Lords Sitting of 21 January 1999

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.

Road Building: Implications of Cutback
Lord Islwyn Lord Islwyn asked Her Majesty's Government:
Whether any assessment has been made of the implications of the cutback in new road building on traffic congestion throughout the United Kingdom.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government take seriously the implications for traffic congestion. As we have explained in our White Paper, A New Deal for Transport—Better For Everyone, the way forward is not simply through building more roads but through an integrated transport policy. In pursuit of that, in December we issued Breaking the Logjam, our consultation paper on fighting traffic congestion and pollution through road user and workplace parking charges.
Lord Islwyn: My Lords, does the Minister accept the Highways Agency's definition of congestion on a motorway as when the average speed of traffic falls to below 30 miles per hour? Will he consider performance measures for the road network so that users can judge whether performance is rising or falling? Finally, does the Minister believe that the inter-urban road network provides the reliability and quality of service that the economy requires?
Lord Whitty: My Lords, there are clearly serious problems on parts of the inter-urban network which we are addressing in the targeted programme of improvements which we announced in July and by looking at movement in a multi-modal sense in many of the more seriously congested and other problem areas of the network.
As far as the speed is concerned, that is a Highways Agency rule of thumb. Although it is possible to assess the speed in terms of particular parts of motorways, the overall picture is not easy to assess with the present technology. Technology coming on stream will allow a better measure of performance. It will also allow us to control the traffic flow more effectively and give information down the line to drivers.
Baroness Ludford: My Lords, will the Government give a guarantee that the mayor of London will have available the proceeds of all congestion charging in London in order to invest in improving public transport in London?
Lord Whitty: My Lords, as I believe my right honourable friend the Deputy Prime Minister has
692
forcefully made clear on a number of occasions, the money from road user charges and workplace parking in London will, for the first 10 years, accrue to the mayor to develop further public transport and other infrastructure.
Lord Brabazon of Tara: My Lords, does the Minister recognise that, however successful the integrated transport policy is, whether or not the amount of traffic falls from 95 per cent. to 85 per cent., or whatever the figure, the vast majority of traffic will still be on the roads and therefore some road building, particularly of bypasses, will be necessary if our economy is still to thrive?
Lord Whitty: My Lords, the first statement that I made in this capacity, following on the work of my noble friend Lady Hayman, on the roads review in July indicated a substantial, well-funded and clearly timetabled programme of road improvements. However, we also wish to shift some of the commercial traffic and, more particularly, individual cars off the roads. We wish to develop more options. In the medium term, we want to see a substantial shift in mode of transport in this country.
Lord Mowbray and Stourton: My Lords, is not the noble Lord aware that the industrial traffic travelling on the roads cannot be put on the railways? I was in the DoE long enough to learn that many clever brains have been devoted to this worthy object. Does he really believe that it is possible to make a significant cut in the amount of traffic on the motorways and going off the motorways? Is it reasonable to expect that that could be achieved?
Lord Whitty: My Lords, I do believe that it is possible over time to achieve a significant shift. Nevertheless, there are limits to that, as the noble Lord indicates. Even if we doubled the amount of commercial traffic going by rail freight, as is the aim of the rail freight companies, 70 per cent. of our commercial traffic would still be on the roads.
Lord Marlesford: My Lords, while there may be limits to how much traffic can be moved off the roads, a huge opportunity exists here. Britain's largest container port, Felixstowe, still has no proper rail link with the rest of Britain's rail system. That is why so many containers use the A.14 and clutter up the roads in the Midlands. If the Government would ensure that there was a good network of railway links between Felixstowe and the rest of England, as I have frequently asked them to do, that would be a big step in the right direction.
Lord Whitty: My Lords, I take the general point that more capacity for freight traffic is needed on our railway system. We discussed this matter briefly yesterday. The Government intend to ensure that that is provided. Unfortunately, the powers left to government by the

693
previous regime are not sufficient to enable Railtrack or the operators to make a major change. We are intending to introduce legislation to that end.
Lord Berkeley: My Lords, road user charges are intended to limit and control the use of the motorways and perhaps bring a bit of discipline to those who expect to pay a large fee at the beginning of the year and then pay no more for their motoring. In other words, there would be payment at the point of use, as there is on the railways. Is that not part of the integrated transport approach?
Lord Whitty: My Lords, it is precisely the aim, on the one hand, to discourage some use of the road network and, on the other, to provide resources to develop alternatives. To precisely which roads those aims will apply depends on subsequent decisions by both central and local government.
Baroness Hamwee: My Lords, does the Minister agree that, perhaps conversely to the implication of the Question, there is no evidence to cause a reassessment of the view that road building increases congestion and road movements in the corridor of a new road? Does the Minister accept on behalf of these Benches and the many victims of a number of rail companies who have been delayed unconscionably in their journeys that they very much look forward to a strategic rail authority which means that they can comfortably and with reliability use the railways and not be subject to road congestion?
Lord Whitty: My Lords, I very much welcome the support of the noble Baroness in her latter point. As to road building, the Government contend that although some road improvement and road building are required, simply to build more roads is not the solution to congestion; rather the reverse.
Baroness Knight of Collingtree: My Lords, can the Minister inform the House when the Government intend to start building the bypasses and making the changes that have been promised but so far have not transpired?
Lord Whitty: My Lords, a programme of works was announced in July, and in December I gave the start date of the majority of the schemes. A number are still subject to public consultation and possibly public inquiry. However, the start date for the majority is now available and I shall write to the noble Baroness.

Heathrow Airport: Fifth Terminal
3.15 p.m.
The Earl of Kinnoull The Earl of Kinnoull asked Her Majesty's Government:
Whether a planning inquiry procedure that has so far taken four years is a satisfactory way of examining in public the Terminal 5 project at Heathrow Airport.
Lord Whitty: My Lords, the inquiry into the proposed Fifth Terminal at Heathrow, which is
694
considering 37 planning applications and orders, is one of several inquiries held into major infrastructure proposals in the past decade or so. I appreciate the frustration felt by many at the length of such inquiries. The Modernising Planning policy statement made in July 1998 reiterated the Governments's manifesto commitment to simplify and speed up the planning process for major infrastructure projects of vital national interest. We are considering a variety of options and will publish our proposals in a consultation paper in the near future.
The Earl of Kinnoull: My Lords, while thanking the Minister for that reply, I am sure he agrees that four years for any public inquiry and a further two years for the inspector to write his report is an exceptional period of time. It will be six years before the Minister has even an opportunity to decide what to do. Does he agree that since airport inquiries are very contentious it would be of tremendous value if the Government introduced a national airports policy for guidance? Can he say what the inquiry has cost the public purse, both central government and local government, to date?
Lord Whitty: My Lords, on the last point the cost to central government is approximately £9 million to date. I understand that a more or less equivalent amount has been expended by local government. I agree with the noble Earl that this inquiry has taken an incredibly long time. That is why we are looking at streamlining and simplifying the procedures. As to a general airports policy, we need to take into account the outcome of this inquiry but then intend to develop an overall airports policy for public discussion. Noble Lords will have an opportunity to debate aspects of that policy in about 10 days' time.
Lord Annan: My Lords, is it not necessary for the Government to review planning procedures, which are very time-consuming? Does the noble Lord recall the Roskill Commission set up in the 1960s? That commission proposed that the third London airport should be sited at Stansted. Having reported a year-and-a-half after the inquiry began, at an expenditure of £1¾ million, the Roskill Commission suggested that the airport should be sited at Cublington. That proposal was turned down by the then Conservative government. Next, it was suggested that the airport should be sited at the end of the Thames estuary and that the road connecting it to London should run through the East End and terminate in the City. That was turned down. In the end Stansted was chosen. Does the Minister consider that that is a reasonable way in which to proceed?
Lord Whitty: My Lords, as described by the noble Lord I find it very difficult to regard that as a reasonable way to proceed. I recall some of the saga. I visited Foulness in the expectation that one day that site might be an airport. We are all concerned that this procedure

695
is too long and needs to be streamlined and simplified, but that at the same time the public must have an opportunity to express their view.
Lord Clinton-Davis: My Lords, is my noble friend aware that the statements he made, today and earlier, will be generally welcomed? There need not be any dereliction of duty towards environmental matters. But is it not plain common sense that the procedures currently undertaken are too lengthy and inhibit our economic effort? Will my noble friend contrast the actions that his department has already taken—we shall have an opportunity to debate them soon—with the inertia which, over 18 years, overcame the former administration in this and other respects?
Lord Whitty: My Lords, as always I am happy to endorse my noble friend's views. We need a more strategic approach.
On planning procedures, my colleague, Dick Caborn, is considering the whole range of planning procedures. However, noble Lords need to be aware that the vast majority of public inquiries last a week. It is the big inquiries which pose a serious problem.
Baroness Hamwee: My Lords, I have to declare an interest as a resident of west London under the flight path to Heathrow.
On a more general point, does the Minister agree that the adversarial nature of planning inquiries does no good to our society? In this case, it appears to have cost the applicants around £60 million. The Minister gave a figure of £9 million as regards the opponents, including cash-strapped local authorities; my figure is £4 million. Either way, there is a great imbalance in the resources available to the parties.
Lord Whitty: My Lords, I suspect that some of the imbalance is inevitable, and far too many resources on all sides are expended. The adversarial aspect is bound to be present in some of the controversial issues, but the procedures should minimise it and the facts should, as far as possible, be agreed.
Lord Brabazon of Tara: My Lords, will the Minister accept that on this side of the House we welcome the possibility of a change in the planning procedures for major projects? Will the Minister remind his noble friend Lord Clinton-Davis that the former government got through the planning procedures some major projects including, for example, the Channel Tunnel which links this country to Europe, of which the noble Lord is so fond?
Lord Whitty: My Lords, I, and no doubt my noble friend Lord Clinton-Davis, greatly welcome the Channel Tunnel. From some of their comments, I am not sure whether all noble Lords opposite do the same.
Lord Ampthill: My Lords, the noble Lord on the Opposition Front Bench seems to forget that before the transport and works legislation the procedure went before both Houses of Parliament. We could have dealt
696
with Terminal 5 in another place and this House in 18 months without the slightest difficulty. Will the Government consider repealing the transport and works legislation?
Lord Whitty: My Lords, the noble Lord rightly reminds us that the parliamentary procedure is an alternative. It is one of the options in the paper.

Mental Health Services
3.22 p.m.
Lord Laming Lord Laming asked Her Majesty's Government:
Whether they will refer the research paper Homicides by people with Mental Illness—myth and reality (Taylor and Gunn—British Journal of Psychiatry) to the review of the mental health services.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hayman): My Lords, yes. This paper has already been brought to the attention of the External Reference Group advising the Department of Health on the development of the National Service Framework for Mental Health, and of the expert group undertaking a scoping study as the first phase of the review of the Mental Health Act 1983.
Lord Laming: My Lords, I am grateful to the Minister for that helpful reply. Does the noble Baroness agree that this research indicates that, contrary to popular belief, of the number of murders committed in this country during any one year those committed by people with mental illness has declined steadily? Will she ask the review team to consider requiring each mental health authority to put in place a multidisciplinary outreach team dedicated to maintaining close contact with those mentally ill people who have a tendency to drift in order that we can ensure that they take their medication and do not drift out of sight?
Baroness Hayman: My Lords, my noble friend is right to draw attention to the article, which takes a balanced and considered view of the issues relating to homicides committed by mentally ill people. In urging that balanced view, we should not stigmatise the mentally ill because of rare occurrences. Neither should we divert ourselves from the need to improve services to reduce those incidences.
Assertive outreach is important to deal with those who suffer from mental illness who, as the noble Lord rightly pinpoints, are particularly difficult to reach by conventional systems. The National Service Framework for Mental Health, which we hope to publish in the spring, will give advice on alternative ways of providing such a service.
Lord Clement-Jones: My Lords, in the light of the Minister's reply, will the noble Baroness agree that the paper should also be referred to the review by Professor Richardson of the Mental Health Act? If or

697
when Professor Richardson's review group makes a proposal for a community care order, will she confirm that there will be full consultation on the principle, and practical application, of any such community care order?
Baroness Hayman: My Lords, yes, I believe that Professor Richardson's group has received a copy of the document. She was asked to consider how community treatment orders might be implemented when the review group scoping study was set up last July. I understand that she has consulted fairly widely already but that before she puts proposals on the subject to Ministers she will consult again.
Earl Howe: My Lords, does the Minister agree with me that dangerous mental disorders, in particular schizophrenia, are often triggered by drug abuse; and that there is a close connection between these two types of disorder? Is it not therefore as important to educate young people on the many dangers of drug abuse as it is to ensure that schizophrenia is effectively treated?
Baroness Hayman: My Lords, the noble Earl is correct to point out that some sufferers from mental illness who are most difficult to reach, and some whom the article identifies as the most likely to be in that small minority who commit offences, are those who have drug or alcohol abuse problems. He is right to point out that we need to consider those issues as well as the issue, for example, of schizophrenia, if we are to be effective.
Lord McNair: My Lords, will the Minister please insist that research is carried out into the violence-producing side effects of modern psychiatric drugs, in particular that of Akathesia, which makes it difficult for many who work in the mental health services to handle the people in their charge?
Baroness Hayman: My Lords, it is important to recognise that we must look at many new treatments in the round. We have to consider the side effects as well as the primary effects. For example, we need to give clear advice on treatment protocols. The national institute for clinical excellence will have a key role in developing and disseminating guidance on drugs in the future.
Earl Russell: My Lords, I am sure this is not the first time the Minister has heard a good proposal for putting an additional obligation on a local authority. Will the noble Baroness agree that the tendency to put additional obligations on local authorities without ensuring adequate funding to meet them has increased, is increasing, and should be diminished?
Baroness Hayman: My Lords, I do not think that the hypothesis to which the noble Earl refers applies in this circumstance. We did indeed put extra obligations on local authorities, not least the obligation to work with health authorities on services for the mentally ill because their needs go across the organisational boundaries of
698
the health service and local authorities. But I am glad to say that with that exhortation we provided extra funding for both social services departments in local authorities, and health authorities, so that they could take action on that.
Baroness Gardner of Parkes: My Lords, the Minister states how successful outreach teams are. I have experience of them and agree with that. Is the noble Baroness aware that, no matter how good the outreach team is, there are people who will deliberately make it impossible for that team to contact them? In that circumstance, the outreach team cannot fulfil the task it sets out to do. Will the Mental Health Act review cover such an eventuality?
Baroness Hayman: My Lords, the Mental Health Act review must look at several problem areas. Some people who can safely live within the community can do so only if they are complying with treatment. We must have back-up to ensure that the treatment is complied with or that there are alternatives if it is not. We must provide safety for patients and public alike. Whether through 24 hour nurse-beds, secure provision, additional treatment for those with severe personality disorder or outreach teams in the community, we wish to have a range of provisions to meet all the needs within the spectrum of mental health.

BBC World Service
3.30 p.m.
Baroness David Baroness David asked Her Majesty's Government:
Whether they can prevent cuts being carried out in Russian, Hungarian and Arabic World Service programmes.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the BBC World Service is drawing up its strategic plan for the next three years. The BBC is considering its priorities in the light of political, technological and commercial developments given the increase in World Service funding of on average 3.8 per cent. in each year over the 1998–99 level. We expect detailed proposals soon to be submitted to my right honourable friend the Foreign Secretary.
Baroness David: My Lords, I thank the Minister for her Answer and welcome the news of the increased grant which will help to improve the service. Will she assure the House that changing to FM and the Internet, which is not available to millions of people in Russia, Eastern Europe and developing countries, will not take place at the expense of short wave services which are available in those countries? Will she ensure that those services will continue and that the staff who work for them will not be made redundant?
Baroness Symons of Vernham Dean: My Lords, I draw my noble friend's attention to the article by the

699
BBC Chief Executive in today's Independent which emphasises the BBC's commitment to the World Service as a global mission. It is difficult for me to give specific assurances about the plan without leaking the plan itself. It has not been finalised. It must be finalised to go to the BBC governors and then it will be submitted to my right honourable friend.
Perhaps I may suggest to my noble friend that once the plan has been finalised we arrange for the BBC Chief Executive to make a presentation to those of your Lordships who I know are extremely interested in the future of the World Service. That will give your Lordships the opportunity to look at the facts and not at some of the newspaper reports we have seen in the past few days and to be able to ask questions of the person who has drawn up the plan.
Baroness Williams of Crosby: My Lords, the House will be aware that throughout the world there is huge respect for the objectivity and quality of the World Service and that it is one of the great British institutions. Will the Minister therefore assure us that there will be no cuts in the Arabic and Russian services at this crucial juncture in world events, albeit that there may be some change in the proportion of news and entertainment? Secondly, will she assure us that the consultation to which she has referred will take place before final decisions are made on the three-year plan, give or take immediate short-term decisions?
Baroness Symons of Vernham Dean: My Lords, I cannot give that assurance. I was trying to be helpful to the House by indicating that once the plan is finalised, having gone to the governors and to my right honourable friend, we would endeavour to explain what it entails. I hoped that that was a forthcoming offer from the Government because I know that your Lordships are most concerned about the situation.
I note the noble Baroness's comments about accuracy, impartiality and objectivity of the BBC World Service. It is a market leader and has almost twice the audience of Voice of America. However, we must wait to see what comes out of the three-year strategic plan. I understand the anxieties about specific language services. Those priorities change from time to time and at the moment I am not in a position to give such undertakings to the noble Baroness.
Lord Hussey of North Bradley: My Lords, I was concerned with the BBC for 10 tranquil years and therefore must declare an interest as I am in receipt of a modest pension from it. During those years I was able to discover and fully confirm in my mind what has been said about the great regard in which the World Service is held around the world. It is of great value to this country and to those countries which receive it.
May I suggest to the Minister that the two most important areas for the World Service are the Middle East and Eastern Europe? In those areas independent news services, either in the press or over the airwaves, are hard to find, which makes the World Service that
700
much more valuable. Will the Minister therefore make certain that she has an opportunity to see the plan before it is finally agreed?
Baroness Symons of Vernham Dean: My Lords, I hope that I have made clear that my right honourable friend will see the plan before it is finally agreed. I agree with the noble Lord about the great regard with which the BBC World Service is held throughout the world. The Government have great pride in the BBC World Service. I do not believe that there is any difference on either side of the House as to the regard in which the BBC World Service is held.
The noble Lord made specific points about the Middle East and Eastern Europe. Those issues are bound to be considered both by the BBC World Service itself in drawing up its plan, by the governors in considering that plan and by my right honourable friend. I point out to the noble Lord that the Macedonian service, for example, was opened up in 1996 and that we have seen further openings in Albania and in the Croat and Serbia services. I hope that the noble Lord is reassured about the efforts going into that part of the world.
Baroness Rawlings: My Lords, I am sure that the whole House agrees that the BBC World Service is acknowledged as the finest service in the world. What provisions are there for the World Service to be able to continue broadcasting effectively to crisis areas of the world, in particular the Middle East?
Baroness Symons of Vernham Dean: My Lords, the BBC World Service has increased its language services to some parts of the world which might be said to be in crisis at particular times. Under the CSR, which was published last year, the BBC is also going ahead with the new, much-needed transmitter in Oman. I hope that that will improve transmissions around that part of the world which could be said at times to be in crisis.

Pollution Prevention and Control Bill [H.L.]
3.37 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Pollution Prevention and Control Bill [H.L.] has been committed that they consider the Bill in the following order:

Clause 1,

Schedule 1,

Clauses 2 and 3,

Schedules 2 and 3,

Clause 4.—(Lord Whitty.)

On Question, Motion agreed to.

Access to Justice Bill [H.L.]
3.38 p.m.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 7 [Services which may be funded]:
The Chairman of Committees (Lord Boston of Faversham): I remind the Committee that if Amendment No. 90 is agreed to, I cannot call Amendment No. 91.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 90:
Page 5, line 12, leave out subsection (7).
The noble and learned Lord said: Amendment No. 90 seeks to leave out subsection (7) of Clause 7. The scheme of this part of the Bill is to set up a body called the legal services commission which will operate through two subordinate bodies, of which the relevant one is the community legal service. The community legal service funds various legal services apart from criminal proceedings. However, by subsection (5) of the clause, the commission may not fund any of the services specified in Schedule 2; and subsection (6) says that,
"Regulations may amend that Schedule".
That is plainly a Henry VIII clause providing for legislation by decree and it is therefore subject properly to affirmative resolution at the very minimum. Subsection (7) however, with which the Committee is concerned, says,
"The Lord Chancellor may give directions … requiring or authorising",
the funding of services in Schedule 2. That equally is a Henry VIII clause but, as I read the Bill, this time it is subject only to negative resolution.
My first question to my noble and learned friend the Lord Chancellor is: why is that subject only to negative resolution? My noble and learned friend has indicated that he will bring forward at Report stage provisions to rectify what some of us regard as constitutional enormities in this Bill. It may be that he intends to make that subsection subject to affirmative resolution.
The other question is probing. It would be helpful to know why my noble and learned friend requires that power. I hope it is not merely that it may come in useful at some time or another in circumstances which cannot now be foreseen. That is not the sort of power that we ought to give. I hope that my noble and learned friend will not use the words "flexible" or "flexibility" which are synonyms for the arrogation of executive powers.
Why does my noble and learned friend, apart from flexibility and a liking to have odd powers in his pocket, want that power? What provisions does he feel may be made subject to the funding potentiality; in other words, taken out of the negative Schedule 2? I beg to move.
The Lord Chancellor The Lord Chancellor: Clause 7(7) provides that:
"The Lord Chancellor may give directions under section 4 requiring or authorising the Commission to fund the provision of any of the services specified in Schedule 2 in circumstances specified by the directions".
I suggest with respect to the noble and learned Lord that he should not be over-prescriptive in relation to these matters. Let me tell him why I cannot and do not think it would be wise to accept his amendment. It is important that the Lord Chancellor should be able to make limited provision for cases otherwise outside the scope of the community legal service where that would be appropriate to alleviate hardship. That seems an entirely sensible provision. What I desire to emphasise to the noble and learned Lord is that the provision confers on the Lord Chancellor a power only to give and not to take away, and the need could be urgent.
I can see that the noble and learned Lord, who is a purist in these matters, takes the view that Schedule 2 should be amended under the affirmative procedure. But there are arguments as powerful the other way. I indicated in my opening speech to the Committee that I thought it right that substantial change to the schedule should be made by the affirmative procedure, in particular if it was taking away. However, I believe it right that there should be powers for the Lord Chancellor to give and to be able to move swiftly to deal with specific problems that may arise. Those are my reasons for inviting the noble and learned Lord to withdraw his amendment.
3.45 p.m.
Lord Simon of Glaisdale: I am grateful to my noble and learned friend for his explanation; I hope he will not be offended if I add the words, "such as it was". Of course, he did not answer the question as to why he needs this power, except to say that it might come in useful at some time. That is simply not good enough.
As to the question of affirmative or negative resolution, we shall have to wait until Report stage when we see my noble and learned friend's better constitutional thoughts. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 91:
Page 5, line 14, after ("2") insert ("or (Community Legal Service)").
The noble Lord said: In moving Amendment No. 91 I shall speak also to Amendments Nos. 99 and 107 which stand in my name and that of the noble Lord, Lord Kingsland. The purpose of the amendments—the first two are paving amendments—is to ensure that some personal injury cases remain within the scope of legal aid. I stress that this is simply a probing amendment. I have tried to list some of the cases which are likely to give rise to difficulty in practical terms.
Conditional fee agreements are unlikely to be offered by lawyers for the foreseeable future on the scale that needs to be contemplated. There will be a serious reduction of access to justice for personal injury victims if no legal aid is available. It is worth noting in passing that a number of successful cases fall within the sort of categories listed in the schedule. I mention only some. For example, there was the liability in the Ben Smolden case. He was a rugby referee who suffered a paraplegic injury. There was also the issue of human growth hormone litigation. The difficult case, which is still pending in terms of assessment of damages at least, relates to chronic bronchitis and emphysema suffered by miners.
I add, in parenthesis, that when I was on the Front Bench dealing with that issue, I made it clear in answer to a question that the Government would not apply the sort of standards applied by insurers when dealing with such matters and would be not just sympathetic, but practically sympathetic.
There is also the question, not totally unrelated to that—in principle, at least—of chronic vibration white finger. I refer to the Myodil case. There are several others. The Hancock case dealt with long-term exposure to asbestos. There are other asbestosis cases. That illustrates the sort of cases that have been successful in the recent past. I feel that it may be necessary to revisit some of the arguments already touched on, and I do so because I have been able to reflect on what my noble and learned friend said about the availability of conditional fee agreements. The assertion was that those will become widely available and that insurance will provide a satisfactory alternative.
With respect to my noble and learned friend, I think that we need further and better particulars of the availability of insurance. He cited some cases. I tried to investigate this with practitioners and I am assured that frequently there are real difficulties in this regard.
Another point arises in relation to this. My noble and learned friend said that the better managerial arrangement of solicitors' offices should overcome any difficulties that may arise in that respect. He prayed in aid a press release from Thompsons. Thompsons is a large firm with a continuing cash flow. It is an extremely competent firm and I have the highest regard for it. However, it is very different from the high street practitioner who does not have the same sort of cash flow.
Premiums in the range of £70 to £100 may be required for a case and if there are a substantial number of cases, that will represent a real burden to ordinary practitioners who practise in the high streets up and down the country, and particularly to those in the poorer areas.
The question was also put to my noble and learned friend by the noble Lord, Lord Goodhart, and my noble and learned friend Lord Archer of Sandwell: what if his prediction is proved to be wrong? My noble and learned friend quite properly referred to his previous statement that he has power to intervene in certain cases of hardship. Again, I feel that we should request from my noble and learned friend a greater idea of what he has
704
in mind. In this regard there is uncertainty and apprehension on the part of many practitioners. Those apprehensions—perhaps misapprehensions—should be put to rest. The deep concerns felt by those providing services at present ought to be met.
I said before that premiums ranged from £70 to £100. On reflection, I believe that the figure of £90 to £170 was quoted by my noble and learned friend, which adds to the burden that I have already sought to argue.
I hope that my noble and learned friend will feel that some of the cases that I have listed in the schedule give rise to particular problems. I do not propose to argue them one by one. I have touched on one or two. However, I hope that my noble and learned friend, while recognising that this is simply a probing amendment, will try to give as many satisfactory assurances as he possibly can to those very worried practitioners who are working, as far as they can, in the best interests of their clients. I beg to move.
Lord Goodhart: I rise to support the amendment. A long series of examples of cases is set out in which it is likely that CFAs will in practice be unobtainable and yet in which there may be a strong case for supporting a plaintiff who wishes to take action to claim damages. The list is extensive; there are 15 different examples. Each of them falls clearly within this category. The number of cases in the list is an example of the fact that it is wholly indefensible to exclude from public funding cases of personal injury. There are many types of personal injury case where CFAs will not be appropriate or available. The amendment illustrates the importance of returning to the principle of saying that public funding will remain available for personal injury cases, but will be excluded in cases which it is reasonable to expect to be funded through a CFA; and only in those cases will it be excluded.
Lord Campbell of Alloway: I wish to support the amendment for the reasons put so clearly by the noble Lord, Lord Goodhart, which are real, practical and wholly cogent.
Before I sit down I should like to take up the point that the noble Lord, Lord Clinton-Davis, made that sometimes it is forgotten and wholly unrealistic to compare the position of a firm of the ilk of Thompsons with that of a high street solicitor working in a poor area. The noble Lord speaks from his own experience and I think that we should defer to his opinion.
Lord Kingsland: I too rise to support the amendment tabled by the noble Lord, Lord Clinton-Davis. There seem to be two categories of personal injury cases covered in the proposed schedule. The first concerns vulnerable victims and the second concerns cases that will require a great deal of research and expenditure before the risk involved can be accurately assessed. That is why I think that the list is worthy of the noble and learned Lord's attention.
We had a long debate on the principles that lie behind CFAs and personal injury cases on Tuesday and it is certainly not my intention to repeat the arguments today. However, it should be borne in mind that when the legal

