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Mr. Rowe: Will my hon. Friend give way?
Mrs. Lait: I am very sorry. I would dearly love to give my hon. Friend the opportunity to intervene, but I am trying to get through my speech quite quickly.
How will the list of authorised officers be kept up to date, and how will the private bodies be notified of changes?
There is also concern about management responsibility for authorised officers. My noble Friend Lord Astor said that, as far as he is concerned, an executive officer is
equivalent to a second lieutenant. Having been in the civil service, I understand exactly what he means. When private sector organisations are dealing with civil servants, they must know that they are working with people who have sufficient management authority to deal properly with the information.A number of my hon. Friends, particularly my hon. Friends the Members for Bournemouth, West (Mr. Butterfill) and for Christchurch (Mr. Chope), referred to the cost of the Bill to the private sector. The mere fact that there is a difference of about £5 million between the estimates in the regulatory impact assessment allows people to ask serious questions.
We hope to make further improvements in Committee and I have raised a number of issues about which we are concerned. We want the Bill to be passed, as it represents a further step towards tightening up the defences against fraud and eliminating fraud from the system.
9.44 pm
The Minister of State, Department of Social Security (Mr. Jeff Rooker): I shall do my best in the time available to answer as many questions as possible. I am deeply humbled by many hon. Members' comments. I can guarantee that the speech will not be my last from the Dispatch Box, although perhaps it could be. [Interruption.] If the Bill is given a Second Reading, I shall move the programme motion, the terms of which are a little more restricted.
I am deeply grateful for hon. Members' remarks, which I reciprocate to others who will not return after the next election. Every day in the House in the past 27 years has been like the first, but all good things come to an end. I hate the word "retirement", and I am not going to prune roses, but I have no plans, though no one believes me.
Some unfortunate phrases have been used about Department staff, although I appreciate that they were not intended maliciously. However, the hon. Member for Northavon (Mr. Webb) mentioned the seniority and probity of staff who issue national insurance numbers; investigating officers were also mentioned. In the past few years, the number of people who are qualified and eligible to issue national insurance numbers has decreased from approximately 1,500 to about 500. The officers who will be authorised under the Bill are the same officers who, day in, day out, visit businesses, contact companies, and ask managers about their employees. In the past 20 months since I have been at the Department, I have not received a single complaint from private sector companies about the way in which they were approached by executive officers.
The Bill will authorise officers by name. We will begin with 175 officers, although I ask not to be tied down to a specific figure. We do not envisage more than 300 such officers. They will be qualified under the professionalism in security--PINS--training programme. When visiting benefits agencies and listening to our fraud staff, I have picked up the point that nowadays Inland Revenue and national health service trust advertisements for investigatory officers state: "PINS training preferred". They prefer the Department of Social Security system. However, the ultimate accolade is that the private sector is now advertising for PINS trained staff. Last summer, a big bank, which was formerly a building society, stated in its advertisement for fraud and investigation audit officers for its headquarters that PINS training was preferred. It was basically trawling for former DSS employees.
Those officers will be the authorised officers under the Bill. If they are good enough to be recruited by the private sector and currently good enough to make inquiries and undertake normal investigations of the private sector, they are good enough to carry out the duties for which the Bill provides.
The hon. Member for Havant (Mr. Willetts) said that the Bill was thoroughly debated in another place. I would never say that the other place conducted line-by-line scrutiny in the same way as the House of Commons, but, in conventional terms, the Bill was given a good going-over and we made several modifications to it there.
We never intended any individual fishing expeditions to be conducted under the Bill. A paragraph of a subsection included a sentence that contained the words, "likely" or "connected to". We used the example of window cleaners. That was a little unfortunate for window cleaners, but we could have used other examples. We could have referred to families of known fraudsters as a discrete group. We took out the original reference because it implied an element of fishing--we do not intend any fishing for named individuals to occur. That is clear in the Bill. I am referring not to the code of practice, but to the Bill. No inquiries can even be made
- "unless it appears to that officer that there are reasonable grounds for believing that the identified person to whom it relates is . . . a person who has committed, is committing or intends to commit a benefit offence; or . . . a person who . . . is a member of the family of a person falling within paragraph (a) above."
We will seek the bulk transfer of information from the utility companies--gas, electricity and water--only when specific properties have abnormally high or low usage. They will not give us the names of any individuals. It will be up to us in the Department of Social Security to data-match that information against our benefit claimants. That is the purpose of the bulk transfer of information--it will not be used for tracing individuals. People must have good grounds for requesting it.
We will not simply trawl the banks. First, officers must believe that something is wrong on the application form or that someone has lied. Alternatively, there could be an allegation. The hon. Member for Billericay (Mrs. Gorman) shopped a whole street--probably because she is not standing for re-election. That case, which was a clear case of fraud, as the hon. Lady said, has come to my attention since I came to the Department in July 1999. However, we can never report back to the hon. Lady's constituent who sent us specific names and addresses, all of which we examined. We are never in a position to report back to a third party--it is simply not possible. We cannot even report back to the Member concerned.
