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Lord Henley: If my noble friend's amendment and the intervention of the noble Lord, Lord McCarthy, are completely irrelevant, I hope that the Minister will answer a very brief question. This matter might be relevant in relation to further amendments that might need to be tabled at Report—doubtless, however, the noble Lord, Lord McCarthy, will oppose them. Would it be possible to get paternity leave although one was no longer one of the caring parents; that is, if one had left the mother of the child before the birth of the child, and one was therefore not going to be looking after the child? Is it possible to get paternity leave in those circumstances?

Lord McIntosh of Haringey: I am reluctant to reply because we are debating Clause 10, which is about powers to require information. However, to help the noble Lord, Lord Henley, in deciding what to do at Report, the answer is yes—under certain circumstances, paternity pay could be given to somebody who was not living with another. That is what the noble Lord, Lord McCarthy, said, and he was right.

Baroness Miller of Hendon: I am sorry if I have tabled the amendment to the wrong clause. I shall reconsider it. I have listened carefully to what the Minister said. I shall certainly think about the matter and see whether I want to table it in relation to the appropriate clause. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 43 not moved.]

Clause 10 agreed to.

Clause 11 agreed to.

Clause 12 [Penalties: fraud etc]:

Lord Razzall: Before the noble Baroness, Lady Miller of Hendon, moves Amendment No. 44, I want to raise a procedural issue. The noble Lord, Lord McIntosh of Haringey, is about to leave—his reasons for doing so are exactly those that I wish to discuss. Without any advance warning, a Statement will be made in the Chamber which the noble Lord, Lord McIntosh of Haringey, has to deliver. I have to respond to it on behalf of the Liberal Democrats. That is of course one of the disadvantages of taking the Bill in Grand Committee. I am due to move Amendments Nos. 54 and 55. Unless I can rely on the noble Baroness, Lady Miller of Hendon, or the noble Lords, Lord Wedderburn and Lord McCarthy, to filibuster on my behalf on an earlier amendment, it is quite likely that Amendment No. 54 will be arrived at while I am still trying to deal with the Statement in your Lordships' House.

Is there any way in which this matter can be dealt with? If necessary, I could move Amendments Nos. 54 and 55 slightly later, on my return. I do not think that

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that is the answer, in which case I suspect the only alternative will be to ask if somebody could move them on my behalf formally. I should have to return to them and withdraw them, and then move them at Report. That seems to be a strange procedure to have to follow.

Lord Henley: Is it possible for the Committee to be adjourned during pleasure in such circumstances? Obviously, we would be adjourned if we were downstairs because we would have adjourn to hear the Statement.

Lord Razzall: In which event, would the Committee be prepared—if I have not returned by the end of Amendment No. 53—to adjourn during pleasure until I return, when I could move Amendment No. 54?

Lord Sainsbury of Turville: We would be very happy with that arrangement if it would help our proceedings. I have no idea whether that is allowed procedurally or not.

Lord Razzall: As the noble Lord, Lord Henley, indicated, that is exactly what would happen were this Committee sitting in the Chamber.

Lord Henley: The Deputy Chairman of Committees said at the beginning of proceedings that the proceedings in the Committee would be identical to proceedings on the Floor of the House, with the one exception that we would not be voting on anything. If the Committee had agreed on something, I suspect that the Committee can do what has been proposed.

Lord McIntosh of Haringey: May I say a word? It is clearly possible within the rules for the Committee to adjourn. If that met the wishes of the Committee generally, we could try to do that.

Lord Razzall: In which case, I suggest that that Motion could be moved at the end of Amendment No. 53, if I have not returned at that stage.

Baroness Miller of Hendon moved Amendment No. 44:

    Page 25, line 33, leave out "£3,000" and insert "£300"

The noble Baroness said: In moving this amendment, I shall speak also to Amendments Nos. 45, 46 and 47.

Clause 12 provides for penalties for fraud or negligence. In the case of fraud or negligence, or the provision of incorrect information relating to statutory paternity pay, under Clause 12(1) the penalty is not to exceed £300. In the case of an identical offence in relation to statutory adoption pay under subsection (2), the penalty is not to exceed £3,000. That is 10 times the amount of the fine in respect of an identical offence relating to paternity pay.

Similarly, under Clause 12(3), the penalty for an incorrect payment of paternity pay is £300 whereas, under Clause 12(4), the penalty for incorrect payment of adoption pay is £3,000—again, that is 10 times as much.

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I might have assumed that the discrepancy between the two types of case was a mere typographical error—perhaps something went wrong and a typist held down the zero key for a little longer than she should have done. However, in Clause 12(5) there is a clear statement on this matter. That subsection makes it clear that for some reason the Government want the power for whoever adjudicates to exact a penalty in cases relating to adoption pay that is 10 times that for cases relating to paternity pay. That subsection is dealt with in Amendment No. 47. Why is one employee more deserving of seeing his employer have to pay a greater penalty than another? Why is one employer who commits what, after all, is an identical offence, to be liable to receive a more draconian penalty than another? I cannot think of a single reason—even a fanciful or implausible one—for such discrimination between natural fathers and adoptive fathers who have been badly treated by their employers. I await, with very rapt interest, to hear what the Minister has to say on this subject. I beg to move.

