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Mr. Deputy Speaker: Madam Speaker has selected the reasoned amendment.
6 pm
Mr. Jack Straw (Blackburn): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: "this House declines to give a Third Reading to the Criminal Injuries Compensation Bill because it provides for a tariff of amounts of compensation in respect of criminal injuries without flexibility in special cases, gives extensive powers to the Secretary of State to frame a Scheme for criminal injuries compensation with insufficient parliamentary scrutiny, includes provision for the contracting-out of what should be a public service function, and includes provisions to exonerate the Secretary of State of responsibility for the conduct of the Scheme."
The country knows that today the Conservative party is in a deep crisis. The people of Britain have so lost confidence in the governing party that the party has comprehensively lost confidence in itself, as well as in its Cabinet and its leader. At the heart of the crisis of confidence is the issue of trust. The Conservative party made promises during the general election campaign, which it swiftly and cynically broke. It has broken promises on tax--
Mr. Deputy Speaker: Order. The Bill is specific. The debate must be about the Bill and the contents of the Bill.
Mr. Straw: Indeed, Mr. Deputy Speaker. My remarks are about the Bill and its contents. As I was about to say, the Bill writes into law a broken promise to the victims of violent crime. It was in the 1992 Conservative campaign guide that the Conservatives boasted of the generosity of the then common law scheme. They declared that, when a crime had taken place, the Government would give the utmost priority to supporting the victims. Nothing was said about any intention to cut or replace the scheme.
The manifesto on which the Conservatives fought and won the general election campaign promised that special attention would be paid to the needs of the victims of crime. However, the Bill cuts almost in half the compensation that will be payable, and punishes the victims of violent crime for the Government's failure to control that crime. There are many major defects in the scheme that is before the House. There is no compensation for loss of earnings before 28 weeks, despite the fact, to which my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) has eloquently testified, that at least 12 million people do not receive statutory sick pay for the preceding 28 weeks. There is no payment for special expenses. Maximum awards will be capped, adversely affecting those with catastrophic injuries.
In some instances the tariff is extremely low, especially for sexual offences. Tariff levels, which are basically the same as those in the discredited 1994 tariff, will not be reviewed until 1999. The tariff provides no flexibility in difficult cases.
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Published this morning were the minutes of evidence given to the Select Committee on Home Affairs on 3 May 1995. Senior officials in the Home Office gave evidence about the compensation scheme, among other matters. The permanent secretary, when talking about the old scheme, referred to 33 awards for punctured lung injuries in 1991- 92. The awards ranged from £601 to £29,203. The permanent secretary said that he was struck by the "enormous range". So may we all be. The common law scheme, however, was designed to provide compensation directly related to the individual's circumstances and needs. Under the new scheme, the tariff for a punctured lung will be set at £3,000. Save for the most exceptional cases, no one will receive more than £3,000. Those who might have received £29,203 will receive over £26,000 less than that.At the heart of the justification for the Bill is the Government's desire to cut costs. They wish to cut the compensation that is available to victims, especially to those of the most serious crime. The estimates that are used to justify the cuts are scarcely worth the paper on which they are printed. The Conservative campaign guide stated, in an attempt to justify the changes, that costs would rise to £570 million by the year 2000. In the explanatory and financial memorandum, we are told that the costs will rise instead to £460 million.
When I put this point to the Secretary of State on 23 May on Second Reading, the right hon. and learned Gentleman said:
"The latter 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 that has been taken into account."--[ Official Report , 23 May 1995; Vol. 260, c. 748.]
I have examined the estimates of inflation. I made it clear that I was speaking about the 1992 Conservative campaign guide, not the 1994 guide. The 1994 guide used the figure of £570 million. It was published after the November 1993 Budget, including the Red Book. If we compare the estimates of future inflation in the 1993 Red Book up to 1999 with the latest estimates until that year, we see that there is hardly any difference between them. The 1993 Red Book predicted that inflation would reach 2 per cent. by 1998-99, as does the 1994 Red Book. There is only a marginal difference between them. There is no difference that could conceivably explain why suddenly estimates would be reduced by £110 million or 20 per cent. In Committee, the Minister of State was repeatedly challenged to explain the estimated fall of £110 million. Where had the estimated £570 million come from? Where had £460 million come from? He failed repeatedly to offer any credible explanation. The estimates on which this discreditable Bill is based are entirely unreliable. It is unfortunate that the Government have offered no serious explanation of the discrepancy and of other changes in costs. That does them no credit.
We know that the Secretary of State has wasted millions of pounds of the public's money by seeking to change the common law system of compensation without any statutory authority and in patent breach of the law of the land, as was found by a Committee of the other place earlier this year.
