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Many years ago, I gave a Fabian lecture called "Democracy and Individual Rights". In that lecture, I made a number of presumptuous suggestions about codifying administrative law, incorporating the European Convention on Human Rights into domestic law, and doing something about justice for all, including establishing community law centres. In that lecture, I gave more importance to civil legal aid than to the incorporation of the European Convention on Human Rights. That is still my belief as someone who fought for 30 years to get the Human Rights Act. It is more important for the most vulnerable people in our society that there is effective access to legal services through civil legal aid than it is to have the Human Rights Act.
Some may find it astonishing that that should be my belief. That is because the Human Rights Act deals with great ethical principles, one of which relates to what we are talking about. The Joint Committee on Human Rights, in its report, has pointed that out as a common law and convention principle. However, if we are concerned about practical realities, the amendment of the noble Lord, Lord Pannick, has good sense in setting out the obligation of the Lord Chancellor to secure that,
and recognises that that must be within allocated public expenditure. It means that if Barbara Castle, who I much admired, were still alive and were to write a similar memorandum to the one she wrote during the Wilson Government, the Lord Chancellor would be able to answer her by saying, "I have a duty to stand up for effective access to legal services to meet the needs of the people and therefore you cannot treat this simply as the Cinderella of public expenditure".
Like my noble friend Lord Carlile of Berriew, I strongly support the Government. Like him, I very much hope that the Minister in his reply will give us some indication-not in detail but generally-of the
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Lord Hylton: My Lords, I rise with great caution as a lay man in this very legal debate. However, I read the article in today's Guardian by the Lord Chancellor, in which he spoke of promoting non-adversarial solutions. I therefore invite the Deputy Leader of the House, when he replies, to tell us a little about how that will work out in practice and to what extent those kinds of solutions will compensate for the very large cut that is proposed to be made to the current legal aid budget.
Baroness Whitaker: My Lords, I will be brief. Very much following the speech of the noble and learned Baroness, Lady Butler-Sloss, I should like to add another slant to why the amendment should be supported. The trouble is that Clause 1, as it stands, does not confer access to justice. The wording does not make it clear that such a provision will meet individuals' needs. It could be minimal, perfunctory and partial, and yet still comply.
What individuals need is the crucial element of what my noble friend Lady King of Bow called in her Second Reading speech the state's compact with the citizen: that is, if the rule of law is unintelligible and unavailable to the citizen, their rights and responsibilities are withheld, so not only is the individual deprived of what they might be entitled to but democracy is significantly eroded. We should not allow the wording of Clause 1 to be unamended, and I hope that the Minister will recognise that.
Baroness Howe of Idlicote: My Lords, we have heard legal speeches from the top lawyers in this country, and no one should fail to recognise that. In particular, as my noble and learned friend Lady Butler-Sloss said, this is a very modest amendment that clearly takes account of the situation that we are all in. However, those of us-and there are many in this Chamber-who sat through Committee on the Welfare Reform Bill know very well where the needs are. There are needs other than those who are disabled or have special needs. As we heard, I think a couple of days ago, there are those who suddenly hit crises and need help.
Above all-from the way I look at these things; I wish we knew more-I support my noble friend Lord Ramsbotham's plea for rehabilitation. One should consider the amount of money that we could save if we actually addressed the point about early intervention
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I also realise that there are difficult loyalties between members of the coalition. One or two of your Lordships have made their position clear, and I admire them for it. It is difficult to vote against your party. I almost beg the Minister to realise that the amendment would meet his and the coalition's needs and should be accepted.
Lord Thomas of Gresford: I can go from 1958 to last Friday on doing legal aid work. I do not know whether the noble Lord can follow me on that, so I have some experience of legal aid. I have filled in the forms and appeared in various tribunals and courts, and I have sometimes appeared pro bono with the assistance of legal aid granted by panels of solicitors who control that sort of thing. However, I am afraid that the amendment does not say anything. That is my concern. It states:
Your Lordships have seen the Marshalled List and will appreciate the number of amendments in my name that make it clear that I am not satisfied with the settlement put forward by the Government within the resources that are made available. The noble Lord, Lord Clinton-Davis, asked what the Bar Council, the Law Society and all the NGOs say. They speak with one voice and accept the need for reductions. They accept that case, and so do I. It is an unhappy position and I wish it were otherwise.
In my Second Reading speech, I said that I hoped that the Government would commit themselves to saying that we are not here to squeeze government expenditure for all time but that when the economy improves we can widen the use of resources that will be available at that time.
Lord Thomas of Gresford: I will say something about that in our debate on Amendment 2. I entirely agree. I think that the Government are making a mistake in welfare law and that cutting legal advice and assistance for people at the bottom end of society will cause more problems than it solves; it will not achieve the savings that the Government think it will.
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Our decisions in Committee should not be about piling back in everything that has been taken out. We are living in a different world. There are different needs. Society has changed. From getting on for 60 years of experience, I think I know what those needs are. I hope, with your Lordships' assistance, to go through it all piece by piece, detail by detail, and point out to the Government what they should rethink.
I can make a speech about principles. Good God, I have done rhetoric all my life-I am a Liberal Democrat. I listened to the noble Lord, Lord Howarth, earlier. He made a fine speech, and I agree with every word, but what it had to do with the Committee's proceedings I was not quite sure.
We want to get away from rhetoric and down to the nuts and bolts of the Bill to see what solution we can come out with at the end. That is why I shall support my noble friend if this is taken to a vote and ask my colleagues to come with me to support the Government at this stage. It might be necessary later in our proceedings to hammer home certain points that we have not yet discussed, but I respectfully suggest that it is not necessary to defeat the Government on this amendment.
Lord Beecham: My Lords, I must begin by declaring some interests. I am an unpaid consultant with the firm of which I was senior partner for 30 years, in the course of which I engaged in legal aid work in the fields of personal injury law, family law and criminal law. I was also one of the founders of the citizens advice bureau in Wallsend, near the town in which I live, and I was instrumental in securing a law centre in Newcastle. I also have to declare a paternal interest, as my daughter practises in the field of housing and employment law at the Bar.
I congratulate the noble Lord, Lord Pannick, and his co-signatories on tabling the amendment. I confess that I share some of the reservations expressed by other noble Lords about the qualification included in the amendment. I am tempted to say that if my noble and learned friend Lord Goldsmith is satisfied, I must be satisfied. In all events, I am open to persuasion by the noble Lord, Lord Pannick, whom, with his display of forensic skill and general persuasiveness, I have never heard without being utterly persuaded. I am sure that he will persuade me and others of your Lordships that the amendment is on the right lines. The reference to Part 1 is predicated upon changes that I think many of your Lordships would like to see to the scope of the Bill.
The key issue for Parts 1 and 2 is that of access to justice, as fully explained by the noble Lord, Lord Pannick, in his brief opening remarks. There are two parts of the Bill with somewhat different purposes.
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At this point, I should say that the noble Lord, Lord Faulks, is wrong to assume that we on these Benches want substantially to maintain the status quo in respect of Part 2. We have some reservations and we may have some amendments, but we are by no means dismissing Lord Justice Jackson's recommendations. Of course, the Government are cherry-picking from Lord Jackson's recommendations and observations in the manner of George Washington, who, as your Lordships will recall, had to confess that he had chopped down the cherry tree. There are those of us who fear that the cherry tree of access to justice is in danger of exactly that treatment.
Lord Justice Jackson, as the noble Lord, Lord Alton, reminded us, was explicit in saying that neither the scope of nor the eligibility for legal aid should be changed. We are presented with a Bill which will drastically reduce the scope of legal aid and impose a very large cut in its financing, so that 650,000 cases will no longer receive legal aid or advice and £280 million of the £350 million savings to be engendered as a result of the Government's proposal will come from civil legal aid.
That approach flies in the face of the pronouncements of the noble and learned Lord, Lord Steyn, referred to by the noble Lord, Lord Elystan-Morgan, when he referred to unimpeded access to a court ranking as a constitutional right, which was cited in the Constitution Committee's report, as was Lord Bingham, who pronounced that,
Both those observations of those very distinguished judges should be reflected on in the light of the book of the noble and learned Lord, Lord Woolf, entitled The Pursuit of Justice, a pursuit of justice which will be made very much more difficult for so many-some 650,000 people.
Therefore, while denying the allegation of the noble Lord, Lord Faulks, that we on these Benches seek to maintain the status quo in respect of Part 2, I make no apology for saying that we will do our best to maintain as much as possible of the status quo for those who are to be affected by Part 1-the most vulnerable people who most need legal help and advice, generally speaking, at the most difficult times of their lives.
Of course, savings have to be made. The previous Government made some in controversial areas and, undoubtedly, we would have made more, perhaps concentrating on some aspects of criminal legal aid, but we would not have put legal aid and advice out of the reach of hundreds of thousands of people across a range of areas of law, from virtually the entirety of private family law to debt, housing, employment and welfare law nor, of course, to clinical negligence, to which others of your Lordships have referred.
Nor would we have legislated to pass the buck for the ensuing problems of homelessness, debt, family breakdown, the impact of welfare cuts and so on to other government departments and agencies and their budgets, or created difficulties in the courts and tribunals systems-enhancing the costs of both systems by increasing the number of litigants in person, for that will undoubtedly be the effect. It is no wonder, then, that family law organisations which are not specifically legal organisations have vigorously opposed the proposed changes. The Children's Commissioner, the National Federation of Women's Institutes and Women's Aid have all come out against the proposals. The Ministry of Justice's own family justice report and the Civil Justice Council have equally criticised the proposals.
At Second Reading, the Minister said that 95 per cent of cases with children as parties would be unaffected. However, there will be a saving of only about £6.5 million as a result of 35,000 such cases involving children being taken out of scope. Of course, 35,000 cases does not mean 35,000 children, as there will be cases involving more than one child. I do not know whether the Government have estimated the total but it is surely likely to be of the order of 50,000 or more. That is just one area in which these problems will become manifest.
Who will be expected to fill the gap following the withdrawal of legal aid and advice? It might be thought that the vanguard in the big society, the much praised citizens advice bureaux and law centres, would be expected to do so, but they are sustaining severe cuts in both government and local authority funding. Law centres face cuts of 85 per cent of their funding, leading, they say, to a 90 per cent cut in legal help cases, which amount to some 33,000. The Lord Chancellor, in his article in today's Guardian, appears to threaten their role, for in that piece he says:
Therefore, legal aid goes and the voluntary sector, which might have been able to take up some of the slack, is not only to suffer cuts in funding but is to be deliberately steered away from replacing what would otherwise have been available from the ordinary legal aid system.
In addition, there are serious questions about the impact of these proposals and the robustness of the financial savings which it is suggested they will lead to. The impact assessment on legal aid, which many of your Lordships will no doubt have read, makes very interesting reading. Paragraph 6 says:
"Legal aid may be regarded as a redistributive transfer of resources from taxpayers to those who are most needy, in relation to both the nature and merits of their case and also to their financial position. The proposals ... involve reducing the scale of these redistributive transfers. This will help the Government secure the wider macroeconomic benefits associated with reducing the fiscal deficit"-
The report also goes on to look at the considerable reduction in case volumes across a whole range of services: 84 per cent of total family private cases, 99 per cent of consumer cases, 95 per cent of employment cases, and so on, would be out of scope. In terms of both legal help and representation, huge reductions would occur in available assistance. The Minister will no doubt refer, as I think he did at Second Reading, to the fact that exceptional funding would perhaps be provided for a new scheme for excluded cases. However, again if one looks at the impact analysis, one sees that this will be minimal. In some cases, there will be,
The Ministry of Justice was very dismissive of the Law Society's proposed savings. There were two sets of proposals. One included what I considered to be the very sensible provision of a 1 per cent increase in the duty on alcohol, although I accept that that is not quite within the province of civil justice reform. The revised version had other suggestions, yet the ministry, which appears to have dismissed the Law Society's suggestions out of hand, does not have evidence to support its own proposals. In 15 separate statements in the impact assessment there are 30 admissions that it is speculating on the likely effect of those proposals. The ministry told the Justice Select Committee that,
The Government should accept this amendment. They should sit down and work with the Law Society and third-sector providers to examine alternative savings, including looking at the costs of the justice system, such as the delays and the administrative problems and the costs of the Legal Services Commission, which have already been referred to by the noble Lord, Lord Alton. They should obtain an independent assessment, perhaps by the National Audit Office, of the impact of the revised proposals on access to justice and in costs to other departments and public services.
