HC Deb 01 July 2002 vol 388 cc41-53

Order for Second Reading read.

4.36 pm
The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton)

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

This short but important Bill was introduced in another place and, with cross-party support, made swift progress unamended through all its stages. I know that my right hon. and noble Friend Baroness Scotland appreciated the support of the Opposition parties in the other place.

The office of the Public Trustee was created by a Liberal Government in the Public Trustee Act 1906. That Act came about in response to a series of notorious defaults by trustees, who had usually disappeared with the trust funds. Prospective trustees, or those making wills, were thought to need a safe place to entrust their money so that the true beneficiaries would receive it. That was why the office of Public Trustee was invented—to provide a completely secure official in whom absolute trust could be reposed.

Until recently, the Public Trustee was located in the Public Trust Office but following the 1999 report of the Public Accounts Committee into the Public Trust Office, and after recommendations in a quinquennial review, a refocused role for Public Trustee work was agreed. The Public Trust Office was re-launched as the Public Guardianship Office from 1 April 2001 and the trust work was transferred to the Official Solicitor's office, to be handled alongside his existing estates work.

The present policy for both the Official Solicitor's estates work and the Public Trustee's trusts work is to accept new cases only as a public sector trustee of last resort. That means that the Public Trustee is available to act to protect the vulnerable or persons under legal disability—such as children or the mentally incapacitated—or where there is a social need to do so; for example, where there is a family dispute and an independent person needs to step in to protect the interests of members of the family. An extreme case might be where a father had killed his wife and was in prison, and someone needed to look after the interests of the children.

Other examples of the Public Trustee acting as trustee of last resort include where no one else is suitable or able to do so and an injustice would otherwise result. For example, if the Public Trustee were not to accept appointment, a deceased's estate would not be dealt with because, for one reason or another, it would not be economical for the private sector to act.

Commercially viable trusts that do not involve the need for special protection for people suffering from incapacity or those who are otherwise disadvantaged have been encouraged to transfer to the private sector. However, as a result of the 1999 changes and the transfer of such work, the accommodation and overhead charges for trust work increased significantly, particularly from 1 April 2001, while the income from trust work has reduced and is projected to continue to reduce.

However, under section 9(4) of the Public Trustee Act 1906, there is a statutory requirement for full cost recovery for trust work. The only way that we can meet that requirement at present would be to increase fees, but the fee increases required to achieve full cost recovery would be extremely high. For this financial year, the increase would be about 100 per cent., and some of the clients affected by those fee increases would be very vulnerable people.

A large number of the clients are elderly. There are also 50 cases where the Public Trustee looks after the interests of beneficiaries of vaccine damage or other compensation settlements. Another 100 cases involve mentally or physically disabled beneficiaries, and a further eight people benefit under charitable provisions.

Some clients, particularly the elderly, rely on the income that they receive from their trust funds and others are reliant on the expectation of inheriting trust capital. Increasing administration fees for those people would reduce the amount of capital generating income and the amount of capital available for distribution. The Bill will therefore remove the requirement for full cost recovery for trust work to prevent those large increases in fees from occurring.

We are also using this opportunity to regularise the position in relation to trust fees to bring fee setting for trust work in line with fee-setting provisions for other work. At the moment, the majority of fee-setting powers are held by the Minister with responsibility for the policy. However, under section 9(1) of the 1906 Act, the power to set fees for trust work is vested in the Treasury, although the sanction of the Lord Chancellor is needed. The Bill will transfer that power to the Lord Chancellor.

The Bill will also repeal section 7 of the 1906 Act, which was an important part of the package that had been put together to reassure the public following the scandals that had occurred. It ensured that if an incumbent trustee stole the funds, or breached trust in dealing with them, the state would indemnify the beneficiary.