Lord Bassam of Brighton: The noble Baroness's amendments to Clause 12—they relate to lines 33, 37 and 44 on page 25—turn on the amount of the penalty being imposed for fraud or negligence in respect of statutory adoption pay.

Before I deal with those issues, I turn to the noble Baroness's amendment to page 25, line 43, which also concerns fraud and negligence. Perhaps I should say at the start that, by emphasising that penalties will not be applied lightly, there will be no penalty where someone has taken reasonable care but has simply made a mistake—whether they are an employee or an employer. That is clearly stated in the opening lines of subsections (1) to (5) of the clause—fraud or negligence must be involved.

I understand from the noble Baroness's amendment to page 25, line 43, that she is understandably keen to ensure that someone who made an error and then notified the board of that error so that it could be rectified would not be in danger of being penalised for that. That situation would of course be looked at in any investigation and, if it was clear that no fraud or negligence was involved, there would be no penalty.

I am happy to reassure the noble Baroness on that point, in particular because the amendment to page 25 line 43 would impose an extra step in the process, which was quite unnecessary. It would appear to enable someone who has already fraudulently or negligently obtained wrong payments to escape sanctions, simply by notifying the board that he had done so within the required time. It would also make it imperative that a fraudulent or negligent failure to notify had also occurred, which would, in effect, mean having to prove that two actions had taken place for one offence. The single important point is whether incorrect payment had been obtained fraudulently or negligently.

I move on to the other amendments tabled by the noble Baroness to Clause 12, at lines 33, 37 and 44 on page 25. However, before I continue I would like to stress that in all cases we are talking here about the

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maximum penalty that may be imposed, not the actual amount in every case. In practice, penalties apply in the same way whether the error results from fraud or negligence, although the amount of the penalty imposed will, of course, reflect the seriousness of the offence. In addition, the maximum level of penalties is the same for employers and for employees.

A key determinant of the seriousness of an offence is the amount of money falsely claimed and obtained. The amount that could be lost to the Exchequer in a fraudulent statutory adoption pay claim could be very significant. The amount paid over a 26-week period could be £2,600 and the small employers' relief would raise it further. A penalty of only £300 for fraud of this magnitude would be quite inappropriate and, I would argue, no deterrent at all. It would clearly be unfair if someone who fraudulently obtained over £2,000 incurred the same penalty as someone who obtained £200.

Clearly, for statutory paternity pay, where the maximum possible obtained for one person would be £200 plus the small employers' relief, which is currently five per cent, there is no need to set a maximum above £300 as for each offence the amount lost would be within that figure.

These examples are at the top end of the scale—the situation where the highest sum of money in each case has been falsely obtained. I suspect the noble Baroness is more concerned about what would happen at the other end of the scale, where an employer or employee fiddled statutory adoption pay for a week or so over and above the entitlement. As I explained, the £3,000 figure is a maximum. The Inland Revenue officer would look at various factors in deciding the level of the penalty. This would include looking at how much was obtained falsely and whether fraud or negligence was involved. In general, the Inland Revenue officer would normally impose a heavier penalty for fraud than negligence.

In addition, there will be—as always with such penalties—the right of appeal against both the imposition of the penalty itself and the amount incurred. If the employer or employee felt they had been treated too harshly they would be able to ask the independent Tax Appeal Commissioners to look at the position.

To sum up, I feel that we have got it right in terms of the amounts of penalties that could be imposed. We need to have a maximum figure which is appropriate to the seriousness of the offence, and I have explained why £3,000 is an appropriate figure to penalise fraud or negligence in respect of statutory adoption pay. We also need to build in safeguards to ensure that the amounts actually imposed are proportionate. These safeguards are in the guidance that the Inland Revenue officers will follow and in the right of appeal to the appeal commissioners where the person penalised thinks they have got it wrong.

5.30 p.m.

Baroness Miller of Hendon: I am not sure if the Minister made an inadvertent mistake, but I think he

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spoke about paternity pay and I was talking about paternity and adoption. It may have been a slip of the tongue. I do understand that people can use discretion, and I do understand that when the words "not exceeding" are used that is absolutely the maximum, whether it is £300 or £3,000. I understand that very well.

Having listened to the Minister, I have to confess that I still do not understand why, for an adoptive parent, the maximum—whether it is discretionary or not—is £3,000, and for a natural father it is £300. That is the point I am making, not that I think there is anything peculiar about the way the matter is handled. It is just the difference between the two that I find completely inexplicable. I understand exactly what the Minister is saying about maximum figures and the use of discretion. That is stated quite clearly in the statute itself. However, from his answer I did not understand why there is such a difference—that is, why one figure is ten times more than the other as between adoptive and natural parents.

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