§ 3.20 p.m.
§ The Minister of State, Home Office (Baroness Blatch)
My Lords, I beg to move that this Bill be now read a second time.
Your Lordships will need little reminding of the importance of this Bill. Its aim is to provide statutory backing for the payment of compensation to the blameless victims of violent crime. The Bill will provide the framework for an enhanced tariff scheme. That new scheme will concentrate on a simple tariff approach for the majority of victims, while ensuring that generous compensation is paid to those most seriously affected by their injuries. In this way we believe the enhanced tariff scheme provides the right balance between meeting the needs of victims while protecting the interests of taxpayers.
We have, of course, had a non-statutory criminal injuries compensation scheme since 1964. It provides compensation from public funds to the blameless victims of crimes of violence and to those injured in attempting to catch criminals or prevent crime. When the scheme was introduced the government of the day made it clear that they did not accept that the state was liable for injuries caused to people by the criminal acts 293 of others. But they did believe that the public felt a sense of responsibility for, and sympathy with, the blameless victim. They felt, therefore, that it was right for that feeling to be given practical expression by the provision of a monetary payment on behalf of the community. We remain of that opinion.
Since 1964 the scheme has been run by the Criminal Injuries Compensation Board. In the first full year of the scheme's operation—1965–66—the board received 2,452 applications and made 1,164 awards, totalling just £403,000. That would be around £4 million at today's prices. In the most recent year for which audited figures are available—1993–94—the board received 73,473 applications. It made 65,293 awards and paid out no less than £165 million. Our criminal injuries compensation scheme is the most generous in the world. We pay out more than the whole of the European continent taken together and we pay out more than the whole of the United States taken together.
Under the current scheme awards are assessed on the basis of common law damages: that means what an applicant might expect to be awarded in a successful action for damages in the civil courts. Calculation of awards on that basis requires finely judged assessments of the degree of suffering and financial loss. That tends to make speedy decision taking more difficult. It also makes it harder to predict and control the costs of the scheme. We all know that under the energetic and able leadership of my noble friend Lord Carlisle, the board has been determined to improve the workings of the scheme. I should like to take this opportunity to pay tribute to my noble friend and his colleagues on the board for all they have done. It has been much appreciated. But, despite those sterling efforts, the backlog of unresolved cases has risen inexorably. It now stands at nearly 110,000. At the same time, the costs of the scheme have continued to increase at a rate that is no longer sustainable for a scheme funded by the taxpayer.
It was against that background that we decided to introduce a new tariff-based scheme in April 1994. That tariff scheme moved away from the one based on individual assessment. It provided for payments to be made on the basis of a scale of awards which grouped together injuries of comparable severity and allocated a financial value to them, based on awards made previously by the board.
The new scheme ran from 1st April 1994 to 5th April 1995, when the Judicial Committee of this House ruled that the method of the tariff scheme's introduction had been unlawful. The scheme was immediately withdrawn and the former scheme reinstated. But I must emphasise here that the legal judgment related solely to the method of the tariff scheme's introduction; it was not concerned with the merits of the scheme itself.
We remain firmly of the view that a tariff-based approach is the right way forward. A tariff scheme is easier for victims to understand. It is easier to operate; and that means that applications can be dealt with more quickly. It also enables costs to be controlled and predicted more easily.
But in revisiting the tariff approach we have, of course, taken careful note of the criticisms made of the earlier scheme, both in this House and elsewhere, and 294 in particular the concern that too simple a tariff approach could have a detrimental effect on those most seriously affected by their injury. We think our new, enhanced tariff scheme meets the major points of concern that were expressed. It will ensure that in the more serious cases payment is made for loss of earnings and earning capacity and for the costs of special care. And, in cases where the victim has, tragically, lost his life, not only will family members receive a fixed tariff payment, but, where they were financially dependent on the victim, they will also receive payment for that loss of dependency and support.
The Bill provides the framework for the new scheme and sets its broad parameters. It makes it clear that it is a tariff-based scheme, but that the tariff would be augmented in appropriate cases by payment for loss of earnings, special care and dependency. It makes it clear that the more important features of the scheme—namely, the tariff itself and other provisions bearing on quantum—will be subject to parliamentary scrutiny. They will require the affirmative resolution of both Houses of Parliament before they can be included in the scheme.
The Bill will also repeal the provisions in the 1988 Criminal Justice Act which would have made the common law damages scheme statutory. It is intended that the Bill should come into force on Royal Assent and that, following parliamentary approval of the details to which I referred, the new scheme should start on 1st April 1996.
Following detailed consideration of the Bill in another place, I suspect that the details of the new scheme are already well known to many noble Lords present today. However, other noble Lords may find it helpful if I briefly rehearse the main features.
There will be a basic tariff of awards. Each injury description is allocated to one of 25 tariff levels which will attract a fixed payment ranging from £1,000 to £250,000. All successful applicants will receive an award from the tariff. But in addition, those who are incapacitated as a result of their injury for more than 28 weeks will be entitled to separate, additional payment for loss of earnings or earning capacity. There clearly needs to be a qualifying period to trigger that extra payment and to differentiate between those who have been most seriously affected by their injury and those whose injuries are less severe. We believe that 28 weeks is the most appropriate trigger, since that is the period for which statutory sick pay is payable by employers. Of course, those who do not qualify for statutory sick pay during that time should qualify for incapacity benefit, or other state benefit as appropriate.
In cases of incapacity for more than 28 weeks there will also be payment for special expenses. That will be payable from the date of the injury and it will cover the costs of special care and future care. In general, if something qualifies for special expenses under the present 1990 scheme, it will qualify for special expenses under the enhanced tariff scheme. Thus the sort of things it will cover include the costs of home mobility equipment, fees for care at home or in a nursing home, 295 and the cost of private medical treatment if, in all the circumstances, both the treatment and the cost are reasonable.
In fatal cases there will be a fixed fatal award of £5,000 per qualifying claimant, unless there is only one qualifying claimant in which case the award will be £10,000. But in addition, where the claimant was financially dependent on the victim, payment will be made for the loss of that dependency—in other words, for the loss of the breadwinner's wage. And a child will be eligible for payment for loss of parental support. Reasonable funeral expenses will continue to be paid in all appropriate cases. The upper limit for awards under the enhanced tariff scheme will be £250,000, double that payable under the old tariff scheme.
Finally, I should mention a most important feature of the new arrangements. That will be the ability to make payments by what are known as "structured settlements". For higher value awards it will enable the claimant to opt for payment by the purchase of annuities which will provide a stream of index-linked payments for life, or other specified period. Those payments will be tax-free. It will considerably enhance the net value of the award to the victim. And I can tell your Lordships that we shall use the Bill to ensure that the benefits of structured settlements can be extended to claimants under the current scheme whose claims have not yet been settled. That will, in fact, necessitate our making a small change to the current scheme plus an amendment to this Bill, which we shall bring forward in Committee.
The tariff itself is based on that used in the earlier tariff scheme which had to be withdrawn. It was derived from nearly 20,000 awards made by the board which enabled us to group the injuries into bands of comparable severity and to set an appropriate level of payment. We have made some adjustments to the tariff in the light of experience of operating the tariff scheme in 1994–95, including the addition of new or amended injury descriptions. The new tariff lists over 300 injury descriptions and is, we believe, now pretty comprehensive.
The new scheme will be administered by a body similar to the Criminal Injuries Compensation Authority, which administered the earlier tariff scheme. The Bill will enable the administration of the scheme to be market tested at a future date, although we have no plans for that at the present time.
The Bill provides for a two-stage appeals process similar to that under the earlier tariff scheme. The first stage will be an internal review of the case by a more senior member of the authority. The second stage will be a right of appeal to an independent appeals panel. This will comprise members of the present board, and people with experience in medicine, business, commerce, or with a trade union background or other broader relevant experience. The workings of the appeals panel will come under the supervision of the Council on Tribunals.
Apart from dealing with appeals from individual claimants, we regard the panel as an important source of expertise and advice. We have therefore made it clear in the Bill that the panel has an advice-giving role. That 296 means that the Secretary of State may consult the panel whenever he feels it would be helpful, while the panel may in turn give advice to the Secretary of State on such matters and whenever it considers it appropriate to do so.
The rules of eligibility and the procedures for making applications and appeals will remain very much as they were under the 1994 tariff scheme. And that scheme, of course, closely followed the rules of the common law damages scheme. However, the time limit for making applications will be extended from the earlier tariff scheme's one year, to two years. And, as before, the authority will be able to waive that time limit in exceptional circumstances.
I mentioned earlier that the costs of the common law damages scheme were increasing at a rate that was no longer sustainable. In fact, as the Financial Memorandum to the Bill makes clear, we estimate that without reform the annual liability to compensation by the year 2000–2001 would be in the order of £460 million. Under the enhanced tariff scheme, the liability will, of course, continue to grow year by year, but at least at a less rapid rate. By 2000–2001 we think that the annual liability will be in the order of £260 million, and that the total payable under the tariff scheme to then will be about £1.1 billion. That is still an enormous amount of taxpayers' money by any standards and, indeed, we will retain our place in the league tables. It is not surprising, therefore, that our scheme is, and will remain, the most generous scheme anywhere in the world.
We believe that the enhanced tariff scheme provides the right balance between the needs of victims and the interests of taxpayers. It has the benefits of a tariff-based approach which will enable most claimants to get their money quickly and without undue fuss. But it also ensures that the most seriously injured are generously catered for, by paying loss of earnings and the costs of any special care, and by making provision for structured settlements. I hope the House will recognise that we have listened very carefully to the criticisms of the earlier tariff scheme, that we have made a number of very significant improvements, and that the new tariff scheme is much the better for it. No doubt others might wish to go further—we shall hear much of that during the course of the afternoon—but any prudent government must have regard to resource constraints and I believe that, within those constraints, the new tariff scheme is a good and generous one. It is good for victims, and it is good for the taxpayer. This Bill provides the necessary framework for the scheme, and I commend it to the House.
§ Moved, That the Bill be now read a second time.—(Baroness Blatch.)
§ The Chairman of Committees (Lord Boston of Faversham)
My Lords, the Question is that this Bill be now read a second time.
§ Lord Simon of Glaisdale
My Lords, I apologise to the noble Lord on the Woolsack. Before the noble Baroness sits down, has she no words of contrition on behalf of the Home Secretary for having acted illegally; more seriously, for having done so in the knowledge that there was a 50:50 chance at least that he was acting illegally; and most seriously, that he was in any case acting unconstitutionally by producing his own scheme in place of the scheme that Parliament had enacted and that was still on the statute book awaiting his bringing it into force?
§ 3.35 p.m.
§ Lord McIntosh of Haringey
My Lords, I think that the noble and learned Lord will recognise that he has just made a substantive contribution to the debate rather than an intervention on procedure after the Question has been put. Perhaps I may, with due respect, suggest to him that if he wants to do that the House would be tolerant if he decided to speak in the gap. I do not think it is appropriate to have interventions at this stage of the debate.
It would be beyond the possibilities of human self-restraint if I were not to make some reference to the sorry history which has brought this Bill before the House. I shall, I hope noble Lords will recognise, seek to spend the bulk of my time speaking constructively about the details of the Bill before us, anticipating the way in which we shall be dealing with it when it comes to Committee and later stages. But before doing so I cannot resist saying that the noble and learned Lord, Lord Simon, has a serious point to make about the history of the Bill. After all, since the 1960s we have had a Criminal Injuries Compensation Scheme which has relied on the Royal Prerogative rather than a statute. It was recognised that that was something of an anomaly. The 1988 Act introduced a statutory basis for the scheme, but did so without setting a commencement date.
Of course it is within the proper scope of government to seek to change the basis of criminal injuries compensation. But if they had, as they did in 1988, decided to make statutory the common law basis which had been working already for 26 years and if they had expected that to be statutory, then surely they ought to have recognised from the very outset that to seek to make a change by Royal Prerogative was an improper procedure. That was recognised in debates in your Lordships' House on th 1993 White Paper; it was recognised in the debates initiated by the noble and learned Lord, Lord Ackner, on the Criminal Justice Bill; and it cannot be said that there has not been plenty of warning from your Lordships' House and from around the country about the impropriety of what the Home Secretary sought to do by introducing a completely different scheme through the use of the Royal Prerogative. That chicken very firmly came home to roost when the Appellate Committee of your Lordships' House decided that the Government had sought to make a major change to the whole basis of a scheme which they had put before Parliament but never enacted. I do not think there can be easy forgiveness for the 298 disruption, the additional cost and the confusion and injustice which have arisen as a result of this whole sorry procedure.
It is not even as though there was any adequate justification for the arguments about increases in cost. Of course there have been increases in cost. The Financial Memorandum to the Bill rather disingenuously describes them as increases in cost in any year as being based on the number of cases settled, the proportion attracting monetary award and the average value of the awards. Well, of course, in mathematical terms, that is the case. That is the proximate cause, if one likes, of an increase in cost in any given year.
What is the cause of the increase in cost over a period of years? Clearly, it is the increase in violent crime. It is exactly the result of policies of this Government over years and the refutation of the claims that were made by successive Home Secretaries to Conservative Party conferences that it is the party of law and order. We must bear in mind that in 1979 the chance of any one of us being a victim of violent crime was 1:213. In the current year the chance is 1:64. Although there has been a decrease in some crimes, the increase in violent crime is currently running at approximately 7 per cent. per annum. So there is indeed a very serious cause for the increase in expenditure on criminal injuries compensation, but it is not one that the Government have ever admitted or accepted as being their responsibility after 16 years in office.
I turn to the two alternatives which the House has to consider in making a judgment about the best approach to the compensation of victims of violent crime. It has to be said straightaway that there is no simple answer to this. The common law scheme, which existed until it was replaced by the illegal tariff scheme, had a number of very clear advantages. It removed the difficulty of the injustice between the suffering of someone who is the victim of crime and someone who is the victim of an accident, which can be compensated by an insurance policy or payment from the person who caused the accident. To the victim there is no difference and to that extent the attempt in the common law scheme, which worked for so many years, to equate the pain and suffering of a victim of crime with that of the victim of a non-crime was admirable.
However, as the Minister rightly said, the tariff scheme has a number of advantages. I shall not embarrass the noble Lord, Lord Carlisle of Bucklow, by reading his very powerful speech in the debate on the White Paper against the total tariff scheme. Perhaps he is proposing to repeat it this afternoon. It was the most devastating attack on a change of government policy that I have ever heard. Nevertheless, despite what he said then and what he might say now, a tariff scheme does have advantages. It is easier to understand and it can be implemented more quickly. It does not require an army of lawyers and legal assistants to make the calculations. It makes it easier to control costs.
We now have neither the common law scheme nor the total tariff scheme which was in force in 1994–95. We now have a hybrid scheme, which I believe has been called the "tariff-plus" scheme. It is incumbent on us to 299 concentrate on the tariff-plus scheme which is before us, rather than to think about the theoretical alternatives. I do not believe that it is possible to go back to the common law scheme as it was. I certainly do not believe that it is possible or desirable to go back a shorter time to the total tariff scheme which was introduced illegally.
