§ 7.15 p.m.
§ THE LORD CHANCELLOR
My Lords, I rise to move that this House approves the Legal Aid (Financial Conditions) Regulations 1973 and the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulation 1973. It was my intention in moving this Motion to include the comparable Scottish Regula
§ THE LORD CHANCELLOR
Oh yes, my Lords; there is no resemblance at all. A Petition of Right was the old proceeding against the Crown which used to exist before the Crown Proceedings Act to give a suppliant (as he was technically called) the right effectively to enforce a contract between him and the Crown. There is no relationship between that and a petition in bankruptcy. This is not a petition in bankruptcy. The whole point which I am trying to establish is that where there is a fund which is certainly insufficient, and which may be non-existent, you ought to apply bankruptcy principles to it, in which case all unsecured and non-preferred creditors have to be treated alike.
§ On Question, Whether the said Motion shall be agreed to?
§ Their Lordships divided: Contents, 49; Not-Contents, 9.721
|Aberdare, L.||Garner, L.||O'Neill of the Maine, L.|
|Amory, V.||Garnsworthy, L.||Phillips, B.|
|Auckland, L.||Gowrie, E. [Teller.]||Rankeillour, L.|
|Balerno, L.||Greenwood of Rossendale, L.||St. Aldwyn, E. [Teller.]|
|Blyton, L.||Hailsham of Saint Marylebone, L. (L. Chancellor.)||St. Just, L.|
|Brecon, L.||Sandys, L.|
|Brooke of Cumnor, L.||Hall, V.||Shepherd, L.|
|Brooke of Ystradfellte, B.||Hood, V.||Somers, L.|
|Clifford of Chudleigh, L.||Hoy, L.||Tenby, V.|
|Colville of Culross, V.||Inglewood, L.||Terrington, L.|
|Colwyn, L.||Long, V.||Tweedsmuir, L.|
|Davies of Leek, L.||Luke, L.||Tweedsmuir of Belhelvie, B.|
|Denham, L.||Macpherson of Drumochter, L.||Vernon, L.|
|Digby, L.||Merrivale, L.||Wakefield of Kendal, L.|
|Dundonald, E.||Monckton of Brenchley, V.||Walston, L.|
|Falkland, V.||Mowbray and Stourton, L.||Windlesham, L. (L. Privy Seal.)|
|Ferrers, E.||Northchurch, B.|
|Beaumont of Whitley, L.||Gardiner, L.||Platt, L.|
|Ebbisham, L.||Gladwyn, L.||Seear, B.|
|Foot, L. [Teller.]||Gridley, L.||Wade, L. [Teller.]|
§ tions, but for a reason I do not wholly understand they do not yet appear on the Order Paper. However, I hope when they do come forward they will be found to raise no separate question and will not give rise to a separate debate.
§ The Legal Aid (Financial Conditions) Regulations 1973 are made under the provisions of Sections 2, 3 and 12 of the Legal Aid and Advice Act 1949, as amended by Section 1(1) and (2) of the Legal Aid Act 1960. Under the provisions 723 of Section 1(3) of the Legal Aid Act 1960, the Regulations require an Affirmative Resolution of both Houses of Parliament. These Regulations, if passed, will benefit a considerable number of people. In the first place, Regulation 4 of the Financial Conditions Regulations provides transitional provisions for re-assessing contributions in current cases. All those whose "period of computation," which means a 12-months period covered by the assessment of an applicant's resources, have more than one month to run will thus be re-assessed, so that there will be an immediate advantage for those in current cases except where the effect would be minimal. There are 11,300 people with current certificates who will have their contributions reduced. In future, about 41,000 people a year will pay less contribution, and about 7,500 people a year will qualify for legal aid who would now be wholly outside the financial limit.
§ My Lords, if I may now come to the actual provisions, the Regulations increase the financial limits within which people are eligible for legal aid, both without charge and on payment of a contribution; that is to say, they increase the income limits. The capital limits, which are not altered by these Regulations, have already been increased, in December last year, following recommendations made by the Legal Aid Advisory Committee in their 21st Report, when the amount of disposable capital which cannot be called upon for a contribution towards legal aid was raised from £125 to £250, and the limit of disposable capital above which a person may be refused legal aid was raised from £500 to £1,200. The present income limits are £300 for free legal aid and £950 a year for contributory legal aid. This is the disposable income. In their Interim Report of February 6, 1973, the Advisory Committee made recommendations for increasing the income limits. They proposed that the lower limit should be increased to £400, and the upper limit to £1,250.
