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Westminster Hall

Thursday 11 January 2007

[Sir Nicholas Winterton in the Chair]

Legal Aid

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Watts.]

2.30 pm

Sir Nicholas Winterton (in the Chair): I advise hon. Members that we finish at 5.30 pm. It looks as though this Adjournment debate will be well subscribed, with many hon. Members wishing to speak, so I merely ask hon. Members to bear in mind the needs and expectations of their colleagues in all parts of the House.

The Parliamentary Under-Secretary of State for Constitutional Affairs (Vera Baird): On 28 November, the Government set out their programme to reform legal aid and put it on a sustainable footing, in the document “Legal Aid Reform: The Way Ahead”. The announcement followed the direction of travel of the Carter review, published in July, that lawyers and other advice providers should be paid by fixed and graduated fees—rather than by the hours worked, which does not encourage efficiencies and can reward the inefficient.

Once those in profession have adjusted to that system, the price per case will be fixed by them, for we shall invite competitive tendering among strictly quality controlled firms for each type of work. They will bid at prices that are, of course, profitable to them, but that are also made competitive for the taxpayer by local market forces. That is the way ahead that will guarantee needy people access to legal advice and representation at a fair price, while paying practitioners better.

Importantly, our document introduces changes to the implementation of the Carter blueprint, following our consultation over the summer, during which we engaged in an unprecedented way with the profession. That is the kind of consultation that points the way forward for good government. I intend to ensure that we continue to engage with advice providers throughout the implementation of the changes and that we do the job in the interests of the public and with the profession. I accept that some of the figures for fees in the Carter proposals were not as well tuned as we have now made them, and I accept that they were a cause of concern.

Mr. Alan Beith (Berwick-upon-Tweed) (LD): The Select Committee on Constitutional Affairs is about to embark upon a series of evidence sessions designed to establish how far the Government have met the concerns that were expressed during the consultation. I hope that the Minister will take the outcome of that fully into account, as well as what is said during the sessions.

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Vera Baird: I shall indeed do that. I shall watch the proceedings with interest, although it is rather a pity that the timing was not different.

Unfortunately, concerns were caused by some of the figures in the Carter proposals and those concerns have not been got over yet. They are not anyone’s fault, but a good deal has changed. However, people have not really taken on board what has changed, so I am glad to have this opportunity to emphasise that.

Keith Vaz (Leicester, East) (Lab): My hon. and learned Friend mentioned the concerns of a number of groups, one of which is made up of the ethnic minority practitioners. She was sympathetic to their concerns when the review was taking place. Does she feel that the Government’s tuning of the proposals has met those concerns?

Vera Baird: I hope that we have done that. As I shall outline, there will be local consultations—in particular, on criminal work—and local regulatory impact assessments, including diversity impact assessments, which I hope can deal with that problem in the best location: as close to the ground as possible, where practices operate.

Mr. Sadiq Khan (Tooting) (Lab): My hon. and learned Friend was courteous enough to send me a copy of a letter that she sent to my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), in which she confirmed that there would be a regulatory impact assessment. Can she confirm whether advice has been taken to establish that we are not thereby in breach of the Race Relations (Amendment) Act 2000 and—to allude to the point made by my right hon. Friend the Member for Leicester, East (Keith Vaz)—that that will not affect either ethnic minority practitioners or ethnic minority clients and potential clients disproportionately?

Vera Baird: I can confirm all that my hon. Friend asks me to confirm. There is already a regulatory impact assessment, which I am sure he will have seen, but the plan is to have fresh ones at each level, so that when we configure how practices will work locally, we can consider ethnic minorities as both clients and practitioners, although clients are the central focus.

Kate Hoey (Vauxhall) (Lab): My hon. and learned Friend has talked about the tuning that was done after representations, but does that tuning not mean that people working with debt will still receive some £64 less than the not-for-profit average? There will therefore be a huge disparity between what people were receiving and what they will receive.

Vera Baird: No, I do not think so. I have seen a number of ways of calculating the current hourly rates. I suspect that that figure is inflated, because the calculator has not removed exceptional cases from the calculation. The average fee now will be in the fixed fee limit. Let us remember that, if a case takes three times as long as the fixed fee time, it no longer comes under in the fixed fee regime. One can calculate using only the cases that will be in the fixed fee regime. The figure that my hon. Friend mentioned seems to be inflated by including all the exceptional fees as well. The figure
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that I have is very much closer—indeed, there is but a pound or two between the new fixed fee and the current national average fee for debt.

