The Earl of Erroll: I agree with everything that has been said. The real person who will suffer from this is the person with a large mortgage and little spare cash. When you are whacked with a fine like this you will have a major problem because it costs money to appeal in court. The likelihood is that the first letter will be whacked down by the Home Office because it will have seen too many sob stories. It will just say, "Terribly sorry; you have to pay up". You then have to take the matter to court. How will you afford a lawyer? If you have a nice house you will not get legal aid, so where will the money come from? It is a delicate balancing act as to whether you can afford to take the case to court. Most people end up being frightened, particularly if they are trying to run a business of their own or something like that. They will not have the time to spend on doing this.

I have seen something like this happen with the congestion charge. If the scheme is outsourced to a private company, which it probably will be, it is even more likely to be abused because revenue will be dependent upon the amount of money raised. The company will have an interest in ensuring that the maximum is got back from it. I will not bore the Committee tonight with the details relating to the congestion charge of sending things to one address, lifting a car from another address and then not notifying you so even the police do not know that it is in the pound. There are horror stories out there about the way that these companies behave or the bureaucracy behaves, so it is essential to have this word "intentional" included and change the burden of
 
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proof back to the way that we have always had in Britain in our common law society where the burden of proof is on the prosecutor; the state.

Baroness Scotland of Asthal: I confess to being a little surprised by the thrust of some of the proposals. In effect, the noble Lord, Lord Phillips, is saying, "Don't make this a civil penalty; make it a criminal penalty". By virtue of the way in which he puts it, I take it that he would prefer non-compliance to be dealt with by way of a criminal penalty. I want to be absolutely clear that we do not wish to criminalise people who are found to be non-compliant. That is absolutely not our intent.

The penalties are not automatic, as Committee Members know. The Secretary of State has an initial discretion and there is a right of objection and appeal, as the noble and learned Lord, Lord Mayhew, rightly highlighted. I commend the draft code that we have put forward for the Committee's attention because it sets out the procedure.

The reason that the penalties are civil and the appeal route is through the civil court is that the Government are not seeking to criminalise those who contravene requirements in the Act. In many cases, people will respond to penalty notices by complying with the relevant requirements. In those circumstances, it will be open to the Secretary of State to waive the penalty and that would be the end of the matter. The primary purpose of the penalties is to deter people from contravening the requirements in the Act, not to criminalise them. The main benefits of the civil as opposed to criminal penalties are that the civil penalties are enforced through the civil not the criminal courts. The civil penalty does not result in a criminal conviction or a criminal record—something that greatly troubles a number of people. Enforcement of the penalty is at the Secretary of State's own discretion. He would have to issue a claim in the county court. If the person belatedly complied with the relevant requirement, it would be open to the Secretary of State to waive the penalty. Non-payment of the penalty could not result in the person going to prison—imprisonment for debt was abolished by the Debtors Act 1869. There are certain exceptions to that principle, but a civil penalty under the Identity Cards Bill would not fall within any of those exceptions.

Lord Mayhew of Twysden: Does the Minister dispute that this penalty is a punishment?

10.30 pm

Baroness Scotland of Asthal: If the noble and learned Lord is asking whether it could be described as the noble Lord, Lord Phillips, says, as bringing to bear Article 6, I can see that there is an argument for that. But even if there were, the scheme that we are now proposing would deal with that; with legal aid and the procedures that we have set in place, there would be a
 
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fair trial and an opportunity to be represented. All those things will be complied with. But let me make it absolutely clear—

Lord Thomas of Gresford: I believe that—

Baroness Scotland of Asthal: I am not going to give way until I have finished answering the noble and learned Lord, Lord Mayhew, because that is courteous to him.

We do not wish to criminalise people, and we do not believe that that would be the purpose of doing this. The procedure that we have set out will enable us to deal with it as a civil matter in a way that makes sense. I shall give way in a moment, but I want to deal with the point made by the noble and learned Lord, Lord Lyell, on the carriers' case, and assure him that his understanding is not quite as he has said it. The procedures that we have included as regards civil penalties in this Bill take into account the Roth case and would therefore be fully compliant.

Lord Thomas of Gresford: I know that I do not have to say what I am about to say, and that she appreciates it, but I say it for the record. There is an enormous distinction between procedure of due process that has in it a presumption of innocence and which requires the prosecution to prove its case—that is, a criminal charge—and the system that the Minister proposes, whereby you are absolutely liable. Intention does not come into it under this scheme; you are liable for a penalty, and you cannot try to excuse yourself before a court. There is all the difference in the world between the civil and criminal approach.

As the noble and learned Lord said, when penalties are as high as £2,500 or £1,500, it bears no relation at all to any amount by which the state suffers by reason of a person failing to fill in a form. That has to be a punishment for failing to fill in a form and send it off. It is not a civil penalty that has any connection at all with any loss to the state.

Baroness Scotland of Asthal: It is a penalty. Both the noble and learned Lord, Lord Mayhew, and the noble Lord, Lord Thomas of Gresford, know full well that in relation to setting a penalty or fee or—if this were to be a criminal offence—the maximum fine, the maximum fine is not necessarily the fine that will be imposed. You could have a fine of anything from a penny to £2,500, which is the maximum; all that setting the maximum does is to say that you cannot have a fine—or in this case a penalty—that exceeds that amount. That is the first point.

