I speak also as a member of the Joint Committee on Human Rights. We opposed the original clause on grounds of both principle and practice, including the argument put so powerfully by the noble Lord, Lord Deben, that we should not condone unlawful decision-making. This is of particular importance to the enforcement of the public sector equality duty, a point which has been made to us by the Equality and Human Rights Commission. I declare an interest as the honorary president and a former employee of the Child Poverty Action Group, which, as Sir Stephen Sedley has pointed out, was a pioneer in the use of judicial review to further the interests of children in poverty and their parents and played an important role in elucidating the law on social security to the benefit of everyone involved.
I will recount briefly a recent case that is relevant also to Motion D, in which the CPAG acted as an intervener. It was a judicial review against a decision to cut the funding for local welfare assistance schemes—which replaced the discretionary social fund—which we know, from a growing body of evidence, is causing real hardship. The decision has taken place without consultation and without first carrying out the review that had been promised to Parliament during the passage of the Welfare Reform Act 2012. As it happened, the Government settled the case—they clearly did not think that they would win it—and have now consulted. The CPAG’s solicitor said to me that if the Government’s version of the Bill becomes law, this intervention probably would not have been possible,
“because of the uncertainty around whether our charity would end up liable to pay costs. As a result, the Courts would have been ignorant of the broader issues at stake”.
Indeed, the case may not even have got permission because the Government might have argued that, even if they had consulted, their decision would have been highly likely to be the same. I hope that that does not prove to be the case. We do not yet know what the decision will be. However, in answer to a Written Question just the other day, I was told that they have had over 5,000 responses to that consultation. That is not a mere technicality; that is about listening to what local authorities and other citizens of this country think about this issue.
To echo the very powerful speech of the noble Lord, Lord Deben, at issue here are the accountability of the Government, the rule of law and access to justice—the very kind of principles that your Lordships’ House has traditionally upheld. I hope very much that your Lordships will uphold them again today.
Lord Phillips of Worth Matravers (CB): The amendment proposed by the noble Lord, Lord Pannick, will do no more than bring the law into accord with the position as described, with apparent approval, by the Secretary of State for Justice in the other place. I hope the Minister will do what he has not yet done, which is to explain to this House why it is open to objection.
6 pm
Lord Cormack: My Lords, I strongly support what my noble friend Lord Deben said in a truly remarkable, powerful and splendid speech. What he did not say—which I think that we can all say—is that the other place, of which I was proud to be a Member for 40 years, was misdirected by the Lord Chancellor. To misdirect a jury is not exactly a trivial matter but the Lord Chancellor has had the good grace and dignity to apologise. The fact is that the House of Commons made its decision having been wrongly advised and made it in a very short space of time. An hour was given up for debates on which your Lordships’ House had spent considerably longer.
Like my noble friend Lord Deben, I was somewhat concerned by the remarks of the noble Lord, Lord Beecham. He is not normally like that but he almost put me into a position where I could do no more than abstain. I say to him that no party has the monopoly over upholding the rule of law. I am inclined to vote for the amendment in the name of the noble Lord, Lord Pannick, because I am a Conservative and because, like my noble friend Lord Deben, I am proud of the part that the Conservative Party has played over the centuries in upholding the rule of law.
I say also to all my colleagues on these Benches that this is not a question of party loyalty or disloyalty. I was in the other place for the whole of the 16 years that my noble friend Lord Deben was a Minister. Of course, I was not a Minister for any of those years and frequently found myself at odds with things that the Government proposed. On a number of occasions I voted accordingly because I always tried to uphold the dictum that one’s order of priorities as a parliamentarian in the other place is country, constituency and party. In your Lordships’ House, we do not have constituency responsibilities but we do have national responsibilities.
If we believe that something is being done that is not in the national interest, we have an absolute duty to speak and to vote accordingly. If this House has any point or purpose—I echo in slightly different words something said by my noble friend Lord Deben—it is to say to the other place, “You have, we believe in all humility, got it wrong. Please, please think again”. We did that last time and the other place did not. It did not think again because it was wrongly advised by the very man who should have been advising them correctly.
Therefore, we have every right this evening to say, “Please reconsider and take a little longer in reconsidering”. We are not talking about the convenience of governance or about narrow party advantage, we are talking about something that is fundamental to the survival of a parliamentary democracy and to the rule of law. I very much hope that my noble friend the Minister, for whom we all have real regard, will be able to say something that will satisfy us, but I am bound to say that I am not overoptimistic. If he does not, I shall have no alternative but to go into the Lobby behind the noble Lord, Lord Pannick.
Lord Phillips of Sudbury: My Lords, when I intervened on the Minister and asked for the evidence or indications to underpin the need for this amendment, he, as the House heard, declined to give the same. It was important to add evidence or indications. I perfectly accept that a
lot of the matters with which we are dealing in this amendment cannot be susceptible to simple adding or subtracting.
I want to make one point. I believe that we live in a time of democratic crisis. The public are voting for UKIP and, to some extent, they voted in droves for Scottish independence because there is a real breakdown of confidence in the main parties. We all know that there is a breakdown of trust in the great institutions of our state, in business and in us. We cannot brush aside the expenses tragedy of a few years back as if it is all forgotten and done with. It is not. I went to Clacton and canvassed. My goodness, it is not. There is a breakdown in trust. Of all the times to bring in a provision as contained in Clause 64, this is absolutely not the time.
Surely it is a simple point that the one thing that controls and contains any Government, however strong or however wrong, is the instrument of judicial review. I do not think that it is justifiable at all to reduce the extent and power of judicial review to any extent. That is the rule of law. If the proposal were to be brought forward, it surely could be brought forward with any semblance of decency only if the evidence for the need for it—the essentiality of it—was abundantly plain. We all know that it is absolutely as miles from that as it could be.
I am completely persuaded that there is only one thing to do tonight. I regret voting against a heavy whip but sometimes we all know that we have to do that, which is what this House is here for. I say again, we cannot take the step proposed by the Government to reduce the extent and power of judicial review.
Lord Horam (Con): My Lords, perhaps I may add an element of balance to this debate, although balance may not be exactly the right word since I probably am the only person who is going to speak in support of my noble friend the Minister in order that the debate may be not wholly, completely 100% unbalanced but a little bit balanced. I want to explain to noble Lords what worries us. I am not a lawyer so I cannot comment on some of the technical points that have been made. I am worried that there is considerable abuse of judicial review.
My noble friend Lord Deben—who was kind enough to say on a previous occasion that we have never disagreed on anything even when we were in different parties, which is largely true—said, in relation to the example brought forward at the beginning of the Minister’s speech, that it was not very convincing. I remind the House of the example which is, I think, shocking and a defining example of how judicial review can be abused. That point is made by the noble Lord, Lord Adonis, in his book, Education, Education, Education. He wrote:
“As soon as academy projects became public, opponents seized on judicial review as a means to stop them. Ultimately they failed, but only after years of lengthy, expensive and immensely distracting court actions, mostly funded by legal aid with the real opponents—the National Union of Teachers and anti-academy pressure groups—masquerading as parents too poor to afford to pay legal fees”.
That is an example of some years ago.
My understanding is that that is happening today not only in education but in rail. For example, the Government have already had to spend £460,000 in
outside legal fees to defend the judicial reviews against HS2. I am aware of judicial reviews in regard to roads. Development was rather scoffed at by the noble Lord, Lord Beecham, but in many instances it means housing projects and we need more housing in this country.
Lord Cormack: Is my noble friend really saying that the legitimate environmental concerns of people who have misgivings about HS2 should be overridden regardless? Surely it is entirely legitimate for those who have real interests to be able to pursue those interests by legal means.
Lord Horam: Indeed, but the point about judicial review is that it is a technical discussion about the process of law-making. Have the Government behaved illegally? Have they consulted properly? That is what judicial review is about. If you want to have an argument about HS2 it should take place in the Chamber quite openly. There are quite clearly profound differences of opinion about the process of HS2 but it is not judicial review that should be encompassing that. There should be an open debate about the merits and demerits of a particular project.
Lord Carlile of Berriew: Is the noble Lord really suggesting that the whole planning appeals procedure should be abandoned for government schemes? That is the clear implication behind what he said. As he said there are—I forget the adjective he used—many abuses anyway of judicial review, would he like to give us perhaps three examples of cases that have been an abuse of the process so we can have an evidence-based discussion.
Lord Horam: I am personally aware from my experience in this House and as the former Member of Parliament for Orpington of cases affecting Travellers and the green belt. My constituents were concerned about Travellers camping on green belt land. Ultimately, Bromley Council, which was the council in question—
Lord Carlile of Berriew: I want to challenge the noble Lord. Is he saying in this House that Travellers do not have the right to challenge the Government by judicial review? If so, we might as well throw away all our democratic values.
Lord Horam: No. What I am saying is that the judicial reviews raised by Travellers in Bromley were ultimately found to be completely meritless. They were meritless because Bromley Council, which has more Travellers than any other council in the country, had plans on how to deal with Traveller sites. Therefore, it was an argument about the nature of the problem of dealing with Travellers. It was not something that could be dealt with by judicial review. That is my point. The abuse of judicial review arises from the fact that questions of merit are being subject to judicial review simply because lobbyists and others are using judicial review as a route to object to proposals they do not like.
If I can complete the list of examples, it was not only green belt and Travellers—
Lord Deben: I have taken advantage of now being able to look up online in this House the suggestions as to why these cases are important. The first one is a case study on residential development in which the judge decided that there were two grounds of law which ought to be met. They were discussed and both were dismissed. Is my noble friend really saying that because it was inconvenient those two particularities of law should not be looked at? There is a second case put before us about a free school which is quite complicated but there were people who had a real issue. They are the only two cases to explain the argument that there have been more and more cases of judicial review. Frankly, there have been more and more cases of the Government interfering in the detailed arrangements of life and therefore it is not surprising that the number of judicial review cases has increased.
Lord Horam: I cannot comment on a churlish Government interfering more and more in the minutiae of daily life. That is something the Government would have to answer. None the less, the fact remains that the use of judicial review, where people are really arguing about the merits of a project, case or change in the NHS, in education or whatever, is fairly extensive. Indeed, I am told by friends and acquaintances in the lobbying industry that if you go to a lobbying company and say, “We are worried about this project and we want to object to it.”, one of the things it will tell you is that if you can afford an expensive lawyer it will find a technical means through judicial review of objecting to the proposal. That is a standard part of the package, I am told. It is hearsay, I fully accept that, but I am told that it is a standard part of the lobbying system in this country. They are the sort of examples I am aware of. It is not particularly statistical evidence but in this field that is rather hard to come by. None the less, it gives a flavour of what is happening out there in the ordinary world.
6.15 pm
Lord Berkeley of Knighton (CB): I want to make one simple point. Even if the noble Lord is right that there are some cases of abuse—there are in every sphere of life including the police or indeed Parliament itself—is it not worth paying that price for the man in the street or the small community to feel that they have some way of redress against large institutions, government and big business? Many people feel it is their only way of making their point. We should not deprive them of it.
Lord Horam: That is precisely why, as I understand it, my noble friend is introducing in a later amendment a de minimis clause precisely designed to exempt small communities. When there is a project and neighbours perhaps contribute £100 or £150 each to object to it, that would be entirely legitimate and I would be wholly in favour of it. That would not be stopped by this precisely because the Government have recognised that point and in a later amendment are introducing a de minimis clause.
Lord Woolf: That is not correct on the first amendment. There is no qualification being introduced by the Government.
Lord Horam: I totally agree. I said on a later clause. Here, we are dealing with a situation where the actual result would be highly unlikely to make any difference. The noble Lord’s point would not occur because obviously they would hope to win their case. Here we are dealing with cases where it would be highly unlikely to make any difference at all and therefore the point made by the noble and learned Lord, Lord Woolf, does not arise.
There is abuse which I think is doing the rule of law and judicial review damage. That is a real problem. How does this Bill affect that? There is a suite of measures here to deal with the treatment of interveners, financial transparency and lowering the bar slightly in meritless cases where it would make no difference to the eventual result. That is a complex series of measures and we do not really know—I do not suppose the Government know entirely—what effect they will have but clearly it is an attempt to remedy abuse. Remedying abuse in this case would serve the purpose of government. It would certainly help judicial review because it would diminish the impression that people have, rightly or wrongly, that it can be used and abused in the way I have described and is happening up and down the country. You could argue that it would not really detract from judicial review but in many ways would improve its performance. I say to my two Conservative colleagues that one aspect of being a Conservative is that very often you want to improve things for the sake of keeping them as they are. It is a classic Conservative position. I would not regard it in any way un-Conservative to be asking to improve these matters rather than defending the status quo, warts and all.
I think there is a serious problem here. The Government are addressing it. Noble Lords may disagree with the way they are addressing it. I think that the Government need some understanding of where they are coming from. In response to the views in the other place, they have listened and changed their position; not here, I agree, but in later amendments. I wholly agree that the discussion in the other place was truncated and in many respects very unsatisfactory, as has been pointed out. None the less, between the two Houses, we are beginning to get to a more rational and sensible position that acknowledges that there are problems and tries its best to find a way through without damaging judicial review.
Lord Marks of Henley-on-Thames: The Government have repeatedly characterised this clause as being concerned with cases involving procedural irregularities only. Indeed, the Minister used the term “technicalities” as a diminutive, which is inappropriate. Such terms are inaccurate in relation to this clause. At very best, they are inadequate. These are public law cases concerned with unlawful conduct of the Executive where an organ of government has ignored the law in taking or carrying out decisions.
