I beg to move amendment 36, in clause 98, page 61, line 21, leave out from “(a)” to end of line and insert “—

(i) omit the words from ‘section 115A’ to ‘or’, and

(ii) for the words ‘the corresponding provision for Northern Ireland’ substitute ‘penalty as alternative to prosecution in Northern Ireland’, and”.

This amendment updates a parenthetical description in section 6B(2)(a) of the Social Security Fraud Act 2001.

With this it will be convenient to discuss clause stand part.

This straightforward amendment is a minor and technical change that looks to update section 6B of the Social Security Fraud Act 2001 by removing the phrase “the corresponding provision”, which will no longer be needed once clause 98 is agreed, and substituting in appropriate wording.

Section 6B, as enacted, references two Acts in which a penalty is defined in legislation and which would attract the loss-of-benefit penalty. The first is the Social Security Administration Act and the second is the equivalent legislation for Northern Ireland. Clause 98 will remove reference to one of those Acts—the Social Security Administration Act 1992—to ensure that the loss-of-benefit sanction is no longer applied if an administrative penalty has been offered by the DWP and accepted by a benefit claimant. Doing so will mean there will no longer be corresponding legislation in section 6B(2)(a) of the Social Security Fraud Act 2001, as it will reference only Northern Ireland legislation. I assure the Committee that the amendment is minor and technical and will have no operational impact on the remaining provisions in the 2001 Act.

Clause 98 removes the loss-of-benefit provisions in cases where an administrative penalty has been offered and accepted as an alternative to prosecution. As it stands, the acceptance of an administrative penalty is compounded by a further four-week suspension of certain benefit payments. The suspension of benefits is made in addition to the acceptance of the administrative penalty and alongside the obligation to repay the overpayment. By removing the four-week loss of benefit in these cases, the clause allows for a more proportionate approach to less serious, lower-value fraud and to first-time offenders.

However, the loss-of-benefit penalty is not being removed in its entirety: it will still apply in cases that are convicted in court, with a potential loss of benefit of up to three years. Limiting the loss-of-benefit penalty to convicted cases will ensure that only the most serious cases of fraud face the harshest consequences, without imposing unnecessarily harsh sanctions on lower-level offenders. On that basis, I commend the clause to the Committee.

The clause amends the Social Security Fraud Act so that if an administration penalty is accepted instead of prosecution, the individual does not lose their benefit provisions. From what the Minister said, it sounds like different scenarios are affected.

I appreciate what the Minister said about the different situations—for example, for a lower-level or first-time offence, someone might not lose their benefits—but the challenge is that this perhaps seems like a soft touch, depending on the situation. Does there not need to be a bit more discretion than just a threshold depending on each case being dealt with? What are the expected values of the penalties, and how do they compare with the typical benefits? Although we need to ensure that safeguards on affordability remain in place and that claimants can meet their essential living costs—that goes without saying —it is not clear why a penalty should automatically prevent the loss of benefits. Ultimately in these situations, there has to be a deterrent in addition to the penalty.

Government amendment 36 will update the Social Security Fraud Act 2001 to allow a penalty to be an alternative to prosecution in Northern Ireland. Our questions on that are the same as those for clause 98. I have nothing further to add.

It is a pleasure to speak to this minor amendment. I just wanted to point something out about the wording of amendment 36. In clause 98(2) there are two instances of the letter (a). I know which (a) the Government intend the amendment to refer to, but I wondered whether the wording could be clarified.

I thank the hon. Lady for pointing that out. I will take advice on whether a further amendment may be required but, as she says, it does appear obvious what I mean when I refer to that measure.

On the comments from the hon. Member for South West Devon, we want to make a change so that only the most serious cases fall foul of the loss-of-benefit penalty. That increases hardship for people but, when it comes to our ability to reclaim money, in practical terms it means we would have to wait four weeks before we could start deducting from a person’s benefits.

To to give some reassurance about thresholds, were we to consider that somebody’s fraud, even in a lower-value case, was particularly outrageous—of course, that is a judgment for our investigators based on the sorts of things they see each and every day—we do retain the ability to go straight to prosecution, particularly if we think the fraud is part of something more serious or organised.

The value of the penalty is £65, but if someone loses four weeks’ benefit, as at the moment, the impact is clearly more significant. I accept that, but I think there is a strong question of proportionality here, and of the need to prevent somebody from falling into further poverty —and potentially as a consequence of that being pushed into wider activity that may be, shall we say, unhelpful.

Amendment 36 agreed to.

Clause 98, as amended, ordered to stand part of the Bill.

Ordered,

That further consideration be now adjourned.—(Gerald Jones.)

Adjourned till Tuesday 18 March at twenty-five minutes past Nine o’clock.

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