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Earl Russell: My Lords, I suppose that the amendment was bound to tempt the Minister into trying to argue that she is against sin and I am not. She has not resisted the temptation. To cut a long argument short, perhaps I may say that where the Bill proposes a six months' sentence of imprisonment, provided I were assured that it was not mandatory I would not oppose it. I believe that we are proposing a somewhat more severe penalty. I know that the Minister does not agree. The noble Baroness heard my arguments about delusion of adequacy as regards the level of income support. I shall repeat them if necessary, but I suspect that the House would rather I did not do so.

Baroness Hollis of Heigham: My Lords, did I hear the noble Earl correctly? Does he think that 13 weeks' loss of 10 on a benefit of 220, reducing the amount to 210, is harsher than a six months' prison sentence?

Earl Russell: My Lords, yes, and I am prepared to consider research to see whether I am wrong. Is the Minister prepared to do the same?

Baroness Hollis of Heigham: My Lords, I wonder how many noble Lords in this House believe that a 10 sanction on a benefit of over 200 over 13 weeks is harsher than six months in prison. I do not believe that the proposition deserves substantial research.

Earl Russell: My Lords, the Minister shows a remarkable lack of curiosity. One of us is wrong. I would rather like to know which of us it is. I am prepared to take the risk of finding out.

The next trap that the Minister fell into was that she listed, very properly, cases of social security fraud which are clearly grossly credible. They were almost all people who were already working--for example, a disc jockey. Those people in law, properly, have no benefit entitlement anyway. So a social security benefit sanction takes away from them what they should never have had in the first place. As Gibbon would put it, it

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robs them of a superfluous treasure. It is a most inappropriate sanction because it bites on something that those individuals should not have anyway.

If we are dealing with real criminals, people to whom benefit should never have been awarded--even if we are thinking in the pure, narrow terms of deterrence--benefit sanctions are not the appropriate penalty. Some more ordinary criminal penalty would in those cases be a good deal more appropriate.

The Minister trotted through a great deal of material about hardship payments to vulnerable people. If one is on a means-tested benefit and that benefit is rightly awarded--we must assume that that benefit is not allowed by the Treasury to be significantly above what is needed to live on--how can one then be deprived of any substantial part of it without being in hardship? I have asked this House before why single people can never be presumed under benefit rules to be in hardship. I have never had an answer. I shall continue to ask the question because one day I should like to hear an answer. It sounds like a somewhat perverse form of family values.

Any punishment must create hardship. I would like that hardship to be such that it does not leave the person beyond the point of recovery--it does not drive him into either illegal courses which may leave him with a long-term drug dependency or in the grip of a drug dealer, or in a state of ill health such that he cannot return to work. That is a degree of moderation which one may legitimately expect of the criminal law in any circumstances. Beyond that point, it becomes self defeating.

I turn to the Minister's difficulties about research. We all know that when the Whitehall machine sets out to prove that some matter is difficult it can do so very well indeed. If we have a sufficient control group with which to compare these people, I do not envisage that every single detail about the area and the weather for which the Minister asks will be necessary. The Minister seeks to make matters more difficult than they need be. It is an art in which any good Minister--as the noble Baroness is--is skilled. I do not take the argument that seriously. But meanwhile the clock is ticking away. We have had the argument previously; we shall have it again. We shall hear the argument during the election. So, ready for the next round, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 to 32 not moved.]

The Deputy Speaker (Viscount Allenby of Megiddo): My Lords, before calling Amendment No. 33 I should tell the House that if the amendment were agreed to I should be unable to call Amendment No. 34.

[Amendment No. 33 not moved.]

7.15 p.m.

Baroness Hollis of Heigham moved Amendment No. 34:

    Page 12, line 24, after ("discharge") insert ("or a court in Scotland makes a probation order").

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The noble Baroness said: My Lords, Amendment No. 33 had originally been grouped with Amendment No. 34.

