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Criminal Injuries Compensation Scheme

Volume 549: debated on Friday 7 September 2012

Motion made, and Question proposed, That this House do now adjourn.—(Mr Evennett.)

I am grateful for the opportunity to raise concerns about the criminal injuries compensation scheme as proposed by the Government. The scheme is due to be considered formally in Committee on Monday, but the concerns are serious enough to be properly aired in the Chamber today. They received a full airing in the other place on 25 July, and I believe that the Lords were wrong to approve the proposals. Significantly, the Minister in the Lords was the only speaker to support the proposals. The previous Government had the good sense to withdraw a similar proposal and I urge the current Administration to do likewise.

I am also grateful for information received from the Union of Shop, Distributive and Allied Workers and the Communication Workers Union, both of which have members who are particularly affected by the proposals. I make no apologies for taking up the cause on behalf of the trade unions and the thousands of employees they represent. The Association of Personal Injury Lawyers has also provided information, for which I am grateful too. I should add that one of my trade union memberships is with the CWU.

Let me return to the origins of the scheme. In a House of Lords debate in December 1962 on the “Report of the Working Party on Compensation for Victims of Crimes of Violence”, the then Lord Chancellor, Lord Dilhorne, told peers:

“For the innocent victims of such crimes we all feel sympathy, but we feel that sympathy alone is not enough.”—[Official Report, House of Lords, 5 December 1962; Vol. 245, c. 305.]

That principle should be maintained. In 1964, the Criminal Injuries Compensation Board was established, later becoming the Criminal Injuries Compensation Authority—the CICA—which administers the criminal injuries compensation scheme.

In October 2010, the then Lord Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), told the House that the scheme was underfunded. As a result, the Ministry of Justice launched a consultation, “Getting it right for victims and witnesses”, which has resulted in the current proposals, which exclude innocent victims of crime from the scheme, denying them financial compensation. Before that, in 2009, the right hon. Member for Epsom and Ewell (Chris Grayling), now the new Lord Chancellor, showed his caring side, saying:

“And law abiding, decent people are asking—who’s looking after me? Well, my message to them is that a Conservative Government will start looking after you.”

Withdrawing the proposals will enable the Lord Chancellor to match those words with deeds. To withdraw compensation from these innocent victims of crime goes against the very purpose of criminal injuries compensation and ignores the view held by successive Governments for decades that victims of violent crime deserve more than just words.

The scheme uses a tariff system that is split into 25 bands. The Ministry of Justice has proposed removing the first five bands—which currently include all claims valued under £2,500—from the new scheme. According to the Criminal Injuries Compensation Authority annual report for 2010-11, 48% of all payments made by the CICS fell into bands one to five. That represents 17,700 victims a year on average. By way of example, under the new scheme someone who has suffered a minor disfigurement of the face will no longer be entitled to any compensation, and someone who suffers temporary partial deafness will also be denied compensation.

I congratulate my hon. Friend on bringing this matter to our attention. I should like to declare an interest as someone who has a scar right across his face. The wound was inflicted without provocation and the person was convicted for it. I believe that it would be an outrage to take away the possibility of compensation from anyone who was entitled to it.

I thank my hon. Friend for that helpful intervention.

It is unacceptable to say these injuries are not life-changing, as the Minister in the Lords did. Many victims say that they are. They suffer flashbacks, nightmares and panic attacks, for example. Moreover, many of the awards in tariffs 1 to 5 are for permanent physical disabilities such as corneal abrasions, speech impairment, or a “continuing significant disability” to a finger—very important for those who do manual work such as filling shelves or delivering letters. Nor are the awards “penny-pinching” amounts, as the Minister claimed. That just shows how out of touch the Government are. To a shop worker on the minimum wage who has to take weeks off work because of a fractured hand, £2,000 compensation is a substantial amount that would help to pay the debts accumulated during the period off work.

