Motion to Approve

Criminal Injuries Compensation Scheme 2012 – in the House of Lords at 1:30 pm on 25th July 2012.

Alert me about debates like this

Votes in this debate

Moved by Lord McNally

That the draft scheme laid before the House on 2 July be approved.

Relevant documents: 6th Report from the Joint Committee on Statutory Instruments, 8th Report from the Secondary Legislation Scrutiny Committee.

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 1:33 pm, 25th July 2012

I shall speak also to the draft Victims of Overseas Terrorism Compensation Scheme 2012.

Our vision for the criminal justice system is that is able to respond in a flexible way to the needs of victims and the communities it serves. This must include proper protection and support for victims to help them recover and to overcome the effects of crime. In some instances, financial assistance will play a part in this recovery process. Successive Administrations have grappled with these schemes. Our system of criminal injuries compensation goes as far back as 1964 when awards were made on the basis of common law damages. When the then Home Secretary, Michael Howard, broke the link with common law damages some 30 years later by introducing the first statutory scheme, based on a tariff of injuries, it cost the Government £179 million a year, or more than £250 million at today's prices. The previous Administration sought to reform the tariff scheme in 2005 by refocusing payments on the most seriously injured and removing less serious injuries. In the end these proposals were never implemented.

We are still resolving claims from before 1996 that were made under the pre-tariff system. When this Government came into office there were estimated liabilities of nearly £400 million. This Administration are now tackling this and are allocating funding to cases so that awards are paid as these remaining cases come to an end. Last year about £237 million was paid in such cases. A total of £449 million was paid in compensation last year-the largest ever in a single year-after the Criminal Injuries Compensation Authority was provided with additional funding. This includes payments to cases under the current scheme and also to pre-tariff cases.

However, despite this cash injection, total liabilities currently stand at around £532 million. This includes an estimate of the cases that are likely to fall due in the future but have not yet been lodged with the Criminal Injuries Compensation Authority. It also includes the remaining rump of pre-tariff cases. Nevertheless, with new liabilities arising at around £200 million each year under the 2008 scheme, this simply is not sustainable in the current economic climate. The revised domestic scheme will focus, as the Government were considering focusing in 2005, scarce resources on those victims most seriously affected by the injuries they suffer as a result of deliberate, violent crime committed in England, Wales and Scotland. This is part of a long-term aim to put this scheme on a more sustainable footing.

We envisage that the cumulative effect of these changes should help deliver savings of an estimated £50 million a year to the taxpayer. This does not mean we are reducing the overall spend on victims. The Government are committed to substantially increasing the amount offenders contribute to victims' services. In England and Wales, we intend to raise up to an additional £50 million a year through the victim surcharge and other financial impositions, investing this money in support services for victims.

The noble Baroness, Lady Royall of Blaisdon, will speak to her amendment shortly but I would like to make it clear that our proposals will protect injury payments to victims with the most serious injuries. In addition we are protecting payments to the bereaved, to all rape victims, to victims of any other sexual assault and to those, including victims of domestic violence and children, who are subjected to a repeated pattern of abuse. We are removing payments from those with less serious injuries.

The additional money that we will raise from offenders will be used to pay for new services for victims. We believe that it is much better to use this money quickly to support victims who are trying to cope with the impact of crime than to give people small amounts of money for minor injuries some time after the event.

Noble Lords will have seen a number of briefings about the reforms to the scheme including on behalf of postal workers and shop workers. I want to acknowledge the valuable job that these people do, often in very difficult circumstances. However, as with any other applicant to the scheme, if their injuries are sufficiently serious they will still be eligible and I hope that the additional services funded by offenders will better support those with minor injuries.

We have listened to those who responded to our consultation and have made changes to some of our proposals as a result, as set out in the Government's response. Notably we have changed our original proposals relating to payment for those with criminal convictions and to establishing a connection to the UK.

Let me make the House aware of the changes that we are making-first, on eligibility. Eligibility is tightly defined in the draft scheme so that only those direct and blameless victims of crime who fully co-operate with the criminal justice process may obtain compensation under the scheme. We will continue to pay secondary victims under the scheme in certain circumstances. Applicants will need to be able to demonstrate a connection to the UK through one of a number of factors, though as a result of consultation responses, we have removed the original requirement that an applicant be resident in the UK for six months prior to the incident that led to their injury. Bereaved relatives of victims who die as a result of their injuries will also continue to be able to apply as long as they meet the revised eligibility criteria. Those with unspent convictions will not be able to claim if they have been sentenced to a community order or have been imprisoned. Those with other unspent convictions will be able to receive an award only in exceptional circumstances. This is a change from the options put forward at consultation, following comments made by respondents. These changes to eligibility are in line with the core purpose of the scheme of compensating blameless victims of violent crime.

