Community Legal Service (Funding) (Amendment No. 2) Order 2011 — Motion to Annul

– in the House of Lords at 8:30 pm on 26th October 2011.

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Moved By Lord Bach

That a Humble Address be presented to Her Majesty praying that the Community Legal Service (Funding) (Amendment No. 2) Order 2011 (SI 2011/2066), laid before the House on 24 August, be annulled, on the grounds that the reduction in civil standard and graduated fees for Legal Help and Help at Court will seriously undermine access to justice because it threatens the financial viability of already hard-pressed community legal practitioners who carry out an essential service to those least able to afford it, including the most vulnerable in our society.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice) 8:34 pm, 26th October 2011

My Lords, in moving this Motion, I make it crystal clear that we on this side believe that there must be cuts to the legal aid budget. Over the past 30 years or so, perhaps until a few years ago, the amount spent on legal aid went up a great deal, year on year, and that was particularly true in the criminal legal aid field until the amount spent on criminal legal aid, compared with civil legal aid, was totally out of kilter.

As part of the necessary cuts, we, when in Government, took action to reduce legal aid spending and I do not apologise for that. Almost the last act we took in government, before the general election of 2010 was called, was to cut criminal legal aid advocates' fees in the higher courts over a three-year period. It was not popular but it was necessary. Incidentally, that gives the lie to the present Government's claim that we, the previous Government, were not prepared to tackle the deficit. If we had won that election, we would have cut further. My personal view is that there are large savings indeed to be made in our whole criminal justice system. In any event, we had published a White Paper, Restructuring the Delivery of Criminal Defence Services, which, if followed through, would have made considerable savings.

However, there are two considerable differences that exist between our proposals and those of the Government. First, Her Majesty's Government are intent on cutting legal aid much too far and much too fast. They have not given any-certainly not enough-thought to the consequences of their policies, either in human or in financial terms. That leads me on to my second point. One of the areas in which they have chosen to axe legal aid, take it out of scope altogether and make savings in fees, is precisely the wrong area of law. They intend to remove welfare benefits advice and representation at all levels, including up to the Supreme Court; employment advice; much housing advice and even more debt advice; and some community care advice and education advice-in other words, advice to the poor and the vulnerable. They intend to save the sum of about £50 million per year through those cuts. Today, of course, we are not strictly debating the rights and wrongs of such an approach, but we shall be able to do that in short order when the Bill, currently in another place, comes to this House.

Tonight we are debating an order that in one fell swoop cuts 10 per cent from all-I repeat, all-civil fees, including family fees. To describe it as a rough and ready figure would be a gross understatement. It is a crude and ill thought-out measure with no evidential justification whatever. Although I am particularly concerned with the 10 per cent cuts to social welfare and community lawyers, the lowest paid of all the lawyers who do civil and family work, I acknowledge the powerful case put forward by other civil and family lawyers to me as a result of my Motion being tabled. I thank all those who have made their case. There may well be champions for them tonight, although I know that because of the lateness of the hour, various noble Lords whose contributions would have been very welcome on all sides have not been able to stay.

Interestingly, there are no comparable cuts on the criminal side-for example, in the sister order that accompanies this particular statutory instrument. This shows that the Government are quite ruthless when it comes to civil and family legal aid and as soft as butter when it comes to criminal legal aid. It is as though they have no sense at all of the fantastic value social welfare law has in our society, allowing, at comparatively cheap costs, early legal advice for many of those who could not possibly afford to get it, with the result that issues are solved and the courts are not full of hopeless cases and litigants in person. Noble Lords will perhaps have seen the concern of some Justices of the Supreme Court in the newspapers this morning. For some reason, the Government are determined to decimate social welfare law and drive out those hard-working, dedicated and, I would argue, poorly paid lawyers who practise in this field.

Who are these lawyers? They are often the not-for-profit sector; they work in law centres, citizens advice bureaux and other advice centres. Some are solicitors and barristers in private practice. Many, wherever they come from, sacrifice more lucrative legal careers in order to practice this type of law. If they do not practice it, who will?

Their fees are fixed fees brought in in October 2007 and raised by 2 per cent in 2008 but untouched since then. They are not overgenerous. We as a Government brought in the fixed fee and it undoubtedly caused problems in itself. We set up a study with many experts from this area of law to look into those problems, and we produced a document entitled a Study of Legal Advice at Local Level in order to attempt to tackle them. We as a Government refused at any time, and particularly during the recession, to cut legal aid spending on social welfare law. We increased it significantly from £151 million in 2007-08 to £208.4 million in our last year, 2009-10. We increased eligibility by 5 per cent, bringing in 750,000 more people, and increased the number of new matter starts. I am proud of what we did.

The proposed fees are set out in Table 1 of the order, to be found on page 4. These cases often take many hours' work. They involve face-to-face contact. Often the lawyer, having seen the client, has to speak to third parties in order to resolve the problem. They are by no stretch of the imagination well paid. There is an exceptional threshold, but a case has to be very long indeed and very complicated to come into that category.

There are currently 52 law centres in England and Wales. They are not profit-making. They have had to make efficiency savings with the introduction of the fixed-fee system. Many rely heavily for the excellent work that they do on legal aid. Eight generate over 70 per cent of their income through legal aid contracts. None of these law centres has a 10 per cent surplus and at present they monitor cash flow on a weekly basis. There is no fat to them at all. All eight are at risk of closure. Four centres are particularly vulnerable, two in London and two outside the capital. Eight hundred thousand pounds is immediately to be taken from law centres' funding overall by the 10 per cent cut. In the medium term, the combined effect of the 10 per cent cut plus the proposed scope cuts is that £8 million out of the £9 million in legal aid contracts that law centres enjoy will disappear. Eighteen law centres out of 52 will just not be viable-it may be more. Where, I ask, will people go to in order to get their legal issues sorted out?

I could make the same points about CABs, the citizens advice bureaux, which have a very high reputation, as do law centres, in Parliament and outside. Obviously CABs do not rely so heavily on legal aid, but many still rely on it, and at a time when local authority funding is, frankly, declining, CABs will also close as a consequence of this order. Noble Lords will remember that a few months ago there was news from Birmingham about the state of CABs in Britain's second largest city.

Private sector firms that do this work also work on the same legal aid rates. All day long I have been receiving e-mails from solicitors who do this work. Sometimes, of course, other parts of these firms subsidise the social welfare law part of a firm, but I have been told that the amount of money that legal aid lawyers of many years' standing get per year would make an extremely interesting data base. It is much less, of course, than that of a solicitor who does not do that work and compares extremely badly with other professionals-very badly indeed. Those who practice in this field and who do this absolutely invaluable work do not expect enormous rewards, but nor do they expect to be penalised even further.

I end with the story of Law for All. Law for All was in west London, and many noble Lords may have heard of it. It was quite a large organisation. It provided legal help in the fields of debt, employment, family law, housing and welfare benefits. It also provided representation for many people over many years. However, it has now been forced to close down in anticipation of the reduction in the fixed fee and, of course, the fact that 90 per cent of their work is being taken out of scope in the Bill that is currently going through Parliament. This is a tragedy for local people, who received legal help in 1,500 cases last year. The local authority in that part of west London is generous, but the Government's proposals have meant that Law For All has closed its doors. I have spoken this afternoon to the chief executive -or should I say ex-chief executive?-who confirmed that the 10 per cent cut that we are debating tonight and the taking out of scope have driven it to close.

It is important to point out that even where the area of social welfare law is not to be taken out of scope altogether, such as in some housing cases and some debt cases connected with housing cases, the order that we are debating tonight means that the continuing work in housing, for example, will be reduced by 10 per cent. All housing work that stays in scope will be affected.

