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I am asking the noble Baroness-I am sorry to repeat this-to give specific examples of the type of knowingly false representation that will be prosecuted under this new law which could not be pursued as an act of fraud. I beg to move.
Baroness Hamwee: I am glad that the noble Lord described these as probing amendments. I was a little confused about the distinctions between what he is proposing and what the Bill proposes-but he has explained them. I do not wish to focus on the drafting, given his intention in tabling these amendments at this stage. However, I noted that "false" in his proposed subsection (1B) would include "misleading". Clause 8(1)(b) includes both terms as separate concepts.
On the substance of the amendments, if the noble Lord is to proceed with them at a later stage, it would be helpful to distinguish between the knowledge of what "might be" false, which is the terminology used in the amendment, and recklessness, which is a more usual concept.
It is hard to envisage a claim described in Clause 8(1) without an intention of making a gain. If the noble Lord proceeds with the amendment, or anything similar, at the next stage, perhaps he could bear that in mind. I do not wish to be unduly picky, but one does not want to create criminal offences without being very careful about every single word.
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I have not had an opportunity to look at the penalties which might apply to the existing offence of fraud under the Fraud Act. The noble Lord has told the Committee that 10 years is the current maximum penalty; that was extremely helpful. I am concerned about creating a new offence for an action or omission that is covered by an existing provision. I understand the politics behind this. What is suggested here-a 10-year penalty-is very serious. Heaven forfend that we should be thought to be indulging in gesture politics.
Lord Campbell-Savours: Amendment 77ZA is very interesting. It deals with the only remaining area of the Bill where there may be some controversy. It deals head-on with the case made by the Opposition in both Houses that the offence set out in subsection (1) carries a penalty that is diluted in comparison with penalties available under other legislation. In the event that the amendment were incorporated in the Bill-this is why I asked the question-I would like to think that there would be no difficulty about Clause 8 standing part, and the House would then unite to approve the clause with this amendment to the penalty embodied in it. I should be very interested to see what the noble Lord says on the Question that Clause 8 stand part of the Bill. If he were to indicate that that was the case, the Committee would be very pleased.
Baroness Butler-Sloss: I will add my voice to the concern about the way in which Clause 8(1) is expressed, for two reasons. First, it is undesirable to create a new offence if an existing offence immediately covers the crime that is dealt with here. I, too, would like to know in what way Clause 8(1) differs from the existing criminal law.
The second matter, which is more important, is political. If the Bill goes through with a 12-month offence, the public will say that Members of the House of Commons are getting a lighter sentence than members of the public. I cannot believe that that is what the House of Commons intended. However, it is extremely important that there is no perception that the law is a soft touch for dishonest MPs compared with members of the public. As the noble Lord, Lord Campbell-Savours, said, if Amendment 77ZA is accepted by this House, that would deal with my second point. It would not deal with my first point, which is to ask why we need a new offence at all.
Lord Campbell of Alloway: These are probing amendments. As such, they afford the opportunity for debate that was referred to yesterday by my noble friend Lord Higgins. That is of interest and value to another place-but perhaps no more. I will oppose the Question that Clause 8 stand part of the Bill. I will not go into the reasons again-I have said enough already. One has to be very careful to bring down the curtain on crime where it is clear; but how can one say what is not a crime or what could be a crime, and so on and so forth? This is not an easy exercise, and not something that we should seek to resolve in this House and impose on another place. It is for another place to decide, constitutionally, what it is going to do about implementation of its domestic procedures covering breaches of rules. It is nothing to do with us.
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Noon
Lord Elystan-Morgan: I certainly have some sympathy with the submission of the noble Lord, Lord Campbell of Alloway. After all, we are a reviewing Chamber, and we are reviewing one of the most important pieces of legislation ever to have come our way. Whether we like it or not, and whether or not we feel embarrassment in relation to a matter which is exclusively-at this stage, at any rate-referable only to the House of Commons, we have that overarching duty which, with the very greatest respect, we simply cannot avoid.