People sometimes believe that the problem is being ignored. I have looked at these cases; I have gone around the country and discussed them. I can assure the House
that, to the best of my knowledge, we check the allegations and set up inquiries. We also do more risk analysis than in the past so that we do not waste resources in checking areas where we think that the allegation cannot be justified. We know that there is a high risk with some groups of benefit claimants, and risk analysis enables us to make the best use of our resources.We will not trawl the banks. If we think that someone is lying to us when he says that he has no bank account, no money and no capital, we will not send out a billet-doux to all the banks asking whether they have any information on that person. That is not our intention. We have never said that we would do that, and we have made it quite clear that we will not. We will not even approach the banks to start with.
If we suspect that someone has an undisclosed bank account, we may first approach a credit reference agency, which we should be able to do electronically. That will tell us who has searched that person's credit files recently as well as giving information on existing credit agreements and credit cards. We would know, because searchers leave footprints on the computers. I have seen it myself when visiting banks and insurance companies. We may see that a bank has searched the file and we may then approach the bank to see whether the person had an account at the bank. In other words, we need a reason to approach a specific bank. If not, we can approach a lender or a credit card company to find out what they know about the person. They might have the details of the person's bank account that he had provided when applying for the credit facility, or they may know how he makes repayments. If those avenues are not fruitful, we might approach a utility company to find out how the person pays his bills, because it might be by direct debit. If all those avenues fail to lead to details of a bank account, we will accept that and rely on other evidence. That is an example of how we might go through the system. We will not take a scattergun approach to the banking system.
Many right hon. and hon. Members have mentioned NINOs--national insurance numbers. I think that the issue is worth a debate; it is worth more publication. I am grateful to the former Secretary of State for Social Security, the right hon. Member for Hitchin and Harpenden (Mr. Lilley), for taking a more responsive, moderate view as he waded through his history of successes at the Department of Social Security as evidence to support Ministers, and his belief that we manage the NINO numbering system.
That system is not static. It is not simply a list of numbers on a computer. It is an actively managed system. Staff manage the numbers going on to the system, the activity associated with them and those coming off.
Everyone is appalled by the figures, but they are due to the nature of the population. We were asked about the 4 million numbers added since 1997. We estimate that 2.8 million are children, 800,000 are foreign nationals and about 120,000 are asylum seekers, which adds up to about 3.7 million. We do not know about British nationals who have come back from abroad.
There is a problem. At the moment, we pay pensions to 1 million pensioners abroad. That is not counting people who are working abroad. There are millions of people who have been in this country and left. Millions of ordinary United Kingdom residents have gone abroad. There may be millions more who have come here to do three weeks of fruit picking in Scotland or in parts of East
Anglia where the gangmasters work. They collect a NINO and then they never return to this country, but the NINO remains on the system.About 12.5 million people on the NINO system are deceased, but we need to keep the records. It is true that we cleanse the system. I do not have the figures to hand, although they are in my folder somewhere, but I think that last year we cleansed more NINO numbers from the system than were cleared in the last 10 years of the previous Administration. We are actively searching and managing the NINO system. It is not always the easiest matter to explain.
Children are on the system these days, for obvious reasons. The child's national insurance number is automatically generated when he or she is 16 because it was locked in when the first claim for child benefit was made. It is an important part of the process.
There are other aspects of NINO management. For the simple reason that children are being born but dead people are not taken off the system, there will be an inexorable increase in the numbers. Everyone will realise what will happen in another 20 years, given that we have reached 80-odd million numbers since 1948. There are huge numbers on the system, so we have to flag them. Suspect numbers--those where we think that there is an abuse--are flagged. If they are used, an inquiry is automatically triggered.
The credit industry fraud avoidance system has been mentioned. I regret that we are not, and cannot be, members of CIFAS, as that would help with reciprocity in the transfer of information. I point out to the hon. Member for Christchurch (Mr. Chope) that the Bill is part of the price that the country must pay for not having an identity card system. We are virtually unique in western Europe in not having such a system. Other countries do not need this sort of legislation.
In so far as we can be, we are satisfied that the Bill complies with the European convention on human rights. We have the best legal advice and the best legal brains in Whitehall. They do not always get it right, but in this case we have put them through the mill since last summer. I must tell the hon. Member for Beckenham (Mrs. Lait) that we have no outstanding inquiries from the Information Commissioner--formerly the Data Protection Commissioner. To that extent, I hope that we can satisfy hon. Members. The Bill will cause a degree of intrusion, but only for people we think have lied to us about a benefit claim.
Finally, I want to reassure the House that there will have to be good, reasonable and legally tested grounds for making claims about people's bank accounts. There will be no fishing expeditions. All the officers will be trained and qualified under the professionalism in security training system. They will be ordinary executive officers, who are dealing with industry day in and day out in a highly professional manner. I think that we will have 13 or 14 sites throughout the country from which the inquiries will be made. It will not be a case of all the fraud investigators being in the Benefits Agency; they will be a select and elite corps. I think that we can trust in them. They will be properly trained to do an effective job.
I commend the Bill to the House.
Bill accordingly read a Second time.
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