|Social Security Fraud Bill [Lords]
Mr. Webb: The Minister has, perhaps inadvertently, failed to answer my question about the cost of merely seeking a magistrate's approval.
Mr. Rooker: I offer a ballpark figure of £60 million, but that is only an estimate. I mentioned the idea of open court. I consider the idea of popping along to see a magistrate at home when one wants an emergency order to be even worse. The figure of £60 million has been quotedif the magistrates were not queueing up for that work, I would be astonished.
I turn to amendment No. 14 and the matter of the central point of contact. Obviously, much work must be done to make the Bill practical both for business and for us. We want the minimum burden on business, and we made that abundantly clear during our discussions with businesses, and in the amendments that we made to the Bill in the other place. When the Bill receives Royal Assent, there will be the normal three-month consultation on the code of conduct.
We have given undertakings that inquiries will be routed through intelligence units within the 13 administrative areas of the Benefits Agency, plus the national intelligence unit that deals with organised fraud. Therefore, there will be 14 sites. That represents an incredible degree of centralisation in a Government Department. We currently have 600 offices, and we do not envisage the initial authorisation of more than 175 staff.
Different issues apply to local authorities, which have a statutory duty to administer housing benefit and council tax benefit. Some authorities are good, some are excellent and some are appalling. Everybody knows that because we publish the reports of the benefit fraud inspectorate. Local authority investigators are trained to carry out their duties, and we assist with such training.
Our best estimate of the cost of housing benefit fraud is £600 million a year. That is an unacceptable drain on resources. However, there are 409 local authorities and the Government cannot tell them precisely how they should do their job. We expect chief executives to run efficient and tight ships. We have given them access to our internal information through remote access terminals; every local authority has at least one such terminal, although some have more. That makes accessing the information easier. However, local authorities can access information electronicallyprincipally information from credit reference agenciesonly following authorisation from the Secretary of State, and a case must be made for such authorisation. There are no blanket authorisations. Nothing has passed over my desk, or the desk of my right hon. Friend the Secretary of State, about local authorities that are good, bad or indifferent.
In discussions with the Local Government Association, we raised the possibility of local authorities banding together to make such inquiries. That will have to be done in writing because we cannot give commitments on behalf of local authorities. However, we understand from British Telecom that in Gloucester inquiries are centralised through the trading standards department, which means that there is only one department making such inquiries. Therefore, even the council channels through one department. The London team against fraud facilitates the sharing of information and best practice throughout the London boroughs. There is a wide variation in the performance of London boroughs that deal with housing benefit, ranging from good to very bad. All boroughs are trying to raise their game, and we want to facilitate that.
Local authority officers will be bound by the statutory code of practice. It will apply to such officers in the same way that it applies to the Department's officers. Paragraph 4.22 of the code of practice indicates that local authorities should join together to channel inquiries through one department in one of several authorities. That will make the measures in the Bill less of a burden on authorities and business. It would be useful if the authorities considered operating in that way.
I accept that this is an area on which we could spend time. The amendments moved by the hon. Member for Beckenham raise legitimate concerns. Liberty has also raised those issues. I make no criticism of Liberty. It does not have the resources to comment on our original consultation. I told staff to remind representatives from Liberty that we had not heard from them, but they wanted to wait until the Bill was published before commenting. I understand that voluntary sector organisations are strapped for resources.
However, I think that even Liberty would accept that we have made substantial changes. I repeat that there is no intention, and there should be no possibility, of fishing expeditions on individual citizens under the Bill. I cannot be clearer than that. Our client group is confined to benefit claimants. They should not have fewer rights than other citizens, whether they are taxpayers or not, because they can be both at the same time. All that we are asking is that people tell us the truth when making benefit claims. We can make inquiries only if there are reasonable grounds for believing that the truth is not being told. We are severely limited from the outset.
Some of the figures look big because we have 50-odd million claimants. For example, we issue a million order books a week50 million a year. We pay out £2 billion in benefit every week£100 billion a year. Huge sums are being paid. One can make the figures look big, but inquiries should not be an onerous cost on business. As taxpayers, businesses have an interest in helping us reduce the scale of benefit fraud.
