PREVENTION OF SOCIAL HOUSING FRAUD BILL
The Committee consisted of the following Members:
Kate Emms, Committee Clerk
† attended the Committee
The Chair: Good morning, everyone. I realise that most people will not have taken part in proceedings on a private Member’s Bill, which are quite different from Committees on which most hon. Members will have served. I think that we have things organised between the usual channels, but if anyone is mystified by it all, please ask questions.
Brandon Lewis: It is a pleasure to serve under your chairmanship, Mr Amess, in my first Committee. The first set of amendments would all do one thing: apply the Bill to Wales. The Welsh Assembly Government have now concluded their consultation on the subject and have confirmed that they wish the Bill to apply to Wales.
‘or to another person to be held for P’s benefit’.
Brandon Lewis: The amendments clarify that the offences under clauses 1(1) and 2(1) do not apply if a child occupies the property. A person under the age of 18 cannot in law hold a tenancy and the amendments make it clear that the exemption applies if the tenancy could be transferred to another person for the child’s benefit.
Although the Bill contains important provisions that would help to reduce the prevalence of fraud in social housing and would impose proper penalties on those who are found guilty of illegally using valuable social homes, it does not yet include powers that would increase social landlords’ access to data to help them detect and prosecute instances of fraud. Landlords often cite their
The power to require information will be subject to affirmative resolution. While there will, therefore, be ample opportunity in the future to fine-tune the detail, I would like to set out our current thinking and put on record how we would seek to ensure that proper safeguards are in place.
The regulations will determine who may use the power to require information. At present, we intend that only persons authorised by local authorities will be able to use the power to require information. The Bill would require persons using the power to have regard to guidance issued or approved by the Secretary of State. Only organisations specified in the regulations would be required to comply with an authorised person’s request for information. Discussions with social landlords have suggested that the key private sector holders of data they need to access for the purpose of building up strong evidence of fraud are banks, building societies and utility companies. We intend those bodies to be on the list of organisations that are compelled to supply data.
When conducting social housing fraud investigations, it is important to be able to link the tenant to another address, which can provide evidence that, for example, the tenant is sub-letting the social home they have been allocated, or that they own a home that they didn’t declare when applying for social housing. Banks, building societies and utility companies hold information that can indicate that the named tenant has an account registered at another address, and in the case of banks and building societies, account statements can provide evidence of receipt of payments suggesting they are sub-letting for money, and of expenditure suggesting the tenant is making monthly mortgage payments, thereby denoting they own a property. We do not currently intend to add any other organisations to the list, but, as suggested by the Information Commissioner’s Office, we would able to amend the list by regulation to ensure that it is no longer or shorter than necessary.
We will consider other safeguards that should be included in the regulations. For example, we will consider whether the regulations should specify when requests to a listed body may be made, whether the number of persons that a local authority may authorise should be limited, and whether only persons believed to have committed an offence should be subject to having their data accessed. We do not intend for sensitive personal data to be accessible. To ensure that organisations comply with requests for information, new clause 2 allows the creation of an offence for non-compliance with a request for data. We intend to create a defence in cases where all reasonable efforts have been made to comply with the request.
John Healey (Wentworth and Dearne) (Lab): Many would welcome this strengthening of the information provision and mandatory requirement to co-operate with local authorities investigating potential social housing fraud. Will the Minister make clear that the offence for non-compliance in information sharing that the new clause will create will be a criminal offence? He consulted on that matter during the Government’s consultation on strengthening these provisions.
New clause 3 makes it clear that the Secretary of State will make regulations for England, Welsh Ministers will do the same for Wales and regulations will be subject to the affirmative procedure. My officials will have further discussions with the Information Commissioner’s Office and we will, of course, take on board any comments and suggestions they have to ensure that the regulations we make follow best practice on data protection.
Stephen Pound (Ealing North) (Lab): Like most people here, I am very sympathetic to the aims and ambitions of the Bill. However, in my authority we have found that the single most useful source of information—although I do not wish to bring Murdoch into this matter—is Sky television. We find that we get more data from Sky subscription channels than from any other source; in particular, we get an extraordinary amount of data from sports channels, which probably says a great deal about my constituents. Has the Minister thought about extending the measure in that direction? If he has, will there be any limits, or will the bounds extend until every source of information in the world is in it?
Brandon Lewis: Without commenting too much about the hon. Gentleman’s Sky subscription choices, we do not want the list to be any longer or shorter than is absolutely necessary, as I said earlier, but I take his comments on board and we will take a look at whether satellite TV subscriptions can play an important part. However, I would be wary of making the list too long and too wide, for the very reasons that I suspect he was alluding to.
My officials will have further discussions with the Information Commissioner’s Office and we will, of course, take on board any comments and suggestions it has to ensure that the regulations we make follow best practice on data protection.
