Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2014; Licensing Act 2003 (Mandatory Conditions) Order 2014 - Secondary Legislation Scrutiny Committee Contents


Fortieth Report


Instruments Drawn to the Special Attention of the House

The Committee has considered the following instrument and has determined that the special attention of the House should be drawn to it on the grounds specified.

A.  Draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2014

Date laid: 31 March

Parliamentary Procedure: affirmative

Summary: This Order is laid by the Ministry of Justice (MOJ) under powers in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) to amend Schedule 1 to that Act to introduce a residence test which individuals will need to satisfy in order to access civil legal aid, subject to certain exceptions. The Committee notes that this exclusion is being pursued primarily as a matter of principle since the savings to be made cannot be quantified. It is a very sensitive matter and the House will wish to be absolutely clear on how the residence test will operate in practice. There are a number of operational aspects that are still being worked out, in particular the emergency provisions and the appeals mechanism, about which the Committee considers the MOJ should make a clearer statement before asking the House to approve the main Order. There are also a number of key pieces of information still in the pipeline such as the outcome of judicial review proceedings and reports from the Joint Committee on Statutory Instruments and Joint Committee on Human Rights on the Order as laid before the House. We therefore recommend that the Order should not be debated until all the these items have been published.

This Order is drawn to the special attention of the House on the grounds that it is legally important and gives rise to policy matters of interest to the House.

BACKGROUND

1.  This Order is laid by the Ministry of Justice (MOJ) under powers in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) to amend Schedule 1 to that Act to introduce a residence test which individuals will need to satisfy in order to access civil legal aid services (as described in Part 1 of Schedule 1 to LASPO), subject to certain exceptions. The Order is accompanied by an Explanatory Memorandum (EM) and a policy statement ("the Statement").

2.  This is one of a number of statutory instruments which implement the legal aid reform proposals set out in the document Transforming Legal Aid: Next Steps. Subject to Parliamentary approval of this Order, the MOJ intends to lay a further set of regulations to amend the Civil Legal Aid (Procedure) Regulations 2012 (SI 2012/3098) to make provision for some of the evidence requirements for the residence test for civil legal aid summarised in the Statement attached to the EM.

JCHR REPORT

3.  The Joint Committee on Human Rights (JCHR) published a report, The implications for access to justice of the Government's proposals to reform legal aid, on 11 December 2013.[1] In that report, the JCHR:

  • "Recommended any residence test be introduced through primary legislation, rather than secondary legislation, to allow for full Parliamentary scrutiny of the details of a measure which interferes with the right of effective access to court;
  • Recommended all children should be exempt from any residence test;
  • Concluded that the test could severely impact the right of access to court of individuals who lack specific mental capacity, and are prevented from litigating in person; and
  • Asked the Government to consider expanding the limited exemptions from the residence test for victims of domestic violence."

The JCHR is yet to comment on the Government response to the report or on the Order as laid.

PRIMARY OR SECONDARY LEGISLATION?

4.  The Government responded to the JCHR's report on 27 February.[2] In it, the Government reasserted their view that section 9(2) of LASPO confers a power on the Lord Chancellor to add to, vary or omit services in Part 1 of Schedule 1 by secondary legislation. MOJ argues that section 41(2)(b) of LASPO makes clear that secondary legislation made under section 9 may make different provision for different cases and may make provision by reference to services provided for a particular class of individual. That position is repeated in paragraph 3.1 of the EM. The Joint Committee on Statutory Instruments (JCSI), which considers the accuracy of the legal drafting of instruments laid before the House, has not yet given its view on the MOJ's interpretation of these powers.

5.  Although not mentioned in the EM, we are aware that judicial review proceedings have been brought by the Public Law Project (PLP) against the proposed residence test which challenges, amongst other things, whether LASPO provides the Government with the vires to introduce the test through secondary legislation. The substantive hearing was held on 3-4 April 2014, a written judgement will follow in the usual way, but no indication has been given on timing. The Committee regards this as pertinent information and suggests that it would be premature to debate the Order before the judgment is delivered.

