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Although we have not resolved what is meant by,

in our transposing legislation, we have done so in our implementation. For example, we have explained the term in the accompanying guidance. We feel it is reasonable to expect land managers to understand and apply this definition. We consulted the NFU on this, to ensure that the guidance was as user-friendly as possible, and the NFU approved it before it was issued. There may have been a transparency problem if we had set a low threshold, which is one reason we set high thresholds. It does not seem unreasonable to require a person to realise that planning work on the scale of removing or adding more than four kilometres of field boundaries is not a minor job—four kilometres of field boundaries is quite an exercise if one is out there doing it, and I have seen it being done. Nor is removing more than 10,000 tonnes—about 400 large lorry loads of earth or rock. These are substantial jobs by any stretch of the imagination. It is not like, “I’m nipping out to knock this job off in half a day, dear, and I’ll be back”.

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The guidance gives details of a Natural England telephone helpline, and other contact details. If managers are in any doubt, they are advised to contact them. It is important to publicise the regulations, which we have done. I was almost tempted to say, “I have got all this written down, put together by my fine officials, who have explained all this, the background and why it is a good news story to me”. However, a front-page article in Defra’s October Farming Link newspaper, sent out to all farmers, set it out in clear, tabloid language—I do not say that in a derogatory way—which gets the meat across to anyone interested in half a dozen bullet points. At the end, there is the helpline, and email and website addresses. If farmers did nothing but read that, the new rules to protect the countryside and the issues I have raised about the four kilometres and 10,000 tonnes are mentioned there. Our press notice was picked up by the farming press as well, so it did not get buried or die a death. Both the NFU and CLA have issued guidance to members on their own websites, and we have published straightforward guidance on the Defra website.

The Merits Committee asked why we chose to make a criminal offence of breaching the restructuring rules. For the avoidance of doubt, we did this because we considered it an effective way of ensuring compliance and making the rules enforceable. It reduces the risk of placing the UK in breach of the directive, which would happen if unnotified and unpermitted projects had significant effects on the environment, and is in the interests of consistency and proportionality. A criminal offence existed in the 2001 regulations, and we plan to keep it for uncultivated land projects. So why would we consider it a criminal offence to fail to give screening permission for an uncultivated land project, but not a restructuring one? As I said, the restructuring must be quite large.

We do not expect many to undertake restructuring projects exceeding the high thresholds we have set. It is early days. After the first two months of the regulations, no screening applications have been received to undertake restructuring projects. We expect that trend to continue, because the high thresholds exclude routine land management activities which farmers are rightly doing all the while. That would be normal, whereas what I have outlined is on a large scale. Most restructuring over the threshold will be exempt, because it will already be covered by existing legislation: the environmental impact assessment rules applying to the planning system, forestry, land drainage and water resources, the hedgerow regulations and the Law of Property Act.

We have asked Natural England to implement the rules with a light touch. Frankly, I give all Defra’s agencies that advice: see the rules are followed, but do not go over the top. We do not want farmers, or people working on the land, metaphorically trapped by barbed wire and wrapped up in red tape. We are trying to release them from that where we can. People will suffer a criminal penalty only if they are prosecuted and convicted by a court, so it not an issue of being done by Defra officials. Any prosecution would of course have to satisfy the public interest test.

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This is basically a good news story, subject to the unfortunate glitch. We are prone to using computers; if you press the wrong key or there is a problem with the program, these things happen. It was unfortunate that it was not spotted. I am not in the blame game; I just want to get on with it and see that they are operating effectively, but we regret this. On the recent difficulties, I say to the noble Baroness that this issue appeared nowhere in any of my lists of the cause of the technical adjustment to Defra’s budget this year. It has not been on the scale of other issues.

Finally, I am grateful to be able to answer the question of the noble Lord, Lord Greaves, on why rural restructuring is not covered by cross compliance. The short answer is that we were keen to avoid increasing the burden of cross compliance. The new rules are designed to have a light touch, so are intended to catch only a small number of projects, whereas cross compliance already covers some of the ground dealt with in the regulations. The benefits of extending cross compliance to cover rural restructuring projects were so small that it was not worth doing. I have no doubt I could give the noble Lord a longer answer, but I hope and imagine that he will be satisfied with that one.

