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Mr. David Shaw (Dover): Will my right hon. Friend accept the thanks of the whole House for being what I believe to be the toughest Secretary of State for Social Security and clamping down on fraud? Will he accept our congratulations on tackling the difficult issue of housing benefit, where local authorities have different computer systems? From evidence received by the Social Security Select Committee to date, it appears that different computer systems in local authorities may account for the fact that housing benefit fraud could be as high as£1.5 billion or £2 billion--equivalent to 5 per cent. on pensioners' state pension or 1p off income tax. We are very grateful that he is tackling this important issue.
Mr. Lilley: I am grateful to my hon. Friend for his words of encouragement. He will, of course, have noticed that no positive proposals have ever been made by the Opposition on this or any other issue, and it is precisely to that area that I want to turn now, because no one doubts--
Miss Hoey: Will the Secretary of State give way?
Mr. Lilley: A last chance for the hon. Lady.
Miss Hoey: Before the Secretary of State moves away from local authorities, will he congratulate the London borough of Lambeth--my authority? Although I have been a critic of it over the years, I believe that it has now turned around. Will he congratulate in particular its fraud unit, which recently discovered that some 105 members of staff were involved in one way or another in fraud, and welcome the fact that local authorities across London are co-operating to ensure that the ordinary ratepayer is not ripped off by people who work either in the council or outside it?
Mr. Lilley: I welcome, of course, any action that local authorities take to tackle fraud, particularly following the sticks and carrots that we introduced to prompt, force and goad them into taking such measures. I welcome the points that the hon. Lady made and the action that Lambeth council has taken in that area. She referred to the long time that it has taken for such action to be introduced. She should apply that test to herself and her own local authority.
No one doubts the Government's dedication to curbing fraud. We have demonstrated that by the priority that we have given it in the Department of Social Security, the extra resources that we have committed to it and the effort and imagination that we have devoted to developing new approaches to tackling fraud.
The Labour party has always been soft on fraud and soft on the causes of fraud. The hon. Member for Manchester, Withington (Mr. Bradley), in our previous major debate on the subject, said:
of fraud--
One of the attitudes of Opposition Front-Benchers to fraud is to pretend that it is not very big; the other is to say that it is not very important. Their attitude to fraud is similar to the attitude of the right hon. Member for Sedgefield (Mr. Blair) on shoplifting, who said:
Opposition Members see fraud in a rather similar light.
Mr. Keith Bradley (Manchester, Withington):
Will the Secretary of State also confirm that, in the same debate,I said right at the beginning:
Mr. Lilley:
I am grateful to the hon. Gentleman for proving that he has the essential qualification for serving on the Front Bench of the Labour party: an ability to contradict himself in the same speech.
On another occasion, the hon. Member for Sheffield, Brightside (Mr. Blunkett) said that the Labour party has too long been associated with the freeloader. Opposition Members were anxious to try to get away from that message.
I acknowledge, however, that the Opposition have now, belatedly, reluctantly and grudgingly, come round to acknowledging the need to tackle fraud, but it is no more than lip service. Their hearts are not in it and nor are their minds. I have checked every reference to fraud by a Front Bench Labour spokesman in Hansard that I can find and I have not been able to locate one positive proposal from any of them on how to combat fraud.
I challenge the hon. Member for Islington, South and Finsbury to correct me. Perhaps he will remind me if I am wrong about the Opposition's plans and proposals for tackling fraud. Has he come up with any such proposals in the past? The hon. Gentleman is now more than halfway through his root-and-branch appraisal and review of Labour's social security policy. Does he now have any ideas that he is prepared to share with the House on how we can improve our efforts to combat fraud? He may not have found a root or a branch but has he found a leaf of an idea of Labour policy in this area?
The hon. Member for Islington, South and Finsbury may be the exception that proves the rule. He may be the solitary socialist with a good track record in combating fraud. The Opposition's amendment harks back 17 years and condemns by implication the 1979 Conservative Government for a lack of activity in tackling fraud in the early 1980s.