Noble Lords may want to know how much this will save. It is estimated that the saving from the whole order, including the 10 per cent cut in civil and family legal aid across the board, is worth £45 million. The cuts as they affect social welfare law fees are all of £5 million. That is a figure that the Legal Action Group has confirmed. Of course it is a rough figure but it shows just how much or, rather, how little will be saved by this order. Saving £5 million in fees when Her Majesty's Government intend to spend £250 million on ensuring that there are weekly rather than fortnightly collections of rubbish is absolute nonsense. Have we not got our priorities entirely wrong?

In the Hansard published today, the Minister has answered a Question that I asked him. The information is that:

"In cash terms, spending on legal aid in 2010-11 was ... some £66 million (3 per cent) below provision".-[Hansard, 25/10/11; col. WA 137.]

Yet the aim is to save £5 million by cutting these fees by 10 per cent.

I am not allowed to seek to amend this order and I therefore have to pray against it as a whole. Whether I vote against it tonight will depend on what other noble Lords say in the course of the debate that I hope will follow and, of course, particularly on what the Minister says. I beg to move.

Photo of Baroness Deech Baroness Deech Crossbench

My Lords, I declare an interest as chairman of the Bar Standards Board. The Bar Standards Board is the regulatory arm of the Bar Council, not the representative one, and I have no direct concern with the pay that barristers earn. My job is to further the objectives laid down for the Bar in the Legal Service Act 2007. There are eight in Section 1, including protecting and promoting the public interest, improving access to justice and encouraging an independent, strong, diverse and effective legal profession. What I have to say tonight when I encourage your Lordships to annul this order is based entirely on the application of those objectives in the regulation of the education and working lives of barristers.

Last Sunday, an advertisement appeared in the Sunday Times headed,

"Helping the most vulnerable in Society".

It was for a new chief executive of the Legal Services Commission, which hands out legal aid. I quote from the ad:

"Our role is to ensure through our providers that independent, high-quality legal advice and representation is available to vulnerable people who cannot afford it themselves. We enable people to protect their rights and defend their interests".

This order flies in the face of the aspiration in that advertisement and of the achievements of the objectives in the Legal Services Act and the profession.

Let me turn first to the effect it will have on women and black and ethnic minority barristers. This is a central plank of the work that we do at the Bar Standards Board in encouraging and retaining those very barristers. The effect of this order is to cut the rates payable in family advocacy by 10 per cent. It will be felt hardest by women and black and ethnic minority barristers, who are disproportionately represented in dependence on legal aid, while white men are the least dependent sector. There has been considerable government pressure to open up the legal profession still more to entrants from all backgrounds, albeit that it is already a very diverse profession.

Alan Milburn's report of 2009 singled out the legal profession in his survey of social mobility, even though the Bar and solicitors go to enormous lengths to explain and reach out to young people all over the country. The Bar has a record to be proud of, with over 15 per cent of pupillages going to black and ethnic minority students in a very competitive market. The cuts in fees in this order undo all that work, and make the Government appear two-faced.

Sixty per cent of the family Bar are women, and they do 66 per cent of legally aided children work. Half the family Bar relies on public funds for more than 60 per cent of its turnover. From their gross earnings, modest though they are, barristers have to pay overheads to chambers and clerks-typically 20 per cent-and in addition meet their own pensions, illness and professional insurance cover and expenses. The King's College London survey of barristers in 2008-09 indicated that 80 per cent of them intended to abandon legally aided public work. This generation of young people have university tuition debts and huge fees at Bar school, and the modest but reliable income that was once their support in the early years at the Bar is now to diminish to such an extent that they cannot earn a living. There is no point in the great efforts put into outreach in this situation.

It continues on into the judiciary. The noble Baroness, Lady Neuberger, reported on judicial diversity in 2010. A less diverse profession means a less diverse judiciary, and fewer women judges. The diminution of the profession also means more litigants in person taking up more court time, not less, with problems being stored for several years down the line because they cannot be settled in court in a proper and timely way.

As with other demanding professions, women are being lost to the Bar after five to 10 years in practice, because of the costs of childcare. It is unaffordable and will be even more so. Twice as many women leave the Bar as do men for that reason. The cut in fees in this order will weaken retention. It will also damage the children who are the subject of court orders, because now the experts who give evidence in child cases are placed within this table of reduced fees, and the fees are set at below the level needed to maintain their practices.

The Government have given no evidenced reason for cutting by 10 per cent, and they have not waited for the outcome of the Family Justice Review, chaired by David Norgrove. In March of this year, its interim report commented on the adverse impact that cuts would have, the lack of data about case-handling and flow through the court, and the contribution made by the lawyers in the cases. In the 2009 study Family Law Advocacy by the very experienced researchers John Eekelaar and Mavis Maclean of Oxford University, it was shown that where lawyers were involved in family law cases concerning money and children, the majority of cases were resolved without court process or contested hearing. Even where the cases went to court, in the highly charged emotional atmosphere that one would expect, the presence of specialist family lawyers enhanced the prospects of resolution and shortened the court process, for they are minded to act collaboratively and in the interests of the children. Additional damage has already occurred to women and children through the closure, because of already instituted cuts, of the advice agencies Refugee and Migrant Justice, the Immigration Advisory Service and Law for All, as the noble Lord, Lord Bach, has just mentioned.

There are more constructive ways to save money. First of all there is too much judicial review, now used as the citizen's right of appeal. I was surprised to find when I was the Independent Adjudicator for Higher Education, running an alternative dispute resolution service for students, that those students obtained legal aid to challenge our decisions. There should be a push back against the notion that human rights mean that any and every decision can be judicially reviewed at great cost to the public. As for human rights, the real denial of those is to the middle classes, who are neither poor enough to be eligible for legal aid, nor can afford to go to law at their own expense. They are therefore the real victims, who cannot access justice.

The other substantive reform needed is to bring certainty into the law of maintenance on divorce. An obvious model for this is the continental European system of community of property, to which the Scottish system is similar, which entails a fixed fifty-fifty split of post-marital property and little ongoing maintenance. Broad-brush justice it may be, but it is cheap and efficient to arrange. As long as we have our Rolls-Royce discretionary system of settling property issues on divorce, couples will continue to waste sums they can ill afford-sometimes amounting to as much as the property in dispute-on deciding who gets what.

This order should be annulled. The Government should await the Family Justice Review report and change substantive law to get a more efficient system without damaging the profession and its diversity.

Photo of Lord Scott of Foscote Lord Scott of Foscote Crossbench 9:00 pm, 26th October 2011

My Lords, I, too, support this Motion and agree with nearly all the remarks made by my noble friend Lady Deech. The statutory instrument is an extremely worrying document, proposing as it does to reduce by 10 per cent the remuneration payable to lawyers for legal services in cases covered by a legal aid certificate. What is the reason for this? The purported reason is set out in the Explanatory Memorandum. Paragraph 7.2 explains that,

"the Government considers that it needs to ensure that it only pays those fees that are absolutely necessary to secure the level of services that are required".

That is an entirely acceptable proposition but I suggest that it is weasel words.

The reason is not that legal aid should not have been granted in a number of cases or that the remuneration assessed under the present regulations exceeds a reasonable charge for the work done or that the work done was unnecessary. The reason is that assistance is needed from the Ministry of Justice to help reduce the budget deficit. Why that could not have been explained as the reason in the Explanatory Memorandum, I know not. But the reason plainly is simply to assist in reducing the budget deficit.

