REVIEW OF INCOME AND CAPITAL LIMITS (Hansard, 26 July 1982)

§ Mr. Archer

I beg to move, That the clause be read a Second time.

This clause represents a principle that we discussed in Committee. It deals with a problem encountered in many areas of administration—the erosion of statutory limits by inflation. The Government went to the electorate and pledged to solve the problem of inflation by the monetarist policies with which we are all familiar. The Government were prepared to solve it at the cost of massive unemployment, at the expense of small companies and by destroying Britain's industry. We have unemployment, the Government have inflicted massive damage on Britain's industry, they left a trail of small companies in liquidation and we still have inflation. The problem with which the clause seeks to deal is still with us.

The problem of pensions was tackled in section 125 of the Social Security Pensions Act 1975, which imposed upon the Secretary of Slate an obligation to review inflation annually, and to bring pensions into line with inflation. In the case of Metzger v. The Department of Health and Social Security, the Vice-Chancellor considered the implications of that obligation. We believe that there is room for a similar statutory arrangement for legal aid.

It is common ground that eligibility levels should be uprated year by year. In Committee, the Solicitor-General confirmed that that was the Government's intention. For many years, the limits were eaten away by inflation. When legal aid was introduced, nearly 80 per cent. of the population was included within the eligibility limits and by 1979 that figure had fallen to about 40 per cent. The Legal Aid Act 1979, passed shortly before the general election, restored the proportion almost to 80 per cent. Already the limits were being uprated each year by statutory order to remain abreast of inflation. That was the Red Queen principle—we were running to try to stay in the same place.

When the Government returned to power in 1979, they made the normal provision for uprating, so that there were two upratings in 1979—the major statutory uprating before the election and the normal annual uprating later to stay in the same place. But there were no upratings in 1980 or 1981. I understand that the Lord Chancellor is as subject to the Government's cuts as everyone else. But that is the argument for a statutory obligation. It is less easy to miss out when times become hard. It is all too easy to impose the burden of cuts, on those who are most vulnerable and I should have thought that the Lord Chancellor would have welcomed the support of this clause in his battle with the Treasury.

In Commitee, the Solicitor-General used one argument against our proposal. He said that it went further than was the case with pensions because, he said, the Government had changed the principle of the Social Security Act 1979. That Act provided that the Secretary of State should uprate pensions in accordance with increases either in earnings or in prices, whichever was more favourable to pensioners. It is true that the Government deleted the bit about earnings. Pensioners were no longer to have a statutory right to share in increases in prosperity. Perhaps that does not matter, since there have been no increases in prosperity since the Government's policies took effect.

833 We took the Solicitor-General's point and have returned with a proposal which is not open to that objection. Our proposal now seeks only to impose an obligation to stay abreast of prices. The clause would operate on the regulations made by the Lord Chancellor under subsection (2) of clause 7 and would apply only to the limits for criminal aid.

It might be argued that we have made no similar proposals for civil legal aid. There are two reasons for that. First, it would have been out of order in a Bill dealing with criminal legal aid and, secondly, it registers our belief that the need to ensure that defendants in criminal proceedings are represented properly is of a different order from the need in civil proceedings, important though they may be. Our proposal seeks to keep people out of prison. It is about civil liberties and should be more akin to welfare legislation than to civil legal aid.

The Solicitor-General referred to the proposal in Committee as an open-ended commitment. It is nothing of the kind. It is clearly limited. We propose a modest commitment to do what the Solicitor-General told us in Committee that the Government had every intention of doing. The House will not require me to develop the case further.

§ The Solicitor-General

The right hon. and learned Member for Warley, West (Mr. Archer) is correct. One argument that I advanced in Committee has been met, but only one. The remainder of my arguments are as sound now as they were then. It is an open-ended commitment, because it would be impossible to say how much it would cost in the next year. My right hon. and noble Friend the Lord Chancellor cannot give such a commitment. To do so would bind his hands by limiting the extent to which he could assign priorities on legal aid expenditure.

I assure the House, as I did the Committee, that the importance of keeping the financial limits for criminal legal aid under regular review is fully recognised. Subject to economic constraints, we intend that the new limits will be uprated regularly. I ask the House to accept that assurance.