As well as removing the first five bands, the Government propose to slash compensation for claims between £2,500 and £11,000 in bands 6 to 12 by up to 60%. Those seven tariff bands represent 42% of criminal injury compensation payments under the CICS. Injuries covered by those bands can include the loss of a finger, two collapsed lungs or the partial loss of an ear, and they account for 13,000 cases a year. The Lords Minister stated that shop workers would still be able to claim for mental trauma of six weeks or more, but that is incorrect. To qualify for the level 6 tariff, a person requires diagnosis by a psychiatrist, which does not occur for several months, until courses of anti-depressants have been tried.

Over the past five years, 23,000 postal workers have been attacked by dogs. On average, 12 postal workers are attacked by dogs every day, amounting to about 5,000 being injured every year in dog attacks. Many are never able to return to their job, owing to the physical and psychological effects of the attack. Many are scarred and receive facial disfigurement for life. Many have lost fingers through dog bite amputations and many others have sustained dog bite injuries leading to painful lacerations and puncture wounds, nerve, ligament and tendon damage, fractures, serious infections, disability and disablement. I was bitten by a dog while delivering leaflets during the last general election campaign. I was not seriously injured—I required only a plaster and an anti-tetanus injection—but it was a disturbing experience.

That group of workers who suffer the disproportionate majority of violent dog attacks now needs the support of the law, the enforcing authorities, the judges and the courts in dealing with the problem. It also needs the support of the scheme, which in many cases is the only remaining avenue for obtaining personal injury compensation. Many postal and BT workers have suffered personal injury through violent crimes, as defined by the Dangerous Dogs Act 1991, caused by irresponsible, reckless and negligent dog owners who are usually uninsured and often do not have the financial means to pay any compensation and cannot therefore be obliged in law to do so. I understand that this is known to lawyers as the doctrine of the man of straw.

The injuries to postal workers may be physical or mental, or both, and in some cases they have resulted in near death. However, the proposals remove the right to claim for injuries resulting from an animal attack. As a result, postal workers will have nowhere to go for effective compensation. Dog owners are unlikely to have third-party insurance, and may have no assets from which to recover a civil litigation claim or pay a criminal compensation order. The current scheme is the last resort for victims of dog attacks, and it will be removed under the proposals. All of the public will lose the prospect of compensation for dog bites, not just postal workers.

No one asks to be a victim of crime. Reducing, or removing altogether, the amount of compensation available to those people will send a clear message that the state does not view their injuries as serious or important. The Government propose to retain awards at their present level for injuries resulting from sexual offences and physical abuse, but that accounts for only about 8% of victims of all crimes who will be unaffected by the changes.

The Government misrepresent the current cost of the scheme. In the consultation, it was claimed that the scheme was not sustainable, and that it had historic liabilities of nearly £400 million. The Minister inflated that figure to £532 million by including possible claims yet to be lodged with the authority—presumably for crimes not yet committed, which seems odd, to say the least. However, examination of the authority’s accounts shows a stable and sustainable scheme, and that view is supported by the impact assessment.

Closer analysis shows that the average annual cost to the Ministry of Justice of existing tariffs is £192 million. It has varied very little, between £171 million and £214 million over the past four years. The cost for 2012-13 is estimated at £181 million under the current scheme rules. Even if I supported the Government’s deluded economic policy, I would have to point out that reducing the scheme’s budget by £50 million will do relatively little to reduce the Government deficit. It is a small sum in the scheme of things.

Historical liabilities have been reduced to 73 cases, estimated at less than £150 million, most of which the authority says should be cleared by 2014. Almost all these cases involve children who were seriously injured before the tariff scheme commenced in 1996, and whose ongoing needs could not be established until they reached adulthood. Neither is the CICA lax in exercising its responsibilities, with over half of claims refused. In 2011-12, of 58,000 applicants, over 30,000 claims—52%—were disallowed.There is therefore no immediate financial imperative to make these drastic cuts, which will impact so seriously on some of our most vulnerable people who most need support.

