Fraud Bill [Lords]

I congratulate the Solicitor-General on having secured that rarest of things for a Law Officer—an outing at the Dispatch Box on Second Reading. I note that the interest of the House has not been wholly seized by this matter, but the Bill is extremely important and I am grateful for the manner in which he introduced it. Furthermore, it is clear that the Bill was well thought through before its initial presentation and I make my remarks against that background. The Bill is an opportunity to simplify and strengthen the law in an important area. If we get it right, we will undoubtedly improve our ability to fight fraud in all its forms, and we wholly support the principle behind what the Government are trying to achieve. As with all technical Bills, this Bill has quite a long history. There is no doubt that the Law Commission’s 2002 report was a document of great value. I would not want Second Reading to pass without expressing the Opposition’s gratitude for the Law Commission’s work, because the report was a model of its kind. I note that the Serious Fraud Office was extremely positive about the commission’s proposals, stating that the suggested improvements would not only clarify offences of fraud, but simplify the law to allow more effective prosecutions, and I am sure that all hon. Members want to see exactly that. I agree with the Solicitor-General that, although fraud sometimes sounds like an esoteric issue that affects others, that is not the case. The scale of the problem is considerable—his estimate of £14 billion appears well researched—and everyone pays for it through extra credit card payments, if nothing else, so the burden falls upon the law-abiding, who provide the fruit of such dishonest activities. Fraud is extensively used to fuel wider criminal activity. The evidence from the National Criminal Intelligence Service shows that, unless we succeed in tackling fraud properly, there will be knock-on consequences in terms of wider criminality and, indeed, terrorism. In my career as a barrister, one fraud case that I did involved allegations of widespread benefit fraud that was being used to fuel the activities of the IRA. The fraud was taking place on a massive scale in south-east London with stolen benefit books and the case brought home to me how the eventual destination of such funds can be inimical to the public good. There are clearly problems with the current law, which originates from a variety of sources, and I accept the Solicitor-General’s comments on that matter. The Theft Act 1968 attempted to simplify matters on obtaining property by deception, but the patchwork of law is unsatisfactory and the multitude of overlapping but distinct statutory offences does not make it easy for the prosecutor to decide the counts on which to draft an indictment, whether there should be alternative counts and how best to present a case to a jury. In my experience of being involved in fraud trials, an astonishing number have come unstuck in one form or another, long before they could be presented to a jury, simply because the prosecutor—I hasten to add that I was defending in these particular cases—had failed to understand the true nature of the fraud or, indeed, who the ultimate victims were. Although the evidence of dishonesty was manifest, it was impossible to show that the people who were alleged to have been deceived had been deceived. In some cases, the wrong target altogether had been selected. In a case where it looked as though a building society had been the true victim, it became clear as the case proceeded that the true victim was almost certainly the taxman. Those examples classically illustrate some of the problems that arise. In those circumstances, there is a powerful argument for reform. The Bill sets out to achieve that in a form that seems to have considerable internal logic and coherence. The creation of a new single offence of fraud that can be committed in three ways appears to be eminently sensible. We will judge it and scrutinise it in Committee on the basis that it fulfils three requirements. First, it must overcome the complexity of the current law and make it more comprehensible to juries. One way of achieving that would be to make fraud indictments simpler and more self-explanatory. At first glance, the Bill seems to go a long way towards achieving that goal. Secondly, the new offence must provide a genuinely useful tool for prosecutors. My Front-Bench colleagues in the other place have said that the current range of specific offences can lead to complicated decisions, so we will need assurances as the Bill goes through that a single offence will really help to focus investigations at an early stage and help prosecutors to get the charge right. Thirdly, we will need to be satisfied—we believe at first sight that we shall be—that the new offence will be adaptable to the changing face of criminality in the 21st century. The Solicitor-General pointed out areas where new offences have been created to deal with new technology. We entirely welcome that. We will seek in Committee to ensure that it delivers what he believes that it will. Let me, at the risk of repetition, raise one or two slight areas of concern. The Solicitor-General mentioned the continuation of the common law offence of conspiracy to defraud. He provided some reassurance in the form of a promise that the Government will not just let that issue drift off into sleep. I would be happier if we had greater reassurance, perhaps by means of a sunset clause to ensure that, unless the Government revisited the matter within three or five years, the power to bring a prosecution under common law for conspiracy to defraud would lapse. The arguments against keeping the common law offence of conspiracy to defraud are enormous. Throughout my career at the Bar, there have been numerous occasions on which that offence has come into disrepute when used. It is possible for a person to be convicted of such an offence if he conspired with another person, yet if he carried out the act on his own, it would not amount to an offence. That immediately introduces an element of concern for anybody who believes in civil liberties. Although I am mindful of the Solicitor-General’s comments on the subject and appreciate that Governments have a tendency to caution, I am sorry that they have not been bolder, especially since the Law Commission stated emphatically that it perceived no good ground for the continuation of the common law offence of conspiracy to defraud. Indeed, the Government’s report of November 2004 acknowledged that when it stated:"““It is normally fundamental to a codification exercise such as this, that the common law should be repealed in favour of the new statute””." It is strange that the Government have clung so obstinately to not doing that. I am mindful of the Solicitor-General’s comments on the views of Lord Justice Rose and his Committee, but against that, the hon. and learned Gentleman need only read the speeches of Lord Lloyd and Lord Ackner—his contributions on many aspects of the law and, indeed, to legislating in Parliament, will be sadly missed—who argue that there is no good ground for retaining the common law offence. I hope that the Government will listen during our proceedings on the Bill. I shall not press the Solicitor-General to get rid of the offence immediately, but we need cast-iron reassurances that, unless the Government can make a good case for retaining it, we can have a finite date by which it will go.