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Mr. Jonathan Djanogly (Huntingdon) (Con): I begin by declaring any interests that I may have as a practising solicitor.
The Bill allows for the power to grant rights to representation to be transferred from the courts to the Legal Services Commission, introduces a means test for the grant of such funding and, where the test is met, provides for contribution orders based on means. Several amendments were made to the Bill in another place, and I pay tribute to the significant progress that was made there.
We, the Conservative Opposition, feel that access to justice is a serious matter that requires full and detailed consideration. Through the determined efforts of our noble Friends, such detailed consideration has already been possible. We welcome the restoration-by amendment in the other place-of responsibility for legal aid matters to the Lord Chancellor, as we welcome the amendments that have been made relating to appeals. I was sorry to hear the Minister say that she will attempt to overturn those at a later stage.
Vera Baird: I am interested to know the views of the Opposition. It is undoubtedly mostly a matter of arithmetic to establish whether somebody is in or outside the financial eligibility criteria. Is the hon. Gentleman suggesting that judicial time could be appropriately used on an appeal against that, or does he have some alternative model in mind?
Mr. Djanogly: I intend to discuss that in greater detail, so if the hon. and learned Lady will wait, I shall come on to it. It is important that the court should be able to hear appeals on the interests of justice test, as well as on the eligibility test, and should be able to consider those matters afresh.
The Conservative party has long been in favour of many of the measures in the Bill, in particular means-testing for those who can afford it, which the Government abolished in 2001. We opposed the abolition of the means test during the passage of the Access to Justice Act 1999, which the Bill amends. Now, after four years' experience, the Government wish to bring back means-testing. It has taken them eight years to bring back the NHS internal market and eight years to bring back grant-maintained schools, so perhaps we should be impressed that it has taken them only four years to do a U-turn on legal aid and means-testing.
The measure is basically right. Those who can make a contribution to their own defence costs ought to do so. However, we need to ensure that those who cannot make such a contribution are still properly represented and not disadvantaged within the criminal justice system. That second aspect is conspicuously missing from the Bill. The proposed means test involves a calculation to derive an adjusted level of income for the purposes of considering eligibility. Various deductions are made on a proportional basis from overall household income to reflect a client's costs. As the Minister explained, if a client's adjusted income falls between a higher and a lower threshold, a more detailed assessment is required to establish whether the client qualifies. Clients will not qualify for public funding in the magistrates court if their calculated disposable income is above £3,156 a year.
The Department has suggested that the abolition of the means test has contributed to the rising costs of criminal legal aid. As the draft Bill and consultation paper put it in 2004,
"Since the abolition of the means test many who previously would have been privately represented or who choose to represent themselves have applied for public funding."
It stated that the
"re-introduction of the means test will focus the resources on those that need help the most."
All that led the Constitutional Affairs Committee-rightly, in our view-to question whether there is enough joined-up thinking, principally between the Department for Constitutional Affairs and the Home Office, in the overall approach to criminal justice policy. It concluded at paragraph 46:
"We recommend that the Department should ensure that initiatives rolled out by other Departments, especially the Home Office, are properly costed so that their impact on the Criminal Defence Service budget can be taken into account. This is an essential feature of 'joined up Government' and needs to be done so that the Government can consider the causes of rising costs, rather than merely relying on the Department to tackle the symptoms".
It would be helpful if the Minister could give us a progress report on how that recommendation is being carried forward.
Bridget Prentice: I am happy to give the hon. Gentleman a progress report: we have introduced a legal aid impact assessment test, which is part of the regulatory impact assessment that every Department conducts when it introduces legislation. If any legislation introduced in this House impacts on legal aid, it must be funded or another way must be found to deal with it.
Mr. Djanogly: I thank the Minister for explaining that all legislation requires a regulatory impact assessment, which I shall discuss later in my speech.