To add insult to injury, under the new scheme victims will be asked to pay up to £50 up front to obtain their initial medical evidence. Making victims pay this amount when they may be off work or still emotionally and mentally scarred from their attack could prevent genuinely injured victims from bringing a claim. Victims of violent crime who are eligible for compensation under the new scheme and who are unable to work owing to their injuries will also suffer as a result of changes to the scheme. These victims will be worse off because of changes in the arrangements for future loss of earnings, which will now pay only statutory sick pay, which is currently £85.85 a week. If someone were to work a 37-hour week on a minimum wage of £6.08 an hour— £225 per week—before they were injured, they could be worse off by £139.15 a week, which could result in serious financial hardship.

Changes to the scheme also fail to take into account the current employment market. The new scheme states that to be eligible for a loss-of-earnings payment, the victim will have to have been in

“regular paid work for a period of at least three years immediately before the date of the incident giving rise to the injury”.

The scheme offers exemptions if the person had a good reason for not having been in regular paid work—for example, because of age, care responsibilities or full-time education. In the current climate, however, it would not be unusual for someone to have been moving between temporary jobs, or to have had a period of unemployment in any three-year period. The new scheme will prevent someone from receiving a loss-of-earnings payment under such circumstances, even if they are now in regular paid work.

The changes to loss-of-earnings provisions will affect not only those who have been injured but relatives eligible for dependency payments after the loss of a loved one. The dependency payments, which are awarded to someone financially or physically dependent on the deceased, will be reduced as a result of these changes, and may not be enough to support the dependant.

Some of the most vulnerable people in our society are, of course, children, yet this new scheme will do nothing to protect children who are victims of certain violent crimes. The Department for Environment, Food and Rural Affairs has recently consulted on the possibility of extending section 3 of the Dangerous Dogs Act 1991 to make it a criminal offence in England for an owner of a dog to allow it to be out of control on private property, such as on the owner’s own property. That consultation closed on 15 June, and no response has yet been published. At the same time, the Ministry of Justice has proposed removing the right of compensation from those attacked by animals, unless the animal was

“used deliberately to inflict an injury on that person”.

This would create a scenario in which a child who has been mauled by a dog will be denied compensation, even though a criminal offence may have occurred—if the Dangerous Dogs Act 1991 is extended—and the child will have sustained life-changing injuries.

While the Government are retaining all awards for sexual offences, the decision no longer to cover the cost of private medical care may prevent a victim of child abuse from receiving counselling and support quickly. While these services are available on the NHS, private funding would prevent any delays, and prompt treatment can be vital in such circumstances.

It is the Government’s intention to cut the lower standards to provide better protection and support for the most seriously injured victims. There is, however, no evidence that this has actually happened. Even those with the most serious injuries will suffer as a result of these changes. The Government should show common sense and compassion and withdraw these proposals.

This has been a short but interesting debate, and I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing it. I have listened very carefully indeed to everything he has said.

Support for victims and witnesses of crime is a priority for this Government. That is why, for example, we have provided Victim Support with £114 million in grant funding spread over three years, enabling it to invest in long-term service provision. The victim and witness general fund provides £5 million a year in grant funding to voluntary sector organisations supporting the most seriously affected, vulnerable and persistently targeted victims.

We are spending £2.75 million on individuals bereaved by murder and manslaughter in 2012-13, while in line with our coalition commitment—I am personally proud and pleased to announce this—we have put rape support centres on a secure financial footing, with 65 centres around the country receiving total grant funding of nearly £3 million a year until 2014. Over the past year we have funded the establishment of four new centres, and a further five will open in March 2013. Last but certainly not least, we aim to raise up to an additional £50 million from offenders, which is a very significant sum. It is to be spent on services for victims, along with the existing central Government spend of £66 million. I shall return to that in a moment.