But the only participant in the debate who was responsible for combating fraud in those days was the hon. Gentleman. Between May 1981 and June 1983 he was chairman of Islington council's housing committee. In that role he was responsible for preventing housing benefit fraud. Perhaps the hon. Gentleman would like to remind the House of the initiatives that he took to curb fraud and to combat it.
I well remember the hon. Gentleman's period in office because at that time I was living full time in Islington. I remember that it was punctured by a period of Social Democratic party rule. The hon. Gentleman was ousted as
chairman of housing for a few months. His job was taken by a member of the SDP, who naturally followed closely the hon. Gentleman's record while chairman of the housing committee. He has today issued a statement, which reads:
Mr. Chris Smith (Islington, South and Finsbury):
As the gentleman that the Secretary of State has quoted stood against me at the last general election and was roundly defeated into third place by me, he might perhaps be somewhat parti pris in his comments.
Mr. Lilley:
Is the gentleman wrong or is he right? That is the issue. The hon. Gentleman failed in his intervention to set things right. We must assume that the gentleman won the argument, even if he did not win Islington, South and Finsbury at the election.
The legacy which the hon. Gentleman left behind of fraud in Islington was pretty lamentable. Until Islington council was goaded into action by the measures that we have taken--the sticks and carrots to which I have referred of about four years ago--it did not take much interest in housing benefit fraud. Since then, however,I am happy to say that the amount of fraud that it has uncovered has quintupled. The sum that they have uncovered is £2.5 million more than that uncovered four years ago. That is a pretty good measure of the minimum amount of unidentified fraud that was going on before we prompted the council into action.
The Opposition say through their amendment that the level of fraud is attributable to means testing in the benefits system. That assertion displays an extraordinary attitude. If all benefits were universally available without condition there would be no fraud because there would be no need for it. Of course there would be no need for fraud if everyone received benefits automatically.
Are the Opposition saying that they will do away with means testing and that they will pay housing benefit to anyone regardless of income with no test of the rent incurred? Will they send the equivalent of income support to everybody? A basic benefit, as some propose, might drastically reduce the level of fraud but it would dramatically increase costs to the taxpayer by a multiple of any fraud savings. Of course, the Labour party does not mean that.
When Labour Members speak today, however, I ask them to say what they propose to do if they believe that the cause of fraud is means testing. What do they propose to do about means testing in the benefits system? As far as we know, their only proposal is to extend the benefit system by introducing a guaranteed minimum income. We are assured by the hon. Member for Islington, South and Finsbury that although the Leader of the Opposition is committed to a guaranteed minimum income for pensioners, he, the hon. Gentleman, is against a guaranteed minimum pension, and believes that the two are in some obscure way different.
The Labour party is unhappy with fraud in social security because the party's entire approach to social security is intrinsically fraudulent. The Labour party seeks
to convince the British people that they can have more for less--in other words, that we can enhance benefits and avoid the savings and changes that I have introduced over the years, all of which the Opposition have opposed and rejected, without increasing the costs that are borne by the taxpayer. That is nonsensical. It is intrinsically fraudulent. It is a fraud that we will expose at the next general election.
"We must place the issue of fraud in context . . . We should continually bear in mind the fact that, in the context of the overall budget, even £1 billion"--
"is not a large amount . . . There is some danger of overstating the amount of fraud in the system."
5 Mar 1996 : Column 170
"Shoplifting is just a case of lone parents and other poor people helping themselves to a treat."
"I wish to place on record immediately that the Labour party is as committed as any other party or the Government to rooting out fraud. We certainly support the measures that the Government have announced to ensure that the fraud crackdown continues."--[Official Report, 16 July 1993; Vol. 228, c. 1253-55.]?
"To my recollection, Chris Smith was not at all interested in the issue of Housing Benefit fraud while Chairman of the Islington Housing Committee. And such interest would have been totally contrary to the spirit of the Islington Labour Party at the time."
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