House of Commons
Monday 4 June 2007
The House met at half-past Two o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
Since 1997, long-term youth claimant unemployment has fallen by over 70 per cent. Independent research published by the National Institute of Economic and Social Research confirms that the new deal has contributed significantly to that improvement. It found that long-term youth unemployment would have been twice as high without the new deal for young people. As a result, the Department is spending £5 billion per year less on unemployment benefits than in 1997.
The figures that have been presented to me tell me that, unfortunately, nearly half of all young jobseekers who leave the new deal for young people return to benefit after a year. What are the Government trying to do to direct those young people into sustainable jobs and to change the present situation?
We are looking to improve the delivery of services under the new deal and we will make announcements about that shortly, but there is no doubt that the new deal for young people has been a success, as I described. It has helped over 700 young people in the hon. Gentleman’s constituency. Without this Labour Government putting that investment in, they would have been looking at years of unemployment, as they did under the previous Conservative Government.
In my constituency, 1,700 young people have been helped back into work under the new deal. However, over 4,000 16 to 18-year-olds are categorised as NEETs—not in education, employment or training. Does my right hon. Friend agree that we need to be positively targeting those young people via successful schemes such as train to gain and entry to employment, which we are operating successfully in Barnsley, East and Mexborough?
I am grateful to my hon. Friend. There is no doubt that we need to target additional help and support for that category of young people. Train to gain will help us to do that. The activity agreements that my right hon. Friend the Chancellor announced in the Budget will help us, too. It is important, however, to keep the matter in context. In 1993, one in four 16 to 25-year-olds was not in education, employment or training. Now the figure is closer to one in six.
Does the Secretary of State agree that, despite the successes of the new deal, unemployment among young people is now rising, the number of NEETs is rising and so is the inactivity rate? Although many of us hope that he will have a long stewardship of the Department to implement many of his longer-term decentralising reforms, might not one move be to bring in the new deal from day one of unemployment?
We will respond shortly to the Freud report on the next stage of welfare reform. David Freud recommended that we provide more targeted help and support at an earlier point in the process for those who perhaps have the greatest overall barriers in coming back to work. We will make an announcement about that shortly, but we continue to look carefully at the new deal, at how it is working, and at the need to increase flexibility and better control front-line aspects of the new deal programme.
We will publish our response to the consultation on the personal accounts White Paper shortly, together with our response to the recent Select Committee on Work and Pensions inquiry. Our intention remains to introduce a Bill in the next Session of Parliament.
Personal accounts give many thousands of working families in my constituency who do not have an occupational pension an investment option, but only if they have confidence in that option to invest in those accounts. Can the Secretary of State indicate what he will do to ensure that those people have confidence and invest in those accounts?
The first and perhaps most important thing that we can all do is to make sure that there is a strong and enduring consensus around the policy itself. I believe that that is the case after the excellent work that Lord Turner did. The key responsibility, of course, will be in this House. We have legislation to enact in the next Session, as I said. It will be important that the personal accounts delivery authority, the new independent board that will be set up to oversee the introduction of the new policy, has the right remit and produces the right guidance, information and help for millions of workers who are not familiar with occupational pension schemes, but who, like many people in my hon. Friend’s constituency, are keen to start saving. It is the responsibility of Ministers, the delivery authority and all of us in the House to continue to make the case for additional workplace savings. We must do all we can here to solidify that consensus and to ensure that the reform can serve her constituents in the way in which she and I would both like.
Does the Secretary of State agree that, alongside encouraging personal accounts, the Government must do all they can to keep good-quality defined benefit schemes in operation? If so, why have the Government chosen explicitly to ignore the recommendation of the Government Actuary in relation to the level of the contracted-out rebate that applies from April this year? Is not that decision essentially another back-door tax on pensions? Will the Secretary of State review that decision in April 2008, which the right hon. Member for East Ham (Mr. Timms) indicated would happen when he was Minister for Pensions?
We always keep such decisions under careful review. The hon. Gentleman is a one-track record when he refers to all these reforms; he has nothing positive or constructive to offer. We both agree that consensus is an important part—[Interruption.] The hon. Gentleman is having a second bite at asking his question, but he should have got his first attempt right. If he had done so, I might have answered in the way that he would like, but I prefer to answer in the way that I wish given the question that he actually asked. I hope that the Liberal Democrats will at some point come to support—however grudgingly—the policy on personal accounts.
Does my right hon. Friend agree that it is particularly women in work who have missed out on occupational pensions who miss out on pensions? How will he ensure that the new personal accounts are targeted on such people so that they get the necessary advice to ensure that they can fill that important gap in their pension provision?
If we are to succeed in doing that—as my hon. Friend and I both wish us to do—we must continue the discussions that we are having with the pensions industry, employers and trade unions. It is important that personal accounts are targeted specifically on the group of people that Lord Turner and the Government have in mind: low and moderate income earners who work for companies that do not have an occupational pension scheme. We can continue to ensure that the policy works in the way that my hon. Friend and I want by making sure that there is a cap on contributions, that there are restrictions on transfers in and that there is a simple scheme exemption process. Personal accounts must be complementary—they must not compete with good-quality existing pensions. I am sure that we can design the system in that way.
Is not the Secretary of State ashamed of the low savings rate that there has been in this country under this Government, and is not the main reason for that the removal of tax reliefs, particularly on pension funds, along with the downgrading of tax relief on other saving schemes? Does he accept that we need better tax breaks to get people to save more, which they clearly need to do to have a prosperous retirement?
Fiscal incentives will be attached to the introduction of personal accounts; I am sure that the right hon. Gentleman is aware of that. If he and his party colleagues truly believe what he has just said they would be proposing to reverse the dividend tax credit changes that we made. I understand that they are not planning to do so, although he personally might favour that.
The Secretary of State has already agreed with the hon. Member for West Lancashire (Rosie Cooper) that public confidence in the pension system must be restored if personal accounts are to be successfully introduced. Does he understand that a vital part of that process is the delivery, without further delay or prevarication, of a fair and equitable solution to the situation of the 125,000 victims of pension scheme failure whom the ombudsman’s report identified?
Yes, I do accept that, which is why we have brought forward further proposals to make the financial assistance scheme more comprehensive in its scope and more generous in its application. It is also why we have set up a review to discover whether there are other unclaimed assets that we can use to improve the minimum 80 per cent. guaranteed level of compensation that will be available under the FAS. As well as accepting that that is important, I am confident that the Government have introduced a full and comprehensive set of measures to deal with the problem. Looking forward, in respect of the Pension Protection Fund, we have the right guarantees in place.
I am glad that the Secretary of State accepts the need to restore confidence, but how does the emotive and aggressive language of his High Court submission against the ombudsman help to restore that confidence? Will calling the ombudsman’s decision “flawed, irrational and peripheral” rebuild that confidence? Or perhaps he thinks that that objective will be best achieved by asserting that the parliamentary ombudsman—an Officer of this House—is
“no better placed to form a view than the Secretary of State”?
I will tell the Secretary of State what he needs to do if he wants to rebuild confidence—
The Secretary of State always acts on the basis of the legal advice that he receives. The Government’s lawyers produced those arguments and I am happy to stand by them.
As at November 2006, 3,701,710 people were in receipt of inactive benefits in Great Britain of whom the majority—almost 2.7 million—are customers on incapacity benefits.
The hon. Gentleman’s tone seems to be entirely out of synch with that of his Front-Bench colleagues on this important issue, on which they have sought to build consensus. The fact is that, after two decades of remarkable rises in the number of people on incapacity benefit, we have had two years of sustained falls; nevertheless, we still have to go further. The national roll-out of pathways is important, and the Welfare Reform Act 2007, which passed through this and the other place, is also an integral part of the process. Ultimately, we want to move away from a system under which too many people were written off during many years of Tory neglect and avoidance of supporting people who needed support through the welfare system.
It must be right that those who cannot work because they are simply not able to perform their duties as an employee are able to get benefits. However, is my hon. Friend satisfied that the appeals system is working quickly enough, so that, when people are not given the benefits that they deserve, they can go to the tribunal speedily to enable such decisions to be made and be satisfied with the result, and so that we can have proper deliberations on these matters?
My right hon. Friend is right to say that we must ensure that the appeals mechanism is speedy, but it must also be accurate. An important part of that is getting the initial assessment correct, because if we can do that, far fewer appeals will be needed and the type of frustrations that he identified will no longer be in play. That is why, when we reform the personal capability assessment, we will transform it so that it takes into account modern trends in disability, mental health illness and learning disabilities. That is a real change from the past.
The fact is that there have been two years of reductions in the number of people on incapacity benefit. The investment that has been put in place through pathways, which the hon. Gentleman and his colleagues opposed every penny piece of, has had an important impact. Some 32,000 people have got into work through the roll-out of pathways thus far, and 900,000 fewer people are on inactive benefits today, compared with a decade ago; that is more than 300 people each and every working day supported off benefit and into work. When we voted on these issues in the Commons, the hon. Gentleman opposed every single penny piece of investment to make all this work and to make the transformation of people’s lives possible.
About 8 million people of working age are economically inactive. The number on benefits is perhaps slightly under half that, but the largest single group on incapacity benefit remains those with chronic mental ill health conditions. Is the Minister convinced that we are doing enough to tackle some of the problems that those people experience in getting into work, particularly with medium-sized employers, among whom there seems to be a continuing reluctance to accept the employability of such individuals?
My hon. Friend is right, and one of the successes of pathways thus far is that we are trying to support people, often with complicated needs, who have been excluded from the labour market for prolonged periods. Importantly, that includes those with learning disabilities—the labour market’s attitudes toward those people are gradually changing, although not enough—and those with a fluctuating mental health illness, who constitute the largest number of people coming on to the benefit. Again, the change in the assessment should help in that regard, but my hon. Friend is absolutely right to say that we have to go further in working with employers—both private and public sector—to give job opportunities to those on incapacity benefit with a mental health illness who wish to work.
There is an emerging consensus that there must be large-scale recycling of benefit savings to fund many more voluntary and private sector welfare-to-work programmes. However, that can happen only if the Chancellor of the Exchequer allows benefit savings from the Department for Work and Pensions’ annually managed expenditure budget to be moved across to its departmental expenditure limits budget. Can the Minister confirm today that the Chancellor has personally signed up to that, because there is a genuine fear in the sector that he has not, and that he is once again being the road block to reform?
