleman is able to claim a decline. Will he now set the record straight and confirm that when he said "fraud", he was mistaken. He meant that "fraud plus errors" has gone down; the incidence of fraud alone has gone up.
Mr. Darling: When asked about these matters, I repeatedly use the term "fraud and error". [Interruption.] I do. The right hon. Gentleman will see, if he looks back at what I have said over the past few years about fraud and error, that I have given equal importance to stopping both of them. I mentioned, for example--the right hon. Gentleman will be interested in this as he was Secretary of State for Social Security for the whole of the last Parliament--that when we came into office, two out of every five income support cases were being paid without sufficient evidence to justify them. We have halved that figure, saving £1 billion. That figure was almost certainly all due to error in the system.
We have also seen reductions in fraud. The reduction of fraud and error in the system, particularly in JSA and income support, is statistically significant. It is the first time that it has ever happened. The right hon. Gentleman could never have announced such a reduction when he was Secretary of State for Social Security, during the whole of the previous Parliament.
Mr. Lilley: Will the Secretary of State give way?
Mr. Darling: I will give way later on.
Mr. Darling: I am happy to stay here all night, or however long modernisation allows us to stay these days.
Two years ago, we set ourselves the target of reducing fraud and error in JSA and income support by 10 per cent. All the evidence is that we are already on target to do that and that we will go beyond it in our drive to reduce fraud and error in the system--particularly fraud in income support and JSA.
Mr. Lilley: Will the Secretary of State give way?
Mr. John Bercow (Buckingham): Will the Secretary of State give way?
Mr. Darling: I will give way to the right hon. Member for Hitchin and Harpenden when I have finished my point, if the hon. Member for Buckingham (Mr. Bercow) does not mind.
I am happy to say again and again that we attach significant importance to the reduction of fraud and error. We are achieving it--something that the right hon. Gentleman could never say during his time as Secretary of State for Social Security.
Mr. Lilley: The Secretary of State has now admitted that he was wrong when he said that fraud had declined--
it is fraud plus error. He then went on to say that the reduction was statistically significant. The Library research document says that the small fall in confirmed fraud and error is not statistically significant. Will the right hon. Gentleman withdraw that statement?
Mr. Darling: I certainly will not. The fall is statistically significant, and I attach considerable importance to it. I say again to the right hon. Gentleman that during his entire time as Secretary of State for Social Security, for the whole of the previous Parliament, he could never, ever point to a single success in reducing fraud and error in JSA, income support or, indeed, anything else. As he well knows, because I think that he sometimes had to struggle with his colleagues in the Department, it was not until 1995--halfway through his stewardship as Secretary of State--that he started to measure fraud in the system. I note that he acknowledges that. As we know, that was 15 years after the Tory Government had been elected.
Despite everything that the Tories said and despite all the right hon. Gentleman's conference speeches--the more ludicrous of which we remember--he did not even start to measure fraud in the system until 1995. It was not until 1997 that real, concrete measures were taken to cut fraud and error in the system. We have seen the first significant fall in fraud and error in the jobseeker's allowance and income support, which the right hon. Gentleman never achieved during his time as Secretary of State.
Mr. Bercow: Will the Secretary of State give way?
Mr. Darling: Yes, I suppose so.
Mr. Bercow: I am very grateful to the Secretary of State for giving way, even though he is in a particularly irascible mood today. Will the right hon. Gentleman confirm that the regulations on loss of benefit covered in clause 11 on pages 15 and 16 will be subject to the negative procedure and will not, therefore, be able to be debated on the Floor of the House? If that is so, and given the importance of getting those regulations right, will the Secretary of State undertake to provide a draft of the regulations before the Bill completes its passage?
Mr. Darling: It is always open to the House to debate regulations. The arrangements for doing so are made through the usual channels, either upstairs or on the Floor of the House. I agree with the hon. Member for Buckingham that it is important to ensure that regulations, no matter what they are for, are correct. If he has concerns about that, the scope of the regulations can no doubt be debated at length during tonight's debate or in Committee.
Mr. Steve Webb (Northavon): Will the Secretary of State give way?
Mr. Darling: Is it on that point?
Mr. Webb: It is on the previous point.
Mr. Darling: I will certainly give way to the hon. Gentleman.
