Skip to main content

Lords Chamber

Volume 597: debated on Thursday 18 February 1999

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Lords

Thursday, 18th February 1999.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Blackburn): The LORD CHANCELLOR on the Woolsack.

Sign Language Users: Safeguards

Whether they are satisfied with the current safeguards for sign language users being interviewed at police stations.

My Lords, the codes of practice which regulate the conduct of police interviews with suspects contain a number of safeguards for suspects who are deaf or hard of hearing. These include the requirement for an interpreter and for a contemporaneous written note of the interview to be made as well as an audio tape recording. In addition, it is open to chief officers to video record interviews of their suspects and, therefore, I believe that the safeguards are adequate.

My Lords, I thank the Minister for that reply and must declare an interest because I have a half-sister and a step-sister both of whom are profoundly deaf. My half-sister relies totally on British sign language to communicate.

Will the Minister acknowledge that British sign language is a visual and spatial language and the only way to record the source of an interview is by video? That then records the visual aspect of sign language which audio recording will not do. Will the Minister also acknowledge that it is the responsibility of the Home Office to ensure that police forces throughout the country have minimum standards so that they do not disadvantage deaf people?

My Lords, I recognise the noble Lord's keen interest in and knowledge of these matters. It is correct that the sign language to which the noble Lord referred is a distinct language, but it is based on the English language. The written record is provided for the suspect to take away. It is useful for a solicitor and for a friend or colleague to have a permanent record in that form.

It is open to chief officers of police to video record interviews, but not every police station has those facilities, which are expensive. If one insisted on video recording, one would then have delays which would be unfair and unfortunate. I acknowledge the responsibility of the Home Office and am pleased to be able to say that we are holding seminars in five centres between 22nd and 31st March of this year to talk through with senior police officers the problems identified by the noble Lord. We are taking the matter forward promptly in that way.

My Lords, can the Minister tell us what proportion of police stations have the capacity to make video recordings?

My Lords, I cannot. I shall research the material, write to the noble Lord and put a copy in the Library of the House. In my experience, outlying small police stations are unlikely to have expensive sophisticated video equipment.

My Lords, does the Minister agree that if a mistake is made by the interpreter, a written record of the interview would not pick up that mistake? However, a video recording of the signing by the deaf person would show what had actually been said by the deaf person and not the mistake that appeared on the written record.

My Lords, there is some virtue in what the noble Lord says. It is a case of practicalities and numbers. That is the reason these seminars are to be held, taking forward research materials that have been provided in at least two documents dealing with this difficult area. However, I stress that the codes of conduct under the Police and Criminal Evidence Act (PACE) provide written safeguards for those who might otherwise be disadvantaged by not being of perfect hearing during an interview.

My Lords, I am grateful for the Minister's reply with regard to the police stations that may not have the facilities for video recording. However, can the Minister say to what extent interviewing procedures covering sign language are required in police stations?

My Lords, the code requires in a number of different contexts that specific safeguards shall be in place for the interviews to which my noble friend refers. For instance, it is not proper to conduct an interview without an interpreter; the interview must be recorded; a copy must be provided; and there must also be audio recording. All those requirements are in the regulations under PACE and in the codes. If there is any unfairness to a defendant, the judge has the overriding discretion under Section 78 of the Police and Criminal Evidence Act to exclude the evidence entirely.

My Lords, is it not difficult for the Minister to reconcile his advocacy of the laws about the courts admitting video evidence in cross-examination, while leaving the responsibility entirely up to the police to implement individual suggestions such as those of my noble friend Lord Annaly?

My Lords, there is no contradiction at all. The police have the responsibility for conducting interviews under the PACE codes. It is rightly upon them. Thereafter the judge has an overriding discretion to exclude unfair material. It is simply not practicable overnight to provide video recording equipment in every police station in the United Kingdom to deal with what is, in the end, a limited number of people.

My Lords, can the Minister say whether there has been, as a matter of fact, any substantial complaint of unfairness in this context which has reached the police or the Home Office?

My Lords, not that I am aware of. That is an indication that the best methods are properly drafted and that they are, by and large. adhered to.

Hedgerows: Guidance On Protection

3.8 p.m.

Whether advice and guidance on the protection of hedgerows and other field boundaries will be included in the proposed code of conduct of good agricultural practice.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food
(Lord Donoughue)

My Lords, the Government are working on a draft code of good agricultural practice and conservation. It will include advice and guidance on the protection of hedgerows and other field boundaries.

My Lords, I am grateful to my noble friend for that reply. Does he agree that the current flow of hedgerow regulations needs to be considered urgently and that the significant report of the Commons Select Committee on field boundaries merits serious consideration? Will my noble friend also look at the implications of the Flamborough judgment which leads to the conclusion that many of the hedgerows in the 4, 000 pre-1840 Inclosure Acts enjoy perpetual protection? Should not farmers be urged not to take down such hedgerows? Where public money has been granted to support their removal over the past 30 years, will steps be taken either to restore the hedgerows or get back the money?

My Lords, getting money back from farmers is a task that I would prefer to leave to others. On hedgerows, I agree wholly with the drift of my noble friend's Question. Immediately on coming into office, the Government announced that they would revise the 1997 regulations on hedgerows which, I think, was the last Act of the previous administration. The Government have responded to the Select Committee in a very positive way. A group is considering what our specific recommendations will be. It is currently pursuing research—it is quite a complex area—on defining what is an important hedgerow according to various criteria. When that research has been completed, we shall come forward with our proposals. I can assure my noble friend that they will be in the direction of supporting the conservation and restoration of hedgerows.

On the Flamborough judgment, which my noble friend spoke about, and the Inclosure Acts, there will be a recommendation in our statement that landowners bear in mind their obligations under the Inclosure Acts. However, it is our view that the Inclosure Acts are a rather inadequate support for the protection of hedgerows; for instance, there has to be an interested boundary partner who takes action. We would rather revise the regulations and make them operate in an effective way on a contemporary basis.

My Lords, when do the Government expect that research to be concluded? At the moment, there is some considerable urgency about it. There is a decline in the bird population in the countryside, a decline, largely through neglect in some cases, of field boundaries and the need to help farmers who cannot at the moment afford to do practically anything, let alone what is needed. When is that research expected to reach a conclusion?

My Lords, it is currently well advanced. It is the responsibility of the Department of the Environment, Transport and the Regions and not MAFF. We are hopeful that by the spring the results will be made available and we shall publish them.

My Lords, may I congratulate the Minister on confirming that MAFF is working on the proposed code of conduct for good agricultural practice? Perhaps I can press him further. The department seems to have been working on it for a considerable period of time—not quite since the Inclosure Acts, but almost. Could my noble friend encourage the Minister to tell us when the proposed code of conduct of good agricultural practice will be available? I understand that his department is finding it difficult to allocate resources and time to that issue at the moment.

Yes, my Lords, a number of other issues have recently occupied some of our time and resources. However, this issue is being pursued vigorously by my honourable friend Elliot Morley and his group. Following our conclusions, we shall need to consult, but we would hope that during this year the benefits of those considerations will be available.

My Lords, if the hedgerows are so important for the good look of the countryside, will the Minister establish them on the downs?

My Lords, I am not sure that that is wholly within my power. I am equally not sure to which downs the noble Lord refers. If he is referring to the High Weald near the South Downs, I can assure him that the proposals now being considered for that area contain proposals for afforestation and. where relevant, hedge-growing.

My Lords, will my noble friend note that the inclosure protection does not differentiate between important hedgerows and other hedgerows? Where the protection is local, it applies to all.

My Lords, my noble friend is correct. It is a feature of the 1997 regulations, and consideration of improvements to those regulations, that they involve a definition of an "important hedgerow" and a hedgerow that is "important for environmental reasons". The Inclosure Acts appear stronger than that, but it is our view that they do not form a practical basis. We would encourage all farmers, all landowners and all local authorities to bear in mind their obligations under the Inclosure Acts, but our judgment is that they are not an ideal basis for pursuing the environmental objectives which my noble friend has. I also want to congratulate him on the work that he has done through a long career, over many years, in this area.

My Lords, given that hedges do not grow overnight, would the Minister please ensure that insurance companies adequately compensate farmers after a car has roared through one of their hedges, removing 50 years' worth of growth, and ensure that they do not receive just small compensation for that?

My Lords, I am sure that those companies read the Lords' Hansard every morning. I hope they take note of what is an important, practical point, but a little beyond my power.

Armed Forces: Post Traumatic Stress Disorder

3.15 p.m.

What are the procedures for the prevention, diagnosis and treatment of post traumatic stress disorder for members of Her Majesty's Armed Forces.

My Lords, the Armed Forces recognise post traumatic stress disorder as a serious and potentially disabling medical condition. Each service runs programmes, the aims of which are to prevent PTSD occurring, and to inform service personnel how to recognise the symptoms. Any service personnel found to be suffering from PTSD will be offered treatment by service medical personnel and, if necessary, a consultant psychiatrist. Those deploying on military operations receive pre- and post-deployment briefings.

My Lords, I am grateful to the noble Lord for that very comprehensive reply. Is he aware that the symptoms of PTSD are shared with other illnesses; for example, organophosphate poisoning manifests symptoms that are very similar to PTSD? In the light of the fact that there are two suicides a month among the Gulf veterans, and that there are well over 200 former Gulf veterans in prison for offences which may well be associated with mood changes which are also associated with OP poisoning, could the Minister ask the medical providers within the military and those caring for Gulf veterans who have left the Armed Forces to look out for alternatives to PTSD—in other words, that they eliminate any organic cause before they turn to a psychiatric cause?

My Lords, I am much obliged to the noble Countess for her first remark. As I am sure she is aware, when we encounter servicemen or women who might be suffering from PTSD, they are normally first examined by their service medical officers, and consultant psychiatrists consider the possibility of physical causes only if there is a clinical reason for doing so. Patients may require a whole range of medical investigations, and from time to time brain scans may be undertaken if there is—I emphasise—a clinical reason for doing so.

I do not challenge the statistics given by the noble Countess. However, this is the first time I have heard them, and I shall want to look into them closely before I can confirm them in detail.

My Lords, with the forthcoming closure of Haslar, can the Minister tell us where the problems of PTSD and other problems described by the noble Countess will be treated, as there will not be a military hospital which is able to do that work?

My Lords, as I am sure the noble Lord realises, there is no intention whatever of closing Haslar before adequate facilities are provided in the civilian community in the immediate neighbourhood. Whether those facilities will include treatment of the conditions to which the noble Lord has referred, I cannot tell him without notice.

My Lords, can the Minister assure us that anybody who is suspected of suffering from post traumatic stress disorder will be treated immediately and that there will be no delay? Bearing in mind that the Defence Medical Services are acutely short of personnel, what assurance can the Minister give the House that PTSD sufferers will be seen rapidly?

My Lords, as I am sure that the noble and gallant Lord recognises and recalls, one of the important conclusions of the recently published Strategic Defence Review was greatly to enhance the resources available to the Defence Medical Services. It will be some time before those decisions will take practical effect. I am sure that the noble and gallant Lord recognises that we shall do everything in our power to ensure that there are no unnecessary delays. If he knows of any cases where delay has occurred, I should he grateful if he would let me know.

My Lords, is the Minister aware that a number of psychiatric cases are cared for at Catterick and that, on the whole, members of the Gulf veterans community are extremely satisfied with the services provided? However, there seems to be a problem with one psychiatrist at Catterick who, despite being presented with patients with, for example, organic pain, refuses to let those patients go on to have further examinations and insists that they receive only psychiatric treatment. May I write to the Minister about a particular case, and about others which have occurred, to see whether we can rectify that situation?

My Lords, I was not aware of the problem to which the noble Countess refers. I am always happy to receive letters from her or for her to call on me to discuss such matters in great detail.

Genetically Modified Food: Research

3.21 p.m.

Whether they consider that current research on genetically modified food is adequate.

My Lords, I look back on the squirrels with nostalgia! There is a considerable amount of research being conducted on genetic modification worldwide. All genetically modified foods and food ingredients go through a very thorough scrutiny process by a committee of independent experts, the Advisory Committee on Novel Foods and Processes, which keeps fully up to date with the latest scientific thinking.

My Lords, I am grateful to the Minister for that Answer. Will he tell his noble friend Lord Sainsbury that noble Lords in this corner of the House are not clamouring for his resignation because, to all intents and purposes, he has behaved in the best tradition with regard to upholding professional standards in public life?

I have two concerns. First, I refer to the fact that the public are concerned about genetically modified foods. Is not now the time to have an informed debate on the matter? Should we not err on the side of caution, and would not a moratorium on such research allow that to happen? Secondly, with regard to the environment, does the noble Lord recognise the need for long-term safeguards and adequate evaluation of the effect of GM crops? No one would forgive us if we ruined the flora and fauna of this country.

My Lords, I thank the noble Lord for what he said about my noble friend Lord Sainsbury. I agree absolutely. My noble friend is a man of total honour and integrity. He has met all the rules. I find absolutely ludicrous the idea that someone who knows something about a subject should therefore be disqualified from involvement in it.

I agree with the noble Lord's wider points. We as a government have from the beginning been concerned about the long-term implications of genetic modification.

With regard to foods, there is a rigorous system for approval. Existing GM foods were approved under the previous administration. On the environmental side, in agreement with the industry we have established that there will be managed trials to assess and analyse the implications of growing such crops. There is no arrangement for their commercial development. There has been no U-turn from that to a different arrangement. There will be field trials. When we have evidence from those trials, we shall judge whether it is safe for such crops to be commercially developed. I think that that is a proper and responsible approach. I agree with the noble Lord that we need a measured and balanced discussion of this and not the scaremongering and hysteria that have been prevalent—and not only in the tabloid press.

My Lords, does the Minister agree that it is desirable that a substantial part of the research in this area in this country should be conducted by government scientists and that too much of it should not be left to commercial firms which clearly have as their first interest the making of a profit?

My Lords, research is conducted both publicly and by private firms. It is conducted internationally, in Europe and in this country. Where such research is conducted by commercial firms, it is then subject to proper scientific peer scrutiny by the Government's advisory bodies. The Government conduct research themselves. We have an extensive programme, with nine projects currently under way on the safety of genetically modified foods. We are also conducting three projects on the environmental side. The Department of the Environment, Transport and the Regions also sponsors many more projects in that area.

My Lords, is my noble friend aware that many noble Lords, on all sides of the House, will welcome what has been said about the probity of my noble friend Lord Sainsbury? Will my noble friend the Minister indicate what ideas the Government have about creating the machinery for a sensible, rational, comprehensive and comprehensible debate about this very vexed issue, as there can be no doubt that many members of the public are very sceptical about such developments?

My Lords, I thank my noble friend for what he said about my noble friend Lord Sainsbury. We are very much in favour of having a proper debate on this matter, with the maximum input. A wide range of specialisms are involved in our advisory bodies, as are members of the general public as consumers. We can also have debates in Parliament. Perhaps I may refer to the excellent report by your Lordships' Select Committee on which we shall certainly have a debate. I advise both the media and certain political dimensions to read that report and the evidence that was given to the Select Committee, because that is the basis for the beginning of an excellent and balanced discussion.

My Lords, can the Minister please tell us, first, on what grounds the Government have rejected the recommendations of English Nature and, secondly, why they have suppressed the report from the DETR? Will the noble Lord agree to that report being published so that there can be maximum discussion?

My Lords, on the second question, I do not know on what information the noble Baroness is suggesting that we have suppressed the report. We have not suppressed any report. If the noble Baroness based what she said on reports in the tabloid press, I advise her to remember her own experience in government and to double-check. That report has been made available and is under discussion. In fact, it was discussed today. The report, and the reactions to it, will be published at an appropriate time.

My Lords, will the Minister assure us that nothing will be done by the Government to prevent the development of genetic crops, rigorously tested, which can do a great deal to reduce reliance on chemicals and pesticides?

My Lords, if the noble Lord reads the evidence and the report of the Select Committee, he will see that the case is made there—it is a strong case—for properly regulated and scrutinised scientific development. Our first priorities are public health and the health of the environment. We shall attempt to balance those two priorities. That is exactly what we are doing.

My Lords, will my noble friend the Minister give some consideration to ensuring that any government information produced by this Government is translated into languages other than English, given the complexity of the issues before us?

My Lords, I thank my noble friend for that question. She makes an excellent point. I do not know in how many languages statements are printed. However, I shall certainly suggest to the department that we take seriously what she has proposed.

My Lords, given that, rightly or wrongly, there is grave concern, and indeed possible loss of confidence in genetically modified foods, will the Minister tell the House whether the Government will accept the suggestion of his right honourable friend Michael Meacher that there should be set up an independent, ethical commission to regulate the development of genetically modified foods, rather in the way of the Human Fertilisation and Embryology Authority?

My Lords, if that was proposed by the right honourable Member who has been mentioned, I am sure that it will be taken seriously by the Government of which he is a member.

Easter Act 1928 (Commencement) Bill H L

3.32 p.m.

The Earl of Dartmouth: My Lords, I beg to introduce a Bill to bring into force the Easter Act 1928. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.— (The Earl of Dartmouth.)

On Question, Bill read a first time, and to be printed.

London Local Authorities Bill H L

Read a third time, and passed, and sent to the Commons.

Baxi Partnership Limited Trusts Bill H L

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time.— The Chairman of Committees.)

On Question. Bill read a second time, and referred to the Examiners.

City Of Newcastle Upon Tyne Bill H L

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time.— (The Chairman of Committees.)

On Question, Bill read a second time, and committed to a Select Committee.

Kent County Council Bill H L

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time.— (The Chairman of Committees.)

