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Lord Mackay of Clashfern: This is the appropriate place to talk about the clause, as amended, that we are now considering. Earlier in the debate it was not amended, although this Motion was grouped with the amendments. It is now a different Clause 8 from the clause with which we started the debate.
I want to raise two points. First, if you have a generalised offence and you have a particular offence that falls within that general offence, there is at least an argument that when this is done by Parliament it creates the second offence for the purpose of carving out that particular area from the major offence. Otherwise, what is the point if the one covers the other? Therefore, there is at least a risk that if this provision is carried into the law there will be an argument to say that the general offences do not apply to Members of Parliament. I do not say that it would necessarily be successful, but I think that there is a very good chance that it would. Obviously, the discussion we have here would be open under the law as it now stands to be looked at by the court in deciding that question.
My second point is this. I want noble Lords to assume that a Member of the House of Commons makes a claim under the MPs' allowances scheme. That is, he or she is claiming money. He provides information-he is not going under a particular head or anything-that is supposed to be factual, which he knows to be false or misleading in a material respect. Can you imagine-I ask rhetorically-that being honest? I find it extremely difficult; in fact I find it impossible to envisage that a person can make a claim for money under the allowances scheme providing what he or she alleges to be fact knowing that what he or she alleges to be fact is either false or misleading-and it is for the purposes of the claim. In other words, to advance the claim he provides information that he knows to be false or misleading. It is not an absolute offence in the sense that if it is false or misleading he is liable: he has to know it is false or misleading. If he does that, can anybody suggest that it could be regarded as honest? The standards of honesty in this country must have fallen very far if that is to be allowed as honest.
I am as certain as I can be that this offence is covered under the general law of the Theft Act or the Fraud Act. Therefore, I think there is a very severe risk, at the least, that this would be regarded as carved out and therefore providing a very much lower maximum sentence for Members of Parliament than in the generalised law. If the Government think that is a good idea, I find it difficult to accept that.
I can understand well the point the noble Lord, Lord Campbell-Savours, makes about making sure that people making claims understand the seriousness of it. I suppose one way of doing that is by ensuring that the claim form that you have to fill up states the risk of criminal prosecution in the event of making false or misleading statements in the claim form. I think that it is going a little bit far to put in a new offence for that purpose to signal to MPs that this is a dangerous business from the point of view of prosecution, particularly when it carries the risk that it would exclude Members of Parliament from the generalised scheme. So I find it very difficult. I know the position that the Leader of the House has taken up, and, as I said earlier, I very much respect all she has done to help us as a House to carry out our work of reconsidering the Bill in a very short time. I think they have done that extremely well, but I really cannot see justification for this particular provision. Therefore, for my part, I would like to see Clause 8 not stand part of the Bill.
Baroness Kennedy of The Shaws: I, too, would like to express concern about the message that is sent to the public. I greatly agree with my noble friend Lord Campbell-Savours that this is really about driving the message home to Members of Parliament, but I am afraid that the message to the public will be rather different.
One of the concerns that I have heard repeatedly expressed by the public when I speak at public meetings, as I have done over the past few weeks in discussing our democracy, is that somehow opportunities are availed to Members of Parliament that are not normally availed to the public if they are involved in dishonest behaviour. One of the examples is that if one were to in any way abuse the social security system, people are prosecuted for making claims or not drawing to the attention of the authorities how their situation has changed and so on. They say, "There seem to be different rules for those in Parliament than there are for the rest of us. If we were found not to pay our capital gains tax on the sale of a house, we would not be able to just write a cheque willy-nilly, there is the real risk that we would be prosecuted". There is a sense among members of the public that there are different rules for Members of Parliament than there are for the general public.
My concern about the creation of an offence specific to Members of Parliament is that it seems to be that, for the very same kind of behaviour that the public would be involved in, Members of Parliament are going to have a much more limited response by way of sentencing. We should be clear about the nature of messages. I agree with my noble friend Lord Campbell-Savours that we want a clear message to Members of Parliament that dishonesty will not accepted. You can do that in a number of different ways, and one was mentioned by the noble and learned Lord, Lord Mackay: by having it firmly on the forms that are filled in that any dishonest claim will be dealt with by existing laws. However, I am concerned that this sends a message to the public that laws will be introduced, specific to Members of Parliament, which carry a much lesser sentence and which will be dealt with in a different way.
The Earl of Onslow: There is an important distinction to be made between a perfectly dotty expenses system from which people can legally claim, albeit with a difference of morality, and doing things like-I am not quite sure if I am in order here-claiming interest on a mortgage that does not exist. Claiming interest on a mortgage that does not exist strikes me as falling exactly into the category to which my noble and learned friend Lord Mackay of Clashfern referred. We should and we must be careful to differentiate between a rotten expenses system that is open to serious difficulties and the criminal law. That is my only point.