705
services commission exercises its discretion in relation to a request for funding, one of its options is to suggest an alternative solution.
I want to ask the noble and learned Lord—perhaps he will say to me that it is obvious on the face of the Bill; nevertheless, it is not obvious to me so I shall ask him—in circumstances where such a list were to be incorporated, would it still be open to the legal services commission to say that in a particular case contained in that list a CFA would nevertheless be appropriate?
Lord Phillips of Sudbury: I should like to support the amendment and to add two points to the debate. First, if Clause 28 is passed as it stands, it could have a significant impact on the risk to which members of the public may be put, who, under present circumstances, may be able to obtain legal aid in the normal way.
The second point that I would add is that I was a non-executive director of one of these legal costs insurance companies for eight years. I had discussions with that and another such company only recently. I fear that the hopes of the Government in relation to the availability of suitable costs insurance may well not be realised. I believe that the premium rates to which the noble Lord, Lord Clinton-Davis, referred may already be out of date. Indeed, there is serious concern within the small group of companies which provide such insurance that there is some selection against them. Moreover, I also fear that the after-the-event insurance, which is what we are principally concerned with here, may not be effectively available in terms of cost. Therefore, I strongly support the amendment.
4 p.m.
Lord Ackner: I, too, should like to express my support for the amendment. However, I think it would probably be helpful to get on record what the noble and learned Lord the Lord Chief Justice said at the Barnett Lecture which he gave on Thursday 11th June 1998. Towards the end of that lecture he said:
"In relation to the main thrust of the Government's proposals for the reform of civil legal aid, the argument is a complex and closely reasoned one. One cannot read the well-argued responses to the Government's proposals submitted, for instance, by the Bar, the Personal Injuries Bar Association and Justice without appreciating the difficulties and the potentially fateful consequences of any radical change to the current arrangements. Those of us who have had no contact with insurance interests cannot be other than unsure whether insurance cover will be available in the much wider range of civil proceedings which are suggested as suitable for conditional fee agreements".
The Lord Chancellor: Conditional fee agreements are good for the public. They will bring into access to justice the millions who are not eligible for legal aid and cannot afford to litigate because they cannot run the risk of losing and having to pay the other side's legal costs. Conditional fee agreements will also be good for the business of lawyers. When lawyers recover from the shock of the new, I believe that they will come to recognise that the extension of conditional fee agreements is a major boost to legal business for litigators. Lawyers in a changing world are not free from
706
the need to adapt. They must recognise that they can no longer live in the world of traditional legal aid where lawyers are paid—win, lose or draw.
The proposed amendments would have the effect of introducing a schedule of entitlements in respect of personal injury cases into the Bill. I cannot accept them for two main reasons. First, the community legal service fund will operate within a controlled budget, and resources will be allocated according to priorities, in the areas of greatest need. There is no place in such a scheme for a set of entitlements such as those proposed by my noble friend and the noble Lord, Lord Kingsland.
Secondly, the exclusion of personal injury cases from the scope of public funding is not only important in releasing funds for priority cases, but it is also based on the fact—and I do not propose to go over the detail that I gave earlier in Committee in this respect—that there is a viable alternative method of funding; namely, conditional fee agreements. I give way to the noble and learned Lord.
Lord Simon of Glaisdale: Is there not, in addition, a further alternative? I refer to the one that will shortly be proposed by the noble Lord, Lord Goodhart; namely, the contingency legal aid fund. It is not just one alternative to which my noble and learned friend is so attached.
The Lord Chancellor: We shall debate the possibility of a contingency legal aid fund in due course and in its proper place in our proceedings. However, we are of the clear view that a contingency legal aid fund would attract only the weak cases because the strong cases would proceed by conditional fee agreements carried forward by the profession. We believe that a contingency legal aid fund would be doomed to failure. However, lest we are wrong about that, we are taking reserve powers which would enable us, if need be, to establish such a fund. In the meantime, we are proceeding in the way that I have indicated.
Nevertheless, I desire to say this to lawyers, be they barristers or solicitors. Every other business incurs costs and runs risks in order to earn profits. Litigation will be very profitable for the lawyer under a conditional fee agreement when he wins. I do not begin to accept that lawyers, among all businesses, should be excluded from running risks and incurring costs in order to earn profits. Lawyers must come to terms with the real world and not that of conventional legal aid where lawyers are paid whether they win, lose or draw. I give way to the noble Lord.
Lord Goodhart: Is the noble and learned Lord the Lord Chancellor suggesting, for example, that doctors should be paid on a no cure, no payment basis?
The Lord Chancellor: Certainly not. We are proposing a means of funding litigation which is an alternative to the public purse and which will expand access to justice, thereby releasing moneys to follow other desirable purposes. However, I will have the

707
flexibility through my direction-making powers in Clause 4 and Clause 7(7) to allow the funding of personal injury cases in some circumstances.
I shall not repeat the detail of what has already been said, but it is clear that, if need be, I shall be in a position to achieve some of the objectives set out in the amendments. By keeping the cases specified by the noble Lord and my noble friend off the face of the Bill, I will have greater flexibility to respond to changing needs and circumstances in the future. I shall certainly take their suggestions into account as I develop policy and, if any need is demonstrated, I shall consider whether to restore particular categories of case to legal aid. I predict that the prophets of doom are wrong and that conditional fee agreements will prove to be a triumphant success. I therefore invite my noble friend and the noble Lord to withdraw their amendment.
However, although it was not germane to the specific argument on these amendments, perhaps I should respond to the point made by the noble Lord, Lord Kingsland. On the footing that the amendment were accepted, he asked whether the commission could still refuse to provide legal aid. In response, I invite the noble Lord to consider Clause 9(2)(d) of the Bill.
Lord Clinton-Davis: I thank my noble and learned friend for at least some of the arguments that he has adduced and, in particular, for drawing attention once again to the power that he will have to utilise directions in certain specific instances. However, the position remains very vague and, notwithstanding my noble and learned friend's usual powerful advocacy, my doubts are not put wholly at rest.
My noble and learned friend said on the first day of the Committee stage that he was satisfied that the kind of concerns that we have mentioned again today were unfounded. He said,
"It is my view that the majority of personal injury cases do not warrant public funding in the future because there is a viable alternative in the private sector; namely, conditional fee agreements".—[Official Report, 19/1/99; col. 568.]
But what constitutes a majority? A majority is 51 per cent. I assume that my noble and learned friend asserts that he is talking about a substantial majority, but I do not know upon what basis this has been properly assessed. It remains imprecise. If there is a real risk that a substantial minority of cases will be prejudiced as a result of this situation, it remains a cause for great anxiety.
I do not agree with the totality of the argument that my noble and learned friend adduces when he acquaints lawyers' practices with the general run of businesses. Lawyers' practices, certainly in the City and the West End, are run as businesses—there can be no doubt about that at all—but they are vastly different in character and in the work that they undertake from the kind of practices to which I have alluded. There are no vast profits being made by the overwhelming majority of that category of firm. I believe that they are doing a superb job in protecting the interests of the public and making access to justice a reality. Of course there are many things that go wrong, but I believe that the public have confused the high-blown cases that one reads about—mostly criminal cases involving substantial fraud—with
708
the ordinary day-to-day routine business that is undertaken in a solicitor's practice of the kind I have mentioned.
I am most grateful to those who have spoken in this debate. It is important that my noble and learned friend should respond to the point made by the noble and learned Lord, Lord Ackner, in citing a speech he made some time in June 1998—I did not catch the exact date—which does not altogether sit satisfactorily alongside the remarks that my noble and learned friend has made.
Lord Ackner: I intervene, first, to correct what the noble Lord has said and, secondly, to strengthen it. I was not quoting from a speech I made, I was quoting from a speech made by my noble and learned friend the Lord Chief Justice.
Lord Clinton-Davis: I apologise if I expressed myself inelegantly or in an inappropriate manner. I was referring to the intervention made when the noble and learned Lord cited the speech made by my noble and learned friend. That does not altogether sit easily with the remarks that he has made during the course of these debates.
I understand that my noble and learned friend will adopt a measure of flexibility. However, while he is reluctant to be more specific about the kind of instances where that would apply—I understand that—the matter remains imprecise. That makes things difficult for people who practise in these areas. I do not know whether any Member of the Committee wishes to speak again before I seek to withdraw the amendment, as I propose to do. I see no vigorous nodding of heads. I ask my noble and learned friend to respond to the points I have just made.
4.15 p.m.
The Lord Chancellor: I do not propose to respond as I did so in the previous arguments that I put to the Committee.
Lord Clinton-Davis: Perhaps my noble and learned friend will at least indicate what he meant by a majority of personal injury cases, and the extent of that majority.
The Lord Chancellor: I shall read Hansard to see precisely what I said but I have total confidence that the overwhelming majority of personal injury cases will be funded successfully through conditional fee agreements. For many years trade union solicitors have carried forward bulk personal injury litigation successfully for those whom they represent on terms specifically of not expecting fees from their substantive clients—the trade unions—when they lose because the fees they get when they win enable them to run a profitable business. In

709
fact probably the best evidence that conditional fee agreements are completely viable in this area is precisely what I have now said.
Lord Phillips of Sudbury: I rise to—
The Lord Chancellor: The noble Lord, Lord Phillips of Sudbury, wishes me to give way before I have completed my reply to my noble friend Lord Clinton-Davis. However, I yield to his enthusiasm.
Lord Phillips of Sudbury: I am grateful to the noble and learned Lord the Lord Chancellor for so doing. He has twice now mentioned firms which represent trade unions and the manner in which they conduct business. My own firm represents one of the large unions and has for a long time had an arrangement with that union as to the payment of costs. However, I must assure the Committee that that situation is not comparable with the situation we are talking about which concerns a case by case arrangement for individual solicitors dealing with clients as they come through the door. A relationship with a trade union involves swings and roundabouts. The arrangement is capable of being adjusted from month to month and year to year to ensure that the firm concerned gets a fair return overall for the cases. There is no such averaging out in the case of an individual solicitor who is dealing with an individual client.
The Lord Chancellor: The noble Lord, by that intervention, gives away his position. What we are doing is addressing whether individuals will have access to justice through conditional fee agreements. I say they will because we can see that the volume providers of services, the trade union lawyers, make a satisfactory profit in providing that volume service. However, the noble Lord says that one cannot equate that with the position of the small lawyer. That shows that the noble Lord is seeking to defend the interests of a particular group of lawyers. The question I am addressing is whether the public will have access to conditional fee agreements in the overwhelming majority of cases. I say that they will.
There is a further point I desire to make in reply to my noble friend Lord Clinton-Davis. The only cases where I have a measure of concern is where there are high investigative costs. We are taking powers under the Bill partially to fund cases going forward under conditional fee agreements so that sums are advanced to cover these high investigative costs. These are the reasons why I have confidence in the situation and why I repeat my invitation to my noble friend to withdraw the amendment.
Lord Clinton-Davis: My noble and learned friend is right to underline again the particular category of case where it is virtually impossible to proceed because of high investigative costs. That point was mentioned by the noble Lord, Lord Kingsland. My noble and learned friend has given an assurance to the Committee that he is giving serious consideration to this kind of issue. I must say that I am no more enlightened about his view
710
of the majority, to which he had referred earlier—and to which he has referred twice more in his remarks—than I was before. I am tempted to submit a request for further and better particulars as regards a majority. However, I shall not hold up the deliberations of the Committee to extract a reply at this stage. I cannot promise that I shall not return to this matter at further stages of our consideration of this Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 92 and 93 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 94:
Page 5, line 14, at end insert—
("( ) Where services are funded in accordance with subsection (3)(b), payment shall be made in accordance with regulations made by the Lord Chancellor after consultation with the Law Society and the General Council of the Bar, and in making such regulations the Lord Chancellor shall have regard to the principle of providing fair and reasonable remuneration.").
The noble Lord said: Amendment No. 94 concerns the regulations which will be made by the noble and learned Lord the Lord Chancellor to determine the conditions under which payments are made by subsection (3)(b) of Clause 7. There are two issues to which I wish to draw the noble and learned Lord's attention. First, it is desirable that the noble and learned Lord should consult both the Bar Council and the Law Society before making those regulations. Secondly, the basis upon which payment should be made under Clause 7(3)(b) should be as transparent as possible. This is to prevent the undermining of quality services. In making these proposals, I am reflecting the terms of the Legal Aid Act 1974 with respect to transparency and the Legal Aid Act 1988 with respect to consultation. I beg to move.
The Lord Chancellor: The purpose of these amendments is to provide a framework in which remuneration of lawyers will be determined. Amendments Nos. 94 and 182 would restore the concept of fair and reasonable remuneration to the face of the legislation. Amendment No. 184 would require me, in relation to services procured through the criminal defence service, to respect the principle that such services are to be remunerated by payment of a reasonable amount in all the circumstances of the case.
I do not accept the terms of the present amendment. The terms "fair" and "reasonable" are far too wide and imprecise. Nor do these amendments contain any reference to what might be affordable or what value for money might be achieved through the remuneration scheme. At the risk of becoming tedious, I have to say that public money is limited; the priorities for that public money are many, and they compete with each other. It cannot be right that a duty should be placed on the Lord Chancellor to make regulations relating to the remuneration of lawyers which take no account of the availability of those public funds. To suggest otherwise is not to live in the real world.
I am not attracted simply to carrying into this Bill provisions about remuneration that have previously failed. It seems to me that the Lord Chancellor should

711
have a discretion to set rates, as now, but that in doing so he should have regard to the extent to which the rates ensure the availability of a sufficient number of competent practitioners, the cost to public funds and the value for money achieved for the taxpayer, and the beneficiaries of the help received from the money spent.
I propose to put down an amendment along those lines, setting out the factors that the Lord Chancellor should consider in fixing remuneration rates. I will also address the level of any consultation that might be appropriate in the circumstances. On that basis I invite the noble Lords who tabled these amendments not to press them.
Lord Kingsland: When the noble and learned Lord the Lord Chancellor began to speak I felt a sensation of intense and acute depression, but I had somewhat recovered by the end of his speech. I thank him for what I take to be a move in some direction towards the terms of these amendments. I look forward to seeing what he has to say about the matter and debating it again at Report stage. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
[Amendment No. 95 not moved.]
Schedule 2 [Community Legal Service: excluded services]:
Lord Goodhart Lord Goodhart moved Amendment No. 96:
Page 53, leave out lines 33 and 34.
The noble Lord said: Paragraph 2 of Schedule 2 excludes from any possibility of funding out of the CLS,
"Services consisting of the provision of help in bringing or defending any proceedings in the course of carrying on a business".
The Legal Aid Act 1988 and its predecessors excluded any form of legal aid to corporate bodies. I think that is an entirely correct position, which is continued by the present Bill. Under the Legal Aid Act, aid can be granted to business proceedings if the business is carried on by an individual on his own or by individuals in partnership. This paragraph of Schedule 2 would exclude that possibility. I believe that position is wrong.
In a small business carried on by an individual, a business action may well destroy that person's livelihood. Let us consider the example of a corner shop. The lease of that shop comes to an end and there is an application for a new tenancy under the Landlord and Tenant Act. The landlord puts in a wholly unjustifiable claim for a much higher rent before the new tenancy is granted. If that claim takes effect, the shop may be forced out of business and the shopkeeper may well suffer personal bankruptcy. A challenge to that claim in the court is very likely to require help from a lawyer and, indeed, from a surveyor. Very many small shopkeepers would not be able to afford that help. Should it not be possible for such shopkeepers to be at least considered, in due course of priority, for help from the community legal service fund?
In a case of that kind it is very hard to see how a CFA could possibly be suitable. It is not a risk of the kind covered by a normal insurance policy. I accept that if the owner of the business has chosen to get the benefit of limited liability by incorporating the business, he should not get publicly funded
712
help for the benefit of that company. Nor would I expect the community legal service to fund the costs of large firms, solicitors and accountants.
Cases where it is appropriate to fund business proceedings out of the community legal service fund will certainly be rare, but I believe that small businesses should not be excluded altogether from the possibility of applying. I accept that if a CFA is available, the case should not be funded by the taxpayer. But that is not always the case and it is not appropriate to exclude that type of case on the assumption that a CFA will always provide an acceptable alternative to public funding. On the relatively rare occasion where a business is conducted by an individual and a case represents a real threat to his livelihood there should be a possibility of funding out of the community legal service. I beg to move.
4.30 p.m.
The Lord Chancellor: I do not accept this amendment. One of the key objectives of these reforms is to ensure that publicly funded help under a controlled budget is directed to areas where the need of people is greatest, such as social welfare cases and public interest cases; for example, those involving the interests of children. Politics is the language of priorities and there are hugely competitive demands on the public purse. I have to live within a controlled budget. Proceedings carried on in the course of a business do not, in my judgment, have sufficient priority to warrant any public funding other than for the provision of basic information and advice on the law.
I agree with the noble Lord that under the current legal aid scheme legal aid is not available to companies but a sole trader can currently receive legal aid to pursue a business dispute. Businessmen who are running profitable businesses have the option of insuring against the possibility of having to take or defend legal proceedings. I do not follow how the noble Lord is able to assert that insurance is necessarily not available for the kind of case which he supposed. It is a question of judgment and priorities. I do not believe that the taxpayer should have to meet the legal costs of sole traders who do not take out adequate insurance.
Lord Goodhart: I find myself naturally somewhat disappointed with that answer. The test of priorities is one that has to be applied in deciding which types of case should have priority, but there should also be sufficient flexibility to enable cases of particular hardship within types of case which in general have a lower priority to be promoted up the scale. While I accept that this is a type of case where it would be relatively rare for the CLS to fund proceedings, I still think that it would be best to keep that type of case in so that, where appropriate, it could be funded. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 97 to 99 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 100:
Page 54, line 28, at end insert—
("( ) proceedings before industrial tribunals,
( ) proceedings before appeal tribunals constituted under the Social Security Act 1998,").
The noble Lord said: In moving this amendment, I wish to speak also to Amendments Nos. 101, 102 and 104. They propose to include in Schedule 2 a number of additional tribunals for which public funding would be possible. The effect of paragraph 5 of the schedule is that services consisting of the provision of representation are excluded except those specified in sub-paragraph (2). Sub-paragraph (2) broadly maintains the present courts and tribunals in which representation is possible.
One of the main drawbacks to the present system of legal aid has been that it has never extended to tribunals which decide many cases of great importance to people who cannot afford legal help out of their own pockets. The Bill retains the possibility of public funding for two tribunals where it is now available—the Employment Appeal Tribunal and the Mental Health Review Tribunal. However, it excludes public funding where legal aid is now available for hearings before the Lands Tribunal or the Commons Commissioners. I accept those exclusions. It also appears to exclude the existing right of representation before the Discretionary Lifer Panels, which consider applications for release on licence from prisoners who have been given life sentences for offences for which a life sentence is not the sole mandatory sentence. Those proceedings are not covered by paragraph 5(2) of Schedule 2, but, equally, do not appear to be criminal proceedings. Aid is now provided by way of the ABWOR scheme for representation. Aid should be provided in such cases and I hope that it has been omitted by way of an oversight.
Paragraph 5(2) does not extend rights of representation to any tribunals which do not have them now. There is no representation for tribunals dealing with employment matters. I must apologise for having used in my amendment the old description of them as "industrial tribunals" rather than the current one of "employment tribunals". It does not provide any representation before the tribunals under the Social Security Act 1998, or before the Social Security Commissioners, or before immigration and asylum tribunals. The rejection of a case before any of those tribunals may be devastating to the claimant. It may lead to a loss of livelihood, it may lead to extreme personal hardship, and in an asylum case it may lead to an applicant being returned to a country where he or she will suffer a grave risk to their life. Representation is extremely valuable. It is clear that claimants who are represented before employment tribunals through, for example, their trade union, or social security claimants who are represented through advice agencies, have a much better chance of success.
I believe that it is the Government's intention that, as and when the costs of existing services are brought under tighter control, it will be possible to modify Schedule 2 to allow an extension of services to these tribunals. But I do not think that that mere statement of intention is good enough. I believe that the Bill should
714
allow representation before suitable tribunals now. I accept that representation would have to be phased in very slowly for these purposes. An immediate grant of tribunal representation to all who need it without a large increase in funds would mean an unacceptable restriction of services provided under the existing law. But necessity for phasing in does not mean that tribunals should be excluded.
It is true that the commission is supposed, under Clause 5, to inform itself of the need for services and to plan how to meet that demand. Obviously, it cannot investigate the need for services which by law it cannot provide. It is only if representation before tribunals is not excluded that the commission can inform itself of the need for representation and plan how those needs can be satisfied. The commission should start on that right away. Representation before tribunals on employment, social security and immigration matters at present form the greatest pool of unmet need for legal services. They should not be excluded by Schedule 2 so that phasing in can begin now for how those services are to be incorporated into the scheme of the community legal service fund. I beg to move.
Lord Archer of Sandwell: Amendment No. 103, in this group, bears my name. It proposes that a further item should be added to the list of proceedings which may be funded as part of the community legal service for the purpose of representation; namely, proceedings before immigration adjudicators and the Immigration Appeals Tribunal. The noble Lord, Lord Goodhart, got there first. So I am content to support his amendment and not to move my own.
The reasons that it would be unfair and unjust to exclude those proceedings from the benefits of the scheme were touched upon by the noble Lord. Perhaps I may briefly elaborate. As the noble Lord said, those who are concerned in these proceedings have very serious matters at stake, sometimes their lives. They are frequently unfamiliar with the English language. It is possible to give evidence with the assistance of an interpreter, but it is very difficult to conduct one's own case using an interpreter. Often, such people are unfamiliar with tribunal proceedings, or indeed any proceedings at all, certainly in the United Kingdom. They are unlikely to know the intricacies of the legal provisions that are at the very core of the issues to be decided.
I take this opportunity to pay tribute to the adjudicators and the chairmen and members of the Immigration Appeals Tribunal, most of whom are totally dedicated and grapple with the difficulties to produce a just result. But unskilled representation in those conditions is no substitute for justice.
Sometimes of course such people are represented at the expense of their families; and sometimes by advocates from outside the legal profession. That representation may be very competent. It is within my knowledge that the Immigration Advisory Service and the Refugee Legal Centre make a commendable contribution to the process, as do law centres. However, some appellants, unfamiliar with the procedure, fall into the hands of charlatans without qualifications,

715
knowledge or skill and who are simply out to make a fast buck. I am aware that the Home Office, the Bar Council and the Law Society are considering how the problem may best be addressed. But at present it is very much in evidence. In terms of a contribution to justice, the addition of these proceedings to the list of those for which representation may be provided would be a sound investment.
However, I confess that, like the noble Lord, Lord Goodhart, I had an ulterior motive in tabling this amendment. We may all make suggestions as to meritorious additions to the list. I was anxious to make a more general point—one which I believe will find some sympathy with my noble and learned friend the Lord Chancellor, even if he cannot respond positively to all the specific suggestions in this group. I am grateful to the noble Lord, Lord Goodhart, for ventilating the subject in general.
I must declare an interest. I am privileged to be chairman of the Council on Tribunals—a matter that is known to my noble and learned friend as, together with my noble and learned friend the Lord Advocate, he appointed me.
When I first came to the Bar, tribunals were the poor relations. The questions with which they dealt were perceived as marginal. It was said in their favour that they were less formal than the traditional courts. So indeed they were. But that very virtue was conceived as ensuring that they administered second-rate justice. I must confess that the period of which I am speaking falls not within history but archaeology! It was before the Franks Report in 1957.
One important consequence was that, almost if not totally without exception, proceedings in tribunals were not considered worthy of legal aid. Now, in terms of numbers, they deal with the major part of our justice system. At the last count, the number of tribunal systems that fell within the supervision of the Council on Tribunals was 78, bearing in mind that some of those jurisdictions embrace a variety of situations and issues. The citizen is six times more likely to encounter our system of civil justice in a tribunal than in the more traditional courts. Some deal with very large sums of money. Many deal with matters of vital importance to those who come before them. The law that they dispense is often exceedingly complicated and requires a high degree of expertise. The president or regional chairman is often of a status at least equivalent to that of a senior circuit judge; in fact, sometimes it is a senior circuit judge.
I hope that in the foreseeable future there will be a new acronym in the language—SCROCG—which stands for the Standing Conference on the Resolution of Citizens' Grievances. It arises out of an international conference which took place in 1997 at the University of Bristol, and, happily, was sponsored by my noble and learned friend's department. Much of the credit for it goes to Professor Martin Partington. The purpose of establishing it is to review the many decisions that are now taken in our system of administrative law where the citizen may need to know in which direction he should go for redress.
716
My noble and learned friend has recognised some of these points already in the schedule, which includes mental health review tribunals. I shall not make a false point about the Employment Appeal Tribunal because that is in a special position. The noble Lord, Lord Goodhart, has suggested other candidates for the list, and I support those candidates.
I hope that the culture in which tribunals were often seen as the harijans of the system will not find its way into the legal services commission, and that even if my noble and learned friend does not feel able to respond positively to all these amendments, the seed will germinate and—who knows?—possibly bear fruit in the future.
4.45 p.m.
Lord Meston: I support the amendment and strongly support the remarks of the noble and learned Lord, Lord Archer. There seem to me to be four main reasons for advocating representation supported by the state in some form or other before tribunals.
Before tribunals, the imbalance between the represented employer and the unrepresented employee, or former employee, is usually most pronounced. If ever there were a case for equality of arms, it is in tribunals. Secondly, over the years the law that was intended to be straightforward and simple, particularly before industrial tribunals, as they were then called, has become increasingly complex. That is partly the fault of Parliament in enacting employment Bills of one kind or another year after year. However, it is not merely a question of legislation coming from Parliament but of that coming directly from Europe. Thirdly, as both my noble friend and the noble and learned Lord said, the issues and their outcome can be of great importance to the individual concerned. Fourthly, the unrepresented applicant who has no recourse to a union, and who will therefore be tempted to represent himself, may fall prey to the so-called experts in representation who hold themselves up as representing applicants to tribunals and who are in some cases, as the noble and learned Lord accurately described, charlatans. They often have their own agenda; they often do more harm than good to the individual concerned; and they are not accountable to any professional body for their conduct. In areas involving particular expertise such as race and sex discrimination cases, and nowadays disability discrimination, expertise is most important for the effective presentation and defence of a claim. For those reasons I strongly support the amendment.
Lord Renton: May I say that I have no objection in principle to Amendments Nos. 100, 102 and 104, although I would have thought it better to leave those to the discretion of the noble and learned Lord the Lord Chancellor when exercising his power, if he ever does so, to add to paragraph 5 of the second schedule. But I must make absolutely plain that for reasons I shall give I am strongly opposed to Amendments Nos. 101 and 103. I say that with deep respect to the noble and learned Lord, Lord Archer of Sandwell, for whom I have had a high regard for many years, having known him well in both Houses of Parliament as well as a member of the Bar.