On Question, Bill read a second time, and committed to a Select Committee.

Medway Council Bill H L

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time. —(The Chairman of Committees.)

On Question, Bill read a second time, and committed to an Unopposed Bill Committee.

United Reformed Church Bill H L

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time.— (The Chairman of Committees.)

On Question, Bill read a second time, and referred to the Examiners.

Health Bill H L

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That it be an instruction to the Committee of the Whole House to whom the Health Bill [H. L.] has been committed that they consider the Bill in the following order:

  • Clauses 1 and 2,
  • Schedule 1,
  • Clauses 3 to 14,
  • Schedule 2,
  • Clauses 15 to 47,
  • Schedule 3,
  • Clauses 48 to 50,
  • Schedules 4 and 5.
  • Clauses 51 to 54.(Baroness Hayman.)

On Question, Motion agreed to.

Road Traffic (Nhs Charges) Bill

3.34 p.m.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee. —(Lord Hunt of Kings Heath.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Payment for hospital treatment of traffic casualties]:

Page 1, line 17, at end insert ("or the Employers' Liability (Compulsory Insurance) Act 1969").

The noble Lord said: I shall speak slowly while the Chamber clears. This is an interesting Bill. We look forward greatly to discussing this Committee stage over the next few hours.

As I am sure the Minister will be aware, this is a probing amendment. I refer to the narrow definition of the Bill in terms of the Long Title. The Committee will see that I have had to be somewhat ingenious in introducing into my amendment the Employers' Liability (Compulsory Insurance) Act 1969 as a way of making a point. However, the Bill is solely framed around motor accidents and compensation in respect of torts surrounding motor accidents. In the light of the consultation paper put forward by the Law Commission at the end of 1996, it seems somewhat extraordinary that the Government have not yet taken a rather wider view of compensation for healthcare, nursing charges and other health-related charges being payable by tortfeasors in those circumstances. The Law Commission considered that something approaching £1 billion worth of hospital costs were attributable to accidents caused by tortfeasors. For the non-lawyers present, the definition of tortfeasor may be somewhat obscure, but it is simply someone who has been negligent in causing an accident and causing personal injury to another. I have no problems with the general principle that the insurers of such tortfeasors should be liable to pay those hospital charges. I do not believe that that is a breach of the principle that the NHS should be free at the point of delivery. I believe it is perfectly reasonable that tortfeasors in those circumstances should be liable to pay hospital costs.

If the National Health Service could raise £1 billion in respect of torts committed by tortfeasors, I wonder why the Government are not taking a wider view. I therefore ask myself whether this Bill is wholly pragmatic in seeking to "jack up- the amount of charges payable in respect of motor vehicle accidents under the Road Traffic Act from £16 million to £160 million, and nothing further will happen, or is this a sprat to catch a mackerel? Is it designed to see how the compensation recovery unit will operate in practice? Is it a swallow that portends a summer of tortfeasors being liable for the hospital charges incurred as a result of the accidents that they caused? I believe that the Government need to put clearly on the record—this is the purpose of my amendment—precisely what their approach is. I believe that when the Law Commission issues its report—which I believe will be this autumn—the Government should take further steps to recover some of that El billion in charges. It is a debate that we need to have. I believe it is a debate that could form part of this Committee stage and indeed a Report stage, if we so chose.

Technically it is perfectly possible under the Employers' Liability (Compulsory Insurance) Act 1969 for employers to be liable for motor vehicle accident health costs. There is no reason why this amendment could not be accepted. It is designed to make the point that this Bill could be considerably wider. For the benefit of the National Health Service the Government need to take a principled approach rather than a purely pragmatic one. I beg to move.

I support this amendment in the sense that I support it as a probe to ascertain from the Government exactly where they stand on extending the principle of a health service funded from compulsory, or any other kind, of insurance cover. At Second Reading the Minister said there were no plans to widen the application of the principles underpinning the Bill so as to bring other kinds of insurance into this new system. Of course I noted what he said. But I confess I remain somewhat sceptical, given the enthusiasm with which the Government have embraced the ideas contained in the Bill. Given the Government's intention to increase by a factor of 10 the sums flowing into the health service from the motorist, we on this side of the Committee are tempted to call the charges "new charges", not to make out that they are newly invented—clearly, in the main, they are not—but to point out that the Government have taken this opportunity to bump up the tariff, by a very considerable percentage, to ensure a much higher take from vehicle insurance policies than has been achieved up to now.

The noble Lord, Lord Clement-Jones, is absolutely right: there is no difference in principle between the philosophy underpinning this Bill and the idea that the hospital treatment of a factory worker who has been injured in an industrial accident should be funded from his employer's insurance policy. In this context, it is interesting that one of the functions of the compensation recovery unit is to recover benefit in cases where employers have paid out compensation after industrial accidents. Why should not the costs of the NHS treatment be recouped by the CRU in that type of case as well?

Can the Minister say why the Government have chosen to treat only motor policies in this way? Before he tells me that it is not the Government's idea and that the principle of the Bill has been with us since the 1930s. I ought to point out to him that the present Government—elected on a manifesto which promised an NHS available to all, funded from general taxation and free at the point of delivery—had a choice of four courses open to them in regard to the collection of NHS hospital charges: first, to accept the status quo, with all its faults; secondly, simply to improve the system of collecting the charges; thirdly, to improve the collection system and hump up the charges; and, fourthly, to abolish the whole idea altogether. The Government have chosen the route which looks likely to maximise the yield from vehicle insurance. As I observed at Second Reading, that decision speaks volumes for New Labour.

It is not hard to discern why the Government took that decision: they knew perfectly well that hardly anybody would notice what they were doing. Perhaps that is one reason why we can take at face value the Government's assurance that they have no intention of widening the principle underpinning the Bill. Interestingly, the press are beginning to cotton on to the fact that the Government have substantially increased the tax burden on ordinary, middle-income families in a whole host of ways. The expression I saw used was a "stealth tax". The AA has recently commented that motorists had been turned into "wallets on wheels". The Bill is yet another example of the stealth tax in action.

We on these Benches would welcome a mature debate on how best to meet the ever-rising demands placed on the NHS over and above the funding raised through general taxation. 1 do not necessarily think that the noble Lord's amendment points the way to the right sort of door for such additional funding, but we should debate exactly this sort of question. I look forward to the Minister's reply.

The noble Lord, Lord, Clement-Jones, has raised an interesting point. The noble Earl, Lord Howe, has certainly widened the debate, almost into a debate on the future funding of the National Health Service, a subject on which we would enjoy many hours of happy debate.

Perhaps I may deal with the specific point raised by the noble Lord, Lord Clement-Jones. He rightly referred to the Law Commission report in 1996, which produced a thought-provoking discussion paper in which it was suggested that the NHS should recover its costs in all cases of actionable personal injury. This would mean the recovery of costs in any case where the accident victim received compensation from another party in respect of the injuries suffered. The obvious examples of this are employer's liability—which is the subject of this amendment—and public liability, but the commission's suggestion would extend this to all actionable personal injury cases.

I have been asked to state the Government's position on this matter. We have acknowledged the commission's suggestion and we are considering it. We shall he particularly interested to see the outcome of the commission's considered report on this matter, which we understand will be published later this year. The Bill before us is not concerned with these matters: it is simply putting in place an administrative system for the recovery of charges which are already on the statute book. The Bill is not a probing measure, or even a swallow that portends a summer. If the Government decide to implement the Law Commission's suggestions, that would have to be taken forward under its own steam. If a decision were taken to extend the charging principle—which has existed in its current form for more than 60 years—a further Bill would have to be brought before Parliament to allow your Lordships and those in another place a better opportunity to consider and debate the important issues involved.

The noble Earl, Lord Howe, returned to a theme which he pursued at Second Reading in relation to what he describes as the pursuit of the motorist. There is another way to look at this. For one reason or another, over many years the NHS has not been able to collect the amounts of money rightfully owed to it. One has to take that into account when considering the whole basis of the Bill. I should also point out to the noble Earl that a cap is being placed on the maximum payable.

As to the issue of the funding of the NHS through general taxation, that is a very important principle. It is supported by the public, and I believe it will continue to be supported by the public. The Bill before us does not eat into that principle at all. The system has been in existence for many, many years: we are simply ensuring that the NHS gets what is rightly owed to it. On that basis, I would invite the noble Lord to withdraw his amendment.

3.45 p.m.

I thank the Minister for his reply. I agree that the Bill does not breach the general principle that NHS costs should be borne out of general taxation. It seems to me perfectly viable and acceptable for hospital trusts to, in a sense, step into the shoes of the victim of an accident and recover hospital costs from the tortfeasor in those circumstances.

The Minister has partially answered my probing question on whether the principle could be taken wider. Why should not a wider class of tortfeasors—not only those responsible for motor accidents but also those responsible for other types of accidents—also not be liable to bear those hospital charges? The Minister said that the Government and his department will look carefully at the proposals in the Law Commission report which is due at the end of the year. Since it will be a way of adding further funds to the National Health Service without breaching the principles involved in its existing funding. I very much hope that the Government will look carefully at the report of the Law Commission and perhaps come back to the House with new proposals. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Page 1, line 22, leave out from ("Part") to end of line 24.

The noble Earl said: This amendment addresses a matter which I raised at Second Reading and relates to the way in which the Bill deals with the cost of treating those people killed or injured as a result of an accident where the driver is uninsured or untraceable. It is a matter which causes me considerable concern. As the law stands at present, the NHS cannot reclaim any charges for hospital treatment where that treatment arises from a traffic accident in which the driver responsible is uninsured or cannot be traced. Claims for compensation, however, can be made by the injured party and, where such a claim is agreed, the Motor Insurers' Bureau meets it. The MIB is in essence a pooled fund resourced and maintained by the insurance industry. The fund is money top-sliced from the premiums of policies taken out by law-abiding motorists. As far as I know, no one would argue against the principle that there should be such a safety net for compensation claims. It is entirely equitable that the MIB should exist for this purpose because if it did not there would be nothing to take its place and many injured parties would be denied compensation altogether through no fault of their own.

Under the Bill it is proposed that for the first time NHS hospital charges as well as compensation should be recoverable from the MIB. My request to the Government is that they should justify that proposal. I do not dispute that the MIB is well placed to assume the role that the Bill envisages. It is well placed. But that is not the question. The question is: who ought to be paying for this hospital treatment? Should it be once again the law-abiding motorist, through his or her motor insurance policy, or should it be the NHS itself?

I frankly do not see why it should be the law-abiding motorist. For many years motorists who are properly insured have been required to pay extra in their insurance premiums to cover potential claims against themselves for the cost of NHS hospital treatment, and that has happened despite the fact that they are already paying for the NHS through general taxation. It is a long-established principle and we accept it. But now the Government are saying that those same individuals should also start shouldering the sins of other people; that is to say, the cost of hospital treatment arising from road accidents caused by drivers who are uninsured. I believe that is a step too far.

Quite apart from the issue of principle, there is a practical aspect to the question as well. Premiums on motor insurance policies will increase anyway as a result of the Bill but they will go up even more because of the Government's wish to tax law-abiding drivers to pay for the hospital treatment of those who are uninsured. Approximately 10 per cent. of the motorist's car insurance premium already goes to the MIB. It is estimated that as a result of the Bill the MIB levy will need to increase by £12 million to £15 million; in other words, a significant slice of the £6 to £9 increase in average premiums predicted by the ABI. But the position is even more serious than that because all the predictions are that car insurance premiums will rise by at least 10 to 15 per cent. this year anyway, and some by as much as 30 per cent. If that happens we are likely to see even more uninsured motorists because inevitably some of them will not be able to afford these higher premiums, and that, in turn, will lead to the law-abiding motorist having to pay yet more.

The most relevant question I can put to the Minister is the one that I put at Second Reading. What action are the Government going to take to tackle the problem of uninsured and untaxed drivers? The cost to the Treasury of these drivers is around £170 million a year and that figure does not represent the cost to the country as a whole. A crackdown on this problem really would yield worthwhile sums of money. In fact it could well raise more than is likely to flow to the NHS as a result of the provisions in the Bill.

The NHS is funded from general taxation to provide healthcare to those who need it free at the point of delivery. The only exceptions to that rule up to now have been prescription charges and the requirement for motorists to insure themselves against potential claims on themselves for the cost of NHS hospital treatment. I really do not believe it is right to add to the burden shouldered by the law-abiding motorist by asking him to subsidise the NHS still further on behalf of other people less responsible than himself. For those reasons, I beg to move.

The Motor Insurers' Bureau exists to ensure that those unfortunate enough to he injured in a car accident involving a driver who either has no insurance or cannot be traced can still receive compensation for the injuries they have suffered. The bureau is funded by levies paid by motor insurers and, as far as concerns the accident victim, acts in the same way as any other insurance company would. That means that the bureau not only pays compensation in the same way as other insurers but also that in cases where the accident victim has also received state benefits as a result of the accident, the bureau is responsible for the repayment of those state benefits to the Department of Social Security.

That principle is well established and, in the inclusion of the bureau in the recovery of benefits legislation, was proposed by the previous government and accepted by Parliament at that time. All we are seeking to do is to bring the situation of benefit and NHS charge recovery into line. Not only is it accepted that the bureau repays state benefit but where the accident victim has opted for care in the private sector the bureau will meet those costs too. Our intention is that the NHS should also be able to recover its costs where appropriate.

The noble Earl, Lord Howe, referred to the cost to others of drivers who are uninsured. I understand from the Association of British Insurers that in 1996 the bureau met claims for compensation in cases where drivers were uninsured to a total cost of around £111 million. That is clearly a substantial sum, but we have to put that sum in context because the total amount paid out in compensation against motor insurance policies was £5.1 billion. I think your Lordships will appreciate that including the MIB within our scheme could not cause much distortion when set against sums such as that. It is also worth pointing out that the estimate we have made of the amount the NHS will receive as a result of this measure would raise the average premium by between 2 and 3 per cent. or approximately £6 to £9.

The noble Earl, Lord Howe, asked about the Government's intention with regard to tackling uninsured motorists. That is an important issue but I believe it is one that should be tackled through the appropriate channels. The police can require evidence of insurance cover at any time and a driver who is caught without adequate cover faces a maximum fine of £5, 000, plus automatic endorsement of his licence and the possibility of disqualification. I understand that the Association of British Insurers is in talks with the Department of the Environment, Transport and the Regions about the possibility of an insurance database linked directly to vehicle registration at the DVLA. It is through such measures that we should approach the problem of uninsured drivers. On that basis, I invite the noble Earl to withdraw the amendment.

I am grateful to the Minister and I shall reflect carefully on what he has said. I am not sure that he has fully answered the point I sought to make on the matter of principle. I know that it is an easy step to bring the NHS into line with the private sector, which can recoup its costs under the current system. It is an easy step. But the question I am asking is whether that is right. That is a rather different question. The fines for uninsured driving average around £200 a time. That is less than the cost of the average motor policy. The noble Lord talks about tackling the problem of uninsured drivers, but it is figures like that that put the whole matter into perspective.

I shall read carefully what the noble Lord has said and reserve the right to bring the matter back at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4 p.m.

Page 1, line 24, at end insert (", or

(e) a payment made in respect of an accident caused by a vehicle which is not required to be insured by virtue of section 144(2) of the Road Traffic Act 1988, ").

The noble Earl said: The Road Traffic Act 1988 provides for certain classes of vehicle to be exempt from the requirement to be insured. In the main these are Crown vehicles, including those belonging to local authorities and the Armed Forces. There are over 1 million such vehicles, although some are conventionally insured in spite of the exemption that is given to them. These vehicles are not, as I understand it, caught by the Bill as currently drafted. I gather that that is because it would be inefficient for funds to be transferred within government.

There are two points to be made. First, intra-governmental transfers occur frequently. including in respect of benefit recovery by the CRU, which is in direct parallel to the provision in the Bill. Secondly, the NHS is being deprived of funds that have presumably been included in the Government's calculations.

The grounds for levying this charge at all—namely, that motorists should bear the cost of damages arising from their behaviour—applies with equal force to Crown vehicles. Therefore I cannot see any ethical justification for the Bill not to catch Crown vehicles as well. I beg to move.

The noble Earl refers to the bodies which under this section are exempt from the requirement to have compulsory insurance, including the police, the NHS and the Armed Forces.

Perhaps I may refer the noble Earl to the basic premise of the Bill; namely, to collect existing charges, but to do it better. There is no intention in the Bill to extend the scheme or to introduce new charges. The existing charges are due only when compensation is paid by an authorised insurer in respect of a claim against a motor insurance policy. The bodies listed in Section 144(2) of the Road Traffic Act 1988 are not required to carry compulsory insurance. On that basis we have no intention of extending the scheme to bring those bodies within it. On that basis I invite the noble Earl to withdraw the amendment.

I am grateful to the noble Lord, and shall of course withdraw the amendment. I am not quite clear from his reply whether the Government have excluded those who have driven exempt vehicles and subsequently found themselves in an accident from the calculation in arriving at the figure or whether they have included them.

My assumption is that they have been excluded; however, I shall write to the noble Earl to make sure that that is on record.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Page 2, line 24, leave out ("compensation payment made") and insert ("injury or death occurring").

The noble Earl said: In moving this amendment I shall speak also to my Amendment No. 7. I understand that these amendments have been grouped with two amendments in the name of the noble Lord, Lord Clement-Jones.