The problem is that his list of critical issues is very short. It refers to loss of life and liberty and loss of home, but it leaves aside a range of issues which most
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If those critical issues do not relate to those very widespread problems, we will have a system in which, if you have the means, the doors to justice will be open but, if not, they will be locked and barred for too many people in our society. It is this fundamental dichotomy that this Committee must address and to which the Government must offer redress. I hope that the widespread support expressed for the thrust of the amendment will be reflected by the time we get to Report in substantial government amendments and with an accommodation that will minimise the damage which the Bill threatens to inflict on too many people in our country.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, I thank the noble Lord, Lord Beecham, for his words. We are very pleased to see the noble Lord, Lord Bach, with us. He very courteously explained to me the personal reasons why he could not be with us earlier, but it is good to see him in his place now.
The debate has taken on some of the aspects of a Second Reading debate and it is none the worse for that. The first amendment allows for such wide-ranging points to be made. I shall not try to reply to them all at this point, as we are at the very start of Committee stage. My noble and learned friend Lord Wallace and I will return to many of the issues, like medical negligence and social welfare, as the Committee stage runs forward.
I accept the point made by the noble Lord, Lord Beecham, that the official Opposition are not arguing for retaining the status quo. He and the spokesman for the Labour Party in the other place have made it clear that, if they had been in office, faced with the economic situation with which we are faced, they too would have been making cuts. The debate is about where those cuts should be made and with what impact. It is fair for him to look at the impact assessment, and the fact that it lends some ammunition to him is an assurance that it is a very fair impact assessment. The very first question I answered from this Dispatch Box about the Bill related to the fact that if you make budget cuts to a section of government expenditure that is focused mainly on the needy, it is the needy who will find the impact of those cuts. That is true of housing, social welfare, and so on, and that is the reality of a Government who have to cut back on expenditure.
I make no complaint at all about the contributions from lawyers in the debate. If we were debating a fundamental issue about medicine, I would hope that the noble Lord, Lord Winston, and other expert medics in the place would contribute; and if we were talking about defence, I would hope that our generals would contribute. I do not think that there is anything wrong with the fact that a large number of the contributors have come from the legal profession. The daunting thing for me, as a non-lawyer, is the array of talent that is on display from the legal profession. I always remind my colleagues down the corridor that, whenever I stand at this Dispatch Box, I am very conscious that
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It is certainly not my intention to approach this-I am trying to find that barb from my noble friend-with something like tetchy impatience. In fact, over the past few months, I have been watching my noble friend Lord Howe at the Dispatch Box. He will be my model for this Committee stage-a kind of concerned bedside manner.
However, in talking about Committee stage when I was on the Benches opposite, I was on record as saying that if the House divides in Committee, almost invariably one will have to resist. I genuinely want to use Committee stage to listen. I cannot make blanket promises and I certainly, at this stage, cannot start giving a list of concessions. The position of the Government is that the Bill has been delivered from the other place in pristine condition and ready for adoption but, as our system works, we listen to the advisory-
Lord McNally: We will listen and we will ponder. I hope that that will be the spirit in which we conduct the debates. It is certainly not, as the noble Lord, Lord Alton, suggested, an attempt to turn the clock back. Even when this exercise is finished, no one could dispute that we will have one of the most generous legal aid schemes in the world. My right honourable friend the Lord Chancellor, in his article in the Guardian, which has been quoted a number of times, says:
Lord Alton of Liverpool: The noble Lord, Lord McNally, has just cited the idea that we have the most generous legal aid system anywhere in the world, which he said no one would dispute. During the debate, noble Lords have heard from the noble Lord, Lord Beecham, myself and others about what Lord Justice Jackson has said about any further cuts in legal aid. He certainly disputes it, as do surely many others.
Lord McNally: There is absolutely no logic in what the noble Lord has said, with the utmost possible respect-I think that is what you say to each other when you are insulting one another. Lord Justice Jackson may well have a perfectly reasonable opinion that legal aid should not be cut, but it does not follow that, if it is cut, it will not remain the most generous system in the world. There is a non sequitur in what was said. Lord Justice Jackson says that he does not
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Lord Phillips of Sudbury: Does my noble friend at least accept that we legislate vastly more than any free democracy in the western world? We have between 200 per cent and 400 per cent more statute law than any free state that I have yet discovered.
Lord McNally: I have no idea whatever whether that figure is correct. I am not even going to promise to write to my noble friend about that. Yes, I think both members of the coalition came into government determined to legislate less and I am sure that, if and when power changes, any new Government will come into power wanting to legislate less. However, you get into a department and find that it has two or three Bills that it has just been waiting to get on to the statute book, or some campaigning organisation, probably chaired by my noble friend Lord Phillips, has a ready-made Bill to get on to the statute book as soon as possible.
First, perhaps I can deal with the calumny from the noble Baroness, Lady Mallalieu. I am not a Home Office Minister; I am a Ministry of Justice Minister. We benefit from that subtle division of responsibilities carried out by the previous Administration, which has so benefited government. Just as my noble friend Lord Carlile emphasises the liberalism of his approach, I make no apologies for approaching these matters as a social democrat. I look at these issues through those eyes, including that raised by the noble Lord, Lord Ramsbotham. It is extremely important that in reforming our justice system, we keep rehabilitation in the forefront. It is important to make clear that we will have a vigorous system to prosecute justice and punish offenders. However, if we carry on casually allowing the upward rise of our prison population into six figures, it will be a self-defeating process. Unless we attack the rehabilitation of offenders to stop the horrendous reoffending rates, as the noble Lord, Lord Ramsbotham, has often championed, we will be doomed to be spending increasingly more on punishment in a justice system with no real help to society at large.
This has been a philosophical debate. The noble Lord, Lord Howarth, set the tone in a speech which, as my noble friend Lord Thomas of Gresford pointed out, was wonderful in its rhetoric but brought us to why there was not universal support for the Pannick amendment. It suggested that the Government might have to take some account of the resources available. The noble Lord, Lord Howarth, went back to Magna Carta, quoting Lord Bingham and others. I have beside my bed a copy of his The Rule of Law, which is a guide for any lay innocent Justice Minister. We have to accept the fact that Governments and departments have to meet budgets and that they cannot find blank cheques and never have been able to.
I went to see the noble Lord, Lord Hutchinson of Lullington, who, sadly, can no longer attend the House and has taken leave of absence. Jeremy Hutchinson is now 96, but was one of the group of lawyers who helped to bring in the 1949 Act. He said rather wistfully, "We thought that we were bringing in a National
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"The logic is simple: to determine carefully which types of cases most urgently merit scarce resources, to encourage people to use non-adversarial solutions to their problems where appropriate, and to speed up and simplify court processes where they are not".
That is the philosophy of the Bill and it is what we are attempting to do. It is unfair when people use language suggesting that we are taking an axe to a whole system of justice. I know from my contact with the Lord Chancellor that that is not his intention.
The noble Lord, Lord Hylton, asked me about our approach to non-adversarial solutions. As the Lord Chancellor indicated in the Guardian article, we are looking to increase funding for family mediation. The Government are committed to increasing it by £10 million, which would fund an extra 10,000 cases.
I hear the speeches from my own Benches and am always interested when someone like my noble friend Lord Carlile makes an intervention followed by praise for courage from around the House. I draw his attention to the line in George Bernard Shaw's "Saint Joan":
Actually, I am a little bit old fashioned. I believe that the real courage is in standing up and saying, "I support the Government. I think that this is a very good Bill and I intend to vote for them tonight".
Lord Lester of Herne Hill: I am sorry to interrupt and I am grateful to the Minister for giving way. I want to help the Minister, I really do. I do not yet understand whether he really disagrees with the principle stated in the amendment tabled by the noble Lord, Lord Pannick. The principle stated would replace what is in Clause 1 with what seems to me a platitude but a very important one. I do not hear the Minister say that he thinks it is not the right principle.
I suggest that this needs to be thought about right now because we had the same situation in connection with the Public Bodies Bill. In Committee on that Bill, the noble Lord, Lord Pannick, and I did a rather bold and perhaps unthinkable thing and I stood on my head about it. The noble Lord made the House divide on my amendment to write a principle at the front of that Bill. We did that at the beginning in Committee, and getting the principle in had a beneficial effect. I am not suggesting that that might be necessary now, but it would help those of us who are loyal to the Government to know whether there is a real disagreement with the statement of principle in the amendment of the noble Lord, Lord Pannick.
Lord McNally: If my noble friend had a fault-and, my God, that is a dangerous thing even to suggest-it is his impetuosity. I was just coming to the nub of the Pannick amendment, but thought that after a long debate it was reasonable to try to pick up at least some of the points made by noble Lords.
The amendment seeks to place a statutory duty on the Lord Chancellor to secure access within the resources made available and in accordance with the provision in Part 1: the legal services that effectively meet the needs of individuals. We accept that this proposed amendment is very similar to the duty placed on the Legal Services Commission by Section 4(1) of the Access to Justice Act 1999. We also accept that the duty that the amendment would place on the Lord Chancellor would be qualified by the reference to the duty being subject both to the resources available and to the provisions of Part 1. However, against the backdrop of this Bill, we believe that Amendment 1 is unnecessary. It is central to our proposal for reform that the reforms establish an affordable system while ensuring that no one is denied their fundamental right of access to justice. Legal aid will be a key element in ensuring access to justice in some cases, but in many cases justice can and should be afforded without the assistance of a lawyer funded by the taxpayer. Fundamental rights to access to justice are the subject of international protections such as the European Convention on Human Rights and certain enforceable EU rights, and are protected by this Bill in relation to legal aid through the areas retained in scope in Schedule 1 and through the exceptional funding provision in Clause 9.
The exceptional funding scheme will ensure the protection of an individual's right to legal aid under the European Convention on Human Rights, as well as those rights to legal aid that are directly enforceable under European Union law. These rights are of fundamental importance, and the Government consider that the Bill adequately protects them. However, we do not consider that any more extensive right to taxpayer assistance by way of legal aid to access to the courts should be established. In light of the way the Bill protects fundamental rights of access to justice, to the extent that the amendment seeks to introduce requirements over and above what is required by, for example, Article 6 of the European Convention on Human Rights, it is not desirable or necessary. To the extent that it would require no more than, for example, Article 6, it is also unnecessary. Clause 1 states that the Lord Chancellor must secure that legal aid is made available in accordance with Part 1 of the Bill. The Lord Chancellor has powers under Clause 2 to make arrangements to meet that duty.
Considerations about the demand for civil legal aid services have not been ignored. Under Clause 10 the Lord Chancellor will make regulations setting out criteria that the director of legal aid casework will be required to consider when making decisions. When settling the criteria, the Lord Chancellor must consider the extent to which the criteria should reflect certain factors. These include the availability of resources to provide the services and the appropriateness of applying such resources to provide the services, having regard to present and likely future demands for civil legal aid services.
In addition, the Lord Chancellor will be required, in carrying out his functions, to protect and promote the public interest and to support the constitutional principle of the rule of law. These considerations are inherent in the Lord Chancellor's functions as a Minister of the Crown and do not require specific reference
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Having read that out, I appreciate that a large number of noble Lords will want to read Hansard, see what it says and see how it matches. It would be madness for any Minister faced with an amendment tabled by the noble Lords who tabled this amendment simply to dismiss it. I will certainly draw the attention of the Lord Chancellor to the debate.
