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Vera Baird: I am interested to know the views of the Opposition. It is undoubtedly mostly a matter of arithmetic to establish whether somebody is in or outside the financial eligibility criteria. Is the hon. Gentleman suggesting that judicial time could be appropriately used on an appeal against that, or does he have some alternative model in mind?

Mr. Djanogly: I intend to discuss that in greater detail, so if the hon. and learned Lady will wait, I shall come on to it. It is important that the court should be able to hear appeals on the interests of justice test, as well as on the eligibility test, and should be able to consider those matters afresh.

The Conservative party has long been in favour of many of the measures in the Bill, in particular means-testing for those who can afford it, which the Government abolished in 2001. We opposed the abolition of the means test during the passage of the Access to Justice Act 1999, which the Bill amends. Now, after four years' experience, the Government wish to bring back means-testing. It has taken them eight years to bring back the NHS internal market and eight years to bring back grant-maintained schools, so perhaps we should be impressed that it has taken them only four years to do a U-turn on legal aid and means-testing.

The measure is basically right. Those who can make a contribution to their own defence costs ought to do so. However, we need to ensure that those who cannot make such a contribution are still properly represented and not disadvantaged within the criminal justice system. That second aspect is conspicuously missing from the Bill. The proposed means test involves a calculation to derive an adjusted level of income for the purposes of considering eligibility. Various deductions are made on a proportional basis from overall household income to reflect a client's costs. As the Minister explained, if a client's adjusted income falls between a higher and a lower threshold, a more detailed assessment is required to establish whether the client qualifies. Clients will not qualify for public funding in the magistrates court if their calculated disposable income is above £3,156 a year.

The Department has suggested that the abolition of the means test has contributed to the rising costs of criminal legal aid. As the draft Bill and consultation paper put it in 2004,

It stated that the

All that led the Constitutional Affairs Committee—rightly, in our view—to question whether there is enough joined-up thinking, principally between the Department for Constitutional Affairs and the Home Office, in the overall approach to criminal justice policy. It concluded at paragraph 46:
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It would be helpful if the Minister could give us a progress report on how that recommendation is being carried forward.

Bridget Prentice: I am happy to give the hon. Gentleman a progress report: we have introduced a legal aid impact assessment test, which is part of the regulatory impact assessment that every Department conducts when it introduces legislation. If any legislation introduced in this House impacts on legal aid, it must be funded or another way must be found to deal with it.

Mr. Djanogly: I thank the Minister for explaining that all legislation requires a regulatory impact assessment, which I shall discuss later in my speech.

The press briefing that the Government published in May at the time of the Queen's Speech estimated that the Bill would lead to annual savings of more than £35 million. We sincerely hope that it will, but it would be useful to hear more about how the Government reached that conclusion. After all, the original justifications for abolishing means-testing back in 1999 were that the system was too bureaucratic, which led to delays in cases being brought to trial and added significantly higher costs, and that it applied to less than 1 per cent. of applicants. It would be interesting for the House to hear how the Labour party, which abolished means-testing as a cost-saving measure, is going to reintroduce means-testing as a cost-saving measure.

In its response to the draft Bill in 2004, the Constitutional Affairs Committee concluded:

We support the Bill in principle, but we want to see more convincing evidence that it will have the desired effect. Will the Minister provide more detail on the projected savings?

We want to address several other issues in Committee. For instance, concern remains about the perverse incentive for defendants to choose the Crown court in cases that may be tried either way in order to ensure a more favourable position on legal aid. That serves only to increase costs, and the matter requires further review. We are still concerned about a related aspect of the Bill, which seeks to translate the magistrates court regime in a modified form to the Crown court simply by delegated legislation. We are of the opinion that separate regimes should be introduced simultaneously for magistrates courts and for Crown courts through primary legislation to avoid uncertainty in the drafting of the
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regulations and the perverse incentives that I have just mentioned. We believe that those points outweigh the benefits of first appraising the magistrates court scheme.