Secondly, on the tariff, we want to strike the right balance between protecting the most seriously injured and making reductions to the overall cost of the scheme. So tariff payments will be available only to those most seriously affected by their injuries and for those who have been the victim of the most distressing crimes. What this means in practice is that bands 1 to 5 of the current scheme have been removed; bands 6 to 12 have been reduced; and bands 13 and upwards-to band 25-are protected in their entirety at their current levels. Tariff awards for fatal cases, sexual offences, patterns of physical abuse and loss of a foetus are also being protected at their current levels-no matter where they currently appear in the tariff. As a result of a consultation response from the First-tier Tribunal we have also broken down some of the payments made for degrees of paralysis with the aim of ensuring that we avoid both over and undercompensation in these very difficult cases.

Thirdly, let me turn to loss of earnings. These payments do not currently reflect actual loss for all applicants, being capped at a salary of one and a half times the median gross weekly earnings but already making up a significant proportion of the costs of the scheme. The new calculation will be a flat rate based on statutory sick pay which should be simpler to administer. Payments will no longer be subject to deductions for benefits. These payments will be available only to those who can no longer work or who have very limited capacity to do so, in line with the focus on those most seriously affected by their injuries.

Fourthly, there are no major changes to these special expenses payments. They will continue to be available for the same categories as under the current scheme, with the exception of private healthcare. We chose to retain these payments because they are generally awarded to those who suffer the most serious injury. However, we have made it clear that the scheme should be one of last resort in relation to special expenses, and that payments will be made only if the claim is reasonable. Fifthly, with regard to payments in fatal cases, we are protecting the awards for bereavement and parental services payments. In the interests of consistency and fairness, dependency payments in fatal cases will be made in line with the revised plans for loss of earnings. The scheme can never compensate someone fully for the death of a loved one but we believe that some financial compensation is appropriate in these cases. Reasonable funeral payments will be made up to a maximum of £5,000.

Finally, I turn to the process. One of the aims of this reform is to make the scheme easier for applicants to understand. For the first time the evidence required to make a claim is being put on the face of the scheme. We are tightening the circumstances in which the authority will meet the costs of obtaining medical evidence and reducing the timescales for submission of review and appeal applications.

I now turn to the other order before us on victims of overseas terrorism. We are introducing the first ever state-funded statutory compensation scheme for British victims of overseas terrorism resident in the UK. I fully acknowledge that this was brought forward by the previous Administration, and I am pleased that this policy has had cross- party support. Terrorism is unique in the public consciousness. Intended as a political statement and attack on the state, it has ramifications beyond those who are directly affected by it. It is therefore right that we should show solidarity with these victims. The scheme will be largely based on the revised domestic scheme, albeit with stricter residence requirements, but with the same levels of compensation being made available-placing those affected by overseas terrorism on a par with victims affected by terrorism in Great Britain. It builds on the support that we have made available under an ex gratia scheme which opened on 16 April this year for victims of attacks going back to January 2002.

The draft domestic scheme before us today provides the most coherent and fairest way of focusing payments towards those most seriously affected by their injuries within an affordable budget. The domestic scheme also takes into account the considerable progress that has been made in improving services for victims and witnesses, despite the shortfalls in the system. We also cannot ignore the tight fiscal backdrop and the need to reduce public expenditure. These reforms will deliver savings of around £50 million which will significantly reduce the burden on the taxpayer. The scheme for victims of overseas terrorism serves to give expression to the additional support that we would like to see made available to those who sustain injury on foreign territory during a terrorist attack. I commend both these schemes to the House.

Amendment to the Motion

Moved by Baroness Royall of Blaisdon

As an amendment to the above Motion, at end to insert, "but that this House regrets that, despite the Government's claims to be on the side of victims, this scheme would actually cut financial compensation for an estimated 92 per cent of victims of crime, many of whom will be considerably worse off through no fault of their own and will find redress much more difficult in the future because of cuts to legal aid; and also expresses concern over the ability of the Government to levy a substantial surcharge on offenders".

