Social Security Fraud Bill [Lords]

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Mrs. Lait: My concern is not so much general trawling and fishing. Although I lead a fairly respectable life, I would not want my bank account to be available to the Benefits Agency, and I am sure that most people would feel the same. They would not like their credit card account, for example, to be made available to the Benefits Agency.

Agreeing amendment No. 17 would mean that only information that was directly related to the investigation could be required. I do not know about other people's bank accounts, but I am happy to share with the Committee that my bank account specifies my mortgage, my life assurance and my direct debits. It gives a life-style analysis to people who wish to examine such things. Our concern is that the matter is broader than checking whether there is illicit income that has not been declared. I assure hon. Members that there is nothing in my bank account that indicates that I have not registered something in the Register of Members' Interests. The amendment raises a worry about scale rather than about a more general trawling or fishing expedition.

Angela Eagle: I hope that I can reassure the hon. Lady again. As my right hon. Friend the Minister said when discussing the previous group of amendments, the person investigated must be a benefit claimant who is covered by proposed new subsection (2C). That states that an authorised officer must have,

    ``reasonable grounds for believing that the identified person''

to whom the inquiry relates has,

    ``committed, is committing or intends to commit''

a benefit fraud.

The purpose of the Bill is twofold. First, we want to deter people from committing benefit fraud. We will send people the message, on leaflets and claim forms, that any information that is given in a benefit claim may be checked by a third party to ensure that the truth has been told. The message will be, ``Don't lie to us''.

The other purpose of the Bill is to make for more effective detection of fraud that has been committed. People who lie on a benefit application form, perhaps by stating that they do not have a bank account, should know that they are taking a serious risk, because the new powers will allow us to discover that they do have a bank account. We will not want further information when we have discovered the facts that are required to prove a fraud. As I said, it would be illegal for us to collect all sorts of information for the hell of it.

We require only one piece of information to confirm that a benefit claimant has given false or inadequate information that affects their benefit claim. In such circumstances, powers are limited and access to information that we have is narrowly drawn. Authorised officers will have legal obligations under other laws on the statute book, particularly the Data Protection Act, which mentions information that is superfluous to need. If we acquire such information, we do not have the right to keep it, and it must be destroyed.

Mrs. Lait: I will be happy to withdraw the amendment on the basis of those reassurances. However, will the Minister reassure me about information from the Information Commissioner?

Angela Eagle: We are considering that matter, and my right hon. Friend the Minister will shortly write to the hon. Lady about it.

Mrs. Lait: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Peter Atkinson: I beg to move amendment No. 21, in page 2, line 31, leave out `or intends to commit'.

The Committee has spent much of today on a fishing expedition and this amendment relates to a similar subject. Clause 1 caused considerable concern in the other place, and the Government redrafted it. That satisfied most critics that the matter was being dealt with in a better way. However, there is a residue of worry about the wording of the clause, especially in proposed new subsection (2C)(a), which states:

    ``or intends to commit a benefit offence''.

That gives authorised officers the opportunity to go on the famous fishing expeditions. Will the Minister explain a little more fully to the Committee the powers that officers will have to investigate on spec an intention to commit a benefit fraud? Will there have to be a particular concrete suspicion to enable them to do so?

12.15 pm

Mr. Webb: Line 31 refers to ``or intends to commit'' and deals also with a person ``who has committed''. That implies that, when someone has committed an offence, the power will apply permanently. In other words, the clause gives the power permanently to investigate banks accounts, and so on, of people because they once committed such an offence. It would be helpful if the Minister clarified the provision. Does it give officers a blank cheque? When someone has committed an offence, that is a matter of fact; presumably, the hurdle of reasonable grounds would be overcome automatically. So, is one's bank statement an open book once one does something wrong—would the fact that a person had committed an offence be sufficient evidence that he may intend to do so again?

Angela Eagle: The hon. Member for Hexham asked for an explanation of the current powers. He is absolutely right that that matter caused anxiety in the other place. The amendment would remove the ``intends to commit'' provision from the clause. That would make us purely reactive in the way in which we could try to combat benefit fraud, rather than adding an extra category of people who we believe are likely to commit or who are in the process of setting themselves up to commit a benefit fraud.

