Fraud Bill [Lords]

May I begin by declaring an interest as a non-practising barrister? Like every speaker in our debate, I welcome the Bill, which is a good measure that deals effectively with an unnecessarily complex area of the criminal law. As has been said, there can be no doubt that fraud is a serious business. The criminal law is required to deal with it effectively, and we do not want to construct laws that allow criminals to find loopholes. The Solicitor-General has made it clear that that is the purpose of the Bill, which I welcome wholeheartedly. I particularly welcome the fact that it deals with the fraudster’s intentions, rather than the consequences of fraud. Instead of dealing with deception and the question of who is deceived, which causes the problems that we have discussed, it addresses the fraudster’s intentions and whether or not they are dishonest. That is an extremely effective riposte to the fact that, as fraud is increasingly perpetrated electronically, there is no one to be deceived. I wish to make three points about the Bill against the background of my broad welcome. First, I echo the remarks of my hon. Friend the Member for Beaconsfield (Mr. Grieve) about jury trials. This is a good Bill, because it makes the law of fraud simpler, thus weakening considerably what, in my view, is an already weak argument for a reduction of the right to jury trial for individuals accused of fraud. In my experience juries are well able to deal with the matters put before them in a fraud trial, so long as the lawyers putting those matters before them do so in a straightforward way. The Bill will help them do that, which means that juries will be more, not less, able to deal with fraud trials. I recognise that, as the Solicitor-General said, these arguments are for the time when we deal with another piece of legislation, but I hope that he will not do something counter-intuitive, by passing one piece of legislation that helps juries, and then not taking that into account when he considers whether juries are able to deal with fraud trials. The second issue that I want to raise also follows on from comments by the Solicitor-General with which I wholeheartedly agree. It should not be up to the criminal law alone to deal with fraud. It is up to the Government to consider the other ways in which they can reduce the likely incidence of fraud. Fraud prospers in complex systems. It is much easier to perpetrate a fraud in a system that is difficult to follow, because that makes it difficult for those who enforce the rules to work out how the rules have been flouted, and difficult for a court and a jury to work out how the system has been abused. I urge the Government to examine the systems for which they have responsibility and ensure that they are as simple as they can be. We have seen recently that in the tax credit system, the internet portal has become subject to precisely the type of fraud that the Bill is designed to address. The Government need to review not only the criminal law but the systems in place in the benefits system and the tax credits system, and ensure that where simplicity is possible, it is introduced, so as to play its part in defeating the potential fraudster. Thirdly, I return to my earlier intervention and press the point about the maximum sentence in clause 11. The clause deals with obtaining services dishonestly. I welcome the fact that it redrafts the law so that dishonesty, rather than the deception of an individual, is the key question, but it is a restatement of the law with regard to maximum sentences. The Bill offers an opportunity, which is well taken by the Government, to simplify the whole area and make it straightforward, consistent and easy for the general public to understand so that everyone knows what they are obliged to do and what they are not permitted to do, but there is a potential anomaly in the law as it stands with regard to maximum sentences. Under the Bill, if someone were to perpetrate a dishonest act by representation or by omission or in other ways, leading to a gain or loss of money or property, they would face a potential sentence of 10 years. If, however, they obtained services by dishonesty, they would face a maximum sentence of only five years. There must be circumstances, as we can all envisage, in which the value of services is at least as high as the value of property, which is encompassed by the earlier clauses. If, for example, one defrauds a merchant bank of property or money to a high value, one faces a potential sentence of 10 years. If, on the other hand, one defrauds a merchant bank in such a way that one receives the services of a very highly paid, professional and experienced merchant banker, which might be worth as much as or perhaps more than the property of which the bank could have been defrauded, one faces half the potential maximum sentence. I accept that, as the Solicitor-General says, not every case results in the maximum sentence, but we could take the opportunity in the Bill to send a message that dishonest acts leading to the defrauding of an individual or a company are all potentially very serious. Whether people are defrauding them of services or of property, the maximum penalty available should be consistent across the board. The Government could take the opportunity to establish that in the Bill, and would be well advised to do so. I hope that we will be able to return to the matter in Committee, and I invite the Government to think carefully about it. Broadly speaking, I welcome the Bill. It is a good Bill, and it is generally well targeted. However, it could be better, and I hope that at the conclusion of its passage through the House, it will be.