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The Theft Act 1968 was relatively good. In 1968 it was regarded as innovative—in plain words we would be able to encompass all the circumstances of theft. In
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practice, it has had to be amended on at least two occasions, and has been the cause of much stress, as the world has changed. We will review the operation of the Bill and see whether a repeal is possible.

Emily Thornberry (Islington, South and Finsbury) (Lab): Does my hon. and learned Friend agree that when people are charged with criminal offences, it is important to make it as clear as possible in the charge what the offence is? One of the difficulties with the common law offence of conspiracy to defraud is that it is too general a provision. We should always try to ensure that offences are as particularised as possible. That is why the common law offence ought to be repealed as soon as possible.

The Solicitor-General: If we can repeal the offence, our preference would be to do so, but we want to ensure that we deal with the issues of fraud, so that is not appropriate at present. The prosecuting authorities and the judges took the view that we need to approach the matter with caution. The Rose committee, whose opinion is highly valued, did not consider it appropriate to repeal the offence at this stage. In principle, though, I have sympathy with the point raised by my hon. Friend.

The Bill will not be a panacea for preventing fraud. We should not overrate the capacity of the criminal law alone to solve this or any other problem. The Bill is only one of a number of measures in hand to combat fraud. Among those measures, we have provided considerable resources for the Serious Fraud Office and the City of London police to tackle fraud, including £1.08 million this year, which has been matched by the City of London. That has gone to the City of London police. We have also set up the Serious Organised Crime Agency, which is a new force in tackling and defeating serious organised crime.

The Government plan to introduce a stand-alone Bill to address the issue of non-jury trials. We have also set up a wide-ranging review of fraud to examine the UK’s long-term response to fraud. The fraud review should report shortly, and we expect it to recommend a coherent strategy for preventing, detecting and penalising fraud, and to suggest ways to improve upon the use of the various tools and techniques at our disposal to reduce the incidence of fraud and the harm to which it can lead.

This Bill is largely based on the Law Commission’s original proposals, and it is only part of the Government’s strategy for combating fraud, but it is a measure that has been eagerly awaited by many of the agencies that prosecute, and by the police. It should improve the prosecution process by reducing the chance of offences being wrongly charged, and provide greater flexibility to keep pace with the increasing use of technology in crimes of fraud.

When hon. Members consider the Bill in Committee and on Report, I hope that they give it a fair wind, so that it can proceed into law and be enforced, which will reduce some of the fraud that is all too often committed against families in this country.


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4.20 pm

Mr. Dominic Grieve (Beaconsfield) (Con): I congratulate the Solicitor-General on having secured that rarest of things for a Law Officer—an outing at the Dispatch Box on Second Reading. I note that the interest of the House has not been wholly seized by this matter, but the Bill is extremely important and I am grateful for the manner in which he introduced it. Furthermore, it is clear that the Bill was well thought through before its initial presentation and I make my remarks against that background.

The Bill is an opportunity to simplify and strengthen the law in an important area. If we get it right, we will undoubtedly improve our ability to fight fraud in all its forms, and we wholly support the principle behind what the Government are trying to achieve. As with all technical Bills, this Bill has quite a long history. There is no doubt that the Law Commission’s 2002 report was a document of great value. I would not want Second Reading to pass without expressing the Opposition’s gratitude for the Law Commission’s work, because the report was a model of its kind. I note that the Serious Fraud Office was extremely positive about the commission’s proposals, stating that the suggested improvements would not only clarify offences of fraud, but simplify the law to allow more effective prosecutions, and I am sure that all hon. Members want to see exactly that.

I agree with the Solicitor-General that, although fraud sometimes sounds like an esoteric issue that affects others, that is not the case. The scale of the problem is considerable—his estimate of £14 billion appears well researched—and everyone pays for it through extra credit card payments, if nothing else, so the burden falls upon the law-abiding, who provide the fruit of such dishonest activities.

Fraud is extensively used to fuel wider criminal activity. The evidence from the National Criminal Intelligence Service shows that, unless we succeed in tackling fraud properly, there will be knock-on consequences in terms of wider criminality and, indeed, terrorism. In my career as a barrister, one fraud case that I did involved allegations of widespread benefit fraud that was being used to fuel the activities of the IRA. The fraud was taking place on a massive scale in south-east London with stolen benefit books and the case brought home to me how the eventual destination of such funds can be inimical to the public good.

There are clearly problems with the current law, which originates from a variety of sources, and I accept the Solicitor-General’s comments on that matter. The Theft Act 1968 attempted to simplify matters on obtaining property by deception, but the patchwork of law is unsatisfactory and the multitude of overlapping but distinct statutory offences does not make it easy for the prosecutor to decide the counts on which to draft an indictment, whether there should be alternative counts and how best to present a case to a jury.