Are others who do work for the Government as independent contractors, such as barristers or solicitors, to have their remuneration reduced to assist in reducing the budget deficit? I have not heard of such a suggestion. Why are legal aid lawyers being singled out for this attention? The effect of the 10 per cent reduction needs to be thought about. A number of lawyers may decline to accept legally aided work, bearing in mind that they will receive 10 per cent less than the sum which would have been reasonable remuneration under present standards. Why reduce what has been assessed as reasonable remuneration?

A second possible result has already been referred to by my noble friend Lady Deech. The number of litigants in person may increase and their presence in court almost invariably means that the case takes much longer. It often means that there will have to be adjournments. The judge with litigants in person before him, particularly if there is one litigant in person on one side and counsel for a paying party on the other side, is placed in the position of having to appear sometimes like counsel for the litigant in person. The judge thinks of points that the litigant in person has not thought of that might assist their case. The judge puts those points forward and then it appears that he is taking the side of the litigant in person. It is an unedifying spectacle but all judges will have experienced it. I have myself. Those are the possible adverse consequences.

What are the beneficial consequences? There would be a reduction in the legal aid bill, but that would depend on the additional costs occasioned by the number of adjournments that litigants in persons may bring about. The Law Society has circulated some documents suggesting that the notion that costs will be saved by these so-called reformed are misconceived. It may be only pie in the sky but the proof of the pudding will be in the eating and the disadvantages, I suggest, are apparent.

More important than the disadvantages to which I have referred is the effect on the civil justice system, for which I have a great affection. I have worked in it all my working life. It is not an optional extra but a system that behoves every government to supply for the benefit of all its citizens. Without a civil justice system self-help would become the order of the day in the settlement of issues between citizens. The civil justice system is there to settle issues between citizens and the Government. A feature of an acceptable civil justice system is that it must be accessible to all who need to use it. The legal aid scheme enables that to be achieved. Some types of litigation are removed from the benefit of the ability of litigants to conduct their cases under legal aid, but, broadly speaking, the legal aid scheme seeks to ensure that access to the civil justice system is available to all, which is right and proper. As I have said before, it is not an optional extra to be paid for only by those who can afford it.

The need for lawyers in that system is apparent also and those lawyers need to be paid for. The notion that that can be avoided by Government is no more realistic than saying that any other necessary service which it behoves Government to provide should be paid for by those who work in it. Are doctors and nurses supposed to contribute to the cost of the National Health Service? Certainly not. How is it different where legal aid lawyers work in cases where legal aid has been granted? A functioning and healthy civil legal aid system is essential. The implications of this statutory instrument are that the Government do not regard it in quite that light but think that these impositions can be made on the lawyers who work in that system in order to reduce the cost that would otherwise fall on government.

The 10 per cent reduction does not perhaps matter very much for senior barristers who have established a practice. They will have some privately funded work. They will have established good will among solicitors and clients that they can rely on in legally aided work as well. They will survive the 10 per cent reduction. The ones who will be struck by it and who may not survive it are the new entrants to the profession. Those men and women enter the profession with trepidation. It is a profession which provides no security. There is no firm that will pay you a salary that you can fall back on. You stand or fall on your own efforts and rely on the fees that you earn. Almost every entrant to the profession will wonder how long he or she can manage to continue before the financial difficulties become too great. The statutory instrument separates counsel providing advocacy services under the legal aid scheme into senior barristers who have been in practice 10 years or more and juniors who have been in practice less than 10 years. Those who have been in practice for 10 years or more can be expected to have built up some degree of practice and good will. They probably have some privately funded clients. They probably have some good will with solicitors who do legal aid work. They can probably avoid suffering too much from this 10 per cent reduction in their legal aid income. But what about those new entrants with five years' call or less? They have no security at all. They will have a meagre income. They will be hoping that it builds to something respectable. For many of them it does but for some of them it does not. Practically every barrister who enters the profession does so in the knowledge that he or she may be unable to afford to continue for long enough to establish a practice on which they can reasonably live. They may have to take a bolthole, so to speak, into employment in a solicitors' firm or in the legal department in some commercial company. The ones who have to take that course, who cannot wait the length of time necessary to build up a practice they can survive on, will be those who have no advantages of family support to help them in their difficult years. This statutory instrument is going to make those first five years much more difficult. Let us imagine somebody on an employment salary, not a very large one, being told that he or she must suffer a 10 per cent reduction for the future. There will be a drift away from the barrister's profession and into firms and commercial companies, to which I have already referred. It will do a disservice to the civil justice system, which depends on a stream of lawyers coming up through the system and becoming available eventually as potential judges.

I respectfully suggest that this is a bad statutory instrument. If my noble friend Lord Bach puts his Motion to a vote, I shall vote for it.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, I regret that I, too, must support the Motion of the noble Lord, Lord Bach, because of my concerns about the impact on child welfare. I regret doing so, because I know that the Government take the welfare of children very much to heart, and I thank the Minister for ensuring that domestic violence issues have been kept out of the scope of the order and that tandem representation of children in private law cases will be untouched.

I remind the Minister and other Members of the House of Article 3.1 of the United Nations Convention on the Rights of the Child, which states:

"In all actions concerning children"- whether undertaken by legislative bodies or other institutions-

"the best interests of the child shall be a primary consideration".

I should be very interested to hear from the Minister how the best interests of children have been considered in this move by the Government to cut legal aid.

Children need the best experts and lawyers in the immensely complex cases that they are often drawn into. My concern is that those experts will be driven out by the further cut in their finances. Expert witnesses to the family courts-including paediatricians, child and adolescent psychiatrists, educational psychologists, adolescent psychotherapists and independent social workers-are all subject to the 10 per cent cut, having already had their fees seriously cut. For clinicians working in London, the situation is worse, because London-based practitioners are allowed to charge only two-thirds of the amount charged by those based outside London. As everyone knows, it is more costly to practise in London.

I am concerned that because of the impact on expert witnesses there will further delays for children in the courts and that poor decisions will be made. If a child is taken into local authority care and the wrong decision is come to, it will stay with that child for the rest of his life and possibly for the rest of his children's lives. We need to get those decisions right and we need the right expertise.

A further concern of the expert witnesses is that they cannot deal directly with the Legal Services Commission but have to work indirectly through solicitors. Perhaps the Minister could look at that, because it would certainly be an improvement if they could deal directly with the commission.

I look forward to the Minister's response. I hope that he can give some comfort to your Lordships.

Photo of Lord Marks of Henley-on-Thames Lord Marks of Henley-on-Thames Liberal Democrat

My Lords, I rise with a heavy heart to speak against this annulment Motion. It is with a heavy heart because, for all my professional life, I have been a devoted supporter of legal aid. I declare an interest as a barrister who over the years has done a great deal of publicly funded work. My first ever motion to a Liberal Democrat conference was on the promotion of legal aid. The Liberal Democrat Lawyers Association, which I chaired for a number of years, drank a toast every year at its annual dinner to the Legal Aid Fund, a toast proposed by a prominent lawyer. It is noteworthy in the context of today's debate that the toast was changed some 10 years ago to "justice for all", as an ironic response to cuts in civil legal aid made by the then Labour Government. I chaired a policy group entitled A Right to Justice, which helped to define Liberal Democrat policy on improving the legal aid scheme. My party has always taken as its starting point for discussion on this topic that access to justice is a crucial right and that legal aid funding provides a vital public service. There is no point in having rights enforceable at law if citizens cannot secure those rights in courts of law. I know from many years' experience of him that that is the position my noble friend the Minister takes as well.

