I am glad to see you in the Chair, Mr. Martlew, and I am grateful for your assistance already in trying to ensure that we can accommodate those who are very interested in the debate. Indeed, I wish that your authority extended to allowing us to change places with the main Chamber, because given the number of hon. Members who want to take part and the wider interest, there might be more interest in this debate than in what is going on in the main Chamber, but alas the Standing Orders do not give you the power to do that. I welcome the Minister to her new post and congratulate her on her appointment. I look forward to hearing from her later.

The debate is on a report that the Select Committee on Constitutional Affairs produced on the Carter review of legal aid. That process—that report—produced more evidence than any other report on which the Committee has worked. Vast quantities of evidence were submitted, which were of great value to us. I am particularly grateful to the staff of the Committee and its advisers for the work that they put into analysing the very large quantity of evidence and dealing with the many responses that we received. The Government issued their response to our report on 22 June, and I shall refer to that as the debate continues.

Legal aid guarantees access to justice and is a fundamental human right. Criminal legal aid is enshrined in article 6 of the European convention on human rights, which is given domestic effect by the Human Rights Act 1998. Scottish cases that have gone to the Judicial Committee of the Privy Council have shown that funding arrangements and fee structures for legal aid providers have serious human rights implications and, if insufficient, violate the right to a fair trial, so let no one be in any doubt about the importance of what we are discussing.

Legal aid is a powerful tool to fight social exclusion: it is focused on the financially weakest and most vulnerable members of society. In the light of the Prime Minister’s recent welcome announcement of his desire to strengthen accountability in local government and public services, it is worth remembering that legal aid can be a powerful vehicle for holding local authorities to account. In the areas of housing, welfare benefit or community care law, for example, it is decisions of local and other public authorities that are often in dispute, and legal aid granted to individuals allows them to challenge those decisions by means of court action if necessary. That, in turn, sets standards for the future conduct of public services.

We can be proud of the legal aid system in England and Wales, whereby we spend more than any other democratic country per capita on publicly funded legal advice and assistance for those in need.

The right hon. Gentleman will remember the proceedings in the Committee and the evidence given by black and Asian groups representing solicitors and others. Is he surprised that they have commenced legal proceedings against the Lord Chancellor in respect of the review? Does he agree that that gives the Government the opportunity to pause and reflect on what they have done and perhaps review these most unnecessary provisions?

The right hon. Gentleman was actively involved in the Committee work on the report, and neither he nor I was surprised. I suppose that it is not really surprising that if lawyers believe that the Government have got something seriously wrong, they are the first people to make use of the mechanisms with which they are familiar, but the right hon. Gentleman is right to say that the Government should take the opportunity to reflect on the problems that have been revealed, and, for various reasons, some of which I shall come to, this is an opportunity to reflect and think again about at least some aspects of the system.

The system has come under severe strain in the past decade. Expenditure, mainly in the areas of Crown court defence cases and child care proceedings, has rocketed and appears to be still on the increase. We now have a legal aid budget of more than £2 billion. No one would disagree with the suggestion that the legal aid system needs some reform, and the Government’s proposals, published on the basis of Lord Carter’s review, are pretty well known. They involve a comprehensive move to remuneration of legal aid lawyers per case—rather than by the hour—at a price set by the market on the basis of competitive tendering for legal aid contracts by providers.

However, until that best value tendering is rolled out nationally after October 2008, new fixed and graduated fees set by the Legal Services Commission will apply to publicly funded legal advice. The planned new fee schemes would lead to significant reductions in fee levels for legal aid practitioners, especially in urban areas and for criminal legal aid. The Constitutional Affairs Committee undertook a thorough inquiry into the proposals and the subsequent modifications to them made by the then Department for Constitutional Affairs and the LSC.

The right hon. Gentleman has said that there is a problem in relation to both criminal legal firms and urban areas. May I assure him that there is a problem in rural areas, where we already do not have criminal cover? There is no steady state, and the proposals will, if anything, probably make the situation worse. I hope that he will bear that in mind.

The hon. Gentleman is absolutely right. I intended to come on to the point that he makes, because it is slightly different. The impact on urban areas will be in the form of a very severe reduction in the number of suppliers. The problem in rural areas is that there are not enough suppliers now, and even a small reduction in rural areas, even if there is any possibility of a transfer of money from urban to rural areas in this process, means that many small towns are likely to end up in a situation in which if there is one supplier they will be lucky, and of course if there are two contending parties in a case or two defendants in a criminal case, that one supplier cannot meet the needs of both.

On the question of the reduction in suppliers, does the right hon. Gentleman agree that it is prophesied that there will be a particular impact on black and ethnic minority-led solicitors in inner-city areas because they tend to be smaller and newer firms and to do predominantly criminal legal aid, and that that is a very unfortunate by-product of the so-called reform?

The hon. Lady is right: the report says that in terms, and I shall refer to it again.

We focused our inquiry firmly on the potential impact of the reforms on legal aid clients and their needs, and we took evidence from individuals, lawyers, representative groups, academics and senior judges. All the witnesses agreed with the need to reform the legal aid system, but only a few thought that the Government had approached that in the right way. Eminent academics in the field of legal aid and its reform complained of the lack of a more holistic approach to legal aid reform: instead of identifying and analysing the cost drivers in the legal aid budget and then addressing them, the reforms would be focused on short-term gains and cuts in lawyers’ fees. That is despite indications that average case costs in terms of lawyers’ fees in a number of areas were not the only factor that contributed to the recent rise in legal aid expenditure, and certainly were not the most significant.

It is self-evident that cuts to legal aid fees, or at least a further freezing of those fees in the future, could set free funds that could be used to finance a greater number of acts of assistance under legal aid. Although the measure of acts of assistance is one of quantity not quality and there is a limit in its value, I still welcome the significant increase in the number of acts of assistance in terms of civil legal help from fewer than 600,000 to nearly 800,000 in 2006-07 and the associated rise in spending on civil legal aid since 2004.

However, such increases in the quantity of publicly funded legal advice, especially when funded through what are in effect cuts in legal aid fees for a significant number of providers, may come at a price. That price is difficult to quantify, but may be very high. Dedicated and experienced legal aid lawyers and not-for-profit organisations providing legal advice may be forced to leave the market because of significant and unsustainable loss of income as a result of the new transitional fee schemes. The quality of legal aid may deteriorate and, worse, there may even be a risk to the provision of legal aid advice, especially in family and civil law in some areas of the country. Areas of unmet need already exist in the north of England, in Wales and in East Anglia, for example, and include rural areas such as those to which the hon. Member for Stroud (Mr. Drew) referred.

In the light of what the right hon. Gentleman has just said, will he consider as an example illustrating his point the case of Brighton Housing Trust immigration legal service? It is the sole legal aid provider of immigration advice in the constituency. It deals with 80 nationalities a year and a case load of 713 cases, which has doubled as this decade has gone on, and it anticipates that the scheme before us will mean a further loss of £44,000 a year in income to the firm. John Holmstrom of that organisation tells me—

Order. Interventions should be short.

You will know from that intervention, Mr. Martlew, that there are many hon. Members present who are well aware that in their constituencies there are legal aid providers who do not see how they can provide under the new arrangements the service that they are providing at the moment. Indeed, figures provided to the Committee by the LSC indicate that in London, which is a hotspot of social exclusion and deprivation, the incomes of 63 per cent. of lawyers who provide housing law advice will be reduced under the Government’s plans for new fixed fees for the transitional period if they do not change their working practices. The average loss for those lawyers who face fee reductions will be 18.5 per cent. The picture is even worse for those who provide welfare benefits advice in London, of whom 70 per cent. will see a similar average fee reduction. Some providers in other regions of the country might receive significant increases in their fees—the previous Lord Chancellor talked about that when he gave evidence to the Committee—which could be a positive development, but it is deeply worrying that there is a risk to the provision of social welfare law advice in London and other urban areas that have particular needs.

Research for the LSC by Andrew Otterburn on the economic situation of criminal legal aid lawyers demonstrated the fragile state that the supplier base is estimated to be in. He warned that the situation is likely to be even worse for civil and family legal aid lawyers. Despite the obvious risk to the provision of quality legal advice posed by fee cuts and aspects of competitive tendering, the Government appear not to have carried out appropriate, wide-ranging research into the likely impact of the Carter reforms on suppliers and clients. They have not undertaken detailed research into the cost drivers in the legal aid budget or into potential means by which to secure a lasting and sustainable development of the legal aid system that consists of more than simply cutting lawyers’ fees. Their view on evidence was shown rather vividly in paragraph 40 of their response, which states:

“Work is in hand to fill the data gaps identified by the Review, but this is not expected to change our view of the fundamental factors driving cost.”

So they are saying, “We are going to get some more evidence, but it won’t change our mind, whatever it says.” I find that very Sir Humphrey.

An urgent warning about the effects of the lack of an holistic approach to legal aid came from Michael Robinson, who is a member of the Law Society Council from Northumbria. On the reform proposals for legal aid in child care proceedings, he said:

“It is not appreciated how fragile the care proceedings system is. No one has really undertaken a review of how it operates in each local magistrates’ and county court or how well the non-solicitor/non-barrister professionals cope with the system. The system works very slowly and, in the main, the interests of children or of parents or grandparents are advanced because solicitors are pro-active. This pro-action will cease with fixed fees. Children will suffer.”

Despite the recent child care proceedings review carried out by the Departments for Constitutional Affairs and for Education and Skills, the Government reforms pay too little attention to the recurring problems faced by lawyers and court users in child care proceedings. Such problems include delay, understaffed courts, problems with the Children and Family Court Advisory and Support Service and insufficient case preparation by local authorities, all of which mar proceedings. The legal aid reforms do not take those considerations sufficiently into account.

During its inquiry, the Committee was provided with many other examples of how the Government have failed to consider the legal aid system as a whole, carry out adequate research and then address the systemic difficulties comprehensively. For example, little attention has so far been paid to the way in which expert fees have contributed to the rise in the legal aid budget, especially in family and criminal proceedings.

The Committee’s report generally welcomed the Government’s intention to move comprehensively to the payment of legal aid providers by case rather than by the hour. However, our inquiry convinced us that neither Lord Carter nor the Government have managed to design fee schemes for the one to three-year transitional period prior to competitive tendering that would provide adequate remuneration for the work that a provider invests in a case. No appropriate set of objective proxies for individual case complexity was employed when deciding the fee levels, and there was almost exclusive reliance on the swings-and-roundabouts effect that is inherent in a fixed fee system with limited graduation. The lack of graduation for differences in case complexity in the initial fee scheme has attracted particularly severe criticism from the most senior family judge in England and Wales, Sir Mark Potter. He called the initial Government proposals for the family fee scheme

“a series of extremely crude averaged fixed fees”

and said that

“the whole thing has to be radically revised”.

Although the proposals have been changed, the modifications to the fee schemes can hardly be called adequate. Crude fixed fees or fee schemes with rudimentary graduation will hit hardest the clients who are more difficult to deal with, and potentially the most vulnerable, as they may have greater difficulty in getting their cases dealt with by experienced providers. Fixed fees will waste the knowledge and talent of specialist and niche providers, as they will be forced to take on more straightforward cases to arrive at an economically viable case mix. Such specialists will not be able to deal with as many of the complicated cases that require a high degree of specialisation. There are no economic incentives in the new fee schemes in the transitional period for the provision of dedicated services and specialist advice. The fee uplifts for members of the Law Society’s children panel will be severely curtailed under the revised Government plans.

The quality control of legal aid lawyers by means of peer review will provide a quality floor, but will not encourage excellence. Michael Robinson, whom I mentioned earlier, told me:

“Already, as a result of the criminal legal aid reforms, we are seeing firms restructure so that expensive, experienced fee-earners will be got rid of and replaced by cheaper, less experienced young people. It is the experience of solicitors which tends to make the system work, and this is not valued by the Legal Services Commission.”

The Committee concluded that more work needed to be done on the Government’s proposals for what they call the transitional period, with LSC set-fee schemes, and that there needed to be a solid evidence base. Severe fee cuts are envisaged not only in the areas of legal aid in which the budget is still increasing, such as in Crown court cases and care proceedings, but across the board in virtually all areas of the law.

The legal aid system is being put at risk even though significant parts of it appear to be operating acceptably and to budget. A wholesale and rushed change to the system is not needed, especially given that the Government have failed to assess the real risk of the reform plans to legal aid clients. The Committee has therefore called for the introduction of the new fee schemes for the short transitional period to be halted. Here is the problem: the dangers of the fixed fee schemes have caused such alarm that they have distracted attention from the main feature of the reform that the Government propose, which is a move to competitive tendering for block contracts for legal aid work.

The Committee was astonished by the lack of concrete plans for the tendering process. There are well-known problems with competitive tendering, such as “winner’s curse”, when the winning bidder bids at an uneconomically low rate and cannot fulfil their contract. Those who travel on the east coast main line will be familiar with that problem, which happened to GNER. It could perfectly well happen in the legal services sector.

Another issue is whether there will be an adequate supplier base, especially after the fixed fees period. If that period goes ahead, who will be left at the end of it to compete in the tendering process? Who will be left at the second round of competitive tendering? There is a real danger that there will not be sufficient suppliers to make the second round a process of competitive tendering in any realistic way. We quoted the evidence of Professor Cape, who called the introduction of competitive tendering without proper piloting “reckless”. We thought that competitive tendering should not be rolled out nationally, even in a phased manner, without such a pilot.

The Government’s response to our report, issued on 22 June, was disappointing. None of the Committee’s hard-and-fast recommendations seems to have been taken on board. The fixed, graduated fee schemes for the transitional period are to go ahead in all areas of legal aid, and no significant changes were made to the structure of the fee schemes in terms of graduation or to reflect the differing work costs across the country. There is to be no proper piloting of best-value tendering and no detailed analysis of the cost drivers in the legal aid budget to inform the current or future reforms. In short, the Government have failed to address the main flaws in their reform proposals.

