House of Commons Hansard Debates for 23 May 1995

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If this scheme is not a hybrid scheme--it combines a tariff with loss of earnings--I do not know what to call it but, in order to save his blushes, perhaps the Secretary of State has thought of a new title for it.

I shall outline some of our detailed objections to the Bill in a moment but I deal first with the issue of cost, which was raised by the Home Secretary. Throughout his sorry stewardship, he has always tried to shift the blame for unpopular policies or events on to someone else. We saw that earlier this year in his handling of trouble within the Prison Service and we see it now in his handling of the compensation scheme. If it has not been the victims of crime who are to blame for the cuts, it has been the Labour party. The Secretary of State has suggested from the Dispatch Box that we are as implicated as him because we have not guaranteed that a future Labour Government would make good the cuts in the scheme which he has made. We welcome his expectation of an imminent Labour

Government--that is thoroughly to be welcomed--but that Government may be two Conservative Budgets away and two public spending rounds away. He cannot even tell me what the Chancellor of the Exchequer is going to do tomorrow--indeed, the Chancellor of the Exchequer cannot even tell me that- -still less what will be in his Budget in November 1995 or November 1996, so he can hardly expect a responsible Opposition to say what their spending plans will be six months after that. What is more, we have always had the gravest doubts about the assumptions behind the escalating estimates given for maintaining the existing scheme. The Secretary of State states in the explanatory and financial memorandum to the Bill, and has repeated it since, that the cost by the year 2001 would be £460 million. I do not know whether he realises that the cost estimate for the year 2001 has already dropped by £110 million in the space of just 12 months.

Who are we to believe? Just 12 months ago, in the 1994 campaign guide, Conservative central office said--I assume that this was on the basis of information provided by the Secretary of State's special adviser and checked with the Home Office--that

"without the changes now being made, spending would have increased to around £570 million by the year 2000."

Who are we to believe--Conservative central office last year or the Home Secretary today?

I am not saying that the Secretary of State has made up the arithmetic but the figures are a moving target. They have come down by £110 million in the past 12 months, so how are we to know that they will not come down even more in the next 12 months, especially given the great sensitivity in his calculations, which I have studied carefully, to the very substantial percentage increases that are assumed in the value and number of awards likely to be made in the next five years?

Mr. Howard: The hon. Gentleman says that he cannot make a commitment to reinstate the scheme because the prospect of a Labour Government is so distant. Indeed, I would argue that it is considerably more distant than he suggests. However, if he says that he cannot commit a Labour Government to reinstating the current scheme on those grounds, why on earth has he tabled a reasoned amendment suggesting that the proposed scheme is inadequate? If he believes that it is inadequate, he must make a commitment to put in place a more adequate

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scheme that will cost more. If he is not prepared to make such a commitment, he should not have tabled a reasoned amendment such as this.

Mr. Straw: I was just about to deal with the purpose of the reasoned amendment, which is to sustain the current scheme. If the Home Secretary were to join us and keep the present scheme going at the proposed budgeted level--a level which, by the way, we think, is an overestimate--and if there were a proper public expenditure survey allocation, I can think of no circumstances in which we would seek to worsen the compensation available under this scheme and no circumstances at all in which we would do that without a clear election mandate. However, if the money to pay for the scheme has gone--if there is no PES allocation--no such guarantee can be given. If the Home Secretary squanders the money over the next two years-- my hon. Friend the shadow Chief Secretary pointed out yesterday that a great deal of cash has been squandered elsewhere--we shall not have it to spend but, if he ensures that the money is there, we should not dream of changing the scheme.

I note that, in his intervention, the Secretary of State did not mention the appalling and astonishing discrepancy between the cost estimate that he now puts to the House--£460 million by the year 2000--and that given by Conservative central office this time last year of £570 million. Who do we believe--Conservative central office or him?

Mr. Howard: The former is a more up-to-date estimate. The hon. Gentleman may not have noticed that inflation has gone down, which is one of the factors taken into account. In addition, the average amount of each award has decreased, which is also taken into account.

What is significant is that the hon. Gentleman did not reply to my point about the Opposition's reasoned amendment. He suggested that its purpose is to maintain the old common law damages scheme for the next two years. I made it clear in the explanatory and financial memorandum to the Bill how much more that would cost. The inescapable inference therefore is that, if a Labour Government were in power for the next two years, taxation would be commensurately higher under them than under the present Government. No other inference is possible.