The repeal of section 7 will do two things. First, it will remove the Consolidated Fund's liability to make good any sum required to discharge the Public Trustee's liability and will place that liability with the Lord Chancellor. Secondly, it will tidy up the position on the Public Trustee's liability to beneficiaries. In preparing the Bill, we found that the exception in section 7 had no legal effect and thus served no purpose, so we have taken this opportunity to remove it.

As I have said, this is an important Bill, although short in length. It will ensure that we protect some extremely vulnerable clients of the Public Trustee from large increases in fees, while at the same time bringing up to date the financial requirements governing the work of the Public Trustee. I hope that right hon. and hon. Members will support it.

4.45 pm
Mr. William Cash (Stone)

This Bill is important in its way, and I am glad to allay the Minister's fears by assuring her that the Opposition do not intend to divide the House. It is an uncontroversial Bill. Indeed, during the Bill's passage in the other place, the proceedings were somewhat truncated—the Liberal Democrat spokesman managed only 16 lines of speech, while the official Opposition spokesman managed only 10 lines. We are not, therefore, trying to break any records by ensuring that we exceed that minimum standard. One or two things need to be said about the Bill, however, and I intend to detain the House for a little longer than the other place was detained.

I knew the Public Trust Office extremely well, as, when I first got married, I was living in Lincoln's Inn Fields, exactly opposite it. I would also like to pay tribute to the Liberal party, if not to the Liberal Democrats, as, although it was claimed in the other place that it was their work, the original Liberal party was responsible. The former leader of the Liberal Democrats clearly differentiated himself from the Liberal party. As a Conservative, I certainly would not do that, as the Liberals did a great deal in the 19th century that was extremely effective and very good.

Mr. David Heath (Somerton and Frome)

The hon. Gentleman may be interested to know that I believe that I am still on the residual body of the Liberal party executive—the real Liberal party.

Mr. Cash

I am extremely delighted to hear that, especially as the hon. Gentleman is my opposite number in whichever party he belongs.

We should not say simply that this is an excellent Bill, and let it sail through without comment. Only a few days ago, towards the end of last week, the Minister and I, and the hon. Member for Somerton and Frome (Mr. Heath), the hon. Gentleman from the erstwhile Liberal party—now the Liberal Democrats—exchanged views on the question of enduring powers of attorney and the issue of fees. That is at the heart of this Bill, too, as it is important to note, not only from the explanatory notes but from the way in which the process has been working, that there is a great deal of uncertainty about how to calibrate the fee system in the context of what we could describe generally as free—or relatively free—legal advice and when the Public Trust Office or the Public Guardianship Office is involved.

The transfer of responsibility to the Lord Chancellor's Department represents a determination to try to reduce some of the fees substantially. As we found in relation to the statutory instrument last week, however, some of the fees being charged have increased up to threefold. There is some inconsistency in that. Enthusiastic as people might be about the proposal, the fact that the Lord Chancellor and not the Treasury will fix fees in relation to the Public Trustee's trust work—that will bring those fees into line with other fee-setting provisions—does not necessarily solve the problem. I do not want to call it the wallpaper difficulty, but the question is whether the sums required to run the functions under the Public Trustee Act 1906 will be adequate. We also need to ensure that the people who will be affected—they will often not be well-off—are not overcharged.

I have described the balance that must be struck, but that is a matter for the future. However, I shall watch the situation as it progresses, because an inherent difficulty is implicit in the proposal; there is no answer in itself. We need to know how the money from the fees will be worked out. Will the proposal be fair and will it strike a proper balance?

The Minister described the interesting exception to section 7 of the 1906 Act. It somewhat defies belief that a provision should have been enacted in 1906 and that it

has taken until 2002 to discover that it is of no effect. I am delighted that the Government have taken this opportunity to rectify the position, but it is astonishing that it should have taken so long to discover that simple legal fact or point of law.

