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Fraud Cases
28. Dr. Brian Iddon (Bolton, South-East): When he last met the Director of the Serious Fraud Office to discuss the failure rate of prosecutions in fraud cases. [87907]
The Solicitor-General (Mr. Ross Cranston): The Attorney-General and I meet the Director of the Serious Fraud Office on a regular basis to discuss the operational work of the office, and on an ad hoc basis as issues require. In the past 12 months, the Serious Fraud Office has brought 19 cases against 39 defendants, of whom 32 were convicted. The overall conviction rate in each year since 1996-97 has been in excess of 80 per cent.
Dr. Iddon: Has my hon. and learned Friend expressed to his colleagues the dissatisfaction of the general public at the fact that millions of pounds have gone down the drain as a result of the failure of several high profile serious fraud cases? Does he believe that people should benefit from serious fraud? I am minded to ask that question because of the case of Nick Leeson, who collapsed a bank, spent only six years in jail, and will apparently benefit to the tune of at least £100,000. Will my hon. and learned Friend condemn the media, as in assisting him to do that they are encouraging people to commit serious fraud?
The Solicitor-General: As I said, the Serious Fraud Office has a very good record. It was not involved in the case of Nick Leeson because he was prosecuted in Singapore. If my hon. Friend is asking me whether people should profit from doing wrong, my reply is that as a general principle they should not. My hon. Friend may know that my right hon. and learned Friend the Attorney-General has taken proceedings against George Blake, who profited from writing his memoirs about spying against the country. I understand that the Press Complaints Commission can take up the matter; that may be appropriate.
Mr. Andrew Stunell (Hazel Grove): The Minister may be aware that an all-party group of right hon. and hon. Members was invited to visit the stock exchange yesterday and heard a detailed explanation of the regulatory regime, particularly in respect of insider trading and other offences that may come to light there. We were told that in the past two years 70 such offences, or suspected offences, had been referred to the Crown Prosecution Service and to the fraud squad, but that no
successful prosecutions had followed. Is that considered an acceptable outcome, when white collar fraud clearly has the capacity to produce great dividends for those who practise it and is often seen as being victimless?
The Solicitor-General: I am not aware of the particular statistics to which the hon. Gentleman refers, but I shall certainly look into the problem. Insider dealing is a difficult offence to prosecute as it is particularly difficult to obtain evidence. Under the new regime in the Financial Services and Markets Bill, the regulatory authorities will be able to take disciplinary action, but at the end of the day serious cases have to be pursued. I shall certainly look at the matter raised by the hon. Gentleman.
Mr. David Kidney (Stafford): When the Financial Services Authority is given the power under the Financial Services and Markets Bill to prosecute fraud cases alongside the Serious Fraud Office and the Crown Prosecution Service, how will that affect the responsibilities of the Law Officers in this place?
The Solicitor-General: The Serious Fraud Office will continue to prosecute the most serious fraud and cases will be referred to it by the regulatory authorities. Of course, under the new regime more cases should be pursued as a result of the activities of the Financial Services Authority. So as a result of the Bill, a more efficient regime will be in place.
Lenient Sentences (Appeals)
29. Mr. John Bercow (Buckingham): If he will make a statement on the number of appeals against lenient sentences in the latest year for which figures are available. [87908]
The Solicitor-General: In 1998 in England and Wales, 94 individual references were made to the Court of Appeal and 88.1 per cent. of the references heard resulted in an increased sentence. Eleven cases have yet to be heard. This year, as of the end of June, 54 cases have been referred to the Court of Appeal. Of the 12 cases that have been heard, the sentence was increased in 10 cases.
Mr. Bercow: I am grateful to the hon. and learned Gentleman for that informative reply. Does he have any plans to extend the number of offences in respect of which lenient sentences can be referred to the Court of Appeal--and if not, why not?
The Solicitor-General: In our manifesto, we undertook to look into that matter, and we have done a great deal of preliminary work. I hope that an announcement will be made in the fairly near future. The previous Government made two minor extensions to the Criminal Justice Act 1988, but experience has shown that not many references have been made. Most of those that arise are for truly serious offences, but statistics demonstrate that more references are being made now than in the past. We take the matter seriously.
Child Support Reform
12.30 pm
The Secretary of State for Social Security (Mr. Alistair Darling): With permission, Mr. Deputy Speaker, I should like to make a statement on our reforms of the Child Support Agency--a key part of our strategy for supporting families and children.