§ My Lords, I am sorry to say that because of the great need for economy in public spending, the Government have not felt able to agree that the Advisory Committee's recommendations should be implemented in full. Instead, it is proposed that three-quarters of the recom- 724 mended increases should be made. The limits provided by the Regulations are, therefore, £375 a year for free legal aid and £1,175 a year for contributory legal aid; the increases are 25 per cent. and 24 per cent. respectively. Although it has not been considered practicable to do all that the Advisory Committee have recommended, the proposed changes will, as I have shown, help a great many people.
§ As I have said, the financial limits relate to what is called "disposable income"; that is to say, the income which an applicant can be expected to receive during the 12 months from the date of his application after deductions are made in respect of maintenance of dependants, repayment of loans, income tax, expenses of employment, rates, rent and other matters for which provision can reasonably be made. The Supplementary Benefits Commission are responsible for calculating the disposable income of an applicant.
§ Before 1970 a separate allowance was made for payments such as hire-purchase instalments, insurance premiums and so on, amounting on average to £54. By the 1970 Regulations such payments are set off against a new fixed sum of £104 of income which, by those Regulations, is now to be disregarded. At the time the Regulations were made the effect, therefore, was to allow the average applicant about £50 more than he used to be allowed. This had the same result as if the lower income limit had been raised to about £350 and the upper limit to about £1,000. Since then, the average payments in respect of hire-purchase and so on by applicants for legal aid have risen to something of the order of about £100, and this benefit has, therefore, largely been dissipated. This point has been taken into account in the proposed increase. It is estimated that the cost of meeting the increases will be £916,000 in 1974–75 rising to £1,017,000 in 1977–78.
§ It has for a long time been unsatisfactory that the income limits have been reviewed only at fairly long intervals. This has led to their being eroded by inflation in the meantime. The Government accept that it is not reasonable for the limits to be dealt with in this way, and it is therefore proposed that they 725 should be reviewed annually so that they do not compare unfavourably with supplementary benefits. This is, I believe, a really considerable improvement.
§ My Lords, I now come to the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations, 1973. These Regulations are made under the Act of 1972 which we discussed not so long ago, and in particular under the provisions of Sections 1 and 11. Under Section 11(2) of the Act the Regulations are subject to an Affirmative Resolution of each House of Parliament. These Regulations increase from £20 to £24.50 a week the maximum income which a person may have if he is to be allowed legal advice and assistance under the 1972 Act. Your Lordships will remember that legal aid, broadly but not wholly speaking, implies representation; legal advice and assistance means what it says, assistance outside the court and legal advice. As my Advisory Committee pointed out, the upper income limit for advice and assistance is now, broadly speaking, the same as the upper limit for legal aid. The former is now £20 a week or £1,040 a year, but allowances of £104 which are given under the Legal Aid Scheme are built into the Advice and Assistance Scheme so as to simplify the process of assessing an applicant's resources, which is done by the solicitor in this case and not by the Supplementary Benefits Commission which act in the legal aid cases. It follows that the present limit compares favourably with the legal aid limit of £950.
§ To increase the weekly income limit from £20 to £24.50, as I propose, that is to say to £1,274 a year, would, if one takes into account the built-in allowances to which I have referred, give an upper limit of almost exactly the same as the proposed contributory legal aid limit and maintain the relationship between the Legal Aid Scheme and the Legal Advice and Assistance Scheme. I propose also to increase from £11 to £12.50 the limit above which contributions are payable. The Regulations do not alter the capital limit for legal advice and assistance, which was increased from £125 to £250 a year by the earlier regulations which came into operation on April 2, 1973. This was done in order to maintain the relationship to the capital limits under the Legal Aid Scheme.726
§ My Lords, I think I should say that the Regulations before the House, the two sets of Regulations I have described, cannot be read alone. They must be read in conjunction with another set, a third set called the Legal Advice and Assistance (Financial Conditions) (No. 3) Regulations, 1973. We are not debating this third set, as they are subject to the Negative Resolution procedure. This third set of regulations will come into force on January 1 next year, when the Regulations we are debating now will come into force and they will increase from £11 to £12.50 the disposable income above which a person in receipt of advice and assistance is required to pay a contribution, and prescribe an improved scale of contributions to replace those in Schedule 1 of the Act of 1972. The contributions will start at £1 for a person with a disposable income of between £12.50 and £13.50 a week rising in eight stages of £2 to £15 for a person with a disposable income of between £22.50 and £24.50. It is estimated that the cost of meeting these increases will be £79,500 in 1974–75 rising to £111,000 in 1977–78. This is the second and third set of Regulations. It is also estimated that about 8,500 people who would now he liable to pay a contribution will pay no contribution at all, and that about 28,000 will pay less contribution.
§ My Lords, this is. I think, a relatively modest step, and I hope the House will agree with it. It is intended to benefit as many people as I can, and I am sure that it represents an important improvement to the Scheme that the review will now be annual instead of being at long rests, in order to meet the cost of inflation. I beg to move the first Motion standing in my name.