The Chancellor publicly declared that he would champion that and many other reforms in the public sector, and along with my right hon. Friend the Secretary of State, he attended the launch of the Freud report. The fact is that, if we had continued with the increases in the number of people on incapacity benefit that we inherited from the party of the hon. Member for Bury St. Edmunds (Mr. Ruffley), we would not be talking about reductions in the number of people on incapacity benefit; the number today would be 4 million. In terms of the attitude of the Chancellor, the sound economy, macro-economic stability, the investment in the new deal and the active labour market policies—all of which he championed, in contrast to the Opposition—have helped to make a reality of much of our success in the world of welfare.
No, we will continue to treat contact and child maintenance as separate issues.
Does the Minister not realise that, in many instances, fathers are being excluded from the upbringing of their children? Although it was recognised that there were good reasons for separating the issues when the current legislation was introduced, does he agree that every child benefits from access to, and contact with, both parents, and from both parents being involved in their upbringing? Would this not be a good moment to review the legislation and consider shared parenting?
On the hon. Lady’s first point, I agree that it is of course desirable that both parents continue to be involved in the upbringing of the child. We would all subscribe to that idea. However, the point is that relationships break down, and it is then up to the separating couple to decide how they will maintain their relationship with the child or children. Some couples will do that voluntarily and others as a result of being forced to do so by an agreement that is arrived at in court. However, what should not happen is that a dispute between parents results in the child or children becoming a pawn in the settlement of maintenance. The two issues are linked, but in establishing a system of determining maintenance, it is important that they are not linked in the way in which the hon. Lady suggests.
I say to my hon. Friend respectfully that it is not a bad idea to consider that issue as part of the review and reform of the child support process. In doing so, will he consider the case of one of my constituents, Frances Lyttle, who has had a nightmare 10 years since her husband left her with two children? She was in court today, trying to resolve divorce issues. The Child Support Agency is absolutely incapable, and it is so inflexible that its actions are creating an injustice while the courts try to bring about a just settlement.
My right hon. Friend is, I think, talking about contact orders, which are not the responsibility of the Child Support Agency, nor will they be the responsibility of its successor body. She may be aware that the Government have already taken action in the Children and Adoption Act 2006 to try to reinforce contact orders. I repeat that we would not want a tussle between parents over contact to drag in the children and make them a pawn in the argument. That would not be right, which is why the issues are quite properly kept separate. The matter was reconsidered in the context of David Henshaw’s review, and there was no consensus among the groups that were consulted for any change in the arrangements, which is why we have decided to persist with them.
It is not often that I entirely agree with the Minister but, on this subject, I do. As someone who has dealt with the matter as a solicitor and as a Member of Parliament, I urge him to resist calls to link the two issues, because there is a real danger of children being used as pawns by both sides in such an argument. It is important that the issues are kept separate.
In the early 1990s, unemployment rose by more than 500,000 in one year alone, and it was consistently above 10 per cent.
Since 1997, unemployment has fallen substantially, the number of people in employment is up by more than 2.5 million, including by 93,000 in the last year alone, and the inactivity rate is now close to its lowest level for 15 years.
My constituents recognise that the long-term trend this past decade has been one of falling employment and record numbers of people in work, but those who work hard, play by the rules and pay their way believe that there are still too many people claiming benefits who could be working. What more can the Government do to tighten eligibility so that those people get off benefits and get a job?
I am grateful to my hon. Friend. What he has said will be echoed in constituencies all over the country. The benefit system has to be fair and reasonable—fair to those on benefits, but also fair to those who pay for benefits through their own hard work. There is a case for looking again at some of the rules, particularly those on jobseeker’s allowance, and we are doing that. We hope to bring forward proposals shortly.
Does the Secretary of State agree that we are at our best when at our boldest? I urge him to be bold and say that we will aim for nil unemployment in some areas of the country, such as my constituency, where the number of jobs about to be created in the Southern general hospital and its associated development is far greater than the number of unemployed people in that area. A drive towards nil employment would be bold but it would clearly discriminate in favour of those who are in greatest need. Will he order his civil servants to work accordingly?
It will not surprise my hon. Friend that I agree that we are at our best when at our boldest. I have visited his constituency with him and seen some of the developments that he mentioned. The really gratifying thing about the changes that have taken place in unemployment is that the biggest falls in the past 10 years have been in constituencies such as those of my hon. Friends the Members for Glasgow, South-West (Mr. Davidson) and for Dudley, North (Mr. Austin). That is right and proper. The Labour Government are here to help those in the greatest need; that has been and will continue to be our priority.
On the question posed by the hon. Member for Dudley, North (Mr. Austin), has the Secretary of State considered the welfare arrangements in Wisconsin that created a life-term period for access to welfare, which had an extraordinary impact on the number of people claiming benefits?
Jobseeker’s allowance is already a time-limited benefit, and we have no plans to change any other arrangements.
Mr. Speaker, you will know about the recent announcement in Wallasey about job losses at my local Burton’s Foods’ biscuit factory. Initially, I thought that 660 jobs were to be lost, but that number has gone up to 821. Will my right hon. Friend meet a delegation and tell us what to expect if the closures go ahead, so that we can try to recover the low rates of unemployment to which my constituents have become accustomed in the past 10 years?
I am happy to meet my hon. Friend’s constituents. I understand that she already has a meeting arranged with the Minister for Employment and Welfare Reform. Jobcentre Plus will be there to help her constituents in any way possible. We have an effective and efficient system of providing such help that has, sadly, been tested on several occasions. I am also happy to discuss with her what arrangements we can put in place to help her constituents.
We recently had the honour, in my constituency, of welcoming my hon. Friend the Minister for Employment and Welfare Reform to meet 31 constituents—mainly single parents. In my right hon. Friend’s review of support for getting single parents into work, is he giving particular consideration to the difficulties of parents of larger families with more than two children, and to the support given to parents through Jobcentre Plus?
Yes, we are considering all aspects of the problem. There is no doubt that many single parents in London face serious problems with getting back into work, such as problems with transport and child care. We are working closely with the Mayor of London to address those challenges. My hon. Friend will know that we are also working with five boroughs in the east end of London to develop a more integrated, efficient and, I hope, more effective and individually tailored service to help people such as the ladies whom she mentioned get back into work. We have a responsibility always to continue to consider what more we can do to help, and we are certainly prepared to do that.
Occupational Pensions (Temporary Insolvencies)
Ongoing solvent employers have a clear moral duty to support their pension schemes and to provide the benefits that members were expecting. The taxpayer should not be expected to step in and make up such shortfalls in scheme funding levels where there is a sponsoring solvent employer. However, we recognise the complexity of this issue, and one element of the financial assistance scheme review of scheme assets is to examine whether—in addition to those with compromise agreements—there are other pension schemes where it would not be reasonable to expect the employer to have a continuing responsibility for supporting an underfunded scheme.
Has the Minister read the forensic accounting study sent to him that showed that some leading American companies—highly profitable companies, such as EMC, EDS and Parsons—systematically manipulated their UK subsidiary accounts to create temporary insolvencies, wiping out their pension obligations? In those circumstances, will British pensioners be entitled to financial assistance scheme compensation, and will the Minister then pursue the companies to compensate the British taxpayer?
I obviously cannot comment on individual cases, but if the hon. Gentleman is concerned about those schemes, they should apply to the financial assistance scheme operating unit to find out whether they are eligible. We have drawn the definition of insolvency as widely as possible to allow people to do so, and it is also open to him to make representations to the Young review to find out whether they should be included in that category.
More than 50 per cent. of occupational pension schemes have assets that far exceed their liabilities, and other schemes are rapidly catching up with them. Can my hon. Friend give the House any assurance that we can stop employers raiding those pensions schemes in the future or creating contribution holidays for them, as happened in the past, which is exactly what got them into trouble?
I can give my hon. Friend the assurance that we now have a much more effective regulatory framework, and partly because of that framework and the pensions regulator’s work, deficits are falling, exactly as my hon. Friend says. The regulator works very closely with trustees to ensure that the promises that have been made to people will be delivered, because people are making contributions on that basis and they should expect that to happen.
The personal accounts White Paper, published last December, set out our proposals for increasing opportunities and incentives to save for retirement. We reached the end of the consultation period in March and shall publish our response shortly. Our proposals will place simplicity and independence at the heart of a system that, from 2012, will introduce a scheme of low-cost personal accounts for millions of people currently without access to good occupational schemes.
That is a very good point. Unfortunately, the truth is that only a minority of people currently have access to employer contributions to their pension, and through these reforms, we will now extend that to every employee, so that whenever an employee wants to save in their pension, it will be mandatory for their employer to match that, with tax relief from the state. That is a significant step forward.
Does the Minister agree that people would have greater confidence in saving for their own retirement if the Government had acted to reform public sector pensions, perhaps guided by an independent review? Will he join the consensus initiated by Lord Turner in another place on 14 May that the Government have so far failed to act on the issue? What steps will he take to answer that call?
Over the past decade, child poverty in the United Kingdom has fallen faster than in any other major economy, but we have to go further to achieve our target, which is why we published our refreshed child poverty strategy on 27 March.
Hundreds of thousands of children are still living in poverty, by the Government’s definition. If the Minister accepts that housing is a crucial part of removing children from poverty, will he prevail on the new Prime Minister to reverse 25 years of housing policy failure and restore council house building?
Of course, we have invested more than ever before in housing, as a Labour Government, certainly overcoming the record and our inheritance from the previous Government. But the fact is that, in terms of the responsibility of the Department for Work and Pensions, the biggest significant input that we can have is to encourage ever more people to get the chance to get into work—work that pays, and work that is sustained. Of course, we have further to go, but it is important to reflect that, each working day that we have had a Labour Government over the past decade, 190 children have been lifted out of poverty, which is in stark contrast to the fact that, in the previous 18 years, 240 kids went into poverty every day.
In 2010, we estimate there will be around 240,000 more people who could qualify for the state second pension through carer’s credit. Of those, around 160,000 could also qualify for carer’s credit for their basic state pension, and we will work with carers’ representatives to encourage all those who are eligible to apply to do so.
