Universal Credit Fraud

Neil Gray Excerpts

Wednesday 10th July 2019 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

(Urgent Question): To ask the Secretary of State for Work and Pensions to make a statement on the universal credit fraud that has been uncovered by the BBC.

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

Universal credit is now in all jobcentres, with around 2 million people claiming this benefit. In accordance with our approach to test and learn while rolling out universal credit, we have made several changes to the advances claimants may receive while they wait for their first payment. If they need it, people can now claim an advance from day one of their claim. They can apply in person, by phone or online—a facility we introduced in July 2018. On Monday, the BBC published an article that described cases where fraudulent applications had been made to acquire advance payments. The figures quoted are unverified.

Those who defraud the benefits system take taxpayers’ money from the poorest people in society. We have a dedicated team of investigators working on this issue, and are working with the Crown Prosecution Service to ensure that, where appropriate, perpetrators will be prosecuted: we have in fact already secured our first successful prosecution. We frequently raise awareness among frontline staff to be vigilant to fraud risks, and raise concerns where appropriate.

I remind hon. Members, and their constituents, that DWP staff will never approach a claimant on social media, or in the street, to discuss their benefit claim. Claimants should never give out personal or financial information to a third party unless they are certain they work for DWP, and have followed a password or security protocol. Anyone with concerns about their benefit claim should contact their local jobcentre directly.

[Neil Gray]

I am grateful to you, Madam Deputy Speaker, and to Mr Speaker for granting the urgent question. I am also grateful to the BBC whose investigative journalism uncovered this scandalous situation. The cases we have seen in the news are truly alarming and heart-breaking. The Minister says that the figures are unverified, but according to the BBC the figures come from a member of his jobcentre team, who released them to the BBC. One jobcentre reported that a third of all claims are the result of such scams by criminals operating on behalf of claimants, while at another £100,000 a month is being lost to criminals and not going to claimants who actually need it.

Those people already desperately need help. They have been pushed into serious debt by the actions of those appalling scammers and it is clear from the leaked communications that staff, and perhaps Ministers, in the Department for Work and Pensions were aware that the scams were happening. It is also worth pointing out that, from the cases that we have heard about, claimants have been doubly hit by their money being stolen by the scammers and then having to pay back the advance payment, which— as we all know—is in fact a loan. The SNP has consistently condemned the system of advance payments and feels that it is counterintuitive. The advance payment needs to stop being a loan.

The BBC has uncovered what we have been talking about for years—people being left in desperate straits by cuts to universal credit, which have seen increased food bank use and, now, people being driven unwittingly to criminals to help them to get the money they need to survive. The cases highlight the failure of universal credit to protect those who most desperately need the support that it is supposed to offer. Can the Minister not see that until universal credit is properly fixed, such desperation will continue?

The DWP says that it has already secured its first conviction, so it already knew about this situation. The Minister was quoted in a BBC article on 20 May about another heart-breaking individual case. Why did the Department not identify the loophole and attempt to correct it sooner? Why was a statement not made to the House so that we could have helped to advise our constituents? What is the scale of the fraud? When were Ministers informed? Has this activity gone unnoticed or unchecked because of the 21% cut in staff numbers reported by The Independent? Of course, Social Security Scotland has a clear commitment that when an error or fraud occurs that is not the fault of a claimant, they will not be penalised or out of pocket. Will the Minister follow that lead for the people who have been affected?

The Government’s initial response, and the Minister’s response today, has put the onus on the claimants, and that is wrong. They cannot wash their hands of this responsibility. What will the Minister now do to ensure that those affected are not left out of pocket, those who have ripped them off are brought to justice and practices are put in place to ensure that it cannot happen again?

[Justin Tomlinson]

I thank the hon. Gentleman, who has taken a proactive approach to this important issue. I share his comment that it is alarming. These are criminal actions by what are, frankly speaking, parasites who target some of the most vulnerable people in society. I give the House an assurance that the Department will do everything in its power to protect those vulnerable people, and I am sure that all hon. Members would support that.

There have been 4.4 million universal credit claims and, as it stands, 42,000 staff referrals for fraud have been made, which is less than 1% of all universal credit claims. That said, each and every one of those has the potential to be a serious case. We take them seriously, they are all fully investigated and, where appropriate, we will take action. We are in talks with the CPS on several cases and, as I have said, we have already had a successful prosecution. We will look at each of the cases raised and, where it is clear that the claimant is an innocent victim who has been targeted, there would be an expectation that they would not pay the money back.

I refute, however, the broader point about universal credit. We will spend £2 billion more than the legacy system, and I very much welcome the introduction of the help to claim scheme to provide an independent additional tier of support across the jobcentre network, provided by Citizens Advice.

We are actively making improvements to the system. We are using more real time information. We are working with data suppliers. We are doing more data matching. We are using the DWP landlord portal to verify housing costs and we are developing risk models to help to assess confidence in information that is provided. There is a balance, however. In debates we have had in recent years, hon. Members have rightly pushed to make advance payments available as quickly as possible. It is the balance between being able to support people who need funding—under current rules, a vulnerable claimant in need of financial assistance can access that funding on the first day of their claim—while ensuring that we have 100% confidence that the money goes to the right person.

We are not complacent. We take this matter very seriously. We have a team of 120 staff dedicated to working on advanced payments. As I said, every case referred to us is taken very seriously and we will use the full force of the law where appropriate.