The other point that I wish to mention is the relationship between the Public Trust Office, the Public Guardianship Office and the Public Accounts Committee. Although I do not intend to do so, I could spend some time on the criticisms of the Public Trust Office made in the 35th report of the Public Accounts Committee. However, those criticisms are part of the reason why I want to spend a little more time on this debate than was taken on Second Reading in the other place. We are being asked to consider the liability in fees of the Public Trustee, so we should take account of the Public Account Committee's severe criticisms of the running of a public body.

Given the recent changes and the transfer of functions to the Lord Chancellor's Department, we should be mindful of the fact that all is not plain sailing. In particular, I refer to three specific comments made by the Public Accounts Committee. In relation to the welfare of people with mental incapacity—I alluded to them earlier—it said: Overall, we concluded that: The Public Trust Office is failing to ensure that the financial interests of patients are adequately protected". That is pretty severe criticism. Secondly, the Committee said: The Public Trust Office is failing to ensure, through its visits programme, that patients funds are being used for their benefit". Thirdly, it said: The Public Trust Office's management information is inadequate". A further 30 pages of material and cross-examination demonstrates the basis on which such criticisms were reached.

It is not simply a matter of going over the past for its own sake because that would do no good. The real question is to what extent the Bill is adequate in changing the regime, attitude and behaviour of the Public Trust Office and its successor in a manner that will genuinely remedy the problems identified by the PAC. If it is not possible for the Bill, because of its long title, to ensure that the problems are remedied, the Minister must assure us that the matters reported by the PAC are being taken seriously by the Lord Chancellor's Department and that the Government are going to do something about them.

4.56 pm
John Cryer (Hornchurch)

Hon. Members will be pleased to learn that I shall be brief, because I want to concentrate on a constituency case.

The PAC and the National Audit Office have produced a series of critical reports, dating back to the PAC's report of 1994 which made damning criticisms of the Public Trust Office. Having read the reports, I think it is clear that their findings are conclusive, and the Bill has widespread support on both sides of the House.

There are various problems with the Public Trust Office. In the case that concerns me, my constituent's mother died and the Public Trust Office is holding £40,000 of her money that it is not keen to release. In a letter, my constituent explains that it is nearly 3 months later and I still have no release of the court funds. I am very sure that the £40,000 is no longer being held in a good interest bearing account, and I also have final payments to make on my mother's behalf. I suspect that many hon. Members will have come across similar problems with the Public Trust Office.

The quinquennial report by the Lord Chancellor's Department mentions that, in the receivership division of the Public Trust Office, the Current live caseload is about 2,750 and clients' funds total approximately £252 million. That is a hefty sum—about £0.25 billion pounds is being held purely by the receivership division, as in my constituent's case. I hope that the changes mean that public offices will not hold on to money for as long, and with the same determination, as the Public Trust Office and its successor, the Public Guardianship Office.

The 1906 Act made the Public Trust Office self-financing, which means that it cannot be subsidised by the Treasury. The Bill changes that provision and the Treasury will be able to provide subsidies if needed.

My hon. Friend the Minister mentioned the repeal of certain sections. Will she assure me that future beneficiaries, who would have been covered by the liability of the Public Trust Office, will not lose out? Will she also assure me that the Bill's provisions will lead to greater efficiency?

4.59 pm
Mr. David Heath (Somerton and Frome)

I thank the Parliamentary Secretary for the way in which she introduced the Bill. Brevity is not necessarily a sign of inconsequentiality, and the Bill, albeit short, is important, so I cannot guarantee that I will be as brief as my colleagues in another place.

I am grateful to the hon. Member for Hornchurch (John Cryer) for his comments. Many hon. Members have constituents who have had difficulties because of the performance of the Public Trust Office, and they will be pleased to know that changes have taken place. However, we must wait to see whether those changes have been effective in ensuring a better service for our constituents.

I am always careful when I see that we are to amend an Act from 1906, from the extraordinary reforming Government of Sir Henry Campbell-Bannerman, who were the fount of a great deal of judicial common sense and social reform.