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As a result of impetuous and unlawful acts by the Secretary of State, he set up the Criminal Injuries Compensation Authority, which has now had to be wound up. He first insisted that claims for the preceding year would be judged on the basis of the unlawful tariff scheme. He had to dismantle that scheme, but at the same time has had to ensure that those who would have been awarded more under the old scheme will receive more. Those who would have received less under the common law scheme will, at the same time, keep their higher tariff award.What is the cost of the Secretary of State's unlawful behaviour? There should be the fullest investigation of the right hon. and learned Gentleman's profligacy by the Comptroller and Auditor General and the Public Accounts Committee.
Had a local council gone in for unlawful expenditure in the face of explicit legal advice and court judgments, and wasted millions of pounds, the Home Secretary would have been the first to demand that the Audit Commission should investigate, and that the councillors be surcharged.
Throughout the Bill's passage, the Secretary of State has sought to evade responsibility for decisions to slash compensation, for which he is morally and politically responsible, by asking us whether we would restore the scheme in full in the event of a Labour Government. That evasion of responsibility will not wash. Labour would not have tricked the electorate as the Conservatives did at the last election.
As my hon. Friend the Member for Cardiff, South and Penarth has said, Labour's position is clear. If Ministers do not cut the scheme now, we will not cut it either. If Ministers maintain the public expenditure survey allocation up to the election and beyond, as they have every right and, indeed, duty to do, we shall keep it there. But if funding for the common law scheme is removed, no guarantees can be given by any party which seeks responsibly to govern the country. On 23 May, the Secretary of State could not even say what would be in the Chancellor's Budget this autumn. He could not say what the availability of funding would be in the Chancellor's Budget. Today, the Home Secretary could not even say who the Chancellor of the Exchequer might be, let alone what might be in the Budget. If the Chancellor of the Exchequer who presents the autumn Budget is, God forbid, the nominee of the right hon. Member for Wokingham (Mr. Redwood), who intends to give away £5 billion in tax cuts and pay for those tax cuts through wholly unidentifiable efficiency savings, the public finances that Labour will inherit when we form a Government will be in an extremely sorry state.
I hope that, when the Secretary of State replies, he has the same full- hearted condemnation for the right hon. Member for Wokingham as the Chancellor of the Exchequer had yesterday, when he accused the former Secretary of State for Wales of
"plucking figures out of the air"--
Mr. Deputy Speaker: Order. This is not a general debate on the views of members of the Cabinet on Britain's financial situation. This is a specific debate on the Bill. I urge the hon. Gentleman to get back to it, and the Home Secretary to resist the temptation to make any comment as well.
Mr. Straw: I was dealing merely with the further uncertainties that now afflict the Government and their
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public spending plans. But speaking of figures that are plucked out of the air, one might say the same for the figures of £570 million and £460 million which the House has variously been given for the possible cost of keeping the old scheme going right up until the year 2000.Just three months ago, the Leader of the House warned the Prime Minister that by these cuts in the criminal injuries compensation scheme the Government had placed themselves
"on the wrong side of an argument about the victims of crime". He was, of course, right.
The Government's shame on the issue has been graphically shown this afternoon. For much of the three hours of debate, not a single Conservative Back Bencher has been present in the Chamber. Still less has one spoken in support of the Bill. I might also add that the Liberal Democrat Benches have been vacant for almost the whole debate. There has been no contribution from any Liberal Democrat during the course of the debate. I am sure that the people of Littleborough and Saddleworth will be interested to know the Liberal Democrats' lack of support for improvements in the criminal injuries compensation scheme and for the Opposition's fight to maintain the old scheme.
It is little wonder that so few Conservative Members have been present and that none has spoken, because the Government's record on crime has been one of the shames of this Administration. Crime has doubled, and the number of victims has doubled, while there has been an absolute reduction in the number of people convicted of or cautioned for crime.
The right hon. Member for Wokingham was right about one thing in the manifesto he issued yesterday. He said:
"We catch far too few criminals--detection rates have to be raised."
The Government have failed the victims of crime. Worse, they are now punishing the victims for that failure. That is why we believe that the Bill should not be given a Third Reading tonight. 6.13 pm
The Secretary of State for the Home Department (Mr. Michael Howard): I invite the House to reject the reasoned amendment which has just been moved by the hon. Member for Blackburn (Mr. Straw), to the detailed terms of which I shall come in a moment. However, I say at this early stage that the use of the word "reasoned" has rarely been less appropriate than in describing the amendment.
The Bill paves the way for a new criminal injuries compensation scheme under which compensation will, for the first time, be paid to the blameless victims of crimes of violence on a statutory basis. Unlike the present, non -statutory arrangements, the new scheme will concentrate on a straightforward tariff approach for the majority of victims. But it will also ensure that the needs of those most seriously affected by their injuries are generously met. We believe that that strikes the right balance between the needs of victims and the interests of the taxpayer.