However, while there was much to agree with in all the speeches that have been made so far in favour of the Motion, we live in difficult times. As the noble Lord, Lord Bach, fairly acknowledged, savings must be made. The provisions of the order are estimated to deliver £120 million of the £350 million of savings that the Ministry of Justice is required to make in legal aid over the spending review period from 2011-15. If we do not make those savings, matters can only get worse and later cuts will have to be deeper.

On a personal note, in Greece, my wife's home country, I have seen at first hand the effects of the extreme austerity measures cutting back public expenditure. The cuts could have been much less harsh had the Government there got a grip on the public purse earlier when all the signs of overspending were plain for all to see.

The need to make savings in the legal aid budget was recognised by the Labour Party in Government who made some 30 attempts to limit it, reducing fees in real terms across the piece as they did so, between 2006 and their leaving office. Furthermore, that was before the full extent of the deficit became apparent and the need for deficit reduction and cuts across the board became as clear as it is now. On 18 May 2009, the noble Lord, Lord Pannick, asked whether the Labour Government would maintain the rates of legal aid payments in family law cases. The noble Lord, Lord Bach, replied:

"Family legal aid costs have risen unsustainably from £399 million per year to £582 million per year in the past six years. We need to control these costs in order to protect services for vulnerable clients".-[Hansard, 18/5/09; col. 1201.]

In the consultation paper sent out by Ministry of Justice in July 2009, for which the noble Lord, Lord Bach, as legal aid Minister, was responsible, its proposals were described as follows:

"Our legal aid system is one of the best funded in the world. We spend around £38 per head on it annually in England and Wales, compared to £4 in Germany and £3 in France. Even countries with a legal system more like ours spend less; for example, both New Zealand and the Republic of Ireland spend around £8 per head".

I regard the fact that we still spend considerably more than comparable countries on legal aid as a matter for pride. That is still the case but it highlights the degree to which the legal aid budget must bear its share of the economies that have to be made.

The Labour Government's consultation paper continued:

"While we devote considerable resources to legal aid-£2bn annually-" the figure is now £2.2 billion-

"our resources are limited, and we need to review regularly how legal aid funds are being spent, and whether we are securing value for money for the taxpayer and providing the services that the public need".

The Government's response to the consultation, published in January 2010 and signed by the noble Lord, Lord Bach, said:

"The Government wants to ensure that we rebalance the legal aid budget as far as possible in favour of civil help for those who need it most. But we also need to ensure that the resources we currently devote to civil legal aid are being targeted appropriately, and that the rules for granting funding are as robust as they need to be to ensure that resources are expended on meritorious cases ... The intended effects are to redirect resources onto higher priority areas, and to ensure that funding is only granted to eligible clients".

The words "rebalance" and "redirect resources" would inevitably have involved real terms reductions in fees. Labour's 2010 election manifesto said:

"To help protect frontline services, we will find greater savings in legal aid and the courts system".

When this Government's consultation paper on legal aid was published, the noble Lord, Lord Bach, very fairly said, as he said tonight:

"It would have been hypocritical of Labour to say we would not cut anything. If we had, we would be rightly criticised".

It is beyond doubt that the reductions in fees embodied in the order, which the noble Lord seeks to annul, do make it more difficult for the already hard-pressed community legal practitioners, mentioned in the Motion, to thrive and will make it more difficult for barristers, junior and senior, who work on publicly funded work. We agree entirely with the noble Lord, Lord Bach, that such practitioners carry out an essential service for those least able to afford it. This order does involve a 10 per cent cut in their fees and in the fees of barristers for publicly funded work across the field of civil and family law, not just social welfare law. It includes-I would suggest rightly-a limit on experts' fees for the first time. It is going to be more necessary than ever for lawyers to practise as efficiently as they can and the harsh reality is that they will earn less from legal aid work. However, I am far less clear that their core viability is threatened.

We will be debating these issues-and the other issues about the scope of legal aid mentioned by the noble Lord, but not the subject of this order-in full when the Legal Aid, Sentencing and Punishment of Offenders Bill comes to this House shortly. I hope we will also be able to explore during the course of this Parliament other ways in which savings might be made without damaging the quality of the justice system. Progress is being made in exploring the achievement of savings through alternative dispute resolution procedures. I believe there is also room for improvement in the efficiency of the court system to produce savings. In the family field, I look forward with great hope to the final report of the Family Justice Review chaired by David Norgrove.

I would make it clear from these Benches that we have been, and are, heavily involved in discussions with practitioners and others , including many civil and family law practitioners, both barristers and solicitors, who have quite rightly expressed their concerns to us. We will examine closely with Ministers whether, and how far, the Bill achieves fairness and the protection of the vulnerable in the use of extremely limited resources. We would hope and expect that in due course, in a reviving economy, any gaps in provision that emerge will be refilled. However, that there must now be some cuts in fees is inevitable in these straitened circumstances.

In advancing this annulment Motion I suggest that the noble Lord and the Labour Party need to tell us what choices they would have made, or would make now, in cutting the legal aid budget. What were the cuts that he was intending to implement? How would they not have threatened hard-pressed community practitioners? Until those questions are answered fully, I suggest that, however regrettable the need for fee cuts in civil and family proceedings, it would not be sensible to divide the House on this Motion.

Photo of The Bishop of Ripon and Leeds The Bishop of Ripon and Leeds Bishop

My Lords, I am grateful to the noble Lord, Lord Bach, for raising this issue tonight and for concentrating my thoughts-like those of the noble Earl, Lord Listowel-on the welfare of children as they are treated by our legal system. We spent the whole of this afternoon talking about the treatment and rights of children. I look forward to the Government's response and comment on the ways in which children can be particularly protected in our legal system by the way in which the distribution of fees is arranged throughout that system.

I am still puzzled by the words of the noble Lord, Lord Marks, and why it should be this area in which we look for savings. A number of noble Lords have spoken of areas, in criminal law, for example, where there could be significant savings. Why should it be this area? I think of the work, for example, of Henry Hyams, a firm of solicitors in Leeds which takes some 2,000 cases a year from the most deprived areas of Leeds. They tell me that almost all of those cases involve the welfare of children.

That takes us to the effect of these cuts on those clinicians who provide reports to assist the courts in making determinations about the safeguarding of children-professionals who provide evidence of injury and of abuse and who are often key to the welfare of children. We have improved immensely our understanding of childcare in our society, and much of that has been due to the diligence of such professionals. We are all made very aware when a mistake is made by one of those professionals; we forget the thousands of cases when accurate decisions are taken about children's welfare and their future. The debate that we had all afternoon and this debate come together in looking at the well-being-again-of children, and of their place in our society.

Clergy in pastoral work are often aware of the time spent both by those clinicians and by lawyers with their clients, seeking the best way forward for children and family life, often in work that is undertaken quite outside the fee system. We claim to be a society that puts the family first; social welfare law is an important part of enabling us to do that.

The noble Lord, Lord Marks, spoke of the way in which he hoped that, if there were gaps in our provision, they would be able to be filled again as the economic situation becomes better. But the most important part of our response to the difficulties in which we find ourselves is that those who are most deprived in our society should be those whom we seek to protect from the cuts being made. The Government and many local authorities seek to do that, yet in this particular instance those cuts are bearing at their hardest on those least able to bear the brunt of them.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

My Lords, I have three categories of interest to declare. The first is professional but, unlike a number of noble Lords who have spoken, not as a member of the Bar and still less as a most distinguished judge but as a mere solicitor and now as an unpaid consultant in the firm of which I was senior partner for some 30 years. The second is a political interest. As my noble friend will recall, it was a resolution that I was responsible for that went to the Labour Party conference some three years ago, which was somewhat critical-and rightly so-of the then Government's policies on legal aid. That led to the establishment of the committee chaired by my noble friend Lord Bach, on which he was gracious enough to invite me to participate. The third is a personal one, because the noble Baroness, Lady Deech, and I graduated at the same time all of 46 years ago from the school of jurisprudence at Oxford.