I cannot resist recording what the noble Earl, Lord Ferrers, said in this House on 16th June last year about the hybrid scheme. He said:a hybrid scheme would retain the worst elements of common law damages—that is, loss of earnings—and would make for great complexities and delay."—[Official Report, 16/6/94; col. 1847.]There has been some change, it might be said, politely, in government thinking since that time. I often wonder whether changes in the personnel of government are made at frequent intervals in order to avoid the embarrassment of Ministers having to eat their own words rather than those of their colleagues, which is what the Minister has done today.
Let us look constructively, if we can, at the defects of the scheme which is before us. It has to be said that there are too many of them. Of course, it is acknowledged that there is an increase in flexibility. The scheme itself is more complex in the number of recorded items which are priced. That has gone up to 310 from the earlier smaller number. But even so, flexibility has by no means been achieved by the addition of the loss of earnings provision. For example, what about the difference between the loss of hearing or sight of a child compared with that of an elderly person? That is a totally different situation in terms of life chances and of the cost of living a decent life.
What about the difference between a facial scar on a young woman or a young man actor, let us say (in order to avoid issues of gender), compared with someone who is past it like me? I say this with feeling as a person who is gauche as well as gauchiste, as the French say. What about the difference between the loss of the use of the left hand as opposed to the right? It makes a huge difference in what one can do, but that is not recognised in the scheme. What about the lack of recognition for multiple injuries? I know that that would make the scheme more complicated, but multiple injuries have an effect on each other, which makes a difference to the total suffering of the victim. All these things are omitted from the scheme, but they are perfectly possible because industrial disablement benefit allows them to be considered.
I turn to the loss of earnings capacity. I was slightly unnerved by the Home Secretary on 29th June in the debate at Third Reading in another place. He thought that these additional provisions in the Bill would only occur in the more serious cases. I very much welcome the Minister's view on what the special conditions might be for loss of earnings. But does loss of earnings include loss of future earning capacity, as it should? Does the provision for special expenses cover future special expenses? What about the provision of no compensation for the first 28 weeks? The argument here is that that is the period of statutory sick pay and the period for the lower payments which are made in the absence of statutory sick pay. There are 12 million people who are 300 excluded from statutory sick pay. Many of them are most vulnerable to violent crime. I take the obvious. examples of a self-employed taxi driver or a sub-postmaster or sub-postmistress. Can we be sure that these people will be adequately compensated for loss of earnings, which are not reflected by other elements of the government benefit system?
I am amazed to find that the 28-week rule also applies for dependency payments. These should not be called "compensation" in quite the same way.
I do not find anywhere here recognition of the conditions of exceptional risk which apply to fire fighters—and I give one example only. I remind the Minister that it was the Fire Brigades Union which brought the Government to their knees in the legal proceedings, which were determined by the House of Lords. I am worried by the provisions for capping the maximum awards. I recognise the value of the settlement procedures and their tax advantages, but we need further debate on maximum awards before we let this provision go through.
I am worried by the provision for the time-limiting of claims. The Minister said that the Government are proposing an increase from one to two years, but the common law scheme allowed three years for claims to be made and, even so, in the last year nearly 4,000 claims were out of time, of which nearly 3,000 were allowed. I wonder whether even three years is enough, let alone the two years which are provided.
I am also worried about the lack of provision for uprating for inflation. After all, the scheme was introduced in 1994, based on 1992 figures, and is proposed to run until 1999 without major revision. We shall have to look into that issue as well. I am also concerned about the independence of advisers and the appeal provisions.
Although in essence we accept that we must have a tariff-plus scheme, a hybrid scheme, we shall have substantial Committee, Report and Third Reading debates in this House. I hope and believe that they will be constructive because they will be concerned with the detail of the scheme and with making sure that we have the best possible scheme that we can afford, which is generous and which recognises the real differences between one victim and another. We owe no less to the victims of violent crime. The House will find us, as always, constructive and forward-looking in the way in which we approach the Bill.
§ 3.51 p.m.
§ Lord Rodgers of Quarry Bank
My Lords, despite the untypically ungenerous and perhaps even pompous opening remarks of the noble Lord, Lord McIntosh of Haringey, I greatly welcome the intervention of the noble and learned Lord, Lord Simon of Glaisdale, who got to the heart of the matter and explained to the House as succinctly as ever why we are discussing this Bill today. Although, as I shall make clear in a moment, I do not want to pursue that matter at length, it should be widely understood and not forgotten that we have this Bill because of the arrogant assumption of the Home Secretary that he could introduce a tariff system without reference to Parliament. All credit to all those who, in 301 their different ways, played their part in exposing that error and in creating the circumstances which obliged the Government to introduce the Bill.
I do not intend to pursue that matter further because the Bill is now before us. Furthermore, the noble Baroness, Lady Blatch, was not at the Home Office at that time. In any case, given her record, she would nobly defend the Home Secretary with her usual loyalty and panache. My regret is not that the noble Baroness does not find it in her—or has not so far found it in her—to express regret or to make an apology, but that I find it sad and unsatisfactory that in another place the Home Secretary did not in any way express contrition for a decision for which he was wholly responsible.
As for the substance of the Bill, I now await with some trepidation the remarks of the noble Lord, Lord Carlisle of Bucklow. I come new to these matters and, reading the Bill and considering the questions that were raised in another place, I, like the noble Lord, Lord McIntosh, have concluded that, on balance, I can accept the tariff system. I have to say—it is right that it should be said—that whatever the shortcomings of the system that is now proposed, which we shall he discussing more fully later, the scheme that is set out in the Bill is better than the arbitrary scheme that was imposed by the Minister in April 1994. Let credit be given where it is due.
Some awkward matters of judgment are involved about the quantum of compensation as well as about its distribution. It is one thing to endorse the principle of compensation—it was recognised by Parliament 30 years ago—but I concede that it is another thing to devise the right system for today. Having said that, it is important to challenge what the Minister has just said and what the Home Secretary said in another place about the costs of the present scheme and of any future provision. The Minister twice repeated the fact that the scheme which we have had and the scheme which we are to have will be the most generous in the world. The noble Baroness went so far as referring to a league table. However, I do not think that the issues of a league table and whether the scheme is the most generous in the world are relevant to the question of priorities which is for Parliament to decide. What we must decide, both in this House and in another place, is whether the scheme is adequate, given the need, and how much we are prepared to spend on this aspect of compensating the victims of criminal actions.
The Home Secretary was frank in another place when he said that the factor of costs had led him to proceed in the way that he, quite wrongly, chose. I hope that we shall examine that point more fully later. As it is not entirely clear to me, I ask the Minister how much less the present scheme is likely to cost in due course than the old scheme would have cost had it continued. Having looked in detail at what the criminal injuries compensation scheme is meant to do and at the need for compensation, I have found it extremely difficult to come up with a figure showing that the cost of the new scheme will be substantially lower than the cost had the old scheme continued.
We can compare the cost of £175 million for the first year of the operation of the new scheme with the figure of £260 million which I understand is the sum envisaged 302 in five years' time. We can compare those figures and others. If we do so, I do not think that we shall conclude that, as the Home Secretary said in another place, the cost of £260 million is enormous. It may sound enormous in absolute terms, but it is not enormous comparatively if we consider expenditure in any government department, expenditure on social policy as a whole or the overall figure for public expenditure as set out in the annual document.
Perhaps I may make one or two comparisons. Even if the proposed scheme costs £260 million, it will cost us much less in a year than our intervention in Bosnia, for example. I see the Minister looking despairingly at her colleagues as if that is not a relevant comparison. If she does not think that that is relevant, what about our annual expenditure on prisons? Is she suggesting that that is not a relevant comparison? Annual expenditure on prisons is £1.5 billion in England and Wales in the current year. We are proposing to spend one-tenth of that figure on the proposed scheme at its peak. So, we are spending on the victims of criminal injuries one-tenth of what we spend on keeping people in prison. That is a relevant comparison when we consider whether these figures are simply enormous or are figures which we should accept as desirable on social grounds.
The only question is how much we should be spending to compensate the victims of criminal injury if, as the Government have proposed, victims should be at the centre of penal policy now and in the future. I repeat that I do not think that the figure is enormous. It is relatively modest when compared with expenditure in other areas.
If the scheme that is now proposed begins to overrun its estimated costs, will there be any attempt to revise the benefits? Will the Minister make clear to the House what role Parliament will have in approving any future tariff if Ministers seek to do what I hope that they will not do and what I hope that the noble Baroness will say that they will not do, which is to reduce the quantum or the benefits that are payable?
Having said that about the cost and, with some qualifications, having in general welcomed the principle of the Bill, I must say that most of the points that I wish to pursue are better pursued in Committee. For the most part, I associate myself with the detailed anxieties rightly expressed by the noble Lord, Lord McIntosh. Perhaps I may refer to four points which cover part of the ground that he dealt with.
First, reference was made to the new scheme being quicker than the common law scheme. Will the Minister tell the House what proportion of those who lodge their claims are expected to receive their compensation within the first year of lodging them? How will that compare with the time that elapsed under the common law scheme? As those in her department must have made judgments about how much quicker the new scheme will be, what evidence does she have?
Secondly, the Minister referred to parliamentary scrutiny but I was not clear as to which aspect of the Bill she was referring. Was she referring to the qualification rules or was there some other indifferent 303 matter in respect of which she says parliamentary scrutiny will be allowed, although through the inadequate means of statutory instruments?
The Minister referred to my third anxiety, although I may have misunderstood her. She may have suggested that an amendment made in Committee would be appropriate. Will she give examples of the changes in the common law scheme which she anticipates being made in the next year before the scheme covered by the Bill is implemented? In another place the Home Secretary referred to the changes as minor and administrative, but if the Minister could give one or two examples the House would be enabled to make up its own mind.
Fourthly, I wish to associate myself with what was said by the noble Lord, Lord McIntosh, about the time limit. I strongly favour a three-year time limit. The Ministers have chosen a two-year limit and there must be some purpose behind that. They must have taken a view about how many claims will be disallowed because they are out of time, albeit subject to an appeal.
I accept on balance the idea of a tariff. However, as we all know, a tariff is inflexible, it leads to anomalies and it results in unfairness. Every victim is different and every injury is distinctive. In my view, it would have been far better if in addition to the tariff we had had clear bands within which discretionary decisions could be made. I hope that as a result of discussion in this place there will be more flexibility in the scheme and more frequent updating than is at present anticipated. If the independent panel to which the Minister referred is only advisory I would much prefer an independent panel which could itself determine the tariff.
Despite the history of the matter and the shortcomings of the Bill we welcome it as far as it goes. However, I hope that the Minister will be far more receptive to amendments tabled in this House to this Bill than she was in the sorry case of the Criminal Appeal Bill, which we finished last night.
§ 4.4 p.m.
§ Lord Carlisle of Bucklow
My Lords, at the beginning of his speech the noble Lord, Lord McIntosh, reminded us that during the past 15 months this is the third occasion on which the House has had the opportunity of debating the criminal injuries compensation scheme. Speaking today, I must begin by declaring my interest, as I did previously, as chairman of the Criminal Injuries Compensation Board. However, I am bound to comment that the purpose of this Bill is to legislate me out of that position.
The first debate was in March last year. During the debate on the Motion of the noble and learned Lord, Lord Ackner, to take account of the Government's White Paper, the noble Lord, Lord McIntosh, was right to say that I expressed the unanimous view of the membership of the board; that that which was then being proposed by the Home Office was not only flawed but was manifestly unfair and would be shown to be unfair in practice. On that occasion, I expressed the hope that 304 the Home Office would look again at its proposals in order to see whether it could achieve its aims while avoiding the unfairness of its proposals.
The second debate was in June last year when the noble and learned Lord, Lord Ackner, proposed the implementation of the provisions in the 1988 Act. I said that I was not in favour of making the current system statutory but that I was supporting the noble and learned Lord's proposal on the basis that it would give yet another opportunity for the Home Office to reconsider the proposals that it was putting forward. Sadly, as was said by the noble Lords, Lord Rodgers and Lord McIntosh, on both occasions the Home Office chose to ignore the opportunity to look again at what was being proposed. As we all know, that department went ahead and firmly hit the buffers when it came up against a Judicial Committee of this House on 5th April this year.
This time the Home Office has had to think again, and it has thought again. I say at once to my noble friend the Minister that the Bill before us is far better than the original tariff scheme proposals. I wholeheartedly welcome each of the major changes that are being made. The board accepts—and I have always accepted—that a scheme introduced in 1964, with the volume of work that the Minister mentioned, is not necessarily the appropriate framework for today's conditions. Last year the board received 73,000 applications, resolved more than 65,000 cases and spent more than £165 million. I agree also that, as regards the vast pressure on the board, much has changed since 1988 and the proposals then put before the other place.
That vast increase in expenditure was not, and has not been, caused by an escalating increase in individual awards. If one takes account of inflation the figures have remained constant over the years. As has been said, it has been caused by the enormous increase in the volume of violent crime. It has been caused also as a result of the commendable publicity given by the Government and other forces to the existence of the scheme. Undoubtedly that has had a major effect on the number of applications which come before the board.
Of course, I understand the Government's concern about the mounting cost to the scheme that those circumstances have occasioned. I believe that change is justified in order to contain expenditure and to ensure that cases can be dealt with as efficiently and quickly as possible. That is particularly so when one notes that of the claims that were dealt with last year more than 85 per cent. were awards of less than £5,000.
I do not resile in anyway from what I said in March about the fundamental flaws within a tariff scheme. I shall not repeat those now. A tariff scheme is not as good as the common law damages scheme. Because of the nature of a tariff scheme it cannot take account of the differing effects of similar injuries on different people. However, I believe that what was so unfair about the proposals that the Government were then putting forward was that by discounting entirely for loss of earnings, and for loss-of-earnings capacity and future care, they were making the vast majority of the savings at the cost of those who had been worst injured. While I believe that the flaws in a tariff scheme still exist and that such a scheme is not as effective as a common law 305 scheme, I accept that a tariff scheme can reasonably be used to meet the vast majority of cases which come before the board.
The Government have made major changes. It is right that we should acknowledge and welcome those changes. They relate to provisions to deal with fatal cases, proposals in relation to loss of earnings and future care, and they increase the maximum ceiling from £0.25 million to £0.5 million. In making each of those changes the Home Secretary has gone a long way towards meeting the major objections to the scheme that he proposed. I believe also that he has gone a long way towards meeting the terms of the European convention, to which he is a party. Knowing the problem that he must have had in wringing concessions of that nature from the Treasury, I feel it necessary to congratulate him on the changes that he has achieved. In Committee I shall argue for a certain flexibility within the tariff, but I do not propose to oppose the principle of the tariff.
The situation will be better in relation to fatal cases because it is intended to pay dependants and the basic flat amount is rather higher than the present bereavement award for England. As regards future loss of wages and earning capacity, while I understand the arguments of those who say that the calculations should start from day one, I am bound to say that I accept that it really is impracticable to continue to assess in each case, however short the absence from work, the amount of lost wages and then deduct from that the amount of benefits which the individual has received. The reality is that a tremendous amount of time is taken up with that work, quite often with very little end result. Therefore, whether or not six months is the right starting point, I have absolutely no doubt that the Government are justified in saying that there must be a period for which loss of earnings should be taken into account.
I welcome the increase from £0.25 million to £0.5 million. I welcome the introduction of structured settlements. I have always believed that there is a justification for a case for ceilings of some kind. In fact, your Lordships may be interested to know that last year, out of the 63,000 cases, there were eight in which the award was over £0.5 million. I am sure that in those eight tragic cases, the state would have provided even if the compensation had been limited under the scheme.