Mr. Straw: That is a silly point. The inescapable conclusion is that if we were in power we would not have duped the electorate by implying that we would keep the scheme going and then breaking the promise within about a year of coming to power.

The estimate of costs is crucial and the right hon. and learned Gentleman makes my point by admitting that they have changed. He has embarrassed himself, and reduced his popularity in the country and his standing in the House by allowing himself, twice before the two most senior courts in the land, to have his actions declared unlawful, and all because of changes in the law that he tried to force through on the basis of wholly inadequate estimates which are now coming down.

Mr. Garnier: What would be the financial consequences of the amendment?

Mr. Straw: I have already dealt with that. We want some honesty in politics. When a party goes to the country

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with express promises--in this case, I am talking about the maintenance of this scheme as outlined in the campaign guide to which I referred--we want it to follow them through when it is in power. If the Government wanted to change the scheme, and as they knew full well what the estimates were before the previous election, they should have included their proposals in their manifesto. Our purpose is to ensure that the party now in power keeps its word, which it gave to the electorate at the previous election.

Mr. Walter Sweeney (Vale of Glamorgan): Will the hon. Gentleman give way?

Mr. Straw: I hope that the hon. Gentleman will excuse me but I have already given way enough.

We have a number of detailed objections to the revised scheme. I have already said that £700 million is being taken out of the scheme over five years, which is a very large sum. As a result, thousands of victims of violent crime will receive less compensation than they would have received under the old scheme. The saving is generated in part by the setting of a tariff, which is very low in some cases and is especially mean in relation to sexual offences. The tariff that is due to be implemented in April 1996 is very similar to the scheme introduced in April 1994. By the end of the first financial year of the new scheme's awards therefore, claimants will have already lost value to the tune of three years' inflation.

In addition, although the Secretary of State has been forced into accepting that some recompense has to be made for loss of earnings, his proposals are markedly less generous than those under the common law scheme. Many individuals will be adversely affected by the decision to pay loss of earnings only after 28 weeks, as my right hon. and learned Friend the Member for Aberavon (Mr. Morris), the shadow Attorney-General, said. That period was chosen because, as the Secretary of State explained, it is the period for which statutory sick pay is payable.

I do not know whether the Secretary of State has properly appreciated just how unfair it is to set a minimum period of 28 weeks before any account is taken of loss of earnings. Estimates prepared by the research division of the Library draw attention to the fact that if 24 million people in total were employees or self-employed, at least 9 million people would not have any entitlement to sick pay during their first 28 weeks off sick. That particularly applies to the low-paid, to those on short-term contracts and to the self-employed.

It so happens that today a lobby of newsagents--self-employed shopkeepers who used to be natural supporters of the Conservative party--are complaining about another abuse of their position and the way in which the Conservatives have allowed large wholesalers to undermine their business. Once again, the Government's rhetorical claim to care for small businesses is contradicted by their actions. Small business people, such as shopkeepers, are often subject to the worst crimes of violence when thugs rob their shops and they are least able, given the paucity of their earnings, to insure themselves to cover that first seven months of unemployment.

Mr. Howard: The hon. Gentleman is entirely right to make the point that self-employed people are not entitled

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to statutory sick pay, but I hope that he is not going to leave that passage of his speech without reminding the House that such people are entitled to incapacity benefit.

Mr. Straw: They are not entitled to loss of earnings to cover that 28-week period and they will be the subject of discrimination under the scheme. Even those employees who have occupational sick pay schemes will not necessarily obtain anything approaching their full salary when unable to work. Indeed, I have obtained evidence showing that most employees in most private sector schemes will have to have worked continuously for one employer for five years before receiving anything like full entitlement to sick pay from their occupational salary.

It is extraordinary that, having failed to consult any victim organisations or indeed the Criminal Injuries Compensation Board before introducing his first and ill-fated tariff scheme, the Secretary of State has failed to do so again. The hon. Member for Sutton mentioned my fine speech to the Police Federation, but in an even finer speech on the day that the Secretary of State spoke to the Police Federation, Mr. Fred Broughton the chairman of the Police Federation said:

"we very much regret that there has been no consultation about the revisions"

made by the Secretary of State. Mr. Broughton continued:

"The major change in the scheme to which we still object very strongly, is the failure to differentiate between the individual circumstances of victims. It cannot be right that, just because they have suffered an identical injury, the young breadwinner with his or her whole life to look forward to, is treated in the same way as the elderly person with no dependents."