Another of the Bill's little iniquities is its retrospective nature. We understand that the Bill is likely to become law on or about 5th April this year. However, the provisions of the Bill are set to bite with effect from 2nd July 1997. That was the date when the Chancellor first announced the Government's intention to introduce these new measures. The amendments seek to ensure that the new tariff of NHS charges will start to apply only when the Bill has passed into law. They therefore follow a standard point of principle; namely, that unless there is very good reason to do otherwise, new law should not be retrospective in its effect.

The Minister will doubtless argue that the insurance industry is well prepared for this change, and that as we are now 18 months down the track from the original announcement the actual cost to the industry will be small. But two points should be made. First, the retrospection in the Bill is bound to result in an additional cost to insurers, who are required to meet claims made under policies sold before 2nd July 1997—claims that were not priced in to those policies at the time of sale. Obviously, those costs will have to be met. Motor policies typically run for a period of 12 months, so any policy written between 2nd July 1996 and 2nd July 1997 included an element of cover which is affected by the 2nd July 1997 announcement.

In practice, even policies written after the announcement will have been affected. Insurers need time to digest the implications of an announcement like that and recalculate premiums accordingly. The effect on insurers who are no longer writing motor business will be particularly severe, as it is most unlikely that any insurer in what is currently a very competitive market could recoup such costs. Premiums can of course be raised to reflect the new costs in the future, and that will affect the whole market. However, that does not apply to historic costs which are charged retrospectively.

The second point is one of principle. I fully accept that there are occasions when retrospective legislation is both necessary and unavoidable—when, for example, there is a need to put right a glaring anomaly, or where it is suddenly discovered that the existing law is deficient in some way. But this occasion is not like that. This is a case of the Chancellor looking to see how he can garner in as much money as he can for the NHS, even to the extent of anticipating the repeal of existing law and the regulations that will ensue from that repeal. The effect of what he seeks to do relates back to events that took place before the present Government were elected. That does not constitute a good enough reason for retrospection. In fact, it is a wholly inadequate basis for taking such a course and it should be deplored. I shall be very interested to hear what the Minister has to say. I beg to move.

I join with the noble Earl in supporting this batch of amendments. He put the matter well. This is indeed a Bill that incorporates retrospection. I have learnt that the correct word is "retrospection". Throughout my remarks at Second Reading I referred to "retrospectivity". However, thanks to the Hansard writers who corrected me. no one ever knew that I got the word wrong—so "retrospection" it is. It stares one strongly in the face in this Bill.

The principle surely must be that insurance companies should be liable to pay out only amounts that were known at the time the premiums were paid by their insured. Otherwise, the situation arises whereby, without any indication or notice of the amounts involved, they have to dip into funds which they believed were otherwise available for the purposes of their business. I cannot see that that is a fair principle. I see it as equivalent in many respects to retrospective taxation.

As regards the amendments, between us we have provided the Government with a menu of possibilities. There is the ability to change the basis of the provision, so that the amount of charges is fixed by reference not to the date the settlement is made but to the date when an accident took place. I believe that that is ultimately the fairest since it gives the most notice. We then have a situation, which may or may not be acceptable, in which the relevant date will be the date from which the Bill comes into effect but in which, as under the Bill as drafted, NHS charges would apply when compensation is paid and not, as proposed in Amendment No. 6, on the occurrence of injury or death.

I believe that my amendment enables the difference to be split between the manifestly unfair date of July 1997 and the date of coming into effect of the Bill. That may be more acceptable to the insurance industry than the July 1997 date and gives the government a range of possibilities in order to avoid a manifestly unjust situation. The July 1997 date enshrined in the Bill did not give the insurance industry sufficient indication of the precise amount of charges that it would be required to pay from settlements made to insureds. Those insureds paid premiums on a wholly different basis. Surely that must be a good enough reason to eliminate this element of retrospection from the Bill.

I start by reminding the Committee that over the years the NHS has lost many millions of pounds through its inability to collect the charges that have been due. The amendments would limit the new scheme to accidents happening after the Bill comes into effect or, in the case of the amendment in the name of the noble Lord, Lord Clement-Jones, to another time altogether.

It is important to recognise that compensation claims in respect of accidents take on average about two years to settle. That means that the NHS would have to wait an average of two years to receive repayment of costs. As the rest of the Bill will deprive NHS trusts not only of the ability to collect the emergency treatment fee but also to collect any charges under the existing law, the amendment would leave hospitals without any income at all from this source. In the meantime, insurers would be able to gain from the provision which they would have made in order to meet those charges.

The Bill is intended to put right a situation in which hospitals have for many years not recovered anything like the sums to which they have been entitled. Insurers have known that recovering charges is something of a lottery, depending on the efficiency of the particular hospital in which the accident victim was treated. In addition, the amounts which can be claimed by a hospital have lost touch with the real costs of treatment. Insurers have known this and must have heaved a sigh of relief when an accident victim has been treated by the NHS rather than by the private sector. Let me make clear that insurers always may have been required to pay the full cost of treatment received in the private sector.

It is not realistic to expect us to allow this situation to drag on. The Law Commission suggested that there should be a new method of recovery of NHS costs in 1996 and the announcement of our move to recover actual costs was made in July 1997. The date from which new charges will apply, 2nd July 1997, was set following consultation with the insurance industry. It was the insurance industry itself which suggested, in a face-to-face meeting with the Secretary of State, that 2nd July 1997 would be a reasonable starting point for us to collect the full cost of treatment.

If insurers were not doing so before, they have had time—nearly two years—to begin to allow for forthcoming NHS charges when setting premiums. Changing the starting date for new higher rate charges to April 1998 would mean that full costs would not be properly fed through to hospitals for another full year. That is because the average length of time taken to settle a personal injury compensation claim is two years. NHS trusts would be deprived of the additional income and insurers, who would have already factored in the new developments, would keep the difference.

By the time the new scheme starts on, we hope, 5th April 1999, the insurance industry will have had a full 21 months to accustom itself and its business practices to the new charges. In addition, the new higher rates will not apply to all claims which are settled under the new arrangements but only to those where the accident happened within the past 21 months.

No one would expect the insurance industry to welcome increased charges with open arms, but I believe that there has been plenty of time between announcement and implementation and I ask the noble Earl if he will withdraw the amendment.

4.15 p.m.

I am grateful to the Minister for what he said. I understood him to say that the effect of Amendment No. 6 would be to deprive the NHS of the ability to reclaim any charges at all between 2nd July 1997 and the date of Royal Assent for the Bill. That was not an intended effect and I shall have to look at the amendment again. Clearly I did not have in mind that the current collection system should be negated. I am grateful to the Minister for pointing that out.

The second and perhaps more substantial point relates to what the Minister said about consultation with the insurance industry. As I understand it, when the consultations took place, the insurance industry was not exactly over the moon with the idea of 2nd July 1997 being the effective date and has pointed out to me that it will involve insurance companies in additional costs for which they could not possibly have budgeted, and in that sense the Bill is retrospective.

I think that when the Bill receives Royal Assent the insurance industry will have to accept the position, but it will do so very reluctantly. The amendment in the name of the noble Lord, Lord Clement-Jones, proposing an effective date of 1st April 1998 may provide a fair compromise. It may well be that we shall want to revisit the question of the effective date at Report stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 7 not moved.]

Clause 1 agreed to.

Clause 2 [Applications for certificates of NHS charges]:

Page 2, line 31, leave out ("may") and insert ("shall").

The noble Earl said: In moving Amendment No. 8, I shall speak also to Amendment No. 10. These amendments are designed to alter the duty created by the Bill to apply for a certificate by increasing the onus of responsibility on an insurer to do so before he is allowed to make a compensation payment. This is a subtle shift but I believe it to be entirely in keeping with the spirit and thrust of the Bill.

If it is the Government's policy that drivers who cause accidents should contribute to the cost of NHS treatment, there is no good reason why that contribution should not be made before, or at least simultaneously with, the payment of damages to the injured party or, in a fatal case, to his relatives. On the other hand, I recognise that it would be wrong to force a delay on the payment of damages or compensation where those are due. My suggestion is that there should merely be an obligation on an insurer to apply for a certificate—not necessarily to be in possession of one—before compensation is paid. Under the Bill as it stands, an insurer does not have to do so, and that seems odd. I beg to move.

The obligation to pay NHS charges arises only when a compensation payment is made. The amount to be paid will he the amount which is due on the day when compensation is paid. In subsection (8) of Clause 2 the Bill places an obligation on a compensator to apply for a certificate of charges within 14 days of making a payment of compensation.

One of the many benefits of using the Compensation Recovery Unit to undertake the work of NHS recovery is that the unit already has an existing, efficient relationship with the insurance industry for the purposes of recovery of state benefits. We are anxious that the advantages of running our two systems together both to help the Government and the insurance industry are fully realised.

But one of the differences between our two schemes is that in cases involving benefit recovery, payments of compensation to victims may be delayed while the benefit recovery is calculated. This is not so in the case of NHS charge recovery as the compensation paid to the victim is completely separate from the NHS charges. Indeed, the NHS charge does not become payable until the compensation has actually been paid. In order, however, to help the two systems run together we have included in NHS charges recovery an option for the insurer to apply for an NHS certificate in advance of paying compensation. This will enable insurers to cover both recoveries at the same time and, where a case includes both benefit and NHS recovery, even to pay both amounts with one single cheque. The amendment fails to recognise that the obligation to pay NHS charges is triggered only when compensation is paid. It makes compulsory the option to apply for a certificate earlier than is strictly necessary and therefore fails to recognise that the insurer has no obligation to apply unless and until he makes a payment of compensation. On that basis I ask the noble Earl to withdraw his amendment.

Amendment, by leave, withdrawn.

Page 2, line 33, after ("State") insert ("or a person providing services to him").

The noble Earl said: Amendment No. 9 is in part a probing amendment but it also raises a drafting point. The Minister explained at Second Reading that the Government intended the compensation recovery unit in the Benefits Agency to act as agent for the Secretary of State in the collection of NHS charges from insurers. I should be grateful if the Minister can elaborate on the practical aspects of that arrangement. First, are all insurers ready to operate the system? Secondly, have all NHS hospitals been notified appropriately? Thirdly, what provisions have been made to ensure that the transition between the old and new systems is a smooth one? For example, presumably it will be necessary to transfer certain information to the CRU from hospital records about traffic casualties who are receiving NHS treatment at the time that the new system comes into operation and about those cases in which a claim for charges could be made but has not yet been made in relation to accident victims treated since 2nd July 1997. Have all those kinds of practical aspects been thought through thoroughly?

I turn to an entirely different aspect. Can the Minister inform the Committee whether the record of the CRU in the area of benefit recovery has been problem free'? I am aware that overall the performance of the unit has been satisfactory, but can the Minister confirm that the new work in collecting NHS charges will closely replicate established procedures that are familiar to the insurance industry? Is he confident that there will be no practical difficulties associated with the expansion of the unit's remit in terms of the procedures that it will follow?

My final question relates to the CRU as an agency acting for Scotland as well as England and Wales. Of course the Scottish Parliament will have responsibility for health matters in Scotland, but Scottish hospitals will be recovering charges through an agency that acts on behalf of the United Kingdom Secretary of State. From a practical standpoint I see nothing wrong with that. But would it not be wise to spell out at this stage in the Bill, as the amendment seeks to do, that applications for certificates may be directed to the Secretary of State's agents as well as to the Secretary of State himself? The Minister may reply that that is not necessary because the scheme is not reserved under the Scotland Act and Scottish Ministers will take on the Secretary of State's powers after devolution. If that is the case perhaps I may ask about the costs of running the proposed system. If the CRU is funded by the Benefits Agency, which in turn is an offshoot of the Department of Social Security, to what extent will the cost of running the new system be borne by the Scottish health budget? I beg to move.

The noble Earl raises a number of interesting points relating to the compensation recovery unit to which I shall try to respond. The fact that the Secretary of State has decided to place the work of NHS charge recovery with the Department of Social Security's compensation recovery unit does not need to he reflected on the face of the Bill. However, details of how the charges will be collected on behalf of the Secretary of State will rightly appear in the regulations.

The noble Earl, Lord Howe, both today and at Second Reading asked a number of questions about the CRU. The main and obvious factor in favour of the compensation recovery unit is its track record of recovering state benefits from compensators. This includes a well-established relationship with the insurance industry that is not just efficient and appreciated by the insurers but has been developing and changing in tune with the times. For example. discussions are currently under way with the major companies to develop electronic data interchange links between them and the compensation recovery unit. It is hoped that this will provide an even quicker and more cost-efficient procedure than now. The track record of the CRU has been widely acknowledged. For example, it prompted the Law Commission to recommend in a paper published in 1996 that the Government should consider using the unit to recover NHS charges.

Not only is the unit a known and appreciated quantity but it is within the government family, as the noble Earl pointed out, and deals daily with information that is both highly personal and confidential. We all appreciate that members of the public might be worried if information about their claims for compensation, including details of their injuries, was spread any wider than absolutely necessary.

The noble Earl, Lord Howe, asked about costs. In the regulatory appraisal we have published information on costing. In the first year we have budgeted for a cost of about mill ion but that includes a contribution to the development of a new computer system that will aid the recovery of both NHS charges and state benefits. In later years we expect this cost to fall. We are looking at a cost of about or less than 1 per cent. of the amounts that are recouped. My understanding is that the Scottish NHS will pay its share towards those costs.

I believe that the decision to use the CRU will benefit the insurance industry. Clearly, as the noble Earl suggests, there has been concern on the part of insurers about the impact on insurance premiums. One way in which we believe we can help the insurance industry is that by using the compensation recovery unit we can keep the administrative burden for insurers to a minimum. Insurers will be able to report relevant claims to the CRU using existing returns that have to be completed for benefit recovery anyway. They will be able to request certificates of recovery simultaneously, and they will even be able to settle both benefit and NHS recovery with one cheque in one envelope. I understand that the ABI supports the choice of the CRU to undertake this work.

The noble Earl asked whether both insurers and hospitals would be ready for the start of the scheme. We are confident that they are. Our understanding is that all hospitals have appointed liaison officers to work with the CRU and the unit has notified insurers of the new system and the practical details of it.

None of this means that the decision to use the CRU is set in stone. We believe that the CRU is the best possible option at this point. That view is based on an assessment of the burdens on the insurer, the concerns of the claimants and the fact that the CRU is a body engaged in a very similar type of work and has already proved what it can do. It does remain open for the Secretary of State, however, and indeed, in answer to the noble Earl, Lord Howe, the Scottish First Minister to decide that the work could be better placed elsewhere. If that decision was ever taken, then the Bill, and indeed the existing legislation, already allows the flexibility to specify exactly how collection would take place through regulations.

On that basis I would invite the noble Earl to withdraw his amendment.

I am grateful to the Minister for that full reply. It raises some interesting questions upon which we shall want to reflect. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 10 not moved.]

4.30 p.m.

Page 3, line 20, at end insert —

("(9A) Subsection (1) does not apply where in respect of a traffic casualty a person making a compensation payment has previously been issued with one or more certificates, giving rise to an aggregate liability which equates to such maximum sum as may be set out in, or determined in accordance with, such regulations made under section 3(2) as are for the relevant period in force.
(9B) In subsection (9A) above, "the relevant period" means the days during which the traffic casualty has received NHS treatment at a health service hospital in respect of his injury and in respect of which the certificate, or certificates, have been issued.").

The noble Earl said: This amendment has a dual purpose. The first is to relieve insurers of the duty to apply for an additional certificate where the ceiling for NHS charges has already been reached under previous certificates. The second purpose is to avoid a situation in which the uprating of charges would trigger a requirement to apply for a certificate when previously the ceiling for charges had been reached.

There are quite a few occasions when an insurer may wish to make an interim settlement in respect of a personal injury claim and settle any NHS charges at the same time. Interim settlements occur where there is a dispute over liability or where time needs to elapse before a full assessment of the size of the settlement can be made, but where the victim is in need of early compensation, for example for the costs of care.

Occasionally claim settlements may be structured over a period of time, perhaps to pay directly for rehabilitative treatment that is received privately. In these cases the insurer likes to be able to discharge his liability to pay NHS charges as early as possible, and the insurer also wants to avoid having to reapply for certificates which will record a nil charge when a further payment is made. The Minister may say that it may not be possible to estimate the full extent of charges when an interim settlement has been made, but that could be dealt with easily enough by specifying that it only applied in cases where the ceiling had been reached, and that is what the amendment seeks to do.

There will he very few cases where an insurer would want to make an interim settlement but where the hospital stay was below the maximum, because one has to bear in mind that £10, 000, which is the limit that the Government have indicated, equates to 22 days in hospital. The sort of provision I have suggested has the added benefit, where it was clear that the maximum had been reached, that it would allow an insurer to apply for a certificate well before making a settlement. He could settle the certificate at that stage and would not have to reapply at the time of making the settlement.

The amendment also seeks to address another point. If an insurer has paid the prescribed maximum in NHS charges under the terms of a certificate issued to him, what happens if those charges are uprated while the casualty is still in hospital? It does not seem equitable, or indeed very sensible, to require of the insurer that he applies for another certificate when, as it were, the goal posts of the charging tariff have moved. If an insurer were required to do this, there would once again be a sniff of retrospection creeping into the provisions of the Bill, because new laws would essentially be applied to the liabilities of insurers under old policies.

I should be grateful for the Minister's comments on that: in particular, what assurances can he give that insurers will not find themselves caught by uprating, and how often in any event will such uprating take place? I beg to move.