Simon Hughes (North Southwark and Bermondsey) (LD): The Minister and Lord Carter have said that access to justice is

The background to the proposals is that they might not be—in the Minister’s words—a cost-cutting exercise, but there is a cost-controlling exercise, in that the legal aid budget during Labour’s nearly 10 years in office has increased by about a quarter, whereas the budget for education has increased by more than a half, and the budget on health in this country has doubled. Why is the legal service—the third pillar of the welfare state—taking so much of a hit when it starts with a much smaller proportion of public finances in the first place?

Vera Baird: I do not regard a budget that has increased from £1.5 billion to £2.1 billion since 1997 as a budget that has taken a hit, but I shall come to the cost in a minute, if I may.

I welcome this debate. It comes in Government time, but I hope that that will give me an opportunity to put to rest some of the misapprehensions that have survived the changes that we made to the Carter proposals after the consultation. I should like to make it clear again that we accept the direction of travel of Carter, but we have changed the pace, the sequencing and so on.

Ms Celia Barlow (Hove) (Lab) rose—

Jim Cousins (Newcastle upon Tyne, Central) (Lab) rose—

Vera Baird: I shall give way first to my hon. Friend the Member for Hove (Ms Barlow) and then to my hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins).

Ms Barlow: I welcome the assurances that my hon. and learned Friend has given on immigration cases and more complex cases that deal with ethnic minority groups. However, she mentioned criminal cases, so will she say whether she is also extending the examination of the flat-rate system to family law cases, many of which are long and complex? I have been approached by constituents—including Pauline Troy, who is a family law practitioner who has worked on complex cases throughout her legal career—with fears that colleagues may be encouraged to do what is called skimming. In other words, owing to the huge pressures of the more complex cases, they either do not take them or go through them more quickly, which is, of course, to the detriment of the children.

Sir Nicholas Winterton (in the Chair): Order. Before I call the Minister, I should say that, although I am not known for supporting Ministers of any party, we should allow the Minister to develop her case before she is flooded with interventions. It is important that
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the Government express their view on what they propose before other Members intervene or try to catch my eye to make their own contributions.

Vera Baird: I shall come to family fees.

There will be a consultation on the regulatory impact assessment on each scheme, and that will include race equality. There is not only a new impact assessment, but a consultation on each one. I hope that that cheers up my hon. Friend the Member for Tooting (Mr. Khan).

Almost everybody who responded to the consultation—

Jim Cousins rose—

Vera Baird: I did say that I would give way to my hon. Friend.

Sir Nicholas Winterton (in the Chair): The hon. Gentleman is a senior Member.

Jim Cousins: That is unexpected and kind, Sir Nicholas.

May I take my hon. and learned Friend back to a point that she made earlier? She said that the bidding system for criminal legal aid was still to be determined. The Government said that, in early 2007, they would publish a threshold value for the firms that would be allowed to bid. Can she tell us what that threshold value will be?

Vera Baird: No. Although a power to include a minimum contract threshold is taken in the new contract, there is no intention at present to include such a threshold. That change has clearly not been noticed. As I shall set out more fully when I come to criminal cases, it is proposed that the police station duty rotors and the fees should be worked out locally, so that we can see whether there is any call for a minimum contract size on the basis of the local market. I hope that I have answered my hon. Friend’s question.

David Howarth (Cambridge) (LD): Will the Minister give way?

Vera Baird: This will be the last time that I do so before I make some progress.

David Howarth: Will the Minister explain the Government’s thinking on the very concept of minimum contracts? The best-value contracting system seems to take care of quality and price and therefore efficiency. What is the extra policy intention behind having minimum contracts at all? Many of us suspect that they are merely for the administrative convenience of the state, which does not strike us as sufficient reason to restrict choice, as a minimum contract regime would.

Vera Baird: As I said, at present there is no intention to limit the contract threshold in any way. However, the hon. Gentleman has put his finger on an argument. The Legal Services Commission also has to cut costs, and it will do so if it deals with fewer people, because it will have fewer transactions to manage. That is a case to consider.

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As I outlined to my hon. Friend the Member for Newcastle upon Tyne, Central—a senior Member—almost everyone who responded acknowledged the need to change the legal aid system. I imagine that most Members here acknowledge that as well. We have the best-funded legal aid system in the world by a mile, but it does not optimise its resources to serve the public and to reward practitioners properly.

