Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Hollis of Heigham: My Lords, I accept that your Lordships are concerned about the issue of national insurance numbers, of which there have been significant reports. Perhaps I may start with the point made by the noble Earl, Lord Russell, partly in response to the noble Lord, Lord Higgins, as to the apparent discrepancy between the size of the population, which he estimates as around 60 million, and national insurance numbers, of which over 80 million are in circulation. The noble Earl is absolutely right in saying that not only are numbers given to individual citizens but that numbers are allocated to children at the child benefit point. When someone dies, his national insurance number needs to continue to exist; in other words, to be a live number, because widows' benefits depend on it. Also, an EC national for example, who has come to this country, worked only for 12 months and then gone back to, say, Spain or Germany, none the less maintains a live number even though not a UK citizen and a member of our population base, because at some point he or she may return to the UK and wish to resume national insurance. Equally, foreign students who are permitted to work part-time have a national insurance number, although not part of the home population.

There may be UK nationals who are entitled to retirement or winter fuel payments even though they may be living abroad. There are even extreme examples of people, like Gurkhas, who are entitled to claim working families' tax credit, or the foreign wives of UK servicemen. Given all that, your Lordships will see that there is an understandable gap between the live population and the number of necessary national insurance numbers in circulation.

Regarding the cleaning project, yes, we identified about 200,000 mis-matched, unacceptable dead numbers which have been cleaned from the system. We have completed that exercise. May I say that the numbers of national insurance numbers being issued each year have not changed since the early nineties: there is not some sudden crisis identified with national insurance numbers. If a number is suspected to have been stolen, it is marked on the computer and checks are carried out to verify this. I hope I have brought the matter into perspective.

The noble Lord, Lord Higgins, also asked about the computers. The basic information is held on the department's central index but there is also additional information, such as the amount of contribution which is held on NIRS2, as he said. Given that background information, I hope I may persuade your Lordships that these amendments, though they may be pegs on which to express wider concern about national insurance numbers, really do nothing at all to help us. They are redundant and may even make the situation worse.

27 Feb 2001 : Column 1149

The first amendment would place a statutory duty on officers to check the validity of a person's national insurance number before initiating any enquiries under the powers of Clause 1; that is Amendment No. 6. We do this already. It is one of the basic building blocks before any further investigation into fraud can continue and therefore putting this on to the face of the Bill would achieve nothing at all. It is already absolutely standard practice. It is imperative that we establish at the outset the identity of the person suspected. I would ask the noble Lord to accept from me that this amendment is redundant, despite being useful as a peg on which to explain that we always do it. We do this already, and checking the national insurance number before we start on any serious investigation is an absolute requirement.

Turning now to Amendments Nos. 46 and 49, I would say to the noble Lord, Lord Higgins, that they would achieve nothing new. It is already an offence to make a false statement in order to obtain benefit. That is what happens when a false insurance number is used. Of course, there may be a genuine error. A person may have been allocated a number as a child, perhaps when living abroad with their parents who were UK nationals, and stayed abroad before returning home perhaps 30 years later and has then innocently sought another national insurance number when starting work here, without realising that a number had been already allocated to them. There will be occasions when people innocently but erroneously hold two national insurance numbers. The issue is whether they use those numbers to perpetuate fraud. That was part of the debate we had earlier. It is already an offence, so once again this amendment is redundant.

The proposal would create a penalty specific to that offence which would tie the hands of the magistrates to a maximum penalty of 500. However, the existing offence attracts a penalty of up to 5,000 or six months' imprisonment. Therefore the noble Lord--I am sure unwittingly, innocently and in error--seeks to weaken the effect of the offence and the punishment which already exists by law.

I hope that I have addressed the point about the gap between the population and the numbers in circulation. I hope that I have covered the point about computers. I hope that I have addressed the issue raised by the noble Earl, Lord Russell, about what happens if the number is stolen. I hope that I have addressed the issues underlying the amendment by suggesting not only that they are already part of departmental procedure but that they are already offences and the amendment would weaken the ability of the department to handle those offences. In the light of all that, I hope that the noble Lord will not wish to pursue the amendment.

Lord Higgins: My Lords, before the Minister sits down, can she confirm whether the cleaning project is continuing; and whether there is any extension of the Balham project?