Lord Clinton-Davis: So far the Minister has not mentioned the conversations that he and the Government have had with the Bar Council, the Law Society and other bodies concerned with this aspect of law. They have been critical of the Government's approach, have they not? In what way?
Lord McNally: At one stage I accused Peter Lodder, chairman of the Bar Council, of stalking me, so often did I see him. Of course the Bar Council, the Law Society and various other bodies, including committees of this House, will give an opinion on legislation. We are certainly in conversation on these matters. The noble Lord shakes his head, but when he was a Minister he did not say, "Come in, vested interests, tell me what you want and I will do it". He listened to them, and where they could convince him he made changes. I assure noble Lords that my honourable and right honourable friends the Ministers in the other place and I have made ourselves constantly available to a wide range of bodies, including professional organisations, and we will continue to do so during the passage of the Bill. No organisation has a rubber stamp on the matter, but we will listen.
In philosophy and in content, this has been an extremely useful debate that I will draw to the attention of the Lord Chancellor. When it comes to the crunch, we face a division between the principled approach of the noble Lord, Lord Howarth, that access to justice means that we must pay the legal aid bill, whatever it is.
Lord Howarth of Newport: I referred to expenditure that was genuinely necessary to ensure that all our citizens have equal access to justice. I certainly did not endorse any inefficiencies or extravagances in the legal aid system that there might be at the moment.
Lord McNally: The point is that that is genuinely what we, too, are trying to do. It is a matter of judgment. In the next month or six weeks, as we take the Bill through the House, we will test those judgments in detail. I hope that in the light of my response, the noble Lord, Lord Pannick, will withdraw his amendment.
Lord Lester of Herne Hill: The Minister referred to Article 6 of the convention being the standard. We should bear in mind, as he said, that among the
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Lord Pannick: My Lords, this has been a lengthy debate that has touched on a large number of very important issues. In responding, perhaps I may briefly take the attention of the Committee back to what we are debating: the terms of Amendment 1. With all due respect to the Minister, I simply cannot understand his objection to the amendment. It is not a matter of legal complexity, it is not a matter of legal expertise, and it is certainly not a matter of philosophy. Surely the amendment identifies in terms that I hope are clear and uncontroversial the aims of the legal aid system in our society. It recognises that the provision of legal aid must be within available resources, so it does not cut across the Minister's understandable desire to save money. There is no question of the amendment requiring a "blank cheque", which was his phrase in answering criticisms of the Bill. Surely a statement of constitutional principle such as this is absolutely vital at the start of a Bill of this nature.
I suggest to noble Lords that the Government's refusal, through the Minister, to recognise a simple, and I hope uncontroversial, statement of principle in Clause 1 is deeply troubling in what it tells the Committee and the world outside the House about the Government's approach to legal aid and to the more detailed provisions that we will come to debate in Committee.
Lord Pannick: I will come to the noble Lord's concern that the amendment does not go far enough. My point is that if the Government are not even prepared to recognise the principle that the Bill should seek to secure, within the resources available, individuals' access to legal services that effectively meet their needs, why should the Committee support the detailed reductions in the scope of legal aid that we will come to debate?
Lord Pannick: I will deal with the noble Lord's point if he will be patient; I prefer to deal with it in the course of my remarks and not at this precise moment. The Minister said that the amendment was unnecessary. I say with respect that that ignores the need for a statement of constitutional principle to assist the Lord Chancellor, the director, the courts and the public. The Minister suggested that these matters were inherent in the role of the Lord Chancellor. What, then, is the objection to putting the statement in the Bill?
The Committee heard support for the amendment from all sides of the House, and I am grateful to all noble Lords who spoke. The only noble Lords who spoke against the amendment, apart from the Minister, were the noble Lords, Lord Phillips of Sudbury and Lord Thomas of Gresford. Each was concerned that the amendment did not go far enough: that it was either anodyne or positively dangerous in cutting down on the possible provision of legal aid. I say to each of those noble Lords, and in particular to the noble Lord, Lord Thomas of Gresford, that his comments, with respect, ignore the provision that has been on the statute book since 1999: Section 4(1) of the Access to Justice Act 1999, the terms of which are echoed in this amendment. Under all Governments since 1999, that has been the state of the law, and Section 4(1) refers both to "the resources made available" and to provision,
but we have not determined what this part will cover. As the noble Lord realises, I have put down many amendments to Part 1 in an attempt to rejig what will be in scope and what will not. He is inviting the Committee to accept,
Lord Pannick: With great respect to the noble Lord, I am inviting the Committee to accept that whatever the Bill is at the end of proceedings in this House and in Parliament as a whole, it is vital to have at the outset a statement of constitutional principle. This amendment is entirely without prejudice to all the amendments that we will be debating, considering, and perhaps voting on, many of which I support, but that is an entirely distinct question from the issue that we are now debating, which is the constitutional principle about what goes into the Bill. I was particularly grateful to the noble and learned Lord, Lord Goldsmith, for his support on this point, and I respectfully agree with what he said.
I am not going to test the opinion of the House today-I am going to take the advice of the noble Lord, Lord Newton of Braintree-but I very much hope that the Minister will be able without a vote to recognise that the opinion of the House is very strongly in favour of this amendment for all the reasons that have been expressed in Committee today. I am sure that the Minister will recognise that if there is no movement on this issue-an issue that I and many other noble Lords regard as absolutely fundamental-the House will return to this matter on Report, and it is clear, I suggest, that the Minister and the Government will face a substantial rebellion on their own Benches. For the present, I beg leave to withdraw the amendment.
"( ) The Lord Chancellor must secure equality between the state and any party in dispute with the state in the provision of services of advice, assistance and representation for appeals on any point of law in the fields of welfare benefits, employment, debt, housing, immigration, education, and asylum."
Lord Thomas of Gresford: My Lords, we are now coming to what I regard as the nitty-gritty of this Bill: what is going to be in scope and what is not? What is to be provided for? I have focused in particular on the area of welfare law, which I think is of extreme importance in our deliberations. I am speaking to Amendment 2, and, as your Lordships can see, to Amendments 29 and 78. They are concerned with the provision of legal aid in the appeal system in the tribunals. I have other amendments set down which I hope will address what I consider to be a very important part of our deliberations: how do you provide advice and assistance to people before they ever get into the tribunal system? When they are faced with a problem and they want a resolution of it, to whom do they go? I have amendments down which will deal with that part of the matter.
It seems to me to be a fundamental principle that if you get to the Second-tier Tribunal and then to the appeal courts beyond that and if, as will undoubtedly happen, the Government are represented by counsel and solicitors ready to argue the point in front of those experienced tribunals, under the principle of equality of arms, which is a very important principle under the European Convention on Human Rights, it is very important that the applicant-or appellant, as he will have become-should be fully represented as well. It would be quite improper, wrong and a breach of the convention if we were to have litigants in person in front of the Second-tier Tribunal and beyond seeking to put their case forward and to argue law as well as fact.
I sometimes have the feeling that the Ministry of Justice is living in the past. At one time, when the tribunal system was set up, it perhaps-I am not convinced of it-did not require experience, skilled advocacy and the putting together of a case. However, with all the legislation going through that my noble friend Lord Phillips of Sudbury is concerned about and with the new Bill on welfare law, it is clear that there are going to be some very important issues of law to be discussed at that level. Therefore it is quite simply a statement of principle in Amendment 2 and of practicality in the two other amendments to which I have referred that I urge upon your Lordships for your consideration. Equality of arms is vital to justice, and nowhere more so than in the field of welfare law. I beg to move.
Lord Newton of Braintree: My Lords, I shall intervene briefly. My remarks, such as they are-I hope they will not be long-apply also to quite a number of other amendments for which I shall not be able to stay, some of them in the name of the noble Lord, Lord Bach. At Second Reading, I indicated that I have a lot of sympathy with many of these concerns, not least those
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That leads me to make two or three points. First, we really need something that we have not had, which is a combined impact assessment of the effect of the various pieces of legislation on poor and vulnerable people. We have not had it. This is not joined-up government and it is very difficult to make a judgment about what we collectively as a Parliament are doing to these people in those circumstances. That is aggravated by what has been acknowledged in this debate, which is that the Government do not know-I do not know whether the Minister will accept these words-what the financial effects of these measures will be, although we all know that there will be effects in increasing costs for other departments. The Government say that they cannot quantify them but I do not think that they would deny that they will be there. If they cannot quantify them, but cannot deny that they will be there, the savings figures are potentially meaningless.
Even within the Ministry of Justice, which I assume has costed the consequences, the extra costs of claimants, litigants and appellants defending themselves will almost inescapably drive up the costs of the Tribunals Service. Has that been measured? Is it taken into account in these savings figures? These are the questions to which we have to have answers. I do not want to see these amendments pressed to a Division tonight any more than I did the previous one, but they enable us to say that we need to know what we are doing before we can make a judgment in these matters.
I cannot stay for too much longer for reasons which I hope the House will understand but there are all sorts of things that one could say. Mediation was referred to earlier as well as alternative forms of advice in one way or another. Again, we need to know just what the position is. I should make the point that mediation has absolutely nothing to do with social welfare. You cannot have mediation about whether you are entitled to a benefit or not. You either are or you are not, although I accept that mediation may have a part to play in some other areas about which we are concerned.
In any event, we keep hearing talk about more cost-effective ways-I do not know the exact phrasing-of assistance, advice and so forth. But as has been said and as was illustrated in the debate on the CABs not much more than a week ago, most sources of advice are being squeezed either by this Bill-for example, the effect on law centres and other advisory services depending on pro bono work or legal aid work from lawyers-or by the squeeze on local authorities, which is putting the bite on CABs. We then hear talk about this, that or the other amount of money being available,
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Baroness Lister of Burtersett: My Lords, it is always a pleasure to follow the noble Lord, Lord Newton, who I am tempted to call my noble friend even though technically he is not. I rise in support of Amendments 2, 19 and 29 in particular, although I do so with some trepidation because I am not a lawyer. After what my noble friend Lady Kennedy of The Shaws said, perhaps that is not such a bad thing after all. In fact, my first job was as a legal research officer with the Child Poverty Action Group. Many people assumed that I was a lawyer because the group did not have one in those days.
From what we have already heard in relation to Amendment 1, this Bill is not about a narrow understanding of the law; it is about an understanding of the law as an important instrument of citizenship. These amendments are about something I spoke on at Second Reading, the relationship between the citizen and the state. I cannot believe that any Member of your Lordships' House wants to weaken the position of the individual citizen against the state, yet my fear is that that is what this Bill will do in Part 1.
I am a believer in the state, particularly the welfare state. But the state can loom very large and very oppressively in the lives of some of our most marginalised citizens. It is really important that they can turn to the legal system in their relations with the state. I also want to refer briefly-we will come back to this in later amendments-to the importance of the tribunal system. One of my first pieces of work as legal research officer at the Child Poverty Action Group was on one of the first empirical studies of the supplementary benefit appeal tribunal system. I was very privileged to be supervised by the late Professor John Griffiths, who I think would be horrified by the measures in front of us today.
The appeal tribunal system of course has moved on since the 1970s. It is a very different system now. But something I learnt then, which is as true today, is the importance of people who appear before tribunals having adequate advice and assistance if they are to be able to make their case. Another point I made at Second Reading is that social security law-welfare law-has become much more complex since then. I prayed in aid the example of the CPAG's national welfare benefits handbook. I wrote the first edition of that, which was about 20 pages. It is now 1,620 pages and probably grows every year. Even though we hope that the Welfare Reform Bill ultimately will simplify the system, it will still be very complex. The noble Lord, Lord Newton, has already referred to how important it is that people are supported through such big changes.