The first question is whether it was necessary to create a third offence at all. Certainly Parliament should always balk at creating an offence that applies only to a very narrow constituency of people-in this case, 665 or 670 Members or thereabouts-unless it is absolutely necessary. The offence of falsification of accounts under Section 17 of the Theft Act 1968 certainly covers this amply, and an offence under Section 2 of the Fraud Act 2006, which double-banks considerably Section 17 of the Theft Act but goes a little wider, also covers it totally. Therefore, it seems that there never was a case for a third offence. The defence put forward by the Government is that in relation to the offences under the Theft Act and Fraud Act it was necessary to prove dishonesty. Under Clause 8, it is necessary to show that a Member has made a claim and provided information for the purposes of the claim knowing that information to be,
However, how can that fail to be dishonesty? That is the first and fundamental question.
The next question is: if I am wrong as a matter of technicality, does it make any difference at all? The test of dishonesty was laid down by the Court of Appeal in R v Ghosh about 25 years ago. A jury has to decide two questions. First, is the conduct that has been proven such that an ordinary, honest, decent citizen would regard it as dishonest? If the answer is yes, then there is a second question; if the answer is no, then of course the charge falls there and then. However, if the answer is yes, the next question is: did the defendant appreciate that he was doing wrong and acting dishonestly in accordance with that standard-not his own standard but the standard of an ordinary, honest, decent person?
Even if one were not to insert the word "dishonesty" in the offence or to regard dishonesty as being specifically necessary for the commission of the offence, I fail to see how it would make any real difference regarding the issues that would have to be determined as matters of fact by an ordinary, reasonable jury. I have the gravest doubt myself.
Secondly, there is the question of punishment. Even if the Government managed to get over the first hurdle of whether a third offence was necessary here, how can there be any justification for the sanctions being so out of kilter with those that apply to ordinary British citizens? Those citizens are subject to a maximum 10-year penalty under the Fraud Act and a seven-year penalty under Section 17 of the Theft Act. The message that will go out to the public if this provision remains worded as it is today is that a soft option has deliberately been created in the interests of Members of Parliament,
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Lord Campbell-Savours: Does the noble Lord not accept that Amendment 77ZA does not dilute the penalty whatever but includes the option?
Lord Elystan-Morgan: I am sorry. I was speaking of the clause as it exists in the Bill at present. I accept totally what the noble Lord says.
The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): Before I respond to the amendments tabled by the noble Lord, Lord Strathclyde, I would like, for the benefit of the Committee, to remind your Lordships that, when talking about clauses in the Bill, we should refer to the Bill as introduced in the House and not to the numbering contained in the Keeling schedule that I have made available in the Public Bill Office.
Lord Higgins: Do I understand that the noble Baroness is talking about the Bill as originally introduced into this House and not the reprinted one, so that, as far as the next amendment is concerned, for example, the noble Baroness will read out the relevant lines as they appear in the Marshalled List?
Baroness Royall of Blaisdon: That is absolutely correct.
This has been a very good debate and lots of interesting questions have been raised. Before today there was a lengthy debate with colleagues in the other place about whether or not the offences set out in subsection (1) were sufficiently different from the offences set out in the Fraud Act to justify their creation. We argued that there is a long list of similar offences to that set out in subsection (1), where Parliament has decided that in particular contexts it should be an offence knowingly to make a false or misleading statement. These offences apply in circumstances where a duty of complete honesty is expected. So, for example, there are offences-less serious than full-scale fraud but culpable none the less-of making a false statement in relation to applications for driving licences and passports and, in an electoral context, of donations to political parties. To take an example close to that of MPs, the Local Government and Housing Act 1989 makes it an offence knowingly or recklessly to provide information in respect of pecuniary interests that the councillor knows to be false or misleading.
As I said when I wrote to noble Lords earlier this week about the government amendments to Clause 6, false statements in the context of benefit claims is an obvious example. Under Section 112 of the Social Security Administration Act 1992, it is an offence to make a statement or representation that the person knows to be false in a claim for benefits. That offence carries a penalty of a fine not exceeding level 5 or imprisonment not exceeding three months. However, there is a more serious offence under the Social Security Administration Act as well, which is to make a false
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Section 2 of the Fraud Act 2006, which is the offence to which reference is most usually made, requires proof of a false representation that is untrue or misleading; that the person perpetrating the fraud knows that it is, or might be, untrue or misleading; and that the person intends to make a gain or cause a loss to another. And all this must be done dishonestly. The offence in Section 17 of the Theft Act 1968 of false accounting applies to someone who destroys, defaces, conceals or falsifies a document dishonestly, with a view to gain for himself or another, or with intent to cause loss to another.