The press briefing that the Government published in May at the time of the Queen's Speech estimated that the Bill would lead to annual savings of more than £35 million. We sincerely hope that it will, but it would be useful to hear more about how the Government reached that conclusion. After all, the original justifications for abolishing means-testing back in 1999 were that the system was too bureaucratic, which led to delays in cases being brought to trial and added significantly higher costs, and that it applied to less than 1 per cent. of applicants. It would be interesting for the House to hear how the Labour party, which abolished means-testing as a cost-saving measure, is going to reintroduce means-testing as a cost-saving measure.
In its response to the draft Bill in 2004, the Constitutional Affairs Committee concluded:
"We do not think these proposals have been properly costed. The Department has produced no convincing evidence demonstrating that reintroducing means testing would result in substantial cost savings".
We support the Bill in principle, but we want to see more convincing evidence that it will have the desired effect. Will the Minister provide more detail on the projected savings?
We want to address several other issues in Committee. For instance, concern remains about the perverse incentive for defendants to choose the Crown court in cases that may be tried either way in order to ensure a more favourable position on legal aid. That serves only to increase costs, and the matter requires further review. We are still concerned about a related aspect of the Bill, which seeks to translate the magistrates court regime in a modified form to the Crown court simply by delegated legislation. We are of the opinion that separate regimes should be introduced simultaneously for magistrates courts and for Crown courts through primary legislation to avoid uncertainty in the drafting of the regulations and the perverse incentives that I have just mentioned. We believe that those points outweigh the benefits of first appraising the magistrates court scheme.
Despite our welcoming the Bill in principle, it is a very small step towards the desperately needed reform of the legal aid system, which the Government have allowed to fall into disrepair, and much more remains to be done. The Minister's speech was short on detail on the Bill's impact-for instance, what percentage of the population will have their access to legal aid restricted by the Bill? That is why I want to address some of the broader legal issues.
The soaring cost of legal aid in England and Wales forms the background to the Bill and this debate. The problem is not new, and I concede that it is not exclusive to the current Administration, because Governments of both parties have grappled with the cost of legal aid over the past three decades or more. It is clear that the problem has become acute since this Government entered office: in 1997, the total legal aid budget stood at around £1.5 billion; this year, it is more than £2 billion, which is an increase of some 35 per cent. while this Government have been in office.
More than half of that £2 billion is spent on criminal legal aid, the cost of which has risen dramatically. Since 2000–01, there has been a significant rise in the cost to the criminal defence service of criminal legal representation in the magistrates courts. By contrast, spending on civil legal aid, excluding the cost of asylum, has fallen in real terms by 24 per cent. since 1997. That in turn has forced many high street solicitors to go to the wall, restricting access to justice for many of the most vulnerable in our society. For example, as I found out through a written question earlier this year, the number of high street solicitor firms offering representation for legal aid and family cases has decreased by more than one third in the past five years.
That is despite the Government's ambition, as set out in the 1997 manifesto, to reform legal aid and achieve value for money for the taxpayer and the consumer. Meanwhile, at this year's election the Government promised to reform legal aid better to help the vulnerable. Their predicament seems to have led to a state of paralysis, and regrettably the vulnerable are being hit the hardest due to their inability to access lawyers who take on legal aid cases.
We agree that the growth in spending on the criminal defence service has to be checked. In the words of Lord Justice Judge in his evidence to the Select Committee on Constitutional Affairs, which reported on the draft Criminal Defence Service Bill in 2004, and to which the whole House is indebted for its work in this area,
"we simply cannot work on the basis . . . that there is a tree at the bottom of the garden full of ten pound notes. There is not, and therefore there has to be some control exercised."
As the Magistrates Association put it,
"there is a large and continued increase in the amount of money spent on legal aid, and we accept that the amount available is not infinite."
We agree.
The fundamental legal aid review was announced by the hon. Member for Tottenham (Mr. Lammy) in May 2004. On 19 July this year, I made a request to the Department of Constitutional Affairs under the Freedom of Information Act 2000 in relation to the review. The relevant DCA press release stated that the review would be
"a far-reaching study into the underlying legal aid system, which will focus on how best to provide legal help to those who need it in the longer term."