The Government have put forward various arguments about why the legal aid system is not necessary for tribunals, one of which is that the law is not sufficiently complex. I am sure that we will come back to those arguments in greater detail. Earlier, we heard from the noble Lord, Lord Lester of Herne Hill, about how Lord Scarman wrestled for three days with his cleaner's social security problem, which does not surprise me at all.
The Government have suggested that people who need help can turn to Jobcentre Plus or the benefits advice line, but that is a bit like asking the victim of a burglary to turn to the burglar for advice on how to deal with it. I am not suggesting for a moment that those employed at Jobcentre Plus are a group of thieves but they are party to the case. The noble Lord, Lord Newton, talked about mediation not being appropriate. Similarly, it is not appropriate to expect those at the source of the problem in the first place-that is, the state in the form of Jobcentre Plus-to give advice on appealing against the decision. In their helpful report, the CPAG and Scope suggest that, often, that advice is incomplete or incorrect. I acknowledge the very good job that many people working in Jobcentre Plus are doing but they are not there to provide impartial advice to benefit claimants.
It is sometimes suggested that legal advice makes the whole tribunal system too legalistic. But a number of groups, including Citizens Advice, have made the point that providing good legal advice can keep people out of the tribunal system when they should not be there-it is known as the triage role-and can send people to the right sources. Often, people think that they have a case to take to the tribunal system when they do not but, if they do have a case, it is important that they should feel comfortable going to the system.
Another argument is that the tribunal system is user-friendly, but we have to think about who the users of the system are. By and large, noble Lords probably are not likely to have a social security problem and have to appear before an appeal tribunal. We have to put ourselves in the shoes of those who do have to appear before the tribunals and accept that, as the research carried out by Scope shows in relation to disabled people, this can be a very daunting experience. It is very daunting to have to know what evidence you need to assemble in order to appear before the tribunal and how to present your case.
If you simply appear without having been given any support, often you will not even dare to go. The Minister has talked about being daunted at appearing before eminent lawyers in this House, but I do not think that that is anything like as daunting as it is for a social security claimant to appear before a tribunal. These people may have had very damaging relationships with the state in the past and therefore do not feel confident about going before something as official as a tribunal.
The only other point I want to make is that we are not simply talking about first order appeals. What happens beyond those? I am talking about going to the Court of Appeal, the Supreme Court and even the European Court of Justice. Even at that point legal aid will not be available to support people, with the
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In conclusion, I return to the central point of these amendments. As we discuss all the aspects of Part 1, but also as we consider the Bill as a whole, I hope that we will bear in mind the central question of our responsibility to protect the rights of marginalised citizens in their relationship with the state.
Lord Phillips of Sudbury: My Lords, I agree with every word that has been spoken so far. I say to my noble friend the Minister that it is easy for those who have never been involved in what one might call social security law to underestimate the extent to which so-called ordinary citizens can be completely baffled and often frightened by their engagement with it, certainly if one is talking about appeals; it is important for the Minister to note that the amendment, to which my name has been added, is only in respect of appeals on points of law. I ask him to contemplate how he would feel, with all his self-confidence and eloquence, if he had to go before any of the tribunals mentioned in Amendment 2,
although heaven forfend that the Minister should appear before a tribunal in relation to asylum. Seriously, however, it is not reasonable to demand a citizen even to decide whether he or she has a point of law which can be taken before a tribunal. It is simply unrealistic. One could almost say it is cruel to pretend that we are creating rights for those citizens most in need when they cannot even get advice and representation on points of law at appeals.
Finally, I shall quote from the National Association of Citizens Advice Bureaux briefing that has been sent to us all because I am sure that we all share a huge admiration for Citizens Advice. The association says that it agrees with the arguments made covering legal assistance in the Upper Tribunals, which share the jurisdiction of the High Court and follow complex procedural rules to hear appeals on points of law; and that most often it is either public bodies or large corporate employers that use these tribunals to appeal decisions made in the claimant's favour in lower tribunals, and they instruct legal counsel to do so. It is important to realise that it is not Mr Jones or Mrs Brown appealing, but the public body they have worsted at the tribunal appealing against the order made in their favour. If these people are denied the right to legal representation, what sort of justice is that? It is not justice and I hope that, with regard to this amendment and the others in the group, the Government will consider and agree to this change.
Lord Williamson of Horton: My Lords, on an amendment such as this it is important that we look first at the substance. This is an important and substantive amendment, and in general I think it is a very good one. However, it is also important to look at the text.
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To a lawyer that may be absolutely clear, but as a non-lawyer I am not clear about what is covered in terms of important bodies like local authorities and so on. They are part of the state, but are they fully covered? Such a range of things is listed here that I would like some clarification on that.
For example, what about a state-owned bank which is in dispute with its staff about employment? Is that or is that not covered? I do not want to make too much of this point because it is not a substantive one on the main objective but, if we have an amendment before us, it is quite important to understand what the intention of the mover is in relation to its coverage.
Lord Dubs: My Lords, I am in broad agreement with the amendment, although again I share the reservation expressed just now by the noble Lord, Lord Williamson, as to what is meant by the state. Does that mean central government, local government, public bodies or other agents of the state? That needs to be made clear because in some of these areas there might be a dispute with a local authority or even a housing association.
Anyone who has been a Member of Parliament or a local councillor will know that at their Friday evening and Saturday morning surgeries there will be people who come in on all these issues. The question then is where one refers them to. I am not absolutely clear whether the phrase,
is at a higher level or whether it refers to a first-instance tribunal. That may reflect my lack of legal background. However, if one has given advice as a Member of Parliament or as a local councillor, one has to become a little bit of an expert at triage in recommending where one's constituents should go for more specialised advice. I used to have the social security handbooks so that I could look these things up, and one becomes not too bad at it. One is never an expert, but one needs to be good enough to know where to refer people, and hence I appreciate that the amendment talks about "advice, assistance and representation". The reference to "advice" is important because we all know that if there is a dispute between an individual and the state or local government, the individual needs help.
I agree strongly with the noble Lord, Lord Phillips, that this is too difficult for people. Some of us, even the non-lawyers, might have enough experience and legal friends to give us advice, but for most people it is too daunting a prospect. We even know from our surgeries how nervous people can get about going to see their MP because MPs are authority figures. One needs to put them at their ease in order to discuss their issues with them. Expecting people to be unrepresented at a tribunal is simply an impossible suggestion. It is not going to work. People need further help in order
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Lord Hylton: I support the principle laid out in Amendment 78, which is in this group, because appeals will almost always involve points of law. However, I urge the Government to think further about the kind of legal advice that is essential to immigrants and asylum applicants at a much earlier stage in the process. They cannot be expected to know when they leave their country of origin everything that is contained within the 1951 UN Refugee Convention, nor can they be expected to know the highly complex law that we now have in this country, much of which is expressed in statutes which refer to earlier statutes.
Therefore, I ask the Government to think deeply, as the previous Administration began to do when they set up the Solihull pilot project, about providing legal advice to asylum seekers at a very early stage before even they have had their principal interview. That project has been going on for more than one year. I hope that it will very soon be possible to draw practical conclusions from it which can be extended to the whole country.
Legal advice for these people does not necessarily have to be given by fully qualified solicitors or barristers who know or can be expected to look up the whole range of English law; it needs to be given by persons who understand the current content of immigration or asylum law.
Lord Bach: My Lords, I apologise to the Committee for not being present during the first, very important debate. I hope that I informed the principal players in that debate that I would not be here for personal reasons -I had to go to a funeral of a dear friend. I am grateful to the Minister for welcoming me in the manner in which he did. However, when I came and heard my noble friend Lord Beecham making his speech, I wondered why I bothered to come back at all.
As the noble Lord, Lord Thomas of Gresford, said, with his Amendment 2, to which he spoke along with his later amendments, Amendments 29 and 78, we get down to the nitty-gritty. I want to talk briefly about Amendment 19, which is in my name and that of my noble friend Lord Beecham. It is the first outing of what I think will be a very important issue in this Committee, which is what should happen to scope of legal aid in particular areas of social welfare law.
The noble Lord, Lord Thomas of Gresford, and the others who spoke in favour of his amendment have been too gentle with the Government on this issue. It is absolute nonsense that there could be any question
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Some vital case law-on welfare benefits, for example-has been decided at the higher courts as a consequence of the claimants concerned having been properly legally represented. Big social security test cases which reached the higher courts by way of the appeals process include Zalewska, on the lawfulness of the workers' registration scheme; Hinchy, on the interpretation of the overpayment recovery test; Pedro, on the meaning of "family member in EU law"; and Mallinson, the seminal case on the interpretation of the law on disability living allowance. The idea that cases of that kind, or even those that are less important, should be conducted by a claimant in person is absurd. So I hope that the Government will accept Amendment 2 without cavil. Whether the wording is right is not a matter for tonight, but it is the principle that matters.
We argue in our Amendment 19, which is a probing amendment designed to find out what the Government feel about it, that the law should go wider and that there should be no question of taking out of scope reviews of welfare benefits. The amendment would ensure that individuals seeking to defend their fundamental economic and social rights had the advice that they needed to be able to present their cases and understand the processes that they would be subject to. Our amendment would allow the applicants to get advice before going to a tribunal. The First-tier Tribunals were set up, as we have heard, to consolidate the various tribunals that adjudicate on administrative matters of the state. Admirable work has been done and is being done to try to make First-tier Tribunals as user-friendly as possible-I praise the noble Lord, Lord Newton of Braintree, for having played a big role in this, as well as Lord Justice Carnwath, whom we should congratulate on being elevated to the Supreme Court today.
Lord Phillips of Sudbury: The noble Lord's mention of Lord Justice Carnwath put me in mind of a fact which none of us has so far mentioned but which I invite him to endorse, which is that the amount of court and tribunal time wasted by having unrepresented appellants has a cost attached to it.
Admirable work has been done in the First-tier Tribunal to make it as friendly as one can. However, it is impossible-and the Minister has heard this from around the Committee today-to square the circle in that those tribunals still fundamentally are ruling on matters defined and decided through laws, rules and guidance, which is sometimes pretty heavy, that often carry criminal sanctions if violated. It is quite clear when one looks at official statistics on the First-tier Tribunals that the Government are wrong when they say that tribunals can be accessed without advice. You are twice as likely to win an appeal if you have had some basic advice rather than no advice at all. The Minister's team has kindly provided information that allows us to quantify the increase in likelihood of winning an appeal if the appellant has been advised. This is to the First-tier Tribunal. For some types of cases, such as employment support allowance, you are more than twice as likely to win. Given that it allows people to return to work, seeing thousands of cases that would have been won with advice is surely wrong headed.
Lord Thomas of Gresford: Rather than saying that cases would have been won, would the noble Lord not use the expression "gained access to justice and obtained the benefits to which they were entitled"?
Lord Bach: In my legal career and otherwise, I have always given way to better phrases used by Welsh lawyers and certainly by the noble Lord, Lord Thomas of Gresford, and I do on this occasion too. Access to justice is rather important because you cannot win if you do not have access to justice. One of the worries is that the Bill will ensure that there is no access to justice for many who have had it up until now.
The reason for marked disparities is that appealing on welfare benefits inevitably requires, as my noble friend Lady Lister and the noble Lord, Lord Newton of Braintree, have just mentioned, an understanding, whether we like it or not, of complex statutes and rules and guidance that govern how the state evaluates an individual's eligibility for legal aid. Had legal aid not been present in 2009-10, if we apply the success rate for those without advice to those who did receive advice, 51,223 people in total would have lost their appeals. The long-term cost of supporting those people is incalculable. Never mind Second-tier, Court of Appeal and the Supreme Court; to take out of scope advice on a review to the First-tier Tribunal is unfair and wrong.
"Reduced social cohesion ... Increased criminality ... Reduced business and economic efficiency ... Increased costs for other Departments ... Increased transfer payments from other Departments, in particular higher benefits payments for people who spent their savings on legal action".