Baroness Byford: I am grateful to the Minister for his full response. He said I was nit-picking, but it has given us an opportunity to debate something important and, obviously, regulations which we support. Perhaps I should keep a list of how many times the Minister has to apologise for things going wrong in his department, but we will let that one pass. I certainly never suggested, as he well knows, that it was a contributor to Defra’s funding issues. I totally accept that.

I am grateful that the Minister updated us on how Defra has gone about putting it on the newsletter, along with the two other organisations. When he hopes that Natural England will deal with it with a light touch—we have not had anybody apply, but let us say that it is a problem in future—can the Minister clarify further whether Natural England will be the last port of call, or will the farmer or land manager held to account have any redress, either through the department or Natural England? I am always uneasy about something that makes somebody guilty unless you can prove that they are innocent. Here we are again, doing just that.

Lord Rooker: On Natural England, there will be a method of appeal for the farmer to the Secretary of State. If it is a question of prosecution, that would of course be an issue for the courts.

Baroness Byford: I am grateful to the Minister for that, and to the noble Lord, Lord Greaves, for his questions. We obviously support the Minister’s drive to minimise red tape that so many farmers and land managers must go through and lessen the burdens on business. Both of us want British agriculture to succeed; there is no difference between us on that. I must say, however, that we will look carefully at all the statutory instruments that come through. If we feel that the Merits Committee has raised concerns, we

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shall take a view: some we raise with the Minister, and others we do not. This one, however, we felt that we should. Before I finally sit down, I again seek clarification on something I have raised.

The committee referred to different member states looking at this regulation in different ways. Is the Minister satisfied that it will in no way disadvantage UK producers or land managers, compared with others throughout the EU? I support flexibility to a certain extent, but I do not want to see flexibility disadvantaging UK producers and land managers.

5.30 pm

Lord Rooker: That is the dilemma. I shall take advice and perhaps write to the noble Baroness on that, but if matters are left to member states things will be done slightly differently in each. On the other hand, if there is rigidity from Brussels, everyone will complain, “It doesn’t suit our local circumstances”. I said that we were following a similar pattern to, for example, Ireland and the Netherlands in the way that we used the lack of a definition in the regulations. We simply transposed the same words in the directive, because that was the legally safe way of doing it. But if there is a relevant issue relating to the treatment of the regulations by different European countries, I shall gladly write to the noble Baroness.

Baroness Byford: I am grateful for that. At the beginning of the debate I referred to the Minister’s presentation of the awards downstairs. One of the issues raised was the whole question of the IPPC charges. The Minister has recognised that there are difficulties on that for our producers and said he will go away and think about how we can ensure that we are not disadvantaging UK producers.

Lord Rooker: Perhaps I may save myself from writing a letter. In answer to the question of why UK regulations are tougher than those in other member states, the restructuring rules are a very light touch, given that we transposed them much later than other member states. One of our problems is that, from 1988, we in this country did nothing for nearly 15 years. That is probably the root cause of our problem, because we did that under infraction pressure and the European Court of Justice case law emphasised the need to interpret the directive broadly. Infractions are brought against member states that define the directive too narrowly, so the UK opted for a broad interpretation.

The uncultivated land and semi-natural area rules are tougher here than in most member states because we wanted to protect valuable areas that were not already protected by environmental designations following the major loss of uncultivated and semi-natural areas during the 20th century. We introduced thresholds to the rules in light of the reduced threat to uncultivated land and semi-natural areas following CAP reforms and the rapidly expanding agri-environment schemes. That is the reason. In some ways it goes back to what was done under infraction pressures after we did nothing from 1988 to 2001. Then we got caught and had to deal with it in that way.

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Baroness Byford: I suspect that the responsibility is shared almost equally by his Government and mine and that it should have been done earlier. I thank the Minister for answering the many questions that we have put today.

On Question, Motion agreed to.

Environmental Impact Assessment (Agriculture) (England) (No. 2) Regulations 2006

Baroness Byford I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Grand Committee do report to the House that it has considered the Environmental Impact Assessment (Agriculture) (England) (No. 2) Regulations 2006 (SI 2006/2522). 46th Report from the Merits Committee (Session 2005—06).—(Baroness Byford.)

On Question, Motion agreed to.

Personal Injuries (NHS Charges) (Amounts) Regulations 2006

5.33 pm

Baroness Royall of Blaisdon rose to move, That the Grand Committee do report to the House that it has considered the Personal Injuries (NHS Charges) (Amounts) Regulations 2006. 2nd Report from the Statutory Instruments Committee and 2nd Report from the Merits Committee.