There are a number of other amendments that I have not commented on. If Members have particular queries about amendments 12, 13 and 14, I will comment on them, but I think that I have dealt with the issue that arose in yesterday’s debate on the money resolution. The provisions will be welcomed by social landlords and I firmly believe that they will improve the Bill.
John Healey: I had not intended to speak but I was too slow to respond to the Minister’s invitation to deal with any other queries. Will he reflect on and respond to the fact that, in recent years, one of the most effective programmes against fraud has been the Audit Commission’s national fraud initiative? He will be aware that his Department is in the process of axing the Audit Commission; there is a draft Bill that will do just that.
In some senses, the national fraud initiative makes up for a gap in the present system, highlighted by the debate on this clause and the other new clauses and amendments: the problem of data matching. When personal data and financial data held by a range of organisations and agencies are put together they can show discrepancies that help to detect and stamp out fraud. Since its introduction, that initiative has highlighted fraud and overpayment of around £664 million.
In the proposals for the Audit Commission—this relates clearly to the matter before the Committee today—the Government say that the national fraud initiative is to be transferred but they have disclosed no details about to whom it will be transferred, whether the commitment to national data matching and the anti-fraud programme will remain, and if so, how it will be carried out.
The other element that relates to our concerns about data matching, data sharing and the provisions to deal with social housing fraud in the Bill, is that the Audit Commission also produces an annual fraud survey. That is extremely useful not only to local government, but to agencies that work alongside local government in similar fields. Will the Minister respond on whether the survey will continue, and whose responsibility it will become in the future? The survey provides an important function, which we risk losing in the wider changes that will continue to help the housing associations and councils responsible for the social housing that the Bill addresses, to deal with the fraud that we are determined to stamp out.
Brandon Lewis: I am happy to give the right hon. Gentleman some good news; there is some bad news. The good news is that the national fraud initiative will continue, and as he rightly said, we have made it clear that it will be moved to another body. I do not want to move outside the scope of the Bill, but an announcement on where it will be moved has not yet been made.
‘(or the best estimate of that amount)’.
Amendment 17, in clause 4, page 4, line 46, leave
‘an appropriate sum under a compensation order or’.
‘, make a compensation order or do both’.
‘(10A) If the amount required to be paid by a person under an unlawful profit order is not paid when it is required to be paid, that person must pay interest on the amount for the period for which it remains unpaid.
(10B) The rate of interest is the same rate as that for the time being specified in section 17 of the Judgments Act 1838 (interest on civil judgment debts).’.
(e) the reference in section 133(3)(c) to a confiscation order under Part 6 of the Criminal Justice Act 1988 or Part 2 of the Proceeds of Crime Act 2002 or an unlawful profit order (or both) were to such a confiscation order or a compensation order under section 130 of the Powers of Criminal Courts (Sentencing) Act 2000 (or both).’.—(Brandon Lewis.)
‘or a registered social landlord’.
‘(4A) The amount payable under an unlawful profit order must be such amount as the court considers appropriate, having regard to any evidence and to any representations that are made by or on behalf of the landlord or the tenant, but subject to subsections (5) and (6).’.
‘Subject to subsection (6), the’
‘(or the best estimate of that amount)’.—(Brandon Lewis.)
‘(3A) In this section “registered social landlord” has the same meaning as in Part 1 of the Housing Act 1996.’.—(Brandon Lewis.)
‘(7A) In this Act “local authority” means a county council, a county borough council, a district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly.
(7B) In this Act “registered social landlord” has the same meaning as in Part 1 of the Housing Act 1996.’.
‘, in relation to an offence,’.
‘an offence under section 1 or 2’
‘an offence under section 1 or 2’
‘an offence under section 1 or 2’
‘, apart from this section, come into force—
(a) in relation to England, on such day as the Secretary of State may by order appoint;
(b) in relation to Wales, on such day as the Welsh Ministers may by order appoint.’.—(B randon Lewis.)
‘(1) The appropriate authority may by regulations provide for the exercise, for prescribed housing fraud investigation purposes, of powers to require the provision of information.
(2) The appropriate authority may by regulations—
(a) make provision about the persons by whom powers conferred by regulations under this section may be exercised;
(b) in particular, make provision for the authorisation by local authorities of persons to exercise those powers.
(3) The provision that may be made by regulations under this section includes, in particular, provision equivalent to—
(a) provision made by a relevant enactment, or
(b) provision that is capable of being made under a relevant enactment,
with such modifications as the appropriate authority thinks fit.
(4) For the purposes of subsection (3), each of the following enactments is a “relevant enactment”—
(a) section 109B of the Social Security Administration Act 1992 (powers to require information);
(b) section 110A of that Act (authorisations by local authorities to exercise powers of investigation);
(c) section 121DA(2) and (3) of that Act (interpretation of Part 6 of that Act).