In welfare benefit cases, it is not enough to have legal aid at the Second-tier Tribunal upwards. In fact, if you do not have it earlier you are unlikely to ever get to the Second-tier Tribunal or above. Advice is needed when seeking to review, for example, DWP decisions before the First-tier Tribunal. It does not have to be expensive or sophisticated legal advice, but it has to be legal advice.
If advice is given at that stage, hopeless cases, as has been said, can be got rid of. First-tier Tribunals would not be so clogged up in the future. The Committee will remember what Judge Martin of the Social Entitlement Chamber said about unrepresented defendants-that at least 10 per cent of time is wasted in explaining what is going on. Proper cases can therefore go ahead quicker. In particular, many legal issues can be sorted out by the advice that is currently given so that the wrong can be put right before the tribunal ever gets involved.
That is what the present system does, although not perfectly. Lots of people do not take advantage of it and sometimes it does not work, but more or less it works pretty well. People get their advice, which frankly does not cost very much money and lawyers certainly do not get rich on it. The truth is that many cases no longer have to go anywhere near a tribunal. It does not encourage courts or tribunals: it actually avoids courts and tribunals. That is why it is slightly ironic that the Lord Chancellor said today in his Guardian article that legal aid's,
That comment is not his finest: I would go so far as to say that it is rather absurd. The type of legal aid that he seeks to abolish is exactly the type of legal aid that he should be encouraging and reinforcing because it avoids courts and tribunals rather than encouraging them. In fact it often has some sort of mediating effect, and we know that mediation is an important and proper part of the Government's policy in this field.
The Minister has described himself today as a social democrat and someone who has a copy of The Rule of Law by his bed. If he is a person of that sort, he must see the argument that has been put in the Committee tonight.
Lord McNally: I thank the noble Lord, Lord Bach, for that summing up. I was well aware of his own deep concern about social welfare law and I am not surprised by the passion with which he deployed his arguments. I was interested that he talked about advice. Quite often as this Bill goes through we will move between what is advice, what is legal advice and what is taxpayer legally paid advice. It may be that some of the areas of concern are addressed by other means.
On the point made by the noble Lord, Lord Thomas of Gresford, about tribunals, I am advised that upper-tier tribunals are under a duty in accordance with the overriding objective to make sure that cases are dealt with fairly and justly. That includes,
I am also advised that legal aid is not available now under the current system for representation at the Upper Tribunal or on welfare benefit cases, so we are not operating from a basis on which legal aid is as generally available now, as some of the speeches might have indicated.
When I started as a Minister I started counting the number of times the noble Lord, Lord Newton, and I disagreed, but I have now stopped counting. Nevertheless, my love for him remains totally undiminished and I know of his own concern and expertise in this area. He mentioned the danger of a pincer movement, but a number of proposals that are currently being considered across government should make it easier for people to receive the right provision or entitlement in areas such as welfare, benefits and education. The most notable of these is the universal credit, which will help to reduce the scope of error significantly, as it makes the whole benefits system simpler and easier to understand. The Ministry of Justice is working closely with the Department for Work and Pensions as part of its wider welfare reform programme to improve the quality and effectiveness of initial decision-making in social security applications, considerations within the DWP and the system of subsequent appeals to tribunal. That is another aspect.
A number of people have asked about the impact of particular reforms. It has not always been acknowledged that other government actions might be improving the situation in some of these areas. It is always difficult to give the full impact of any particular measure. As the Lord Chancellor points out in his oft-quoted Guardian article-I did not know there were so many Guardian readers in the House-part of the aim is, to a certain extent, to change attitudes and approaches so that we do not become overly reliant on legalistic solutions. There might well be changes, both beneficial and less beneficial, in the outcomes of some of the things that are going on.
I accept the point made by the noble Baroness, Lady Lister, the noble Lord, Lord Phillips, and others that appearing before a tribunal is daunting for the lay man. The noble Baroness, Lady Lister, asked me a specific question about the cost of legal aid appeals to the Upper Tribunal on welfare benefit matters. I am advised that at the moment we spend approximately £1 million a year on legal aid for advice and representation on welfare benefit appeals to the Upper Tribunal and higher courts. I will come back to Amendment 2.
Amendment 19 deals with Clause 7, which defines what "legal services" and "civil legal services" mean for the purposes of Part 1. Clause 7 provides an overarching definition, but the specific levels of service-for example, legal help and legal representation-that will be available in any particular case will be set out in regulations made under Clause 10. This approach is based closely on the current model, where Section 4(2) of the Access to Justice Act 1999 describes the types of services that can in principle be funded, and the Legal Services Commission's funding code criteria set out the precise levels of service that are available in any particular case.
The definition of service in Clause 7 is wide enough to cover the things that one would expect, such as advice from a high street solicitor about a case that a person wishes to bring. I can perhaps assure noble Lords that legal advice and assistance in relation to tribunals is a service that is already encompassed in the description of legal proceedings in Clause 7(1). Indeed, "legal proceedings" is defined in Clause 41 as meaning,
We rely on this for the provision of services, including advocacy, in, for example, mental health tribunals as set out in paragraph 5 of Part 1 of Schedule 1 or in paragraph 9 of Part 3 of Schedule 1. The definition of legal services in Clause 7 is therefore wide enough to include legal help and indeed advocacy in proceedings before a court or tribunal, and this amendment is unnecessary.
where an individual is in dispute with the state. Amendment 29 seeks to make legal aid, including advocacy, available in social security appeals before the Upper Tribunal and appellate courts. Amendment 78 would add a new paragraph to Schedule 1 and seeks to include appeals on a point of law,
The categories of law in question include ones such as welfare benefits where tribunals are used. Legally aided representation is not available for most tribunal hearings because tribunals are designed to be user-friendly, without the need for legal representation. Indeed, legal aid is not currently available for legal representation in point-of-law appeals on welfare benefits. Amendments 2 and 29 seek to extend legal aid even beyond its current boundaries by providing legal representation for these Upper Tribunal appeals.
The Government have considered whether funding remains justified for all appeals, regardless of the area of law in which they arise. In the Government's view, it does not. Under the present scheme, funding is not provided for cases that are not considered a priority for the scheme, such as defamation or business cases, even where these take place in the High Court, the Court of Appeal or the Supreme Court. We consider that the ability of the client to represent their arguments and the importance and complexity of the issues will vary from case to case. The fact that a case is to be heard in a higher court or tribunal does not automatically mean that it will be particularly complex; nor will the forum in which a case is heard outweigh other considerations that determine our priorities for funding.
The noble Lord, Lord Hylton, referred to immigration. Since consultation, we have taken on board some of the concerns raised, including those raised during the passage of the Bill in another place on domestic violence and immigration cases. On the introduction of the Bill, we included in Part 1 of Schedule 1 funding
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On the question of appeals to the Supreme Court, we will continue to fund appeals to the High Court, the Court of Appeal and the Supreme Court where the area of law to which the appeal relates remains in scope. Again, this will allow for our limited resources to be focused on areas of higher relative priority.
Amendment 2 appears to suggest the requirement of an equality of arms with the state in such cases. The principle of equality of arms is clearly important but is susceptible to misunderstanding. This amendment implies that justice can be done only in a particular case where both parties in proceedings have identical representation. This is not a view supported by the law, or by the experience of many litigants who currently appear before tribunals without the benefit of legally aided representation.
The important question is whether an imbalance in representation gives rise to an obvious unfairness in the proceedings. The case law on Article 6 of the ECHR sets out the circumstances in which legal aid will be required to guard against an obvious unfairness in proceedings. In determining this question, it is necessary to consider all the circumstances of the case, including the nature of the rights at stake, the complexity of the law, the capacity of the individual to represent themselves and whether there are alternative means of securing access to justice. In many cases, for example before tribunals, the procedure is relatively straightforward and there are sufficient safeguards in place to ensure that the absence of legal representation on one side does not lead to an unjust outcome.
Clause 9 provides for an exceptional funding scheme that will continue to ensure the protection of an individual's rights to legal aid under the European Convention on Human Rights as well as the rights to legal aid that are directly enforceable under European Union law. I must emphasise that the threshold here is very high-as the name suggests, they will have to be exceptional cases. However, in cases in which Article 6 of the ECHR is engaged, the exceptional funding scheme will provide an important safety net for those in which an egregr-
Lord McNally: This is another moment in history. I have been heckled for mispronunciation by the noble Lord, Lord Prescott. I stand corrected. The exceptional funding scheme will provide an important safety net for cases in which an egregious inequality of arms would lead to an obvious and unlawful unfairness in proceedings.
We have had to make difficult choices about legal aid. Our reforms to the scope of the scheme are designed to refocus civil legal aid on the most serious cases in which legal advice and representation is justified. In social welfare law, education and immigration, we are reducing the availability of legal aid; but it will remain for cases with the highest priority, and we will continue to spend £50 million on social welfare law.
As I said in the other debate, I realise that noble Lords will want to study some of the things that I read out at speed while referring and cross-referring to parts of the Bill. I think my noble friend indicated that he will withdraw his amendment, and I hope he will, although I am making no promises of massive change. One of the crunch parts of this Bill as it passes through the House will be whether we rightly judged which areas we are withdrawing from the scope of legal aid. The Lord Chancellor and my colleagues in government are confident that we have made the right decisions, hard as they have been in some cases; so, as I say, I hope that the noble Lord will, at this stage, withdraw his amendment.
Lord Thomas of Gresford: My Lords, I thought I detected in the last few sentences the possibility of some movement in this area, but despite that the final sentence was a killer. I am very disappointed with my noble friend's response to what I considered to be an overwhelming case. If you cannot get legal aid for the Second-tier Tribunal, the Court of Appeal and above, as of right, we really are in a very parlous position. I assure my noble friend that I shall press him on these matters in the future. I thank all noble Lords for their participation in this debate and say to your Lordships that the state in Amendment 2 is widely defined to include local authorities, government organisations and so on. That is quite well understood when we deal with the concept of equality of arms.
While I listened to my noble friend's summing up, I was reminded of the one person I know quite well who appeared as a litigant in person in the Divisional Court and won-my noble friend Lady Walmsley. The authority concerned went to appeal, where she was represented by a leading counsel, who is now a High Court judge, and by my son, who is a Queen's Counsel in his own right, and lost. Fortunately her costs were all paid by the authority concerned. It takes an exceptional person to be able to take a case before a judge as a litigant in person and argue it through. The Government have underestimated just how exceptional that person has to be. For the moment, and subject to what I shall say at a later date, I beg leave to withdraw this amendment.
"Mr Speaker, with permission, I would like to make a Statement on the reform of public service pensions. Seven weeks ago, I reported to the House that in an effort to secure agreement, the Government were making a new offer to public service workers. Despite some unnecessary interruptions, scheme negotiators have been working hard to reach detailed heads of agreement by the end of the year deadline that we set.
It has not been an easy task, but this Government have demonstrated that they will not shy away from taking difficult long-term decisions in the nation's long-term interest. We wish to see pensions for public service workers that are fair, sustainable, provide dignity in retirement and are affordable to both those workers and to taxpayers. That is why we committed in the coalition agreement to establishing an independent commission to bring forward proposals for reform. Lord Hutton's magisterial report did just that. We have stuck closely to the recommendations of the former Labour Work and Pensions Secretary throughout this process.
The case for reform is self-evident. The average 60 year-old today is living longer now than they did in the 1970s. It means people are living in retirement longer-the life expectancy of a 60 year-old was 18 years in the 1970s, but has risen to 28 years today. As a result the costs of public service pensions have risen to £32 billion a year, an increase of one-third over the past 10 years. We have already made some changes that deal with short-term pressures, including changing the basis of pension uprating to CPI, and increasing member contributions by 3.2 percentage points, phased over three years.