I believe that the tariff is as good as can be devised and that, on the whole, the figures are generous. Indeed, I am bound to say to the Minister that I question whether savings will be made by this great change in the system. On the last debate I questioned the figure of £500 million as the cost of the current scheme in the year 2000–2001. I suggested that that was based on spurious assumptions. I was told, in those wonderful Civil Service words, that that figure had been arrived at only after careful scrutiny. It is. rather ironic to find that, six months later, that figure has been changed from £500 million to £460 million. I suggest that that is still an over-generous estimate of what the costs would have been. If one sets against that the additional costs incurred by the changes which the Home Secretary is now making, there will be little difference in practice.
306 I turn now to the question of the two great virtues which have been claimed for the scheme. The first is speed. I recognise the desirability that victims of crime should be paid as quickly as possible. I am grateful to the Minister for the very kind and generous words that she said about myself and the board. I tell the Minister and the noble Lord, Lord Rodger, that last year 70 per cent. of the cases which came in were resolved within 12 months compared with only 25.5 per cent. in the year 1990–91. Now that about 50 per cent. of all decisions are delegated to members of the staff, that figure will be higher still.
Therefore, while I accept that there will be some saving of time and a speeding-up of the process, I do not believe that it will be all that great because the majority of the time is still taken up in obtaining the police and medical reports on which the assessment is made. It will still be necessary to obtain those reports and, in certain cases, it is necessary to await the results of trials.
As regards simplicity, I make only one comment. The original tariff which was produced a year ago decided that there were 187 different identifiable injuries. Nine months later the new tariff has decided that there are 310 different identifiable injuries. That increase has occurred in nine months, and it will steadily continue. If one looks at individual cases and sees the size of the files compared with what they were before, I shudder to think of the number of trees being cut down in Africa to meet the additional demand for paper which the scheme appears to create.
I welcome the changes that have been made. I accept that this is the most generous scheme in the world. I still believe that the tariff could be workable but it will be shown to need flexibility. I very much agree with what the noble Lord, Lord Rodger, said about looking again at whether some of the figures should he in bands rather than individual figures. I believe that to he true in particular for sexual cases and cases of shock.
The Government must look again at some aspects of the tariff scheme because I believe that they will find that experience has shown not that the figures are too low but that they are considerably higher than those which the courts are awarding. If the scheme is to be subject to the affirmative resolution, I hope that that matter and also the matter of multiple injuries will be looked at again.
As I understand it, the scheme has not yet been published and is to be subject to the affirmative resolution. I hope, understand and believe that in the new concordat that exists the board will be invited to comment on the details of the scheme. If this scheme is to work, it is essential that there must be power within the scheme to refer complicated cases to a hearing for assessment. Awards for future loss of earnings capacity cannot be decided on the basis of papers before you while sitting in an office. It depends on the evidence that you hear and the people that you see. The scheme will fail in that regard if the Government do not allow a degree of flexibility which will provide for those who are running the scheme to refer matters of that kind immediately to a hearing of the new hearings panel.
307 I have spoken for longer than I should have done. Again, I thank the Minister for her kind words about the work of the present board. I hope that in Committee we shall be able to put forward proposals that will make the scheme even better than the considerable improvement that it is on the original scheme proposed.
§ 4.19 p.m.
§ Lord Ackner
My Lords, I am sure that your Lordships will be pleased to hear that my contribution to this debate will be mercifully short. I have only a few comments to make.
In a debate in the other place, when supporting this Bill, the Minister made but one reference to his having been found to have acted unlawfully in regard to the first tariff proposal. He said, as the Minister said today, that the House of Lords did not say anything about the merits of his scheme. Of course they said nothing about its merits because that was not the question before the House. What was before the House of Lords and the other courts was whether the Minister had acted unlawfully and had exceeded his powers.
Judicial review is not a process of appeal in which one considers the merits of the decision; judicial review is devoted to seeing whether the defendant to those proceedings has acted unlawfully, exceeding or abusing its powers. That is all that was before the court and that is all that the court decided. The implied suggestion of, "Oh, well, there was nothing which I was criticised for by the courts", is a misleading approach. The criticism on the merits occurred in this House. That was the place for the criticism and it occurred again and again. Indeed, it occurred just before the scheme was brought into effect, which I believe was on Good Friday of the previous year.
The House then unanimously condemned the Minister for the gross unfairness of the scheme, the abuse of Parliament in bringing it in in the way that he proposed and, of course, as regards the failure of any form of consultation. I only make those opening observations so that your Lordships will not think that the reference to the Judicial Committee having not commented on the merits showed that, sub silentio, it was approving of the situation.
I turn now to the Bill itself. I have a few reservations to make with regard to one or two of the clauses. I suppose that it is on the basis of being once bitten and, therefore, twice shy that I refer to Clause 11. Subsection (2) of the clause provides that,arrangements for compensation for criminal injuries in operation immediately before the passing of this Act ('the current arrangements')"—that is, the common law arrangements—shall continue in force until the date on which the Scheme comes into force ('the commencement date')".Then, subsection (3) says:.At any time before the commencement date, the Secretary of State may make such alterations to the current arrangements as he considers appropriate".I find that a disturbing provision because it seems to provide no time-scale for laying before Parliament the draft tariff or for the introduction of the new scheme. 308 Therefore, the effect of the clause could be to undermine the decision of the Judicial Committee requiring parliamentary approval for changes in the scheme by permitting delays by the Home Secretary, during which period he would remain free to introduce whatever change he wished. On past experience, I think that this cautionary note is wholly justified.
Parliamentary control is dealt with under Clause 10. Subsection (1) provides that the Secretary of State,shall lay before Parliament a draft of—But, in regard to the scheme, subsection (2) provides that the Secretary of State,
- (a) the Tariff… and any alteration which he proposes to make to the Tariff".shall lay before Parliament a draft of any provision which he proposes to include in the Scheme as to"—and then some six matters are set out. It is no doubt my ignorance and my naivety, but I do not understand why the scheme should not be in the legislation. Then parliamentary control can be properly exercised. I find it an unusual and unsatisfactory arrangement—to use an unattractive term—that the essential guts of the whole new procedure should be outside the Act itself. Thus, parliamentary control, which, again, on past experience, seems to be so necessary, is weakened.
I believe that there was some talk about the parliamentary ombudsman having an opportunity to exercise some control over the scheme. I do not know whether the Minister can help in that regard. But, as I understand it, there has been little willingness so far to discuss the details of the scheme. It seems that it will not be prepared until the date when it may be too late to take any steps in regard to it.
As regards the tariff itself, its inflexibility has already been emphasised. I do not see why it is necessary to have one specified figure for each species of injury which it is thought appropriate to classify, because it has no reference to the impact on the individual of the injury. The suggestion has been made—and I support it—that bands or brackets should be provided in regard to those injuries. The Government have no doubt seen the admirable work of the Judicial Studies Board which has provided bands for injuries and, within those bans, some flexibility obviously exists. I do not know whether the answer is that if you do that then you must have a somewhat higher grade of civil servant administering the scheme because the thought process will be in greater demand rather than with a specific figure which you apply, the only argument being whether it relates appropriately to the injury.
I should like to know a great deal more about the appeal process. It appears that the legal element—and by that I mean the experienced practitioner in this field of activity who has hitherto been responsible for justly fixing the right figures—is only to appear in the appellate process and not below. Therefore, I should like to know in what circumstances an appeal is permissible. I have heard it said that it will involve some form of deterrent mechanism to dissuade what is referred to as frivolous or vexatious appeals, but I do not know how it will operate.
309 All that arises out of the fact that the scheme is unparticularised in sufficient detail. That is why I urge, and will urge, that a great deal more appears in the legislation and that far less is left to be worked out subsequently with the affirmative procedure which, although obviously it has some force, has its deficiencies, as we all know from past experience.
I have an engagement this evening which I must keep because it is a long-standing one and difficult to avoid. However, I shall certainly stay in the House until 6 o'clock. But, if we have not completed by then, I hope that your Lordships will accept my apologies for my absence. I only say in further mitigation that I have done my best to limit the time that I have taken of your Lordships.
§ 4.28 p.m.
§ The Earl of Longford
My Lords, I am sorry that the noble and learned Lord will have to leave by 6 o'clock, but he will at any rate hear my speech and, no doubt, one or two others. I should like to express my support for many of the criticisms put so effectively, for example, by my noble leader Lord McIntosh. However, I shall leave the details for the next stage of the Bill. I shall speak in very general terms and even more briefly than other speakers.
I do not believe that any of us under-estimate the seriousness and the difficulty of the subject that we are discussing this afternoon. In 1964 I chaired a committee set up by Justice to examine the problem of criminal injuries compensation. I introduced the first debate into this House on the subject. The Government produced their scheme post hoc or propter hoc soon afterwards in 1964. Although it is difficult to obtain the relevant statistics, since then crime in general has more than trebled. In 1979 I introduced the first Private Member's Bill into this House.
My noble friend Lord McIntosh has reminded the House that today one is more than three times as likely to suffer from violent crime than was the case in 1979. That is the background to the matter that we are discussing. One has to ask how much has been done in the meanwhile. I would not say that nothing has been done apart from the development of the 1964 scheme. In 1964 and 1979 a number of voluntary schemes were in existence. The National Injuries Victim Support Scheme, which has done such wonderful work, came into being in 1980. A great deal of voluntary help has been forthcoming since then, and the Government have also given considerable help, although not enough.
Where do we find ourselves today? I suppose that if I had been a victim and attended the Conservative Party Conference in 1993 I would have come away elated. I would have thought that at last something would be done for victims. Both the Prime Minister and Home Secretary said that they would give criminals a far worse time and victims a much better one. I do not believe that anyone will dispute that that was the general impression, and certainly that was the impression given to the cheering crowds at the conference.
What has happened since? The Home Secretary, always supported by the Cabinet and the Prime Minister—therefore, we do not want to blame him or 310 pick him out as a wicked individual—has made an attempt to produce a scheme. However, far from helping victims, the scheme has damaged them so severely that it has been treated with contempt and dismissed as being totally unlawful by the Law Lords, who are not always regarded as the most progressive members of society. That was the first effort of the Home Secretary.
He now comes forward with the present scheme in the form of the Bill that we are discussing. What will be the effect of it? I understand that, according to the Government's figures, in the year 2000 £460 million will be spent on victims, but that under this beneficent Government that amount can be cut down, by some miracle of administrative legerdemain, to £260 million. That cannot be done just by clever technology. It means that someone will suffer. From long experience, I cannot think of any assault on any particular social service on that scale. I would regard it as about the most shameful attack ever made on a social service. Whatever be the messing about with this or that detail, the apparent intention is to cut by nearly half the amount that goes to victims. That is a hard-pressed section of society that the Government have pledged to assist and have picked out as their favourites. I do not argue about it but just recite the facts.
I do not wish to be too depressing or to end upon a gloomy note. If I remember rightly, the French Prime Minister in the crisis of 1940 said that only a miracle could save France and that a miracle would save France. It took four years and a great deal of bloodshed before that miracle was eventually performed. I hope that a miracle in this field can be performed rather more easily before the present Home Secretary has to take flight. I hope that that will come about rather sooner than it did in France. There is a ray of hope on the horizon in the form of the new Home Office Minister responsible for prisons, and perhaps victims, whom I warmly welcome. This lady is no stranger to dramatic conversion. I hope that, always assisted by the much admired noble Baroness, Lady Blatch, she will guide the wandering soul of the Home Secretary in the direction of Damascus.
§ 4.35 p.m.
§ Lord Colnbrook
My Lords, some of your Lordships may recollect that when we discussed the proposals of the Home Secretary last year in March and June I was one of those who spoke very strongly against what he intended to do. In contrast, today I support what is now proposed. There are two main reasons for this. First, I am delighted that at long last this scheme to compensate the victims of criminals will be put on a statutory basis. It has been going for 30 years, and in all that time it has proceeded on the basis of the Royal Prerogative. I do not believe that a scheme which disposes of so much public money should be operated under the Royal Prerogative for such a long time. It may be all right to do that to start with, on an experimental basis, but if the scheme is operated under the Royal Prerogative Parliament has virtually no control and the Minister in charge, in this case the Home Secretary, can—or, at any rate, could until seven years ago—alter it whenever he 311 likes without consulting anybody. I do not believe that that is a proper way for a scheme such as this to be operated.
About nine years ago the then Home Secretary said in the other place that the Government intended to put the scheme on a statutory basis as soon as possible, and in 1988 Parliament did so. However, I believe that that Act contained a fatal flaw, in that it was left to the Home Secretary to decide when that should happen. We all know the outcome of the Home Secretary's efforts to alter the scheme last year and the appearance before the court and the judgment upon it. But, if I read this Bill correctly, the Home Secretary has no choice but to get on with it. The scheme has to be brought into operation immediately, which I believe to be a very good thing.
My second reason for supporting this measure is that the Government have listened to all of the representations made to them about the proposals presented last year. Not only have they listened but they have responded. Quite frankly, that is something which does not always happen. I suspect that noble Lords opposite will realise that more than anybody else. This time the Government have responded positively and are to be congratulated on so doing.
There is no doubt that the scheme introduced by this Bill is a great deal better than the one we discussed last year, in particular for the reason that what is now proposed will take account of actual and potential loss of earnings, the cost of special care and the like. One can pick holes in the tariff. Some holes have already begun to be picked, and no doubt more will be picked as time goes on. But I do not believe that to be a vital point because last year, when discussing the amendment to the Criminal Justice Bill proposed by the noble and learned Lord, my noble friend Earl Ferrers, the then Minister, said this about the tariff:The terms of the tariff scheme are not set in stone. We shall listen to the views of responsible people and practitioners and, if the scheme can be refined or improved in the light of experience, we shall not hesitate to make the necessary changes".—[Official Report, 16/6/94; col. 1847.]That gave me some encouragement, because it seemed to me that the Government were admitting that they had not necessarily got the scheme absolutely right and were prepared to alter it. I hope that when my noble friend the Minister replies she will repeat that assurance so that we know that the Government will not hesitate to alter the tariff scheme, if necessary.
I was slightly put out by something that the noble Lord, Lord McIntosh of Haringey, said. I understood him to say that he believed that no changes were to be made to the tariff scheme before 1999. I may have misheard him. If I did, I apologise. If he did say that, perhaps my noble friend the Minister will also refer to that point because I do not know quite where I am. Is she going to hesitate, or is 'she going to wait until 1999?
§ Lord McIntosh of Haringey
My Lords, if I did say that in those terms I was wrong. I meant to refer to the fact that there was no provision for up-rating for inflation until 1999, which is a more limited point.
§ Lord Colnbrook
My Lords, I am grateful to the noble Lord. Perhaps my anxiety is not justified; but I shall await with interest what my noble friend the Minister says when she replies to the debate.
I should also like her to refer to the question of the speed with which awards can be made. I know from the experience of people I know well that in days gone by, long before my noble friend Lord Carlisle became chairman, payments sometimes took forever to be made. I know of one particular case involving a widow whose husband had been killed in which not one single penny was received for over three years. That is appalling. I know that my noble friend Lord Carlisle has done wonders in ensuring that payments are made much more quickly. However, even a moment ago I heard him say that a substantial percentage of claims were settled within 12 months. Ten years ago the Home Affairs Select Committee of another place, which had been examining these matters, mentioned the question of speed. It used a phrase which is familiar to us all:He gives twice who gives quickly".One can go on and say that he gives half as much who gives slowly.
