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Lord Warner moved Amendments Nos. 408A and 408B:

"Superannuation Act 1972 (c. 11)

4A In Schedule 1 to the Superannuation Act 1972 (kinds of employment in relation to which pension schemes may be made), at the appropriate places in the list of "Other Bodies" insert the following entries—
"The Commission for Healthcare Audit and Inspection.";
"The Commission for Social Care Inspection." Page 144, line 21, at end insert— "25A In section 55(3)(e)—
(a) for "the Commission" substitute "the CSCI";
(b) for "section 31 or 46 of this Act" substitute "section 31 of this Act or section 86 or 96 of the Health and Social Care (Community Health and Standards) Act 2003".

On Question, amendments agreed to.

Schedule 9, as amended, agreed to.

Clause 144 [Interpretation of Part 2]:

[Amendment No. 409 had been withdrawn from the Marshalled List.]

Clause 144 agreed to.

Clause 145 agreed to.

Lord Skelmersdale moved Amendment No. 409A:

    Before Clause 146, insert the following new clause—

No regulations may be made under this Part unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House of Parliament."

The noble Lord said: Listening to two days of debate on Part 2 gave me plenty of time to reflect that CHAI is rather inelegantly named because it is, of course, Turkish for the word "tea". We may consider that at the Bill's next stage. Be that as it may, we now turn to something entirely different.

Ever since 1948, insurance claims against motorists resulting in NHS treatment to the plaintiff have given rise to a proportion of the settlement money going to the National Health Service for treatment costs. The basis of that agreement has been changed twice: once in 1989; and again in 1999.

Part 3 of the Bill changes the basis again and extends the scheme for NHS charges from just motor insurance to include both employers' liability, personal liability and, I believe, product liability claims. The 1989 Act need not concern us—at least for

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the moment; although I note that my noble friend Lord Hunt of Wirral, whom I am delighted has joined us with his expertise, has an interest in it—but the 1999 Act, which the Bill replaces lock, stock and barrel, most certainly does.

When the latter Act was a Bill before your Lordships' House, the noble Lord, Lord Clement-Jones, will perhaps remember asking at Second Reading whether the National Health Service might recoup its costs in cases where personal injury was paid. The then Minister, the noble Lord, Lord Hunt of Kings Heath, replied that the Bill,

    "does not provide a mechanism to extend those rights"

—incidentally, those rights were the rights of the NHS to claim money from compensation payments for motor injuries. He continued, rather strangely:

    "by stealth".—[Official Report, 2/2/99; col. 1459.]

Those were unfortunate words. In the modern political lexicon, "stealth" is always accompanied by the word "tax".

When a similar point was put to the noble Lord in Committee, the then Minister said:

    "We have acknowledged the commission's suggestion"

—that is, the one contained in the Law Commission's 1996 paper that proposed that the NHS should recover its costs in all cases of actionable personal injury—

    "and we are considering it".—[Official Report, 18/2/99; col. 762.]

Four years is a fairly long time for consideration.

My first question is therefore: why now, if not that the Chancellor is scraping every barrel that he can find to fund the NHS without increasing income tax or VAT? Why do we find it buried well into the Bill and, even worse, do we find not one but eight different statutory instruments, subject to annulment, to launch it? Eight negative instruments? If that is not stealth, I do not know what is.

It is true that Members of this House are rather better at picking up negative instruments than are Members of another place, but no one would claim that the system is perfect. I hope that it will be a little better when we have the statutory instrument policy committee that we have been promised next Session. Nonetheless, orders following close on the discussion of a Bill have a better chance of scrutiny.

Unfortunately, that will not happen in this case. The Department of Trade and Industry and the Department for Work and Pensions have been sufficiently alarmed to launch an inquiry into the workings of employers' liability insurance and the premiums paid by employers, which, according to Zurich Insurance, the Association of British Insurers and the British Insurance Brokers Association, have increased on average by between 40 and 60 per cent since as recently as 2002. According to the regulatory impact assessment of the Bill, another 7 to 8 per cent will be added to employers' costs purely as a result of employers' liability.

That leads me to my next question: what figures does the Minister have for personal or product liability? In another place, the Minister of State said that the new scheme will not be brought into effect

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until after the investigation to which I referred has concluded. What is the prognosis? Are we to wait another four years before it sees the light of day?

In any event, that is why the amendment would make all the amendments proposed by this part of the Bill—not just those commented on adversely by the Delegated Powers and Regulatory Reform Committtee, whose objections I see are acceded to by the Minister in Amendment No. 474A—subject to affirmative resolution. I beg to move.

12.15 a.m.