Our legal aid system is the best-funded in the world by a long way. A table kindly sent to me by a senior judge shows that the legal aid of the majority of countries whose justice systems we consider to be good costs between €1 and €5 per person. For example, legal aid costs €5 per person in France and Germany. Countries whose civil liberties we admire, such as Scandinavian countries, spend between €10 and €30 per head. The UK, and only the UK, pays €60 per head, or £100 per taxpayer, on legal aid.

I am glad that our system is well resourced, because that makes it the best. However, although we taxpayers pay £100 each, in the past two decades, under Labour and Conservative Governments, the costs have gone up far faster than inflation and those of any other public service. Since 1997, the fund has increased from £1.5 billion to more than £2 billion. Despite that, costs are rising exponentially and the budget is overspent.

There is no prospect of more cash, although there is a campaign to get more into the legal aid budget. I would be very pleased to have more cash for my budget; I would not argue with that at all. The Department for Constitutional Affairs is not the right target for any such campaign. However, realistically, as we well know, there will be no more cash. I am waiting to see whether Opposition parties will pledge more cash; they have not done that so far, and I suggest that they will not. Furthermore, they should not do so if, as I shall set out, we are not getting best value from our current cash.

Mr. Dominic Grieve (Beaconsfield) (Con): Why has the DCA apparently been so relatively unsuccessful compared with other Departments in its bidding round with the Treasury? Does the Treasury consider that the DCA is not getting value for money and is punishing it, or is there some other reason behind the fact that, in the context of overall Government expenditure, the DCA has been one of the very big losers in the various spending rounds and negotiations?

Vera Baird: There certainly is a question about value for money for legal aid. As I am about to set out, that is part of the driving force behind the proposals, which are about using our money more wisely and, if we need more money, being able to demonstrate to the Treasury that we need it on the basis that we are using wisely what we have already. Paying for hours is not the way to demonstrate that.

Someone with more stripes on their arm than I have would be required to answer the question about the adequacy of our settlement. I believe that our settlement is regarded as being as good as that of many other Departments.

Ms Sally Keeble (Northampton, North) (Lab): Does my hon. and learned Friend accept that, although the overall budget has gone up, the spending has not
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increased in some areas? I have been particularly concerned at spending on housing advice and legal services in my area. Does she also agree that we need to consider, for example, the provision of legal aid for work with people with disabilities—in particular, for families with disabled children?

Vera Baird: Spending has gone up on the kind of civil help that my hon. Friend mentioned. As she knows from her own area, there have been new developments. Of course disabled people and children in families with disabled parents need to have proper access to legal aid. That is very much part of the DCA’s social exclusion agenda; we intend to ensure that such people have that access.

I am told that, in the 2007 spending round, our settlement was the average of that for all the Departments. I shall come to housing in a bit more detail in a minute.

Jim Cousins: Will the Minister give way?

Vera Baird: I keep saying that I will not take any more interventions, but my hon. Friend is irresistible. However, his intervention will definitely be the last for a while.

Sir Nicholas Winterton (in the Chair): Briefly, please.

Jim Cousins: My hon. and learned Friend said that the settlement for the DCA was average. In fact, the DCA is virtually unique in having already been committed to the outcome of the comprehensive spending review. It is virtually the only Department for which the comprehensive spending review has already been announced. How could she say what she said?

Vera Baird: I have said what I have said—can we now talk about legal aid?

In our view, there is no prospect of any more cash for the legal aid budget. I wait to see whether any other party will pledge to offer more, but I do not think that they will—or that they should while we are not getting best value for our cash. Let me make it clear: the changes are not about cost cutting; if there were a sudden windfall into the legal aid budget, we would still make them. It is imperative that we obtain best value for taxpayers’ money.

We have a duty to get best value for taxpayers and to pay in a way that ensures the best-quality coverage to people who need legal aid. That requires us to stop paying by the hour, which can favour the inefficient, and instead to pay per case, which will encourage high-quality and efficient practitioners to streamline the processes and develop the capacity to do more cases and get more advice to more vulnerable people. The quality of service will improve. Peer review as the means of quality assuring all practitioners has been welcomed by everyone. If suppliers do not reach the required level under peer review, they will not be allowed to supply legal aid.

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