The proper protection and support of those who have suffered at the hands of criminals is a fundamental and essential part of our civilised justice system. We are determined to provide the best possible support for the most seriously affected, vulnerable and persistently targeted victims of crime, helping them to cope with and recover from what are often terrible experiences. However, because of the financial climate, we cannot be blind to the question of which policies are feasible and which are not.

As the hon. Gentleman said, the criminal injuries compensation scheme is demand-led, and the cost to the Government is more than £200 million each year. Historically, the scheme has been underfunded. Funding allocated at the beginning of the year has often needed to be topped up at the end of the year to enable the Criminal Injuries Compensation Authority, which administers the scheme, to continue to make payments for claims as and when they fall due. Last year the authority was provided with additional funding, and a total of £449 million in criminal injuries compensation payments was made, the largest ever in a single year.

Despite that cash injection, total liabilities currently stand at around £532 million. That includes an estimate of the claims for which payments are likely to fall due in the future but which have not yet been lodged with the authority; it also takes account of the remaining rump of pre-tariff cases. With new liabilities arising at a rate of about £200 million a year under the current scheme, that is simply not sustainable in the present economic climate. The scheme must be put on a sensible, sustainable footing so that timely payments can continue to be made.

Against that background, it made excellent sense for the Government to look carefully at the scheme and consider certain reforms. We concluded that the scheme needed to focus resources on the victims who are most seriously affected by injuries that they suffer as a result of deliberate violent crime committed in England, Wales and Scotland. We believe that the provision of support services for victims at the point of need is a much better use of money than providing small amounts of compensation, in some cases long after the incident involved, for relatively minor injuries. For that reason we are removing payments for less serious injuries such as sprains and fractures.

However, we concluded that, as well as protecting injury payments to victims with the most serious injuries, it was right and proper to protect tariff payments to the bereaved, to all rape victims and victims of other sexual assaults, and to those—including victims of domestic violence and children—who are subjected to a repeated pattern of abuse. We have also retained the vast majority of special expenses payments, with the exception of payments for private health care. Those are fair and sensible policy decisions.

Some Members may have seen one or two briefings about our reforms, including papers produced on behalf of postal workers and shop workers. While I am more than happy to acknowledge the valuable, indeed essential, role that many of those people perform, sometimes in the face of challenging circumstances, the Government do not believe that a compelling case has been made for maintaining payments for minor injuries, which is what has been asked of us. As with other applications to the scheme, if postal or shop workers’ injuries are sufficiently serious, they will be eligible. As I said earlier, our aim is for additional services to be funded by offenders, which will provide better support for those with minor injuries.

Another key part of our reform package results from our view that payments should be made only to blameless victims who co-operate fully with the justice process. Those with unspent convictions will not be able to claim if they have been sentenced to a community order or imprisonment, and those with other unspent convictions will be able to receive an award only in exceptional circumstances.

The hon. Gentleman made important points about loss of earnings. We believe that our proposals are the fairest way to achieve the necessary reforms and to create a sustainable system. I also wish to clarify the position on dog attacks, which he also raised. The purpose of the scheme is to compensate for injury caused by deliberate violent crime, and there are other avenues that people can pursue, including civil remedies, in relation to these incidents.

We envisage that the cumulative effect of our reforms will help deliver savings of an estimated £50 million per year to the taxpayer. That does not mean that we are reducing the overall spend on victims—our aim is to keep overall spend on victims the same. That is to be achieved by offsetting the £50 million reduction in the criminal injuries compensation scheme with a similar amount raised from the offenders for victims’ services.

The Government’s intention is that the new scheme will be implemented around the end of September. For that to happen, it requires the approval of both Houses. There was a debate in the Lords on 25 July and there will be a debate in this House next week, on Monday 10 September. On that occasion, I will go into more detail than I have today about the changes to the scheme and I will also be seeking the House’s approval for our statutory scheme which will compensate victims of future overseas terrorism. In conclusion, the draft criminal injuries compensation scheme represents a coherent and fair way of focusing payments on those most seriously affected by their injuries, within an affordable budget.

Question put and agreed to.

House adjourned.