§ Mr. James Lamond
asked the Secretary of State for Social Services whether he will make a statement on current measures being taken by the Government to deal with social security fraud; and whether he has investigated allegations of widespread fraud and abuse made in letters that have been submitted to him.
§ Mr. Orme
In statements to the Press on 29th July and 21st September last year I stressed the Government's determination to tackle the problem of social security fraud and abuse. I welcome the opportunity to make a progress report about the measures that my Department has been taking in close co-operation with the Department of Employment.
In the longer term it is of overriding importance that we improve our means of preventing fraud. But it is clearly an immediate and continuing task to detect and prosecute the fraud which does take place. As my hon. Friend will know. the number of prosecutions doubled over five years—from 7,700 in 1970 to 15,400 in 1975. Over the last year they increased even more sharply—by about 25 per cent. to over 19,000. This is a considerable achievement by the staff of both Departments, and it has been done without any lowering of standards; we still have a 98 per cent conviction rate.304W
As well as bringing this much larger number of cases to court, we are actively engaged on about 40 specific studies into ways of improving our defences against fraud and abuse. In assessing the results of these studies it will be necessary to take account of current limitations on Civil Service staff numbers; and we must ensure that honest, and sometimes vulnerable, claimants are treated in a humane and civilised way. The social security system is now concerned with paying over £10,000 million annually to an average of 13 million people a week, of whom at least 60 per cent. are retirement pensioners. We process about 22 million fresh claims each year. These figures indicate the scale and the nature of the enormous enterprise that we are engaged in, and they should serve to put this problem in perspective. But we are giving high priority to the completion of the first phase of these studies by September this year, and we shall implement measures arising from them as quickly as we can. In particular, we shall pursue every possibility of dealing more effectively with collusive employers who, for their own financial advantage. help claimants to social security benefits to work "on the side". Our two Departments are very ready to examine any evidence that can be provided of collusion by employers and to take firm action against it.
But I do not wish to lay the main stress on these efforts to deal with detected fraud. Prevention is even more important, and we are concentrating on using the knowledge gained from successful prosecutions to stop similar frauds happening in future. A special review of criminal techniques was completed in December and the knowledge gained was used to assemble a package of material which has been distributed to all local offices to encourage staff to have a greater awareness and understanding of possibilities of fraud. In the light of the most recent evidence about criminal methods, it gives local office staff guidance about suspicious features in an application for a national insurance number, or in a first claim to benefit; about methods of interviewing claimants or checking statements that are made; about effective ways of following up claims; and about dealing with applications for the replacement of allegedly lost order books or Girocheques. Managers in all offices have been asked to 305W discuss this material, together with any specific examples from their own offices' work, with their staff to make sure that the anti-fraud safeguards in our procedures are understood and properly applied. We are also reviewing some of our key procedures, including those for registering people for insurance, for visiting claimants in their homes, and for issuing payments to beneficaries.
My Department investigates all letters in which precise allegations of fraud are made. In recent weeks we have been dealing with a large number submitted by the hon. Member for Aberdeen, South (Mr. Sproat), who was reported last July as saying that at least 20 per cent. of claims are fraudulent and that about 50 per cent. of people claiming unemployment benefit are not unemployed at all. I challenged him to produce the evidence for this, and by the end of last month the hon. Member had sent me 765 letters making various accusations about alleged swindlers and scroungers. However, many of these were of a generalised or unspecific nature, and since the hon. Member had obliterated the names and adresses of the writers of all the letters it was only possible to follow up 295 of the letters which made allegations against 485 named individuals. All these cases were referred to our local offices for detailed investigation.
By the end of January, 196 of these investigations had been completed. In 24 there was no trace of the person named ever having been a claimant. In another 135, no reason to suspect fraud was found. A further 20 were inconclusive and could not be pursued. Fraud was positively established in only 17 cases, and nine of these were already being investigated by the local office before the hon. Member wrote. Thus, out of the 196 cases so far investigated only eight new cases of fraud have come to light. To identify these has required the diversion of about 200 man-days of effort by our specialist fraud investigators; in the normal course we would expect this amount of effort, directed at cases where there was suspicion of fraud, to yield a return about 10 times higher in terms of cases of fraud uncovered. This is a measure of the small value of the evidence that the hon. Member has provided.
I have made it clear that we are always ready to investigate evidence. of fraud. 306W and we shall continue to look into the remaining cases sent to me by the hon. Member where identified claimants have been named. But we cannot follow up allegations which lack specific details. Investigations of cases so far has disclosed no possible justification for the hon. Member's sweeping assertions about the prevalence of fraud, and I condemn such assertions unreservedly for the harm they do to the interests of genuine claimants.