I will be brief. The proposed new clause would provide that:
“The Lord Chancellor may by regulations make provision for alternative sources of funding to support the provision of Legal Aid.”.
We gave careful consideration to alternative sources of funding to support the legal aid fund when drawing up our consultation proposals. Hon. Members will be aware that we consulted on two alternative sources of funding that have had some success in other jurisdictions. The consultation paper sought views on establishing a scheme under which the interest accruing on sums held by lawyers on behalf of clients would be used to offset the cost of legal aid. However, many respondents raised concerns about both the principle and the practical arrangements of operating such a scheme, including concerns that the scheme would not provide a certain income, would be easily avoided, might reduce the level of pro bono work or competitiveness in the sector, and might cause significant harm to some small businesses. Having considered the responses, we recognise that the estimated financial benefits of the proposal are uncertain, and the impact on providers unclear. We therefore decided not to pursue the proposals at this stage. We have, however, decided to proceed with our other proposal for an alternative source of funding, namely the establishment of a supplementary legal aid scheme. I briefly described that earlier. This approach will also ensure that, so far as is possible, legal aid is no more attractive than conditional fee agreements, as revised in accordance with the proposals in part 2 of the Bill.
In conclusion, we have already given careful consideration to possible alternative sources of funding to support the legal aid fund in drawing up our proposals for reform. I therefore urge the hon. Member for Hammersmith to withdraw the motion.