I hope very much that under the new tariff scheme payments will be made immediately, or as early as possible. I should have thought that in some cases that does not present any great difficulty. I give the example of a man who is injured and loses a finger in trying to prevent a robbery. The finger is gone, and that can easily be seen. All that is needed is for the police to confirm that there was a crime. To my way of thinking, the appropriate figure—which I fancy may be of the order of £5,000—should be paid the next day, should it not? If not, why not?
I accept that sometimes cases will not be as easy as that. To take another example, under the proposed tariff—which we have been allowed to see—one can receive compensation for what is known as a whiplash injury to one's neck. There are four scales on the tariff for that injury. For a simple injury one receives £1,000; and the scale increases, depending on the severity of the injury and the length of time one suffers, up to £10,000. I accept that in such cases, and in others, it will not be possible immediately to say that a particular injury has caused permanent damage. It will be some time before one knows whether the damage is permanent. However, it again seems to me that for someone in that situation, once it is known that the injury has happened and it is shown by the police that a crime has been committed, one should at least give the man something—the smallest award which he would receive anyway.
There is no doubt that, particularly for dependants but also for the person who has been injured, if something is done to help straightaway it makes an enormous psychological difference as well as an enormous financial difference. I very much hope that it will be possible for awards which are laid down—not for the long-term injuries involving loss of earnings which will take some time to work out—to be paid as soon as humanly possible; within days if possible, but certainly within weeks.
313 I find myself in disagreement with the noble and learned Lord, Lord Ackner, on the Bill. He believes that the scheme and the tariff should be set out in the Act. I do not, because if it is in the Act it is an awful business to change it: there has to be a new Act. We all know how long it takes to pass an Act of Parliament. Despite all the disadvantages of an Order in Council, which cannot be amended, it is a better way, because the legislation can be changed more quickly if circumstances show that it ought to be changed. After all, there is nothing to prevent either House of Parliament saying that they will not accept an order unless the Government change it. Happily, in my judgment, it is provided in the Bill that the scheme requires the assent of both Houses of Parliament before it comes into effect. That is the right way to proceed.
Finally, I come to the question of money. Let us face it, we all know that it is the question of money that has forced the Government to introduce the scheme. They are hoping to save money. I understand that. The Government have produced figures to show what the existing scheme is likely to cost in the year 2000. It would be very rude of me to say that I do not believe the figures, and I shall not. However, I shall take the figures with an enormous pinch of salt. What has been done is to extrapolate what has happened over the past 10 years. To be frank, it is a guess. It may be an intelligent guess or it may not. My noble friend Lord Carlisle does not think that it is an intelligent guess. Furthermore, he does not think that much money will he saved.
However, I accept that there must be some control over expenditure on the scheme and the possibility, from the point of view of the unfortunate taxpayer, of being able to say that we can afford so much for this purpose but that we cannot have an open-ended scheme. I do not know whether the figure of £260 million by the year 2000 given by my noble friend the Minister is right. She does not know, either. If it is about right I submit that that is probably about right for this country. That is why I am happy to support the Bill.
§ 4.46 p.m.
§ Lord Ewing of Kirkford
My Lords, if the noble Lord, Lord Colnbrook, does not object, in my comments I should like to take up the point that the noble Lord made in response to the noble and learned Lord, Lord Ackner, about whether the scheme should be part of the Act. I regard that as an important element of our debate today on the Second Reading of the Bill.
First, I declare an interest in that for 35 years I have dealt with casework involving injuries to people in my former industry, the post and telecommunications industry. Even before I went to the other place, for 10 years I was involved in casework involving Post Office workers who had been criminally injured. They were the largest group of workers in this country who were at risk from criminal activities. I maintained that interest during my 22 years' membership of the other place and in the three years since I became a Member of this House. Therefore, I declare that interest in that I maintain my role in that work.
314 We come to the debate today with one disadvantage and one major advantage. Here I come to the point made by the noble and learned Lord, Lord Ackner, and the response of the noble Lord, Lord Colnbrook. The disadvantage is that we do not have the scheme in front of us. I take the same view as the noble and learned Lord, Lord Ackner, that the scheme should be part of the Act. The reason is simple. The problem with the affirmative procedure is that one cannot amend an order that is produced for debate. When that order is debated and voted upon one can only vote for it or vote against it. One cannot amend an order under the affirmative procedure. If the scheme were part of the Act, the issue would be open to debate. I accept the point made by the noble Lord, Lord Colnbrook, about the need for primary legislation when amending the scheme, and the problems that might create. On balance, it would be much better for the scheme to be part of the Act.
I turn to the advantage of debating the Second Reading today. We are only two days away from the long summer Recess. I hope that the Minister will take this point on board. During the Recess the Government will have an opportunity to discuss the scheme in detail and, if possible, to bring it to the House on the first Committee day. I understand that to be 17th October—almost three calendar months away. They have the opportunity to add that scheme to the Bill as an additional schedule. I believe that would be the tidiest way to deal with the point. It would also deal with the situation created by the acceptance of an amendment in another place which gives the Home Secretary almost carte blanche to amend the existing common law scheme, and, as the noble and learned Lord, Lord Ackner, said, of undermining the decision of the judicial review.
The noble Lord, Lord Rodgers of Quarry Bank, my noble friend Lord McIntosh and the noble and learned Lord, Lord Simon of Glaisdale, expressed disappointment (I put it no higher) that the Home Secretary had not apologised for his folly in going ahead, thus facing consequent humiliation. I do not join with my three noble colleagues. I am a simple soul. I never expected an apology in the first place. Anyone who expected an apology from the present Home Secretary simply does not know him. Therefore I do not join in that complaint.
However, I wish to place on record my thanks—I am sure that I speak for Members in all parts of your Lordships' House—and the gratitude of a great many people that the Trades Union Congress and the 10 trade unions pursued the matter through the judicial procedure. Without that pursuance, we would not be debating the Second Reading of the Bill today. We should place on record our gratitude to the TUC and the 10 trade unions.
We shall reach Committee stage in October. Between now and Committee stage, I hope that the substantive point relating to the scheme being added to the Bill as a new schedule will be taken on board by the Government.
315 I understood the Minister in her opening speech to say that the principle of the loss of earnings would apply to all claimants. However, I understood from the legislation—it may well be that I read it incorrectly—that the loss of earnings principle is based on the statutory sick pay scheme. As my noble friend Lord McIntosh of Haringey said, figures have been produced in the House of Commons Library demonstrating that 12 million people in this country do not qualify. They have no mandatory contractual sick pay scheme. They are low paid workers. They work so few hours that they are not entitled to cover under the statutory sick pay scheme. I refer to the self-employed—taxi drivers, sub-postmasters and sub-postmistresses. But if sub-postmasters, sub-postmistresses and shopkeepers in general are injured in a criminal act, they have to appoint a locum manager to keep the business ticking over. They do not suffer simply a loss of earnings; they also incur expenditure on the appointment of a locum manager.
I should like to hear a more detailed explanation. The noble Baroness may not wish to give that today; I shall not complain. We shall deal with the matter in Committee. But further more detailed consideration has to be given to the issue. Does "loss of earnings" mean loss of full pay or part pay? What does "loss of earnings" mean? There is no definition in the Bill.
I turn to the question of exceptional risk. The noble Lord, Lord McIntosh, referred to the position of fire fighters. It is important to point out that their position has been changed by the proposals contained in the legislation. Where a fire is started deliberately—we do not refer to house fires, but arson—that is a criminal act. In order for the fire fighter to qualify for compensation under the proposed tariff scheme, the fire fighter has to prove that he was taking an exceptional risk. For example, he has to prove that there may have been a body in the building and he was rushing into the building in order to attempt to rescue that person. Under the present common law scheme, the fire fighter does not have to prove that. That is another point that I hope the noble Baroness will consider.
I regard the issue of time limits as very important indeed. I appreciate that the Minister has moved position considerably since last year. In the original tariff scheme, the time limit was one year. That has now been doubled to two years. But the present criminal injuries compensation scheme has a three year time limit with provision for applications to be considered out of time. As my noble friend Lord McIntosh said, out of 4,000 applications made out of time last year, 3,000 were granted. Without my telling her, the Minister knows that most cases which have to be considered out of time relate to sexual offences. It takes a very long time indeed for the victim of such crimes to come to terms with what has happened. I honestly and sincerely do not believe that the Government will lose anything by going back to the current common law scheme, making the time limit three years rather than two, because of those exceptional cases.
316 I accept that we are about to have a tariff scheme. In contributing to the debate I seek to improve the proposals before your Lordships' House. I hope to contribute at Committee stage in an effort to improve the proposals rather than to frustrate them.
Finally, we ought not to build up false hopes in the minds of claimants. The noble Lord, Lord Colnbrook, mentioned the time that it takes to pay out criminal injuries damages. Of the applicants under the suspended tariff scheme, only 17 per cent. reached a settlement. Under the present common law scheme over 80 per cent. were settled within 12 months. As legislators, we have to be careful that we do not build up false hopes in the minds of those who will make applications under the new tariff scheme. The evidence that we have, limited though it may be, indicates that only 17 per cent. of the cases were settled. At present, the position is that all those cases which were settled under the tariff scheme which had to be suspended now have to be reviewed by the board of the noble Lord, Lord Carlisle. They are subject to review now.
There are a number of problems. I finish almost where I began by saying that my purpose in this debate, in Committee, on Report and at Third Reading will be to seek to improve the Bill and make it as workable as we possibly can.
§ 5 p.m.
§ Lord Windlesham
My Lords, I must begin by apologising to the House for not being here at the start of the debate and for not hearing what the Minister said. I was delayed by an unavoidable public engagement, but I can assure the Minister that I have read the Home Secretary's speeches on Second Reading and Report in another place. So I am familiar with the Government's explanation.
The Bill is an important one and, unusually, on two distinct grounds. It raises in a vivid way the accountability of Ministers to Parliament and the law as found by the courts of justice and the appellate courts. It also deals with the means by which the state should substitute financial compensation for injuries suffered as a result of violent crime where—as is only too often the case—the offenders are not detected or do not themselves have the resources to pay compensation. As we heard earlier in the debate, the policy of compensating victims has been accepted by all parties since 1964. The first point—the accountability of Ministers—is one of the cardinal principles of our unwritten constitution.
The House is familiar with the chequered legislative history of criminal injuries compensation over the past 30 years, and in particular over the past seven years since the Criminal Justice Act 1988. The 1988 Act arguably conferred a statutory right to compensation, and it certainly provided proper legislative authority for expenditure of public funds on a substantial scale. That point was made by the noble Lord, Lord Colnbrook. But, as we know, the commencement order bringing the sections into effect was never implemented. It is not unprecedented for legislation to be on the statute book and not brought into effect for practical reasons, but it is highly undesirable, to put it mildly. There are arguments 317 which perhaps should not be developed now, but which might be followed up in a separate debate, on the whole question of non-implementation. There are a good number of former Ministers of differing parties in the Chamber this afternoon. For example, in Australia if Ministers have practical reasons for not implementing what has been enacted by Parliament, they must report annually to Parliament what those reasons are. That is not to say there may not be good reasons, but at least they have to be put on public record, whereas here they can easily be overlooked.
In this House, those of us who are concerned with criminal justice policy generally are aware of a great debt to the noble and learned Lord, Lord Ackner, for the way in which he raised the issue in your Lordships' House. It was later taken up by Victim Support, by the representatives of the TUC and the 10 trade unions mentioned by the noble Lord, Lord Ewing, and it then proceeded through the courts.
I join my colleagues on these Benches in paying credit to the Home Secretary for the prompt and uncomplaining way in which he immediately accepted the decision of the House of Lords, acting in its judicial capacity. It found that his action in introducing a tariff scheme, while the original scheme based on common law damages still lay unimplemented and unrepealed on the statute book, was an abuse of his discretionary powers, and hence was unlawful.
What we are considering today, therefore, is a Bill presented to Parliament to rectify an error of judgment and to make lawful an administrative action which the highest courts have found to be unlawful. As such, the legislation is to be welcomed.
The challenge in the courts has also provided an opportunity for a breathing space and for second thoughts. No one knows better than my noble friend Lord Carlisle that it is common ground that the original tariff scheme was introduced far too cursorily and with inadequate consultation with the interested parties. More and earlier consultation with the main user organisations as well as the Criminal Injuries Compensation Board itself—paradoxically, I may remark in passing, a theme of the Citizen's Charter—might have avoided some of the practical difficulties which have arisen since then.
At this stage I should declare an interest as the national president of Victim Support, the full name of which is the National Association of Victim Support Schemes. Victim Support, has a direct and extensive interest in the subject of the legislation. It is the main user organisation involved with compensation for victims of crime. I thought it would be of interest to your Lordships if I obtained some statistics. I understand that although all of the current returns are not yet in, in the year April 1994 to March 1995, Victim Support assisted with 11,235 new applications for criminal injuries compensation. That is a large part of the work of Victim Support. The noble Baroness will be aware that Victim Support has been in close contact with the Home Office. A meeting took place recently with her colleague in another place, the Minister of State, David Maclean. Victim support acknowledges, as I acknowledge personally, that significant concessions have been made compared with the original tariff scheme.
318 The concessions now include provision for loss of earnings after 28 weeks; dependency in fatal cases; care costs; and provisions for structured settlements. All of those are improvements. Yet those in the field who see the victims, often immediately after the criminal act to which they have been subjected, and when they are in no state to pursue applications themselves, remain concerned about some aspects of the enhanced scheme.
I make the point that the criticisms are not ideological. They are not derived from root and branch opposition to the switch from the common law damages approach to the tariff-based scheme. That stance is taken by some critics, but it is not the position taken by Victim Support. Its reservations are based on sheer pragmatic experience of handling the many thousands of claims every year.
I might remind noble Lords that the independent committee on compensation established by Victim Support and which reported in 1993, came down in favour of a tariff based approach. When I referred to this in an earlier debate it was not music to the ears of my noble friend Lord Carlisle and the noble and learned Lord, Lord Ackner, but that was the conclusion reached by the independent committee. The reasons for proposing a shift were: speed of payment, and certainty in what the applicant could expect. As the number of claims rose steadily upwards in the 25 years following the introduction of the common law scheme in 1968, with QCs assessing the amount of compensation to be paid in individual cases, the process simply became too cumbersome and too slow. I know that the noble Lord, Lord Carlisle, the chairman, and his predecessor, Sir Michael Ogden, made strenuous efforts to obtain the additional resources to reduce the backlog. But the fact is—I looked it up only this morning and have the figures with me lest I should be challenged from the Benches behind—that in 1992–93, when the decision was taken to change the policy, 53 per cent. of cases took over 12 months to resolve. It is true that in the following year the total came down to 39 per cent., but in 1992–93 over half of the cases took more than 12 months. (I hear a grumbling noise from behind me). That struck me as a highly relevant statistic and I place it before your Lordships.