Some of its conclusions were set out in the July 2005 paper, "A fairer deal for legal aid", but the Minister decided on the basis of public interest to withhold the detailed responses and conclusions contained in an internal report. I called for an internal review of that decision, which resulted in certain limited material being made available. Nevertheless, the contents of the internal report remain elusive. That is entirely unsatisfactory, and one has to query why such information is being withheld. It seems only to add further weight to the concern that the legal aid system is in a state of crisis. The fact that fewer than two fifths of the population now qualify for legal aid sits rather uncomfortably with the concept that everyone is entitled to access to justice so that they can enforce and defend their legal rights and so that the Government and other powerful bodies can be held to account or contested where necessary.
The ridiculous extremes of bureaucracy involved in the legal aid process must continue to be broken down, and where savings measures are introduced, the savings must be real. The Government give in to the ever-present pressure to come up with short-term reforms designed to control the budget, but what is needed is a long-term strategy, particularly to reduce the amount spent on high-cost cases. The following figures represent the crux of the problem, which the Government are not adequately addressing. The half dozen most expensive criminal legal aid cases in 2003 amounted to no less than 25 per cent. of the total criminal legal aid budget. One per cent. of the highest cost cases amounted to between 40 and 50 per cent. of the total criminal legal aid budget.
The problem is not that the Government are spending too little money but that cases need to be managed more efficiently. There needs to be clarity about what legal aid is spent on. The Crown Prosecution Service needs to manage cases more effectively, as do judges. Dealing with the management issues at an early stage will help to avoid even bigger problems and spiralling costs later on. Yet the Government seem utterly unable to get to grips with the problem, which is not new.
Vera Baird : The hon. Gentleman is making a very poor point. He said that very high-cost cases accounted for between 40 and 50 per cent. of all criminal legal aid spending. That is so, as it was in 1996, when the Conservatives were in office. Since then, it has gone up from 42 per cent. to 49 per cent., but we are tackling it, whereas the hon. Gentleman's Government did nothing whatever.
Mr. Djanogly: Eight years later, here we are talking about what needs to be done, and the best that the hon. and learned Lady can say is that the last Conservative Government did not get it right.
Vera Baird: Would the hon. Gentleman like me to tell him over what period of time the same proportion of high-cost cases took up criminal legal aid? It was for many years while the Conservative Government were in office. We are trying to tackle that. I repeat that the Conservative Government did nothing about the problem for 18 years. We are trying to do something. How can he accuse us?
Mr. Djanogly: With barristers and magistrates going on strike, law firms closing down week after week-
Vera Baird rose-
Mr. Djanogly: No, I shall not give way to the hon. and learned Lady again.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We cannot have two hon. Members on their feet at the same time. The hon. and learned Lady must know whether the hon. Gentleman who has the Floor is giving way to her.
Mr. Djanogly: Thank you, Mr. Deputy Speaker.
Vera Baird: Will the hon. Gentleman give way?
Mr. Djanogly: No, I shall not. The hon. and learned Lady has already intervened several times. The fact that the Government have to have a Home Office Parliamentary Private Secretary as the only Labour Back Bencher in the Chamber reflects the Labour party's attitude to legal aid and the crisis in the system.
Vera Baird rose-
Mr. Djanogly: I shall not give way.
I repeat that the Government appear unable to get to grips with the problem. It represents a significant failure on the part of the Department for Constitutional Affairs. It must know that the reintroduction of means-testing will not solve the problem or make significant savings in relative terms.
The Law Society said in its submission to the fundamental legal aid review of January this year that early skilled diagnosis would have the most benefit in controlling the budget and prevent straightforward issues from becoming more significant and therefore a greater burden. It recommended the early identification of problems, and access by clients to appropriate services through a single point of entry offering legal aid services at different levels, or planned referrals. That will enable firms and advice agencies that already exist to take on extra rolls and expand their business. Does the Under-Secretary agree that that is a sensible way forward? If so, will she assure us that something will be done to implement it?