Continuation of the old scheme, based on common law damages, was no longer a viable option. Costs were rising rapidly, and many victims were having to wait a long time for their money, despite the best efforts of my noble Friend Lord Carlisle and the Criminal Injuries
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Compensation Board--efforts for which we remain very grateful. In contrast, the new, enhanced tariff scheme should enable costs to be more readily predicted and controlled, and once the new scheme has settled down and the remaining old scheme cases have been cleared, victims should get their money more quickly and with less fuss. In devising the new scheme, we have of course listened to the criticisms of the earlier non-statutory tariff scheme which was withdrawn in April following the ruling of the Judicial Committee of the House of Lords. The new scheme incorporates many of the more helpful suggestions made in both Houses and elsewhere.All successful claimants will get a tariff award, but, in more serious cases, victims will also receive additional payment for loss of earnings and for special care. In fatal cases, payment will additionally be made for dependency and loss of support.
We are doubling the upper limit for awards payable under the old tariff scheme from £250,000 to £500,000, and we are making provision for recipients of higher-value awards to opt for payment by structured settlements. Those can provide a stream of index-linked, tax-free payments for life, considerably increasing the net value of the award. In addition, the tariff of awards has been improved and refined, to reflect the experiences of operating the non-statutory tariff scheme in 1994-95.
The Bill has already been discussed in detail in Committee. Among other things, it was agreed there that the benefits of structured settlements should be extended to claimants under the old scheme whose claims have still to be settled. We shall seek to give effect to that in another place. We also agreed to an express provision being made on the face of the Bill that the new independent appeals panel should be able to offer advice to the Secretary of State on matters relating to the scheme.
Perhaps I should also remind the House that, contrary to the completely erroneous impression given in the Opposition's so-called reasoned amendment, the Bill provides that the more important features of the new scheme will be subject to parliamentary approval, both before the new scheme starts, and before any changes are made subsequently.
The so-called reasoned amendment also claims that the Bill enables the Secretary of State to evade responsibility for the scheme. That simply beggars belief. The Bill does no such thing, as was explained at length to Opposition Members in Committee. What the Bill does is preserve the present position and make it clear that the Secretary of State is not responsible for the decisions in individual cases taken by claims officers or the scheme manager.
Of course the Secretary of State has responsibility for the scheme and for the rules and procedures under which it operates. The Bill is quite clear on that, and for the Opposition to claim otherwise is characteristically absurd.
Since I am dealing with uninformed comment, I repeat that the new scheme does not cut the amount of money which will be available to compensate victims--far from it. We are simply controlling the unsustainable rate of growth in such expenditure. Ours is by far the most generous compensation scheme in the world, and it will remain so once the changes envisaged in the Bill come into force.
We pay out more compensation than the United States, and more than all the other countries in Europe put together. By the end of the decade, the liability to
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compensation will be in the order of £250 million a year. That is no mean achievement, and one in which we can all justifiably take pride.All that the hon. Member for Blackburn can do in the face of that is to nit -pick about some detailed estimates which have had to be revised in the light of more up-to-date information--a process so foreign to the hon. Gentleman that he does not appear to understand even that simple state of affairs.
Let me explain to the hon. Gentleman why the estimates over which he spent such an inordinate amount of time have been changed. The estimates are affected by several different factors. I have to spell them out for hon. Gentleman, although I think that most people will readily understand what they involve. They include the number of cases settled; the success rate; the percentage of claimants receiving an award; inflation; and increases in the average award. Those estimates have to be based on long-term, 10-year trends. Clearly, those change over a period as circumstances change and later data become available.
The figure of £570 million over which the hon. Gentleman spent-- indeed, wasted--so much time was derived before the outturn figures for 1993-94 were available. We now have the outturn figures for two subsequent years. Our information is more accurate and up to date. We prefer to make our estimates based on the most accurate and up-to-date information available--a process clearly completely alien to the hon. Gentleman and the Labour party.
The Labour party has no constructive alternative to the scheme which the Government propose in the Bill. There is no clearer evidence of that than the complete about-face demonstrated in its so-called reasoned amendment. On Second Reading, the hon. Gentleman and his right hon. and hon. Friends complained in their amendment about the inadequacy of provision for criminal injuries. When he was challenged to make a clear, specific commitment to increase resources, he refused to do so.
We now have a totally different reasoned amendment. It clearly was not drafted by the hon. Gentleman. It was clearly drafted by someone who understood the impossibility of complaining about inadequate resources while refusing to make a commitment to increasing resources. It was drafted by someone who had some glimmering of understanding that government is about making decisions--often hard decisions.