§ Moved, That the Legal Aid (Financial Conditions) Regulations 1973, he approved.—(The Lord Chancellor.)
§ 7.27 p.m.
§ LORD GARDINER
My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor, for explaining these Regulations to us, and we welcome them, although we regret they are made so late and they are on such a mean basis. For some time now it has been increasingly usual to refer to legal aid as being the Cinderella of the Social Services. It may be that it is because it is the only social service, I 727 think, for which the Minister for Social Services is not responsible, but I will not go into that now.
Whatever Government is in power, I think it is fair to say it has always been a question of too little and too late. The reasons are, I think, mainly these. Legal aid—and by that I mean civil legal aid, for which alone the noble and learned Lord is responsible—is, of course, administered by the Law Society. To find out what is happening in this field, therefore, one has to rely on the Annual Report on Legal Aid of the Law Society. Their legal aid year ends on March 31. It usually takes 6 to 9 months to get out their Report, which is not only financial but on how the thing is working. It does not at that stage get published at all, but goes to the noble and learned Lord's Advisory Committee, who take another 6 to 9 months. There is no complaint about this at all. I have been assured by the Law Society that they cannot do their part quicker, and the Advisory Committee are, of course, private citizens doing all this good work in their spare time. The result is that the two Reports are published together, and usually in about July of the year after the year ended March 31; that is to say, about 15 months after the end of the year. Of course, by that time, with an inflationary situation, things are getting out of date.
On this occasion the Advisory Committee, quite unusually considered the position, and the need to alter the income limits and to do it soon, so serious that they presented the noble and learned Lord with a special Interim Report, in which they said:We think it urgently necessary to inform your Lordship of our conclusion on income limits. It is important that they should be considered by your Lordship before Part 1 of the Act comes into operation on April 2.This Report was made in January of this year. It was published in February, and, seeing that, I put down a Question on February 14 and asked the Government whether they accepted all, or some, and if so which, of the recommendations contained in this special Report. The noble and learned Lord said that all the recommendations were still under consideration. I then said, at column 1544:While thanking the noble and learned Lord for that Answer, may I ask him whether he is aware that in paragraph 3 of the Report 728 the Committee say: "We think it urgently necessary to inform your Lordships of our conclusions on income limits …if your Lordship accepts our recommendations, we regard it as essential that the revised income limits should come into operation at the same time as the introduction of Part I of the Legal Advice and Assistance Act 1972'".I then added:May I ask the noble and learned Lord whether that date is not April 2, and therefore if the recommendation of the Committee is to be accepted, would it not be necessary to bring a Statutory Instrument into force next month?"—that is to say, March. The noble and learned Lord said:I think the answer to the whole of that question is, Yes, my Lords.March came and went; April came and went; May came and went: June, July, August, September. It is only now, in October, that we get these Orders put forward, implementing, but only partly, the recommendations which the Committee had said it was essential, in their view, should be agreed by April 2.
The first question I ask the noble and learned Lord is why there has been this considerable delay, bearing in mind the fact that in an inflationary situation when income limits are not altered it means that every month there are men who would have been entitled to legal aid last month but will not be entitled to it now because the income limits have not been altered. When this goes on month after month for about eight months, I think that we should know why. Secondly, now that we get the regulations we find that they are all on a cheeseparing basis. There has to be both a limit above which a man cannot get any legal aid at all and there has also to be a bottom limit on which a man with that income, but no more, is entitled to legal aid without making a contribution. The Committee have gone into this very fully, and what they have recommended is that the stoppage for legal aid, the top limit of which was £950, should be increased to £1250. The Government do not do that on the grounds that the noble and learned Lord has told us, of economy; they have cut it down to £1,175. As to the bottom income limit, it was £300, which the Committee said ought to be £400; and they have cut it down to £375. This piece of cheeseparing is put forward on the ground of economy.
729 I hope it will not be thought from anything that I have said that I am intending to be in any way critical of the noble and learned Lord on the Woolsack. I have occupied his position and I know what the Treasury is. This is one of the reasons why I have always wondered whether it might not be better (indeed, I remember discussing this with Mr. Crossman when he was Minister of Health and Social Security) that the Minister of Health and Social Security should do this, because he has £5,000 million approved by the Treasury to spend and has considerable discretion as to how he spends it. Unfortunately, the Lord Chancellor has to battle away against the Treasury all by himself. I am not in any sense criticising the noble and learned Lord, but it is unfortunate that his Government should come along with this so late, and even then not carry out the recommendations of this admirable Advisory Committee and be too mean even to do exactly what they recommend. Since January 15, which was the date on which the Advisory Committee made this Report on the cost of living as it then was, how much inflation has there been? One of the hardships of putting these things off month after month is that if, some nine months out of date, you carry out the Committee's Report, by that time you have a further degree of inflation.