There have been some improvements to the previous proposals, such as the phasing in of the new private law family fee scheme, with level 3 and 4 fees coming into force at a later date than levels 1 and 2, which come into force in October, but those improvements do not change the overall picture. The most recent fee schemes and consultations published by the LSC at the end of June and the beginning of this month vindicate the Committee’s concerns. For example, one of the Committee’s main criticisms of the Government and the LSC was the lack of data on which the fee schemes for the transitional period were modelled. This spring, the LSC announced a change to its initial plans to reform the arrangements for the allocation of police station slots for criminal legal aid suppliers. Because of what it described as “data integrity issues”—a wonderful-sounding euphemism—the initial proposals were stopped and the LSC re-consulted, asking suppliers to provide it with more and accurate data on which further models could be based. Similarly, it had to delay a crucial decision on the introduction of minimum contract sizes for police station and magistrates court work in order to refine its data.

The most striking example is the new consultation paper on the litigators graduated fee scheme for Crown court defence work. The LSC acknowledges that certain complicating factors, such as a client being a non-English speaker, would increase the amount of work in a defence case, but it admits to not holding enough data to quantify the increase in work load. It concluded that it was not able to model, with certainty, an appropriate uplift for such complicated cases. In the light of that recognition and the apparent difficulties with modelling the level three fees for the private law family fee scheme, I wonder how the LSC will ever be able to identify the appropriate value for money for pieces of legal aid work, if not through crude cost averaging. Of course, some delay is justified when it is used to collate and apply better and more reliable data, but that should have taken place before fee schemes were published or, in the case of police station slot allocation, before firms engaged in re-organising their duty solicitor working practices.

Another example of the undue haste with which the Government are pushing ahead with the reform proposals is the very short consultation period for the Crown court litigators graduated fee scheme, one of the most central planks in the Carter reform armoury. Consultees were issued with a 91-page consultation paper, replete with data and models, given two online calculators and asked to feed back their experience with these mock calculations to the LSC. Only six weeks were allowed for that time-consuming exercise for Crown court defence solicitors. General Government consultation guidance provides for a three-month consultation period, but the LSC is resorting to the pretext of these schemes having been the subject of a previous consultation: the one following the Carter report. Why is the LSC not allowing providers more time to calculate the fee models and come up with a sensible, well-tested response?

All that reinforces the suspicion that the current reform plan, especially in respect of the transition period with its Government-set fixed and graduated fee levels, is not a carefully planned, well-thought-out step based on diligent analysis of extensive and reliable data, but a rushed attempt to save money at all costs in a short period of time. The Government partly acknowledge that, saying in their response that they intend to

“tackle known cost drivers as a matter of urgency”

and that they need

“to act decisively if reductions to scope and eligibility”—

for legal aid—

“ are to be averted.”

So, there is a sense and rush and urgency.

Reforms carrying significant risks to the provision of quality legal aid in the near future should not be implemented in this way, without proper reflection and without a solid basis of evidence and piloting. It sounds like a Treasury-driven approach is being taken, and it may be highly damaging to our legal aid system. Along with it has gone something that we were very concerned about: a breakdown in relations between the LSC and the professions and the not-for-profit providers, who are also important in this area. Citizens Advice has said:

“We hope that members will support Citizens Advice in urging the Ministry of Justice and the Legal Services Commission to initiate a consultative process involving all stakeholders in the design of a pilot tender process, supported by robust research on demand and delivery cost drivers.”

Some of the damage has already been done. Many people have given us evidence—right up until this morning—of what is happening. The Association of Major Criminal Law Firms sent me some information this morning, saying:

“Over 80 per cent. of our member firms are contemplating taking or have already taken steps to make staff redundant.”

Large firms have indicated that they are going to “leave the market” and others have indicated that they have “no interest” in taking on the work that those firms are doing.

It is not too late to make a change, even though some damage has been done. As was indicated at the beginning of the debate, an opportunity exists; some legal action may be taking place and we have a new Minister, whom I have congratulated on her appointment. She has an opportunity to take a new look. Any new Minister coming into office would expect to check carefully whether matters already in hand really do fit with the Government’s wider social objectives. In their present form, these proposals cannot be matched to the Prime Minister’s declared objectives for a fairer society. I hope that the Minister will examine the proposals carefully and follow some of our guidance on ways in which not only could they be mitigated, but we could proceed to a much more carefully thought-out second stage without the damage of the transitional fee scheme.

rose—

Order. Many hon. Members are standing, and I hope that they will bear that in mind in terms of the length of speeches.

It is always a pleasure to follow the right hon. Member for Berwick-upon-Tweed (Mr. Beith), the Chairman of the Select Committee on Constitutional Affairs, on any matter, but especially on this one, as he chaired the Committee sitting that examined this important area of work.

Mr. Martlew, you told me that we should be brief. I can be brief, because I agree with everything that the right hon. Gentleman has said. I am happy to support it, because he speaks with the authority of someone who, like myself and other members of the Committee such as my hon. Friend the Member for Southampton, Test (Dr. Whitehead), took evidence from a wide range of people.

The worst witness by far was Lord Carter. I cannot understand the Government’s love affair with Lord Carter; with legal aid having been completely messed up and firms having been driven into legal action against the Government, they have decided to appoint him to examine the Prison Service. Goodness knows what will happen to that after Lord Carter finishes his report, because, to quote Catherine Tate, in our dealings he was just “not bothered”. He came along having not done any analysis of the impact that his proposals were going to have on legal aid firms, he had no understanding of the legal profession, he did not understand what running a legal practice that had to rely on legal aid was all about, and he just shrugged his shoulders when he was asked questions of fact. On the basis of that kind of demeanour, this report has been produced.

I hope that having heard what the right hon. Gentleman has said, having read the Committee’s deliberations and noted the way in which witnesses gave evidence, the new Minister will step back, carefully examine what has been proposed and take the pause that the professions, consumers and Members of Parliament have requested, so that this area can be reviewed.

I believe that 157 right hon. and hon. Members have signed my early-day motion on legal aid reform. Five key early-day motions are before the House: early-day motions 537, 738, 493, 1303 and 1475. Let us consider the collective voice of right hon. and hon. Members from across the House. A total of 264 have signed one or other of those early-day motions. Judging by the nods of Opposition Members, it is clear that the Committee’s report, which was unanimous, has the support of Members from both sides of the House.

I congratulate the Minister on her appointment to one of the most exciting Departments in Whitehall. Its new and wide brief means that it is so easy to lose sight of a core responsibility such as legal aid. I am delighted that she has got it because she has proved in her ministerial career that she is able to master a brief quickly and to think carefully—and one hopes independently—once evidence is put before her. I hope that she will not just read out what civil servants have prepared for her predecessor, because we were not impressed by what was said by her predecessor on this issue.

I know that since the Minister was given this job by the Prime Minister she has not had the opportunity to visit a legal aid firm. I believe that she has also not had a chance to talk to the Law Society and the Bar Council about this matter, although I might be wrong about that. That is one of the first things that a new Minister does when they take office in Selborne house, and I hope that she will take the opportunity to have such discussions.

My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) and I were on our way to see the previous Lord Chancellor to discuss these very issues a couple of days before the reshuffle. As a result of diary problems—I believe that he had to deal with overcrowding in prisons—and because we were delayed on other matters, we did not manage to meet him. We were looking forward to meeting him. He is strongly committed to the community legal service, and I think that he would have paused and considered carefully what we have had to say.

I am sure that the current Lord Chancellor is in exactly the same position, because once he examines the evidence—I am sure that we can provide evidence of how the proposals will affect firms in Blackburn—he will know the effect that the proposals will have on the legal aid service in this country. He will also know they will affect the basic tenet of what this Government have tried to do over the past 10 years: to create the seamless community legal service. That was the intention when we took office in 1997. If legal aid is subject to this review and if it is implemented and these reforms take effect, the seamless community legal service will be fractured forever.

The disproportionate effect that that will have on ethnic minority firms—my hon. Friend and I have raised this point on many occasions, both in the House and in meetings with Ministers—will destroy the ethnic minority base of the provision of legal services in this country. Our representations to a number of Ministers, the evidence that we have seen, and our conversations with black, Asian and Chinese solicitors suggest that the entire ethnic minority community will be forced to give up this work and to merge into bigger firms. They will lose their identity and their unique ability to communicate effectively with their specialist client base. That is why they have gone to court. It is not a welcome start for the new and strong ministerial team to have to cope with the Lord Chancellor facing action over a decision concerning legal aid. However, I am glad that they have done so, and if I can help in any way in supporting their legal action, I will because the case has been made and it must be prosecuted in the courts.

Does my right hon. Friend agree that there is little point in the Government saying that they are committed to more diversity in the judiciary and the legal profession as a whole if they are driving through untested and unthought-out processes that could lead to 75 per cent. of ethnic minority solicitors going out of business? That would have an indirect effect on black and ethnic minority barristers and have the total effect of reducing diversity in the profession.

My hon. Friend is absolutely right, and there will be an impact on other services. As young, talented people refuse to go into the profession because there are no training contracts to enable them to be trained in those firms, they will choose other professions and other areas in which to develop their careers.

This is an opportunity for the Minister. The legal action gives us an opportunity to stop the Government doing what they are doing, but the best way forward is to call the parties to a meeting, listen to the almost unanimous views of hon. Members, and reconsider the proposals. I support a Government, and the Minister is a member of a Government, who have done more to provide individual rights than any other Government in history. They have modernised the constitution as no other Government have. What a sad testament it would be to that great achievement if we took away the very basis of people’s ability to go to law, which is legal aid. I hope that the Minister will reconsider the proposals.

It is a pleasure to stand here again to talk about an issue on which I introduced a debate with the previous Minister just last month. Unlike the Minister here and many other hon. Members, I am not a lawyer or an expert on the intricacies of legal aid.

My interest in the matter began when I was contacted by constituents who work for criminal legal aid practices in Hull. They told me that, like so many others around the country, they were desperately worried about the Carter proposals and their impact on businesses and, more importantly, on the vulnerable clients with whom they deal daily. I promised to look into the proposals and to question the Government on their behalf. That culminated in the debate on 12 June, and I wish to return to several of the points raised in that debate, because my constituents were not happy with the then Minister’s response.

I congratulate the new Minister on her post and I understand that she has been a legal aid solicitor, which is extremely welcome. I hope that she will have a better understanding of the matter than her predecessor. It seems that the bigger the error made by Ministers, the higher the office that immediately results.

The hon. Gentleman should not be unduly excited that the Minister was a legal aid solicitor. The former Minister was a barrister who had done plenty of legal aid, yet she proved quite obdurate on the matter.

Perhaps self-confidence and even occasional arrogance are seen more often in barristers than in solicitors. I say for the benefit of my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox), that that applies in only a minority of cases. We are asking the Minister to reconsider the matter calmly and coolly. We hope that she will take that opportunity.

If the suggestion that super-casinos in poorer areas of a major city are a means of regeneration can be reconsidered, surely the suggestion of marketisation, without pilot, without practice and without evidence, of something that affects the most vulnerable people in our society can also be reconsidered. I hope that the Minister will have the courage and self-confidence to do so. A solicitor in Hull wrote to me saying:

“Civil liberty and freedom are illusory concepts if you cannot afford legal representation to defend them.”

That is why so many hon. Members are in the Chamber today.

Eight firms in Kingston upon Hull undertake publicly funded criminal defence work. They have historically covered towns in the East Riding, such as Beverley, Bridlington, Goole, Driffield, Hornsea and Withernsea. As a result, more than 8,000 East Riding residents received help through legal aid in 2006. Their united opposition to the Carter proposals stems from the fact that the Government have designated 16 urban areas in which solicitors can no longer charge for travel and waiting time. Hull has been declared an urban area, although, oddly, Norwich, Middlesbrough and Doncaster have not. That has had an impact on out-of-town courts, such as Beverley.

It is worth making the point that criminal legal aid solicitors are not in a highly paid area of the law. People who enter that sort of work do not do so because they seek riches; they do so because they want to put their legal skills to work to help some of the most vulnerable people in our society. However, they expect to be able to make a living and to sustain their practices. The diversity of supply may be confusing for the Government and perhaps for civil servants. There is complexity all over the country: different areas have different sorts of practices and different specialties are provided in different ways, but that organic system works and has provided stable costs. Many hon. Members cannot understand why the one area of legal aid work where costs have not exploded, is the very area in which the Government are smashing through change and putting at risk good practice provided in a stable, cost-controlled way. That is a question for the Minister to respond to.

The firms in Hull went on strike—they were hardly minded to do that—but when that got them nowhere, they announced that they would no longer provide duty solicitor services for courts based outside Hull or take on new cases. That came into effect on 16 April 2007. The firms decided that it did not make economic sense to do such work, despite the fact that it constituted 20 per cent. of their business. The decision had a major impact on their businesses, but they could not afford to do the work. They are not high-earning individuals charging the vast hourly rates that perhaps the former Minister was able to charge as a barrister. The firms decided that they could not go to Beverley, Driffield or Bridlington, and that was not an easy decision.

The Minister disputed the figure that the firms concerned would lose 20 per cent. of their income, but the Legal Services Commission admitted that Hull firms were expected to take on the same work load as last year, but for £30,000 less. The previous Minister in the earlier debate tried to make out that those solicitors had pay rises, but, on the contrary, they lost business and were expected to do the same work for £30,000 less when they already had low margins.