In Committee I undertook to consider further the point raised by the noble Lord, Lord Astor, regarding the treatment under these provisions of an absolute discharge or probation order in Scotland. As the noble Lord will recall, the legal system in Scotland and in England and Wales differs somewhat on the labelling of offences. But I am sure the House will agree that social security legislation has to be consistent across both countries.

As I said in Committee, the key point at issue here is whether or not a court has found a person guilty of fraud against the benefit system. The purpose of this amendment is to put that principle beyond doubt. The effect of the amendment is to specify that any case where a court in Scotland makes a probation order is treated as a conviction as regards these provisions.

The noble Lord, Lord Astor, was correct in saying that where a court in Scotland grants an absolute discharge or makes a probation order it is not treated as a conviction because this is what the Criminal Procedure (Scotland) Act 1995 provides. However, the position in England and Wales differs in that while the granting of an absolute discharge is similarly deemed not to be a conviction, any case where a court makes a probation order is a conviction.

The social security system applies to Great Britain as a whole. I am sure that your Lordships would agree that claimants should be able to expect the same treatment whether they live in Scotland or in the rest of Great Britain. It would be unfair to sanction a person in England or Wales on the basis that he had committed two benefit frauds, one of which had attracted a probation order, but not to sanction a person who had committed identical frauds in Scotland and received identical sentences.

I hope that the amendment, which ensures that the sanctions are applied even handedly across the whole of Great Britain, will be accepted by the House. I beg to move.

Lord Astor of Hever: My Lords, I am grateful to the Minister for explaining in detail the amendment. Of course, we welcome it.

On Question, amendment agreed to.

[Amendments Nos. 34A to 35 not moved.]

Clause 7 [Effect of offence on joint-claim jobseeker's allowance]:

[Amendment No. 36 not moved.]

Clause 8 [Effect of offence on benefits for members of offender's family]:

[Amendment No. 37 not moved.]

[Amendments Nos. 38 and 39 not moved.]

Clause 12 [Interpretation of sections 6 to 11]:

[Amendment No. 40 not moved.]

Clause 13 [Delegation of functions]:

[Amendment No. 41 not moved.]

27 Feb 2001 : Column 1194

Clause 14 [Colluding employers]:

Lord Higgins moved Amendment No. 42:

    Page 18, line 29, at end insert ("and, in addition, an amount which is 32 times the weekly cost of the benefit which was defrauded by each employee").

The noble Lord said: My Lords, in Committee we debated the question of what penalties should be imposed on colluding employers whose actions resulted in social security fraud. Generally speaking, the feeling on this side of the House is that the proposals with regard to measures to combat organised fraud are significantly less and less effective than proposals to combat individual fraud.

In Committee we suggested that the penalty on employers who were colluding in fraud with their employees should reflect the fact that substantial amounts of money might have been lost to the Exchequer, in particular in relation to employees drawing benefits to which they were not entitled. Somewhat to my astonishment, the Minister expressed horror that any colluding employer should suddenly become liable for the consequences of his action. She suggested that that might put the employer out of business and was unduly severe. Therefore, taking, as always, the views of the Minister into account, I have tabled a more moderate amendment.

Amendment No. 42 suggests that the penalty that a colluding employer should incur, in addition to that set out in the Bill, should be 32 times the weekly cost of the benefit defrauded by each employee. Your Lordships may be puzzled why the figure is 32 times the weekly cost of the benefit defrauded. It is based on the proposal which applies to local government when it adopts an incentive scheme to stop fraud. That seems a not unreasonable proposal. It may be the case that a particular employer employs perhaps 20 or 30 individuals, all of whom are drawing benefits fraudulently. If that is so, the penalty of 32 times the amount of money lost to the Exchequer as a result of the fraud is not an unreasonable penalty to impose.

So I have taken into account the views, and, indeed, the reaction, which the Minister put forward, but it seems to us that a significant penalty should be imposed on employers. The overall effect of the collusion between employers and employees may be significant but both groups of people have an option. They do not have to commit the fraud. Furthermore, the employer does not have to go along with a situation where his employees can defraud the taxpayer. I beg to move.

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