Despite our welcoming the Bill in principle, it is a very small step towards the desperately needed reform of the legal aid system, which the Government have allowed to fall into disrepair, and much more remains to be done. The Minister's speech was short on detail on the Bill's impact—for instance, what percentage of the population will have their access to legal aid restricted by the Bill? That is why I want to address some of the broader legal issues.

The soaring cost of legal aid in England and Wales forms the background to the Bill and this debate. The problem is not new, and I concede that it is not exclusive to the current Administration, because Governments of both parties have grappled with the cost of legal aid over the past three decades or more. It is clear that the problem has become acute since this Government entered office: in 1997, the total legal aid budget stood at around £1.5 billion; this year, it is more than £2 billion, which is an increase of some 35 per cent. while this Government have been in office.

More than half of that £2 billion is spent on criminal legal aid, the cost of which has risen dramatically. Since 2000–01, there has been a significant rise in the cost to the criminal defence service of criminal legal representation in the magistrates courts. By contrast, spending on civil legal aid, excluding the cost of asylum, has fallen in real terms by 24 per cent. since 1997. That in turn has forced many high street solicitors to go to the wall, restricting access to justice for many of the most vulnerable in our society. For example, as I found out through a written question earlier this year, the number of high street solicitor firms offering representation for legal aid and family cases has decreased by more than one third in the past five years.

That is despite the Government's ambition, as set out in the 1997 manifesto, to reform legal aid and achieve value for money for the taxpayer and the consumer. Meanwhile, at this year's election the Government promised to reform legal aid better to help the vulnerable. Their predicament seems to have led to a state of paralysis, and regrettably the vulnerable are being hit the hardest due to their inability to access lawyers who take on legal aid cases.

We agree that the growth in spending on the criminal defence service has to be checked. In the words of Lord Justice Judge in his evidence to the Select Committee on Constitutional Affairs, which reported on the draft Criminal Defence Service Bill in 2004, and to which the whole House is indebted for its work in this area,

As the Magistrates Association put it,

We agree.

The fundamental legal aid review was announced by the hon. Member for Tottenham (Mr. Lammy) in May 2004. On 19 July this year, I made a request to the Department of Constitutional Affairs under the
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Freedom of Information Act 2000 in relation to the review. The relevant DCA press release stated that the review would be

Some of its conclusions were set out in the July 2005 paper, "A fairer deal for legal aid", but the Minister decided on the basis of public interest to withhold the detailed responses and conclusions contained in an internal report. I called for an internal review of that decision, which resulted in certain limited material being made available. Nevertheless, the contents of the internal report remain elusive. That is entirely unsatisfactory, and one has to query why such information is being withheld. It seems only to add further weight to the concern that the legal aid system is in a state of crisis. The fact that fewer than two fifths of the population now qualify for legal aid sits rather uncomfortably with the concept that everyone is entitled to access to justice so that they can enforce and defend their legal rights and so that the Government and other powerful bodies can be held to account or contested where necessary.

The ridiculous extremes of bureaucracy involved in the legal aid process must continue to be broken down, and where savings measures are introduced, the savings must be real. The Government give in to the ever-present pressure to come up with short-term reforms designed to control the budget, but what is needed is a long-term strategy, particularly to reduce the amount spent on high-cost cases. The following figures represent the crux of the problem, which the Government are not adequately addressing. The half dozen most expensive criminal legal aid cases in 2003 amounted to no less than 25 per cent. of the total criminal legal aid budget. One per cent. of the highest cost cases amounted to between 40 and 50 per cent. of the total criminal legal aid budget.

The problem is not that the Government are spending too little money but that cases need to be managed more efficiently. There needs to be clarity about what legal aid is spent on. The Crown Prosecution Service needs to manage cases more effectively, as do judges. Dealing with the management issues at an early stage will help to avoid even bigger problems and spiralling costs later on. Yet the Government seem utterly unable to get to grips with the problem, which is not new.

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