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Spokesperson (Equalities and Women's Issues), Shadow Leader of the House of Lords, Shadow Spokesperson (Cabinet Office) 1:45 pm, 25th July 2012

My Lords, I will also speak briefly to the draft Victims of Overseas Terrorism Compensation Scheme 2012. I am grateful to the Minister for his presentation of the two draft instruments before us. I am also grateful to the Association of Personal Injury Lawyers, the trade unions-USDAW and the CWU-and the Association of Convenience Stores for their excellent briefings, all of which expressed deep concerns.

The Minister said that we needed a system able to respond to the needs of victims, and then he made it sound like a very reasonable step to cut £50 million from the criminal injuries compensation scheme. He did not say so, but I suggest that the catalyst for the proposed changes is the cuts faced by the justice department and the notion that we are all in it together. As is evident from the amendment, we on these Benches fundamentally disagree. Victims do not choose to be victims; they have suffered through no fault of their own, and in proposing the draft Criminal Injuries Compensation Scheme 2012 the Government are putting deficit reduction before humanity. I do not underestimate the need to reduce the deficit, although the Government have cut too far and too fast. Nor do I dismiss the need to introduce changes to the scheme from time to time. As the noble Lord rightly said, my own Government considered changes but we chose not to make them. I am sure that when the noble Lord was himself in opposition, he applauded that fact.

Why are the Government seeking to exclude 42% of innocent victims of crime from the scheme and making life more difficult for those who might still be eligible? Like the Association of Personal Injury Lawyers, I believe that the withdrawal of compensation from innocent victims of crime goes against the very purpose of criminal injuries compensation and ignores a view held by successive Governments for decades that victims of crime deserve more than words. What is happening to similar schemes in other European countries that are also coping with a financial crisis? Are they cutting entitlements for victims or do they regard compensation for victims as a matter of national honour? I suspect that they would not agree that innocent victims of violent crime should bear the brunt of austerity.

In the foreword to the Government's consultation on the criminal injuries compensation scheme-CICS-the Lord Chancellor and Secretary of State for Justice says that the current scheme for providing compensation to victims of violent crime,

"has never been properly funded", and must be put on a "sustainable footing". As the Minister said today, the document painted a picture of schemes that were not sustainable and had historic liabilities of nearly £400 million. However, as he will know, these figures are disputed.

The 2011-12 accounts, together with an analysis of the previous three years' figures, show that the scheme is both stable and sustainable, with an average annual cost to the MoJ of existing tariffs of £192 million, and that historic liabilities have been reduced to 73 cases, estimated at less than £153 million. So why is the budget being cut by £50 million? In relation to the consultation, I also take issue with the very partial and extraordinarily subjective references to the results of the consultation in the explanatory memorandum, which do not reflect many of the real concerns expressed during the consultation.

The noble Lord gave a clear explanation of the CICS and the band system, but frankly it is not acceptable that the first five bands, which represent almost 50% of all payments, are going to be cut. They will be not cut just a little, but abolished. In human terms this means that more than 18,000 people a year who have quite serious and permanent injuries will receive nothing.

These include injuries such as partial deafness, post-traumatic epileptic fits, and burns and scarring causing minor facial disfigurement. To date these people, if their claims are successful-which is not easy-might receive between £1,000 and £2,500 compensation. The Minister said this is a small amount. Indeed, for some of us it is, but for others this money is not just compensation and recognition of an injury. It means being able to cope, not having to cross the line into a personal financial crisis, and retaining the dignity and self-esteem that enables them to continue to work or to seek work.

Among the people we are talking about are shop workers, far too many of whom are subject to physical assault, and the thousands of post men and women who are attacked by dogs every year. Of course, the other bands are not unscathed. Indeed, compensation for claims between £2,500 and £11,000 would be slashed by up to 60%. These claims are for injuries such as permanent brain injury resulting in impaired balance and headaches, fractured joints resulting in continually significant disability, and punctured lungs.

In addition, victims of violent crime who are still eligible for compensation under the new scheme and who are unable to work due to their injuries will also suffer as a result of changes to the scheme. The Minister suggested that changes along these lines were necessary for simplification. However, people will be worse off due to the changes in the arrangements for future loss of earnings, which will now only pay statutory sick pay-currently £85.85 a week. If someone were to work a 37-hour week on the minimum wage before they were injured, they would be worse off by £139.15 per week, which could result in serious financial hardship.

Then, there is the failure to take into account the current employment market. To be eligible for a loss of earnings payment, the victim will have to have been in regular paid work for at least three years immediately before the date of the incident giving rise to the injury. What would happen to a person who sustained the injury while moving between temporary jobs, or who had a period of unemployment in those three years?