I must ask the Secretary of State again: why is he so afraid to consult those who know more about the issue than he does? After the debacle of his first attempt, it would have been far better to have spent some time in discussion with those who understand the impact of compensation on victims and to have got it right this time. The proposals fail adequately to recognise the experience which victims have suffered or to assist them to recover from that experience and live as normal a life as possible. The Secretary of State has undoubtedly introduced some improvements in the scheme which has been so derided. The changes have occurred not because of his great concern to improve the lot of victims, but because of his great desire to save his own political skin. The changes do not go far enough, which is why we tabled the reasoned amendment and why we shall seek to improve the Bill in Committee.

The Secretary of State said in September in yet another of his lecturing speeches that the scales of justice had tilted too far in favour of offenders. He said:

"Victims have had a raw deal. I want to redress that balance." His actions belie his words. He has sought to cut victims' compensation by half and to cut the compensation available to some victims--the most severely injured-- to a tenth of what they would have received. If the courts had not intervened to stop him, the Secretary of State would have succeeded in cutting compensation in such a way. The right hon. and learned Gentleman has failed effectively to tackle the relentless rise in violent crime and is now making the victims of that violence pay for his failures. The scheme is unacceptable and I urge the House to vote against the Bill and for our reasoned amendment.

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5.54 pm

Mr. Michael Shersby (Uxbridge): I wish to declare two interests. I am president of the Uxbridge branch of Victim Support, which is a voluntary activity on my part and is unpaid. I am also parliamentary adviser to the Police Federation of England and Wales jointly with the hon. Member for Warwickshire, North (Mr. O'Brien).

The revised criminal injuries compensation scheme proposed by my right hon. and learned Friend the Secretary of State in the Bill is a great improvement on the tariff scheme that he introduced last year, for several reasons. He has clearly listened to the views of his parliamentary colleagues, their constituents and organisations with a special interest in this very important matter. Victim Support was critical of a number of features of the tariff scheme which was introduced last year. One of its principal objections, which was shared by the police, lawyers and many others, was that it did not properly take account of loss of earnings. Apart from the notional average amount, the tariff contained no provisions for loss of earnings and other financial loss.

In the opinion of Victim Support, one of the most serious defects in the tariff scheme remained, as compensation awards were still counted as capital by the Department of Social Security when calculating means-tested benefits such as income support, so that some victims lost all benefits until the award was spent. That point still concerns my local branch of Victim Support, which points out that victims on low wages have compensation deducted from social security benefit. If a victim receives compensation of more than £3, 000, for example, it is deducted from benefit. If a victim receives more than £8,000, he or she loses benefit altogether. I draw those matters to the attention of my right hon. and learned Friend. Victim Support has, however, welcomed a number of aspects of the Bill, but it still has some concerns which I am sure can be discussed in Committee. One important point is that the entitlement to loss of earnings applies to victims who are off work for 28 weeks. Victim Support wants to know how the provisions will apply to self-employed people and those in part-time, low-paid or temporary work. My right hon. and learned Friend the Secretary of State touched on that issue in response to a point raised by the hon. Member for Blackburn (Mr. Straw). My right hon. and learned Friend made the point that such people would be able to rely on incapacity benefit. Members of the Standing Committee will probably wish to explore that matter in a little more detail so that they may compare the amounts available under incapacity benefit.

Victim Support set up an independent working party on compensation and put forward a number of principles on which it felt that the scheme should be based. It wanted a tariff to be based on clear principles and adequate provision for reducing earning capacity or loss of support in the case of homicide. It wanted no reduction or withdrawal of benefit because of the compensation. It also wanted no judgment about a victim's previous conduct if unrelated to the current crime. It wanted a regular, independent review of levels of compensation, and clear and prompt operation of the scheme. It also wanted compensation to be available for all injuries that were more serious than minor cuts or bruises, and for the psychological equivalent. I hope very much that my right hon. and learned Friend the Secretary of State, as he gives

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his customary careful consideration to the views of such an important organisation as Victim Support, will listen sympathetically as the Bill passes through Parliament.

