§ Lord Colwynasked Her Majesty's Government:
Whether they can estimate the increased cost of damages that will be awarded under the new discount rate of 2.5 per cent announced by the Lord Chancellor on 27 June; and whether this proposal was discussed beforehand with the Secretary of State for Health and the Chancellor of the Exchequer. [HL314]
§ The Lord ChancellorA full assessment of the impact of the new discount rate is being prepared and will be published in due course.
There was wide public consultation between March and May 2000 on the setting of the discount rate for personal injury awards under Section 1 of the Damages Act 1996. Eighty-four responses were received. HM Treasury were consulted as part of that exercise pursuant to Section 1(4) of the Act, which requires the Lord Chancellor to consult the Treasury before making any order under Section 1(1).
However, I did not discuss the rate, or my reasons for setting it at the level chosen, with either the Secretary of State for Health, the Chancellor of the Exchequer or any other Minister, in advance of taking my decision. The decision was mine and mine alone. My function was to set the discount rate at the right level in accordance with the law.