A change in policy to a tariff scheme was accepted in principle by large numbers of people working in the field with the victims of crime. It held out the prospect of a new approach based on published and clearly stated criteria, and with the potential to achieve the objectives of openness, certainty and consistency more effectively than had been possible before. As regards the basis of assessment and, equally important, the scope of criminal injury, there was a broad measure of agreement on a change of direction. But as so often happens, it has been in the detail and the execution that the differences have emerged.
The priorities now include some relaxation of the lower limit of £1,000. This remains a matter of real concern to Victim Support workers. Secondly, there is the question of loss of earnings. We welcome the fact that that is now to be subject to compensation, which it was not in the earlier version. But the likely impact of the 28-week restriction, and the effect it will have in 319 excluding several categories of claimant is, I think, a criticism familiar to the noble Baroness. She may be aware that this is an aspect on which Victim Support wishes to hold further consultation. Thirdly, there is the all-important matter of setting the levels of award and the mechanism for uprating. As they stand both are open to criticism and further improvement. I shall not pursue these arguments now. They are for the Committee stage. I join the noble Lord, Lord Ewing of Kirkford, in urging the Minister and her colleagues at the Home Office to use the long Recess constructively. It happens that there is now a period of several weeks available to try to reconcile these differences, and to hold further consultations with the main user organisations.
§ 5.15 p.m.
§ Lord Broadbridge
My Lords, the Bill before us should be measured against two overriding principles. First, is the compensation proposed at a fair and reasonable level in absolute terms? Secondly, does it bring fairness of treatment to different claimants suffering the same criminal injury? The Bill as presently constructed falls flat on its face on both measures. Being thus critical, I must try to justify my condemnation and possibly, though not with too much hope, influence the Minister who is to reply.
First, is the compensation proposed at a fair and reasonable level in absolute terms? Benchmarks that can be helpful here are, I suggest, a measure of the situation of the claimant before and after the injury; and secondly, how the proposed compensation compares with that for comparable civil injuries and the present scheme for criminal injuries under the Criminal Injuries Compensation Board.
The situation of the claimant before and after injury should take into account a multiplicity of factors that make up what we call "quality of life". The most obvious of these are the actual and potential earnings; ability to lead a normal, undisabled life; and psychological factors such as shock, stress, depression and appearance—the latter being particularly the case with young women and girls. All this the present common law based claims procedure does. It assesses the person as a whole individual and makes a settlement as analytically and scientifically as possible, bearing in mind the possible slight subjective variations between one adjudicator and another.
A major difficulty in analysing the Bill's proposals is caused, as we heard from a number of noble Lords this afternoon, by the Government's failure to publish the scheme itself. The intentions of the Home Office have been difficult to establish. We in this House have to rely heavily on statements made by the Home Office Minister in Committee and other government statements and speeches in another place.
While the Bill makes provision in Clause 10 for the tariff itself to be laid before Parliament, it does not appear that much of the administrative or qualification arrangements are to be the subject of parliamentary approval; and attempts to throw greater light here were rejected in another place. However, it can be factually stated that the illegal tariff scheme, while it lasted, 320 resulted in significantly lower awards for victims of crime than similar injuries dealt with both by the common law scheme it temporarily replaced and awards in civil cases.
That raises the whole case of the Government's humanity. The Home Secretary's arguments in favour of a tariff are that it is quicker and simpler, which it was not in its year of illegal operation, and most importantly that it is less expensive. It has been my impression that the intention of the present Prime Minister, when he took up office, was to introduce the Age of the Common Man, the dismantling of the "automatic" honours system and the cherishing of all our people as somewhat more equal than they had been. And now, with this pernicious little Bill, it is sought to save money on payments to, of all people, victims of criminal injury, people who have suffered injuries ranging from the grossly inconvenient to the outright horrific. Why should a person who is pushed down a staircase by a criminal be significantly less compensated than an employee who falls down one because a negligent employer has failed to light it properly and who brings a civil claim to court? This is presumably why the present Criminal Injuries Compensation Board awards are roughly in line with civil cases involving similar disablement.
Britain is no longer the hub of an empire on which the sun never sets, but we are still a considerable world economy. Any responsible government must indulge in good economic housekeeping and not spend more than it can afford. But to make savings at the expense of those injured by crime is the budgeting of an uncivilised and uncaring government, whose Members in another place were elected to look after their electors' interests. As we heard earlier, we shall be spending one-tenth on criminal injuries compared to what is spent on keeping those who caused them in prison. Quite a lot of people are affected, too. There were 66,387 adjudications in 1994–95. On the subject of the absolute levels of compensation proposed in the new tariff, we do not, I believe, know them yet. But the illegal one was low. The Home Office wants to save money, and doctors widely believe that past performance is a good guide to future behaviour.
Finally on this subject, will the Minister explain to me why the Law Commission has for the past two or three years been engaged on a review of civil damages—that is, broadly, accidents and negligence—and expects to continue for the next couple of years before reporting, so important is the subject; yet the Government can introduce a Bill such as this with a speed similar to making instant coffee?
My other principle for measurement of the stature of this Bill, as I mentioned in my opening remarks, is to ask whether it brings fairness of treatment to different claimants suffering the same criminal injury. Surely it cannot do so, by virtue of its very nature—its present tariff-based nature. The airline pilot who loses his sight and cannot fly, losing at 25 years of age maybe an average prospect of £40,000 per annum for 20 years or £800,000 and most of his future, if any, non-flying earnings, is treated broadly in the same way as an 80 year-old who is living with his family, subject to some ameliorating concessions wrung out of the Government 321 during passage of the measure in another place and relating to loss of earnings subject to an overall cap—why is there an overall cap?—and subject to no payment for the first 28 weeks, which is often the period of greatest need. That is a subject which has been raised by other noble Lords.
It is not entirely clear whether loss of earnings for such victims will be compensated on the basis of full loss of earnings and with a cap that must disadvantageously affect some claimants, and be subject to the same maximum of one-and-a-half times average earnings as before. But even with that concession, I ask myself in this context how students who have never earned will he treated. My main problem, which is that of many noble Lords who have spoken, is the inflexibility of the tariff as presently proposed. Injuries are listed against specific and inflexible figures. The same basic criticism therefore applies to the new tariff as applied to the old. No distinction is made between individuals, each victim of crime with the same injury being treated in the same way as another.
That leads to anomalies and unfairness. It cannot be right, for example, that a young child who loses an eye should receive the same compensation as an elderly person. The disability suffered by the child will last for much longer; in fact for decades. The effect of a facial scar on a young woman is likely to be far greater than on an elderly man. No distinction is made between injuries to the dominant or non-dominant hand or arm. It is self-evident that an injury to the right hand for a right-handed person is more disabling than an injury to the left hand. That is a point which has already been made. Anyone who has seen the tortured writing of the one-armed Admiral Nelson in letters and despatches in the Nelson Room at Lloyd's must realise that.
The courts assess injuries by reference to the victim rather than by reference to a fixed scale. But the Judicial Studies Board has recently published the second edition of its guidelines for the assessment of general damages in personal injury cases. Those guidelines are more flexible than the fixed tariff proposed by the Home Secretary, in that they provide bands for the assessment of particular injuries which enable an assessment to be made within parameters but reflecting the circumstances of the victim.
A flexible tariff or banding system would be far fairer than the fixed tariff proposed. I feel that that is the general mood of the House. Victims deserve to be treated on an individual basis as is done, for example, by the Industrial Benefit Disablement Scheme which provides for the assessment of disability by reference to the extent of continuing disability suffered by an individual, comparing "before" and "after" the accident. Why should there not be such a scheme for criminal injuries? Or why not allow the tariff to be seen as a starting point with discretion for the assessor to vary by plus or minus a percentage figure to reflect the victim's circumstances? So far the Government have resisted all attempts to introduce any degree of flexibility into the tariff.
The 1994 tariff scheme made provision for additional and multiple injuries by very low percentage uplifts. The Home Office has indicated that multiple injuries will be 322 assessed under the new tariff scheme in a similar way to that of 1994. But surely improvements are necessary to avoid the problems identified then. For example, the victim with two serious but independent injuries to different parts of the body from the same incident obtained an uplift of only 10 per cent. to the second tariff, 5 per cent. for the third injury and nothing for any additional injuries beyond that. That rough and ready approach is a disaster. As there were only 641 applications in respect of multiple injuries in the year of operation of the 1994 tariff, it seems reasonable that that small number should be separately assessed outside the tariff. After all, 641 was 1 per cent. of total applicants.
That leads me to my final point; namely, that the relativity between people and the feeling that one has been fairly dealt with are quite as important as the fact that there is some compensation at all. While grief from the loss of a parent, relative or loved one mercifully usually passes away after a period, a sense of unjust treatment has quite the opposite profile. It festers and grows with time. We should think of Carruthers, the brilliant chemist who invented nylon in the 1930s. He was so cast down by a feeling of unjust reward from Du Pont, his employers, that he committed suicide. There was also Beck, an underground engineer, who, in his own time devised what we call the tube map. It revolutionised all previous maps which looked like unsuccessful arguments with a plateful of spaghetti. His scheme is used internationally by virtually every city which has an underground railway. At first submission, he was scoffed at, and, in the end, grudgingly paid £50 for his scheme and forbidden to submit developments and improvements. His map is in the Metropolitan Museum of Art in New York. But to the nub of my point, the treatment that he received remained with him and ruined the rest of his life.
I fear that it will be thus for many of the claimants under the Bill which is now before your Lordships if it is not significantly amended toward much greater flexibility of treatment of the actual circumstances of the victim, as opposed to the operation of a menu of inflexible payments. With the Government dedicated to saving money, I fear that the answer may well be a lemon, leaving the same bitter taste. I could never support this Bill in its present, inflexible form. Let us try to improve it.
§ 5.26 p.m.
§ Baroness Elles
My Lords, the noble Lord, Lord Broadbridge, has certainly given a formidable list of criticisms of this Bill. Most of those matters will no doubt be raised at Committee stage.
I was somewhat surprised by his comments on the meanness of the Government. After all, the Government have a duty to look after taxpayers' money. It is not the Government's money and they have to guard it carefully. Considering that the United Kingdom has the most generous system of criminal injuries compensation in the whole world—as my noble friend the Minister said in her opening speech—more generous than all the member states of the European Union put together and, I understand, the whole of the United States, I do not believe that one can call the Government relatively 323 mean in that regard. I am sure that everybody would like to give as much as possible. But money has to be allocated to a great many other very needful purposes. I consider that the Bill has been extremely generous and we shall look forward to seeing the tariffs when they are finally discussed.
I should also like to say, from what I have heard from previous speakers, how much this House has benefited from the debate initiated by the noble and learned Lord, Lord Ackner, on 2nd March last year. Quite clearly, to many of the matters on which concern was expressed during that debate and later the Government have, indeed, as my noble friend Lord Colnbrook said, both listened and responded. Of course some issues will be debated during Committee stage but, broadly speaking, I have the feeling that the whole House warmly welcomes the Bill, as indeed I do.
Whatever the past circumstances leading to the introduction of the Bill, it must be said that it remedies a legal defect quickly and without delay, as stated by the Judicial Committee of your Lordships' House. Also, it seeks to set out a balanced and fair system of compensation to the victims of crime. Noble Lords will recognise that that is indeed no easy matter. It is certainly not an easy task for my noble friend the Minister.
Looking at the statistics which relate to crimes of violence, it is depressing to consider estimates showing a continuing increase by the end of the century, contrary to the advice so often given to investors that figures can also fall as well as rise. It is a pity that that particular saying does not apply to statistics on crime. The consequent increase understandably reflects on the number of victims as well as incurring further and enlarged organisation and administrative resources. Already it appears that victims have to wait up to nine months to receive payments which, because of the circumstances, are usually needed as soon as possible after the criminal injury has been incurred. Many noble Lords also made that point.
It is to be welcomed that the Bill now contains provision for loss of earnings and special expenses. Again, the Government are to be commended for that. Great credit is due to the president of Victim Support—my noble friend Lord Windlesham—and the Police Federation, which also welcomed many of the provisions.
I should also like to touch on three issues which may be raised during the Committee stage. The first is the question of the diversity of age, occupation and other relevant features which may be considered over and above the appropriate tariff. I wonder whether the appeals committee, which is to be set up under the Bill, will be enabled to give guidance on individual cases as well as giving general advice on policy for the future.
My second concern is that the police, who deserve our constant admiration and of whom it is estimated around 18,000 will be injured during 1995, may lose some of their legitimate entitlement to benefit and special pensions if they receive compensation under the Bill. I do not know whether I understood that point correctly, but I should like clarification either when my noble friend replies or during Committee stage.
324 The third point relates to the situation where victims are in receipt of benefit from the DSS and receive compensation of over £3,000. It is understood that benefits would decrease and disappear altogether when the amount reaches £8,000. Surely that is not equitable or fair. Anyone not in receipt of benefit would be a net beneficiary under the Act and the person who does not receive benefit is presumably better off than the person who does. That does not strike me as being either fair, in the case of the beneficiary under the DSS scheme, or equitable in general terms. I hope that the Government will be able to look at that point when we come to discuss these issues later on.
I should like to refer to two further points which have not been raised by other noble Lords. The first is that contribution to the cost of paying out and maintaining a generous compensatory scheme should surely be bolstered by every effort being made to encourage the criminal to contribute to the compensatory amounts. I understand that in 1993–94 compensation orders were made in over 2,000 cases as a result of victims' claims and amounted to over £600,000 being paid out. But that is very little either in terms of the numbers of crimes being committed or in the amount of money paid out. I am not aware of any system to encourage victims to make a claim automatically when criminals are convicted. It would certainly be welcome if the issue could be considered. If criminals knew that they had to pay their victims, it may make them slightly more cautious.
In conclusion, I suggest that—recognising that this is not strictly part of the provisions of this Bill—the weekly prizes from the National Lottery should be restricted to a maximum of a fixed sum—say, £5 million or £6 million. That is surely an adequate win for any person who buys a ticket for £1. The balance could be allocated to improving the situation of victims. If compensatory payments are based on the public's desire to be generous to those who have suffered as a result of crime, for the cost of a £1 lottery ticket the public may be willing to see some of the massive winnings go to the victims of crime.
§ 5.34 p.m.
§ Lord Macaulay of Bragar
My Lords, I was interested to hear what the noble Baroness, Lady Elles, had to say in relation to people who are injured as a result of a criminal act. Many of those injured pay tax. The impression may have been given by the noble Baroness's remarks—I am sure inadvertently—that it is only people who do not pay tax who suffer injury and claim upon the board.
§ Baroness Elles
My Lords, perhaps the noble Lord will allow me to interrupt. My point related to those who have been injured and are in receipt of benefits from the DSS. They will not receive the total benefit of the criminal compensation paid as it will be deducted from their DSS benefit. The point did not relate to taxpayers.
§ Lord Macaulay of Bragar
My Lords, I appreciate the point the noble Baroness is making. I will read with interest what she said in more detail.
325 In the courts we have compensation orders but as I understand it the reason for the existence of the criminal injuries compensation scheme is that in 95 per cent. of cases the people who assault other people are not worth pursuing. That is why the scheme is ex gratia; it is a recognition by the Government that a wrong has been done which should not have been done within the context of society. That is what it is all about and we must sort it out within that context.
At one time I was going to make a speech, but then decided not to; I will simply make some observations.