Lord Goodhart: I should speak on this briefly because I am one of the Members who gave notice of their intention to oppose the Question that Clause 8 stand part. The noble and learned Lord, Lord Mackay, and the noble Baroness, Lady Kennedy of The Shaws, have made interesting and important points. I will certainly be interested to hear how the noble Baroness the Leader of the House replies to them.
Nevertheless, I simultaneously recognise that the Government have made considerable concessions on this. Certainly, if Clause 8 was in its original form I would have been absolutely committed to opposing it. I find the situation really quite different now. It is important, as I understand it, that the Bill should be enacted as soon as possible. I am therefore anxious to hear what the noble Baroness says in response to those who have spoken.
On what the noble Baroness, Lady Kennedy, said, while I quite recognise that Clause 8(1) produces a crime that is a good deal less effective than the general law on fraud in terms of the maximum sentence, the fact that a sentence is being introduced might in itself make a good impression on the public, most of whom will not be in a position to consider whether this is also a fraudulent offence that would have a much higher penalty, so I am not particularly worried by that problem.
Lord Strathclyde: What the noble Lord, Lord Goodhart, has said is very interesting. I have already spoken once on the clause stand part, but the way in which the debate has moved on has raised in me another thought. I agree completely that the Clause 8 that we now have is a vast improvement on the Clause 8 that we had earlier this morning-and thank goodness for that. However, there now seem to be two clear views on the offence that we have created. The first is that this is tough action by the Government, dealing with these terrible Members of Parliament who have misbehaved, and they need this offence with a new imprisonable penalty. Then noble Lords such as the noble Baroness, Lady Kennedy, say that this is completely unnecessary and that, far from looking tough, it could actually look rather weak by allowing MPs to be prosecuted with a lesser penalty. The noble Lord, Lord Goodhart, gave the impression that he favoured the Government's view rather than that of the noble Baroness, Lady Kennedy. I have no idea how the public will view this. I expect that they will be as mystified as I am, so I am looking forward to hearing
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Lord Norton of Louth: I reinforce what my noble friend has just said, because that is my concern both about the Bill and this clause. The noble Baroness seems to think that the Bill is being introduced to meet public concern and that that is justification for it. It is not addressing public concern; if it was, it would be an abolition of MPs' allowances Bill. That is the real issue.
My fear is that this clause will reinforce rather than ameliorate public concern, for the reasons that have been given in terms of the legal offence, about which a compelling case has been made by my noble and learned friend Lord Mackay of Clashfern. Therefore, what will be left is the political dimension, in terms of what is seen as a lesser offence. Indeed, there is also the issue of commencement. While the Government will claim that the offence has been created, it will not actually have been commenced. My fear about this clause is part of my wider concern about why the Bill is being brought forward.
Baroness Royall of Blaisdon: On the last point of the noble Lord, Lord Norton of Louth, one of the key purposes of the Bill is to address the demonstrable public concern of the past few months and to improve the confidence and trust of the public in our system of governance. However, it is also a question of improving that very system of governance. The Bill improves our system of governance by having in place a better system for the payment of allowances to Members of Parliament.
The main thrust of this debate is whether or not the clause will engender a sense among the public that there are rules for them and different rules for us. MPs, as I have made clear and as noble Lords recognise, can still be prosecuted under the Fraud Act 2006 if they are clearly acting dishonestly. In that respect, MPs and members of the public are exactly the same. I, of course, agree with the noble Lord, Lord Goodhart, that this is a strong Bill, not a weak Bill. We are acting from a position of strength because we are introducing a new offence for MPs which should ensure that, if there is wrongdoing, it will be properly prosecuted.
Lord Campbell-Savours: I have tried to be helpful to my noble friend throughout the Bill but I want to say something now which I hope does not worry her. I think that MPs will not understand the distinction on this issue of dishonesty. It is worrying me, the more I think about it. I want the Bill to go through with a criminal offence, but it must be clear to MPs exactly where they stand. We need a little more reflection on this matter before Report.
Baroness Royall of Blaisdon: Clarity is of the essence whenever offences are being discussed. A person must know whether or not what they are doing is against the law. Like the noble and learned Lord, Lord Mackay, I do not think that standards have slipped so far that people do not know when they are being dishonest. I hear what my noble friend says, but I think that it is extremely important that we accept this clause today.
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Lord Eden of Winton: Is the guidance likely to draw the Member's attention to the fact that, if a knowingly false claim is made, the Member would be liable to prosecution? Would that prosecution liability come under the Fraud Act or would it come under this Bill? If so, what is difference between the two and how would the guidance make that distinction?
Baroness Royall of Blaisdon: That has been the very crux of our arguments today. What I am suggesting is that I will go away and consider the possibility of guidance and what that guidance will say. I have undertaken to come back to noble Lords on that.
Lord Crickhowell: Listening to the speech of my noble and learned friend Lord Mackay of Clashfern, I thought that he demolished the Bill on an important legal point about changing the law. The noble Baroness the Leader of the House has not answered my noble and learned friend's point at all. It seems important that she should.
