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Mrs. Theresa May (Maidenhead) (Con):
I am grateful to the Deputy Leader of the House for the helpful tone in which he is responding on this issue. Although I
never thought that I would stand here and say it, I think that we can learn something from the Scottish Parliament in relation to a petitions committee. However, there is a real difference between what the many thousands of people, who often sign petitions and who work hard to get signatures on petitions, feel will happen as a result of bringing their views to the House and to the Government, and the way in which those petitions are handled. We need to find a way in which people’s views are taken more seriously by the Government and the House when they have gone to all that effort.
On a technical point, may we please—I know that the Procedure Committee is looking into the petitions issue—find a way to accept petitions by e-mail? Many people find it so strange that they cannot e-mail signatures on petitions.
Nigel Griffiths: I agree with the right hon. Member and I thank her for her constructive support for the proposals.
House of Commons Commission
The hon. Member for North Devon, representing the House of Commons Commission was asked—
House of Commons Chamber
24. Mr. Graham Allen (Nottingham, North) (Lab): If the Commission will agree with the Royal Institute of British Architects the rules and prize for an architectural competition to redesign the House of Commons Chamber; and if he will make a statement. [76116]
Nick Harvey (North Devon) (LD): The Commission has no plans to sponsor such a competition.
Mr. Allen: Does the hon. Gentleman feel that there would be greater public interest in debates in the House, which are watched and listened to by very few people, were the debates more worth listening to— [ Interruption]. Does he feel that a wider group of members of the public, architecture students and architects’ practices could help us to build a Chamber that was more conducive to genuine debate —[Interruption]—as opposed to posturing and shouting from a sedentary position, as is being demonstrated at this very moment, thereby making my argument?
Nick Harvey: When the hon. Gentleman raised a similar point a while ago, I suggested that he should approach the Modernisation Committee if he wanted to test the degree of support that he had among his colleagues. I am not aware of his having done that. Alternatively, he might like to table an early-day motion to test support for any idea that he might wish to put forward.
Sir George Young (North-West Hampshire) (Con): Is the hon. Gentleman aware that public esteem for Members of Parliament might be further lowered were we to decide to spend scarce public resources redesigning a Chamber that works perfectly well?
Nick Harvey: As I said, the Commission has no plans to sponsor such a competition.
Points of Order
Bob Spink (Castle Point) (Con): On a point of order, Mr. Speaker. I seek your help. Castle Point has serious antisocial behaviour problems, and I have spent some of my time over the past few weekends persuading residents not to get together in vigilante groups in order to go out on to the street late at night to protect their community, as that would be dangerous and unhelpful to the police. Has the Home Secretary indicated that he will come to the House and explain his new policy of encouraging residents to take control of their streets late at night, which seems dangerous?
Mr. Speaker: The hon. Gentleman can put both written and oral questions to the Home Secretary.
Mr. Graham Stuart (Beverley and Holderness) (Con): On a point of order, Mr. Speaker. As the stoutest defender of Back-Bench rights and of new Members such as me, will you give me some guidance? I wrote to the Minister for Housing and Planning at the then Office of the Deputy Prime Minister on 24 January seeking a meeting to discuss planning conditions in relation to residential homes for troubled young people. When I did not receive a response, I followed up with another letter on 25 April. I phoned her office on 19 May and was told that my letter had gone from official to official and that no one had dealt with it, but that a reply would be sent within the next couple of days. Nothing further came, so my office called again on 31 May and we were told that investigations would be made and that we would be telephoned back shortly. Will you give guidance on this lamentable situation?
Mr. Speaker: If the hon. Gentleman sends me the details of the question, my officers will investigate the matter.
Mr. David Winnick (Walsall, North) (Lab): On a point of order, Mr. Speaker. The Foreign Secretary has rightly condemned the massacre of a Palestinian family that left only a seven-year-old girl as a survivor. The Foreign Secretary’s condemnation is welcome, and I have always condemned suicide bombings. Is there any way in which you could use your influence, Mr. Speaker, so that an oral statement can be made in the Chamber before Foreign Office questions? There is very great concern over what occurred.
Mr. Speaker: The hon. Gentleman is well aware of the procedures of the House. If he feels that there should be an oral statement, he can apply for an urgent question. I give no guarantee as to whether that urgent question will be granted.
Orders of the Day
Fraud Bill [Lords]
[Relevant document: the Fourteenth Report from the Joint Committee on Human Rights, Session 2005-06, Legislative Scrutiny: Sixth Progress Report, HC 955.]
Order for Second Reading read.
