Social Security Fraud Bill [Lords]

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Mr. Webb: I am sure that, before she sits down, the Under-Secretary will respond to the hon. Member for Hexham, who raised utilities and trawling. I am puzzled, because the Government's attempt to reassure us by saying that they will target roads, streets and towns, not named individuals is supposed to be good news. On the face of it, that seems rather alarming. Will the Minister clarify the criteria for deciding which streets, villages or whatever will be chosen? In other parts, the Bill refers to reasonable suspicion, so how does that concept apply to blanket searches?

Angela Eagle: I thank the hon. Gentleman for reminding me to deal with that point, because I must admit that it had slipped my mind, not because it is not a reasonable question to ask but because I was getting carried away with the code of practice.

We will begin with pilot exercises and pay the utilities for their costs. Hon. Members know about the problem of houses used as giro drops. They are a potential source of fraud; people claim that they are living on their own when they are living in substantially different circumstances. The searches are a way of checking and putting a stop to the fraud. The Government have tried in other ways, with some success, to prevent the growth of giro drops, for example by the ``do not redirect'' arrangements that were agreed with the Post Office. However, we know that such abuse still happens, so the pilot exercises will find out whether the proxy, which is abnormally high or low usage of the utility, will be an accurate way of plugging the leaks and stopping the frauds that are well known in our communities. We will not immediately launch huge bulk searches in every major city; we will use pilots to see what is successful, and then decide which areas to target.

Mr. Webb: Will it be the case that, for example, a local authority will identify that a single address is being used for several claims and then ask, or get the Department to ask, the utility company for the relevant bills? Such methods will be speculative and statistical. Linked to that is another concern that we expressed in the other place. We believed that the Bill had a generality—it identified people who were more likely than average to commit fraud—and that aspect was taken out. Why has that not been removed from this part?

Angela Eagle: We are speaking about a substantial abuse of the benefit system and a main method of fraud. If one takes away identity fraud as a category, the misuse of property addresses for giro drops and misreporting of living arrangements are two other categories of substantial fraud. The information that we would use is available in other organisations; for example, the water utilities know which properties in their areas have the water switched off. We will get a list of such properties, run it past our information on claims, and, if we find that people are claiming benefits from properties at which there is no water supply, send somebody along to check what is happening.

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One could conceive of instances in which people are living without water supplies—I hope not. It may be that they have some other arrangement and are not defrauding the benefits system. We would check, once we had matched up the two bits of information. That is the idea of the bulk transfer. The information exists and is held as public knowledge. We are merely data matching to provide an extra safeguard against fraudulent use and stealing of benefits. In such circumstances, our use of the bulk transfer powers in the Bill is justified.

Mr. Peter Atkinson: We all agree that such a system is useful, but the hon. Member for Northavon (Mr. Webb) and I are trying to determine its scale. After piloting the programme, do the Government intend to roll it out across the whole country? Will it operate in a manner similar to the television licensing service, which concentrates on houses without a TV licence?

Angela Eagle: I do not know the answer to that, because we have not done the pilot exercises. If they involve a huge amount of trawling but do not close any loopholes, we may decide that we do not want to proceed. However, if they prove to be effective in detecting giro drops and inconsistent benefit claims that we can then check, my guess is that we would proceed to the extent of our capacity to go out and do the checks. Collecting and matching data is of no use if we do not then go in person and check it.

Until we have been able to evaluate the pilot exercises to determine whether such a system is a good or bad way of finding the fraud that we know exists, I cannot give the hon. Gentleman any more details about how we would subsequently use the information. However, it will not be a secret. Such powers are intended to deter fraud, as well as to detect it. To reassure the hon. Gentleman, if it proves to be fertile ground for discovering benefit fraud, we will let everybody know that we are doing the checks to deter as many people as possible from thinking that they can get away with such fraud.

Mrs. Lait: I am grateful to the Under-Secretary for that clear exposition of how the system will work, but it has actually caused me greater concern. In the best of all possible worlds, it would act as a deterrent but, as I am sure that she and every member of the Committee knows, more and more people are now buying timing devices. When we go canvassing, we hear dogs barking and televisions coming on, but no one is in. Timing devices even turn lights on in one room and then another.