THE JCHR'S OTHER RECOMMENDATIONS

6.  All children should be exempt from the residence test: The Government disagree with the JCHR's recommendation to make an exception to the residence test for all children as a class of person. However, they have decided to exempt applicants for civil legal aid from the test on certain matters of law (as set out in Schedule 1 to LASPO) that relate to an individual's liberty, where the individual is particularly vulnerable or where the case relates to the protection of children. These exceptions are described at paragraphs 7.4 and 7.5 of the EM and are enacted by Article 3 of the Order. They broadly relate to instances of abuse, forced marriage and trafficking. In response to the consultation exercise, MOJ has also added an exemption for cases under sections 17 and 20 of the Children Act 1989: section 17 places a general duty on local authorities to safeguard and promote the welfare of children in need in their areas; and section 20 places a duty on local authorities to provide accommodation for children in their area who are in need because there is nobody with parental responsibility for the child. LASPO defines a child as a person who is under the age of 18.

7.  Those with mental capacity problems unable to litigate in person: The Order makes specific exceptions for detention cases. With regard to mental health and mental capacity, the Order provides that an applicant for civil legal aid would not be required to satisfy the test in relation to:

·  the discharge of a person liable to be detained or recalled under the Mental Health Act 1983 or paragraph 5(2) of the Schedule to the Repatriation of Prisoners Act 1984; or

·  deprivation of liberty authorised by: section 4B of the Mental Capacity Act 2005, an order under section 16(2)(a) of the 2005 Act, or Schedule A1 to the 2005 Act.

8.  Expand the exemptions for domestic violence: The Government have concluded that victims of domestic violence who apply for civil legal aid under paragraphs 11, 12, 13, 16, 28 and 29 of Part 1 of Schedule 1 to LASPO will not be required to satisfy the residence test. This covers matters such as a person seeking protection from domestic violence or to protect a child from abuse, for private family law matters arising out of the abusive family relationship, forced marriage and specific immigration applications for victims of domestic violence. MOJ states that this exemption from the requirement to prove a strong connection with the UK recognises that there are certain specific circumstances where individuals are particularly vulnerable and in need of legal aid. The Government however do not accept that this provision needs to extend more widely.

IMPACT

9.  MOJ cannot quantify how many cases will be affected by the changes brought about by this Order or how much money will be saved because the Legal Aid Agency does not record the residency status of a client. The costs will fall on providers of legal aid and on applicants who will need to provide adequate evidence before they can gain assistance. In supplementary evidence, the MOJ stated:

    "The residence test would be carried out by the legal aid provider who was dealing with the application for civil legal aid and may subsequently be validated by the Legal Aid Agency. It will be necessary for the individual applying for legal aid to provide documentation which establishes that they satisfy the residence test or fall into one of the excepted categories of person. As set out in the Impact Assessment, individuals who do not already have evidence of lawful residence may have to pay a fee for a copy of documentary evidence to satisfy the test if they do not have easy access to it. Claimants may also experience a delay in their cases whilst documentation is sought."

10.  MOJ added "We recognise that there will be some cases where the need for legal assistance is so urgent that it is not appropriate to require the person to provide the evidence required by the regulations or guidance when he makes the application for legal assistance. We are considering how to address this point in the Procedure Regulations and guidance, for example by requiring the person to provide the necessary evidence within a short time after the application is made."

The Committee notes this intention but recommends that the MOJ should make a clear statement of how it will handle emergency situations before this Order is considered by the House.

GUIDANCE ON FLEXIBILITY AND APPEALS

11.  MOJ also indicates at paragraph 7.17 of the EM that there will be "some flexibility" in the evidential requirements for individuals whose personal circumstances, for example, age, mental capacity or homelessness make it impractical to supply it. The Committee therefore asked how this flexibility is to be expressed and what the appeal mechanism would be if someone felt they have not been treated with sufficient flexibility. MOJ responded:

    "The evidential requirements for the residence test will be set out in legislation and guidance, as described above and in the policy statement. Where the personal circumstances of the client may make it impracticable for this evidence to be supplied (either in whole or in part), that will also be set out in regulations and/or guidance as appropriate.