Mr. George Osborne (Tatton)

Is the hon. Gentleman certain that the Bill was not prepared by the preceding Conservative Government and then implemented by the incoming Liberal Administration?

Mr. Heath

Had the hon. Gentleman held his fire for a second, I would have implicated Lord Halsbury in the Bill's preparation. It was introduced by a Liberal Government, but on an all-party basis. The Conservative Opposition, who supported it, had indeed been working on a Bill when they were in government, but had not managed to find time for it. The Act, which has stood the test of time since 1906, addressed a social ill.

Let us turn away from history and consider the Bill before us. We welcome the findings of the quinquennial review and the actions that have been taken since: the creation of the Public Guardianship Office to deal with enduring powers of attorney, the move of the court funds office to the Court Service, and this Bill dealing with Public Trustee work, which has been moved to the Official Solicitor's Office.

I am grateful to the hon. Member for Stone (Mr. Cash) for mentioning our discussions last week on the fee structure, introduced by the Lord Chancellor's Department, for work on enduring powers of attorney in the Public Guardianship Office. There are parallels between the two matters of which we need at least to be aware. The fees for registering enduring powers of attorney and for first-year case set-up in receivership have massively increased, and it is legitimate to ask whether an analogous situation will occur with this Bill.

In Committee last week I voiced strong suspicions that there is continuing cross-subsidy of the investment now being made in the service. For years, investment was sadly lacking, which may be one reason for the standard of service to which the hon. Member for Hornchurch referred. The extra investment, particularly in IT, is being paid from the fees charged under the new structure, and that is a real concern.

Mr. Cash

Does the hon. Gentleman recall that both Opposition parties divided the Committee on the question of the way in which the fees are being levied, not because of any grave objection to the principle of trying to ensure that we balance the fee structure, but because we wanted to ensure that, when the new structure begins to operate, we do not see threefold increases in fees?

Mr. Heath

The hon. Gentleman is absolutely right, but the Government would respond by saying that this Bill is an attempt to remedy precisely that evil. As we know, under the 1906 Act, the present fee structure has to produce an annual amount sufficient to discharge the salaries and other expenses incidental to the working of the Act and no more. It is hard to discern the intention of the Attorney-General, Sir John Walton, almost 100 years ago, but I suspect that it was to limit the fees so that they did not become excessive. The words "and no more" are the key. What has resulted, however, is a restriction on the Lord Chancellor's Department which is unsustainable in the present circumstances, particularly in the light of the new role of the office.

I welcome the power to mitigate the fees. The Parliamentary Secretary has set out how essential it is to provide protection for the vulnerable people who are the recipients of this service, so that we do not allow their capital to be eroded, particularly in the direction of the Exchequer.

According to the explanatory notes, the Government intend to reduce the current working deficit of £1.9 million and achieve recovery, less remissions, in three years. I find it a little difficult to reconcile that intention with the Bill's adduced purpose of protecting the recipient of such activities from excessive fee increases, but perhaps the Minister will offer an explanation. The suggestion is that a new cross-subsidy will be introduced, and that—excluding those who are unable to pay—people

will have to pay for the reduction in the subsidy. In other words, they will pay more than they would otherwise have paid.

It would help if the Minister could confirm that the fee structure will be devised by order, and that the matter will be debated in the House. Will the total fee structure of the Public Trust Office form part of the departmental annual report to the House, or will it be reported in some other way? A key point—I hope that it is not spurious—is that the Bill's impact is not retrospective. It appears that the Government are currently acting illegally, outwith the 1906 legislation. What would happen if a legal challenge were mounted against the actions of the Lord Chancellor's Department, up to the point at which the Bill becomes law? That is not entirely impossible.

When I spoke on matters agricultural, the analogous situation of the White Fish Authority was mentioned. In that case, such a challenge was mounted, and the fee structure was deemed unlawful and outwith existing legislation. Retrospective charges had to be applied unless new primary legislation were enacted to correct the problem. What would happen if such a challenge were made in this case? Would the current shortfall have to be made up between its first coming to light and its correction by means of the Bill, and a retrospective charge imposed on recipients of the Public Trust Office's services?