I am grateful to my hon. Friend for that reply, but given the invaluable contribution that carers make to our society and the billions of pounds that they save the taxpayer, could we not do more? Will my hon. Friend consider taking specific steps to ease the financial burden on carers, specifically to ensure that carer’s credit and carer’s allowance are equivalent to the national minimum wage and that carer’s allowance can be claimed in conjunction with the state retirement pension?
Obviously, I can agree with my hon. Friend about the valuable work that carers do and the energy and commitment that they give to their task. He raises two issues that are complex, especially the payment of carer’s allowance and the state pension. As he is aware, there is an overlapping benefit rule that makes it impossible to pay two income maintenance benefits to one individual at the same time. However, I hope he also recognises that we lifted the age barrier on entitlement to carer’s allowance so that people could carry forward their entitlement to the allowance past the state pension age. Even if such people could not claim carer’s allowance itself, they were thus entitled to claim the carer’s premium within pension credit.
We are examining ways in which we can enhance the income of carers, not just in retirement but throughout their lives, which is why, for example, carers can earn up to £87 a week as well as receiving carer’s allowance. I agree with my hon. Friend that we need to examine constantly how we can improve the situation for carers, which is why we are undertaking a review of the national carers strategy.
Given that, according to Carers UK, we will need an additional 3.5 million carers in the next 30 years but that more than half of current carers say that financial worries are affecting their health, does the Minister agree that the complexity of the benefits system does carers no favours? Does she have any plans to review the complexity of the system to ensure that we encourage and support people in their caring roles, rather than frustrating them to the extent that they pass on their responsibilities to the state?
As I am sure the hon. Gentleman is aware, we have taken steps to simplify elements of the application for carer’s allowance. We are constantly looking at how we can improve the application process. We work closely with Carers UK and other carers organisations to examine the wider issues for carers—not just the benefit issue, important though that is. I have pulled together several carers stakeholder groups to examine some of the wider strategic issues. I hope to update the House as appropriate when we have further discussions with that group.
Well, I appreciate that my hon. Friend, in the nicest possible way, wants to push me a little further on this particular issue. There is a complication with two benefits that are essentially for income maintenance being paid to the same person for the same purpose at the same time. We have lifted the state pension age barrier, which, to be frank, was in place for all the years of the previous Government. We lifted that to allow carers to claim the extra entitlement through pension credit that gives them an extra £27.15 a week, to recognise the caring element of their work. The problem is difficult to explain and to understand, but it arises from the overlapping benefits rule. The rules, which have been agreed by this House, across the House, on more than one occasion, state that two benefits cannot be paid to the same individual for the same purpose at the same time.
Does my hon. Friend agree, however, that financial pressure is one of the biggest worries that carers suffer? As my hon. Friend the Member for Hartlepool (Mr. Wright) rightly asked, should we not ensure a minimum standard by introducing a minimum wage for carers?
The carer’s allowance was introduced by a Labour Government in the 1970s as a recognition of carers’ commitment to their caring responsibilities. It was never intended to be a carer’s wage, and that has rarely been challenged in this House. We want to look at the wider issues relating to support for carers and, as the hon. Member for South-West Surrey (Mr. Hunt) allowed me to point out, we are working with carers organisations to look across the issues, not just at the benefits system. I reiterate that even carers who receive the full carer’s allowance may earn up to £87 a week, after deductions, to ensure that they enhance their income. We are working closely with carers organisations to examine the wider strategic issues relating to carers.
Financial Assistance Scheme
As at 25 May 2007, the financial assistance scheme had paid out more than £4.6 million gross—more than £3.6 million net—to more than 1,200 qualifying members. We are paying everyone we can, and members who believe that they are eligible for assistance but are not being paid should ask their pension scheme trustees to apply on their behalf.
I do not think that that will be of much comfort to the members of the pension scheme of British United Shoe Machinery in Leicestershire, who are still waiting for money after the collapse of their scheme. Will the Minister confirm that more than 9,000 people are eligible and that only a very small fraction of that number have been paid from the FAS; and that, even going by the figures that he gave, it has cost more than twice as much to administer the scheme as has been disbursed?
My understanding from meeting people from the scheme is that people in the BUSM scheme are being paid. I believe that 18 members’ survivors have been assessed for initial payments and six are in receipt of initial payments.
The more general point is that we cannot pay people if the schemes do not give us the information on what people are owed. We are working with some trustees, such as those at BUSM, where we get good co-operation, but there are others who are not co-operating with us to give us the information we need. My right hon. Friend the Secretary of State has made it clear today that he is prepared to use criminal sanctions against those trustees who persistently refused to give us the information we need.
The Minister said a few moments ago that more than 100,000 beneficiaries of the FAS scheme are now getting the money, but how many of the 125,000 are getting their full entitlement under the scheme and how many of the 700 Dexion workers whose pensions were stolen from them have received the full amount that they were promised?
The hon. Gentleman’s question demonstrates a misunderstanding that is quite prevalent. There is no system to pay all 125,000 people now, because the vast majority have not reached pension age. No one is saying that all 125,000 should be paid now. The key point to make is that trustees should be giving us information on people who have reached pension age, so that we can pay them—
Will the Minister disown the claim made on GMTV recently by the Chancellor that every single one of the 125,000 will get at least 80 percent. of their pension? Does he accept that that claim is inaccurate and cynical, and that most FAS claimants, when they get paid at all, will get only half of their original entitlement, with many receiving much less? Why is this Government treating them like second-class citizens?
The hon. Gentleman will not be surprised to hear that I do not disagree with the Chancellor, for the good reason that there is no difference between the hon. Gentleman’s party and mine on the issue. The only difference is on whether more taxpayers’ money should be put into the scheme. A few weeks ago, the hon. Gentleman said that there should not be more money for it, but when we found money to put into it and doubled the scheme to nearly £2 billion in net present value, the Conservatives agreed with us. The difference is that we were prepared to put more taxpayers’ money into it, and they were not.
As I made clear in my written statement of 17 May, the new account will be available nationally, and eligibility for the new account will be on the same basis as for the Post Office card account.
May I suggest to the Minister that when the franchise for the new card account is let, he looks closely at the BBC’s experience of letting the franchise for the sale of television licences to PayPoint? That has left literally hundreds of constituents from the smaller islands in my community with no access to an over-the-counter service. Will he give me an undertaking that whatever form the new account takes, it will be accessible to all communities in the country?
Yes. As the hon. Gentleman will see from the written statement that I issued on 17 May, we have set out the criteria under which we have asked interested parties to submit an expression of interest. We made it clear that there must be national coverage, and that the account will have to be available in rural areas. That should reassure the hon. Gentleman that the facilities currently enjoyed by his constituents with card accounts will continue to be provided; in fact, there will be additional activity under the account provided by the successor account.
Will my hon. Friend ensure that there are sufficient security measures in place for the successor card account, so that we can prevent a type of fraud that I dealt with recently in a constituency case? A couple in my constituency in South Yorkshire were threatened with the loss of jobseeker’s allowance, housing benefit and other benefits because a couple in Canary Wharf were claiming funds using a Post Office card account that was opened with my constituents’ details. Will he ensure that extra security measures are brought in with the successor card account?
I am grateful to my hon. Friend for raising that point. Thankfully, generally speaking we have very few problems relating to fraud with the Post Office card account. From the sound of it, the case that he raised with me is more an issue of identity theft and of course, as he will be aware, the Government are taking many measures to try to bear down on that. The existing card account has been largely devoid of opportunities for fraud, and I am certain that we will carefully consider such issues when we award the contract for the successor product.
Child Support Agency
Subject to parliamentary approval, from 2008-09.
What assurances can the Minister give the House that when the new body—the child maintenance and enforcement commission—is operational, it will not repeat the mistakes of the past, in which hundreds of thousands of families were failed, and in which the parent with financial responsibility was often excluded and marginalised? Does he agree that families need fairness, but they also need fathers?
If the hon. Lady studies the report that Sir David Henshaw undertook for us and the subsequent White Paper that we issued on replacing the Child Support Agency with a new operation, she will see that we have addressed the very issues that she raises. I think that there is consensus across the House that the CSA’s performance was not up to standard, and I think there is acceptance that reforms that were introduced along the way, and which were designed to improve its performance, have not delivered the results that all of us in the House wanted. That is why we came to the view that there had to be a fresh start, and a different way of doing things and of offering a system of child maintenance. The scheme set out for the new commission is fundamentally different from that of the old CSA in many respects. The hon. Lady will see just how different the scheme is if she carefully studies the White Paper, the proposals and the Bill that is to be introduced shortly. The scheme holds out the prospect of the new body delivering the standard and quality of service to its clients that we hoped for, but never managed to achieve, under the CSA.
We have made significant progress on long-term reform of the pensions system, which began back in November 2002 with the establishment of the Pensions Commission. The Pensions Bill is now entering the Committee stage in the Lords, and last December we published our proposals to transform the culture of under-saving in the UK for millions of people by introducing personal accounts.
But does the Minister agree that, if pension reform is to be worth the name, there must be a strong restoration of confidence in the procedures to prevent people who have lost pensions from sustaining those losses? He referred to the Bill going through the Lords. Will he guarantee that if the Lords pass amendments on Wednesday that will ensure that those losses are made up, he and his fellow Ministers will not ensure that his hon. Friends are whipped into voting against those amendments and against their conscience?
Here comes the cavalry to rescue the Opposition Front-Bench team from not having managed to get a question out earlier. The Opposition’s protestations about a cross-party agreement behind their amendment are starting to fall apart. Did they see that my right hon. Friend the Member for Birkenhead (Mr. Field) wrote recently that the amendment is a dodgy amendment—
House of Commons Commission
The hon. Member for North Devon, representing the House of Commons Commission, was asked—
The parliamentary estate has an energy and waste saving policy which is due for review later this year and can take on board any comments that the hon. Lady and anybody else might wish to make. The current energy efficiency target is to make a 15 per cent. reduction in energy consumption per square metre of building floor area by 2010-11, relative to the base year 1999-2000.
I can assure the hon. Lady that the Commission is well seized of the need for the House to lead by example, and I can further assure her that some of those options are being explored even at this moment. We have had meetings with representatives of the microgeneration industries and we are exploring the practicalities of pursuing any of those options.
I am delighted that the hon. Member for Gateshead, East and Washington, West (Mrs. Hodgson) has raised this issue. The waste of energy in this building is appalling. Anybody who has walked its corridors at night knows that it is like the Mary Celeste—all the lights on and nobody here. In May, when it was hot, the heating was on. Can the hon. Gentleman please assure us that there will be a proper investigation of the matter, and that we will develop modern techniques of switching off lights when there is nobody in the building? They operate on infra-red, I understand, and I think we could do it pretty easily for not very much money.
