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7.44 pm

Kali Mountford (Colne Valley): I have been a little surprised by this evening's debate. There seems to be so much conciliation that Member's are acting as though there is no opposition outside the House to arguments about the need to deal with fraud, but that is not my experience. In a recent debate outside the House, I was alarmed to find that a large group of people believe that those who commit fraud have some excuse for doing so. Often, the defrauders themselves believe that they have an excuse. That is why it is worth taking a moment or

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two to reflect on the social effect of fraud within the system, and to consider why it should be dealt with by the Bill. If we failed to introduce such a measure, we would be failing to deal with the arguments that are advanced outside the House to try to justify benefit fraud.

One of the first obvious facts is that social security fraud is a misappropriation of public funds. Such an abuse must always be wrong, although people sometimes try the excuse that life is tough for those on benefit. However, such arguments do not recognise that life can be tough on all those who receive benefit, most of whom do not commit fraud. I accept that people sometimes make mistakes. Indeed, I often met such people in my previous career and in my work in the voluntary sector, but I know that not all those who commit fraud will be in that position.

Recently, I visited the ONE centre in my constituency with the Under-Secretary of State for Social Security, my hon. Friend the Member for City of York (Mr. Bayley). I was impressed by the way in which the centre deals with benefit and saw how its methods can prevent some of the mistakes that are made. I also saw how well information technology was used and how successfully staff related to their clients. I noticed that clients were very responsive to the information, help and support that was given by ONE. Such help can go some way towards dealing with so-called mistakes. If we get the information right in the first place, we might help the whole process. I am pleased to have seen at first hand the benefits that can be provided to all concerned.

However, such schemes do not deal with the offenders--I call them offenders--who are persistently ripping everybody off. I think that the hon. Member for Havant (Mr. Willetts) mentioned the advertising campaign that has been conducted. I have seen people such as those depicted in the advertising campaigns in my constituency. Indeed, I have received complaints about them and the effects of their actions. There is a far louder cry from those who deplore their behaviour than from those who support it, but I believe that we must nevertheless deal with the arguments of those who try excuse themselves or others from responsibility for such actions.

In the late 1970s, the early 1980s and towards the 1990s, when I was working in the Department, I often thought people on benefit had a very hard time. Jobs were hard to find and things were tough. When 3 million people were unemployed, benefit was inaccessible and circumstances were more difficult, one could feel a little sympathy for people who were guilty of social security fraud. Even at that time, however, I would have said, "Look, there are hundreds and thousands of others in the same town or region as you. They, too, may have lost their job in the steelworks, in mining or in their local factory, but they are not doing the same thing." Such actions are not excusable, even in such tough circumstances, but there might at least have been some compassion when times were hard.

In 1997, at the beginning of my time in the House, the unemployment rate was 4.9 per cent. It is now down to 2.5 per cent. It was low in 1997, but it is now very low indeed, and it is continuing to fall. What excuse can a

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person in my constituency have for benefit fraud? There are more jobs, so why are such people finding it difficult to find work?

Mr. Butterfill: I am listening attentively to what the hon. Lady is saying, and I agree with a great deal of it. Does she accept that people who commit fraud against the benefit system can rip off not only their fellow citizens, but charities too? A number of charities rely on an almonry process, and many of them rely on eligibility for state benefits to decide whom they should help. I am a trustee of the People's Dispensary for Sick Animals, which does exactly that; it gives free veterinary care to people who are in receipt of state benefits. People who fraudulently claim benefit often fraudulently obtain the free veterinary care that we provide. Many other charities operate on the same basis, which means that benefit fraud can be a rip-off of the whole of society.

Kali Mountford: I agree with the hon. Gentleman. There is a domino effect when people start to commit fraud. My experience is that somebody will often start with a simple mistake, which is why the ONE project is so important. Many people make that one simple mistake, find that they get away with it and then move on to commit more serious breaches. The collusion with others to rip us off in such a manner is outrageous. In that respect, I should like to cite the "Kilroy" programme, although I hope that this is the first and last time I do so. Only a week ago, it featured a debate--which I saw--in which people defended such action on the grounds that they might want to buy Adidas shoes, for instance. They suggested that it was all right for them to act in that way, given the pressure to maintain a certain standard of living in today's society.

I would say to those people that we do not necessarily have a right to own goods of a particular brand. I think we all agree that there is a right to be decently clothed, fed and housed, but it seems that some of us have gone beyond that. It is regrettable that those to whom I refer were willing to act in such a way, and then to defend their actions.

I thought it worth pointing out tonight that fraud is wrong, and describing its effects, but I also want to say something about the employers who collude in such fraud. A measure of discontent has been expressed to me by employers who fear being involved in more red tape and bureaucracy, and having to deal with the Department more than they would wish to. I understand that--I have never encountered an employer who wanted to deal with any Department if he could avoid it--but I hear another view from employers in my area.

