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Baroness Hollis of Heigham: My Lords, if the Minister is continuing with this point I will gladly sit down, but before he leaves this point I did want to press him on his reply on the data protection register. If the Minister could indicate, I would be grateful.
Lord Mackay of Ardbrecknish: My Lords, I was about to say: however, our minds are not closed as far as a code of practice is concerned. We have certainly noted the letter which my right honourable friend Mr. Lilley received from the data protection registrar, so our minds are not closed and we will consider the case for further assurances, taking into account the points made today by your Lordships.
Leading on, as I mentioned I would, to the EU data protection directive, questions were raised by my noble friend Lord Chelmsford and by the noble Lord, Lord Lester of Herne Hill, about this. We believe that the United Kingdom's data protection regime should be the least burdensome for business and other data users while affording the necessary protection for individuals. We intend to implement the directive in order to satisfy our obligations under European law. We will consider whether any additional changes to the current data protection regime are needed to ensure that it does not go beyond what is required by the directive and the Council of Europe Convention.
We are considering whether the EU Data Protection Directive requires any extension of the data protection registrar's powers. In doing so, we will have regard to the views of the registrar herself as well as to those of other respondents to the recent consultation paper on the directive.
Moving on to the section on offences and penalties, I do not think I have much to say there. Perhaps I should answer the noble Earl, Lord Russell, and my noble friend Lady Anelay of St. Johns on the question of "dishonestly". The noble Earl asked about mens rea. The use of "dishonesty" in Clause 13 is intended to
represent its normal meaning in criminal law and this would convey mens rea: a dishonest intent. I hope that that is helpful to the noble Earl.The noble Lord, Lord Whitty, suggested that the Bill shifts the burden on claimants to report changes. I do not believe that is true. Claimants already have a responsibility to report changes of circumstance which affect their entitlement. Currently there is no penalty where claimants fail to report changes, and if they have done so fraudulently we believe there ought to be some sanction other than just to repay overpayment. But that is in cases where it has been done fraudulently. The noble Earl wondered how people would know about the need to report changes of circumstances. He challenged me--I hope without expecting me to try to answer--to give a full resume of all the regulations the benefits agency has to apply in this regard. I think the only point the noble Earl makes there I might just make back to him: perhaps that underlines the need for the changed programme and for policy simplification to make all these matters a good deal simpler for those who operate them.
Applicants and claimants are informed at the outset of their responsibility that they must report changes which may affect benefit. People who sign on as unemployed are asked whether anything has changed; order books state the changes which should be reported, and ACT customers are similarly advised. When it comes to looking at changes which were not reported, it is up to the department--and to the local authorities in the case of housing benefit--to show that a failure is fraudulent and is not, in fact, just a mistake.
A good deal of the debate was taken up by landlord fraud. There is a dispute between the noble Baroness and myself about the extent of the fraud. We have been over that before and I do not think it will add anything to this debate if I simply say that our estimates are based on the DSS accuracy review of housing benefit. It is not the case, as we see it, that the majority of fraud is perpetrated by landlords. I am afraid that landlords and tenants are both involved, and sometimes involved together, colluding with the fraud. I say to the noble Baroness, Lady Gould of Potternewton, that we take landlord fraud very seriously. I suggest that the penalties on indictment, for example of seven years' imprisonment or unlimited fines, would certainly be available to a court dealing with serious landlord fraud. I do not think these penalties could be considered in any way as timorous.
Between the Bill and other action we propose we have 10 key points on landlord fraud. We are introducing the power to enable local authorities to demand information from landlords about whom there is a suspicion of wrongdoing. We are extending the powers of local authority investigators, by analogy with the Benefit Agency's investigators, to enable them to enter landlords' business premises and inspect the records. The power to pass information between local authorities and between the local authority and the department will make multiple claims--one of the most common frauds involving landlords--much more difficult. We are introducing new provisions to improve
the recovery of overpayment from landlords who received the original payment directly and have other payments flowing to them at the same time.The new powers to inspect local authority performance will ensure that all authorities take appropriate action. The new offence of failing, without reasonable excuse, to report a change of circumstances required under regulations and the new system of administrative penalties as an alternative to prosecution will both apply to landlords fraudulently receiving direct payments. The ability to prevent redirection of benefit mail will prevent fraudulent landlords from exploiting the redirection facilities to collect benefit for fictional or long-departed tenants.
We have invested £1 million to set up the London-organised fraud investigation team, which will look at serious landlord fraud in the capital. We have commenced a national roll out of the housing benefit matching service, which will make landlord fraud more difficult to commit and easier to detect by allowing local authorities to data match. Finally, we are providing strong financial incentives for local authorities to tackle fraud, including landlord fraud, through the subsidy scheme.