3.34 pm
The Solicitor-General (Mr. Mike O'Brien): I beg to move, That the Bill be now read a Second time.
The Bill will reform the criminal law on fraud and dishonestly obtaining services. It applies to England and Wales and to Northern Ireland; Scotland has different provisions.
We know that fraud has a massive impact on the United Kingdom economy. It is difficult to give precise figures, because fraud is by nature secretive, but in 2000 National Economic Research Associates estimated that it cost the UK economy £14 billion. In 2004, Norwich Union suggested that the cost had risen to more than £16 billion. Despite the public perception that most fraud is a victimless crime, the reality is that it hits most of us. We all pay higher prices for security systems, banking services, credit and goods, and of course we also pay higher premiums for insurance. If the Norwich Union estimate is right, fraud is costing each household more than £650 a year.
Tackling fraud and the provisions of the Bill are therefore important to everyone. The Government’s strategy for tackling fraud has three aims. The first is to get the law right, and is the reason for the Bill. The second is to improve the investigation of fraud by the police and other agencies. The third is to ensure that the courts deal expeditiously and effectively with fraudsters. The investigation of fraud is being considered by the fraud review that the Attorney-General is currently leading, and which is expected to report soon. I shall return to that later. We have also agreed to deal with the issue of trials, particularly the contentious question of non-jury trials, in another Bill.
This Bill was the subject of a great deal of discussion in another place. By the end there was broad all-party support for most of its provisions, although I am sure that Opposition Members will want to test the detail in Committee.
Strange as it may seem, no general offence of fraud exists today. When lawyers talk of fraud, we refer collectively to a wide and complex array of deception and theft offences. The Theft Acts and the common law, compiled somewhat haphazardly, have the task of encompassing the wide range of fraudulent conduct.
In 1998, the Government asked the Law Commission to review this area of law. The commission conducted a lengthy and painstaking review, for which we thank it, producing a report in July 2002. Unsurprisingly, it concluded that the existing law on fraud was deficient and proposed changes, most of which found their way into the Bill. It identified certain key problems. First, the deception offences in the Theft Acts tend to be specific and narrow, which makes them vulnerable to technical assaults. Defence lawyers are often able to argue that a particular
behaviour fell just outside the definition of the offence with which the defendant was charged, or that the defendant was charged with the wrong kind of deception and so ought to be acquitted. Defendants may indeed face the wrong charge or too many charges, and indictments may be excessively complex because of charges relating to various alternative counts.
Secondly, deception is an essential ingredient of the offence. That requires a victim to be deceived. However, a shop assistant who accepts a card for payment may be indifferent about whether the cardholder has authority to use the card as long as the payment goes through. Machines and computers have generated new problems. For example, a ticket machine has no mind of its own: can it be deceived? What of problems such as internet phishing? The more we use machines to obtain goods and services, the greater such problems are likely to become. So far the old laws are coping with those developments, but the signs of stress are beginning to show.
The Law Commission rightly took the view that it was unrealistic merely to plug the loopholes in the deception laws, or to try to create a new collection of specific new deception offences, as such piecemeal reform would produce even more complexity. Instead, the commission recommended a new general offence of fraud that would make the law more comprehensible to juries, would be fairer to defendants by making the law more straightforward, and would encompass fraud in its many unpredictable forms. In proposing that change, the Law Commission made two specific recommendations in relation to the law. First, the focus should be on dishonesty rather than on deception. Secondly, proof of gain should no longer be essential to proving the crime: it should be enough that the offender intends to make a gain for himself, to cause a loss to another, or to expose another to a risk of loss.
The Bill creates the general offence of fraud in clause 1. It will replace provisions in our law that are in daily use in the courts. It is important that we get those changes right. That is why, in 2004, after the Law Commission's report, the Government decided to carry out a further consultation on the proposals. The consultations showed wide support for the proposal for a new general offence. Most stakeholders agreed that it would be right to focus the crime on the dishonest behaviour of the defendant, rather than the deception of the victim. Most also agreed that the Law Commission was right to reject the idea of a very broad offence of dishonesty, which risked being too uncertain.
The general offence in clause 1 requires not only dishonesty and the intention of making a gain or causing a loss, but one of three other elements, which must be met before the crime can be charged. The three elements are: fraud by false representation, fraud by failure to disclose information, or fraud by abuse of position. Let me briefly describe each of them.