With the greatest respect to my noble friend Lord Horam, I must say that his assertion that the system of JR is rife with widespread abuse is unsupported by the evidence. Nor does he take into account the fact that judicial review is, at its heart, about decision-making in accordance with law. Nor does he take into account the fact that, certainly over recent years, judges have made it very difficult indeed, in the exercise of their discretion, for unmeritorious cases to get permission to proceed.
I do not regard this clause as merely protecting government from the effects of minor procedural errors that have made no difference to decision-making. I regard it, as do other noble Lords who have spoken, as an attack on the rule of law and an attack on parliamentary democracy. To take the example given by my noble friend Lord Lester, where a statute is passed by Parliament, often after discussions such as the ones that we have had on this Bill, which requires that the Government consult before making a decision, it should not be open to government to flout that requirement imposed by Parliament and then claim an immunity from judicial review on the basis that a lawful consultation would have made no difference to the outcome of the decision-making so that permission and relief should be withheld. That is the heart of the point made by the noble Lord, Lord Deben.
The public interest amendment of the noble Lord, Lord Pannick, reflects an amendment that I moved in Committee. If carried, and if this House insists on it, a court will not be compelled to say, where a government department has acted unlawfully, that the decision would have been the same anyway and therefore permission to apply for judicial review must be refused and relief must be withheld. The court will instead be able to say that the decision was illegal and, before it can be properly made, the Government must follow the law—quite simply because that is what the law requires. That is the rule of law. That respects the will of Parliament. That gives effect to be principle of government accountability. This House has a constitutional duty to be very careful indeed when what is happening here happens—when the Executive seeks parliamentary sanction for breaking the law, as this clause does. I shall support the amendment of the noble Lord, Lord Pannick.
Lord Mackay of Clashfern (Con): My Lords, the question in this particular amendment is a simple one. The courts have developed law in relation to situations in which the outcome would not be any different if the conduct complained of had not occurred. My understanding of the decision in that area is that the court may decide, if it concludes that the result would inevitably be the same, that the relief is to be refused.
The government Motion that is the subject of this substantial debate simply raises the question of whether that would be inevitable or “highly likely”. In the civil law, of which judicial review is part, the ordinary rule is that the balance of probabilities determines the fact. That is the question that was raised here and there is quite a lot to be said for that point of view. But the situation tonight is affected by the way the debate was conducted in the other place. It is not for us—it is certainly not for me and not for any of your Lordships—to criticise what happened in the other place. On the other hand, the Lord Chancellor has apologised to a Member of the other place for the mistake that he made, which is fairly fundamental to the consideration of this amendment. Therefore, for my part, I would like to see this amendment going back to the House of Commons, not necessarily to change the result—that is a matter for the Commons—but so that the debate should proceed on a basis that is 110% correct.
Lord Faulks: My Lords, I begin my concluding remarks, which will be short, by saying how much I agree with much of what has been said during the course of the debate. First, the Government and I have great respect for our judges and their capacity to deliver justice in the course of judicial review and in any other field. I also have, of course, profound respect for the rule of law. In particular, I respect the role of judicial review in upholding the rule of law. I do not for a moment believe that anything that we do in Parliament should provide any form of carte blanche to a Minister or any other public body in how they conduct affairs.
The Government very much appreciate the careful consideration of the Joint Committee on Human Rights and the Lords Constitution Committee and their respective reports. They were not referred to by anybody on either side during the course of the rather truncated House of Commons debate. I do not know the extent to which they were taken into account sub silencio, but they are important and I fully acknowledge that.
Nor do I suggest that failures of consultation are not—or are not capable of being—serious matters. It is not the Government’s contention that failures to consult should be regarded necessarily as trivial—far from it. The clause refers to “substantially” and the Government’s intention is to ensure that judicial review focuses on issues that might have made a difference, not mere technicalities. We do not consider that the clause will give public authorities carte blanche to act unlawfully. No decision-maker will deliberately do something unlawful on the basis that they might hope that they can survive judicial review on the basis of the inevitability of the outcome or the outcome being “highly unlikely”.
I accept what the noble and learned Lord, Lord Woolf, said about the importance of declaratory relief and how it can play an important part in ensuring that public bodies understand their rights and responsibilities. If a judge looking at a particular case considers it important that there should be a declaration, he or she is most unlikely to decide that the case should not go further forward.
However, as my noble and learned friend, Lord Mackay, so correctly said, there is nothing revolutionary about a judge looking at a case on the question of what the outcome would have been. In particular, I refer the House to the well known case of Cotton v Chief Constable of Thames Valley from 1990 and a number of other cases that had the same effect. It was decided that the courts should look beyond the narrow question of whether the decision was taken in a procedurally improper manner and consider the wider question of whether a decision properly taken would or could have benefited the claimant.
Much of the law in this area is concerned with consultation. While consultation can be very important, if it is a trivial omission, it is appropriate that the court should look and be capable of looking at a particular case and saying, “I do not think it is an appropriate use of public resources or an individual’s resources for a judicial review to proceed, notwithstanding the putative unlawfulness, if in fact it would have made no difference or was highly unlikely to make a difference”. That is why I agree with much of the rhetoric around this
important point of principle because what the Government are inviting the House to approve is a minor change to the existing law. We are not abandoning judicial review. We are not inviting the Government, local government, Ministers or public authorities to ride roughshod through the law. We are simply saying that judicial review may be reviewed. Judges can be relied on to prevent abuse in this regard, but I suggest that it is not inappropriate for Parliament to say, “If you, as a judge, consider it is highly likely that it would make no difference, we invite you, on reviewing the facts and not fettering your discretion, to decide that the case should go no further”.
6.30 pm
The noble and learned Lord, Lord Woolf, made some serious allegations about the Lord Chancellor’s regard for the rule of law, and that is a matter on which I think he has given evidence to the Constitution Committee. The Government believe that the reforms of judicial review are part of a natural improvement of the justice system. They do not fetter the independence of the judiciary or the very useful and fundamental role that judicial review plays. However, I do not think that anybody could realistically suggest that judicial review is not sometimes open to abuse. It remains valuable—indeed, more than valuable; it is critical—but I suggest that this reform is modest. It will satisfy the very public benefit and the public interest test that features—unnecessarily, we say—in the amendment put forward by the noble Lord, Lord Pannick.
Baroness Butler-Sloss: Before the Minister sits down, I wish to ask one question: how does he answer the second part of the comments of the noble and learned Lord, Lord Mackay of Clashfern?
Lord Faulks: It is a matter entirely for the House. The whole of the speech was before the House of Commons. It was clearly regrettable. The Lord Chancellor has written a letter which is deposited in both Houses. This House will take the view that it thinks appropriate.
Lord Pannick: My Lords, I am very grateful to the Minister. He has been put in a quite impossible position, not, I think, for the first time, and I sympathise with him.
There are two central points here. The Minister very fairly accepted that the Lord Chancellor inadvertently misled the House of Commons when it considered the amendment that was approved by your Lordships. The Lord Chancellor misled the other place on the very issue that is at the heart of this amendment. He wrongly suggested that there is an exceptional circumstances provision in this clause which confers discretion on the judge. That alone is reason enough for this House to invite the other place to think again, and to do so on the basis of an accurate statement by the responsible government Minister as to the terms and effect of the clause that he was putting before the House of Commons.
However, that is not all. The public interest amendment is essential to the rule of law. That a Lord Chancellor should regard the need for a fair procedure and legality as unimportant technicalities which should be excluded
from judicial control is, to my mind, profoundly depressing and alarming. I say to the Minister that that is not a matter of rhetoric but of substance.
The noble and learned Lord, Lord Mackay of Clashfern, suggested that this clause is a development of the current law. However, the change is not merely to alter the test of inevitability to a test of highly likely; the vice of the clause that we are debating is that it imposes a duty on the court in all circumstances to throw out judicial reviews without retaining any discretion in the public interest. The Lord Chancellor and the other place should be invited to think again about the need to retain judicial discretion in the public interest, as Motion B1 states. I wish to test the opinion of the House.
6.35 pm
Contents 274; Not-Contents 205.
CONTENTS
Adams of Craigielea, B.
Adebowale, L.
Ahmed, L.
Alli, L.
Alliance, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Armstrong of Ilminster, L.
Bach, L.
Bakewell, B.
Bassam of Brighton, L.
Beecham, L.
Berkeley, L.
Berkeley of Knighton, L.
Bew, L.
Bhattacharyya, L.
Bichard, L.
Billingham, B.
Blair of Boughton, L.
Blood, B.
Boateng, L.
Borrie, L.
Bradley, L.
Bradshaw, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brown of Eaton-under-Heywood, L.
Butler of Brockwell, L.
Butler-Sloss, B.
Campbell of Surbiton, B.
Campbell-Savours, L.
Carlile of Berriew, L.
Carter of Coles, L.
Cashman, L.
Chandos, V.
Chester, Bp.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Condon, L.
Cormack, L.
Corston, B.
Cotter, L.
Craig of Radley, L.
Craigavon, V.
Crawley, B.
Cunningham of Felling, L.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Deben, L.
Denham, L.
Desai, L.
Donaghy, B.
Donoughue, L.
Doocey, B.
Drake, B.
Drayson, L.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Temple Guiting, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Fellowes, L.
Filkin, L.
Finlay of Llandaff, B.
Ford, B.
Forsyth of Drumlean, L.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Giddens, L.
Glasman, L.
Glenarthur, L.
Golding, B.
Goodhart, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Grantchester, L.
Greaves, L.
Green of Deddington, L.
Greengross, B.
Griffiths of Burry Port, L.
Grocott, L.
Hannay of Chiswick, L.
Hanworth, V.
Harris of Haringey, L.
Harrison, L.
Haughey, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hennessy of Nympsfield, L.
Higgins, L.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Hope of Craighead, L. [Teller]
Howarth of Newport, L.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Hussein-Ece, B.
Hutton of Furness, L.
Hylton, L.
Irvine of Lairg, L.
Janvrin, L.
Joffe, L.
Jones, L.
Jones of Moulsecoomb, B.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kakkar, L.
Kennedy of Cradley, B.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kerr of Kinlochard, L.
Kidron, B.
King of Bow, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Laming, L.
Lane-Fox of Soho, B.
Lea of Crondall, L.
Lennie, L.
Lester of Herne Hill, L.
Levy, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
Listowel, E.
Lloyd of Berwick, L.
Luce, L.
Ludford, B.
Lytton, E.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of River Glaven, L.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
Mackay of Drumadoon, L.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Maclennan of Rogart, L.
Mallalieu, B.
Mandelson, L.
Marks of Henley-on-Thames, L.
Martin of Springburn, L.
Masham of Ilton, B.
Maxton, L.
Mendelsohn, L.
Monks, L.
Morgan of Drefelin, B.
Morgan of Ely, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Northbrook, L.
Norwich, Bp.
Nye, B.
O'Neill of Bengarve, B.
O'Neill of Clackmannan, L.
Ouseley, L.
Pannick, L.
Parekh, L.
Patel, L. [Teller]
Patel of Blackburn, L.
Patel of Bradford, L.
Patten of Barnes, L.
Pendry, L.
Phillips of Sudbury, L.
Phillips of Worth Matravers, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Puttnam, L.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Ramsbotham, L.
Rebuck, B.
Reid of Cardowan, L.
Rendell of Babergh, B.
Rennard, L.
Richard, L.
Robertson of Port Ellen, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowe-Beddoe, L.
Rowlands, L.
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6.48 pm
That this House do not insist on its Amendments 103, 104, 105 and 106, to which the Commons have disagreed for their Reason 106A, but do propose Amendments 106B and 106C in lieu.
103: Clause 65, page 66, line 10, after “paragraph” insert “or, notwithstanding a failure to do so, the court in its discretion considers that it is nevertheless appropriate to grant the applicant leave to make the application for judicial review”
104: Clause 65, page 66, line 32, after “paragraph” insert “or, notwithstanding a failure to do so, the tribunal in its discretion considers that it is nevertheless appropriate to grant the applicant permission or leave to apply for relief”
106: Because it is appropriate to impose duties, rather than confer discretions, on the High Court, the Upper Tribunal and the Court of Appeal in connection with information about the financing of applications for judicial review.
106B: Clause 65, page 66, line 21, at end insert—
“(3AA) Rules of court under subsection (3)(b) that specify information identifying those who are, or are likely to be, sources of financial support must provide that only a person whose financial support (whether direct or indirect) exceeds, or is likely to exceed, a level set out in the rules has to be identified.
This subsection does not apply to rules that specify information described in subsection (3A)(b).”
106C: Clause 65, page 66, line 43, at end insert—
“(3AA) Tribunal Procedure Rules under subsection (3)(b) that specify information identifying those who are, or are likely to be, sources of financial support must provide that only a person whose financial support (whether direct or indirect) exceeds, or is likely to exceed, a level set out in the rules has to be identified.
This subsection does not apply to rules that specify information described in subsection (3A)(b).”
Lord Faulks: My Lords, we now come to Clause 65 and its sister clause, Clause 66. As introduced, Clause 65 would do no more than see a person provide financial information with their application for judicial review. This will prevent others from sheltering from their proper costs liability at, almost invariably, the expense of the taxpayer. As introduced, Clause 66 would do little more than require the court to consider that information.