Mr. Peter Atkinson: The figures are huge. That is why I asked the Minister to give us some idea of the scale of the inquiries, which he seems unable to do. I would even appreciate a guesstimate. As I understand it, there will be 175rising to a possible 300authorised officers located in the 14 Department of Social Security centres. When we discuss the question of housing benefit and local government officers, the whole problem becomes vastly less clear. We need to know the details of how the proposal will work to make us more confident that there will be no wholesale speculative inquiries on individual citizens. What matters is how the proposal will work in practice. If we are talking about more than 400 local authorities, on what basis will they be authorised by the Secretary of State? Do they have to show some competence? Should they have a single authorised officer? How is it going to work?
Will the Minister explain how the proposal would work with credit card companies? Let us suppose that an inquiry is made to a credit card company. Would the request be made electronically, or would it be an automatic transfer of data on the credit card customer's account? If such an inquiry is made to a credit card company or credit reference agency, is there anything to preclude the company recording the fact that an inquiry has been made on the account? Presumably, a person's credit worthiness could be innocently damaged. It may be thought that because a DSS inspector has inquired into a person's financial affairs, something dodgy must be going on. Those may be details or minutiae of how the proposal works, but they are important.
CSA investigators examining a particular case would have no right to make such inquiries in the CSA, but could ring up their mates in the Benefits Agency and say, ``We are investigating this individual, will you do the credit checks for us, because we think that something is wrong. It might benefit all of us.'' That might be a legitimate thing to do, and we might want to encourage it. However, I would be interested to know further details about how it might work.
Mr. Rooker: I am sorry that I missed the hon. Gentleman's point. The best that I can do is draw his attention to the regulatory impact assessment. Table 3 in paragraph 18 gives an estimate of the number of inquiries made by the DSS and local authorities. As the hon. Gentleman will see, we estimate that there will be just over half a million inquiries from the DSS and about a quarter of a million from local authorities, which will be split between banks, utilities and so on. The grand total is about 800,000. Those are big figures. In the context of what the Government are doing they are small beer, but there is big money involved in fraud.
Inquiries to credit card companies should be in writing. Credit card companies are a different kettle of fish from credit reference agencies. In the main, electronic access will be to credit reference agencies. The company can record the fact of the inquiry made by the DSS, but it must not hold that information for too long, because it is not relevant for its purpose. The DSS footprint will therefore not be available for everyone to see for ever more.
It is not generally known that the private sector in this country has its own organisationCIFAS, the credit industry fraud avoidance systemto combat fraud. It involves the Metropolitan police. Information is exchanged so that people who make an application to buy a three-piece suite or a car are subject to checks, instantly and overnight, by address, name and date of birth. That is also done in relation to making an insurance claim and taking out insurance. People receive their service, their sofa is delivered, and they think that that is the end of the matter. However, the computerised checks continue under the CIFAS system, and I hope, expect and assume that they conform to the requirements of the Data Protection Act 1998.
I tried to explain at a recent banking conference, which I mentioned on Second Reading, that our first port of call in relation to a query might be a credit reference agency, because that could give us an idea of what had been paid by the person concerned. It might give us a clue as to whether there had been a check with a bank, which might be that person's bank. That would allow us to track whether the person had a bank account. We would not send off missives to all the banks. As I tried to explain, if we think that someone has a bank account, and is lying to us, we will not contact 50 banks to ask them whether a certain person has an account with them. It will not be done in that way. If we cannot find out what we want, we shall have to use the evidence available in the best way that we can. We do not intend to be oppressive.
CSA investigators are part of the same set-up. They have their own powers of inquiry and inspection. Inter-departmental powers exist for data matching benefits. People are beginning to learn that, even with our inadequate computers, which are being modernised dailyI must stop calling them rubbish because they are improvingwe are data matching on people who are claiming one benefit against another. That is done internally within government, and the CSA is no different in that respect. There have been problems with the CSA since it started. I have heard amazing allegations from constituents about people driving Mercedes estates and jobs on the side dealing in antiques. Nevertheless, the powers of CSA investigators are limitedthey cannot go fishing. I make it abundantly clear that it is not a case of meeting a colleague in the pub or having a quick chat on the telephone to ask, ``Could you run a check on this person?'' Investigators must have reasonable grounds, and their inquiries must be recorded, supervised and managed so that if they are misusing their power we can catch them out.
|©Parliamentary copyright 2001||Prepared 3 April 2001|