Work needs to be done on proposals for competitive price tendering. If such proposals are to succeed, we cannot have a system that runs a high risk of being no more than a cost-cutting exercise, which will inevitably reduce access to justice and the quality of advice and representation that is available to legally aided clients. Given the range of quality accredited suppliers already in existence, where is the justification for jeopardising quality purely to save costs? Representations have been made to us that small, often ethnic, inner-city firms will have to close shop because of the proposals. The high street criminal practice could become almost defunct.
The graduated fee scheme could have the perverse effect of encouraging barristers to drag out cases so that the longer they last, the more money they receive. It is also worth pointing out that, although civil and criminal legal aid constitute different pots, the Government appear to want to examine the whole. Losing control of criminal legal aid budgets has meant a collapse in civil legal aid, excluding asylum, by 24 per cent. in real terms since 1997 as criminal expenditure has risen by 37 per cent. We need imaginative solutions to achieve a sustainable legal aid system and an application of basic management skills to criminal case management.
Another concern is the falling number of solicitors who choose criminal law defence work as a career. Work needs to be done to increase participation. The number of solicitors' offices that provide criminal defence services has fallen by 25 per cent. from 3,500 in April 2001 to 2,651 in September this year. Legal aid practitioners should be of a high quality and receive proper compensation. In a survey that the Law Society conducted, 50 per cent. of trainee solicitors said that, all things being equal, they were likely to pursue a career in legal aid work. However, the practical reality is that only 8 per cent. said that they were indeed likely to pursue a career in legal aid. Financial uncertainty is a particular problem for young barristers, who have not even the guarantee of a meagre salary.
Given that legal aid rates have not increased for approximately eight years, the idea of attaching the tag of "fat cat" to the average criminal lawyer is perverse. Indeed, the problem is so bad that criminal practitioners tell me that very few wish to practise criminal law. Of those who do, many want to become prosecutors, who get a decent salary.
Perhaps the Under-Secretary could describe the pilots for state defenders. I understand that they are even more expensive than private defence solicitors. Firms also need some predictability in their businesses. Many face immense pressure as they try to deal with new proposals and the complexities of the current system in a hostile environment.
In relation specifically to criminal law, the increased complexity of the law as well as trial length must be taken into account, as the Bar Council has argued that those are the central drivers in increasing costs. It has cited annual criminal justice Bills and other legislation, which, over the past decade, have produced major changes in almost every area of legal practice and procedure. Two important examples are the Human Rights Act 1998 and the Proceeds of Crime Act 2002.
Changes to sentencing guidelines and the increase in the number of offences that carry a prison sentence are further factors. In cases in which imprisonment is the likely consequence of a conviction, the interests of justice test in assessing entitlement to legal aid is more likely to be satisfied, causing more frequent grants of rights to representation. Imprisonment is increasing; indeed, the prison population today stands at about 77,000, an increase of 28 per cent. since 1997.
The effects of the Government's overall criminal justice policy must also be taken into account. For example, targets to increase arrest rates and the creation of a vast number of new criminal offences are contributory factors. That point was made by the hon. and learned Member for Redcar (Vera Baird) in her very worthwhile comments in a recent Westminster Hall debate. Surely the message is that, if we are going to charge more people, send more people to Crown court trials and lock more people up, the costs of processing the accused-including legal aid costs-will rise.
Criminal solicitors are threatening to close up shop and criminal barristers have gone on strike, yet the Government seem unable to see that we need provisions to address the legal aid problems that are handicapping some of the most vulnerable and disadvantaged people in our society. What is needed is not simply to restrict the number of people being helped by the legal aid system, as the Bill proposes, but what was proposed in the Government's own report, "A Fairer Deal for Legal Aid", which was published in July this year. That is, a legal aid system that will be
"fair and effective, providing access to justice for all who need it".
Why can the Government not respond to their own message? If the Minister thinks that we, or the legal profession, will accept the Bill as the answer to the legal aid crisis, she will have to think again.
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