§ Lord Macaulay of Bragar
My Lords, the difference is that a speech has some continuity in it. I do not intend to have any continuity in my remarks. Since the time when the Home Secretary acted illegally—let us not beat about the bush; he was deemed to have acted illegally—what consultation has taken place with any one involved in the area of criminal injuries compensation? What consultation has there been since that decision and the production of this piece of paper we are now considering? I hope the Minister will be able to say who was consulted. Of course, the Home Secretary's domain does not include Scotland but we can look at this on a UK basis. Who was consulted before this Bill was produced? I should say that it is a fairly useless piece of paper at the end of the day, and observations have been made by various Members of your Lordships' House in regard to its contents.
I said that I did not intend to make a speech, but I should perhaps declare an interest as a member of the Criminal Injuries Compensation Board. I shall not say a great deal about the Bill. But just looking at page 1 we find that there is somebody called a "scheme manager"—that is a lovely expression. Then I find the qualifying words,if one has been appointed".When we go into the detail of the Bill, we do not know whether or not we are going to have a scheme manager. The scheme manager seems to be an alternative to the Secretary of State. Quite frankly, as a lawyer I cannot understand what the Bill is about or how it will be implemented. One either appoints a scheme manager or one does not. The word "if' is a small but important word. When we look into the context of the Bill it becomes even more important.
Then we read about "claims officers". Who will they be? There is no definition at all in that regard. Then we have magic people called "adjudicators". I may have misheard the noble Baroness when she was presenting the Government's position, but I believe she said that existing members of the board may be adjudicators. I should say that I am not remotely interested in that position because I am on the way out, so it does not matter. I am getting on a bit so I do not have an interest in who is going to be an adjudicator. However, did I understand the noble Baroness to say that existing members of the board would be appointed as adjudicators?
326 I am only dealing with the Explanatory and Financial Memorandum; we have not really started yet. Coming to the bottom of the page we find the heading, Effects of the Bill on public sector manpower. As I understand it—I will be corrected by the Minister if I am wrong—the criminal injuries scheme as it stands at the moment, even with all the difficulties caused by the illegal act of the Home Secretary, is still running at a commercial rate administratively of between 11 and 13 per cent., which is within the acceptable range.
Including myself, there are 44 members of the board. According to the financial memorandum, the 44 members—if I understand it: perhaps I do not understand it—will disappear and 50 civil servants will be appointed; at what grade we do not know. Perhaps I may say—this is not self-pleading—that the Government and the country get the services of the members of the Criminal Injuries Compensation Board at a fairly cheap rate. The noble Baroness the Minister smiles. But there are no pension implications. We get the daily deputy recorders' rate in England. In Scotland we do not have deputy recorders, so I do not know whether I should be paid at all. The 44 members who are doing the job without a pension and without any other rights will be replaced by 50 civil servants who will carry with them all the implications of Civil Service terms of contract.
I have studied what is said under Effects of the Bill on public sector manpower. What is the output per member of the board at the moment? I read that the staff will each settle 180 cases a year. That is a ludicrous figure. I am fairly certain that if the noble Baroness asks her advisers she will find that 180 cases a year is minimal. What is happening here is that to get the settlement of 90,000 cases the staff has to be increased by 50. I do not know anything about economics but that seems a perverted form of economics. Perhaps the Minister will let us know what that is all about.
There is also the question of inspecting the victims of violence. That is a central and crucial part of settling the level of awards and a public relations exercise is also carried out in that context. As I see it—I may be quite wrong about this—the whole objective behind this exercise is to exclude lawyers from participation in the criminal injuries compensation scheme. If that is the objective, let the Government be honest about it and say that this will be Civil Service orientated and that lawyers will have nothing to do with it. The end result of that will be that the judicial review procedure, which has become an industry certainly within the English Bar—not so much within the Scottish Bar—will increase tenfold. People will be seeking a review by the courts of decisions taken by civil servants. What will be the extra cost of that?
What will be the qualifications of those who will administer the scheme? Clause 3(4) refers to scheme managers and claims officers. The interesting phrase in the subsection is that a claims officer,shall be appointed on such terms and conditions as the Secretary of State considers appropriate".There is not one word about what training is to be given to the scheme managers, the claims officers or the adjudicators. Who will they be? Will they be nameless 327 people picked up off the streets? Will they be told, "You go in and adjudicate on what you think you would give that chap or that lady for the injury that he or she sustained"? I could go on at some length—I shall probably go on at some length anyway—but I am challenging the very essence of the Bill. One cannot run a criminal injuries compensation scheme without the professionalism required to adjudicate on the effects of assaults.
Perhaps I may make one final point. Many of your Lordships have already spoken on this matter and therefore I shall not expand too much on it. What has been the cost to date of the illegal actions of the Secretary of State? I can tell the House as a member of the Criminal Injuries Compensation Board that many of us will be sitting in August submerged under bags of review cases from the tariff system. The Secretary of State was put on his guard very early on that he might be wrong. From the very outset of this exercise he paid no attention to the Criminal Injuries Compensation Board. I say that with the greatest of respect for the noble Lord, Lord Carlisle, who had meetings with the Financial Secretary, Mr. Jack, and with the Minister of State, Mr. Maclean. The theme throughout the proceedings was that the tariff scheme was not negotiable. It is still not negotiable because it is in this Bill. In the interim, instead of sitting back to see what the courts were going to do, the Secretary of State in his wisdom—or lack of it—continued this scheme with letters to people saying, "Here is an award of £1,500 for a broken nose and a couple of black eyes. By the way, it might be reviewed. If that is so, you may have to pay back the money".
The Government took a deliberate decision. Some of your Lordships may be aware that there was a leaked letter of advice to the then Secretary of State to say that it was politically incorrect to try to claw back money from victims of violence. Therefore, when I am sitting going through these bags of cases and I see that an award of £1,500 has been made and I think that it should not have been £1,500 but £1,000, it will not matter a damn—if your Lordships will excuse me—because the Government will not claw it back. That is in contrast with what they do in civil litigation with the recovery unit in respect of social benefits. People are penalised beyond bounds. The whole thing is quite ridiculous.
What is the figure to date—not only the balance between what would have been awarded under the old common law system but what the cost of administration has been since the Home Secretary stuck his head in the sand and ignored what is going on around about him and ignored the courts? I cannot remember which noble Lord said that he had a 50:50 chance of success. Would it not have been a more prudent course for the Home Secretary at the time to have suspended the system until the Appellate Committee of your Lordships' House had made its decision?
The administrative costs will be horrendous by the time the review of all the cases done under the tariff scheme has been conducted. In the cases where the award is lower, there will be no claw back and the country will have lost. By the time we discuss the Bill 328 in Committee I hope that a little more common sense will have been applied to the whole operation of criminal injuries compensation.
§ 5.49 p.m.
§ Lord Campbell of Alloway
My Lords, having had the privilege of listening to the observations of the noble Lord, Lord Macaulay of Bragar, I wish to congratulate him on a most enlightening speech which has no doubt enriched the order of our debate while, along with the noble Earl, Lord Longford, and the noble Lord, Lord Broadbridge, challenging the essence of the principle of the Bill. The noble Lord asked some most interesting questions which are not really for me to answer but are answerable and are a matter for my noble friend the Minister, if she cares to deal with the matter today.
At the outset, from these Benches I want to acknowledge the action taken by the TUC as a result of which your Lordships' Appellate Committee aborted the previous Bill on judicial review on the ground of ministerial misconduct. As has been said, the merits and principles of the Bill were wholly irrelevant. At all events, this Bill, which in a sense has arisen like a phoenix from the ashes of your Lordships' sustained objections to the previous one, serves as a tribute not only to your Lordships' House in the exercise of its revisory role, but also to the Government, something which seems to have been forgotten by certain noble Lords. In this Bill they were able to reflect, to a certain measure, such objections.
Why it should be suggested, as it has been, that my right honourable friend the Home Secretary should don the mantle of sackcloth and ashes and grovel around the place, is simply not understood, for he has responded in full measure to your Lordships' reservations. Of course, it is a fair political point because, I suppose, all political points are fair. I do not object to it being made, but it is a pure political point. At this stage all your Lordships accept the principle of the Bill, as indeed do I. It is that we have to replace the common law system of compensation with an enhanced tariff scheme; what is called a "tariff-plus" or "hybrid" scheme.
§ The Earl of Longford
My Lords, when the noble Lord talks about the principle of the Bill, is not its essence that it will cut the amount going to victims by almost one half?
§ Lord Campbell of Alloway
My Lords, no, that is not the essence of the Bill. With respect to the noble Earl, as I see it, the essence of the Bill—and I can only speak for myself—is the principle: do we carry on with the common law principle of the assessment of compensation, or do we change to a tariff or hybrid system? That is the principle. The noble Earl is referring to the consequences of the change. At this stage I am not dealing with those. This is Second Reading and at this stage I am dealing with the principle of the Bill, which is that we move from one system to another. That is acceptable to all noble Lords. I shall come in a moment to what the noble Lord, Lord McIntosh of Haringey, said—with much of which I agree—that 329 really we simply have to move, as a matter of principle, towards what the noble Lord called a "hybrid" or an enhanced "tariff-plus" system.
Why? Because as a matter of principle that affords the reasonable resolution of a fair compromise between the interests of the victim, the obligations of the state and the burden on the taxpayer, under any government. For that reason the Bill has my full support. It also has the support of my noble friends Lord Carlisle of Bucklow, Lord Colnbrook and Lord Windlesham. We all opposed the previous Bill for reasons which are known and on record.
I wholly agree with the noble Lord, Lord McIntosh of Haringey, that it is not an easy solution but, as he said, we cannot go back to the old common law regime. He asked a number of cogent questions which assuredly warrant serious consideration, no doubt at Committee stage. I shall not seek to enter further into them because of time.
As my noble friend the Minister has said, this Bill will continue to afford the most generous compensation scheme in the world, and will dispense more compensation than all other European countries put together. It would surely be unrealistic and idle to suppose that the existing non-statutory scheme, under which compensation is awarded in line with common law damages, can continue.
There is no Bill which is incapable of improvement. Speaking only for myself, I hope that by some supplementary provision within the tariff scheme, some flexibility can be introduced to meet the individual needs of the victim in certain types of cases. If that were to be done in all cases, it would break the whole tariff concept wide open. Nonetheless, I hope that that may be possible. I have in mind some machinery to enable discretion to be exercised within financial constraints, such as might be acceptable to government. I do not have the skill to formulate that—or do not have it yet—in the form of an amendment.
One has to strike a fair balance. I agree that the figures given by my noble friend the Minister about what happens in the year 2001 inevitably have to be taken with a pinch of salt. Who on earth knows what will happen then? But the Government have to work on predictions and assumptions. There is no doubt that these are respectable predictions and reasonable assumptions, on which the Government are entitled to work. There is a very high degree of saving between £1.8 billion and £1.1 billion. That saving seems to be considered by the noble Earl, Lord Longford, as a shameful attack on the social services, and by the noble Lord, Lord Broadbridge, in stigmatising the Bill as a pernicious little Bill. Every noble Lord is entitled to his opinion, but when considering the realities of the situation, the burden on the taxpayer and the fair resolution of compensation, as compared with other countries, some of which are far better off than ourselves, I believe that this is a reasonable response.
However, expenditure is not the only problem. There is the backlog, which was referred to by my noble friend Lord Colnbrook and is a very serious problem. As yet 110,000 cases are unresolved. That is not a government prediction; it is, I am told, a clear statistic. The 330 importance of immediate payment has been stressed and is of great importance, but how one gets immediate payments with that order of backlog, I am uncertain.
My noble friend Lord Windlesham said that the scheme was too cumbersome and too slow. I am not here to criticise the administration of the scheme; only to point to the fact that the number of applications has risen from 554 in 1964, when the scheme was set up, to 73,000 in 1993–94. I am informed that under the tariff scheme, it is expected that the backlog will be reduced substantially and that that reduction will continue. I suggest that that is yet another reason why, if the tariff scheme will reduce the backlog, as I understand that it will, one should support that tariff scheme.
The Bill has many attractions which have been explained in full by my noble friend the Minister and by my noble friend Lord Windlesham in particular. The structured settlements with the annuity payments which are not taxable are, among other aspects, very important attractions. At all events, it is a regime which is very different from that proposed in the previous Bill, and which is broadly acceptable to my noble friends Lord Carlisle of Bucklow and Lord Colnbrook with whom consultation on the Bill has, I understand, ensued.
The Bill is not open to objection as a skeletal Bill. I am coming now to the point raised by the noble and learned Lord, Lord Ackner. The degree of the proposed implementing machinery is wholly appropriate. The affirmative resolution procedure affords a satisfactory measure of safeguard. I entirely agree with my noble friend Lord Colnbrook that it would be wholly impracticable to have that complex implementing machinery, which may and, indeed, should require amendment from time to time, cluttering up the face of primary legislation. I wholly reject the criticisms of the noble and learned Lord, Lord Ackner, in that regard.
With reference to Clause 11, I can see no reason to suppose why on earth the Home Secretary would seek to ignore, avoid or evade the decisions and rulings of your Lordships' Appellate Committee. Some suggestion was made to that effect, but I find it unacceptable and clandestine. There are no serious criticisms of the Bill on that score.
In conclusion, I should like to make just one point. The common law system is a tariff system. Between brackets, we advise, in the light of decided cases, as to how much on the basis of full compensation, on full liability, and how much on the basis of contributory negligence and so on and so forth. There is a bracket and there is a tariff, but under the common law system you take the risk of litigation. You have to prove liability. You have all the' costs of substantive trial, and in all litigation you have the inevitable risk of failure and of vast expense. You are on risk. How you compare the common law system in that set-up with a system in which all that you have to do is to prove causation and get your money without substantial risk, I do not understand. To my mind—I am an ordinary lawyer—it is not a comparison as between like and like. Under the tariff system, you are getting something without risk and without expense.
331 Therefore, on that ground alone, quite apart from the issue of expense and quite apart from the point about the reduction in what people get, which was made by the noble Earl, Lord Longford, and other noble Lords, we should support the principle of the tariff. There should be a reduction in any event because the scheme should never have started off on the basis of common law compensation, but no yardstick other than that was thought of. On that ground also, it seems wholly right that, leaving aside the burden of expense, the principle of introducing the tariff as proposed by this Bill, albeit enhanced, is wholly justified.
§ 6.6 p.m.
§ Lord Archer of Sandwell
My Lords, the debate has provided the Government with much well-informed criticism of the proposals and some responsible suggestions for further improvement. There may be a distinction between a speech and some observations, but I hope that the noble Baroness will avail herself of all that wisdom.
The noble Lord, Lord Colnbrook, and the noble Baroness, Lady Elles, said that the Government have responded to all of the criticisms made in the past—
§ Lord Archer of Sandwell
My Lords, I thought that the noble Lord actually used the word "all", but if he says that he did not, I accept it. Then, even the noble Lord is not claiming too great an open-mindedness on the part of the Government. As the noble Lord, Lord Campbell, has just emphasised, there is still the question of the change which occasioned all the problems—the change from the common law basis of assessing compensation to a tariff system. I make no secret of this: I agree with the strictures of my noble friends Lord Ewing and Lord Longford on that change. However, I suspect that my noble friend Lord McIntosh is right and that our horse has long escaped.