That decision meant that there was potentially no legal aid provision at Beverley magistrates court in my constituency. The Legal Services Commission, after a short spell using the public offender service in Darlington at heaven knows what cost, arranged for three firms—one from Bridlington and two from Scarborough—to be used. Those firms are now being paid to travel and wait, at a cost of £26 per hour to the taxpayer. When one considers that a case programmed for an 11 o’clock start at Beverley may often not start until 2 pm, we are talking about a significant amount of waiting time. If Hull solicitors come out—the previous Minister attacked them aggressively during the earlier debate—they are expected to sit unpaid in a courtroom while another set of solicitors is paid for waiting and the inevitable delays. Surely it is madness for firms to be brought in from further afield when local firms are willing to do the work.

The hon. Gentleman must be aware that some courts are incredibly badly run. Large numbers of cases are set down for the same time, even though everyone knows full well that they will not be dealt with for many hours. That just results in large numbers of people sitting around some grotty coffee machine hoping that something will happen, which is an incredible waste of everybody’s time.

That is absolutely right, but instead of looking to tackle the problem, Ministers are here attacking committed public defenders. The previous Minister did herself a great disservice during the previous debate, when she suggested that Hull solicitors were simply seeking more money. She repeatedly accused them of behaving like fat-cat lawyers by demanding more money to travel to Beverley. She told us that they were refusing to do work that they were contractually obligated to do—that is, to travel to Beverley—and that they were trying

“to boycott the work that they are being paid to do.”—[Official Report, Westminster Hall, 12 June 2007; Vol. 461, c. 250WH.]

That was said by a Minister of the Crown in this Room about hard-working criminal solicitors based in my constituency and working in Hull. No wonder she moved jobs, although, sadly, that has resulted in a promotion, instead of a return to the Back Benches which she properly deserved for having said what she did.

The then Minister said that the solicitors had

“achieved a 2 per cent. pay rise on the assumption that they go to Beverley. Actually, solicitors are not going to Beverley; they are grasping a much bigger pay rise by avoiding that obligation.”—[Official Report, Westminster Hall, 12 June 2007; Vol. 461, c. 250WH.]

That was said by a Minister of the Crown about solicitors in my local area. However, the 2 per cent. figure to which she referred is incorrect. Just one of the eight firms will receive a 2 per cent. increase; most will receive no extra money, and one is set to lose money as a result of the reforms. Peter Barker, of Barker and Co. solicitors, tells me that the Legal Services Commission has consistently refused to provide the evidential base for the claim that was made in this Chamber about those Hull solicitors. If the new Minister is unable to respond to that point today, perhaps she will write to me following the debate to ensure that the then Minister’s claim is either substantiated or retracted.

Within just a few days of the debate, I received an e-mail from Richard Miller, of the Legal Aid Practitioners Group, who stated that the Minister’s claim

“would amount to serious misconduct and breach of contract by the firms, not to mention arguably amounting to a fraud of the taxpayer. The firms are doing nothing of the sort. They are receiving a fixed fee for work they undertake in accordance with their contract, the same fixed fee as every other solicitor in an urban area outside London. They are not being paid specifically to attend Beverley, they are not paid for any cases they do not undertake and they are not failing to undertake any work they are contractually required to do.”

I also received correspondence from Bill Waddington, of Williamsons solicitors, who watched the debate on television in disbelief. Speaking of the Minister’s claim that the eight Hull firms had proposed to the Legal Services Commission that they be offered payment for travelling and waiting on top of the new revised fee—in essence, that they be paid twice over—he said

“I cannot imagine for one moment that this was a misunderstanding of the proposals that we put to the LSC”.

The firms had suggested that they revert instead to the old, lower fee, but that they be paid for waiting and travelling, because the inadequate administration in many courts often led to solicitors sitting around for many hours, and they could not afford to do that without at least being remunerated or having the system improved. Mr. Waddington went on to say that, unfortunately, he had come to the view that the then Minister’s statement was “deliberately misleading.” He said:

“what we in fact proposed in an attempt to resolve this issue pre-April 16th was that they should consider de-urbanising the rural area”,

which would take us back to the old way of doing things.

The previous Minister and, indeed, this Minister—as I understand it, we have one, indivisible Government—owe the eight Hull firms an apology. The then Minister attempted to tarnish their professional reputations and caused personal anguish to the individuals concerned. Those people are committed to the services that they provide in our community; they do not enter the profession to become rich and they are particularly proud of the work that they do. As one firm put it:

“Solicitors do not jettison clients that have sometimes been represented by their firm over many years without trepidation and crisis of conscience.”

These solicitors do not deserve to be smeared by a Minister who, as a member of the Bar, was used to far greater remuneration than they currently receive. The present Minister should recognise that, do the honourable thing and apologise on behalf of the previous Minister this afternoon. If she cannot find time to address my points in her remarks, I would ask her again for a written communication that I can share with my constituents to ensure that the injustice that occurred in this Chamber is put right.

I hope that we can all agree about the statement right at the beginning of the Government’s response, where they say that the legal aid system is

“one of the proudest legacies of the progressive post-war Labour governments”.

There may be a few dissenting voices, but the legal aid system is indeed a great achievement, and the fact that further money has gone into it over recent years indicates the support that it receives.

However, it can also be generally agreed that the overall cost is increasing, and the question before us is how to ensure that the legal aid system offers fair representation across the country, regardless of whether the person seeking representation lives in a large town, a city or the countryside, and that representation is undertaken on a reasonable basis. When it is suggested that changes are made to the way in which the legal aid system works to address those issues, some people will resist those changes for reasons of self-interest.

The issue is, however, much larger than simply whether administrative changes can maintain the legal aid system in the way that I have described. The issue that took up a considerable part of the report on the implementation of the Carter review—the question that is at the heart of the proposed changes, whatever else may be contained in the detail—is the method by which any changes may be undertaken. Put simply, the chosen method is a best-value tendering system based on market principles. We have long experience of the process of best-value tendering—and of compulsory competitive tendering before that—particularly in local government services. It is not, therefore, a new concept, although as we know from experience, it does not always turn out to be quite what its proponents thought it was when they introduced it.

The Government response errs, however, on the side of suggesting that the principle of the tendering process itself—not any variation of the process based, among other things, on the many lessons that have been learned over the years as a result of the unfolding of the tendering process in various services—will solve a number of the problems. Indeed, the Government state:

“We agree that there may need to be different ways of creating a viable market in different parts of the country: different areas have different conditions…In urban areas where the balance between the number of firms and legal aid clients is strongest we might reasonably expect downward pressure on prices. In rural areas where supply is often weaker and clients are certainly more dispersed, a move to the market will reveal the lowest price at which a sustainable service can be secured.”

I read that extract twice, but I came to the conclusion on both occasions that it appears to say that, where there are few suppliers, the process will reveal the point at which the service will no longer be supplied. That, of course, will be the nub of the issue if this complex method of tendering becomes the chosen instrument by which to make changes and to ensure that supply exists across the country in the way that I have described.

There is not just a slight difference or a difference of emphasis, as has been suggested in the quotation I just gave, but an enormous difference between the process in large cities and towns and that which applies in smaller towns and rural areas particularly. There is a smaller number of suppliers, and in some instances just one or two even in quite large communities. We know that there is continuing movement away from the area, and evidence to the Committee indicated a reduction in the number of people who continue to be engaged in supplying legal aid services.

Does my hon. Friend accept that there is another problem with the tendering process: one that relates to the subject of tenders? National Family Mediation claims that its work saves money for the state and is much more successful than court processes in trying to deal with family break-up. It has told me that because mediation will now often be subject to court action—that being the way in which the tendering process will operate—its valuable work is being pushed to the margins. The mediation agency in Gloucestershire is considering closure. I am sure that other hon. Members have received similar information.

My hon. Friend illustrates that there are complications in the application of the tendering process to legal aid services—not just in the bidding process but in connection with a range of other factors such as mediation, advice from citizens advice bureaux, and similar areas. He underlines the point that I was about to make, which was that it is difficult to apply a relatively simple tendering idea to the complex issues before us.

The Committee heard evidence of the so-called “curse of the winner”, whereby tendering firms might, because of anxiety to remain in the frame, make a low bid at an early stage. Another way of putting it is contained in a book by the late Kieron Walsh entitled, “Public Services and Market Mechanisms: Competition, Contracting and the New Public Management”. In that book, he said:

“The fixed price contract is likely to have an effect on the way that the service is provided. If contractors cannot control the income they receive then they are likely to try to cut the costs of the work by reducing the quality or quantity of work done.”

That is just one example of why we do not need to look into a crystal ball to see the outcome of what is happening to tendering processes. The information is not new; we have it in a book—in that case, a book written in 1995.

The known outcomes of the tendering process mean that, as was the case historically, we must consider not just the question of the first tendering process but those that follow—the second, third and fourth rounds. The suggestion appears to be that, if prices increase as a result of the process, as they might well do in areas such as those that I have described that have only one or two suppliers, that might be seen as evidence of a cartel. That is not necessarily the case at all; it might simply be that there is not sufficient supply to accommodate a tendering process.

During the Committee’s deliberations, I asked one or two questions that were couched in terms of comparison with waste collection tendering processes. I subsequently received letters from several lawyers asking how I dared to compare them to bin men. It was not my intention to do so, but I did intend to draw some lessons from waste service tendering processes, among other things. One of the lessons is that, once second, third or fourth tendering process are reached, the tenderers that were previously knocked out cannot get back in. After a period, that results in the only remaining tenderers being those that have tendered already, because they are the only ones left in business. In those circumstances, the idea that the process will continually improve competition, drive down prices and lift the standard of services does not necessarily stand up.

That idea is based on classic tendering theory. As Kieron Walsh said, it is relatively simple to organise a tendering process for rubbish collection, but it is much more complex to organise one for legal services. Among other things, and as has been mentioned, the tendering parties in a rubbish collection tender have to submit a tender in order to stay in the market. If local authorities or private companies do not tender for municipal waste collection, they are not in the waste collection business. That is not true of legal services; the firms will simply switch to some other legal service. The point about the planned tendering process is that it is leaky; firms leak out of the process and switch out of the area.

Does the hon. Gentleman agree that some processes are not suitable for tendering? In a commercial environment, businesses allow audit tenders because there are statutory auditing requirements, and the supplier will seek to fulfil those at the lowest cost. However, companies do not ask their lawyers for fixed advice tenders, because the amount of advice that they receive differs, and they want the best possible advice. Instead of adopting an appropriate process, we are trying to drive down costs in the same way as for bags of waste.

Order. Interventions should be short.

I agree with the hon. Gentleman. The tendering process is differentially appropriate to different services, and different kinds of tendering are appropriate to different services. I wish the party of which the hon. Gentleman is a member had said that a few years ago about other forms of tendering, but we shall let that pass.

I recognise that a number of other Members wish to contribute, so I shall be as brief as I can in drawing my remarks to a close. I draw the House’s attention to a fundamental assumption about what will happen after the first or second tendering round—Lord Carter himself, in evidence to the Committee, suggested that it would be the case. When asked what would happen about the maintenance of effective competition beyond the first bid round, he said that it would be

“very difficult…I think people will leave.”

However, he said,

“if people saw that there are weak suppliers in an area,”

they might “break away” or come in

“from other areas, which is probably more likely.”

It is a sort of “on your bike” theory of tendering. It is most unlikely to happen in this area of supply. That is why it would have been important to pilot the process in London, as was suggested, before undertaking the Carter review.

The Government’s response to the Select Committee report says:

“We propose to roll out best value tendering initially”.

That is a sort of suggestion of piloting, inasmuch as the Government recognise

“the need…for a dynamic information monitoring process in order to assess the state of the market.”

A roll-out is not the same as a pilot, nor will it enable the sort of lessons to be learned that I have suggested are needed.

I also note that the Government propose in their response to undertake consultation on the tendering processes that will be designed for the system. I hope, if piloting is not to occur, that the design of the tendering process will take into account the fact that inevitably, both the initial and subsequent rounds of tendering will have to be very different in some areas from others. I suggest that in some areas, the mechanism effectively would not be a tendering process. If the consultation leads to that conclusion, it will be a positive outcome.

Careful thought is needed about how the system will progress. As other hon. Members have suggested, the danger is that we might end up effectively destroying the very service of which I, as a Labour Member and supporter of this Government, have been so proud—a service introduced over many years to ensure that people receive the proper assistance in accessing justice.

I draw attention to my entry in the Register of Members’ Interests. Some Members present will know that I am a practising member of the Bar, and that I practise in fields funded by legal aid. I have thought long and hard before rising to speak, and before attending this debate. I have attended none until this one, because it has been extremely difficult for me to see how I could make a speech to the House on a subject of such close financial interest and concern to me.

After careful reflection and consultation with many people in the profession whom I have known for many years, I have found that I am duty bound to speak on a subject of such grave concern not only to the legal profession of which I have long been a member but, I firmly and passionately believe, to the wider public interest, which is being defeated and damaged by the Government’s proposed measures.

The quality of justice and the judiciary in this country is one of the proudest assets of which we can boast. When I say “the quality of justice”, I refer to all those involved in the administration of justice in this country. We sometimes forget that when we speak of the administration of justice, we are talking not only of those who dispense justice from the bench, the magistrates courts, the Crown courts, the High Courts and the county courts right up to the House of Lords itself. Critically, we are also talking of those who assist the administration of justice in an essential way—those who represent people before the courts, whether they be solicitors or members of the Bar. It is upon their integrity, competence and willingness to commit themselves to their clients’ cause—their decision to go that extra mile to discern whether the interests of justice help their client and to discover a particular way to assist them—that the administration of justice integrally and importantly depends.

All members of the justice system administered in this country should do their job with the maximum vigour. Only that guarantees the system’s success. During the 25 years for which I have practised, I have seen the most breathtaking commitment. People not remunerated at all well have given their time—frequently knowing that they will not be paid for it, or certainly not paid at any commercial rate—trying, at 9 o’clock in the evening, to find a bail hostel for a drug addict; trying to find a probation officer to give their client a chance and to look into his case; trying to find a way to help their client in a criminal legal aid case to avoid the spiral of imprisonment and continuing drug addiction.