As your Lordships will see, what is required in all three of the offences that I have cited, which carry significantly greater maximum penalties than those set out in this Bill, is proof of dishonesty and of the purpose for which the false representation was made. Dishonesty is a high hurdle for the prosecution to mount. It is something in addition to knowledge or intention. It requires the prosecution to prove that, first, the person has behaved dishonestly according to the ordinary standards of reasonable and honest people and, secondly, that the defendant realised that reasonable and honest people would regard what he or she did as dishonest.
The offence of knowingly making a false statement in support of an expenses claim differs from the more serious Fraud Act offence in that it does not require the prosecution to prove dishonesty or an intention to make a financial gain. This is a combined objective and subjective test. A person who knowingly provided false information in an allowances claim but who did not satisfy the dishonesty test or did not have the requisite intent to make a gain would not commit an offence under the Fraud Act or the Theft Act. For example, a belief that the claimant is entitled to money claimed or that the person from whom it is claimed consents to the payment, or an intention to repay the money claimed or to set it off against other claimable expenses, may negative dishonesty. As in other contexts, the prosecution will have a choice of potential offences depending on the evidence and the seriousness of the breach.
The amendment replicates offences under the Fraud Act. I would argue that, if it was thought that subsection (1) was unnecessary, new subsection (1A) as proposed in the amendment is even more unnecessary. I understand that noble Lords wish to make it clear in the Bill that the higher penalties are available in respect of really serious breaches of the rules. However, I suggest that it is not good law-making to include unnecessary provisions. The amendment does not add to the options available for prosecuting an offence. The evidence required would be exactly the same as would be necessary to prosecute under the Fraud Act. That is the difference between subsection (1) and this new subsection. I therefore urge the noble Lord to withdraw his amendment.
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I should say that I do not regard a test of the success of this Bill as being evidenced by successful prosecutions of Members of Parliament-quite the contrary. The Government hope that, by setting up a new independent system with clearer rules on what allowances can be claimed, Members of the other place will be in no doubt as to what is required of them. We all expect Members of both Houses to respect the duties of honesty and integrity which are included in the codes of conduct and which reflect the Nolan principles to which we all subscribe. Creating an offence specifically in respect of providing false information in an allowance claim makes it apparent to Members of the other place and to the general public that we expect a duty of candour from our elected representatives in this matter. It is a backstop should this duty be flouted. However, I hope that the success of creating a new criminal offence and the success of this Bill will be judged not by criminal convictions but by the fact that in two years' time we will celebrate the fact that no prosecutions of MPs have been contemplated or necessary.
I again specifically want to make it clear, in response to the question whether the new offence means that MPs will be treated more leniently than their constituents for fraudulent claims, that the new offence criminalises conduct that on its own is not currently an offence. If there is evidence of dishonesty and an intention to make a gain, the prosecuting authorities will, as now, have the option of prosecuting for the more serious offences of fraud or false accounting.
Lord Peston: Before my noble friend sits down, perhaps I may ask her a question, as I desperately try to follow the argument. I first heard about all this at the Constitution Committee when the noble and learned Lords, Lord Woolf and Lord Lyell, raised it and said that this special thing was totally not needed because the Fraud Act covers all possible cases. We are now talking about the future and not going over the past. Will my noble friend give a specific example of the new relevant matter in relation to an MP misbehaving, as opposed to what would be covered under the Fraud Act? In other words-to reveal my total ignorance-what are we talking about?
Baroness Royall of Blaisdon: I understand what my noble friend wants and what other noble Lords asked earlier. Of course, this Bill does not pertain to any current cases. Because cases are under investigation, I am told that it would be inadvisable to cite cases in which this new offence would be applicable.
Baroness Butler-Sloss: Before the noble Baroness sits down, perhaps I may ask again my question as to what will be the public's perception in relation to a one-year maximum sentence. I understand her point that there are other offences that are less important, but it will look to be a cop-out.
Baroness Royall of Blaisdon: This new offence criminalises conduct that on its own is currently not an offence. It does not mean that, if there was evidence of dishonesty, the person against whom the claim was made would not be prosecuted under the Fraud Act. This is a new offence but, if dishonesty were the case, the person would be prosecuted under the Fraud Act.