(5) After the repeal of section 110A of the Social Security Administration Act 1992 by Part 1 of Schedule 14 to the Welfare Reform Act 2012, the reference to that section in subsection (4) is to that section as it had effect immediately before it was repealed.
(6) A person exercising powers conferred by regulations under this section must have regard to guidance issued or approved by the appropriate authority.
(7) In this section “housing fraud investigation purposes” means purposes relating to the prevention, detection or securing of evidence for a conviction of —
(a) an offence under this Act;
(b) an offence under the Fraud Act 2006 relating to the unlawful sub-letting or parting with possession of the whole or part of a dwelling-house let by a local authority, a private registered provider of social housing or a registered social landlord,
(c) an offence under the Fraud Act 2006 relating to an application for an allocation of housing accommodation under Part 6 of the Housing Act 1996,
(d) an offence under the Fraud Act 2006 relating to an application for accommodation, or for assistance in obtaining accommodation, under Part 7 of the Housing Act 1996,
(e) an offence under the Fraud Act 2006 relating to—
(i) a claim to exercise the right to buy under Part 5 of the Housing Act 1985,
(ii) a claim to exercise the right to acquire under section 16 of the Housing Act 1996, or
(iii) a claim to exercise the right to acquire under section 180 of the Housing and Regeneration Act 2008, or
(f) an associated offence in relation to an offence mentioned in any of paragraphs (a) to (e).
(8) In this section “prescribed” means prescribed by regulations under this section.’.—(Richard Harrington.)
‘(1) The appropriate authority may by regulations provide for the creation of an offence that may be committed by a person by refusing or failing to provide any information or document when required to do so by or under regulations under section [Regulations about powers to require information in connection with housing fraud].
(2) Regulations under this section—
(a) must provide for an offence under the regulations to be triable only summarily;
(b) may not provide for such an offence to be punishable with a fine exceeding level 3 on the standard scale.
(3) Regulations under this section—
(a) may provide, in a case where a person is convicted of an offence under the regulations and the act or omission constituting the offence continues after the conviction, for the person to be guilty of a further offence and liable on summary conviction to a daily fine;
(b) may not provide for the daily fine to exceed £40.
(4) The appropriate authority may by regulations make provision—
(a) about defences to an offence under regulations under this section;
(b) about the commission by a body corporate of such an offence;
(c) about the conduct of proceedings for such an offence;
(d) about the time limits for bringing such proceedings;
(e) about the determination of issues arising in such proceedings;
(f) about other matters of procedure and evidence in relation to such an offence.’.—( Richard Harrington.)
‘(1) In sections [Regulations about powers to require information in connection with housing fraud] and [Regulations about related offence] “the appropriate authority” means—
(a) the Secretary of State, in relation to England, and
(b) the Welsh Ministers, in relation to Wales.
(2) Regulations under section [Regulations about powers to require information in connection with housing fraud] or [Regulations about related offences]—
(a) are to be made by statutory instrument,
(b) may make different provision for different cases or circumstances, and
(c) may contain incidental, supplementary, consequential, transitional, transitory or saving provision.
(3) A statutory instrument containing regulations made by the Secretary of State under section [Regulations about powers to require information in connection with housing fraud] or [Regulations about related offence] may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(4) A statutory instrument containing regulations made by the Welsh Ministers under section [Regulations about powers to require information in connection with housing fraud] or [Regulations about related offence] may not be made unless a draft of the instrument has been laid before and approved by a resolution of the National Assembly for Wales.’.—(Richard Harrington.)
‘Housing Act 1988 (c.50)
3A In section 1 of the Housing Act 1988 (meaning of assured tenancy), after subsection (1) insert—
“(1A) Subsection (1) has effect subject to section 15A (loss of assured tenancy).”’.
‘8A In section 133(3)(c) (review of compensation order where person subject to confiscation order made in same proceedings), after “Proceeds of Crime Act 2002” insert “or an unlawful profit order under section 4 of the Prevention of Social Housing Fraud Act 2012 (or both).”’.
(a) an order has been made, or it believes an order may be made, against the defendant under section 4 (criminal unlawful profit orders) of the Prevention of Social Housing Fraud Act 2012 in respect of profit made by the defendant in connection with the conduct, or
‘11A In section 7(3) (calculation of recoverable amount), after “section 6(6)” insert “or 6(6A)”.’.
Chris Williamson (Derby North) (Lab): It is a pleasure to serve under your chairmanship this morning, Mr Amess. I should like to make some general observations about the Bill, which has cross-party support. We recognise that social housing fraud affects a large number of people; something in the order of 50,000 people are estimated to be sub-letting across the country. When my right hon. Friend the Member for Wentworth and Dearne was the Housing Minister, he took steps to crack down on social housing fraud. He launched an initiative in 2009, which I believe 150 local authorities signed up to, and, prior to the general election, he was planning to create criminal offences. We are pleased that this private Member’s Bill effectively gives form to the measures we were planning to put into place ahead of the general election.