Let me cite two types of employer in particular, involved in industry and services respectively: those in construction and allied trades, and those working in private taxi hire companies. Both tell me that they know what is happening in another company further down the road, or in the next valley--the information is never specific enough to enable me to deal with the problem. I am told that certain people are picked up in the morning to be taken to work. Apparently, all the neighbours know about this--certainly those who are in the pub or the supermarket, or outside the post office.

The employers I have mentioned are upset about such people, because they are trying to operate their businesses

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on a level playing field. They are making national insurance contributions for their work force, and dealing properly with tax, health and safety regulations and all the other Government arrangements. They are working in a fair marketplace, in which they must price their services and goods appropriately. Meanwhile, unscrupulous employers are colluding in benefit fraud. As the hon. Member for Bournemouth, West (Mr. Butterfill) said, there is a domino effect: not just charities but the whole economy could be ripped off by such behaviour.

That brings me to another part of the Bill that I consider important--that on "two strikes", and how we are to deal with persistent offenders. I think that more support is available now than there used to be: there are more opportunities in an economic context, and advice is more available in the system than I have known it to be in my 22 years of dealing with benefits. I do not consider that mistakes that can have that domino effect on behaviour are as excusable as they seem to have been in the past.

Where does this take us? People to whom a mistake may have been pointed out in the first instance may have to repay overpaid benefit; if it is found that a clerk in the benefits office, or elsewhere, did not spot the mistake, those people may not even be asked to repay the amount. On a future occasion, some other mistake may occur. Again, information may be given outside a public house, or in a post office or supermarket. Those are the places where people seem to be given advice on benefits. I urge such people not to take advice anywhere but in the office with which they are dealing.

I meet people who say, "I was told by Fred Bloggs that if I worked only a certain number of hours a week, or earned only a certain amount, I would not have to declare the amount. I made an honest mistake." I tell them that, under the system as it is now, that excuse is not credible. Those in regard to whom we might want to apply a "two strikes and out" arrangement will have had quite enough connection with the system as a whole to know that their behaviour is wrong. By that time, they must have received sufficient advice to be aware that their actions would result in certain consequences.

The hon. Member for Northavon (Mr. Webb) asked whether the "two strikes" provision was over-harsh. I agree with him that the benefits system contains a number of sanctions, intended both to deter and to punish; but another form of punishment is imprisonment, which is also available in the system. Surely it is better for the family of an offender for the offender not to be removed but--if he or she is working and continuing to claim--to formalise the arrangement, and find a proper job.

In all our debates the hon. Gentleman has shown himself to be a compassionate man, and I have some sympathy with his view, but I am worried about the problem affecting families. In generations of families, reliance on the so-called alternative economy has become the norm. We must break that cycle, and if we impose no sanctions of any kind--or if the alternative sanction is imprisonment--I am not sure that we will do families any more good than we would by imposing the sanction of reduced benefit. I think that 13 weeks is the standard period involved in such sanctions. It has proved to be of some value for a number of years, and I think it appropriate.

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Conservative Members, and my right hon. Friend the Member for Birkenhead (Mr. Field), have expressed criticisms, suggesting that sanctions and controls could be taken further--into the area of organised crime. The Bill is not designed to deal with organised crime, but I welcome the work that has been done with regard to fraud overseas. When I worked in the benefits system, I dealt with reciprocal arrangements involving people coming here from overseas and clients going overseas, either for a holiday or, ostensibly, to look for work and to review their arrangements.

It is remarkably difficult to keep track of such people, and to know exactly what is happening. I have received reports of people setting up tents and caravans while ostensibly searching for work, having already found work that they are not declaring. I am pleased that the Bill contains provisions to deal with that. I have some sympathy with the idea of extending the provisions to international crime--the sort of fraud mentioned by my right hon. Friend the Member for Birkenhead--and to the same kind of crime in this country. I have heard of examples, and I think we have no excuse for not dealing with such matters now.

I welcome the Bill and the present spirit of conciliation throughout the House, although at times I felt we were almost on gladiatorial terms. I also thank the hon. Member for Havant, if I thank him for nothing else today, for reminding me that the Minister of State, my right hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), will soon be leaving us. I can hardly believe that. I experienced a Freudian moment in which I did not want to remember it, and I was rather surprised to be reminded of it today.

I have not been in the House for long; I have been here for barely four years. In that time, however, I have had several opportunities to work with my right hon. Friend, and I admire him greatly. I do not want to make him blush any more than he has already, for he is a modest man and is probably sick of our going on about this, but having received the reminder, I do not want to miss the opportunity of telling him what a pleasure it has been to work with him, how much I have learned from him and what a remarkable parliamentarian I think he has been--not just in my four years here. Like the hon. Member for Northavon, I knew who was and was not worth watching when I was not here, and my right hon. Friend was always the man to watch.

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