The gulf between the person who drafted the reasoned amendment and its contents, and the contents of the speech of the hon. Member for Blackburn could not have been wider--it was enormous. Indeed, it rather looked as though the hon. Member for Blackburn had not even taken the trouble to read the so-called reasoned amendment before he got up to make his speech. The Labour party is not prepared to face up to the need to make decisions. Until and unless it is, it should be treated with the derision it deserves.
We have now come up with as good a scheme as it is possible to devise, given the constraints under which any responsible Government must operate. It is a generous, straightforward and transparent scheme, and one that serves the interests of victims and taxpayers alike. The Bill provides the framework of that scheme, and I invite the House to reject the reasoned amendment, endorse the scheme and give the Bill a Third Reading.
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6.23 pmMr. Simon Hughes (Southwark and Bermondsey): I explained on Second Reading the view that I and my hon. Friends took of the Bill. My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who served on the Committee, is not here today because he is on parliamentary duty in the United States. Neither his views nor mine have changed since then.
The Bill amends the present system in ways that the Home Secretary was right to say start from a need to reappraise the ever-escalating cost. I concede that. The most interesting and important question is how much money will be in the kitty. I do not dissent from the view--indeed, it is unarguable--that we have the most generous system in the world. That is clear.
It is also unarguable that the cost has grown over the years, and if the old system remained, it would go on growing. That is why, on Second Reading, I made it clear that I thought that all responsible politicians would be forced to accept a tariff-plus system. There is no other way, unless we accept uncontainable prospective costs. I made that clear before, and I hold to it. My views have not been altered by the debate in Committee. The questions that arose in Committee and on Report have not gone to the fundamentals of the Bill. Again, the Home Secretary is right to say that they went to the margins of the Bill, but that is because the Bill, in large measure, does not itself address the practicalities.
The practicalities will be how much money is in the kitty; what will be the level of awards; who reviews that and how will it be upgraded; and the scheme under the delegated legislation that the Bill will bring into operation. That is why we have the same simple view that we had at the beginning.
There were certain things wrong in the original tariff that needed to be corrected. We need to make sure that we do not reduce the amount of money and keep it pegged--not so that it escalates out of control, but at least so that it stays in line with inflation, so that people are compensated for the injuries they sustain at a real rather than an ever-reducing cost. The scheme must be flexible, so that it meets the variety of injuries and practical losses that people sustain through disability, on-going costs, loss of earnings and the rest.
This is not a Bill that we would have introduced, or one that needed to be introduced in this way or form. It is important that we continue to put more money and interest into the cause of victims. That is why the Home Secretary and his hon. Friends have not received our support for their proposals, either at earlier stages of the Bill or tonight.
I understand that there will be further challenges in another place. The legal and other interested professions, let alone the victim support groups and victims' representatives, are unhappy at the prospect of reduced funding. That is the greatest fear that people will have as a result of this debate. The scheme may have been the most generous in the world, but people will fear that, in future, it will be both less generous and less flexible, and that is a bad thing.
Question put, That the amendment be made:--
The House divided: Ayes 202, Noes 260.
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Division No. 187] [6.27 pmAYES
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Abbott, Ms DianeAdams, Mrs Irene
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Allen, Graham
Anderson, Donald (Swansea E)
Armstrong, Hilary
Ashton, Joe
Austin-Walker, John
Barnes, Harry
Battle, John
Bayley, Hugh
Bell, Stuart
Benn, Rt Hon Tony
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Berry, Roger
Betts, Clive
Blair, Rt Hon Tony
Bray, Dr Jeremy
Brown, Gordon (Dunfermline E)
Brown, N (N'c'tle upon Tyne E)
Burden, Richard
Byers, Stephen
Caborn, Richard
Callaghan, Jim
Campbell, Mrs Anne (C'bridge)
Campbell, Menzies (Fife NE)
Campbell, Ronnie (Blyth V)
Campbell-Savours, D N
Cann, Jamie
Carlile, Alexander (Montgomery)
Church, Judith
Clarke, Tom (Monklands W)
Clelland, David
Clwyd, Mrs Ann
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank (Stockton N)
Cook, Robin (Livingston)
Corbett, Robin
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cunningham, Rt Hon Dr John
Davies, Rt Hon Denzil (Llanelli)
Dewar, Donald
Dixon, Don
Dobson, Frank
Donohoe, Brian H
Dowd, Jim
Dunwoody, Mrs Gwyneth
Eagle, Ms Angela
Eastham, Ken
Etherington, Bill
Evans, John (St Helens N)
Fatchett, Derek
Faulds, Andrew
Flynn, Paul
Foster, Rt Hon Derek
Foulkes, George
Fyfe, Maria
Galloway, George
Gapes, Mike
Garrett, John
George, Bruce
Gerrard, Neil
Godman, Dr Norman A
Godsiff, Roger
Golding, Mrs Llin
Gordon, Mildred
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