Sneak on benefit cheats, urges Lilley

The public will be urged tomorrow to inform on friends or neighbours who are claiming social security fraudulently.

Peter Lilley, Secretary of State for Social Security, will announce a free national telephone hotline, and launch a pounds 500,000 poster and press campaign with the slogan "Know of a benefit rip-off? Give us a telephone tip-off."

The "Beat a Cheat" initiative, which has the backing of John Major, follows the success of similar activity in pilot schemes and in 21 "spotlight" areas. The latter campaign has saved the Government an estimated pounds 30m.

Labour last night suggested the move was a gimmick that ignored the role landlords play in defrauding the taxpayer of millions of pounds in housing benefit. Ministers insist, however, that the battle against fraud could make a vital contribution to the Treasury's finances. One source said: "The money saved on fraud is big money, so the Treasury is behind us. The Prime Minister has taken a close personal interest in the anti- fraud drive."

The pounds 90bn annual budget of the Department of Social Security accounts for nearly one-third of Whitehall's spending. The main targets of this week's campaign will be people claiming benefits while in work, although callers will be asked to report any type of fraud.

The DSS, which loses an estimated pounds 3bn a year in benefit fraud, stepped up its blitz on fraudsters late last year with a pilot project in a handful of areas.

In March that was extended to the 21 "spotlight" areas, including London, Birmingham and Leeds. Those claiming benefit illegally were given two weeks to come forward and be dealt with leniently, before their area was targeted. That campaign took advantage of more than 13,000 calls from local hotlines, and encouraged ministers to go national with the project.

Mr Lilley will also announce tomorrow that savings from benefit fraud in the last year were between pounds 1bn and pounds 1.4bn, sharply up from the previous year's tally of pounds 700m.

That was achieved largely without the phone hotlines, through a series of other counter-fraud measures, including bar-coding benefit books. However, the Benefits Agency still faces a big task in trying to recoup up to pounds 2bn in undetected fraud.

Henry McLeish, a Labour social security spokesman, said: "It is interesting that this comes hard on the heels of the withdrawal of the free telephone hotline for claimants who are unsure of their legal entitlements.

"Labour has no problem with cracking down on fraud. Indeed, we have outlined our own plans to do so. We would ask, however, whether this is another gimmick by Peter Lilley, because the reality is that the largest area of fraud is housing benefit, including landlords defrauding the taxpayer."