This order, coming as it does shortly before the Legal Aid, Sentencing and Punishment of Offenders Bill reaches your Lordships' House, is something of a tawdry harbinger of what is very likely to be a prolonged and hard winter for access to justice. It is interesting that the young legal aid lawyers, in the briefing note that they have circulated, drew attention to the fact that the consultation that the Government entered into on their proposals to reduce these fees was very limited. They consulted only the Law Society and the Bar Council; there was no consultation with other stakeholders, such as law centres, community groups or citizens advice bureaux, or indeed any client interests. This does not seem to represent the "no decision about me without me" process, which was allegedly followed in terms of the health service.

More importantly, that body of young legal aid lawyers has pointed out that the National Audit Office has issued a warning about the process that the Government undertook. They quote the National Audit Office as observing that there is a,

"risk to the sustainability of the supplier base, arising from the fact that remuneration for legal aid work is often unfavourably compared to other legal work. Proposals such as these"- the ones we are debating-

"have the potential to increase the risk".

In other words, the supply side is likely to diminish. That is surely inconsistent with one of the favourite mantras of the Government-perhaps rightly so-which is to increase choice. If you reduce the supply base, you restrict choice.

I have been looking into and discussing with the Newcastle Law Centre the impact of these reductions in fees on that organisation. It employs three solicitors at an average salary of around £29,000 and two qualified caseworkers at around £25,000. By no possible stretch of the imagination could these be described as fat-cat lawyers-some might regard them as potentially half-starved lawyers-but certainly they are not well paid in comparison with those in private practice or commercial organisations. Interestingly, the organisation also engages the work of eight volunteers. In the last financial year it advised 2,000 people and opened 550 active files. That is a substantial workload. As a result of the fees decision of this order, they are likely to lose some £20,000 a year. Their salaries, of course, have not been increased since 2009, the fees have not gone up since 2008 when the previous Government increased them, and we are now in a time of considerable inflation on non-salary costs. So they are not just getting a 10 per cent cut in the next year; they will be getting a 10 per cent cut on top of inflation and on top of no real increase in the past few years.

In addition, the centre faces the prospective loss of £60,000 a year from the Equality and Human Rights Commission. It is not yet clear whether that funding will be continued to any extent. Perhaps the Minister will be in a position to indicate either when or what kind of decision will be made about this sort of funding. In the current financial year, the centre has also sustained a loss of £30,000 of the £95,000 grant it receives from the local authority, Newcastle City Council. The grant is now £65,000, and given the scale of the cuts in grant that the authority has received, it can by no means be assumed that the grant will be sustained at that level. One hopes that the grant will be sustained-and there are two Members of your Lordships' House who might be arguing that case-but certainly no guarantees can be given in that respect.

This is an organisation that, at the moment, is carrying out important work in the realms of asylum, immigration, consumer and employment law, and is facing a very fraught future, which will have a significant impact on the people who use its services. I repeat: there have been 2,000 advice cases and 550 active files opened in the past year. That is a significant number of people, many of whom will now be unlikely to be assisted.

Moreover, demand will increase as a result of the prevailing circumstances in the economy and also because of the potential impact of the fees on private practice. I have had discussions with a leading north-east firm that is largely a legal aid firm. It depends on legal aid for about 80 per cent of its fee income. Interestingly, the salaries that are paid there are also pretty modest. The senior solicitors in their legal aid departments earn all of £40,000 a year; less experienced solicitors are on £24,000 a year; and they have a number of caseworkers on between £16,000 and £18,000 a year-again, not exceedingly generous salaries. Some of the departments are barely covering their costs at the moment and that is before this fee cut or, indeed, before taking into account rising inflation. There is also a significant question about the funding of family law, to which other noble Lords have referred. Again, I do not know whether the Minister is able to indicate either when decisions will be made about that or whether they are likely to match or differ from the current position.

It is not clear whether that firm, which is a very significant player in the local legal economy, will be able to sustain the breadth of its operations. Again, if it were to reduce its staffing and coverage, that would restrict the choice of those who need legal advice. The firm which I am consulting has for some time sustained its criminal department on the basis of not covering its costs in some years and barely covering them in others. It has been able to do that only because it has been relatively buoyant in other areas. It cannot be expected that firms in the private sector will be able to continue to provide a pro bono service, even for criminal legal aid. However, if I may say so in the presence of those who have affiliations with the Bar, there and in the court system, rather than at the solicitors' end, is probably where the savings need to be made. There is a real risk of that supply base being undermined and choice being restricted with it.

The noble Earl, Lord Listowel, referred to experts. It is perfectly reasonable to look at the fees payable to experts and to develop a system in which they can perhaps be better controlled. On the other hand, expert advice is often needed. The large firm to which I referred instructs experts-for example, country experts in asylum cases or medical experts in welfare cases. Again, it is reasonable that they should be properly, if not overgenerously, remunerated because there could be a significant impact on the supply base of important people with a significant role in the administration of justice.

I heard what the noble Lord, Lord Marks, said about the annual Liberal Democrat lawyers' get-together. I hope that they will again be toasting access to justice and the legal aid system-perhaps next year, in the light of these circumstances, not with claret but more likely with bowls of thin gruel. With the combination of this measure and what is to come, we are facing a significant attack on the legal aid system. It is perhaps no coincidence that that takes place while we are also debating the future of the National Health Service. Many Members of your Lordships' House last night paid tribute to the post-war Labour Government and the creation of the National Health Service as a great achievement in social policy and a great pillar of the welfare state. Many of us, if not all, particularly on this side of the House, think that that achievement and that pillar are threatened with being substantially undermined by the Health and Social Care Bill. We will be debating that matter at some length over the next few weeks but whether or not that be the case, it is clear that there is a real threat to the legal aid system. It is potentially facing being dismantled and access to justice, which was one of the great achievements of the post-war Labour Government-and a fundamental part of the welfare state that was then developed-is severely at risk.

I do not know whether my noble friend will be dividing the House tonight-it would, perhaps, be unusual for the House to divide on a statutory instrument of this kind-but if he does not, we will, of course, return to the greater issue, the substantive issue, of which this is the trailer, when we look at the legal aid Bill. If your Lordships' House does not significantly amend that Bill, access to justice will be significantly diminished and there will be a significant diminution in the quality and breadth of the welfare state and the society which that great post-war Government sought to create and foster. I hope that the Government will think very carefully before they do further damage to something which, as the noble Lord, Lord Marks, said, we have all been proud of for the past 60 years.

Photo of Lord Newton of Braintree Lord Newton of Braintree Conservative 9:30 pm, 26th October 2011

My Lords, we live and learn. I apologise to my noble friend on the Front Bench for my slowness in getting up and, possibly, for what I am going to say. We live and learn: I always knew that I was more liberal than the previous Labour Government; I now know that I am more liberal than the Liberal Democrats, at least as represented in the House tonight. I hope that my noble friends on the Front Bench have not reached the stage of trembling when I stand up, because I am really quite a nice pussycat-in comparison with some, at any rate-but I can assure them that, were this to be pressed to a vote, I would not vote for it. I do not think that it is right for us to be killing off statutory instruments in the way that this would do, certainly with the way that the House operates at the moment. However, it is important that somebody from these Benches should make it clear that, even if we would not want to see this voted down, we are not happy bunnies about the policies that seem to underlie it. There are those of us, as I have already warned my long-suffering Whip and others, who are likely to want to return to some of these issues when we get to the Bill that is coming down the track towards us.