I recognise that, as the noble Lord, Lord McNally, said, the Government have proposed to retain awards at their current level in respect of domestic violence, sexual offences and physical abuse, and I welcome that. But what compensation would a woman be entitled to if, for example, she were the victim of rape and other physical abuse such as a broken arm and the loss of an eye? Would she be entitled to compensation for rape and each of the other two injuries sustained?

There are many questions to be answered about the proposed new scheme, but most importantly I believe that thousands of innocent victims of crime will be considerably worse off through no fault of their own, and because of the pernicious cuts in legal aid that have been debated long and hard in this House they will find redress much more difficult in future. For these reasons, I hope that noble Lords will support my amendment.

I turn briefly to the draft Victims of Overseas Terrorism Compensation Scheme, which is welcome, and I endorse the views expressed by the Minister. I am glad that the Government intend to show solidarity with British and European Union victims who are part of our community and have been caught up in acts of terrorism overseas, by making payments to those who have been seriously injured and who could not have reasonably anticipated the significant threat to their safety or security when travelling abroad.

I pay tribute to my noble friend Lord Brennan, who cannot be in his place today, who introduced a Private Member's Bill in 2007 which led to a section on victims of overseas terrorism in the Crime and Security Act 2010, and as a consequence, as the Minister said, to the statutory instrument before us today.

One important question for the Minister is: why is the scheme not retrospective, so that payment can be made to the victims of acts of terrorism in Bali, Sharm el-Sheikh and Mumbai? I understand that the cost of such payments would be between £3 million and £5 million, and to exempt the victims would seem to me rather mean-spirited. However, the Minister said that there would be an ex-gratia scheme backdated to 2002. I would be grateful if he could give me some further information on that point. I look forward to the answers from the Minister, and I beg to move.

Photo of Lord Davies of Coity Lord Davies of Coity Labour

My Lords, we have all heard about the big society. We have all heard that we are all in this together.

I am driven to the belief that the proposed cuts in the draft Criminal Injuries Compensation Scheme 2012 are another example of the most vulnerable people in our society being expected to make the greatest sacrifices.

Before coming to your Lordships' House 15 years ago, I was an officer of USDAW, the Union of Shop, Distributive and Allied Workers, for 28 years, the last 12 of which were as general secretary. Then as now the retail sector was dominated by women workers, a large number of whom were part-time workers struggling to combine employment and home responsibilities and duties. All these workers are in the front line when criminal activity is perpetrated by the most vicious of criminals. Yet this coalition Government are now going to deny criminal injuries compensation to many of these workers.

The Union of Shop, Distributive and Allied Workers, which has never merged and has represented shop workers for over 150 years, demonstrates that this Government have ignored in their consultation all opposition to these proposed cuts. Some 50% of victims currently eligible for compensation will receive nothing if these cuts go through. Over 40% of the remainder would see their compensation reduced by £1,500 to £2,000. This is not a great sum for a millionaire, but by any standard a great sum to a shop worker already on low wages and injured by vicious criminals. If this proposal goes through, what next, I ask? Child labour, then slavery?

If there is to be a vote on this draft Criminal Injuries Compensation Scheme 2012, I for one will be voting against the government cuts.

Photo of Lord Howe of Aberavon Lord Howe of Aberavon Conservative 2:00 pm, 25th July 2012

My Lords, I rise to make perhaps a selfish contribution and not to invite the House one way or the other on the issue that has just been raised with some vigour. I speak because of an egocentric pleasure in the existence of the scheme and in the fact that it exists at all. It takes my mind back almost exactly half a century to the annual conference of the Conservative Party at Brighton in 1961. At that conference at that time, on behalf of the Aberavon Conservative Association, modest though that organisation was, I tabled an amendment for consideration challenging hanging and flogging and urging instead a liberal motion calling for a prison-building programme, strengthened probation services, longer sentences and, crucially, the establishment of a scheme to compensate the victims of violent crime.

To my surprise, some weeks later when we were on our Norman holiday near Coutances, a telegram came inviting me to ring up the then deputy chairman of the party, Sir Toby Low, or Lord Aldington, as he is better known to us. I wondered what on earth he wanted. He asked me whether I would be willing to move my motion as an amendment to the usual hanging and flogging motion. I was flattered to be involved with such a question. But he added, "The people here would be much happier if you dropped the last bit about compensation for violence". The Treasury was worried about the cost, the Home Office about the principle and so forth.

