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I urge the Government to examine the systems for which they have responsibility and ensure that they are as simple as they can be. We have seen recently that in the tax credit system, the internet portal has become subject to precisely the type of fraud that the Bill is designed to address. The Government need to review not only the criminal law but the systems in place in the benefits system and the tax credits system, and ensure that where simplicity is possible, it is introduced, so as to play its part in defeating the potential fraudster.
Thirdly, I return to my earlier intervention and press the point about the maximum sentence in clause 11. The clause deals with obtaining services dishonestly. I welcome the fact that it redrafts the law so that dishonesty, rather than the deception of an individual, is the key question, but it is a restatement of the law with regard to maximum sentences. The Bill offers an opportunity, which is well taken by the Government, to simplify the whole area and make it straightforward, consistent and easy for the general public to understand so that everyone knows what they are obliged to do and what they are not permitted to do, but there is a potential anomaly in the law as it stands with regard to maximum sentences.
Under the Bill, if someone were to perpetrate a dishonest act by representation or by omission or in other ways, leading to a gain or loss of money or property, they would face a potential sentence of 10 years. If, however, they obtained services by dishonesty, they would face a maximum sentence of only five years. There must be circumstances, as we can all envisage, in which the value of services is at least as high as the value of property, which is encompassed by the earlier clauses.
If, for example, one defrauds a merchant bank of property or money to a high value, one faces a potential sentence of 10 years. If, on the other hand, one defrauds a merchant bank in such a way that one receives the services of a very highly paid, professional and experienced merchant banker, which might be worth as much as or perhaps more than the property of which the bank could have been defrauded, one faces half the potential maximum sentence.
I accept that, as the Solicitor-General says, not every case results in the maximum sentence, but we could take the opportunity in the Bill to send a message that dishonest acts leading to the defrauding of an individual or a company are all potentially very serious. Whether people are defrauding them of services or of property, the maximum penalty available should be consistent across the board. The Government could take the opportunity to establish that in the Bill, and would be well advised to do so. I hope that we will be able to return to the matter in Committee, and I invite the Government to think carefully about it.
Broadly speaking, I welcome the Bill. It is a good Bill, and it is generally well targeted. However, it could be better, and I hope that at the conclusion of its passage through the House, it will be.
5.39 pm
Chris Bryant (Rhondda) (Lab):
I apologise for having missed the speech by the hon. Member for Somerton and Frome (Mr. Heath), although when I
asked him whether he had said anything that I would not have expected him to say, he said no, so I did not miss very much.
In recent years, it seems to have become a law of Parliament that the significance of a piece of legislation to ordinary people’s lives is inversely proportional to the number of hon. Members in the Chamber. This Bill is very important for our constituents, not least because the law on fraud has been a hotch-potch until now, with different bits and pieces of legislation being knitted together to cover what many would consider to be an important offence.
Since the introduction of the Theft Act 1968 and its subsequent amendments, the nature of fraud has changed dramatically. The hon. Member for Rugby and Kenilworth (Jeremy Wright) has referred to the fact that much fraud is now conducted electronically, which is a specific issue for those trying to secure successful prosecutions. The law must keep up with technology, which it has failed to do in that area in recent years.
I know from my constituency surgeries and from letters from my constituents that a significant number of people are affected by identity fraud, the theft of credit card details and other scams. Such scams often involve relatively small sums of money, so people do not necessarily go to the police, who may find such matters too complicated to proceed with. I suspect that a large amount of fraud is barely considered by the criminal justice system, because people shrug their shoulders and say, “Ah well”.
In welcoming the Bill, I want to press the Solicitor-General on implementation and enforcement. He has referred to the Crown Prosecution Service, the Serious Fraud Office and additional funds for the police, particularly in central London. Around the country, however, police forces sometimes feel incapable of dealing with the complexity of the IT, of the fraud itself or of the law, and I hope that training will take place in all the police forces in the United Kingdom to make sure that everybody has equal access to justice.
Fraud is more than a national matter. Frauds that have been brought to my attention through my constituency casework include the Spanish lottery fraud, which is well known and has been well attested on television. In order to pursue justice in such cases, one needs a degree of Europe-wide intervention. Similarly, I am sure that all hon. Members have received e-mails from people across the continent of Africa offering them large amounts of money to set up some kind of business. Again, none of us ever refers those e-mails on to any part of the legal system—yet perhaps we should, because others who are perhaps less cynical and sceptical than us fall into those traps.
All hon. Members who have spoken have discussed whether we should abolish the common-law offence of conspiracy to defraud. I agree with the Government that fraud cases can be amazingly complex and that statutory conspiracy law may not suffice. In most major credit card fraud cases, one person does the phishing by sending out e-mails—again, I am sure that all hon. Members have received such e-mails—that make it look as if one’s bank has managed to lose one’s details and is asking for them to be restated.