717
The trouble really is this. We have to acknowledge that our country, probably more than any other country in the world, is subject to pressure from immigration. We have bogus asylum seekers; we have people who come here not as asylum seekers but in a speculative way, hoping that they will be allowed eventually to stay.
Lord Goodhart: I am most grateful to the noble Lord, Lord Renton, for giving way. When he says that the pressure on this country is greater than on any other country in the world, does he seriously suggest that the pressure is greater than that on Germany and Austria which face very large incursions of refugees from eastern Europe and the former Yugoslavia?
Lord Renton: I agree that pressure has been very great in the past, but it is not within my knowledge that it continues to be so, whereas year after year we have vast numbers of people wishing to come here and settle in overcrowded parts of England; not so much in Scotland or Wales. I shall not give way again, although I may later. I think I should be allowed to develop my argument. If noble Lords are afraid of hearing my argument, so much the worse for them.
To grant the kind of aid which is being proposed in respect of appearances before the immigration appeal authorities and the immigration appeal tribunals would produce, I am sure, many more bogus asylum seekers coming here speculatively and hoping to get leave to remain. I do not consider that a wise use of public funds, especially when the noble and learned Lord the Lord Chancellor, faced with tremendous public expenditure on legal aid, is doing his very best under the Bill to try to change the system and make it more rational. I do not consider it would be wise for your Lordships to accept Amendments Nos. 101 and 103. I now give way.
Lord Archer of Sandwell: The noble Lord is typically generous and I am most grateful to him for giving way. He uses the words "bogus asylum seekers". How is it to be known whether an asylum seeker is bogus until his case has been competently deployed and competently considered?
Lord Renton: If I may say so, I think that a somewhat tendentious argument. We know that many people come here speculatively and we would only increase the numbers doing so if they were given public funds to help establish themselves here. I must confess that I do not think that is in the public interest.
Lord Clinton-Davis: I support, certainly in principle, the amendments we are addressing. I record a prior interest. I was at one time chairman of the Refugee Council, a body which undertakes invaluable work on behalf of people who are extremely vulnerable, many of them inarticulate and most of them incapable of coping with the sort of problems we are talking about.
I want to address briefly some of the remarks made by the noble Lord, Lord Renton, for whom I have a high regard, as he knows. We are good friends. However,
718
I reject most of what he had to say. It is simply not true that this country, in the past or currently, bears a burden of immigration comparable to that of many countries in Europe, certainly proportionately. The noble Lord is simply mistaken. I did not know that he would raise the point; otherwise I would have armed myself with the statistics to buttress what I am saying. I invite the noble Lord to examine the statistics which are available.
The burdens borne by European countries do not compare with those in impoverished countries of Africa which have immigration problems of an unparalleled size. I think it is fair to say that in the light of the noble Lord's remarks.
As to the amendment, I adopt the argument adduced by my noble and learned friend Lord Archer. The issues being dealt with here can, even if they concern only a minority of cases, be matters of life or death. They have the most profound significance for many of the people who appear before the tribunals. I would also add—it goes without saying—that by no means all asylum seekers should be declared "bogus" before their cases have even been investigated properly.
I understand the arguments about priorities which I am sure my noble and learned friend will seek to adduce. I remind him that those arguments were present before in connection with the Society of Labour Lawyers, of which he is a distinguished co-president along with my noble and learned friend Lord Archer. I too have the privilege of being a co-president. I think the society is on record as having made a statement defending legal aid before the sorts of tribunals we are addressing. So there is something of an inconsistency about the current situation as it is being argued under the Bill. The Society of Labour Lawyers is very clearly on record over a long period of time as being in support of the very proposition now being discussed.
Lord Renton: Before the noble Lord sits down, does he agree that even if we are not getting more people seeking immigration here, relatively speaking, than other countries, the number is higher than is acceptable in the interests of the people of this country?
Lord Clinton-Davis: I am not going to enter into an argument because the matter cannot be dealt with properly in this way. I do not accept the argument that the noble Lord has adduced; nor do I accept that bogus immigrants are pouring into the country and that they are likely to get legal aid to appear before these tribunals. That is a rather speculative possibility and in fact one which is very unlikely to happen.
Lord Mackay of Clashfern: In relation to Amendments Nos. 101 and 103, it occurs to me to inquire whether, once the legal aid system is altered in accordance with this Bill, it might not be quite a good idea to invite the noble and learned Lord the Lord Chancellor and his colleague the Home Secretary to pass over the budget for support of representation in these tribunals so that it might be brought into the community legal service as part of the planned integration and

719
perhaps therefore made use of under criteria which are more general than those which apply to the Home Office budget in this respect at the present time.
5 p.m.
The Lord Chancellor: The proposition is that Schedule 2 should be amended to allow legal aid to be available for representation in proceedings before employment tribunals—the old industrial tribunals—and social security tribunals. I speak from personal experience, and I believe that my experience would be confirmed by practitioners today. I have always made my views crystal clear, and my noble friend Lord Clinton-Davis has called attention to that.
I accept that employment tribunals follow procedures similar to those of the courts. That is because their function, like that of the courts, is to determine what are often complex factual and legal issues between private parties. Legal complexity can in some cases exceed anything which appears in the county courts. There can, I agree, be professional cross-examination of witnesses, and lawyers frequently appear in these tribunals. Applicants can be unrepresented in difficult cases, while employers are represented, and that is unequal representation. I accept that there are certainly some cases in which legal representation is desirable.
I recognise that representation is already provided for in proceedings before employment tribunals from a number of sources, including trades unions and statutory bodies such as the Commission for Racial Equality and the Equal Opportunities Commission. Nevertheless, it is clear to me that many people are unable to obtain representation when they need it, and it would be unworthy of me to seek to deny that.
I have already extended the availability of conditional fee agreements to all civil courts and tribunals, and under the Bill I propose changes to make these agreements more attractive. As I have already said, it is my belief that where the private sector can provide an effective service, such as conditional fee agreements, public money should not be spent. Conditional fee agreements are available for people to use in relation to employment disputes in employment tribunals. However, under the employment tribunals' costs rules, costs do not follow the event as in almost all other litigation where significant sums of money are recovered. A successful applicant in the employment tribunal under a conditional fee agreement would therefore have to pay his lawyer's success fee and the insurance premium from the damages awarded because he could not recover these from the respondent.
At the Home Affairs Select Committee on 13th October 1997 I was asked whether I planned to expand legal aid to cover representation at tribunals. The answer I gave on that day was that it would not be possible until I had control over expenditure. The reformed scheme which I propose to introduce under the Bill should, over time, give me that control and the flexibility required to target resources on deserving cases. I am willing to consider whether legal aid could be made available, in certain limited circumstances, for representation in proceedings before employment tribunals.
720
However, there are two points I wish to make. First, it would be premature to reach any decisions about extending publicly-funded representation in tribunal proceedings before the Government have completed a review, on which they are now embarked, of the extent to which current procedures and other arrangements, including representation, comply with our ECHR and EU obligations and until we have identified the options for ensuring compliance in the future; and, secondly, in any event, within my controlled budget I could not here and now realistically consider the availability of legal aid in employment tribunals beyond a very limited category of case, for to admit it even to that extent would be at the expense of other priority parts of the budget.
Legal aid could not conceivably be granted in present circumstances in every employment case. My general approach is clear. Public funding should not support weak cases. It should not displace other forms of support. Cases need to be tested for priority of claim under a controlled budget. Factors to be considered would include the complexity of the case, factually or legally, the public importance of the issues at stake and the availability to the applicant of other sources of representation. I can assure the Committee that I have these issues under active consideration.
Different considerations apply to tribunals dealing with social security appeals, whether the appeal tribunals or the proceedings before the social security commissioners, although I cannot claim any direct personal experience of these. Welfare tribunals investigate all questions relating to the appeal through an informal and inquisitorial hearing and are in sharp contrast to employment tribunals, which are adversarial. Oral evidence in these tribunals does not carry the same significance that it has in employment tribunals. Since 1996 appellants have had the opportunity in these tribunals to opt for either an oral or a paper hearing. The Department of Social Security's officials act as amici curiae, informing the tribunal of the relevant evidence, whether it assists the appellant or the department. Presenting officers receive training and guidance which stresses that they must not assume a defensive role or think in terms of winning cases. For these reasons, I see far less prospect that these cases could have a sufficient claim on a controlled budget.
On that basis, and bearing in mind what I have felt able to say about employment tribunals, which I believe is of an encouraging nature, I invite noble Lords not to press their amendments.
I turn now to Amendment No. 102. The noble Lord, Lord Goodhart, called specific attention to discretionary lifer panels. He proposes an amendment to Schedule 2 to allow funding to be available under the community legal service for representation in proceedings before discretionary lifer panels.
I welcome the opportunity to assure the Committee that representation will continue to be made available under the new scheme. However, I cannot accept the amendment because I intend to make provision under the criminal defence service rather than under the community legal service.

721
Although these hearings are not strictly criminal proceedings, the expertise necessary to provide this type of representation is most likely to be found in those practitioners who will provide services as part of the criminal defence service. However, I can give an assurance to the noble Lord, Lord Goodhart, that, although there is no provision for representation at these proceedings on the face of the Bill, I intend to make regulations under Clause 12(3)(f) to enable prisoners to be represented before parole board panels dealing with "discretionary lifers" and offenders detained at Her Majesty's pleasure. Clause 14(2)(b) requires the legal services commission to fund representation in the circumstances there prescribed. On that basis, I invite the noble Lord not to press that amendment.
I turn to Amendments Nos. 101 and 103, which address immigration tribunals. I am grateful to my predecessor the noble and learned Lord, Lord Mackay of Clashfern, for fuelling my assumed irredentist ambitions and seeking to gain control over part of the Home Office budget. I shall certainly convey what the noble and learned Lord said to my right honourable friend the Home Secretary. I do not believe that the amendments are necessary in the area of immigration tribunals. The Home Secretary already makes grants under Section 23 of the Immigration Act 1971 to the Immigration Advisory Centre and the Refugee Legal Centre. They are two voluntary organisations who provide free advice, assistance and representation at these appeals.
The whole system of immigration and asylum appeals is a matter that is receiving the current attention of the Government. I have been working closely with my right honourable friend the Home Secretary on proposals to rationalise the whole system of immigration appeals. I have also asked the Legal Aid Board to report to me with proposals for contracting legally-aided immigration work. All of this means that currently we are addressing the effectiveness of the system from the standpoint of having good quality advice, assistance and representation where needed. On that basis I invite the noble Lord to withdraw the amendment.
Lord Harris of Greenwich: Speaking as a former chairman of the Parole Board, I very much welcome the observations of the noble and learned Lord about discretionary life panels. When I was chairman of the board the Home Secretary alone took the final decision. As a result of the judgment these decisions are made by panels of the Parole Board. That being so, it is highly desirable that there should be legal assistance in cases of this kind, and I very much welcome what the noble and learned Lord said.
5.15 p.m.
Lord Windlesham: I also was chairman of the Parole Board and had an opportunity to observe discretionary life sentence prisoner hearings. I was under the impression that applicants were already legally aided.
Lord Meston: Before the noble and learned Lord responds further—if he intends to do so—perhaps he
722
can add to the list of those whom he acknowledges provide good representation for those who appear before employment tribunals, in particular the Free Representation Unit. Further, when considering whether conditional fee agreements are appropriate before such tribunals, will he bear in mind that they would be inappropriate in many cases where the primary remedy sought was reinstatement rather than financial compensation, and also that they might be inappropriate before tribunals where inter partes orders for costs are not the norm?
The Lord Chancellor: That is the problem, is it not? It is very difficult to make conditional fee agreements wholly effective where costs do not follow the event. That was the point that I was at pains to make. Conditional fee agreements can work in a regime where costs do not follow the event, but they have the disadvantage that the fees of the claimant's lawyers and the uplift must come out of the compensation and so reduce the amount to which ex hypothesi the claimant is entitled. Conditional fee agreements therefore work much more effectively in a regime where costs follow the event.
It is not however obvious why costs should not follow the event in tribunals when that is the norm in every other class of litigation. But conditional fee agreements in employment tribunals can, without the benefit of a general presumption that costs follow the event, still improve upon the current state of affairs. I can assure the noble Lord that I am ready to add my voice to that of others in praise of the Free Representation Unit.
Lord Donaldson of Lymington: Do I understand the noble and learned Lord the Lord Chancellor to say that it is not obvious to him—or I assume to anyone else—why costs should not follow the event in employment tribunal cases? I believe that it is very obvious. Usually they are cases in which individuals are suing their employers. The employer has considerable assets and can incur enormous sums in costs. If the employee loses, under a revised regime he will be liable for the employer's costs. In many cases that would strongly deter the employee from seeking to assert his rights. The very threat would achieve the employer's result. It is not a case where one would expect the employee to insure against that liability. Not all employees—perhaps not even the majority—have trade unions behind them to act as substitute insurers. I would be very alarmed at any move to make costs follow the event in employment tribunals except to the extent that it already exists; for example, if there were a major abuse of process by the claimant.
The Lord Chancellor: This is a matter that we can debate to a substantial degree. A rule that costs follow the event must be a reciprocal one. The applicant would have to be liable for costs if he lost. That is the position in all civil litigation. One asks what is so special about employment tribunals that entails that the rule that applies in all other civil litigation should not apply in employment tribunals. Throughout the country employers are sued for damages in the county courts

723
and the High Court by employees where the rule applies that costs follow the event. What reason in principle is there for making a difference in employment tribunals? The noble and learned Lord suggests one reason may be that the applicant will be deterred from bringing his case before the employment tribunal by the risk of a liability in cost. It can be argued, however, that one should discourage weak cases. Very often applicants bring weak cases before employment tribunals inspired by animus against their employers arising out of their dismissal. If the effect of changing the cost rule were to deter weak claims and prevent employers being vexed by them there is a highly respectable argument in favour of that change. There is a lot to argue about in this area, but perhaps now is not the time.
Lord Simon of Glaisdale: This most valuable debate has brought out a number of interesting points. I draw attention to one spin-off. We now have a clear demonstration that conditional fee agreements are not a universal panacea. They do not give access to the legal system in all circumstances but much less to justice. I hope that the proponents of the contingency legal aid fund—the noble Lord, Lord Goodheart, and my noble and learned friend Lord Brightman who made such a striking speech on the White Paper—will note that. I understand that it is not proposed that the contingency legal aid system should be in addition to conditional fees. My noble and learned friend is right when he said that if that were so, the conditional fee agreement would cream off all the cases likely to succeed leaving only the more speculative cases. That is not what I understand is proposed. On the contrary, the contingency legal aid fund system covers the same ground as the conditional fee agreement area, but without any of the disadvantages of the latter. However, it has been a valuable debate. We now have clearly demonstrated one of those disadvantages.
Lord Goodhart: I am grateful to those who have spoken in the debate; and I am grateful to the noble and learned Lord the Lord Chancellor for the answers he has given to the amendments in the group.
In descending order of gratitude, perhaps I may touch on the replies to the amendments. First, on Amendment No. 102 relating to the proceedings before the discretionary "lifer" panels I am entirely satisfied by the response of the noble and learned Lord the Lord Chancellor. It clarifies a point which was not clear on the face of the Bill and was a matter of considerable concern to Justice.
As regards immigration proceedings, there is a considerable, unmet, need for assistance. However, in view of the extensive review of immigration proceedings now under way, this may not be the moment to press that issue further. It is a matter that I wish to take away. I shall be interested to hear the view of the noble and learned Lord, Lord Archer of Sandwell, on this aspect.
I shall wish to read what the noble and learned Lord the Lord Chancellor said on social security proceedings,
724
and to consult with bodies which are actively involved in that area before deciding whether the issue should be brought back. However, in the case of appeals before the social security commissioners—they are appeals from the first level of appeal tribunal under the 1998 Act—there is inevitably a strong case at that level for providing publicly funded assistance. By the time the matter is before the social security commissioners it necessarily involves a point of law. It involves necessarily technical arguments, and it is surely appropriate that assistance should be provided there.
Finally, on employment tribunals the noble and learned Lord accepted that it was desirable in principle that in a number of cases, and subject to a case satisfying the applicable merits test, there should be publicly funded assistance. But that was dependent on getting the budget in order. I am somewhat disappointed. If that is the objective, the provision should go into the Bill now, even though at present it is necessary to give it a low priority. It is desirable that a clear aim of the Government should not at the very first stage be wholly excluded, but should be included on the understanding that it inevitably receives a low priority.
Having said that, I beg leave to withdraw Amendment No. 100 at this stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 101 to 104 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 105:
Page 54, line 32, at end insert—
("(I) proceedings in coroners' inquests into death, and
(j) public and judicial inquiries").
The noble Lord said: It does not follow that all coroners' inquests, and public and judicial inquiries, would fall within these categories; but in the light of the exclusion of clinical negligence from the general negative approach towards legal aid, I believe that these amendments could be associated with that provision. I presume the reason for excluding clinical negligence from the general rule that personal injury negligence should not come within legal aid is because of its complexity, the expense involved and the difficulties of carrying out investigations. I submit that enabling representation to take place where these difficult considerations are likely to apply could well obviate costs.
I have appeared at inquests and have found that material which had not been willingly given—perhaps suppressed is too hard a word—was available at the inquest. I cannot remember a case where I charged to appear at an inquest; it has not been eligible for legal aid in the past. But in my experience, and I am sure that of other practitioners present, in particular in clinical negligence cases, it would have been extremely difficult to obtain the information and evidence to enable that to happen. I believe that there is an argument for this to be considered by my noble and learned friend in relation to the approach that he has indicated about other matters.
The same argument applies as regards public and judicial inquiries. I do not press that so hard and I should be happy to abandon that part of the amendment. The issue is more important in relation to coroners' inquests.
I hope that my noble and learned friend will recognise the point I made at the outset. It is a way of obviating costs which could be expensive if the provision is not allowed. It occurs at present; and I believe that it should not. My noble and learned friend will always have discretion in relation to these matters. I commend the idea to him. I beg to move.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): The effect of my noble friend's amendment would be to make public funds available to provide representation at coroners' inquests and at public and judicial inquiries. I do not think that we can accept the amendment. An inquest is an inquiry concerned with the facts surrounding a death rather than issues such as civil or criminal liability. The proceedings are intended to be inquisitorial and informal; and legal representation is generally considered unnecessary. Full civil legal aid is not therefore available to someone appearing at an inquest. For similar reasons, it is not available for making representations for public or judicial inquiry. This does not mean that someone who is required to attend an inquest will receive no assistance from the legal aid scheme. Legal advice and assistance from a solicitor is available under the green form scheme to those who are financially eligible. The proposed new scheme replicates this position.
I accept that there may be truly exceptional circumstances in which it is fair for public funds to be spent on representation at inquests and inquiries. I am thinking of circumstances similar to those concerning the inquest into the "Marchioness" disaster where a second inquiry was necessary because of failures in running the first. On that occasion, legal aid was provided in the form of a specific grant covering only that instance. As the failures of the inquest were in no way the responsibility of the families, it was only fair that they should not have to pay to be represented a second time around. The noble and learned Lord the Lord Chancellor therefore exercised his power to permit the legal aid board to pay for representation at the second inquiry, despite that being outside the normal scope of legal aid. No similar grants have been made since. I believe that the new scheme should contain a similar provision and the noble and learned Lord the Lord Chancellor will be considering how best this can be achieved. I hope that in the light of that somewhat encouraging speech the noble Lord will withdraw his amendment.
Lord Clinton-Davis: I welcome what has been said by my noble and learned friend. He has been more forthcoming than I expected and I accept with relish what he has offered. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.30 p.m.
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 106:
Page 55, line 5, at end insert (", and
( ) proceedings on a complaint under the Environmental Protection Act 1990.").
The noble and learned Lord said: This is a narrow point. The amendment seeks to add an item to the list of proceedings in a magistrates' court for which funding may be made available for representation. The proposal, for which I am indebted to the Law Centres Federation, is designed not primarily to assist people in defending proceedings but to enable someone to bring proceedings. The proceedings in question arise where a tenant is living in a house which by reason of disrepair is alleged to create a health hazard, or an unfitness for habitation, or a public nuisance. The complaint may be against a private landlord or against a local authority.
Most constituency MPs have experience written on their hearts of where a problem which despite repeated complaints is always relegated to next year and the danger to health is overlooked. Sometimes a summons is the only way to concentrate minds. I cannot believe that this would represent a serious drain on resources. However, the existence of the possibility of a sanction represented by the inclusion of these proceedings in the list may itself lead to the redress of a genuine grievance.
The provision is a useful statutory provision, but tenants may well hesitate to avail themselves of it without access in an appropriate case to representation. I hope that in such a case, where generosity is not likely to be exhaustive, my noble and learned friend will feel able to respond. I beg to move.
Lord Falconer of Thoroton: My noble friend's amendment to paragraph 5 of Schedule 2 would have the effect of making public funds available for representation for complaints under the Environmental Protection Act 1990. These are summary criminal proceedings which allow for any person to issue a complaint to a magistrates' court where aggrieved by the existence of a statutory nuisance, or the defacement by litter or refuse of any public land or other land within a litter-control area of a local authority, as specified in Parts III and IV of that Act.
I am afraid that we cannot accept the amendment. In the cases described, the court has to order a defendant to pay the reasonable expenses incurred by the complainant where there were reasonable grounds for bringing the complaint. In the majority of complaints, the defendant will be a public body or company and there is not the risk of costs not being paid. One of the key objectives of the reforms of the legal aid system is to ensure that publicly-funded help under a controlled budget is directed to areas where the need of people is greatest; for example, social welfare cases, public interest cases and those involving the interests of children. In the judgment of the noble and learned Lord the Lord Chancellor, these proceedings do not have sufficient priority to warrant any public funding other

727
than for the provision of basic information and advice on the law. Therefore, I invite my noble and learned friend to withdraw his amendment.
Lord Archer of Sandwell: My noble and learned friend and I are agreed on the premise—something has slipped—but we are not agreed on the conclusion. I agree that the purpose of the legislation should be to direct legal aid to where the need is greatest. If he had seen some of the cases with which I had to deal as a constituency MP he might have believed that there was a need. However, we live in a real world, even in this Chamber. I am disappointed but scarcely surprised by his response and not being surprised I am resigned. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
[Amendment No. 107 not moved.]
Clause 8 [Individuals for whom services may be funded]:
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 108:
Page 5, line 15, at beginning insert ("Subject to subsection (4),").
The noble and learned Lord said: It may be to the Committee's convenience if with this amendment we discuss Amendment No. 112, for which Amendment No. 108 is a paving amendment. I tabled the two amendments in the hope of allaying anxiety, including my own. If I am told that they are unnecessary I shall be delighted and happily seek leave to withdraw them.
Clause 8 is about financial limits on applicants for community legal service funding. Subsection (2) recognises that there may be situations in which justice may require funding without an investigation of financial resources, possibly because there is an emergency and no time to carry out an investigation or because for some reason the applicant is unable to provide information about his resources.
There is some anxiety because no specific mention is made of what is now called the green form scheme. I believe that a few moments ago my noble and learned friend Lord Falconer went some distance to make the point which I am now raising, but the fact that he did not go the whole distance was because it did not arise in respect of the amendment moved by my noble friend Lord Clinton-Davis.
As I ventured to suggest during our debate on Tuesday, problems do not always come packaged in neat categories to facilitate administration. Someone may have a variety of problems. Some he may not recognise as legal problems at all. Some he may not appreciate as being susceptible to a remedy. Frequently he may not know what his remedy is and where to find it. A short interview with someone well informed and practised in analysis may be essential to sort out whether he can bring proceedings at all and if so for what. There can be no application for public funding and therefore no financial assessment until he is clear for what purpose he is making the application. A short interview may be not only the source of a solution to his problems, but it may represent a saving in court or tribunal time
728
and certainly in administrative time. If my noble and learned friend can assure me that such an interview can be funded under the proposed scheme without my amendment I shall proceed no further and simply enjoy the feeling of pleasure which he has engendered. If he cannot give me that assurance, and if the amendment is necessary, I hope he will agree that it should be made. I beg to move.
Lord Goodhart: I rise briefly to express my complete support for what the noble and learned Lord, Lord Archer of Sandwell, said. The free diagnostic interview seems an absolutely essential element in any scheme if it is to work, and I too therefore hope that the noble and learned Lord the Lord Chancellor will be able to satisfy the concerns of the noble and learned Lord, Lord Archer, and myself.
Lord Clinton-Davis: I wish to ask my noble and learned friend Lord Archer a question. I have not been involved with the green form for many years but I think it does attract a fee which is assessed by the solicitor when dealing with the green form application. He or she is required, on the basis of means as he or she feels appropriate, to insert in the form a fee—it is a very small one—from the client. I think that the wording of the amendment is therefore defective because it refers to an initial free interview. If my noble and learned friend was referring to the inclusion of the green form requirements and conditions, that is fine, but the proposal may be defective for that reason.
Lord Archer of Sandwell: If the question had occurred to me I would have consulted my noble friend Lord Clinton-Davis because I would have assumed that he knew more about the green form scheme than I do. However that may be, I am grateful to him for having raised the question. I do not seek to improve on the existing green form scheme, and if the wording of my amendment is defective as he suggests, I would be very happy to withdraw it if we can be assured either that it is unnecessary or that an appropriate amendment will be forthcoming at a later stage.
Lord Falconer of Thoroton: I can very well understand the intention behind this amendment. For technical reasons it will not achieve its desired effect, but I am happy to say that I think it is unnecessary. As I understand the amendment and the speech in support of it by the noble and learned Lord, Lord Archer of Sandwell, it is meant to ensure that it will always be possible for people to get an hour's free basic advice regardless of what other conditions may be imposed on eligibility by regulations made under Clause 8.
The amendment says that those regulations cannot preclude the provision of the hour's advice. However, regulations made under this clause cannot provide for charges to be applied or disapplied. They can only impose conditions on eligibility in terms of applicants' financial resources. Regulations about payment for services would be made under Clause 10. In strict terms, therefore, it is already the case that the regulations in Clause 8 cannot preclude the provision of free advice.