The noble Baroness said: For 70 years, hospitals have had the right to recover the costs of treating people injured in road accidents where the victim has been paid injury compensation. The NHS costs are borne by the compensator, rather than by the accident victim or the hospital. The principle is that those responsible for causing injury to others should pay the full cost of their actions or negligence, including the cost of treating the victim’s injuries. Under the existing Road Traffic (NHS Charges) Act 1999, the costs are recovered centrally and then paid back directly to the NHS trusts that provided the treatment.

The road traffic Act scheme has so far paid some £300 million to hospitals in Britain for them to reinvest in front-line patient care. The Health and Social Care (Community Health and Standards) Act 2003 took the powers to extent recovery of NHS costs to cases involving personal injury compensation generally. It does not seem logical that the successful road traffic Act scheme should be restricted to motor accidents. Therefore, it will not be restricted to motor accidents when the new scheme comes into force early in the new year.

When a person receives compensation for an injury, the costs of any NHS hospital treatment and ambulances in connection with the injury will be recoverable from whoever has paid the compensation. The income raised from the new injury cost recovery scheme will be paid straight back to the hospitals that

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provided the treatment. Those hospitals will be free to use the money to improve patient services as they see fit. In that way, we hope to recover an additional £150 million to be reinvested in front-line patient care.

These regulations make provision concerning the amounts of NHS charges to be recovered under the injury costs recovery scheme from people who pay compensation in cases where an injured person receives NHS hospital treatment or ambulance services. As well as setting the tariffs for outpatient and inpatient treatment, the provision of NHS ambulance services and the maximum amount to be recovered in relation to any one injury, these regulations also set out how the injury costs recovery scheme is to deal with a range of circumstances in which the amounts to be recovered may need to be adjusted.

These regulations are made using for the first time powers under section 153(2) of the Health and Social Care (Community Health and Standards) Act 2003. The Act requires the first regulations made under these powers to be subject to the affirmative resolution procedure. The Act also requires the Secretary of State to consult the National Assembly for Wales before making regulations under Part 3 of the 2003 Act. As these regulations are made under Part 3, consultation has taken place. The noble Lord, Lord Warner, has made the following statement regarding Human Rights:

Part 3 of the Health and Social Care (Community Health and Standards) Act 2003 makes provision for the establishment of a scheme to recover the costs of providing treatment to an injured person where that person has made a successful personal injury compensation claim against a third party. The injury costs recovery scheme builds on the existing scheme introduced by the Road Traffic (NHS Charges) Act 1999—the RTA scheme—which allows costs to be recovered in road traffic accident cases only. The new injury costs recovery scheme will come into force on 29 January 2007.

The injury costs recovery scheme will be administered by the Department for Work and Pension’s Compensation Recovery Unit—CRU—on behalf of the Secretary of State for Health. The CRU has operated the current RTA scheme since 1999, and has extensive links with, for example, solicitors and insurers. The person found liable to any extent in respect of the injury will also be liable to pay the relevant NHS charges in respect of NHS hospital treatment and ambulance services, in so far as provided. Compensators will have a legal obligation to inform the CRU of any claim for personal injury compensation.

Under the existing RTA scheme the amounts to be recovered are set using a simple tariff system. The tariff consists of a single one-off payment where hospital treatment is provided without admission, currently £505, or a daily rate, currently £620, for each day or part day of admission to hospital, excluding the day of discharge. There is also a statutory ceiling on how

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much can be recovered in relation to treatment of injuries resulting from any one incident—currently £37,100, or roughly 60 days’ in-patient treatment. These amounts have been migrated to the injury costs recovery scheme, with the addition of a new element to cover the cost of any ambulance journeys that may be required. This has been set at £159. Regulation 2 of these regulations sets out the amounts of NHS charges payable.

The tariff system means, of course, that frequently the amounts recovered do not match exactly the costs of providing treatment in any specific case. The tariffs represent average treatment costs; all these amounts have been established by calculating the average cost of treatment for injuries typically suffered in accidents and, for ambulance journeys, the average costs of providing ambulance services. These amounts are not intended to provide exact reimbursement.

