Social Security Fraud Bill [Lords]

[back to previous text]

Mrs. Lait: I am grateful to the Minister of State for responding to so many of our points, but unfortunately his responses raise further questions. I shall follow the order in which he responded to our points, as that is how I took my notes.

The comparison that the Minister drew between the Inland Revenue's powers and those of the DSS is precisely the reason why we did not table an amendment to transcribe the relevant section of the Taxes Management Act 1970 into the Bill. We recognise that the Revenue has much wider powers and can require information from third parties. We wanted to ensure that a similar system, or, as semantic arguments are involved about whether ``similar'' means ``the same'', a system that would produce the same effect as that operated by the Inland Revenue in respect of an independent check on inquiries, was passported into the Bill.

The Minister drew an interesting but slightly unfair comparison with Inland Revenue commissioners. Inland Revenue investigators must secure agreement from those independent commissioners, who number about 3,000. The commissioners cannot participate in subsequent inquiries, which ensures that they remain independent. The most obvious parallel with those commissioners are magistrates.

To frighten the horses, the Minister suggested that all requests for action would have to be made by magistrates in open court. As he suggested, magistrates often do not have to give such orders in open court. In the same spirit as the Government allow Inland Revenue commissioners to give permission, we suggest using magistrates, as we believe that independent scrutiny is necessary.

The decision is entirely up to the Minister, and if I were in his position I should do exactly the same as him and put the worst possible case. We, necessarily, put the best possible case—that magistrates do not need to act in open court.

The Minister has said that the Bill does not allow fishing expeditions. Anxiety about fishing expeditions led us to table the amendments on magistrates, court orders and the code of practice. We believe that in some cases fishing expeditions will still be possible and have tabled amendments to tease out why he believes that fishing expeditions will be precluded. We tabled the amendments not merely because fishing expeditions might be possible but because we believed that the system should include independent scrutiny.

The Minister rightly defended the probity of DSS staff and people in local authorities who are involved in fraud investigation. I hope that he does not believe that we are casting aspersions on the bulk of the staff, but according to his own figures, 18 staff were prosecuted, three were downgraded, and 21 resigned, which is 42 staff out of, I believe, 5,000 benefit investigators.

Mr. Rooker: No. The Benefits Agency employs 80,000 people. The figures to which the hon. Lady refers are general figures for members of staff who have done things wrong under the legislation. They cannot be classified as part of the figure of 5,000.

Mrs. Lait: I am grateful for the Minister's clarification. I am pleased that the management checks pick up anyone who in any way, shape or form is acting illegally. I am not suggesting that the 300 authorised officers would act illegally, but given the management checks, it worried me that it was necessary to take action against 42 people in the Benefits Agency in the past year because they were behaving outside the bounds of their legal responsibilities. We are not casting the aspersion that the Department of Social Security or the Benefits Agency do not supervise their staff.

Mr. Rooker: The Benefits Agency is in receipt of bogus calls from debt collectors and other agencies in the private sector that are trying to find out information about our benefits plans. Prosecutions are pending in respect of that. None of the bogus calls have come from inside the Benefits Agency. They were all from the private sector. Probity is at risk. We have to take a tough line. It is not all one way.

Mrs. Lait: I am delighted to know that the Department of Social Security and the Benefits Agency take a tough line. None of us would condone any illegal action or transgression of an individual's right to privacy. I am not sure how relevant that is to our call for an independent check, but I am pleased that the two establishments act in that way.

I want to put it on the record that we are talking about the principle of independent scrutiny. My hon. Friend the hon. Member for Hexham (Mr. Atkinson) referred to the detail of the provisions. I shall be grateful if the Minister will explain how he plans to keep companies informed of staff changes. It could be routine, but we all know that internal telephone directories are always changing. For example, the House of Commons has an efficient system; each three or four months we receive a new telephone directory, but it is still tempting to hang on to an old one. We then suddenly find that the names are wrong. It is a matter of crucial detail. Companies should be assured that there will be a robust system by which they can be kept updated. I am sure that they will have the best method of ensuring that the information that they receive from the Department of Social Security is up to date. There is much worry about such matters.

The right hon. Gentleman said that, under the amendment, the code of practice would take precedent over the Act. If he is intrigued by the idea of the code of practice, we should be delighted if he took away the amendment and drafted it in such a way that it satisfied him. A check should be made that the inquiries by the authorised officers are as independent as possible.