The speeches in this debate by the noble Lord, Lord Bach, the noble Baroness, Lady Deech, the noble and learned Lord, Lord Scott of Foscote, and others, including the noble Earl, Lord Listowel and the right reverend Prelate-in fact, everybody bar one, dare I say, who has spoken-have made a pretty devastating case. I will listen to the Minister's answer. I am a notoriously pliable chap, and if I am convinced I will be prepared to change my view, but at the moment I think that they have made a pretty devastating case. I have only one question to add to those that have been asked, which is about mental health, where locking people up remains one of the areas where you can get legal aid for the mental health tribunal.

I think it is relevant that two years ago, when I was still chairing the Administrative Justice and Tribunals Council, the Ministry of Justice, under its former incumbents-or the officials, at any rate-asked the council, and me as its chair, to chair the user group for mental health tribunals. This is a little less comfortable for the Opposition Front Bench, but even at that stage, mental health lawyers were expressing the view that the cuts that had been made in legal aid remuneration were, at least in some parts of the country, making it virtually impossible to find people to represent those before the mental health tribunals. It was particularly true in the south-west; there were some concerns in the north-east, but there were certainly concerns, even with the policies that had previously been pursued. I therefore want to ask two questions of the Minister. Is mental health affected or potentially affected by this? What is the position on the availability of legal aid lawyers to help claimants who have been confronted by the prospect of being deprived of their liberty by mental health tribunals? This ties in with the point that the noble Lord, Lord Beecham, has just made very effectively. The net result of this may well be to reduce the amount of support available to vulnerable people, not only because legal aid is not available but because growing numbers of young lawyers who do pro bono work will not be able to afford to go on doing it. This is a worry for many law centres and the like. I should like some comment on that.

Lastly, and to avoid being too unfriendly to my noble friend Lord Marks, it is the case that a lot of cuts that did a lot of damage were made by the previous Labour Government. That ought to be acknowledged. It is the case that we need to find savings in various places and the Ministry of Justice cannot be excluded. However, if these proposals, under either the previous Government or this one, end up causing damage by trying to save our nation at the expense of the most vulnerable people-whether families, children, battered wives or the mentally ill-it raises some questions. Is the Ministry of Justice being asked to find too many savings? Certainly, it raises the question of whether the Government are finding their savings in the right way.

I say to my noble friend Lord Marks that the same thought occurred to me as had evidently occurred to the noble Lord, Lord Bach. If we can find £250 million to ensure that local councils provide weekly rubbish collection services, which some already do for food waste, I question some of the priorities here. I make no apology for making an uncomfortable speech. If the matter is pressed to a vote, I will not vote for the Motion, but I am not very happy with what we are being asked to support.

Photo of Lord Martin of Springburn Lord Martin of Springburn Crossbench 9:45 pm, 26th October 2011

My Lords, I have enjoyed listening to the experts in law and legal aid. It is deeply unfair that a 10 per cent cut should be put on one section, and one section alone, of a service that is paid for by the taxpayer.

The Law Society was here today to talk about the future legislation that will come before this House. I asked how much lawyers earn in the field of legal aid. I was told that young lawyers earn £25,000, as has been mentioned. They rightly deserve it, but there are many manual workers, tradesmen and semi-skilled people who earn that kind of money and work hard for it. However, we are making a 10 per cent cut.

As the noble Baroness, Lady Deech, said, many of those who work in the legal aid service are women. I know that there is not much sympathy for Members of Parliament at the moment but I met a former colleague, a lady Member, who said that a substantial part of her salary goes on childcare. There is no doubt that the cost of childcare has gone up. It has gone up for those young mothers who work as solicitors. Any of us who drive a car will know that prices are going up every time we go to a forecourt. Lawyers need to travel to get to court. They are not just based in London. Therefore, this cut is extremely unfair.

I am surprised by the Minister, who was at one time a member of a trade union. I do not know whether he still is; it would have been the T&G that he was in, would it not? I do not think that any organiser in the Transport and General Workers' Union would want a cut of 10 per cent in the workforce, or take it lightly, so why should we do this?

In the constituency that I previously served and the place that I was raised in, a great many men and women who were asylum seekers came, as a result of a decision of the Home Office, to live in my community. More often than not, they came and received advice from legal aid practitioners. While those asylum seekers were coming to me, they were also going to the legal aid practitioners. I was able to form a good working relationship with those practitioners and found that they were doing things over and above their duties as solicitors-working outside office hours and going to people's homes to try to help them. These practitioners are the people on whom we are going to impose cuts.

As the noble Lord said, cuts have to be made, but we have to look at how we implement them. It is the easiest thing in the world to say, "Right-10 per cent across the board". However, it is not necessarily the right thing to do. I urge the Minister to reconsider this matter. At a time when many young people in this profession cannot even get mortgages, because that is difficult, they have to go into the rented sector, and their overheads are far more than they used to be. I can recall times when people did not have access to legal aid solicitors, and the difficulties and hardship that that caused for their families lasted for years. I hope that the Minister reconsiders this matter.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

My Lords, this is the point in the evening when I thank everyone for contributing to a wide-ranging debate-so wide, in fact, that it would probably take me at least 40 minutes to reply. I will try to do justice to the debate in a shorter time because the House has more business to consider. I remind the House that this was supposed to be dinner hour business-a matter that the usual channels might look at in future when they do their planning.

The debate was indeed a trailer for the Legal Aid, Sentencing and Punishment of Offenders Bill-now known to its friends as LASPO-that will come to this House. I do not object to colleagues using the opportunity to widen the debate to cover some of those areas. The noble Lord, Lord Beecham, said that it was a "tawdry harbinger" of a long hard winter for legal aid. I say to the House-to the right reverend Prelate, my noble friend Lord Newton, and others-that there would be a long hard winter if this Government did not face up to the spending cuts that are needed. It is all very well, as the noble Lord, Lord Martin, said, to say that this 10 per cent cut was the easy way. I put it to him that the easy way, which we have heard time and again tonight, would be to say, "Not this cut. Not that cut. We would do it in a different way". We have had to face up to the fact that we have to make some hard decisions.

It is not just this part of legal aid that is taking the hit. The Ministry of Justice is a relatively small department with a budget, when we came into office, of £10 billion. We made a commitment for the spending review to cut that by £2 billion. As the noble Lord, Lord Bach, knows, we have only four major areas of responsibility-prisons, the Probation Service, legal aid and court services. They have all taken their cut and it is simply not true to suggest that we have taken a particularly easy view in terms of legal aid. As my noble friend Lord Marks said-and, to be fair, the noble Lord, Lord Bach, echoed it-the previous Labour Government were looking at legal aid. I went to the Commonwealth Law Conference. I have never used the comparison with continental legal aid because I know that there is a different system there, but I particularly sought out the Canadian, Australian and New Zealand law officers to talk about legal aid and they confirmed what the noble Lord, Lord Bach, knows full well-they all consider our legal aid system to be, in their terms, "absurdly generous". It is also untrue that we have not made comparable cuts in criminal legal aid. In fact, the parallel order will, over the period, save some £80 million in criminal legal aid spending.