729
I hope that in that rather convoluted way I have dealt with the point. The regulations in Clause 8 cannot preclude the provision of free advice. That is the important point. Perhaps the noble and learned Lord's amendment is intended to go further and ensure that an hour's advice will be available to anyone, regardless of their means. I am not sure that the amendment as drafted will achieve that. If that were the effect, I would have to urge your Lordships to reject it. Clause 8(2) allows the Lord Chancellor to prescribe circumstances in which services can be given regardless of means. I envisage that this will usually mean only the most basic of services such as information about the availability of help. I would be reluctant to make an hour's advice available to absolutely anyone because of the cost implications. Even diagnostic advice would take time that would need to be paid for, and giving that to anyone who asked would take money away from people who needed it more.
The Government intend to make services available free of charge to people who absolutely cannot afford to pay for them and will bring forward regulations in due course under Clause 10. But we believe people should pay something towards their help where they can afford to. This amendment carries the risk that some services might not be provided on that basis. I hope therefore, with those encouraging words, that the noble and learned Lord will withdraw his amendment.
Lord Archer of Sandwell: I am grateful to my noble and learned friend for that exposition. I did invite him to tell me that my amendment was unnecessary. I did not expect him to tell me that it was unnecessary because I had put it down in the wrong place. As I said a moment ago, I do not seek to improve on the existing scheme. I probably moved the amendment from a reservoir of ignorance which ought to be dispelled before I seek to proceed further. I shall consult further with those who know about these matters to decide whether there is some other way in which I can ensure that what I originally intended will take place or whether what my noble and learned friend has promised will be sufficient to achieve that. That will require a little reflection and, for the moment at least, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
[Amendments Nos. 109 to 112 not moved.]
Clause 8 agreed to.
Clause 9 [Code about provision of funded services]:
Lord Kingsland Lord Kingsland moved Amendment No. 113:
Page 5, line 23, after ("code") insert ("following consultation with interested parties as appropriate").
The noble Lord said: The intention of this amendment is to introduce into Clause 9(1) an obligation on the commission to consult with interested parties before its funding code is settled. I understand that recently the Legal Aid Board has published a draft funding code. I wonder whether the noble and learned Lord the Lord Chancellor will confirm that he intends to take
730
account of the views expressed by interested individuals and organisations before approving the code in final form.
The Lord Chancellor: Never in the history of this Chamber can advocacy so brief have met with success. I am happy to consider these amendments. Our practice, as the noble Lord indicated, is always to consult on major innovations like the funding code. As the noble Lord said, the Legal Aid Board only last week published a first draft of the code for consultation. That shows that we are already abiding by the duty envisaged in the first amendment, and I have no objection at all to the Bill containing such a duty.
The second amendment imposes the same duty on the commission when it is considering any revisions to the code. Again, I would expect consultation to be undertaken as a matter of course. I imagine that in many cases revisions to the code will come about as a result of the commission consulting practitioners and others about the way the code is working in practice. I think that consultation will drive the revisions rather than the other way about. I am happy, however, to take both these amendments away for positive consideration.
Lord Kingsland: If my brevity has that effect I shall continue in the same vein. I am most grateful to the noble and learned Lord for his reply and in those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (The Viscount of Oxfuird): I must advise the Committee that should Amendment No. 114 be agreed to, I am unable to call Amendments Nos. 115 to 118 inclusive due to pre-emption.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 114:
Page 5, line 27, leave out subsection (2).
The noble and learned Lord said: This amendment seeks to leave out subsection (2) and is grouped with amendments to leave out subsections (4) and (6). My noble and learned friend the Lord Chancellor was, or seemed, rather cavalier on Tuesday about the desirability of economical drafting. Under our arrangements there is no one to give directions to the draftsmen generally that they should draft in accordance with the recommendations of the Renton Committee on preparation of legislation or the later report of the Hansard Society on the legislative process. It is therefore left to each departmental Minister in charge of the Bill to ensure and satisfy himself as to the drafting. That does not mean only the accuracy of the drafting; it also means its economy.
Perhaps I may remind the Committee that it was prolonged dissatisfaction as to the contents of the statute book which led to the setting up of the Renton Committee in 1975. It remarked, among other things, on the evil of prolixity in the statute book and over-elaboration. At that time the statute book consisted of three medium-sized, though fairly stout, volumes of

731
public and general Acts. Ten years later, far from there being economy in pursuance of what the Renton Committee recommended, it had swelled to five volumes—not only five volumes but, comparably, there were fewer statutes in those five volumes than there had been in the preceding three volumes.
The format of the statute book was enlarged rather than the drafting being made less prolix. That was expensive to those who had bookcases made for the smaller format, but was a minor consideration when it succeeded once again in reducing the number of volumes from five to three. However, in spite of the larger format, within a few years it was again up to five volumes. I shall be very surprised if this year it is not six or more.
Therefore I make no apology—I hope I do not need to make one—for begging for there to be economy in the drafting of the statute books. There is another disadvantage. It is extremely expensive to have unnecessary provisions; for example, subsection (2), which is around one third of a page, will be printed over and over again; secretaries, draftsmen, printers and bookbinders will all be concerned and the people who pay for it in the end are, first, the taxpayers who fund the public purse and, secondly, the users of the statute book. That is not the only reason.
The other reason, as I am sure my noble and learned friend the Lord Chancellor will bear out, is that unnecessary provisions in a statute add to the complication and difficulty of interpretation, which quite often leads to a misinterpretation. Therefore, if we can get down to the essentials, we are performing our duty as a legislative chamber.
Subsection (2) might be described under the rubric of legislation to teach grandmothers to suck eggs. Clause 9 says that the commission must draw up a code as to the criteria which will govern the principles of funding. That is splendid; so it should. But then the clause goes on to say precisely how that should be done. One must remember that the commission is not drawn from the local mental deficiency colony; it consists of men of acumen and experience chosen for their special gifts by my noble and learned friend himself. Let us consider what they have to be told. They have to consider the likely cost and how much money they have to meet those cost, the importance of the matters, the prospect of success and the conduct of the applicant.
Do they really need to be told that? But that is not the end. They have to be told also that they must consider the public interest. Is it really conceivable that, in carrying out the duties imposed on them by subsection (1), they would not consider those matters? So much for subsection (2), which is a grandmother/egg subsection.
Subsection (4) falls under the same rubric. It says,
"Where more than one description of service is available, the service funded is that which (in all the circumstances) is the most appropriate having regard to the criteria set out in the code".
Do they need to be told that too? Subsection (6) is not grandmother-led, it is computer-led. It is something that
732
pops up in almost every statute in one form or another. It says,
"The code may make different provision for different purposes".
Is it conceivable that it should not do so; that the same provision must be made however different the purposes and the different circumstances?
As I say, we are under a duty to see that this measure, which is extensive and one of whose objects is economy generally—with which I wholly concur—ensures that the cost of the legal aid service is contained. But in doing that, we should act consonant with it. All those provisions merely either tell people what they would do in any event without the necessity of writing it into the statute, or are completely absurd, telling them that the code must not make different provisions for different purposes.
6 P.m.
Lord Hacking: I have had a great affection for the noble and learned Lord for over 30 years. He was generous to me when, as a young and nervous barrister, I appeared before him when he was President of the Probate, Divorce and Admiralty Division. Alas, I must profoundly disagree with what he has just said. I do not believe that the drafting of Clause 9, and the code that will be published consequent to Clause 9, is a licence to print reams of legislation and subsidiary legislation; nor do I consider that subsection (2) falls under the rubric of trying to teach one's grandmother to suck eggs.
The correct approach is to look at what the Government are seeking to achieve. First, it is plain that the Government are seeking to achieve greater flexibility in the application of legal funding than is currently available under the legal aid merits test. Secondly, they are deliberately introducing a range of considerations identified in subsection (2)(a) in terms of comparing the likely cost of funding and the benefit to the individual. That seems an entirely sound test.
I turn to subsection (2)(c) on,
"the importance of the matters in relation to which the services would be provided to the individual".
Again, that seems an entirely sound test.
Paragraph (f) deals with the conduct of the individual. We shall discuss that later and I shall reserve my position on it. I refer finally to paragraph (g) which deals with the public interest. Those are all examples of the helpfulness of the Explanatory Notes which have been prepared under the auspices of my noble and learned friend the Lord Chancellor.
I refer to paragraph 82 where we see another good example of why the new proposed criteria are a definite step forward from the criteria used for the grant of legal aid. It states:
"For example, prospects of success will not be a relevant factor in cases about whether a child should be taken into local authority care".
Again, that is an example of how I believe that the clause achieves its objective. As a result, I believe that it will result in a much better regime for the funding of legal aid than currently exists.

733
The fact is that, economic with the legislation or not, the amendment drives a coach and horses through the setting up of the new criteria. On that basis, I hope that my noble and learned friend will resist the amendment. If he does, he will have my full support.
Lord Falconer of Thoroton: I am encouraged by that support to resist, with diffidence, the amendment proposed by the noble and learned Lord, Lord Simon of Glaisdale. Of course, I concede immediately that unnecessarily long legislation is to be deprecated. Therefore, the position that I have to defend is why the three subsections that the noble and learned Lord seeks to remove should be retained.
The first, Amendment No. 114, would remove Clause 9(2) in its entirety. This would be an act of quite astonishing statutory vandalism. This is the clause that sets out the factors which are to be considered in framing criteria for the funding code. The removal of the criteria would render the funding code either ineffective or unclear. They are its essence in terms of enabling the commission, in drawing up and operating the code, to reflect priorities and ensure that only the most deserving cases receive funding. The removal of the criteria would also make the system of giving help to individual cases far less accountable. I cannot understand why anyone would want to remove that subsection.
Lord Simon of Glaisdale: I cannot have made myself clear. The subsection is quite unnecessary; it goes without saying.
Lord Falconer of Thoroton: The noble and learned Lord says, "It goes without saying" as to which are the particular considerations for the commission to take into account. It may "go without saying" to a reasonable man, such as the noble and learned Lord, but I would not for one moment think that it would "go without saying" to lawyers considering the means of challenging the ways in which the commission has prepared its code. A reasonable fellow, such as a predecessor of the noble and learned Lord the Lord Chancellor, was himself challenged in court by both the Bar Council and the Law Society some years ago in relation to provisions that he made in relation to regulations. No doubt it would have been said in those proceedings that what is required "goes without saying". In my submission, it is perfectly sensible in such a Bill to specify with precision the considerations that the commission has to take into account. If they are obvious, that makes things clearer.
The second amendment, Amendment No. 120, would remove Clause 9(4). This clause allows the commission to ensure that the most appropriate type of service is used in individual cases. The amendment is unacceptable because it would remove the commission's discretion to assess whether the most appropriate service was being considered by the applicant; for example, was the case suitable for mediation rather than full-blown
734
litigation? The noble and learned Lord's point on that, that "It is so obvious; they could do that anyway; you do not need to include that"—
Lord Simon of Glaisdale: Not only that; it says elsewhere in the statute that it cannot be done.
Lord Falconer of Thoroton: In my respectful submission, subsection (4) is the only place where it is made clear that the code shall seek to ensure that. That is why it is there.
The final amendment, Amendment No. 123, would remove Clause 9(6). The clause allows the commission to vary the funding code criteria according to the category of case or the type of service; for example, if a case has a wider public interest, the commission could apply less stringent criteria for the prospects of success. The removal of the clause would remove an important part of the commission's ability to allocate funds according to priorities and need.
Lord Simon of Glaisdale: I apologise for interrupting the noble and learned Lord again. I say again that I have not made myself clear. Certainly, it should have power—obviously, it should have power—to make different provisions for different cases. The noble and learned Lord has just given an example. The point is that it does not need to be told that it can do that. Common sense and reasonableness say that it may do that. We cannot go on legislating for every aberration, for every ridiculous argument that some ingenious advocate might place before a court.
Lord Falconer of Thoroton: I am grateful to the noble and learned Lord for making his argument clear. I had understood it. The argument boils down to assertion and counter-assertion. The noble and learned Lord says that common sense leads to the conclusion so clearly that there is no need for such provisions to be set out in the Bill. Parliamentary draftsmen take the view—having, with the greatest of respect to the noble and learned Lord, heard him making that point in respect of a number of parallel clauses in previous legislation—that that is not right. It is a matter of judgment and balance. It is sensible to set out this sort of power in order to avoid any disputes that may be brought by lawyers.
A judgment must be made as to whether or not it is necessary—and thereby avoid disputes in the future—or whether one can rely on the common sense not only of the judges, which I am sure one can, but also of the claimants who might think that because there is a gap there is a chance for making a claim and clogging up the time of the court. So, a judgment has to be made and the line must be drawn somewhere. It does not seem to me to be inappropriate to draw the line in the way outlined by the parliamentary draftsmen. It will avoid disputes, especially in an area where lawyers might be motivated to bring judicial review or similar proceedings. Speaking for myself, I think that it is quite a sensible course that the parliamentary draftsmen have taken. Although the noble and learned Lord might disagree, and although I have obviously failed to

735
persuade him, I trust that he will rest assured that I did understand his argument. In the light of those comments, I invite the noble and learned Lord to withdraw his amendment.
Lord Simon of Glaisdale: My first very pleasant duty is to thank the noble Lord, Lord Hacking, for what he said in his introductory remarks. All too often these days I have to say, "Yes, I knew his father". Occasionally, as with the noble Lord, Lord Strathclyde, it is, "Yes, I was a fellow Member with his grandfather in both Houses". The father of the noble Lord, Lord Hacking, was a very old friend of mine. It is a great joy to see his son intervening in debates, even if the points he made today were not perhaps the best that could be made. Neither he nor the noble and learned Lord, Lord Falconer, really faced the fact that, although they may be desirable, these criteria are the sort which the kind of people that my noble and learned friend is going to appoint are bound to consider.
The noble and learned Lord said that any reasonable body would take these criteria into account. But he then went on to say that that would not preclude some enthusiastic lawyer putting forward to a tribunal a point that is ex hypothesi unreasonable. If we are really going to legislate in that way, there will be no end to the statute book. It will not be merely six volumes; indeed, it will be seven, eight or nine in a few years' time. What is more, it will establish a precedent.
I recall a certain Bill, but I am not sure whether it was one for which the noble and learned Lord the Lord Advocate was responsible. However, I remember one of the Ministers involved. I shall name him because there is no shame attached. I have in mind the noble Lord, Lord Williams of Mostyn. When I pointed out to the latter during the proceedings on that Bill that a provision was unnecessary, he said: "There is precedent". Members of the Committee will remember the well-known provision in paragraph 10 to the seventh schedule of the Local Government (Scotland) Bill. That is the way in which the provision will be used. I am sure that we shall have many precedents.
I am afraid that the noble and learned Lord did not make the point that the test is: what is the meaning to a reasonable man? That is the test in every court. We simply cannot go against the reasonable man, the very basis of Anglo-American jurisdiction, and take as our criterion the most ingenious and wrong-headed advocate seeking to find a hole. That is not the way—and I say this with all the force at my command—to frame a statute. If we try to do so, as I said, there will be no end to the mischief.
The noble and learned Lord concluded his speech—given, as usual, so delightfully—by saying that, in view of what he had said, he hoped I would withdraw the amendment. I shall withdraw the amendment, but I trust that the noble and learned Lord will not take offence if I say that it is not in view of what he said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Kingsland Lord Kingsland moved Amendment No. 115:
Page 5, leave out lines 31 to 34.
The noble Lord said: This amendment seeks to remove the provision which enables the legal services commission to deny legal aid in cases in which an individual would otherwise have qualified but does not do so because of lack of resources. In seeking to illuminate the point, I shall quote briefly from the keynote address to the Bar Annual Conference in 1996 made by the noble and learned Lord the Lord Chancellor. Lest he should think that this is a hostile act on my part, I should say that I accept that the words he uttered cut both ways, politically. The opening part of the noble and learned Lord's speech referred to a White Paper produced by the previous government. He said:
"The main feature of the White Paper is to cap legal aid for the first time and to impose heavier liabilities on assisted persons both to pay greater contributions and their opponent's costs if they lose. Of course, I do not exclude cost capping, if the cost of a demand-led system makes that unavoidable. Cost capping, however, is unattractive in principle because legal aid would cease to be a benefit to which a qualifying individual is entitled. It would, in practice, become a discretionary benefit, available at bureaucratic disposal—a benefit which would have to be disallowed when the money run out, or when another category of case was given preference. Legal aid would cease to be a service available on an equal basis nationally because cases would go forward in one region where identical cases in others of equal merit would not. I am not persuaded by the arguments of the White Paper that that would not happen".
I accept, first, that the policy of capping legal aid was the policy of the previous government; and I am a member of the party of that government. Secondly, I also accept that the noble and learned Lord the Lord Chancellor qualified, quite heavily, what he said on that occasion by saying that he did not exclude cost capping,
"if the cost of a demand-led system makes it unavoidable".
Nevertheless, it seems to me that the principle which flows from what the noble and learned Lord said is that, all things being equal, a system of entitlements is preferable to a system of bureaucratic discretion.
At present, we face a legal aid budget which is not out of control. The budget has been underspent over the past five years and, indeed, it forms only just 0.5 per cent. of the total annual budget of this nation. Moreover, the measures that the noble and learned Lord is proposing in the Bill will further discipline expenditure. I am thinking in particular of the block contracting system to solicitors. I am thinking also of the intention to widen the use of graduated fees, which currently apply in criminal cases up to a length of 10 days, to other cases.
If those facts are put together, it is my submission that, far from being out of control, the legal aid budget is well under control. In those circumstances, the threat to which the noble and learned Lord the Lord Chancellor alluded in his speech is not on the horizon. I wonder whether the noble and learned Lord will reconsider that part of the Bill which imposes financial

737
cut offs in circumstances where otherwise individuals would be perfectly entitled to be legally aided. I beg to move.
Baroness Crawley: I cannot agree with Amendment No. 115 in the name of the noble Lord, Lord Kingsland. For the commission to operate effectively it is essential that it is able to assess the availability of resources and use those resources within the terms of the community legal service fund. After all, as we are constantly reminded by my noble and learned friend the Lord Chancellor, this is a properly controlled budget which must be administered in the context of the priorities set by my noble and learned friend. My noble and learned friend quite rightly reminds us that there is no longer a bottomless pit of resources within the terms of this Bill.
Lord Phillips of Sudbury: We on these Benches wish to associate ourselves with the amendment moved by the noble Lord, Lord Kingsland. Access to justice—as this Bill is entitled—will not prevail once the capped budget has been reached. Access to justice and equality before the law is one of the most basic and fundamental rights to which citizens of this country are entitled, and which they have claimed since the time of Magna Carta.
Like the noble Lord, Lord Kingsland, we too believe that the budget is not out of control. Last year and this year the legal aid system operated within budget. The number of cases covered rose by 3 per cent. Most important of all under this Bill the Government will take vast new powers, discretions and controls to ensure that what has prevailed without those extra powers over the past two years will prevail in future. Therefore the difference between us in terms of this amendment may be less than the previous speaker and the noble and learned Lord the Lord Chancellor have indicated.
As I said, with the new regime there is a degree of flexibility which the Government can control to some extent by means of the merits test and the means test. That is desirable from any point of view and most of all in terms of obtaining access to justice. The legal aid budget has never before been capped in this way. It is difficult to see the justification for doing so at a time when the legal complexities of life for the ordinary citizen and the importance of obtaining access to justice, have never been so great. That need will continue to increase. In our view it is not possible to justify this aspect of the Bill.
Baroness Thornton: I am puzzled about this matter. The figures appear to indicate that expenditure on legal aid has risen dramatically over the past few years and that it continues to rise at a rate well above inflation. That means that we have to set priorities in regard to this area of our public expenditure. Politics is about setting priorities. I do not see why this area of our public expenditure should not be subjected to the same conditions as other areas of our public expenditure. No one has said anything so far to convince me otherwise.
This legislation seeks to establish systems to ensure we obtain the best value from the resources which are available. The Bill seeks to build a modern legal edifice
738
which will achieve several key objectives; namely, high quality legal services which are accessible to people when they need them most. The Bill seeks to achieve the most effective use of public funds to meet those objectives. A cornerstone of the Bill is the concept of the availability of resources and likely demand. The effect of the amendment would be to make the new structure lopsided, even if it did not make it fall over, as it were. Therefore I believe the amendment must be resisted.
The Lord Chancellor: The Prime Minister said again and again during the election campaign that schools and hospitals were our number one priority. He did not say that legal aid was our number one priority. I agree with the realism of the noble Baroness, Lady Crawley. With regard to all the competing claims on scarce resources, the Government are entitled to take a view as to how much they will spend on legal aid, and on what kinds of services they will expend those moneys. The average cost of cases has continued to outstrip inflation. In 1997–98 the average cost of a civil case was 12 per cent. higher than the previous year.
It is essential that under a controlled budget the funding code should reflect the availability of resources. Therefore I cannot accept the noble Lord's amendment. The main way that resources will affect the code will be through the priorities that I set for the deployment of resources. That will obviously be influenced by the amount of money that I can provide to the community legal service fund. I must repeat a simple truth that no noble Lord would or could gainsay in our discussions; namely, that what is available for civil legal aid is what is left over from the budget after the prior claims of criminal legal aid have been met. We can no longer operate in a world where the budget for funding civil legal aid is entirely open-ended and controlled by the lawyers and simply regulated by demand. That is simply not an appropriate way of spending taxpayers' money when there are so many other important calls on public expenditure.
Resources will not usually be taken directly into account in individual funding assessments as regards the merits of cases that should go forward. But they will be a factor in determining the toughness of the criteria at any particular time. For very expensive cases, which will be funded through a centrally held budget, resources will always be a factor, and they may be a factor in borderline cases, particularly if the commission is faced with unforeseen demand and needs to ensure that it can continue to meet the demand for funds that are judged to be required in priority areas. In fact unforeseen demand is not something that I expect to be a major problem. The combination of effective planning and the flexible allocation of resources to service providers through contracting should, with the ability to vary the criteria in the funding code, mean that we have an effective system for matching the available resources to the need for publicly funded legal services.
However, it is important here to stress this flexibility in the funding code. It has been designed to be able to take a variety of factors into account, with criteria varying with the priority accorded to the category of

739
case. In some cases resources will be a major consideration, such as the high cost cases to which I have just referred. In others, such as cases about whether a child should be taken into care, they will not be considered at all.
I know that some people fear that the funding code will somehow or other be used covertly to achieve cuts in services and to lead to differing availability of services in different parts of the country. I shall take those two points in turn. First, there is nothing covert about the funding code. Quite the opposite is the case. For a start, a consultation document—to which I have already referred—outlining the code has just been published by the Legal Aid Board. People have until the end of April to make their views about it known. The code is very much more detailed and open about what is intended than before. For example, there is an entire chapter about resources issues. I have already indicated that I am prepared to consider making the important changes to the code in future subject to affirmative resolution by Parliament. Openness and accountability are central characteristics of the new code.
Secondly, the code is a national one. There is nothing in it which will discriminate between different areas or communities across the country. I refer your Lordships to paragraph 2.27 of the code. It is simply wrong to suggest that that kind of discrimination is possible. Of course the differing needs of areas and communities will be assessed by the commission under its duties in Clause 5(4) so as to assess the needs for particular kinds of services that specific areas most require. The allocation of contracts will take account of geographical variations in the need for services of particular kinds.
I understand the concerns that noble Lords may have about the consideration of resources in the funding code. I do not believe their concerns are well founded and I invite the noble Lord to withdraw his amendment.
6.30 p.m.
Lord Simon of Glaisdale: As I have intervened every time, until now, on matters on which I considered this Bill was open to criticism, it is only in justice to my noble and learned friend that I should say that I entirely agree with the way in which he has just put the case. We really cannot afford any open-ended financial commitment—not even for education, which I would certainly put first, or health. Our resources are not unlimited. If any fund is to be limited it has to have priorities within it, just as there must be priorities for the other major demands.
Still less are we entitled to regard any fund as open-ended if we are in a state where we are borrowing—not only borrowing at a particular moment but incurring debt over the whole economic cycle. What we would then be doing is asking those who come after us to pay for our satisfactions. To my mind, that is legitimate in education, which will inure to their benefit; it is extremely doubtful as to health and access to justice. Access to justice is not the same as access to the legal system.
It seems to me, even though we are disappointed in our particular predilection—even those of us who have chosen a life in the law because we believe it to be a
740
life serving justice—that we have to accept that there, too, the funds are not unlimited and that therefore there must be priorities. As I said, I entirely agree with the way in which it was put by my noble and learned friend.
Lord Kingsland: In rising to respond I feel more than usually battle scarred as a result of the intervention of the noble and learned Lord, Lord Simon of Glaisdale. If there were clear evidence that the legal aid budget was out of control, of course I would accept the arguments of the noble and learned Lord the Lord Chancellor, and his position would be entirely consistent with what he said in his speech to the Bar Council in the autumn of 1996. But, in my submission, there is no evidence that the legal aid budget is out of control. It must therefore follow in that context that the decision to switch from an entitlement system to a system of bureaucratic discretion is unjustified.
However, I have been in your Lordships' House long enough to know when a Minister means what he says. The look in the eye of the noble and learned Lord the Lord Chancellor left me in no doubt that he meant what he said. In those circumstances, it would be prudent of me to seek leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 116:
Page 5, leave out line 42.
The noble Lord said: I am moving Amendment No. 116 in the name of the noble Lord, Lord Kingsland, and myself. Clause 9 of the Bill is very important. It requires the commission to prepare a code setting out the criteria according to which it will decide whether or not to fund. The paragraph that we are dealing with here refers to "the conduct of the individual" as being one of those matters in respect of which the commission's criteria must speak.
The problem is that if, as has been said previously, phrases such as "fair and reasonable" are too flexible and uncertain of interpretation, what on earth is one to make of the phrase "the conduct of the individual"? For example, does this mean that the criteria will address the degree to which the public supports or condemns the conduct of the individual applying for legal aid? Would that conduct be in relation to the matter for which legal aid was applied for, or for some previous matter? If the person was very unpopular and had convictions for dire offences against children, would that be a matter that the commission, through its criteria, would have regard to? I suspect not, but the degree of flexibility which this particular paragraph allows the commission seems to be excessive and to encourage indiscretion on its part in drawing up the criteria. It is on those bases that we would prefer to see this part of Clause 9 removed from the Bill. I beg to move.
Lord Hacking: As the noble Lord, Lord Phillips of Sudbury, has so succinctly described, he seeks to remove the criteria of the party's conduct in the provisions under the new funding arrangements. Conduct has always been a factor in considering

741
whether to grant a legal aid certificate and, more significantly, whether to withdraw it. For example, persistent failure to attend appointments with the individual's lawyers, persistent failure to give proper instructions to the lawyer, failure to co-operate, and behaving in an abusive way have always been grounds for withdrawing legal aid.
It has never been ground for refusing or withdrawing legal aid that a client's cause is unpopular or that he has behaved in a way which gives offence. For example, the conduct of those disrupting the Easter Sermon of the Archbishop of Canterbury in Canterbury Cathedral last March or April was extremely offensive to some people. I am sure that the noble and learned Lord the Lord Chancellor is not directing attention to the conduct which has caused the individual to be involved in the litigation, be it criminal or civil. After all, murder is pretty awful conduct.
Having said that, I wonder whether the word "conduct" as drafted in the Bill is quite the appropriate word. I wonder whether, in the circumstances, my noble and learned friend would consider a different drafting so that we focus not on the conduct that has caused the individual to be involved in the litigation but the conduct in the course of that litigation.
Lord Phillips of Sudbury: I am obliged to the noble Lord for that suggestion. Amendments along those lines would indeed meet the point I have been trying to make.
Lord Meston: I had assumed that the reference to "conduct" was to deal with those individuals who were perceived to be vexatious and possibly also, in the modern climate, with those individuals who refused to submit themselves to mediation when mediation was available.
I should like to deal with one further point. The Explanatory Notes say, and the noble and learned Lord the Lord Chancellor has repeated, that the prospects of success referred to in the preceding paragraph will not be a relevant factor in cases concerning whether a child should be taken into local authority care. That must be quite right. There are few cases in which one can think of representation being needed more than when a local authority is preparing to take the drastic step of removing a child into care, possibly irrevocably if adoption is considered. There may well be cases where the prospects of success for the individual parent in resisting care proceedings will be relatively slight. Although the Explanatory Notes indicate that the code will not allow that to be a factor in care proceedings, I cannot help wondering whether the conduct of the individual will allow the parent to be denied representation if the conduct of the parent is perceived not to be deserving of representation irrespective of the prospects of success. In other words, those cases in which the prospects of success are not to be taken into consideration will be undermined by the paragraph referring to the conduct of the individual.
Lord Renton: There have been rare cases in which the legally aided person has behaved in a most
742
extraordinary way, sometimes starting off by dismissing the solicitor and barrister who were appearing for him and then becoming a litigant in person who wastes the time of the court by extraordinary behaviour. That necessarily would add to the ultimate costs of the case. I think that a person who behaves like that should not be treated in the way that he would normally be treated if as a legally aided person he had behaved properly throughout. I think that the word "conduct" is fairly broad. If noble Lords think that the word "behaviour" is slightly different and would meet the point of the noble Lord, Lord Hacking, we could add "behaviour". But I do not think it is really necessary.
Baroness Crawley: Perhaps I may add one or two points to those already made. I understand the concern of the noble Lord, Lord Phillips of Sudbury, about the word "conduct", but in that concern I think that if he continues with his amendment he will close down the opportunity of being able to cut off the facility of public funding from people who, as the noble Lord, Lord Renton, has said, may behave extraordinarily badly and be impossible as applicants to deal with. The noble Lord must have met one or two of my constituents over the years.
6.45 p.m.
The Lord Chancellor: The noble Lord, Lord Phillips of Sudbury, conjured up the spectre that the politically or socially unpopular might be denied legal aid because of who they are by contrast with the merits of the case that they desired to bring forward. That is no part of the Government's intention. It is only the applicant's case—the quality of his case—and his financial eligibility that matter as to whether he should receive help. His character and who he is do not count.
However, as the noble Lord, Lord Hacking, made perfectly plain, there are circumstances where the applicant's conduct can matter, if not when applying for help then certainly once it has been given. The noble Lord, Lord Hacking, gave good examples. The board can remove someone's certificate for reasons of conduct—for failing to attend interviews or failing to provide material information about the case. It is always open to a solicitor to decline instructions, to refuse to continue to act, if the solicitor believes that the solicitor-client relationship has broken down because the client is being persistently abusive or, for example, is wilfully declining to give proper instructions so as to put the solicitor in an impossible position.
Clause 9(2)(f) simply preserves for the legal services commission powers that are already there. I can assure the Committee that these powers would be used very sparingly. But it is important to retain a power to take people's help away from them if their conduct warrants it, as the board can now do. For example, I am sure the Committee would agree that people who have been demonstrably untruthful to the commission about material facts—I see the noble Lord, Lord Renton, nodding his assent—should not be able to take up funds that other more honest people could better use. But I can assure the Committee that the commission will monitor refusals and removals of legal aid as part of the contract monitoring process.

