Legal Advice and Assistance (Financial Conditions) Regulations 1982 (Hansard, 23 February 1982)

§ The Lord Chancellor (Lord Hailsham of Saint Marylebone)
rose to move that the regulations laid before the House on 1st February be approved.
The noble and learned Lord said: My Lords, for the 837 second time in two days have to detain your Lordships' House with business relating to legal aid, and I now rise to move the first of the two Motions standing in my name. I will, with the permission of the House, speak to both of them together but, of course, the second will be moved formally afterwards. I will call the regulations respectively the Aid Regulations and the Advice and Assistance Regulations. Their effect is to increase the financial limits for civil legal aid and for legal advice and assistance in England and Wales by approximately 9 per cent. They are intended to ensure that persons with the same real income in the coming year as those who qualified for legal aid in the past year, will be eligible to receive legal aid subject, where appropriate, to a similar contribution.
Taking the regulations in detail, the Aid Regulations raise the lower income limit for legal aid (below which no contribution from income is payable) from £1,700 to £1,850 a year and the upper income limit (above which legal aid is not available) from £4,075 a year to £4,440 a year. They also raise the lower capital limit for legal aid (below which no contribution from capital is payable) from £1,200 to £1,310 and the upper capital limit (above which legal aid is not normally available) from £2,500 to £2,725.
The Advice and Assistance Regulations increase the upper income limit for legal advice and assistance (above which legal advice and assistance is not available) from £85 a week to £93 a week and increase the capital limit (above which advice and assistance is not available) from £600 to £655. It is right, also, to say that I have made a second set of regulations for which affirmative approval is not required. These are called the Advice and Assistance (No. 2) Regulations. Those regulations which, as I said, do not require an affirmative resolution, increase the lower income limit for legal advice and assistance (below which no contribution is payable) from £40 to £44 and also make amendments to the scale of contributions which an applicant for advice and assistance may be required to pay towards his costs.
I should like to say a word about the percentage of the population covered by legal aid and its alleged reduction when legal aid financial limits are not increased. I think that there has been a certain amount of misunderstanding about it, because the question is both complex and, to some extent, misleading, as the rules for assessing a person's financial eligibility differ according to the facts of his or her case. For example, a husband who sued his wife for injuries suffered while a passenger in the car she was driving, would have his resources assessed solely on his own income and capital. Normally the rules aggregate spouses' income. But this is an exception to the general rule, and an exception which applies to all cases where the interest of the two spouses is in conflict. Thus, were the same husband to sue a stranger, his and his wife's income would be aggregated but, where he sues his wife, it is not.
However, accepting the difficulties and the necessary assumptions, the best figures available to the Government and to my department suggest that with the proposed uprating at least 70 per cent. of households will be covered by legal aid after commencement date of 1st April. This compares with the same estimate of at least 70 per cent. in 1979 when, as a result of the changes brought about by my noble and learned predecessor in office, the limits were substantially 838 increased to achieve a similar coverage to that which legal aid provided when first introduced in 1950. When I was in Opposition, I congratulated the noble and learned Lord on his achievement, although I remember that I criticised him to some extent about the financial savings which were exacted in return for the advances which he was then able to make.
Many might wish to see a greater increase. Some would argue that there has been no increase since November 1979 and that the present increase does not make up that lost ground. I have taken very great care to check that allegation with my department; and, indeed, I checked it again this morning. I cannot profess to be able to do the precise sums, but their view firmly is that those who make those criticisms have not adequately taken account of the effect of the allowances affecting financial eligibility. These have the effect, particularly in the case of family men or one-parent families with children, of reducing the disposable income, so that over the whole population coverage is, as I have said, about 70 per cent. It will be higher in the case of the classes I have mentioned; lower in the case of single persons and persons who do not have the benefit of the allowances I have mentioned.
It may also be complained that the present increase might have been expected to have been implemented last November when the supplementary benefit financial limits were increased. Such complaints, however, usually ignore the background against which the present uprating has been made. The coverage of the scheme has not been much affected by the lack of an uprating in 1980 or the postponement until April of the present increases. Many increases in the cost of living are automatically taken into account in assessing the person's financial eligibility. For instance, usually a full allowance is given for housing, travelling and other work expenses, and tax and national insurance payments are deducted in full when a person's disposable income is being assessed. In addition, allowances for dependants are tied to their supplementary benefit counterparts and rise automatically with supplementary benefit allowances. Given those ameliorating circumstances and the Government's overall economic strategy of public expenditure restraint, to question the adequacy of the present uprating would, I am advised. involve taking an unrealistic attitude towards legal aid. I therefore invite the House to approve both sets of regulations, and I beg to move the first of the two Motions standing in my name.