If someone is seriously organising the sort of fraud that the Under-Secretary is hoping to deter—I completely agree with her; we want to deter it as well—it is not beyond the wit of man to buy a timing device that would pay for itself in illegal benefits before long.

Mr. Ian Davidson (Glasgow, Pollok): Does the existence of the timing devices that the hon. Lady referred to demonstrate that there is no length to which people in this country will not go to avoid Tory canvassers? [Laughter.]

Mrs. Lait: Well, they install the timing devices to prevent illegal entry into their homes by—we hope that it is not by Department of Social Security fraud investigation officers. The crucial point is that the technology exists. It is unlikely that the pilot schemes will reveal such sophistication immediately, but it will not be long before people involved in organised fraud are creaming off a lot of money from the state. With new technology, it may be unnecessary to gain information from the utilities.

If the Government decide that that form of information is useless, fundamental changes will be necessary to the code of practice—referring to which allows me to come back in order, Mr. Maxton. The Secretary of State should consult not only the industry and all affected, but the highest court in the land, which is Parliament. That strengthens the case for introducing the code of practice by affirmative resolution, and any amendments to it should be made by the same procedure.

The Under-Secretary rightly says that there are many opportunities to raise the relevant issues in Adjournment debates in Westminster Hall and elsewhere, but if the Government are as concerned as we are about fraud, they should be positively approaching Parliament to seek its approval for changes to the code of practice. The hon. Lady may like to think further on the matter. I am happy to withdraw the amendment on that basis, but we may reintroduce it on Report.

Angela Eagle: I doubt whether anyone has yet invented a timing device that can turn taps on.

Mrs. Lait: It will come—it is called computers.

Angela Eagle: I accept what the hon. Lady says. In the future it may be possible to make a property appear that it is lived in when it is not, but that should not stop us from closing any loopholes now. In respect of tax evasion, we need to assume powers to deal with current abuses. We know that the people whom we are fighting will become increasingly sophisticated and devise other ways of continuing their evasion. Anti-fraud work is similar; one closes the loophole in the present and we have to deal with what may emerge later when we get there. We will not know for sure until the pilots are completed, but we believe that bulk transfer on abnormally low and high usage of utilities is a fertile area for closure of loopholes, and I hope that the hon. Lady agrees.

The hon. Lady and I have a slightly different approach to affirmative debates on the code. If substantial change were required, consultation would take place. The new code would be sent out to all groups of people affected by it. The Secretary of State would consult and Parliament could, if it wanted, debate it. There may not be that much between us. The Government's intentions are clear, and I hope that the hon. Lady will accept that we want an open, two-way process to secure the best possible support for the code.

Mrs. Lait: We all have people coming to our surgeries to raise this matter, so the hon. Lady should accept that Parliament is one of the most concerned groups. The Secretary of State will be at the very least ungenerous if he does not consult by means of an affirmative resolution.

Angela Eagle: As a result of some modernisation in Parliament, we have more than 200 extra debates in which to discuss such issues. That gives a greater chance for Back Benchers to instigate debates, even if some conspiracy of silence between Front Benchers prevents the matter from reaching the Floor of the House. I suspect that if Parliament really wanted a major debate about the code, it would instigate one.

Mrs. Lait: In a sense, the Under-Secretary makes my point for me. Since there are all those extra opportunities for debate, it would be generous of the Government to provide one in their own time. An affirmative resolution would be the easiest way to do that.

Angela Eagle: Clearly, our not accepting the hon. Lady's amendment would not preclude such a debate, as and when necessary. We have introduced substantial changes in clause 3, which creates the code and have given substantial chances for consultation. The code can be used in evidence in civil and criminal proceedings. The powers in the Bill cannot be commenced until the code has been consulted on and agreed. The hon. Lady has been generous enough to accept that substantial moves were made in the other place in this area. I hope that she will also accept that this process is similar to those relating to many other codes, issued not only by Parliament, but by the Data Protection Commissioner. We believe that that is an adequate way of dealing with the matter.

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