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Social Security (Loss of Benefit) Amendment Regulations 2010

My Lords, I, too, thank the Minister for explaining the regulations, which one might call "one strike and you’re out" rules—in other words, a new four-week loss of benefit provision, or "one strike" sanction, for all first-time benefit fraud offences. As the Minister pointed out, the purpose of the new rules is to act as a deterrent to benefit fraud of all sorts. We on these Benches are as keen as anyone to eliminate fraud in the benefit system. Those caught making fraudulent claims, if five or six-figure sums are involved, invariably make the front pages of the red-top newspapers and bring the whole benefit system into disrepute. The lurid headlines created tend to make many people think that all benefit claimants are fraudsters, so anything that can be done to stop genuine fraud must be a good thing. At present, the two-strike rule enables benefit to be withdrawn or reduced for a period of 13 weeks where a person is convicted in a court of law of benefit fraud twice and the second offence was committed within five years of the date of conviction for the first offence. The new rules starting next month under the Welfare Reform Act 2009 apply to those whose cases—estimated to be about 50,000 a year—result in an administrative penalty or caution, not just to those prosecuted in court. I understand that, for certain more vulnerable claimants, benefits would be abated, not completely withdrawn. That is very important, particularly if there are children in the household, who will have to pay the price for a parent's fraudulent claim. I hope that those entitled to hardship payments will be told about them automatically, and that those genuinely entitled to benefits will be encouraged to claim. It is worth repeating that fraud is estimated to be 0.6 per cent of the amount spent on benefits, with underclaiming of benefits estimated to be 9 per cent. Fraud is one thing, and misunderstanding is another. Error—both customer error and Jobcentre Plus official error—is yet another problem. When I spoke on the parent clause in the Welfare Reform Bill last autumn, I had evidence from Citizens Advice that a lot of claimants were being sanctioned for fraud when they had genuinely misunderstood the position, either through lack of adequate English or lack of a clear explanation of the situation from a benefits adviser. That is very worrying. Citizens Advice tells me that its evidence still shows that some vulnerable clients are sanctioned for failing to comply with benefit rules through a failure to understand what is required of them. Citizens Advice fears that, under the new rules, people may feel pressurised to accept a caution to avoid further penalties, and states that many people do not realise that the interview is "under caution" until they attend. Consequently, they may not ask anyone to accompany them or seek legal advice before attending the interview. It is, of course, particularly important for people with learning difficulties or other mental difficulties to have the support of a representative, friend or family member. The full implications of accepting a caution should be spelt out to the client, and the letter informing them of their interview should ensure that they understand that they can take someone with them. By accepting a caution, under these rules, they could now lose benefit as well as being sanctioned. If someone simply receives a letter from the DWP requesting that they attend an interview "under caution", why would they know exactly what that meant? Finally, will the Minister confirm that if someone receives an administrative penalty, that will not count as a criminal record in future?