There are some criticisms to be made of the common law system. I am not referring to what I think the noble Lord, Lord Campbell, was adverting to, which was the method of deciding liability. Nevertheless, there are criticisms to be made of the common law system of assessing damages. Of course, not all of them are addressed in the new proposals. However, the common law at least attempts to address the principle of fairness—and fairness entails two factors. The first is that similar situations should be treated alike and the second is that relevant differences should be reflected in different treatment. That requires room for flexibility. The Government's initial proposals clearly failed to give effect to that second element. Victim Support, which has the advantage of having as its president the noble Lord, Lord Windlesham, together with the Bar Council and other organisations demonstrated some of the more absurd consequences of what the Government were then proposing, as did a number of your Lordships during the subsequent debates in this House. I should like to add my tribute to those paid about the initiatives of the noble and learned Lord, Lord Ackner.
332 So, belatedly, the Government looked at it again and emerged with a tariff-scheme-with-some-flexible-elements—I hope that that phrase will appear in Hansard with hyphens between the words—still operated not by lawyers who are accustomed to assessing damages but by the same officials who were to operate the original tariff scheme. I accept, as did the noble Lord, Lord Carlisle, that the result is a substantial improvement. However, I suspect that the result will be what it usually is when one sets out unreflectingly to create one thing and then halfway through changes one's mind and decides to create something else.
The Devil begins with a tail and hoofs and halfway through it is decided to give him a human face. The parts do not fit together and it is not a pretty sight. Certainly, the new scheme still admits of the anomalies referred to by my noble friend Lord McIntosh and the noble Lords, Lord Rodgers and Lord Broadbridge. As the noble Lord, Lord Carlisle, pointed out, the number of identifiable injuries has doubled but, as the noble and learned Lord, Lord Ackner, commented, there is no suggestion that the single rigid figure against each may be replaced by a band or a bracket.
As my noble friend Lord McIntosh reminded us, there remains a distinction between the method of assessing compensation for a tort and compensation for a crime, corresponding to no distinction in either the loss or the need. At the end of it all, I share the doubt of the noble Lord, Lord Carlisle, about whether the new scheme is likely to be more expeditious.
That case has been made out in this debate and it will not profit from further comments from me. Nor do I believe that your Lordships would be assisted if I were to repeat what has been said about some of the questions which your Lordships may wish to address in Committee. I hope that I may be forgiven if I spend what time falls to me not on the content of the Bill but on its form. Perhaps I may express agreement with the noble and learned Lord, Lord Ackner, my noble friend Lord Ewing, and the noble Lord, Lord Broadbridge, because I believe that it is one example—probably the most blatant but, unhappily, certainly not unique—of a tendency by the present Government to lose sight of a fundamental constitutional principle. It is the difference between the functions of the Executive and the legislature.
If the Executive has proposals for changing the law, it submits those proposals to Parliament. Parliament may agree or disagree, or it may agree subject to some amendments. Of course, Parliament may initiate legislation without waiting for a proposal from the Executive. But normally the division of function is that the Executive is responsible for policies, for which it is accountable to Parliament. Where those policies entail changes in the law, including changes in Ministers' powers, it submits a proposal to Parliament.
The question which sometimes arises is: what is a proposal? There was once a body of opinion, chiefly among traditional Conservatives, that a proposal meant all the details of the changes which it was intended to make. Lord Hewart, a former Conservative law officer, argued in the book on which many of us were reared, The New Despotism which was published in 1929, that 333 all the details should be embodied in the primary legislation and that leaving details to delegated legislation was a dangerous transfer of power from Parliament to the Executive.
That was an extreme version of the doctrine. Since the Donoughmore Report in 1932, it has been generally agreed to be acceptable if the primary legislation sets out clearly what is to happen and Parliament entrusts to the Executive the filling in of the details, subject of course to some of the proper safeguards referred to in the debate. That is for the reasons given by the noble Lord, Lord Colnbrook; there needs to be a degree of flexibility.
We are familiar with provisions such as those in Clause 10, inviting the Secretary of State to decide on the details after Parliament has legislated and then to lay those details before Parliament. Your Lordships will notice that in this case it is not all his proposals, even as regards the details, but only some of them. In Committee, your Lordships may wish to discuss some of the proposals which the Secretary of State is empowered to make which are not brought within Clause 10 and which he will not have to lay before Parliament.
However, the point that we are considering here is more fundamental. When Parliament is invited to approve subordinate legislation it is on a take-it-or-leave-it basis. As my noble friend said, there is no provision for amending it. The time when the debate takes place is at the mercy of the Government's business managers. It is likely, if I may say so from experience, to be at a very inconvenient hour and conducted to a background of yawns from the Government Whips. No one would consider those procedures satisfactory if they were applied to primary legislation. They are acceptable for matters of detail.
Yes, we have moved from the position of Conservatives such as Lord Hewart. There is a place for subordinate legislation. However, the present Conservative Government have moved not only away from their Lord Hewarts but they have swung out of sight, in the opposite direction. The Executive comes to Parliament not with a proposal at all but with a request for a blank cheque. Of course, a blank cheque is more flexible but most of us prefer to fill in the amount on our cheques because it makes it clear to what we are agreeing.
What we are requested to say in this Bill is, "There shall be a scheme of some kind and the Secretary of State is hereby empowered to decide what it shall be". That is not a proposal; it is inviting Parliament to abdicate its legislative function. We have been told most helpfully by the noble Baroness today—indeed, we have been told on other occasions—what is to be in the scheme, but it is not in the Bill. It is at the discretion of the Secretary of State and it may be changed when he chooses and without any prescribed procedures. That is precisely a Henry VIII provision.
Constitutionally, of course, it is all a very dismal episode and the more alarming because it comes from the Home Office. That is the department which, above all others, is expected to understand and accept responsibility for constitutional theory and practice. The 334 past history is well known to your Lordships and it has been recounted in this debate by the noble and learned Lord, Lord Simon, my noble friend Lord McIntosh and other noble Lords.
In the Criminal Justice Act 1988, Parliament was invited by the Government to approve the structure of a statutory scheme. However, it delegated to the Home Secretary, the discretion to decide when it should come into force. It used to be thought that a provision of that kind was inserted in order to give time to the Secretary of State to make the necessary preparations before the statutory provisions became effective. It was not generally believed among lawyers that, when Parliament provided by statute for certain things to be done but authorised the Secretary of State to decide when they should be done, that constituted authority to decide that they should not be done at all. That, as the noble Lord, Lord Windlesham, noticed, has occasionally been breached in the past and it has usually occasioned some surprise.
In 1994 the Secretary of State went further. He did not simply decide to himself that the provisions should not be implemented; he announced publicly that he had decided that the provisions made by Parliament were not to be implemented. Even that was not all. With a statutory scheme having been approved by Parliament, not only did the Secretary of State decide that it should not be implemented, but he decided that he would make provision for a wholly different scheme, ignoring the intentions of Parliament in the statute. Of course, as your Lordships have recounted, he was firmly told by the judiciary that that was not constitutional. I am bound to say that I share the curiosity of my noble friend Lord Macaulay as to the cost to the public of that episode.
All right, that is in the past. What is more worrying is what is happening now and what is to happen in the future. Now he says, "I need the authority of Parliament. Very well, I shall not simply write the new scheme on my own notepaper. I shall ask Parliament to place a rubber stamp on it. But I shall not ask Parliament to rubber stamp the scheme when it is set out. I want the rubber stamp in advance of the scheme". Lord Hewart rests in his grave, although I suspect that his spirit may be emitting a few howls.
We are now facing the opposite extremity—not a refusal to admit sensible limitations on the doctrine that the legislature is there to legislate but inroads which threaten to eliminate the doctrine itself. Another recent obvious example was the Deregulation and Contracting Out Act. Unless Parliament intends to become a department of the Executive, the time is fast approaching to make a stand.
There is one specific area in which the danger is magnified. The jurisdiction and powers of the judiciary are fundamentally matters for Parliament. It would be doubly dangerous if the Executive sought to reserve to itself the power to decide on the existence and extent of appeals against its own creations. I doubt whether, ever since the Franks Report, there is any serious dispute that tribunals and adjudicators are part of the judiciary.
I must now pause and, declare an interest. This is a matter on which the Council on Tribunals, which I am privileged to chair, feels strongly. Although I have no 335 reason to believe that my party would disagree, I should make it clear that I am speaking for myself and not necessarily for my party.
Clause 5 provides that the scheme shall include provision for appeals to adjudicators. The remainder of the clause confers a wide discretion on the Secretary of State as to their terms of appointment, their mode of proceeding and all the other matters associated with that. I say at once that there has been some consultation between the department and the Council on Tribunals. I recognise and appreciate the inclusion of Clause 5(7), to which the noble Baroness quite properly adverted, which brings adjudications within the supervision of the council.
But the Secretary of State is left to provide for appeals. He will appoint the adjudicators; he will decide what qualifications, if any, are required; he will decide whether the adjudicators will sit alone, as a panel or in some other combination; and whether there shall be an entitlement to an oral hearing. Those are matters not for the Executive but for the legislature.
I should like to quote from the annual report for 1992–93 of the Council on Tribunals. It states:We emphasise here, as we have in the past, that when establishing new tribunals, the Government should give due consideration to the appropriate legislative division between primary and secondary legislation. To establish a new tribunal by statutory regulation, however clear the legislative intention, does not accord with current practice. Establishment of a tribunal by Act of Parliament emphasises the tribunal's independent standing which is appropriate for a body exercising adjudicative functions in relation to the statutory rights of individuals".That is a matter of principle which your Lordships would expect me to raise on Second Reading. There are further matters which your Lordships may wish to ventilate in Committee. But in view of the time that I have taken, I shall leave those matters until Committee stage and keep the noble Baroness on tenterhooks.
What should be said now is that the differences in function between the legislature, the Executive and the judiciary are fundamental to our constitution and we shall permit them to be blurred at our peril. I do not believe that the noble Baroness wishes harm to the democratic process. I do not believe that there are officials in the Home Office who are plotting to destroy democracy. I doubt whether even the Home Secretary is opposed to democracy, although there are occasions when he is in danger of misleading us about that. But there can be death from a thousand cuts. And history may judge him less charitably than we do. Meanwhile, we must do that which lies within our power to address the more detailed matters about which anxiety has been expressed in the debate. The noble Baroness may demonstrate her commitment to the democratic process in her responses to those suggestions.
§ 6.24 p.m.
§ Baroness Blatch
My Lords, as I said at the outset, this is an important issue. We have had a full and interesting debate. It is clear from the thoughtful contributions which have been made that your Lordships feel genuine concern for those who have been injured as a result of violent crime. Not unexpectedly, differing 336 views have been expressed about what should be done. We are all agreed that we need a system which gets generous payments to victims as quickly as possible and at a cost that is affordable. We believe that our enhanced tariff scheme is the best way to achieve that.
Many points have been raised in the course of the debate and it will not be possible for me to address them all. I know that the matters that I do not address will be the subject of further debate as the Bill passes through each of its stages in this House. Nevertheless, I shall try to cover the main issues that have been raised.
Much has been said about my right honourable friend the Home Secretary in the course of the debate, and in particular by the noble and learned Lord, Lord Simon of Glaisdale, at the beginning of the afternoon. My right honourable friend acted throughout in good faith. He was subsequently judged, as we all know, to have acted unlawfully. With good grace my right honourable friend accepted fully that judgment and acted speedily to present the current Bill before the House, taking into account many of the anxieties voiced by your Lordships and others outside the House.
Much has been said about the detail of the scheme. The detail of the scheme will be set out in the draft scheme which we hope to publish within the next two or three weeks. Copies will be placed in the Library of the House and sent to noble Lords and Members of another place who have taken an interest in the scheme. Of course, copies will also be sent to interested organisations.
The noble Lord, Lord Rodgers of Quarry Bank, referred to undertakings about the future shape and structure of the scheme. Clause 10 requires prior parliamentary approval of the tariff and other key features before the scheme starts. It also requires parliamentary approval before any changes can be made to those key features. Thus, it will be Parliament which has control over the future of the scheme. I shall return later to that aspect.
The noble Lord, Lord Rodgers, referred also to the costs of the scheme and compared them with the costs of the prison service. He suggested that the costs of the scheme are only one-tenth of the costs of the prison service. He seemed to imply in some way that the Government are spending more on offenders than on victims. But expenditure on prisons and the criminal justice system as a whole benefits victims by ensuring that offenders are prosecuted and punished accordingly. That is as much in the interests of offenders as it is in the interests of the community as a whole.
The noble Lord, Lord Rodgers of Quarry Bank, referred to the opening speech of the noble Lord, Lord McIntosh, as pompous. If the noble Lord reads Hansard tomorrow, he will find that one of the adjectives which he used was "pompous".
§ Lord Rodgers of Quarry Bank
My Lords, with due respect to the noble Lord, Lord McIntosh, as well as to the Minister, I made a very specific reference to the opening remarks of the noble Lord, Lord McIntosh, about the noble and learned Lord, Lord Simon of Glaisdale. That alone I said was pompous. I hope that he will forgive me for that. I thought that the rest of his speech was absolutely splendid and not pompous at all.
§ Baroness Blatch
My Lords, the noble Lord, Lord Rodgers of Quarry Bank, reduces many matters to personal comment. He knows and I know that we do friendly battle across this Dispatch Box. But perhaps I may say that, uncharacteristically for the tone of this House, the noble Lord, Lord Rodgers of Quarry Bank, has developed pomposity to an art form.
The noble Lord suggested that we should spend more—perhaps a related percentage of what is spent on, for example, Bosnia or prisons. I believe that he even evoked the GDP. During the course of the Bill it will be interesting to know what is the precise percentage of public expenditure that the noble Lord would wish us to spend on this scheme. Perhaps he wishes that to be totally unlimited.
We shall review and revise the benefits. Parliament will be involved in that process. However, I must ask what proportion of the claims will be met in the first year under the new scheme as opposed to the old scheme. I shall refer again to that matter.
The noble Lord referred to changes in the existing common law scheme before the tariff scheme starts. The only planned change is to allow structured settlements to be made where claims under the old scheme have not yet been settled. I believe that the whole House would welcome that opportunity being afforded to those set-back claims that have not yet been settled. The noble Lord went on to ask for comparative figures for the new tariff and the common law damages scheme. However, I gave them in my opening speech which I invite the noble Lord to read in Hansard tomorrow morning.
I have mentioned the action of my right honourable friend and I rest my case in that respect. The noble and learned Lord, Lord Ackner, referred to Clause 11 which allows the Secretary of State to make changes in the common law damages scheme. Perhaps I may link that hack to the point that I have just made. There is nothing sinister about Clause 11. It puts beyond doubt that the common law damages scheme may continue until it is replaced by the new scheme and that my right honourable friend the Secretary of State may make any changes necessary. That will ensure, for example, that the necessary changes can be made to allow for those structured settlements to which I referred a moment ago.
The noble Lord, Lord McIntosh, referred to dependency payments and asked if they were subject to the 28-week rule. That is not the case. In fatal cases, there will be a fatal award for all qualifying claimants, plus a payment for loss of dependency where the qualifying claimant was financially dependent on the victim. That will be calculated from the time of the death of the victim.
