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Baroness Maddock: My Lords, I believe that there is general agreement that the complexity of the housing benefit system is what makes tackling fraud so difficult. Indeed, the Minister's Answer this afternoon demonstrated that fact. In view of that difficulty, can the noble Baroness tell the House how the

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Government calculate the level of housing benefit fraud and other fraud; in other words, can she give us a figure in that respect?

Baroness Hollis of Heigham: My Lords, the noble Baroness is absolutely right. It is very difficult to put a figure on fraud that has not yet been uncovered. One has to multiply it by the number of weeks that it would have continued had one not intervened and stopped it. More generally, we believe that benefit fraud runs between £2 billion and £4 billion a year and if, we include cases where there is mild suspicion of fraud, we believe the figure to be £7 billion.

Housing benefit fraud runs at about £840 million, but there is a 30 per cent possibility of error either way. As the noble Baroness said, our difficulty is that we do not know the level of fraud that we have failed to uncover. However, from talking to experienced investigators, that is the best estimate available. It is certainly supported by the research report of 1997-98 on housing benefit accuracy. I agree that the statistics are flaky and that they should carry a health warning.

Baroness Gardner of Parkes: My Lords, can the Minister comment on the logistics involved? I understood that correspondence regarding housing benefit is not meant to identify that fact on the envelope, so as not to embarrass the recipient. Therefore, if local authorities are to instruct the Post Office not to re-direct such correspondence, how can they mark such correspondence so as to ensure that it is not re-directed?

Baroness Hollis of Heigham: My Lords, the noble Baroness has put her finger on one of the reasons that so many local authorities have been slow to take up the "Do not re-direct" scheme. It means that they have to separate their housing benefit mail from the rest of their correspondence. But, basically, with the aid of government grant--indeed, this is entirely funded by the DSS, with £350,000 a year being spent on new envelopes--local authorities must have a "return to sender" address printed which allows the envelopes to be returned. However, even where local authorities are using their best efforts to ensure that housing benefit giros are returned to them, all the evidence suggests that it is likely that the Post Office fails to intercept perhaps 50 per cent of such correspondence.

Lord Higgins: My Lords, can the Minister say whether or not the original envelopes are identifiable as such?

Baroness Hollis of Heigham: My Lords, they come from the local authority's housing section and will have a "return to sender" address printed on the front. However, local authorities print their own envelopes and, therefore, every set of envelopes from each local authority can be different. There is no standard envelope in use across the system. Local authorities take responsibility for this because they have different forms and they may wish to include different information in the correspondence; for example, they

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may wish to include council tax benefit, and so on. I am afraid that that is one of the problems which arise when working with a pluralist regime.

Lord Rotherwick: My Lords, can the Minister say whether or not it would be possible to have a common envelope that could be printed by the Government so as to solve this problem?

Baroness Hollis of Heigham: My Lords, I suppose so. At present, every local authority has its own envelope which may contain different types of information. But, given the fact that this is a matter of concern to your Lordships, I shall ask my colleagues to mention this suggestion at the next meeting with local authority associations to ascertain whether this is an avenue that should be pursued. However, once all local authorities are in the scheme, we have no reason to believe that this should not effectively help us to reduce fraud by some £5 million a year.

Missile Defence System: US Decision

2.52 p.m.

Lord Chalfont asked Her Majesty's Government:

    Whether they have entered into any arrangement to provide support for an American national missile defence system if the United States Government should decide to establish such a system.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): No, my Lords. The United States has not put any such request to us, nor would we expect it to do so until, and unless, it has decided to proceed with the deployment of a national missile defence system. No such decision is expected before later this summer at the earliest.

Lord Chalfont: My Lords, I thank the noble Baroness for that only moderately enlightening Answer. Does she agree that this is part of a much wider issue and a very serious one? Given that strategic policy nowadays involves the frequent use of expeditionary forces and the fact that many countries around the world which might be involved have weapons of mass destruction and the missiles to deliver them--they are sometimes capable of being delivered from surface vessels--does the noble Baroness also agree that such forces are becoming more and more vulnerable to counter-attack as time goes on? Further, can she give the House an assurance that that assessment of the threat is included in the long-term defence and strategic planning of the Government?

Baroness Scotland of Asthal: My Lords, I can give the House such an assurance. As we made clear in the Strategic Defence Review, that is indeed the focus of the research work we are undertaking in the United

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Kingdom. It is also the focus of the feasibility study that we and our allies commissioned in NATO earlier this year. At this stage, we still judge that it would be premature to decide on acquiring a ballistic missile defence capability either for our deployed forces or for homeland defence. However, our involvement in the NATO study and our own national programme will enable us to make an informed judgment on whether to invest in ballistic missile defences in the future. This is obviously a matter that we must take into account and consider seriously. We are not disregarding it; indeed, we understand the concerns highlighted by the noble Lord.

Baroness Williams of Crosby: My Lords, I am sure that the Minister will agree that the prospect of a new arms race as a result of the NMD proposals does exist. However, can the noble Baroness comment on the very interesting link made by President Putin on his recent visit to London about the possibility of linking a Start II treaty ratification and, possibly, the ratification of other unratified nuclear treaties by Russia with an agreement about an NMD that Russia could accept? Will the Government explore the possibilities that arise from President Putin's remarks?

Baroness Scotland of Asthal: My Lords, I can reassure the noble Baroness that Her Majesty's Government are doing everything to encourage both our Russian partners and the United States seriously to consider the anti-ballistic missile treaty. Those two parties are the ones negotiating it. I can also assure the noble Baroness that we very much wish to encourage them to reach a decision about which both can feel comfortable so that our security is enhanced thereby.

Lord Jenkins of Putney: My Lords, will the Minister urge the Government to discourage the American Government from proceeding along the lines of a national defence system? Further, does she agree that it would be a step towards nuclear armament and away from nuclear disarmament? Consequently, should not such a step be viewed with less enthusiasm and, indeed, as a step that could lead us in a direction in which we ought not to be going?

Baroness Scotland of Asthal: My Lords, we understand the concerns expressed by my noble friend. I should point out that the signing of Start II on Friday was a very helpful indicator that the Russians are participating in a way that we must all feel is very productive. We hope that this is not a step forward that will be taken without the full implications of the international consequences being taken fully into account. In our conversations with our partners, these are of course issues that are explored quite extensively.

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Lord Marsh: My Lords, the noble Baroness has accepted the fact that there are very real dangers in the spread of anti-missile systems of this type, particularly in the Far East. Is she aware that, for the first time in my life, I find myself agreeing with a great deal of what the noble Lord, Lord Jenkins, said?

Baroness Scotland of Asthal: My Lords, I hope that that is a comfortable position for the noble Lord.

Viscount Cranborne: My Lords, perhaps the noble Baroness can enlighten the House in one respect. As the object of the American scheme, as I understand it, is primarily to guard against the increasing missile capability of rogue states, can she tell the House to what extent that danger was explored in recent conversations between her right honourable friend the Prime Minister and the President-elect of Russia? Further, can the noble Baroness say whether the President-elect saw the force of those arguments and whether there might therefore be some means of bringing such conversations forward to enable him to become more sympathetic to the idea of a breach of the ABM treaty?

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