In my experience of being involved in fraud trials, an astonishing number have come unstuck in one form or another, long before they could be presented to a jury, simply because the prosecutor—I hasten to add that I was defending in these particular cases—had failed to understand the true nature of the fraud or, indeed, who the ultimate victims were. Although the evidence of
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dishonesty was manifest, it was impossible to show that the people who were alleged to have been deceived had been deceived. In some cases, the wrong target altogether had been selected. In a case where it looked as though a building society had been the true victim, it became clear as the case proceeded that the true victim was almost certainly the taxman. Those examples classically illustrate some of the problems that arise.

In those circumstances, there is a powerful argument for reform. The Bill sets out to achieve that in a form that seems to have considerable internal logic and coherence. The creation of a new single offence of fraud that can be committed in three ways appears to be eminently sensible. We will judge it and scrutinise it in Committee on the basis that it fulfils three requirements. First, it must overcome the complexity of the current law and make it more comprehensible to juries. One way of achieving that would be to make fraud indictments simpler and more self-explanatory. At first glance, the Bill seems to go a long way towards achieving that goal.

Secondly, the new offence must provide a genuinely useful tool for prosecutors. My Front-Bench colleagues in the other place have said that the current range of specific offences can lead to complicated decisions, so we will need assurances as the Bill goes through that a single offence will really help to focus investigations at an early stage and help prosecutors to get the charge right.

Thirdly, we will need to be satisfied—we believe at first sight that we shall be—that the new offence will be adaptable to the changing face of criminality in the 21st century. The Solicitor-General pointed out areas where new offences have been created to deal with new technology. We entirely welcome that. We will seek in Committee to ensure that it delivers what he believes that it will.

Let me, at the risk of repetition, raise one or two slight areas of concern. The Solicitor-General mentioned the continuation of the common law offence of conspiracy to defraud. He provided some reassurance in the form of a promise that the Government will not just let that issue drift off into sleep. I would be happier if we had greater reassurance, perhaps by means of a sunset clause to ensure that, unless the Government revisited the matter within three or five years, the power to bring a prosecution under common law for conspiracy to defraud would lapse. The arguments against keeping the common law offence of conspiracy to defraud are enormous. Throughout my career at the Bar, there have been numerous occasions on which that offence has come into disrepute when used. It is possible for a person to be convicted of such an offence if he conspired with another person, yet if he carried out the act on his own, it would not amount to an offence. That immediately introduces an element of concern for anybody who believes in civil liberties. Although I am mindful of the Solicitor-General’s comments on the subject and appreciate that Governments have a tendency to caution, I am sorry that they have not been bolder, especially since the Law Commission stated emphatically that it perceived no good ground for the continuation of the common law offence of conspiracy to defraud. Indeed, the Government’s report of November 2004 acknowledged that when it stated:


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It is strange that the Government have clung so obstinately to not doing that.

I am mindful of the Solicitor-General’s comments on the views of Lord Justice Rose and his Committee, but against that, the hon. and learned Gentleman need only read the speeches of Lord Lloyd and Lord Ackner—his contributions on many aspects of the law and, indeed, to legislating in Parliament, will be sadly missed—who argue that there is no good ground for retaining the common law offence. I hope that the Government will listen during our proceedings on the Bill. I shall not press the Solicitor-General to get rid of the offence immediately, but we need cast-iron reassurances that, unless the Government can make a good case for retaining it, we can have a finite date by which it will go.

The Solicitor-General: The hon. Gentleman referred to the Rose Committee. Let me refer him to the letter from Sir Christopher Rose, representing the views of senior judges. It stated:

That is not an example of the Government deciding not to do something but of the Government listening. We have listened to the consultation.

Mr. Grieve: I, too, have listened to the consultation. If I had not been listening, I—and, I daresay, my noble Friends—would be pressing for the removal of the common law power. I want to make it clear that I do not seek to do that because I have read what has been said. Distinguished as the group may be that has called for the retention of the powers, I remain mildly unconvinced.

I hope that the Bill is sufficiently effective that it becomes crystal clear in two to three years that the common law offence of conspiracy to defraud is no longer necessary. The other option that one might consider if the offence remains necessary is whether that hole could be filled by something else, which does not have some of the problems that are associated with common law conspiracy to defraud that the Solicitor-General heard me discussing. He would, I am sure, be the first to acknowledge them. There may be a halfway house that we need to consider and that we have not yet explored.

Conservative Members will not try to amend the Bill to get rid of common law conspiracy to defraud. However, knowing as we do the constraints on Government of timetabling and so on, we do not want the opportunity to slip through our fingers so that we end up with the offence in 10, 15 or 20 years. I believe that there might be some way of at least ensuring that the matter is properly revisited so that either the offence’s retention is justified or it disappears.

