§ From the amount which, but for the provisions of this section, would be the maximum amount of a person's contribution in respect of capital to the Legal Aid Fund in respect of any proceedings, there shall be deducted a sum equivalent to the assets and capital resources, which by virtue of section five of and paragraphs 2, 3, 6, 7, 8 and 9 of the Second Schedule to the National Assistance Act, 1948, would be disregarded in relation to that person for the purposes of that Act; and the maximum amount of that person's contribution shall be. the first-mentioned amount less the said sum.—[Mr. Mitchison.]
§ Brought up, and read the First time.
§ Mr. G. R. Mitchison (Kettering)
I beg to move, That the Clause be read a Second time.
The effect of this new Clause, very shortly, is this. If it be accepted, the first step, in order to ascertain a person's contribution, will be to work it out according to the rest of this Bill and preceding legislation. The next step will be to deduct a sum equal to the assets and capital resources which would have been disregarded under the National Assistance Act. The result, after that deduction, will be the actual contribution.
The Solicitor-General has just explained to us on another Amendment the infinite kindness of the Government which does not deprive an applicant for National Assistance of either his bed or his trousers. I recognise that there are certain disregards, domestic resources of one kind and another, and so forth. I recognise also that, in suggesting this new Clause, I have the full weight of all authority against me. The authority begins with the right hon. and learned Gentleman the Attorney-General as a member of the Rushcliffe Committee, and it ends with what we have heard from the hon. and learned Gentleman the Solicitor-General tonight. On the other hand, I have in my favour obvious good sense, good logic, and I hope, a certain amount of reason, which I propose to direct to the hon. and learned Gentleman.
All I have to deal with really is the nest egg argument. The hon. and learned Gentleman, on Second Reading, 1098 when this suggestion was made to him, simply followed the language of the Rushcliffe Committee in saying that the two cases were different. What he said was this:The hon. and learned Gentleman traced that back"—that is, the proviso about the £500—to the recommendation of the Rushcliffe Committee, which said that the capital could be expected to be called on if there were a sudden emergency. It seems to me that the sudden emergency of legislation is quite different"—I think he meant litigation—from the emergency which calls in the National Assistance Board.On that, which is the National Assistance case:That is a continuing emergency in a sense, and, therefore, it is reasonable to have a wider disregard from the point of view of capital than under the Legal Aid Scheme."—[OFFICIAL REPORT; 1st February, 1960; Vol. 616, c. 706–7.]I hope I may remain within the bounds of Parliamentary order in describing that as a somewhat "phoney" argument, but it is just as good or bad now as it was when it started in the Rushcliffe Committee. It has always been the same argument, that there is a difference between an emergency which calls in National Assistance—and in that case we must leave the nest egg alone—and the emergency of litigation, in which we can creep up on the nest egg and suck out the contents. It is the only defence which has ever been put forward.
I have listened to these discussions. It is a curious view which everybody takes of the assisted litigant. He is always a plaintiff with a somewhat doubtful but plausible case. Of course, he may just as well be a defendant. Will the hon. and learned Gentleman tell me what the difference is between the man who gets, let us say. an illness or, if the hon. and learned Gentleman likes to take the other case, an industrial accident, or something of that kind, and, finding, as is so common, the Government's, the National Assistance or Industrial Injuries allowance, insufficient, has to have recourse to the National Assistance Board, and somebody who gets knocked down by a motor car and suffers from an injury and desires to recover some of the damages, at any rate, from the motorist?
1099 Or let us take the motorist himself. It is nowadays—and here I shall have the enthusiastic support of the hon. Member for Crosby (Mr. Page)—possible for people in quite humble circumstances to own a motor car which is occasionally a peril on the roads. And that may have been the motor car which caused the accident; and even the motorist may be in need, and properly in need, of some assistance in his litigation.