743
Having said that, I appreciate, as the noble Lord, Lord Hacking, indicated, that the word "conduct", particularly perhaps in relation to the grant of legal aid, is somewhat stark and conjures up the image of people being refused help for reasons quite unconnected with their applications, although I can assure the Committee that that is no part of our intention. I undertake to consider our deliberations and take this amendment away and consider how best to ensure that the commission has the powers that I have described and how best to obviate any risk, although I do not think it is a very real risk, of these powers being carried beyond their proper sphere. On that basis, I invite the noble Lord to withdraw his amendment.
Lord Phillips of Sudbury: On that basis, the noble and learned Lord the Lord Chancellor has entirely satisfied the movers of the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 117 and 118 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 119:
Page 6, line 5, at end insert (", provided that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation.").
The noble Lord said: This amendment is based on the principle that those who cannot afford the full cost of legal services should have the same access to the system of justice as those who pay privately. If we apply that principle to Clause 9, at line 5 on page 6 of the Bill, we should reach the conclusion that it would only be appropriate to require mediation from public funds, rather than defray the costs of negotiations through solicitors, if a private party were likely to take the same approach. In other words, we do not wish to see mediation introduced as a poor relation to a procedure that would have been used were the parties to the action or the dispute both private parties. That is the purpose of the amendment. I beg to move.
Lord Hacking: I am sure that it is not the intention of my noble and learned friend to treat mediation as a poor relation in the resolution of disputes. The starting-point is the guidance. As I have said several times, the guidance notes are very helpful. Paragraph 83 states the principles which it is intended that the code should follow. Perhaps I may read the paragraph as I believe it is important. It states:
"The Code is required to reflect the principle that in many family disputes mediation is more appropriate than court proceedings. This is intended to reinforce the development, under the Family Law Act 1996, of mediation as a means of resolving private law family disputes in a way that promotes as good a continuing relationship between the parties concerned as is possible in the circumstances. The Government believes that mediation is more constructive than adversarial court proceedings, and that litigation in these cases usually serves only to reinforce already entrenched positions and further damage the relationship between the parties. In addition, the cost of court proceedings is higher than that of mediation and additional costs have to be borne by the property of the family, reducing the amount available to the parties and their children in future".
744
Those are important principles. Neither the Bill nor the guidance note indicates that mediation is mandatory; nor do they indicate that there should be some obligatory appropriateness test. Indeed, if the code did so, it would be going beyond the powers given to it by Parliament under the Bill.
Secondly, I am not sure that the test proposed by the noble Lord who moved the amendment is entirely satisfactory. It is the test of what private litigators would do. Unfortunately, experience shows that some private litigators who have the funds can be pretty bloody-minded in matrimonial and other civil cases and go for court proceedings for reasons of vindictiveness. To attempt to apply this test to what a private vindictive person would do is surely not sensible in any degree. For those reasons I oppose the amendment.
Baroness Crawley: I, too, oppose the amendment. I do so simply because it would cut across the proposition that, in order to increase access to justice for more people while keeping an eye on best value for money for the taxpayer, it would be better for people to try mediation first, before becoming eligible for other services. Such a course of action would seem eminently sensible, certainly from the point of view of the distinct advantages of mediation in conflict resolution.
Lord Simon of Glaisdale: Perhaps I may speak briefly from the point of view of family law. My remarks are made in the knowledge that the noble Lords, Lord Meston and Lord Hacking, and the noble Baroness, Lady Scotland, have more recent experience than I.
As regards family disputes, we are concerned only with the financial and property repercussions, where mediation is of particular value because passions are frequently more virulent in such disputes. Indeed, they may poison whole relationships, particularly those of the parties as regards their children. One should not regard mediation as a poor relation, or even as a first step to litigation. On the contrary, in family disputes mediation will frequently be in the interests of the parties.
The Lord Chancellor: The noble Lord, Lord Kingsland, was more economical in his recommendation of this amendment to the Committee than even the noble and learned Lord, Lord Simon of Glaisdale, would wish the statute book to be.
The noble Lord, Lord Hacking, put the matter in context. Clause 9 as a whole provides for a code that reflects priorities and under which the commission seeks to ensure that the most appropriate types of service for an individual case are funded. It is a discretionary framework, as it must be under a controlled budget.
The amendment to Clause 9(3) cuts across that discretionary framework. The clause provides that,
"The criteria set out in the code shall reflect the principle that in many family disputes mediation will be more appropriate than court proceedings".
The amendment would add,
"provided that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation".

745
So the amendment cuts across the discretionary approach by laying down an iron rule that assistance for representation shall not be refused on the grounds that mediation is more appropriate unless the circumstances are such that a privately paying individual would be likely to opt for mediation in the circumstances.
I do not accept that this is a test that the commission should have to apply in addressing the allocation of scarce public resources for the benefit of people who do not have the resources to be privately paying clients.
The noble Lord, Lord Hacking, made sound points. It may be that the acrimony in a particular marriage relationship between well-off partners who can afford to litigate would mean that they would be likely to insist on a set-piece confrontation in the courts instead of mediation. The result would be costly litigation from which their lawyers would benefit. That would do nothing but harm their long-term relationship. It would be likely to be damaging to the interests of the children, with whom they must both continue a relationship after the marriage and property disputes have been resolved.
It would be entirely reasonable for the commission in its discretion to take the view that people should try mediation in these property disputes first, and become eligible for representation only if that failed. The fact that well-off people who could afford to litigate might be likely to prefer an Olympian confrontation in the courts should not deter the commission from promoting a more sensible course. So I am afraid that the Government cannot accept this amendment, because it cuts across a discretionary system based on clear criteria which the Government believe does command popular assent to achieve access to justice for the many while maintaining best value for taxpayers' money. Traditional litigation in this area does not, because of lawyers' costs, make a persuasive appeal to claims on scarce public resources. On that basis I invite the noble Lord, Lord Kingsland, to withdraw his amendment.
7 p.m.
Lord Kingsland: I should like to thank the noble and learned Lord for his response and, although I am not happy with it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 120 not moved.]
The Deputy Chairman of Committees (Lord Brougham and Vaux): Amendment No. 121 has already been debated.
[Amendment No. 121 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 122:
Page 6, line 16, at end insert ("and procedures for informing the individual applying for funding about the decision, the reasons for that decision, and where funding has been refused what help should be given to that individual to find alternative ways of resolving the dispute.").
The noble Lord said: This amendment requires the code to contain procedures for informing applicants of the reasons for decisions and provisions concerning what help should be given to applicants who are refused
746
funding to find alternative ways of resolving their disputes. As your Lordships are aware, the Bill replaces the merits test with a funding assessment which takes into account a large number of considerations. There are the Government's priorities; the availability of finance; the strength of the case; the importance of the case to the client; public interest in bringing the case; whether there is another way of funding the case; and whether there is another way of resolving it.
Depending upon the particular priority given to the area of law which is the subject of the decision, different weights will be given to each of these factors. So the task of balancing all these weights against each other is an extremely complex one in each individual case. There are likely to be very many dissimilar instances. In those circumstances, if the application is refused it is my submission that very clear reasons should be given so that, first of all, the applicant knows exactly where he stands. Secondly, if that funding is refused the applicant is given a very full opportunity to consider all the other options that may or may not be at his disposal.
The noble and learned Lord the Lord Chancellor has spoken on several occasions during the course of this Committee stage about the importance of open government and of an open approach to decision-making. In my submission, that principle is more important in relation to Clause 9 than in relation to any other clause. I beg to move.
Baroness Wilcox: I rise to support my noble friend Lord Kingsland, because this amendment involves consumer protection and accountability to consumers for decision-making. The amendment deals with the vital information that will be given to people when a decision is made as to whether or not their case will be funded.
The new decision-making process considers a number of factors which will be given different weights depending on the priority and resources for that type of case. This process will be much more discretionary than in the past, and much more complicated. Unless the Act places a duty on the decision-maker to give clear reasons to the applicant when funding is refused, the applicant will be in great danger of not knowing what to do next.
Where the applicant is refused because there are better ways of funding or of resolving the dispute, the applicant may need help to find alternatives. During my time serving on the review of the civil Court of Appeal set up by my noble and learned friend Lord Mackay of Clashfern when Lord Chancellor, I came into contact with people driven to appeal, often as lay litigants in person, because they did not understand the reasons for the decisions affecting their cases.
Although this is a different aspect of decision-making, I suggest that it makes the point that a lot of wasted time, and unnecessary heartache, in the civil justice system could be avoided if people were entitled

747
to and were actually given—in plain English, of course—clear reasons for the key decisions in their cases.
Lord Donaldson of Lymington: I should like strongly to support this amendment on the basis partly of trying to remove a sense of injustice on the part of the person refused funding, but much more on the basis of causing those who are deciding the matter to think through why they are refusing funding. That view is consistent with the view that is being taken by the courts—it was being taken by the courts even when I was in office—which was in all circumstances to try to encourage not the High Court but the tribunals and lower courts, and in many cases judicial review, to give reasons. I was responsible, with others of course, for giving leave to apply for judicial review, largely on the basis that while the authority concerned might well have been right we just did not know, because of the failure to give reasons. So, both from the point of view of deciding whether anybody ought to object to the refusal, but much more in terms of improving the decision-making process, I think that something on these lines ought to be included.
The Lord Chancellor: Clause 9(5) already lays down that the code must include procedures for appealing against decisions, and I agree with the noble and learned Lord, Lord Donaldson of Lymington, that an integral part of such a procedure must be to give the applicant reasons for the decision. Not to do so would breach basic principles of natural justice and, I am sure, would lead us very quickly to judicial review of the commission.
My officials are working on the details of the information that unsuccessful applicants will be given. I expect them to be set out in the code when it is finalised. A draft appeals procedure is already contained in the version published last week, but it does not go as far as the points we are currently discussing.
I take a similar view of information about alternatives. One of the criteria on which funding can be refused will be the existence of an alternative. Providers will have to advise applicants whether there are alternatives so that they can give them a good idea of whether their applications are likely to succeed. In fact, where an alternative exists I expect that many will not even put in an application. But there will be situations where someone has been turned down for some reason or another and will want to know about alternatives. Given that one of the tasks of the commission will be to give basic advice about the availability of services, doing this should become second nature. I am sure that there will be no harm but much good in making it an obligation at this stage of the process as well.
That leaves the most obvious case, simple refusals, for which the amendment would require reasons, which we should in any event give before the appeal to which I have referred could be meaningful. So, if I may, in the light of this debate, I will take this amendment away
748
and give it positive consideration. On that basis, I invite the noble Lord to withdraw his amendment in its present form.
Lord Kingsland: I am most grateful to the noble and learned Lord the Lord Chancellor for his reply. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 123 to 129 not moved.]
Clause 9 agreed to.
Clause 10 [Terms of provision of funded services]:
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 130:
Page 6, line 33, after ("individual") insert (", other than a person who is in receipt of any means-tested benefit,").
The noble and learned Lord said: While my noble and learned friend's ear is so obviously open, this may be a propitious moment at which to introduce the debate on my amendment. Clause 10 deals with the contributions which a recipient of services from the community legal service shall be required to pay. At present we do not know what the rules will be because the Bill provides that they will appear in regulations. It may be that my noble and learned friend will take advantage of this debate to give us some indication of what the regulations may contain. They are not regulations which, according to Clause 23, are to be subject to the affirmative procedure. That may make it all the more important that we should have some indication of what they may say.
My amendment is designed to ensure that one matter is not left uncertain: that no one, as a condition of access to justice, shall be required to pay a contribution which is beyond his means. One criterion of that seems to me to be where some other authority has investigated the applicant's means and found that they are not sufficient for his needs.
I note that the noble Lord, Lord Goodhart, together with the noble Lords, Lord Phillips and Lord Kingsland, have set their names to Amendment No. 133, which seeks to impose a similar constraint with respect to capital resources. Subject to anything which may emerge in this debate, I support their amendment, which is wholly consistent with mine. I beg to move.
Lord Goodhart: I rise briefly to say that I sympathise with the view that it seems unnecessary to have rules about recovering contributions from someone who clearly is not in a position to pay them.
Lord Falconer of Thoroton: I hope that the noble and learned Lord, Lord Archer of Sandwell, will forgive me if I do not take up his gentle invitation to give details of what may be in the regulations. It may be that we shall do that later, but I am not in a position to do it at the moment.
The noble and learned Lord's amendment goes to the important issue of the relationship between eligibility for social security benefits and for help from the community service fund. The effect of the amendment

749
would be to prevent the Lord Chancellor from making regulations requiring contributions or fees from any person who was receiving any means-tested benefit.
The noble and learned Lord's argument is that, if someone's means have already been assessed for social security purposes, they should also qualify for help from the fund. In other words, he says that, if a person's means are low enough to warrant help from the state with living expenses, help for legal services should be automatic. If that were the position, his argument would be very attractive. Unfortunately, it is not as simple as that.
Currently, recipients of income support and income-based jobseeker's allowance are indeed automatically qualified for legal aid without contribution. In the jargon, they are "passported" through the means test. But there are other means-tested social security benefits that do not automatically qualify the recipient for legal aid—with good reason. Income support and jobseeker's allowance are benefits designed to guarantee a minimum level of income, and the eligibility limit for legal aid without contribution is aligned with that minimum level of income. Other means-tested benefits, however—for example family credit—are available in certain circumstances to people with significantly higher income. It would not be fair to allow family credit recipients free legal aid when people on the same income would be required to pay a substantial contribution. The powers under the Bill should be wide enough to allow us to replicate the position that currently exists under legal aid, which seems fair. This amendment would prevent that. In those circumstances, I ask the noble and learned Lord to withdraw the amendment.
7.15 p.m.
Lord Archer of Sandwell: My noble and learned friend correctly paraphrased my argument. He equally correctly pointed out where it breaks down. I understand that his heart is in the right place, even though his ear is not as open as was that of my noble and learned friend the Lord Chancellor at an earlier stage. Perhaps we should both reflect further on the problem. Clearly we both want to achieve a just result. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 131:
Page 6, line 36, leave out (", or conduct is,").
The noble and learned Lord said: This probing amendment is grouped with a number of other amendments which, apart from the last one, are also probing amendments. The amendment refers to Clause 10(2)(b):
"if his financial resources are, or conduct is, such as to make him liable … under the regulations".
We may have covered that point in discussing a previous amendment. I am not certain whether my noble and learned friend wishes to add anything. I am not clear
750
what is the conduct in question and whether it is the kind of matter which we discussed in relation to an earlier amendment.
Amendment No. 134 relates to Clause 10(6):
"The regulations may …
(b) make provision for the determination of the cost of services for the purposes of the regulations".
I am not sure what kind of machinery my noble and learned friend has in mind for that.
Amendment No. 135 is to leave out of Clause 10(7) the words,
"Except so far as regulations otherwise provide".
What is the force of that?
Amendment No. 136 relates to Clause 10(7)(b):
"other sums payable by the individual by virtue of regulations under this section".
What is that meant to catch?
Finally, Amendment No. 137 relates to Clause 10(8):
"For the purposes of subsection (7)"—
which I believe is an old provision, going back to the original Legal Aid Act, relating to a first charge on any property recovered or preserved—
"it is immaterial what the nature of the property is and where it is situated; and the property within the charge includes—(a) any to which the individual is entitled under any compromise or settlement of the dispute".
At the moment I do not see why that is not subsumed in subsection (7) which gives a first charge in respect of any property that is recovered or preserved. Does that not include property recovered or preserved under a compromise? I beg to move.
Lord Falconer of Thoroton: The amendments in this group are Amendments Nos. 131, 132 and 134 to 137. The noble and learned Lord has dealt with some, but not all of them. Amendment No. 132 in the name of the noble Lord, Lord Kingsland, has not been moved and I shall not deal with it unless the noble Lord moves it later. I deal first with Amendment No. 131.
Lord Simon of Glaisdale: To clear my mind, is it right that the odd man out is Amendment No. 132? I do not believe that I spoke to that amendment.
Lord Falconer of Thoroton: The noble and learned Lord did not speak to that amendment but it is in the grouping. The noble and learned Lord is right not to speak to it because that amendment is in the name of the noble Lord, Lord Kingsland, who has lost heart as to that, quite understandably.
Lord Kingsland: I have not lost heart. I simply reserve my position for a later stage.
Lord Falconer of Thoroton: The noble Lord lies in wait for me with Amendment No. 132. I am on tenterhooks as my noble friend Lord Clinton-Davis says. The effect of Amendment No. 131 is to remove conduct as a consideration in deciding whether or not a person should pay something towards the costs of his case. The noble and learned Lord asks whether the Government

751
wanted to elaborate on the meaning of "conduct". All I can say is that this will allow the commission to recover its costs or retain contributions where a person has misbehaved; for example by fabricating evidence. It is already possible to do this under the present scheme. A person's certificate can be revoked if his conduct is bad enough and revocation means that he is liable to repay everything that has been spent so far on his case. We need to be able to do the same under the new scheme to cater for similar extreme cases. That gives some indication of the conduct considered.
Under Amendment No. 134 the noble and learned Lord seeks to remove Clause 10(6)(b). That subsection allows regulations to provide for how the cost of a service is to be calculated. This will be essential in future if the contract price paid to the lawyer is a fixed unit price per case. Around this fixed price costs for work done in an individual case may vary considerably.
Lord Simon of Glaisdale: Before the noble and learned Lord moves on I am not clear about the machinery of recovery.
Lord Falconer of Thoroton: Is the noble and learned Lord referring to the machinery under Amendment No. 131 or Amendment No. 134? I have not finished my response to Amendment No. 134. Perhaps I may complete my response and return to that question. The power under Clause 10(6)(b) could be used to set a notional cost at the beginning of a case to avoid assisted people having to pay unexpectedly large or small amounts. This power also allows us to develop more detailed systems for relating repayment more closely to the stages cases reach. These features are important to make the scheme fair and predictable. That is the aim of Clause 10(6)(b). The precise machinery set up to achieve that has not yet been fixed. At this stage I can do no more than set out precisely what it is aiming at rather than the form of the machinery.
The noble and learned Lord's next three amendments are about the statutory charge. Clause 10(7) provides for a first charge that the commission (like the board now) will have over any property recovered or preserved in proceedings in respect of the costs of the case. The first of these amendments, Amendment No. 135, would remove the power by regulations under Clause 10(7) to modify or disapply the charge in respect of some cases. That lack of flexibility can risk serious unfairness and harshness and that is why it is there. Amendment No. 136 would remove Clause 10(7)(b). That provides for the statutory charge to include sums over and above the actual cost of the case. This would be necessary if a conditional legal aid fund (CLAF) were set up where the person would be liable to pay a success fee into the fund. To remove the power would undermine the operation of a CLAF if one were set up.
The noble and learned Lord's last amendment, Amendment No. 137, would remove Clause 10(8)(a) which applies the statutory charge to property recovered or preserved as a result of settling a case. It would be very odd not to have that power. At present the Legal Aid Act does the same. I am not sure why the noble and learned Lord wants to take a backward step. In this
752
respect there is no reason why we should make a distinction between cases that go to trial and those that settle.
Lord Simon of Glaisdale: I apologise to the noble and learned Lord for not making myself clear. My question is this: why is the power in subsection (8)(a) not contained in the last limb of subsection (7)? In other words, why is recovery under a compromise or settlement not property recovered or preserved in a dispute?
Lord Falconer of Thoroton: It is dealt with in this way because it is wide enough to cover a situation where no proceedings have been issued. I believe that that answers all of the questions raised by the noble and learned Lord. In the light of that I ask him to withdraw his amendment.
Lord Simon of Glaisdale: As usual, the noble and learned Lord has replied very pleasantly, although I fear that he as well as his noble and learned friend the Lord Chancellor have now used the word "flexibility". I understand that the question that I asked about machinery was answered on the basis that the Government had not yet made up their mind. I am quite content to accept that. Otherwise, I believe that the noble and learned Lord answered satisfactorily all of my other queries except for the last which I shall consider and perhaps return to on Report. Perhaps the noble and learned Lord will himself consider the matter again. I was not entirely convinced in so far as I took it in. In the meantime, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 132 not moved.]
Lord Hunt of Kings Heath: My Lords, I beg to move that the House do resume. In moving this Motion I suggest that the Committee stage begin again not before 8.29 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Road Traffic (NHS Charges) Bill
Brought from the Commons; read a first time and to be printed.

Social Security Benefits Up-rating Order 1999
7.30 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham) rose to move, That the draft order laid before the House on 13th January be approved [5th Report from the Joint Committee].
The noble Baroness said: My Lords, as your Lordships are aware, this annual order and the others standing in my name on the Order Paper are an important part of the routine business of the DSS. The uprating order will increase most rates of social security benefits from this April. Most national insurance and non-contributory benefits will increase by an RPI of 3.2 per cent. Most income-related benefits will increase by the Rossi index of 2.1 per cent. As is usual, the increases are based on the change to the retail prices index from September to September, with the increase for the income-related benefits adjusted to remove the element of housing costs. As your Lordships know, housing costs for those on the income-related benefits are met separately through housing benefit, council tax benefit and income support mortgage interest and the Rossi index reflects more appropriately the spending of those claiming income-related benefits.
I must first ask for the indulgence of the House. I draw your Lordships' attention to the fact that we discovered only late this afternoon that during the drafting of the uprating order a transcription error meant that on page 17 of the uprating statement, item 11, the amount of benefit for widowers' pensions in industrial injuries benefits is shown as £66.25 whereas the actual uprated amount equals £66.75. The error will be remedied as quickly as possible and will not affect the benefit paid to claimants. None the less I wish to apologise to the House.
Lord Higgins: My Lords, the noble Baroness was good enough to alert me a short time ago to the fact that a mistake had been made. Clearly, it is better that it is discovered now rather than later when pensioners would either have been paid 50p less than they should have been or the right amount without appropriate parliamentary authority. It is right that that should be corrected as soon as possible. Had the mistake been the other way round and the Government were paying more, I should have been in a more difficult position. Perhaps the Minister will indicate how she proposes to correct that. I believe that the order comes before the Commons next week.
Baroness Hollis of Heigham: My Lords, unless I am misinformed—I shall write to the noble Lord—I understand that there will be a correction when the matter comes to the Commons. We have made the matter clear now. When the Statement is before the Commons it will have the correct figure. Does that answer the noble Lord's question?
Lord Higgins: My Lords, I doubt it. I presume the matter needs to be corrected in this House too. The noble Baroness clearly cannot amend the order at this moment. I presume the noble Baroness will either lay a new order—I understand that that is not what she intends; we should have to debate the whole matter again—or she will simply carry this order, and a second order will correct the figure.
754
I may be wrong but I do not believe she can simply correct the order in another place and not in this House.
Baroness Hollis of Heigham: My Lords, apparently it is not unprecedented. Section 152 of the Administration Act explicitly allows for the laying of subsequent affirmative regulations to put right mistakes. The error has now been referred to. We shall be remedying it. No claimants will be affected. A similar reference will be required for the Commons debate. Subject to agreement with the business managers, it is proposed that an amended order be laid and debated in March as part of a package of affirmative orders and regulations.
Lord Higgins: My Lords, I am anxious to facilitate the matter for the reasons I mentioned. I was surprised that the Minister seemed to indicate that the matter would be corrected in the Commons and not in this House.
Baroness Hollis of Heigham: My Lords, no. The situation will become clear because of the correction in the Commons. The matter will obviously have to come back to us. I apologise to the House.
The Guaranteed Minimum Pensions Increase Order is a consequence of Section 109 of the Pensions Schemes Act 1993 which requires that salary-related schemes contracted out of SERPS increase that part of the GMP earned since April 1988 by RPI or 3 per cent., whichever is less. So this year the increase will be 3 per cent. with the balance of inflation proofing provided through SERPS. This arrangement means that the burden of inflation proofing the post-1988 GMPs in payment is spread between the state and occupational pension schemes.
The national insurance re-rating order will increase the rates of class 2 national insurance contributions paid by self-employed people and of class 3 voluntary contributions broadly in line with the increase in the basic state retirement pension. Class 2 contributions will go up by 20 pence from £6.35 a week currently to £6.55 a week from April 1999. Class 3 contributions also go up by 20 pence a week from £6.25 to £6.45.
The order increases the small earnings exemption limit for class 2 contributions from £3,590 a year currently to £3,770 a year from April 1999. Self-employed people who expect to have annual profits or gains below that limit can apply to be excepted from payment of class 2 contributions. The order also increases the lower and upper profits limits for class 4 contributions paid by self-employed people on their annual profits and gains which are chargeable to income tax under Schedule D. The lower profits limit will go up from £7,310 a year to £7,530 a year. The upper profits limit will increase from £25,220 a year to £26,000 a year.
There will be no increase in the rate of class 4 contributions. This remains at 6 per cent. of annual profits and gains between the lower and upper profits limits. Nor will there be any increase in the rate of class 1 contributions paid by employees on the portion of their earnings that exceed lower earnings limit but do

