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War Risk Insurance

John Barrett: To ask the Chancellor of the Exchequer what the total cost was of the Government's decision to underwrite the third party war risk insurance for UK airline and service providers. [22963]

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Mr. Andrew Smith: The total cost of the scheme is unquantifiable at this time, as it depends on potential claims—if any—made under the scheme to the Treasury as reinsurer. Full details of the scheme and the liabilities entered into were submitted to Parliament in a Treasury Minute of 28 November 2001.

Parliamentary Questions

Mr. Clappison: To ask the Chancellor of the Exchequer when he will reply to the question of 15 October from the hon. Member for Hertsmere, on the subject of fraud and the WFTC. [23151]

Dawn Primarolo: I have done so today, at columns 323-24W.

Benefit Fraud

Mr. Clappison: To ask the Chancellor of the Exchequer what steps he has taken to (a) encourage and (b) enable the public to provide information about fraudulent or improper claims for working families tax credit or other tax credits. [23308]

Dawn Primarolo: The Inland Revenue treats all information received from members of the public about suspected fraud, including tax credit fraud, very seriously. Members of the public are able to inform the Inland Revenue about potential fraudulent or improper claims to tax credits in a number of ways. They can write to or telephone the Tax Credit Office or a local office or telephone a helpline, including the Benefits Anti-fraud Hotline. The Tax Credit Office also has a Childcare Tax Credit Hotline for child care providers to give information of suspected improper claims for child care costs.

Mr. Clappison: To ask the Chancellor of the Exchequer how many employers have been (a) investigated and (b) prosecuted in respect of fraudulent claims for (i) working families tax credit and (ii) other tax credits in each year since the relevant credit commenced. [23309]

Dawn Primarolo: (a) In 2000–01, routine checks were carried out on the payroll records of approximately 6,800 employers who made payments of tax credits to their employees. The checks established that the vast majority of employers were operating tax credit payments correctly.

In addition, 199 employer cases were taken up by local offices for action in 2000–01 where the Tax Credit Office suspected error or breakdown of the payment system. Of those cases

(b) There have been no prosecutions of employers in respect of tax credits.

Mr. Clappison: To ask the Chancellor of the Exchequer how many (a) investigations, (b) penalties and (c) prosecutions in respect of (i) working families tax credit and (ii) disabled person's tax credit involved the child care tax credit in each year since the credit commenced. [23306]

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Dawn Primarolo: The following table lists the number of investigations, penalties and prosecutions involving child care for working families and disabled person's tax credits, broken down into financial years since the schemes began in October 1999.

PeriodChild care investigationsPenaltiesProsecutions
Working families tax credit
1 October 1999 to 31 March 20005520
1 April 2000 to 31 March 200126300
1 April 2001 to 30 November 200110000
Disabled person's tax credit
1 October 1999 to 31 March 2000100
1 April 2000 to 31 March 20011400
1 April 2001 to 30 November 2001500

Tax Credit Claims

Mr. Clappison: To ask the Chancellor of the Exchequer what guidance is given to resource officers concerning tax credit claims where the claimant is allegedly in receipt of payment at a rate beneath the minimum wage. [23310]

Dawn Primarolo: The Inland Revenue computer system prompts staff looking at working families tax credit applications to check whether the National Minimum Wage is being paid for each employment. The Employment Relations Act 1999 makes provision for information about apparent non-compliant employers to be passed to the National Minimum Wage Unit for further investigation.

Working Families Tax Credit

Mr. Frank Field: To ask the Chancellor of the Exchequer what his Department spent to counter fraud in the working families tax credit in nominal terms and expressed as a percentage of the total working families tax credit expenditure in the last three years. [1151]

Mr. Clappison: To ask the Chancellor of the Exchequer what assessment he has made of the extent of fraud in working families tax credit; how many prosecutions have been undertaken in respect of such fraud; and what plans he has to tackle fraud in WFTC. [7471]

Mr. Goodman: To ask the Chancellor of the Exchequer (1) what estimate he has made of the level of WFTC fraud; and if he will make a statement; [18884]

Mr. Willetts: To ask the Chancellor of the Exchequer how many (a) investigations of fraudulent claims, (b) penalties for fraudulent claims, (c) prosecutions of fraudulent claims and (d) successful prosecutions for fraudulent claims there have been in respect of the working families tax credit, since its introduction, broken down into (i) monthly and (ii) quarterly periods. [2272]

Dawn Primarolo [holding answer 28 June 2001]: The Inland Revenue is currently undertaking an exercise to benchmark the level of fraud within the working families tax credit. The full results of this will be known early next

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year. The findings of this exercise will then be used by the Inland Revenue to ensure that WFTC compliance work is adjusted if necessary.

The Revenue's approach to compliance is based on the progressive use of civil penalties, and prosecution in cases of criminal fraud.

The tables show the number of WFTC applications investigated by the Inland Revenue for the period from October 1999 (when the scheme began) to September 2001. Of the applications investigated for this period, 8,852 were closed in the Department's favour by recovering overpaid tax credits. At present, there are 7,560 WFTC investigations under way.

Month ending WFTC investigations opened in periodTotal WFTC investigations opened for quarter ending

Approximate number of penalties imposed for false WFTC applications(1)478
Number of successful prosecutions for false WFTC applications(1)13
Number of prosecutions for false WFTC applications(1)22
Number of prosecutions pending as at 22 November 20019

(1) October 1999 to September 2001

While tax credit applications are received and processed centrally, compliance work associated with them is also undertaken in network offices throughout the UK and consequently it is not possible to answer specific questions about the proportion of the Inland Revenue's compliance costs that relate to Tax Credits.

Tax Fraud

Mr. Clappison: To ask the Chancellor of the Exchequer what the outcome is of the Inland Revenue benchmarking exercise to establish the level of fraud in

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tax credit claims; if he will place a copy of reports received from the Inland Revenue (a) relating to this exercise and (b) otherwise concerned with fraud in tax credit, in the Library; by what criteria the seriousness of fraud cases is assessed with a view to prosecution; and if he will make a statement. [23228]

Dawn Primarolo: I refer the hon. Gentleman to the answer I gave to the right hon. Member for Birkenhead (Mr. Field) on 3 April 2001, Official Report, column 154W. The Inland Revenue assess cases for prosecution according to their published prosecution policy, a copy of which I am sending to the hon. Gentleman.

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