Much has been made of incidents where someone may lose a left or right hand, and concerning the difference in treatment of those two injuries. The tariff awards are based on an injury to the dominant limb. Therefore, the actual basis is on the dominant limb. If, in Committee, the House wishes to suggest that there is a lesser payment for the less dominant limb, then of course we shall consider that if someone wishes to table an amendment. We would like to think that there is an 338 overpayment concerning the less dominant limb and the right payment for the dominant limb. However, we shall await developments during the further stages of the Bill.
My noble friend Lord Colnbrook referred to loss of earnings. In cases where loss of earnings or special expenses are payable, the expectation is that the basic tariff payment will be made as soon as possible—that is, of course, once eligibility has been determined—rather than waiting for a loss of earnings assessment which, as my noble friend will know, could take more time. However, we take the point about paying people as quickly as possible.
The noble Lord, Lord Ewing, referred to the tariff scheme and said that it was not quicker than the common law damages scheme. As my noble friend Lord Campbell of Alloway, said, it is not possible to make proper comparisons on the basis of one year's experience of the tariff scheme, especially as the scheme was under challenge at the time. Priority was given to dealing with the backlog, which I am sure the noble Lord would agree was the right thing to do, of cases under the old scheme. Therefore, until the tariff scheme stands alone and the old scheme cases have been dealt with, it will not be possible to make proper comparisons. However, we are confident that the scheme will deliver speedier payments to most victims and we believe that there has been some support for that in the Chamber this afternoon.
The noble Lord, Lord Macaulay of Bragar, asked if members of the existing board would become members of the new panel. Well, we expect to invite some members of the existing board to become members of the new panel as, indeed, happened with the tariff scheme which operated last year. We shall, of course, be inviting people from a wider range of backgrounds to become members. Therefore, it is not quite the "horror house" that I believe the noble Lord described during the course of his speech.
As regards my noble friend Lord Campbell of Alloway, perhaps I may say, first, how very good it is to see him in his seat today following a very recent operation. Indeed, my noble friend returned to active duties in the House with unseemly haste. We wish him well as he recovers to full fitness.
§ Baroness Blatch
My Lords, I am grateful to my noble friend, first, for what he said about the Bill; and, secondly, for the important point that he made. Any government have to balance competing interests—that is, those of the victim in this case and, of course, those who must fund the scheme, the taxpayers. However, as my noble friend said, the scheme remains the most generous one in the world.
I listened most carefully to the noble and learned Lord, Lord Archer of Sandwell, when he criticised the proposed new scheme. I hope that the noble and learned Lord is not too dismissive of additional payments to the fixed tariff of loss of earnings, costs of care and of the facility to opt for structured payments which allows for a tax-free income stream for life. That was, indeed, the impression that he gave to the House. If, on the other hand, the noble and learned Lord is advocating a more 339 generous scheme, then, let him tell his colleagues in another place about it because I believe they will note what he says with interest. Alternatively, would the noble and learned Lord cap the overall amount, but offer a different form of distribution? If so, perhaps we will understand what the capping arrangements could be during the course of the Bill's proceedings.
§ Lord Archer of Sandwell
My Lords, I must have been more than usually incomprehensible. I thought that I said clearly that I wholly agreed with the noble Lord, Lord Carlisle, in that the new scheme is a great improvement on the old one.
My Lords, I actually heard the noble Lord say that; but I also heard him dismiss the sort of "add ons" to the tariff scheme. Perhaps we should both read Hansard tomorrow morning to clarify the matter. I shall offer a fulsome apology if I misunderstood what the noble Lord said.
The noble Lord, Lord Ewing of Kirkford, and indeed, the noble and learned Lord, Lord Archer of Sandwell, both referred to Henry VIII clauses. I said that I would return to that issue. First, if the scheme were to form part of the Bill, any change, however minor, would have to be a matter for primary legislation which would present very considerable difficulty. Again, that point was made by my noble friend Lord Campbell of Alloway. The Bill will, of course, go before the scrutiny committee between now and the Bill's next stage. Indeed, that is an important part of the process. It will be for that committee to take a view on whether my right honourable friend is seeking proper powers or whether he is exceeding his office in that respect. In that case, no doubt the scrutiny committee will report the matter to the House.
The noble and learned Lord, Lord Ackner, referred to awards and suggested that they should be selected from a band; and, indeed, my noble friend Lord Carlisle referred to a banded system. Assessing an appropriate payment from a wide band for each injury description would, in effect, mean reverting to a common law method of assessment. It would reintroduce an element of subjectivity and consequent uncertainty for the victim. It would undoubtedly lead to more appeals and to a gradual, upward drift towards the top of the band.
I should also remind the House that we are not looking to provide finely judged compensation on the same basis as before; we are looking to provide a speedy and generous payment to the victim for the injury suffered. The tariff approach is open and transparent and victims will have a pretty good idea when they apply of how much money they are likely to receive. However, that would not necessarily be the case under a banding system, but it will, of course, be for the "add ons" to take particular account of the circumstances of each claimant.
The noble Lord, Lord McIntosh, referred to the rising cost as being due to the increase in crime. I believe that that fact was also mentioned by other speakers. There is no absolute correlation between the crime figures and the number of applications under the scheme. Since the scheme's introduction in 1964, it is true that violent 340 crime has increased by 500 per cent., while the number of applications has increased by 3,000 per cent. Moreover, the amount of compensation paid has increased by no less than 40,000 per cent.
The noble Lord, Lord Rodgers of Quarry Bank, referred to the time limit. We intend to introduce a time limit of two years. The one-year limit under the old tariff scheme was criticised as being too short, but the three-year limit under the common law damages scheme is, we believe, rather too long. Police and other records are often weeded out at three-yearly intervals. That can make it most difficult to secure the documentary evidence needed to substantiate the claims. However, there will continue to be discretion for the authority running the scheme to waive the time limit in exceptional cases.
My noble friend Lord Carlisle referred to the Criminal Injuries Compensation Authority and said that it should be able to refer difficult cases to an oral hearing. We recognise that in such a scheme there will always be cases which are more difficult, especially those involving complicated loss of earnings and special care calculations. However, we do not believe that a power of referral for an oral hearing, as is possible under the current 1990 scheme, would be appropriate. The enhanced tariff scheme is administered in a different way from the current scheme. Under the tariff scheme there is complete separation of the original decision taking process and the appeals function. Therefore, it would not be appropriate for the CICA to refer so-called "difficult cases" to the appeals panel for an oral hearing. To whom would any dissatisfied claimant then apply? The appeals panel would have to become both judge and jury, thereby compromising the independence of the appeals process.
The Criminal Injuries Compensation Authority will be able to call upon the advice of senior experienced staff and lawyers in more difficult cases. I believe that that point was also made by my noble friend Lady Elles. However, the initial decision must be for the authority alone. If, after review—that is, if one is requested—the authority decides on the balance of probabilities that a certain award should or should not be made, that must be a matter for the authority. It will then be open to the applicant to decide whether to appeal to the independent appeals panel, which can then consider the matter afresh without having been involved in any way in the earlier decision.
The noble Earl, Lord Longford, was fairly condemning of the Government and their treatment of victims. It was the Government who introduced the victim support scheme in the first place. The Government have supported it well, and will continue to do so. The victim is central to our concern about fighting crime. We have toughened up the criminal justice system almost precisely because we are concerned about the plight of victims.
I was asked by the noble and learned Lord, Lord Ackner, why the tariff and the detail of the scheme were not on the face of the Bill. I believe that I have already referred to that. Until it comes before the scrutiny committee, in my view changes to the scheme, which sometimes are very minor, will require a primary place 341 in the programme for primary legislation. I do not believe that that is the way to deal with the details of such a complex scheme.
My noble friend Lord Colnbrook and the noble Lord, Lord McIntosh, referred to the up-rating of tariff levels. The tariff levels have been left as they were when the earlier scheme was introduced on 1st April 1994. Those levels were based on board awards and included at the time an unquantified element for loss of earnings and special care plus a generous amount for inflation. Though we are now paying loss of earnings and special care, in addition to the tariff award in more serious cases, we have not stripped those elements from the tariff levels which are therefore higher than they would otherwise have been. There is already a considerable cushion built into the tariff. For the future, the intention will be to review the tariff bands every three years. We shall give further thought to how that review will be undertaken. The priority for now is to get the scheme up and running successfully. But the element of the award for loss of earnings and special care will go up automatically in line with wages and the costs of care.
My noble friend Lord Colnbrook referred to early payments. I agree with him: it is our intention that payment should be made as soon as possible once liability has been established. My noble friend also asked whether I would repeat assurances given by my noble friend Earl Ferrers that the Government would not hesitate to make any necessary changes to improve the tariff. First, I should set the context of the way in which my noble friend asked the question. He was referring to the 1994 tariff scheme which had to be withdrawn following the ruling of the Judicial Committee of this House. Under that scheme, the Government would have been able to make changes administratively without having to come to Parliament and so could have acted much more promptly. Under the new scheme the tariff and other key features bearing on quantum will require the prior approval of both Houses of Parliament, both before the new scheme is introduced and before any subsequent changes are made to the tariff or to those key features.
Therefore, I cannot give an unequivocal assurance to my noble friend that we shall make any necessary changes because they will no longer be in the Government's direct gift. What I can say to my noble friend is that the Government will continue to be receptive to ideas and suggestions to improve the tariff, or other aspects of the scheme. If it seems appropriate, we shall not hesitate to invite Parliament to approve the necessary changes just as soon as that is practicable.
Reference was made to the minimum award of £1,000. It was said that it should be abolished. That would not make sense. There must be a minimum threshold to stop the authority from being swamped with minor claims which will hinder the award of compensation to the more seriously injured victims who have more need for it. The minimum threshold of £1,000 has been at that level since February 1992, and we have no plans to raise it.
342 The noble Lord, Lord Ewing of Kirkford, referred to the 28-week trigger point for loss of earnings. I believe that his point was that it would be particularly serious for those in part-time or low-paid temporary work, as well as for the self-employed.
There needs to be a trigger for loss of earnings and special care to differentiate those who are most seriously affected by injury, and those for whom we all have particular sympathy from those who are less seriously injured and who recover more quickly. The 28-week trigger was chosen because that was the period for which statutory sick pay was payable by employers. Those of working age who are ineligible for statutory sick pay should qualify for incapacity benefit or other state benefit, as I think the noble Lord knows.
The prudent self-employed may also have made provision for absence from work for whatever reason through business or other insurance payments. Successful claimants will all receive the basic tariff award for their injuries. The minimum payment is £1,000, and more serious injuries will attract much more. All tariff awards still have some unquantified element in them for loss of earnings and special care. Therefore, it is difficult to see quite how the absence of additional payment for loss of earnings will be likely to lead to hardship. Therefore, we believe that between incapacity benefit, the state statutory sick pay benefit and income support probably everybody is covered.
I should like to thank my noble friend Lord Windlesham for the work that he does with Victim Support. He will know that the Government take the work of that body very seriously. He referred to the levels of award on the tariff in 1996, and said that they were based largely on median awards paid in 1991–92. The 1994 tariff was indeed based on median awards. The most typical award was that made in 1991–92. But those awards were first reflated by 19 per cent. to bring them up to what was thought to be 1994 levels. The actual increase in average award over the three-year period was under 12 per cent. Therefore, the awards under the 1994 tariff were 7 per cent. higher than they need have been. From the point of view of Victim Support, that is a point worth noting.
Being based on the median award, under the old 1990 scheme, the 1994 tariff included elements of all the heads of damage payable under that scheme. I repeat that it included many of those now separately considered as add-ons. My noble friend also referred to the levels of award being reviewed only every three years, with no guarantee of an increase in line with inflation. We have given a firm undertaking that tariff levels will be reviewed every three years. For the reasons already given, we believe that to be adequate.
Reference was also made to some very low awards which it was said gave rise to concern. It was said that the sexual assault of children resulted in an award which was less than that for a broken finger. The tariff is based on 20,000 awards made by the board under the present arrangements, and therefore reflects what actually happens under common law damages. We believe that it is the most defensible basis on which to construct a tariff. It would be wrong to substitute someone else's subjective assessment for that more objective approach. 343 But we have undertaken to keep the tariff under review. If, with the passage of time, it appears that some of the relativities in the tariff need to be changed, then I go back to my promise to my noble friend: we shall consider inviting the House to reconsider them.
My noble friend Lady Elles referred to social security benefits and how they related to compensation. It is necessary to deduct social security benefits and payments made in respect of loss of earnings to avoid claimants being compensated twice over from state funds in respect of the same period of absence from work. The rules for taking account of capital when assessing eligibility for benefits are a matter for the Department of Social Security. We understand that that department considers that it is unfair and impracticable to attempt to distinguish capital received under the scheme from capital received from other sources, such as insurance payments. That replicates the situation that exists under the present scheme.
My noble friend Lady Elles also posed the question why National Lottery prizes could not be capped and the excess used to fund the compensation scheme. Parliament has agreed that the five areas to benefit from the National Lottery are: the arts, sport, National Heritage, charities and projects to mark the year 2000 and the start of the new millennium. Therefore, it would not be possible to use Lottery money for the criminal injuries compensation scheme. To do so would require a change in primary legislation. Even if that were possible, international experience has shown that large prizes are an essential part of any successful lottery. Attempts to cap prizes in other countries have generally led to a significant loss of sales and therefore a consequent loss of lottery money for good causes. However, I have no doubt that that particular point will rattle around for some time.
My noble friend Lady Elles also referred to court compensation. I hope that she is comforted by the fact that the Government share her view that defendants should be made to pay compensation where appropriate. The courts are required to consider making compensation orders in all cases, but such orders depend upon an assessment of offenders' means. It is often the case that they do not have adequate means to pay compensation.
The noble Lord, Lord Macaulay of Bragar, asked whom we had consulted in the course of the intervening months. We have received many helpful comments and consultation from a number of quarters, including the Law Society and my noble friend Lord Carlisle, the chairman of the Criminal Injuries Compensation Board. Many of those comments are reflected in the new proposals.
I was also asked how the scheme affected the police and who are the major beneficiaries of the scheme. Like other claimants, the police, firemen and nurses should all receive broadly similar payments under the enhanced tariff scheme as they presently receive under the common law damages scheme, including past and future loss of earnings.
344 I shall stop addressing individual points in view of the time. I shall sum up by reiterating that the Government are committed to doing their best both for victims and for taxpayers. We have considered very carefully all the representations that have been made about the scheme, and we believe that we have devised a scheme that achieves the right balance. It is a simple scheme. It is a workable scheme. And it is an affordable scheme. Yet it will remain the most generous in the world. We can all continue to take pride in that. I await, on tenterhooks, the further stages of the Bill. Meanwhile, I commend the Bill to your Lordships' House.
§ Lord Macaulay of Bragar
My Lords, before the noble Baroness sits down perhaps she will deal with the point that I raised as to the cost arising to the public purse from the Home Secretary's illegal actions in introducing the tariff scheme. The Minister did not deal with that issue at all. I accept that she may not have figures available now, but will she give an undertaking to provide the figures to the House, perhaps in a month from now?
§ Baroness Blatch
My Lords, the important point is that claimants have been treated fairly in the intervening period. The question of whether parliamentary time has cost money is not the only point raised during the course of the debate that I have not dealt with. I hope that the noble Lord will forgive me for not answering the question, of which I was not given notice. If I can produce some quantifiable figures I shall write to the noble Lord.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.