The House’s amendments to Clause 65 would allow an applicant to be granted permission where they had not provided financial information with their application for permission, with nothing more said about the circumstances in which that would be appropriate. Similarly, the House’s amendments to Clause 66 would mean that, even where that information had been provided, the court need not consider it, nor consider whether a person identified should have costs awarded against them. Therefore, conceivably, a person might control a judicial review’s course while sheltering behind a shell company, precisely to avoid proper costs liability, and the judge could be given no information about that.
We think that those amendments, although undoubtedly well intentioned, simply go too far. The Government have, however, been persuaded to table an amendment, even after the other place so resoundingly supported the Government’s original clause, to give noble Lords additional reassurance that the Government do not intend Clause 65 to apply inappropriately or unhelpfully. I trust that the Government’s actions with regard to this clause, and the amendment itself, will give noble Lords the comfort they need to support the Government.
We have been clear throughout that we intend an approach which strikes a balance between the court having the information it might find helpful when deciding costs and avoiding providing it with too much information. The amendment provides comfort on that, by requiring any procedural rules which give effect to the clause to include a de minimis threshold.
When providing the court with information, an applicant would not have to identify any person who had provided contributions below that threshold.
I am sure that noble Lords will understand that we are not in a position to bind the hands of the procedural committees that will make the rules as to what the figure will be. That would be as inappropriate here as it would be with regard to any other procedural rule. I am comfortable that, whatever figure is ultimately adopted, it will ensure that the rules are not overly burdensome or require an excessive level of investigation. Quite simply, setting the threshold too low would result in flooding the courts with unhelpful paper that would not suit the Government’s purposes. I can happily confirm that the Government will, of course, take into account evidence and views appropriately as they come to a view on what figure is appropriate.
It is important to emphasise that nothing in Clause 65, which would make mandatory the provision of information on an application for permission, would require any level of financial resources to be available before permission can be granted. This is not about taking discretion away from the judges but about giving them the information to enable them to take fully informed decisions.
We have not tabled an amendment to Clause 66 as we are satisfied that it continues to strike an appropriate balance. The clause as the Government wish to see it would not require the courts to award costs against a person or a type of person. It simply does not affect the judge’s discretion as to costs, but it would place the court under a duty to consider the information that has been provided and whether persons identified in that information should face costs—something that they would inevitably do in any event. What decisions it takes having considered that information is a matter for the court.
For the sake of absolute clarity, I am happy to repeat that there is nothing obliging courts to make costs orders against a person identified in that information; we require only that the courts have the full picture. The alternative is to say that the judge should make an order with a less than full picture and with less than full transparency, and I am not convinced that that is desirable.
Perhaps I might make one further thing clear. These clauses and the amendment do not alter the court’s existing powers on costs. The common-law position would remain. More than mere funding will be required before a third party is made liable for costs; for example, those parties who are not only funding but are seeking to drive the litigation or to benefit from a potential remedy in the case might be ordered to pay costs. We are concerned that the courts have the wherewithal to identify who is driving litigation—that people cannot shelter behind matters—but, equally, small contributions to a fighting fund, where those individuals do not expect to control the litigation, should not bring with them an obligation to declare that you have put a modest sum into a fighting fund. Therefore, you would not inevitably be liable for costs. In fact, you would probably not be liable for costs anyway but you do not have to disclose that information.
I hope that the House will not insist on its Amendments 103 to 106 but will accept Amendments 106B and 106C in lieu. I beg to move.
As an amendment to Motion C, leave out from “House” to end and insert “do insist on its Amendments 103, 104, 105 and 106”.
Lord Pannick: My Lords, the amendments that were approved on Report by your Lordships’ House by a majority of 33 arose out of two concerns about these clauses on financial information.
The first concern is that the judges would be prevented in all circumstances from granting permission to bring an application for judicial review unless the relevant financial information has been provided. As with Motion B1, on which your Lordships have just voted, so with this Motion C1 a degree of discretion is appropriate to permit the judge to decide that a case should be allowed to proceed in the public interest, even if some financial information has not been provided. An absolute bar is inappropriate in this context and the removal of all judicial discretion is inappropriate.
The second concern is about the effect of the provisions on people who contribute to the funding of a judicial review. The Minister’s helpful letter of 4 December to noble Lords explained that the Government wish to ensure that there is no “chilling effect” on contributions because of a fear by potential contributors that they will be ordered to pay the defendant’s costs. Therefore, as I understand him, the Minister has said that it is not the Government’s intention that those who provide small amounts of funds should be subject to costs rules, and that that will be ensured through rules of court.
As I understand it, the rules will state a threshold so that people contributing less than the specified amount would not need to be identified by the claimant and so would not be liable to be ordered to contribute to the defendant’s costs. That is all very laudable. The problem, however, is that the Minister has not told the House what the threshold level will be. If the level is too low, it will inevitably deter people from contributing to judicial reviews brought in the public interest because of the risk that the contributor will have to pay the defendant’s costs.
Funding judicial review has become much harder in recent years with the decline in legal aid. It is very regrettable that the Government should now wish also to impede the ability of claimants to fund judicial review applications by private contributions. I am not satisfied by what the Minister says unless he can assure the House that the threshold level will be sufficiently high that it will not deter modest or reasonable contributions to the funding of judicial reviews.
Lord Faulks: I am very grateful to the noble Lord for giving way. Perhaps he could assist the House by saying what he would consider a modest contribution.
Lord Pannick: I would suggest that one should look up the average cost of a judicial review application and say that if the individual concerned is contributing less than, say, 10%, 15% or 20% of the costs, then that figure would not lead to any cost implications for that individual. However, I am not the one who is putting forward this proposal; it is surely for the Minister to come forward to the House and tell us what his proposal is. This House voted on Report that it was not satisfied with the Government’s approach. The Government now come forward and invite the House to agree with the other place by reference to this new proposal, and I simply suggest to the House that the Government’s proposal cannot be adequate unless your Lordships are told what the relevant figure is. I beg to move.
7 pm
Lord Marks of Henley-on-Thames: My Lords, throughout the passage of the Bill, my concern with these clauses has been that they would require any individual who was minded to support a judicial review application financially to disclose to the court his or her resources. That requirement is coupled with a requirement for the court, when considering questions of costs, to consider making a costs order against a supporter of an unsuccessful application, making use of the information disclosed.
With the greatest of respect to his argument, the Minister understated the effect of Clause 66. He said that the court would have to consider the information; what he did not take into account was that the court would be enjoined to consider making a costs order against the supporter. The inevitable effect of that would be to deter people from supporting judicial review applications financially. Group applications—for example, by groups of villagers or school parents—would then become very difficult indeed to fund.
This House’s amendments gave the court a discretion relating to financial information and costs orders. The Commons rejected our amendments and, in response to the concerns raised, my noble friend Lord Faulks and the Government have nevertheless introduced an amendment to provide that rules of court would exempt some supporters of judicial review applications from the financial disclosure requirement, provided their support did not exceed a level to be,
“set out in the rules”.
The difficulty, as the noble Lord, Lord Pannick, pointed out, is that the Government and my noble friend have given no indication of the level of support intended to be covered by their amendment. My noble friend and his officials—I am grateful to him and them for this—have met me and, I understand, others to discuss this amendment. I quite understand their position, enunciated by the Minister, which is that further work would need to be done to set an appropriate level. However, the Government are able to say nothing as to the level intended, except that it is likely to be a “few hundred pounds at most”. That is not satisfactory.
A very limited exemption for small-scale supporters would not significantly reduce the chilling effect of a disclosure requirement. It will not be anything like enough to enable groups to raise meaningful funds to
support JR applications. I remind the House that most solicitors now charge about £250 or more per hour, even outside London. For the exemption to be meaningful, a supporter would have to be permitted to contribute several thousand pounds before financial disclosure was required. I accept the formulation put forward by the noble Lord, Lord Pannick, but that could be assessed when formulating the regulations on a percentage basis. I had in mind a figure of 20% as the starting point. I had in mind a figure of somewhere between £10,000 and £15,000 as a likely level below which disclosure would not be required. However, from the Government we have heard nothing, except that it would be figure of a few hundred pounds at most. That is not a significant concession.
What is necessary is that individual supporters providing small or medium sums, who are doing so genuinely to support the application—not as the real principals and not to try to control the litigation—should not be deterred from so doing by the costs threat involved in this clause. We need that as a statement of principle, but it needs to be a statement that shows that the principle has changed to meet the objective that I have just set out.
The Government’s stated aim in these clauses, restated by my noble friend, has been limited to ensuring that wealthy people do not use impecunious applicants to pursue litigation as fronts, with no risk in costs to themselves. He rightly used the argument of shell companies as supporting an argument that their promoters should not get protection. That is an understandable aim, properly expressed by my noble friend, which no one could sensibly criticise. However, I remind your Lordships that the court already has the power to require information and make costs orders against non-parties in such circumstances. However, if the Government wish to legislate to implement their stated aim, it would be entirely reasonable to expect them to limit the legislation to what is required to achieve that aim. That would mean a firm commitment to this House that the level set out in the rules would be such as to exempt from financial disclosure small and mid-range supporters of judicial review applications who were not seeking to control the litigation.
I have made it clear to the Government that I would be prepared to support the amendment in lieu if there were a clear statement that genuine supporters in this category who provided significant funds but did not wish to control the litigation would be protected. In the absence of such a statement, I feel obliged to support the Motion of the noble Lord, Lord Pannick, to insist on the Lords amendments. The Commons will then have to consider whether it is prepared to incorporate the sort of principle that I have enunciated to protect the financing of group litigation and incorporate it into an amendment in lieu when it is sent back to this House.
Lord Mackay of Clashfern: My Lords, I had understood the Government’s proposed amendment as conferring power on the rule committee to determine what the rules should be. There is, of course, an ultimate power but I would expect the rules to be fixed by the rule committee, after appropriate consultation and with a fair amount of knowledge of how the whole system
works. This kind of amendment would deal with the sort of problem that the noble Lord, Lord Adonis, and I referred to in Committee. The Government’s amendment would be a sensible one to make and the Minister has explained the principle under which it would work. I am perfectly happy to leave that to the rule committee to determine, in the light of its great experience and knowledge of the situation.
Lord Carlile of Berriew: My Lords, I have listened, of course with enormous respect, to the noble and learned Lord who has just spoken but I do not agree with him. As my noble friend Lord Marks said a few moments ago, rules already exist to deal with the problems that are legitimately identified. What I want to say, in agreement with the noble Lord, Lord Pannick, and my noble friend Lord Marks, is about who the people are who sometimes contribute to group actions and would be chilled out of them as a result of the proposed changes.
I have to go back to my period as a Member of another place, representing a geographically large but population-small rural Welsh community. From time to time in that community, issues arose relating to judicial review. For example, many people wanted to challenge the closure of small primary schools or the changes made by the Conservative Government of the time to the structure under which primary schools could be governed. There were challenges to new roads and planning decisions, which had been made on faulty procedure by the local authority.
Who are the people who contribute to these group actions? They include people with small businesses who decide that the issue matters more to them than might at first sight be apparent. They do not, however, want to open up their private business to the courts—not because there is anything wrong with their private business, but because they think it might be made public and their neighbours might know that business. Some small farmers are much more affluent than their neighbours know; others quite the opposite. The affluent ones may want to make a disproportionate contribution to a group action, because it matters to them and because their families have been central to the community in which they live for several generations. Elderly people may not want to leave quite as much as their unworthy relatives would like to receive from their estates; they may feel that there are community issues that justify their descendants perhaps paying a small price by a contribution being made to a community group action of judicial review in the public interest.
Those are just three illustrations of the types of people who will feel that they are simply not prepared to give more than a few pounds to a group action, whereas in the past they may have given several thousand. So I agree with the point that has been made eloquently by others. Before we go down this road, we need some indication from the Government—they must have some idea—at least of the proportion of costs that would fall within these provisions. Until we have that, we could not conceivably be responsible in agreeing to a proposal that would have such a serious chilling effect, not only on judicial review but on the spirits of small communities such as the one I represented.
Lord Rooker (Lab): I am a complete outsider on this, but I am now confused. The examples that the noble Lord has given I can recall from my own experience, not of judicial review but of group activities—the community. The noble Lord, Lord Marks, however, said that he would buy 15% to 20%. Now, 15% is six or seven people. That is not a group or a community. Twenty per cent would be five people funding. I am now at a loss. I realise that the Government should put something forward about the level, but I am confused by the idea of lots of people contributing for the community. The noble Lord, Lord Marks, said, “I could buy 15% or 20%”. That is not a group and it is not a community. That is a small tightly knit group of motivated people. So I am confused about which way we are going on this debate.
Lord Carlile of Berriew: The noble Lord, Lord Rooker, has, extremely uncharacteristically, if I may say so, missed the point. I am sure that it is my fault. We are talking about group actions that may involve a significant number of people—hundreds or thousands, maybe—to which a few individuals make a large contribution. They are making that contribution, often anonymously, to ensure that the matter is capable of going to judicial review for the reasons I gave earlier. We are not talking about 20% meaning that there are only five people involved in the action. We are talking about 20% of the funding that is collected, although there may be hundreds of people involved in the action.