Under the RTA scheme the tariffs are uprated annually on 1 April in line with NHS inflation. The increase is calculated using an average amount based on the three most recent years for which figures are known. The intention is to retain the annual uprating exercise but the tariff will not be uprated on 1 April 2007, given that the scheme will only recently have been introduced.

These regulations also set out how the ICR scheme is to deal with a range of circumstances where the amounts to be recovered may need to be adjusted. For example, the regulations make provision for where more than one person is liable to pay the NHS charges in respect of the same injury. Regulation 5 provides for the liability to pay the charges to be apportioned by the Secretary of State between two or more compensators. Naturally, there has to be adjustment for cross-border cases. Regulation 6 covers the adjustment of a certificate of NHS charges where the Secretary of State and Scottish Ministers both issue certificates. This could apply, for example, when an injured person has received treatment in both a hospital in England and a hospital in Scotland.

If the amount specified in the certificates when aggregated exceeds the maximum amount—currently £37,100—the Secretary of State may adjust any amount specified in the certificate issued by her. Regulations 7 to 10 make provision for the repayment of overpayments of charges and the recovery of underpayment of charges, including provision requiring the Secretary of State to send out statements showing the amount of overpayment or underpayment and the action required. If, as a result of a redetermination, adjustment, review or repeal, it appears that the amount of NHS charges paid by any person is more than the amount that ought to have been paid, the Secretary of State will either pay the difference to the person who paid the NHS charges, or instruct the trust or body to pay the difference to the person who paid the NHS charges.

Where the Secretary of State pays the difference, she will instruct the relevant NHS body to pay the difference to her or deduct it from future payments to that NHS body. If it appears that the amount of NHS charges paid by any person is less than the amount that ought to have been paid, the person who paid the relevant NHS charges will pay the difference to the

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Secretary of State, who will then pay that difference to the relevant NHS body. Where an underpayment or overpayment occurs, the Secretary of State will send a statement to the person paying NHS charges and the relevant NHS body, setting out the details, including details of the revised amount of NHS charges.

In summary, these regulations extend the scheme that allows the NHS to recoup the cost of treating the victims of road traffic accidents to include all cases where an injured person has made a successful claim for personal injury compensation. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Personal Injuries (NHS Charges) (Amounts) Regulations 2006. 2nd Report from the Statutory Instruments Committee and 2nd Report from the Merits Committee.—(Baroness Royall of Blaisdon.)

Earl Howe: I thank the Minister for introducing the regulations. The regulations look routine and rather dull, but they are not. They are the latest manifestation of the Government’s push to levy indirect taxes on the public through the medium of higher insurance premiums and, in so doing, effectively to introduce new charges for NHS treatment, which they have consistently denied that they would ever do. They have done so twice, as the Minister explained. Provision was made in the Health and Social Care (Community Health and Standards) Act 2003 for NHS hospitals to receive reimbursement for the cost of treating those people who have suffered a personal injury and have been compensated under an insurance policy. That measure represented an extension of the scheme introduced by the Road Traffic (NHS Charges) Act 1999, under which all hospitals treating victims of road accidents would be reimbursed by motor insurers for the cost of doing so.

It has taken some time for the Government to lay regulations to implement the extended scheme. The reason was apparently the concern expressed during the consultation exercise about whether the employers’ liability compulsory insurance market was sufficiently robust to cope with the additional demands to be made on it. The Government undertook not to put the scheme in place until they had carried out a study of the ELCI market. The study was published in late 2003, and it recommended that the new injury cost recovery scheme be postponed for a year.

A year later, there was another public consultation, which again excited concerns about the fragility of the ELCI market. Therefore, the first issue on which I should appreciate reassurance from the Minister is whether her department is absolutely satisfied that the ELCI market is now stable and strong enough to sustain the impact of the new ICR scheme. If it is so satisfied, I should be grateful to know the grounds on which it has reached that conclusion. What sums of money do the Government believe that the NHS will recover from the scheme once it is fully operational, if one excludes the amounts to be collected from motor insurers under the existing scheme? What will be the costs of collection?

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At present, claims against motor insurers are collected on behalf of NHS trusts by the Compensation Recovery Unit in the Department for Work and Pensions. Can the Minister confirm that the CRU will also be charged with the work entailed by this order? I believe that she said that that was the case. If I am correct about that, can she tell me why the contract has not been put out to competitive tender? Why have the Government not sought to achieve best value? If they believe that the CRU represents best value, how do they know?

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