I am perfectly content that the Lord Chancellor's Department should set the fees, rather than the Treasury, inasmuch as a member of the judiciary, the Lord Chancellor, should set any such fees. It is entirely proper that the Parliamentary Secretary to the Lord Chancellor's Department should set those fees, but I am less content that a member of the judiciary should have that Government function.

In terms of abuse of the process, if liability were established and such sums were recovered from the budget of the Lord Chancellor's Department rather than from the Treasury's contingency funds, would they form part of the operating costs of the Public Trust Office, or of the Official Solicitor? In other words, will any costs be in effect recoverable from those who receive the service? Would such costs have to be recovered to meet Treasury rules? My suspicion is that they might, but I hope that they will not, and that contingency funds will be available from the Lord Chancellor's Department's overall vote. Perhaps the Parliamentary Secretary can confirm that point.

I conclude by pointing out that the Liberal Democrats have no intention of dividing the House, and we wish the Bill good progress.

5.9 pm

Mr. George Osborne (Tatton)

It is a novel experience to be called to speak so early in the afternoon, although not so novel to be called at the end of our debate.

Like my hon. Friend the Member for Stone (Mr. Cash), I support the Bill, and wish to speak as a member of the Public Accounts Committee. Sadly, most other PAC members are in a hearing at the moment, although I notice that a new PAC member, the Financial Secretary to the Treasury, is in the Chamber. She may not be aware that my constituency is supposed to provide mutual aid to the Conservatives in her Bolton, West constituency, although that has proved spectacularly unsuccessful recently—witness the fact that she is here. Indeed, the Conservatives were providing that financial aid when they lost my constituency.

The Bill is needed to protect the vulnerable people mentioned by the Minister—the elderly, the mentally incapacitated, families with vaccine-damaged children and so on—who benefit from the work of the Public Trustee. Many would be unable to afford the increased fees which would be imposed if the existing law remained unamended. The Bill has all-party support, as has been demonstrated this evening. It has been dealt with quickly, and was dispensed with in just seven minutes in the House of Lords, as my hon. Friend the Member for Stone pointed out. However, with contributions from him and the hon. Member for Somerton and Frome (Mr. Heath), that was never going to be the case in the House of Commons.

Before the Bill is rubber-stamped and reaches the statute book, it is worth reflecting that chronic mismanagement of the Public Trust Office by the Lord Chancellor's Department under two successive Governments—so I am not making a party political point—led to its introduction. We should congratulate the PAC under the chairmanship of both Robert Sheldon, now Lord Sheldon, and my right hon. Friend the Member for Haltemprice and Howden (David Davis), whose work, along with that of the National Audit Office, has exposed many of the poor financial practices which plagued the Public Trust Office. The PAC produced various reports, one of which was mentioned by my hon. Friend the Member for Stone. The second report of the Session for 2001 to 2002 says: Public bodies that manage or regulate their clients' money, especially for people disadvantaged through mental incapacity, must meet the highest professional standards. The Public Trust Office fell below those standards. It also says: Departments should have effective mechanisms for overseeing the work of Agencies for which they are responsible. The Lord Chancellor's Department acknowledged that its oversight of the Public Trust Office should have been better. As a result of that mismanagement in an office which, as the Minister said, should have commanded the highest degree of public confidence, many fees were not collected on time and it became almost impossible to trace large unclaimed balances. Members of the public had to go through filing systems or read back issues of the London Gazette dating back to 1726 to see if they were eligible to claim certain moneys. No attempt was made to alert people to the fact that they were entitled to payment. Indeed, there was even a failure to reclaim about £125,000 in VAT, which the clients of the Public Trust Office paid for in increased fees. The staff were overstretched and unable to cope and eventually the office's chief executive was asked to leave early. However, she collected a hefty bonus, which the Department was unable to do anything about.

