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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I welcome you to the Chair, Mr Bone. I believe that this is your first debate as Chairman, and I hope that it is the first of many. I am a non-practising solicitor, but I have never engaged in legal aid work. I congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing this debate, which is timely. Many issues have been raised, and I will do my best in the time available to address them.
My hon. and learned Friend is an experienced criminal barrister and, as I would expect of a leading silk, argued his case strongly, as did my hon. Friends the Members for Carshalton and Wallington (Tom Brake), for Gillingham and Rainham (Rehman Chishti) and for Enfield, Southgate (Mr Burrowes), and the hon. Member for Kingston upon Hull East (Karl Turner).
I should say at the outset that the Government agree that we need good-quality advocates to prosecute and defend in criminal cases, and to ensure that the criminal justice system works effectively and fairly. My hon. and learned Friend the Member for Torridge and West Devon and others have argued passionately for the continued future need for an independent Bar, and I support that. However, it is important to recognise that the legal landscape in this country is changing and we must all acknowledge that; we must adapt to it, and to the financial realities of the current economic climate.
I will deal later with the various points made, but before that it may help if I speak about legal aid more widely in the current context. As hon. Members know, the Government have pledged to reduce the budget deficit to deal with the acute financial crisis and to encourage economic recovery. That is something that the whole Government must do. However, we are not driven only by economic considerations; the financial situation is a rare and urgent opportunity to develop imaginative and creative policies. I accept that our policy should not be determined only by the need to deal with the deficit.
In June, we announced that we were considering our policy on legal aid. That reflects the aim of creating a more efficient legal aid system as set out in the coalition Government’s document of 20 May. My hon. Friends the Members for Enfield, Southgate, and for Carshalton and Wallington voiced their concerns about the operation of the Legal Services Commission. I confirm that I have established a good working relationship with the LSC and that we are working through some of the issues. I should also say that the Government have decided to replace the LSC with an executive agency of the Ministry of Justice, in the belief that that will strengthen accountability and control of the legal aid fund.
As the right hon. Member for Delyn (Mr Hanson) said, there have been several reviews of legal aid in recent years under the previous Government. For example, Lord Carter of Coles’s report of July 2006 proposed a market-based approach to reform. The previous Administration implemented some of Lord Carter’s recommendations, but they did not succeed in implementing price competition for criminal legal aid work.
I can confirm to the right hon. Member for Delyn that we are seeking to develop an approach to legal aid spending that takes into account the necessary financial constraints, the interests of justice and the wider public interest. We are seeking to develop an approach that is compatible with necessary access to justice for those who need it most, the protection of the most vulnerable in our society, the efficient performance of the justice system and our legal obligations.
The cost of the legal aid system as a whole has risen over time. The scheme now costs over £2 billion per annum and, as has been recognised by my hon. Friend the Member for Enfield, Southgate, it is one of the most generous schemes in the world. We spend significantly more on legal aid than most other comparable countries. For example, the per capita spend on legal aid is about £9 per head in Australia and Canada, and £11 in New Zealand, but we spend £38 for every man, woman and child in England and Wales. In the current financial situation, that is unsustainable.
Tom Brake
My point is not directly related to the debate, but I would like to raise a point with the Minister about legal aid, particularly the availability of legal aid to British citizens in foreign countries and the extent to which the Government are able to publicise its availability.
Mr Peter Bone (in the Chair)
Order. It does not help when the hon. Gentleman starts by saying that his point is not relevant to the debate.
Mr Djanogly
As I have said, the cost of the legal aid system has risen over time. The problems were well recognised by the previous Administration, but their piecemeal attempts at reform often served only to add to the upward pressures on cost, and they did little to address the underlying causes of cost or to look at the situation in the round; they found it too complicated to deal with. We want to take a different approach and look at the whole legal aid system and the wider justice system. With respect to my hon. and learned Friend the Member for Torridge and West Devon, legal aid is not only about the fees paid to lawyers; that is the wrong starting point. The starting point should be more fundamental questions, such as: what is legal aid for? What is the role of the state in legal aid? Who needs access to legal aid? How should we fund legal aid? What are the alternatives, in civil cases, for resolving disputes in a way that avoids expensive court processes and the need for lawyers? How should we set the price we pay when legal aid is required? Importantly, what can be done to encourage the resolution of legal problems, both criminal and civil, in a timely and proportionate way?
My hon. and learned Friend asked about timing. We have been assessing such questions over the summer as part of our consideration of legal aid, and I can confirm to him, and to the right hon. Member for Delyn, that by autumn we will be in a position to seek views on our emerging proposals in a full consultation. I also confirm that the resulting Green Paper will outline our proposals for the way forward for criminal legal aid.
I will now look specifically at issues of criminal advocacy. The world is changing in a number of ways. I have already mentioned the need to reduce public spending, and my hon. and learned Friend the Member for Torridge and West Devon has rightly highlighted the fact that in the dying days of the last Parliament, the previous Administration decided to reduce advocate fees by 13.5% over three years, with the first stage of that cut coming into effect last April, and he provided details of those statements. Although we have no plans to reverse that decision, I confirm to my hon. and learned Friend that we want to look at the efficiency of the whole legal aid system, which I agree will go beyond the criminal Bar. At this stage, however, I am not prepared to rule out any specific types of reform.