I hope that I can set the noble Earl's mind at rest on this matter. For obvious reasons, we would not want a system whereby an insurer could apply for a certificate of NHS charges at a very early stage in the handling of a case, simply to limit his exposure to those charges in cases where NHS treatment is continuing. Where an insurer has applied for a certificate and the accident victim has already received treatment with a cost in excess of the maximum, which initially is to be set at £10, 000 in any one case, we intend to issue a certificate which would have indefinite validity. Such a power has been expressly provided in Clause 2(4)(c).

Where NHS cases. at first and subsequent interview, are not at the maximum, certificates would then have a cut-off date related to the occurrence of a specified event, so that there would be some flexibility in operating the system.

I hope that I have reassured the noble Earl on that matter and that he will withdraw the amendment.

I am grateful to the Minister. I think I have followed what he has said, and I shall of course read it in Hansard with care. In the meantime T beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Page 3, line 26, at end insert—

("( ) No certificate issued more than three months after the making of an application under subsection (8) shall have any legal effect.").

The noble Earl said: This is a very simple amendment. It is designed to give some teeth to the obligation, which I am sure will be imposed on the compensation recovery unit by the Secretary of State, that it should expedite the issue of certificates with the maximum speed. It is not fair on an insurance company to have to wait interminably for a certificate to be issued. I am therefore suggesting that, if the CRU does not meet a three-month deadline in processing the application, the insurer is entitled to close off his files. I beg to move.

I have every sympathy with the aim of the noble Earl. The Bill does not bind the Secretary of State to produce a certificate for insurers in a set time period following an application; it simply asks that he do so "as soon as reasonably practicable".

I certainly agree that any insurer who waited more than three months for a certificate would be entitled to think that the Secretary of State had failed in that respect. We have deliberately not specified a timescale in the Bill, however, because the compensation recovery unit, acting on behalf of the Secretary of State, will not have the information needed to verify a claim to hand. It will in the main be dependent on NHS trusts to supply the necessary details.

We have no intention whatever of keeping insurers waiting for their certificates. We intend to specify in the service level agreement between the health departments and the compensation recovery unit that a certificate should be sent within 28 days of application. Where the CRU cannot meet this timescale because of failures on the part of the NHS, we would expect them to notify the relevant health department. It would then be a matter for management action between the health department and the relevant NHS trust to rectify the situation.

I hope that that reassurance will be sufficient for the noble Earl and that he will withdraw the amendment.

Once again I am grateful to the Minister. I find what he has said reassuring. It will be incumbent upon everybody, most especially the CRU, to ensure that this system works as smoothly as we all wish it to work, and I have every reason to expect that the CRU is up to the task. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Information contained in certificates]:

Page 3, line 29. after (amounts") insert ("(expressed as the product of the amount set out in regulations under subsection (2) and, where applicable, the number of days that a traffic casualty has received NHS treatment at a health service hospital in respect of his injury)")

The noble Earl said: In speaking to this amendment, I shall also speak to Amendment No. 27. Amendment No. 13 seeks to ensure that when a certificate is issued to an insurer clear details are spelt out on that certificate, not simply of the aggregate charge but of the basis on which that charge has been arrived at.

I believe that an insurer is entitled to know how many days of in-patient treatment the casualty has received and what tariff has been applied to those days; and preferably the dates rather than just the number of days should be included. It is straightforward information which the insurer should have ab initio in the interests of transparency and for internal auditing purposes. It is

information which will assist him where necessary to verify details of fact where there is a dispute at a later stage.

During a patient's stay in hospital the charging tariff may be uprated and unless it is possible for an insurer to see exactly how the aggregate chart has been arrived at queries about certificates will multiply. The insurer will wish to see, and I believe that he deserves to be told, the basis on which the total amount has been calculated.

Allied to that is the point I raised under Amendment No. 27. The Bill specifies that one of the grounds of appeal against a certificate is that the amount specified on it is incorrect. The amount on the certificate is clearly the product of two figures—the number of days spent in hospital, and the rate of charge per day. Amendment No. 27 picks up my earlier amendment to Clause 3 and seeks to create a further ground of appeal; namely, an error in the number of days' treatment specified on the certificate. The Minister will tell me that taken at face value it is unnecessary because if there is an error in the number of days there will be an error in the amount. That is right. However, the amendment is intended to point out a different issue; namely, the definition of a day. That may sound trivial but it is not. Either a day is a continuous period of 24 hours or it is a calendar day.

I should be concerned if, for the purposes of calculation of charges on a certificate, a day were to be defined as a calendar day. If it were so defined it would mean that a casualty admitted one evening and discharged the following morning would incur two days' worth of charges. That seems extremely unfair and would be likely to result in a huge number of claims incurring charges which, strictly speaking, were not warranted. In other words, insurance companies would find themselves subsidising other types of hospital costs.

Concern has been expressed to me by the insurance industry that the provisions of the Bill might act, however subtly and subliminally, as an inducement to hospitals to admit patients unnecessarily or encourage them to pursue claims in order to receive the NHS charge. If a day is defined as a calendar day, the likelihood of that happening must increase. Let us assume that a bed is available overnight. A hospital could he tempted to convert an out-patient charge of £354 into an in-patient charge of twice £435. That is a considerable difference. I shall be interested to hear the Minister's comments.

On Amendment No. 27, I hope that the Minister will tell me that for the purposes of the Bill a day will be counted as a period of 24 hours and not a calendar day. I beg to move.

4.45 p.m.

I speak first to Amendment No. 13. One of the overriding principles when revising the scheme was to make arrangements as simple as possible. In that way we think that everyone benefits, both the NHS and insurers. Using a tariff structure to assess charges means that the amounts involved are known to all and the amounts due can be easily computed with only a few facts needing to be confirmed.

Because of that, we have opted at the outset to have a tariff which involves a daily rate for charges. It is therefore important to be clear about the numbers of days for which a charge is being sought and we intend, again from the outset, that certificates of NHS charges will include, as a matter of routine, the number of days involved and the total amount therefore due.

The tariff is, however, a new departure. Its ease of use is one of the factors we shall consider when the scheme is reviewed after a period in operation. I cannot foresee any reason why the tariff should not succeed, but I suppose it is a possibility that, at some point in the future, it may be decided that a daily rate charge is no longer appropriate.

Should such a change be made then your Lordships will, of course, have the opportunity to scrutinise and comment as the tariff must be specified in regulations and is therefore subject to the usual lines of parliamentary scrutiny. Placing a requirement for the number of days to be specified on the certificate on the face of the Bill ties us tightly to the newly derived tariff. We have no intention of changing the system—we think that it will work well—but it would not be sensible to force the House to reconsider primary legislation should it prove necessary to change what is essentially a matter of administration.

The noble Earl raised the question of appeals. The grounds of appeal are currently that the amount specified in a certificate is wrong, that the amount takes into account non-NHS treatment or that the payment being taken into account is not a compensation payment. We have opted at the outset to use a tariff which involves a daily rate of charges. The amount or amounts specified on a certificate will of necessity depend on the number of days spent by the victim in hospital. Therefore, if the number of days is wrong, the amount will be wrong and the compensator will be able to appeal.

The noble Earl then asked about the definition of a day in health service terminology. We are talking about a charge of over £400 a day, I can understand that insurers might feel irritated when on what I believe will be rare occasions, they must meet a charge for two days when the accident victim has spent just over 24 hours in a hospital bed. However, I ask the Committee to reflect that, for reasons of simplicity, which is very much in the interests of insurers, we have opted to have a tariff system where average charges are being sought. I think that averages implies swings and roundabouts. Regulations will make clear that the daily rate charge is to apply from the date of admission increasing with every midnight stay. This means that insurers will pay the full daily rate for the initial part day of admission. But it also means that they will pay nothing for the part day of discharge.

We have gone out of our way to be flexible with insurers. It is a scheme under which we are attempting to recover actual costs. However, where an insurer would find it easier to apply for a certificate of NHS charges in advance of paying compensation, we have made it possible for him to do so. Of course there may be cases where the NHS will lose some income. But we accept that. Where an accident victim is severely injured and spends time in intensive care, we shall still only charge the insurer the tariff daily rate which, at around £400, is much less than the actual costs involved. In addition, in the most severe cases where patients unfortunately spend long periods in hospital, perhaps in spinal units or rehabilitation centres, we will cap the insurers' costs at £10, 000. Again that would be a long way short of the actual costs. On the basis of swings and roundabouts, I do not feel that it is unreasonable to charge by the calendar date.

One has also to consider what the alternative implies. Hard-pressed nursing staff will be required to record not just the dates of admission and discharge but hours, minutes and seconds. Because the nursing staff will not know at the time of treatment whether or not the accident victim will make a claim for compensation, let alone whether the claim will succeed, such information will need to be captured for every patient.

The noble Earl suggests that the scheme for daily payment might contain a perverse incentive for the NHS to keep patients in hospital longer than required. That is not my experience of the normal pressures under which the NHS operates. He will know that while that kind of motivation might have existed under the internal market, as we move to a co-operative partnership that perverse incentive will not exist.

I recognise that there will be cases where the insurer may feel hard done by in relation to the rule that we propose. However, because we wish to keep the scheme simple. with swings and roundabouts, and to reduce the administrative burden on the NHS, I believe that it is a sensible proposal and I urge the noble Earl to withdraw the amendment.

I am grateful to the Minister. Did I correctly hear him say that in respect of a part day no charge would he levied?

The regulations will make clear that the daily rate charged applies from the date of admission, increasing with every midnight stay.

Again, I am grateful to the Minister. I understand the need for simplicity in such a scheme; the fewer complications that are introduced the better. I have less experience of the NHS than the Minister, but I should have thought that it was a simple enough matter for the staff on a ward to record the time of admission and discharge. I believe that it is done as a matter of routine practice in any event. I am grateful to the Minister for his full explanation and I shall reflect upon what he has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Page 3, line 31, after ("out") insert ("in").

The noble Earl said: I shall speak also to Amendment No. 15. I hope that the Minister will be minded to accept Amendment No. 14 because it seeks to put right what appears to be an infelicity of syntax in Clause 3(2).

As regards Amendment No. 15, the wording on the Marshalled List is designed to highlight my unease at the thought of regulations being brought forward which do not specify in terms the prescribed charges. As the clause is drafted, it would appear that regulations might simply set out a formula which could be open to misunderstanding or interpretation and whose full implications might not be obvious to the House when the regulations are made. I should be grateful for the Minister's comments on that.

I should also be grateful if he would confirm precisely what level of charge the Government have in mind for both in-patient and out-patient treatment. On Second Reading, he mentioned a ceiling of £10, 000 for in-patient charges and he has repeated that today. Can he confirm the figures he gave on Second Reading and say how often the Government intend to review the tariff? We are told that the charges will be based on the actual cost of treatment in the NHS. Will the Minister confirm that the way in which the costs are assessed will be a matter of public record?

When I learnt basic accountancy, I was taught that there is no such thing as "the cost" of anything; it all depends what you build into your formula. You may build in direct costs only; or direct costs and some overheads; or all overheads, depreciation and some head-office costs; or all overheads, including the cost of capital. But then if you decide to charge out the costs of a particular activity—in this case, the treatment of road accident victims—you have to work out what proportion of your cost base this activity represents in an average year. In arriving at a sensible daily charge there is a lot of scope for subjective judgment. However you take account of part days of treatment, do you fix the charge at a level which is designed to over-recover charges if part days are treated as whole days, or do you aim as far as possible not to recover costs in any way and, if so, how? I should be grateful if the Minister would say a little more about the methodology of underpinning the charges.

Finally, what account has been taken in calculating the cost of attendance and treatment by ambulance staff at the scene of an accident and of subsequent transport to hospital? Are those costs to be included in the charge for in and out-patient treatment? I beg to move.

I am grateful to the noble Earl for so clearly describing the purpose of the amendments. First, the method of calculation has been published in the regulatory appraisal. We have no reason to suppose that future calculations will not be in the public domain.

The noble Earl suggested that there was an error of syntax. However, I believe that as drafted the clause is clear. Changes can be set out by regulation or determined in accordance with them. At this stage, we are not minded to change that.

In relation to the substantive matter which the noble Earl raised, if we accept that we are to have a system of NHS recovery, we have to decide how to go about that recovery. The Bill provides the mechanism; how it is done. It contains the outline or framework of a simple, centralised system. The flexibility to adjust or develop the system is contained in regulations. One of those flexibilities is to have a system whereby a tariff can be used for charges with a simple formula to produce costs in each individual case. The costs in each case are not found in the tariff, but are derived from it. The amendment appears to remove that flexibility and, taken at face value, could be read to mean that the actual costs for every possible permutation should be laid down in regulations.

It is important to emphasise that we are pledged to review the system when it has been in operation for about six months. That will be the time to judge how our tariff structure is working. The noble Earl's amendment would result in less flexibility. Should change to the tariff be desirable after a period of operation, these amendments would have removed the flexibility which we have built into the system to deal with such problems.

The noble Earl asked detailed questions about how the figures were arrived at. That falls to be debated in Amendment No. 16 and perhaps I may comment more fully then. However, as regards the tariff structure and charges, I can confirm that for in-patients the figure is £435 a day, with a maximum of £10, 000, and for out-patients it is £354 flat rate fee. On that basis, I invite the noble Earl to withdraw the amendment.

I am grateful to the Minister and understand the point about flexibility. I do not mind how the regulations appear, so long as everything is crystal clear when we debate them. It should be clear to everyone what the charges will be and we should not have to work them out by some labyrinthine process.

I am a little disappointed at the Minister's response to Amendment No. 14. It seems to me that the phrasing could he improved in a minor way. Clause 3(2) states:
"The amount or amounts to be specified are to be those set out, or determined in accordance with, regulations".
If one takes out the phrase between the commas, the subsection reads:
"The amount or amounts to be specified are those to be set out … regulations".
I merely suggest that one should insert the words "in". Does the Minister agree that it is better to have legislation which contains sentences that he and I would rather use?

I am sure that one would always desire to see legislation that is as clear as possible. Nonetheless, what is meant is clear by the wording as presently in the Bill.

5 p.m.

I do not agree. It is not clear. Of course, one can understand that this is a kind of pidgin English which is being used in the Bill, but that is not appropriate for a piece of legislation which is going on to the statute book. I do not wish to press the point too much and I do not know whether any other Members of the Committee wish to join in the debate. The noble Lord, Lord Mishcon, may wish to contribute.

These are extremely interesting and technical debates on amendments. I do not know whether he will appreciate my support, but I definitely support the noble Earl in his application of English to this Bill. If those commas were not there, I could just see the point of the Minister saying that it is quite clear that the words "set out" are in regulations, but there are commas there quite unnecessarily. It is always dangerous to punctuate in a Bill. The noble Earl is absolutely right that as it now reads the word "in" is missing and it should be included.

I do not suppose that anyone regards this as one of the most weighty points to be made in Committee on the Bill, but as a lover of the English language, I must support the noble Earl.

I wholeheartedly support the noble Earl, Lord Howe, and the noble Lord, Lord Mishcon. It may not be one of the most weighty matters but it is important that we get the wording right.

I am grateful to both noble Lords who have intervened. In withdrawing this amendment, I invite the Minister to have another look at the matter between now and Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 15 not moved.]

Page 3, line 32, at end insert—

("( ) Where the amount or amounts specified in regulations made in accordance with subsection (2) consist of a daily rate for in-patient treatment, such daily rate shall not exceed the average daily cost of NHS in-patient treatment for motor accident casualties from time to time specified.").

The noble Lord said: The Minister has used the word "flexibility" a good deal in connection with this Bill. On this side of the Committee, we prefer to use the word "transparency". In many parts of the Bill, there is something of a battle between the Government's desire to have flexibility and our desire to have transparency. Amendment No. 16 seeks to make explicit what I suspect is implicit in the department's intentions.

However, it is important that there is a degree of transparency and certainty about the charges to be levied under Clause 3. Currently, the regulations are very broad. Subsection (4)(a) is very broad and gives a wide discretion.

Obviously, one is given assurances as the Bill passes through its stages, but it seems to us on these Benches that there is a need to enshrine protection against charges being levied which are higher than the average. I heard what the Minister said in response to a previous amendment about average charges being levied. I take some comfort from that. However, I believe that that protection should be included in the Bill even at some small, fairly negligible, risk to flexibility. Those daily rates must be pegged to a particular level and it will also give some incentive to those less efficient hospitals which have costs which are higher than the average.I beg to move.

As the Committee will he aware, the Chancellor of the Exchequer made clear in his Budget Statement in 1997 that we would move to collect the full costs of treatment following road traffic accidents. We have devised a system under which that will be done by using average treatment profiles to inform a tariff.

It may be worth while to the Committee if I explain how that is arrived at. The daily rate charge covers more than the cost of an in-patient bed. Patients who spend any amount of time in hospital are generally seen for follow-up or check-up in out-patient departments. The daily rate therefore also includes an amount towards the out-patient treatment which an admitted patient would be expected to receive. No subsequent charges would need to be made for the out-patient treatment received by those patients who had been admitted previously.

Setting a tariff is an essential part of having a simple scheme. It allows everyone to know where they stand and means that charges can be calculated with a bare minimum of knowledge. Devising the tariff itself has not been a simple task and we have not pretended that it has been. I refer the Committee to the two-page explanation of how the tariff was set in the published regulatory appraisal.

Department of Health economists looked at the information on road traffic accidents which is available. This pool includes information from the NHS on numbers of patients and their treatment; Department of Transport data, including numbers of accidents and their severity (drawn from police records); and detailed work carried out by the Transport Research Laboratory on the type and costs of treatment given to road traffic accident victims. We also have data from Department of Social Security on the numbers of claims for compensation made each year following motor vehicle accidents and the rate of success of those claims. The latter data come, of course, from the work of the Compensation Recovery Unit.