If we are to go on with this theory of sudden emergency, litigation always being a sudden emergency, what about the case which the hon. and learned Gentleman will have well in mind—either party in a divorce suit? Where is the sudden emergency? What has happened? Is it that they have quite suddenly decided life has become intolerable? Or that one has caught the other partner out in some assignment of a nature which could be the basis of divorce proceedings? It might apply to either side and be the result only of an accident.
It is a curious philosophical distinction between the emergency of litigation and the need for National Assistance. A man who suffers an accident of some sort may not be entitled to anything but National Assistance. His circumstances may be such, as I said just now, that National Assistance is insufficient. But in all those cases it is a pure accident whether the calamity takes the form of something rather sudden or something which may happen at one moment but continue for a considerable time. There is no philosophical, sensible distinction between the two things. The extraordinary theory that there was a distinction was adopted by the Rushcliffe Committee, and I think its source was the idea of the assisted litigant as a rather plausible plaintiff with a rather indifferent case. That is what he is often thought to be, but there is no reason for that theory. I suggest that it is about time that we put this right.
It is proposed here to bring in the capital disregards appropriate to National Assistance. I will not go through paragraphs 2, 3, 6, 7, 8 and 9 of the Second Schedule to the National Assistance Act, because I do not think anyone wishes me to do that at this late hour, and I will put the argument shortly.
1100 In some cases and to some extent we have a rather similar effect to what might have been produced by another Amendment on the Order Paper which has not been called and which would have dealt with the problem in a different way. It is nevertheless an invitation to work it out according to the rest of the Act first and then to disregard certain capital provisions. One of the first of them is what are called in that Act "war savings"—and the definition would cover a great deal more nowadays than what are commonly regarded as war savings—in certain forms and up to a maximum of £375.
There is another provision which contains a smaller sum where it is not a case of small savings; and then there is a restriction to certain classes of savings. They are, broadly speaking, such things as National Savings Certificates, a balance in the Post Office Savings Bank, and that kind of thing. All of us who have had to advise people about National Assistance—and I am sure that we have all had to do it at one time or another—know perfectly well how very important these disregards are. I will not dwell on that tonight, but, once we get rid of the somewhat bogus definition about which I have been talking, I think it is perfectly clear that there ought to be similar disregards in relation to legal aid.
I listened to my hon. and learned Friend making an excellent case against the curious discrimination against small savings which is apparent in the Bill, and I will not try to repeat it. I can only say that the Solicitor-General has left me quite unconvinced, and I think he has left other hon. Members unconvinced, that small savings have had fair treatment in the changes now proposed. It is extraordinary that an hon. Member from this side of the Committee should have to lecture the Conservative Party, as I am lecturing them, on the desirability of not depriving people of their small savings except in very critical circumstances. My right hon. Friend the Member for South Shields (Mr. Ede) called attention to the slender distinction between these small savings.
§ The Deputy-Chairman (Major Sir William Anstruther-Gray)
Order. I am reluctant to interrupt the hon. and 1101 learned Gentleman, but I hope that he will not go back to the last Amendment; we have already dealt with that.
§ Mr. Mitchison
I am obliged, Sir William. I, too, hope that I shall not go back to it. I am trying to have certain capital disregards which are applicable for the purposes of National Assistance applied for the purposes of legal aid. The effect of these capital disregards will be to allow people to keep a certain amount of small savings which otherwise they would not be allowed to keep. This was the obvious effect, in the plainest possible language, in respect of National Assistance, and all I am saying—I do not wish to develop the point unduly—is that small savings are very important, particularly for people in a position such as that described by my right hon. Friend the Member for South Shields.
For that reason I hope that the Government, having been shown the illogicality of their argument and indeed the comparative absurdity of it, will accept the position and, with a broad-mindedness and generosity which they have failed to show so far, will accept the Amendment.