The hon. Gentleman will be aware that such devices have existed in parts of the estate, notably in Portcullis House, where there were many complaints from hon. Members working late in the evening that they were plunged into darkness sitting at their desks because they had not moved sufficiently to trigger the infra-red light sensors. However, the hon. Gentleman makes a good point. There is a significant problem of energy waste. A variety of high-tech methods of dealing with that have been explored and, where appropriate, they will be fitted, but as I have said on previous occasions, nothing beats the responsibility of hon. Members and other users of the estate for turning off lights when they leave the room.
Although I appreciate the points that the hon. Gentleman has made, does he agree that it is ridiculous that the annunciator screens are left on when the House is not sitting? Not just overnight during a parliamentary Session but during the long summer recess of 10 weeks, one can come into the Palace and see all along the corridors screens saying, “House adjourned”.
The Commission has taken a close interest in facilities for those visiting the House. Recent improvements include the employment of visitor assistants, and we look forward to the eventual opening of the visitor reception building. The Commission will consider the latest recommendations from the Administration Committee shortly.
Although I welcome the new facilities and the new building, have we not for a long time missed a trick in terms of getting more school parties to visit the House of Commons? Does the hon. Gentleman agree that as two thirds of those visiting the education unit come from London and the south-east, we might well think of providing support for travel for schools from other regions of the UK to get a more equitable distribution of visits so that our children can be more involved in the political process in the Palace of Westminster?
I have every sympathy with what the hon. Gentleman says. I will not compare constituency distances, but obviously those coming from Wirral, like those coming from North Devon, are confronted with the problem to which he alludes. Hon. Members have made requests to the Administration Committee for some sort of public subsidy to be offered to help school parties from further distances to come here, and a proposal will come forward later this year which the Commission will then consider.
Pursuant to the question by the hon. Member for Wirral, South (Ben Chapman), one way to improve visitor facilities at the House would be to give young people the chance not merely to observe but to participate in our proceedings. Does the hon. Gentleman agree with that proposition and, if so, does he accept that there is a powerful case for acting to ensure that organised school parties can have, at periodic intervals during recesses, staged debates on the Floor of the House to enhance their interest in this House and to prepare them for their future contributions? [Interruption.] The fact that my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) disagrees gives me great hope for the future.
That is not an idea that the Commission has had put before it, and we have not had the chance to consider it. I can see that there would be opposition from certain quarters to such a thing, but if the hon. Gentleman wishes to advance such a proposal, I am sure that it will be considered with proper reverence.
Is it correct that the new entrance for visitors, which is nearly completed and appears to start just outside St. Stephen’s entrance, is going to guide them down and round the building in order to come back on themselves to begin the Line of Route? Is that not a masterpiece of planning, and could we not congratulate those who are responsible?
I believe that what the hon. Lady says is basically true. People will be guided in and then brought through the north entrance, which will be both the way in and the way out for visitors, enabling them to have a good look at Westminster Hall in the process.
There are many ways in which Members and their staff contribute to developing the capacity of Parliaments in emerging democracies, but they are not funded from within a single budget. For example, during 2006-07 the Overseas Office dealt with 95 visits from 66 countries and ran eight professional development programmes for parliamentary staff from 16 mostly Commonwealth countries. Three staff are engaged directly on this work, with a total identifiable cost of about £200,000, of which about one tenth was spent on visits to other countries.
It is good to hear that the staff of this place do so much to help parliamentarians from other countries to learn from our centuries of experience. However, does the hon. Gentleman think that it would be wise if we established a dedicated unit within Parliament to provide such support and advice to other Parliaments in emerging democracies? Canada has had such a unit for decades; should we not examine the feasibility of setting one up ourselves?
It is entirely open to the hon. Gentleman to make such a proposal. He wears a variety of hats that would put him in a good position to do so. It is important to realise that what I described represents only part of what the UK is doing and that other schemes—of which he is well aware—funded by the Treasury and the Foreign Office support such work in many other ways. The House’s actions in that regard should not therefore be taken to represent the total of what the UK is doing.
I wonder whether the hon. Gentleman is aware—I believe that he is—of the wonderful work of the Inter-Parliamentary Union, which is very much part of this place, and the Commonwealth Parliamentary Association’s UK branch. They do a huge amount to help developing and emerging democracies with good governance and other matters that relate to democratic representation and democratic Parliaments. Could we not utilise the good offices of the IPU and the CPA a little more and thus answer the question that the hon. Member for City of York (Hugh Bayley) asked?
I entirely agree that the IPU and the CPA do a great deal of such work—indeed, I was referring to that when I said that other programmes were funded by the Treasury. The Westminster Foundation for Democracy, which the Foreign Office funds, also undertakes such work.
Leader of the House
The Leader of the House was asked—
I have made clear to the House on many occasions the importance that I attach to the timeliness and quality of responses to parliamentary questions that are tabled in the House. I have raised the matter directly with ministerial colleagues on several occasions.
Perhaps I could refer the Leader of the House to my exchange with the Minister for Employment and Welfare Reform in Work and Pensions questions earlier today, when the Minister failed to answer my question. What measures is the Leader of the House taking to get Ministers to give straight answers to straight questions? That is what the general public and hon. Members want. May I urge the right hon. Gentleman to do that before he moves on to bigger and better things, or is the culture of spin so embedded in new Labour that he cannot?
I am sorry that I missed the exchange in Work and Pensions questions. All my ministerial colleagues try hard to ensure that questions are answered accurately and in a timely fashion. I have been trying to deal with the significant increase in parliamentary questions. I made it clear in evidence—not least to the Procedure Committee—that none of us has an interest in a cap on written ministerial questions. However, that requires some self-restraint by some hon. Members of all parties. If we can achieve that, Ministers will be able to spend more time dealing with answers. I have made the point on several occasions that, although the number of officials who deal with parliamentary questions can vary to some extent according to the volume of questions, that is not the case with Ministers. If they get bogged down, that can lead to inaccurate and sometimes sloppy answers.
Points of Order
On a point of order, Mr. Speaker. I am pleased that the Leader of the House is still here to hear the point of order. Will you give a Back Bencher advice? If we ask a Minister a question and he answers a question that we did not ask, as happened in Work and Pensions questions earlier, it is a slight to our constituents who are waiting for answers from Ministers. We desperately need answers to questions and if Ministers do not answer them, are we not wasting our time?
On a point of order, Mr. Speaker. Reference was made earlier to the new visitors entrance. I do not know whether hon. Members realise that visitors will use the same entrance as Members. In the event of a vote and a surge of visitors at the same time, are we meant to use St. Stephen’s entrance to avoid the crush? Has any thought been given to Members’ access in the event of a vote?
The hon. Lady says no, but I think that she is mistaken. I do not use the Members entrance that I knew and loved so well so often now because of being in Speaker’s House. However, I understand that it will not interfere with the visitors’ centre. It would be best if the hon. Lady went to the Serjeant at Arms Department and looked at the drawings. If I am wrong, she can point that out and perhaps we can rejig the drawings—although the centre will open soon and we could be in difficulty.
Orders of the Day
Legal Services Bill [Lords]
[Relevant document: The Third Report from the Joint Committee on Human Rights, Session 2006-07, Legislative Scrutiny: Second Progress Report, HC 287]
Order for Second Reading read.
I beg to move, That the Bill be now read a Second time.
I am absolutely delighted that, at last, after much debate in the other place, the Bill has finally reached this House. It is an especially important Bill because above all it puts consumer interests at the heart of legal services provision. The consumer focus, as the volume and nature of amendments in the other place show, was clearly forgotten during the Bill’s long and drawn-out six-month passage there, so I now look forward to this House reacquainting the Bill with its real purpose. This is our opportunity to give voice to the needs and aspirations of consumers as opposed to providers of legal services.
Before I deal with the Bill, let me pay tribute to Citizens Advice, the Federation of Small Businesses, the National Consumer Council, the Office of Fair Trading and Which? and particularly to the members of those organisations who have worked tirelessly on the Government’s consumer advisory panel to inform and shape the Bill and to ensure that it properly reflects the consumer interest. I am, of course, also grateful to leaders and members of the legal profession who have welcomed our agenda for reform and who have engaged with the Government, sometimes very constructively, in the development of the Bill. I also want to acknowledge the hard work and foresight of Sir David Clementi, whose independent review and report in December 2004 set very solid foundation stones for our proposals.
For too long, regulation of legal services has focused on the suppliers of those services at the expense of the consumer. It has been the consistent message from consumers, who have told us loud and clear—as, indeed, did Sir David Clementi—that their needs are simply not being met. In particular, they told us that they were not satisfied with the way that legal services were delivered, as the focus was on what suited the provider as opposed to the consumer; that they had lost confidence in self-regulation alone; and that their experiences of poor complaints handling had undermined their confidence in the system as a whole.
Let us look at some of the underlying problems. Bad experiences with poorly handled complaints, dealt with by the providers’ own bodies, have not only given consumers a raw deal, but undermined the confidence that we all should have in our legal profession. Problems with the quality and speed of the handling of complaints about solicitors are well documented: it is a headline story, but it is not just a problem with the Law Society. In fact, based on figures from the office of the legal services ombudsman, we can see that a higher proportion of the total number of consumer complaints against barristers over the last three years were found to have been handled unsatisfactorily than when compared with complaints about solicitors.
I will just acknowledge that I am a barrister, though not a practising one. Would not the Minister accept, however, that if we look at the legal services ombudsman’s annual reports of the Bar and how it deals with complaints, we find that it has been praised the whole way through, whereas when it comes to solicitors, the ombudsman actually fined the Law Society £250,000?
The hon. Gentleman is right about the ombudsman’s report, but my point is that while there are many more complaints against solicitors in comparison with the Bar, the percentage of complaints going from the Bar to the ombudsman is marginally higher than the number of complaints about solicitors going to the ombudsman. In other words, I do not believe that either house—the Law Society or the Bar Council—can afford to be complacent about their responses to consumers.
