Draft Social Security (Electronic Communications) (Child Benefit) Order 2002

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Mr. Steve Webb (Northavon): I shall, likewise, be brief and I echo the thanks expressed to you, Mr. O'Hara, and to the Department for the demonstration that we have just seen. It made slightly clearer what the statutory instrument is going on about.

Inevitably, the presentation sparked off a series of questions, some of which we were able to ask informally. Four issues arise from the order that I should like to put on the record and ask the Under-Secretary to address. First, when someone uses the website and chooses a method of payment for child benefit, the options are automatic credit transfer or order book. If someone chooses order book, a prompt comes up that says the same thing as the paper form; it asks the claimant whether they are really sure that they want to use an order book, because they are old-fashioned things and the credit transfer system is so much better. It basically steers people away from post offices.

There has been a long-running debate on that, into which I shall not stray, but my specific point is that people using this electronic gateway to child benefit will be steered away from order books. Will the Under-Secretary assure us that when order books have gone and we are completely on ACT, the universal bank or whatever the system is for getting money, future claimants will not be steered by the website away from accessing their money at the post office? There are

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wider social implications of that, and the technology that we are discussing should not be used to steer people away from post offices, with all the consequential effects that we know that can have.

Secondly, the Under-Secretary mentioned the Inland Revenue website, about which there has been bad publicity. In the demonstration that we have just seen, it was mentioned that, as I understood it, the technology that will be used, if not the very same system, is that which led to the problems with the Inland Revenue website. Arguably, the information that one gives to the Inland Revenue is even more sensitive than the mere fact that one has a child, or the number of children that one has, but if this method is to be applied to other benefits, security is clearly of the utmost importance.

Although I am great fan of e-everything, the Government's record on such mass IT projects is lamentable. One only has to think of NIRS2—the national insurance recording system—the Child Support Agency computer system or the Inland Revenue fiasco to which the Under-Secretary referred to question how confident the Government can be that they can deliver such systems safely. This Government Department, because it deals with the entire population and tens of millions of records, has the toughest job but, regrettably, it has a track record of consistent failure in many such systems. What assurance can the Under-Secretary give to our constituents? No doubt assurances were given that the Inland Revenue site would be alright, but it went horribly wrong in perhaps a few months—or, at most, a few years—of being up and running. How confident is he that the problems will be dealt with and that this system will be better?

Thirdly, as discussed at the presentation, the first person to make a claim for child benefit through the mechanism is able, in principle, to claim the benefit, whether it is the mother or the father. On average, men have greater access to the internet than women and are more likely to use it. I may be wrong; that is my assumption. Presumably, mothers have other things on their mind immediately after the birth of their first child and getting on-line to the DPW may not be the first thing that they think about. The father might go into the office, get on the net and claim the child benefit. We understand that the website warns people of the consequences and the problems for women if men claim the benefit. Are there any additional mechanisms to prevent a higher proportion of child benefit being claimed by fathers, which could be bad news for mothers' future pension rights and so on? If not, are there plans to put them in place?

From something that the Under-Secretary said, it struck me that we may have some early evidence of that issue. He said that the existing DWP website is regularly used to download child benefit claim forms. Do people have to enter their name to get the child benefit form? If they do, does he have any statistics on the proportion of men who use the net to download child benefit claim forms? That might give us a sense of

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whether men use the technology more. For example, the proportion of child benefit received by men is, presumably, tiny. If only 5 per cent. of child benefit is received by men but 25 per cent. of the downloads from the websites are by men, we might start to worry that women will lose out because of the technology. Again, the Under-Secretary may not have the figures readily to hand, but it would be helpful to the Committee if he obtained them.

