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Baroness Hollis of Heigham: My Lords, I shall come on to the intended effect of the amendment in a moment but, for the record, perhaps I may point out what the actual effect will be. To do so, I need to set out subsection (3) of Clause 7, which this amendment seeks to change, in the context of the rest of Clause 7. I am looking to the noble Lord, Lord Goodhart, to tell me whether my drafting is incorrect or is fine.

Subsection (2) of Clause 7 provides that, subject to the exceptions created by subsections (3) to (5), no sanctionable benefit is payable during the 13 weeks sanction period where a person is twice convicted as defined in subsection (1). Subsection (3) of Clause 7 provides the power to make regulations providing for income support to be paid, albeit at a reduced rate, during the sanction period. By changing "shall" to "may", the application of those regulations--that is, the payment of any income support-- would become optional; or, as the noble Earl would say, discretionary. However, the provision would set no criteria on which to base a decision not to pay any income support at all. I am sure that the House will agree that this would be fraught with danger, far from good legislation and very unwise.

It may even have the opposite effect to the one that the noble Earl, Lord Russell, intends. I think he intends--we are talking about wording--to seek a discretion to disapply the sanction in certain circumstances. This would mean that claimants on income support could be treated differently from those on other sanctionable benefits. It would also create the potential for disparity of treatment within the income support client group. It would be possible for two claimants, both receiving income support, both having been twice convicted of identical benefit frauds, to receive different decisions on whether the sanction was applicable.

It envisages a state of affairs where a family on income support might not be subject to the sanction because an officer felt that their circumstances did not merit it, whereas a family in identical circumstances, but receiving JSA, would automatically be subject to it. This cannot be fair, but would become a possibility were the amendment to be accepted.

It would also be unfair in another way. The sanction is designed to catch those who repeatedly cheat the benefit system. This is defined not by reference to whether there has been an over-payment of benefit or

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to the investigating officer's opinion on the claimant's motives, but by the decision of the court. The person must be found, or plead, guilty to benefit fraud not just once but twice. So it is a matter of fact that the person has defrauded the system twice. If a person disagrees that he has been so convicted, there is, of course, a right of appeal.

Having established the fact that a person has been twice convicted, the next question to be established is whether he is entitled to a sanctionable benefit and at what rate, if any, it should be paid during the period of the sanction.

As noble Lords will appreciate, and as we discussed during the earlier stages of the Bill, the effect on benefit will depend on the person's family circumstances. The standard rate by which income support will be reduced will be 40 per cent of the personal allowance--£20.90 at current rates. But that will be ameliorated where a member of the family is pregnant or seriously ill. In such a case benefit will be reduced by 20 per cent of the personal allowance--£10.45 at current rates. For those on income support and jobseeker's allowance (income based), housing costs will, if they are in rented accommodation, continue to be met through housing benefit. Again, there will be a right of appeal.

This package of safeguards ensures that application of the sanction will not put vulnerable people at risk. I believe that the element of discretion that the noble Earl is seeking to introduce in this aspect is, therefore, unnecessary. As I say, it is already the case that someone who is vulnerable will have legal protection, as we have specified, and will have a much reduced sanction as a result.

I understand what the noble Earl is seeking to achieve. However, I believe that he is turning the issue into a lottery as regards which benefit a person is receiving--for example, whether he is receiving income support or JSA--and what opinion the investigating officer might have of the claimant's motives, rather than leaving it to the independent judgment of the court. I believe that that would be an unwise route to follow. With that explanation, I trust that the noble Earl will feel able to withdraw his amendment.

4.30 p.m.

Lord Bruce of Donington: My Lords, before the noble Earl withdraws his amendment--

Baroness Amos: My Lords, I should remind my noble friend that this is the Third Reading stage of the Bill, and the Minister has already spoken.

Earl Russell: My Lords, if the noble Lord wishes to intervene before the Minister sits down, I believe that that would be in order.

Lord Bruce of Donington: No, my Lords.

Earl Russell: My Lords, I thank the Minister for that reply, which was both careful and thoughtful. Indeed, one would expect no less of her. Some parts of her response I take very seriously; some parts of it are

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worth considerable thought; and some I take rather less seriously than others. Clearly my amendment was not correctly drafted. I returned to the House after illness just two hours before the last time for tabling amendments. I offer the Minister my apologies in that respect.

The difference between the treatment of income support and JSA is clearly indefensible. Had I been minded--which I was not--to press the amendment, that would have been sufficient to dissuade me from so doing. However, when the Minister talks about lotteries, I am slightly less persuaded than she hoped. The noble Baroness says that my proposal would mean that two cases of benefit fraud would not be treated identically. I do not have any problem with that: two cases of dangerous driving are not treated identically, as we were painfully reminded yesterday. Two cases of dangerous driving are not necessarily equally iniquitous or equally serious. The same goes for two cases of benefit fraud.

I believe that it is perfectly proper, and has been for a long time, for sentences to be appropriate to the particular case before the court. That was all that I sought to achieve. I do not believe that there is any great problem involved. The Minister invoked the categories of vulnerable people. I believe that she knows that I am not quite as impressed by that as she would wish: first, because I do not believe that there is spare fat on income support to allow sanctions below income support level to provide adequate support for vulnerable people; and, secondly, I have never been able to persuade myself that vulnerability is entirely confined to those categories that happen to have been foreseen by the DSS.

In particular, I asked the Minister a question during the last stage. I have asked her previously and, as she has raised the point, I shall take the liberty of asking her this question again: can she tell us, before I withdraw the amendment, why in DSS thinking single people cannot be vulnerable? Is the Minister prepared to help me on that point?