Does the Minister agree that the key thing that comes through from the deliberations of the other place about the Bar Council is clearly the self-interest of wanting to keep its independence? Does she further agree that, if we are to build confidence in the complaints procedure and also make it independent, the Bar Council must come within the remit of the legal complaints service?
Does not the hon. Lady recognise, however, that when the Bar Council disciplines someone, the people who do that work are barristers, who are effective in finding out exactly what happened in court or the circumstances of complex cases? The way in which they do that has been praised to me by, for example, Which? It would not be good if we lost those skills to wheedle out exactly what had happened in particular cases and punish those who had not met the standards.
Of course we should not lose those skills. I am sure that the office for legal complaints, to which I shall refer later, will be able to call in some of those skills should it feel it necessary to do so. Some 33 per cent. of complaints dealt with by the Bar Council go to the legal services ombudsman, compared with about 10 per cent. of those dealt with by the Law Society. The point of the Bill is to reduce the number of complaints made in either sector of the legal profession, so that the consumer gets a better deal.
Does my hon. Friend also agree that the relationship between solicitors and barristers needs to be examined? Recently, I referred to the Legal Complaints Service the case of a poor constituent of mine who had been given very bad advice in relation to her divorce. There was a big question mark over whether barristers needed to be employed in the first place. Dealing with them separately would mean that one body would deal with the complaint against the solicitor, while the other, the Bar Council, would deal with the barrister. In that case, for example, would not it be common sense for one body to deal with the single complaint?
My hon. Friend makes a valid point. He is right: the purpose of the office for legal complaints is to have a one-stop shop to make a judgment as to who, if anyone, is at fault. Time and again, consumers have raised with me the issue that it is difficult for them to tell whether the fault is the solicitor’s or the barrister’s.
To get beneath the skin of some of the less obvious issues, we have undertaken long, thorough research and wide-ranging consultation. Concerns about the competitiveness of the sector began with the OFT’s 2001 report, “Competition in Professions”. That identified a number of potentially unduly restrictive rules of the legal profession, which had the potential to drive up costs and prices, limit access and choice, reduce value for money, and inhibit innovation in the supply of services. To a Government committed to delivering a better deal for the consumer, that is simply unacceptable.
Following the OFT's report, the Government consulted publicly throughout 2002, and in July 2003 concluded that the current regulatory framework was
“outdated, inflexible, over-complex and insufficiently accountable or transparent”.
It was clear that the existing regulatory framework was more like a “regulatory maze”, with a wide range of oversight regulators who had overlapping responsibilities and few clear objectives. The problems were not restricted to oversight regulators. The legal professional bodies contributed to the “maze” by failing to separate the exercise of their regulatory and representative functions. All of that drove the Government to the inescapable conclusion that reform was not only necessary but long overdue.
We therefore immediately appointed Sir David Clementi and charged him with the task of identifying a new framework that would be independent in representing the public and consumer interest, comprehensive, accountable, consistent, flexible, transparent and no more restrictive or burdensome than is clearly justified. He published his report in December 2004. I want to put on record that he lived up to that challenge and produced an excellent report.
The model that Sir David proposed was one of strong oversight regulation under which legal professional bodies would carry out day-to-day regulation provided they separated their regulatory and representative functions. He also proposed that there should be a clear set of statutory objectives and, importantly, that complaints handling should be taken away from the legal professions. The Government broadly accepted Sir David’s recommendations and in October 2005 published the White Paper “The Future of Legal Services: Putting Consumers First”. I leave it to hon. Members to work out from the title exactly where the Government stand on the issue.
In May last year, a draft Legal Services Bill was subjected to pre-legislative scrutiny by a Joint Committee of both Houses, and a very useful process that turned out to be. I am very grateful to the Committee for the hard work that it put into that.
I think that everyone in both Houses is grateful to the Committee that carried out the pre-legislative scrutiny—[Interruption.] No, they were not all lawyers. Having done that work, does the Minister accept that we should listen carefully to what it said, and that where its members supported Opposition amendments in the Lords, the Government should also accept that those amendments are the right ones to keep in the Bill?
I cannot say in all honesty that I would accept the amendments on that basis. We have accepted 34 or 35 of the Joint Committee’s recommendations wholly and absolutely, plus another eight at least in part, and have not accepted 14. Given the amount of consideration that we have given to the recommendations, I think that we have been fairly balanced in our approach to the subject.
That was the background. No one could accuse us of rushing ahead without a well thought-out or well thought-through policy.
As a lawyer and a member of the Joint Committee, I take issue with the point about not rushing the legislation through. Does the Minister accept the concern raised by the Joint Committee about the limited time given for it to consider what at that time were 159 clauses in the draft Bill, which has grown exponentially as the matter has been considered? Perhaps less time could have been given to the amendments if further time had been given to the Committee. Is there not a concern for Parliament that such a time limit has been extended to the Joint Committee on human embryo research? There is profound concern that we should give proper time for pre-legislative scrutiny.
I have always been a great advocate of pre-legislative scrutiny. The timing was challenging, but the Committee clearly rose to that challenge and invited me to respond in an equally short period of time, which I managed to do.
On the Bill itself, regulators must have clear objectives to guide them in exercising their functions and to provide a basis on which consumers can hold them to account. Part 1 sets out those objectives and principles. They will apply to the board, the approved regulators and the office for legal complaints. It is important to be clear that the objectives are not ranked.
Part 2 makes provision for the new oversight regulator, the legal services board. The board will provide independent oversight of legal regulatory bodies. While the day-to-day regulation should, quite rightly, remain with the professions, the board will have a range of powers over them. The Lord Chancellor will appoint the chair and members of the board, and will do so subject to the oversight of the Commissioner for Public Appointments. The Lord Chancellor can also remove members of the LSB subject to strict criteria set out in schedule 1.
An amendment in the other place now means that the Lord Chancellor must seek the concurrence of the Lord Chief Justice in appointing and removing members of the board. I understand that that might give comfort to the legal professions, but it gives no comfort at all to consumers, and I intend to table amendments to reverse that change.
It is clearly important to reflect both the consumer interest and the public interest, but there is a feeling that the legal profession should be independent of Government and that claimants should be able to rely on that independence. How can independence be assured if the Minister removes the provision inserted by the House of Lords that the Lord Chief Justice should be happy with appointments to the board?
Clause 1 sets out the regulatory objectives, one of which is
“encouraging an independent, strong, diverse and effective legal profession”.
Moreover, the Lord Chancellor’s appointments procedure will be subject to supervision by the Commissioner for Public Appointments. A joint appointment would not be dealt with in that way, and could therefore undermine the independence that the commissioner would ensure.
As the Minister will have realised, this is controversial territory, to which the House of Lords devoted a great deal of time. I understood her to say that she did not want the professions to decide membership of the legal services board. The Lord Chief Justice, however, is not regarded as a defender of the professions, and the Lord Chief Justice—any Lord Chief Justice—is held in high regard by the public. Does the Minister not think it would be better to bolster the confidence that the public may or may not have in a Government Minister with their confidence in someone who is clearly independent and above the fray?
That is not the view of the consumers with whom we have discussed the issue. They strongly believe that if a lawyer—even one as important and well-respected as this Lord Chief Justice, or any in the past—is seen to be party to the appointments, their confidence in the board will be undermined.
Does the Minister agree that what is paramount is for the legal services board to be seen to be independent, not only from Government but from the profession? Having read the reports of debates in the House of Lords and having heard what was said a moment ago by the hon. Member for North Southwark and Bermondsey (Simon Hughes), I have the impression that the legal profession is confusing the public interest with its own self-interest.
After giving evidence to the Select Committee, Sir David Clementi wrote to the Chairman, Lord Hunt of Wirral, to confirm the recommendation in his report that the judiciary should have a say in the appointment. He wrote:
“In practice this is likely to mean that the senior judiciary would have representation on the Nolan type committee selection process.”
That is much less than is provided by the amendment passed in the House of Lords. Can my hon. Friend assure us that that practice will be followed as Sir David Clementi would wish?
One of the benefits of allowing the Lord Chancellor to make the appointments is that, as well as their being made independently of Government, there will be clear lines of accountability to Parliament. That is one of the reasons why we enshrined the functions in the Lord Chancellor rather than the Secretary of State. The fact that public appointments made by Ministers are subject to supervision by the Commissioner for Public Appointments, and to the commissioner’s code of conduct, will help to ensure the board’s independence. Another point that may give succour to my hon. Friend is that no Lord Chancellor would make such an appointment without paying attention to the views of others, including the Lord Chief Justice, consumer councils and others. Therefore, I am not minded to leave the clause in as it presently stands, but I will be happy to hear further representations about whether there is a more appropriate way for the Lord Chancellor to go about making appointments.
My hon. Friend is being as generous as ever. I am a non-practising solicitor. She has given helpful reassurances. In response to the intervention by the hon. Member for North Southwark and Bermondsey (Simon Hughes), she mentioned consulting consumer groups for their views. Has she heard the views of what might be called consumer groups abroad? London is a major earner of foreign currency through legal services, particularly in the shipping sector, but also in the commercial sector. What do foreign users think about the independence of our judiciary and what would be their view were the Lords amendment to be reversed?
I am interested in consumer views abroad. I know that there are those who suggest that the legal professions in other countries think that that system might not be the way forward, but they have their own internal reasons for thinking that, so I am not over-impressed by that particular argument. The work that the legal professions bring to the country and the boost that they give the economy through their work abroad is exceedingly important. We would not want to undermine that, but I do not believe that that system to appoint the legal services board, with the oversight of the Office of the Commissioner for Public Appointments, would in any way undermine that part of the economy.
The hon. Lady is being very generous in giving way. I was pleased that she said that she would look at alternatives, but she will be aware that in Germany there is considerable concern and the thought is that solicitors firms from Britain that currently are allowed to practise there might not be in future if the issue is not resolved satisfactorily. Has she looked into that and what is her latest thinking on it?
I have looked into that because the one example that is constantly cited to me is the German example, but the BRAK in Germany is the representative body there, so it is looking at its own vested interests, rather than those of the consumer. As I have said, however, I am happy to look at ensuring that people feel confident that the system of public appointments made through Ministers is robust and will be seen to be independent.
May I move on to part 2 and to the legal services board? The board will provide independent oversight of the regulatory bodies. Again, day-to-day regulation will, clearly, remain with the professions.