    The legal aid residence test will be carried out by the legal aid provider. Where evidence of the kind set out in the regulations and guidance cannot, because of their personal circumstances, be provided by the individual, it will be for the provider to determine whether they are nonetheless satisfied on a reasonable basis that the residence test is met or that the individual falls within an exception. The provider will need to record on the attendance note why they considered the personal circumstances made it impracticable for full evidence to be supplied and the basis on which the provider nonetheless reached the view that the test/grounds for an exception were met. This may be subsequently validated by the Legal Aid Agency.

    As part of the amendments to the Procedure Regulations we will consider whether an individual who was refused civil legal aid as a result of not providing evidence that they satisfied the residence test (including in circumstances where they consider the provider should have taken a flexible approach) should have a right of review of that decision and a right of appeal. It is important to note that a similar flexible approach already exists in respect of evidence of financial means and we are not aware of any concerns that this is failing to operate effectively. However, as set out in the EM, the operation of and expenditure on the legal aid scheme is continually monitored by the Ministry of Justice and the Legal Aid Agency and a post-implementation review of LASPO will be conducted within two to four years. That review will also consider the operation of secondary legislation."

12.  The Committee notes the MOJ's intention to address the point but no clear statement about how the flexibility will be applied is currently available. Legal aid providers will make judgements that will be "validated" by the Legal Aid Agency - we assume this means that if providers make an incorrect assessment then they will not be paid for the advice already given: the policy on flexibility therefore needs to be very clear.

13.  The statement from MOJ above also indicates that it is still working some aspects of the policy out and has not yet decided whether there will be a right of appeal for an individual refused civil legal aid on these grounds (including in circumstances where they consider the provider should have taken a flexible approach to the evidence provided). The Committee recommends that the MOJ should make a clear statement of how it will handle appeals against the residence test before this Order is considered by the House.

Conclusion

14.  The Committee notes that this exclusion is being pursued primarily as a matter of principle, since the savings to be made cannot be quantified. It is a very sensitive matter and the House will wish to be absolutely clear on how the residence test will operate in practice. There are a number of operational aspects that are still being developed, in particular the emergency provisions and the appeals mechanism, about which the Committee considers the MOJ should make a clearer statement before asking the House to approve the Order. There are also a number of key pieces of information still in the pipeline such as the outcome of the Judicial Review and the reports by the JCSI and JCHR. We therefore recommend that the Order should not be debated until all these items have been published.

B.  Draft Licensing Act 2003 (Mandatory Conditions) Order 2014

Date laid: 9 April

Parliamentary Procedure: affirmative

Summary: This instrument replicates the Draft Licensing Act 2003 (Mandatory Licensing Conditions) Order 2014 ("the original Order"), laid on 9 February and debated in this House on 25 March. Because the original Order was not cleared by the House of Commons before 6 April, the coming into force date set out in that instrument, it was rendered void. As a result, this new Order has now been laid.

The Order adds a new licensing condition that requires that no alcohol is supplied from licensed premises below the "permitted price" (defined as the aggregate of the duty chargeable and the amount of that duty multiplied by a percentage which represents the applicable rate of VAT (currently "permitted price" = 120% of duty due)). We do not question the evidence that increased alcohol prices can reduce consumption, but the anticipated effect of the "permitted price" on sales is not clear. Supplementary material quoted in our 32nd Report indicated that the Home Office anticipates that the policy will reduce the average individual's consumption by one large glass of wine a year and figures set out in the Impact Assessment indicate that those most at risk from harm will increase their expenditure and/or change to a cheaper product. Since our consideration of the original Order, the Budget has reduced or frozen the level of alcohol excise duty. The House may wish to ask the Minister to explain how the Budget changes will affect the apparently negligible benefits of the policy. The House may also wish to invite the Minister to clarify the specific effects of the "permitted pricing" policy and what direct effect it will have on reducing alcohol-related crime and health harms over and above the established trends illustrated by the Cardiff study. Given that the explanatory material accompanying the revised Order does not provide any additional explanation, we remain of the view that the effectiveness of the policy is likely to be negligible and may, therefore, imperfectly achieve its policy objective.