Next year's contribution increase is almost identical to that planned by the previous Government. The precise details of next year's increase have been set out by departments-all are tiered by income to protect the lower-paid. The Government will review the impact of next year's increases, including on opt-outs and equality, before taking final decisions on how future increases will be delivered. Interested parties will have the opportunity to provide evidence and views to the Government.
I know that many Members of the House will be concerned about pay and conditions of our Armed Forces. Let me be clear. Members of the Armed Forces will continue to make no contributions towards their pensions and will be exempt from the increases announced at the spending review.
From the beginning of this process, we have committed to ensuring that public service schemes continue to offer a defined benefit pension based on the size of workers' salary-not dependent on the market performance of a fund, and not available to most people in the private sector. From the beginning, we
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In November, we improved the offer to a one-60th accrual rate, an increase of 8 per cent that is available only in the event of agreement being reached, together with protection for those 10 years from retirement. I would like to pay tribute to the Minister for the Cabinet Office, the TUC and the scheme negotiators on both sides for their efforts to reach agreement.
I am pleased to report that heads of agreement have now been established with most unions in the local government, health, Civil Service and teachers' schemes. It will of course now be for union executives and memberships to decide their response. These heads of agreement deliver the Government's key objectives in full, and do so with no new money since our November offer. In future, scheme pension ages will match the state pension age, future schemes will be on a career-average basis, and all the agreements are within the cost ceilings I set in November and will save the taxpayer tens of billions over the decades to come.
Because heads of agreement have been reached, the better offer I made in November has been secured by trade unions for their members, including the no-change guarantee for workers 10 years from retirement. The heads of agreement also deliver a number of the key objectives set out by the trade unions during the talks. Negotiations on these heads of terms are now concluded. We and the unions agree that this is the best outcome that can be achieved by negotiation. This is the Government's final position and we will bring forward legislation to the House. The full details of the heads of agreement in each scheme are today being set out in Written Statements by each department.
The key changes made are as follows. In the Civil Service, we have agreed to revalue each year's contribution by CPI rather than earnings, allowing an accrual rate of 44ths to be offered. This costs the same as our original offer, but with a configuration preferred by the trade unions. As a consequence, the new scheme will be very similar to the nuvos scheme already available within the Civil Service, except that in future the normal pension age will be linked to the state pension age as it rises. It is therefore disappointing that the PCS has rejected the heads of agreement and walked away from the talks.
I have previously made the point that the local government scheme must be treated differently because it is a funded scheme. The Local Government Association and the trade unions have agreed that the pension age in the new scheme will be linked to the state pension age, and that their preference is to deliver a career-average scheme. Further discussions will take place over the next three months to agree the details. In health, we have agreed to a revised revaluation factor of CPI plus 1.5 per cent. This allows the accrual rate to be improved to one-54th. In education, we have agreed to a revised revaluation factor of CPI plus 1.6 per cent, allowing for the accrual rate to be improved to one-57th, along with modest improvements to early retirement factors.
All these heads of agreement are within the cost ceiling I set out in November, but in a configuration preferred by the unions. Discussions on police, Armed Forces, judiciary and fire service schemes have been a separate process from the start, and proposals will be brought forward in due course.
Let me turn to some other aspects of these deals. All of these agreements include a cap on taxpayer costs at 2 percentage points above or below the scheme valuation. This cap is symmetrical, so employees will benefit if costs fall. As Lord Hutton made clear, with the other aspects of reform now agreed, there is no reason to believe that under normal circumstances this cap will be used. It is there as protection for taxpayers and for workers if extraordinary, unpredictable events occur. In the course of all these talks, unions have stressed the importance of ensuring that their members will continue to be able to receive the benefits of these schemes if they are outsourced. This is the purpose of the fair deal policy, the future of which we have been consulting on. Because we have agreed to establish new schemes on a career-average basis, I can tell the House that we have agreed to retain the fair deal provision and extend access for transferring staff.
The new pensions will be substantially more affordable to alternative providers and it is right that we offer workers continued access to them. In addition, the Government will consider what practical options might be available to reform the terms of access to the NHS pension scheme, in particular for NHS staff who move to a non-NHS "any qualified provider" delivering NHS services. At the same time, by offering transferred staff the right to remain members of the public service scheme, we are no longer requiring private, voluntary and social enterprise providers to take on the risks of defined benefit that deter many from bidding for contracts in the first place.
Replacing so-called bulk transfers of pensions with continued access to public sector schemes means that we continue to protect public service workers' pensions, manage the risk to the taxpayer and forge ahead with our ambitious plans on public sector reform. I have committed that these reforms will be sustained for at least 25 years. The Government intend to include provisions in the forthcoming public service pensions Bill to ensure that a high bar is set for future Governments to change the design of the schemes.
What does this deal really mean? For our workforce, it means they will continue to receive the best quality pensions available in this country-and rightly so. These pensions could be bought in the private sector only at the cost of one-third of salary. This is a proper reward for a lifetime's commitment to serving the public. This new scheme is fairer to women too. By moving to career average, we will be giving a better pension in future to those, mainly women, who have low or steady salaries throughout their careers.
The Government have been clear that, because we are living longer, public service workers must work a bit longer and pay a little more for their pensions but, in return, we have also made an important commitment: that at retirement, those on low and middle incomes will get at least as good a pension as they do now. I can confirm today that we have met that commitment.
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These are reforms that significantly improve the long-term fiscal sustainability of this country and reinforce the credibility of our fiscal stance. The Office for Budget Responsibility will provide a forecast of these savings in its next fiscal sustainability report. For industrial relations, I believe this shows that it is possible to reach agreement through negotiation in good faith, based on clear objectives. That is the right way to approach relations between government and the trade unions. In these difficult times, it is important to show that people can come together to achieve genuine reform, preserving the best of the past but recognising the realities of the future. This is a fair deal for public service workers, an affordable deal for the taxpayer and a good deal for the country. I commend this Statement to the House".
Lord Eatwell: My Lords, it is important to remember that what we are discussing is the reduction in the lifetime living standards of a significant proportion of the people of this country. We are discussing the fact that the real incomes of public service workers will, in retirement, be significantly lower than they had every right to expect when they took up their positions in the public service. When the noble Lord speaks of "reform" of public service pensions, he means reduction of public service pensions, and when he speaks of saving,
Noble Lords will be aware of the difficult choices that we all face over the question of pensions. The excellent report a few years ago by the noble Lord, Lord Turner, and the recent study by my noble friend Lord Hutton have spelt out the consequences of lower birth rates and greater longevity for the provision of pensions. Given that the standard of living of everyone depends on the goods and services produced by the working population, the smaller the working population is in relationship to the whole the more difficult it becomes to provide for the non-working pensioners. The choices that need to be made when facing such a major, secular shift in demography and in the economy should have been the subject of bipartisan national debate. They should have been approached with the clear understanding that what is under consideration is the decision to reduce lifetime living standards.
In his report, oft cited by the Government, my noble friend Lord Hutton stressed the need to approach these issues in a careful and balanced way, with particular care for the impact of any increased contributions on lower-paid public service workers, and the need to sustain high-quality, reliable pensions provision. Having
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The consequence of this arbitrary and authoritarian approach to reducing the lifetime incomes of some of the lowest-paid people in the country was 10 months of stalemated negotiations and then strike action, in many cases by people who had never dreamed that they would ever go on strike. The strike on 30 November, a strike that could and should have been avoided, seems to have brought the Government to their senses. We on this side of the House are pleased that the people who rely on public services, as well as millions of public sector workers, can approach the holiday season knowing that proper negotiations are taking place at last and that a solution that is fair to pensioners and fair to taxpayers may be on the horizon.
We are pleased that the Government have at last recognised the need to protect the lowest-paid from unaffordable increases in contributions, the need to reassure older employees worried about how long they will have to work and the need to ensure that people who dedicate their working lives to our public services can expect a decent income in retirement. It is important that, in any proper national consideration of how best to tackle the changing demographic factors behind pensions provision, the Government should provide the fullest and clearest information on what is proposed and on the consequences for public service workers at all levels of income.
For each of the four schemes under consideration, what are the new proposals for contribution increases? What is the timetable according to which they will be introduced? How do the Government intend to ensure that the new contributions are affordable for lower-paid workers, including part-time workers? What assessment have the Government made of the impact that their proposed changes might have on the number of public service workers opting out of the scheme, of the impact that this may have on future pensioner poverty and of consequential demands on state benefits? In taking steps to increase the pension age, what allowance do the Government intend to make for those in physically demanding jobs where the current retirement age from that particular line of work may indeed be appropriate?
Most importantly, the Government must now realise that a pensions agreement in the public services should be for the long term and should be part of the fundamental relationship between Government and people, whichever party is in power. How will the Government make good on their promise to deliver a deal that is secure and sustainable for the next 25 years? Will they learn from their errors of the past year and understand at last that a properly informed public debate, and an appropriately negotiated agreement with strong bipartisan support, is the only way to achieve a fair and lasting agreement?
Lord Sassoon: My Lords, I am sorry that the noble Lord, Lord Eatwell, does not welcome the deal that the Government have come to today with the great majority of unions in the public sector. The Government must get a grip on the significant increases in the cost of providing public sector pensions that have simply arisen from the fact that people are living longer. That is why we asked the noble Lord, Lord Hutton of Furness, the Work and Pensions Secretary in the previous Government, to look at the current position and identify whether further reform was required. The noble Lord, Lord Hutton, set out an overwhelming case for reform, saying that,
It is a good deal. It ensures that public service pensions will remain among the very best available. If members retire later, as most of them will, most of them will not see a reduction in the pension that they receive at retirement; indeed, many of them will get more than they would now. I do not think that the noble Lord, Lord Eatwell, recognises that. The deal delivers on our objectives to ensure that most low and middle earners working a full career will receive pension benefits at least as good as, if not better than, what they would get now.
I turn to the specific questions that the noble Lord asked me. On the increases in contributions, the scheme-by-scheme contributions for 2012-13 are set out on the respective departmental websites. They follow on from separate consultations that were held over the summer. The average is a 3.2 per cent increase over three years, with 40 per cent of that increase falling in the first year and 40 per cent in the second, building up to the full increase in the third and final year. The projections are that anyone with earnings below £15,000 will face no increase and that those between £15,000 and £21,000 of earnings will have their contributions increased by only 1.5 per cent over the three years. Individual schemes have worked out other particular protections; health, for example, has protected those earning up to £26,000 by having no increase in the first year.
On the question of part-time workers, it is the case that all public service scheme members, whether full-time or part-time, are included, apart from those within 10 years of retirement who are, as I have explained, protected. The lower-paid will not pay more for their pensions. The pension benefits themselves are based on full-time equivalent earnings and it is appropriate that the contributions are calculated, as are benefits, on the same basis. There are approximately 350,000 part-time workers in local government, where alternatives to contribution increases are being considered, and a further 150,000 part-time workers would be partially protected as their full-time earnings are less than £21,000.
On the question of opting out, the general point to make is that there is no reason why members should do so. There will remain a strong economic rationale for them to remain in their schemes, and it is important that all employees in the public sector hear that message clearly. Beyond that, we have committed to reviewing the impact of opt-outs following the increase in members' contributions. We will do that before final decisions are taken on how future increases are made. It needs to be borne in mind that it would cost a member around 30 per cent of their earnings to purchase equivalent benefits in the private market.
I turn to the question of the increase in pension age and the effect of that, particularly on those in physically demanding jobs. For the armed services, firefighters and police, the noble Lord, Lord Hutton of Furness, recommended an earlier retirement age of 60, and we accept that recommendation. For the other schemes, we have agreed that the retirement age will be the state retirement age, the same age when other citizens will receive their state pension. It will be for employers to review the appropriateness of certain jobs for older employees and to make appropriate arrangements for staff possibly to move into alternative roles as necessary. The NHS, for example, has already agreed to set up a tripartite review involving the department, NHS employers and the NHS trade unions which will look at addressing the impact of working longer in the NHS, with particular reference to staff on the front line and in physically demanding roles, including emergency services. I accept that this is an important point but it is one which is already being addressed.