Secondly—and I say this so that noble Lords absolutely understand it—the Government do not wish people to be criminalised. Most ordinary, decent people take a criminal conviction very seriously indeed. If you were to ask them whether they would be more content to have a criminal conviction or a civil penalty, I very much doubt that your Lordships would find many of them putting their hands up and wanting
 
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to be made criminals as a result of doing this. We need to take that very seriously indeed, because members of the public will take it very seriously.

Lord Mayhew of Twysden: What the Minister describes relates to the means by which the punishment can be enforced; it does not relate to the character of the penalty, which is a punishment—as she has virtually conceded. The punishment is criminal in character and, accordingly, ought not to be able to be imposed save on proof of intention. That is what we are on about—and I am afraid that I have not grasped that the Minister has herself grasped that.

Lord Thomas of Gresford: Surely the public are readier to accept a punishment for a person who intentionally fails to carry out their obligation or breaches the terms of the legislation, rather than one for a person who has to pay a penalty even though they do not know anything about their liability to register, to send in particulars of change of address, or whatever else.

Baroness Scotland of Asthal: I know that the noble Lord, Lord Thomas of Gresford, has not had an opportunity to look at the draft code, but that is why we have made it available—so that Members of the Committee will understand how we intend to deal with that matter.

I assure noble Lords that every effort will be made to ensure that those affected by the requirement know exactly what is expected of them and to warn them that failure to comply may be penalised. The order made under Clause 6 will be very widely publicised. The process under Clause 7 is likely itself to give rise to extensive public discussion. Every effort will be made to contact those affected by an order to inform them of their requirement to register and there will be a clearly publicised timetable before any requirement to register comes into force. So a failure to comply will not necessarily lead to a penalty notice, as I said. However, the civil penalty regime is a different form. We have set out the draft so that noble Lords could have a better idea of how it will work and be able to comment on that.

At the stage at which a civil penalty notice is issued, the Secretary of State will not normally know what the state of mind of the person concerned is, only that he or she has not complied after efforts have been made to notify them and after there has not been a response. At that stage, fairness to the individual who did not in fact know of the requirement; or did know and intended to comply but did not do so for some good reason, is built into the statutory scheme at the objection and appeal stage. Clauses 34 and 35 provide that one of the grounds of objection and appeal is that imposition of a penalty is unreasonable in all the circumstances. As the noble Baroness, Lady Seccombe, made clear, she wants to ensure that people who are not deliberately trying to be difficult—they are not members of the awkward squad or trying to cause difficulties; they just have not known about it and it has not come to their attention—are not caught. I agree with her.
 
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Our purpose in setting up the scheme is to try to ensure that those people are not disadvantaged. The fact that someone was unaware of a requirement will make it unreasonable that any penalty should be imposed. Clause 36 provides for a code of practice setting out the matters that the Secretary of State and the courts will take into account when considering civil penalties. The code of practice will be laid before Parliament before the first identity cards are issued at the end of 2008. So we have lots of time to look at the code. I just thought it was important that we had a draft so that Members of the Committee could have a look at it and consider whether it is the sort of thing that would make them feel easier.

I make it clear that that was the basis on which we have done it. We have said in the code:

"If there is genuine doubt as to whether the person concerned was aware of the requirement, any penalty imposed should normally be cancelled. This may be because they had no notice of the requirement or because they were not able to understand it due to language difficulties, illiteracy or lack of intellectual capacity".

So we have put those issues in the code for the very sensible reasons that the noble Baroness, Lady Seccombe, highlighted: because we do not want that to be an undue burden.

I can therefore assure noble Lords that where non-compliance appears to be unintentional or an individual has subsequently complied with the requirement, any penalty should normally be waived. That is what we want to happen. The draft code of practice goes on to say at paragraph 6.9:

"As the purpose of the penalty scheme is to encourage compliance rather than to punish, it will usually be appropriate to cancel the penalty if the individual has complied with the relevant requirement by the time the objection or appeal is considered. Mere lateness should not generally lead to a penalty unless it is both deliberate and prolonged or repeated".

I know that that is what the Committee is worried and concerned about, and the amendments are a good prompt for me to clarify why certain aspects of the scheme are being backed up by civil, not criminal penalties. The primary reason is that we do not consider that failure to register or failure to comply with related requirements should attract the full opprobrium of criminal law. We are not seeking to make criminals out of people who are not compliant; rather we are seeking to coax them into complying. The first stage of challenge to a civil penalty would be an objection to the Secretary of State. At that stage the courts would not be involved at all. There will also be a right to appeal to the county court or sheriff. The matter will at all times be kept out of the criminal courts and will not give rise to a criminal record. Should a person refuse to pay, the subsequent debt recovery proceedings would also be a matter for the civil courts. The methods by which a civil debt may be enforced do not include imprisonment. I believe that we have achieved the right balance in the Bill for the civil penalties.

I promised to deal with the point made by the noble and learned Lord, Lord Lyell. He made reference to the carriers situation. That is a clear example of where we have used a similar procedure before. Similar penalties were imposed in relation to a carriers'
 
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liabilities scheme in the Immigration and Asylum Act 1999. It is normal with civil penalties for the objection and appeal stage to come after the imposition. It is true that the courts in the Roth case were critical of one aspect of the carriers' liability scheme—the fact that there was no discretion for the Secretary of State as to the amount of the penalty, but the courts confirmed that a civil penalty scheme is lawful and is compliant with Article 6. The scheme in this Bill is based on the scheme as amended in the light of the Roth judgment. The current carriers' liability scheme has been ruled compliant by the courts with ECHR rights. I have made it clear that we will comply, even on a civil scheme, with Article 6. To finish with—