It was a tough choice to throw at a thus far unsuccessful candidate, but I responded by saying, "Certainly not. If I am going to have to take this on, you must not take the sugar off my pill". Sir Toby Low agreed to consider my point. A few days later came a reply that disappointed me. "Reluctantly", he said, the authorities had nevertheless agreed to give me a chance. When the debate came it was one of the high points of the conference. Tempers ran high. Our reforming amendment was carried by a large majority and a few months later I was invited by Henry Brooke, the then Home Secretary, to join a committee that he set up to consider detailed proposals for compensation. Within two years, a suitable scheme was established without having any resort to legislation. It was one of the first in the world and has served us well, as the House recognises, for many years.

For me, it was an early lesson in the importance of sticking to one's guns and may be one reason why I have remained such a tiresome creature ever since then. But I commend the subject of the debate. I am tempted to say a little word of sympathy about some of the criticisms, but not so as to offend my noble friend Lord McNally. I am sure that he will deal with them in his reply in a suitably positive way.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour

My Lords, I am sure that the whole House will have listened with great respect and interest to the intervention of the noble and learned Lord, Lord Howe. The incident that he has retailed from 50 years ago shows what a very humanitarian politician he has been during 50 years of extremely distinguished public life.

My noble friend the Leader of the Opposition and my namesake, my noble friend Lord Davies of Coity, spoke powerfully on this subject and I agree with them. There would be no point in repeating what they just said. But I rise to ask the Minister a question. Can he tell the House what is the average time taken to process applications under the criminal injuries compensation scheme? My noble friend gave us some rather different figures, but if the noble Lord's figures are correct and annual disbursements are of the order of roughly £200 million and the total liabilities of the scheme are about £500 million, it implies that rather a long time is taken to process each individual claim.

If my noble friend's figures represent reality, the situation may be slightly better, but it is important for the House to know exactly the effectiveness of the bureaucracy handling this important scheme and therefore what sort of time is taken.

Will the noble Lord also tell us the cost at the present time of administering claims? Perhaps he could break down the average cost of the claim so that we can see how much of taxpayers' money that goes into the scheme is used for the benefit of victims and how much goes to the administration of the bureaucracy involved.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I, too, support the amendment moved by the noble Baroness, Lady Royall, and I support the remarks made by both noble Lords, Lord Davies. It will be interesting to see the answer to the question that the noble Lord, Lord Davies of Stamford, posed.

I support the amendment because I believe that the people who are being disadvantaged are the very people whom the Government say they want to look after. They are also the people who make this country work, such as postmen, people in shops and people on the shop floor. They are the people who are likely to be worst affected by these cuts.

It puzzles me why we make cuts of this sort for essential compensation while at the same time we spend huge sums on matters that appear not to matter. We also ladle money out to foreign countries, which perhaps should start looking after themselves.

I had a Question answered about the £10 billion that many countries have agreed to make available to Afghanistan. I asked how much that would cost Britain. The Answer came back that it would cost £170 million a year between 2013 and 2025, so it seems that we can find money to support people abroad. I have no objection to that, but I want decent treatment of the people of this country.

The amount of money that is involved is relatively small. If the Government really believe in this big society in which we will all be treated properly, perhaps they should reconsider what they are doing in the matter of this compensation order.

I do not believe everything that I read in the newspapers about the Government being completely out of touch. But, frankly, almost every day we have an indication that the Government are completely out of touch. For example, the Exchequer Secretary to the Treasury, Mr Gauke, suggested that people who pay cash to some of those who might be injured are immoral for doing so. The Government do not appear to realise that millions of people in this country do not have a bank account. There is only one way in which they can pay and that is in coin of the realm.

I put that forward as an illustration of how the Government appear to be completely out of touch with what is happening in the country and the needs of people, particularly those who are unfortunately victims of accidents or other incidents.

Photo of Baroness Donaghy Baroness Donaghy Labour

My Lords, I support the amendment moved by my noble friend Lady Royall. First, there is the issue of people being attacked by dangerous dogs. This particularly concerns the UCW, the trade union representing postmen and women, but has also been raised by a wide range of other organisations, including the Police Federation, the Royal College of Nursing and the Local Government Association. The MoJ consultative document proposed to tighten the current policy under which claims have, in some cases, been considered from applicants attacked by dangerous dogs not kept under proper control. The Government's response to the consultation claims that:

"A small number of respondents expressed concern".

That is a travesty, as widespread concern was expressed. We should not forget that not so long ago this was the subject of cross-party support and I regret that that is no longer the case.