On the final questions of the noble Lord, Lord Eatwell, around how the Government will be able to deliver a commitment on no further reform for 25 years, the critical point here is that we have set out a position that is not only fair and sustainable for those who work in the public sector but is a reform that is sustainable in terms of the public finances. I reiterate the point that, as the Government address the very difficult fiscal position that we inherited and as we compare ourselves with countries in Europe and elsewhere, this is an important reform that will underpin the fiscal sustainability of the public finances for many years to come. Therefore, I believe that no further reform should be necessary for 25 years. To give substance to this, we intend to include provisions on the face of the forthcoming primary legislation to ensure that a high bar is set for future Governments to change the schemes, as I said in repeating the Statement.
Lord Prescott: My Lords, having listened to the Minister claiming the support of the noble Lord, Lord Hutton-the architect of the scheme-for his interpretation, and then having listened to my noble friend Lord Eatwell give a different interpretation, I am all the more sorry that the noble Lord, Lord Hutton, is not here to give his interpretation. I wish to ask the Minister a question, as in 2008 I negotiated pension agreements with local government workers. That is a different pension scheme from the state one as it is funded by the employers and the employees. We made major changes in that pension agreement which I do not have time to explain. We did that with a
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Lord Sassoon: My Lords, I am happy to try to clear up any misunderstandings on this. As the DCLG has made clear this afternoon, it is in discussion with the unions to resolve any misunderstanding and reassure them that the intentions of the department and of the Government have not changed. It would seem that the unions have read more into the letter that was issued today than was intended by the DCLG. No new conditions are being imposed by the department. In order to iron out any ambiguity, the department will be issuing a new letter to make clear that there is no ambiguity, there is only one deal and there are no conditions. Therefore, I am confident that this can be resolved quickly, but as noble Lords will understand, there have been many deals with a lot of unions and several departments. We must clear up this ambiguity that has slipped in on one particular aspect.
Baroness Kramer: My Lords, the Government and the unions that have signed the heads of agreement deserve congratulations on having achieved this in this day and age, given the immediate financial pressures and the reality that we will all live much longer and therefore need pensions for a much longer period in our lives. They have achieved an agreement that retains defined benefit schemes-when the private sector has essentially abandoned that and gone on to defined contribution schemes-and have provided protection for those approaching retirement and for those on the lowest incomes. That is a real achievement by both sides and we ought to acknowledge it.
However, I wish to ask the Minister two questions. Can he clarify for us where the negotiations now stand with the PCS? The experience that has been described tonight demonstrates that negotiation has to be the way forward, not strikes. The Minister said that the PCS had walked away. The newspapers used the phrase, "not invited to future talks". Can he clarify what he sees as the progress that can be made in that regard-preferably progress which does not inflict any more strikes on the long-suffering British public?
Secondly, can the Minister expand a little on an area I find most intriguing: namely, the position of staff transferring from the public service to the voluntary or private sectors or to social enterprises who will retain access to a public service pension? I cite the example of the NHS in that regard. Should we see that in narrow terms, or are we moving towards an arrangement which will allow a much more flexible
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Lord Sassoon: My Lords, I am grateful to my noble friend for welcoming this deal. She rightly points out that it means that public sector workers have among the best pensions available in this country, including defined benefit schemes which are not now generally available to people entering private sector schemes. Therefore, I endorse entirely her comments in that respect.
The PCS has not agreed to put the final design of the Civil Service scheme to its executives. It is important to remember that the PCS represents fewer than 5 per cent of the members of the public service schemes and discussions will continue without it. We believe that the final deal-it is a final deal-is a good one and that the remaining unions will recommend it to their members. We are clear that what has been set out today is the Government's final position.
My noble friend asked about the ability of members exiting a public sector employer to remain in the pension scheme under the "Fair Deal" provision. Implicit in her question was the notion that this may have wider implications. I certainly think that this opens up all sorts of possibilities, whether in relation to the mutualisation of services or the ability of people to come in and out of the public sector.
Lord Lea of Crondall: I echo the opening remark of the noble Baroness, Lady Kramer, in referring to the constructive nature of the recent negotiations, albeit at the eleventh hour. I hope that the Minister will take care in saying who represents 5 per cent of what. One minute he is talking about the total public sector negotiation and the next minute he picks out a statistic which is to do with the Civil Service. We ought to be very careful not to pick and mix in that particular way.
I hope that the Minister will comment on a general point: namely, now that we have reached where we have got to, it would be very useful for all of us to discourage people from going in for rhetoric such as many Members of the Minister's party, both in this House and in the Commons, have indulged in. Their slogan can be summarised as, "Private sector employment is productive; public sector employment is unproductive". It is not just the Daily Mail, the Daily Express, the Daily Telegraph and the Murdoch newspapers that say that-it is members of his own party in this House and the other House. I do not mean that anyone in this House tonight has said that, but it has been said on other occasions. Such comments are quite ridiculous. People will think that nurses and teachers are unproductive, and that hedge fund managers and second-hand car dealers are productive. Is it not time that, in a modern social democracy or mixed capitalist economy-I do not mind what you call it-we agreed that that is a ludicrous way of dividing people up?
That leads to the point that we must get on with improving pension provision in the private sector. The Adair Turner report on auto-enrolment has been stymied to some extent. Is it not important that we do not have a race for the bottom as regards pensions? I am glad that we have drawn back from that to some extent.
Am I not right in thinking that CPI has been selected instead of RPI because CPI has been growing more slowly in recent years? Would the Government have preferred CPI to RPI if it had been growing faster? I have been around for long enough to know that that is exactly how the Treasury thinks. I ask the Minister whether he agrees with me that there is a position in the final set of correspondence which refers to CPI plus 1.5 per cent or 1.6 per cent, and that that is the rationale for some of the arithmetic, which-understandably, given the Government's predicament-is based on getting more in for the Treasury, hence the 3 per cent take-away.
Finally, is this not also the time to say, given the huge growth in pension pots for the top 0.1 per cent of people-which is scandalous and is getting up the nose of everyone in the country, apart from that 0.1 per cent-that the idea that we are all in this together is a bad joke, unless that issue is also addressed?
Lord Sassoon: I am sorry-I thought there was a new and welcome procedure whereby Back-Benchers could answer questions on my behalf. That is an excellent idea, but it might require discussion before we do something so radical.
I should first be clear about the interesting analysis of the noble Lord, Lord Lea of Crondall, on how we have got to this point and what else we should be doing. When he talks about an eleventh-hour deal, it is worth reminding the House that the final deal was put on the table by the Government on 2 November. The agreement today is entirely in line with what was put on the table then, well ahead of the strike action on 30 November.
The question around CPI and RPI broadly relates to the nature of the deal whereby individual negotiations were carried out, scheme by scheme, around the level of benefit accrual and indexation rates. That is why we allowed considerable flexibility for the unions to vary the balance of factors within the total cost caps that were set. That is why a variety of different approaches was taken. There was considerable flexibility within the overall parameters set by the Treasury.
Baroness O'Cathain: I must apologise to my noble friend for jumping up. It is just that I was slightly goaded by the noble Lord, Lord Lea of Crondall. I want to come back to him about the CPI versus RPI issue, because I have a pretty long memory, too. In the early stages of the Monetary Policy Committee and the Labour Government, there were endless discussions
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Lord Lea of Crondall: I should be very glad to have such a discussion, but I have an even longer memory. For many years, I represented the TUC on the Retail Prices Index Advisory Committee, which was abolished by the Treasury when we made a recommendation that it did not like. The recommendation in about 1970 was that we should stick with the RPI for general purposes because-
Lord Lea of Crondall: I am quite entitled to come in for a second time within the 20 minutes. I have been asking a question. Is there not a case for looking at which index should be used, based on considerations other than which one is likely to increase more slowly than the other?
Lord Sassoon: My Lords, this was a negotiation between the unions and the employers. It was a choice regarding accrual rates and indexation, and the unions have expressed a preference for going for that measure of inflation, essentially as a way of funding better accrual rates. That was just the nature of the negotiations.
The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, I beg to move Amendment 1, which leaves out Clause 2(5). This subsection was added to the Bill following acceptance of an amendment in Committee. I will also speak to Amendment 2, which proposes an alternative and-I hope that the House will agree-improved approach to addressing the Committee's concerns about renewal of insurance contracts. Having considered the amendment accepted by the Committee, we felt it was necessary to come forward with alternative drafting to achieve what noble Lords had in mind through the original amendment.
Taken together, these two amendments will mean that insurance companies are expected to have to show that they told their policyholder that answering questions on renewal was important. However, they also avoid some unintended consequences of including this requirement in its current form as part of Clause 2.
These amendments address something which the Bill Committee touched on extensively in its deliberations. There was much discussion of the implications of the Bill for consumers renewing insurance. Renewal involves entering into a new contract and consumers are therefore under the same obligation as when first purchasing their policy-that is, they must take reasonable care to answer the insurer's questions, or the insurer may be entitled to refuse a later claim. Noble Lords were concerned that consumers might not recognise the significance of questions asked on renewal, as they may not understand that it is a new contract, and as a result might not take sufficient care to answer these questions.
The Government agree that insurers should take measures to ensure that their consumers are aware of the importance of responding to questions which they are asked at renewal. However, as I mentioned, to ensure that the effect of this change to the Bill reflects the wishes of noble Lords, we felt that it was necessary to come forward with alternative drafting. There are some relatively small drafting points.
The inserted text splits subsections of the current clause which need to run together, and the phrase "make clear" may be a difficult standard. However, most importantly, it leaves no remedy for an insurer who has not included the right wording, even if the consumer's failure to reply was a deliberate or reckless misrepresentation. I am sure that the Committee did not intend to give consumers a "get out of jail free card" in circumstances where they knowingly and deliberately deceived their insurer. The amendment therefore removes the drafting accepted in Committee stage and substitutes an alternative in Clause 3. That explicitly adds to the list of factors that a court may take into account, when determining whether a consumer acted reasonably, whether the insurer communicated the importance of answering questions on renewal. Both the Association of British Insurers and the Investment and Life Assurers Group agree that that is a more suitable approach.
There are many ways in which an insurer may communicate the importance of answering questions at renewal. The Committee discussed whether wording which explicitly told the consumer that they were entering into a new contract would achieve that. That is indeed one way in which an insurer may communicate the importance of answering questions as required by the amendment.
It might be helpful if I set out for noble Lords current market practice at renewal and the effects of the amendment in this context. An insurer will often send the consumer a letter to say that their insurance is up for renewal. Market best practice is usually to send a list of the facts that the consumer told them the last time. The consumer is asked to read and consider the list, and to contact the insurer if the facts have changed.
In motor insurance, it is common practice for insurers to renew the policy even if the consumer fails to reply. It is now a criminal offence for a motorist to allow their car insurance to lapse without notifying the Driver and Vehicle Licensing Agency and we therefore welcome any practice which makes renewal a simple process for the consumer. If nothing has changed, there is no need for the consumer to reply, but if something has changed and the consumer fails to respond, this is capable of being a misrepresentation. As my noble friend Lady O'Cathain stated during the last Committee sitting, it may be that nothing has changed in relation to your car insurance. Alternatively, you may have been convicted of a new driving offence which you should tell your insurer about. As a result of this amendment, the insurer should clearly communicate the importance of mentioning such changes. If the letter is poorly laid out or in very small print, or if it fails to tell the consumer that failing to mention changes may lead to claims being refused, then a consumer may act reasonably in overlooking it.