From that pool the economists produced an average cost to the NHS of both severely and slightly injured people. Multiplied by the total numbers of those people who can he expected to make a successful claim for personal injury we arrive at the total amount which the NHS can expect to receive through charges. This total amount was then used to produce the tariff.

This amendment would specify that average costs for in-patient treatment alone could be used as the daily rate tariff. It does not recognise the complexities of the situation and would limit freedom to introduce any changes which prove necessary.

The tariff is a new venture, as is the whole system we are introducing. We are pledged to look at how the new arrangements, including the tariff, are working after around six months of operation. I suggest that that is the stage at which any fine tuning should take place: once we can see how things are working and can change them if necessary thanks to the flexibility of the Bill before us—the flexibility which this amendment would restrict.

I understand the point made by the noble Lord, Lord Clement-Jones, about the variations in costs of NHS treatment. I spent many years trying to puzzle out a defence of that in my previous incarnation. It is a matter which the Department of Health takes very seriously and we are addressing it through various initiatives such as the publication of reference costs. That will be challenging to NHS trusts which find that their costs are out of line with what may be considered to be reasonable.

However, action to deal with that issue is best taken by the NHS through appropriate NHS management processes, in close discussion with clinicians. This Bill is about the better collection of existing charges. On that basis, as well as on the basis of the tariff which I described earlier, I ask the noble Lord to withdraw the amendment.

I thank the Minister for that very helpful reply, not only in terms of explaining the complexity of the calculation but also in explaining the steps being taken on the question of costs, which are important.

I have some concerns about the very complexity of the calculation itself. I do not believe that I could replay back to the Minister off the top of my head precisely how that calculation comes into being. It is clearly a complex process. I need some time to read Hansard in order to reflect on the issue.

We all want a situation in which it is clearly understood how those charges are made up, in whatever form. Of course, the scheme will need some bedding down in the due course of time. However, there may be a case for some further pointers in the Bill as to how those calculations are arrived at. That should not be too complex but should indicate, for example. that out-patient charges are taken into account and so on which is not clear on the face of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 17 and 18 not moved.]

Page 4, line 3, at end insert

("( ) Regulations under this section, other than the first such regulations, may not be made—
  • (a) until after consultation with such bodies representing the insurance industry as the Secretary of State shall determine; and
  • (b) unless one calendar month's notice of the content of such regulations has been given to those bodies.").
  • The noble Earl said: In moving Amendment No. 19 I shall speak also to Amendment No. 29. The intention behind Amendment No. 19 is to ensure that, when charges are uprated. the insurance industry has at least a minimum period of notice of the Government's intentions and can also voice its views before the new tariff is fixed in stone. Naturally, I hope that the Minister will tell me in his reply that the amendment is unnecessary, as I should like to think that the Government intend to proceed in the way I propose as a matter of course.

    Adequate notice has been given of the initial level of charges though, in passing, perhaps the Minister can tell me whether the draft regulations have yet been published. On the whole, I believe that the industry has been kept informed up to now but I trust that the Department of Health will repeat this consultative process on subsequent occasions in the future.

    Amendment No. 29 is designed simply to ask the Minister whether and to what extent the insurance industry has been consulted over the appeals process and if it is content with what is proposed. I beg to move.

    I hope that I can reassure the noble Earl on that matter. We would all accept that it is not unusual to consult the relevant bodies on regulations which affect them. Indeed, we consulted with the insurance industry throughout on the details of this scheme. We recently began to consult it on the draft regulations in which it has an interest. We cannot conceive of circumstances in which we would not consult the industry about changes that affected it. I hope that reassures the noble Earl and that he now feels able to withdraw his amendment.

    Amendment, by leave, withdrawn.

    Page 4, line 6. at end insert

    ("( ) No amount specified in a certificate shall anticipate either in whole or in part NHS treatment at a health service hospital which post-dates that certificate.").

    The noble Earl said: I shall be grateful if the Minister will shed a little more light on the way in which the system of certification will work. As it stands, Clause 3 appears to be drawn sufficiently widely as to cover the recovery of charges that have yet to be incurred by the NHS—that is to say, the cost of future treatment. First, is that reading correct? Secondly, in practice will the system work in a way which allows the hospital or the CRU to anticipate treatment that has not yet been given?

    The Minister may tell me that the point is theoretical only. But if the practice of anticipating charges were to occur, it is difficult to see how costs could be quantified accurately. More than that, it would not be compatible with the practice adopted when benefits are clawed back. As I understand it, when benefits are recovered from accident victims the recovery is limited to past benefits and may not include benefits that have yet to he received. I beg to move.

    Again I hope to reassure the noble Earl, Lord Howe. The amendment aims to exclude the possibility of charges being anticipated on certificates. As I understand it, the benefit recovery scheme includes provision for the Department of Social Security to anticipate future benefits on certificates issued before a compensation payment is made. However, the NHS scheme will not allow any anticipation of charges. Clause I of the Bill makes it clear that charges are only in respect of treatment which has already been received.

    Amendment, by leave, withdrawn.

    Clause 3 agreed to.

    Clause 4 [Payment of NHS charges]:

    [Amendment No. 21 not moved.]

    Clause 4 agreed to.

    Clause 5 [Recovery of NHS charges]:

    [Amendment No. 22 not moved.]

    5.15 p.m.

    Page 4, line 36, leave out ("immediately") and insert ("within three months").

    The noble Earl said: In moving Amendment No. 23, I shall speak also to Amendment No. 24. One of the striking features of the Bill is that there do not appear to be any sanctions on insurers who, for whatever reason, pay their bills late. Nor does there seem to be any sort of offence created by late payment.

    The amendments are designed to put that right by allowing the Secretary of State to charge a penalty in severe cases of non-payment—I emphasise the word "severe". The precise scale of the penalty might vary with the degree of delay and could be established in regulations. The point of the provision is not so much to bring additional money into the NHS as to deter insurers from dragging their heels unnecessarily once a certificate has been issued. I beg to move.

    The first point to be made here is that the average time taken to settle a claim for compensation following a motor vehicle accident is around two years. As I have already made clear, the NHS charges are due when compensation is settled.

    I do not think it unreasonable to expect insurers to be able to meet NHS costs at least at the same time as they pay compensation and perhaps settle any benefit recovery. Where someone has had around two years to anticipate the forthcoming bill, perhaps several weeks to consider the bill itself and 14 days in which to make payment if he has waited until the last possible moment to pay his dues, it is not unreasonable that a demand for what is "late payment" should be immediate.

    On the matter of double payment, we are attempting to recover the actual cost to the NHS of providing treatment to road traffic accident victims and this amendment would work against that. The noble Earl raised the issue of penalties in the Bill. Quite deliberately we have not included penalties. We expect full co-operation from the insurers. Much of the basis of the details of the Bill has been a desire to introduce simplicity both for the insurers and for the National Health Service. As part of our good faith in attempting to do that we are saying that we expect co-operation from the insurers; we expect insurers to play fair and meet their obligations at the appropriate time. On that basis, I invite the noble Earl to withdraw the amendment.

    I understand entirely what the Minister said and, as he indicated, I am sure that much depends on there being goodwill and efficiency on all sides. In the light of that, I beg leave to withdraw the amendment.

    Amendment. by leave, Withdrawn.

    Amendment No. 24 not moved.]

    Page 4, line 42, leave out from ("court") to end of line 43.

    The noble Earl said: This is a probing amendment designed to elicit an explanation from the Minister as to what this part of Clause 5 means. Can he say in what ways, other than by a procedure ordered by the county court, an amount which is due for payment and is the subject of a formal demand by the Secretary of State, might be recovered? I beg to move.

    I hope I can provide an explanation on this for the noble Earl. Recovery of unpaid debt is not particular to this scheme. In England and Wales the standard way of providing for recovery of debt to the Secretary of State through the county courts is to make clear that the courts are not being asked to re-open the question of whether or not the debt is due. That question has already been decided by the Secretary of State or the appeal tribunal. The court is merely being asked to enforce recovery of that debt. The wording of this subsection is standard. For example, I refer Members of the Committee to Section 7(4) of the Social Security (Recovery of Benefits) Act 1997.

    I shall immediately have a look at that. I thank the noble Lord. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Page 5, line 1, leave out subsection (5).

    The noble Earl said: In moving this amendment, I should like to speak also to Amendments Nos. 30, 33, 38, 39, 41, 42, 43 and 44. There are several features of the Bill to which we, on this side, have taken small exception and sometimes greater exception. but one feature that seems glaringly anomalous is the inclusion of Scotland within the Bill's provisions. We stand on the eve of devolution and the Government still insist on creating new laws which, in the matter of a few weeks, will, north of the Border, become the exclusive prerogative of the Scottish Parliament. Why are the Government doing that? Having specifically exempted the issue from being a reserved matter, why are they not leaving it to the Scottish Parliament to decide whether it wishes to replicate the system that is to be established in England and Wales? What is it about this matter that makes it impossible to leave it entirely to the Scots to decide on their own?

    Perhaps there is worry about the human rights issues involved. Perhaps there is an argument that someone who causes a road traffic accident in England will be liable, through his insurers, to pay the hospital charges, whereas a similar wrongdoer in Scotland may be free of them if the Scottish Parliament were so to decide and that would constitute discrimination. I am simply imagining the argument. I would he grateful if the noble Lord will explain.

    In the absence of an explanation, I do not think there is any good reason for foisting this new law on the Scots who are, after all, able to continue operating the system already available under the Road Traffic Act 1988. I beg to move.

    I should like to support this amendment in the same spirit as the noble Earl, Lord Howe. It seems that there are a number of explanations to be put as to why the Bill deals with the Scottish situation. Perhaps it is an old Bill which has been hanging around on the shelf for a period of time. That is probably the only plausible explanation I can think of. as it is such a short time before the Scottish Parliament takes effect. Certainly, Scottish colleagues on these Benches find it somewhat extraordinary that it should be in its present form.

    On the other hand, Ministers have given assurances that this is not a reserved matter, that the Scottish Parliament will be entitled to deal with it, that the CRU is not necessarily tied in with the Scottish situation and that Parliament will be entitled to place its business elsewhere. I suppose that is one way to put it. On that basis, we would explicitly seek those assurances again in this Committee from the Minister and some explanation as to why the Bill is drafted in this way. After all, the whole purpose of devolution is to place such matters in the hands of the Scottish Parliament and the ministers of that parliament.

    It is worth focusing a little attention on this point. I had not intended to take part in the debate but what I have heard reminds me of an occasion, not more than a fortnight ago, when the noble Lord's noble friend—I refer to the noble Lord, Lord Sewel answered a Question on education in Scotland, which is to be a devolved matter. He gave a firm indication of what will happen in two years' time. As the noble Lord's party may not be in a majority then, it seems that the Government are in no position to give any such undertaking. It seems there is a cast of thought within the Government which indicates that they have not woken up to the reality of devolution to the extent that we have in opposition and which may account for their calmness on the subject.

    It has certainly proved to be an interesting debate. The reason why provisions for Scotland are in the Bill is simply that they will benefit the NHS in Scotland. As I have already said, the Bill has been brought forwarding the light of what is, frankly. the poor record of hospitals throughout Great Britain in collecting the existing charges and the record of Scottish hospitals is no better than that of those in England and Wales.

    The scheme which is proposed will use the CRU to act as agent for recovery. The CRU recovers state benefits throughout the United Kingdom and, as social security is a reserved matter, will continue to do so post-devolution. As far as the CRU issue is concerned, it is the best option, as I have already stated.

    If we accepted the amendment, the simple result would be a direct loss of income for Scottish hospitals. The announcement of the move to full costs was made in July 1997. Devolution is still to come, although it is not very far away. Only then will Scottish ministers have the opportunity to consider the issue. It will take time for them to resolve and decide on a future solution and more time to implement the scheme. It comes down to the time that it takes for charges to be recovered, which, on average, is two years.

    Given that the main and overriding purpose of the Bill is to increase income direct to hospitals, the amendment would actually exclude Scottish hospitals from those benefits two years after they were announced, and with no resolution in sight. I doubt very much whether the NHS in Scotland would be happy about that.

    The noble Lord, Lord Clement-Jones, asks me to confirm the position with regard to the Scottish Parliament. As I said at Second Reading, the scheme is not reserved in the Scotland Act, so post-devolution Scotland will be able to do as it wishes. The powers of the Secretary of State will be transferred to Scottish ministers on devolution, and they and the Scottish Parliament can consider what they wish to do. However, they will do it on the foundation of a new scheme which will bring in extra revenue for Scottish hospitals. On that basis, I ask the noble Earl to withdraw the amendment.

    Of course, I completely understand that the Scottish provisions in the Bill are designed to benefit the NHS in Scotland and doubtless, were those provisions not in the Bill, there would be a loss of income to the NHS in Scotland for a period. But all the Scottish Parliament has to do is to decide at a very early period of its existence what the Government have decided; namely, to institute a retroactive Bill. It can announce at an early stage that it intends to introduce the charges and bring in legislation at a later date to do so and the loss of income will therefore be minimal.

    I think that the presence of these provisions in the Bill demonstrates that the Government believe that the man in Westminster knows best. I do not believe that a good case has been argued for having these provisions included. However, I shall reflect between now and Report on this matter. In the meantime, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 5 agreed to.

    Clause 6 agreed to.

    Clause 7 [Appeals against a certificate]:

    [Amendment No. 27 not moved.]

    Page 6, line 5, leave out ("may") and insert ("shall").

    The noble Earl said: Again, this is a probing amendment. I would be grateful if the Minister could say more than he did at Second Reading about how the appeals procedure will work in practice and the sort of circumstances in which it may be invoked. Given the existence of the review procedure, am I right in supposing that the Government do not expect that the formal appeal mechanism will be used all that frequently?

    On a different point, which I think it appropriate to raise under the amendment, can the Minister enlighten me on how the system of certification will be able to cope with cases where the medical treatment received in hospital relates to a condition that preceded the road accident but which was exacerbated by it? In the sort of case of which I am thinking, it would not be possible to say that the accident had caused the condition or that the hospital treatment was wholly as a result of injuries sustained in that accident. In such cases, how might the cost of hospital treatment be apportioned? I admit that such cases are likely to be relatively rare. Who would decide? Would it be for the appeals process, if necessary, to examine the matter and to decide each case on its merits? I beg to move.

    5.30 p.m.

    This clause deals with the arrangements governing appeals. Having for the first time introduced a method of appeal against NHS charges, we accept that detailed provisions must be made to govern how such appeals will be handled. There is no question of our not doing so. As far as that goes, the sentiment behind the amendment is fully appreciated.

    This is fairly standard drafting and perhaps I may again refer the noble Earl to the delights of Section 11(5) of the Social Security (Recovery of Benefits) Act 1997. It might be as well to stress here that, having opted to run in parallel with the recovery of benefits system, we intend that the appeal procedures and regulations will follow those found in the benefits recovery system, where at all possible.

    The noble Earl asked whether we felt that the formal appeal mechanism will be used frequently. Clearly, we hope not. We hope that system will prove to be administratively sound and that therefore it will not be necessary to use the appeal mechanism very often. Clearly, however, we need to provide for it and for the fact that appeals may still arise.

    The noble Earl raised an interesting point on some of the technical issues involved when he referred to pre-existing conditions. That is not a new issue for the CRU. It already deals with that in relation to benefits recovery. I understand that it is not thought that this provision will raise an insurmountable problem.

    Once again, I am grateful to the Minister and I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendment No. 29 not moved.]

    Clause 7 agreed to.

    Clause 8 [Appeal tribunals]:

    [Amendment No. 30 not moved.]

    Clause 8 agreed to.

    Clause 9 [Appeal to the court on point of law]:

    Page 6, line 36, leave out ("Regulations may provide that") and insert ("In England and Wales, ").

    The noble Earl said: This amendment picks up a criticism of the Bill which was levelled at it by the Select Committee on Delegated Powers and Deregulation. It was not clear to the Select Committee—it is not clear to me—why it has to be left to regulations to establish an appeal to the High Court in England and Wales on a point of law whereas for Scotland there is to be an automatic right of appeal (under Clause 9(2)) to the Court of Session. Why is a set of regulations needed to confer a right of appeal south of the Border? I beg to move.

    I support the noble Earl in his amendment. Members of the Committee will see that Amendment No. 32, which stands in my name, is virtually identical to his amendment and would have exactly the same effect. Like the noble Earl, I cannot see why we cannot have the same certainty of an appeal from an appeal tribunal in these circumstances. As the noble Earl rightly pointed out, the Select Committee on Delegated Powers and Deregulation referred to that. That point should be borne in mind. As I understand it, it is intended in the regulations to give the Secretary of State and insurers a right of appeal against the decision of a tribunal. It seems to me that the place for such a provision is primary legislation, not regulations. We should not be in a worse position than Scotland.

    I hope that I shall be able to reassure both the noble Earl and the noble Lord on this point. The Committee will have appreciated that this Bill is designed to follow as closely as possible the format of the recovery of benefits legislation. Where, however, the avenue for further appeal in the benefits recovery scheme lies to the Social Security Commissioners, in the NHS scheme it lies to the courts. In England and Wales, it is necessary, as with appeals to the Social Security Commissioners, to have provisions governing what the court can do once it has heard the appeal. Is it, for example, being asked to replace a decision of the appeal tribunal with one of its own? Is it being asked to refer that decision back with directions to the same tribunal for reconsideration or, indeed, to another tribunal?

