PUNISHMENT should be stepped up for people convicted of illegally resuming flats for redevelopment, United Democrat legislator James To Kun-sun said. Mr To said the maximum penalty was now a $500,000 fine and although the Government had planned to increase the penalty to $1 million, a fine was not an effective deterrent. He said some developers hired drug addicts or ''small potatoes'' in triads as ''front-line workers'' to intimidate the tenants. ''The fine doesn't mean anything to these front-line people because they don't have any money,'' he said. The legislator said a jail sentence would be a better deterrent than a fine. Mr To suggested a jail term of at least 12 months should be imposed on first-time offenders. He pointed out that without such a jail term, the offence would not be an ''arrestable'' one, meaning the police could not arrest any first-time offenders. ''Arresting people will be a better deterrent than just summoning them to appear in court,'' he said. A government spokesman said Mr To's suggestion would be considered. On Monday, police arrested a man near a building in Fa Yuen Street, Mongkok whose residents said triads had been intimidating them to get them to move. The suspect, believed to be a triad member, was wanted in connection with an assault on a 75-year-old resident of the building this month.