Social Security Fraud Bill [Lords]

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Mrs. Lait: I beg to move amendment No. 53, in page 11, line 44, at end insert—

    `; likewise any third party either informed of the restriction or contacted as part of the investigatory process shall be notified of the quashing of the conviction.'.

The Chairman: With this it will be convenient to take amendment No. 55, in clause 9, page 15, line 17, at end insert—

    `; likewise, any third party either informed of the restriction or contacted as part of the investigatory process shall be notified of the quashing of the conviction.'.

Mrs. Lait: The amendment is designed to provide a system of redress for a claimant whose benefit is withdrawn. We acknowledge that such a system already exists, under which, when a conviction that has resulted in the restriction of benefit is quashed, all payments and adjustments are made to the claimant as though the conviction had not occurred. However, we are concerned about those who are subject to an investigation that is found to have been ill advised and unnecessary. Such abortive investigations have an effect. Most of us will know of people who have been turned down for credit or hire purchase because the credit reference agency did not have sufficient information. That can happen because the person is not on the electoral register. It happened to me when I lived in the city of London; the city of London electoral register was not on the credit reference agency's computer and I was turned down for credit. Luckily, I could use a cheque, but not everybody can do that.

If an investigation proves to be unfounded and is abandoned, there may still be traces—footprints—on a person's record showing that such an investigation has taken place. We want to ensure that there are safeguards for people who find themselves in that position. I should be grateful if the Under-Secretary would reassure the Committee on that.

Angela Eagle: I hope that I can reassure the hon. Lady. The clause is designed to ensure that any money resulting from withdrawal or reduction of a claimant's benefit as a result of a two-strikes sanction is repaid if one of the convictions is quashed, which is right and fair. The same principle is applied to other benefit sanctions.

Accepting the amendments would mean that the Department would have to inform any third party contacted over the course of a fraud investigation, who may have been notified of the imposition of a sanction, that the conviction had been subsequently quashed on appeal. That would mean that any individual, agency, employer or Government organisation—irrespective of the extent of their involvement in the investigation—would have to be notified of the quashing of the conviction whether they knew the outcome of the original investigation or not.

It has never been normal practice to go back through an investigation file and inform third parties either of the result of an investigation in which they may have been involved, or whether a sanction has been imposed. The process that the hon. Member for Beckenham suggests should be adopted would be cumbersome and expensive. I hope that the key thing she is getting at with the amendment is that any quashed conviction ought to result in the repayment of benefit rather than a mass declaration of innocence to all the people or agencies that may have been involved in the initial investigation.

Mrs. Lait rose—

Angela Eagle: The hon. Lady is champing at the bit, so I shall give way.

Mrs. Lait: I am talking not about people who have been convicted, but people who have been investigated and found to have no case to answer.

5.15 pm

Angela Eagle: I thank the hon. Lady for clarifying that. I do not know whether it will reassure her—I hope that it will—to know that we are making arrangements with credit reference agencies so that footprints will not be left in any records and credit reference agencies will not record criminal convictions. No footprints should be left by any of our investigations. I hope that that will persuade the hon. Lady that her worries on this point are groundless, and that she will consider withdrawing the amendment.

Mrs. Lait: I shall be happy to withdraw if the Under-Secretary assures me that if evidence emerges of any footprints remaining—not just with credit reference agencies but with utilities, banks, insurance companies or any of the other organisations that the Department will be able to contact to check people's bona fides—the Government will take immediate steps to ensure that they are eliminated and that the necessary qualifications are placed on people's records.

Angela Eagle: It is not our aim to leave footprints and place innocent people in difficulties with their credit reference agencies or in other business transactions. That understanding will be an important part of the agreement when we share data. We do not intend the Bill to result in innocent people being put on a blacklist because of information sharing, whether that involves utility files—which the hon. Lady should remember contain addresses, not names—or any others. If anything were to go wrong with our proposal, it would be incumbent on those involved in the information sharing to rectify matters as quickly as possible, but we hope that such errors will be preventable.

Mrs. Lait: I am grateful for the Under-Secretary's reassurances, and I accept them. I am glad to have it on the record that the Government will take instant action if anything is proved to have gone wrong, and I hope that in such an event the Under-Secretary would share the information with the House. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mrs. Lait: I beg to move amendment No. 54, in page 12, line 17, leave out `(ii) working families' tax credit'.