So I believe that landlord fraud can be prosecuted, that the powers we have given local authorities will help them to deal with this issue and that the penalties available to the courts when a case gets to court should be more than sufficient, if properly used, to send out a very serious signal to people, whether landlords or tenants, who are considering engaging in serious fraud.
The noble Lord, Lord Stallard, referred to DLA and AA. The problem here is that once an award of DLA or AA has been made it cannot be reviewed unless a written application is made to the adjudication officer. There is a body of opinion within the disability lobby that maintains that the legislation as drafted gives only the claimant the legal right to apply for a review. Even if there is indisputable evidence that benefit is being paid incorrectly, the Secretary of State has no power to ask the adjudication officer to stop the overpayment. The department does not accept that interpretation, but we are keen to avoid legal challenge. Therefore, we are taking the opportunity of this Bill to put the Secretary of State's powers beyond doubt. The noble Lord, Lord Whitty, said that overpayment is not always fraudulent. I hope I have answered that point. Of course that is the case and it is up to the department and the fraud investigation officers to make that decision.
The noble Earl, Lord Russell, asked me about national insurance numbers and the position of homeless people or people with learning disabilities. I understand the noble Earl's concern in this regard. People who apply for benefit are asked to provide some basic information--their age, name, address, previous address and so on--and that, taken with other supporting information such as earlier correspondence, allows the DSS or an employer to confirm who the person is and establish the national insurance number. I can assure the noble Earl that people with learning disabilities will not be thought to be making fraudulent claims if they cannot remember their national insurance numbers. I do not
think we should go to the test of each of us having to show that we remember our national insurance number. I, at least, would lead the band of failures in that regard.I was asked about the redirection of mail being used by people other than the department to find out where someone lives, perhaps in a case of domestic violence. I hope I can assure the House that the provisions of the Bill set out the uses to which the information disclosed to the department may be put. It is to be put to the use of preventing or detecting fraud, to check the accuracy of information already held by ourselves and local authorities and for official purposes relating to social security. Any official who uses any departmental information for unauthorised purposes is guilty of a serious offence. That would include checking the whereabouts of someone for whatever reason--either because they knew of them or they wanted to do a favour for a friend in a pub who wanted to find out where someone had gone. Any such official would be guilty of a very serious offence. Prosecution, dismissal from his job, or both, could easily be the outcome. I hope that helps the noble Earl.
My last point is one that is not in the Bill. I think it fair that I sum up by dealing with it briefly. I refer to take-up. We already do a great deal of work to encourage the take-up of benefits by those with entitlement. We provide information which we believe to be comprehensive, accurate, accessible and easily understood to explain to people what their eligibility may be and what benefits are available. I do not think take-up will ever reach 100 per cent. There will always be some people who, for whatever reason, do not wish to avail themselves of benefits even though they are apparently entitled to claim. I would certainly not want to see people being forced to claim benefit if they did not want to. I suspect that many of the instances that are used are for small amounts and that people actually make decisions that they do not wish to go to the bother or hassle of going to the Benefits Agency in order to fill in forms and so on if they are moving in and out of benefit as the year progresses and their circumstances change. However, we have a comprehensive policy of publicising benefits and emphasising to people what benefits are available to them.
The noble Baronesses, Lady Gould of Potternewton and Lady Hollis of Heigham, and the noble Lord, Lord Whitty, suggested that we could use data matching to identify those people who had not claimed their benefit. That would be taking data matching a good deal further than what is specified in the legislation, which is to investigate fraud. It also assumes that the data to be matched would have all the information on all the income and all the savings of all people, which I suspect would be quite a different scale of operation. I do not believe the systems we have access to contain that amount of information. Nor do I believe that it would be economic or feasible to work on the kind of scale that is being envisaged. What we do now is sufficient. We keep at it. We keep running campaigns. We work with many of the organisations mentioned by the noble Lord, Lord Stallard--Help the Aged and so on--in order to bring to the attention of people who should be applying for benefits the availability of those
benefits. We are also attempting through the change programme and policy simplification to make the applications for benefits simpler, easier to understand and easier to complete.This is an important Bill in the fight against benefit fraud. It will ensure that more fraud will be detected and that those guilty of offences will face tougher penalties. In this way more cheats will be punished and more would-be cheats will be deterred. We recognise, as noble Lords have said, that the vast majority of people claiming benefit are completely honest. But for those determined to abuse the system, this Bill reduces the chance they have of success. It means that there is a greater chance that they will be caught and a greater likelihood that they will be punished. I commend these measures to the House and invite your Lordships to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
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