I move on to reserved legal activities. Part 3 sets out those legal activities that will come under the regulatory control of the board, such as the provision of advocacy and litigation services. It also provides for the offences of offering or providing those services when not entitled to do so. The Bill also provides for alterations to be made to the list of those activities by affirmative order. That is an important change because, at present, additional activities cannot be brought under regulatory control without primary legislation.
I will be tabling amendments to ensure that trade unions can continue to provide legal services to their members, although they will need to be licensed under part 5 if they want to provide services more widely or on a commercial basis.
Part 4 sets out the arrangements under which the board will regulate “approved regulators” such as the Law Society and the Bar Council, and defines their regulatory and representative functions. That part also provides the board with its powers. Those include to set targets and to monitor the performance of approved regulators; to exercise a power of direction over approved regulators; to censure publicly an approved regulator; to fine approved regulators; to take over a function or functions of an approved regulator; and, ultimately, to remove the designation of an approved regulator. There are grades within those powers, and the board will determine which of them is appropriate at the relevant time.
The powers ensure that the board can effectively and fully protect the consumer interest. There must be the widest possible mix of powers, and the greatest possible flexibility in deciding when to exercise them. That is why I intend to introduce amendments to reverse changes made in another place that limit the legal services board’s flexibility by adding the term “significant” to the adverse impact test that triggers the use of the powers and by adding a requirement that the impact must be on the regulatory objectives “taken as a whole”, rather than on any single objective. As the National Consumer Council has said:
“The Board should not have to wait until a significant or serious event before taking action to protect consumer interests.”
Amendments made in another place also sought to make explicit in the Bill the “oversight” nature of the board. Although I have some sympathy with that, in its current form the relevant amendment does not properly reflect Government policy. I therefore intend to bring forward amendments to refine the change. Finally, this part of the Bill also provides the important power—to be exercised by affirmative order, and only following a recommendation from the board—for the Lord Chancellor to modify the functions of approved regulators in order that they might effectively discharge their regulatory responsibilities.
Part 5 of the Bill provides a means of increasing competition and consumer choice. By becoming licensed bodies, firms will be permitted to have different types of lawyer and non-lawyer working together on an equal footing. They will also have access to external investment. The Bill provides a number of important safeguards, including requirements for there to be named heads of legal practice and of finance and administration, and a “fit and proper” test for external investors. I know that there are concerns about the impact these proposals might have on access to justice and I accept that that is a vital issue, but I believe that the Bill already protects—indeed, that it enhances—access to justice, particularly given changes that the Government introduced in the other place to require the board to carry out monitoring of the impact of alternative business structures and to report on that monitoring.
However, it is also important to listen to consumers. Earlier this year, the National Consumer Federation said:
“The increased competition promised in the Bill should be a public benefit encouraging providers to be more responsive to consumer need, stimulating innovation and lowering prices.”
I therefore intend to introduce amendments to reverse the amendment made in the other place that could have the effect of ranking the regulatory objectives by requiring special consideration to be given to access to justice when granting ABS—alternative business structures—licences. I also intend to bring forward amendments to reverse those made in another place which require further study and a “sunrise clause” before part 5 can come into effect. That would only serve to delay innovation and consumer choice.
Far be it for me to be seen as a defender of the legal profession, but will the Minister take into consideration the Government’s self-inflicted scandal in relation to miners’ claims, particularly hearing loss claims? A claims handler called Vendside Ltd—non-solicitors—was allowed to bring forward claims on behalf of consumers, but the consumers then found that there were no regulatory powers in relation to any redress, other than using the civil courts.
My hon. Friend has been robust in his pursuit of Vendside and others over the appalling way in which they have handled matters with regard to his constituents. He, and others among our hon. Friends, welcomed the Compensation Act 2006. That Act means that there is now regulation of the claims handling market, and when the Bill is enacted, it will make that even more robust. My Department and the Department of Trade and Industry have, of course, been working very hard recently to ensure that claims made on behalf of miners are being properly dealt with.
Given the appalling record that the Minister has just alluded to with two trade unions, does she really think that there is any justification for excluding unions from the proper regulation that the Bill provides? Is that not asking for the sort of problems with legal advice that we have already experienced with claims handling?
The answer to that question is quite straightforward. If a trade union wishes to give other advice or to spread its wings more widely, it will have to be licensed. If the shop steward on the shop floor is giving advice to that union’s members, I do not think it appropriate for it to have to be licensed. If it wants to go beyond that, it certainly would have to be licensed.
I should perhaps declare an interest, in that I am a non-practising solicitor, although as a Scottish solicitor I would not be directly affected by this provision. On the sunset clause—or sunrise clause, as the Minister called it—for the ABS, concern has been expressed by the Law Society of Scotland, and, I think, others, about the extraterritoriality of some of the larger firms. The hon. Member for Wolverhampton, South-West (Rob Marris) mentioned large English firms working abroad. As part of our investigations, the Trade and Industry Select Committee came across such a firm in India and in Brazil. Has the Minister considered how the legal services board will deal with businesses that chose to go into an ABS structure but operate in more than one jurisdiction, given that the rules may well be different in other jurisdictions?
The Bill does touch on Scotland, in the sense that we will give effect to the Legal Profession and Legal Aid (Scotland) Act 2007 through it; that to some extent answers the hon. Gentleman’s question. However, it will be for the legal services board to look at how different firms operate, and to decide through the various structures that will be set up whether a particular firm is an appropriate one to act in that way. It will then license or not license that firm, accordingly.
Let me clear up the question of whether the clause relating to part 5 of the Bill should be called a sunrise or a sunset clause. It is called a sunrise clause because the idea is that nothing will happen until the relevant research is done, as opposed to allowing something to happen and reflecting on it afterwards. However, I am sure that Hansard will make the appropriate amendments for me regarding the use of the word “sunset” or “sunrise”.
Through part 6 of the Bill, we intend to establish a new and independent office for legal complaints, which will provide quick and fair redress of up to £20,000 for the consumer, although the Bill does provide for that figure to be increased.
I am grateful to the hon. Lady for giving way. She rightly says that part 6, through clause 114, provides for the establishment of the office for legal complaints. I am a little concerned about this. In terms of the Bill’s chronological sequence, we are referred for further and better particulars to schedule 15. That is not entirely unhelpful, but I am a little disconcerted to discover only in the explanatory notes the observation that the office will be responsible for determining the details of the ombudsman scheme. Although I understand why the Government are proceeding as they are, if the devil is in the detail, it is a matter of some concern that Members will see that detail only after we have decided whether to approve the Bill. The public are very concerned about the detail of a scheme that will determine whether or not they benefit, and if so to what tune. Does the Minister have some sense of the legitimate concern that people will feel about the fact that they will see the detail only at a much later stage?
The hon. Gentleman makes a reasonable point, and as always, he is accurate about the detail and the parts of the Bill to which he refers. There will be a long run-in time before the structure is set up. I mentioned that we started in 2001 with the report by the Office of Fair Trading, and we are now in 2007. Alternative business structures, the office for legal complaints and so on will not be up and running until 2010-11. In the period before the legal services board and the OLC are set up, the details will be considered, and there will be an opportunity for everyone to see them. As I have said from the beginning, the Bill is about consumers, and about putting them at the heart of the legal system. I expect that the OLC would take account of consumer interest when developing an appropriate scheme.
I do not think that £20,000 is a high enough limit. May I give the Minister an example? Mrs. X, from Stanley in my constituency, recently complained to me about a firm of solicitors called Mark Gilbert Morse, which handled a miners’ compensation case on her behalf and rejected an offer of £42,000 from the DTI without even consulting her. Subsequently the offer was reduced, and it was only through the legal services complaints service that we shamed the company into paying her the original figure of £42,000. If it had been pinned down at £20,000, my constituent would have lost in excess of £22,000.
I understand my hon. Friend’s point, which is why the Bill allows for the amount to be increased. We set it at £20,000, which is still above the Law Society’s present level of £15,000, which was increased only recently. It will be not for me but for the OLC to determine whether to recommend that the amount be increased.
No doubt the matter will be gone into in more detail in Committee. However, is the Minister aware of the significant number of services awards for miners’ compensation claims which solicitors appear not to have put in for, and which, on the balance of probabilities, are all liable to be higher than £20,000? They include the case of one of my constituents, in which the solicitors concerned had to pay back £23,000. Many such detailed potential claims will go forward as complaints against solicitors, and all are liable to be in excess of £20,000. Should not that figure be reconsidered at this stage, to avoid the absurdity of having to change it within days of the Bill becoming an Act?
I state my interest as a solicitor and as a member of the Law Society. The Minister says that she will exempt trade unions from part 3 of the Bill. Does she intend to exempt them from all the reserved legal activities set out in clause 12(1)?
Yes. As I said, under part 3 we will exempt the trade unions when they provide services to their members. However, when lawyers—perhaps in-house lawyers—employed by trade unions provide reserved activities, they will be regulated in exactly the same fashion as any other lawyer. I was talking about lay members of trade unions who give advice in their workplace. Lawyers who are employed by trade unions will be regulated in the same manner as any lawyer working in any other firm.
The Minister will understand the concern caused by the idea that if a shop steward represented a union member at an employment tribunal and made a hash of it there would be no redress, whereas if that person were represented by someone from a citizens advice bureau, there would be redress. Is that what she is saying?
No, that is not what I am saying. Perhaps the hon. Gentleman’s lack of knowledge of the trade union movement is rising to the surface. The work that lay officials of trade unions do on behalf of their members, whether in employment tribunals or elsewhere, is generally of a very high quality. I do not want trade union members to be any less well-off than anyone else, and I want to ensure that they are not. We have been working with the TUC and the Law Society to deal with that matter, and I think that we have agreed an appropriate way forward.
Under part 6 of the Bill, every authorised person must have internal complaints-handling arrangements, and approved regulators must set standards for that. The Bill recognises the importance of the legal professions disciplining their members, and provides for potential professional misconduct matters to be referred to approved regulators for consideration of disciplinary action.
There are two areas in which amendments were made in another place. First, there were amendments to restrict the circumstances in which the OLC may impose a charge on a respondent when a complaint is received, as under the case fee arrangements operated by the Financial Ombudsman Service. Again, I have sympathy for the arguments expressed in the other place, but the Bill already provides for that fee to be reduced or waived, and I am not yet fully convinced of the merits of restricting the OLC’s flexibility in that way. I therefore intend to table amendments to reverse those changes.