In circumstances where the consumer fails to respond because they did not understand the implications, the insurer would be expected to show that they told the consumer how important it was to respond to the questions at renewal time. The insurer would know that it could not just point to the consumer's oversight. This last important point was teased out in Committee and was, I believe, noble Lords' real intention. I believe that the amendment addresses the concerns raised by noble Lords during those discussions.
Lord Eatwell: My Lords, as I have stated throughout our proceedings, we on this side of the House fully support the Bill as a measure which makes a major improvement to the relationship between insurer and insured in consumer insurance. We have sought to improve the Bill, making clear elements of the drafting which were unclear or which, on careful examination, did not correspond to the declared intentions of the Law Commission and therefore required amendment. Accordingly, in Committee I proposed the amendment to which the noble Lord has referred and which in due course the Committee passed almost unanimously, the only dissenting voice being that of the Minister himself.
When we look for the meaning of "cosmetically different", earlier in the same paragraph it is stated that amendments must not be identical or of identical effect. Consequently, the Minister cannot argue that this amendment has identical effect. If he does, he must withdraw the amendment.
Lord Sassoon: I wonder whether it would be helpful at this stage to confirm that the government amendments have been drafted in full recognition of what the Companion says. As I tried to explain in setting out the rationale for the amendment, I do not believe that it has the same effect because it provides greater clarity
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Lord Eatwell: I think that the noble Lord is contradicting himself. He said that it was what noble Lords wanted to achieve when they voted on the amendment in Committee, yet he says that it is not identical in effect. That does not seem consistent. However, let us move on.
Turning to the substance of the amendment, I accept that its placement in the Bill is superior to that which I proposed in Committee, and for that I am grateful. However, the intention of the Committee was that insurers would be required to make clear to consumers that when a policy was renewed, it would in fact be a new policy, and consequently the importance of questions asked would be of the same order as when new business was written. As many noble Lords argued in Committee, they were not aware of this-indeed, I believe that the Minister himself admitted that he was not aware of it-and they could well understand a consumer failing to be aware of it too. This lack of awareness might result in the consumer taking insufficient care in answering questions posed by the insurer.
That is a very vague rendition of what was intended by the amendment in Committee. Instead of being explicit, the matter is now to be left to the courts to decide. However, I note that the Minister stated that explicitly telling the consumer that they were entering into a new contract would be "one way" in which the insurer could communicate the importance of the questions asked at renewal. I fully expect that the ABI and the ILAG will draw this passage in Hansard to the attention of their members and that it will form a background to any subsequent court proceedings. On that basis, I shall raise no objection to the government amendment.
Finally, I would be grateful if the Minister would clear up the matter raised in Committee by the noble Lord, Lord Goodhart, and not subsequently resolved. That is the relationship between Clause 5(1) and Clause 5(3). As the noble Lord, who is in his place, pointed out, they seem to duplicate one another and hence, potentially, they are a source of confusion. As we still have a chance to sort this out at Third Reading, perhaps the Government could enlighten us about the reasoning behind this dual oddity of drafting.
Lord Lloyd of Berwick: My Lords, I am very glad to hear that the noble Lord, Lord Eatwell, is not objecting to the amendment. Whether it is something new or exactly the same in a different form does not matter so much, but I am glad that the amendment proposed will not be opposed by the noble Lord.
While on my feet, perhaps I could say a word about the Law Commission and the part that it has played in bringing us to this point. The report was originally published in 2009. It followed three years of intensive research and a great deal of evidence-taking, as one can see from the report. The commission then succeeded in reconciling the many divergent interests and produced, as a result, a draft Bill, which is the Bill before us with only a few alterations. It is unquestionably the most important reform of the law of insurance since the Marine Insurance Act 1906. The draftsman of that Act was Sir Alfred Chalmers, who is always referred to in this part of the law as the "legendary Chalmers" because he was a brilliant draftsman. It seems to me that this Bill is a worthy successor to the Chalmers Act of 1906. We owe a great debt of gratitude to the Law Commission and, in particular, to David Hertzell, who was in charge of the report. I hope that we may have many more Bills from that stable and I gather that there is already one in the offing, but as it relates to some rather obscure matters of trust law I assume that we shall not have the pleasure of the noble Lord, Lord Sassoon, taking it through the House.
Lord Goodhart: My Lords, I would like to mention one matter as the noble Lord, Lord Eatwell, has referred to the amendments that I put forward in Committee. As I said then, there was basically a pedantic reason for what I did. I thought what I did was slightly better but, quite frankly, it was not a serious problem at all. As they were not automatically accepted in Committee, there is no point in raising the matter again now. I am quite happy that it no longer appears.
Lord Borrie: My Lords, I share the view of the noble Lord, Lord Goodhart, and, therefore, share the view of my noble friend Lord Eatwell today in raising again the duplication that there seems to be in Clause 5. I do not think that anyone wants to press the point. In addition to the thank you to the Law Commission and the usefulness of this Bill, to which the noble and learned Lord, Lord Lloyd, has just referred, I express thanks for the excellence of the chairmanship of the noble and learned Lord.
Lord Sassoon: My Lords, thank you for that short and focused discussion. On the specific point about the interlinkage of Clause 5(1) and Clause 5(3), I think that my noble friend Lord Goodhart has answered the question. Frankly, if the amendment had come forward again, in the Christmas spirit I and the Government might have accepted it. For goodness' sake, I hope that it is now too late to table a handwritten amendment, but it was a fine bit of drafting either way.
I would rather stay with the noble and learned Lord, Lord Lloyd of Berwick, in welcoming the importance of this small but targeted measure. I echo my thanks to him as chairman of our committee under this special procedure, to the Law Commission, and in particular to the commissioner, David Hertzell. I will not say that I wish I did not have to deal with more Law Commission matters because your Lordships
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"( ) in the case of a failure to respond to the insurer's questions in connection with the renewal or variation of a consumer insurance contract, how clearly the insurer communicated the importance of answering those questions (or the possible consequences of failing to do so),"
Lord Bach: My Lords, this amendment, short though it is, is important because it allows the Committee to question the Minister and to have a discussion around public legal education. That subject does not appear much in the Bill and we thought it worth tabling a probing amendment. If the Minister is not able to answer all the questions today, I am sure that he will be kind enough to write to Members of the Committee.
Perhaps I may go down memory lane for a moment or two. When I held the position that the Minister's colleague, Mr Djanogly, now holds, part of my brief covered public legal education. It was based on the thesis that, of course, it is important for people to be able to access justice, but people will do so only when they know that a civil wrong may be or has been done against them. The truth is probably that many millions of our citizens do not know when they have some claim-perhaps not big or major-because some civil injustice has been done against them. They have no idea how the system works.
We very much want to keep the good things in this system, which means that people with a legal claim can get advice and, it is hoped, sort out the claim in that way. We think that legal aid plays an important role in making that system work. However, when we live under the rule of law in a modern liberal democracy, what do we do when people do not have a clue about their rights and responsibilities in this legal sense?
I was lucky enough to chair a pretty powerful committee of independent outsiders at the department on this issue. From outside the ministry, a committee group was led by the brother-in-law of the noble Lord, Lord Brooke. He is a very distinguished former Lord Justice of Appeal who has done very good work in many fields, as the Minister is confirming. The committee included people such as Professor Hazel Genn; Richard Susskind, the expert on legal IT and associated subjects who has advised Governments of all colours and none; Michael Smith, a very distinguished solicitor; the chairman of the Legal Services Board; and Amanda Finlay, to name just a few. What we talked about and tried to do something about, and what we as a Government were prepared to put money into, was an attempt to make our legal system better understood by ordinary citizens.
Public legal education is not a very attractive phrase, but we know what we mean by it. The question was where we would concentrate the limited resources that were devoted to such a concept. It seemed to me that there was one place where more work ought be done. Some work had been done in schools, which was excellent, but more was needed. Also, sixth-form colleges and colleges of further education were places where probably there was not much teaching or education even in its broadest sense about a citizen's legal rights and obligations. We thought that this was an important part of trying to establish a proper democracy that lives under the rule of law.
I hope that other noble Lords will join in the debate and ask other, perhaps deeper questions. In the Bill the requirement to provide legal education is discretionary rather than mandatory. Our probing amendment argues that it should be mandatory; there should be an obligation on the Lord Chancellor. What mechanisms does the Minister's right honourable friend intend to use to secure the provision of information about the law? That is an important point. Online facilities, with the exception of YouGov, are fragmented and of varying quality. How does his right honourable friend intend to work with other departments of state and external actors to ensure that citizens are informed of their rights and duties when interacting with the state and other services?
I think that most noble Lords in Committee will agree that this question could be well directed to the Department for Work and Pensions, because I imagine that we will talk quite a lot about mistakes that have been made by that department. However, it applies also to the Department for Education, the National Health Service, private banks and of course local authorities. Our concern is that the Government have rather put on one side this sort of work, either for financial reasons or because they do not believe that it has much place in the Ministry of Justice's responsibilities.
What is the Government's attitude towards the future of public legal education under our system, and to the goal of educating more of our citizens in the ways of knowing what their obligations and rights are, so that they do not walk around blind to the kinds of rights and obligations that they have in a society such as ours? That is the point of the amendment. I need
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Lord Phillips of Sudbury: My Lords, I declare an interest as president and founder of the Citizenship Foundation, which is the principal educator about the law in schools in this country. We work with more than half of all primary and secondary schools and try to give young people a sense of what it is to be a citizen of the modern, highly complex state. I commend the noble Lord, Lord Bach, for bringing forward this amendment and, indeed, I commend the Minister and the Government for an imaginative clause. I do not think that a clause such as this has appeared in legislation before, and I wholly commend it.
I have only a couple of points to add to what the noble Lord, Lord Bach, said in moving his amendment. The first is that we still live in a system where ignorantia legis neminem excusat, which is all very well if you know Latin and if you know a bit of law, but the average man or woman in the street, let alone the average pupil in any of our schools, is understandably, predictably, woefully ignorant of this extraordinarily complicated society and state that we have given birth to, principally, I have to say, in these Houses of Parliament. I have mentioned before, and I have to mention again in relation to this amendment and this clause, that we have a larger corpus of statute law than any democracy in the world by far and, of course, we are supposed to be a common law system, so it is not as if it stands on its own.
I believe that one of the principal causes of civic disaffection, if I can call it that, in this country, which I think is present and apparent on all sides-and I do not refer just to the riots a few months ago, I refer also to the declining turnout at elections and the declining inclination of people to stand for office in local government and so on-has everything to do with how people, not even consciously, feel that somehow we carry on here in total disregard of them out there. They never get asked, and they never get told, unless there is an election on, when all candidates are deeply keen to engage with the public at large. We have to do something about this. I am delighted to see that this clause is here. I shall be interested to hear what the Minister and other noble Lords say, but I would have thought that the importance of doing something about this is so pressing and so little understood that to have a requirement here rather than a discretion would, on balance, be desirable because there is no time to lose.
I shall give one small example of what a desert there is of accessible information about the law. It is that the Citizenship Foundation publishes the Young Citizen's Passport, which is a passport to the law that will affect young citizens when they leave the school gates or, indeed, before they leave them, to do with housing, sex, contract and so on. The Citizenship Foundation has sold 2 million copies of this booklet, and that is not a small number. I suggest that that gives an indication of what a thirst there is for accessible, practical information about issues of law that are not voluntary for anybody, but are compulsory for everybody. I wholeheartedly support this amendment.
Lord Howarth of Newport: It was a very good idea of my noble friend Lord Bach to table this amendment, and I do not want to introduce a jarring note because I am sure that we want to be consensual on this matter, as on others, but I make the point that if more people are going to have to represent themselves in tribunals and courts, they are going to need better opportunities to inform themselves about the law and it is not quite clear how that is to happen, not least against the background of reductions in funding from the Department for Business, Innovation and Skills, the Ministry of Justice and local government for CABs, a matter we touched on earlier this afternoon.
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