The Chairman: With this it will be convenient to take amendment No. 44, in page 12, line 19, leave out from `pay;' to end of line 20.

Mrs. Lait: The amendment is an attempt to include working families tax credit as a payment which, if the subject of an offence, could be withdrawn or lost. We have already discussed working families tax credit as a Treasury issue, and the fact that the authorised officer is at a higher level, under the Taxes Management Act 1970, than the relevant officer in the Department of Social Security. However, all the international evidence is that tax credit fraud is quite prevalent and that there are potential problems.

Mr. Steve Webb (Northavon): Amendment No. 44 is intended to tease out why the Department has chosen to exclude retirement pension from the list of disqualifying benefits but to include war pension. When the Bill was debated in another place, three Lords expressed concern, on behalf of war pensioners and their organisations, about the inclusion of war pension on the list. When Baroness Hollis responded to the debate, she said:

    ``So far as I am aware, we have detected only six frauds during the past six months involving war pensions.''—[Official Report, House of Lords, 16 January 2001; Vol. 620, c. 1091.]

Given the scale of that fraud, one assumes that there were no repeat occurrences.

This part of the Bill will probably have no effect, so why should it not be taken out? It should be removed, because to leave it in would offend the war pensioner community. I cannot find the exact reference, but I am sure that, when challenged as to why retirement pension was not included on the list, Baroness Hollis said, ``Because we do not think there is a problem of fraud with retirement pensions.'' Why exclude retirement pension but not war pension?

The Minister of State, in responding to the Second Reading debate, seemed to imply that the logic of my argument required that retirement pension should be included. As he well knew, that was not the point that I was making. I was suggesting that if there is a good case for excluding retirement pension, because there is practically no evidence of fraud, there is a good case for excluding war pension, too. It is on the record that the number of cases of war pension fraud is negligible, so the provision is unlikely to have any practical effect, except that of giving offence to Britain's war pensioners. On that basis, I hope that the Government will be sympathetic to the amendment.

Mr. Rooker: I am sorry if I misunderstood the hon. Gentleman on Second Reading. I do not have a window into people's minds, and I naturally assumed that he was arguing the other way around.

It may be repetitive, but it is important to reiterate what was said in the House of Lords. There is a distinction between retirement pension and war pension, and between retirement pension and many other benefits. It is almost impossible for someone to commit fraud with with regard to retirement pension. As long as people are the right age, are who they say they are, and have paid their national insurance contributions, retirement pension is theirs by right. There are no qualifying conditions. It is simple—date of birth and identity can be checked easily.

Fraud can occur when the person entitled to the retirement pension no longer requires it, but someone else continues to collect it. Sometimes the centenary lady at the DSS spots that; sometimes it goes on for a long time. In such cases, the fraud is committed by someone entirely different, not by the benefit claimant. Retirement pension fraud committed by benefit claimants themselves is almost non-existent. That is one reason for not including retirement pension in the Bill.

As the hon. Gentleman told us, Baroness Hollis said that in the past six months only six frauds involving war pensions had been detected. The level of war pension fraud has never been measured. Information is available only on the frauds detected. No benefit review, like those of jobseeker's allowance and other benefits, has been conducted.

The hon. Gentleman has asked me to distinguish between war pension and retirement pension. Unlike retirement pension, war pension has areas in which fraud can occur. This is most likely in five areas. With treatment allowance, false claims about attendance for treatment can be made. Fraud in respect of the allowance for the lowered standard of occupation takes the form of a failure to declare an increase in earnings. There could also be a failure to declare employment when an unemployability supplement was being paid. False statements could be made about walking ability when war pensioner's mobility supplement was being paid. There could be a failure to declare co-habitation when war widow's pension was being paid.

Rigid conditions covering age, identity and national insurance contributions apply to retirement pension, but other factors apply to war pension. I am not casting a slur on war pensioners, but fraud has occurred, and I am not aware of any fraud concerning retirement pension, except when it is committed not by the pensioner, but by someone else who has collected the pension after the pensioner's death.

There is a difference between the two pensions. Conditions covering war pension and some of its supplements do not cover retirement pension. I am referring to the basic retirement pension, not the add-ons, the minimum income guarantee and so on, so the scope for fraud almost non-existent--I am not daft enough to say that it is totally non-existent. On the other hand, there is scope for fraud in war pension.

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