Secondly, following calls primarily—or, I suspect, exclusively—from the Bar, amendments were made providing for the delegation of complaints handling from the OLC back to the legal professional bodies. That point was raised earlier. That change defeats the whole purpose of this part of the Bill, and flies in the face of the deepest felt consumer concerns about complaints handling. Indeed, even the Law Society’s complaints-handling body accepts that
“delegation of complaints handling would dilute the Bill and the Office for Legal Complaints and be more complicated for consumers. The Bar Council seeking to ‘opt-out’ weakens the structure of the Bill and the Office for Legal Complaints.”
I agree. As far as consumers are concerned, that is a clear red line. I shall, therefore, table amendments to reverse those changes, and I shall be interested to hear the views of the House on that important issue.
I must declare an interest, in that I am in a minority in the Chamber because I am not a lawyer. Before the Minister goes on to discuss the OLC’s objectives, will she pay at least some tribute to the midlands-based Legal Complaints Service? It has been noticeably independent of the Law Society, has been recognised by the consumer association Which?, and has been engaged on an agenda of improvement for some years.
As we still have three years until the OLC emerges, will the Minister encourage the Legal Complaints Service to continue to invest in the improvement and independence that has impressed great numbers of people throughout the country? It has dealt with 18,299 complaints against solicitors in the most recent year for which we have figures. That is more than one complaint for every six solicitors. It still has a role in the next three years, has it not, so will my hon. Friend say something positive about what it has done in the past year or two?
My hon. Friend makes the very important point that the improvement made in recent years by the Legal Complaints Service has been remarkable, and much of that is due to the leadership shown by Shamit Saggar and others in ensuring that they deal with things robustly. My hon. Friend rightly points out that they must continue to deal with complaints about solicitors for the next three years. So it is very important that we manage properly the transition from the complaints services provided by the Law Society and the Bar, so that complaints continue to be dealt with and so that the improvement in dealing with them continues, too. I am very happy to put all that on the record.
The Minister helpfully indicated earlier how many of the pre-legislative scrutiny Committee’s recommendations had been accepted and how many had been rejected. I think that I have now calculated that she has addressed each amendment made by the House of Lords, and unless I am mistaken, she has indicated that the Government will accept none of the Lords amendments. Is that the position, or is the reality that although the Government are saying today that they will accept nothing, they recognise that the House of Lords has an important role, and that the best legislation is made when they listen to both Houses of Parliament and do not steamroller things through on the basis of the views of one side alone?
No, the hon. Gentleman is wrong. We have accepted a number of amendments in the House of Lords. For example, we have agreed that the public interest is different from the consumer interest. We have substituted the term “Lord Chancellor” for “Secretary of State”. We have amended the threshold for action on financial penalties. We have accepted the requirement for the ABS licensing authorities to issue policy statements. We have given the board a specific duty to cover ABS in its annual report. We have accepted a number of consumer-focused amendments, a power for ombudsmen to enforce the determination on a complainant’s behalf, and a narrowing of the circumstances in which complainants can be ordered to pay costs, and so on. We have accepted a number of amendments that were proposed in the Lords, and I pay tribute to my noble Friend Baroness Ashton, who worked very closely with others in the Lords in getting the Bill to its current position.
Part 7, which sets out further provisions relating to the board and the OLC, will require that those who are subject to regulation must pay for the cost of that regulation. The alternative—that the changes should be funded through general taxation—does not seem appropriate. Parts 8 and 9 will provide for amendments to existing legislation to align it with the Bill.
In relation to the board, I have not yet heard whether the Minister will honour the undertaking given in the other place. Hon. Members who are lawyers are used to honouring undertakings, and it would be useful if the Minister would do likewise, particularly in relation to the Lord Chancellor’s power to increase the size of the LSB. I understand that an undertaking was given that that relevant power could be dealt with by affirmative, rather than negative, resolution.
I will have to look in more detail at whether we have given such an undertaking. It is not one that jumps to the forefront of my mind at the moment, but I will look at it, and if we have given an undertaking, I will seek to find out whether there is a way in which we can carry it out. But I make it clear that I am not making any guarantee to the hon. Gentleman.
I apologise to the House for taking quite so long over the Bill, but as hon. Members will know, it is a pretty hefty piece of legislation. Parts 8 and 9, as I said, will provide for amendments to existing legislation, and I will introduce a number of minor amendments, including those promised in another place, to ensure that the Bill is consistent with existing legislation.
The rules of the Solicitors Disciplinary Tribunal will be subject to oversight by the LSB. The courts will be able to make a costs order in civil cases in favour of a party whose legal representation has been provided on a pro bono basis. Awards will be made at the discretion of the court and will be payable to a designated charitable body. As I have said, the Bill will give effect to the Legal Profession and Legal Aid (Scotland) Act 2007, which introduces new arrangements for handling complaints about lawyers in Scotland.
The Bill will restore consumer confidence. We will see a modern, flexible, transparent and independent system of regulation. We will have a new oversight regulator that can act, and will act, to protect consumer interests. There will be enhanced competition, with lawyers able to provide services in new and innovative ways. Most importantly, we will see the sweeping away of decades of piecemeal reform and a new robust regulatory system in its place that will put the consumer at the heart of the legal system. I commend the Bill to the House.
I welcome the Bill, which addresses serious issues regarding the regulation of solicitors, barristers and other legal professionals. It builds on the work of Sir David Clementi, whose report has been its cornerstone. I echo the tributes that have been paid to his work.
The Bill has important allies. The president of the Law Society, Fiona Woolf, has said that the society
“has consistently supported the principles of the Bill”.
Jill Johnstone, the director of policy at the National Consumer Council, also welcomed the Bill asking that
“MPs…give these consumer-friendly reforms a smooth passage through Parliament”.
Which? has been a strong supporter of the measure and, especially, moves to tackle complaints involving solicitors more effectively.
I join the Minister in paying tribute to the work of my right hon. Friend Lord Hunt of Wirral, who chaired the Joint Committee expertly. The Committee gave the Bill effective pre-legislative scrutiny over a short time scale. My hon. Friend the Member for Enfield, Southgate (Mr. Burrowes), a practising solicitor, also brought his insight to the Committee’s work. It was a sign of the Joint Committee’s effectiveness that the Minister in the other place was able to concede many of the points that it made. Improvements were made to the Bill in the other place and it was to be hoped that the Under-Secretary of State for Justice, the hon. Member for Lewisham, East (Bridget Prentice), would accept that the Bill was now much better than when it started its passage. I pay tribute to my right hon. Friend Lord Kingsland, who played a big part in improving the Bill.
I agree with the Minister that it is right that consumers should be able to challenge their lawyers effectively when things go wrong and that complaints should be efficiently handled. However, it is also vital that lawyers should be free to act for their clients without Government interference. The Government should not be able to use consumer rights as a cloak to attack people’s basic civil liberty of having a genuinely independent lawyer acting on their behalf.
Legal services make up a major economic sector that is valued at about £20 billion and they generate almost 2 per cent. of the UK’s gross domestic product. It is estimated that UK legal services exports amount to £2 billion a year. London is a major centre for international commercial litigation and arbitration, and English law is widely used as the basis for many international business transactions.
The legal profession is large. There are 14,000 practising barristers, 97,000 practising solicitors, thousands of legal executives and hundreds of licensed conveyers, registered trade mark attorneys and public notaries. Not-for-profit organisations such as citizens advice bureaux and law centres also provide much-needed legal advice. An independent legal profession provides legal services to some of the most vulnerable in our society. Indeed, many lawyers enter the profession with a vocation to help to right wrongs. It is an important check on government that lawyers in Britain will take on public authorities and the Government in court without fear or favour, often in cases that are not popular with the public. Indeed, it was reported only today that prisoners were taking the Lord Chancellor to court to ask not to sit around in prison idly all day, but to be able to work purposefully towards their rehabilitation.
I agree with the hon. Gentleman that lawyers should act in the best interests of their clients. However, does he agree that there are many cases, especially those regarding miners’ compensation that my hon. Friend the Member for Bassetlaw (John Mann) and I have raised, in which a huge number of lawyers, some in “well-respected” legal firms, did not act in the best interests of their clients—they did not care about the interests of their clients—but worked for their own interests? Surely that scandal shows that self-regulation involving the Law Society has not worked and that people need the protection offered by the Bill to get legal redress from such lawyers.
Yes, I agree absolutely. The hon. Gentleman and I have made common cause on some of those cases and have been disappointed to some extent by the Government’s response, especially in relation to claims handling. However, he and the Government must recognise that having a strong legal profession, independent of Government, is an important constitutional issue and improvements to the regulation of the legal profession should respect that. It is not in the consumer interest to have Government control over lawyers, because many consumers of legal services are taking cases against public authorities and the Government.
British exports could be threatened if the international perception is that our legal profession is not truly independent of Government. Indeed, the chairman of the Bar Council has described the plans as “an absurd own goal” and he and the senior partners of five of the largest legal firms have written to the Economic Secretary to the Treasury pointing out how important the issue is and explaining that overseas legal professions are already protesting about the Government’s plans. We believe that the amendments made in the other place have helped to save British legal services exports, but can the Minister give an assurance that legal services exports are safe under her plans? If she cannot, is not £2 billion a year in lost exports a high price to pay?
The Government appointed Sir David Clementi as long ago as July 2003 and the focus of his report was correctly summarised by the Minister as the complexity of the regulatory framework, how complaints about solicitors were being handled and the restrictive nature of the current business structures for lawyers and skilled professionals. However, I would say that the area of most concern was how consumer complaints against solicitors were being dealt with. There were concerns about efficiency and the overlapping powers of the oversight bodies. Sir David described the current regime as
“outdated, inflexible, over-complex and insufficiently accountable or transparent”,
and the Government accepted that phrase. He suggested the three main reforms: the legal services board, with its statutory objectives; the new office of legal complaints; and liberalisation through alternative business structures. We agree with that approach.
The handling of complaints against solicitors started to become a major issue as long ago as the 1980s, when it first became clear that it was taking up to two years to deal with some complaints. More recently, we have seen the cases referred to by the hon. Members for Bassetlaw (John Mann) and for North Durham (Mr. Jones), in which solicitors firms have fallen into disrepute over the handling of compensation claims by former miners.