§ Lord Elwyn-Jones
My Lords, the House will be grateful to the noble and learned Lord for explaining these two sets of Legal Aid and Legal Advice and Assistance (Financial Conditions) Regulations. I confess that to follow the technical detail which the noble and learned Lord has just covered is not very easy. One or two points emerge. Of course, until last November this was an annual exercise; namely, to ensure that legal aid limits kept pace with inflation, at least to the extent that increases in supplementary benefits kept pace with inflation. But am I not right in thinking that in fact the supplementary benefit 839 increases in 1981 did not achieve that target? In so far as the same equation has been maintained, has there not therefore been a falling back—in other words, a decline in the availability of legal aid and advice in the period since November? Has that diminution been covered? I confess that I did not find it easy to follow the pointers of the noble and learned Lord to other beneficial increases which in his view make up for the basic loss resulting from the failure to upgrade supplementary benefit increases last year, but that no doubt is my fault and not that of the noble and learned Lord.
I shall not be very long, if noble Lords are worrying about the time. There are some questions, however, which ought to be asked about this matter, with great respect to the Whips opposite regarding whatever it was that was going on which I ought perhaps not to have been watching or listening for. Having so foolishly interrupted myself, may I return to what I was asking about. I should like a specific answer to the question whether or not there has been a decline in the uprating of the benefits in the last few months. The information that 70 per cent. of householders are still covered is reassuring, so far as it goes. A considerable step was accomplished when we reached that level in 1979. In the previous period it had been way down to about one-half. It means of course that 30 per cent. of households are not covered. Bearing in mind the high costs of litigation, it presents that proportion of our population with a great deal of anxiety if faced with the prospect of litigation. if it were not for that deterrent, the noble and learned Lord might be having even more trouble with over-crowding of the courts. We ought to move forward, further than that figure of 70 per cent. when we can because, as I say, the costs of litigation are potentially ruinous and the protection of legal aid, even on the basis of a substantial contribution, is of great value to the average citizen.
Turning to the take-up of the legal aid and advice scheme, if the noble and learned Lord has information readily available it would be interesting for the House to hear about it. It has been a valuable element in the field of legal aid and assistance and its short-cut methods often achieve very satisfactory results which the full process of application and certification, et cetera, for legal aid do not easily provide. Therefore I welcome the proposed increases—obviously so far as they go. One can only hope that they will go further. At the next turn-around steps will be taken to make up for what I fear is the loss suffered by the failure of supplementary benefit increases to keep pace with an inflation which has been the subject of considerable attack in our debates on that subject, and by the failure to have any increase in the last normal accounting period.

§ Lord Lloyd of Kilgerran
My Lords, may I join the noble and learned Lord, Lord Elwyn-Jones, in thanking the noble and learned Lord the Lord Chancellor for introducing these regulations in the way that he has. May also join the noble and learned Lord, Lord Elwyn-Jones, in welcoming the proposed increases, so far as they go. I should like to know whether the 840 noble and learned Lord the Lord Chancellor can say if there has been a decline in the uprating of the benefits along the lines which he has indicated. The protection of legal aid is most important to many classes of individuals. That is the only question which I wish to put at this stage to the noble and learned Lord the Lord Chancellor.

§ The Lord Chancellor
My Lords, I will do my best to respond to the two noble Lords, whom I thank for the welcome they have given to these regulations. Yes, there has been a lag since 1979. During the period of that lag there was obviously some decline which was mitigated by the factors to which I drew attention in my opening speech. When the new regulations come into effect across the board I am advised that the position will be restored to what it was under the reforms of November 1979, to which I referred and which the noble and learned Lord mentioned. Those reforms were designed to restore the position to what it was in 1950 when civil legal aid came into effect, and they broadly did so. The 70 per cent. is the 70 per cent. of the whole population. This does not mean that there will not be variations between particular classes of person. If one chose the more vulnerable classes, such as one-parent families, the percentage who would be entitled to legal aid would be very much higher than if one took the less vulnerable classes of the population. The figure of 70 per cent. is an average and relates to the whole population of households.
The other question which the noble and learned Lord raised is much more difficult: whether the legal aid scheme which aims, I would have said, ideally at about three-quarters of the population (70 per cent. is of course less than three-quarters) ought to go beyond that. That is a question of policy of very general debate into which I should not like to enter in detail. When one discusses the question of civil litigation, there is no doubt that there is a group of people who are ineligible for legal aid—that is to say, they have financial resources above the maximum limits. They could not be described as rich. If one wanted to bring a High Court action at present, most persons present in this Chamber would find it expensive. A very great deal of civil litigation is carried on either out of untaxed income, which therefore is deductible for tax, or alternatively is brought at the expense of insurance companies, or trade unions, or is supported in some other way. So again one would have to distinguish before increasing coverage further. I agree that there is a middle class of person who finds the cost of litigation in the High Court very onerous—and probably so in the higher ranks of county court litigation, too. I found it so myself on the very rare occasions when I was compelled to litigate.
When I began my Chancellorship I entered into some discussions with insurance companies to try to cover that class by a form of voluntary insurance and I think that they are looking into that possibility. There is a widely taken up insurance scheme in Western Germany which we might do very well to imitate here. But, as I say, I do not think that any general advance above the limits which the noble and learned Lord managed to achieve, at a certain cost, in 1979, and an annual exercise to try to keep them up to date could be wisely promised by a Lord Chancellor at present, 841 for the kind of reason which I was discussing yesterday; namely, that such advances have to compete with education, health, defence, housing, hospitals, schools and other things.
A responsible Lord Chancellor has to recognise that there are other claims on the public purse and that he must bear his share of the burden in a small but still very rapidly increasing social service about which we try to do the best we can. Having said that, I do not think that I can say any more. I cannot off hand answer the question I was asked about the statistics on take-up, but I will seek to write to the noble and learned Lord; and if he thinks the figures of general interest he can put down a Question for Written Answer based on my letter.