Last year, we published a Green Paper setting out our proposals, and there was overwhelming support for change. I am placing in the Library a summary of 1,500 responses to the Green Paper, along with a list of those who contributed. I am also publishing our White Paper on child support, setting out reforms that will get money to 1 million children who currently miss out. I have written to all hon. Members enclosing a summary of the White Paper, and I have placed copies in the Vote Office.
The reforms that I will set out today are driven by principle. We are putting children first, and we are making sure that the new system is fair on fathers who want to support their children, and tough on those who will not. Our reforms mark a new contract for child support, based on the right of a child to the care and support of its parents, and on the responsibility of parents to provide it.
The responsibility for bringing up children lies squarely with both parents, and that responsibility endures whether they live together or apart. All children have the right to a decent start in life. The Government are already doing a great deal to help. We are increasing child benefit by a record amount and providing more help for low-paid families through the new working families tax credit, tax changes and the national minimum wage. Taken together all that means that a family on £13,000 a year will be better off by up to £2,500 a year.
We are investing £540 million in the sure start programme for very young, disadvantaged children. We are committed to ending the scandal of child poverty in a generation. We are determined to make sure that children receive all the help that they need, which is why we are introducing a new system of child support that is simple, effective and fair.
Today, many children miss out on the support that they should receive from both parents. Under the present system, only 250,000 children receive maintenance, and only 100,000 children get all that they should. Some 30 per cent. of parents using the CSA pay nothing towards the care of their children. That cannot be right. The child support system should help parents to meet their responsibilities, and, where necessary, it should take action when parents will not do so.
The system that we inherited has failed. It does not help parents who want to pay, and it is not tough enough on those who will not pay. The previous Government set up the Child Support Agency in 1993 to replace a court system that could not cope. Going back to the courts is not the answer. In 1979, 52 per cent. of lone parents on income support received maintenance, but by 1990, the courts were getting money to only 20 per cent. On top of that, decisions were often unpredictable, unreliable and unfair. The CSA was meant to sort that situation out, but it did not. The percentage of lone parents on income support getting child maintenance is the same today as it was when the agency was set up.
The CSA became a bureaucratic nightmare for parents and staff alike. The reason for that is clear. Underthe current system the CSA can require more than
100 different pieces of information to make a single decision, meaning that a third of all child support cases wait at least six months for a decision. The CSA spends 90 per cent. of its time chasing information, and only 10 per cent. chasing parents who will not pay. The result is that many responsible parents who genuinely want to support their children often find themselves facing a mountain of debt through no fault of their own, while irresponsible parents can play the system to their advantage and end up paying nothing for their children. We must always remember that it is children who lose out.
These failures have their roots in the complexity of the current system, and the result is an administration so burdened that only root-and-branch reform will turn things round. We are tackling that inheritance by introducing a simple, new and effective system of child support to deliver for children by reforming the policy and rebuilding the agency.
We will put the confidence back into child support by introducing radical reforms in four key areas. First, we are abolishing the current system for calculating child support, replacing unworkable policy with a workable new system that is based on a simple way of deciding how much parents should pay. Secondly, we are turning the agency round so that it provides a decent and effective service to all parents to make sure that children actually get the money from their parents, and quickly.
Thirdly, we are introducing tough new measures todeal with parents who try to run away from their responsibilities. Fourthly, we are helping the fight against child poverty by introducing new help for children in the poorest families.
I now wish to refer to the detail of our proposals. I want to set out our plans to reform the formula that is currently used to calculate how much parents pay towards the care of their children. That is the fundamental flaw at the heart of the system. It was designed to take account of any--in fact every--detail that might affect how much a father could pay. The result is a calculation so complex, it is barely workable; so complex, it is often difficult for parents to know whether a decision is right or not; so complex, it takes months to get a decision.
Today, I can announce that we are abolishing the complex formula and replacing it with a system of simple rates that is so easy to understand that parents can work out for themselves how much they should pay. We will publish these rates--indeed, they are in the White Paper--by putting leaflets in post offices, libraries and elsewhere.
The new rates are reasonable because they reflect the amount a parent would pay if he were still living with his children. Under the new system, a father will pay a flat-rate percentage of his take-home pay. The amount will be 15 per cent. if he has one child to support., 20 per cent. if he has two and a maximum of 25 per cent. where he has three or more children. For fathers on less than £100 a week, there will be a flat-rate payment of £5 a week.
Every parent knows that one cannot calculate the cost of bringing up a child down to the last penny. However, our proposals are fair and reasonable. The changes are fairer to fathers, because they are more reasonable and realistic. They are fairer to mothers, who will get money much more quickly. They are fairer to children, who will actually get the money they need. As the system is so
simple, it will take the agency only a few days to confirm what should be paid, rather than the six months it takes now. It is fast and simple for parents and fast and simple for the agency--but, above all, it is right for children.