Lord Berkeley of Knighton: My Lords, the noble Lord is quite right. In my experience—which I am sorry to say is rather larger than I would like—of local communities in mid-Wales fighting, for example, wind farms, a lot of households give a few pounds, but a judicial review becomes possible because one or two people who really do wish to remain anonymous give significantly more. Many of these people have been terrified by threats of being sued for costs. So I would implore the Minister to give as much clarity as possible on this point.
7.15 pm
Lord Thomas of Gresford (LD): My Lords, I am moved to continue with Wales because I acted for my community—the Gresford community—when there was a proposal to opencast mine part of Gresford colliery at a time when there were about 260 bodies still buried in it as a result of the 1934 disaster. Your Lordships will appreciate how people felt about that: they felt that there had been a stitch-up between the National Coal Board and the local authority.
Since the matter had not been properly advertised, we took it to judicial review. We could not, however, expect every member of the community to be involved, so a committee of about eight people was set up to instruct solicitors and counsel to appear on this judicial review. It is those eight people I am thinking about, who might be found liable for costs. I can tell your Lordships that even then—back in the 1970s or maybe the early 1980s—costs were a considerable issue for these people before becoming involved in this matter. The result was that the judicial review was successful.
The county council advertised properly and the villagers —the community—then made contributions to the consultation that took place. Although the decision to permit opencast mining went ahead, it was with very stringent conditions. The National Coal Board was very concerned to keep to those conditions, so the work was carried out strictly in accordance with them and the land was replaced to such a degree that it is now the training ground for Wrexham Football Club. Your Lordships will appreciate that in that case a decision was taken that excluded a community which had the highest sensitivities about what had happened. The fear of costs was something that might have deterred that successful action altogether.
Lord Brown of Eaton-under-Heywood (CB): I wish to support the Motion of the noble Lord, Lord Pannick, and resist the Minister’s Motion on rather a broader basis than perhaps has been suggested so far. The problem, or one of the problems, with the Minister’s Motion is that it leaves intact the central thrust of Clauses 65 and 66, which were of course objected to and disagreed with by the Commons on the basis set out in Commons Reason 106A:
“Because it is appropriate to impose duties, rather than confer discretions, on the High Court”,
et cetera. My deep disagreement with that basis of rejection is that I do not believe it is appropriate in this jurisdiction to impose duties and to narrow or eliminate discretions on the part of the judiciary.
In Committee in July, I suggested that it is difficult to think of any area of law less suitable than this one for this sort of legislative interference. We are here concerned with the inherent supervisory jurisdiction of the courts to hold the Government to account; to ensure that the rule of the law is observed when the Executive take action. Yet here is another example of the Government seeking to weaken those powers with the inevitable chilling effect, and in many cases making it practically impossible to bring a challenge. The fresh ministerial amendments still leave intact the provision that you cannot bring judicial review unless you give a whole series of particulars about how the process is to be funded.
In that same debate, the noble and learned Lord, Lord Mackay of Clashfern—my respect and admiration for him is second to none, not least since he had the sagacity 22 years ago to promote me to the Court of Appeal—rightly pointed out that it was the judges themselves who had originally sought to underpin the rule of court under which judges had previously exercised their judicial review jurisdiction by giving it legislative form. Thus was enacted the section of which the noble and learned Lord, Lord Woolf, spoke a little earlier: Section 31 of what used to be called the Supreme Court Act but, since the invention of a Supreme Court, is now called the Senior Courts Act. However, it must be recognised that Section 31 merely facilitated the exercise of the judges’ supervisory jurisdiction; in no way did it seek to constrain, limit or inhibit it. It imposed no duties on the judges and you will search it in vain to find such.
Now, though, in this clause, as in the one that we discussed a little earlier, the Government are intent on seeking to eliminate the judges’ powers and to impose duties upon them. I echo what the noble Lord, Lord
Deben, said about the earlier proposal: this is an amendment of constitutional importance. In truth, it is not a party political matter. It is a question of where the boundary should be drawn between the Executive and the judiciary. The judiciary in this country, unlike its American counterpart, has always fully recognised the sovereignty of Parliament. We do not strike down primary legislation. Parliament, in turn, has not hitherto sought to whittle down the judges’ supervisory jurisdiction, and it is really inappropriate that they should now start to do so.
If the Government have their way on this or, on reconsideration later, on the previous or the next amendment, the constitutional balance will have shifted. The fact is that the Motions that the noble Lord, Lord Pannick, is advancing are ones that are truly worth fighting for.
Lord Faulks: My Lords, this has been a very useful debate. The questions of the information available to judges are difficult. Most judges would say that the more information that they have, the better, to enable them to exercise any discretion in any context. When it comes to making orders for costs, which can be extremely serious in their consequences, it is important that they have information. By the same token, the Government take the view that it is only fair that people who seek the remedy of judicial review, who will inevitably cause costs to be incurred—often by a public authority, so indirectly by the taxpayer—should not be able to hide behind shell companies. That much, I think, is agreed. Where there is still some disagreement is over whether those who want to contribute to a fighting fund or a potential claim—however one likes to characterise it—should have to disclose that information.
The amendment is regarded by some noble Lords as being unsatisfactory because the Government do not specify a particular figure or percentage. Although, as the noble Lord, Lord Pannick, quite rightly says, it is the Government’s amendment and he does not have to put anything forward, he said helpfully that it might be helpful if the figure was by reference to the overall costs of the judicial review. Our view, and I rely on the support of the noble and learned Lord, Lord Mackay of Clashfern, is that these are pre-eminently matters for the Civil Procedure Rule Committee. It is of course not a committee of which the Lord Chancellor—the subject of much criticism today and throughout the Bill—is the chairman or has control, but it has considerable experience.
The important thing, I suggest, is to consider what is really at stake here. I respectfully suggest that actually the noble Lord, Lord Rooker, put his finger on exactly the dilemma here: whether we are talking about people who are making small contributions to a community project or about quite large sums of money where there is a pooling of resources to take forward a claim. I shall try to characterise what we are trying to get at by these rules. We suggest that there is a difference between an amount of money that by most people’s standards would establish a vested interest in the outcome of a case and someone who, in support of a cause, wishes to make a small contribution to a fighting fund. It is the latter that our clause seeks to exclude. That is the difference. We have adhered to that as an
approach. We are not seeking to exclude people who are making substantial sums. I respectfully suggest that £10,000 to £15,000, as referred to by my noble friend Lord Marks, is a substantial sum of money.
The amount that individual lawyers charge is of course often much criticised, but I am asked to give some idea about the sort of costs that may be involved in judicial review. For cases that proceed to a full hearing, the Public Law Project estimated in 2007 that, for a straightforward case, costs to a claimant could be in the region of £10,000 to £12,000—adjusted for inflation, that is £11,000 to £22,000. In 2012, Guildhall Chambers published information estimating this at £5,000 to £10,000. In relation to defendants’ legal costs, the Treasury Solicitor’s Department estimates that in 2013, in cases that it was involved in, the defendants’ costs ranged from £8,000 to £25,000 for non-immigration and asylum cases, and from £1,000 to £15,000 for immigration and asylum cases. For an oral permission hearing, the Treasury Solicitor’s Department estimates an average cost to a defendant for preparing and attending the hearing at around £1,000 to £1,500.
It is important to bear in mind that Clause 66 requires the court to consider the funding information and whether to make costs orders. Of course the noble and learned Lord, Lord Brown, is quite right: the funding must be provided for them to go on to consider how to exercise their power over costs. Importantly, though, whether to make any costs order against a third party, provided that the prerequisite is there, will be entirely for the court to assess. The clause itself, provided that Clause 65 is satisfied, does not affect the judge’s discretion. We think it is right that the judge, in exercising his discretion, should have regard to what information would reasonably be expected to make a proper judgment about whether costs should be paid.
There was a reference to the possibility that privacy would effectively be invaded by having to provide costs. The information would be made available to the court but not publicly available, in line with existing practice when the courts deal with information that concerns personal finances or is otherwise confidential. It is right that there is transparency in the more generally used sense, and that the courts are aware of the nature and extent of funding provided to a claimant from those directly party to, but not potentially controlling, the litigation.
The judiciary itself responded to the consultation on judicial review. So that I cannot be accused of misrepresenting what it said, I shall quote from paragraph 179:
“The court is already empowered to make costs orders against non-parties … We support the proposal that it should be mandatory for a claimant to provide details of how a case is funded … to assist the court in assessing whether to make a cost orders against a non-party. We welcome the acknowledgment that the court should retain full discretion in relation to the making of these orders”.
That is a point made by the noble and learned Lord, Lord Brown; he says that there should be no obligation on the part of those who are funding matters to provide information.
Lord Brown of Eaton-under-Heywood: My Lords, as I understand Clause 65, it involves an insertion into Section 31(3) of the Senior Courts Act. That will provide that no application for judicial review shall be made unless, as at present, the leave of the High Court has been obtained—that is fine. But then you insert these provisions—“unless the applicant has provided the court”. In other words, the court has no discretion left to grant leave to move unless this whole rigmarole is gone through and whatever it is ultimately decided has to be disclosed by way of the financial basis of the claim has been disclosed. That is the respect in which I suggest there is no longer going to be any discretion for the court to allow proceedings to go ahead.
Lord Faulks: That is entirely correct. The discretion would exist on whether to award costs. This is the discretion which is fettered, I entirely accept, to the extent that the Government think it is appropriate for it to be fettered because they consider that, because of what results from bringing a judicial review in terms of cost consequences, it is perfectly reasonable to provide within the realms of privacy the basis on which you are funding. That excludes those small contributors whom I have characterised, and whom I accept would be covered by the rules. Beyond that, however, we consider it to be an appropriate obligation. It is there to prevent what has been a potential evil. I will not go over the Richard III case again; the noble Lord, Lord Beecham, is relieved. Undoubtedly there have been cases where shell companies have been used; the case is lost; there is nobody for anybody to recover costs from and again the taxpayer loses. This can happen. This is not a draconian matter: we have made a concession which, I suggest, is a reasonable one. The rule committee can be trusted to come up, with its experience in the matter, with an appropriate compromise reflecting the principles that I have endeavoured to outline on the Floor of the House.
Lord Marks of Henley-on-Thames: I have two questions for the Minister. First, will he clarify that the figures for claimants’ costs—and it is, of course, the claimants’ costs that are important when considering financial information—are those related only to straightforward cases? Secondly, will he confirm that I am right in saying that the level that the Government intend as a matter of principle should be reflected in the rules is a level of only a few hundred pounds—in other words, very small contributions rather than significant contributions from larger contributors?
Lord Faulks: In answer to my noble friend’s first question, I did use the word “straightforward” and that is entirely correct; I adhere to that. On the second question, I am reluctant to give figures because, for the reasons I have given and in terms of what we are talking about, it relates to a small contribution to a fighting fund. That would not be £10,000 to £15,000. I do not think it is appropriate to go beyond that. That is a matter that I will leave to the rule committee: it will arrive at an appropriate figure in the light of its experience.
Lord Pannick: My Lords, this is a really puzzling matter. The Minister accepts that a threshold figure should be included in the rules below which a contributor
to the funding of a judicial review should not be liable to be identified or pay costs. That is a vital concession, because without it, private funding of judicial reviews in the public interest would not be able to continue. However, the Minister is unable to say what the threshold figure will be; he is not able to state any criteria by reference to which that figure should be determined, and he is reluctant, in answer to the noble Lord, Lord Marks, to say more than that it will be a figure less —significantly less, as I understand him—than £10,000 to £15,000. That, I suggest to noble Lords, is quite unsatisfactory in relation to the Government’s attempt to persuade this House not to insist on its previous amendment.
The noble and learned Lord, Lord Mackay of Clashfern, said that the rule committee will deal with this in an independent manner. However, the rule committee will no doubt be heavily influenced by what the Government say is the purpose of this. I am not suggesting that the rule committee is bound by what the Government say, but the Government will have a very considerable influence, particularly when there are no criteria set out in the amendment. In any event, there is also—as emphasised by the noble and learned Lord, Lord Brown of Eaton-under-Heywood—a vital need in these clauses to retain a degree of judicial discretion in this sensitive context. The Government wish to impose absolute duties again and I, in this context, as in the previous context of Clause 64, suggest that judicial discretion should be retained. I wish to test the opinion of the House.
7.34 pm
Contents 210; Not-Contents 192.
CONTENTS
Adams of Craigielea, B.
Ahmed, L.
Alli, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Bach, L.
Bakewell, B.
Bassam of Brighton, L.
Beecham, L.
Berkeley, L.
Berkeley of Knighton, L.
Blood, B.
Boateng, L.
Borrie, L.
Bradley, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brown of Eaton-under-Heywood, L. [Teller]
Butler-Sloss, B.
Campbell of Surbiton, B.
Campbell-Savours, L.
Carlile of Berriew, L.
Carter of Coles, L.
Cashman, L.
Chandos, V.
Chester, Bp.
Clark of Windermere, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Cotter, L.
Craigavon, V.
Crawley, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Donaghy, B.
Donoughue, L.
Drake, B.
Drayson, L.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Temple Guiting, L.
Falkland, V.
Farrington of Ribbleton, B.
Fellowes, L.
Flather, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Gale, B.
Giddens, L.
Glasman, L.
Golding, B.
Goodhart, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grantchester, L.
Greaves, L.
Greenway, L.
Grocott, L.
Hanworth, V.
Harris of Haringey, L.
Harrison, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Hope of Craighead, L.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Hylton, L.
Irvine of Lairg, L.
Janvrin, L.