The change of wording in the other place from ``likely to commit'' to ``intends to commit'' was an attempt to tighten up the provision and to leave no opportunity for ``fishing'' or unwarranted discrimination against particular benefit claimants. The Committee must remember that there must in all instances remain reasonable grounds for suspecting that the person is intending to commit benefit fraud, and that is dealt with under proposed new subsection (2C).

An obvious example will illustrate what is in our minds. Let us suppose that a person has multiple national insurance numbers and multiple identities—that does happen—but had not yet activated such numbers in order to receive benefit. Why on earth would a person have a series of national insurance numbers and different identities? It is reasonable to believe that such an individual was about to access them to claim benefit. If the ``intends to commit'' provision were removed, we would not be provided with the ability to take action to prevent such people from committing the fraud in the first place. We hope that the Committee will realise that the proactivity allowed under the clause will be beneficial in stopping fraud.

In answer to the hon. Member for Northavon, there are grounds for believing that those who have committed fraud in the past are likely to do so in the future. We regard them as a risk. Clearly, we are anxious with the new powers in the Bill to communicate to such people that we are beefing up our powers in order to catch them and that, in the long term, it will not be in their interests to continue stealing from the benefit system. We hope that such powers will begin to persuade people that such action is not acceptable and that they will be taking much greater risks with their own personal liberty if they pursue it.

The hon. Gentleman should read the two lines previous to line 31: an officer must have ``reasonable grounds for believing'' that the person has committed fraud and is about to commit fraud again. Therefore, the fact that a person has previously committed fraud would not qualify as reasonable grounds for suspecting that he or she is about to commit fraud again. If an authorised officer was dealing with a case in which a claimant had previously committed fraud, he could not make inquiries unless he had reasonable grounds to believe that fraud was about to be committed. That principle must be applied on a case-by-case basis, because it is not possible to specify every individual circumstance in which an authorised officer might reasonably hold that belief.

Mr. Webb: I apologise if I am misreading the proposal, but I do not think that that is what it says. It states that an authorised officer cannot make inquiries unless he has reasonable grounds for believing that a person

    ``has committed, is committing or intends to commit''

a fraud. Once a person has a record for having committed a certain crime, he or she is, by definition,

    ``a person who has committed''

such a crime. It is not necessary to have ``reasonable grounds'' to believe that. It is a fact, and that satisfies the requirements of the provision. The authorities would therefore have carte blanche to investigate such a person's accounts.

Angela Eagle: The hon. Gentleman is entitled to his opinion, but I have been informed that authorised officers must have reasonable grounds to believe that a fraud is about to be committed.

Mr. Webb: That is not what the provision says.

Angela Eagle: The hon. Gentleman can hold whatever views he likes, but that is the interpretation of the legislation that I have been given, and I will pass it on to him.

Mr. Peter Atkinson: As the Minister surmised, this is a probing amendment, because there was a residue of concern that the Bill's wording might allow for the alternative interpretation that has been described. However, the Minister's reassurance will be recorded, and those who are interested in the matter outside Westminster will be able to examine her explanation. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mrs. Lait: I beg to move amendment No. 42, in page 4, line 19, after `benefit', insert

    `, child tax credit or Working Families Tax Credit'.

As a couple of members of the Committee sat through debates on the Welfare Reform and Pensions Bill, I will not describe the details of the working families tax credit. However, hon. Members will know that the working families tax credit and the children's tax credit are benefits—in effect, if not in their technicalities. Currently, provisions on the working families tax credit and the children's tax credit are covered in tax credits legislation, as part of the Taxes Management Act 1970, which we have refrained from translating into the Bill. That Act states that the people who investigate fraud in WFTC and CTC must be of higher executive officer level, whereas the Bill states that the authorised investigator must be of executive officer level.

I do not wish to discuss that matter, as I hope that it will be addressed in the code of practice. However, the amendment is intended to make the Department of Social Security and the Benefits Agency responsible for fraud investigations concerning the working families tax credit and children's tax credit, and I would like the investigators to be of higher executive officer level. The amendment aims to achieve that because the working families tax credit and the children's tax credit are part of the benefits system.

Other countries abandoned such tax credits because of the levels of fraud associated with them. I would be interested in the Minister's comments about whether fraud is beginning to emerge in WFTC and CTC—we understand that it is. Such fraud should be covered under this Bill—and, as subsequent amendments would allow, dealt with at HEO level, in line with the Taxes Management Act. The amendment is a probing one.

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