I welcome the fact that in future this is to be an annual event. That is an improvement. We welcome the Orders as a whole, but for the reasons which I have ventured to give we regret that they are made late, and that in the case of each of these Orders the recommendation made by the Advisory Committee has been a little cut down on the grounds of economy of a very cheeseparing kind.
§ 7.36 p.m.
§ THE LORD CHANCELLOR
My Lords, I must thank the noble and learned Lord for the extreme enthusiasm and warmth of the welcome which he has given these Regulations. I do not quite know what to say, because he has so exonerated me from the strength of his strictures that I almost blush from shame. I should like to tell him one figure about which I reciprocate his kind understanding of the difficulties under which I have laboured with a similar understanding about the difficulties under which he may have laboured in the past. I should like 730 to tell him one figure which may lead him to modify his strictures on the present Government. When the last Government, of which he was an ornament, left office, they were spending about £9 million on legal aid; we are now spending about £24 million on legal aid. Cinderella or not, she certainly is one of the fastest-growing, percentage-wise, of the social services.
I do not think that I should like to comment on the theory that my right honourable friend the Secretary of State for Health and Social Security would get more than the Lord Chancellor. It is open to question. You can be lost in a crowd much more easily than you can be lost if you are the one petty ewe lamb of a small Ministry. Moreover, looking, as I do, at the correspondence I get from Members of Parliament about the administration of the Scheme, I give every letter that I get, with the Law Society, individual attention, which I think counts for something in dealing with M.P.'s correspondence. I doubt whether they could hope to get anything like that from other masters of the big battalions.
There are a number of questions about legal aid one gets in the course of business which it is possible that the Lord Chancellor's Office, with its considerable expertise, can answer better and more helpfully than a great Civil Service Department. I do not think that one wants to take that too tragically. It may be that a future Government will come to a different conclusion, but at present, being mildly Conservative, I think that I prefer the status quo.
The noble and learned Lord asked what had been the rate of inflation since a date in January. He kindly gave me some notice of this question. I can only tell him what I am told. The retail price index from mid-February to mid-September, which is the latest figure available, has risen from 172.4 to 181.8, an increase of 5½ per cent. I am also told that in arriving at the agreed uprating of the legal aid limits regard has been paid to the increase in the cost of living up to and including the time when the authority for the increase was given. I then inquired what was the time when the authority for the increase was given, and I was rather happy to see that it was October 15, which is only a few days ago.
731 It is true that the noble and learned Lord put down a Question and I gave the Answer that he attributed to me. I do not think he would be right to assume that either I or my minions have been altogether idle during that period. What we have achieved—and I think this is of considerable value—is tile annual review, and I think it was worth getting it in the terms in which it has been obtained. Of course, as the noble and learned Lord is well aware, what one gets is a package, and one sometimes has to work for it. I think I have done the best I could in the circumstances for the customers, who are the people in need of legal aid and legal advice and assistance.
I do not think one should despise the obligation of loyalty which a spending Minister, even a modest spending Minister like myself, with a relatively small budget, has to owe to his Treasury colleagues. The Treasury are always given the reputation of being mean, but of course it is not their money they are dispensing; it is other people's money. There is no question of meanness about their own. We are constantly being asked to reduce public expenditure, and here am I coming along with a proposal to increase it by more than £1 million a year. I can quite understand people saying that that is a very small sum when we are spending I do not know how many thousands of millions a year in the Budget; but I think the fact is that you have to practise as you preach, and if one Government Department is told to practise economy with a very large sum, I suppose those who are less lucky and have to practise economy on rather smaller sums have to show a like example.
I certainly am not one who would deprecate in any way the importance of legal aid or the desirability at some stage of considering the whole scope of this social service. The truth is that since 1949 successive Governments have operated a bottom limit which is not much above National Assistance level, and so long as that remains the statutory basis for the thing there are very considerable limits on what can be done to improve matters. This is clearly one of the matters that future Governments must think about, but they must think about it in the context of the national economy 732 and of other calls on our purse. The thing about legal aid, apart from criminal legal aid, is, of course, that if you win your action or are successful in your defence to an action for which you get legal aid the unsuccessful litigant pays, and the Fund is to that extent recouped; and, of course, if you recover money as a plaintiff, to the extent that the unsuccessful defendant does not pay the actual money recovered is charged—rather cruelly, but I think justifiably—with the recovery of the costs. So it is not quite as expensive as it would otherwise be; and one has therefore to look at the rather modest limits of income and capital both in the light of deductions in this regard which are made and in the light of these considerations. But since the noble Lord has been so generous in his praise of these new Regulations, I shall not say any more.
§ On Question, Motion agreed to.