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The Lord Chancellor: My Lords, it is certainly a problem that those who appear—I emphasise "appear"—to be well off qualify under the rules for legal aid. I have sought to address that particular problem in a paper that I published earlier, taking up various suggestions for altering the rules, so that when they are applied to such people the result may differ from that under the present system. In addition to the propositions put to me, I have incorporated some other suggestions which have occurred to us in the paper. The consultation period is proceeding. Again, any proffered help will be very gratefully received.

Lord Irvine of Lairg: My Lords, does the noble and learned Lord agree that legal aid should be available to meet social need in meritorious cases? Does he further agree that, as a matter of principle, legal aid should not be subject to a blind financial cap regardless of merits?

The Lord Chancellor: My Lords, I consider that the legal aid scheme would be better if it were possible for it to respond more readily to priorities than does the present scheme. The quotation in the Starred Question was in reply to a question to me about the present scheme and my difficulty in assigning priorities once an entitlement had been established. In the proposals that I am considering, I have no intention of imposing a blind cap. The idea would be to allot a sum of money with priorities as to how that sum of money should be spent. I hope that it may be possible to include in the scheme a degree of local priority as well as national priority.

Lord Barnett: My Lords, as one who does not object in principle to cash limits—indeed, I was responsible for introducing them widely some time ago—can the noble and learned Lord explain how the system would work in the case of legal aid if, for example, earlier in the year the total amount of money allocated under cash limits was utilised? Would it mean that towards the end of the year many well-deserved cases would be refused the money?

The Lord Chancellor: My Lords, I feel sure that the noble Lord met this argument when, in his earlier days, he proposed an extension of the cash limited system to other areas that previously it did not cover. I have no doubt that he disposed of it very well by pointing out that, where somebody has a given sum of money to

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apply over a period such as a year, wise planning requires that it is not all spent at the beginning of the year but is spread in such a way that it will be used evenly. The success of the cash limited schemes introduced by the noble Lord show that his arguments in that connection were correct.

Lord Hailsham of Saint Marylebone: My Lords, when my noble and learned friend is considering priorities, will he confirm my belief that certain types of litigation—for example, defamation cases—are still excluded from legal aid? As a matter of national priorities, is it not possible to devise a system whereby certain types of litigation have a lower priority than others?

The Lord Chancellor: My Lords, that is a possibility under a scheme that I have in mind. It would be a welcome addition with a more flexible type of allocation of priority than exists at the moment. As my noble and learned friend says, defamation is and always has been excluded. It is a rigorous type of priority in relation to defamation, but it is more difficult under the present scheme to have any kind of gradation of priorities between not allowing a case at all and allowing it in fully. There is also scope for regional and local differentiation in priorities.

Lord Annan: My Lords, can the noble and learned Lord consider another matter? I refer not only to the question of who is entitled to legal aid, but also to the actual cost of justice. Will the noble and learned Lord consider whether refreshers are a natural and entirely admirable way of payment for the fees of barristers? If so, will he consider whether there might be refreshers for some of us who attend the House of Lords?

The Lord Chancellor: My Lords, I believe that your Lordships' arrangements depend, among other things, upon a subsistence rate which varies according to the time for which your Lordships are present. That is the underlying principle of the refresher. But the system of fees is also a matter that I want to consider in relation to this proposal. The Bar Council has proposed for some time—I am endeavouring to implement the principles of it—a graduated fee system which would make it easier to make arrangements along the lines that I am proposing if we go down this road.

Lord Wigoder: My Lords, just to put the record straight, is not the obsolete term "refresher" simply another way of talking about the daily rate?

The Lord Chancellor: My Lords, I thought that that was the substance of what I was trying to say. It is a matter of opinion what one calls it. In this House we call it a subsistence allowance on a daily basis. But the time a case takes is one factor that is relevant to the amount the person taking the case should be paid. Precisely how that is determined is a matter for judgment in relation to specific classes of case.

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Housing Benefit

2.55 p.m.

Lord Milverton asked Her Majesty's Government:

    What estimate they have made of the cost implications for housing benefit following the deregulation of private rents under the Housing Act 1988.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the deregulation of the private rented sector is only one of several factors which have a cost implication for housing benefit. It is not therefore possible to make a reliable estimate of the cost implications of deregulation alone. The amount of housing benefit rent allowance expenditure increased from £1.1 billion in 1988-89 to an estimated £3.8 billion in 1993-94.

Lord Milverton: My Lords, I thank the Minister for his reply. However, can he say whether, possibly through unforeseen consequences of the policy, the current bill has risen to a figure in excess of £9 billion? If so, has the House been informed of that?

Lord Mackay of Ardbrecknish: My Lords, the £9 billion to which my noble friend refers is the total cost of housing benefit. That is made up of three parts. The first is payments to local authorities via rent rebates; the second is payments to housing associations; and the third relates to payments to the private rented sector. My noble friend gives a figure of £9 billion (which is perhaps from the year before 1993-94) but that is for housing benefit across the whole field and not merely for the private rented sector.

Lord Stallard: My Lords, can the Minister tell us a little more about the relationship between housing benefit and average rents? For instance, in 1979 the average rent was £4.75, the equivalent of which today would be £13. In fact, average rents are way above the £100 limit in some cases. That is relevant when we talk of housing benefit. Can the Minister tell us something about the equation between housing benefit and average rents?

Lord Mackay of Ardbrecknish: My Lords, as I mentioned in my original Answer, a number of factors play a part in the increase from just over £1 billion to just over £4 billion. For example, part of that is accounted for by housing association tenants, in which there has been an increase; part of it is accounted for because of an increase in unemployment and people now needing to claim benefit who did not need to claim it before; part of it comes from inflation over the years; and part from an increase in market rents. However, part of the increase came from the introduction of deregulation, the object of which was to halt the decline in the private rented sector. That happened and we have both better accommodation on the market in the private rented sector and 200,000 more units available in the past four or five years.

Baroness Turner of Camden: My Lords, is the Minister aware that the National Federation of Housing Associations said, without equivocation, that the

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problem is the high rents since 1988? The federation is pressing for adequate subsidies in order to keep rents at an affordable level. What are the poor to do if rents rise and they are faced with the problem of a government who want to restrict benefits such as housing benefit? There must be a policy of ensuring that affordable rents are available for very poor people.

Lord Mackay of Ardbrecknish: My Lords, accommodation must be available for all people, including the very poor, and the housing benefit system is designed for just that. But in addition to being fair to the tenant, one must also be fair to the landlord to encourage him to bring his property to the market. As I explained, that has happened since 1988. One must also be fair to the taxpayer. That is why my right honourable friend the Secretary of State for Social Security announced that there will be a limit to the amount of money which will be paid in housing benefit on above average rents. Both the tenant and the landlord should be able to look at a market where neither thinks that the taxpayer is standing behind whatever rent they agree on.

Baroness Gardner of Parkes: My Lords, is it not a fact that the amount that can be paid in rent is totally unlimited at the moment? One London borough claims that the housing benefit total which it administers for the Government has increased since 1988 from £30 million to £100 million. I take the opposite side from the noble Baroness, Lady Turner, on this issue. I think that there should be a definite ceiling, as some people are getting housing benefit on properties costing £300 a week or more for one person in occupation. If there was a limit well below that level more money would be available to help those people who really need affordable accommodation.

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