§ The Solicitor-General
The hon. and learned Member for Kettering (Mr. Mitchison) rightly pointed out that if there is an illogicality here—which I do not admit for a moment—it goes back to the very inception of this scheme. It was in accordance with the Rushcliffe Committee's recommendation that a distinction was drawn between treatment of capital under the National Assistance Scheme and under the Legal Aid Scheme. That was accepted by Parliament as a valid distinction in 1949, and it was again accepted by Government and Parliament as a valid distinction when the Regulations were made in 1950. When the matter was recently reviewed by the authoritative Advisory Committee which advises my noble and learned Friend on these matters, that Committee again endorsed the validity of such a distinction.
The reason for that, as one would expect from such a consistent body of opinion, is a weighty one. Firstly, the National Assistance Board is required to disregard completely the first £100 of capital, leaving aside the question of war savings. That compares with the dis- 1102 regard under the Legal Aid Scheme of what is now to be £125, plus the further disregard of £75 for a wife or £75 for the first dependent child, and so on, in the way we discussed in the last Amendment. Thus, just resting there, the treatment of the capital in the way of disregards under the Legal Aid Scheme compares by no means unfavourably with that under National Assistance.
It is also true that there is a complete disregard of war savings up to £375. That is written into the National Assistance Scheme, as, under special war-time conditions, it was desired to encourage saving specifically in war savings. Where there is capital above £100 which is not war savings, the Board reduces the National Assistance at the rate of 6d. per week for every £25 above that £100 nest egg, and that amounts to a deduction of just under £5 per cent. per annum, so that where there is capital, other than war savings, above £600 no assistance is provided.
In the first place, I submit that the treatment of war savings is really quite an anomalous one. There is no reason why a particular type of savings should be disregarded disproportionately. Obviously, having been written into the National Assistance Scheme and people having had reasonable expectations aroused, it is very difficult to deal with it; but there are very strong reasons for not writing it into the Legal Aid Scheme— reasons which appealed to the Rushcliffe Committee, to the Labour Government who introduced the scheme, and to the Advisory Committee since.
§ Mr. Mitchison
I expected the hon. and learned Gentleman to say that, and I think it right to say to him that, if the Government had been more generous in extending the ordinary cash limit for capital, then I doubt whether there would have been the same weight in this proposal.
§ 10.45 p.m.
§ The Solicitor-General
That is only the first of the fundamental objections of principle.
The second, which appealed to the Rusholiffe Committee, the Government in 1949 and in 1950, and the Advisory Committee and the Government today, is that the emergency which calls for National Assistance is quite a different 1103 type from that which calls for legal aid. That was the point which I endeavoured to make on Second Reading and again in Committee.
The fact is that where a person falls into indigence which calls for National Assistance, it is not reasonable to expect him to exhaust all his savings before giving him assistance. What is reasonable is to expect him to draw gradually on his savings, if he wishes to eke out or supplement the income which is vouchsafed to him by the National Assistance Board. But, as I pointed out on the last Amendment, litigation is unlikely to be recurrent. It is an emergency of exactly the type for which the capital has been accumulated, as the Rushcliffe Committee and the Advisory Committee pointed out.
The hon. and learned Gentleman asked what was the difference between illness or industrial injury and being knocked down in the street. The answer is that someone who is knocked down in the street and who applies for legal aid hopes to recover damages from the wrongdoer, and does do so in 85 per cent. of the cases. The hon. and learned Gentleman asked about divorce suits, but I should have thought that divorce was a calamity which one expects to meet not more than, I hope, once or twice, or three times at most, in a lifetime. That is very different from the sort of continuing emergency which one gets under the National Assistance Scheme.
It is also important to consider how the Amendment would work out in relation to the concept of the Legal Aid Scheme, a scheme to help those of small fixed means. I hope that this will appeal to my hon. Friend the Member for Tyne-mouth (Dame Irene Ward). In order to assist such people, one has to tax; and one has to tax not only the Surtax payer, but the person of small means, the person living on a small fixed income.
§ The Solicitor-General
It seems to me to be fundamentally unfair to tax comparatively poor people in order to enable comparatively rich people to do what they are otherwise capable of doing.
