Draft Social Security (Loss of Benefit) Regulations 2001

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Paul Holmes (Chesterfield): My hon. Friend the Member for Northavon (Mr. Webb) is not away celebrating at a party for those who have joined the Liberal Democrats today; he is in the Chamber dealing with the Bill under consideration there.

The case against the regulations was made eloquently and in detail by my colleagues in both Houses when the legislation was passed, and I do not propose to repeat all that was said. However, it is important to summarise concisely why the Liberal Democrats oppose the regulations in their present form.

Social security fraud is a crime that steals from the taxpayer money that could otherwise be spent on needy people, health, education or public transport. We all agree that crime should be deterred and punished. However, punishment for any crime should be appropriate and proportionate, as article A.2 of the European convention on human rights requires. The sanctions might well be neither. First, when we send people to jail for serious offences, we do not deprive them of shelter, of food or of warmth. In some cases, that could be the effect of some of the benefits sanctions.

Secondly, we should consider possible negative effects on the children of those who might be punished by the loss of benefits under the regulations. Do the Government really aim to punish children for what their parents have done? If the sanctions are to hurt

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and be a deterrent, as the Government say that they will, they will affect the children of those who are punished. A 20 to 40 per cent. benefit cut would inevitably have that effect. The legislation is based on little research, but the former Department for Education and Employment and the Department of Social Security published research report 86, which studied a small sample of 30 claimants. That research showed clearly that those hit worst by the benefit sanctions were the children of the people involved.

Should the sins of the fathers or mothers be visited on the children in that way? Parents should not commit fraud, but should their children be punished if they do? The Government should think again about the legislation and undertake more research into the effects of benefit sanctions before they introduce them. They should consider alternative sanctions, from community service upwards.

4.50 pm

Malcolm Wicks: The discussion has been brief but useful, and I thank Opposition Members for their contributions. The hon. Member for Hertsmere (Mr. Clappison) said that there had been a recent decline in prosecutions. Such matters are difficult, because a claimant may claim, rightly or wrongly, that an error rather than fraud has been committed when a change of circumstance was not reported. We need to deal with those matters carefully, which is why sanctions are sometimes used, rather than the person being taken to court. We should consider the decline in prosecutions in that context, taking into account, too, the decline in the number of people on income support because of falling unemployment.

With regard to the more serious offences—although I hesitate to use that phrase because they are all serious—I agree that we should press for prosecution. We hope that the courts would give people serious sentences in those cases, but that is in the hands of the courts. I should add that prosecutions have recently increased for housing benefit fraud, which I welcome. I thank the hon. Gentleman for the way in which he presented his remarks.

The hon. Member for Chesterfield spoke about the severity of the sanctions. I can put that in context by explaining that the 40 per cent. sanction—or the 20 per cent. sanction, when there is a hardship such as a pregnancy—falls on the single personal allowance of income support, not the total benefit that the family might receive. Examples and arithmetic may vary from case to case, but a lone parent with two children, who receives income support, housing benefit and council tax benefit would have a total weekly income of £231. After the 40 per cent. sanction to the personal allowance, the family would still receive £210. I hope that that example shows that we have no interest in touching child benefit or other benefits that support the whole family. I hope that the hon. Gentleman thinks that we are being reasonable.

Money that is claimed fraudulently belongs not to the Government but to the community. I remember a case in my own constituency, when an elderly woman who was waiting for a stair lift was told by the local

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authority that because of resource shortages she would not receive one until the next financial year. She pointed to a house across the road on the estate and said, ''Everyone knows that that family is defrauding the system. The man's working but he's getting benefit.'' There is real anger in our communities, especially in the poorer ones, about the extent of fraud.

We want to be fair in these regulations and in our response to the concerns expressed by hon. Members. We are heedful of children's needs, and I hope that my example showed that they would not be affected unduly. We are concerned by the extent of benefit

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fraud. I am pleased to report the reduction of 18 per cent. in fraud on jobseeker's allowance and income support, but we are not complacent because there is still too much fraud in our system. The measure is small and will affect only a few people each year, but it gives out a strong signal. If for no other reason, I ask the Committee to support the regulations.

Question put and agreed to.


    That the Committee has considered the draft Social Security (Loss of Benefit) Regulations 2001.

        Committee rose at four minutes to Five o'clock.

The following Members attended the Committee:
Beard, Mr. Nigel (Chairman)
Blizzard, Mr.
Clappison, Mr.
Davies, Denzil
Dean, Mrs.
Garnier, Mr.
Holmes, Paul
Mahmood, Mr.
Sedgemore, Mr.
Smith, Angela
Smith, Mr. Chris
Vis, Dr.
Wicks, Malcolm
Wright, Mr. Anthony D.

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Prepared 10 December 2001