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Baroness Hollis of Heigham: My Lords, I am sure the noble Lord does not wish to overstate the position. I take issue with the phrase that we have made them a "high profile target". We have merely not omitted them from the list of all the other recipients of benefits from whom proper controls, inspections and information are required.
Lord Astor of Hever: My Lords, I take the noble Baroness's point. However, the numbers must be minuscule. Perhaps the Minister can give the House an idea of the number of fraudulent war widows. On the War Pensions Agency's own figures, from June to December 2000 there was evidence of abuse in only 114 cases from around 100,000 pensioners in receipt of a war pension.
I reiterate that we on these Benches are fully behind real attempts to tackle the growing menace of benefit fraud. With each year such fraud is costing hard-pressed British taxpayers many billions of pounds which could be used elsewhere. This diverts much needed resources and attention from those who are most in need. What indicators of success, therefore, will the Government introduce for the Bill?
Baroness Hollis of Heigham: My Lords, this is an important issue although it is a small Bill. It is important because, as my noble friend Lady Crawley said, the amount lost for taxpayers by fraud could well exceed the amount we spend on overseas development. The figure is substantial. I was pleased, as I am sure were other noble Lords, to hear the thoughtful and well-informed debate from around the Chamber, for which I am grateful. I am also grateful that the need to deal with fraud and its pervasiveness attracts such wide support. I always pale when phrases such as "getting the balance right" are used. No one disagrees with the phrase, it is the meaning that we dispute, although I am confident, as always, that the Government have got the balance right.
In seeking to wind up, I make the usual disclaimer. If I inadvertently omit any point, or run out of time--that is the more likely--I shall write to noble Lords. For example, I hope that the noble Lord, Lord Astor, will allow me to write to him on Scotland. I have all the information here but it is elaborate. It might be better to write to him and I am happy to put a copy of the letter in the Library so that other noble Lords may take advantage of that.
I shall respond to three general points: timetable, responses and the scale of fraud. I shall refer to the four major points raised: the use of powers, safeguards, human rights issues and the burdens on business. If time permits, I shall deal with some of the more specific one-off points which have arisen in the debate.
The first general point related to the timetable. The noble Lord, Lord Higgins, said that there was not time to comment on the Bill. The main measures of the Bill were set out in the White Paper, Safeguarding Social Security, which was published last July. Organisations and members of the public were given three months to comment. The report of my noble friend Lord Grabiner was published as long ago as March 2000. I accept that this debate comes immediately after the vacation but I do not think that organisations could argue reasonably that they have been short changed on consultation time.
The noble Lord also asked whether we intended to put copies of the consultation responses in the Libraries. We have published a summary--although I take the point that it is a summary of a summary--and, in addition, anyone who wants copies of the responses may apply and will receive them from the department. We do not normally place copies of all responses in the Libraries because the bulk of them can become a storage problem, but I shall ensure that the noble Lord and any others who are interested are sent a full set of the responses to work on.
The noble Earl, Lord Russell, also asked whether we could see the draft code of practice. We have promised to involve the organisations affected by the Bill in the drafting of the code. The first meeting to discuss the code will take place next week. A draft will then be prepared for further discussion.
The third general point, raised by the noble Earl, Lord Russell, and the noble Baroness, Lady Fookes, was the scale of fraud and how we arrived at our estimate of £2 billion of fraud. We estimated the figure through our programme of benefit reviews, which take a random sample of claimants who are subjected to a detailed investigation, including home visits. The number and volume of frauds identified are grossed up to produce a total national estimate. That is supported by area studies, sampling and covert activities. We cannot have firm figures, but, as my noble friend Lord Desai said, we use the best methods that we have, with sampling, detailed follow-up surveys and area-based studies. However, the noble Baroness is right that the figure remains approximate.
The first major point of issue embodied in the Bill, as opposed to process points, was the use that we expect to make of the powers. Many of your Lordships asked about that. The measures could in no way be used to permit discrimination. A person's race, sex or disability do not predetermine whether they are more likely to commit fraud and the Bill does not provide for inquiries on that basis. The powers can be used only when there is statistical evidence to support targeted inquiries. I have two examples. First, we know from our area benefit reviews that income support claimants who have committed fraud before are 70 per cent more likely than other income support claimants to commit fraud. Such a differential surely justifies targeting those who have committed fraud in the past.
Secondly, we know from experience that local areas may have activities or occupations that are particular to them. Window cleaners and gardeners sometimes advertise their services by telephone number only in the
Baroness Hollis of Heigham: My Lords, I hope that the measure will ensure that window cleaners do not simultaneously ask for cash in hand and draw benefit. Instead, they should charge their customers, including the noble Earl, Lord Russell, the going rate for the job so that they do not need to milk the informal economy.