755
not exceed the upper earnings limit. This rate remains at 10 per cent. The rate of employers' class 1 contributions was set at 12.2 per cent. by the Social Security Act 1998 as part of the radical simplification of employers' and employees' contributions which comes into effect from April 1999. This simplification replaces the present multiplicity of employers' contribution rates with the single 12.2 per cent. rate in respect of non-contracted out employees, raises the point at which employers start to pay contributions to a new earnings threshold and abolishes the 2 per cent. "entry fee" contributions currently paid by employees on the portion of their earnings below the lower earnings limit.
Regulations will be laid next month to increase the lower earnings limit for employees' contributions from £64 a week currently to £66 a week from April 1999, to increase the upper earnings limit for employees' contributions from £485 a week currently to £500 a week from April 1999 and to set the earnings threshold for employers' contributions at £83 a week from April 1999.
These orders are laid with a report from the Government Actuary's Office on the National Insurance Fund. The Deputy Government Actuary estimates that the fund will not require a treasury grant in 1999–2000 in order to meet its estimated expenditure commitments and achieve an end of year balance of at least the minimum level recommended by the Government Actuary. However, in order to safeguard management of the fund's finances in the event that contributions revenues are lower than expected or benefit expenditure is higher than currently forecast, the contributions re-rating order provides that the maximum amount of Treasury grant which could be made available to the fund in 1999–2000—subject to parliamentary approval of a supplementary estimate—is set at 2 per cent. of annual benefit expenditure from the fund, some £930 million.
I turn to the costs of the uprating. The total additional cost of the uprating for the year 1999–2000 is estimated to be £3.7 billion. This will mean that the total estimate of DSS benefit expenditure for that year will be over £95 billion. Around half of this expenditure will go to pensioners, a quarter to sick and disabled people, with around 20 per cent spent on families. Over the period 1998–1999 to 2001–20, the period covering the settlement of the comprehensive spending review, cumulative DSS expenditure in cash terms will increase by £24 billion. The main beneficiaries of this significant increase will be pensioners who will gain some £12 billion, disabled people and carers some £7 billion, and £3 billion on child benefit. This last increase partly reflects the increase in child benefit for the eldest child by a record amount of £2.95 a week.
I must reassure your Lordships that this increased provision, most of which is targeted on the most vulnerable in our society, is within our spending capacity. We expect that the average real growth in DSS benefit spending, including the working families tax credit, is forecast to be under 2 per cent. a year over this Parliament. This compares to to 4 per cent. a year during the last Parliament, and an average of 3.4 per cent. a year for the period 1978–79 to 1996–97. I must also
756
reassure your Lordships that our expenditure plans are affordable. This Government have consistently taken a responsible approach to the public finances and the plans include cautious forecasts of growth in the economy and include margins to cover uncertainties. The result is that social security spending is now growing more slowly than the long-term trend for the economy as a whole.
It is important to focus on spending patterns and projections in a debate which calls for an increase in public spending of £3.7 million. It is also important, as these orders are debated in both Houses, to demonstrate that this total of social security expenditure, over 10 per cent. of GDP, provides the taxpayer with value for money. These are difficult equations. A business case which provides for cash transfers from one group to another and which involve issues like decency, security and the nature of a civic society, are difficult to construct. But while it is difficult ever to know that you have got it just right, it is plainly obvious when you have got it wrong. Between 1979 and 1997, the amount spent on social security increased in real terms by £43 billion. But during that period poverty, inequality, dependency and social exclusion increased dramatically. That was plainly and badly wrong.
How did it go so wrong? At the root of it was a failure to understand the extent to which society had changed. Just as fundamentally, it was a failure to use the great machinery of welfare which had developed in Britain since Beveridge to encourage and enable people to live to their full potential and make the best of their lives. Our task as we tackle the issue of welfare reform is to get it right, to ensure that the vast sums of money which are the essence of the orders today are used as an investment.
We have set about the task with some urgency. Our first priority was to help people of working age back into work, changing the culture of social security, no longer a bank of last resort but an active partner in providing people with greater employment opportunities. Thus our New Deals are already making a real difference to the lives of thousands of people, providing them with training, new skills and the springboard for participation in the labour market. We wanted to raise our horizons. Rightly, in the first wave, we focused on the young unemployed and those who had lived with the misery of long-term unemployment. But we also recognise that those who need additional help to participate, or those who want to participate but can only do so to a limited degree, by reasons of health or domestic responsibility, require different services and support. The New Deals for lone parents and for disabled people are providing that support by matching service to needs.
But no matter how big the hand-up, we can only change people's perception of work, especially those who are entrenched in social exclusion, if we ensure that work pays, if it is truly a pathway out of poverty. The national minimum wage to be introduced in April will make a significant contribution. As important are our plans for helping families and the disable to stay in employment. The working families tax credit will guarantee an income of at least £180 a week for every

757
working family in full-time work. Families with earnings of less than half average, £220 per week, will not pay income tax. The childcare tax credit will also provide significant support to single and two-parent families. This credit will provide help of 70 per cent. of eligible childcare costs up to a weekly limit of £100 for families with one child and up to £150 for families with two or more children. Underpinning the childcare tax credit will be a coherent childcare strategy with an aim of encouraging good quality, affordable and flexible childcare to be widely available.
We will also make work pay for those disabled people who want more out of life than being set-aside to depend entirely on out-of-work benefits. They tell us that they want to work. We are seeking to help them to work through our New Deals. The disabled persons' tax credit will increase the rewards of working for those people who have only limited earnings capacity.
This is just the first stage of getting it right on social policy, and I look forward to developing our reform agenda over the coming months. But social security expenditure is not just about covering the costs of benefit rates. We need to ensure that we achieve maximum value for money in terms of service delivery. Our objectives are a system for delivering welfare that is flexible, efficient and accessible. But welfare is more than just delivering benefits. We are working to change the environment and culture of claiming benefit. Crucial to this is active management of individuals by trained personal advisers geared to help and encourage people of working age to develop their potential. When people have been out of the labour market for some time or have special needs such as caring responsibilities or want to better themselves by maximising their employability, they need ongoing help, a proper skills analysis, help in overcoming skills deficiencies and practical advice on overcoming barriers to work. In short, we believe that obtaining value for money in service delivery terms is by recognising the needs and aspirations of our clients.
I mentioned earlier the difficulties of building business cases where social policy is involved. But clearly our approach of using the social security budget as an investment in people, as an instrument of change, is based on our principle of work for those who can. Security for those who cannot is the other side of that coin and an essential element of a decent society.
While our approach to work for those who can has been to reject the past, our approach to security for those who cannot work is to take direct government action. For instance, an extra £1.25 billion a year will help all families with children. Similarly, the substantial increase in benefit for the poorest pensioners included in this uprating order is part of a £2.5 billion package of measures to give help among the most vulnerable in our society. Our approach is about delivering more help to those who need it most.
Our reform of the severe disablement allowance will target extra help on people who become disabled early in life and do not have the opportunity to work. Parents of severely disabled children will be able to plan for the future in the knowledge that their child will have a
758
secure non-means tested income. People who become disable early in life and claim benefit before the age of 20 will have access to incapacity benefit. After a year on benefit, they will receive the long-term rate of incapacity benefit—as much as £25 a week extra for some claimants, a significantly higher level of guaranteed support without means testing. The vast majority will be floated off income support.
The disability income guarantee will provide a new enhanced premium in the income-related benefits for severely disabled people aged under 60 with the highest care needs. A similar new premium is provided for families with severely disabled children with the highest care needs. It means an extra £5.75 a week for a single person or a child, £8.30 for a couple, at April 1998 rates. To meet a longstanding gap in the system of support for severely disabled young children, the DLA higher rate mobility component worth £35.83 a week, will be extended to children aged three and four, something that I know your Lordships welcome.
At the heart of our approach to getting it right is making effective change by taking practical measures. We are not burdened by dogma. This is reflected in our attitude to means tested, contributory and universal benefits. In my mind there is no one right method. Since the election we have heavily endorsed the universal benefits by increasing child benefit to its highest ever amount. We will extend contributory widow's benefit to bereaved men. We are extending needs-based disability benefits for people disabled early in life and severely disabled young children. Other changes, such as working families tax credit, will increase means testing but will help to make sure that work pays for up to 1.5 million families who will be better off as a result. We want to promote fairness and opportunity, and partnerships between public and private provision. We will face these challenges with all the tools at our disposal, including a full range of benefit structures.
I look forward to the debate with interest. Precedent allows for a wide-ranging debate on social security. While I believe that under this Administration we can, for the first time in many years, give an assurance that social security spending is increasingly providing added value out of total government spending, I always welcome your Lordships' informed views on the matter. This Government set a very clear agenda for welfare reform. For most people of working age the promotion of social inclusion is the promotion of employability and the promotion of personal responsibility. The responsibility for the security for those who cannot work falls to society. The instruments before us are part of that process. For example, the changes to national insurance are just a component of substantial changes to national insurance for April which will help ensure that work pays. The uprating order, by providing price protection, ensures continuing security and for some groups such as parents and the poorest pensioners ensures more security. I therefore commend the order to the House.
Moved, That the draft order laid before the House on 13th January be approved [5th Report from the Joint Committ].—(Baroness Hollis of Heigham.)
7.52 p.m.
Lord Higgins: My Lords, though I have been here for little more than a year, I still have a slight sense of culture shock. I had not fully anticipated the extent to which this debate would be wide ranging. If the Minister's speech is repeated in the other place, I suspect that there may be some trouble with the Speaker.
Be that as it may, when we debated this issue last year, it was preceded by a Statement on the uprating order which I had understood would be one of the few fixed points in the annual financial timetable. I believe I am right in saying that that has not happened this year and I am not at all clear why that is so. Perhaps the Minister will enlighten us.
As the noble Baroness rightly points out, the total of social security spending is around 10 per cent. of GNP—an enormous amount. She raised a large number of issues which we have debated on former occasions and is aware that there are great disputes between us; for example, with regard to the working family tax credit there is a clear division between the two sides of the House. There is also a difference in the view we take with regard to means testing, the contributory principle and so forth. It is not my intention to rehearse those arguments this evening, but there are a number of specific points which it may be helpful to make.
As I understand it, we are debating all three orders together. In that context there is scope for a certain amount of confusion between the minimum pension guarantee and the guaranteed minimum pension. One order deals with one and another with the other. The distinction is substantial. One relates to the national insurance pension and the other to corporate pensions.
I turn immediately to some of the arithmetic, though I do not propose to concentrate too much on this. Given what the Minister said about the total social security and welfare expenditure, I am a little puzzled as to why—if I understand it correctly—the uprating orders this year will cost £3.7 billion for 1999–2000 whereas last year it was only £2.45 billion. Perhaps the Minister will indicate exactly what is the situation with regard to those figures.
Having said that, I turn to the question of the minimum income guarantee. As the Minister will well know from our previous exchanges, we are concerned about this in as much as it contributes to the undermining of the contributory principle—one of a number of measures which have that effect. As we understand it, some people will receive benefits to which they have not contributed, even though that specific benefit was previously regarded as one which could be obtained only if one had satisfied the contributory conditions.
In that regard a specific point arises. We understood that one of the main reasons the Government felt that there was a case for a minimum income guarantee was the fact that there is a lower takeup of income-related means-tested benefits than one would wish. The impression was created that in future there would be a minimum income guarantee and that the arrangements which were going to be made would ensure that the take-up was greater at the bottom end of the scale. I was
760
therefore surprised to note what I had not previously understood from a representation made by the citizens advice bureau; that is, that the expression "minimum income guarantee" which was being used by Ministers when introducing the increased benefits, though it was reassuring, did not make clear that it related to means-tested benefits. It will not automatically be paid into a retirement pension; it will have to be claimed separately as income support. It would seem therefore that this change, which has the disadvantage I mentioned a moment or two ago, would not have the advantage we had previously understood was one of the main reasons, if not the main reason, why the Government believed it right to introduce it. It seems to undermine to some extent the whole exercise.
I turn now to a question which arose at the Committee stage of the social security contributions Bill last week and is likely to arise again on the Bill's Report stage next week; namely, the situation which has arisen with regard to the breakdown (if that is the right word) of the national insurance computer. I indicated to Ministers that I felt that it would be helpful to pursue that when we come to Report stage next week. It is also relevant to these orders since there is no point in increasing the extent of the pensions and so forth if they are not going to be paid. I thought therefore it would be helpful for me to pose some questions to the Minister. I imagine that, with her great expertise, she will be able to answer some right away, but I shall fully understand if she cannot answer them all. I give her notice that I hope to raise them next Monday at Report stage but, as I say, they are entirely relevant to these orders.
I am nowhere near as expert as the noble Baroness and my first question relates to whether it is just one computer which is the problem or whether there are several related computers, including the ones run by the Inland Revenue, which will be affected if the transfer of the Contributions Agency from the Department of Social Security to the Inland Revenue takes place. Secondly, is it the case that the computer went down last June? If so, when is it expected to become fully operational again? It is said to be next April. Is that too pessimistic or too optimistic an estimate? It is clearly a disastrous situation if it has been down from June to April.
Clearly a significant number of pensioners are affected by the breakdown. My understanding is that a number of them have received no communication whatever from the department telling them what the situation is. One would have thought at the very least that that might have been done, though I understand from one person who inquired why he had not been told, that the answer came back, "Because it has all been computerised and we would have to do it manually".
It is all very well to laugh now, but it is not very funny if one receives the answer another person had; that is, "I have now to write a considerable amount of correspondence on this matter as to what people should do if they were expecting to receive their pension and did not. The answer is that they should go on income support". Whether the computer is capable of coping with that, I am not sure. Perhaps the Minister can tell us whether the computer deals with both income support

761
and pensions. She indicates that it does not. At least if people are not receiving their pension, they can claim income support. I do not find that very comforting, but it could be worse.
I am not clear also about the exact scope of the orders. As I say, I do not expect the Minister to answer all my questions tonight but if she can at least answer some of them, it will help to clarify what is obviously a serious situation.
I am not clear whether the provisions refer only to a limited number of people, particularly those who have deferred claiming their pension in order to obtain the higher amount. If you defer claiming your national insurance pension, you get a certain amount—not necessarily uprated—but with a notional rate of interest added to it. In that context, if people have not yet been paid their pension, having now claimed it, but not having claimed it previously, will they receive this uprating? Let me put it more clearly. If such people were expecting to receive their pension last June but now find that they will not receive it until after April, will they receive both the uprating and the increased allowance normally made by way of an interest calculation?
Perhaps the Minister will tell us how many people are affected by that change and something about the situation as regards tax? The Government, in their wisdom, have introduced a system of self-assessment which involves very heavy penalties. Some 20 years ago, I opposed that. How are those people to complete their self-assessment forms? If they do not do so by the end of this month, they will incur heavy interest penalties.
One could go on longer, but perhaps I may add one more point. I understand that it is proposed that, because of the delay, the Government will pay a degree of compensation. I understand that something like 0.5 per cent. a month will be paid. Will that be taxable? How does that compare with the interest charged to people who do not pay their tax on time? One would think that there should be a correlation between the two. We can pursue this further on Monday. However, it would be helpful to have a ground-clearing exercise at this stage.
The Minister has made great play of the overall effect of the Government's policy and seeks to present it in a favourable light. Perhaps I may quote her. She said that the Government want to give help,
"to those who need it most".
On previous occasions we have spent a lot of time debating the effect on pension funds generally of the Chancellor's first Budget and the fact that something like £5 billion a year was extracted from that. I do not want to pursue that point further this evening.
What received much less attention at that time, although it was included in the same Budget, was the fact that there would be a withdrawal of dividend tax credits for individual non-taxpayers, clearly the poorest in society. Such people pay no tax whatever although they may top up their meagre income with income from savings invested one way or another. Clearly, those
762

amounts are not very large. Nonetheless, the effect of withdrawing the dividend tax credit from them is that the lowest paid—those who do not even pay tax—find that their incomes have been reduced as a result of the Government's Budget. How is that compatible with the clear statement made by the Minister this evening that the Government want to give help,
"to those who need it most"?
I understand that the Government reviewed the situation. Hopes were raised that they might see sense on the issue. However, I understand that, having reviewed it, they still concluded that that group of people should be penalised in the way that I have described. Why are the Government maintaining their attitude, which is clearly inconsistent with the position that the Minister set out this evening?
Two other orders are on the Order Paper, both fairly technical. One relates to the guaranteed minimum pension which, of course, is a piece of jargon used to relate it to individual company pensions. As on former occasions, I must declare an interest as chairman of a company pension fund—although one not, I suspect, affected by the provisions. That may or may not be so; I think not; but I should declare it. I am unclear as to why the figure in that order is 3 per cent. It seems to relate to the retail prices index. I am not clear why it is not related to earnings. Perhaps the Minister will clarify that point.
My final point relates to the second order regarding national insurance contributions and the Treasury subvention. The other day we discussed the fact that the payments into what I have described as a "tank" rather than a "pipe"—I refer to the National Insurance Fund—have to be at least one-sixth of the expected annual expenditure for the following year. Therefore, as the Government Actuary has decided that no further contributions are necessary—instead of being only 16 per cent. or so, it is more than 20 per cent.—I am unclear why the Government have taken the precaution of saying that there might be a further payment during the year of 2 per cent. of the estimated benefits, which is a substantial sum. Is it really the case that the margin of error in the Government's forecast is that great?
As I have said, the orders raise several points, but I do not want to go into the wide issues which the Minister raised. However, I hope that I can receive some clarification and that we can pursue some of the matters further when we meet next Monday.
8.6 p.m.
Earl Russell: My Lords, I want to express sympathy with the Minister for her misfortune with the printers. It reminded me of John Locke's remarks when he saw the proofs of his Second Treatise of Civil Government that printers have ways all their own, not united by the general fairness which cements mankind. However, the Minister may be comforted to reflect that when the courts construe legislation, they construe the intention of Parliament, and, as far as I can understand, she has made the intention of Parliament crystal clear. There are precedents for that and I think that they are being observed.

763

I listened with interest to the Minister's speech. I was particularly glad to hear that there is no one right method between means-based, needs-based and universal benefits. That is a good basis for discussion and I am in entire agreement with it.
The Minister is now well played into office. She has many distinguished achievements behind her, mostly in the field of disability, including the unravelling of the problem of the benefits integrity programme. I am glad to hear that saga can finally be laid to rest.
In a sense, this is the wrong moment for a review of social security because the Bill on welfare reform is not yet on the field of play. I feel a little like Geoff Boycott poking at the pitch before there are any players on it. It is not a part in which I am particularly expert.
One can look with some satisfaction at the report of the Government Actuary. The noble Lord, Lord Higgins, expressed some surprise at the Government's forecast being so far out. Instead of a deficit of £425 million we have instead the very welcome development of a surplus of £2.6 billion. That is largely due to an increase in the number of national insurance payouts. It seems to be one of the lessons of recent economic cycles that the variation in tax receipts on the up and down stages of the cycle is much greater than one used to think. That confirms what I once said, that when I consider the interests of taxpayers what I want most is for there to be more of us.
That brings me to my main general criticism of the Government's approach to the issue of welfare reform, which is, as I am sure the Minister knows, that I believe that they have started from a wrong diagnosis. They are blaming the social security system for the failure to alleviate poverty. Last October, Angela Eagle, commenting on the statistics on households with below average incomes, said:
"The figures show that the ever increasing social security bill has had little impact on reducing inequality. This confirms our approach that welfare reform is required".
I believe that she was putting the blame in the wrong place. The job of the social security system is to keep people going through periods of poverty; it is the job of the wider economy to prevent poverty. In fact, the Minister illustrated that theme in her speech. When referring to the increase in social security spending under the previous government she asked: "How did it go wrong?" What she should have been asking was: "Where did it go wrong?"
Without meaning to endorse the social security policy of the previous government the noble Baroness might consider the view that a great deal of it went wrong in areas that were not within the responsibility of the Department of Social Security: in the overall level of employment in the economy; in the fact, to which the Acheson Report drew attention very usefully, that the decrease in mortality has not been accompanied by any corresponding decrease in morbidity—something which those considering NHS priorities might take into account—and in the increasing troubles of matrimony, which I am sure were not caused primarily by the activities of the DSS.
764
If the Government were to look at that wider canvas for problems of poverty they might be rather less inclined to blame the system of social security. In fact, when we come to debate the Acheson Report, which I hope we will be able to do, I hope that we will be able to take it not just as a report on health (because it is far more than that) but also as a report on poverty. It raises the question: does poverty breed poverty? That is an area to which I hope we shall return.
While the Government are missing the impact of the wider canvas on poverty, they are also sometimes missing those few and limited areas where policy pursued within the DSS may have the effect either of creating poverty or of failing to alleviate it. I hope that the Government will be paying attention to the remarks made in the Acheson Report on benefit levels. Of course I understand the overwhelming problems involved in dealing with the latter, but I should like at least to hear their admission that there is a problem. If indeed benefit levels are causing malnutrition they may also be creating expenditure, even while saving is the apparent aim.

I should like the Government to think further about disentitlement. Perhaps they could apply to disentitlements to benefit the recommendation of the Acheson Report that all policies liable to increase poverty should be evaluated for their impact on ill-health. If benefit levels can cause malnutrition, what can absence of any benefit cause? That is a point to which I have always wanted the Government to pay attention. They should ask themselves whether they are trying to cure social exclusion with one hand, while, through disentitlement, they are creating it with the other.
I also hope that the Government will look at the extended payments rule for housing benefit where claimants have eight days to make a claim. It is not always made clear to them within those eight days that the claim has to be made in so short a time. Many people are missing out in that respect. As a result, what looked like a very welcome change is not achieving the benefit that it should.
Perhaps the Government will also look again at a number of problems involving poverty among pensioners. I am struck to discover that our pension levels are right down at the bottom of the scale; indeed, they are above only those in Ireland. The myth that we have very generous social security benefits by international comparison is one which I think ought to be changed. The much-trumpeted minimum income guarantee, passing under the slightly unfortunate acronym of MIG—a hostile acronym I should have thought—was described in another place last Monday by my honourable friend Mr. Davey as an Arthur Daley guarantee because, being delivered through income support, it applies only to those on income support. Much though I know the Minister cares about take-up, I am not yet convinced that adequate methods have been found to get all those pensioners who do not take up income support to do so.
Moreover, a great many pensioners are missing out because they are above the savings level. Once again, the savings level has not been uprated. I am sure that

765
the Minister can hear me in her sleep complaining that savings levels have not been uprated. However, that is a point which gains in force rather than diminishing by repetition. I ask the Government to remember the misfortunes that overtook Harold Wilson in office through the failure to uprate the dog licence. We are in danger of getting to that point. Of course, one might have hoped that anything that discouraged saving would be contrary to Government policy.
I should like to second what the noble Lord, Lord Higgins, said about the dividend tax credit. It is a subject upon which our two parties co-operated very amicably last Monday. We are always ready to co-operate with another party where we agree with it. When I do so with the party of the noble Lord, Lord Higgins—and I will give way to him in a moment—I hope that he will recognise that, when I do so to our mutual benefit, he cannot blame me if I also co-operate with another party. I give way to the noble Lord.
Lord Higgins: My Lords, that rather makes the point on which I was about to intervene. I understand that it was not only my party nor, indeed, just the party of the noble Earl. I believe that a significant number of Labour Members in the other place also supported the Early Day Motion. It was an all-party agreement, not the Government's.
Earl Russell: My Lords, I am grateful to the noble Lord for making that point. That is very true. There were several interventions from Labour Members and a good deal of support in the background. Therefore, I believe that no one party would wish to take credit for what happened.
My honourable friend Mr. Webb has discovered that the winter fuel payment of £20 costs £12 million a year to administer, whereas if it had been paid as a weekly increase in the pension the extra administrative cost would have been nothing. Indeed, £12 million is an awfully expensive price for a headline. I did not think that even the most expensive newspapers in the country charged that much for advertising space. The Government do not seem to have any clear answer to the really big problem of pensioner poverty, which is defective contribution records. If the Minister has an answer to that I shall listen to it with great pleasure. In particular, they do not seem to have an answer for the problem which will become more common with the growth of the single market; namely, people whose contribution records are defective because of the amount of time that they have worked outside this country.
Therefore, despite the best efforts of the Department of Social Security and the rest of the Government, inequality is not diminishing. I have been very struck by the information from Households Below Average Income that 70 per cent. of Pakistani and Bangladeshi families come in the bottom 20 per cent. of income distribution. That is something which should not be. The progress towards equal pay is very nearly stalled. I hope that we will be thinking again about a new equal pay Act.
766
There are many fields in which there is a great deal more work to be done. In the future, therefore, instead of barking up the wrong tree I hope that we may see the Government beginning to bark up some of the right ones.
8.20 p.m.
Baroness Hollis of Heigham: My Lords, I should like to thank both noble Lords for their contribution to this evening's debate on the up-rating order. It did not entirely surprise me that the noble Lord, Lord Higgins, asked a series of questions which would not have been inappropriate to some degree in a National Audit Office committee or Treasury committee, nor that the noble Earl, Lord Russell, raised areas of social policy which he and I have discussed on many an occasion. As I say, I think these roles into which we have fallen may persist.
I shall do my best to answer some of the questions that have been raised. As regards some of the questions the noble Lord, Lord Higgins, asked on NIRS 2, I shall write to the noble Lord because issues of commercial confidentiality are involved. The noble Lord will understand that. He asked whether it was usual to have an uprating not preceded by a Statement. As I recall I read out a Statement on this issue and welfare reform last autumn. I remember that the noble Baroness, Lady Castle, tackled those issues in feisty form. We dealt with the two issues together as it seemed appropriate to do so. I accept that that was an unusual way of tackling the matter. However, it is not every year that we set out our stall in terms of a major welfare reform Bill.
I know that the noble Lord will return to issues of working families' tax credit, means testing, the contributory principle and so on. The noble Lord raised a point which was also emphasised by the noble Earl, Lord Russell. He referred to pensioner poverty, minimum income guarantee and take up. The noble Lord said that according to the CAB people had thought that the minimum income guarantee was somehow an increase in their basic state pension as opposed to an increase in the income support related element, as the state retirement pension is below income support levels.
The following matter has been raised in this House on many occasions. There is a real problem as regards identifying the pensioners who are entitled to claim income support but are not doing so, and encouraging them to claim it. We originally estimated that about 1 million pensioners—mainly elderly single women over 75 who do not have contributory pensions in their own right—are entitled to income support who fail to claim it. That figure may be a little high as it is now clear that one of the main reasons those people fail to claim income support—or are ineligible if they do so—is that although their income may be below income support levels, their capital floats them above income support. Many of those pensioners were raised in a culture of keeping £5,000 or £10,000 in the bank to pay for their funeral or to leave to their children. That prevents them from drawing down that income. Therefore they live on an income which is below