Lord Clement-Jones: I support the noble Lord, Lord Skelmersdale, in his cogent introduction of the amendment. He mentioned that the Minister of State in the other place said that provisions on NHS costs recovery in the Health and Social Care Bill would not be implemented until the Government's work on employers' liability compulsory insurance was completed. That was in reply to my honourable friend Brian Cotter, the Liberal Democrat small business spokesman.

We feel strongly about the potential additional costs of compensation claims and the fact that at present, in the calculation of scale premiums for employers' liability, there is no ability or sensitivity to distinguish between different track records among the small business community. Much of the inquiry will be about how the insurance industry can get its act together in that respect. The noble Lord said that the Association of British Insurers reckons that the increases will be by as much as 8 per cent. That is a significant potential increase for small businesses.

In the circumstances, it seems peculiar that the Government are persevering with this part of the Bill, when it is contingent to such an extent on further work to be done by the DTI. An affirmative resolution must be required for the regulations provided for in the amendment.

Lord Warner: The noble Lord, Lord Skelmersdale, is clearly revitalised by not having had to participate in Parts 1 and 2 of the Bill. I am sure that I look a little jaded by comparison.

This is not just a stealth tax. On the contrary, it removes from the general taxpayer the burden of meeting some of the costs of treating the victims of another person's negligence and places it on the wrongdoer. Why should a man or woman in the street have to pay for the medical treatment of people injured at work because their employer failed to take adequate steps to protect them? If the proposal constituted stealth tax, the Law Commission participated in it, as it emerged from a Law Commission review quite a long time ago.

In response to the noble Lord's questions about cost, the estimated losses are 75 million for employers' liability and 75 million for public liability. An estimate has not been made for product liability because the numbers are extremely low.

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A first-stage report, setting out the findings of the ELCI review, was published on 3rd June. A further report is to be issued in the autumn, so the review has not yet been completed. We are taking steps to include the arrangements in this legislation, but we have indicated that we will not implement it until the outcome of the final review is settled.

Much was made of the issue of affirmative resolution. Amendments Nos. 409A and 475 would make the regulation-making powers in Part 3 subject to the affirmative resolution procedure. Amendment No. 477 would have the same effect for the commencement order for Part 3.

With only one or two exceptions, the regulation-making powers in Part 3 are not new. Rather, they mirror—sometimes word for word—powers that already exist in the Road Traffic (NHS Charges) Act 1999. All regulations made under the terms of that Act are subject to negative resolution procedures.

In most cases, the Government can see no valid reason why regulations made under the Bill—which will be largely concerned with the detailed and technical administration of the scheme—should be treated any differently. I said "in most cases", as there are two possible exceptions. The report on the Bill from the Delegated Powers and Regulatory Reform Committee recommended that the regulation-making powers in Clauses 146(12) and 149(2) should be subject to affirmative procedures.

On Clause 146(12), the Government accept the Committee's view that the powers granted there could be exercised, but the Government are less convinced about Clause 149(2). The Committee has suggested that because the scope of the expanded scheme is so much greater than that of the existing scheme, the powers to set the amounts payable should be subject to affirmative resolution.

In fact, the way in which payments will be established is intended to be no different at all from the way in which it is done now. There will be three simple tariffs. As now, there will be a single, one-off payment for outpatient treatment, however many appointments are needed, and a daily rate payment for inpatient treatment, irrespective of what that treatment actually entails. In addition, because the scheme will allow recovery of ambulance costs, we will also need to establish a new tariff, again a single one-off payment, to cover ambulance journeys. It is definitely not the intention that a wide range of different payments for different treatments or different types of personal injury will be developed. So the scope of these powers and the way that the Government intend to use them, is the same as the corresponding powers that already exist in the Road Traffic (NHS Charges) Act 1999.

Nevertheless, the Government want to be as constructive as possible in their response to the Committee's recommendations. As a result, I have tabled Amendment No. 474A which would make all regulations made under Clause 146(12) subject to affirmative resolution procedures. It would also make the first set of regulations made under Clause 149(2) subject to affirmative resolution procedures, but

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subsequent regulations subject to the negative procedures. That would give Parliament the opportunity to debate tariff-setting and so forth at the outset and reassure both this House and the other place that the scheme was being appropriately set up.

Amendments Nos. 474A and 474B also give effect to another of the Committee's recommendations by amending Clause 196, which gives the Secretary of State—or in relation to the "Welsh" parts of the Bill, the National Assembly for Wales—the power to make supplementary, incidental and consequential provisions, including provision modifying any Act or subordinate legislation, when such modification is necessary to the supplemental, incidental or consequential provision made. Subsection (c) of government Amendment No. 474A requires any order or regulations made under the Bill that will have the effect of amending or repealing part of any other Act to be subject to affirmative resolution procedures. In the light of those assurances, I hope that the noble Lord will be able to withdraw his amendment.

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