I have naturally also had discussions on this with the Police Federation. The federation welcomes the fact that, following the Lords' judgment, the Home Secretary has introduced a Bill rather than seeking to alter the tariff scheme by means of the royal prerogative. The federation takes the view that it is right that the scheme should have the force of statute and I share that view. It is clear from the recent public pronouncements by Mr. Fred Broughton, the chairman of the Police Federation, that in announcing revisions to the tariff scheme my right hon. and learned Friend has moved a long way towards meeting the strong criticisms of it made by the federation, by Victim Support and by trade unions whose members include potential claimants.

The police are especially pleased, as are many of my constituents in Uxbridge, that loss of earnings will continue to be compensated for and that awards will cover special medical care and attention in long-term cases. It would be helpful to have the scope of the provisions spelled out in the Bill in a little more detail. The increase in the amounts that can be paid in awards to £500,000 is most welcome. I must ask, however, whether my right hon. and learned Friend considers that that amount would be sufficient to provide full medical care and attention for the small minority of very serious and tragic cases of which those of us who have read the Criminal Injuries Compensation Board's reports are aware.

Can my right hon. and learned Friend the Secretary of State or my hon. Friend the Minister of State tell us whether it is the Government's view that the cost of such care and attention should be paid for by the improved value of the higher awards because they will be able to provide a guaranteed, index-linked, tax-free income for life? If so, has the Department made any estimate of the improved value of the maximum award to, say, a young man or woman in his or her 20s with normal life expectancy?

The changes proposed in the Bill do not increase the scope of compensation for victims of violent crime compared with the scope of the non-statutory scheme operated by the Criminal Injuries Compensation Board. However, the Bill will bring about a change in the overall costs. As there is no evidence that awards to victims have been unduly generous, we must ask ourselves the reason. The reason was given, quite candidly and properly, by my right hon. and learned Friend the Secretary of State in an earlier debate on the matter. He made the point that the ever-rising cost to taxpayers, based on forward projections of claims, would be too expensive for them to bear in the longer term.

As has already been pointed out in this debate, the reforms proposed in the Bill will not cut expenditure on compensation for criminal injuries, but will simply help to keep rising costs under control. My right hon. and learned Friend the Secretary of State has given, in his excellent speech, a projection of the figures to 2001 which illustrate that point well. He can still claim with absolute justification, however, that the scheme provided for in the Bill will be the best available in the world. It is beyond doubt that the United Kingdom pays out more compensation than the United States and more than all the

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European countries put together. I believe that that is a record of which our country can be proud and I hope that that view is shared by all hon. Members.

It was because many groups, notably the police and Victim Support, felt that the former statutory scheme was the best way to meet society's obligations to victims that they strongly supported it, regardless of the costs. Many of us who read the gripping and often horrifying reports published by the Criminal Injuries Compensation Board felt that we were discharging our obligations to people unfortunate enough to become victims of violent crime. I suspect, however, that few of us realised the extent to which the costs would escalate.

The police accepted that a tariff-based scheme was appropriate for lesser cases involving straightforward injuries. They accepted that such a scheme could mean less bureaucracy and that compensation would reach victims sooner. Speed of compensation is an important point in our consideration of the whole matter. The police have, however, always felt that in cases of homicide, permanent disablement, mutilation and disfigurement, there should continue to be a subjective judgment which takes account of all the consequences of the attack on a victim. The Police Federation therefore regrets the passing of the Criminal Injuries Compensation Board. It also points out that the proposed new scheme will be administered by civil servants instead of the old board staff and that the claimant's right of appeal appears to be limited. Those points need to be investigated and clarified in Committee.

Another issue that needs to be examined is the time limit for submitting a claim. I suggest that it should continue to be the limit which applies to a claim in the courts--three years from the date of the incident. That point is important for some victims who suffer psychological injuries or who have suffered sexual attacks. The new scheme does not appear to distinguish between individuals and I ask why that is. It seems rather illogical to regard the loss or damage suffered by victims as identical just because they have suffered the same kind of injury. A young person, perhaps a child, who is blinded and who will have to cope with that handicap for the rest of his or her life will be given the same compensation as an elderly person with a short life expectancy. I hope that my right hon. and learned Friend will seriously consider that point. Perhaps he will be willing to consider regarding the proposed tariff as the base for compensation and allowing an assessor to vary awards according to the degree of harm suffered by the claimant. What is the position of victims who have suffered more than one injury? Should not the new scheme be more generous in respect of a second or further injury than the 1994 scheme was? Perhaps my hon. Friend the Minister of State will respond to that point when he winds up. The new scheme should also specify how awards will be uprated to take account of the effects of inflation. That and a number of other questions need to be considered further in Committee.