§ Dame Irene Ward
My point is that the Government should not tax those living on very small fixed incomes. I should be delighted if my hon. and learned Friend would move in that way and advise the Chancellor of the Exchequer to introduce a relief of tax in his Budget next week.
§ The Solicitor-General
It is very difficult to avoid tax. If we manage to exclude them from direct taxation, many of those of small means will still pay tax, for we still have a very substantial system of indirect taxation. There will always be a point where the tax begins, and it would be wrong to tax people who are less well off for the benefit of those who are better off, if the latter can afford to perform the functions for which it is proposed to give them assistance.
Let us see how the new Clause works out against that background. It would have the effect of exempting the first £125 of disposable capital—under Clause 2 (1, b). Secondly, £100 is disregarded under paragraph 3 (a) of the Second Schedule of the National Assistance Act. Thirdly, £375 of War Savings are disregarded under paragraph 2 of the Second Schedule of the National Assistance Act. The litigant may be a married man, and if his spouse has a second £375 of War Savings that too is exempted by paragraph 6 of the Second Schedule to that Act. In addition, a further £500 would be disregarded as such, but would be treated as the equivalent of 10s. a week disposable income in the way that I described when I was dealing with the disregards under the National Assistance Scheme. What one therefore gets is that an assisted person could be eligible for legal aid with a capital of £1,475. The only effect would be to increase his disposable income by £26, and his maximum contribution by under £9.
Is it right to assist somebody who has a capital of £1,475? That is not the whole of the capital, because once one invokes the National Assistance Regulations one does not disregard only the first £2,000 or £3,000 of the value of his house, and half the value above that, as one does under the Legal Aid Scheme, one disregards the whole of the value of his house, whatever its value. He could therefore have a house worth £5,000 in addition to the £1,475 capital which would be disregarded under the Amendment. Indeed, he could, if he 1105 bought Blenheim Palace and had only £1,475 in addition to that, be eligible under the Amendment.
If he is a commercial traveller, with a car and a television set, they are all disregards. Is it right to assist people with those means who can, I submit to the Committee, assist themselves and undertake unassisted their own litigation? In my submission it would be wrong, and this Amendment should therefore be resisted.
§ Mr. Mitchison
I am not concerned to go into detail about the disregards for the purposes of National Assistance. What the hon. and learned Gentleman has in effect been doing is to criticise those. If those cars are to be disregarded for the purpose of National Assistance, and not to be disregarded for the purposes of legal aid, we are driven back to the distinction he seeks to draw between the two types of emergency.
I say with all the vigour that I can that a great deal of what the hon. and learned Gentleman has been saying has been simply a criticism of the Legal Aid Act and the Legal Aid Scheme. He has been talking as though there were something wrong in providing legal aid for people who might not have started, or wished to start, any litigation themselves, but who might be defendants, and whom for many years we have recognised should be entitled to assert or defend their rights in courts of law, even if to do so they required some assistance from public funds.
§ The Solicitor-General
The hon. Gentleman does me an injustice. The Legal Aid Act in its Long Title makes legal aid and advice available for "persons of small or moderate means." That is what I seek to endorse, not criticise. I say that the Amendment provides for people who cannot properly be described as persons of small or moderate means.
§ Mr. Mitchison
All I can say to that is that exactly the same argument would apply as regards National Assistance. When National Assistance is provided, certain things are disregarded, because it is thought that they are not things which should disentitle a person to receive National Assistance out of public funds.
What is the difference on these lines? On that sort of argument, I should have 1106 thought that, if anything, there should be more disregards in the Legal Aid Scheme than in the other, because it at least includes persons of moderate means and persons of moderate means are not always—indeed, seldom—successful in getting National Assistance. It is another somewhat bogus argument and I hope that the Solicitor-General will think out the consequences of what he is saying before he gets up and draws these curious distinctions.