The Government acknowledge the complexity of defining a crime of violence. They believe that these cases involve injuries sustained in incidents outside the core purpose of the scheme and that proper redress in these circumstances would be found elsewhere, through an insurance claim, a compensation order as a result of criminal proceedings or a civil claim. This is the height of cynicism. The Criminal Injuries Compensation Scheme is the very last resort when all else has failed. The options suggested by the Government would offer no recompense, as the Minister well knows. A further suggestion by the MoJ is that postmen and women injured in dog attacks could sue their employer, the Royal Mail. However, the Royal Mail has a good record in discharging its duty of care to reduce risks and it is virtually impossible to secure personal injury compensation from an employer in a civil court in respect of criminal injury, with employers liability insurers resisting such claims vigorously and the courts, when tested, holding that the employer is not liable, on the whole.

The determination of deliberate attack, as the Government themselves acknowledge, is extremely complex. I live in an area of London where dogs are often kept as aggression accessories. To close off the opportunity for compensation to people who have suffered mental and/or physical injury as a result of dog attacks is inhumane. These cuts will also affect thousands of people who work in shops and public offices. Compensation is very important to the innocent victims. At present, only injuries that disable the victim for at least six weeks are compensated. It gives public recognition for pain and suffering, helps to pay off debts and can help recovery from trauma. Those who work part-time, as my noble friend Lord Davies has already said, which is 35% of retail staff, earn too little to qualify for SSP. The Government's own impact assessment admits that the scheme has very stable running costs-around £210 million per year-and,

"we assume that in the absence of reform this will continue".

There has been too much emphasis on the CICS as a demand-led scheme when it is, in fact, reasonably stable. As the general secretary of USDAW, the shopworkers' union, John Hannett, has said:

"We do not believe that the innocent victims of violent crime should bear the brunt of austerity, or that these cuts are justified by the £50 million projected savings".

Victims are to be asked to pay up to £50 upfront to obtain their initial medical evidence. If they are off work or still shaken from their experience, this could prevent genuinely injured victims from bringing a claim. The proposals for future loss of earnings could be worse off by £139.15 per week, which could result in serious financial hardship. The changes, as my noble friend Lady Royall said, fail to take account of the current job market, by demanding that people be regularly paid for a period of at least three years when temporary periods of unemployment are reasonably common nowadays.

The Government's stated intention was to cut the lower awards to provide better protection and support for the most seriously injured victims. There is no evidence that this has happened. Even those with the most serious injuries will suffer as a result of these changes. In conclusion-and we have already heard from the noble and learned Lord, Lord Howe, about what happened 50 years ago-it will be 50 years ago in December that the then Lord Chancellor, Lord Dilhorne, said in this House:

"For the innocent victims of such crimes we all feel sympathy, but we feel that sympathy alone is not enough".-[Hansard, 5/12/62; col. 305.]

If the Government's proposals go through, this will be a very sad anniversary indeed.

Photo of Lord Christopher Lord Christopher Labour 2:15 pm, 25th July 2012

My Lords, I am anxious not to repeat what has been said, but there is little doubt that we have, day by day in recent months-indeed for a year or two-heard nothing but sad news for those who are represented by the people that this order will affect. There is a callousness about so much legislation at the moment that is very hard to believe. Perhaps there has been a little hope raised by the noble and learned Lord, Lord Howe, that the heart of the party is not wholly stone. Having heartily enjoyed a number of years negotiating with him across a table, usually, I think, to mutual benefit, my feelings are, come back, Geoffrey, all is forgiven.

What is the benefit that has been received by the country for all these cuts? The news at one o'clock was that we are now in the third quarter of recession. There is no sign at all that what is being done by the Chancellor is having any material helpful effect. It is extremely sad that we are now dealing with what, in money terms, is a minority issue to the Treasury, but is a very significant issue to those affected by these cuts. We have a useful audience in the Gallery, but I think it is important for the record that we have some indication of what we are talking about, because there is no precision, as things stand.

There have been two broad groups affected by attacks. I was surprised that the number is as high as it is in the USDAW field. We certainly had them in the days when I was responsible for the staff in the Revenue. They could be serious and every attempt was made by the department to ensure that these were kept to a minimum. What sort of injuries are we talking about for those who are receiving the higher award? We are talking about significant facial scarring; permanent brain injury resulting in impaired balance and headaches; penetrating injury to both eyes; fractured joints including elbows, both knees and vertebra, resulting in continual significant disability; and a punctured or collapsed lung. This is the nature of the injuries for which there is now to be significantly reduced compensation.