The noble Earl asked a serious question about other forms of discrimination, including on the grounds of sexual orientation. I took that point. Inquiries on that basis are not provided for and they would be unlawful. We shall make that plain in the code of practice that will govern the operation of the powers. Given the concern of the noble Earl and others, it is right that we should make that transparent in the code of practice.
The noble Lord, Lord Higgins, asked whether DSS inquiries would affect credit ratings. My noble friend Lord Grabiner said that we can now do that with credit agencies without leaving a footprint that could affect someone's credit rating.
Lord Higgins: My Lords, I was slightly puzzled by the response of the noble Lord, Lord Grabiner, on that point. Clearly the credit agency will know and the footprint of the inquiry will be all over its documents.
Baroness Hollis of Heigham: My Lords, we shall make arrangements with the credit reference agencies to ensure that nobody accessing their records will be able to detect that the DSS has looked at a person's credit record. In that sense, the information should not go on to other, inappropriate sources.
Baroness Hollis of Heigham: My Lords, there are two points here. First, maybe they should. Secondly, the broader point is that we are talking about individual staff members of the credit reference agency. They will not be able to detect the footfall, because the DSS will not leave it behind after interrogating the records.
That brings me to a related point that the noble Lord raised about the banks' concerns for the civil liberties of their customers. I think that I detected a tongue-in-cheek response from the noble Lord when he made the point. Obviously, banks have a proper concern, although they may be more concerned to retain their customers' trust in their probity. That is an honourable
The noble Lord also asked whether local authority staff could wander off and interrogate individual bank staff--the problem of centralised information. DSS and local authority staff will make arrangements to obtain information in writing. We are talking to those from whom the information will be sought to agree appropriate administrative arrangements for requiring information using the powers.
The second point was about safeguards. We already provide strong safeguards against a person obtaining or disclosing information unlawfully. We have a Data Protection Act that makes it an offence knowingly or recklessly to obtain or disclose information, with fines of up to £5,000 and an unlimited fine in the Crown Court. Secondly, Section 123 of the Social Security Administration Act 1992 provides for the specific offence of unlawfully disclosing information obtained during social security administration. That covers staff who are working or have worked on social security administration in the DSS and local authorities. It provides for severe penalties, including imprisonment. Finally, the Computer Misuse Act 1990 contains offences relating specifically to the misuse of computers to obtain information. It provides for a maximum of five years in prison. I do not think that we need additional provisions.
However, as the noble Lord, Lord Astor, said, we also have additional administrative safeguards in the quality and training of our staff. Only authorised staff can use the powers. We anticipate authorising only a handful of staff in each of the 13 administrative areas to ensure that the powers are used only by specialists. The detailed code of practice will bind investigators and can be obtained by organisations and members of the public, who can then hold them accountable against it. DSS staff authorised to use the powers will be trained by our professionalism and security programme, which is also available to local authorities. The staff will be securely chosen, checked and trained. If the system breaks down, tough disciplinary procedures will follow. If any of your Lordships have any further worries, I shall be happy to respond in correspondence.
The noble Earl, Lord Russell, asked whether we could guarantee that the information would not be given to anyone else. The only obvious recipient that we can think of is the Inland Revenue, which is already permitted. Unlawful disclosure of information is an offence punishable by imprisonment for up to two years.
I was also asked how long the DSS would hold on to its records. We normally destroy such records after about 18 months, but if a fraud prosecution was under way, we would hang on to them until it had concluded. Finally, on the point about information, the noble Baroness, Lady Fookes, asked about charities. The provisions relate only to information about customers, not the relationship between employers and employees.
The third issue of substance was human rights and interaction with data protection. My noble friend Lord Grabiner dealt with that powerfully. His arguments were unanswerable. The Data Protection Commissioner has questioned whether the powers to obtain information are necessary and whether they are sufficiently precise and accessible in order to comply with the European Convention on Human Rights. I would argue, as did my noble friend, that so long as some claimants lie to us, as they do--that is the definition of "fraud"--those powers are necessary.
If benefits cheats did not lie to us and were not fraudulent, I would agree with the Data Protection Commissioner that we could obtain the information that we need from the claimant. However, by definition, if the claimant is fraudulent, he will lie to us or refuse us access to information. I gave an example in which we suspected someone in the building trade who had large sums of money going into his bank account. He refused us access. If the Data Protection Commissioner's concerns were upheld, we would not be able to obtain information about such a fraud because the person concerned could refuse us access to his bank account. That fraud, which may involve a sum of £10,000 or £50,000, could go unchecked because those powers would be denied us.
A question of balance arises, and I respect that. However, I believe that your Lordships will understand our difficulties. If claimants have sole control over the information which we can obtain about them, by definition the very people whom we suspect will be those who deny us access to that information. It is very difficult to square that circle in good faith. That does not mean that the powers should not be exercised properly according to a code of guidance by staff who are properly trained and managed. However, it is a circle that we cannot otherwise square.
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