The noble Lord, Lord Bach, particularly mentioned Law For All. That is interesting because it very much echoes what was said when the Immigration Advisory Service closed. Let us be fair: Law For All has closed before any of these legal aid cuts have come in, so the legal aid cuts have not caused its collapse. However, it is interesting that the Legal Services Commission was able to make provision from other providers, and I shall return to that in a few minutes. We have recognised the problem relating to CABs and law centres, and I shall try to cover that in my main remarks.

The noble Baroness, Lady Deech, made an interesting point. I am proud to be the Minister responsible for promoting diversity in the legal profession. I put it to the noble Baroness that it is not a matter of diversity to suggest that women and black and ethnic minority lawyers should be corralled in one part of the legal profession. Indeed, my drive in terms of diversity-the noble Baroness is quite right and I have talked to both the Bar Council and the Law Society about this-is that the profession as a whole has a responsibility to promote diversity, not in the narrow area of legal aid but across the profession. To be fair, I think that they are responding to pressure in that area. We are taking diversity extremely seriously.

The noble Baroness and a number of other noble Lords also mentioned the Family Justice Review, which is a separate and independent programme of work looking at the entire family justice system. Our proposals are not dependent on the outcome of that review and are focused on legal aid; they go in the same direction as, and in support of, the aims of the Family Justice Review, which I am assured will be published very shortly.

The noble Baroness, Lady Deech, and a number of others talked about the fee levels reducing access to good-quality experts. The benchmark rates for experts have been applied by the Legal Services Commission for some time. The truth is that there are only limited anecdotal reports of problems with access to experts.

The noble and learned Lord, Lord Scott, accused us of weasel words in the Explanatory Memorandum, and I hope that my opening remarks have removed those weasel words. Of course, much of this has been driven by the need for cuts in public expenditure, but we have tried to do so in a way that focuses legal aid on the most needy.

We go back to the issue of the level of spending. What is so sacrosanct about £2.2 billion? It certainly was not sacrosanct for the previous Labour Government because they were planning to cut it anyway. The system is not being dismantled. It does not help when the noble Lord, Lord Beecham, makes that kind of comment. I could make a point about the earnings of barristers in family legal aid work, but let us not go down that route.

I turn to the points made by the noble Earl, Lord Listowel, and the right reverend Prelate the Bishop of Ripon and Leeds. There is a question about whether the Legal Services Commission should be able to commission experts directly, and that could be looked at. On aid to children, we will retain legal aid for child parties in family cases. In 2009-10, we provided £133 million civil legal aid funding to child parties in all categories of law and, under our proposals, around 95 per cent of that aid would continue. I hope that gives some reassurance to the noble Lord on the points that he raised.

Apart from getting some of the previous Government's record into Hansard, I am also grateful to the noble Lord, Lord Bach, for pointing out that we are, as the Lord Chancellor has pointed to, consciously looking for an approach to the settlement of disputes that is less legalistic and brings in mediation and alternative dispute resolution. We are also looking at possibly legislating in the next Session of Parliament on court efficiencies.

The noble Lord, Lord Beecham, talked about the supply side being likely to diminish and I shall try to cover that in a moment. It is certainly not right to say that we did not consult widely. The reforms were subject to full public consultation, which ran from 15 November 2010 to 14 February 2011 and elicited over 5,000 responses.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health) 10:00 pm, 26th October 2011

The lack of consultation to which I referred and on which I quoted the legal aid lawyers was in relation to this fees order, not the Green Paper.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

These were all foreshadowed in the Green Paper. The noble Lord, Lord Newton, is not a happy bunny but, as I said to the noble Lord, Lord Beecham, if we were not willing to take tough decisions, there would be a lot more unhappy bunnies around because we would be paying interest rates of two, three or four times what we are paying now, which would result in far greater cuts in public expenditure and services. The fact that our Government are not making headlines in relation to the economic situation in which they find themselves is because we had the courage to take tough decisions early. I have no doubt that when we ask colleagues and the Opposition to face up to that fact, we will always have the problem that these are tough decisions; we have never resiled from that.

Photo of Lord Higgins Lord Higgins Conservative

Would my noble friend give way?

Photo of Lord Higgins Lord Higgins Conservative

Yes, I realise that, but my noble friend has just made a rather extraordinary statement. He said that we would be paying interest rates three or four times greater than we are now and I just do not understand what he means.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

At what rates is Ireland borrowing at the moment? I am suggesting that we would have lost control of our economy in the way that some parts of Europe have lost control of their economies. The consequences for public expenditure would have been much more severe. I would have thought that I would have had the support of my noble friend in that.

Photo of Lord Higgins Lord Higgins Conservative

No one is more enthusiastic than I am that we should cut the deficit as fast as possible. I have made that clear, time and again. I just did not understand the quantitative statement that he made, but I do not wish to delay the House further.

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

On the other points that the noble Lord, Lord Newton, made, legal aid is currently available for legal advice on any mental health matter and representation for mental health matters heard in the county court, such as charging a detained person's nearest relative for mental health legislation purposes, for damages claims and for representation before the first tier mental health tribunal and onward. We propose retaining these changes within the scope of legal aid.

In 2010, tenders for legal aid contracts for mental health demonstrated a strong demand for mental health work, with nearly three times as many new cases bids than there were cases available.

I hope that answers the points that the noble Lord, Lord Newton, raises; namely, that there is the supply that he was concerned about and that we will continue this in scope.

The House will be aware that the Government have had to make some tough decisions. As I mentioned, the noble Lord, Lord Bach, accepted that when he had responsibilities for this matter the legal aid fund had to play a part in the often difficult exercise. To govern is to choose. It is a key role of Government on behalf of the taxpayer to ensure that the amount they pay for any service represents maximum value for money. In this context it is essential that the Government ensure that they only pay the rates that are necessary to secure the level of services that are required. While this may not be welcomed by those who provide services funded by legal aid, it is a reality that suppliers of other services across the country face this reality on a daily basis. The Government recognise that some providers may choose not to continue to provide legally aided services in this environment, but it is not the purpose of the legal aid system to sustain the current legal market. Rather, we want to continue to have a sufficient supply of providers of satisfactory quality to provide an appropriate level of services for legally aided clients.

The order that we are debating this evening introduces a number of changes to the fees that the provider can currently receive for carrying out legally aided work. The main features were referred to by the noble Lord, Lord Bach. Justice is required to make savings in the year 2014-15 of about £50 million. My noble friend Lord Marks referred to the total savings of £120 million. With the exception of the family fee reforms which will take effect on 1 February 2012 when new contracts under the family re-tender exercise are expected to commence, the new fees took effect on 3 October 2011 and apply to all cases commenced after that date.

The reforms were subject to a full public consultation which ran from 15 November 2010 to 14 February 2011. I have already referred to that in reply to the noble Lord, Lord Beecham. With the exception of the Law Society, no respondents provided any form of detailed numerical analysis of the market. The Law Society did so through Mr Andrew Otterburn. His report indicated that while the fee reduction will inevitably reduce the income of solicitor firms, on the whole, they would still make a profit even before making any efficiencies in working practices.

Subsequent to his report, Mr Otterburn specifically confirmed to the MoJ that, in his view, an overall phased reduction in fees of around 10 per cent, with the reduced fees only applying to new cases commenced after the implementation date, would allow solicitor firms time to adjust to the new fee levels and would not, therefore, necessarily make supply unsustainable.

The Government accept that the proposed reforms may be particularly challenging to the not-for-profit sector. That was raised by a number of colleagues. However, it is also the case that the major issue for this sector, generally, is change to other sources of funding; for example, as was acknowledged by the noble Lord, Lord Bach, from local authority cuts, which may make supply in the areas they cover vulnerable in any event.