The final question is whether the technology can be extended to benefit claimants. When they go through the process and fill in their details to ask for child benefit, will a box pop up on the website that asks if they have claimed child tax credit? The technology could have a wide application in improving take-up of benefits, particularly on the birth of the first child. Obviously, take-up for child benefit tends to be near 100 per cent., but it is much lower for other credits. Does the interface envisaged in the order encourage people to claim other benefits? A slip in the front of the paper copy of a child benefit order book asks whether working families tax credit has been claimed. It was not apparent from the demonstration whether the website will flag that up; if not, is there an intention to do so? That would be a positive reason for pushing this form of interaction more.

I have no particular problem with the order, subject to the reservation that I raised about security. I do not wish to stand in its way but would be most grateful for the Under-Secretary's response to those specific points.

4.47 pm

Malcolm Wicks: I thank hon. Members for the way in which they have approached the debate and for their serious questions. If, after the proceedings, I feel that I can give fuller answers, I shall write to both hon. Gentlemen, in the usual way.

We are very concerned that the security of the system should be at least as robust in protecting against fraud as the existing paper-based system. As we do with all new policies in the Department, we have asked our anti-fraud and security experts to review it, and we are confident that the security will be at least as rigorous as the existing system. I assure the Committee that we shall monitor the scheme during its early months against several criteria, one of which will be security.

The hon. Member for Hertsmere (Mr. Clappison) asked whether the results of the testing would be communicated to members of the Committee before we go live. That is a perfectly reasonable request, and I shall ensure that we communicate with him and others in the proper way. If the hon. Gentleman is interested in other aspects of security, I shall write to him. However, as the Minister responsible for fraud—or, as I prefer to put it, anti-fraud—in the Department, this is a matter that I am very concerned about, for obvious reasons. The hon. Member for Northavon (Mr. Webb) is clearly concerned about post offices and payment methods. We feel that the future for social security payments is through electronics and ACT, but we are, of course, sensitive to those people—whether

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they are elderly claimants of pensions or claimants of working age—who want to go to a post office and cash their benefits in the traditional way. Even people applying through this electronic method could use the new post office accounts to withdraw their child benefit. Going electronic is not anti-post office; far from it. With payment modernisation we will have the new post office accounts so that people can claim their benefits in that way.

We will be learning things from the experience of the Inland Revenue. There were particular circumstances surrounding the breach of security that occurred there. I am told that a weakness in the Inland Revenue system allowed an internet service provider, or a supporting company, to store the unique identifier for some taxpayers in a way that unintentionally enabled that identifier to be accessed by others. Such information should never be stored in internet service arrangements. Neither the internet service provider nor the Revenue knew that that was happening and there is no evidence whatsoever that it was a malicious act. Nevertheless, it was a serious breach and the Inland Revenue is investigating it. We shall ensure that we learn lessons from what happened there.

Mr. Webb: I am slightly alarmed that the Under-Secretary has said that the Inland Revenue did not know what was going on. That is almost more disturbing, because it suggests that things can go on that Departments do not know about that breach security. Perhaps that is a fact of life. Given that security breaches are probably almost inevitable at some point in such big systems, does the Department have a security plan for dealing with such a breach?

Malcolm Wicks: We are not there yet and, as I said, we will seek to learn lessons from the Inland Revenue to make this system as secure as possible. We must be honest and say that no method in social security can ever be guaranteed, by a Minister or anyone else, to be absolutely forever 100 per cent. proof against others seeing information, or against fraud. One has to be aware of that.

One should not pretend that the existing method of filling in paper forms and sending them—and moneys—through the post is the most secure of systems because that would not be true. There are many thefts from the post office system, as the hon. Gentleman will be aware.

Mr. Tony Lloyd (Manchester, Central): The hon. Member for Northavon raised an interesting point, not just about security but about who bears the initial cost. Historically, one problem when money goes astray in the benefit system has been that the claimant is disadvantaged because payment has been stalled. If there is the capacity for the system to throw up error—even concerning something that has not been

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claimed—we want to avoid a situation in which people who are entitled to money, and rightly deemed by Government policy to be in need of that money, are disadvantaged. Can we ensure that in the event of a malfunction of the IT system, claimants do not have to wait for prolonged periods before receiving money to which they are entitled?

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