The activities of trade unions have been criticised in connection with those cases. It seems odd that today the Minister has said that it would be all right for a trade union official who is not a lawyer to appear in court, to give legal advice and to carry out other activities associated with the work of a lawyer and there would be no regulation of that person, but someone who works for a law centre or citizens advice bureau would be regulated. That may be something that trade union leaders want, but trade union members should not be treated in that second-class manner. Trade union members are consumers every bit as much as any other person and I believe that they should be treated equally. The Minister said that lawyers employed by trade unions would be regulated, but we all know of cases in which trade union officials attend tribunals and other forums on behalf of members, so surely they should be regulated.
I think that the hon. Gentleman is inadvertently misleading the House by suggesting that trade union officials would appear in court. They have no rights of audience in court, so they would not be able to do that. The Bill will protect trade union members because if a union offers reserved legal services, those services must be carried out by qualified lawyers, who will be subject to regulation by an approved regulator. The exemption applies only where the union provides legal services by virtue of membership, and not in any wider sense. I hope that the hon. Gentleman understands that the Bill does not go quite as far as he seems to be suggesting.
The Minister may misunderstand the position herself. I have on many occasions attended tribunals where there has been a trade union official—often, I must say, expert in the law—on the other side with a right of audience. If she looks at clause 12, she will see that the reserved legal activities are set out there. They include exercising rights of audience, conducting litigation and giving legal advice in connection with any of the activities listed. Those are things that trade union officials do, and I cannot see why she would want trade unionists to have second-class status under the legislation.
I used to attend industrial tribunals on a weekly basis, as an unqualified solicitor and as a trade union official, and given some of the pathetic barristers that I had to deal with, I never saw myself as a second-class citizen. Does the hon. Gentleman agree that what a trade union official or layperson can do is quite limited? There were only two sets of proceedings that I used to appear in: one was industrial tribunals, and the other was county court proceedings, in which anyone can represent themselves. In terms of the scope of the legal services, one has to be legally qualified to represent people at a higher level—for example, if a case goes to appeal.
The hon. Gentleman will see in the Bill the list of activities for which, if undertaken by a trade union official, there should be no regulation. Yet if a person from a citizens advice bureau did one of those activities, the situation would be different. There are tribunals where trade union officials appear, but of course he is right that not every tribunal would allow that to happen. I do not see why members of a trade union should not have the protection that the Bill would give someone from the citizens advice bureau or a law centre doing the same work. We can pursue the subject further in Committee, but that position seems to be all of a piece with the exemption that applied to trade unions as regards their activities as claims handlers. My view on that is that what is good for one group of people doing a particular job should be good for all groups that do that job.
At the moment, legal complaints are handled in-house by the Law Society. A claimant who is dissatisfied can go to the legal services ombudsman, who can ask that the complaint be looked at again. There has been some suggestion that criticisms of the way in which barristers deal with complaints are on a par with criticisms as regards solicitors, and that simply is not so. The ombudsman has regularly praised the Bar for the way in which it deals with such cases, and has said:
“I can report I have seen an increase in the percentage of Bar Council investigations I was satisfied with, up…to 88 per cent. this year. I welcome this improved performance.”
She praised the “excellent progress made” on the speed of handling cases, and said, on transparency,
“I have found the Bar Council to work in a very open and co-operative manner.”
As I am sure that the Under-Secretary of State for Justice, the hon. and learned Member for Redcar (Vera Baird), would acknowledge, if there are disciplinary proceedings against a barrister, there is nearly always a conduct case, and in those cases it helps if the people carrying out the examination are skilled at cross-examination and at finding out what really happened. As I have said, when I discussed the subject with Which? some time ago, it acknowledged that the way in which the Bar dealt with such cases was very good.
The hon. Gentleman prays in aid Which?, but has he seen the briefing that it gave hon. Members for today’s debate? It says:
“Which? has found that the BSB’s complaints handling is not at all transparent, is far too complicated and bureaucratic, relies too heavily on ‘volunteers’ and is not particularly accessible.”
That is hardly an endorsement of the present system.
Perhaps that is an interesting reflection on a change of personnel. All that I can say is that when I spoke to a representative of Which? when the White Paper came out, they were very complimentary about barristers’ approach to professional standards. Which? said that it wanted barristers’ skills to be brought to the new office for legal complaints. It is important that we do not lose those skills, because one thing is sure: no one will be better at finding out what really happened in a particular incident, and at understanding the full issues of conduct, than someone who is skilled at finding out such things professionally.
In the debate about complaints—MPs have great experience of complaints against solicitors rather than against members of the Bar, although there are complaints against both—does the hon. Gentleman accept that the system has sometimes not worked very well for the professions, either? Significant numbers of solicitors have been unhappy about the old system of dealing with complaints, which has been as bad at dealing quickly with their concerns as it has been at dealing with the concerns of lay users of their services.
Yes, I agree entirely. One of the first points that I made was that I support the setting up of an office for legal complaints. If we can find a way of harnessing for the future the skills that the Bar has brought to the process, that would be a better way forward than immediately reversing the amendment made in the other place.
How would the hon. Gentleman deal with a complaint from a consumer where—for example, in many of the hearing loss claims on behalf of textile workers—unbeknown to the consumer because of their limited understanding of the process, the legal executive handling the claim goes to a barrister for five minutes of quick advice, but between them they handle the claim very badly? To whom should the consumer complain?
I suspect that the hon. Gentleman is referring to a particular case, of which I do not know the full circumstances. Depending on the circumstances, we would want the actions of both individuals to be carefully and effectively analysed in a speedy and transparent way. That is what we are all hoping the office for legal complaints will produce.
That is precisely the point. There is a raft of complaints concerning the process whereby the solicitor gives the work to a legal executive, who unnecessarily calls in a barrister for opinion, in order to advocate the case on behalf of the individual. Who should the complaint in such cases go against—the solicitor or the barrister, or should it not be against both?
One would start in such a case with the solicitor’s firm, but it is important that the new office for legal complaints is a one-stop shop and that each aspect of the problem outlined by the hon. Gentleman can be properly, speedily and transparently investigated. That is the outcome that we all seek.
The legal service ombudsman’s reports on the Bar were positive and praised the way in which it dealt with matters. It is not chance that, as the hon. Member for North Southwark and Bermondsey (Simon Hughes) observed, most of the complaints that Members of Parliament have received have been about the way in which solicitors have performed. Zahida Manzoor, the legal services ombudsman, fined the Law Society £250,000, stating that she was imposing the penalty because of the inadequacy of the Law Society’s plan for securing improvements to its complaints handling procedure.
The White Paper that followed the original Clementi report committed itself to the three main provisions proposed by Sir David. The Joint Committee then made some valuable recommendations pointing to particular areas of concern. It is right to pay tribute to the Government for listening to a substantial number of those, but on regulatory objectives, the Committee recommended that
“protecting and promoting the public interest”
should be included in the Bill’s list of objectives, and that the objectives should be redrafted to make explicit reference to the independence of the legal profession. The Committee found that the Bill gave the Secretary of State too much power, and recommended that that should be re-examined. It also expressed concern about alternative business structures, highlighting the potential for conflicts of interest, and about access to justice. It felt that the office for legal complaints should be not just a “rebrand”, but a genuinely new start, particularly for complaints relating to solicitors. In that connection, how does the Minister justify simply moving the office to Coventry from Leamington Spa—a move that is deliberately designed to ensure that the very staff whose work has been criticised would continue to deal with complaints against solicitors—and how can she assure us that that constitutes something good for the future that will tackle the problems that have bedevilled that part of the law since the 1980s?
The Government have accepted that there should be explicit reference to independence and that there should be reconsideration of the Secretary of State’s role. In the other place, the Government tabled amendments that dealt with many of those issues, but given the issues on which they lost votes, whether the amendments were tabled by a Cross Bencher, a Liberal Democrat or a Conservative, they seem rather unbending if the Minister’s tone today is anything to judge by. That is a pity, because the process has been relatively co-operative and progress has been made. For example, an amendment was passed that meant that the Lord Chief Justice’s concurrence would be required before the appointment by the Lord Chancellor of the chairman of the board. That was a means of securing for the board some independence from Government. The Minister’s comments suggest that she has some sympathy with that idea, although she has made it clear that the Government will reverse that decision. We must find a way that ensures that it would not be possible for the Lord Chancellor to appoint friends of his to the board without any check. It would be intolerable and unprecedented if it was possible to put friends of the Labour party or friends of the Lord Chancellor on the board, and that would not give us the independent, free legal profession that we are entitled to expect in this country. Even if one accepted that the present Lord Chancellor could be trusted, any such appointment would still be a constitutional issue.
The concurrence of the Lord Chief Justice provides a necessary check. The Minister says that she will reverse that, but it is important to have some form of check in the system—some consultation and some way of ensuring that our legal profession can continue to be genuinely independent.
Before I give way to the hon. Gentleman again, he should reflect on the fact that the legal services board, appointed by the Lord Chancellor, has the power to change the way in which the front-line regulators operate and seriously to affect the regulation of the legal profession. It would be wrong to do that in anything other than a transparent way with proper checks and balances.
I agree with the hon. Gentleman about transparency. Is it not also a fact that the appointments will be made with the Nolan principles in place, which the present Government introduced and which will make the process quite transparent? I would not agree with the situation described earlier either—no future Government of any party should interfere in the process—but why does the Lord Chief Justice’s involvement make the board more independent?
We are talking about pillars of the constitution. Let us think about the judicial pillar—our courts. Right at the top, we have the Lord Chief Justice. Under the former arrangements, the Lord Chancellor used to span both pillars: he was part of the Executive and the most senior judge. However, it seems appropriate that under the new arrangements there should be appointments by the Executive, but with the concurrence of, after consultation with, this very important figure in the other pillar. Let us not forget that the legal profession gives us our judges, so if it was not truly independent, that would have very worrying implications for our constitution. By having the most senior judge involved in the process, the constitutional position would be subject to a proper check. That is my view, although I am willing to accept that there may be other ways in which to achieve the objective and that we can discuss the matter further in Committee. However, doing nothing is not acceptable and simply reversing the amendment would be intolerable.
Earlier, I quoted from a letter from Sir David Clementi. Would the hon. Gentleman accept a position whereby the Lord Chancellor made the appointment, but after a Nolan procedure had been undergone and a senior member of the judiciary had served on the Nolan committee that recruited?