This Order is drawn to the special attention of the House on the ground that it may imperfectly achieve its policy objective.

15.  This instrument replicates the Draft Licensing Act 2003 (Mandatory Licensing Conditions) Order 2014 ("the original Order"), laid on 9 February and debated in this House on 25 March.[3] Because the original Order was not cleared by the House of Commons before 6 April, the coming into force date set out in the instrument, it was rendered void. The only difference between this Order and the original Order is a small change in the title and the commencement provision (will bring the legislation into effect 14 days after making). The Explanatory Memorandum (EM) and Impact Assessment (IA) laid with the Order are unchanged.

16.  The Order proposes to add a new condition to a premises licence that requires that no alcohol is supplied from licensed premises below the "permitted price". The Schedule to the Order sets the permitted price as the aggregate of the duty chargeable in relation to the alcohol and the amount of that duty multiplied by a percentage which represents the rate of VAT chargeable in relation to the alcohol (currently permitted price = 120% of duty due). The duty applies to the content (proof and volume) of the container and would be the same regardless of intended sale price. For example, the permitted price for a litre of cider at 4% proof would be the same whether it was in the supermarket basics range or an organic product in a designer bottle. The EM states that the ban on selling alcohol below the permitted price will "prevent anyone who supplies alcohol from selling alcohol at heavily discounted prices and aims to reduce excessive alcohol consumption and its associated impact on alcohol-related crime and health harms."

OUR VIEWS ON THE ORIGINAL ORDER

17.  When we reported on the original Order,[4] we expressed concern about the poor quality of explanation and the lack of evidence to support the Government's view that the policy would be effective in reducing crime and health harms. We concluded that, while there was evidence that increased alcohol price could reduce consumption, the specific effect of the "permitted price" on sales was not clear. It would not appear to fetter competitive promotions beyond establishing an absolute minimum price which, being set at the current rate of duty plus VAT, appeared likely to have minimal effect. Reductions in health and crime costs claimed in the supporting documentation seemed highly speculative and would not offset the costs of implementing the policy.[5]

18.  In response to questions raised by the Committee, the Home Office stated that it was anticipated that the policy would reduce the average alcohol consumption by one large glass of wine per person per year. While there may be some impact on moderate drinkers, figures in the IA indicated that those most at risk from harm would increase their expenditure and/or change to a cheaper product. The Committee concluded that the effect of the policy appeared to be negligible and that it may, therefore, imperfectly achieve its policy objective.

19.  In a later report,[6] we published follow-up correspondence from the Minister, commenting that, in our view, it added nothing to the information already obtained. The EM and IA laid with this new Order have not been revised to address any of the points raised in our previous reports.

20.  The original Order was debated in this House on 25 March[7] and Baroness Smith of Basildon moved a motion of regret specifically referring to the criticisms made in our reports. At the end of the debate the Minister, Lord Taylor of Holbeach, undertook to write to those who had taken part setting out answers to questions raised. Neither letter answers the criticisms made in our report or in the debate.

FURTHER DEVELOPMENTS: THE BUDGET

21.  Since the original Order was laid, the Budget included announcements of changes to the rate of duty on alcohol from 24 March 2014:

·  the duty rate on general beer (beer between 2.8% and 7.5% ABV and not produced by small breweries) has been reduced by 2%, as a result an average pint of beer will be one pence cheaper;

·  the duty rates on spirits and most ciders has been frozen this year. The freeze on spirits means a bottle of spirits will be 42 pence lower than under previous government plans;

·  the duty rates on wine and high strength sparkling cider have increased by Retail Price Index (RPI) only and the duty escalator on wine would come to end. (This was the policy introduced in Budget 2008 to increase duty by 2% above inflation.) The effect of the change is that wine duty will rise by RPI inflation (2.5%), instead of the expected 4.5%, resulting in the addition of approximately six pence to the price of a litre of strong cider and six pence to the price of a bottle of wine.