Another person may use a “Trojan horse”—the practice of sending random e-mails that attach
themselves to the recipient’s internet explorer and manage to inveigle them into visiting a website that they would not otherwise have visited, so that in the process, or in trying to extricate themselves from the website, they end up inadvertently giving further details about themselves. Such a fraudster may be separate from the first type.
Then, if money is to be taken out of the United Kingdom, a money mule will be required. The entire process of complex credit card fraud can involve a series of different people, each of whom is committing a fraud, but one does not get the full sense of the criminality that has been engaged in without seeing the whole package of the fraud. Indeed, individual members of the gang may not know that the others are engaged in it. In those circumstances, I understand that there may be reasons why we should want to keep the common law offence of conspiracy to defraud.
Moreover, the fact that, as the British Retail Consortium points out, many new forms of fraud are coming online as a result of new internet IT may mean that we would want to keep a stop-gap clause of some kind. However, as other hon. Members have said, some more hotly than others, it is pretty difficult to advance the argument that we should keep stop-gap legislation just in case we need it. Despite the comments of the Solicitor-General, the law says that an act committed by an individual is not an offence against the criminal law, whereas it may be an offence when it is committed by two people. That puts us in danger of bringing the law into disrepute. I realise that the Solicitor-General has moved considerably further on this issue than the Attorney-General did in the House of Lords, but I would welcome a clear indication that if we do not feel that the common law provision is still necessary, we will see a specific end date.
I question whether 10 years is a sufficient sentence. Some of this fraud is very significant. It does not always involve one person being defrauded out of a small amount of money; sometimes millions of pounds is defrauded from lots of people.
I also question, as did the hon. Member for Somerton and Frome, whether aspects of corruption should be included in the Bill. I note in particular that we have not revised for many years the legislation on the suborning of a police officer. There is some debate about precisely what that offence now is. However, many newspapers acknowledge that they pay police officers for information that would otherwise be secret and private, and should probably remain so, so that the police can perform their legitimate duties as regards a secure prosecution. Perhaps by now the Government should be advancing legislation to reform the law on suborning a police officer.
I think that what the shadow Solicitor-General said about magicians and the Magic Circle was wholly erroneous. It is clear that under clause 6, which deals with carrying articles for use in connection with a fraud, the fraud would have to involve the person making a gain for himself or another, causing loss to another, or exposing another to a risk of loss. I cannot see why magicians would be caught by that in any sense. The clause that they are most likely to be caught by is clause 2, which
covers fraud by false representation, but they would probably not be dishonestly making a false representation, but honestly making a false representation.
5.49 pm
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I am trying to follow the last point, which was interesting, to say the least—a rabbit out of a hat.
The debate is important and the Bill is interesting. As hon. Members of all parties have said, it is welcome, but, as with every measure, aspects need addressing in Committee. I agree with hon. Members who spoke in favour of preserving the right to jury trial. I speak as a practising barrister and not, I hasten to add, out of self-interest. Jury trial is and always has been the bulwark of justice and it should be retained at all costs.
The Solicitor-General, who was generous in allowing interventions and has taken the debate forward through his responses, made the point that the Bill will simplify to some extent the offences involving fraud and lead to shorter indictments. That, in turn, will lead to a simpler process, which will negate the need for denuding people of jury trial. [Interruption.] I note that the Solicitor-General was with me on the first three points but unfortunately shook his head at the last one.
All of us who are involved in the criminal justice system—as legislators, practitioners and so on—are bound to try to keep matters simple. That is not to be offensive to juries. When I prosecute, if I do not keep a case simple and it is lost, it is my fault because I have not made the case properly and it therefore should be lost. It does not happen because the jury did not understand it but because the case was not made simply and understandably. It behoves us all to make law that is readily understood by all concerned, including juries.
The Solicitor-General knows that the Lord Chief Justice recently referred to some protocols, including case management, the involvement of prosecutors at an earlier stage in larger fraud cases, more effective pre-trial hearings, encouraging judges to use their powers to persuade prosecution that charges should not be pursued, severing indictments and so on. If those are proactively pursued, together with the simplification for which the Bill provides to a large extent, a good job of work will be done.
I do not intend to say much about conspiracy to defraud because others have discussed it at length. Ultimately, there will be no case for retaining that offence, but I have some sympathy with the Solicitor-General, who is effectively saying, “Let’s see how the offences bed down and, in three years’ time, we might be able to knock it on the head.” That is a pragmatic and sensible approach. The hon. Member for Beaconsfield (Mr. Grieve) said that he would like the measure to include a sunset clause. That could amount to the same thing as the Solicitor-General’s approach, if we are considering discontinuing the offence in three years. I appreciate that it is not exactly the same, but it could have the same effect. I understand his caution, especially given that several highly regarded senior members of the judiciary on the Rose Committee have said that we should be careful about ditching it now. My opinion therefore varies slightly from that of the hon. Member for Beaconsfield.