I conclude with one of three examples provided by USDAW of the kinds of practical changes which will take place. I shall read about Simon, aged 33, the manager of a convenience store in Stoke on Trent who risked his own safety when he disarmed an axe-wielding man during an attempted robbery. He says:

"I saw a man at the till waving an axe and shouting at the checkout assistant. As I went to grab the handle of the axe there was a bit of a tussle and it fell to the floor. I managed to kick it out of the way. Two customers came to my aid and we held him down until the police arrived. He became more aggressive and started lashing out, then he bit my leg".

Simon received £1,250 compensation for his injuries and the mental trauma he suffered, which, I suspect, was considerable. He received a public bravery award from the local police. Under the new proposals, he would receive nothing. I regard this as utterly outrageous, as I am sure does the Gallery, and it is high time that there was a rethink and that these sorts of changes were removed from your Lordships' agenda.

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, first, I say to the noble Lord, Lord Christopher, that the reality, which apparently still takes time to sink in across the House, is that we are all a lot poorer than we thought we were four years ago. Whichever Government had come in would have carried out drastic cuts in public expenditure. That has been acknowledged by the Opposition in their moments of candour. Therefore, every time that the Government come before the House with some saving in public expenditure, the Opposition say, "These are not the kind of cuts that we would have made". The Liberal Democrats have neither the resources nor the inclination to do this, but I know of parties who keep a running total of cuts in expenditure which the Opposition would not have undertaken, and it adds up to something that questions their economic competence.

As for my noble and learned friend, Lord Howe, I hear his story. I have been in a few small parties myself, but the Aberavon Conservatives, which he led, must have been almost of Liberal Party size in its gatherings. The scheme that he pioneered in the 1960s cost £6 million. We are debating a scheme that costs more than £200 million. Also included in his long and distinguished career was a period as Chancellor when, like me, he must have stood at Dispatch Boxes listening to the impact of cuts that were necessary at the time. That is one of the responsibilities of government.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

I have a simple question. What would £6 million be in today's money?

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

That is in current prices. The actual scheme cost less than half a million pounds when first introduced, so I was not trying to belittle it. We have all known schemes which have been introduced with the best of intentions but have had long-term consequences. As the noble Baroness acknowledged, the previous Government took a hard look at this in 2005 and then backed off from making similar decisions.

Noble Lords:

Oh!

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

I suggest that some of the roots of the economic problems that we later faced was that they backed off too many difficult decisions-something that we are not doing.

The noble Baroness asked me how the ex gratia schemes compare. People who are victims of terrorist attacks which took place between 1 January 2002 and 16 October 2012 will, in general, have until 16 October 2012 to claim. The scheme is based on equivalence to those in tariffs under the existing domestic scheme. Eligibility is restricted to those with an ongoing disability as a direct result of an injury sustained in a designated act. Only injury payments are available, in accordance with the tariff of injuries; bereaved relatives are not eligible for an award. Tariff payments are in line with those in Criminal Injuries Compensation Scheme 2008. The maximum payment for a single injury on the tariff of injuries which forms part of the scheme is £250,000.

The noble Lord, Lord Davies, raised the issue of the impact on shop workers, as did other noble Lords. Shop workers, and all trade unionists who have been named, are still covered by the scheme, but not for small payments for minor injuries. I heard the example given by the noble Lord, Lord Christopher. Perhaps those in the Gallery also ask whether £1,250 for a very noble, brave act is not enough. Should we build into a scheme which is supposed to address real victims of crime pay-outs of significant sums-not life-changing but, for low-paid workers, significant sums-for injuries that also are not life-changing? We are removing the lower end.

Photo of Lord Christopher Lord Christopher Labour

The examples, which the noble Lord says that he has read, are life-changing.

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, those are examined by CICA under the scheme and some of them, frankly, I cannot believe would be outside the scheme, but that is something that the authorities take account of.

The reforms that we have discussed today not only put the criminal injuries compensation scheme on a more sustainable financial footing but will achieve our aim of focusing compensation on those most seriously injured as a direct result of deliberate violent crime.

I touch on a couple of other points made. The noble Baroness, Lady Royall, asked what happens with multiple injuries. The situation will remain as now: 100% for the most serious injury; 30% for a second-rated injury; 15% for the third most serious injury. The noble Lord, Lord Davies, and others mentioned shop workers. They are treated as other victims are, but where they suffer long-term mental injury lasting for more than six weeks, they will still be able to claim. The noble Lord, Lord Davies, heard the cost of running CICA. The time to process claims is seven to eight months for a first decision and about five months to review a decision.