Mr. Cash

In fact, as was mentioned in Committee the other day, there have been three chief executives in the past year or so. I believe that the Minister will confirm that.

Mr. Osborne

I am grateful to my hon. Friend. I was referring in particular to Chief Executive Ms Lomas, who received a bonus.

Ms Rosie Winterton

Before my time.

Mr. Osborne

I believe that it happened after 1997.

The failures highlighted by the PAC over a number of years were reinforced by the Department's quinquennial review, to which the Minister referred. It noted: Corporate development, business modernisation, high quality client service and comprehensive, reliable financial management information systems have not materialised". That is Sir Humphrey-speak for a complete mess. As a result of the review, the Public Trust Office was abolished and its trust work transferred. I suspect that a sorry history of poor management and lack of financial accountability led to the current position—the Government have had to accept that the work of the Public Trustee, which has been self-supporting since 1906, cannot remain so in future. I accept that. There is no mileage to be made from making vulnerable people in our society pay for the mistakes of Whitehall.

I end with a couple of questions which I should be grateful if the Minister would consider. The explanatory notes state rather vaguely: The Bill will enable fees to be set which allow for a level of public subsidy where fee remissions are justified". Before we give the Bill a Second Reading, I should be interested to hear from the Minister what level of public subsidy she envisages as a result of the Bill.

The explanatory notes also state that the current deficit is about £1.9 million. The hon. Member for Somerton and Frome, speaking for the Liberal and Liberal Democrat parties, made a good point. The Government state in the explanatory notes that they intend to reduce the deficit, but how will that be achieved? By how much will fees increase? Even if they do not increase by 100 per cent., which would have been the case if the law had not changed, by how much will they increase in order to reduce the deficit?

Finally, Baroness Scotland pointed out in the other place that, as a consequence of the administrative changes that led to the abolition of the Public Trust Office, the accommodation and other overhead costs attributed to trust work increased significantly from 1st April 2001, while the income from trusts work has reduced".—[Official Report, House of Lords, 27 May 2002; Vol. 635, c. 1050.] Can the Minister say why the accommodation and overhead costs increased so dramatically, so that we can be sure that we are not still suffering from poor financial management in her Department, and so that we can be reassured that the culture change about which the hon. Member for Somerton and Frome spoke will take place?

5.16 pm
Keith Vaz (Leicester, East)

I shall speak briefly in a very brief debate—so brief that when I saw the Minister's name appear on the annunciator I rushed in, but by the time I arrived she had finished speaking. I apologise to my hon. Friend for not being present during her speech.

It is unusual for both sides of the House to support a measure, and I am glad that we are supporting it. I welcome the Bill, which will provide for the necessary changes to ensure that the work of the office and the trustee is made more efficient. The hon. Member for Somerton and Frome (Mr. Heath) said that we should be cautious when we seek to amend an Act of Parliament that has been around for 100 years, but I think that that fact itself makes it ready for amendment.

Mr. Heath

I said that it was not the Act's longevity that gave it added value, but the fact that it was introduced by a Liberal Government.

Keith Vaz

Liberals are always claiming credit, especially for their own Acts.

I see my hon. Friend the Member for Ealing, North (Mr. Pound) in his place. He has the Adjournment, and I do not want to detain him or the House. I shall make three quick comments. First, I am glad that the Government have responded so positively to the points made in the quinquennial review. They have acknowledged that errors were made. However, when the Government create executive agencies, as the Conservative Government did in 1994, the degree of ministerial involvement will inevitably be less effective than if that body were part of the Government's work. With executive agencies, Ministers and officials must wait until matters are brought to their attention. We should not criticise the officials of the Lord Chancellor's Department for what they have done. They reacted as they ought to have reacted when matters were brought to their attention.