I have seen such things personally. I have seen how solicitors paid on legal aid contribute every day with their effort, energy and dedication to the administration of our justice system. We should be proud of that system, and we should be proud of them. Their remuneration does not make them fat cats, although I suspect that many people regard them as such, and I often wonder whether this Government do too.

I say more in sorrow than in anger that I cannot help feeling that some of the measures shortly to be put before the House are driven by what we have seen from this Government in recent years: a regrettable tendency to denigrate those who practise in the criminal justice system. I do not mean only judges, although it is true that the Executive have repeatedly denigrated them. All sorts of extraordinary remarks have been made not only about judges, but about other practitioners in the field. I seem to recall that a former Home Secretary of this Government referred two or three years ago to “bent briefs” who tried too hard for their clients. I am not sure that the two are necessarily related. However, that kind of remark and that kind of atmosphere seem to be driving what is almost contempt for those involved in legal aid and the legal profession—particularly those engaged in representing people in the criminal courts.

The measures will lead to a brutal degradation of legal services. Some 600 to 1,100 firms will close or merge. Black and minority ethnic solicitors will be particularly affected, as will rural firms in constituencies such as mine. The plight of those firms is the burden of my short speech.

From time to time in my surgeries, I see people at their wits’ end, unable to get help with legal problems that are desperately and obviously important to them; other hon. Members must have similar experiences. For example, I have seen a lady with learning disabilities, who was married to a violent husband, and a man whose stepmother had left a disputed will, the money from which would have set him up and enabled him to escape poverty. There are so many ways in which legal problems can go to the root of somebody’s life. Unless such people can easily get advice and help, the problem of going to the law to tackle the issue that stands in their way can often be insurmountable.

My constituency of Torridge and West Devon is very rural. It consists of scattered villages, widely dispersed rural communities and a number of market towns. In those towns, there will be perhaps one or two long-established family firms. Often they do a small proportion of legal aid work, to the best of their ability and with extraordinary professional integrity in the service of their communities. They are not well paid for that work. Those firms—certainly the legal aid side of their practices—are going to face the axe. Many have written to me expressing their real concern.

If a person lives near Holsworthy or Bideford in my constituency and the one or two legal firms stop taking legal aid cases, they will have to travel 50 or 100 miles to reach somebody who will give them the service. What type of service is that for the elderly, infirm or learning disabled? How will they gain access to those services? I tell the Minister that that is a real problem even now, although the one or two firms in my area at least give me somebody to whom to send such cases.

However, if those firms’ legal aid sides go out of business, to whom will I send such cases? Thankfully, Bideford has a citizens advice bureau, which has a franchise from the Legal Services Commission, and I pay tribute to the extraordinary work that it does. If it were not for that bureau, there would be a desert of legal services in my part of northern Devon—there would be none. People would have to travel to Barnstaple, which could involve a journey of as much as 50 or 60 miles there and back, or to Exeter or Plymouth to receive the services that they needed.

I urge the Minister to understand that the measures will have a direct human impact on people whom I understood it was part of her political philosophy to defend. She will be hurting those people; this Government will be hurting those people. I find it inexpressibly sad that the measures are being rushed through. They have been introduced speedily, with no allowance for adjustment and no pilots that could have shown the effect that they will have on the fragile, rural legal services framework—and, I accept, other services in urban areas. We have not been able to see how they will work before they damage people.

I appreciate that there must be a proper concern for economy and for saving money. The legal aid budget has risen, and I completely understand why the Government wish to save money. However, they must balance that against the hurt and damage that they will cause, particularly to those vulnerable sections of our community. I speak particularly for those in rural areas.

The budget for criminal legal aid has risen by 37 per cent. in real terms in the past 10 years. Why is the legal profession providing a poorer level of service—the hon. and learned Gentleman says that firms are closing down and that it is harder for clients to get the advice that they need—when the expenditure has risen by a third in real terms?

That is a question to which I shall return this answer. First, I do not believe that a poorer level of service is being provided. Secondly, this Government, of whom the hon. Gentleman is a Member, have created several thousand new criminal offences. They introduced the Human Rights Act 1998 and presided over the largest avalanche of legislation in the criminal justice system that we have ever seen. There are 379 sections in the Criminal Justice Act 2003 alone. There are hundreds and hundreds of provisions.

I say to the hon. Gentleman that it is not surprising that the legal aid budget has risen in the criminal courts, given that thousands of new offences have been created. Furthermore, a whole layer has been added by legislation such as the 1998 Act—with which, I should say, I have no personal grouse. If the Government introduce such a measure, they must be prepared to pay for it. People will take advantage of their rights and bring cases for judicial review that they would never previously have been able to bring. The whole purpose of the 1998 Act was to repatriate rights. That meant that, rather than going to the European Court of Human Rights, people could go to the courts in this country—and they have, in their droves.

rose—

No, I shall not give way at the moment. The studies on the criminal legal aid system show that the unit cost of the individual case has not risen. What has risen is the volume of cases that have come before the criminal courts. I suspect that the reason for the rise in volume has been the massive rise in legislation, creating new rights of which people were bound to take advantage, and new offences.

My hon. and learned Friend is absolutely right. The fault is not with the lawyers. Legal aid payments to solicitors have been almost static for several years; the last pay increase for criminal legal aid was in 2001. The rise in costs is due not to lawyers claiming more money, but to the plethora of new offences created by this Government.

As a lawyer, I am willing to accept almost any fault. I am certainly not going to defend lawyers. There will always be two factors in debates such as this: the factor of professional interest and of a profession defending itself, and the genuine question of the impact on human beings. I have been trying to address the Minister about the latter one. I ask her to accept that there will be that impact, particularly in the rural areas that I represent. Small firms will go out of business. They will not find that, by merging, the access to rural legal aid services will increase. It will diminish. That is why I ask the Minister, and I know that she has been in the profession, to think carefully about whether some amendment, or pause for thought at least, could be introduced even at this stage.

My concern is for those who will be damaged, not really for the effect on the profession, which is a by-product. Large firms will be unable to take the care, trouble or time over individuals that those firms with which I have been familiar for more than 25 years have habitually done. It is on the professional energy, dedication and commitment of such firms that much of the integrity and quality of our justice system is based. If that is attacked, one of the foundations of justice in this country will be eroded and undermined. Although I appreciate that the Government do not see it as an attack, it is perceived as such across the profession. I have never known the profession in such a state of trouble, indignation and general anxiety for the services that they will be able to provide. The measure is perceived as something that will degrade the system of justice, and I urge the Minister to pause and to think again.

I, too, congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith), as chairman of the Constitutional Affairs Committee, and all the members of the Committee on producing a detailed, common-sense report.

I welcome the Minister to her new post and I hope that she took volume II, in particular, to bed with her as bedside reading. Anyone who has read all the details of the evidence that was given by people who know what they are talking about—I am not a lawyer, so I will not profess to have the detailed expertise of many of those people—can see that the Government response to that well-documented, detailed report is wrong and almost disgraceful. I am disappointed, too, that although a few minor changes were accepted and made, the report did virtually nothing to make the fundamental changes that would have made a difference. Fundamentally, nothing has changed about the underlying flaw in the way in which the fixed fee system will affect the most vulnerable in our society.

We have heard a lot today about rural areas, but I want to point out—as I and many other London MPs did in an Adjournment debate on the same topic in this Chamber on 11 January—the particular difficulties and issues in London. We asked the Minister then to consider London in a different way. I looked back on that speech and read the whole debate, and I remember that we went away hoping that there would be some changes in the light of the fact that Members from all parties expressed concerns about the changes and the way in which they were being implemented. We felt that some changes would be made and that the Government would listen. We then saw this report and that little had been changed as a result of it. It has led not only the legal profession but many MPs to question who is ultimately supposed to make such decisions.

I am distressed to discover that as an MP for an inner-city seat, where I rely so much on the valuable work done by my law centre and the many solicitors’ firms that work in legal aid, I will end up representing people who will be affected by these changes without having had a chance, in our democracy, to make my views known through a vote. That is wrong, no matter what the rules are about the Legal Services Commission and its being a quango. Ultimately, Parliament should decide on the matter, but it has not had the opportunity to debate and vote on the matter.

The Minister’s boss, the new Lord Chancellor and Secretary of State for Justice, comes from a background that leads him to know a great deal about inner-city areas and the particular and special nature of their multifaceted problems: people with concerns and issues that need legal advice and aid are linked to people with mental health problems, immigration problems and housing problems, which lead to all sorts of other problems. Those are the sort of people who will suffer in inner-city areas such as mine.

I want the Minister to tell us, in particular on the question of London and other inner-city areas, whether she thinks, having listened to what everyone has said and having read the report, that she can be absolutely confident that the changes will not affect the most vulnerable. I certainly think that they will and I know that the people who have the experience in my constituency think that they will.

Let me repeat what I said in January about the overall legal aid budget. Of course, more money has gone into legal aid. Although a few people laughed, the hon. and learned Member for Torridge and West Devon (Mr. Cox) is right. There are some 3,000 more offences. Many of the people involved in those criminal offences have also been caught up in the net of some of the other issues to do with immigration and mental health problems. Of course that has led to more demand for legal aid. Legal aid solicitors are not being paid more and making huge amounts of money. There is more work—we know that from our surgeries. There is more work, and that relates specifically to some of the changes in the law and the Human Rights Act. It does not mean that we are against the Human Rights Act if we simply point out that it has led to more cases.

My hon. Friend the Member for City of York (Hugh Bayley) sought to imply that the rise in cost was wholly down to solicitors making more money and, perhaps, charging inflated fees. Is it not a fact that, as my hon. Friend the Member for Vauxhall (Kate Hoey) has said, there has been much more immigration work? My immigration caseload has gone up three times in recent years. There are also the increased costs of specialist witnesses and those caused by bad organisation and waiting times at court.

My hon. Friend is right. We have a similar caseload. All London MPs who represent inner-city areas know that the volume has increased. It is not fair and not right to put the blame onto somebody else for causing the problems.

I have heard what various hon. Members have said about increasing expenditure being down to volume increases. Obviously, there is some element of that, but it is not the whole explanation. Child care case costs, for example, rose 24 per cent. in real terms over the past five years. Private law children’s cases rose by 5.75 per cent. in real terms. Crown court cases expenditure rose 65 per cent. with little change in case volume. Although case volume has some part to play, it is not the whole explanation.

I do not think that any of us said that it was the only explanation, but it is a major aspect. The Minister’s figures show that. If we are serious about access to justice for those people who need support and legal aid, we should all agree with the previous Lord Chancellor, who said at the Law Society on 13 October last year:

“Free access to justice for those who need legal aid is as integral to the Welfare State as the NHS or state education.”

If we all share that view, which I hope we do, we have to face the fact that maybe the cost will have to increase. I am concerned that the cost will continue to rise because of the factors that have been mentioned, but that the quality of service will be greatly reduced. The cases of the people whom I represent, who need specialist help, will take a lot longer than those of people who do not need extra help and support. They will therefore be more costly. Many solicitors’ firms in my area have already had to stop doing legal aid cases, because some of the smaller firms just cannot afford it. There will still be some solicitors and support available, but not nearly as much as is needed, and they will not necessarily give good value.

Of course the Government want to streamline the legal aid system and make it financially workable, but under the proposals fewer cases will be taken on. Solicitors taking them on will want to turn them over as quickly as possible and get on to the next one, and individual need will not be considered. Rather than create access to justice, the proposals will create an even greater underclass in our society, consisting of elderly, sick, disabled and illiterate people, many of them from ethnic minority backgrounds. They will simply not be able to obtain access to solicitors. In the words of one legal aid solicitor in my constituency:

“These are the people who require our support.”

There is a theme running through some Government comments. They almost imply that any solicitor is just out to make a huge fortune and that they are all fat cats. A solicitor in a practice in my constituency wrote to me, saying that he trained in the City and took the conscious decision to work in legal aid to help other people. His colleagues in Lambeth are like-minded and he says that

“there is a genuine commitment to society. In contrast to the public image of legal aid solicitors we work long hours and could earn substantially more money elsewhere with the skills that we have. However, we have taken the decision to act for what is essentially a public service.”

Those dedicated public servants, who do a job that we know is necessary, are going to feel very much let down by the Government if the Government do not listen. There should be a vote in the House and some radical changes, which should be on a much longer time scale so that, as the Committee has said, we can test them properly and evaluate what they will mean.

I urge the Minister to be brave and do what the Prime Minister did on Wednesday. He came to the House and said that he has, quite rightly, changed his mind on large casinos, a policy that a few Labour Members and Opposition Members opposed. We got into trouble with our Whips for opposing Government policy on super-casinos, but we were right all along. I ask the Minister not to let legal aid be an issue on which the Government ultimately have to change their view when they see the catastrophe that it will cause in constituencies such as mine. They should change their view now and use the opportunity of a new Prime Minister, a new Lord Chancellor and a new Minister to listen to the people who really know what is going on.

A considerable number of Members wish to speak, so if hon. Members keep their speeches short we may get them all in.

I will be brief, because I want to ensure that everybody gets in. The attendance here, the volume of correspondence and the briefings that we have had indicate just how much of a crisis currently surrounds legal aid. Crucially, the issue is access to justice for the very poorest and most vulnerable people in our society. The comments of each Member who has spoken have reflected that point.

I start from the point of view that if we deny people access to justice because they cannot get legal aid, and if they do not get a fair hearing in divorce, immigration, housing or criminal cases, we are effectively saying that they are not good enough to get any kind of justice. If we believe that the law is there to bring about justice and should have some degree of equality in its operation, we must be prepared as a society to spend a great deal of money on legal aid to ensure equality of representation when a case finally gets to court.