Mr. Heath: It concerns me that arguments for the retention of the common law offence in prosecuting
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multiple offences are affected by the fact that provisions in the Domestic Violence, Crime and Victims Act 2004, which the hon. Gentleman and I spent time debating, have not been implemented two years on. That might have coloured the judicial voices in favour of retention in a way that would have been unjustified had implementation occurred.

Mr. Grieve: The hon. Gentleman makes a good point. Indeed, one problem, given the plethora of legislation that the Government introduce, is the astonishing length of time that it takes to bring into operation much of the legislation that we pass. I do not wish to get diverted down a side road, but I would say to the Solicitor-General that we will try at least to probe the Government in Committee as to how we might best proceed in this regard. I would feel uncomfortable if we were really saying that it was inevitable that such a blunt instrument as common law conspiracy to defraud should continue to be an offence for the foreseeable future. If that turned out to be necessary, we would have failed to legislate properly here. Minds need to be concentrated on that issue.

I would like to express my gratitude to the Government, because I had feared that there might be a major difference between us over the role of juries in fraud trials, but that issue has been parked to await other legislation. May I say to the Solicitor-General that the sensible thing to do would be to wait and see how well this legislation works? If it turns out greatly to have simplified the law on fraud, no more powerful an argument could be devised for persuading the Government to drop their idea of getting rid of juries in certain fraud trials in its entirety.

I have always taken the view that juries are perfectly capable of understanding fraud trials. Indeed, as I have pointed out to the Solicitor-General, in my experience, the cases that collapsed did so long before the jury had the opportunity to consider the issues. I remain concerned about the proposals on juries in fraud trials that the Government had floated, and that will doubtless be a subject for debate at another time. The Government appear to wish to move speedily towards implementing their proposals to restrict the use of juries in certain fraud trials, but it would be odd if they did so immediately after implementing new legislation that could go far towards reassuring them that fraud trials can be considerably simplified.

In interventions on the Solicitor-General, I raised some matters of detail that gave rise for concern. We shall doubtless return to them in Committee, but I want to put them on the record today. Fraud by abuse of position is a concept that most right-thinking people have no difficulty in considering improper. However, the definition in the Bill of the position in which such fraud is committed is woolly. I am worried that we have developed a consistent pattern in recent years of passing legislation whose scope is uncertain in criminal justice terms. People behave reprehensibly at times in ways that other people would consider to be of poor moral standing. The hon. Member for Rhondda (Chris Bryant) gave the good example of a friend not revealing to another the true worth of some chattel that he was selling off to a third party—or to the friend
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himself—when he knew that it was in fact very valuable. However, we should be careful about moving from a position of deeming such activity morally reprehensible to saying that it is in breach of the criminal law.

Clause 4 deals with fraud by abuse of position. However, unless we define exactly who is intended to be caught by the provision, quite a wide range of people—including relatives, for example—could fall into that category. I want effective legislation on the statute book and I believe that it is possible to sharpen this measure to make it clear who is intended to be caught by it. If we do not improve clause 4, the danger is that we will end up bringing prosecutions in circumstances in which people are surprised to learn that some special duty lies on them to protect another person from making a loss.

I also highlighted the issues surrounding the making or supplying of articles for use in frauds and was delighted to hear the Solicitor-General comment that the provisions were not intended to catch conjurors or members of the magic circle, but I have to say that, looking at the plain text of the statute, such people might well be caught. The use of gadgetry that can potentially be used to defraud in order to entertain is a well-established practice, so I wonder what other safeguards could be provided to ensure sufficient mens rea in clauses 6 and 7 to avoid idiotic prosecutions of individuals who never had any intention of defrauding anyone. We shall look further into the detail of those clauses in Committee, as we will examine further the general issue in clause 2 of what constitutes gain or loss.

I do not want to take up more of the House’s time on Second Reading. As I have already told the Solicitor-General, we welcome the Bill.

Mr. Hurd: Before my hon. Friend finishes, what comfort did he take from the Solicitor-General’s assurances about the police resources available to screen and investigate these offences in the first place?

Mr. Grieve: I took little comfort from the Solicitor-General’s words on that subject.

The Solicitor-General: Are you going to spend more money?

Mr. Grieve: The Solicitor-General makes a perfectly reasonable point that it all comes down to money and there is no doubt that resources for the investigation of fraud are limited. My hon. Friend may have seen the Norwich Union briefing, which showed that it uncovers thousands of fraud cases in any 12-month period, but that only a very small percentage of the total are even passed on to the police because of the company’s awareness of the lack of police resources.


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