Joffe, L.
Jones, L.
Jones of Moulsecoomb, B.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kakkar, L.
Kennedy of Cradley, B.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kidron, B.
King of Bow, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Lane-Fox of Soho, B.
Lea of Crondall, L.
Lennie, L.
Liddell of Coatdyke, B.
Liddle, L.
Linklater of Butterstone, B.
Lipsey, L.
Lister of Burtersett, B.
Lloyd of Berwick, L.
Ludford, B.
Lytton, E.
McAvoy, L.
McDonagh, B.
Macdonald of River Glaven, L.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Maclennan of Rogart, L.
Maginnis of Drumglass, L.
Mallalieu, B.
Mandelson, L.
Marks of Henley-on-Thames, L.
Maxton, L.
Meacher, B.
Mendelsohn, L.
Monks, L.
Morgan of Drefelin, B.
Morgan of Ely, B.
Morris of Handsworth, L.
Morris of Yardley, B.
Nye, B.
O'Loan, B.
O'Neill of Bengarve, B.
O'Neill of Clackmannan, L.
Pannick, L.
Patel, L. [Teller]
Patel of Blackburn, L.
Patel of Bradford, L.
Phillips of Worth Matravers, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Puttnam, L.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Ramsbotham, L.
Rebuck, B.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Robertson of Port Ellen, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Sheffield, Bp.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Snape, L.
Soley, L.
Stevens of Kirkwhelpington, L.
Stevenson of Balmacara, L.
Stirrup, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thomas of Gresford, L.
Thornton, B.
Tomlinson, L.
Tonge, B.
Touhig, L.
Trees, L.
Tunnicliffe, L.
Turnberg, L.
Turner of Camden, B.
Tyler, L.
Walker of Gestingthorpe, L.
Wall of New Barnet, B.
Walpole, L.
Warner, L.
Warnock, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Crosby, B.
Williams of Elvel, L.
Williams of Oystermouth, L.
Winston, L.
Woolf, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Anelay of St Johns, B.
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Bakewell of Hardington Mandeville, B.
Bates, L.
Black of Brentwood, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Borwick, L.
Bourne of Aberystwyth, L.
Brabazon of Tara, L.
Brady, B.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Buscombe, B.
Byford, B.
Carrington, L.
Carrington of Fulham, L.
Cathcart, E.
Chalker of Wallasey, B.
Colwyn, L.
Cooper of Windrush, L.
Cope of Berkeley, L.
Courtown, E.
Crathorne, L.
Crickhowell, L.
De Mauley, L.
Deighton, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Evans of Bowes Park, B.
Falkner of Margravine, B.
Farmer, L.
Faulks, L.
Fellowes of West Stafford, L.
Finkelstein, L.
Flight, L.
Fookes, B.
Fowler, L.
Fox, L.
Framlingham, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Garel-Jones, L.
Geddes, L.
German, L.
Glasgow, E.
Glenarthur, L.
Glentoran, L.
Goddard of Stockport, L.
Gold, L.
Goodlad, L.
Grender, B.
Griffiths of Fforestfach, L.
Hanham, B.
Harris of Peckham, L.
Helic, B.
Higgins, L.
Hodgson of Abinger, B.
Hodgson of Astley Abbotts, L.
Holmes of Richmond, L.
Home, E.
Hooper, B.
Horam, L.
Howard of Rising, L.
Howe of Aberavon, L.
Howell of Guildford, L.
Humphreys, B.
Hunt of Wirral, L.
Hussain, L.
Inglewood, L.
James of Blackheath, L.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Kilclooney, L.
Kirkham, L.
Kramer, B.
Lang of Monkton, L.
Lee of Trafford, L.
Leigh of Hurley, L.
Lexden, L.
Lindsay, E.
Lingfield, L.
Liverpool, E.
Livingston of Parkhead, L.
Loomba, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
MacLaurin of Knebworth, L.
McNally, L.
Maddock, B.
Mancroft, L.
Marlesford, L.
Mawhinney, L.
Mobarik, B.
Morris of Bolton, B.
Moynihan, L.
Naseby, L.
Nash, L.
Neville-Jones, B.
Neville-Rolfe, B.
Newby, L. [Teller]
Newlove, B.
Nicholson of Winterbourne, B.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Oppenheim-Barnes, B.
Paddick, L.
Parminter, B.
Perry of Southwark, B.
Pinnock, B.
Popat, L.
Purvis of Tweed, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Ribeiro, L.
Ridley, V.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Ryder of Wensum, L.
Sanderson of Bowden, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Sharp of Guildford, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Sherbourne of Didsbury, L.
Shields, B.
Shipley, L.
Shrewsbury, E.
Shutt of Greetland, L.
Skelmersdale, L.
Spicer, L.
Stedman-Scott, B.
Stephen, L.
Stewartby, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Suri, L.
Suttie, B.
Taylor of Goss Moor, L.
Taylor of Holbeach, L. [Teller]
Teverson, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
Tugendhat, L.
Tyler of Enfield, B.
Ullswater, V.
Verjee, L.
Verma, B.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Warsi, B.
Wasserman, L.
Watson of Richmond, L.
Wei, L.
Wheatcroft, B.
Whitby, L.
Wilcox, B.
Williams of Trafford, B.
Wrigglesworth, L.
Young of Graffham, L.
Younger of Leckie, V.
7.46 pm
That this House do not insist on its Amendment 107 and do agree with the Commons in their Amendments 107A, 107B, 107C, 107D and 107E in lieu thereof.
107: Clause 67, page 67, line 25, leave out subsections (2) to (6) and insert—
“( ) The High Court and the Court of Appeal shall have a discretion whether to order an intervener to pay the costs of a relevant party to the proceedings, and shall have a discretion whether to order a relevant party to the proceedings to pay the intervener’s costs.”
Commons Disagreement and Amendments in lieu
The Commons disagree to Lords Amendment No. 107 and propose Amendments Nos. 107A, 107B, 107C, 107D and 107E in lieu.
107A: Clause 67, page 67, line 22, leave out subsection (1) and insert—
“(1) This section applies where—
(a) a person is granted permission to file evidence or make representations in judicial review proceedings, and
(b) at that time, the person is not a relevant party to the proceedings.
(1A) That person is referred to in this section as an “intervener”.”
107B: Clause 67, page 67, line 30, leave out subsection (4) and insert—
“(4) On an application to the High Court or the Court of Appeal by a relevant party to the proceedings, if the court is satisfied that a condition described in subsection (4A) is met in a stage of the proceedings that the court deals with, the court must order the intervener to pay any costs specified in the application that the court considers have been incurred by the relevant party as a result of the intervener’s involvement in that stage of the proceedings.
“(4A) Those conditions are that—
(a) the intervener has acted, in substance, as the sole or principal applicant, defendant, appellant or respondent;
(b) the intervener’s evidence and representations, taken as a whole, have not been of significant assistance to the court;
(c) a significant part of the intervener’s evidence and representations relates to matters that it is not necessary for the court to consider in order to resolve the issues that are the subject of the stage in the proceedings;
(d) the intervener has behaved unreasonably.”
107C: Clause 67, page 67, line 44, at end insert—
“and the proceedings described in paragraphs (a) to (d) are “stages” of judicial review proceedings.”
107D: Clause 67, page 68, line 3, leave out from beginning to “directly” in line 6 and insert—
“(a) a person who is or has been an applicant or defendant in the proceedings described in subsection (7)(a), (b) or (c);
(b) a person who is or has been an appellant or respondent in the proceedings described in subsection (7)(d);
(c) any other person who is or has been”
107E: Clause 67, page 68, line 8, at end insert—
“( ) If a person who is an intervener in judicial review proceedings becomes a relevant party to the proceedings, the person is to be treated for the purposes of subsections (2) and (4) as having been a relevant party, rather than an intervener, at all times when involved in the proceedings.”
Lord Faulks: My Lords, Clause 67 concerns those who intervene voluntarily in a judicial review and would see the court award reasonable costs against them—both their own and those their intervention causes a party—in most circumstances. Your Lordships’ Amendment 107 to this clause would provide absolute discretion to order an intervener’s costs against a party, or a party’s costs against an intervener, or not. That is effectively the current position, which in practice allows interventions to be made with very limited risk of any cost implications of how that is done, often with the taxpayer left to meet the bill.
As this House acknowledged during the Bill’s previous stages, the Government accept that Clause 67 as introduced caused concern, and we listened with care to the arguments raised. However, we think your Lordships’ amendments to the clause go too far, and so we have brought forward our own amendment in lieu. Our amendment strikes a proportionate and sensible balance: giving interveners the right incentives to ensure that they do not intervene inappropriately and more certainty about when they will face costs; giving taxpayers the protection they need; and giving the judges the scope they need to apply Parliament’s will to the circumstances of the case at hand.
Our amendment in lieu would place the court under a duty to award costs against an intervener if one or more of four conditions were met. The first condition is that the intervener has usurped a party’s proper role, perhaps because they want to drive the litigation without accepting the responsibility for costs which this entails. The second is where the intervener has simply not been of significant assistance to the court. Perhaps the intervener has argued at length, placing the parties at considerable expense, without advancing the court’s understanding of the issues. The third is that the intervener will meet a party’s reasonable costs of dealing
with the intervention where a significant part of their arguments are not germane to the court’s consideration of the case. They may, for example, spend much of their time in court pressing the importance of a cause in which they are expert, or indeed their own importance, with only a small amount of time spent focusing on the issues really at hand. Finally, the court will be under a duty to order costs where the intervener has acted unreasonably.
Following the amendment in lieu, Clause 67 will continue to give the court significant leeway when it comes to making costs orders. First, it will be for the court to consider whether any of the four conditions has been met, so it will look at the facts in every case. Secondly, and importantly, the amendment preserves the court’s role in deciding whether costs were in fact caused by the intervener and incurred by the party reasonably. Thirdly, where the court is of the view that there are exceptional circumstances which would make the award of costs under the clause inappropriate, it need not make an award. I am happy to be entirely clear that the exceptional circumstances carve-out would remain in the clause in light of the Government’s amendment in lieu. In fairness, that was not particularly clear in the debate in the House of Commons. Nobody said anything to the contrary, but it was not emphasised with sufficient clarity. Finally, Clause 67 quite purposefully would not affect the court’s discretion to invite an intervener to participate in a judicial review, which would take the intervener outside the ambit of the clause.
In the Government’s view, your Lordships’ amendments to this clause went too far in undermining their intended effect and perhaps underestimated the significant safe-guards built into the clause as agreed by the elected House. As such, the Government continue to be of the view that the first presumption in the clause—that a party must not, unless there are exceptional circumstances, be made to meet the costs an intervener accrues when making their intervention—should be retained as it was introduced and without amendment.
Nobody doubts that interveners can and do make a valuable contribution in a number of cases. They make a valuable contribution and can assist a court in deciding a case, but equally we think that it is appropriate that interveners should pause long and hard to think about whether they can truly add anything to a case and to make sure what they add is proportionate and sensible and provides assistance to the court. They should not act simply as a cheer-leader because it is an issue about which they feel strongly, and repeat all of the arguments that have already been made by one party; they should not expand the scope of the case beyond that which is before the court; and they should not, as a matter of routine, simply join in the case because it is the sort of thing that they feel strongly about.
We encourage focused interventions, but we do not wish to deprive judges of the interventions that are appropriate, nor do we wish to deprive them of the discretion which they have. We simply ask them to make up their mind whether these four conditions are satisfied. If one of those four conditions is satisfied, then they must order costs, unless there are exceptional
circumstances. Judges are best placed to decide whether they have been given assistance, and we do not seek to usurp that discretion. We think that interventions can be useful; they can also be overlengthy and expensive. This is a moderate compromise, and a reflection of the anxiety which has been expressed by a number of noble Lords, and indeed, some Members of the other House, and I ask that the House accepts the amendments of the Government. I beg to move.
As an amendment to Motion D, leave out from “House” to end and insert “do insist on its Amendment 107 to which the Commons have disagreed and do disagree with the Commons in their Amendments 107A, 107B, 107C, 107D and 107E in lieu thereof”.
Lord Pannick: My Lords, I shall be brief, given the time, given that your Lordships’ House has debated this issue on two substantive occasions already, and because I apprehend that your Lordships’ House will be anxious to move speedily to a vote on this matter.
Judges have repeatedly emphasised how helpful they find the contributions of interveners to be. Courts already have ample powers, which they exercise to control who can intervene on what subjects and with what costs consequences. The Government have at no stage in the debates on this Bill in either House identified any cases whatsoever in which the courts currently lack adequate power to deal with abuse or misuse of interventions. This clause, even with the amendments approved in the other place, will inevitably deter interventions which the courts will regard, and do regard, as valuable in determining the results of judicial review. I simply cannot understand what the Lord Chancellor hopes to achieve by this clause. I suggest that this House should ask the other place to think again. I beg to move.
Lord Faulks: My Lords, it has been a short debate. The issues have been fully covered at previous debates and at previous stages. I am not going to prolong this debate, but the noble Lord, Lord Pannick, says that the Government have not identified any issue. I made a rather more lengthy speech at an earlier stage in which I did identify—or at least attempt to identify—what the Government were driving at by this amendment. It was indeed based—I have to declare an interest—on personal experience of lengthy interventions, which no doubt a judge with all good intentions envisaged being very minor, which turned out to be extremely major in terms of their volume. These involve lengthy skeleton arguments, volumes of authorities and lawyers no doubt seeking to justify their existence. This is not helpful.
