Social Security Fraud Bill [Lords]

[back to previous text]

Mr. Webb: No one doubts that efforts are made to supervise, but the Minister said himself that 18 staff were prosecuted, which proves that there are rotten apples in the barrel. That strengthens the case for independent scrutiny. Random checks are fine but, by definition, they miss the majority of cases. Why is the Department afraid of independent scrutiny?

Mr. Rooker: To be honest, the hon. Gentleman's point strengthens my case. The idea has somehow got abroad that we are not managing, checking on or supervising our staff, but that is not the case. They are governed by legislation under other Acts of Parliament, as is everyone else. Even when staff simply remain logged on for too long on one case, it is noted and inquired about. Random and management checks are both part of the management process.

The hon. Member for Beckenham raised the question of inquiries through a central point. She suggested, too, that the powers could be exercised only in line with a code of practice. I can dismiss that last point first because, if that were so, the Bill when enacted would be subservient to a code of practice, which would not make sense. If one wrote into the Bill that the legislation would have to follow the code, one would be doing things the wrong way around. That does not happen with any other code of practice, and I do not understand why anyone would want it to be the case with this one.

Amendment No. 3 would require the DSS and local authority-authorised offices to obtain a court order in every instance. The Committee should bear in mind that, unlike the police and those at the Inland Revenue, who can obtain information about anyone, the need of the DSS to make inquiries is strictly limited. The provision relates only to benefit claimants and those included in the claim. When people claim benefits, they know that they are required to tell the truth. We can make inquiries under the Bill and need to do so only when we have reasonable grounds for believing that claimants are not telling the truth. Therefore, there is no analogy to the police and Inland Revenue. We will make it clear to people that what we are told when the claim is made may be checked with third parties and that, if there are grounds for believing that they have told us a lie, we have the right to check up on them.

The Bill provides safeguards against abuse because the powers can be used only when it is reasonable. The measures are governed by the statutory code of practice and the work of the authorised officer will be supervised. The authorised officers that will use the powers will not have responsibility for taking the decision about the benefit entitlement or whether a fraud has been committed. A chain of command of highly specialist people has that responsibility. If they abuse the powers, they will be found out and, under the powers of the Computer Misuse Act 1990, the Social Security Administration Act 1992 and the Data Protection Act 1998, they can be sent to prison for up to five years.

Obtaining a court order before using powers to require information would achieve nothing other than to condemn the taxpayer to even bigger bills. We estimate that it would cost the Department of Social Security, local authorities and the court system about £120 million a year to obtain prior authority before every inquiry. That is about one fifth of fraud in housing benefit and approximately one seventh of fraud in income support and jobseeker's allowance. Would that be a good way of spending £120 million? I realise that, for some, that might be a point of principle; nevertheless it is not chicken feed. It could take up to 265,000 hours of court time a year to provide prior authority for the inquiries made under the Bill. Those hours are currently spent on dealing with criminals.

Amendment No. 4 would require us to obtain a court order before a utility provider could be required to provide information about the quantity of services supplied to residential addresses. I want to make it clear again that the power to obtain information from utility providers does not apply to individual citizens. We will not receive names from gas, water and electricity undertakings. We will receive only addresses at which there is an abnormally high or low use of a service. It is then up to us to match the data with our benefit records to find names of individuals who may or may not be claiming benefit. If water or electricity is not being used, yet someone is claiming housing benefit, there is a good chance that the person is not living at that address. A court order would not assist in that respect.

Amendment No. 5 applies to electronic access. As I have said previously when talking about advanced technology, it would be useful if we modernised our Committee arrangements in a future century so that we could use a screen or a laptop. I could then show the Committee an example of electronic access. I have had the benefit of going to banks and insurance companies to see people log on, in respect of credit references, to individuals' addresses. For example, when people buy furniture, millions of checks are made overnight through the credit industry fraud avoidance system. Such systems are cheap and effective. They are simple, but they are also highly controlled.

Amendment No. 3 would prevent DSS-authorised officers from requiring information by electronic access without a court order. Electronic access costs about one tenth of the cost of requesting information by writing. It is a cheap way of making an inquiry—cheap on the access provider and cheap for the staff. Authorised officers must keep a record of the inquiries that they make by electronic access. Organisations that provide electronic access, such as credit reference agencies, will provide an audit trail of the inquiries made. Intelligence unit managers will be able to check to confirm that there were reasonable grounds for making the inquiries.

The powers to obtain electronic access are important. They are efficient: they place a minimal burden on business and are the cheapest way in which to obtain information. If we had to apply for court orders each time that we wanted such information, we would be held up for weeks. Electronic access can be completed within seconds of a person realising that an inquiry has to be made.

11.15 am

Amendment No. 2 would slow us down, but speed is not the only reason why I am arguing against it. It would require the consent of a magistrate. We have been using such powers since the 1940s. We have access to employers. We have the power to ask employers for information about their employees. The staff who will be carrying out inquiries under the Bill are the same people who, day in, day out, contact employers about employees, and have been doing so under the powers granted by statute for decades. I am not aware that a single complaint from an employer has crossed my desk since I was appointed to the Department two years ago. My staff have told me that if they ask nicely, they usually get the answers that they want. That is how they work.

The provisions concerning powers of inspection were consolidated in the Social Security Administration Act 1992. The previous Government extended them to local authorities in the Social Security Administration (Fraud) Act 1997, but they did not introduce powers to place problems before magistrates, although it is well known that local authorities face substantial fraud with regard to housing and council tax benefits, and we must tackle that.

The powers to make inquiries, the level of staff who make those inquiries, and their supervision, are all part and parcel of our current processes. My Department also matches benefit runs under the generalised matching service, and we operate under a code of practice concerning data protection that has been agreed with the commissioner. She signed the foreword to the last version of it, which states that it works well and that there are no areas of abuse.

Mr. Webb: With regard to amendment No. 2, the Minister offered a costing for forcing matters through open court, but has he tried to ascertain the cost of merely seeking a magistrate's approval? That would, presumably, be cheaper than a full court hearing, and it has been suggested by the British Bankers Association.

The Minister has stated that staff currently ask employers for information. They are asked principally for earnings information, which is germane to benefits entitlement, but the Bill refers to a wider range of information, such as bank statements. Surely that amounts to a difference of kind.

Mr. Rooker: I am not seeking to give a false impression. Staff ask employers questions about their employees, such as their names, addresses, the date on which their employment began, their hours of work and their pay. They do not ask for further information that employers do not have a right to know about their employees.

The Bill would make it possible to inquire about a slightly broader range of information, but one must not get carried away about that. For example, if an employee denies having a bank account, it might be necessary to check that. If we think that we have been lied to, and we discover that an employee has an account and we confront him or her about the lie, that might be sufficient for him or her to cough up. In such a case, we would not need to gather further information concerning that account's statements, or the details of its direct debits. The mere fact that we can check whether such employees have bank accounts might be sufficient for them to admit to having misled us, or, perhaps, to plead that they had forgotten about the account and to offer us the information that we require. We do not want to trawl the depths of people's finances; the hon. Member for Northavon (Mr. Webb) rolls his eyes, but such details might not be required.

I turn to the matter of the relationship between the Act of Parliament, as the Bill will become, and the code of practice. The Bill will become law, and the code of practice will provide guidance that must be followed. However, although a code of practice cannot override an Act of Parliament, amendment No. 15 would make the Act of Parliament subordinate to a piece of guidance. That does not make sense.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 3 April 2001