HC Deb 27 May 2004 vol 421 cc1710-2
18. Mr. Henry Bellingham (North-West Norfolk) (Con)

What plans she has to assist small businesses to combat fraudulent schemes targeted at small and medium-sized businesses. [176007]

The Solicitor-General (Ms Harriet Harman)

There is a wide range of initiatives under way across Government to help small business combat fraud. Those include helping small businesses protect themselves against fraud and ensuring better investigation and prosecution of fraud.

Mr. Bellingham

I am grateful to the Solicitor-General for those remarks and for the effort she is putting into the dealing with the problem, but is she aware that many of the scams are becoming ever more brazen and complicated? One was reported to me the other day that was targeted at small and medium-sized enterprises and involved an organisation in Holland that purported to be an official lottery. It informed the recipient that they had won a large amount of money, asked for their bank details and asked them to send a handling fee. Some small firms have already been conned by that, believe it or not. Can the Solicitor-General tell the House what further steps she will take to try and sort out the problem?

The Solicitor-General

The hon. Gentleman raises an important point and brings to the attention of the House the fact that huge amounts of money are involved in frauds perpetrated against small businesses. Often that has an international dimension and is highly organised and complex. He may be aware that the Federation of Small Businesses now has a column in its newsletter called "Scamwatch". Perhaps that ought to include the fraud that the hon. Gentleman described.

It is important that we work across Government Departments and across agencies. It is an issue for the Department of Trade and Industry, the Financial Services Authority and the Office of Fair Trading, as well as for the police and prosecutors and small businesses themselves.

Mr. Peter Pike (Burnley) (Lab)

Does my right hon. and learned Friend accept that many small businesses have difficulty with the current legislation on money laundering? Does she agree that we should provide more guidance, so that people do not fall into traps that they are not expecting?

The Solicitor-General

We are always happy to give guidance to small business, and we keep in close contact with the chambers of commerce as well as the Federation of Small Businesses. For the most part, they ask for more police resources to investigate fraud and closer working with prosecutors, but if there is a particular issue with small businesses having difficulty with the important new money-laundering regulations, we will do everything we can to help. Those regulations and the changes in the law are very important to tackle a growing problem.

Mr. David Heath (Somerton and Frome) (LD)

There certainly is a growing problem, not only with "phishing" for bank details, but with the west African scam, which has been mentioned, and with what I consider to be the worst of all: firms purporting to be Government Departments or agencies asking for registration fees from companies for functions that are, in fact, free of charge.

Many of those cases are reported to local trading standards departments in the first, instance, and it is difficult to assess the scale of the problem across the whole country. Can the Solicitor-General assure me that such cases are collated and that what is perhaps minor fraud in individual cases is considered as major fraud when it is replicated across the country and internationally?

The Solicitor-General

Just as Ministers must work with colleagues in other Departments, so the Crown Prosecution Service must work closely with the police—on fraud, it works particularly closely with City of London police. It is also important for local police forces and local trading standards departments to work together. The line between what is a criminal offence and what is taking advantage is often blurred, and we must keep an eye on that point. I shall take up the hon. Gentleman's suggestion and examine liaison between trading standards departments and local police on that issue.