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David T.C. Davies (Monmouth) (Con): I have listened with great interest to what the Minister has said, but is not she saying—in a roundabout way—that the Government got it all wrong a few years ago and that they are now making a gigantic U-turn?

Bridget Prentice: The system that was in force before we came into government was decrepit, convoluted,
 
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complex and overly bureaucratic. We introduced a system that swept all that away, but we were not aware how many people would take advantage of the new system. That is why we need to look again at the issue. We have an obligation to live within our means and to ensure that the available funds are targeted in the fairest and most strategically beneficial way.

We must make our money work for us and the Bill seeks to do just that by rebalancing and refocusing legal aid expenditure to ensure that we not only protect the rights of those who find themselves prosecuted under the criminal law, but we fund law-abiding citizens who may find that they need to protect or enforce a civil right.

Despite the refinements to the proposed scheme that the Bill empowers, the core principles of the policy, and the Bill itself, remain largely unaltered from the draft that the House saw originally.

Mr. David Burrowes (Enfield, Southgate) (Con): The Government refer to the fact that they are focusing funds. Although the Bill seeks to make further savings of £35 million in respect of the lower courts, has not the Legal Services Commission already accepted that those costs are under control? Indeed, the Department for Constitutional Affairs has predicted that they are on the decrease. One respects the fact that legal aid costs in general have increased, but the budgets of lower courts are under control, so should not the true target for cost-cutting be high-cost cases?

Bridget Prentice: The hon. Gentleman may have been in the Chamber during Constitutional Affairs questions, in which case he would have heard me say that we are targeting high-cost cases. The Bill tries to ensure that we have a much fairer system in both the lower and higher courts. The Bill will also cover the Crown Court.

There are two key enabling powers: first, the power to grant representation is to be transferred from the courts to the Legal Services Commission and, secondly, a test of financial eligibility is to be reintroduced. Clauses 1 and 2 confer those powers by amending schedule 3 to the Access to Justice Act 1999. Clause 3 creates a power to require defendants to make contributions towards the cost of their legal aid, which will be a central component of the Crown court scheme. Clause 4 makes consequential amendments to other legislation.

The scheme to be developed through those powers will consist of three distinct elements: transfer of the power to grant; means-testing in the magistrates court; and means-testing in the Crown court.

Mr. Philip Hollobone (Kettering) (Con): Will the Minister explain to the House why she had to sign a certificate to ensure that the legislation complies with the European convention on human rights?

Bridget Prentice: We all sign certificates to ensure that we comply with the convention. It is a good thing to do and that is why we do it. Every Bill that comes before the House has to have such a certificate. That is part of the law that we introduced and I am puzzled about why the hon. Gentleman is asking that question. Perhaps he would like to explain.

Mr. Hollobone: I am grateful to the Minister for allowing me to intervene again.
 
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I understand from the helpful explanatory notes that there are particular difficulties with clauses 2 and 3, such that the Minister had to sign a certificate under section 19(1)(a) of the Human Rights Act 1998. I am not aware that that has been necessary with other recent legislation.

Bridget Prentice: I can only reiterate that it is part of the law of our country that we comply with the Human Rights Act, and we are ensuring that the Bill does so. I am happy to have signed up to the Act according to those provisions—[Interruption.] I am informed that all Ministers taking Bills through the House sign according to the same provisions in the Act. There is nothing unusual about the Bill in that respect.

I want to explain some of the things that the Bill will not do. I must emphasise that it will not affect the existing interests of justice test, which will remain an important feature of the legal aid system and all applicants will need to satisfy it. The test allows for several factors to be taken into account; for instance, whether the applicant is likely to lose his liberty when determining if it is in the interests of justice for legal aid to be granted.

It is an inescapable fact, however, that, as matters stand, every Member of the House would qualify for legal aid provided they passed the interests of justice test. I doubt that I need to remind Members about the unfortunate stream of well-publicised cases in which apparently wealthy individuals are able to claim legal aid under the current scheme. Few would disagree that such a perverse system needs to be tackled and that is precisely what the Bill sets out to do.

