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Session 2000-01
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Standing Committee Debates
Social Security Fraud Bill [Lords]

Social Security Fraud Bill [Lords]

Standing Committee A

Tuesday 3 April 2001

[Mr. John Maxton in the Chair]

Social Security Fraud Bill

10.30 am

The Minister of State, Department of Social Security (Mr. Jeff Rooker): I beg to move,


    (1) during proceedings on the Social Security Fraud Bill the Standing Committee do meet on Tuesday 3rd April at half-past Ten o'clock, on Thursday 5th April at five minutes to Ten o'clock, and on Monday 9th April between half-past Four o'clock and Seven o'clock;

    (2) the proceedings on the Bill shall (so far as not previously concluded) be brought to a conclusion on Monday 9th April at Seven o'clock.

I am pleased to see you in the Chair, Mr. Maxton. This is a special Standing Committee for both of us—it being our last.

Mr. David Wilshire (Spelthorne): The Minister has said that this is his last Standing Committee. I note his enthusiasm in saying that; perhaps he knows more than the rest of us. If the House sits until October, someone may pick up some more work for him to do, so we may meet again before he retires.

It is my first Committee since the new arrangements came into being, and I have not seen a motion of this type before. I am mystified why five to 10 has been chosen as the time for the Committee to sit, as distinct from 10.30. I am sure that there is a sensible explanation for that and I should like to know what it is.

Mr. Rooker: That question shows that the hon. Gentleman has not been doing his fair share of Standing Committees for the Opposition. If he had for the past three years, he would know that Standing Committees sit on Thursday mornings at five to 10 to take account of prayers in the House at 11.25.

Question put and agreed to.

The Chairman: I remind members of the Committee that copies of the money resolution that accompanies the Bill are available in the Room. As a general rule, I do not intend to call starred amendments.

Clause 1

Additional powers to obtain information

Mrs. Jacqui Lait (Beckenham): I beg to move amendment No. 6, in page 2, leave out lines 20 and 21.

The Chairman: With this it will be convenient to take the following amendments: No. 7, in page 2, leave out lines 48 and 49.

No. 8, in clause 4, page 8, line 5, leave out from `(c.39))' to end of line 6.

No. 9, in clause 4, page 8, line 8, leave out from `(c.23))' to end of line 9.

No. 10, in clause 4, page 8, line 12, leave out from `(c.39))' to end.

No. 11, in clause 4, page 8, line 14, leave out from `pipes' to end.

No. 12, in clause 4, page 8, line 16, leave out from `systems' to end of line 17.

No. 13, in clause 4, page 8, line 20, leave out from `section' to end of line.

Mrs. Lait: This is the first time that I have been a member of a Committee under your chairmanship, Mr. Maxton, and I look forward to it. I am sure that someone who loves the Isle of Arran as much as you do will be a fair Chairman.

I shall not take too long to explain the amendments. They are based on our remaining worries about the Bill, which was amended in the other place along the lines that we suggested. In principle, we have no difficulty with the Government's requirement for information to eliminate fraud, because we are all agreed that it should be eliminated. However, certain parts of the Bill put too much pressure on people in both the public and the private sector. The amendments deal primarily with employees or employers who may feel pressurised by the requirements for information.

Baroness Hollis said in the other place:

    Servants and agents can be the subcontractors of organisations. If a subcontractor held the information we needed, it would make sense to go to him as the servant or agent of the primary body rather than to the primary body itself. Servants are also the employees of a company. Putting it crudely, servants can be agents but also employees whereas an agent is a person authorised to act on behalf of another. —[Official Report, House of Lords, 1 February 2001; Vol. 621, c. 853.]

In the other place, Lord Higgins observed that the problem under discussion initially arose in relation to the Electronic Communications Act 2000, which was seen to place an unfair burden on employees to disclose information that they might not possess. That is still our fundamental problem with the Bill.

Lord Higgins also stated that he understood that the first version of the Electronic Communications Bill was sent back to the draftsmen because major objections had been made concerning the onus that it placed on employees to disclose information, as people employed at junior levels might have only partial access to such information. I seek the Minister's reassurance that that point has been adequately addressed.

Hon. Members will have dealt with housing benefit issues in their constituency surgeries. In Bromley, housing benefit administration is subcontracted to Capita, and that company would be categorised by the Bill as a servant or agent, as would its employees. However, Capita would have access merely to partial information so if employees of such a company are pressurised, they might resist helping the Government with regard to fraud matters. That must not be allowed to happen, but I understand that the Bill proposes a deadline of about 10 days for the receipt of information, and that employees will be liable to prosecution even if they have access only to partial information, as will employers such as Capita. Baroness Hollis did not address that matter in the other place, so I want the Minister to reassure me that my concerns are merely spectres.

Mr. Rooker: I will briefly address the central point raised by the hon. Lady. The Department would not prosecute an employee or servant of an organisation. There is no prospect of that happening. The organisation would be the subject of any legal action.