I represent an inner-city London constituency, which, like those of my hon. Friends the Members for Vauxhall (Kate Hoey), for Hackney, North and Stoke Newington (Ms Abbott) and for Hayes and Harlington (John McDonnell), has the perverse characteristics of fantastically fast-rising house, land and business prices, very high costs of running any business and an increasing sense of isolation and deprivation among many people. In the midst of all that, legal aid firms face a combination of factors. One is lower income, another is greater demand on them and yet another the people who end up in our advice bureaux. I was doing an advice bureau this morning for people with really serious problems. I am sure that all Members do this: we ask someone in an immigration case who their solicitor is and they say, “Haven’t got one. Don’t know where to get one. What can I do about it?” I sometimes then start ringing round local solicitors to get them to take cases on. It is not the function of an MP to go round finding solicitors for people—it ought to be a relatively simple process.

I would be grateful if the Minister considered in her reply the related issue of access to the advice that goes with legal aid. She can write to me on it if she prefers. I find that people increasingly get into all kinds of serious legal problems on housing, immigration, divorce and so on because they do not have adequate access to basic advice in the first place. Funding for people’s rights groups, citizens advice bureaux or whatever there happens to be in a given locality is important.

The Select Committee described well in its report a lot of the issues involved. Its points should be read carefully, such as the one that it was breathtakingly risky to go ahead with the reforms. I took part in the debate in this Chamber a few months ago, and in today’s debate there is a sense of déjà vu plus. We are all making more or less the same speeches, but we are six months further on and have the experience of what has happened in our communities as a result of the changes.

I shall quote from a letter that I have received from Islington Law Centre, which shows one of the reasons why legal aid is at crisis point. The letter urges me to get involved in the debate, which I am happy to do. The law centre is very good and the people there work incredibly hard. Nobody there is particularly well paid and they are totally dedicated, just like most legal aid solicitors all over the place. I do not draw a distinction between somebody who works in a law centre and somebody who works in a legal aid firm—they usually have an equal commitment to the community. The issue of funding is serious, and the letter states:

“While general inflation has risen by 43 per cent. since 1993, legal aid rates have been increased by less than 10 per cent.”

Ruth Hayes, who wrote the letter, says:

“I started work at the Law Centre in 2001, and we have received an inflationary increase in our legal aid rate only once since I have been here—5 years ago. As we have not received an inflationary increase from any of our other funders, it is a massive struggle every year to maintain our services.”

I know that, because I ring up the staff to ask them to see people who cannot get a lawyer anywhere else, and they have a problem dealing with such cases. It is up to Parliament to do something about that, and I hope that the Government are listening to such concerns and understanding them.

I have a letter from another firm, which is quite well known and not local to me. It points out:

“As things stand we have already taken steps to shed staff in our Housing, Community Care, Family (including Children cases) and Mental Health Departments.”

That is the story for legal aid firms across London. The big firms that do a proportion of legal aid cases are continuing to do so only because they can cross-subsidise within the firm—not because there is sufficient funding but because they can afford to. However, I have a number of legal aid solicitors’ firms in my constituency, as I am sure colleagues do, in which sometimes as much as 90 per cent. of the work is on legal aid. If the cuts go on, they will have to close down and we will lose the benefit of them.

After the last debate, I took the opportunity of writing to every solicitor’s practice in my constituency. I sent them a questionnaire and asked them to outline what they did, whether they had signed the new contract, what they thought the effect would be on their clients and whether they would be prepared to take part in a repeat exercise in a few months’ time. Many companies replied. All of those that replied had signed the contract, but they pointed out that they had been unwilling to do so, it was done at the point of a gun and so on. They did not do so willingly.

On 16 May, Deighton Guedalla and Company replied to my questionnaire. I asked what the effect of the new regime was likely to be on finances, training and so on, and the company replied:

“Effect is likely to be adverse, and is already felt as such in terms of uncertainty which makes future planning almost impossible. We are uncertain whether and for how long we can survive.”

Deighton Guedalla is a good, effective local company. I could read out all the survey reports, because they say much the same kind of thing.

Colleagues may have done similar surveys of local firms in their constituency. I have a quote from Islington Peoples Rights, which is a very effective, popular voluntary organisation. It has a legal aid contract. My questionnaire asked:

“What is likely to be the effect on your clients?”

The reply was:

“Lack of support to enforce their rights, financial exclusion, further marginalised communities, negative effects on improving child poverty.”

There are so many more responses like that one.

I had a letter from a local legal aid solicitor, Greg Foxsmith, who referred to a meeting of legal aid lawyers that he had attended the day before in Conway Hall, at which it was said that allegations about the top 10 high-earning barristers had been used to an absurd degree by the media and others who go on and on about the gravy train for fat-cat lawyers. I do not doubt that there are fat-cat lawyers. I do not doubt that those who represent the Beckhams and other such people in this world probably make a lot of money. There is a difference between the world of the rich and the famous for being famous—those who are famous because of their barrister—and the reality of life for ordinary people whom we have been sent to Parliament to represent. I wish that we could separate the two and seriously review the consequences of the changes that have been introduced.

Access to Justice Alliance set out a good summary of the issue. It asked, what is the point of legal aid, and said that it was the supply of advice, accessibility of legal aid services to all ethnic groups, local networks of organisations that provide help and support to vulnerable people, and quality of advice.

Given that good advice and those sound points, it is important that the Government recognise that the Carter review came along, there were warnings about problems, and problems occurred. There was a debate in this very Chamber when prescient warnings were given. The Select Committee published a report—and a very good report it is, too—and here we are again, having another debate.

We have a new Minister. I compliment her and congratulate her on her appointment. She has a real chance to do something about the situation by listening to those who work day to day in this field, by understanding the problems that they face, and by understanding that, in the present atmosphere, the reality is that the people who are being short-changed and treated the worst are those who have already been short-changed and treated the worst by society as a whole.

If we are here for justice, we must ensure equality of access to justice. That is what I want. That is why I ask the Minister to think seriously about the Government’s response to the Select Committee report, and to give us some hope when she replies that there will be a rethink on the contract and the funding, and on accessibility to advice services in constituencies and communities.

I shall conclude with this point. I have represented Islington, North since 1983. When I was first elected, the borough had three law centres, two citizens advice bureaux, a large number of community advice organisations and an effective welfare rights organisation run by the local authority. In other words, many people could get access to advice. Therefore, benefit take-up rates and all the other things that go with that were high.

The borough now has one law centre, no citizens advice bureau—the last one just closed—Islington Peoples Rights, which does its best but is flooded by demand, and legal aid solicitors who do their best. I suspect that many people, particularly those whose first language is not English, have no access to any advice or the benefits that would come if they were to get advice, and no access to legal aid because of the shortage of legal aid provision. It is up to us, as Labour Government Members, to ensure that those people in our society do not go under-represented and short-changed.

Legal aid is a very necessary service, and legal aid lawyers do a fantastic job on behalf of the clients whom they represent. Few earn large salaries for the work that they do. However, none of those incontrovertible facts is a reason not to curb excesses within the legal aid system, or to seek better value for money in a public service for which expenditure is rising a great deal faster than the rate of inflation.

The problem with legal aid is that almost everyone who has anything to say in the debate has a vested interest in increasing the amount that is spent on it. [Interruption.] I know that some hon. Members disagree with me. I have listened patiently to their views, so I hope that they will have the decency to listen to a different point of view.

My comment about vested interest applies to lawyers and to members of the public who qualify for legal aid. It applies to the courts, the police and many pressure groups.

I am neither a lawyer nor, because of my income as a Member of Parliament, do I qualify for legal aid. What is my vested interest?

I said that almost everyone who has anything to say about the matter has a vested interest. The hon. Gentleman makes a debating point. He has looked at the evidence in front of him and reached conclusions, but I ask him to listen with an open mind to someone who has reached conclusions that are different in some respects.

The consequence of the nature of the debate that we have had in this country about how we provide legal services for those who cannot afford to pay for them themselves has left us paying more per capita—

Owing to the time lost through Divisions, the debate is now scheduled to finish at 6 pm.

Given the reaction of the Chairman of the Select Committee to my opening remarks, I feel a little as I did when, in front of an audience that included many Yorkshire miners paid by their union to attend, I argued the case, against Arthur Scargill, for the Labour party abandoning clause 4 of its constitution, which committed us, in those days, to the nationalisation of the means of production, distribution and exchange.

Whatever the reasons, the legal aid budget for England and Wales is larger per capita than that for any other country, and, therefore, it is not self-evident to me that the way to deal with the problems facing the legal aid system is simply to increase the budget. That might be necessary, but so too is radical reform of the budget. The Government are right to seek to limit the rate of growth in the budget and we, as Members of Parliament, have a responsibility to taxpayers to ensure that they receive value for money from taxes paid for the legal aid fund, as we seek value for money from other taxes.

My hon. Friend the Member for Islington, North (Jeremy Corbyn) said that he is irritated by reports in newspapers of legal aid lawyers earning more than £1 million a year from legal aid work. Like him, I accept that few lawyers earn such remuneration from legal aid. Recently, I read a report in a newspaper that listed the top 10 earners from legal aid, one of whom, I believe, earned more than £1 million. Frankly, I find it extraordinary that any lawyer, who inevitably will be an educated man, could be so out of touch with the lives of ordinary people that they believe that it is fair to accept remuneration of £1 million—in some cases, more—as recompense for their contribution to society through representing clients in the courts. That is four times the remuneration paid to the highest paid doctors in the NHS, the Prime Minister or the highest paid judges.

Doubtless the vast majority of solicitors practising in my constituency would share my incredulity, because they earn a tiny fraction of that level of remuneration, especially if they are working on legal aid. Nevertheless, I believe that there is an urgent need to rebalance the way in which the legal aid budget is spent. For instance, I suggest that the Government set an upper limit, perhaps of £100,000 a year, on the amount that can be paid to a lawyer for legal aid work. Any legal aid work done beyond that should be pro bono.

I am surprised that a self-confessed Labour moderniser is calling for a return to a prices and incomes policy. He is utterly transparent. He has made it clear that the purpose of this so-called reform is to cut costs. If it could be proven to him that that would impact very unfairly on black and Asian lawyers and clients, would he say that it was a price worth paying?

My hon. Friend makes an assumption; I shall listen carefully to her speech to see if she provides evidence with which to back it up. If the small number of legal aid lawyers earning hundreds of thousands of pounds would not wish to carry out that work if their maximum remuneration was £100,000 or less, plenty of other legal aid lawyers would be prepared to do it, and many of them would be black or Asian.

I cannot accept that a public service should pay Rolls-Royce prices. My hon. Friend the Minister, in a previous job, ran the Motability car service for disabled people, which buys decent, safe, appropriate, sensible and necessary cars for disabled people, but nobody would suggest for one minute that such a service, paid for out of the public purse, through disability living allowance, should provide Rolls-Royces. If it did and, therefore, left less money in the budget to provide ordinary, necessary and serviceable cars to other disabled people, it would be malfunctioning. To make that comparison, I believe that the legal aid budget is malfunctioning.

If the hon. Gentleman took a straw poll of solicitors in this country and offered them £100,000 a year, they would be falling over themselves—they would bite his arm off. Most of them are being paid a fraction of that, as he has said already. I do not understand the bearing of the suggestion that there should be a cap. Most are earning far below that.

The point is that if we have a system that overpays some and leaves insufficient money for the rest, we ought to limit the overpayments so that more is available for the others.

We need to find ways to build incentives into the legal aid system to reduce unnecessary expenditure. For example, some cases come to court only because legal aid is available and could be settled properly and justly if they did not. Let us look at some family law cases, which account for the largest part of the civil legal aid budget. The National Audit Office produced a report in March of this year, entitled “Legal Aid and Mediation for People Involved in Family Breakdown”. It states:

“The average cost of legal aid in non-mediated cases is estimated at £1,682, compared with £752 for mediated cases, representing an additional annual cost to the taxpayer of some £74 million.”

I am grateful to the hon. Gentleman for giving way, because he raises a quite important point. Indeed, the Committee has in the past drawn attention to the fact that legally aided parties in such proceedings are required to consider mediation before they can get legal aid, whereas a non-legally aided party is not so required by the court and therefore will take the matter to court.

The Chairman of the Committee is right, but the NAO report, as I am sure he is aware, found that 33 per cent.—one third—of legal aid recipients said that they had not been made aware that mediation was an option, even though there is a statutory requirement to consider referring cases to mediation. If the Government are paying legal aid lawyers to do a necessary job of work for people with family law cases that are being brought before the courts, we should at the very least require them to do what they are statutorily bound to do—to advise clients in most cases to try mediation. Of course, there will be some cases of domestic violence in which that would not be appropriate. The NAO, in its report, recommends that the Legal Services Commission should “actively promote mediation”. Will the Minister say what action is being taken to give substance to the NAO’s recommendations?

I believe that more radical change is needed than the Government or the Committee is considering. I would like the Government to consider contracting out management of legal aid to not-for-profit bodies, which have their clients’ interests at heart and which would benefit from maximising the number of clients who receive advice for the money available. I know that that is done in part by contracting services out to citizens advice bureaux, but why is that not done also to National Family Mediation or possibly to the Refugee Council?

I have been lobbied by solicitors in York to sign early-day motion 537, tabled by my right hon. Friend the Member for Leicester, East (Keith Vaz). I studied the motion closely, but decided not to put my name to it because I took the view that it was tabled on behalf of the producer interest—that of the Law Society—and that it took too little account of the public interest, the interests of members of the public, including my constituents, who pay for the service through taxation. However, I have talked with solicitors in York and examined their concerns in great detail and I agree with other hon. Members that the solicitors working in this area have some real concerns that need to be addressed and some constructive proposals about how to deal with those concerns. I know that time is at a premium, so I shall be brief.