As the House knows, I have a special interest in police officers who are, all too often, the victims of violent crimes. It is an unhappy fact that in 1995 the police will sustain about 18,000 serious injuries. However, awards to

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police claimants have always been abated by the extent of their entitlements under the police regulations and the police pension scheme.

The persons most likely to be worried about the scheme are probably those about whom Victim Support is concerned. They are those who are not covered by occupational injury and pension schemes and who are, by definition, often the weakest and most vulnerable in our society. All of us represent some of those people.

While I fully acknowledge that my right hon. and learned Friend the Secretary of State has responded in his customary positive way to the criticisms made of the 1994 tariff scheme, I hope that he will keep an open mind and that he will be ready to consider some further improvements to the proposed new scheme as the Bill passes through Parliament.

It is important that the tariff scheme is reviewed at regular intervals. The 1994 scheme provided for a review every three years, and it would be sensible for the proposed new scheme also to be reviewed at three-yearly intervals, so that the effects of inflation--albeit the low level that we are experiencing today--can be taken fully into account, and so that the value of awards will not depreciate.

I welcome the Bill and I shall certainly support my right hon. and learned Friend in the Lobby tonight. I hope that he will be able to take account of some of the points that I have made in the debate. 6.9 pm

Mr. John Morris (Aberavon): The hon. Member for Uxbridge (Mr. Shersby) made a careful speech, in which he analysed some of the defects of the Bill. Given the totality of those defects, I wonder how he can vote to support the Bill in the Lobby tonight. I shall make a short speech. The Home Secretary has been forced to introduce this Bill because he adopted a high-handed approach to Parliament. As Lord Denning once said, however high a man is, no man is above the law--not even the Home Secretary.

The right hon. and learned Gentleman cannot say that he was not warned from all sides. My hon. Friend the Member for Blackburn (Mr. Straw) warned him, as did Lord Ackner. In a debate on 20 October 1994, I said that the attitude of the Government was

"an affront to Parliament . . . The Bill ignores the 1988 Act . . . It is not even repealed. It will lie idle on the statute book. Instead, we have a non-statutory scheme and the Government have played ducks and drakes with Parliament and the time that Parliament gave to passing the 1988 Act."-- [ Official Report , 20 October 1994; Vol. 248, c. 466.]

My hon. Friend the Member for Blackburn commented on the goal average approach of the Home Secretary. The right hon. and learned Gentleman lost in the Court of Appeal, and lost in the Judicial Committee of the other place. The Home Secretary has undoubtedly abused his prerogative power, and he and his advisers should have known better.

The Home Secretary has brought forward an amended scheme with a double objective--first to satisfy the courts, and secondly to placate the other place in its legislative capacity. Although there are some improvements, it is still a far from satisfactory measure.

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Many of the victims of crime will get much less. I trust that not even this arrogant and brazen Government will lay claim to being the friends of the victims of crime.

Mr. Sweeney: Does the right hon. and learned Gentleman agree that, while many people will be worse off, 60 per cent. of claimants will be no worse off?

Mr. Morris: I do not accept that figure, which is not put forward by the Government. The bulk of the victims--as regards the totality of their claims--will be less well-off than they would have been under the original scheme. The hon. Member for Vale of Glamorgan (Mr. Sweeney) may be making a comparison not with the new scheme, but with another one.

We have complained about the proposed tariff, and particularly that no allowance was made for loss of earnings. It is now proposed that victims of serious crime who are off work for more than 28 weeks will be eligible for an allowance for loss of earnings up to a maximum of one and a half times the average industrial wage.

Such an allowance for loss of earnings was opposed adamantly by the Government when they brought the original proposals before the House. I am sure that the hon. Member for Uxbridge and others will want to follow in detail the reply that the Home Secretary gives about the self-employed, and I hope that the difficulties in that subject can be clarified in Committee.

A high earner's loss is bound to be higher than that of a low earner. That is common sense. But if one insists on a tariff--this is what the hon. Member for Vale of Glamorgan may not have fully grasped--the high earner will still be a loser. That is the failure of the tariff, which makes no allowance for the consequences as they affect different people.

