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Baroness Hollis of Heigham: I think that I addressed both those points at length in my answer. On the second point, the answer is yes. On the first point, I was estimating the higher figure of 7 million to be the top figure falling on businesses. The share of that apportioned out would come to something like 450,000 to 500,000 per bank. I was setting that against the profits of 2.4 billion for Barclays Bank, 1.25 billion for the Halifax, 3.6 billion for Lloyds TSB, 1.2 billion for the Royal Bank of Scotland, 3.8 billion for British Telecom, and so on. I hope that in the course of my earlier remarks I addressed the points raised by the noble Lord, Lord Astor.

Lord Goodhart: Before the noble Baroness sits down, is it not also true that there has been a good deal of publicity from time to time about some of the very high salaries paid to the chairmen and chief executives of some of the utility companies? Many of those companies make very large profits. Would not that argument then lead to the implication that no payment ought to be made to any organisation or business?

Baroness Hollis of Heigham: In Committee last Thursday I tried to make the distinction between the payments to the utilities for bulk information for

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which they would need to put in place new software packages and the rest, and the individual inquiries--they hold that information already--for which they would no more be paid than would a bank or building society. In that sense I hope that I have addressed the point made by the noble Lord, Lord Goodhart.

Lord Astor of Hever: We are very disappointed with the Minister's response. Her point about pleadings of poverty being untrue will disappoint the business sector. There will be substantial costs to business. Legitimate businesses and individuals are not there to act as a branch of government administration. We shall consider these points very carefully and may want to return to them at the Report stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 61 not moved.]

Lord Higgins moved Amendment No 61A:

    Page 7, line 34, at end insert--

("( ) any local authority;").

The noble Lord said: In moving Amendment No. 61A it will be convenient to discuss Amendment No. 62A. Amendment No. 61A is a paving amendment for Amendment No. 62A, which suggests that at page 8, line 17 we should insert:

    "For the purpose of complying with duties under this section, the costs of doing so shall be met by monies provided by Parliament".

The issues raised by these amendments, while they relate to the question of payment, are significantly different from the amendments we have just discussed. In that context, given the speech by the Minister, I am not clear how much the chairmen of credit rating agencies are paid and whether that supports her argument. No doubt, they are paid very small amounts.

Baroness Hollis of Heigham: Equifax and Experian are both international companies with business worth 15 billion to 20 billion and having across the world 16,000 employees. I suspect that their position is rather different from a company based in the United Kingdom.

Lord Higgins: Nonetheless, it means that they can probably afford to bear the costs in the same way that the banks or building societies can, according to the Minister.

Amendment No. 61A is concerned with local authorities. There are significant differences. In the very helpful meeting that was held with the Minister, her officials and others, the view was expressed that the money which the local authorities were failing to protect was the money belonging to central government. Therefore, it seems not inappropriate to suggest that if one is going to take measures to prevent such fraud, the costs of that should fall upon central government rather than on local authorities. Not surprisingly, that is the view of the Local Government Association.

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The point goes wider than that. The expenses that the local authorities will incur are not simply those involved in operating the system to prevent fraud, particularly housing benefit fraud. In the view of the local authorities, the effect of the provisions in the Bill will impose other strains upon them. They refer, in particular, to the Government's proposals for the so-called "two strikes and you are out" policy that might mean that individuals in a local authority area find that they are rendered homeless. That would involve additional costs. That is the view of local authorities.

Local authorities are also worried about the effect the proposals may have if the costs are borne by them rather than by central government. For example, they suggest that the standard spending assessment will apparently remain the same but they will have to cover the cost of operating the proposals in the Bill. The result of that will be that they have fewer resources to carry out the normal duties of a local authority. If the money that they were saving was their money, that would be one thing. As I understand it, the Government's position is that it is central government's money. We will find a reallocation of resources between central and local government as a result of local authorities having to bear this cost--there is apparently not to be an adjustment in their standard spending assessments--and local services will deteriorate.

It is also the case that there will be differences between one local authority and another. Local authorities in particularly deprived areas, where there is perhaps a tendency for people to find that they are engaged in activities of a kind which the Bill is intended to prevent, will find that their resources are reduced more than those provided to other better off areas which are less likely to engage in some of the forms of fraud with which the Bill is designed to deal.

Local authorities feel that they are being discriminated against because the power given to them in the Bill is limited compared with the power given to the DSS.The ability to check bulk information from utilities as an indicator of residence is at least as relevant, if not more so, for housing benefit and council tax benefit as it is for central government. If I understand the Bill correctly, central government and the Department of Social Security will be able to use such bulk information but local authorities will not. To that extent, not only will local authorities be lumbered with the costs incurred in protecting central government's money, as they see it, but they will also be handicapped because the provisions of the Bill will not be equally available. Local authorities will have fewer resources in the sense of additional information to do their job than the Department of Social Security. Local authorities feel that they are being hard done by. My amendments would cover most of the problems.

There are significant differences between local authorities. In a news handout on 30th January the London Borough of Wandsworth pointed out that it is being commended on the action it has taken against fraud. That is in contrast to a report from the benefit fraud inspector relating to Camden and one or two other local authorities. There is a discrepancy. It may

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be that the resources available to Wandsworth to cover the cost of the Bill's proposals are smaller than those made available to other more deprived areas.

It is interesting that the report on Wandsworth by the department's independent benefit fraud inspector noted that Wandsworth had done very well because of a new verification programme which it had instituted. The Minister indicates assent. To what extent will the verification process, which presumably will effectively fulfil the objectives of the Bill, be extended nation-wide? The noble Baroness said that there are 409 local authorities in all. How many of the 409 are likely in the near future to adopt the verification process, which apparently has been so successful in the London Borough of Wandsworth?

In particular--I first raised this point with the noble Baroness a long while ago--to what extent will there be standardisation of the forms used by local authorities for housing benefit? Given the problem of housing benefit fraud, it is extraordinary that there still appears not to be a standard form, though again the department's benefit fraud inspector has commended the form used by the London Borough of Wandsworth.

Baroness Hollis of Heigham: Three mentions and they are in.

4.45 p.m.

Lord Higgins: That is true. Alternatively, with some of the other boroughs, three mentions and they are out. But that would be a sordid party political point to make, which did not cross my mind for one moment.

There are differences in ability and determination to deal with these problems. I cannot help but feel that the arguments put forward by the Local Government Association show that local authorities will be operating the provisions of the Bill with less enthusiasm and efficiency than would be the case if it was made clear to them that the Government are seeking to protect central government money--that is the view expressed by the Minister--and that therefore it is appropriate that the cost of doing that should not fall on those paying local taxes. It would be far more appropriate, efficient and effective if it were done on the basis of national financing of local authorities for carrying out what is effectively for the benefit of central government. If that is not done, it will be to the detriment of local authorities and local communities.

I hope that the Government will accept what is a sensible amendment put forward by local authorities. I look forward to hearing what the Minister has to say. I beg to move.

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