767
income support levels but they do not qualify for income support because of their capital. However, as I say, they are not willing to draw down that capital.
Of the 600,000 pensioners who are disqualified from the minimum income guarantee, we estimate that more than half have excess capital of over £20,000. Of those, some 190,000 people have capital of over £50,000. Nevertheless their income can be below income support levels. That forms a major part of the dilemma. That is not to say that the Government are not considering the capital rules. Nonetheless the spread of income on capital is as wide as the spread of income—
Earl Russell: My Lords, when the Minister considers the reluctance of pensioners to spend their savings, will she remember the rapid escalation in funeral costs?
Baroness Hollis of Heigham: My Lords, I entirely take that point. That is why the social fund now identifies reasonable costs for a funeral that will enable the pensioner or the pensioner's family members to afford a funeral with help from the social fund if they do not have sufficient savings to cover that. The point I sought to establish was that the disqualification of pensioners from income support was affected by capital which in many cases constitutes a sizeable sum.
Lord Higgins: My Lords, the sums may be sizeable but that was not my experience when I was an MP and dealt with constituents. Are not these the very people who will be hit by the tax credit problem which I mentioned?
Baroness Hollis of Heigham: My Lords, it depends how that £50,000 is converted into income. The broader question that was asked concerned why pensioners were failing to claim the minimum income guarantee to which they were entitled. As I said, one of the main reasons for that is the capital rules. We need to consider whether the existing capital rules are appropriate. We are now receiving feedback from our nine or so pilot schemes which indicate that pensioners feel there is a stigma attached to claiming this benefit and pensioners are ignorant of their entitlement to benefit. A slightly worrying feature is that a person may have applied for income support or a benefit in the past to which he was not entitled. That person was rebuffed and deterred from making subsequent applications. Having said that, I do not in any sense underestimate the difficulty—having identified the people who are entitled to the money—of persuading people to claim the benefit. That generation of older people comprises people who are extremely reluctant to claim a means tested benefit which in the past was associated with national assistance and all that that entailed. I believe noble Lords will understand what I mean.
As I said, the noble Lord referred to the CAB. However, he may have also noted that the CAB supports the steps the Government are taking to increase the take up of income-related benefits by pensioners. The CAB states that extra publicity will be necessary to ensure that all pensioners are aware of how they are to be provided with a guaranteed minimum income. We
768
entirely accept that point. Obviously the longer term response must be to ensure that pensioners have access to a decent second pension. The problem with the guaranteed minimum income concerns those pensioners who have not been able to build up a decent second pension in their own right, whether through SERPS or through occupational pensions.
One of the important elements in our pensions proposals is the proposals for the new second state pension. As your Lordships will be aware, those on modest incomes who may be in and out of work and who earn between, say, £3,500 and £9,000 will in future be entitled to a pension as though they were earning £9,000 a year. That is a massive redistribution for some of the lowest paid. That will benefit women. One must take account of the implications for carers who will effectively obtain a £1 a week's worth of pension for every year of caring. That also applies to those caring for children. I think your Lordships will accept that we have a twofold problem with pensions. There is the immediate problem of the poverty of existing older pensioners and the longer term problem of ensuring that we float pensioners off poverty by giving them access to a decent second pension. That is the basis of our proposals.
The noble Lord, Lord Higgins, raised a whole set of connected issues about NIRS. I believe I have noted most of the questions asked about this. However, if I have missed any of the more technical points I shall write to noble Lords as these are technical issues. I do not think anyone would deny that there have been real and serious problems with NIRS 2. However, they should not be exaggerated as they are being overcome. There is a stabilisation and recovery plan which has been developed jointly by the Contributions Agency, Andersen Consulting, the Benefits Agency and the Employment Service, with input from the Inland Revenue. NIRS 2 is basically a computer system which does not affect the Inland Revenue. Therefore some of the noble Lord's concerns are not, fortunately, justified. NIRS 2 does not affect any of the income-related benefits, or any of the universal benefits such as severe disablement allowance, ICA, disability living allowance, DWA, income support, income-related jobseeker's allowance, child benefit, family credit, housing benefit or council tax benefit. Those account for about half of all our benefit expenditure. However, NIRS affects benefits which are dependent upon the payment of national insurance contributions; namely, retirement pensions, incapacity benefit and contributions-based jobseeker's allowance. Also affected—as the noble Lord noted—are rebates paid into approved personal pension schemes. As I say, there is a problem here and we are not trying to suggest otherwise. However the two areas which I think give rise to the need for an alternative path of income support are retirement pension and widows' benefit. Since 6th January of this year NIRS is on-stream to provide long-term benefit calculations in respect of retirement pension and widows' benefit.
The noble Lord asked a series of connected questions about compensation and the like. This is an extremely large system which handles about 65 million accounts. It is the largest in Europe. No records have been destroyed

769
during the conversion, or as a result of live processing. All benefits are currently either unaffected or are using standard or interim procedures during transition. After transition any interim payments will be retrospectively adjusted and appropriate compensation on retrospective payments will be made accordingly. I hope that deals with the bulk of the noble Lord's points on that issue.
Lord Higgins: My Lords, we shall return to this on Monday, but perhaps I may just ask one question. To what extent have the pensioners and others involved been told what is going on?
Baroness Hollis of Heigham: My Lords, the noble Lord was right in his initial remarks. That sort of information tends to be generated by the very same computer which is unable to handle it. In that sense, that is true. However, in terms of the benefit helpline, the advice at local DSS offices, the voluntary agencies, from Age Concern through to CAB, there is ample information on this. We should not forget that people continue to receive an old benefit if they are not eligible through the faltering of NIRS to receive their up-rated benefit. If there are any individual cases that the noble Lord has in mind, obviously we shall look at them for him. We have got a fair amount of information. Having said that, at the end of December something like 60 per cent. of the age-related rebates that went with personal pensions were being paid compared with the previous year's records.
We are hoping that it will be on track. It was a contract established by the previous administration; it has taken a long time to bed down. We received it, with caveats, in 1998 and the problems associated with NIRS have continued to come through. We hope, having established a stabilisation programme between all the four parties—the Contributions Agency, DSS, the Employment Service and Andersen Consulting—that we shall now be on track. As I say, if the noble Lord wishes to come back to me on any of those detailed points, I shall be happy to try to answer him.
The noble Lord raised a point about the Government Actuary. He asked why, if the report said that the Treasury grant is not needed, as indeed it does, we are we making one. The contributions re-rating order provides that the maximum amount of Treasury grant which could be made available to the fund is set at 2 per cent. of annual benefit expenditure. This is a prudent and practical way of managing our finances. It means that the Secretary of State has further resources, agreed with the Treasury which he can draw on if necessary. It is not new. At this time last year the maximum estimated grant of £900 million was made available for 1998–1999, even though the Government Actuary did not estimate that we would require any such grant. That indeed proved to be the case. It is a well-established precedent of fall back.
I turn now to some of the wider points raised by the noble Earl, Lord Russell. He asked me first about BIP. We expect to see the end of the present system by the end of the financial year; that is, the beginning of April.
770
Clearly the details of what exactly will be replacing it are still being discussed with the Disability Benefit Forum.
Secondly, the noble Lord said that we expected the social security system to carry the responsibility for poverty whereas that was the responsibility of the wider economy. I entirely agree. It was easy enough when most of the social security system was a contributory system based on 40 hour, 50 year jobs. What we now see is that one family in five is without work; three million children are in families without work; and we have work rich and work poor households. That is why we have support in the House for emphasising that the best pathway out of poverty is access to work. That is why we are combining that with new deals, personal advisors, minimum wage and the like in order to make work pay.
As to those unable to work, I should have thought that tonight's uprating statement which shows that pensioners will have a minimum income of £75 a week, that there will be a minimum income for disabled people and a record increase in child benefit should address the problems facing those unable to enter the labour market.
I think and hope that most of the rest of the noble Earl's discussion overlapped with that of the noble Lord, Lord Higgins on pensioner poverty, capital ceilings and how we are attempting to increase the take up of income support. I hope and believe that I have addressed most of those concerns and I hope, as a result that your Lordships will be able to accept the three uprating statements tonight.
On Question, Motion agreed to.

Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1999
Baroness Hollis of Heigham: My Lords, I beg to move that the draft order laid before the House on 13th January be approved [5th Report from the Joint Committee].
Moved, That the draft order laid before the House on 13th January be approved [5th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Guaranteed Minimum Pensions Increase Order 1999
Baroness Hollis of Heigham: My Lords, I beg to move that the draft order laid before the House on 13th January be approved [5th Report from the Joint Committee].
Moved, That the draft order laid before the House on 13th January be approved [5th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Access to Justice Bill [H.L.]
8.38 p.m.
House again in Committee on Clause 10.
Lord Goodhart Lord Goodhart moved Amendment No. 133:
Page 7, line 1, at end insert—
("( ) The regulations shall not require any payment from a person whose capital resources are such that they would be eligible for income support.").
The noble Lord said: This is a much more important amendment than, on the face of it, it would appear. I should say at the outset that the drafting leaves something to be desired. It should have said that regulations shall not require any capital payment from a person whose capital resources are such that he would be eligible for income support. It was not the intention of this amendment to exclude payments out of income from those whose income permitted them.
Without this amendment, in its corrected form, the Government's plans will suffer from a very serious, potentially devastating, defect. Under the present law, applicants for legal aid have to pay contributions from capital if their capital exceeds £3,000, and they are not eligible for legal aid if their free capital exceeds £6,000. In the case of income support, if their capital exceeds £3,000 they are not eligible. For income support, the value of the home, the dwelling house of the claimant for income support, is disregarded completely. That used to be the case for legal aid but now the equity value of the house is taken into account so far as it exceeds £100,000. The equity value of course means, in non-lawyer speak, the value of the house less the amount outstanding on the mortgage. If the equity value is more than £100,000, the owner can be and is expected to borrow against it to fund his litigation.
That is fair enough. We would not object to an amendment to this amendment to modify it to retain that provision. However, the Government now propose to change the rules. The new rules are set out in Annex A to the explanatory notes. The effect of the change is that the equity value of the house will still be disregarded for the purposes of eligibility for funding—which means that you will still get funding if the equity value of your house is worth less than £100,000, provided your other assets are worth less than £6,000. But if the equity value of your house is between £3,000 and £100,000, there will be a liability to repay any costs not recoverable from another party as a capital payment. That repayment can be deferred until the house is sold, but meanwhile the liability will be charged on that house and a market rate of interest will be charged, not as at present a relatively beneficial rate of interest.
The effect of that is obvious and disastrous. Anyone currently paying a mortgage will, in practice, be unable to claim public funding out of the community legal service fund. They will run the risk of an open-ended liability and increased payments to fund interest to the CLS fund, as well as having to pay their current mortgage instalments. If a young couple are planning a family they risk losing the equity they need to trade up to a larger house. If the owners are pensioners who have
772
paid off their mortgage they risk serious hardship if they have to pay interest to the CLS out of their pension. For owner-occupiers, therefore, funding will be by way of loan charged on the equity of the house, carrying what the notes describe as a "realistic rate of interest".
The consequences of the grant of funding out of the community legal service fund to an owner-occupier are therefore so potentially damaging that in a case involving a cost potential of any significance it is almost impossible to imagine that any such owner would wish to take it on. Therefore, in practice, funding will be available only to those who are living in rented accommodation. That would be grossly unfair. I hope the Government will accept the need in this respect for an amendment. I accept that some assistance is provided by the Government's new amendment, which says that nothing will be paid beyond what is reasonable, but I think that this remains an extremely dangerous provision. I beg to move.
Lord Archer of Sandwell: I rise briefly to echo the anxiety expressed by the noble Lord, Lord Goodhart. The equity in one's house is not really capital available for expenditure. If one loses the equity in one's house, one does not have a home. I hope that my noble and learned friend Lord Falconer has grasped that point, even though I think his attention was not always entirely on the argument. I support the amendment.
8.45 p.m.
Lord Falconer of Thoroton: The amendment tabled by the noble Lords, Lord Goodhart and Lord Phillips of Sudbury, is similar to the amendment of the noble and learned Lord, Lord Archer, Amendment No. 130, in its intention but is much more limited and specific in its effect. It provides that people whose capital resources are such that they would be eligible for income support should not be required to make any payment towards services provided by the community legal service fund.
In its naked form, the amendment, as I think the noble Lord accepted, would again prevent the Lord Chancellor from making regulations which provided for the same financial conditions that exist now for legal aid. However, as the noble Lord, Lord Goodhart, explained with total clarity, he has a much more limited aim in mind. As I understand his argument, he is seeking to remove one of the proposals for changing the current regime set out in the Explanatory Notes; namely, the extent to which the first £100,000 of the equity in your house is taken into account in determining the amount you have to pay to the legal services commission. I understand that, but just for the sake of the record, perhaps I may outline the relationship between income support and legal aid without repeating what I have said in relation to the amendment of the noble and learned Lord, Lord Archer.
Under the legal aid arrangements today, if you are on income support you automatically qualify for free legal aid. If, though not claiming income support, you would qualify on income grounds, you would also qualify for legal aid without any contribution from your income. People who have some capital assets may still qualify for income support. Capital of £3,000 or less is

773
disregarded altogether: so is the value of any equity that the applicant owns in his or her own home. If someone has capital worth between £3,000 and £8,000, income support is reduced by a set formula to reflect an assumed weekly income from the "free capital" between those limits. If they have more than £8,000 capital they do not qualify for income support, regardless of how low their income is.
The legal aid provisions for contributions from capital are somewhat different: below £3,000 disposable capital, a person is eligible without a contribution from capital; between £3,000 and £6,750 (or £8,560 in personal injury cases), the assisted person is required to pay the full amount above £3,000 as a contribution from capital; with disposable capital above those upper limits, people are ineligible for legal aid, unless the Legal Aid Board exercises its discretion to waive the upper capital eligibility limit in a potentially very expensive case. Under the existing provisions, the first £100,000 of equity owned in a home is disregarded in these calculations.
The point focused on by the amendment of the noble Lord, Lord Goodhart, is Annex A, paragraph 8 of the Explanatory Notes to the Bill which proposes that the first £100,000 of equity in a home should continue to be disregarded for calculating eligibility, but that it should be counted in assessing contributions. However, under the new proposal, no contribution from capital tied up in a home would be payable until the end of the case, when costs liabilities are determined. Furthermore, the Explanatory Notes explain that the legal services commission would have discretion to postpone the payment of a contribution from this source, typically until the house is next sold. This is the position that already applies when the legal aid statutory charge attaches to a home that was recovered or preserved in proceedings.
The noble Lord has explained that this is the proposal that his amendment is intended to prevent. As I have indicated, the language of the amendment would go further than that. The amendment provides that,
"regulations shall not require any payment from a person whose capital resources are such that they would be eligible for income support".
That would mean that someone whose capital did not exceed £8,000, but who had an income above the free limit, would qualify for free legal aid under the amendment. In other words, other than those exceptional cases where the upper capital limit is waived, no one who qualified for legal aid would ever be asked to pay a contribution. The noble Lord has accepted that that is not what he has in mind. He has the more limited aim in relation to the proposal with which I have just dealt.
There is a difference in kind between income support and legal aid contributions so far as the value of the house is concerned. Income support is provided as help with living expenses. Disregarding the value of the house for income support obviates the need to sell your house to live. Legal action is a one-off event. It is reasonable to ask people with assets, in whatever form, to pay what they can afford for it, especially if one considers the potential effects on other people of taking
774
legal action. Capital is generally taken into account for legal aid contribution purposes and it would not be fair to owners of different forms of capital to disregard this first £100,000 absolutely. Justice is done by disregarding it for eligibility purposes and in practice making it available for contribution purposes only when the house is sold.
It is true that, under the regulations contemplated in the Explanatory Notes, delaying enforcement will be at the discretion of the commission. But the Lord Chancellor is willing to consider requiring the commission to call on the £100,000 only on sale and removing its discretion to do so earlier. I would also envisage that the commission would have a discretion not to enforce the contribution even then, where to do so would cause hardship. On that basis, which goes some way to meeting the noble Lord's argument, I invite him to withdraw the amendment.
Lord Goodhart: I do not find that answer entirely satisfactory. I was well aware that there is a power to postpone enforcement of the charge. In the example I gave of the young couple thinking of having a family, I was concerned about the threat not to the house in which they were currently living but about the fact that when they needed to sell in order to move to a larger house because of their growing family they would be unable to do so because at that point the charge would bite. While the charge is postponed there is of course a continuing liability to pay interest at what will from now on be a market rate. That is potentially a cause of hardship sufficiently great to justify returning to the matter. However, I shall wish to see what the noble and learned Lord the Lord Chancellor has to say.
I should not be favourably impressed by an amendment that went no further than stating that the enforcement of the charge must compulsorily be delayed until the house was sold. The hardship could well arise when there was a need to sell the house, which could be not merely because of a growing family but, for example, the need to move to a different part of the country for work and so on. Therefore I should wish to see, as a minimum, a commitment to giving a discretion not to enforce a charge even on sale where that would result in hardship. However, on this occasion I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 134 to 137 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 138:
Page 7, line 40, at end insert—
("( ) The regulations shall provide that in any proceedings where a costs order is made in favour of any individual who has agreed to make a payment under subsection (2)(c), the costs payable to him shall include costs in respect of any payment he has agreed to make.").
The noble Lord said: Under Clause 10(2)(c) the Government effectively take reserve powers to set up a contingency legal aid fund. I understand that to be the case from paragraph 86 of the Explanatory Notes.
It is my understanding that the Government do not intend to use these powers immediately. They offer a fall-back if the CFAs fail to operate satisfactorily and

775
open the possibility of a form of mixed public/private funding through hybrid legal aid CFA cases. I certainly welcome the fact that the Government are taking these reserve powers. It is a forward-looking step.
However, in the Bill the Government propose that in the case of CFAs the success fees should in future be paid by the losing party rather than by the client.
I submit that the same principle should apply to a contingency legal aid fund so that legally aided clients would be on the same footing as those under a CFA. The situation would be that if costs were recovered from a non-legally aided party, those costs should include the success fee to be paid back into the contingency legal aid fund in the same way as under a private CFA. So this amendment would put clients whose cases are brought under a contingency legal aid fund on the same basis as those who bring cases under a CFA. I beg to move.
Lord Falconer of Thoroton: This amendment, which my noble friend explained very clearly, would create a duty on the Lord Chancellor when making regulations under Clause 10 to include in the regulations a requirement that costs awarded in favour of a person receiving funded services would include any payment that person had agreed to make under Clause 10(2)(c) which exceed the costs of the funded services. I believe that by itself this amendment might act oppressively and is in any event unnecessary.
At present the successful unassisted defendant cannot recover his costs from the assisted plaintiff, nor from the Legal Aid fund in practice, unless there is substantial hardship. Clause 11 broadly replicates that position for cases funded under the new community legal services fund scheme; that is, the status quo is to be maintained.
Under Clause 10(2)(c), provision is made for services to be on terms that, in the event of success, he is liable to pay the equivalent of a success fee into the fund. This would enable the legal services fund to establish a contingency legal aid fund if so directed. We have no present intentions to do that. This is a reserve power only.
The amendment would provide that if a contingency legal aid fund were set up in this way then the successful assisted person would be able to recover the success fee payable to the contingency legal aid fund in costs from the unsuccessful defendant. That, however, would operate unfairly for defendants who could not reciprocally recover their costs from the unassisted plaintiff or the fund when they succeeded.
If a contingency legal aid fund were ever to be established in this way, and what I say offers no expectation that it ever will, then Clause 11 provides very wide powers for the Lord Chancellor to make regulations which make provision about the costs in cases. In particular, Clause 11(2)(e) allows him to specify the principles to be applied in determining the amount of any costs which may be awarded to a party who is receiving funded services. I believe that these powers are sufficient, and indeed are intended, to allow the Lord Chancellor to make regulations that can specify what should be taken into account in determining the
776
costs to be paid to a successful party supported by the commission. Under this power he could, for example, make the fund liable in these circumstances.
My noble friend's amendment would, however, oblige the court to make this payment recoverable whenever an agreement has been made under subsection (2)(c). That is too inflexible. Those of us with court experience know that courts, when exercising their discretion as to costs, can feel that because of, for example, contributory negligence, or perhaps the behaviour of the parties in the litigation they are not prepared to award the successful party all or any of their costs. There needs to be some flexibility in applying any scheme for recovering costs and in allowing the courts to exercise some discretion in arriving at the final amount to be paid.
If it will help my noble friend, I can tell him that I am fully seized of what he is trying to achieve and that I believe the Lord Chancellor could achieve this under the powers already contained in the Bill if he wished to do so. I shall carefully consider how to give effect to the aim of this amendment when we come to look at the regulations that may need to be made once the Bill passes into law. On that optimistic note I ask him not to press his amendment.
Lord Clinton-Davis: I am grateful to my noble and learned friend for that semi-encouraging note. I need to examine his reply carefully and to take advice on the matter. However, having regard to that situation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Costs in funded cases]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 139:
Page 7, line 41, at beginning insert ("Where services relating to a dispute have been funded by the Commission for an individual as part of the Community Legal Service, his liability under an order for costs made against him in proceedings relating to the dispute shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including—

(a) the financial resources of all the parties to the proceedings, and

(b) their conduct in connection with the dispute;

and, in assessing the financial resources of an individual for whom such services have been so funded, his clothes and household furniture and the tools and implements of his trade shall not be taken into account, except so far as may be prescribed.
(1A) Subject to that,").
The noble and learned Lord said: I move this amendment because, on reflection, I think it is preferable that the qualification on the right of unassisted parties to recover costs against a person receiving funded services should appear on the face of the Bill. Before I come to my amendment, it might be helpful if I explain what Clause 11 is intended to do.
The clause creates a general power for the Lord Chancellor to make regulations in relation to the legal costs of cases where one of the parties is receiving services funded by the community legal service. The

777
clause goes onto define certain provisions which may in particular be included in regulations made under the power conferred in subsection (1).
The first three circumstances set out in subsection (2) relate to what are often referred to in the current Act as the cost protection provisions. These are presently contained in Sections 12, 13, 17 and 18 of the 1988 Act. They are designed to ensure, first, that those receiving publicly funded support are not deterred from proceeding with a legitimate claim by fear of the possibility of having to pay the costs of their opponent if they are unsuccessful in proving their claim (Sections 12 and 17). Secondly, the provisions protect the taxpayer by establishing the circumstances in which the commission might be required to pay the costs in place of the person receiving services (Sections 13 and 18).
The other particular circumstances in which the Lord Chancellor may make regulations are largely drawn from existing provisions contained in Section 34 of the 1988 Act. Essentially they deal with the way in which and by whom the amount of a costs order may be determined and that any costs recovered shall be payable to the commission or the body or person who provided the services. As we have set out in the explanatory notes, that is Annexe A, paragraphs 12 and 16 on pages 62 and 63. We intend to make two changes to the existing position in relation to cost protection. First, while we intend broadly to preserve the protection to those receiving assistance from the commission against having to meet a liability for costs we intend to allow the value of a person's home to be taken into account in assessing his means.
Secondly, we intend to relax the test before a court can order the commission to pay on behalf of the person and to support it. The present test requires the unassisted party to prove severe financial hardship. We intend to require the unassisted person to have to prove the lesser test of financial hardship in order to obtain payment of costs from the board. Moreover, as I said, we are taking a reserve power to establish a contingency legal aid fund. As I also said, I do not believe that I will need to use this power because the Lord Chancellor is confident that conditional fees will provide a substantial alternative to publicly funded assistance, particularly in the area of personal injury cases.
An assisted person would, however, if the reserve power were exercised, be required to make an additional payment to the contingency legal aid fund in the event of success. We believe that this payment ought to be recoverable in just the way that Clause 27 will make a success fee in conditional fee agreements recoverable from a losing opponent. In such a circumstance we believe it would be only equitable that unassisted parties should be able to recover their costs against the contingency legal aid fund in the normal way. We would therefore wish to use the regulation-making powers in Clause 11(2)(c) to ensure that this could be done.
The amendment which stands in the name of the Lord Chancellor will put the protection given to the person who is assisted by the community legal service on the face of the legislation. Given the importance of the protection in reducing the deterrent effects of
778
potentially incurring a liability for costs that could not be met, the Government believe on reflection that it is better that this is set out plainly in the primary legislation. We continue to believe, however, that the protection afforded to the commission should be made by regulations, subject to the affirmative resolution procedure, so that we may respond to changing circumstances as necessary.
Consequently, Clause 11 is amended so that a new subsection (1) is inserted, which substantially carries into the Bill the protection provided by Section 17(1) of the 1988 Act. It is of course rare for costs orders to be made against assisted persons. The court, however, has a discretion to make an order by taking into account the comparative resources of both parties. If that discretion were to be exercised, then Clause 11(1) also specifies that personal goods and effects are to be disregarded in any assessment of the means of the assisted person to meet a liability for costs.
The existing subsection (1) is renumbered (1A) and made subject to the new subsection (1). The remainder of the clause is unchanged, save for an amendment to subsection (2)(a). It no longer needs to provide regulations which deal with affording the protection now provided by the new subsection (1). Rather, regulations under subsection (2)(a) will specify principles that will apply in any determination of the amount of any costs a person receiving funded services may be required to pay. In those circumstances, I move the amendment standing in the name of the Lord Chancellor. I am grateful to be reminded that in speaking to Amendment No. 139, I have also been speaking, with the leave of the Committee, to Amendments Nos. 140 and 205. I should have mentioned that earlier. I apologise for not having done so.
Lord Goodhart: I have to say that while on the face of it this looks like something I should welcome, and indeed in certain respects I do, I think it is in fact an extremely dangerous provision. Or shall we say that what lurks behind it in the Bill itself is an extremely dangerous provision. What is now proposed is stated in the Explanatory Notes, which say:
"In future, assisted parties will retain most of their protection against paying inter partes' costs. But where courts are considering costs orders against assisted parties, the value of their homes will be counted towards their assets and the statutory bar on enforcing against homes will be lifted."
This raises exactly the same point that occurred in my Amendment No. 133. That amendment related to the recovery of money by the community legal service fund from the party whom it had funded. This concerns to the different, though related, issue of payment by the assisted party to the other party to the case. As soon as the value of the home is counted towards the assets of the assisted party, that means there are going to be far more assets against which the court will be able to make an order. It is likely therefore that there will be far more cost orders made against an unsuccessful assisted party. It is even worse than in the case of the recovery of payments by the community legal service fund because in this case it appears that the whole value of the home shall be counted towards the assets—it does not say