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12.15 pm
Lord Jenkin of Roding: Before the noble Baroness sits down, I do not think that the noble Lord, Lord Peston, was asking about cases currently under investigation. He was asking-perhaps the noble Baroness can help us-whether she can give an example of the kind of case that might be caught by this new offence and which would not be caught by either the Theft Act or the Fraud Act. Perhaps she does not have information on that with her at the moment, but I think that it would be enormously helpful if, before we reach Report stage, she could give us one or two examples, so that we know what we are talking about.
Baroness Royall of Blaisdon: Forgive me, but it is not the case that I did not understand. As cases are ongoing, I cannot cite any future examples; I am advised that that would not be appropriate. That is what I am told by my lawyers.
Lord Mackay of Clashfern: I can understand the difficulty. I wonder whether this argument is not properly referable to the stand part debate, which I was intending to take some part in on this specific point. For the moment, I think that there is some difficulty in giving specific examples. On the other hand, it may be possible to test this by just asking a question which I shall pose in due course.
Lord Elystan-Morgan: Before the noble Baroness sits down, perhaps I may rashly suggest a question that may be of assistance when we come to a rather fuller consideration of the matter as a whole. The noble Baroness said that those cases that show dishonesty will be prosecuted under either the Theft Act or the Fraud Act and that cases that do not show dishonesty will be prosecuted under this clause. Perhaps she can answer this question, which is in essence the same one that noble Lords have already raised. If one thinks of this-to put it, I hope, in a homely way-as an evidential bar that has to be overcome, how much higher, if at all, is the bar for a test of dishonesty under Ghosh than it is under this provision, where a person has to be shown to be knowingly providing information that is false or misleading? Is the bar in exactly the same position or is the difference so tiny-weeny that we really should not be troubled?
Baroness Royall of Blaisdon: The Government clearly believe that there is a difference and that the bar is set at a different level. That is precisely why the Government believe that this is an appropriate offence.
In answer to the question from the noble and learned Baroness, Lady Butler-Sloss, about public perceptions, I point out again, as I did in my earlier statement, that the same situation applies to benefit claimants. Therefore, the public might see MPs in the same light as we impose on benefit claimants.
Lord Condon: Before the noble Baroness sits down, perhaps I may establish whether I have correctly understood. Is she saying that this proposed new offence is primarily symbolic and presentational and that its true success will be that it is never used? Is that really what she is saying?
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Baroness Royall of Blaisdon: I am not saying that it is symbolic and presentational at all. I said that we believe that the new offence is absolutely necessary. However, it is my profound hope that the activities of MPs and the way in which people conduct themselves will be so improved that in future there will be no resort to the use of this offence.
Lord Campbell of Alloway: It is difficult, as I said, to bring the curtain down. Dishonesty is a difficult concept for anyone other than a jury to achieve. There are many cases on the border of dishonesty, so who is to decide whether it is the new offence, where there is no dishonesty, or the old offence, which is dishonesty? With an apparently new offence, someone will have to make that decision and it certainly is not going to be a jury. One is getting to a difficult stage, so difficult that I, too, will oppose the clause when it is considered. If the Government are going to persist, they must deal with this. If you are charged with dishonesty and the jury acquits you, can the new offence be charged because there was no dishonesty? All sorts of silly questions can be asked, but they require consideration and answers.
Baroness Royall of Blaisdon: I note the many concerns of the noble Lord. These offences will be dealt with in the same way as any other offence. Who decides what penalty is going to be appropriate for every offence and who is going to be charged under what offence? The same rules and regulations will apply to this as to any other offence.
Lord Strathclyde: When I put down this amendment originally, we were faced with a rather different Clause 8, if we accept the amendments that we are about to come to, as I am sure we will. It is in terms of that that we will have the wider clause stand part debate, so this whole new debate can be seen as a precursor to that one. I am equally looking forward to the questions of my noble and learned friend Lord Mackay of Clashfern for the noble Baroness. In that context, perhaps I could make a small procedural point. I have noticed one or two Peers saying, "Before the noble Baroness sits down". Since we are in a Committee of the whole House, there is no need to say it because we can ask as many questions as we want, as we may well need to on this occasion.
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