The Government’s overhaul of community sentences will ensure the public have confidence in the system, Justice Minister Lord McNally said today as he introduced the detailed plans in Parliament.

Lord McNally said the system will be strengthened to ensure “non-custodial sentences provide robust punishment, are effective in reducing reoffending and give a better deal to victims”.

His comments follow pledges last week from Prime Minister David Cameron and Justice Secretary Chris Grayling to toughen up community sentences.

The new provisions are contained in a string of Government amendments set to be made to the Crime and Courts Bill in the House of Lords today.

The plans involve ensuring non-custodial sentences carry a punitive element except in “exceptional circumstances”, using new technology to track offenders, expanding the use of restorative justice, removing the £5,000 limit on compensation orders in magistrates’ courts and giving courts new powers to find out about the wealth of people they are sentencing.

But Labour shadow Home Office minister Lord Rosser questioned whether Government’s real intention was to get the courts to impose tougher sentences “or give the impression this is the case for the benefit of the Conservative right wing and the right wing media”.

Introducing the new measures, Lord McNally said community orders could be effective at tackling reoffending and pointed out that around 80% of the sentences handed down by the courts last year were non-custodial.

He told peers: “At present community orders do not always inspire public confidence. Some community orders do not contain an element that the public would consider punitive, demanding or restrictive.

“For example in 2011 around 10% of community orders contained only a supervision requirement, while the percentage of successfully completed orders was still low.

“The Government is determined to increase public confidence that community orders provide a proper sanction to criminal behaviour.

“Only in this way can community sentences be effective in tackling the causes of offending while reassuring victims and communities that justice has been done.”

Lord Rosser said two-thirds of community sentences already had a punitive element and questioned whether the Government believed the courts were making the wrong decision in the other third of cases.

“The Government say they do not want to tie the hands of the courts, but clearly though, at the very least they want to give the appearance of telling the courts that they have got it wrong up to now in their community order sentencing,” Lord Rosser said.

He said Mr Grayling made it clear tougher community sentences should not be used as an alternative to short prison sentences of a few months.

“It would appear that the Government’s proposals will not reduce costs or the prison population, but rather with the emphasis on an extended mandatory requirement would, if actually implemented, increase costs without necessarily impacting positively on reoffending,” he said.

“Is the Government’s real intention to impose tougher sentencing on the courts with community orders with an emphasis on a mandatory requirement on punishment and very little said on rehabilitation, or alternatively is the intention to give the impression that this is the case for the benefit of the Conservative right wing and the right wing media while in reality continuing to leave it to the courts to decide the appropriate balance between punishment and rehabilitation in a community order as they do now?”

Independent crossbencher Lord Ramsbotham, a former chief inspector of prisons for England and Wales, warned against “posturing about punishment and undermining the position of the probation service”.

Urging ministers to reconsider their approach, during committee stage debate on the Bill, Lord Ramsbotham said he was “seriously alarmed about the state to which the probation service has been reduced since 1997”.

Former lord chief justice of England and Wales Lord Woolf welcomed provisions on restorative justice but warned that provisions for a punitive element to community orders would cause “huge difficulties” for sentencing.

“I regard it as being – I’m sure this is not intended – offensive to the judiciary, who strive to ensure that each person that has to be dealt with is sentenced to the appropriate sentence.”

The independent crossbencher said it must be “unjust” for a judge to impose something that “he or she doesn’t think is the appropriate form of punishment”.

Baroness Butler-Sloss, a retired senior judge and independent crossbencher, expressed “alarm” about the proposals for a “punitive element” in community sentences in all but exceptional circumstances.

She said: “There will be many circumstances which are not exceptional where it would be unjust or inappropriate to make an order that was seen as a requirement of punishment.”

Labour former Home Secretary Lord Reid of Cardowan said the Government had taken a “blunt and crude” instrument to reassure the public about the effectiveness of community sentences.

He said the policy was a “gratuitous attempt to play to the gallery” and said the problem was not the weakness of community sentences but the public perception of them.

“We need to do more to illustrate to local communities the effect of what is being done for their good as recompense and part of rehabilitation,” he added.

Lord McNally later introduced amendments to the Bill aimed to help prosecutors combat fraud, money laundering and bribery.

Under the new system of deferred prosecution agreements (DPAs), companies would pay financial penalties, make amends to victims and take steps to stop behaving in the same way in the future.

If they fail to stick to the agreement the company could then be prosecuted for the original offence.

“DPAs will enable more organisations involved in wrongdoing to be brought to justice and secure better outcomes for victims,” Lord McNally said.

“Last year alone fraud cost its victims and the taxpayer an estimated £73 billion – this is unacceptable. More needs to be done to hold organisations involved in wrongdoing to account.”

For Labour, Lord Beecham said the Government would have to convince the public that under the new system companies would not be “let off lightly”.

Lord Woolf welcomed the proposed change as a “very valuable step” and Labour former attorney general Lord Goldsmith said he was in favour of the them “broadly speaking”.

But Liberal Democrat Lord Phillips of Sudbury, a lawyer, said the measure was “fundamentally unacceptable”.

He told peers: “This is plea bargaining, this is breaking the rule of equality before the law because it places huge, powerful, sophisticated companies engaged in pre-meditated and long-term fraud in a different position from a man or woman had up before the local magistrates for shop lifting, which is another form of economic crime.

“I really do believe that we are driving a coach and horses through the ancient traditions of this country by giving privilege, because that’s what it boils down to, to the already rich and powerful.”

Lord McNally, however, denied the Government’s move was not the start of the “slippery slope to plea bargaining”.

Committee stage was later concluded, although unusually the Bill will be given a second committee stage to allow peers to discuss further the amendments introduced today.

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