For example, the consequences for a young girl--let alone a model--with a scarred face will be different from the consequences for a middle-aged man with a similar injury. If there is a flat-rate tariff, the same allowance will go to the young model and to the older man who unfortunately suffer similar injuries.

The Minister of State, Home Office (Mr. David Maclean): Before the right hon. and learned Gentleman moves on from that point, will he tell the House under which principle he thinks it right for the taxpayer to pay less to a man who is scarred than to a woman with a similar injury?

Mr. Morris: The principle is clear. The original prerogative scheme was based on common law, whereby the common law sought to put the loser back in the position in which he was originally. That was the basis of the scheme, and the Home Secretary referred to it this afternoon. The Minister may not have been listening. The common law would assess the damages, assuming the case was being heard in court. For a young model of 21 with a distinguished career in front of her who unfortunately has her face scarred so that she is never able to work again, the damages would be enormous.

Regrettably, it would be different if someone like myself, or perhaps the hon. Member for Uxbridge, suffered the same calamity. The hon. Gentleman and I are not models--no one would pretend that we were. We are much older, and our expectation of life is, unhappily, shorter. The damages in any common law court would be wholly different from those given to the young model. If

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the Minister has not grasped that, he has a great deal to learn about the way in which the common law seeks to right a wrong.

Mr. Maclean: I understand the way in which the common law works. I am merely asking whether the right hon. and learned Gentleman thinks that it is right that a taxpayer-funded scheme which is not attempting to right all wrongs but attempting to make payments to victims who have suffered injuries should discriminate against some people because of their age, or because they may be ugly.

Mr. Morris: Under Governments of different colours, and ever since the Criminal Injuries Compensation Board was set up, the taxpayer has awarded damages on that basis. It is only the blinding light which has struck the Government in the past two years that is changing the whole situation. In no manifesto of the Conservative party has the change been put before the electorate. That is the basis on which the CICB has been working all these years, and I and the overwhelming number of electors who were not told otherwise were satisfied with that approach.

The tariff is fundamentally flawed, and takes no account of age, sex or occupation. There are also no allowances--I can be corrected if I am wrong- -for inflation until another review takes place. The Government are getting away with murder, because the tariffs for the new scheme to be introduced in April 1996 are at the same level as the original tariff proposed in April 1994. If I am wrong, I am sure that the Minister can correct me in his reply. If there is no allowance for future inflation and for giving realistic amounts to victims, the scheme will wither on the vine.

There is concern about how the tariffs were arrived at. The Home Secretary clutches some figures for some assessments and cases, but would it not have been better if an independent outside source had confirmed what the tariffs should be, rather than having an inquiry within the Home Office? If the Home Secretary had then wanted to reduce them, we would have known the foundation.

Concern has already been expressed about the differences in valuations. People are worried about the low awards in the tariff for sexual cases. Why is £1,000 proposed for a child who is sexually assaulted, and £1,250 for an adult who suffers a dislocated finger? I am sure that the Standing Committee will want to explore those examples, and to find out the basis for that approach.

Finally, the poorest victims will suffer. People who receive more than £3,000 will have deductions made from their income support, and those who receive more than £8,000 will lose their entitlement altogether. If that is so, and if the rule is to survive, perhaps hon. Members who will be exploring such matters in Committee will want to consider the way in which clause 8 deals with the income tax position for annuities.

Under that clause, awards will not be regarded as income for tax purposes, but that will not be the case when it comes to any family income support scheme. I agree with Victim Support that criminal injuries compensation should be exempt under the capital rules of the Department of Social Security.

If we have to have this scheme, let there at least be regular reviews of compensation levels, and let every victim of crime be given the health warning, "A Tory Government will damage your expectation of compensation."

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6.22 pm

Mr. Edward Garnier (Harborough): I must take the right hon. and learned Member for Aberavon (Mr. Morris) up on one point--the little argument that we seem to be having about the number of judges who decided one way and the number who decided the other. Surely, given that five eminent lawyers decided one way on the matter and five the other, we should simply forget the argument about the hierarchical structure of the courts, as it was a matter of--

Mr. Michael: What a silly argument.

Mr. Garnier: The hon. Gentleman does himself no good by making that sort of fatuous remark. If he will allow me to finish the sentence, I will make my point.