To do this, we need also to reform the way in which the CSA operates and to improve significantly the service that it provides. This is not going to be easy. The CSA will never be popular--it will always be doing a difficult job at a difficult and emotional time. However, by replacing the complex formula with new, simple rates, we are laying the foundations for a far better service than would ever be possible under the current system.
These reforms mark a new contract for the CSA, too--a new system in return for a radical change in culture, service and approach. The shake-up has already started. We are strengthening the agency's management and we are importing private sector know-how to work together with public sector experience to sort things out.
From next week, we are bringing in the private sector to help the agency to collect more money from more parents and get it to children. I can announce today that we will invest an extra £28 million over the next three years, but, in return, the CSA must deliver clear and tangible improvements--a better service, quicker decisions and more money getting to children than ever before.
The CSA will get new information technology, and will make more use of the phone to sort out queries quickly. It will be there at times that suit parents, so that they can call in the evenings or at weekends from the privacy of their own homes, and not in the daytime while they are at work.
The CSA will introduce also a more effective complaints system to ensure swift and effective action if things go wrong. Parents will get a clear statement setting out what they have paid and what is due. They will receive a clear picture of where they stand, just as one would get from a bank statement. In short, the CSA will move from an organisation that is bogged down in paper to an organisation that will focus on the needs of parents, and, above all, on the need to get money to children, fast. Our new contract for child support is good news for responsible parents, who will get a better service that helps them to do what they want to do. However, it is bad news for the minority--the hard core who persistently let their children down. We will make sure they are brought to book.
I can announce that, for the first time ever, we are making it a criminal offence to fail to provide, or to misrepresent, information to the agency. If parents lie to the agency, if they try to dodge their duty or persistently pay late, they will face a fine or even time in jail. Although most self-employed parents are highly responsible, there are some who are not, so we are introducing new measures allowing us to access tax records to get a true picture of their income. That will ensure that fathers who run around in the company Porsche, but plead poverty to their children, cannot get away with it.
We are also closing a loophole that allows fathers to string out a decision by denying that they are the father of their child. In future, if a child was born while the father was married to the mother, the burden will be on him to prove that he is not the father. We shall also make sure that teenage boys who become fathers face their
responsibilities. They must realise that bringing a child into the world is a lifelong responsibility; it is not something that they can ever walk away from. We shall make sure that once they can pay towards the care of their child, they do pay.
Furthermore, because we are determined to make sure that all parents meet their responsibilities, we are looking at further measures to achieve that--including taking away driving licences from fathers who persistently shirk their responsibilities. The message is simple: there is no hiding place, no excuse and no easy way out. They must realise that their child is their responsibility. Every parent has to face up to that; they owe it to their children to do so. This is our new contract for child support. We will deliver a new, fair and simple system that will help responsible parents to support their children, but, in turn, we will take tough action to ensure that the rest deliver for their children.
We are also reforming the system to make sure that it does more for children in the poorest families. Under the current system, mothers lose their income support, pound for pound, whenever any maintenance is paid; because mothers lose out, their children lose out too. So, today, I can announce significant new help for children in the poorest families, worth up to £10 a week. More than 250,000 children will gain from that change alone. That is real help from the Government for children in the poorest families. For the first time ever, we are making sure that money goes to the poorest children, not to the Treasury.
I can announce today that, to make work pay, from October, low-paid families in work and receiving the working families tax credit will keep every pound and every penny of child maintenance paid. All those measures are delivering on our commitment to do more for those who need it most, to end child poverty and to make sure that the Government, parents and the Child Support Agency together deliver for children.
Of course, we need to make sure that those changes are introduced smoothly and successfully. We want to introduce the new scheme as soon as possible, but it is vital to get it right. The present system collapsed under its own weight because the previous Government tried to introduce reforms too quickly, and with too little thought. It is a massive task. Within a year of the millennium, the Child Support Agency will be dealing with more than 1 million cases--that is more than 2 million parents. Radical change on that scale will take time. The new system needs legislation and new computer systems, as well as a radical change of culture and working practices in the CSA itself.
We plan to introduce the new system for new cases towards the end of 2001, with existing cases coming on to the new system later, once it is up and running. However, we want to introduce some measures earlier, such as making it a criminal offence to lie to the agency, closing the loophole that allows fathers falsely to deny their paternity, and improving the administration of the CSA itself.
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