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Baroness Hollis of Heigham: That was one point. The second point, which was more substantial, is that I thought it was unfair. The point is that the employer will have committed one offence--lying about the hours and wages of an employee. It is not necessarily the case--although it can be--that the employer is then responsible for the amount of benefit subsequently defrauded. That is the responsibility of the employee. To connect the two would be to punish the employer for an offence over which he does not have personal and direct control.

Lord Higgins: If he had not committed the offence of colluding in the fraud, the fraud would not have succeeded. The Exchequer would not have lost the money. The penalty imposed on an employer would be the amount of money the Exchequer had lost as a result of his collusion. He is a party to the fraud. If he were not a party to the fraud it would not take place.

Baroness Hollis of Heigham: He was a party at the opening stage of the fraud; he is not a party necessarily at all subsequent stages. I am very surprised by the noble Lord, Lord Higgins. Far be it from me to take the line of the Conservative Party about burdens on business, but to hold the employer subsequently responsible for everything that happened after he had told an initial lie--which could involve huge sums of money, and he may have had no knowledge that it was being done in that way--would seem to be not appropriate justice.

Lord Higgins: I understand the noble Baroness's argument. Nonetheless, the reality is that if he had not told this little lie, in the words of the noble Baroness, the fraud would not have taken place. Taxpayers are bearing the consequence of him having told that lie, which does not seem in that context so little. I shall think about what the noble Baroness has said. It does not seem to me that the penalty that will be imposed is other than one which would result from the action which the offender has taken. I shall consider carefully the point that the noble Baroness has made.

On the broader point raised by the noble Baroness, there is concern about the extent to which local authorities seem not to be pursuing the matter with appropriate enthusiasm. We have not opposed the Bill. We continue to take the view that if we can deal with the problems of the side effects it will be a worthwhile Bill and one which will reduce the burden

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on the taxpayer. I shall consider what the Minister has said. I may wish to return to the matter at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 89 to 93 not moved.]

Clause 14 agreed to.

Clause 15 [Offence of failing to notify a change of circumstances]:

The Deputy Chairman of Committees (Baroness Nicol): In calling Amendment No. 94, I have to point out that if it is agreed to I cannot call Amendments Nos. 95, 96, 97 or 98.

Lord Astor of Hever moved Amendment No. 94:

    Page 20, line 18, leave out subsection (2).

The noble Lord said: I rise to move Amendment No. 94 and to speak to Amendments Nos. 95, 96, 97 and 98. As Clause 15 is currently drafted, there is a danger that it has been drawn too widely. It may bring within the strict terms of the offence people who work for housing associations who have no criminal intent and, through no fault of their own, may find themselves doing something illegal. I think of housing professionals, such as housing officers working for housing associations among others. What will be the position of these workers who have entered into a relationship of professional confidence with their client, probably about an unrelated matter, and it then becomes apparent during the course of a confidential interview that a change in their benefit status has occurred? Will they be compelled to report the change--at the risk of criminal sanction--or break their client confidence?

Many charities and supported housing projects rely on direct payments of housing benefit for their financial viability. They also rely on their reputation for complete client confidence. We seek to protect those people. They are also precisely the same categories where the landlord relies on direct payments because of the transient nature of the clients. Giving up direct payments is not an option.

The consequences that would flow from the conviction of such people could be catastrophic for both themselves and their employer. Officers would find it difficult to find work in the sector and there are several dire consequences for landlords as well. First, as a corporate body, they would also be liable for the same offence. Secondly, those in control, such as the manager or the trustees of the housing association, would also be liable. Thirdly, the landlord's right to receive any direct payment could be placed in jeopardy. That could cause administrative chaos, disruption to tenants and a cash-flow crisis for the landlord, especially if it is a large housing association, as the only option would be to pay each tenant individually.

The current offence of failing to report a change of circumstances has a safeguard against what I have described but it is swept away by the clause. Under the current offence, a person with "reasonable excuse"--

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broadly speaking, a person with no criminal intent--would not be at risk of prosecution; hence the inclusion of the words "without reasonable excuse" in the amendment. The proposed subsection does not undermine the intention of the Bill but it avoids a situation whereby those without criminal intent find themselves within the strict terms of the offence.

I look forward to the Minister's clarification on these points. I beg to move.

Baroness Hollis of Heigham: I am slightly concerned. I have an extremely long speech which addresses each of the amendments but at no stage does it refer to housing associations or charitable bodies, which were the substance of the noble Lord's concerns. If the noble Lord will allow me, I shall give a brief reply. If my answer does not meet his concerns, I shall cover the issue in correspondence and come back to it at Report stage. I do not wish to waste the time of the Committee by going through cases about widows and so on which have not been raised by the noble Lord.

The noble Lord asked whether professionals could be guilty if they did not pass on information--in other words, would there be third party liability. The answer is no. The liability occurs when the third party knows that the change affects benefits and causes or allows the beneficiary not to report it. Third parties are not responsible if they do nothing and the claimant fails to report the change.

I think that I have addressed the major issue raised by the noble Lord. I can quite understand where he is coming from and the worries that organisations might have on this issue. If he needs any further clarification, I shall be happy to follow it through with correspondence; and, if necessary, he can return to the matter on Report.

Lord Astor of Hever: I am grateful to the noble Baroness for that reply. We have received most of our briefing from the Chartered Institute of Housing. I should like to discuss the noble Baroness's response with the institute and possibly come back to the matter at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 95 to 98 not moved.]

Clause 15 agreed to.

Clause 16 agreed to.

7.15 p.m.

Lord Higgins moved Amendment No. 99:

    After Clause 16, insert the following new clause--


.--(1) The Secretary of State shall--
(a) undertake an annual assessment of the level of benefits fraud and related issues; and
(b) lay a report of his findings before each House of Parliament.

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(2) The first report shall be submitted no more than 18 months after the commencement of this Act.").

The noble Lord said: In moving this amendment, it may be helpful to consider also Amendment No. 101. Amendment No. 99 suggests that the Secretary of State shall undertake an annual assessment of the level of benefit fraud and related issues and lay a report of his findings before each House of Parliament, starting not later than 18 months after the commencement of the Act. We are all concerned about the level of benefit fraud and the extent to which improvements are being made in dealing with it. Therefore, it seems appropriate, following the passage of the Act, that there should be some form of annual assessment as to what progress is being made. An annual report would enable that to be done.

Similarly, Amendment No. 101 provides that it shall be the duty of an authority administering housing benefit or council tax benefit to make a report stating the level of fraud, the number of cases, and so on. Despite the progress which the noble Baroness rightly said has been made over the past few years, the level of fraud is a cause for concern. That is particularly so in relation to local authorities where the degree of enthusiasm between one authority and another seems to vary considerably. Given the importance of housing benefit fraud and the problems associated with it, one very much hopes that further progress will be made. However, it seems to be a question of raising those local authorities which are not performing well to the level of those which are taking the matter seriously.

Some of the situations which I described earlier give one cause for concern. What I have proposed would be an appropriate way of monitoring the way in which the Bill is operating and, more generally, the way in which we are tackling these problems. I beg to move.

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