The Wine and Spirit Trade Association claimed that the Budget would save the industry £175 million in additional duty payments.

22.  These Budget measures have the effect of reducing or freezing the duty on some types of alcohol thus reducing the "permitted price" and counteracting the policy proposed in the Order to the effect that this minimum price should act as a disincentive to buy alcohol. The cost/benefit analysis in the IA supporting the revised Order, which was laid after the Budget, has not been amended to reflect these changes which, it seems to us, are likely to undermine the already negligible benefits of the policy.

FURTHER DEVELOPMENTS: ESTABLISHED TRENDS

23.  Whilst we do not question the evidence provided by Sheffield University and the Canadian experience that there is a link between excess alcohol, crime and negative health effects, we remain unconvinced of how the marginal effects of "permitted pricing", as described by the Order, will produce the reductions claimed in the EM and IA.

24.  Our doubts are increased by a Cardiff University study,[8] reported on the BBC News on 23 April, which indicated that there is already an established long-term fall in violent crime in England and Wales. According to annual figures from almost a third of emergency departments in NHS hospitals, examined by Cardiff University, there was a 12% fall in injuries from violent incidents in 2013. The study found 235,000 people were treated following a violent attack in 2013, 32,800 fewer than in the previous year. The authors said the rising cost of alcohol might have played a role but also that the growth of multi-agency violence prevention involving police, the NHS and local authorities may well be a factor; violence has fallen more in regions where this is best organised. The report also said that the figures mirrored other research, adding to the evidence that the long-term trend in violent crime was down. As a result of the 12% fall, this is the fifth consecutive year that NHS units have recorded a decrease in violent injuries.

25.  Given the large implementation costs to the industry, the House may wish to invite the Minister to explain what added value this policy change will produce to the NHS and the police over and above economic and societal factors and the policing initiatives that produced a 12% reduction in violent injury last year.

CONCLUSION

26.  In its responses to our previous questions and those raised in the debate, the Home Office has simply reiterated the research without showing any direct connection between the "permitted pricing" proposal and the benefits claimed. We do not question the research: page 8 of the IA suggests that doubling the level of alcohol excise duty would reduce alcohol-related mortality by an average of 35%, traffic crash deaths by 11%, sexually transmitted disease by 6%, violence by 2% and crime by 1.4% [period not specified]. Such results would be impressive but the "permitted price" described in this instrument does not double the level of alcohol excise duty, it only seeks to reinforce the current level of excise duty. Furthermore, that excise duty has recently been reduced in the Budget.

27.  When the new Order is debated, and the House will have another opportunity to press the Minister to explain the specific benefits of the "permitted pricing" policy and what direct effect it will have on reducing alcohol-related crime and health harms over and above the established trends illustrated by the Cardiff study. Since the revised Order does not provide any additional explanation, we can only conclude, as before, that the effect of the policy appears to be negligible and may imperfectly achieve its policy objective.


1   The implications for access to justice of the Government's proposals to reform legal aid JCHR 7th Report of Session 2013-14 (HL Paper 100). Back

2   See https://www.gov.uk/government/publications/the-implications-for-access-to-justice-of-the-governments-proposals-to-reform-legal-aid. Back

3   HL Deb, 25 March 2014, cols 508-18. Back

4   32nd Report of this session (HL Paper 137). Back

5   The outcome of the figures set out in the EM is a net annual cost of £0.95 million.  Back

6   35th Report of this session (HL Paper 149). Back

7   HL Deb, 25 March 2014, cols 508-18. Back

8   http://www.cardiff.ac.uk/news/articles/serious-violence-in-england-and-wales-drops-12-in-2013-12836.html?utm_source=cu-home&utm_medium=slide&utm_campaign=news Back


 
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