I wrote on 1 June 2007, on behalf of Kevin Blount, a solicitor in my constituency, to the Minister’s predecessor, who is now the Solicitor-General, to make the case that the Legal Services Commission should allow lawyers in a wider range of rural areas to claim for travel in addition to their fees. That is necessary because if the LSC continues to include travel in fees, that will lead to fewer remand prisoners seeing a solicitor before they appear in court and that could be costly in terms of court time and lead to an overall increase in expenditure. In addition—this follows a point made by my hon. Friend the Member for Islington, North about waiting time in court—including waiting time in a bundled fee will, in my view, place lawyers in the unreasonable position of having to bear the cost for court or police failures to process cases efficiently.

I look forward in due course to the Minister’s reply in writing to the letter that I have sent to her Department and I look forward to her response to the debate. I say to my colleagues, who, by and large, appear not to share my view about this matter, that reform of the legal aid system is necessary. Additional money may well be necessary. The hon. and learned Member for Torridge and West Devon (Mr. Cox) made the point that the Government are bringing more criminals to court—there are more cases in front of courts—and therefore there is greater pressure for criminal legal aid. I accept that point, but to see the answer simply as more money would be a grave mistake and not in the service of the public.

The hon. Gentleman has been generous with his time and I am extremely grateful, but I wish to make the point—

To ask the question.

I am most grateful to you for reminding me of that, Mr. Martlew.

Does the hon. Gentleman not accept—in fact, he said this himself—that very constructive proposals have been made not only by the solicitors’ profession, but by the Bar? The problem is not so much that the legal profession does not accept the overpowering need to achieve economy, but the speed with which the proposals are being introduced, the way in which they are being introduced, the changes of proposals and the abandonment of graduated fees, which have been proved to work and to allow control of costs. The Government are rejecting all that in favour of a steamroller approach.

I most certainly agree with parts of what the hon. and learned Gentleman has said. The problem with this debate is that it has polarised into a debate about capping the budget on the one hand and breaking the cap to provide justice for people who need legal aid to take their case before the court on the other hand. A truly just solution needs also to take into account the interests of the taxpayers, who are paying for a public service whose costs are rising faster than the rate of inflation. A real and just solution will require a combination of both those factors.

rose—

Order. Three Back Benchers wish to speak, and I would like to start the winding-up speeches at 5.25 pm, so you can figure that one out for yourselves. I call John McDonnell.

I shall be extremely brief then, Mr. Martlew, and simply place on the record the concerns that my constituents have on this matter. I have received representations from the local citizens advice bureau, Hillingdon legal resource centre, of which I am a former chair, Hillingdon women’s centre, the Middlesex Law Society and solicitors too numerous to mention. All of them are unanimous in their view that the proposals may well undermine the service that they provide to my constituents and therefore undermine and impede access to justice.

I share the Government’s previous stated view that legal aid is a central plank of the welfare state. In any democracy, people need to ensure that they have the right of legal redress. I also share the concerns of my hon. Friends who are anxious about the control of public expenditure but, to put these matters in perspective, we are talking about an increase in public expenditure that is less than 0.5 percent. of the amount that the Treasury has calculated for tax not collected as a result of tax avoidance, particularly in relation to big business in the City. I agree that we need to ensure that we control public expenditure, but it should be on the basis of need. We should ensure that there is a proper assessment of the need for legal advice and legal aid and, on that basis, calculate what the public expenditure should be.

The concern that many of us have, which comes through in the report, is that, rather than undertaking a proper, rational assessment of need—the report refers to the drivers for the increase in costs—we have fallen back into an old politics style of addressing the issue. I regret that. I regret, for example, that before the debate, there was spin about fat cat lawyers and so on, which was not really the issue that we wanted to address in our discussions. The Government have followed a pattern, similar to that followed in other exercises, of establishing a review by a prominent individual whom, to be frank, they are confident will respond in a way that the Government would expect and wish, and then undertaking a consultation in which the vast majority of responses express severe reservations about the Government’s proposals yet they are largely dismissed. I think that a large number of people working in legal services feel that the whole process has been set up and that the solution of a market-driven approach was not arrived at as a result of rational debate or discussion, but was plumped for initially.

I share the concerns of my hon. Friend the Member for Southampton, Test (Dr. Whitehead). We have all experienced, in our different walks of life, the introduction of systems that are market-based rather than focusing on the provision of public services, and we have seen what happens: initial cost-cutting followed by a virtual monopoly. In the end, with such systems, there is neither the delivery of service nor the cost savings that were expected in the long run. Indeed, many such public services have been undermined as a result of that approach.

I simply ask that now, with the new Prime Minister, when there is an attempt to demonstrate that the Government have learned the lessons of past, similar exercises, especially in relation to the need for change, with involvement in Government decision making, the Minister will consider having a moratorium on the implementation of some of the proposals. Will she consider some of the fresh ideas that have been suggested? I agree that there could be prospects for caps on earning levels, but alternative mechanisms have been suggested by legal service practitioners on the front line that could achieve the reforms that the Government want, while delivering effective services and providing value for money. However, I do not relate that to the control of overall costs, because if the need is there, we should spend the money to ensure that that need is satisfied.

Will the Minister reconsider? There has been a long process of debate on this issue, and appeal after appeal has been made in this Chamber and elsewhere for it to be re-examined. What would it cost the Government to give us another few months in which we could come up with a consensual solution and take with us not only the legal services community, which is arguing for some form of dialogue with the Government, but all those in our communities who are deeply concerned about the Government’s approach to this matter?

I am not a lawyer, and neither am I here to represent the producer interest—to use a rather distasteful piece of jargon. I want to talk about the thousands of people whom I have dealt with in my 20 years of representing one of the poorest areas of the country, who would have faced disaster in their personal lives, with housing and access to their children, for example, without receiving quality legal advice that was paid for by legal aid. In the inner city, legal aid is not a luxury frill, but a pillar of the welfare state.

I shall speak specifically about the plight of black and minority ethnic solicitors, partly because it sheds a light on what is problematic about this whole reform. My hon. Friend the Member for City of York (Hugh Bayley) disputed whether the Carter reforms will have an unfair impact on black and minority ethnic solicitors. Of course, we do not really know, which is why some of us are calling for a pilot scheme, at least, or a proper race impact study. People who should know, however, such as the Law Society and different bodies that represent black and Asian solicitors and lawyers, say that black and ethnic minority solicitors will be decimated by the Carter proposals. That is also what the Committee’s report says. In their response to the report, the Government say:

“The evidence in the regulatory impact assessments suggests that the impact of some of the civil, family and immigration fee schemes on BME managed providers is somewhat greater than that on white-managed firms.”

I must tell my hon. Friend that the people whom I know who were involved in fashioning the Carter reforms concede freely, in private, that of course they will have a disproportionate impact on black and minority ethnic firms. That is why I asked whether he, with his particular family background, thinks that is a price worth paying.

Some Members might ask whether it really matters that black and minority ethnic solicitors will be decimated if it means that taxpayers in York will pay less tax. I say that it does matter, for several reasons. Black and minority ethnic solicitors, especially those in London—I accept that the issue might look different in inner-city Brixton, Hackney and Islington than it does in York—add value to our legal and justice system. Many members of the ethnic community prefer, rightly or wrongly, to go to such solicitors. My hon. Friend will remember the Lawrence case; a brilliant minority ethnic solicitor took that case and drove it forward, when there was not necessarily any money in it, and made sure that Doreen Lawrence got justice for her dead son. She chose that brilliant solicitor, but she might no longer have that choice under the proposals that my hon. Friend supports.

Black and minority ethnic solicitors add value through their language skills, their understanding of the community and because some members of the community are more willing to go to them than others. In Asian communities in Blackburn, for example, many Muslim women are trying to pursue divorces, and they simply would not go to a white, male solicitor. They want to go to a solicitor with whom they feel comfortable. Black and minority ethnic solicitors bring added value, but if we remove the choice to go to them by decimating the profession, we will affect people’s access to justice. That is the basis of the court case that the Government currently face.

Will my hon. Friend give way?

I am afraid that time is against me.

Black and minority ethnic solicitors are an important ingredient in bringing more diversity to the profession, as they are more likely to engage black and minority ethnic barristers. That is why the Society of Asian Lawyers is engaged in the legal action against the Government. If we decimate the base of such solicitors firms, we will indirectly affect the career chances of those barristers. How in the world are we to have a more diverse legal system and judiciary if we, as a Government, are taking a hammer and smashing the base of the profession for black and minority ethnic solicitors?

I remind hon. Members that the reason why many such solicitors set up their own firms was because, sadly, they faced institutional racism in the mainstream profession. So, what is the response of my Government in 2007? It is to turn around and say, “You tried, you struggled, you set up your high-street firm because of institutional racism, but we are going to break it up with ill-thought-out, untested, market-based proposals.”

In addition, many black and minority ethnic solicitors are small entrepreneurs on local high streets who help to build community cohesion. For all the reasons that I have given—added value, access to justice, the importance of diversity and community cohesion—it would be very dangerous to go through with the proposals without first introducing the pilots that my hon. Friends have suggested.

Community cohesion and access to justice are important for all our people—both the taxpayers of York and people on benefits in Hackney, Brixton and Islington—and are as important as the concerns of those taxpayers in York. Even at this late stage, the Government should be prepared not to give up on reforming the legal aid system. No one who has spoken is against reforming the system; the only query is about what to reform—but at least the proposals should be tested. They could then come back and reassure us that our worst fears are unfounded; otherwise, they will stand as having taken a hammer to one of the pillars of the Beveridge welfare settlement, which would be a very sad thing to do.

It is a pleasure to take part in the debate. I have a registered interest as a non-practising solicitor. Before I was elected to Parliament in 1997, I was a solicitor. As it happens, for 20 years I was mostly a legal aid solicitor working on cases relating to families and children in care. As such, in my first 10 years in Parliament, it was noticeable that other hon. Members spoke about lawyers in derogatory terms. Indeed, I often heard hon. Members say that there were too many lawyers in this place, and they did not mean it as a compliment. It has therefore been heart-warming to hear the recognition and solidarity shown to legal aid lawyers in this debate. I can certainly confirm, from personal experience, that we are—or, in my case, I was—motivated by a deep commitment to our communities and social justice before personal profit and advancement.

The people to whom we are showing solidarity are not just lawyers in private practices and solicitors firms, but people in the not-for-profit sector. Indeed, hon. Members have mentioned citizens advice bureaux and law centres. Much of the valuable social justice and social inclusion work in the sector goes on in those settings.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) reminded us at the beginning of the debate that the legal aid system in England and Wales still has something of which we can be proud. We probably still spend more on legal aid per head of population than any other system in the world. The reach of our system is probably as good as anything in the world. All those years after the founding of a legal aid system after the second world war, we still start from a position that has something in which we can take pride. However, we stand on a precipice where decisions may be made that would throw away that pre-eminent position. Who would want to be responsible for making such a decision? Not I, and hopefully not this Minister. We are all trying to help her to avoid such a mistake.

The debate has been helpful in reminding us that we are debating two possible developments in the future funding of legal aid. The longer-term one, although it is not so far away, is the Carter proposal, red in tooth and claw, of competitive tendering to decide who delivers legal aid services. That is untried and untested. It cries out for piloting first, so I add my voice to those who have said that it should be piloted. The right hon. Gentleman reminded us about the transitional system that might get us from where we are to that arrangement. The crude fixed fees that are being proposed are in danger of causing great damage.

There might have been reactionary forces in the legal profession who wanted this all to go away and said, “Leave it as it is. It is not broken, so do not try to fix it. It is okay.” All those voices have long since ebbed and died. When preparing for this debate, it was instructive to see the briefings from the Bar Council and the Law Society about how they have recognised the need for change. They have put forward positive proposals that meet their members’ concern for certainty in respect of an amount of money from which they can make a living, and the Department’s concern for certainty in respect of the outcome of its expenditure. That all relates to a system of graduated fees. We ought to consider more closely replacing the fixed fees that are being proposed with the graduated-fee scheme around which everybody has eventually coalesced.

What will the consequences be should we get this wrong? The Access to Justice Alliance, which is a deep and broad alliance of all those with a real interest in this area, comprising many people who are friendly towards and supportive of the Government and want them to make the right decision, reminds us that the regulatory impact assessment points out that the effects of standard fixed fees will be most acutely felt in London and by the not-for-profit providers. In addition to those, the areas that can expect the biggest adverse effects are Reading, Cambridge and Bristol.

My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) referred to the negative impact on black and minority ethnic communities. In that regard, the areas that can expect the most significant detriment are London, Birmingham, Leeds, Manchester, Reading and Cambridge. We are not talking about a narrow danger—it is widespread and will be deeply felt.

I also want to examine a couple of areas relating to the complexity of law. The present proposals for fixed fees run the risk of undermining the delicate balance involving those lawyers who are committed to carrying out the work. My experience tells me that the first such area is child care proceedings. That is a concern for the Minister because of the increasing costs of individual cases; the unit cost has risen. Nevertheless, if we do not have the commitment of the lawyers who do the careful work required in those cases and if we are not careful, people will be compelled by the fees that they will receive to cut corners, reduce the amount of work that they do or leave the area altogether and thus leave too few lawyers who are able to do that work. For similar reasons, great detriment is likely to be caused in mental health law, where cases require patient, detailed work with clients and incredible amounts of investigation to get the outcome right.

My hon. Friend the Member for Hackney, North and Stoke Newington has mentioned the risk to lawyers’ black and minority ethnic clients. I want also to point out the danger to lawyers’ disabled clients. They are a specific group who require attention and detailed consideration, and they would not get that under the fixed-fee proposals.