Secondly, it is important that the work of the Public Trustee should be publicised. The fact that not many people know of the existence of that office may be due, in part, to the fact that when things go wrong, we do not get to hear about it unless we sit on the Public Accounts Committee or the matter is brought to our attention in some other way. I hope that we will hear from the Minister that the Lord Chancellor's Department will provide more information about the office, so that its work can be brought to the attention of the public, especially those who are vulnerable and who need the support of the Public Trustee. If we publicise such information, we will be much more careful about the way in which organisations and executive agencies are reviewed. That will mean that more ministerial attention is directed to that area of policy.

As for the quinquennial review, there were resource and other recommendations. I know that the Government have accepted the recommendations, and I hope that they have all been implemented. At least we can hear from the Minister that she hopes that they will be implemented in the near future. There has been a change of name and there has been a relaunch, but it is not enough to change a name. It is necessary also to change the ethos, the structure and the way in which things are done. I hope that my hon. Friend will tell us that the process will continue.

5.20 pm
Mr. Cash

We have had a short but useful debate. To take up the remarks of the hon. Member for Leicester, East (Keith Vaz), I had some slight misgivings about the fact that, as the Minister said in another place, the office has been relaunched as the Public Guardianship Office with effect from 1 April 2001. There is a problem because we have the Public Trustee Act 1906, we have functions that are repeatedly referred to as Public Trustee functions, but we have a relaunch as a Public Guardianship Office. There could be some confusion in the mind of the public. There has been an example of that with the rebranding of the Post Office as Consignia, with a return to the previous name.

In the spirit of co-operation and good will that has been generated during the debate, some significant points have been made. My hon. Friend the Member for Tatton (Mr. Osborne) raised some important points about the Public Accounts Committee and the way in which it has conducted its functions. We have also heard some criticisms about the practical operations of the office.

I conclude by requesting the Minister to consider the uncertainty and confusion that can arise, especially when we are dealing with people who are not necessarily learned in the law. They merely want to have their affairs dealt with properly. If names are not consistent with the Act and if we do not have clarity, there may be some confusion.

5.23 pm
Ms Rosie Winterton

With the leave of the House, I shall respond to the debate. As has been said, it has been short but thoughtful.

I am grateful for the support that Opposition Members have shown so as to give the Bill a fair wind. My hon. Friend the Member for Leicester, East (Keith Vaz) suggested that the work of the Official Solicitor and the Public Trustee is perhaps not widely known. I take on board his points about seeing whether we can give wider publicity to the work that is undertaken. I assure him that a considerable amount of information is available on the internet. I accept, however, that clarity is important.

During the debate, there has, perhaps, been some confusion about the work of the Public Trustee as opposed to that of the Public Guardianship Office. I can assure the hon. Member for Somerton and Frome (Mr. Heath) that our changing the 1906 Act implies no criticism of the Act. It suited the times, but obviously things have moved on.

My hon. Friend the Member for Hornchurch (John Cryer) referred to one of his constituents—he works assiduously on behalf of his constituents. I think that the issue to which he referred would have been dealt with by the Public Guardianship Office. Following the 1999 report and the quinquennial review, the trust work was transferred through the Public Trustee to the Official Solicitor's office. The Public Guardianship Office dealt with people who had mental incapacity problems and, perhaps through the enduring power of attorney, had receivers or needed receivers to be appointed. The work of the Public Trustee is somewhat different, as it will administer funds that have come through the trusts. As I mentioned, the Public Trustee will be responsible for administering the compensation awarded to vaccine-damaged children. None the less, in the light of the specific problems that my hon. Friend's constituent may have experienced with the Public Guardianship Office, I shall take up the matter. I think that he has written to me once already, but if he would care to do so again, I shall certainly look into the matter.