Another change in the landscape is the increasing number of higher court advocates competing for work with the criminal Bar. I understand that there are now at least 2,500 solicitor-advocates in practice in the higher courts. That means that the Bar no longer has exclusive access to Crown court work. I know that the Bar welcomes healthy competition and believes that it is well placed to offer specialist expertise in advocacy, particularly in more complex cases. Equally, the Bar has grown over time. Thirty years ago, there were just over 4,500 barristers in self-employed practice. Twenty years ago there were more than 6,500, and today the number of barristers in private practice is greater than 12,000. Taken together, the changes mean that it is unlikely that there will be enough publicly funded criminal case work to support the number of people who wish to earn a living from publicly funded practice at the criminal Bar. That is a simple economic fact of life.
My hon. Friend the Member for Gillingham and Rainham spoke about the need to recognise and protect the diversity of the Bar. I agree with his sentiments and it is an important issue. However, the numbers of black, minority ethnic and women barristers are affected by issues other than simply fees. As I have already argued, legal aid exists to provide help for those who need it. In criminal cases, that means the defendant who cannot afford to pay for representation in cases that pass the “interests of justice” test, which in practice tends to exclude the more minor criminal cases. Let me be clear: it is not the purpose of legal aid to provide a living for any particular number of lawyers. Instead, taxpayers’ money should be targeted at those who cannot afford to pay for their own defence, when that is required in the interests of justice.
My hon. and learned Friend the Member for Torridge and West Devon raised the issue of a single fee for Crown court litigation and advocacy. Given the likelihood that a single fee for Crown court cases covering litigation and advocacy would encourage greater efficiency between litigator and advocate, one should expect that point to be considered carefully, among other options for reform. That point was also raised by my hon. Friend the Member for Carshalton and Wallington.
As a point of principle, the so-called VHCCs—very high-cost cases—consume a disproportionate amount of the legal aid budget. Half the Crown court legal aid budget is now swallowed up by fewer than 1% of cases. I am keen to do all that we can to reduce the number and costs of long, complex cases that are bad for the justice system. We will look at that issue in the Green Paper but to clarify, contributions are returned to acquitted defendants, although means-tested contributions now mean that those who can afford to do so pay towards the cost of their representation.
Earnings at the criminal Bar vary enormously. We know that some barristers at the most junior end are far from fully occupied, and as a result their earnings are low. However, at the more senior end of the Bar, earnings can be high. My hon. Friend the Member for Carshalton and Wallington asked about fee levels. The previous Administration published information on that, which showed that for 2008-09, the highest-paid barristers took £928,000 from the criminal legal aid budget. One hundred and twenty barristers were paid more than £250,000 in criminal legal aid, and a total of 416 were paid more than £150,000. I accept that those figures are subject to a number of caveats. In particular, those fees include VAT and do not take into account chamber expenses.
Mr Djanogly
I do accept that, but I wanted to give some idea of the amount of public money that is being paid out.
Looking at the wider regulatory picture, we are currently commencing the Legal Services Act 2007, which will encourage greater competition and innovation in the provision of legal services and a better focus on the consumer. That programme of work has already made important changes to the way that legal services are regulated in England and Wales, and it will also allow for alternative business structures. It will allow lawyers and non-lawyers to work together as one enterprise to provide legal and non-legal services.
To help pave the way for those new business structures, legal disciplinary practices have already been introduced. That has made it possible for different types of lawyers to work collaboratively to provide legal services. For decades, members of the criminal Bar have complained that solicitors have the whip hand. It is time for the Bar to embrace the new opportunities and equality of position that the Legal Services Act will provide. I hope that that opportunity will be grabbed.
As recognised by my hon. and learned Friend the Member for Torridge and West Devon, I was encouraged to hear Nicholas Green, QC, the chairman of the Bar, recently indicate that the Bar is preparing to change and adapt by setting up procurement companies that will enable groups of barristers to bid for criminal defence work. I have met Mr Green and other senior members of the Bar, and I will continue to work closely with them on the issue. Mr Green has been travelling the length and breadth of England and Wales to explain to members of the Bar, face to face, why it is time for the Bar to prepare for change. That is a sensible course to advocate, and I urge all members of the Bar to look carefully at the material that the Bar Council is producing on the subject. I do not think that the majority of members of the Bar, as part of a referral profession, can afford to be aloof as we move forward in what is likely to be an increasingly competitive environment.
I do not want to pre-empt the consultation paper that we plan to publish this autumn, but we must consider whether there is a case for the greater use of competition in providing legal aid. I think that my hon. and learned Friend will accept that, as long as it is done correctly and fairly.
In conclusion, I say to my hon. and learned Friend that however our thinking develops, I want a level playing field so that barristers, other advocates and litigators can compete on an equal basis. The Bar Council is right to advocate change, so that the Bar can not only survive but prosper in the longer term in a changed legal services market.