One hon. Member mentioned rural communities as a whole, and I want to underline that point. The future vision might be one of large-volume suppliers of legal services, but there is no way that the practices that exist in rural areas can be those large-volume suppliers. Practices will go out of business and people will have to travel a long way to find a lawyer willing to help them.

All those comments come from my background, my taking part in debates such as this and my correspondence with the former Minister responsible for this area, but I want to mention constituency pressures. My citizens advice bureau gives astonishingly good value. It is a shoestring organisation that delivers high-quality law in many social law areas of practice. It is already warning me that it faces stopping some of its activities because the fixed fees would not cover them.

That is a worrying fact for me to face. Cathie Halliday, a lawyer who carries out legal aid in my area, has had the gumption to collect a public petition of objections to the changes and led a day of action outside court, in which lots of legal aid lawyers participated. Such activities on the part of lawyers in my constituency are unheard of.

A good friend and long-standing colleague when I was a lawyer, Neil Robinson, is now an experienced family lawyer and sometimes a district judge. He is particularly strong on mediation, and he warns me of the dangers for mediation cases if the fixed fees go ahead as planned, especially in respect of the not-for-profit sector as opposed to private lawyers. He is writing an article for the Family Law Journal this month expressing his fears about what might happen in mediation cases.

Bearing in mind what my hon. Friend the Member for City of York (Hugh Bayley) said about the National Audit Office report that points out the financial benefits to the legal aid system of encouraging more take-up of mediation, and the Government’s stated stance of supporting more mediation, it seems ridiculous to take the risk of mediation going backwards under these proposals.

We should not get fixated on these schemes. Many other solutions to the problems of pressures on the legal aid system exist. One is increased use of mediation. We must get to grips with the high-cost cases and understand the reasons why the child care cases are becoming so expensive. We must examine the way experts are instructed and used and the other disbursements that are increasingly coming under a legal aid heading despite their not really sitting there. We must also examine this place’s responsibility for creating new laws, for making the law that courts have to implement more complex, and for creating delays in the court system, which several hon. Members have mentioned.

My hon. Friend the Member for Southampton, Test (Dr. Whitehead) sought to make his point by comparison with the waste sector. I should like to make my point by comparison with national health service dentistry, which was a good scheme until the early 1990s, when a disastrous contract drove many state-funded dentists away from the system. When the impact on the public was realised, a new Government tried to bring those dentists back with a new contract, but they had either left the system completely or had become comfortable with the ways in which they had become ensconced, and they did not want to come back to help us out with national health service dentistry.

I fear that exactly the same situation might occur: that we will drive away lots of legal aid lawyers and find out that there is a disaster in terms of services to the public, and when we want the lawyers to come back and we throw more money at the problem, they may not want to come back. Plenty of alarm bells are ringing and I hope that the Minister will listen to them.

This has been a remarkably powerful debate—I include the previous speech in that comment—which has had a clear message. The hon. Member for City of York (Hugh Bayley) is perhaps the exception in that regard, but it was noticeable that even he was not agreeing with the Government’s proposal. He was putting forward a different set of proposals which, admittedly, would not go far. I doubt whether he has worked out how much money would be raised by his cap, but I suspect that it would be only 1 to 2 per cent. of the budget. Nevertheless, he was not supporting the Government’s ideas.

I served on the Select Committee during the writing of this report. Technically, I still serve on it, although I am in the process of extricating myself. I voted for the report and agree with every word of the speech made by my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith).

Many hon. Members have mentioned the key thing: going back to the purposes of legal aid. Its main purpose is to allow people to vindicate their rights. I am talking about those who would otherwise not be able to do so because of their lack of funds. I believe that that is central to the whole idea of legal aid; otherwise we would spend our time in this place passing laws that would be meaningless. I think that one hon. Member said that civil liberties and all the welfare rights that we can think of would be illusory if people could not enforce those rights in the courts.

The second theme of legal aid is equality and to ensure that people are not put at serious disadvantage in the courts because they are poor. That is a fundamental principle that we should fight for. It applies in housing law, social welfare law, immigration law and, above all, criminal law where criminal defendants face the states’ might and resources. Criminal defendants are perhaps the most unpopular group of people, and the civilisation of society can be measured by the extent to which it sticks up for the principle that criminal defendants, no matter how unpopular, deserve a fair trial.

The Government’s concerns are budgetary. There is no doubt about that. One of the odd background facts is that the budget would seem to most people to be demand-led—the number of people who need legal aid, especially in the criminal law, is the number of people who are brought before the courts. That is completely outside the control of those in the legal aid sector. A budget that is largely demand-led is counted by the Treasury as not being demand-led, but as part of the departmental expenditure limits, so unlike other demand-led budgets—for example, benefits—the Department must keep within annual spending limits even when it has no control over the calls on that budget.

The overall cost of legal aid has risen sharply since the late 1990s, although more recently the budget has fallen back slightly. The Committee stresses in its report, as I want to do today, that the Government do not know and the Committee could not find out why that has happened. We know what is not a problem. The community legal service is not a problem, because it is rising by only around 0.7 per cent. a year. We know that it has nothing to do with the lower criminal court defence services because payments in that area and the magistrates courts are falling. There is an increase in payments for police station attendances, but almost all of that is explained by the increase in the number of people arrested.

The problem seems to be in three places: first, in the higher criminal courts—the Crown court and above—where the cost per case is indeed rising; secondly in child care proceedings, as many hon. Members said; and thirdly, in the administrative costs of the Legal Services Commission. Little is understood about any of those three. There is speculation about the place of expert witness fees in child care proceedings, delays caused by other organisations in the system, and ideas in the system about degrees of certainty that cannot be achieved.

No one knows for sure the causes of the increases, and it is reckless—the Committee used that word—to go forward with the changes without understanding the real reasons for the budgetary problem. The Government’s solution is that if they cannot do anything about the case load, they can only reduce the spend per case. Everyone recognises that the danger of reducing the spend per case without understanding the causes is that quality of advice and representation will be reduced. The essence of the Committee’s criticism and my criticism is that the Government have not gone about the task rationally. They have not tried to discover the cause of the budgetary problem and to deal with it; they have simply adopted an across-the-board solution as a quick fix.

That quick fix is the average fixed fee system, and the idea is that firms and providers will absorb all the risks of variation in costs. There are two big variations in the cost of cases. One is the complexity of the case and lawyers’ ability to deal with it. The other is the needs and requirements of the clients: their need for interpretation and translation, and so on. All the variations in those complexities, both legal and concerning the client, are borne by the providers under the fixed-fee system. The Government say that that does not matter because the fees will average out, but firms must bear the risk of that averaging out.

There are three big problems. One is cherry-picking. Providers may take on only the cases that they can deal with within the fixed fee and let the others go. We know from other attempts at out-sourcing that that happens. The Government say that they will deal with that with the contract, and that the contract will provide a sign, but how will they know when there is cherry-picking? They will have no way of knowing. If they threaten to take contracts away, they will have to give them to another firm, or the threat will be empty. If, as we suspect, an effect of the system will be to wipe out vast swathes of other providers, there will be no alternative provider to give the contract to.

The second problem with fixed fees is that they undermine the possibility of firms specialising by the complexity of the case or special needs of the clients. That is precisely what lies behind the problem of black and minority ethnic firms and the problem of clients with disabilities.

The third problem is that fixed fees undermine choice. A fundamental question for people who are represented is, “Can I trust this lawyer?” What happens if someone has been represented by a lawyer previously, had a bad experience, and wants to go to a different lawyer? The system undermines the possibility of finding a different lawyer.

We have been told that the fixed fee system is necessary as a precursor to best-value contracting, but that argument does not work in its own terms. The benchmark applies only to the Government because they need to know what price they will offer. It does not help bidders, except as a general guide to what prices might be, but the Government can tell them that without setting up fixed fees. It is entirely unclear how the best-value contracting system will work, and that was the basis for the comments by the hon. Member for Southampton, Test (Dr. Whitehead). The Government should think about that.

The real problem is that if the contracting system is just an average, fixed fee with a bit of competition, which is what I think is intended, it will have exactly the same problems as the average fixed fee. It will cause cherry-picking, undermine choice and make it impossible for firms to specialise by the complexity of the case or the complexity of their clients’ needs.

What is the way forward? I think it is to do nothing until the exact nature of the problem has been grasped. It might lie in the Treasury, not in the Department or the world, because of the way in which the Treasury deals with this budget. The Government should abandon the average-fixed-fee system at this stage. It is not needed as an interim measure and will be deeply damaging. Finally, they should rethink the best-value contracting system so that it does not merely reproduce the problems of the average fixed fee with a bit of competition added in.

There is no ultimate solution to the problem of guaranteeing quality in public services; we can try different solutions at different times. The solution with the widest degree of support, however, is the idea of graduated fees, although it must be combined with a sophisticated system of quality assurance. One of the problems in the way that the Government have set about their task is in trying to simplify and make savings in the quality assurance system. The Chairman of the Committee said that that resulted in a minimum requirement, rather than a guide to the complexity of an individual case or of client needs. A graduated fee system with sophisticated quality control, on the other hand, could work.

There is even a way of combining graduated fees with competition, which, as a former council leader, the hon. Member for Southampton, Test will probably recall. It was the method that was in use at the time of the schedule of rates contracts. For the reasons that he mentioned, that is probably not the way to go, but it would still be better than anything that the Government are suggesting.

My impression is that, in the minds of the press and of some Ministers, legal aid has been seen as an obstacle to be swept aside using press releases about fat cat lawyers and so on. In reality, it is about modestly paid lawyers trying to vindicate the rights of their even more modestly paid clients. I urge the Government to think again.

I too declare an interest, although it is registered. I am a non-practising barrister. I congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on his superb report, and I agree with him that it is a pity that this debate is taking place in Westminster Hall, especially as it is the second occasion on which we have had a debate on this subject here instead of in the House. Many people take a huge interest in the subject, and they would have liked to have seen the debate take place in the main Chamber and to have had better seating. Had that been the case, everyone would have been able to get into the Gallery. That should be considered in future.

The report was extremely full, and the Committee went to a great deal of trouble to take evidence from every possible affected organisation. The Committee produced some compelling and damning quotes, remarks and suggestions. On the need to take action, page 86 of the report says:

“Not to do so would be reckless.”

Paragraph 38 on page 87 is headed “The impact of the reforms on BME firms and clients.” Underneath, the report says:

“This may limit access to justice for members of ethnic minorities.”

The final paragraph says:

“There has been a catastrophic deterioration in the relationship between suppliers, their representative organisations, and the LSC.”

I found the Government’s response to a very impressive report to be wholly inadequate, and that has been brought out in the speeches of other hon. Members. There were some excellent contributions. The hon. Member for Vauxhall (Kate Hoey) spoke with great passion. She is my local MP, so I suppose that I am biased, but I agreed with her entirely, as I do on virtually every issue. So much is that the case that I shall have a dilemma at the next election—I shall either vote for myself in North-West Norfolk or I shall support her in Vauxhall. I shall look to the opinion polls nearer the time to guide me in that choice.

I shall briefly mention the contribution of the hon. Member for City of York (Hugh Bayley), who, because he was looking towards you, Mr. Martlew, could not see the gnashing of teeth going on behind him. Some of his logic was flawed, I think, because he suggested that if one is a rich crook one can afford the best legal advice but that a poor crook has to make do with second best, and he implied that the best lawyers should not get legal aid work and support in order to represent people in their hour of need.

Will the hon. Gentleman give way?

I am short of time, but I shall give way very quickly.

I made no such suggestion. The hon. Gentleman’s own implication that the 99 per cent. of lawyers who do not take hundreds of thousands of pounds in legal aid fees in a single year are somehow inadequate and not up to the job is wrong, and I hope that that he will withdraw it.

I shall not, because the hon. Gentleman said that the very top Queen’s counsel should not be available to represent the poorest in the community, which is flawed logic. He spoke about contracting out to non-profit-making organisations that have the interests of their clients at heart, but I can tell him that every single law firm, citizens advice bureau and individual who has been involved in the debate on this topic has that interest at heart.

We all recognise that, with the legal aid budget rising very quickly, action was needed. However, the Government should be targeting the areas in which costs actually are rising. Spending on civil legal aid has fallen by 24 per cent. in real terms since 1997, and there are many other areas of legal aid in which costs are either under control or falling. The budget for criminal legal aid has indeed increased but, as my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) said, with all the extra offences that have been created, and with court procedures becoming more complicated, that is not surprising. There are a number of problems within the court system itself as well.

One should think carefully about the argument put forward by people in some circles that solicitors are causing the problem by taking too much money. Legal aid payments to solicitors have been static for quite some time. The last pay increase for criminal legal aid was in 2001. Civil practitioners received just one rise—of 2.5 per cent.—in 2004, and there were no increases in 1993, 1994, 1997, 1998, 1999 or 2000. Even before the changes are introduced, the number of offices with civil legal aid contracts has already fallen from 4,301 in March 2004 to 3,500 in March 2006.

The debate needs to be seen in context. The hon. Member for Islington, North (Jeremy Corbyn) observed that there is a sense of déjà vu about it, and I agree. I welcome the new Minister to her post. However, the last time we had a debate on this subject, on 11 January, I thought that the then Minister, the hon. and learned Member for Redcar (Vera Baird), was very complacent. We debated the consequences that we predicted would flow from the changes, and we were told that we were scaremongering and over-egging the pudding.

In fact, very serious patterns have emerged since that debate. The previous Minister said that everything was okay because a lot of firms had signed the contract and therefore everything was rosy. However, I have received dozens of letters from solicitors’ firms that signed the contract under what they felt to be duress. I shall quote just one example from a firm in SE20, which is probably in the constituency of Bromley and Chislehurst. It says:

“As a firm, we did not want to sign the new Civil Legal Aid Contract. It is manifestly unfair in as much as the Legal Services Commission can change it on very little notice and even put us out of business on six months’ notice without committing any offence.