Mr. Webb: The Secretary of State was talking about the Government's record on tackling fraud. I certainly
accept that the previous Government did little until late in the day. However, will the right hon. Gentleman confirm the Audit Commission's finding that between the second and third years of his term in office the amount of housing benefit fraud detected by local authorities fell? Why did he allow that to happen?
Mr. Darling: As the hon. Gentleman will know, the business of measuring and detecting housing benefit fraud has been a concern to successive Governments. About two years ago, we changed the way in which we rewarded local authorities. The situation that we inherited from the Conservative Government was that local authorities were rewarded for the fraud that they found. As the National Audit Office identified, authorities tended almost to let fraud come into the system, then detected it and claimed the reward.
Two years ago, we changed the system so that the emphasis was put on preventing fraud from coming into the system in the first place. The approach was different--indeed, it is an approach that the NAO endorsed and it is far better. Of course, it is important to deal with fraud once it is detected, but the emphasis in the Government's strategy--it should be local authority strategy on housing benefit too--is to prevent fraud from coming into the system.
The problem that we inherited was one of wrong incentives--the incentive almost to allow fraud in. We have replaced it with measures that are designed to prevent it from getting into the system in the first place. The National Audit office has endorsed that approach and said so in the subsequent report to the one to which the hon. Gentleman referred.
We are beginning to see the results of the reforms that we have made. There is a clear choice: we either continue with the drive against fraud and error, or we return to the previous situation in the Department, with cuts in investment and staffing that helped fraud and error to enter the system in the first place. Indeed, in the past four years, we have put in place many reforms that were needed to tighten the benefit system across the board: tighter rules and greater conditionality in the system and tighter gateways, but all backed by investment to enable the job to be done.
That investment is critical. We have invested in front-line staff to check and keep claims right. That investment would be under threat if the Conservatives were returned to power because the £16 billion in cuts to which they remain committed and the policy of freezing civil service recruitment would in one year cost more than 5,000 front-line jobs in the Benefits Agency. If anyone is in any doubt, it is those front-line staff who make the difference when it comes to the amount of fraud and error in the system. They check the claims and the facts. Year after year when the Conservatives were in power, the staff were able to spend less and less time checking benefit claims due to staff cuts. As I said in a reply to the former Secretary of State, one reason why we have reduced the error rate in income support is that we have more staff on the front line and fewer posts in Whitehall, so we are able to check claims far more efficiently.
Secondly, we are investing in computers and information technology, which is also important. It is something to which the NAO has repeatedly drawn attention. We inherited a system in which some of the
computers on which staff were expected to work were more than 30 years old. Sometimes, our staff go home to find their children working on systems that are more efficient and up to date than some of those that the Conservatives left and expected them to work on. After years of underinvestment, following the spending review last year, we now have the money to replace all of the Department's ageing IT equipment so that our staff have the tools to do the job.The Bill will enable us to make better use of that technology. Again, that is investment in staff and IT, which the Conservatives oppose. It would all be at risk if they were returned to power because they cannot say that they are going to spend £16 billion--or more--less than Labour, but at the same time pretend that they would maintain our levels of investment in the system. That investment is essential if the system is to be tighter and more robust against fraud and error.
We are also investing in tighter gateways to benefit. The new working age agency will introduce regular interviews for all claimants of working age, helping people to get into work. There will be new rights and responsibilities, but the whole time we will be checking that the right benefit is paid to the right person.
We are also investing to tackle organised fraud. The fight against such fraud is now controlled centrally, which did not happen before, and a new national intelligence unit will ensure that resources are far better targeted than they were.
No doubt tonight we will be told by the Conservatives that they want to set up another national organisation. They claim that by setting up a national benefits squad, they will somehow save £1 billion, just like that. There is no independent evidence to support the claim. If ever there was a fraudulent claim, that is it. I read in The Independent at Christmas, under the heading, "How I will cut public spending to provide money for lower taxes", an article by the shadow Chancellor, who wrote:
- "For instance, we're going to set up a single benefits investigation squad . . . Common sense measures like these will yield at least £1 billion in savings".
I will be interested to find out in the debate if the present Conservative spokesman, the hon. Member for Havant (Mr. Willetts), can give us one concrete example of how by simply setting up a national investigation squad, the shadow Chancellor can save £1 billion just like that. The Conservatives did not do it in 18 years and I will be interested to hear how they think that they can claim all that money just like that. It is important to them because they have already spent the £1 billion. If they cannot find it, the consequences will be dire.
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