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Fraud and identity theft are serious problems threatening Universal Credit, Blighty's soon-to-be-launched web-based benefits system, ministers said yesterday.

Pensions Secretary Iain Duncan Smith and welfare reform minister Lord Freud were grilled by the Work and Pensions Select Committee over the new programme, designed to take over and merge separate public-funded payouts such as jobseeker's allowance and housing benefits.

Lord Freud admitted that he saw online security as a risk and worried about being able to prove people's identities online to stop benefit fraud.

"I’ll say what the challenges are, what we need to get right to get the security system working properly," said the great grandson of Sigmund Freud.

Former Tory leader Duncan Smith said that the government would also have to ensure that the new system was always online: "We must always be ready for the moment we need to pay people the money."

The ministers said the project, now in the final stages of development, was adopting security systems used by banks, and the team behind it was in talks with internet companies including Amazon for advice on how to keep availability high.

But they also said that programmers still hadn't tested the bridge that is supposed to link data from HMRC and the Department of Work and Pensions.

"We're testing that bridge, the mechanics of the bridge with dummy data, and we will be getting live feeds for our trial in April," Lord Freud said, adding that there was no need for a Plan B in case the bridge didn't work - because he has a "comfort level" about it sorting itself out.

Like most major reforms to government policy, the Universal Credit system is facing an all-round backlash: Treasury officials questioned whether it can stick to its implementation timetable, charities and interest groups claimed the system will leave Brits out of pocket, and Labour lambasted the project. ®

Internet Security Threat Report 2014

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