§ 3.27 p.m.
§ THE LORD CHANCELLOR (LORDHAILSIIAM OF SAINT MARYLEBONE) rose to move, That the Legal Aid (Financial Conditions) Regulations 1972 be approved. The noble and learned Lord said: My Lords, it may be for the convenience of the House for me to deal at the same time with the Legal Aid (Scotland) (Financial Conditions) Regulations; a Motion for the approval of which immediately follows this Motion. Save that the present Motion applies South and the next applies North of the Border, the two sets of Regulations are in identical terms.
§ The Legal Aid and Advice Act 1949, as amended by the Legal Aid Act 1960, provides that a person may be refused legal aid if he has a disposable capital of more than £500 or such larger figure as may be prescribed and it appears that he can afford to proceed without legal aid. The Acts also provide that a contribution is required from capital of the amount by which disposable capital exceeds £125 or such larger figure as may be prescribed. Section 1(3) of the Act of 1960 provides that Regulations for either of these purposes shall not come into force unless and until approved by Resolution of each House of Parliament. Similar provisions are made in the Legal Aid (Scotland) Act 1967. No Regulations have hitherto been made increasing these limits and, indeed, the upper limit of £500 has remained unchanged since the coming into force in 1950 of the Legal Aid and Advice Act 1949.
§ The Acts refer to "disposable" capital. Disposable income and disposable capital are defined in Section 4 of the Legal Aid and Advice Act 1949 as referring to the rate of income or amount of capital after making deductions in respect of maintenance of dependants, interest on loans, income tax, rates, rent and other matters for which the person in question must or may reasonably provide. Deductions are made from gross capital to exclude the value of household furniture and effects of a dwelling house, articles of personal clothing and personal tools and equipment of trade. Account is taken of one-half of the value of a dwelling house after deducting the value of any contribution 756 and after further deducting the sum of £5,000. Under the Legal Aid (Assessment of Resources) (Amendment) Regulations 1972 which have now been laid before Parliament, the £5,000 allowance for a dwelling is increased to the sum of £6,000 but is limited only to the main dwelling, where there is more than one. For any second dwelling account is taken of any sum which can be borrowed on its security. There are also allowances for dependants. These are at present £75 for the first, £50 for the second and £25 for the third and any subsequent dependant, but these allowances are increased by the other Regulations I mentioned just now to £125 for the first dependant, £80 for the second and £40 for any subsequent dependant. There are also other allowances for which I need not take up the time of the House.
§ The Legal Aid Advisory Committee, constituted under Section 13 of the Act of 1949 to make comments and recommendations on the Law Society's Annual Report, whose Chairman at that time was my noble friend Lady Emmet of Amberley (she has now been succeeded by my noble friend Lord Hamilton of Dalzell) made recommendations relating to capital in their last Report dated June, 1972. They pointed out that to restore the limit of £500 to the value it had held when the Act of 1949 was passed, required it to be increased by 136 per cent. That would bring it to £1,200 and this is what the Regulations do. The Committee, however, thought that the limit should be raised further still to £1,500 to allow for further inflation. In the present circumstances, the Government have stuck to an increase which would restore the £500 to its original value in money terms. Your Lordships will know that this limit is not an absolute bar to receiving aid, because the Act provides that a person may still get aid if it appears that he cannot afford to proceed without it. Thus, legal aid is still granted if the Committee consider that the costs of the action will be more than the maximum contribution which an applicant can be called upon to pay under the Regulations. This limit is not therefore of overwhelming importance.
§ In paragraph 23 of their Report, the Advisory Committee pointed out that the amount of capital which a person may retain without being called upon to pay 757 anything from it by way of contribution had remained at £125 since the year 1960. They pointed out that to increase the limit by the amount that money values had declined during that period would mean raising the £125 to the sum of £210. The Committee thought, however, that it would be better to fix the new limit at £325, which is the limit at which capital is ignored for the purpose of assessing supplementary benefit. There is, however, I should explain, an important difference between the Supplementary Benefits Scheme and the Legal Aid Scheme. In the former, no allowances are made for dependants. Under the Legal Aid Scheme, allowances are made, as I have already described. The effect of the Committee's recommendations was therefore to be much more generous than the Supplementary Benefits Scheme where the applicant was married or had children.
§ The Government have therefore fixed the new limit at £250. This is an increase in real terms of £40 above the previous limit. For a single person, it is £75 lower than the supplementary benefit level. For a married person, it is £50 above that level, and this rises to £130 for a married person with one child and £170 where there are two children. This therefore makes a fair compromise between the conflicting positions under the two Schemes. The Advisory Committee have intimated that their recommendations were interim ones only, pending a thorough reappraisal of the capital limits and the contributions required from capital. The new limits may therefore be only temporary. In the meantime, they make important improvements to the Legal Aid Scheme. For that reason, my Lords, I beg to move.
§ Moved, That the Legal Aid (Financial Conditions) Regulations 1972 be approved. (The Lord Chancellor.)
§ LORD GARDINER
My Lords, I am sure that the whole House will welcome these Regulations and those which are immediately to follow. Legal aid has always been in a difficulty with regard to figures, in that we have always had to contend with an inflationary situation, and it is no doubt right that increases should be made. The one question which I should like to ask the noble and learned Lord the Lord Chancellor is whether he 758 is satisfied that these increases are high enough. If I have understood it rightly, the second figure, for example, of £1,200, is against a recommendation by the Committee that the sum should be increased to £1,500. That recommendation was itself made six months ago and the inflationary situation has continued. I have always felt it is one of the difficulties that, quite naturally and perhaps inevitably, time elapses between the Report of the Advisory Committee and the moment of implementation. If one is justified in looking at the probable figure, I should like to ask the noble and learned Lord whether he is satisfied that the figure of £1,200 ought not to be at least the £1,500 which the Committee recommended six months ago.
THE LORD CHANCELLOR
My Lords, one is never wholly satisfied with anything in this world, but I would say this. First of all, the principle upon which the Committee recommended £1,500 was not one which, on reflection, the Government could accept, because it was at that stage, at any rate, making allowance prospectively for inflation, which is contrary to policy. The second point I would make is that the Committee are examining the limits in a much more thorough-going way, which may or may not give rise to a further set of provisions being moved later in this Session, or perhaps next Session. The result is that I would ask the House and the noble and learned Lord, whom I would thank for his remarks, to pass these Regulations, but of course without prejudice to my coming again should the situation demand it.
§ On Question, Motion agreed to.