David T.C. Davies: Surely, we made those points four or five years ago, when the hon. Lady's Administration changed the rules and brought an end to means-testing.

Bridget Prentice: I am not aware that the hon. Gentleman was making any of those points four or five years ago, but if some of his colleagues were doing so, I was not aware of it. When the scheme was introduced four or five years ago, it was seen to be much simpler and more straightforward than what had gone before. We recognise that we made it much easier for people to obtain legal aid when they would not otherwise have chosen to do so. We are trying to get the balance right.

Under the Bill, the grant of legal aid will cease to be a largely judicial function administered by court staff and, instead, become an administrative function with judicial oversight. Responsibility for the grant will be given to    the Legal Services Commission. However, the Government's intention is that court staff will remain responsible for the scheme's day-to-day operation. That arrangement will be regulated by a service level agreement between Her Majesty's Courts Service and the Legal Services Commission. A right of appeal to the court on the interests of justice test will still remain.

Jeremy Wright (Rugby and Kenilworth) (Con): The Minister has made it perfectly clear that the Government's intention is to reduce the demands on the criminal legal aid budget, but I am sure that she will accept that delay in the criminal justice system is a
 
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problem. What measures will the Government take to ensure that means-testing, and all that goes with it, does not delay the bringing to court of criminal cases?

Bridget Prentice: The hon. Gentleman makes an important point, which I shall come to later in my speech if he is prepared to bear with me.

The transfer of grant will allow the Legal Services Commission to exercise greater control over legal aid expenditure, as well as ensuring consistency and certainty for applicants. The proposed means test in the magistrates court will be quick and simple to administer. A simple initial filter that consists of upper and lower thresholds will be applied. Applicants whose income falls below the lower threshold will automatically qualify for legal aid, while those who exceed the upper threshold will not be eligible.

To enhance the scheme's sensitivity, however, those thresholds will not be set at a single level; they will be weighted to take account of household composition. For instance, for a childless couple, the upper threshold would be set at £34,000 and the lower one at £19,000. However, a couple with a three-year-old child would have an upper threshold of £40,120 and a lower threshold of £22,420.

For applicants whose income falls between the two thresholds, a more detailed assessment would be carried out to determine disposable income by incorporating a system of allowances covering actual housing, child care and maintenance costs. Applicants whose disposable income, when so calculated, is below a set level would be eligible for legal aid. At the moment, we believe that the disposable income threshold should be in the region of £3,156—close to that used in the civil legal aid scheme.

To place that in context, under that two-tier model for the means test, a couple with a three-year-old child and a joint gross income of £24,000 would probably be granted legal aid after completion of the detailed assessment, but a childless couple, with a similar income and therefore a far higher disposable income, would be unlikely to pass the detailed assessment and therefore would not receive legal aid.

The means test will include assets held by the applicant's partner. Since the test makes allowance for the increased cost of a two-person household, it is fair to recognise not only the full cost, but the full income of the household. However, we acknowledge the concerns of those who argue that unfairness may arise in cases where the partner has a clear contrary interest—for example, in a domestic violence case. For that reason, we will build safeguards into the new scheme to deal with such situations. Once legal aid has been granted, it will cover the entire cost of the defence.

We are aware that such a system can never take account of all possibilities. It has long been a central objective of the scheme that it is sensitive to individual circumstances and considers not only an individual's income, but his capacity to pay. To achieve that, tightly drafted regulations will detail when an applicant can request that special consideration be given to his circumstances. For example, account would be taken of the circumstances of applicants who had especially high
 
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outgoings and were genuinely unable to pay for their defence, perhaps because they cared for a disabled relative.

It is also a prime objective that the scheme causes minimal disruption to the justice system. Information on a defendant's means will be collected at the earliest opportunity after entry into the criminal justice system. In some cases, that will be as soon as an applicant is charged with a criminal offence.

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