Of course, judges are capable—it is perfectly true—of expressing their disapproval, of limiting those interventions by appropriate methods. None the less, those who are involved will have inevitably had to spend time in preparing the case, in the eventuality that all of these interventions will in fact be treated with considerable scrutiny. Perhaps the case may be lengthened.
We consider this is an appropriate compromise. It does no more than identify the sort of cases that judges should be looking at, and probably are looking at, to make an order against interveners in appropriate circumstances. There are exceptional circumstances and judges will know when they are helped and when they are not helped, but to suggest that all is perfect in the world of interventions is simply to ignore the reality.
Lord Pannick: My Lords, it is not an acceptable compromise for the Government to bring forward a clause, with amendments, which will undoubtedly deter the interventions which the courts currently find helpful. There are interventions from all numbers of persons and bodies, many of which have made representations to your Lordships that this clause will deter them from coming forward and assisting the court. I have seen representations from bodies ranging from Liberty to Buglife. They are concerned that they cannot, for financial reasons, seek to assist the court if they fear that, other than in exceptional circumstances, they are going to be liable to pay the costs under this provision. For that reason I respectfully suggest to noble Lords that we should ask the other place to think again about this vital matter. I wish to test the opinion of the House.
7.58 pm
Contents 160; Not-Contents 190.
CONTENTS
Adams of Craigielea, B.
Ahmed, L.
Alli, L.
Andrews, B.
Bach, L.
Bakewell, B.
Bassam of Brighton, L.
Beecham, L.
Berkeley, L.
Berkeley of Knighton, L.
Blood, B.
Boateng, L.
Borrie, L.
Bradley, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brown of Eaton-under-Heywood, L.
Butler-Sloss, B.
Campbell of Surbiton, B.
Campbell-Savours, L.
Carlile of Berriew, L.
Cashman, L.
Chandos, V.
Chester, Bp.
Clark of Windermere, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Craigavon, V.
Crawley, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Donaghy, B.
Drake, B.
Drayson, L.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Foster of Bishop Auckland, L.
Gale, B.
Giddens, L.
Glasman, L.
Golding, B.
Goodhart, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grantchester, L.
Grocott, L.
Hanworth, V.
Harris of Haringey, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hope of Craighead, L. [Teller]
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Joffe, L.
Jones, L.
Jones of Moulsecoomb, B.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kennedy of Cradley, B.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kidron, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Lane-Fox of Soho, B.
Lea of Crondall, L.
Lennie, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of River Glaven, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Mandelson, L.
Martin of Springburn, L.
Maxton, L.
Morgan of Ely, B.
Morris of Handsworth, L.
Nye, B.
O'Loan, B.
O'Neill of Clackmannan, L.
Pannick, L.
Patel, L. [Teller]
Patel of Bradford, L.
Phillips of Worth Matravers, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prescott, L.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Ramsbotham, L.
Rebuck, B.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Sheffield, Bp.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Soley, L.
Stevenson of Balmacara, L.
Stirrup, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Strasburger, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thomas of Gresford, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Trees, L.
Tunnicliffe, L.
Turner of Camden, B.
Walpole, L.
Warnock, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Winston, L.
Woolf, L.
Young of Norwood Green, L.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Anelay of St Johns, B.
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Bakewell of Hardington Mandeville, B.
Bates, L.
Bew, L.
Black of Brentwood, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Borwick, L.
Bourne of Aberystwyth, L.
Brabazon of Tara, L.
Brady, B.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Buscombe, B.
Byford, B.
Carrington of Fulham, L.
Cathcart, E.
Chalker of Wallasey, B.
Clement-Jones, L.
Colwyn, L.
Cooper of Windrush, L.
Cope of Berkeley, L.
Courtown, E.
Crickhowell, L.
Curry of Kirkharle, L.
De Mauley, L.
Deighton, L.
Dixon-Smith, L.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Evans of Bowes Park, B.
Farmer, L.
Faulks, L.
Fellowes of West Stafford, L.
Finkelstein, L.
Flight, L.
Fookes, B.
Fowler, L.
Fox, L.
Framlingham, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Garel-Jones, L.
Geddes, L.
German, L.
Glenarthur, L.
Glentoran, L.
Goddard of Stockport, L.
Gold, L.
Goodlad, L.
Greenway, L.
Grender, B.
Hanham, B.
Harris of Peckham, L.
Helic, B.
Higgins, L.
Hodgson of Abinger, B.
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Holmes of Richmond, L.
Home, E.
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Howe of Aberavon, L.
Howell of Guildford, L.
Humphreys, B.
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Hussain, L.
Hussein-Ece, B.
James of Blackheath, L.
Janke, B.
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Jolly, B.
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Kirkham, L.
Kramer, B.
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Lexden, L.
Lindsay, E.
Lingfield, L.
Liverpool, E.
Livingston of Parkhead, L.
Loomba, L.
Lothian, M.
Ludford, B.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
McNally, L.
Maddock, B.
Mancroft, L.
Marks of Henley-on-Thames, L.
Marlesford, L.
Mawhinney, L.
Miller of Chilthorne Domer, B.
Mobarik, B.
Moynihan, L.
Naseby, L.
Nash, L.
Neville-Jones, B.
Neville-Rolfe, B.
Newby, L. [Teller]
Newlove, B.
Nicholson of Winterbourne, B.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Paddick, L.
Parminter, B.
Perry of Southwark, B.
Pinnock, B.
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Randerson, B.
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Ribeiro, L.
Ridley, V.
Roberts of Llandudno, L.
Sanderson of Bowden, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
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Sharp of Guildford, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Sherbourne of Didsbury, L.
Shields, B.
Shipley, L.
Shrewsbury, E.
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Skelmersdale, L.
Smith of Newnham, B.
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Stephen, L.
Stewartby, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Suri, L.
Suttie, B.
Taylor of Goss Moor, L.
Taylor of Holbeach, L. [Teller]
Teverson, L.
Tope, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
Tugendhat, L.
Tyler, L.
Tyler of Enfield, B.
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Verma, B.
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Wallace of Tankerness, L.
Walmsley, B.
Warsi, B.
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Wei, L.
Wheatcroft, B.
Whitby, L.
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Care and Support (Deferred Payment) Regulations 2014
Motion to Annul
8.10 pm
That a Humble Address be presented to Her Majesty praying that the Care and Support (Deferred Payment) Regulations 2014 laid before the House on 31 October be annulled on the grounds that the Regulations are to come into force in April 2015 instead of simultaneously with the other post-Dilnot reforms in April 2016. (SI 2014/2671)
Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee
Lord Lipsey (Lab): At last, the big event of the day —the one you have all been waiting for. First, I declare an interest as an unremunerated president of SOLLA, the Society of Later Life Advisers, which is the body that accredits financial advisers who work with the elderly.
As there could be some misunderstanding, perhaps I may explain that there will be two separate debates and I will be making two separate speeches. This will not take any more of the House’s time, but I think it will make it a much less confusing debate than it otherwise would have been. I will speak, other noble Lords will speak, my noble friend Lord Hunt will speak, the Minister will speak, and then we will decide the first Motion; and then we will do the second one.
I turn to the first Motion, which is the fatal resolution. In a world of logical governance it would be taken for granted that the whole post-Dilnot package should be implemented in one—the new deferred payment scheme covered by these regulations together with other elements including the cap on how much people have to spend on care. The Government, however, have proposed that the deferred payment scheme should take effect in April 2015 and the cap and the rest of the measures in April 2016. By this new system, they have set a course for potential chaos. There will be chaos in local councils. The LGA says, quietly, that,
“the timetable is challenging for councils”.
A recent report by the National Audit Office says:
“It may not be feasible for local authorities to implement all the proposed changes to the indicated timetable”.
There will also be chaos for financial advisers whom, through SOLLA, I represent. There will be one development this coming April; the next the following year. How can they give coherent advice to older people on how to proceed in the gap year? As SOLLA has written to the Minister:
“This does seem to add a level of unnecessary complexity to an already difficult system”.
If advisers are struggling to understand the relationship between the two sets of proposals, how are older people themselves or their families supposed to understand? How are they to make the choices before them? It is batty—I can use no less a word. That is the unanimous view of all the experts with whom I have discussed the matter. My noble friend Lord Warner, who is a member of the Dilnot commission, has given me authority to say that, in the commission’s view, there should be one proposed date, not two.
Why? The answer is 7,600. This is the Government’s estimate of the number of extra people who would benefit in 2015-16 from the scheme taking effect in April 2015, rather than waiting another year for the rest of the package. The detailed calculations are set out in the impact assessment, pages 107 to 147. As there are 40 pages, your Lordships will be glad to learn that I do not intend to read them all out now. Broadly, this is the logic. There are 55,000 new self-funders going into care each year. Of these 25,000 are eligible for the new scheme. We will debate how 55,000 go down to 25,000 in my second Motion. If 40% of these take advantage of the scheme, that will be roughly 11,500 claimants in all. Take off the 3,900 who would get it under the existing, defective deferred payments scheme and the Government end up with an additional 7,600—the answer to the question, in their view—as a result of introducing the scheme in 2015 and not in 2016. That is a significant number.
I know it is difficult to take all these numbers in swiftly but I want to question whether this 7,600 estimate is anywhere near correct. The first law of statisticians—and I speak as chair of the All-Party Parliamentary Group on Statistics—is that if a number looks wrong, it probably is wrong. Having been involved in this subject for 17 years, I think it is, since the noble Lord, Lord Joffe, and I were on the royal commission, I have to say this number feels completely wrong to me. No one can take advantage of the scheme unless they know about it. Do you find people rushing up to you in the street saying: “Oh, it’s great. In April I’ll be able to take out a deferred payments scheme”? No, nobody will start to know about it unless the Government have planned some information measures.
Secondly, to take out a deferred loan to pay for your care in this scheme is exceptionally unattractive to most people. It means that their wealth is tied up in a home—probably an empty home, with no income earned on it. Meanwhile, they are paying interest on the loan that the council is making to them. Interest is rolling up at compound rates. So the circumstances in which it is possible to conceive of an older person wanting to do this are quite rare. I sympathise with the Government in making these estimates. It is not surprising that they completely changed the estimates from the first impact assessment to the second one only months later, because it is very difficult to get an exact number. However, I think that the 7,600 is an exaggeration in itself.
8.15 pm
There is a further point. There is a schoolboy howler in this. Of course there will be additional claimants in 2015-16 if the scheme is introduced in April 2015; there is no question about that. What will the people who would have qualified if it came in in 2015 do if it does not come in until 2016? It is pretty obvious what they will do—they will wait. Suppose you are retiring in March 2016 and would like to do a deferred payment. If the scheme is not coming in until April, you may borrow a bit of money from your family or ask the home to let you pay it next month. You wait the month and then claim the scheme the following year.
So it is perfectly true that, as a result of this, the figures go up by a certain amount—though not by 7,600—in 2015-16. However, that is then compensated for by fewer claims than there otherwise would be in 2016-17. It is just a transfer of people who are claiming—not an extra number, as the Government have claimed.
The Government recognise the logic of this. I refer noble Lords to paragraph 8.33 of the impact assessment, which allows for extra claims from those people already in homes who will qualify under the new scheme. I should be surprised if the early introduction of the scheme made a big difference to the total number of claimants and astonished if it came near to the Government’s estimate of 7,600 extra, at the cost of causing disarray in local authorities, distress to old people and despair among the best financial advisers. So why are they doing it? Why are they doing something so palpably absurd? The noble Baroness is not batty—of course she is not. The Care Minister Norman Lamb is not batty; I have a high admiration of him. I do not personally know the Secretary of State, Jeremy Hunt. I have not taken advice on his mental state, but I do not suppose that he is batty either.
I am drawn reluctantly to this conclusion. This is nothing to do with good orderly government, nor with helping elderly people. It is about the imminence of the general election and the Government wanting to say, truthfully or otherwise, that they have done something to stop people having to sell their homes for care. It is all about electoral votes and the group that the Government think might be attracted to UKIP when the election comes. I have been around democratic politics long enough to know that these things happen, but it would be sad if they happened without your Lordships’ House having had a chance to express its distress and dismay at what the Government have decided to do.
The Deputy Speaker (Viscount Ullswater) (Con): I should advise the House that if this Motion is agreed to the second Motion in the name of the noble Lord, Lord Lipsey, cannot be called by reason of pre-emption.
Lord Hunt of Kings Heath (Lab): My Lords, my noble friend has done a singular service in bringing these two Motions before your Lordships’ House. I take this opportunity to welcome back my noble friend Lady Wilkins, who is in her place. It is great to see her back in your Lordships’ House.
My noble friend made some very telling points about the scheme and the puzzle about the differentiation in numbers relating to the date of its introduction. I was particularly struck by his comments and concerns about the impact on local authorities, on financial advisers, and, of course, on old people themselves. I hope the Minister is in a position to answer my noble friend. He referred to the National Audit Office’s study of the state of readiness of local authorities. I had the opportunity of meeting with the Local Government Association yesterday. It is fair to say that it seems prepared for the introduction. However, its own report has pointed out some of the issues it faces: concern about an increase in total costs; measures around IT, workforce, information
and advice, and market shaping; and feedback through direct conversations with its own members that suggests that other pressures on councils, including funding shortfalls and work on the better care fund, compounded with uncertainty on key advice and information, has delayed or otherwise impacted on its preparations in a number of areas.