    Our intention is that appeals in England and Wales should be dealt with under the general provisions found in rules of court. However, the rules of court are under review and we therefore need to ensure that, if the revised rules do not provide sufficiently for our purposes, we have in reserve the power to enable us to make the provisions specifying what the court is being asked to do when considering cases involving NHS charges. We shall also use that power to specify in regulations who will be able to take an appeal to the courts. We intend to offer that avenue to the insurer and to the Secretary of State.

    The power has not been replicated with regard to appeals to the Court of Session as the review of the rules of court which may affect procedures in England and Wales will not affect procedures in Scotland.

    Before the Minister sits down, is it not the case that those rules of court have already been published and that it would be perfectly possible to act upon those rules of court in these circumstances, so the right of appeal could be specified in the Bill? On the basis that those rules exist and are being acted on by members of the legal profession, can the noble Lord tell me what makes that situation different from the position in Scotland?

    As I have said, my understanding is that rules of court which may affect procedures in England and Wales will not affect procedures in Scotland. The rules of court are still under review. It would be difficult for us on the face of the Bill to anticipate a decision in relation to that review.

    I am sorry to press the point but, as I understand it, those rules of court are published and can be acted upon. They are not still in draft form. My question about Scotland was: why is it possible to enshrine that right of appeal for Scotland, but not for England and Wales? An assumption is being made that those rules are in place for England and Wales. Why should it be possible to be definite for Scotland, but not for England and Wales?

    I can only advise the noble Lord that it is my understanding that that matter is still under review. With regard to Scotland, I can only repeat that the power has not been replicated because the review of the rules of court which may affect procedures in England and Wales will not affect procedures in Scotland. My understanding is that the main rules of court have been published. However, certain existing rules are still being considered for re-enaction pending review of them. On that basis, I ask the noble Lord to withdraw his amendment.

    It is not up to me to withdraw the main amendment. However, I shall read carefully what the noble Lord has said about the rules. I am not clear in my mind as to the status of those rules. It seems to me as a matter of principle that if those rules are sufficiently certain and agreed as part of the Woolf reforms, a right of appeal should be set out in the primary legislation. We may wish to return to that matter at Report stage.

    I confess that I am similarly puzzled. I shall, of course, read carefully what the noble Lord has said. In the meantime, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendments Nos. 32 and 33 not moved.]

    Clause 9 agreed to.

    Clause 10 agreed to.

    Clause 11 [Provision of information]:

    Page 7, line 30, leave out ("the traffic casualty or, ").

    The noble Earl said: The Government have said repeatedly that one of the reasons for introducing the Bill in the first place is to avoid the practice which doctors and nurses understandably find distasteful and difficult of interviewing accident victims to ascertain whether they intend to make a claim for compensation or, in the case of the emergency treatment fee, to ask for money. However, as we know, the Bill abolishes the emergency treatment fee.

    My object with this amendment is, first, to ask the Government about the circumstances in which they would envisage the casualty being asked for information, as Clause 11 allows. The way in which road accident victims or their relatives are approached and asked to give information is—as I am sure the noble Lord will agree—most important. The questioning needs to be done with extreme sensitivity if it is not to cause distress. I seek the Minister's confirmation that accident victims will not generally be approached directly by the compensation recovery unit and that most claims and queries will be dealt with via the relevant insurers. What steps will the Government take to ensure that all the relevant authorities are sensitive to the potential traumas and stress that accident victims may experience in respect of their injuries?

    My second point is rather different. Insurers generally do not advocate the interrogation of victims while in hospital or after treatment. Victims who make a claim will be asked the necessary questions by the insurer to establish what the liability may be, including whether NHS treatment was received. In the vast majority of cases this information will be volunteered perfectly readily. However, it is possible that a victim may refuse to supply information on a hospital stay. That leaves the insurer with a legal obligation to pass this information to the CRU but with no enforceable right to obtain it. I should be grateful for the Minister's comments on that point. I beg to move.

    I very much share my noble friend's concern, particularly as regards the first part of his remarks. Can the noble Lord explain the relationship between paragraph (c) and paragraph (e)? It seems that there is in paragraph (e) an alternative course of action; that is to say,

    "anyone acting on behalf of a person within paragraph (b), (c) or (d)".
    I am bound to say I am not clear whether that lets the traffic casualty off, so to speak, in any demand upon him to give the information which is demanded in Clause 11(2).

    5.45 p.m.

    Under the terms of the new scheme the primary source of information for the central recovery body will be the compensator. The new administrative system places a requirement on the compensator to supply to the central recovery body sufficient information for the claim to be verified with the relevant hospital. This basic information will be the name and address of the accident victim, the date of the accident—both of which are already collected by the CRU—and the name and address of the hospital providing treatment. In the vast majority of cases this will be all the information which is necessary to process an individual case.

    We envisage that the additional powers to collect information from the accident victim or his representative will be necessary only where the compensator is unable to provide sufficient information. Although we do not think that the situation will arise often, it may be that there are cases where the compensator is unable to provide sufficient information to verify the hospital, for example. In this case the victim would need to say in which hospital he had been treated, but would not be asked for any details of his treatment.

    I take the point made by the noble Earl which is particularly apposite given the experience we have had with the existing scheme. One of the problems with the existing scheme has been the difficulty of staff having to ask patients who are in distressing circumstances for details such as the ones we are discussing.

    I want to stress that we anticipate needing to use the powers to approach an accident victim's personal representative only in exceptionally rare circumstances. Approaches directly to the victim will be even more rare. Where such an approach does prove necessary it will of course be handled as sympathetically as possible. We have no wish whatsoever to cause distress or concern where it is not necessary. However, to exclude the victim from the list of people required to provide information might mean that in an exceptional case there would be no way to verify the claim. This would remove an important check in the system, and I think it is probably not sensible to set up a system without such a check. We have a great deal of faith in the insurance industry but I think in this respect it is sensible to have that check in place in the Bill. On that basis I ask the noble Earl to withdraw the amendment.

    I hear what the noble Lord says, but the Bill states that certain persons must give the Secretary of State information. The noble Lord said that the information which may be required of a traffic casualty would be straightforward. I think I understood him to say that it may consist of asking which hospital the victim had been treated in. It seems to me rather bizarre to have one paragraph in the Bill which allows anyone acting on behalf of that person to give that information and one paragraph which makes it necessary effectively to demand of the traffic casualty that he should give that information. Surely those two provisions are not compatible.

    A case may arise where there is no one acting on behalf of the person concerned. In that case one would have to go direct to that person for the information.

    I am grateful to the Minister for his remarks. It is not wholly clear to me that the point made by my noble friend Lord Glenarthur has been addressed, nor is it clear that the Minister answered the second point that I raised about the possibility of an accident victim refusing to supply the necessary information, thereby leaving the insurer out on a limb, with a legal obligation to pass information to the CRU that he does not have. I do not know whether the Minister can enlighten me further on that or whether he would care to write to me on the point.

    NHS charges become liable when compensation is paid. It will be up to the insurer to decide whether he pays compensation. if an insurer pays without knowing whether hospital treatment has been received, the CRU would need to ask the victim about that. As regards liability, I shall write to the noble Earl on that matter.

    Amendment, by leave, withdrawn.

    Page 7, line 37, leave out subsection (3).

    The noble Earl said: This is a straightforward probing amendment. I would like to know why the definitions of "claim" and,

    "person against whom the claim is made",

    have been relegated to secondary legislation. Presumably the regulations are ready for laying immediately after Royal Assent. If so, there are only two possible explanations for not including these definitions on the face of the Bill, where I think they really ought to be: one is that the definitions are complex; the other is that they are definitions which may change over the years. I really cannot imagine either reason is the case. Can the Minister enlighten me? I beg to move.

    I, too, find this a most extraordinary subsection. In his previous answer the Minister used the words "the claim" several times. If the Minister does not know what the words "the claim" mean, was his last answer absolutely meaningless? The Minister cannot know what the words "the claim" mean, because they have not yet been prescribed. Nobody knows what the words "the claim" mean, unless they have their normal English meaning. In which case, why bother to prescribe them?

    The success of the new scheme for the collection of NHS charges will depend, to a large extent, on the co-operation of insurers. As I have already said, we are happy to acknowledge that we expect that the co-operation will be forthcoming. For that reason, we have purposely not provided any penalties for non-compliance in the Bill.

    However, as we are asking insurers to come forward and to inform us of claims for compensation—without either the insurer being prompted to do so or the financial carrot which exists for them in the benefit recovery scheme—we certainly need to make sure that, if necessary, we can specify exactly who has the obligation to inform the compensation recovery unit that a claim has been made, and when that obligation arises.

    I accept that this information could be specified on the face of the Bill but, as the insurance handling business is an evolving and constantly changing one, we have placed the definitions in the regulations so that changes can be made to them as and when they become necessary. The amendment would remove these definitions from the regulations, not only losing the flexibility to amend them but, as they are not replaced on the face of the Bill, they would also be lost altogether. On that basis I would ask the noble Earl to withdraw his amendment.

    I can readily understand from the Minister's answer why he needs to put the expression,

    "person against whom the claim is made",
    in the regulations. As he has said, the insurance business is an evolving thing and there might be a new set of firms carrying out some sort of insurance business, perhaps specialised firms in this particular area, which would not be covered by an expression defined on the face of the Bill. I readily accept that, but it still does not answer the question as to why the word "claim" has to be prescribed.

    As I have said, it reflects the changing circumstances of the insurance handling business. It seems more appropriate that we should have the ability to make any changes to the definition of "claim" and to the definition of,

    "person against whom the claim is made",
    in the regulations rather than on the face of the Bill. Such flexibility would be a considerable advantage in this case.

    But why do you need flexibility? Surely a claim, is a claim, is a claim.

    I do not think that I can help the Committee further on this point. As I have said, we think that it is important in both terms of "claim" and,

    "person against whom the claim is made",
    that we have the flexibility to prescribe that in regulations, which will of course come before your Lordships' House.

    My noble friend Lord Skelmersdale has said it all. I find it baffling why the word "claim" should be a sort of mutable term that will require re-casting from time to time in regulations. It seems extraordinary. I take on board that the Minister's department has thought very carefully about these matters. I suppose I have to accept what he says. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 11 agreed to.

    Clauses 12 and 13 agreed to.

    Clause 14 [Regulations governing payments into court, etc.]:

    Page 9, leave out lines 19 and 20.

    The noble Earl said: This amendment seeks to find out from the Minister why a payment into court should be treated as the making of a compensation payment, which is essentially how I understand this part of the Bill. I am sure that the Minister is well aware that a payment into court may be made for purely tactical reasons; that the payment may not be accepted by the accident victim; and that it may also be withdrawn. If the defendant's insurers subsequently do not agree to pay damages, or are not held liable by the court, it would be unfair to allow the NHS to recover treatment costs solely on the ground that a payment into court had at one stage been made. I am extremely anxious to know from the Minister why this provision has been inserted in the Bill. I beg to move.

    As a non-practising lawyer, I am equally baffled by this part of the clause. That is why I put my name to the amendment. It seems to me that the department is trying to place a significance on a payment into court which it is quite incapable of bearing. As the noble Earl has said, a payment into court is purely a tactic in litigation. Basically, it is designed to avoid costs falling on the defendant in circumstances where the plaintiff subsequently recovers less in damages than the amount of the payment into court. It cannot at all be seen as a settlement. It is purely designed to make sure that the costs do not fall on the insurer in certain circumstances.

    Of course it is possible to turn it into a settlement—the payment can be withdrawn from the court by agreement and the case settled. But that is an entirely different matter, and, of course, that would be caught by the Bill as a settlement as it is properly defined. I can see that regulations need to be made as to how a payment in those circumstances is to be treated as a settlement, but I cannot see that it would be proper to treat the payment into court as a compensation payment. One would need some considerable convincing that there would not be a great degree of unfairness involved if it were to be treated as such.

    While I fully accept what has been said so far, perhaps the Minister can also explain why subsection (2) extends only to England and Wales.

    Presumably what has been said applies in exactly the same way in Scotland, where it is not necessary; why should it be necessary in England?

    As I said earlier, NHS charges are payable when the authorised insurer makes a compensation payment. The authorised insurer may make a payment into court in an attempt to settle a claim, but at that point he has not made a payment of compensation. The offer may be accepted and payment made over to the plaintiff. In those circumstances, the award payment is made by the court and not the authorised insurer. Regulations will enable us to specify that in those circumstances the award payment, even though not made by an authorised insurer, will count as a payment of compensation by him and trigger NHS charges. We have no intention of collecting NHS charges when a payment into court is first made. As has been pointed out, there is no guarantee that such a payment would be accepted, and unless and until it is, NHS charges are not due.

    This is not a straightforward issue. We do not want to clutter the face of the Bill with details of how payment into court is to be handled. We therefore need the regulation-making powers which the amendment would remove.

    6 p.m.

    The Minister's reply was interesting. It seems that what he is saying is that the regulations should deal with payments out of court and not payments into court. That is where the matter seems to bite. It seems perfectly possible to frame in primary legislation that a payment out of court, where it technically comes from the court's bank account and not the insurer's bank account, is to be treated as a compensation payment where it is done at the direction of the insurer. That seems to be wholly possible under the clause. I can see that it is a technicality which needs to be cleared up but I do not think that the Minister has answered why the subsection should have that breadth.

    I agree entirely with what the noble Lord, Lord Clement-Jones, has just said. I cannot help observing that the wording of this clause is such as to make it clear that when a payment into court has been made it is treated as a compensation payment. In those circumstances, if one refers back to Clause 4, it is clear that when a compensation payment is made the certificate has to be settled within a period of 14 days. That is what the Bill says.

    I am still rather concerned that a more sweeping provision is being introduced into the Bill that is not consonant with many of the circumstances that precede a payment into court. As I have explained, all kinds of situations trigger payments into court. For that act in itself to be treated as the repayment of compensation seems quite wrong.

    I thought I had made it clear that, although the authorised insurer may make a payment into court as an attempt to settle a claim, at that point he has not made a payment of compensation and that we have no intention of collecting NHS charges when a payment into court is first made.

    Is not the scheme in subsection (2) of Clause 14 exactly analogous to what happens now? In 1987 or 1988 I was the Minister at the Government Dispatch Box when we were reviewing and changing the 1948 compromise. Stretching my memory a long way back, I have a feeling that we made almost identical provision in that Bill.

    I entirely accept what the Minister said about the Government's intention, but the width of the wording of the subsection goes well beyond that. It would affect what is a major litigation tactic if the Government decided to have a different interpretation in the future. That is highly dangerous in circumstances where at present the Government's intention is a narrow, technical one. For the purposes of the Bill they can say that it is a compensation payment simply because it is the court paying it rather than the insurer. It is an important point for the protection of litigants in those circumstances.

    Before the noble Lord replies to that point, will he answer my point about Scotland, which seems very relevant and so far has not been replied to?

    I shall reflect on the interesting points that have been made in the debate. I want to make it clear that we are talking about regulations covering cases in which a payment into court is made. We are not talking about a payment into court itself. They are exactly as found in social security legislation passed in 1997 and so do not introduce any new provision in principle in relation to this matter. On that basis, I ask the noble Earl to withdraw the amendment.

    I am grateful to the Minister. I shall read carefully what he has said. I beg leave to withdraw the amendment.

    Before my noble friend withdraws the amendment—I am slightly faster than my noble friend Lord Glenarthur behind me—can the Minister say what is the position in Scotland?

    My understanding is that this position does not apply to Scotland.

    Can the Minister clarify that point, whether by correspondence or in some other way? Does that mean that the same social security regulations do not apply in Scotland or that different provisions apply to Scotland? It is important to establish that.

    Amendment, by leave, withdrawn.

    Clause 14 agreed to.

    Clause 15 [Application of Act to military hospitals]:

    On Question, Whether Clause 15 shall stand part of the Bill?

    The presence of Clause 15 in the Bill is, I take it, a prima facie expression of intent to bring military hospitals within the scope of the new administrative arrangements for recovering costs of treating road accident victims, but the Explanatory Notes to the Bill do not indicate when the Government intend to make such regulations. If the Government intend to lay regulations in the near future, why is not Clause 15 expressed as a direct enactment rather than as an enabling power? Why bother with regulations at all when the provisions could be set out straightaway on the face of the Bill?

    Presumably, military wings of civilian hospitals are part of the civilian establishment and would not be covered by this clause. Perhaps the Minister would confirm that. Can he also say how many military hospitals there are and to what extent they are in practice called upon to treat civilian accident and emergency cases? Has a calculation been done on what level of cost might be recouped by military hospitals as a result of the provision? Finally, I should be interested to know from the Minister the extent to which the average cost of in-patient and out-patient treatment at military hospitals has affected the overall levels of charge that the Government are proposing. Have these costs been taken into account in arriving at the flat rate figures? That concludes my questions.

    There are three Ministry of Defence facilities currently providing treatment and care to civilians following road traffic accidents: two general hospitals and a specialist brain injury rehabilitation centre. They have, as have NHS hospitals, always had the right to collect charges following accidents but have suffered, as the NHS has. through the lack of organised collection. We intend that the military hospitals will benefit from the centralised arrangements this Bill will introduce and that from the day the new scheme begins they will be fully on board alongside NHS trusts.

    The regulation-making powers found in Clause 15 will enable us to cover the detailed provisions which will be necessary to cope with the administrative differences between military and NHS hospitals.

    I am afraid that I do not have the figures for which the noble Earl asked. I shall certainly see whether any are available.

    Did the noble Lord answer my question as to why the Government could not treat this as a direct enactment in the Bill rather than include it as an order-making power? I do not fully understand why military hospitals cannot be brought within the sweep of the Bill immediately.