Surely the important thing is that that decision tells us that it was an important and extremely complicated matter, that had vexed other judges and lawyers. Of course no one is arguing that we have a hierarchical courts system, or that, because the decision was 3:2 in the House of Lords, that is what the law was found to be. Surely the simple point is the one that I adumbrated--that the issue is highly complex, and no one can produce any evidence to impugn the motives of my right hon. and learned Friend the Home Secretary.

Mr. Streeter: Does my hon. and learned Friend agree that, now that the Labour party thinks only in terms of soundbites, Labour Members would not know a complicated legal argument if it leaped up and bit them on the nose?

Mr. Garnier: I will study Opposition Members' nasal probosces with interest.

Mr. Michael: Perhaps I can heighten the quality--

Mr. Garnier: I have not said that I would give way.

Mr. Michael: Will the hon. and learned Gentleman give way?

Mr. Garnier: Most certainly.

Mr. Michael: I am very grateful. Perhaps we could lift the standard of debate. Does the hon. and learned Gentleman acknowledge that the Home Secretary was warned by Back-Bench and Front-Bench Members in the House, by people outside the House who specialise in the law and in the Lords long before the judgment, that he ignored them, and that they advised him that the course of action that he proposed to take would indeed breach the law?

Mr. Garnier: I think that the hon. Gentleman has misunderstood the argument, which was twofold. First, what was the law? The House of Lords reached a decision on that, and on how the prerogative should be exercised. Secondly, what was the best way to approach Parliament? My right hon. and learned Friend the Home Secretary was given plenty of warnings. People made political points--I am sure that the hon. Gentleman was foremost among them --saying that, politically, it would be more advisable if my right hon. and learned Friend did this, that or the other, but the intellectual debate on a matter of law was evenly balanced, and that is the only point that I am making. If the hon. Gentleman is not prepared to accept that, it tells us more about him than about anything else.

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It would be helpful to place today's Second Reading debate and the Bill in the context of the criminal injuries compensation system. The Government established a scheme 31 years ago to compensate out of public funds the victims of criminal violence. The scheme was brought into existence through the exercise of the royal prerogative, and the payments were made ex gratia. There was no statutory authority for the scheme, although the necessary funds were voted annually by Parliament, and the victims had no right in law to claim payment. Compensation was given in the shape of a lump sum, which was arrived at in the same way as a civil award of damages for personal injury caused by a tort--a civil wrong- -subject to an upper limit on the amount attributable to the loss of earnings. The scheme was administered by the Criminal Injuries Compensation Board, which comprised a chairman and a panel of eminent lawyers.

At first, the scheme operated on a modest scale, but by 1978 the number of awards had increased twelvefold. In that year, the Royal Commission on civil liability and compensation for personal injury recommended that compensation for criminal injuries should continue to be based on tort damages, but that the scheme, which had originally been experimental, should be put on a statutory basis. The Government, however, preferred to wait until more experience had been gained.

Although, as the years passed, some important changes were made, the scheme retained its original shape, but its scale and costs increased remorselessly. In the first year, the board paid out £400, 000. By 1984, the annual amount had risen to more than £35 million, and the backlog was approaching 50,000 claims.

At that point, the Government decided that the time had come to put the scheme into statutory form, and they appointed an

interdepartmental working party to consider how that should be done. The working party made numerous recommendations, which the Government largely accepted. The most important was that compensation should continue to be given to the victims of criminal violence on the basis of civil damages.

Accepting that among other recommendations, the then Secretary of State, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, announced in Parliament that legislation would be introduced accordingly, and that considerable extra public funds would be made available. Within a few years, the promised legislation materialised, in the Criminal Justice Act 1988, together with its dependent schedules.

It was decided that, when it was brought into force, the scheme would be administered by a statutory body appointed by the Home Secretary and that it would not be a servant or agent of the Crown. The Home Secretary would defray the expenses incurred by the board, and, subject to certain exceptions and limitations, claims for compensation were to be determined and amounts payable assessed in accordance with the way in which a claim in tort was determined. Of course, there was to be a right of appeal from a determination of the board, to the High Court or the Court of Session.

In the years that immediately followed the passing of the 1988 Act, it seemed probable that, whether or not the statutory scheme took effect, the compensation regime would continue as before. Indeed, as recently as December 1991, my right hon. Friend the Member for Mole Valley (Mr. Baker), then the Home Secretary,

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