We debate the introduction of the Care Act’s provisions by local authorities in the context of a huge squeeze on local authority funding. Remember that, since adult social care is probably local authorities’ biggest area of discretionary spend, there have inevitably been huge reductions in their resources. I remind the Minister that, as we have seen from the Autumn Statement, the Chancellor has said that he wants to keep the state permanently at the size it was in the 1930s—around 35% of GDP. If the Government are re-elected at the next general election, that is bound to have a huge impact on local authorities’ capacity to introduce and run the provisions in the Care Act.
I particularly want to talk about one issue relating to implementation. The Minister knows that local authorities will be liable to assess people’s eligibility as self-funders from 2016 onwards. That will then start the clock running to reach the 72,000 cap, at which point those self-funders will be eligible for local authority support. However, picking up my noble friend’s comment, it is clear that local authorities will not be able to assess all current self-funders in April 2016. In fact, I think some self-funders will not be aware of the provisions and therefore will not apply on the first date that they could. Others will apply, but the local authority will not be able to get round to assess them.
The question that I want to put to the Minister is this: will the introduction of the cap on individuals be retrospective? In other words, if I am a resident in a care home, it takes the local authority a year to come round and assess me because of lack of capacity, so will the Government backdate the assessment to the beginning of the introduction of the provisions in April 2016, or will the clock start to run only when the assessment has been made? The question also applies to those self-funders who did not apply on the first potential date when they could have done but were in a care home at that date. That is crucial. There is a risk, if it is not completely retrospective, that local authorities will ration people’s eligibility for this new system by simply delaying the assessments that take place. That is entirely consistent with the point raised by my noble friend. At the heart of his argument are the issues of capacity and the state of readiness of local authorities to undertake the considerable responsibilities that they have been given. It would really be helpful if the Government were able to state with confidence their assessment of the state of readiness of local authorities. What will happen to the thousands of individuals who, in my understanding of what these provisions mean, would be eligible right from the start of the new scheme? Will they have to wait until the clock starts for their assessment to take place?
Baroness Jolly (LD): My Lords, the Government have made a clear commitment to introduce a universal deferred payment scheme from April 2015. The fulfilment
of this pledge directly addresses the long-standing problem in the care system whereby people who have gone into residential care have often had to sell their homes at short notice in order to pay for care. This has often happened at a time when people need space to adjust to a change in lifestyle and circumstances and to make important decisions about their care and finances. This has been a well known source of distress to people—I am sure we would all identify with that—as well as making it harder for them to plan. The introduction of the universal deferred payment scheme directly addresses this issue and that is why we are proud to announce the new scheme from April 2015.
The first Motion that we are to debate calls for the regulations bringing the universal deferred payment scheme into force to be annulled on the grounds that the reforms are coming into force a year before other changes to social care funding. There are two compelling reasons why the Motion is misguided and any delay must be resisted. First, many thousands of people stand to benefit from deferred payments in the first year of the scheme alone. These people would otherwise be at risk of having to sell their homes to pay for care. Secondly, local authorities are confident that they will be ready to implement the scheme in full from April next year so there is no sensible reason why these people should not benefit.
The need to reform deferred payments without delay has been accepted for many years. The Commission on Funding of Care and Support, chaired by Sir Andrew Dilnot, supported extending deferred payments in part due to its finding that,
“the availability and use of deferred payment schemes is patchy”.
At the moment, offering deferred payments is voluntary for local authorities, with no common eligibility criteria. As a result, not everyone who wants and needs a deferred payment can get one. The Dilnot commission identified that one of the key reasons for this patchy provision across the country was the fact that local authorities were not able to charge interest on deferred payments and were thus forced to run the scheme at a cost to them. By allowing local authorities to charge a low rate of interest that will help them run the scheme on a cost-neutral basis, we are removing one of the clear disincentives of the old scheme. From April next year, local authorities will be able to charge up to 2.65% interest, which helps to keep the scheme financially sustainable and compares very favourably with equity release products, which can charge in the region of 7% to 8% interest. Through the regulations being debated today, all local authorities will be required to have a deferred payment scheme from April next year. There will be a universal offer across the country, ensuring that those most at risk of losing their home can benefit from the support they need to meet their care costs, wherever they live.
It has been suggested by the noble Lord that the universal deferred payment scheme should be delayed by a year and not come into force until 2016. We are sympathetic to concerns that local authorities could have found the implementation of the scheme challenging, but I can reassure your Lordships’ House that the
timetable that we have planned is realistic, necessary and achievable. The Department of Health has worked closely with local government colleagues through the LGA and the Association of Directors of Adult Social Services to ensure that the sector is ready to implement the Care Act from April 2015. To pick up on a point raised by the noble Lord, Lord Hunt, we recognise that there will be a need for additional capacity to assess people and we are prioritising £335 million in 2015-16 to support implementation, including early assessments towards the cap. The latest survey of local authority readiness shows that progress towards implementing Part 1 of the Care Act from April 2015 is on track and that confidence is high and improving in almost all areas, including deferred payments.
It is important to note that the introduction of the universal deferred payment scheme from April 2015 will mean that an extra 7,600 people will be able to benefit from the protection of a deferred payment. This is in addition to the 3,900 people who would have benefited in the current regime anyway. This means that when the new scheme comes into force, we project a total of 11,500 new deferred payment agreements in the first year alone.
The noble Lord, Lord Lipsey, questioned the uptake assumptions in the impact assessment. The figures used in the impact assessment are based on a local authority with a well established scheme. All who qualify for deferred payment would also qualify for the 12-week property disregard so will come to their local authority anyway. Noble Lords will surely agree that, bearing in mind the confidence of local authorities in being able to implement the scheme, it would be hugely unfair to these people to wait any longer than is necessary to introduce this historic reform.
Lord Lipsey: I thank the noble Baroness for her reply, which the world will be able to peruse together with my speech in Hansard and judge whether she has answered all the points that I made. She and her department are obviously getting quite different information from local authorities, which is not surprising because local authorities want to tell the department that they can do it but they tell us that they cannot. There is no seeing which is the truth.
Despite what I said about the 7,600 figure, the noble Baroness did not address the substance of my remarks. Perhaps I could deal with this matter quite easily. I will have a bet with the noble Baroness. For every one by which the figure that finally emerges is above 7,600, I will give her £1 and for every one that it is below 7,600, she will give me £1. If that is agreeable, perhaps the House will excuse me while I book my Mediterranean cruise for next year because the figure will not be 7,600, as in due course we shall find out.
I do not want to press this Motion to a vote today. I am concerned about adding chaos to chaos. It would have been much better if we had debated this some months ago. I do not want to do a screeching U-turn at this stage. I fear that the Government have very far from convinced me and I hope that they have not convinced the House that they are doing the right thing.
Care and Support (Deferred Payment) Regulations 2014
Motion of Regret
8.32 pm
That this House regrets that the £23,500 asset limit proposed in the Care and Support (Deferred Payment) Regulations 2014 is at odds with Her Majesty’s Government’s pledge that no-one will have to sell their home in their lifetime to pay for care. (SI 2014/2671)
Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee
Lord Lipsey (Lab): My Lords, I imagine that the tummies of some noble Lords are starting to rumble, but I must detain the House a little longer. Inevitably, this is a complex matter. Let me start with the history of the deferred payments. I think that my noble friend Lord Joffe, who is beside me, and I were the people who invented them when we were involved in the minority report of the royal commission. We were against the majority view that all social care could be free because it was unaffordable and greatly benefited the rich. We thought it was right that people with means at the end of their life should dip into those means to pay for care.
However, we were very aware that a great deal of political heat had been understandably stirred up by one particular aspect; namely, that people could be forced to sell their homes to pay for care—homes which they hoped that one day their children would be able to live in. The Daily Mail, the Telegraph, and “Panorama” all have reported on this issue. We thought it was necessary to take the heat out of all that before a rational view on the future of care funding could be taken. We therefore recommended a scheme of deferred payments whereby in such circumstances the local authorities would lend people money to pay for their care, taking a charge on their homes which would be repayable on their death. The Labour Government accepted that but, unfortunately, we botched the implementation in 2002. Of the 55,000 self-funders who go into care each year, fewer than 4,000 sign up to the current scheme.
The next stage was the Dilnot commission, which recommended, as part of its package, a new universal deferred payment scheme. The Government immediately accepted this and proudly proclaimed, and continue to proclaim, that, under their scheme implemented by these regulations, no one will have to sell their home to pay for care. They probably meant it at the time, but the rats got at it.
As the Care Bill was going through the House last year, a proposal was smuggled out that meant the payment scheme was not universal in the true sense; namely, that it would be open only to those who had less than £23,250 in non-housing assets. Therefore, 30,000 of the 55,000 people who would otherwise have qualified for the scheme were disqualified by this measure. When this was pointed out to the House—it was headline news in the Telegraph and the Mail—the
Government indicated a retreat. The noble Earl, Lord Howe, who alas is not here tonight, said the Government were,
“happy to consider a range of figures”,—[
Official Report
, 29/10/13; col. 1474.]
for the ceiling and No. 10 emitted similar emollient noises. Encouraged, the House decided not to amend the Bill. The Government by this stage had ratted on their original proposal of universal deferred payments. Now they are re-ratting, this time on their implied pledge that £23,250 would be increased. What is before the House now is, in effect, an extremely limited scheme from which in my opinion, and as we will see in reality, very few people will benefit.
Have the Government and the Prime Minister, who must have authorised the No. 10 briefings, lied? Perhaps I should rally to the best defence I can find. This scheme is universal, just not in the original sense that it was available to everyone. It is universal in that the same scheme—or broadly the same scheme—applies in every local authority. Indeed, no one will be forced to sell their house when this scheme is in place. Take a family of fairly modest means with £75,000 in non-housing assets. The Government expect them to run down those assets until they have got only £23,250 left in the bank. It would pay £500 in interest a year, if they were lucky. It is not enough to cushion them from the uncertainties of life, not enough for presents for the children and so on. Who in this House would ever be happy if they had only £23,250 in their old age to sustain them for the rest of their lives? None of us. Nobody of modest means will take advantage of that scheme and run their savings down to £23,250. The last government proposal I said was batty; I would say that anybody who did that would be pretty well crackers. I have never met an adviser to the elderly who would advise them to do so. They are not forced to sell their house; they can do something completely ridiculous that leaves them in penury for the rest of their days. That was not the intention of the minority of the royal commission or Dilnot and it is not the intention the Government wish to convey to the public at large.
We live in a time of some crisis with the political class, of which I am a long-established member. People out there worry that we use words in a different way to them. We use words that are literally true but, when you examine them under any form of illumination, they turn out to be weasel words designed to hoodwink. That is what the Government have done here. They have used words that are strictly and literally true to hoodwink the public as to what they are proposing. I think the use of clever language to disguise intent is desperately sad and is essentially part of the crisis we are facing in this country. It is for that reason I ask the House to regret that situation this evening.
The Minister will reply in a minute, but let me get my retaliation in first by dealing with two of the arguments she could use. A proper universal deferred payment scheme, she could say, would mean state support for the rich. I empathise with that. I would not want to be handing state money to the rich, but we are not talking about the rich here—we are talking about £23,250. There would have been a perfectly sensible course for the Government to take. Under the new means testing for social care you can be helped if you
have up to £118,000 in assets—£23,250 is the present upper capital limit and £118,000 is going to be the new limit. The Government could have set the same limit for this scheme and aligned the two. That would have been perfectly logical and completely right. Instead, today they are saying that somebody who has accumulated £30,000 in savings and a house should be disqualified. How can they say that such a person is rich? That person has worked hard for what they have, has played by the rules and is being betrayed by a Conservative Government who claim that that is the kind of person to whom they want to appeal.
Secondly, the Minister could say that to change this would cost public money—a higher ceiling would mean spending more money. That is simply untrue because the loans would be made at interest—the interest on gilts—so in the long term the Government would get back every penny that they spend. Indeed, they have gone to great lengths to ensure that they do because people will be charged for the administrative costs of taking out one of these. There is no cost to the Government. It is true that there is a cash-flow cost because in year one the loans are paid out and then the repayments come back later—not much later because the average loan lasts only 18 months.
But there are plenty of ways that a similar saving could be made within the current budget for care without slapping middle England in the face. As I proposed earlier, they could have introduced this scheme a year later, boosting the public finances in a tight year next year. They could reduce the £144 to be allowed to individuals before they have to contribute to their care home fees—some six times the amount allowed for personal expenses to people under this scheme than applies to people who are getting means-tested benefits. I look forward to discussing this with my noble friend Lord Joffe, since we were responsible for it, but they could freeze the nursing cost allowance paid to everyone in nursing homes or reduce its amount for new claimants. We could debate the merits and demerits of these alternatives all night, but none of them is half as bad as the scheme that the Government are putting before the House tonight.
As happened when the royal commission was considering these matters—and we two stood shoulder to shoulder against the weight of the majority who came to loathe us for our unwillingness to dip into taxpayers’ pockets for paying for care—again, siren voices are being raised in favour of making personal care free for all. That was the recommendation of the recent Barker report for the King’s Fund. It even sometimes seems as if Andy Burnham, the shadow Health Secretary, has flirted with such an idea, but it is noticeable that it does not appear in the shadow manifesto that the party produced yesterday, and I am glad to hear it. That is one side of what might come out.