Paragraphs 4.4 to 4.8 of the code of practice explain what would happen if there was a failure to comply. Concerns have been raised that we would prosecute employees, but we have made it clear that that will not happen. The draft code deals with the issue of subcontractors, and we shall conduct thorough consultations about that once the Bill receives Royal Assent.

People who do not have access to information will not be prosecuted. The Bill empowers the Government to target people who have access to information, if they do not comply, but I envisage that such situations would rarely arise.

Organisations may identify individuals as responsible for fielding inquiries, because the Department may initially write to a company to request information, and the letter may refer to the code of practice and ask whether a specific employee is to be designated to deal with the matter. In such circumstances, the employee would be categorised as the servant of the organisation. However, the organisation, rather than their employees, would be held responsible for non-compliance. I hope that that reassures the hon. Lady.

Mrs. Lait: I am grateful to the Minister for his reassurance, which is as clear as it could be without being included in the Bill, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mrs. Lait: I beg to move amendment No. 14, in page 2, line 21, at end insert—

    `(2AA) Any authorised officer wishing to obtain information under this section shall make an application to the person holding it through that section of the Department of Social Security responsible for the investigation of fraud.'.

The Chairman: With this we may discuss the following amendments: No. 2, in page 2, line 26, at end insert—

    `(2BA) An authorised officer shall not give a notice to a person who falls within subsection (2) except with the consent of a magistrate, who is to give his consent only on being satisfied that in all the circumstances the authorised officer is justified in proceeding under this section'.

No. 3, in page 2, line 29, after `unless', insert

    `a court order is obtained and,'.

No. 15, in page 2, line 30, after `grounds', insert

    `according to the provisions of the Code of Practice'.

No. 16, in page 2, line 30, after `grounds', insert

    `subject to the approval of a magistrate'.

No. 4, in page 2, line 37, after `officer', insert

    `who has obtained a court order'.

No. 5, in clause 2, page 5, line 8, at end insert

    `subject to the granting of the appropriate order of the court'.

Mrs. Lait: I begin by assuring you, Mr. Maxton, that I will not try to discuss amendment No. 43, which is about the regulation of investigatory powers. I hope that we may take that starred amendment, which relates to clause 3, but unfortunately, much of what is contained in that amendment could be discussed with this group of amendments. I do not want to test your patience, Mr. Maxton, because I know that that would not be productive.

The amendments in this large group fall into two categories. Amendment No. 14 is about the single point of contact, while the remainder are about the independent scrutiny of requests for information made to private sector organisations.

I shall discuss first the single point of contact. Many of the organisations that will be asked for information still have considerable worries that a proliferation of people could contact them. I do not want to get into a debate about authorised officers and investigating officers, to which later amendments to clause 3 refer. One of the matters that emerged from the debates in the House of Lords, and on Second Reading in the House of Commons, was the sheer number of people from Government Departments and local authority departments who could contact banks, the telecoms industry and insurance companies.

In the Lords, Baroness Hollis said that there could be up to 500 such people from the Benefits Agency and approximately 1,000 people from local authorities. On Second Reading, the Secretary of State revised the figure down to 300 people and, by implication, about 600 local authority officers. Will the Minister give us more accurate figures? The Government said that they hoped to have more accurate figures available in Committee. Whatever the numbers are, they are large.

British Telecom has written to Lord Astor, who passed the letter to me. It mentioned 400 local authorities and 150 authorised officers—that is another estimate of the number of people who would be able to contact the private sector. WorldCom plc and NTL state that there are,

    ``13 Area Intelligence Units and a National Intelligence Unit. It is expected that the number of Authorised Officers who can request communications data disclosure will be between 2 and 10 per unit. DSS cannot give any figures but at a minimum there will be 28 Authorised officers but potentially up to 140.

    The situation is made far worse in relation to Local Authorities where up to 400 will be granted the powers under the Bill.''

There is a wide difference in the estimates and confusion about the number of people involved, which should be clarified.

The principal difficulty is that, given the sheer number of people who may be able to contact the private sector, and despite all the safeguards in the code of practice and the fact that the authorised officer will have to include in the information his certificate of authorisation, it will be exceedingly difficult for companies to deal with the large number of people who may respond. The point of our amendment is what companies want—one point of contact through which requests should flow.

10.45 am

There is organisational difficulty with not only the sheer numbers involved but in keeping the list up to date. As we all know, there is a turnover in staff. When I worked in the civil service, people had a two-year stint doing any one job. It is difficult to keep track of numbers, names and people. Those of us who contact ministerial offices find that the private office changes on a two-year basis. Although people may specialise and have a career in fraud investigation in the Department of Social Security or the Benefits Agency, they may be promoted out of that grade and authorisation may not continue. Companies will find that they do not know with whom they are dealing and have not heard of the new person. There is therefore a practical reason for a single point of contact.


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