    It is intended that the scheme will operate in relation to military hospitals from the same day as it operates in relation to NHS trusts.

    That may be so. But if that is the case, and the Government are ready to move on the matter, I should have thought it possible to bring that provision into the Bill and save the House time in considering the regulations that will ensue. I shall not press the point too much. I am grateful to the Minister.

    Clause 15 agreed to.

    Clause 16 [Regulations and orders]:

    Page 9, line 35, leave out ("or areas").

    The noble Earl said: There is no indication in the Explanatory Notes to the Bill as to what the Government have in mind in allowing for different rules and procedures to be set up in different parts of the country. This is therefore a probing amendment designed to ascertain what this subsection of Clause 16 actually means.

    What I hope it does not mean—because it would involve undue and unwarranted complexity—is that different charging tariffs could be set up for different regions of the country. One of the main factors which recommend the Bill is that the Government have opted for simplicity and for the most straightforward type of charging formula: namely, a flat fee for both in-patient and out-patient treatment whatever hospital in the country is involved. It would certainly not make life any easier if, say, hospitals in Scotland were able to charge a different amount, and hospitals in London yet another. I should be grateful if the Minister would put my mind at rest on that point.

    I wonder whether the noble Lord can explain the relationship between the word "areas" in paragraph (b) in respect of the regulations conferred by the Bill and exercisable by statutory instrument, and the fact that subsection (2) of Clause 14 extends the provision only to England and Wales. Is not that subsection in a sense tautological? If "areas" includes England, Wales and Scotland, the provision is unnecessary.

    One of the advantages of using the compensation recovery unit to handle NHS recovery work is that the unit is a national body already covering recovery of state benefits throughout the United Kingdom. Ministers in England, Scotland and Wales are keen to see the unit carry out this new role but, as I have said earlier, that decision is not set in stone. It may be that, at some point in the future, collection is handled differently in, for example, Scotland. It may also be that some other changes are felt necessary to adapt the system to the particular needs of one or the other of the home countries.

    I ought to say that the use of the term "areas" is standard drafting. It should not be taken to imply that new regulations will be introduced for accidents happening in West Yorkshire or the Black Country.

    The amendment would remove flexibility. I hope that the noble Earl will withdraw it.

    6.15 p.m.

    This is a probing amendment. However, do I understand the Minister to say that there could be a separate Scottish tariff?

    Under devolution, with the election of a Scottish Parliament, responsibilities will pass to the Scottish Parliament. It will then be for the Scottish Parliament to decide what it wishes to do with the scheme that it inherits.

    Is the Minister aware whether or not the insurance industry is happy with that? Has the industry been consulted on the point?

    The industry has been consulted on many aspects. I am not aware whether it has been consulted on the particular impact of devolution. I can inquire into that.

    Amendment, by leave, withdrawn.

    Clause 16 agreed to.

    Clause 17 [Interpretation]:

    [Amendments Nos. 38 and 39 not moved.]

    Page 10, line 28, leave out from beginning to ("and") in line 32 and insert ("has the meaning given in section 192 of the Road Traffic Act 1988;").

    The noble Earl said: I fully realise that the provisions of the Bill in relation to the definition of a road stand absolutely four-square with the equivalent provisions of the Road Traffic Act 1988. The point of the amendment, however, is to draw the attention of the Committee to an apparently strange discrepancy between the definition of a road in legislation relating to England and Wales and the equivalent definition in Scottish legislation. It is a matter of genuine puzzlement to me.

    Clause 17 gives one definition of "road" for England and Wales and another for Scotland. The Minister may be about to tell me that in reality there is no difference of interpretation. But the Scottish definition in the Roads (Scotland) Act 1984 refers to "a public right of access". In other words, the legislation would not on the face of it cover an accident in Scotland which occurred on a private road or a private car park, even though for all practical purposes the accident were a road traffic accident involving injury to a vehicle occupant or a pedestrian.

    The English definition in Clause 17 appears to be broader. It appears to cover a road to which the public have physical access, whether or not they have a legally enforceable right of access. I should therefore be glad if the Minister would clarify the issue. It would clearly be wrong for there to be any discrimination between those responsible for accidents in Scotland and those responsible for accidents south of the Border. I beg to move.

    I understand the point that the noble Earl has made in relation to the definitions laid out in Clause 17 and the question as to whether this would introduce a new variation of the meaning of "road" in Scotland. I have sought advice on this matter and I am assured that, because of amendments to the definition of "road" in Scotland since 1988, it is no longer necessary to make extra provisions, as are needed in England and Wales, to the definition found in the Roads (Scotland) Act 1984. I hope on that basis the noble Earl will withdraw the amendment.

    I am most grateful to the noble Lord.I readily beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendment No. 41 not moved.]

    Clause 17 agreed to.

    Clause 18 [Consequential amendments]:

    [Amendment No. 42 not moved.]

    Clauses 18 and 19 agreed to.

    Clause 20 [Transitional provision]:

    [Amendment No. 43 not moved.]

    Clause 20 agreed to.

    Clause 21 [Short Title, etc.]:

    [Amendment No. 44 not moved.]

    Clause 21 agreed to.

    House resumed: Bill reported without amendment.

    Education (Student Support) Regulations 1999

    6.20 p.m.

    rose to move. That the draft regulations laid before the House on 4th February be approved [8th Report from the Joint Committee].

    The noble Lord said: My Lords, I should remind the House that the Government were required under the Teaching and Higher Education Act 1998 to subject the first regulations made under that Act to the affirmative procedure. That requirement does not extend to these, the second regulations to be made under it, but we have chosen to follow that procedure because these regulations signal important further changes in the arrangements for student support. The Government recognised that Members of both Houses would welcome the opportunity to clarify any remaining questions they had on the detailed policy they embody. This debate therefore provides an opportunity to focus on the detail of the regulations before us. We had interesting debates last year on the Government's policy on student support and I ask noble Lords not to go over ground today which has already been covered.

    These regulations give effect to the Government's proposals for student support for students who will enter higher education in 1999–20(X) and for those who entered in 1998–99. Parallel regulations for Northern Ireland will be made shortly. There will be an opportunity to debate the Education (Student Loans) (Scotland) Regulations in respect of Scotland under a separate Motion immediately following this one.

    The Education (Student Support) Regulations were laid on 4th February. They have been considered by the Joint Committee on Statutory Instruments and were considered in the other place on 15th February. The regulations relate to the academic year 1999–2000. They will apply to students who enter higher education during that year and to those who entered during the 1998–99 transitional year. They will not apply to students who entered higher education before 1998–99; nor will they apply to those who entered in 1998–99 but who for specific reasons are treated under the previous arrangements—for example, gap-year students. Those students will continue to be subject to the previous arrangements. We shall shortly bring forward regulations on mandatory awards and student loans which will govern those arrangements for the coming year.

    The Government are keeping their promise to students and their families. The rates of support for 1999–2000 set out in the regulations reflect an increase in the resources available to all students for their living costs by 2½ per cent., in line with forecast inflation; and they are honouring their pledge that the student's family will not be expected to contribute any more in real terms towards living costs than under the old mandatory awards regime. These increases apply equally to existing students who continue under the old mandatory awards arrangements and to new students who in 1999–2000 will be eligible for 100 per cent. loans. The parental contribution will be the same for both groups.

    Students to whom these regulations apply will be eligible to receive a loan towards their living costs and a grant towards the cost of tuition fees. The maximum full-year loan for a student living in London will be £4, 480 and the maximum contribution towards tuition fees will be the full amount of £1, 025. Those in exceptional circumstances—for example, students who are disabled and students who have dependants—will continue to be eligible for supplementary allowances in the form of grants.

    The regulations deal with all issues relating to the payment of support. They set out the eligibility criteria for support—for example, that generally a student should be ordinarily resident in the United Kingdom and that he or she should be doing a course which is designated for student support. They cover the amount of loan available, and this varies depending on whether the student lives at home, away from home, in London or is studying abroad. They cover grants towards tuition fees and the supplementary grants towards living costs. Finally, the regulations cover the application process students should follow; the financial assessment of the level of support a student will be entitled to; and arrangements for paying support to students in instalments. The arrangements for the prepayment of loans will be dealt with in a further set of regulations to be made later this year.

    A key feature of the regulations for England and Wales is that they bring together and streamline the provisions relating to the payment of all types of higher education student support. In the past, different criteria applied in relation to eligibility for student loans and for mandatory awards; students needed to apply to their LEA for mandatory awards and to their institution for a loan; and they were paid grants by their LEA and their loan by the Student Loans Company. We have taken the opportunity to simplify and harmonise the policy where appropriate and to remove unnecessary duplication in the administrative procedures.

    In future, all students will apply to their LEA in the first instance. The LEA will determine whether they are eligible for support and notify them of how much they are entitled to. At the same time, it will notify the Student Loans Company, which will make payments to students. Higher education institutions will be responsible for confirming the student's attendance and handing over the first payment. The new arrangements will be clear and transparent for students and for those who administer the arrangements—local authorities, the Student Loans Company and higher education institutions. Our aim is that all students will receive payment by the first day of term and thereafter by termly instalments. Students have their part to play in this by meeting the deadlines we have set for making applications.

    We have consulted on the policy and administrative procedures reflected in these regulations with key representative organisations—the Committee of Vice-Chancellors and Principals, the National Union of Students and the Local Government Association. They have helped us to ensure that the technical aspects of the regulations are right, for which we are most grateful.

    There are some new features to which I would draw your Lordships' attention. Our aim to is to widen access to higher education, and these regulations contain policy measures to help achieve that.

    First, we have extended loans to those aged under 55 at the start of their course, where the student intends to enter employment after completing his or her course. This fulfils the pledge the Secretary of State made last June, and this welcome extension will he of real benefit to those wishing to retrain or develop new skills at this stage of their lives.

    Before I leave this point and this age group, I should like to make clear to the House our position on one issue in these regulations which I know has caused some particular concern. SKILL (the National Bureau for Students with Disabilities) made representations to us during the course of last week about the effect of the regulations on disabled students aged over 50. While we have extended loans to certain students between the ages of 50 and 54, the effect of the regulations is that students who do not qualify for loan support towards living costs will not in future qualify for disabled student allowances. I should like to assure the House that the Government have heard these concerns very sympathetically. We are clear that we wish disabled students to continue to receive support towards costs arising from their disability. We are currently considering how best to achieve this and we shall be exploring the options in meetings with SKILL next week. We shall make an announcement on our plans soon.

    Secondly, we are introducing a new allowance of up to £100 per week for students who enter higher education after having been in care and who need housing costs in the long vacation. Students who have been in care have often found it difficult to get a place to live in the long summer vacations. It is usually impossible for them to stay with their parents or to look to them for help and support. There are not many of them—in fact there are not enough of them—but we are determined not to let these few students down as they seek to improve their lives and job prospects through higher education.

    We also announced last month that from autumn 2000 part-time higher education students on a low income will for the first time be entitled to loans of a maximum of at least £500 to help with the costs of their courses. We shall allocate £30 million to support the new loans over the next two years from 2000 to 2002. The loans for part-time students—both new and existing ones—on a low income will be to help with their course expenses, such as books and equipment. Also, £5 million has been allocated for the 1999–2000 academic year to enable fees to be waived for those starting undergraduate courses who are in receipt of benefits. Similar amounts will be available for following years. They will be available in respect of existing as well as new students for part-time undergraduate study towards first degree, HNC, HND or other undergraduate credit-bearing HE provision which is funded by the Higher Education Funding Council for England. "Part-time" here means at least 50 per cent. of a full-time course.

    On the basis of that explanation, I commend the regulations to the House.

    Moved, That the draft regulations laid before the House on 4th February be approved [8th Report from the Joint Committee]—(Lord McIntosh of Haringey.)

    My Lords, I thank the Minister for his very full explanation of the regulations. I am particularly grateful for his remark about the disabled student allowance. As to that, I should like to have a brief moan and to give a cheer in more or less the same breath. I should also like to ask the Minister a question for clarification. I am delighted that the Minister is to rectify the situation for those disabled students who would be affected by the change in the rules. My moan is that it is unfortunate that it should be necessary to do so. The situation need never have arisen had the department in the first place consulted the organisations representing those people with disabilities who would be affected by the changes. I have in mind particularly SKILL, to which the noble Lord referred.

    I mention it again because I must declare that I am president of that organisation. I believe that it was someone in SKILL's information service who, being a careful reader of the student support information note that detailed the changes, spotted the problem. SKILL then raised it with the department.

    My cheer is that I am terribly pleased with the Minister and also the noble Baroness, Lady Blackstone, who acted very promptly when the matter came to light. I am delighted that they have undertaken to reverse any ill effects that the change will have. SKILL also welcomes this news and the fact that the department is willing to consult on how best to do it. It is very encouraging that the noble Lord has today said that they will meet so soon.

    I turn to my question for clarification. Paragraph 5(a) on page two of the information note SSIN 02/99 states:
    "Previous study rules will in 1999/2000 apply only to fee support. Eligibility for loans and supplementary grants will not be affected by previous study".
    SKILL interpreted that as meaning that DSA would be extended to those students with disabilities who had undertaken a higher education course in the past. Obviously, that would be greatly welcomed particularly by those disabled later in life who might need to retrain for a new career. However, following a conversation with the noble Lord, Lord McIntosh, the other evening. I understand that this may be limited to those who have previously undertaken HNC and HND courses. I am not sure about the position. I have tried to look through the regulations but have become totally bogged down in them. Perhaps the Minister can try to clarify the position or write to me about it.

    I thank the Minister once again for such a positive response now that the problem has been identified. I look forward to a satisfactory solution, whatever that may be. It matters very little what the package is called. What is important is that a small group of about 200 students should obtain the help they need, and it was intended they should receive, to pursue the course of their choice.

    My Lords, I too thank the noble Lord for taking us through this rather complicated set of regulations. I must record my disappointment that the noble Baroness, Lady Blackstone, is not dealing today with these regulations. This is a sensitive issue and it was very controversial when it was debated in Committee. When the dates were negotiated with me I was not informed that the noble Baroness would not be available; otherwise, I would have been extremely accommodating in negotiating a date when the noble Baroness and/or the department whip could have dealt with the matter. Certainly, I do not complain at having to do business with the noble Lord, Lord McIntosh of Haringey. It gives me some feeling of affection and nostalgia to work again with the noble Lord.

    It will come as no secret that I take no pleasure whatever in dealing with these regulations. The measure under the Teaching and Higher Education Act is beginning to take its toll on students. As the years pass I believe we shall find that that will be increasingly the case. The introduction of fees and the wholesale removal of maintenance grants and loans have created difficulties for many students. For example, the unfairness of the system leaves young people from low income families with a greater burden of debt on leaving higher education than fellow students who are fortunate enough to come from more wealthy families. The system is very bureaucratic and has already resulted in many problems for students throughout the higher education sector. The system has an effect on recruitment and retention, especially for more mature students. My noble friend Lord Mackay will refer to the Scottish regulations and therefore I shall pass on.

    Sadly, the Government have not seen fit to address the anomalies arising from students who pay fourth year fees in Scotland or the bachelor of education courses where young teachers, especially in the primary sector in which the majority of our teachers are trained, do not enjoy the fourth year concession of fees, unlike their postgraduate friends who receive the fourth year of education entirely free of fees.

    A particular point at issue in relation to the regulations now before the House is the penalties to be paid by students when applying for grants within the time-scale set down in the regulations. The National Union of Students has quite rightly referred to how one-sided it is: the students suffer but the Student Loans Company does not. Very often it is the fault of the Student Loans Company. There are administrative problems at local education authority level, higher education institute level and the Student Loans Company level. At the end of the day it is the student who needs to be serviced, and promptly, because for many students this is a matter of survival. Very often they are left to access the hardship fund and some, sadly, even abandon their courses. There is a catalogue of experiences during the first year: delays in processing the forms; application forms being sent to the wrong destination and gathering dust in places where they are not meant to be; insufficient numbers of application forms being sent out to some universities; and registrars' departments at some universities being understaffed due to insufficient resources to administer the application forms that come in from students.

    Another issue that has also been raised by the National Union of Students relates to those students who change courses mid-year from one institution to another. It is important that students should not be required to pay fees in excess of the maximum in any one year at a single institution. My understanding is that there is a risk that students may end up paying part of the fees to one university and part to another and the combination of the two is greater than the maximum for any one year at a single institution.

    Dealing with European Union students, I understand that by the middle of October the Government had spent £327, 000 in assessing their claims. Can the Minister tell the House how many students from the European Union were subject to an assessment under that heading and how many claims of that number were rejected? It was probably a slip of the tongue when the noble Lord, in referring to part-time students who would be allowed to have a loan of up to £500 from the year 2000, said that they would receive a maximum of at least £500. They may receive a maximum but they do not receive up to a maximum.

    I strongly support the plea of the noble Baroness, Lady Darcy de Knayth. I also join with her in thanking the department for responding so positively to SKILL. But perhaps I may press the Minister a little further. The noble Baroness rather skilfully used the word "rectify". The noble Lord, Lord McIntosh of Haringey, used rather different words. I wonder whether he could confirm that the omission of this point in the regulations was just that: an omission. Could he confirm that whatever is to be put in its place by some informal means will have the same effect; that is, the effect that it would have had had it been within the regulations, and that, whatever other methodology is to be resorted to, the effect will he the same and students over 55 will enjoy the benefits?

    The National Union of Students is concerned about the definition of "unfit to study" and it seems important that we should have clarification. Of particular concern is the Department of Education's proposal that information on previous study that has terminated before conclusion will be requested when assessing eligibility for an award. The students therefore seek clarification from the Minister on its use and the definitions and request that the department includes this in any guidance to local education authorities.