779
anything about the first £8,000—and, perhaps worse still, the statutory bar on enforcing against the home will be lifted.
This will be an enormous disincentive to anyone thinking of applying for assistance. Coupled with the problem which I attempted to deal with by means of Amendment No. 133, it means that it will be virtually impossible for anyone who is an owner-occupier to apply to receive legal assistance in any case where the costs are at all serious without incurring great danger to himself and to his home. This is a seriously misguided view. The Government should revert to the previous position. It is certainly something I shall wish to examine again at Report stage.
Lord Kingsland: I may not have heard the noble and learned Lord clearly, and I apologise if I have misunderstood. Is he saying that the liability of the commission to contribute to costs awarded in favour of an unassisted person who succeeds against the assisted party is something that will be determined by regulation, or is it now to appear on the face of the Bill?
Lord Falconer of Thoroton: The purpose of this clause is to bring on to the face of the Bill protection for those receiving funded services from having to meet a liability for costs should they lose. What it deals with—on the face of the Bill, not in regulations—is a right in certain circumstances not to be pursued for the costs if one loses.
Lord Kingsland: I am most grateful to the noble and learned Lord. I was thinking of the opposite situation and the rights of an unassisted party. I know that that is not dealt with in the noble and learned Lord's amendment.
Lord Falconer of Thoroton: This is a very Byzantine way of looking at it but, as far as an unassisted party is concerned, he has no relationship with the legal services commission or the Legal Aid Board. The individual can pursue him, often on behalf of the legal services commission or the Legal Aid Board, pursuant to the ordinary rules of costs. We would not be expected to deal with that on the face of the Bill or in regulations.
Lord Kingsland: I am most grateful to the noble and learned Lord for clarifying that matter. Clearly I misheard what he said.
Lord Thomas of Gresford: Am I right in thinking that, whereas a person who is the beneficiary of a conditional fee agreement can cover his liability for costs with insurance, a person who receives assistance under the CLS scheme may find, as a result of this clause and the amendment, that his house is taken away from him and that he is not insured against that dramatic and dreadful loss that he may suffer if he should lose the case?
Lord Falconer of Thoroton: The noble Lord, Lord Thomas of Gresford, in effect raises the same point as the noble Lord, Lord Goodhart. What is the right
780
answer where the assisted person loses and on the other side there is someone of modest means who has fought and won, having spent a great deal of money fighting the battle? Where should the financial pain lie? Must it always lie with the person who has won, even though the person who has lost has a house with a valuable amount of equity in it? Is not the right course in relation to those cases for the court to be in a position to consider, having regard to the resources of both the defeated assisted party and the victorious unassisted party, what the right result should be?
Let me give an example. Suppose you have spent £100,000 in costs in fighting off an unmeritorious claim put together on the basis of perhaps unreliable evidence by the assisted party. You have to sell your house in order to pay your lawyer, even though the other party, which was assisted, had equity in a house which was even greater than the equity in your house and, because of the point made by the noble Lord, there is nothing that can be done about it. That does not feel fair to me.
Lord Thomas of Gresford: I do not think that the noble and learned Lord is addressing my point. As I understand it, conditional fee agreements with an insurance cover are there to protect a person who loses a case. It is not always unmeritorious cases that lose; there is a balance of merit. There are some cases which are hopeless and some which are marginal and on the cusp where that party loses. A person who has a CFA is protected, but it seems to me that a person who can qualify for financial assistance under this scheme has his house on the line. It is that unfairness that I should like the noble and learned Lord to address.
Lord Falconer of Thoroton: With the greatest respect to the noble Lord, that seems to me to be dealing with a completely different point. You are there comparing the unfairness, as you would have it, between a conditional fee case, on the one hand, and a legally aided case, on the other. The balance of hardship in these cases is not between the case in front of the court and some notional other case; the unfairness is between the plaintiff and the defendant. Where should the burden fall? With the greatest respect to the noble Lord, Lord Thomas of Gresford, I do not think that the comparison he makes is the right one.
The right comparison—that raised by the noble Lord, Lord Goodhart—is the point I have to deal with. Should the failed assisted party in the case be able to treat his house as protected whereas the successful party who has to pay his own costs should have his house taken into account? If he is unassisted, his lawyers will seek to get their fees from wherever they can. The point made by the noble Lord, Lord Goodhart, merits consideration, and the noble and learned Lord the Lord Chancellor has indicated that, without giving rise to any expectation that change will occur, I should say that consideration will be given to it. However, the arguments about resources are quite powerful and would have to be answered by the noble Lord, Lord Goodhart, before there was any reasonable expectation of give in relation to that issue. I hope that that is a satisfactory response to the noble Lord's point.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 140:
Page 7, line 45, leave out ("limiting the amount of'') and insert ("specifying the principles to be applied in determining the amount of any").
On Question, amendment agreed to.
9.15 p.m.
Lord Renton Lord Renton moved Amendment No. 141:
Page 8, line 15, at end insert (", and
(h) providing for the payment of the costs of any other party.").
The noble Lord said: On behalf of the noble and learned Lord, Lord Simon of Glaisdale, I beg to move Amendment No. 141. I have always thought it best that the courts should be given a broad discretion as to costs without tying them down to too much detail. In my time that was always the practice. I do not know whether it is still so. But here the arrangement is that regulations shall be made governing the award of costs. Those regulations may in particular make provision for the various matters that are listed. The noble and learned Lord, Lord Simon of Glaisdale, has in my humble opinion correctly suggested that we should add something to enable the payment of the costs of any third party, for example, or to enable a co-defendant who may not be legally assisted to be paid. I believe that to be an omission that the noble and learned Lord is wise to suggest should be put right.
Lord Falconer of Thoroton: I dread to think what would have happened to me had I included in the Bill a provision such as this if the noble and learned Lord, Lord Simon of Glaisdale, had been here. He would have said that such a provision was quite unnecessary. He would have drawn my attention to Clause 11(1), which gives a general power to make regulations that
"make provision about costs in cases in which services have been funded by the Commission for any of the parties as part of the Community Legal Service".
He would also have drawn my attention to Clause 11(2)(a), which explicitly provides powers to make regulations concerning the payment of costs awarded against an assisted party whether they are to be paid either by the assisted party or by the commission. These powers are not limited to apply in relation to the costs of the successful unassisted opponent but to any costs awarded against the assisted person or commission.
The noble and learned Lord, Lord Simon of Glaisdale, would have asked in tetchy tones what was the point of adding this additional clause when it was obvious to anyone of reasonable common sense that the matter was already covered and that we should not insert provisions simply for the fatuous imagination of some crazed lawyer. In those circumstances, adopting the submissions of the noble and learned Lord, Lord Simon of Glaisdale, on previous occasions, I invite the noble Lord to withdraw the amendment.
Lord Renton: In spite of the wisdom of the noble and learned Lord I must inform the Committee that I
782
do not know the motive of the noble and learned Lord, Lord Simon of Glaisdale, in tabling this amendment. Presumably he did so because he thought that it was necessary. However, he will read the Official Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11, as amended, agreed to.
Lord Goodhart Lord Goodhart had given notice of his intention to move Amendment No. 142:
After Clause 11, insert the following new clause—
("The Public Interest Litigation Fund
PUBLIC INTEREST LITIGATION FUND
.—(1) The Commission shall establish and maintain a fund known as the Public Interest Litigation Fund.
(2) The Lord Chancellor—

(a) shall pay to the Commission the sums which he determines as appropriate for the funding of services by the Commission out of the Public Interest Litigation Fund, and

(b) may determine the manner in which and times at which the sums are to be paid to the Commission and may impose conditions on the payment of the sums.

(3) The purpose of the Public Interest Litigation Fund shall be to finance the provision of services of any of the kinds specified in section 5(1) to a person who is or may become a party to legal proceedings if the conditions in subsection (4) are satisfied and the Commission thinks it appropriate to finance the provision of those services.
(4) The conditions referred to in subsection (3) are—

(a) that the proceedings give rise to an issue of substantial public importance,

(b) that the person seeking the services is not entitled to have those services funded out of the Community Legal Service Fund or as part of the Criminal Defence Service, and

(c) that neither the person seeking the services nor any other person having a similar interest in the proceedings can reasonably be expected to pay for such services out of his own financial resources or resources which may be made available for that purpose from another source.

(5) Regulations may be made for the implementation of this section.
(6) In this section "proceedings" include prospective proceedings and any step in proceedings.").
The noble Lord said: In the absence of my noble friend Lord Lester of Herne Hill, I do not propose to move this amendment on this occasion.
[Amendment No. 142 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 143:
After Clause 11, insert the following new clause—
("Conditional Legal Aid Fund
CONDITIONAL LEGAL AID FUND
.—(1) The Commission shall establish and maintain a fund known as the Conditional Legal Aid Fund.
(2) The purpose of the Fund shall be to provide help in the conduct of legal proceedings by entering into conditional legal aid agreements.
(3) For the purposes of this section a conditional legal aid agreement is an agreement between the Commission and a person providing advocacy or litigation services and his client which provides—

(a) for the costs of the client of the proceedings and any costs ordered to be paid by him to any other party to the proceedings to be paid out of the Fund;

(b) for any costs of the proceedings recoverable by the client from any other party to the proceedings or from any other source to be paid to the Fund; and

(c) for a further sum to be payable by the client to the Fund in specified circumstances.

(4) A conditional legal aid agreement shall be enforceable.
(5) For the purposes of the making of any order for payment of costs in the proceedings, the fact that any costs are being paid out of the Fund shall be disregarded.
(6) Regulations may provide for—

(a) the categories of person with whom (as client) the Commission is authorised to enter into a conditional legal aid agreement;

(b) the categories of proceedings in relation to which the Commission is authorised to enter into a conditional legal aid agreement;

(c) the computation of any money payable under subsection (3)(c);

(d) the administration of the Fund; and

(e) such other matters as may be appropriate to ensure the effective functioning of the Fund.

(7) The Lord Chancellor shall pay to the Commission such sums by way of loan or grant as he determines to be appropriate for establishing the Fund and may guarantee payment of any liabilities of the Fund.
(8) Regulations under subsection (6) may provide that, with a view to ascertaining the demand for conditional legal aid agreements, they shall be entered into for a trial period only with persons resident in a specified part of England and Wales.
(9) The Lord Chancellor may by order repeal this section and provide for the winding up of the Fund if, having regard to experience in the conduct of the Fund, he is satisfied that—

(a) there is insufficient demand for conditional legal aid agreements to justify the continuation of the Fund; or

(b) the Fund is not, and is unlikely to become, financially self-supporting.

(10) Any power under this section to make an order or regulation is exercisable by statutory instrument, and no order shall be made under subsection (9) unless a draft order has been laid before, and approved by resolution of, each House of Parliament.").
The noble Lord said: Amendment No. 143 is a very important matter because it raises—unfortunately relatively late in the proceedings—the question of setting up a conditional legal aid fund. This fairly lengthy amendment would require the legal services commission to set up as a separate fund a conditional legal aid fund. I do not move this amendment in any great expectation that the noble and learned Lord the Lord Chancellor will accept it, but it is an important subject that requires ventilation and discussion. I believe that there are enormous and unrecognised virtues in a conditional legal aid fund.
What is a conditional legal aid fund or CLAF? From the point of view of the clients it is very like a conditional fee agreement (CFA). The clients will not pay their own legal costs if they lose. They will have to pay the mark-up on their own legal costs if they win, subject to any power of the court to order recovery of the mark up from the losing party. The vital difference
784
between a CLAF and a CFA is that in the case of a CLAF the risk is borne not by the lawyers but by the fund. Lawyers will receive their normal costs, win or lose, without a mark-up. The fund will pay the client's legal costs if the client loses. The fund will receive the mark-up if the client wins.
The CLAF idea was floated by Justice in 1966 from a report on road accident cases, and was developed further in the report of a working party which I chaired in 1978. If one has CFAs, why have a CLAF? There are two reasons. First, CFAs present an element of danger to the public interest. If lawyers are at personal risk of losing fees, they will be reluctant to disclose the unexpected document damaging to their case which turns up late in the proceedings.
The noble and learned Lord the Lord Chancellor may say—indeed, he has said frequently—that lawyers should put their money where their mouth is. If that is carried too far, it turns the legal profession into speculators. Doctors have never expected payment by results. If lawyers do so, they will become a different and a worse profession. The noble and learned Lord the Lord Chancellor said earlier today that the legal profession should take risks like other businesses. Of course we take risks. For example, any solicitors' firm has to hire office space, buy computers and other equipment necessary to a modern office, and employ staff. If they do not obtain the work to meet the costs, they will go bust; and from time to time they do. But lawyers, like doctors and accountants, expect to be paid for the work they do. The only professions which operate on a no success, no payment basis are those paid on commission. Those include, for example, estate agents and insurance brokers. With all respect to the many honourable, honest members of those professions, are they the professions with which lawyers should seek to compare themselves? I believe very firmly that they are not.
The second reason for having a CLAF is that many lawyers will not wish to accept CFAs. Some firms will specialise in CFAs—for example, those with a large personal injuries business. They will have a large throughput which will enable them to carry the risk involved in any one case even if that risk, as sometimes it may be, is quite substantial. But, frankly, many firms of solicitors will not be willing to fund their client's litigation and they will prefer the certainty of payment of a CLAF to the risk involved in a CFA even if that were potentially profitable. Firms unwilling to enter into CFAs should have no objection to acting under a CLAF agreement. Therefore a CLAF will widen the choice of lawyers available to the clients. The CLAF has been tried in Hong Kong and worked effectively. It does not mean that CLAFs will necessarily work in England. But I believe that the case for CLAFs is sufficiently strong to justify an extended trial.
Perhaps I may outline briefly the new clause. It speaks largely for itself. Subsection (1) requires the commission to establish the conditional legal aid fund. Subsection (2) states that the purpose of the fund is to help in the conduct of legal proceedings by entering into conditional legal aid agreements. Subsection (3) defines a conditional legal aid agreement. Subsection (4) states

785
that it is to be enforceable, because there would be doubt in existing law as to whether it is enforceable. Subsection (5) states that the fact that any costs are being paid out of the fund is disregarded when making an order for costs.
Then there is a provision for regulations. Subsection (7) requires the Lord Chancellor to grant or lend the start up costs, the intention being that the fund should be self-financing. Subsection (8) provides for a trial period. Subsections (9) and (10) allow the Lord Chancellor to wind up the fund on specified grounds; either if it turns out that there is no demand following the pilot scheme or that it is not financially worth doing.
I have already pointed out the advantages of CLAF over CFAs as a matter of public interest and the reason why many lawyers prefer it. From the client's point of view, CLAF financing is equally as attractive as the CFAs. CLAF will involve an extra level of administration because the fund will need to be administered, but the greater capacity and its management on a non-profit basis should allow it to offset administrative costs by offering a narrower risk margin than any single firm. It has been suggested that some firms may cherry-pick by keeping the best risks for themselves while passing on poor risks to CLAF. If that is thought to be a risk, and it may be, it can be suggested that firms which offer CFAs for any category of case should not be eligible for CLAF funding in the same category. One would have to choose whether to provide CFAs or CLAF.
I believe that many solicitor's firms which would be unwilling or reluctant to enter into CFAs would prefer CLAF funding. I believe that the Bar would much prefer CLAF. Few barristers, particularly young ones, can afford to expose themselves to the risk involved when a large part of their practice is conducted under CFAs; nor can they afford the delay in payment if payment is never available until the case is finally decided. I believe that the Government should commit themselves to a significant CLAF trial funded by them. CLAF agreement is not currently legitimated by Clause 27 so that under the present law it seems very unlikely that even a privately funded CLAF scheme could be tried. If the Government are not prepared to go as far as I would wish, it will be necessary to come back with a further amendment to Clause 27 which would enable a privately funded CLAF scheme to be tried out.
Lord Ackner: I strongly support the amendment. I am concerned that the CFA will ultimately affect the very existence of the Bar. The Bar, as independent practitioners, is not geared to carrying on the business of bookies, which is what the CFAs require them to do. It is the old problem of speculative litigation.
CLAF is not in that situation. One must bear in mind that the Bar is not as yet organised to run the risk of significant parts of its litigation being subject to the risk of no win no pay. One must also bear in mind that whereas the solicitors will get the litigation which is to be speculative at the earliest possible stage and can settle those which are settleable, which is a large part of the personal injury field, those which go to the Bar are
786
the difficult cases in which the risk of losing is high. As has been pointed out, the young members of the Bar cannot afford to take that on.
I think one should look, as the Bar Council has, into what are the dangers of CFAs for the ultimate development of the Bar. The only way to cope with the risks is to try and separate them by some form of partnership between members of chambers. When I was Chairman of the Bar we had a committee to consider partnerships at the Bar. It was presided over by the noble and learned Lord, Lord Templeman, as he then was not. It concluded without any difficulty that the result of a partnership at the Bar would be greatly to restrict the availability to solicitors and ultimately to the lay clients of practitioners available to take on cases. All you had to do in a specialist field was to take the top silk out of one set of chambers, the top junior out of the next set of chambers, and a couple of noting briefs out of the third and fourth set of specialist chambers, and you had thereby denied to the rest of the litigating public the rest of the specialist Bar. That was the danger of partnerships.
This need not arise in respect of CLAFS and that is why this needs to be seriously developed. We have the usual clich's in this sort of legislation. The Government recognise that a strong and independent Bar is a vital foundation of liberty and all the rest. Of course it is, but you cannot have a strong and independent Bar unless you have some regard to its development. I do not see, speaking for myself, where a young man gets started at the Bar in 10 years' time. I believe that it will be a species of fusion forced upon the Bar. The judges, when they say, as they often do, at the end of a case, that they are very grateful for the assistance they have received, are really making that observation with great sincerity. Without a strong, diligent and competent Bar, the judiciary would be incapable of making the quality decisions which they now make. The judiciary are dependent upon the quality of the Bar and once we begin to undermine that quality, it will run throughout the entire system.
9.30 p.m.
Lord Falconer of Thoroton: I immediately spotted that the noble and learned Lord, Lord Ackner, was overstating his case when he stated that whenever a judge says that he is grateful for the assistance that the Bar has given in a particular case, he means it with sincerity on every occasion. I know from my own experience as a member of the Bar that that is not and could not be right, though I appreciate that there are very many occasions when it is said with sincerity.
Lord Ackner: The noble and learned Lord says that he knows from his own experience. I think he must be relying on hearsay evidence.
Lord Falconer of Thoroton: No; on the basis of my own dismal performance in front of various judges who have then congratulated me with apparent sincerity upon the performance I gave, which was out of pure politeness.

787
The serious issue that divides the government side from the amendment proposed by the noble Lord, Lord Goodhart, is that the amendment of the noble Lord, Lord Goodhart, proposes that a conditional legal aid fund should be compulsory in the sense that the commission should be obliged to set it up and should be obliged to pilot it when it has been set up. On the other hand, the effect of the Bill as it is presently drafted is that there is a reserve power in the legal services commission to set up such a fund and it has been said separately from the Bill that it is thought at the moment unlikely that such a fund would be set up. We on this side do not accept that it could be right for the commission to establish such a scheme. Neither can we accept that a scheme should be piloted, as the proposed clause would allow the commission to do, in order to establish whether a CLAF would be viable.
The Government's priority for using public money is to direct it towards areas where there are no suitable alternatives. Conditional fee agreements provide a suitable alternative in certain areas of the law—in particular, personal injury cases. Conditional fees are already working in this area and increasingly are becoming a common way to fund those cases.
The noble Lord, Lord Goodhart, does not suggest that conditional fee agreements should not be available in personal injury cases or, indeed, in any other sort of case. Therefore, the effect of his proposal is that the CLAF and the conditional fee agreement should subsist side by side. It is our belief that if they exist side by side, the result will be that the strong cases are dealt with by the conditional fee agreements—they would lead to a better return for the clients because the successful client would not need to make any payment into the CLAF—whereas the weaker cases would end up in the CLAF.
The result would be that the CLAF would become the dumping ground for the weak cases and all the strong cases would be dealt with under the CFA. The significance of that would be that the CLAF would not be able to fund itself. That is the present expectation of those on this side of the Committee. If that expectation is correct, it would be wrong to set up a CLAF. If, as we believe to be unlikely, that expectation turns out to be wrong, there is the reserve power in the Bill to set up the CLAF.
With respect to the noble Lord, Lord Goodhart, that is the most sensible way of approaching the problem rather than, as he suggests, by compelling the legal services commission to expend what would be a substantial amount of money to set up the fund. He does not deal in his submissions with where the start-up money—which would run into millions of pounds—would come from or what cases should be deprived of funding to set up the CLAF. We believe it would be wrong to set up a CLAF if our expectations on the conditional fee arrangements are right.
As I said, conditional fees are already working in the area of personal injury. Products exist to provide protection insurance, as I have already explained to the Committee. Many lawyers who already work in this field are experienced in taking cases where they carry
788
disbursements or have arrangements to defer payment of expert fees and the like to the end of the case. I see no reason why other lawyers cannot make similar arrangements once public funding ceases to be available for certain categories of case. Given my firm intent that public money should be used where there is no suitable alternative, chancing public money—for that is what it amounts to—to seek to establish the viability of a CLAF is not an appropriate use of public money. It will not help those on whom I wish to focus our intentions and resources.
The noble and learned Lord, Lord Ackner, made an obviously sincere defence of the Bar's decision. It is not a clich' for this Government to say, as we have said repeatedly, that we value and see the importance of an independent, strong Bar. I believe, as the Lord Chancellor and the Attorney General believe, that a strong Bar is a bastion of liberty. But in considering what is the best way to finance litigation, the Bar is not the only consideration. Other considerations apply as well, including what is best for the people who become involved in litigation. In the circumstances, I ask the noble Lord to withdraw his amendment.
Lord Ackner: Before my noble and learned friend sits down, he has said that the CFAs are working. Can he tell the Committee what monitoring exercises have been carried out to ensure that CFAs are working fairly in the sense that litigants are not being taken advantage of in cases which are open and shut—or virtually open and shut—as has been conceded to be the situation in at least 90 per cent. of personal injury cases?
Lord Thomas of Gresford: The issue that the noble and learned Lord has not addressed is this. Risk is at the heart of the problem. If a firm of solicitors has a large volume of cases and enters into a large volume of conditional fee agreements, the risk will be spread within that firm across that large number of cases. Consequently, it can carry the lost causes. It may be that the 5 per cent. or 10 per cent. of the cases that such a firm takes on under conditional fee agreements will fail and, if so, the firm will not get paid for those cases. However, the uplift received on the successful cases will pay for the ones that fail. That is all right within a solicitors' firm that has a large volume of cases. The risk will be spread fairly.
The problem to which the noble and learned Lord, Lord Ackner, referred is that when you are dealing with the Bar, or with a small firm of solicitors, there is no opportunity to spread the risk across the small practice of the individual barrister or solicitor. That is particularly so for the individual barrister who is just starting at the Bar and seeking to make his way. If he loses 50 per cent. of the cases and does not get paid that 50 per cent., his income will be taken up with all his other expenses and he will suffer a loss.
I do not believe that that is a healthy state of affairs; nor do I believe that the legal profession should be treated as a business that should carry the risks of litigation because of the conflicts of interest and all the other arguments that we have heard about on this topic.

789
If conditional fee agreements had been in existence for a significant period of time—instead of the two to three years during which they have been effected—the situation might be different. But so many of the cases that have come to fruition—I do not believe that it is a high percentage—have settled. As the noble and learned Lord, Lord Ackner, pointed out, it is not the easy, settleable cases that cause the problem, but the difficult cases. The Bar's difficulty is that barristers get only the difficult cases. The risk is different.
The risk for the Bar differs in two ways. First, each individual barrister cannot spread the risk as widely. Secondly, he is not dealing with readily settleable cases. If we had had five or 10 years' experience of conditional fee agreements, we could forget about legal aid and move to that, but we have not. The CLAF ensures a fair system of remuneration that avoids a conflict of interest between the lawyer and his client, does not make it in the interest of the lawyer to come to a settlement of the case below its true value, and ensures every lawyer is properly paid, win or lose. We are thus back in a satisfactory situation where professional standards and professional ethics are maintained.
I believe that the introduction of this gambling element in relation to barristers and small firms of solicitors is highly undesirable. I note that the noble and learned Lord the Lord Chancellor shakes his head. He has no doubt never been in the position of having a range of cases, half of which he has lost and half won. Others are not quite so fortunate. If we are to maintain a strong and independent Bar, we must avoid conditional fee agreements being the sole method of funding the whole system.
9.45 p.m.
Lord Clinton-Davis: I am not totally persuaded by the noble Lord's argument. I believe that my noble and learned friend Lord Falconer clearly indicated that the Government would carefully monitor the situation. The nature of the monitoring is all important and I believe that it needs to be undertaken with a degree of independence. It is not only the Bar that faces a problem; indeed, the client also does so. With conditional fees the solicitors involved have a financial stake in the outcome of the litigation. Therefore, there is a possibility—and I put it no higher—that some solicitors will feel compelled, especially when they are carrying very heavy overheads, to ensure that there is a settlement. They will preserve that financial interest on their part, which may not necessarily be conducive to the interests of the client.
I urge my noble and learned friend to give Members of the Committee some indication, if not now, then at a later stage of the Bill's proceedings, of how the situation—which, to a large extent, is still a novel one in that it is very new—is developing. Perhaps he can also confirm that there will be no real prejudice caused to clients, which, after all, is the overriding consideration of my noble and learned friends. That being the case, while I am not necessarily asking my noble and learned friend to give an answer here and now
790
on that point, I should like to hear that the Government will give it consideration and make an announcement at a later stage.
Lord Archer of Sandwell: I do not take a dogmatic position in this debate. I rise only to underline what was said a moment ago by my noble friend Lord Clinton-Davis: that the risk we are talking about is not principally to the Bar but to the clients who may, in certain circumstances, find difficulty in securing representation and, certainly in the solicitors' profession, in securing advice.
I venture simply to draw one lesson from history. The noble Lord, Lord Goodhart, said that no doctor would contemplate a conditional fee agreement. I seem to remember reading somewhere that it was the habit in parts of the Ottoman Empire to pay your doctor so long as you remained in good health. However, if you fell ill, you ceased to pay him until you recovered. There is some evidence that those who were invalids found it very difficult to find doctors.
Lord Goodhart: I am grateful for the support that my amendment has received from the noble and learned Lord, Lord Ackner, and for the considerable degree of support that it received from the noble and learned Lord, Lord Archer, and the noble Lord, Lord Clinton-Davis. The reaction of the Government is hardly unexpected; but, nonetheless, it is disappointing. I shall not go into it further, except to make two very brief comments in response to what the noble and learned Lord, Lord Falconer, said.
First, as far as concerns cherry-picking, I do not see that as being a danger. It is obvious that a conditional legal aid fund would be able to spot the bad cases that were being thrown at it and that it would look with a great deal of suspicion at any case that comes to it from a firm that is known to have a wide CFA practice. Indeed, what is far more likely to happen is that firms which are not prepared to undertake the risk of CFAs will go for CLAF. As I said earlier, this means that there will be a considerable widening of choice to potential clients. As the noble and learned Lord, Lord Archer, rightly said, it is the client's interest that we are considering in this case.
Secondly, as regards funding, I do not believe that this proposal need divert funds from anywhere. The way that I would in fact envisage this assistance being funded would be through money raised from the private sector but guaranteed by the Government. If, as I strongly believe, CLAF turns out to be viable, one would not be diverting funds from anywhere else. On this occasion I shall withdraw the amendment, but we may wish to discuss this matter further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Ampthill): I call Amendments Nos. 144 and 145. These were debated on Tuesday.
Lord Windlesham: With the leave of the Committee, I point out that there is a point of inaccuracy as regards

791
the groupings list, in that Amendment No. 144, which has been debated, is grouped with Amendment No. 145, which has not been debated, as the amendment to which it was attached was not moved. Together with my noble friend Lord Kingsland I wish to make a number of points on Amendment No. 145. However, this constitutes a major new part of the Bill. Perhaps the Committee wishes to adjourn until another day. I am probably speaking out of order but I wished to make that point.
The Deputy Chairman of Committees: May I just deal with Amendment No. 144, which has not been moved, and Amendment No. 145 to which the noble Lord wishes to speak?
Lord Windlesham: I wish to speak to it, but not necessarily now. If the Committee wishes to adjourn at approximately 10 o'clock I think my remarks would receive a better welcome on another day rather than making a substantial speech now. As I said, we have
792
just reached a landmark point in relation to Amendments Nos. 144 and 145. I refer to the introduction of a novelty to our system of criminal justice—the criminal defence service. It may be better to discuss that another day, if that is the wish of the Committee.
Lord Ackner: I support that proposal. We have two days next week set aside.
The Deputy Chairman of Committees: There is no proposal currently before us because the noble Lord does not intend to move that amendment at this stage.
Baroness Farrington of Ribbleton: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at eight minutes before ten o'clock.