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Mr. Darling: No, it is not. I do not know whether the hon. Gentleman wants us to include pensions, but the figures simply do not justify doing so. That is why I do not propose to include them. He is right on one point: I do not normally remain to hear what he has to say because of circumstances beyond my control, and I am sorry to tell him that tonight will be no exception. For reasons that I understand, earlier business in the House has meant that this debate started a lot later than I thought it would, and many people are awaiting my presence at some stage. However, if the hon. Gentleman is called to speak early enough--or even late enough--I dare say that I shall hear him speak, but I am sure that he will take it on the chin and not get too upset if I do not.

I have no doubt that many other hon. Members will wish to catch your eye this evening, Mr. Deputy Speaker, so I want to conclude by making one important point.

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There is a lot of talk and rhetoric about fraud and error in the social security system, but the difference between this Labour Government and the Conservative Opposition is that we have a strategy that is working; they do not have a strategy that works. They do not have a single credible proposal that would save a single pound in tackling benefit fraud. They have no strategy whatever. We are beginning to turn the corner. We are beginning to see the results. We are cutting fraud; they could not because they do not have the measures to do so. I commend the Bill to the House.

6.32 pm

Mr. David Willetts (Havant): The Bill has, of course, been thoroughly debated and heavily revised in another place in response to constructive suggestions from my right hon. Friends and others. I shall quote the final remark in the final day's debate in the other place. The Minister said:

"I am delighted that the Bill has gone through without Division, though with substantive change. I hope that it is treated in the same conciliatory and positive way in the other place."--[Official Report, House of Lords, 8 March 2001; Vol. 623, c. 340.]

I am afraid that, instead of the Secretary of State following the advice of his colleague, we had a taste of what the hustings might be like on a wet Wednesday in Edinburgh, Central. Instead of an attempt to explain in any detail exactly how the Government believe they can use the Bill to tackle welfare fraud effectively, we heard a rather feeble attempt at a warm-up speech for the election campaign.

Let me make it clear to the Secretary of State that we believe that the Bill is better than nothing, especially now that it has been revised and significantly improved in another place. We believe that it is a step in the right direction, so we shall not divide the House on Second Reading.

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): A ringing endorsement.

Mr. Willetts: The Opposition certainly want social security fraud to be reduced, and, especially with the amendments that have been made to it, the Bill represents a useful step in that direction.

While we are in a mood of positive endorsements, perhaps I can make a personal comment about the Minister of State, the right hon. Member for Birmingham, Perry Barr (Mr. Rooker), as this may be our final debate on social security before the House rises to fight the election--although I know that oral questions will take place next week. The Minister of State is retiring from the House, so in case this is his last full outing in a debate in the Chamber, perhaps I can say that the Opposition have always appreciated the opportunity to debate with him. He has made a significant contribution to pensions policy. He arrived from the Ministry of Agriculture, Fisheries and Food, so he was able to introduce genetically modified group personal pensions--stakeholder pensions--and we appreciated the way in which he drew on that experience in his work on pensions. Many Opposition Members think that the right hon. Gentleman was the best Chief Whip that Labour never had, and I wish him well as he retires from the House.

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This modest and sensible Bill has been introduced after four years of not much activity among Ministers. Certainly, the level of activity has been pathetic compared with the arguments and observations made about the size of social security fraud. Back in July 1998, the original Government publication, "Beating Fraud is Everyone's Business" state that:

"a conservative estimate of fraud is £2 billion . . . the figure could be much higher, around £7 billion if all suspicions of fraud were well founded."

One of the ways in which Labour Ministers have tried to show that they are making progress in tackling fraud is by reducing the size of their estimate of fraud. We do not hear so much about £7 billion now, but they were happy to talk about £7 billion then. The Minister of State famously answered a parliamentary question by specifying that there could be total of £7 billion of "definite", "probably" and "possible" social security fraud.

I should be interested to know whether Ministers still believe that there is £7 billion of fraud. I should also be interested to know whether Ministers agree with the proposition in their own manifesto, on which the Secretary of State and his colleagues fought the last election, in which they said:

"We will start with a clampdown on Housing Benefit fraud, estimated to cost £2 billion a year".

I wonder whether they still believe the estimate that housing benefit fraud costs £2 billion a year, because such figures put their record on social security fraud into perspective. As my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) said so effectively, the only way in which the Government can claim any progress at all is by combining fraud and error.

I recognise that in a complicated social security system, error can slip into fraud; it is not always possible to make an easy distinction between the two. It is perfectly possible for someone initially to make a genuine mistake in filling in a claim form. By and large, if the mistake or error leads to an underpayment, people are more likely to go back to their benefit office and challenge it than if the error leads to an overpayment. Those who consciously accept an overpayment are on the slippery slope that leads to deliberate fraud. I recognise that links exist between fraud and error, so I hope that the Secretary of State will recognise, that one of the best ways to tackle fraud is by reducing the complexity of the social security system. Fraud and error breed in a system that is far too complicated to administer.

The Public Accounts Committee got it absolutely right in a report last year, when it stated that

"without simplification"--

of the rules on income support--

"10 per cent. of payments would always be wrong."

That represents a warning about the consequences of an overcomplicated social security system. Our criticism of the Government is that, far from making it simpler, they are perpetually making yet more complicated. That is why there is so much fraud and error. The Government can get at the root of the problem only through genuine simplification.

The Secretary of State claims the credit for setting up a system properly to measure fraud and error, but, of course, that system was set up by my right hon. Friend the Member for Hitchin and Harpenden, a previous

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Secretary of State. The Government are ignoring the problem with tax credits, which represent another complicated new system that is wide open to fraud. We hear dismissive answers from Ministers, who deny that an easy way to measure fraud exists. At the moment, they refuse to offer any estimates whatever of fraud and error in tax credits, but we know that they are a significant problem.

The providers of child care are directly affected. They have brought to our attention the scandal of people claiming the tax credit for child care, providing invoices and estimates for child care that they have not used and pocketing the cash. That is a classic example of the way in which tax credits are exploited because they are wide open to fraud and abuse, yet Ministers have discontinued the estimation of fraud for in-work benefits that we introduced when we were in office in an attempt to deal with the problem of fraud in family credit, as it then was.

Mr. Butterfill: Does my hon. Friend agree that the move towards credits adversely affects the cash flow of many small businesses, without any apparent compensation for the difficulties that they face?

Mr. Willetts: My hon. Friend is correct. We have many criticisms of tax credits and I know that it is sometimes with a sense of relief that Ministers in the Department of Social Security say that such credits are now a matter for the Treasury. However, the administration of tax credits is an increasing scandal in the tax and benefits system. In my surgery, I have to deal with more problems involving the working families tax credit--WFTC--than I do with problems involving the Child Support Agency.

The problems that people face with the WFTC, and the fraud and error involved, are significant. That is why I regret the fact that the provisions in the Bill explicitly exclude tax credits. It is a great pity that tax credits are not included within its scope.

Mr. Bercow: My hon. Friend rightly said that the Bill was modest, and that is in stark contrast to the bloated rhetoric of the Secretary of State's speech, which was wholly out of proportion to the limited accomplishments that the right hon. Gentleman has to his credit. Would my hon. Friend care to say something about the recent plaudits that Wandsworth council has earned for its excellent and robust policy in prosecuting fraudsters? Will he also comment on the appalling incompetence of Labour councils in failing to bring fraudsters to book and on the two-fifths of local authorities that have no formal prosecution policy for fraud?

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