11.45 am

The Minister went on to talk about the misuse of powers by officials and said that people could be sent to prison for five years, which probably would act as an effective deterrent to such behaviour. He argued that, because there were various management checks and deterrents, there was no point in independent scrutiny and that it would cost £120 million to obtain court orders. It was estimated that 120,000 court orders would be needed to deal with inquiries. I think that the right hon. Gentleman referred to £60 million in respect of magistrates. I am not sure whether he meant that it would cost £60 million for magistrates to sit in court or that that would be the cost of private sessions.

The Minister then referred briefly to amendment No. 5 on electronic records, which are indeed quick and accessible. Obtaining a court order would slow down the process. I do not wish to be out of order, but the Benefits Agency is putting together an inquiry about potential benefit fraud. Given the nature of the bureaucracy involved, the mere fact that inquiries can be conducted electronically overnight, as is the case under CIFAS, will not have a material effect on the case against the benefit fraudster. Thus, the argument about the delay that would be caused if a court order or a magistrates order to sit in private were sought—heavens above, no one wants to make our courts process any slower than it is—is an argument for argument's sake as opposed to a proposal that is well thought through.

Naturally, we want the case against a fraudster to be put together efficiently, effectively and as quickly as possible, but I doubt that the other inquiries that would need to be made to put together a case that would stand up or to persuade a benefit fraudster to withdraw his claim would be affected by a delay of 24 hours to obtain a court order rather than the simple overnight gathering of electronic information. An enormous amount of paper would have to be put together, whether or not the searches were done by computer, to confront the fraudster with the case against him or to make a case that the CPS would recognise. I think that the CPS still uses the criterion of a 50 per cent. chance of success.

My hon. Friend the Member for Hexham referred to the number of inquiries. On Second Reading, I think that the hon. Member for Northavon said that 800,000 inquiries would have to be made. That is a small point, but paragraph 19 of the regulatory impact assessment refers to 900,000 inquiries. The figure of 800,000 is large, but 900,000 is even larger. I do not want to split hairs, but we need to put the matter on a proper basis. The number of inquiries set out in the draft code of practice and in the regulatory impact assessment are 594,000 and 287,000, which add up to 881,000.

Mr. Rooker: The hon. Lady is using the regulatory impact assessment that was in place when the Bill was introduced in another place. Aspects of the Bill have changed since then. I am using the regulatory impact assessment in respect of the Bill that is being discussed in the House of Commons, and the number of inquiries totals 784,000.

Mrs. Lait: I am delighted to hear that. I am sorry, I was using the House of Lords code of practice draft, too. It shows that we work closely with our friends in the other place. I should be fascinated to know why the figure has fallen.

The right hon. Gentleman brought his remarks to a close on the single point of contact. I was interested in what he said about reducing the gateways—I think that that is the best description—so that the origin of the inquiries is clear. I was pleased to hear what he said about negotiations with the local authorities and the Local Government Association. After the Minister has responded to the substantive points that I made, the way forward will be to withdraw the amendment in order to think about those responses.

Mr. Rooker: I shall be brief. To reiterate a point that I have already made, the powers to obtain information from persons who fall within proposed new subsection 2A(a) to (n) are restrictive and not on the scale of those used by the Inland Revenue, which can demand access to solicitors and accountants. The power in the Bill is very restricted.

We are still in discussion with industry on updating the list of staff—I want that to be clear. Nothing is set in concrete and we need flexibility because we genuinely want to take on board industry's concerns. We want a system that works to the best advantage of both partners in the attack on fraud. Our intention is to ensure that representatives in the businesses that we deal with always have the name and telephone number of a senior officer, so that if there is any doubt in their minds about the inquiries made to their organisation, they can approach that senior officer directly. We are still discussing that with the business community.

I do not think that it is our intention to publish to the wider world the list of authorised officers. I do not know quite what our intentions are at present, but I do not think that there will be a public notice outside the 14 units saying, ``These are the authorised officers'', or that we will post their names and work addresses on the internet. However, there will be named officers at the 14 points. When they change, we will issue new names, but we will ensure that businesses always have access to a senior officer with whom to check any doubts about inquiries. We are often approached with bogus inquiries, and it is difficult to know whether it is a genuine inquiry from another part of Government or someone in the private sector trying to discover information to which they are not entitled.

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