Mr. Jeremy Hunt (South-West Surrey) (Con): Does the hon. Gentleman agree that the fundamental difference between the course of action that the Solicitor-General proposes and a sunset clause is that the latter does not require further action on the part of the Government for the common law offence to fall whereas the former does?
Mr. Llwyd: That is self-evident. Surely this place can find time for the presentation of a short Bill, if the political will is there. I do not understand why I am suddenly defending the Government—it is an unusual if not unique position for me to occupy——but the hon. Gentleman is right.
Mr. Jenkins: Will the hon. Gentleman give way?
Mr. Llwyd: Of course I shall give way to the hon. Gentleman from the Clapham omnibus.
Mr. Jenkins: Although I should like to agree that it would be appropriate to incorporate a sunset clause, what guarantee could the hon. Gentleman give that sufficient cases had come to trial within the time to be sure that we no longer needed the offence? That is the difficulty. Who can guarantee the number of cases that will come before us in a set time? Surely it would be better to build up a bank of knowledge and ensure that the measure is working before we make the decision.
Mr. Llwyd: I think that I agree with the hon. Gentleman. A period of three years has been mentioned and that is ample time in which to ascertain whether to get rid of the offence. I stress that I do not violently disagree with the hon. Member for Beaconsfield, who supports a sunset clause. We all want the same thing—it is a question of how we get there.
I shall be relatively succinct because others wish to speak and we are holding a Second Reading debate, which does not call for going into the minutiae. The hon. Member for Beaconsfield referred to the definition of “gain” and “loss”. Some people believe that it is too broad. We shall have to revert to the matter in Committee and I am sure that we will hold an interesting discourse on it.
I am worried about clause 6. I intervened on the Solicitor-General to point out that it requires no mens rea element and that it should do so. A few moments ago, he responded to the hon. Member for Somerton and Frome (Mr. Heath), who made the same point, by saying that intention will be necessary for a successful prosecution. That poses the question of why “knowing” or “intending” is not included in the provision. If it were, I would not have raised the matter and I am sure that many other learned commentators would not have raised it. Is the Solicitor-General open to an amendment along those lines in Committee? He was adamant that intention was required. In opening the debate, he said that there was some sort of tie-up between the old offence of “going equipped” and the clause. I tried to make the point that they are different because, if a person, late at night, is carrying bolt cutters, jemmies and all the typical gear of a housebreaker, that is one thing, but there is also the high-tech stuff—PINs, cards and so on—that is not perceived as being there specificallyeb;normal;j for a dishonest or nefarious purpose. There is therefore a distinction, which bolsters the case
for including some sort of mens rea element—either “knowing” or “intending”—in the provision. It is necessary to have a serious debate about that.
Mr. Garnier: Perhaps a better analogy than the offence of “going equipped” is instruments that can be used for an innocent purpose and adapted for a nefarious one, for example an iron bar or knife. It is the old distinction between “made” and “capable of being adapted” for a criminal purpose.
Mr. Llwyd: The hon. and learned Gentleman gives a better example, albeit along the same lines as mine. I shall come back to this point in due course, and I do not want to labour it this evening. It was important to mention it in passing.
There is a mental element in clause 7(1)(a), which states that a person is guilty of an offence if he makes, adapts, supplies or offers to supply any article—
“knowing that it is designed or adapted for use in the course of or in connection with fraud”.
I believe that that approach is preferable. I am not sure why there is a distinction between clauses 6 and 7, in that there is a mental element in the latter but not the former.
The provision in clause 4 on fraud by abuse of position is overdue. A typical example that we have all come across is the situation in which a carer is less than honest and takes money or goods from the person in his or her charge. Unfortunately, we have all seen cases of that. The old Theft Acts would have covered such circumstances, but this provision creates a specific offence that may well be simpler to prosecute.
I have some difficulty with the wording of clause 4, particularly with the words
“position in which he is expected to”.
Those words are vague, and I hope that we can debate them in Committee. The present definition also raises the question of who is expecting the defendant to safeguard another person’s financial interests or to avoid acting against them. Is it the person whose interests are concerned? Is it a third party? Or is it a “reasonable person”? If a person unreasonably expects another to safeguard their financial interests, that should not give rise to liability under the clause. Further, if there was no legal duty to do so, and the defendant was not aware that he was expected to do so, he or she should not be liable for this offence. We need clarification and it is the whole point of our proceedings in Committee to discuss such matters in detail.
The organisation Justice is of the opinion that
“the offence should only give rise to liability for the intention to cause loss or risk of loss where the person suffering the loss is the same person to whom the duty is owed. It is, in our view, illogical that the mere existence of a duty towards party A may result in liability for an intention to cause loss to party B, who may be completely unrelated to A.”
I do not expect the Minister to respond to these points today, but no doubt we shall be able to engage in a debate on them in due course.
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