This is clearly a matter for concern for the Government as a whole, and the issue of the future of the voluntary advice sector will be considered as part of a cross-Government review on which an expected announcement will be made shortly. In the interim, the Government have already provided transition funding to assist the not-for-profit sector to adapt to the changing financial environment. I understand that overall 45 individual CABs and 17 law centres have taken advantage of this fund. As the noble Lord will be aware, the Government will also be providing a further £20 million of funding for the not-for-profit sector. Specific details of this fund will be made available shortly.

In the context of legal aid services, the issue is whether services will be available for clients rather than whether that service is provided by any particular provider. We assessed the likely impact of the reforms when considering the responses to the consultation and overall are satisfied that the reforms are sustainable and that, although individual providers may leave the legal aid scheme, there will be a sufficient supply of providers of satisfactory quality to provide an appropriate level of service in all areas of law. The Government therefore consider that the fee reductions will be sustainable and will ensure that clients can continue to access legally aided services.

As noble Lords will be aware, the Justice Committee report on legal aid concluded that, given the extent of the savings that the Ministry of Justice is having to make, in principle it is correct that fees should be reduced. We are willing to look at areas of isolation-the so-called legal aid deserts-and there are a number of actions that the Legal Services Commission can take to mitigate shortfalls if they develop. As I said earlier, it is also true that some of the fears that people would not come forward have not been borne out in areas where individual firms have collapsed. Indeed, in all the areas where we put forward contracts, there has been an oversupply in terms of those seeking that work.

In addition, there is a genuine alternative. The Community Legal Advice telephone helpline is an alternative for those involved in legal aid. I see the noble Lord, Lord Beecham, shaking his head. The other night, I went to a Law Society function giving prizes to successful law firms, and I was amazed by how many of the prize winners were offering online and distance advice. The old idea of face-to-face may not survive. There is no doubt in my mind that the legal profession is a profession in transition in many respects.

I am being told to shut up, and I will. The fact is that wherever we have been looking at new contracts, we have found that they have been oversubscribed, so I do not think that this is the issue that is suggested. It is not a 10 per cent cut per individual. It is a challenge to those firms and to the legal profession to find different methods of service, different structures and different efficiencies. That is a pattern that many professions and many industries have found over the years. We are confident that there are sufficient numbers of providers willing to remain in the legal aid market. I am well aware that a lot of what we have discussed today is a dress rehearsal for when the LASPO Bill comes, but I do not believe that it would be right to pass this Prayer this evening, and I sincerely hope that the noble Lord, Lord Bach, will resist putting the Motion to a vote.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice) 10:15 pm, 26th October 2011

My Lords, I thank all noble Lords who have taken part in this debate, and especially the Minister for his winding up. I will give the House the good news, which is that I certainly do not intend to divide the House. I would very much like to, particularly given the degree of support for my Motion from around the House tonight-I am most grateful to noble Lords who have supported me-but it is too late to call a vote tonight, and in any event I am not certain that it would be the right thing to do, given that the Bill is due to come to this House next month. I will not be calling a vote, so anyone who wants to go now, please feel free.

I am afraid, though, that it was not the Minister's arguments that persuaded me not to call the vote-indeed, if he had gone on much longer I might have been tempted to call it in any event. I shall make a few points and then the House can move on. Some very good speeches were made, if I may so. The noble Baroness, Lady Deech, talked about the Bar with great experience and knowledge. The noble and learned Lord, Lord Scott of Foscote, made some very important points, one of which I will come back to at the end of what I have to say. The noble Earl, Lord Listowel, and the right reverend Prelate the Bishop of Ripon and Leeds were both right on the spot with their concern for children law, if I may call it that. My noble friend Lord Beecham, with his experience, made very telling points as always. Last, but certainly not least, the noble Lord, Lord Newton of Braintree, made a very telling contribution, and one to which I think the Government side should listen with some concern.

As to the speech of the noble Lord, Lord Marks, of course I admired his loyalty, perhaps rather more his loyalty to the Government and to the Minister than to his party, which as I understand it has already made it clear at conferences twice this year that it does not like the way in which the Government are behaving towards legal aid. He asked me to state which cuts my party would have made in Government. I am not sure that he was listening with his usual care to what I said in my opening remarks, which was that the Labour Lord Chancellor and myself put out a White Paper called Restructuring the Delivery of Criminal Defence Services, which we would almost certainly have put into effect had we been elected-which we were not-and which would have saved a great deal of money. It would have been controversial and I have no doubt that there would have been debates in this House too in that event.

I did notice that in his interesting speech there was nothing at all about social welfare law and nothing about whether he felt it was right to attack social welfare law. What I had to say earlier was very much based around that part of the order. He said very little about criminal law, either, and about whether savings might be made in that field. He quoted figures and speeches that I had made, in which I, like legal aid Ministers down the years-as they no doubt will in the future-had said how generous our legal aid system was compared to the ghastly rest of the world. I did use those phrases, and there is some justification in them, but to be honest, not perhaps quite as much as I used to think when I spouted those words. For example, we compare ourselves with New Zealand, another common law country, and say, "My gosh, New Zealand gives a much smaller amount for legal aid than we do". However, the situation in New Zealand is quite different. There, for example, there is no liability compensation, which costs a great deal in this country. There are other considerations as well.

Let me be frank: when we were in Government, I have no doubt that we made mistakes in this field. I am sure we did. There is no doubt in my mind that his Government are making mistakes now as well. Perhaps the noble Lord, Lord Marks, will remember next time he speaks to the House on these matters that we are dealing with what his Government are intending to do, not with what my Government did or did not do when they were in office.

The Law Society has suggested savings of up to £350 million as an alternative to the legal aid cuts that the Government are putting forward. As we did not hear it tonight, we look forward very much to hearing what is wrong with the Law Society's-

Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords

What is wrong with the Law Society's figure is that it does not save public expenditure to shuffle costs around Whitehall to other departments or to propose extra taxation on alcohol. That is not saving public expenditure; it is shuffling the pack.

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice)

If the noble Lord is right, perhaps he will explain this decimation of social welfare law, with its few savings for the Ministry of Justice, and how it will cost infinitely more to the state as a whole when problems are not solved, people are chucked out of their houses, debts grow bigger, families break down and children commit crime. Other departments will have to pick up the pieces for the paltry savings that the Ministry of Justice will make. Please do not give us that stuff about public spending. The truth is that these Ministry of Justice savings-we have said that we accept that the MoJ has to find a number of savings-will cost the state and the community much, much more.

As the noble and learned Lord, Lord Scott of Foscote, said, civil legal aid is not an optional extra. The concern is that this Government are treating it just as an optional extra and the cost will be much greater. We could see which way the Government were going on legal aid way back in June or July 2010 when out of the blue they removed the grants that were given by the Legal Services Commission for young legal aid lawyers to get legal contracts with legal aid firms. It cost a few million pounds a year, if that. But the Government abolished them at the start and we should have been wise as to what they were planning to do now. There was absolutely no reason for doing that and there cannot be any reason for doing what they are intending to do now to social welfare law.

Legal aid in the civil field is well worth protecting. I shall end with a quote from Supreme Court Justice Lewis F Powell who spoke about the American system but it could just as easily be applied to the British system. He said:

"Equal justice under law is not merely a caption on the facade of the Supreme Court building, it is perhaps the most inspiring ideal of our society. It is one of the ends for which our entire legal system exists ... it is fundamental that justice should be the same, in substance and availability, without regard to economic status".

He was right. I hope only that the Government change their mind. I beg leave to withdraw the Motion.

Motion withdrawn.