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Welfare Reform Bill

Currently, benefit fraud remains at the lowest level ever recorded, our latest estimates showing that by September 2008 we had reduced fraud across all benefits to 0.6 per cent of benefit spend—half a penny of every £1 of benefit expenditure. That is good news, but we must not be complacent; we recognise that there is still fraud in the system. I acknowledge that, as the noble Baroness said, the system is complex. Part of what we seek to address in the Bill is to move towards a simpler system, but there will always be a degree of complexity in a system that tries to cater for a whole range of needs. That is the environment in which we live. Convictions are judged by the courts, not by the DWP, although I accept that that is not the case when we are dealing with cautions or administrative penalties. On the point made about not many people knowing what they are suspected of and not knowing that they can be accompanied, a letter issued calling an individual in for an interview under caution states that they can be accompanied. The letter may be the first that they know about the fraud investigation—sometimes for obvious reasons. The decision whether to offer an administrative penalty or caution is made by a fraud manager. I stress that that is only an offer; they do not have to accept. They can contest the case, in which case the court will decide. Notwithstanding that, we always need to ensure that the system recognises that there are vulnerable people and people whose understanding of issues is sometimes challenged, and that our systems are fair to those people. We seek to do that. Clause 21 introduces a change to the benefit fraud sanctions regime. It amends the Social Security Fraud Act 2001 and allows for benefit to be withdrawn or reduced for those customers who commit benefit fraud for the first time. Our existing, successful two-strikes benefit fraud sanction, introduced in 2001, allows that customers convicted of benefit fraud twice within a period of five years are disqualified from benefit for a set period. We believe that it is now time to build on the success of the two-strikes initiative by extending the penalties that fraudsters face to deter more people from committing benefit fraud. The clause will do that through the introduction of a loss-of-benefit sanction for first-time benefit offences. As a result, all fraudulent customers who have committed benefit fraud, whether as a first or subsequent offence, will now face the loss or reduction of their benefit for a set period. That is in addition to any administrative penalty, caution or court conviction and requirement to repay the overpayment. Given that, we believe that the clause, combined with our existing two-strikes provisions, creates a stringent and effective benefit fraud sanction regime.