I turn again to the emergency. This is absolute nonsense. It is none the less nonsense because it started with the Rushcliffe Committee and has ended today with the hon. and learned Gentleman himself. I agree with him that if the Government had been generous in their treatment of capital in other parts of the Bill, there would have been no need to move the new Clause. That is the reason why, in 1949 and 1950, this rather illogical distinction between the two kinds of disregard was accepted.
The Government, however, have been remarkably stingy about the capital limit, to put it in general terms, and for that reason it has become necessary to move the new Clause. Once one begins to move it, one is compelled to see that there is no real distinction between an emergency of one kind, say, a broken leg in an industrial accident, and an emergency of another kind, a broken leg when somebody is run down by a motorist. It is true that the results are different. One is a claim for Industrial Injuries benefit and the other is an application for legal aid, but the difference is sought to be justified on the ground that the emergencies are different. They are not different. They are each the consequence of an accident in a case of that sort.
When one considers a spouse who is being brought before the court in divorce proceedings, I find it highly artificial to call that an emergency of the sudden and calamitous character which, apparently, the Solicitor-General attributes to litigation of any kind. It is not quite as bad as that. People have rights and they are sometimes entitled, and should be assisted, to assert or defend them. I fail to see any distinction between National Assistance disregards and the disregards that logically there should be in these proceedings. I am well aware that we are a profoundly illogical race 1107 and that, I suppose, unreason and authority joined in unholy matrimony may once more prevail, but it is quite wrong.
§ Mr. A. R. Wise (Rugby)
I make an appeal to the hon. and learned Member for Kettering (Mr. Mitchison), who has argued the case cogently and has put it to us as an extremely hard case and has had it turned down absolutely fiat, almost flatter than any case I have heard turned down for a long time. He owes it to himself and to the high principles of his party to make certain that hon. Members opposite go into the Division Lobby on this issue.
Many of us were shocked to learn that the resident of Blenheim Palace, with £1,400, could get National Assistance. The figures which my hon. and learned Friend the Solicitor-General put forward were rather shocking. As the hon. and learned Member for Kettering (Mr. Mitchison) said, that was criticism of the National Assistance scale. It is, I understand, argued that there are plenty of disregards under the Legal Aid Scheme and one does not need to apply anything more or to apply, as is suggested by the new Clause, the National Assistance scale.
What has not been brought out. either in this discussion or in the one on the previous Amendment, is this. Much has been said about dependants' allowances, the £75 for the first child and the £50 for next, but this may not be taken into account against the capital. That may already have been eaten up in allowances against a small income and they cannot be taken into account twice. So, the person with a small income—say, the £350 person—may have had account taken of all these disregards against his income.
§ 11.0 p.m.
Am I right, then, in understanding that a child allowance can be taken into account twice over, both 1108 against income and capital? I have no doubt that the area offices of the National Assistance Board have not taken it into account in that way; those with which I have had to deal have never done so.
Surely the argument here is that we might be taxing those of small means to help those who are better off. It is just the contrary argument that I was trying to make on the previous Amendment, and which applies to this one. There are those who are well off who are entitled to legal aid. We can compare those cases with the pensioners who have a small amount of capital, but who are refused legal aid. The Solicitor-General has said again and again that if the capital is more than £500 it is discretionary to grant legal aid. In the cases before me in practice that discretion is not exercised and, from these debates, I hope that it will be exercised in future. If these people have capital over the £500 mark they are disqualified straight away.
I do not think that the Amendment of the hon. and learned Gentleman the Member for Kettering is right, but at least it has given us the opportunity to argue over these people with small incomes and small capital.
§ The Solicitor-General
I would just draw the attention of my hon. Friend the Member for Crosby (Mr. Page) to what the Advisory Committee says on this very point:The Law Society inform us that this is not so and that the committees grant legal aid where disposable capital is larger than £500 if in their view the cost of the proceedings will be greater than the maximum contribution which the applicant would pay if he got legal aid.
§ Question put and negatived.
§ Bill reported, without Amendment; as amended (in the Standing Committee), considered; read the Third time and passed.