I heard what the noble Baroness, Lady Royall, said: that somehow the backlog is not real. What is real is that we paid £480 million-the largest sum ever-in compensation this year in part to deal with claims that go back beyond 1996.

Photo of Lord Brookman Lord Brookman Labour

I say to the noble Lord, Lord McNally, that it is quite evident to me and, I am sure, to the whole Chamber and the Gallery, that you have not had one voice from the coalition government Benches in support of what you are saying. It is obvious that in this Chamber there is strong resentment about the changes proposed, even from your Benches.

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

You may make that assumption. We will see what happens when we come to a vote. I am fully aware, as has been readily acknowledged, that the trade unions, which have been readily represented on the opposition Benches-and rightly so-today have argued against the changes. I understand that. I understand less the willingness of those on the government Benches-sorry, the opposition Front Bench-to leap on this passing bandwagon.

It is no use pretending. We are dealing with relatively small payments from the scheme for temporary injuries. In return for that change-I notice that the noble Baroness did not mention this-we are substantially reforming the amount of money that will go into victim support. I think that I will have support in this House for this concept that rather than paying small amounts here and there-small penny-packet amounts to various minor injury claims; some maybe justified, some very much less so-it is better to devote that money to real victim support and to dealing with the trauma of crime at the sharp end, when it happens, in a way that is effective. That is the basis of these reforms.

I understand where the trade union members are coming from, but I do not know where the noble Lord, Lord Stoddart, is coming from when he throws in overseas aid. One of the things I am very proud of is the way that this Government have sustained overseas aid.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

I gave that example because I had just received an Answer that we are going to spend a further £178 million in Afghanistan-that is, after billions and billions of pounds for our military presence there. I raised this amount because we have people who need to be looked after in this country. We are talking about some of them now. If we can afford to spend £178 million to help people in Afghanistan, which is fine, surely we can find an extra few million to help unfortunate people in our own country.

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

We are finding it for unfortunate people in our country, but Afghanistan remains one of the poorest countries in the world. I am proud of our aid programme there. If the noble Lord rereads what he said he will probably find echoes of that great conservative sentiment of "hang 'em and flog 'em" and "don't give it to foreigners".

Noble Lords:

Oh!

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

Noble Lords know exactly what I am talking about. In the past, in some of the battles over civil liberties, human rights and the way that we treat people in overseas aid I would have relied on the Labour Party. The Labour Party has gone a long way from the one that I remember in many of these areas.

M

The Labour Party has gone a long way from the one that I remember in many of these areas.

So have the Conservatives.

Charity begins at home, in fact it should never leave home.

Submitted by Mr Raymond Neal

Noble Lords:

Oh!

Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice)

I will intervene just briefly. We would have relied on the Liberal Democrats as far as legal aid was concerned. What went wrong there?

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

We have had the whole gamut today of the Labour Party never supporting a cut and never facing up to a responsibility. I listened to what the party opposite has said, and we have taken the tough decisions. Not only have we done that; in this case we have also made the sensible decision to move victim support to where it is needed, at the sharp end. We are finding the resources by these reforms and I commend them to the House.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Spokesperson (Equalities and Women's Issues), Shadow Leader of the House of Lords, Shadow Spokesperson (Cabinet Office)

My Lords, I answer this debate as the Leader of Her Majesty's Opposition, a very responsible Opposition. I am also a proud trade unionist. I am not leaping on a bandwagon that was put together with a bunch of trade unionists. I am doing what I believe to be right and I am proud that the trade unions have sought to support the workers whom they represent. However, I have to say that many of the representations that I received prior to today's debate were from lawyers who are also concerned about victims.

Today we are talking about victims. Yes, we are living through a financial crisis; we are living through a double-dip recession which one might say was made in Downing Street. However, as noble Lords will know, my party is rightly being extremely careful in relation to financial commitments, precisely because we are entirely realistic about the financial situation that this country faces.

The Minister says that we are against all cuts. That is not true. We simply believe that some of them are too far and too fast. When making financial decisions one is also always faced by a choice. We believe that the choice that the Government have made in relation to victims is the wrong one. Victims do not choose to be victims. They have suffered through no fault of their own. In proposing the Draft Criminal Injuries Compensation Scheme 2012, the Government seem to be putting deficit reduction before victims. I wish to test the opinion of the House.

Division on Baroness Royall of Blaisdon's amendment to the Motion.

Contents 117; Not-Contents 171.

Amendment disagreed.

Division number 1 Criminal Injuries Compensation Scheme 2012 — Motion to Approve

Aye: 115 Members of the House of Lords

No: 169 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Motion agreed.