Labour joins crackdown on benefits fraud

Public Policy Editor

Labour yesterday set the seal on a marked shift in cross-party attitudes to social security fraud as it backed the beginnings of a national anti-fraud scheme.

Frank Dobson, Labour's environment spokesman, launched Fraudwatch - a 24-hour freephone telephone line - in Reading which encourages people to report suspected cases of benefit and other fraud.

The scheme has already been adopted by Labour-controlled Reading and the London borough of Camden, and Liberal Democrat Aylesbury Vale. Both parties are encouraging councils that they control to join the scheme nationally.

The move came as Oliver Heald, Under-Secretary of State for Social Security, prepared for today's launch of the next stage of the national drive against benefit fraud being run by Peter Lilley, the Secretary of State.

A new electronic system is to begin operation today in 1,400 post offices in London and the South-east, reading bar codes on new-style order books and using a central computer to check to whom they were sent and when.

The system is to go national in all 20,000 post offices in an attempt to halt a pounds 150m-a-year loss from order books that are lost, stolen, forged or sold and then claimed to be lost.

In addition, redesigned order books and foils and payment giros, all containing anti-fraud devices, are to be launched, together with small cash awards to post office staff who detect or prevent fraud. Recent government studies suggest pounds 1.4bn a year in income support is being fraudulently claimed.

Tony Blair, the Labour leader, endorsed Fraudwatch, saying: "Initiatives like this are very welcome." It was entirely right "that those who seek to fraudulently claim benefits or grants are prevented from doing so".

The phoneline - which will operate in seven languages including Hindi to Welsh - has already contributed to a pounds 1.4m fraud saving that Reading made last year, bringing it a pounds 200,000 award from the Department of Social Security.

Cases that Reading detected include the son of a wealthy ambassador who was making pounds 25,000 a year by claiming both student grant and housing benefit in two different authorities while making a false child benefit claim. A brother and sister defrauded the system of pounds 19,000 by making false single- parent claims, while a cleaner made pounds 16,500 over three years by claiming while working.

Reading council rejected suggestions that it was encouraging people to snoop on each other. A spokeswoman said: "Fraudulent claims leave less money for people in genuine need of benefits.

"People who defraud the system also take money away from much needed services from home helps to equipment for the disabled and computers in schools."

Avril Davies, the Liberal Democrat chair of Aylesbury Vale council, said: "All honest council taxpayers should welcome this initiative."