Many hon. Members, including the hon. Member for Stone (Mr. Cash), mentioned the relationship between the Public Guardianship Office and the Official Solicitor. The hon. Gentleman also spoke of the efficiency of the Public Guardianship Office and enduring powers of attorney. He mentioned the fact, as he did in Committee last week, that some fees were increased but that a number of fees went down. I was disappointed that the Opposition chose to divide the Committee on that matter, as I believe that the remissions policy that we introduced is extremely important and protects some of the least well-off people.

Mr. Cash

I am sure that the Minister will not be disappointed when I say that what I am seeking to do in this debate—I did so when I assisted in pressing the Committee to a Division—is to ensure that a proper balance is struck between what goes up and what comes down. That is the key point. The difficulty was that we were faced with the knowledge that there had been a threefold increase in fees, which we thought was too much.

Ms Winterton

I think that the hon. Gentleman would also accept, however, that there was a great deal of criticism of the previous cross-subsidy, and that it was important to achieve the right balance in terms of one client paying for another's services. That was affecting some of the least well-off, so we wanted to ensure the proper balance.

I shall now turn to the issues raised by a number of hon. Members, including the hon. Member for Tatton (Mr. Osborne), who is a member of the Public Accounts Committee. As I said, I could not quite remember all the previous chief executives of the Public Trust Office, as some of them were before my time as a Minister. The point about the Bill—this is where some of the confusion may have arisen—is that in setting the future fees, we hope to establish that there is not a statutory requirement for full cost recovery. We will consider how fees may be increased to meet certain of the Treasury criteria and to ensure that we do not face criticism from the Public Accounts Committee. We certainly want to ensure that we can have an element of public subsidy to protect the very poorest clients if necessary.

The hon. Members for Somerton and Frome and for Stone mentioned overheads and the way in which the trust function previously operated. Prior to the transfer of the trust function to the Official Solicitor and Public Trustee, that function of the office was already operating at a deficit in cost recovery of some £500,000. Overhead costs originally increased by about £1.2 million in April 2001. That was the result of two factors—first, the higher cost of accommodation at Chancery lane, which the hon. Member for Stone recalled nostalgically, as compared to the costs of Stewart house and, secondly, the share of the higher overheads that had to be borne by the trust function at the new office. Recent discussions with my Department about projected forecasts for the current financial year suggest a further increase in overhead costs of about £700,000.

The hon. Member for Somerton and Frome asked whether there would be retrospective liability in terms of costs not being recovered. We believe that it is highly unlikely that we would face a legal challenge from somebody who wished to pay more than they had previously paid, so it is unnecessary for the Bill to apply retrospectively. It is extremely unlikely that someone would say, "We want to take action in order to ensure that we could have paid more previously." Consequently, there will be no such liability.

The hon. Member for Somerton and Frome mentioned fees orders. Those are made by the Lord Chancellor and are not laid before the House, but they will be considered by the Joint Committee on Statutory Instruments.

Mr. Heath

May I return the hon. Lady to the potential confusion between the various offices? Can she confirm whether the legal person of the Public Trustee is now identical to the legal person of the Official Solicitor, and whether that is set out in any statute or might be incorporated into the Bill?

Ms Winterton

Yes, they are the same person. I do not believe that it is necessary for that to be covered by the Bill, but if it is I shall write to the hon. Gentleman to confirm it.

Mr. Cash

On the question of confusion arising in respect of legal capacity or legal personality, the use of such expressions may create confusion in itself. I am worried about people's perceptions. Many of those involved would not necessarily be able easily to make such distinctions. The same probably applies to many Members of Parliament, but that is another matter.

Ms Winterton

I am sure that few Members of Parliament could be confused about anything. That was an extraordinary comment.

The debate has been thoughtful and I am grateful for hon. Members' support for the Bill. I am pleased that the House has recognised the valuable work of the Official Solicitor and Public Trustee, especially that of protecting some of the most vulnerable members of our society. The Bill will enable us to continue to provide that vital protection, and to modernise some of the financial and other procedures in government.

Many people will benefit from the Bill, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).