I want to express one word of caution in relation to people who sub-let their homes in good faith. Hopefully, in such circumstances, the response will be sensible and proportionate, to avoid unnecessary and punitive action being taken against people who, perhaps through lack of awareness, took steps to sub-let their home, but were not intending to commit a criminal offence in the way we understand it.
Stephen Pound: I do not want to detain the Committee unnecessarily, but I want to draw my hon. Friend’s attention to the fact that, whereas to sub-let the entire property is clearly wrong, and hopefully that will be a criminal offence after today, it is entirely legal—in fact, in many cases it is the policy of registered social landlords—to allow the tenant to sub-let part of the property. I find that odd, but it is very much the case. If a person is the legal tenant of a two-bedroom property, the majority of registered social landlords, certainly in the London region, will allow that person to sub-let the second room for their own benefit. In many cases that is encouraged. How does that impact on the comments that my hon. Friend has just made?
The Chair: Order. Before Mr Williamson comments, this is obviously quite out of order—we normally just have pleasantries at this point—but, because there has not been too much debate about matters, I thought it was only right to give the Opposition a chance to say something. Could I ask the hon. Gentleman to be fairly brief, and will the Minister reply briefly as well?
Chris Williamson: I will now draw my remarks to a close, Mr Amess, save to say, in response to my hon. Friend the Member for Ealing North, that with the changes to housing benefit rules—the housing benefit cap and so on—many more people will probably seek to sub-let their home to avoid the bedroom tax and other punitive steps taken by the Government.
In conclusion, although the Bill is a useful step forward, it is important to recognise that the real key to addressing housing need in this country is to look not at social housing fraud, but at the lack of housing supply. I urge the Minister to take more appropriate steps: to embark on a credible house building programme, perhaps by using proceeds from the sale of 4G licences to build 100,000 new affordable homes; to offer a stamp duty holiday on properties of up to £250,000; and, indeed, through a bankers’ bonus tax, to ensure that 25,000 more homes are constructed. That would be not only a huge benefit to people in addressing the need for social housing in this country, but a big boost to growth. It is important to acknowledge that the construction industry is now in significant decline, and any boost that we can offer it would be welcome, would help to generate jobs and would boost growth in this country.
Brandon Lewis: I am very aware of that, Mr Amess. I share what I suspect you imply, which is a slight frustration that on a cross-party Bill—it has been very cross-party all the way through—we have suddenly moved into a political debate. I will not get involved in that. It is for another time and place to respond to the comments made about housing supply, otherwise I might be tempted to point out that we have unblocked some of the blockages left by the previous Administration and got rid of the top-down targets that stopped houses being built, and that we are moving forward in that way. That debate is for another time and place—this is not about the politics of it—but I take on board the point made by the hon. Member for Derby North about the need for a proportionate response.
John Healey: I am so grateful to the Minister for giving way. My hon. Friend the Member for Derby North has made some important points, but I just want to add our congratulations to the hon. Member for Watford on bringing forward the Bill and on the way he has done so, with wide consultation and close discussion
Brandon Lewis: I thank the right hon. Gentleman for his intervention, which was opportune because I was about to thank him for his cross-party work on the subject, which I know is also appreciated by my hon. Friend the Member for Watford. I also thank the officials for their work with my hon. Friend to pull together the legislation, and you, Mr Amess, for chairing a very sweet and swift sitting.
Chris Williamson: It was very remiss of me to fail to congratulate the hon. Member for Watford. I got carried away with the occasion and therefore omitted to do so. I want to put on the record that I endorse the comments about the hon. Gentleman made by my right hon. Friend the Member for Wentworth and Dearne.
Richard Harrington (Watford) (Con): Having known you for probably more than 20 years, Mr Amess, I am delighted to say that I never dreamed that it would be my great honour to be responsible for a private Member’s Bill, and I do not have the words to describe how well the sitting has been chaired today. I think that all hon. Members in this Committee Room agree with that. I congratulate you on keeping order—I had better not name names, which would not be parliamentary, but certain Opposition Members have not been known to make speeches of less than 15 or 20 minutes in magnitude.
To be serious, everyone has worked very well together on the Bill. It was actually the idea of the right hon. Member for Wentworth and Dearne, who spoke extensively on the subject when he was a Minister. He spoke magnanimously about me, but he deserves to be congratulated, as he really led the way. This is an important Bill that will make a difference to the lives of many people by freeing up many social houses for those who deserve them, rather than leaving them for those who profit from them. I thank everybody for all their help.