Baroness Hollis of Heigham: My Lords, I thought that I had mentioned the cleaning project. We have

27 Feb 2001 : Column 1150

identified something like 220,000 mismatched numbers. We have completed the exercise; it was finite. Perhaps I may write to the noble Lord on the Balham exercise. I can give him information about the local project.

However, on the basis of that exercise we have found significant areas of benefit fraud. It is not all associated with national insurance numbers. The project was set up in 1997. We have had validation trace units at seven of the sites within the offices. We have been looking at the allocation of ninos. As a result, there have been something like 166 arrests for identity fraud; a further six deportations; and by extending the initiative to neighbouring Benefits Agency offices in 1999 there were a further 46 arrests. We seek to make use nationally of the lessons learned from Balham. We now have specialist teams to combat identity fraud and the fraudulent use of ninos. From1st April 2000 we are not only continuing the work in Balham but extending it nationally. We are going live across London inside the M.25 corridor and Wales from 1st April 2000 where 70 per cent of all nino applications are handled. We have gone live in the rest of the country from 1st October 2000. So, yes, we are continuing the Balham project. We extended it to the M.25 and Wales last summer. Last autumn we went live to the rest of the country. I hope that I have answered the noble Lord's point on Balham.

Lord Higgins: My Lords, I am grateful to the noble Baroness for the points she made. I understand what she says about some national insurance numbers continuing in operation with regard to widows' benefits and so on. Clearly that is necessary. None the less the extent of the surplus seems to be very large--80 million people as against 60 million would scarcely be covered by that. It could surely be argued that we withdraw the number with regard to the owner but perpetuate it as regards the widow or other related claimant.

None of these matters covers the basic point which the Balham project--I am glad to hear that it is being extended--seems to confirm: that it will be a relatively simple exercise, albeit large scale, to check up on the extent to which the national insurance numbers held by an individual coincide with those which appear on the Government's records. There is the feeling that a large number of invalid national insurance numbers are being held. Therefore, to clean up the matter by making the initial inquiry on a national basis has much to be said for it in terms of reducing benefit fraud.

The Minister's other points are very fair. I take the point that inquiries are already made at the first stage on national insurance numbers. But that is the present situation before the Bill comes into operation as an Act. We were concerned that this should be an upfront part of the exercise.

I concede the point the Minister makes on penalties. It merely demonstrates how important the issue has been considered in the past. The report of the noble Lord, Lord Grabiner, seems to bear out that point. It

27 Feb 2001 : Column 1151

gives considerable cause for concern with regard to surplus numbers and the stringency with which new numbers are issued.

I shall study carefully the point the noble Baroness makes. Clearly I shall need to amend the second set of amendments, if not the first, and return to the matter at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

Lord Higgins moved Amendment No. 7:

    Page 2, line 29, at end insert--

("( ) Prior to the exercise of the power conferred on an authorised officer to obtain information under this section, that officer shall obtain in writing the consent to carry out an investigation.
( ) Consent shall be obtained from an official of seniority of "Band B" or above from the relevant department.").

The noble Lord said: My Lords, the amendment is concerned with the way in which the powers conferred on authorised officers to obtain information under the clause shall be authorised and the level at which the investigations take place.

There is still considerable concern about the way in which the investigations will be carried out, despite the excellent amendments moved by the noble Baroness earlier, with no external check on whether it is reasonable to investigate an individual. The British Bankers Association still feels that independent external checks should be made on the way in which the Government operate. It remains of the view that one should have independent judicial authorisations for specific inquiries. It stresses that it does not understand why those suspected of benefit fraud should have a lower standard of protection against the invasion of their privacy than those suspected of tax fraud or criminal offences.

The Minister has been kind enough to write to me and to others on this point. No doubt the noble Baroness will wish to put on record her arguments. The code of practice gives us more reassurance than we had in Committee. The protections which are built in seem to be more substantial than we had at first realised. On the other hand, it is not entirely clear how the system will operate in practice. We had understood that there were to be authorised officers. On page 10 of the code of practice we find a reference to a selection of individuals. There is reference to authorised officers; and we are clear about them. However, there will also be fraud investigators, decision makers, fraud specialists, responsible officers and accredited fraud officers. The relationship between each of these is not entirely clear.

Next Section Back to Table of Contents Lords Hansard Home Page