The National Insurance scandal that ministers ignored
By JAMES SLACK, Daily Mail 07:44am 2nd June 2006
Comments Reader comments (25)
Josette Fitzpatrick
Warnings that thousands of National Insurance numbers were being handed
out to illegal immigrants were ignored by ministers for six years.
The revelation came as the Government finally promised to scrap a
policy of giving the numbers to people even if officials have grave
doubts about their right to work in the UK.
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The Department for Work and Pensions promised to close the loophole as
'soon as possible'.
But it has known about the scandal since at least 2000 and did nothing,
it has emerged.
In a remarkable admission, a spokesman said last night: "Whether
applicants work legally or illegally has never been an issue."
Senior officials decided it would be too complicated to ask Job-centre
staff - who are in charge of giving out the numbers - to do checks on a
person's immigration status at the same time.
Ministers faced a barrage of questions over why it has taken so long to
end such blatant abuse of the system.
MPs demanded to know why a report submitted to ministers six years ago
by Lord Grabiner, QC, demanding reform of the system, was swept under
the carpet.
Astonishingly, five years after his report the policy of handing out NI
numbers to those with no right to be in the country was even officially
sanctioned.
In 2005, a memo from a senior Department for Work and Pensions official
said: "Where DWP is satisfied as to the individual's identity, a NI
number would be issued in this situation even if we have suspicions
around his immigration status."
Last night Shadow Home Secretary David Davis said: "Six years after
they were warned about this problem and told how to put it right, the
Government's left hand still doesn't seem to know what its right hand
is doing.
"This is a massive hole in our systems, both of benefits and
employment, and it is long past time it was put right.
"This is not just a massive administrative failure - it is a massive
failure of political will to get a grip on this problem."
The number of foreigners applying for National Insurance numbers was
440,000 last year, up from 350,000 in 2003.
Last month the Daily Mail revealed that up to 300,000 NI numbers were
being given to foreign nationals every year without even cursory checks
on their immigration status. They need only to produce documents
proving their identity, and proof they hold a job, and a NI number is
handed over.
Now it has emerged that, even when officials suspect the documents are
forged, they still issue the migrant with a number.
The case is then supposed to be referred to the Home Office's shambolic
Immigration and Nationality Directorate for further investigation This
happened in 3,300 cases last year - but the Home Office is unable to
say if anybody was prosecuted or action taken.
The 2005 memo, written by Gary Gibson of the Identity and Security
Branch, Programme Protection Division, at Jobcentre Plus, made it plain
that a person's immigration status was a matter for the IND only.
It said: "Any prosecution action in respect of falsified immigration
documentation would be the responsibility of IND - NOT DWP."
Lord Grabiner, a Labour peer, said his report into the black economy in
2000 had warned of abuse of the system.
It said: "There are a number of ways of abusing National Insurance
numbers but, in respect of the hidden economy, the most significant is
the acquisition of a number by an individual not entitled to work."
Facing the Home Affairs Committee two weeks ago, DWP chief economist
Jonathan Portes admitted the problem was well known in the department -
but had not been stopped.
He told MPs: "It is something that has occurred to us."
'Significant policy change'
Mr Portes said it would be 'a significant policy change' to train
Jobcentre staff to check a migrant's right to be in the country and it
would add hugely to their workload.
He added: "In terms of numbers, I think we issue in the order of
200,000-300,000 NI numbers a year to foreign nationals; so that sort of
number we would be talking about."
In his evidence to MPs, he also admitted: "The important point for us
is that National Insurance numbers are an internal reference number
that lets us link an individual with their social security, or their
child support, or their tax contribution record.
"It is not proof of their identity, and it is not supposed to be proof
that you are entitled to work. It is not supposed to provide a rigorous
check on immigration status."
Critics say one reason for the Government's slowness to act is the
benefit for Chancellor Gordon Brown.
Once people have an NI number they are liable to pay tax and National
Insurance, even if they are not legally entitled to work. The DWP
yesterday said that it planned to have the loophole closed by the end
of July. It requires a change to the law so that those in work are not
automatically entitled to an NI number, regardless of their status.
Insiders said the Work and Pensions Secretary, John Hutton, had only
personally become aware of the loophole after the select committee
hearing. A spokesman said: "Having reviewed this issue, ministers have
decided to change the law as soon as possible so that people who have
no right to live or work in this country are not given a National
Insurance number."
Liberal Democrat spokesman Nick Clegg said it was clear at least 3,300
illegals had been given NI numbers last year, as this was the number
with forged documents spotted by DWP staff.
He added: "Failing to check the immigration status of individuals
seeking NI numbers is one thing, but deliberately issuing those numbers
even when the Department for Work and Pensions suspects, and in some
cases knows, the document to be forged is a travesty of the system in
place."
The revelations are the latest to hit the Government's immigration
policy, plagued by accusations of a lack of 'joined-up' management.
Last week new Home Secretary John Reid dubbed the operation 'not fit
for purpose'.
Got a job? Have a number
Under Government rules, a National Insurance number cannot be denied to
anyone who has secured a job in the UK.
So for an illegal immigrant trying to give some legitimacy to their
status, this means the first step is gaining employment.
Firms are supposed to check a person's entitlement to work in the UK by
asking for a visa, passport or letter from the Home Office. Some simply
do not bother, while others are duped by fake documents.
Once a job is secured, the migrant asks for a letter to take to the
Jobcentre. Here, they must show both the letter and proof of their ID
to obtain an NI number.
The only check carried out by staff is that the person is who they say
- not whether they are legally in the UK. Once their identity is
established, the NI number is handed over, even if the documents used
to establish ID are forged or suspect.
An NI number is crucial in unlocking the door to thousands of pounds of
benefits, including jobseeker's allowance. Before a person can make any
claim for housing benefit, tax credits, jobseeker's allowance or any
other state handout, they must have a number to present to officials.
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Why are people complaining? Sure beats me.
Labour was always like this - great at handing out taxpayers' money to
any dead-beat with a tin cup. They were doing it in the 60's when I
bailed out and have just got better at it over the years.
Brits have a great facility for voting in really awful governments and
then complaining about them. This is the third time this shower have
been elected. If you want it to stop it's very simple - vote for
someone else!
- Barry Mckay, Ottawa, Canada
Us idiots that have paid into the system for years can expect about
£84 a week max when we retire in a few years time. I fortunately
haven't needed to take that much out of the Health Service, nor have my
kids. If I had saved my NI contributions myself in some high interest
account during my working life and not left it to the government to
take it away from my earnings at source, I would be rolling in money
now. Once the governments has the money, they by and large waste it.
- Liz, Bristol, UK