Parliamentary Standards Bill

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 statement or representation dishonestly and with a view to obtaining payment of any benefit. That carries a maximum penalty on conviction of seven years’ imprisonment. The differences between the two offences are that the more serious offence requires proof of dishonesty and that the purpose of the false statement was to obtain payment of a benefit. 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. 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.