Baroness Hollis of Heigham: My Lords, single people can be vulnerable if they have, for example, a disability. I am talking in broad, general DSS terms that do not apply specifically to this Bill. They can also be vulnerable if they are suffering from a severe illness and if they are pregnant. Similarly, former offenders, and so on, can be vulnerable. So single people can be vulnerable; but being single does not make them vulnerable. People may suffer from conditions that make them vulnerable, whether or not they are single or, indeed, are living in a family household.

Earl Russell: My Lords, they may not fall into a vulnerable category; they may be destitute without being vulnerable. This puzzles me. However, I do not believe that we shall move any further on the issue tonight. We shall have to return to it on a future occasion. The point is a general one, to which we shall also return in the future. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Earl Russell moved Amendment No. 8:

    Page 13, line 11, leave out from second ("references") to ("to") in line 13.

The noble Earl said: My Lords, this is another amendment that leads us to consider whether the mandatory sentence is entirely appropriate. It relates to the provision that says that references to a conviction shall include cases where the court makes an order for a conditional discharge. I made the point a short while ago that one case is not necessarily as severe as another. It is a reasonable presumption that a case where the court has ordered a conditional discharge is not as severe as one where the court has thought that something rather more serious was wanted.

I wonder whether there is a slightly "slot machine" approach in the insistence that cases involving a conditional discharge shall be treated as being of exactly the same level of gravity as anything else. I shall listen with great interest to the Minister's reply. I beg to move.

Baroness Hollis of Heigham: My Lords, the effect of this amendment would be that any conviction resulting in a conditional discharge would not count as a "strike" for the purposes of these provisions. It would have two additional effects: first, it would exclude around a third of our successful benefit fraud convictions in England and Wales from the scope of these provisions--something like one-third of those cases where someone is found guilty by the courts in England and Wales result in a conditional discharge. Secondly, it would create a disparity of treatment in relation to the application of the provisions in Scotland. I know that the noble Lord, Lord Astor, is keeping a watchful eye on such disparities.

We have given most careful consideration to the points made by the noble Lord, Lord Goodhart, in Committee, which were raised again today by the noble Earl, Lord Russell. Where the court discharges the offender conditionally, we believe that that should be treated as a conviction for the purposes of these provisions. I could go into detailed argument on the matter, but it may assist the House if I give an example of the kind of situation that I have in mind.

I have before me some cuttings from the Derbyshire Times dated 22nd February 2001. One cutting describes how police were waiting when a woman tried to carry out her third benefit fiddle at a Post Office. I shall not give the woman's name, but she was given a replacement income support book after having reported her original book lost. She cashed one slip worth just under £100 from the "lost book", obtained a further £100 on a second visit and then called again for a third time at the Post Office. The police prosecuted. The woman admitted obtaining money by deception in November 1999. She had previous convictions for the same offence, for handling stolen goods and for conspiracy to defraud; and was given a one-year conditional discharge with £148 costs.

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Far be it from me to comment on the appropriateness of the sentence; indeed, like your Lordships, I do not have knowledge of the full background. All I have for reference is the press cutting from a local newspaper. I looked through the other cuttings and found several cases that resulted in a conditional discharge; for example, someone was given a two-year discharge and asked for 22 other similar offences to be taken into account, and so on. In such circumstances, where something like a third of all those people found guilty are given a conditional discharge, I honestly do not believe it to be reasonable for us not to count that as a benefit offence for these purposes. We want those who have been found guilty but are given a conditional discharge--as I say, far be it for me to say that this is not an appropriate sentence--to take it seriously and to know that a repeated offence will jeopardise their benefit.

However, there is also a Scottish dimension to this issue. In Scotland, the nearest equivalent to a conditional discharge is an admonishment. As with conditional discharges in England and Wales, around a third of our successful prosecutions in Scotland result in admonishments. An admonishment is basically a "telling off" by the court. No other penalty is applied and there are no conditions applied. But under Scottish law an admonishment is a conviction.

If, as the noble Earl suggests, a conditional discharge in England or Wales is not to be treated as a conviction, we have an inherent disparity of treatment in relation to Scotland. We face the possibility of two people being treated differently either side of the Border. We would have a disparity of treatment regarding cases where a court in Scotland makes a probation order which my amendment on Report removed. As your Lordships may recall, under the Criminal Procedure (Scotland) Act 1995, such cases are deemed not to be convictions. However, the position in England and Wales differs in that cases where the court makes a probation order are convictions.

Therefore, not only do I think it inappropriate that conditional discharges should not be counted as a conviction--I have just referred to one case but I could have referred to many more--but the noble Earl's amendment would open up the very disparities in treatment between Scotland and Wales that previous amendments on Report sought to overcome.

However, I may be able to help the noble Earl in one respect. We have thought long and hard as to whether absolute discharges should be treated as convictions--these are a much rarer category, perhaps 10 or a dozen a year--and have concluded that they should not be so treated. It may be valuable to the House to spell that out. Although the person is undoubtedly guilty, the granting of an absolute discharge is equivalent to the court saying, "This case should not have been brought before us". It may be, for example, that the offender was suffering from post-natal depression or had recently suffered a bereavement which came to light

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only at the hearing or in a pre-sentencing report provided by the Probation Service. Although at the time of the offence someone was in good health, at the time the sentence came to be determined that person may be found to be suffering from some serious illness.

In order to ensure parity of treatment both sides of the Border, we have decided--I hope that the House welcomes this--that absolute discharges should not be treated as convictions for the purposes of the benefit sanction. It is not on the face of the Bill and does not need to be given under the Powers of Criminal Courts (Sentencing) Act 2000. Given that we have responded to some of the earlier concerns of your Lordships and have made the decision that the very special cases of absolute discharges should be exempt, I hope that the noble Earl will feel that he has at least made some headway today and in the light of that will feel able to withdraw his amendment.

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