At the last moment we signed the Contract when it was apparent that our brethren were not going to hold their nerve and refuse to sign. We could not commit suicide then and there without a further review of our options.”

It goes on to say:

“I anticipate that, having made alternative arrangements for the structuring of our firm, this firm will be withdrawing from publicly funded family work later this year”.

The figures that were issued by the Law Society in January mentioned its survey of members. The figures indicated that 82 per cent. of family practitioners believed that their firm would be less likely to undertake publicly funded work in future, 78 per cent. of mental health practitioners were considering whether to continue to represent publicly funded clients, and 74 per cent. of immigration practitioners said that their firms were less likely to undertake legal aid work. The staggering figure of 95 per cent. of civil legal aid practitioners believed that the proposed fixed fees would make their work non-viable.

Events have moved on. The Housing Law Practitioners Association survey, which is far more recent, says that 82 per cent. of respondents were opposed to the introduction of a national fixed fee, 65 per cent. expected their income to decrease by more than 10 per cent., 38 per cent. expected their income to decrease by more than 25 per cent., and 96 per cent. said that the proposals would produce a disincentive to undertake more complex cases or assist the most vulnerable. That is obviously what is happening now, and the Minister ought to recognise it and consider events as they are now.

I went to see a firm in East Anglia the other day, and I sat down with its practitioners, who told me about the dilemma that they face. Some of the partners in the firm were doing a substantial amount of commercial work, and they were making a great deal of money. The other partners were doing legal aid, criminal and civil work, and they were being heavily cross-subsidised by the partners who were earning substantial amounts of money. Those other partners told me that, in all consciousness, they could not consider going on and on with the publicly funded legal aid work, because of the contrast in partners’ earnings. The firm said that it would carry on for the time being until those other partners retired, but that it would almost certainly not take on any new legal aid lawyers. As we know, many other firms are pulling out, and there will be a great deal of consolidation.

In the Otterburn report, which the Department commissioned, Mr. Otterburn made it quite clear that big does not necessarily mean more efficient. In some sectors of the economy, big may be more efficient, but he came up with some valuable and compelling evidence to show that, with the extra overheads that large firms must carry, they do not necessarily offer the Department better value for money in publicly funded work.

The comments made by my hon. and learned Friend were pertinent. There will be legal aid deserts. There is no question but that in the small market towns in East Anglia, there will be a significant contraction in the number of firms supplying legal aid to my constituents and to those of my numerous neighbours in such sparsely populated parts of the country. People will have to travel much further; that is the pattern emerging in many places.

My hon. Friend the Member for Beverley and Holderness (Mr. Stuart) once again went through the extraordinary example that affects his constituency. I hope very much that the Minister will respond adequately to his points, because the previous Minister did not respond properly to the concerns that the firms in my hon. Friend’s constituency expressed. The time has come for the Minister to get a grip of that situation and give my hon. Friend a proper answer.

The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) spoke passionately about black and minority ethnic practices. There is no question but that they will be disproportionately disadvantaged by the Government’s proposals. It is well known that in many large cities, small firms and black and minority ethnic firms are over-represented among criminal legal aid contractors, and the hon. Lady is right that many people from ethnic minorities feel more comfortable going to a business that is run by people from their community. I thought that the Government were in favour of trying to further social mobility and to help young people who want to set up in business and serve their community. I have seen people from the black and minority ethnic communities who have gone into business against considerable odds and with little support from their families. They have struggled to finance their way through college, often setting up set as single practitioners or as partners in a small business.

I endorse the points that the hon. Gentleman and my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) have made. Although I do not minimise the effect of the loss of legal aid anywhere in the country, does the hon. Gentleman acknowledge that the problem is at its worst in the big cities, and particularly in London? All indices show that the biggest loss of legal aid practitioners and support, and the biggest gain in need is in London, which reflects the lack of minority ethnic firms that are able to survive the current crisis.

The hon. Gentleman’s point is absolutely spot on, and I agree 100 per cent. that, of course, that is the situation. My hon. and learned Friend pointed out that it is the clients who matter most. The people in the community who rely on publicly funded legal advice will suffer most. There is no question but that many such clients have complex cases, and that without legal aid and access to local solicitors, those cases will not be solved.

I have considered various individual cases; in fact, my hon. Friend the Member for Mid-Sussex (Mr. Soames) brought some complex child and family cases to my attention. They included one extremely complex case that involved care proceedings, which went on and on. That case would never fit easily into a fixed-fee system, but it would probably not be complex enough to fit into the next category.

Citizens Advice wrote to all Members with a brief, giving us many examples of people who come in with one particular case, but for whom after about 10 minutes, it becomes apparent that the case is far more complex. Again, such cases just do not lend themselves easily or tidily to a fixed-fee system. Cherry-picking will take place: there is no question but that fixed fees will actively encourage many firms to cherry-pick the easier, simpler cases. Of course, they could resort to exceptional status cases, but very few cases will qualify for that status. There will be a few such complex cases, but the vast majority will fall into the fixed-fee category. What will happen is very simple: many firms will have to cherry-pick cases and ignore more complicated cases. Richard Miller of the Legal Aid Practitioners Group said that

“as well as penalising firms doing more complex work, the scheme”—

will actually encourage providers to look at the more—

“simple cases.”

The consequences that will flow from the situation are obvious.

We must consider the law of unintended consequences. The Government may well save a small amount of money through those changes, and they may control the budget and put it on an even keel, but what about the social consequences and the other costs that other Departments will have to pick up? The profession and HM Courts Service are in meltdown. We have a new Prime Minister, new Ministers and a superb Committee report. I urge the Minister to make a name for herself, and plead with the Prime Minister to treat this issue in the same way as he treated the casinos issue. He has the ideal opportunity: he has the Committee’s report, to which there has been a wholly inadequate response. The Minister should take it away, consider another response and reconsider all the arguments that have been put by Members from all parts of the House, but above all, by people in the profession who know what is happening on the ground. I urge her to take action.

It is a pleasure to attend the debate as the new Minister with responsibility in the House of Commons for legal aid. So that Members are aware, however, I ought to make the point that Lord Hunt of Kings Heath takes the policy lead in the Department. It is not quite accurate to say that I have my hands fully on policy making in this respect, although everybody in the ministerial team has an interest in the issue.

I thank Members, and in particular the right hon. Member for Berwick-upon-Tweed (Mr. Beith), whose Committee report we are debating today, for their excellent work. I thank him also for the way in which he introduced the debate. There are a few lawyers in the Public Gallery today, and some are even sitting in the Chamber. I am one of them, although I do not practise. I have not practised in the 10 years since I became a Member of Parliament. However, as a solicitor, I have experience in the areas under discussion. I therefore do have an understanding of these matters, although it is more out of date perhaps than that of some people who will be interested to read the Hansard report of today’s debate.

I recognise the great concern and the passion with which points have been made during the debate. In the short time that I have been in my post, I have had the opportunity to read about the gestation of some of the issues and to read previous debates. I have read the early-day motions. I have read about a lot of what has been going on, so I understand the issue and I recognise the concerns that have been expressed.

I am pleased to answer the debate, although time is short. In the time that remains, it is inevitable that I shall not have a chance to deal with every point that has been raised. However, as some Members have asked specific questions about their constituencies, I undertake to contact them by letter, because I shall inevitably run out of time before I have dealt with all the points. I have listened to what they have said, and I understand both the concerns that have been expressed, and that many present do not agree with much of what the Government are doing. However, it seems that there is some agreement and common ground between the Government and those people who disagree with aspects of the reform programme.

Everybody wants a system that allows us to help more people. We all want a system that allows proper value for money, that is joined up with the rest of our justice system and that contributes to and benefits from the work going on to improve the entire criminal justice system and to make it more efficient. Legal aid provides a vital service; everybody has made that absolutely clear. It has never enjoyed the same profile as other elements of the welfare state—a number of Members have made this point—but it is an important plank of it.

I do not accept that legal aid has been starved of funds. Nobody said that specifically, although the hon. Member for Cambridge (David Howarth) came precious close. Spending has increased in the past 10 years from about £1.5 billion in 1997 to more than £2 billion. A lot of money is going into the system. My hon. Friend the Member for City of York (Hugh Bayley) might have felt like Daniel in the lions’ den for making similar points—he ought to consider how I feel at the moment—but he was correct that this country spends far more on legal aid than any other European country. The Committee made the same point in its report.

The taxpayer has a right to expect good value for money. Payment by the hour is rather old-fashioned. Any member of the legal profession would accept that—there are not many other professions these days in which one gets paid by the hour. It is old-fashioned, it does not work and it has its own perverse incentives. Part of our debate has concerned the perverse incentives that might arise from some of the reform proposals, but we should not forget that the current system has perverse incentives that have existed for many years.

There is an important question about hourly rates. The Minister is right to say that they create perverse incentives. Why are the Government proposing to go back to hourly rates in the exceptional cases mentioned by the hon. Member for North-West Norfolk? Surely it should be a completely different system, if the Minister is correct.

I do not think that we are moving from a completely terrible system to a totally perfect one. We are trying to effect reforms that will create many desirable outcomes. I do not think myself that hourly rates are ideal, but there we are. With exceptional cases, it will be a way of recognising that some cases are much more expensive, and of giving those who handle them some certainty that they will be properly remunerated for the extra complexity.

The large amount of money that we spend on legal aid has resulted in a system to be proud of—it helps hundreds of thousands of people a year—but we must focus on achieving best value for money, so that we can get as much help as possible to those who need it. Many hon. Friends from inner-city areas, specifically those from London, have made points about that access and about using the money that we have to ensure that those who need help the most get it. I could not agree more. The example of civil legal help, much of which has been provided under the tailored fixed fee scheme, bears that out. There were fewer than 600,000 acts of assistance in 2004-05, but 800,000 were carried out in 2006-07, partly as a result of that reform—a significant increase due to better productivity.

Obviously, we must balance things carefully. One person’s productivity is another person’s squeeze on profits. We must get it right, but that is what the Legal Services Commission, with providers’ co-operation, seeks to do.

Do the Government have any plans to ameliorate the reforms’ disproportionate effect on black and minority ethnic solicitors?

I wanted to make a few comments before dealing with specific issues, but my hon. Friend has raised an important one about the impact on black and minority ethnic providers in inner cities. She made her point particularly powerfully. I must be slightly careful what I say; I am enough of a lawyer not to go into too much detail when a matter is before the court. There is no doubt that a lot of solicitors—16 per cent.—are black and minority ethnic. The majority work for white-run firms, if I can put it crudely, not black-run ones. Sixteen per cent. is greater than the proportion of black and minority ethnic people in the population, so there is a great deal to be proud of in having so many in the profession.

The proposals for a minimum contract size will have little or no adverse impact on individual BME solicitors. My hon. Friend is making a point about the proposals’ impact on small firms, but the Government have not yet decided to introduce a minimum contract size. I accept that doing so could have an adverse impact on firms that do less work—that is common sense—but we have made no decision to do so, and we are continuing to listen.

When she was the Minister responsible, the Solicitor-General—she has moved on to greater things—did something that I am sure everyone would agree with, whatever they think of what she might have said in previous debates: she went out and consulted extensively with the profession during the gestation of the proposals. I accept that hon. Members and the profession do not necessarily like the prescriptions that she came up with, but she and the Government consulted extremely widely about them, and we wish to continue to do so. I want to make it absolutely clear that the new ministerial team will be listening as we continue to develop the proposals, because we want to listen to what people have to say.

The right hon. Member for Berwick-upon-Tweed and others mentioned the impact on firms in rural areas. In respect of civil and family legal aid, the hon. and learned Member for Torridge and West Devon (Mr. Cox) made a point about advice deserts, as did one or two others. Some 93 per cent. of the population live within five miles of specialist legal aid providers. There is no evidence that we have deserts. That does not mean that firms will not merge or decide to stop doing legal aid work; I accept that such issues may well arise, and we need to keep a close eye on them. The last thing that we want is for advice deserts to develop. We are trying to ensure that the money we spend, which has been increasing, is spent properly on helping as many people as possible to get advice for their legal problems.

I should just like to nail one point. The legal aid budget has increased, as the Minister said, to £2 billion, but taking into account inflation during that period, it is pretty much where it was in 1997, despite 3,000 extra offences. The truth is that the legal aid budget has not grown above inflation; it has stayed where it was. There is no crisis.

There is no doubt that the legal aid spend has been going up. There have not been cuts in the way that has sometimes been described by those who have commented. The hon. Gentleman made some points about his constituency, and I would prefer to write to him in response to them. I heard what he said, and want to make clear that I shall come back to him.

A specific issue was raised about the urban-rural balance and whether there would be a greater impact in the inner cities or rural areas. The aim of the proposals is to try to get a wider range of provision in rural areas, in some of which that is currently quite limited. Members have concentrated on saying that they think that the provision that they already have might disappear, but we recognise that there are already some such issues in some areas. The aim is to improve the situation.

In respect of London, the constituency of my hon. Friend the Member for Islington, North (Jeremy Corbyn) appears to be pretty well served by legal aid solicitors. He said that there had been a change in the nature of the provision, but his constituency is still pretty well served compared to some other inner-city areas. We are trying to ensure that everywhere there is the required provision of legal services for those who need them.

The hon. and learned Member for Torridge and West Devon and my hon. Friend the Member for Vauxhall (Kate Hoey) discussed the role of not-for-profit organisations and citizens advice bureaux, which have a vital role. Over the years, the Legal Services Commission has made increasing use of such providers, which have accounted for much of the increasing provision of legal help, particularly in inner cities. More help is needed in London, but the volume of help there is rising.

It being Six o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.