I have to agree with the point that was made earlier, because I am advised-I believe that I have made it clear-that it is well precedented to create a hierarchy of offences, with additional elements leading to more serious offences. I enumerated some examples earlier. The Fraud Act, based on a Law Commission report, deliberately added dishonesty to knowingly making a false statement. In 2006, the Law Commission and Parliament both thought that there was a difference. Section 17 of the Theft Act was also referred to. Providing false information under an allowances claim could potentially amount to false accounting, provided that the additional elements of the offence were made out. False accounting requires destroying or falsifying an account or document required for an accounting purpose, or dishonesty with a view to gain for oneself or another. The Government continue to believe that it is more appropriate for there to be a choice of potential offences, depending on the evidence and the seriousness of the breach. We also continue to believe that it is important that the option of prosecuting for the lesser offence remains available.
Lord Peston: Before we proceed, I have one or two questions for clarification. Would I be right that, if your Lordships voted that Clause 8 should not stand part, the Theft and Fraud Acts would still be Acts of Parliament and would therefore apply? I would like that answer. As your Lordships know, I felt that we should never have hurried our deliberations on the
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Lord Campbell of Alloway: If this clause, as it stands and has been amended, does not stand part, that is fair enough. The Government could, I think, produce a totally new clause on Report, or even at Third Reading, although it is not often done. That would have to include this new offence. It would have to be in a form that complied with the requirements of any legislation and was totally clear. That is something for the future; I am not suggesting that it should be done.
Baroness Kennedy of The Shaws: I have great sympathy with the noble Baroness the Leader of the House because this is a difficult area of law. However, we are not here creating an absolute offence whereby, if an MP writes something that is at all wrong on a claim form, they can be prosecuted. We accept that absolute offences have to be very rare and that, therefore, there would have to be an intention to defraud and make a claim wrongly. My noble friend refers to the requirement for dishonesty in fraud, which the Law Commission introduced. You can imagine a situation where a Member of Parliament lives at No. 19 in a block of flats and claims for the rent on that flat. He then moves across the hall into flat 20 and does not bother to notify anybody because the rent is exactly the same. There is no dishonesty but he is making a false statement. Rather than going through any complex reorganising or rearranging with the Fees Office, he just makes the same claim. The absence of dishonesty would mean that he would have a defence, but so he would in fraud. It is not part of the hierarchy. I am saying that it is important that Members of Parliament know exactly what is being criminalised. Is it different from fraud and, if so, how? That clarity is what people are urging.
Baroness Oppenheim-Barnes: The crux of our arguments so far on Clause 8 is really rather simple. Is it right that MPs should be judged by the law of the land as it stands if they have committed a clear offence, or should MPs have a harsher regime than already exists in law to try to prevent such dishonesty? If that is right, does it achieve anything and is it fair?
The Earl of Onslow: When the noble Baroness was asked earlier, she said that an offence committed under the Fraud Act had to be shown to be clearly dishonest.
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Baroness Hollis of Heigham: I rise not at all on the substantive issue-like others, I have just parachuted in occasionally-but on a procedural point. My understanding of the procedure-I stand to be corrected-is that only in Committee can you oppose that the clause stand part of the Bill and take it out. I understand that that cannot be done on Report. However, I have been in situations in which we have kept in a clause about which there was some concern but then, on Report, it was decided with the agreement of the House to revert temporarily to Committee to take out a clause before the Bill reverted to Report stage, thus allowing a breathing space to consider the appropriate route.
Baroness Royall of Blaisdon: I am never irritated by my noble friend Lord Peston; I am a very patient person. It is absolutely clear that MPs are now covered by the Fraud Act. If this Bill becomes an Act and Clause 8(1) remains in it-or even if it does not-MPs will continue to be covered by the Fraud Act. We are discussing today a new offence under Clause 8(1). Perhaps one could call it a lesser offence because the threshold pertaining to dishonesty is lower.
Baroness Royall of Blaisdon: He is not less dishonest; there is a lower burden of proof, as I understand it. Under Clause 8(1), you need to have made a statement knowing it to be false or misleading. Dishonesty does not also have to be proved. That is why this offence is different from the offence in the Fraud Act.
I hear the understandable demands for clarity from around the Committee. I have already undertaken to come back to the House on Report and to try to provide guidance, not only for this House but for honourable Members in the House of Commons, on the new offence and thresholds.
My noble friend asked what would happen if we voted against Clause 8 standing part of the Bill today. If we voted against it, the clause would disappear. If we allowed the clause to remain today, this issue could be raised again on Report with the aid of an imaginative amendment.
Notwithstanding any provision of the European Communities Act 1972 (c. 68), the European Convention of Human Rights or the Human Rights Act 1998 (c. 42), nothing in this Act shall be construed by any court in the United Kingdom as affecting Article IX of the Bill of Rights 1689."
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