On the other side are the sane and sensible proposals of the Dilnot plan, albeit with a higher threshold than Dilnot recommended, of which universal deferred payments were an integral part. Tonight, with these recommendations, the Government are effectively demolishing a keystone of the Dilnot proposed universal scheme.
I am under no illusion that the Government are likely to give way on this tonight, but your Lordships, who so often have been the bulwark against arbitrary and misguided government, should have this chance to debate it and, unless the Minister says something wholly unexpected, if necessary, to vote against it. I beg to move.
Lord Hunt of Kings Heath (Lab): My Lords, I again thank my noble friend for bringing us back to a very important part of our debate during the passage of the then Care Bill some months ago. We need to remind ourselves of the fanfare with which the Government introduced that Bill. As my noble friend said, there was an explicit statement that older people would no longer have to sell their homes to pay for their care. As he has carefully outlined, that is strictly true even within the provisions of the deferred payment regulations. But as he said, it is not in the spirit with which the Government actually announced this policy. Instead of a scheme that would have brought comfort to thousands of people, they have produced a very mean-spirited scheme that will clearly exclude many people who one would have thought should have taken advantage of its provisions.
As these are regulations, we tend to ask technical questions. I have two questions for the noble Baroness, on which she may want to write to me. On the impact of the relevant figure on pensions, how will a pension pot be treated in relation to the calculation of the non-housing asset? Do the Government expect the new flexibility in assessing pension savings contained in the Taxation of Pensions Bill to have any effect on this policy? Will those savings be counted towards the £23,250 cap? I would be very happy for the noble Baroness to write to me on those points.
My noble friend Lord Lipsey came to the crunch of the matter when he said that he did not expect a scheme to be available to the wealthy and the very asset-rich. I endorse that. My noble friend Lord Warner wrote to the right honourable Norman Lamb a year or so ago. My noble friend was a member of the Dilnot commission but is unable to be here tonight. He wrote:
“As a commission we accepted there had to be some eligibility criteria because this was never intended as a scheme that was available to the wealthy and asset rich”.
However, as he said, and as my noble friend Lord Lipsey said, being required to spend down to assets of £23,250 seems far too restrictive to deliver a viable scheme or to reflect what the Dilnot commission recommended.
Surely, even at this stage, the Government need to reconsider this scheme. It is very disappointing that the consultation has taken place, we had a very good debate on it and yet the Government have moved not one inch on this policy. If it goes ahead, it will be very disappointing for many thousands of people who had every reason to expect that they would take advantage of the scheme. The noble Baroness may say that we should not worry because local authorities will be able to offer schemes above the threshold of their own volition. However, I very much doubt whether many local authorities will take advantage of that. Therefore,
I support my noble friend. I am delighted that he will push this measure to a Division tonight. We are very happy to support him.
Baroness Jolly (LD): My Lords, I shall also have to take exception to the noble Lord’s second Motion today on the eligibility criteria. The eligibility criteria are not, as he has suggested, at odds with the overarching policy intention that people should not be forced to sell their home within their lifetime to pay for their care. Indeed, they ensure that protection and support is available to those who need it.
Noble Lords will recall that in my earlier speech I made reference to the conclusions of the Commission on Funding of Care and Support, chaired by Sir Andrew Dilnot. As I said, the commission supported the extension of deferred payments. More specifically, it recommended:
“Anyone who would be unable to afford care charges without selling their home should be able to take out a deferred payment”.
The deferred payment scheme that each local authority will be required to implement will achieve precisely this—it will provide protection to those at risk of having to sell their home to pay for their care.
It has been suggested that the eligibility threshold, which requires a person to have less than £23,250 in savings and assets on top of the value of their house to qualify for a deferred payment, has been set too low and will not achieve this aim. It has even been suggested that this policy would leave people unable to afford their basic living expenses. So allow me to shed some light on this debate by informing noble Lords that setting the threshold at this level means that 80% of people who develop a residential care need will qualify for either help from their local authority in paying for their care or a deferred payment agreement. This means that only the wealthiest 20% of people entering residential care—those who have savings and assets above £23,250 on top of the value of their property—will be asked to initially meet their own care costs before they receive local authority support. Crucially, anyone in this wealthiest 20% bracket would subsequently qualify for a deferred payment if their savings and non-housing assets fell below the £23,250 threshold. So if a person has a change of circumstances or has to spend down their savings to below £23,250, they would be eligible for the support and protection provided by a deferred payment.
Lord Hunt of Kings Heath: My Lords, can the Minister clarify this? Taking the case raised by my noble friend of an individual with £30,000 of non-housing assets, under her definition these classify this individual as being in the wealthiest 20%. Is that so?
Baroness Jolly: That is what has been assessed as wealthy. The £23,250 was set as a level below which you would be eligible for assistance.
While we want as many people as possible to benefit from the reforms, the eligibility threshold was set at this level because we wanted to focus the funding available for the scheme on providing protection to those at most risk of losing their homes. If we extended
automatic eligibility for deferred payments to the wealthiest 20%, who can afford care without having to sell their home, it would mean having to take funding from elsewhere in the care and support system, where it could surely provide greater benefit. That is why the regulations that were laid before the House do not mandate that a local authority must offer a deferred payment to someone with assets of more than £23,250. This is necessary to ensure value for public money by targeting resources where they are most needed.
We have set these criteria so that people will be entitled to a deferred payment when they would be at risk of being forced to sell their home to pay for care. The criteria are also to ensure good value for public money and minimise the risk of bad debt. I trust that noble Lords agree that it is only right and proper that we should prioritise first, and help and support those most in need. There has also been some suggestion this evening that the Government have not been open about the £23,250 threshold, or that my noble friend Lord Howe, who is not in his place, was somehow disingenuous when he spoke on this matter in your Lordships’ House previously. The £23,250 asset threshold, discussed frequently during the passage of the Care Act, has been the subject of not one but two public consultations. First, it was discussed in the consultation on funding reform in July 2013; secondly, it featured in the draft regulations and statutory guidance published for consultation this summer.
These consultations have involved officials from the Department of Health proactively engaging with people, and travelling the length and breadth of the country to consult the full range of stakeholders, including service users, local authorities, members of the general public and the Care and Support Alliance. The policy has been developed in close consultation with an expert body, called the Paying for Care Transformation Group, whose membership includes a range of charities and third-sector organisations, including Age UK, Carers UK, the Care and Support Alliance, and Sense. Through this group we have ensured that the development of the universal payment scheme has been guided by the expertise and insight of those key organisations. It is hardly fair to say that we did not take a full range of views into account, or that the asset threshold is in any way a surprise.
On a point made by the noble Lord, Lord Hunt, about whether the pension pot should be included, that is covered in the statutory guidance on charging, but I am more than happy to write to him and place a letter in the Library.
The introduction of the universal deferred payment scheme will extend protection to those most at risk of having to face selling their home to pay for their care and support. The scheme will help provide reassurance and peace of mind to thousands of care recipients and their families who would otherwise be faced with making extremely challenging decisions at a most vulnerable time in their lives.
I hope that I have been able to provide assurance about the great benefits of the deferred payment scheme and how it will work from April next year. I hope that
I have also convinced your Lordships’ House that these regulations should be allowed to come into force without further delay or hindrance.
Lord Lipsey: My Lords, I shall be much milder in winding up than I would have been had the noble Earl been in his place. I recognise the care that the Minister put into those remarks, but I am afraid that she inadvertently displayed her lack of background in the field and I am sorry if she was advised to use some of the words that she did.
The Minister said that this issue had been discussed frequently on the then Care Bill. I will remind noble Lords what happened. There was no mention of the threshold in the Care Bill. The Care Bill went through Second Reading. It went through Committee. When it got to Report, it was only because I did the sort of thing that, as a geek, I do—reading through the 700 pages that the Government had produced to accompany it, and not just the bit on deferred payments but the bit on the draft statutory orders—that I discovered this proposal. I raised it at the last minute on Report. The Government freely admitted that there could then be an amendment at Third Reading, which the House indeed discussed, and it was the assurances that the noble Earl, Lord Howe, gave that caused us not to take it further. When the noble Baroness says that it was discussed during the passage of the Care Bill, it was, but no thanks to the Government. They had hidden it away in those 700 pages. I am inclined to make the noble Baroness read all 700 tonight—she will sleep better and she will know the true history of this affair when she has done so.
The second substantive point the Minister made was that £23,250 is high enough—it seems reasonable that it should be denied to people with £23,350. I will not dissect the 80% thing at this moment. Does she realise that she is kicking her own Government in the teeth when she says this? Her Government do not think that £23,250 is enough. Following the recommendations of the Dilnot report, they are upping that figure to £118,000 next year. Incidentally, that is a higher figure than Dilnot recommended because they decided that Dilnot was not generous enough. Next year they will happily be giving state support to people up to £118,000, with the exception of one small group of people—those who might use deferred payments—who will be confined to the £23,250 of non-housing assets. So I hope that there will not be any boasting about the coming of the £118,000 in the months to come, because the noble Baroness has told us that she thinks £23,250 is enough.
Anyway, we have debated this long enough. I hope that those who think that £23,250 is rich will vote with the Government and those who think £23,250 is not very rich will vote with me and the Opposition in favour of this Motion.
8.57 pm
Division on Lord Lipsey’s Motion.
Contents 54; Not-Contents 147.
Lord Lipsey’s Motion disagreed.
CONTENTS
Adonis, L.
Bassam of Brighton, L.
Beecham, L.
Berkeley, L.
Bradley, L.
Brookman, L.
Campbell-Savours, L.
Chandos, V.
Clark of Windermere, L.
Collins of Highbury, L.
Corston, B.
Davies of Oldham, L.
Davies of Stamford, L.
Donaghy, B.
Drake, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Foster of Bishop Auckland, L.
Golding, B.
Gordon of Strathblane, L.
Hanworth, V.
Haworth, L.
Healy of Primrose Hill, B.
Howe of Idlicote, B.
Hunt of Kings Heath, L.
Joffe, L.
Jones, L.
Jones of Whitchurch, B.
Jordan, L.
Kennedy of Cradley, B.
Kennedy of Southwark, L.
Lea of Crondall, L.
Lipsey, L.
McAvoy, L.
McFall of Alcluith, L.
Maxton, L.
O'Loan, B.
O'Neill of Clackmannan, L.
Patel of Bradford, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Prescott, L.
Radice, L.
Royall of Blaisdon, B.
Sawyer, L.
Simon, V.
Smith of Basildon, B. [Teller]
Thornton, B.
Touhig, L.
Tunnicliffe, L.
Warwick of Undercliffe, B. [Teller]
West of Spithead, L.
Wilkins, B.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Anelay of St Johns, B.
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Bakewell of Hardington Mandeville, B.
Bates, L.
Berridge, B.
Bonham-Carter of Yarnbury, B.
Borwick, L.
Bourne of Aberystwyth, L.
Brabazon of Tara, L.
Brady, B.
Brougham and Vaux, L.
Browne of Belmont, L.
Buscombe, B.
Byford, B.
Carrington of Fulham, L.
Cathcart, E.
Clement-Jones, L.
Colwyn, L.
Cooper of Windrush, L.
Cope of Berkeley, L.
Courtown, E.
Crickhowell, L.
De Mauley, L.
Deighton, L.
Dixon-Smith, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Evans of Bowes Park, B.
Farmer, L.
Faulks, L.
Finkelstein, L.
Flight, L.
Fookes, B.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Garel-Jones, L.
Geddes, L.
German, L.
Glenarthur, L.
Goddard of Stockport, L.
Gold, L.
Goodlad, L.
Grender, B.
Hamwee, B.
Hanham, B.
Harris of Peckham, L.
Helic, B.
Higgins, L.
Hodgson of Abinger, B.
Hodgson of Astley Abbotts, L.
Holmes of Richmond, L.
Home, E.
Hooper, B.
Horam, L.
Howard of Rising, L.
Humphreys, B.
Hunt of Wirral, L.
Hussain, L.
Inglewood, L.
Janke, B.
Jenkin of Kennington, B.
Jolly, B.
Kirkham, L.
Kramer, B.
Lang of Monkton, L.
Lexden, L.
Lindsay, E.
Lingfield, L.
Liverpool, E.
Livingston of Parkhead, L.
Lothian, M.
Ludford, B.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Maddock, B.
Manzoor, B.
Marlesford, L.
Miller of Chilthorne Domer, B.
Mobarik, B.
Moynihan, L.
Neville-Rolfe, B.
Newby, L. [Teller]
Newlove, B.
Nicholson of Winterbourne, B.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Parminter, B.
Perry of Southwark, B.
Popat, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Ridley, V.
Roberts of Llandudno, L.
Sanderson of Bowden, L.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Sharp of Guildford, B.
Sherbourne of Didsbury, L.
Shipley, L.
Shrewsbury, E.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Newnham, B.
Stedman-Scott, B.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Stowell of Beeston, B.
Strasburger, L.
Taylor of Goss Moor, L.
Taylor of Holbeach, L. [Teller]
Teverson, L.
Thomas of Gresford, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
Tugendhat, L.
Tyler, L.
Tyler of Enfield, B.
Ullswater, V.
Verma, B.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Warsi, B.
Wasserman, L.
Wheatcroft, B.
Whitby, L.
Williams of Trafford, B.
Wrigglesworth, L.
Young of Graffham, L.
Younger of Leckie, V.