    There are a number of other concerns and some which are voiced by the CVCP. First, the issue of local education authorities processing student assessments and the Student Loans Company paying the fees has been discussed extensively in groups involving the vice-chancellors and principals. Given the concerns about the performance of the Student Loans Company this year—I have catalogued some of them—could the department be urged to keep this matter under review and also the option of further grant re-programming by the funding councils next year in order to avert continuing cash-flow problems? This is a very real problem for many students.

    With reference to the "borrower" in the second regulation, while the interpretation given may be clear in law, it is not so clear to those who have to administer the loans and access funds. The definition needs to be expanded to clarify the point at which an applicant becomes a borrower. Is it on approval of the loan by the Student Loans Company, or not until the loan has been received? Clarification in the guidance notes would again be very welcome.

    On the 21-hour rule, could there be more guidance for the higher education institutions on the application of this rule?

    Regulation 9 deals with addresses. The tracking of students' addresses was always going to be problematic for the higher education institutions. They cannot do this with any certainty. If students do not tell their higher education institutions, they are unlikely to tell their local education authorities, or indeed the Student Loans Company—especially the Student Loans Company.

    Regulation 17 deals with students deemed to be living at home. The vice-chancellors and principals believe that this issue could be resolved in consultation with the higher education institutions, since they are best placed to take a view as to whether it is feasible to commute from a home. It is hoped that LEAs would work very closely with the higher education institutions, which have particular views on this issue.

    Where split contributions are made, the suggestion is that either in the regulations—though of course that is now too late—or in the guidance notes the amounts of contribution notionally attributed to each child shall be expressed to the nearest whole pound. No one will lose money over this; it just makes life rather easier. Rounding fees up to the nearest pence is administratively inefficient.

    Although the proposals for support for part-time ITT students look sensible and equitable, there is a need for the department to examine the impact of the changes on part-time ITT courses where the academic year does not begin in the autumn, where the length of the final year is shorter than standard and where teaching practice is not evenly distributed between the years of the course. There may be issues here, for example, for the postgraduate course offered by the Open University and other institutions. The department might note this point and issue guidance at a later date, after consultation with the course providers.

    In relation to long-term residential courses, there could be problems for some certificate or diploma courses classed as higher education. In some cases these may entitle students to admission to the second or later year of a degree course, but may only admit to a first year, depending on the closeness of the course content match. It might be advisable for the department to check with a sample of colleges. If this has not already been done, could I suggest that it is done? It would be unfortunate if students from such colleges lost part of their support entitlement, having taken a course which was nominally higher education but which in practice gave them access only to the first year of their chosen degree course.

    On previous study rules, could we seek clarification of whether "European Union public funds" means funds administered by the European Union, European Commission or funds from a government of an EU member state? If the latter, there may be problems in establishing the precise status of the funds in question.

    As for assisted students, the removal of the "assisted students" provisions is welcome but the new proposals are not problem-free. Many of the assisted students have come from other EU countries whose student support rules allow the support to be used to fund courses in other countries. They have often arrived expecting, under the mandatory award regulations, to qualify to have their fees paid and have faced difficulties when they have found themselves classed as assisted students. The provisions in Regulation 21(7) are not clear unless their purpose is understood, and it is therefore essential for the provision to be explained in simple language, both for EU students and others.

    I know that is rather a lot of questions, but these are very complicated regulations. It is important that some of these issues are addressed because there are considerable concerns within the university sector and the higher education sector in general

    6.45 p.m.

    My Lords, I too begin by thanking the Minister both for bringing the regulations to us tonight and for the clear and careful way in which he has explained them. I also echo the comments and the question from the noble Baroness, Lady Darcy de Knayth. I do not need to repeat those points. They are a matter of concern and we look forward to seeing how things develop. Similarly, the noble Baroness, Lady Blatch, has dealt fully with the concerns raised by the NUS and in the briefing from the CVCP, which I too received. I hope that the House will accept that I simply echo those points and I shall not repeat them as fully as the noble Baroness quite rightly did.

    These regulations were debated in the other place earlier this week and I have read the debate that took place there in full. Not surprisingly, the Minister's speech tonight bore a close resemblance to the speech in the other place; indeed, it would have been remarkable if it had not done so. I shall endeavour not to repeat exactly what my honourable friends in the other place said but rather to follow up on some of the points which did not receive the clear answers that we would have wished.

    The noble Baroness, Lady Blatch, made reference to the poor performance of the Student Loans Company and the seeming inequity that students are set a fairly tight timetable of one month for supplying the requisite information but that there are no performance targets either for the Student Loans Company or indeed LEAs. My honourable friend in the other place, Phil Willis, suggested that for LEAs there should be a four-week mandatory processing period for establishing eligibility and six weeks for the statutory financial assessment by LEAs and the Student Loans Company. I echo that, but what I wanted to pick up on was the response he received from the Minister, who said in Standing Committee in the other place:
    "The Government are confident that key players will deliver".
    We would all wish to share that optimism but I am not sure that we all share that confidence. More to the point, the Minister went on to say that administrative arrangements had been made and were in place and that they detailed,
    "the deadline dates and turn-about times at each stage"—
    referring to the LEAs and to the Student Loans Company. He made this comment also:
    "The matter should be transparent, and we should be able to see the background against which companies or institutions are administering student loans".
    I echo that and I hope that tonight the Minister is in a position to be transparent and to tell us exactly what these deadline dates and turn-about times are. It would be helpful to have that on the record.

    My second point relates to students changing university or perhaps the course. Regulation 7(1)(b) seems to suggest that students can do so only on "educational grounds". All of us know that students change courses and universities for often good reasons but not necessarily good reasons on educational grounds. That point was queried during discussion in another place. The Minister stated that eligibility will not be based specifically on educational grounds but on what is in a person's best interests. If that is so, I welcome it. I hope that the Minister will confirm that that is what is intended and that the provision will be interpreted—dare I say it?—liberally and not strictly on educational grounds as appears to be the case.

    My next point concerns part-time students and completion of courses. Increasingly degrees are unit based. They increase in number and importance. That is especially important for the poorest students. I am unclear about the position of part-time students who may take some time to complete a course. The regulations appear to suggest that failure to complete their course within two years will lead to termination of eligibility. I was not clear of the exact position from the Minister's reply in another place. I hope that the Minister will clarify it and give us an assurance that the leeway provided for in Regulation 8(2) will be used to assist poorer, mature and OU students who are combining study with work and may well take more than two years to complete a course.

    Lastly—it is a point of particular concern to my honourable friend Phil Willis—I refer to field trips. Regulation 10(1)(c) specifically excludes field trips. Yet field trips are an essential part of many courses, for instance, in geology, archaeology, foreign travel and study for foreign language students, and so on. I worry that they are so specifically excluded. Perhaps we have misunderstood the position, but I do not think so. I hope that the Minister can explain that and give some further consideration to it.

    I have been entrusted with further points which arise more specifically on the Scottish regulations. Although some apply equally to these regulations, I shall raise them later with some trepidation.

    My Lords, I, too, thank the noble Lord, Lord McIntosh of Haringey, for giving us the opportunity to discuss the regulations and to raise further points, one of which concerns the grants to be made available for students who have left care. I welcome that as a concept, but I am puzzled by the detail in the regulation which affects such people. At page 48 it states that to be eligible it is necessary that the person should have been in care,

    "throughout any three month period ending on a date on or after the date on which he attains the age of 16 and before the first day of his course".
    Therefore, if he had gone into care a month before the course he would not be eligible. I do not understand the reason for that. Why should one wish to exclude from the benefit of the regulation people who have only recently gone into care?

    The following words seem strange for the opposite reason: that students must not have been back with their parents in the three months before the beginning of the course. Why? Does it mean that a student who has been in care and wishes to take advantage of the regulation has to avoid association with his or her parents in the three months before the beginning of the course; or has to avoid seeking reconciliation in order not to lose his grant? The regulations as drafted seem to contain somewhat strange aspects.

    I wish to raise the question of lone parents. The regulations seem rather harsh towards lone parents. If someone is to attend a course properly, he or she may be paying out substantial amounts for babysitting or childminding. He will find life extremely hard under the regulations as drafted. I do not expect a clear answer from the Minister today, but perhaps he can write to me later. I refer to paragraph 1(1)(a) on page 43. Why do lone parents not have the disregard which other students have?

    My Lords, I am grateful to noble Lords perhaps not for their reception of the regulations but at least for the evident care with which they have studied them and the attention they gave to asking questions on them.

    Perhaps I may say, first, to the noble Baroness, Lady Blatch, that it is a pleasure for me to face her across the Dispatch Box. As the noble Baroness knows, my noble friend Lady Blackstone is in South Africa this week. If there has been any failure of communications through the usual channels, I apologise for that.

    I am grateful to the noble Baroness, Lady Darcy de Knayth, for her reception of what I said about disabled students between 50 and 54. Of course there are not many. We are talking about perhaps 4, 000 students, able and disabled, and perhaps 200 disabled students in that category. However, the noble Baroness is right to say that it might have been better if we had anticipated the problem without it having to be brought to our attention by SKILL. We are grateful to her for the understanding and the co-operation which her organisation is giving to resolving the issue. I do not know how it will be resolved, but we are keen that it should be.

    The noble Baroness asked me about previous study rules. The removal of the previous study rules from disabled student allowance is universal. There is no qualification to that. Students will be eligible for disabled student's allowance for any second course designated under the regulations, whether for HNCs, HNDs, or first degrees, regardless of the nature of the previous course. I hope that she will accept that that is as widely drawn an exemption from previous study rules as it can possibly be.

    The noble Baroness, Lady Blatch, asked so many questions that I hardly had time to write them down, let alone answer them! However, I shall do my best to do so. On a wider issue which is not contained in the resolutions, I simply do not agree that there is a greater burden of debt on students from low income families than on those from better off families. On the contrary, the qualifications for exemption from charges, for eligibility for loans, and the repayment conditions are fairer than they were previously.

    My Lords, I am grateful to the Minister for giving way. Does the noble Lord accept that a student from a low income family shares the full burden of the whole maintenance grant irrespective of the tuition fees, whereas a student from a more affluent family is responsible personally only for paying back half the maintenance grant?

    7 p.m.

    My Lords, I do not know that the Government can be responsible for the internal household arrangements of better off students. We can ensure that the provisions for loans and the repayments of loans are properly tailored between families of different backgrounds.

    I will deal with the noble Baroness's questions in the order in which I have notes rather than the order in which she asked them. I cannot reconstruct her speech. She asked about students from the European Union and correctly said that the cost was £327, 000. She will recall that the department, of its own volition, volunteered to take over the responsibility for the assessment from local education authorities because it was believed that the conditions in so many European countries with so many different regimes would be difficult for local authorities to deal with. They would have to learn about small numbers and 96 per cent. of applications from the European Union countries were dealt with by the central unit.

    The department has processed about 10, 000 applications from European Union students for fee support. The noble Baroness can draw what conclusions she wishes about value for money, but it is more expensive in the first year. I will have to write to the noble Baroness detailing how many students did not qualify for fee support as a result, but the cost relates to the application.

    The noble Baroness asked about guidance to higher education institutions on the application of Regulation 9 about tracking student addresses. Both the LEAs and the Student Loans Company will contact students by any available route if we are aware that the address is no longer valid. However, it is a failsafe device in the sense that it is in the students' interest to allow their addresses to be tracked successfully.

    Of course, the noble Baroness had the benefit of the briefing from the Committee of Vice-Chancellors and Principals, which I did not have. She asked at what point an applicant becomes a borrower. The answer is when the first instalment of the loan is received by the student. A number of questions were raised by the noble Baroness and the noble Lord, Lord Tope, about the performance of the Student Loans Company and about targets. The Minister in another place was able to say—and I know that it caused some queries—that 97 per cent. of completions were satisfactory. Of course, the ability of the LEAs and the Student Loans Company to achieve targets which are on a calendar basis depends on the proportion of students who complete their applications accurately and on time. But we have set targets. They are that there should be a turnaround for applications for new style loans within 14 days and for hardship payments within 7 days. Our fundamental target is that the first cheque should be available from the higher education institution on the first day of the first term. Those are tough targets. The improvement of the performance of the LEAs and the SLC in the past year leads us to have some confidence that it will be achieved. However, if there are problems we will be prepared to ask for a full review.

    We have closely involved the major players in the design of the overarching system of administration. It makes clear the roles and responsibilities of each player, which are much more rational than under the preceding system, and it sets out a schedule which enables each of them to make their contribution at the right time. We have deadline dates and turnaround times for each stage of the process and the SLC has developed staffing plans so that it can meet its new responsibilities.

    It is important for us and for the regulations to ensure that everyone is clear about their roles and responsibilities. Formal definitions and agreed business processes are being backed up by information and advice from the department. The Student Loans Company is rolling out a comprehensive training strategy for its staff on the changes. Nevertheless, we have contingency plans. We are developing monitoring systems to ensure that we receive early warnings of any problems. Representatives of the LGA and the CVCP have been involved in the development of the systems.

    The noble Baroness, Lady Blatch, asked about my phrase, "a maximum of at least £500". I confess that I added the word "maximum" because I wanted to provide for the possibility that part-time students would want less than £500. At the same time, Ministers have decided that there will be payments to part-time students. The maximum has not yet been determined, but it will not be less than £500; in other words, it could be more. I am sorry if my wording is somewhat elliptical and misled her. The noble Baroness also asked me whether the omission of disabled students was purely an omission. I can confirm that that was the case. There was no sinister intent.

    I have already replied about the previous study rules. I hope that the noble Baroness will agree they are a good deal more user-friendly than they were. Of course, it is still the case that a student will not be eligible for fee support if he or she has previously attended a full-time course of higher education lasting one academic year or more. But that will not affect the student's entitlement to maintenance support. It means that, for the first time, a student will not be disqualified from receiving supplementary allowances, such as disabled student allowances or dependent allowances, on the ground of the previous study. I hope that goes some way towards reassuring the noble Lord, Lord Lucas, who asked me about lone parents for whom dependent allowances are made. I can confirm that the previous study rules will not affect initial teacher training courses or people continuing from a higher education course that does not lead to a degree; for example a higher national diploma. After all, that is the purpose of access courses which carry with them the right to credit transfer.

    The noble Baroness asked me about the liability of students to pay tuition fees on transfer between institutions. The collection of tuition fees is essentially a matter between higher education institutions and the students, but we are aware of the issue and we will be discussing it with the CVCP in order to agree guidelines. In answer to the noble Lord, Lord Tope, we do not intend to define "educational" in any narrow sense. The Minister in another place referred to the person's best interests. That includes opportunities for education to be defined very widely. It gives the possibility of a second chance if something has gone wrong and we shall be advising local education authorities accordingly.

    The noble Baroness asked me about the impact of the changes on part-time initial teacher training courses and she referred specifically to the Open University. I am grateful to her for that. The changes will simplify them while ensuring that students are no worse off than now. They will promote access to the teaching profession. The regulations accommodate a range of patterns of part-time ITT study and start dates, as they have in the past. I would not imagine that there are special implications in respect of ITT start dates, but we are providing full and comprehensive guidance for LEAs, higher education institutions and the Student Loans Company. Of course, we cannot be completely flexible and allow students to dip in and dip out at will, but we recognise that there are some occasions, particularly for part-time students, when there must be breaks. I am sure that the regulations can be interpreted sympathetically from that point of view.

    The noble Baroness asked me about the removal of the assisted students rule. A simple means test ensures that European Union students are treated no less favourably than UK students. I do not know whether that means that they are European Commission funds or national funds, but we shall provide further guidance to assist with interpretation.

    The noble Lord, Lord Tope, asked me about field trips. That is more complicated. Field trips have always been excluded from the fees payable under mandatory awards and we did not change that in the Teaching and Higher Education Act. Had we done so, there would have been pressure to meet the cost of those field trips, which were not met previously, within the funds available. Therefore, on balance, we believe that it is right for those and certain other fees to continue.

    I have dealt with the issue of transfers on educational grounds and delivery by the principal players. Perhaps I may say a few words on the question asked by the noble Lord, Lord Tope, about part-time students and the lapsed time for a course. The time for completing a course is that which the institution sets, whatever the mode of attendance. There is discretion to extend it, which can be exercised in the light of all the circumstances.

    If the noble Lord, Lord Lucas, will forgive me, I shall answer his question about the definition of the dates of eligibility for the carer's allowance in writing. The point which occurs to me immediately is that if we have the three months' qualification for having been in care, it is right that there should be the same qualification for not having been back living with parents. It would be wrong if there were any asymmetry between those periods. However, I do not quite know what is the justification for specifying three months rather than one month.

    I have taken too long, and I am sorry. I have tried to answer as many questions as possible. I shall write to noble Lords on those matters that I have not covered.

    My Lords, before the noble Lord sits down, perhaps I may ask one question in relation to what he said about the maximum of £500. I shall not go into semantics, but the noble Lord said something interesting. My understanding was that from 2000 part-time students will be given help up to a maximum of £500. The noble Lord said—and it is quite important—that it could be more. Will he confirm that?

    My Lords, Ministers have not decided what the maximum will be. My brief said "at least £500". I wanted to add that if people wanted smaller loans they could have them. The maximum amount has not yet been decided. It will not be less than £500; it could he more. I commend the Motion to the House.

    On Question, Motion agreed to.

    Education (Student Loans) (Scotland) Regulations 1999

    7.13 p.m.

    Lord McIntosh of Haringey