Fraud by false representation is set out in clause 2. The extra element is that the offender makes a false representation knowing that it is, or might be, false or misleading. The types of representation covered may be of fact or law, including making a representation as to a person's state of mind. There is no restriction on whether it is written, spoken or in non-verbal communication. The representations can be implied or
expressed in any form. For example, it can be done by entering a stolen chip or PIN into a machine or by internet phishing, where someone puts a letterhead on an email suggesting it has come from a bank in order to elicit a victim’s financial details.
Under the second limb of the offence, fraud by failing to disclose information, the extra element is that the offender fails to disclose information that he has a legal duty to disclose. There were some differences of view on that proposal between the Law Commission and others. The commission’s report proposed covering circumstances where there was no legal duty to disclose but where one person trusted the other to disclose—where there was some kind of moral responsibility, for want of a better phrase—but in the Government's consultation, although there was widespread welcome for that limb of the general offence, the issue of going beyond a legal duty was questioned.
Some—for example, the Association of Chief Police Officers fraud working group—said that it would create uncertainty in the law. I can see their point. For example, how many of the minor defects of a second-hand car would a seller be trusted to disclose? The Government listened with care to those concerns and responded by restricting the offence to legal duties only—a position supported by the Rose committee, comprising members of the senior judiciary set up to ensure that legislative proposals are as well formulated as possible and can work in practice.
John Bercow (Buckingham) (Con): The incidence of credit card fraud, not merely by customers against retailers but often the other way around, is a significant problem, of which I confess I was briefly the victim in South Africa last year. Will the hon. and learned Gentleman tell the House something about the penalties proposed in the clauses and specifically how they compare with existing penalties? Is he prepared, alongside custodial sentences, to consider stiff community penalties and possibly the use of restorative justice?
The Solicitor-General: We certainly need to look at the full range of penalties. Crime involving fraud, particularly cheque card fraud and other credit card fraud, varies in terms of extent. It can be a massive fraud that merits a high penalty. Indeed, the maximum penalty under the Bill is 10 years’ imprisonment. A community penalty and restorative justice may be appropriate if the amount involved were limited, the defendant had a limited record, or none at all. In those circumstances, we could look at various forms of restorative justice, particularly if the defendant were younger. I think that it is about achieving proportionality and ensuring that the appropriate sentence is delivered for the offence that was committed.
The third limb of the offence—fraud by abuse of position—is set out in clause 4. Here, the additional element is abusing a position of responsibility to commit a fraud. It applies in situations where the defendant has been put in a privileged position and by virtue of that position is expected to safeguard another's financial interests, or at least not to act against those interests.
Mr. Dominic Grieve (Beaconsfield) (Con): I understand the thrust of the clause, to which we will obviously have to return in Committee, but is there not a possible problem with the lack of definition involved in a person’s occupying a position in which he is “expected to safeguard” somebody else’s interests? That is a much wider term than “a duty to safeguard” such interests.
The Solicitor-General: We need to ensure that we have a view about how a relationship is created. It can be created in various ways, such as by contract, through various relationships or by a legal obligation. It is clear that, as long as there is a basis for ensuring that a person has a fiduciary duty to another person, there is the potential for such a charge to be made. But in prosecuting any such case, it will of course be necessary for the prosecutor to ensure that he identifies the way in which the circumstances had developed, and whether a fiduciary duty had indeed existed. It will then be up to him to show that that is what happened.
Mr. Grieve: The Solicitor-General has used the precise expression “a fiduciary duty”, which would already provide a definition that appears currently to be absent from clause 4. In saying that, I emphasise that he might be able to persuade me during our proceedings that the current wording is better; I simply wish to register that this issue causes me some concern.
The Solicitor-General: Of course, the duty may well go beyond a mere fiduciary one; other duties could be encompassed. We can deal with such detail in Committee.
Mr. David Heath (Somerton and Frome) (LD): I wish to make exactly the same point. I am unclear as to why the expression
“he is expected to safeguard”
should replace a clear reference to a fiduciary duty. The question that all Members wish to ask is: who is the “he” who is expected to provide the safeguard? Is it the man on the Clapham omnibus, or the judge; or will the terms of contract provide the safeguard? What does the expression “expected to safeguard” mean? We will clearly need to explore that issue in Committee, but if the Solicitor-General can help us to understand it now, that would be to the advantage of us all.
The Solicitor-General: The Law Commission cogently set out its views on how this relationship should be formed. In each prosecution, it will be necessary to assess the particular circumstances and whether there is a duty, in that a person is expected to safeguard, or not to act against, the financial interests of another. It will be for the prosecutor to show that that relationship existed, and, in due course, for the court and the jury—if it is a jury trial—to determine whether such a relationship existed.
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