Illegal Migration Bill

Baroness Kramer Excerpts

Report stage
Wednesday 28th June 2023 Lords Chamber

[Lord Stewart of Dirleton (Con)]

The Government are acting on the basis of information in the context of these provisions.

[Baroness Kramer (LD)]

Can the Minister give clarification? The context is that one is a British citizen and the others are not British citizens, and therefore their standards are different. That must be the interpretation: that the Government have a benchmark for British citizens but a completely different benchmark for those who are not British citizens. Can the Minister please explain this much lower benchmark?

[Lord Stewart of Dirleton (Con)]

In setting the benchmark for countries that are safe for persons to be sent to, the Government are looking at it from the point of view of the objectives of the Bill. We are not looking at it from the point of view of British citizens travelling abroad.

The Bill already includes adequate safeguards to protect those in fear of persecution based on their sexual orientation, gender identity or other protected characteristics, or those who are fearful of onward refoulement. I say again that these amendments are unnecessary, and therefore invite the noble Lord, Lord Carlile, to withdraw Amendment 19. Although we will not be voting tonight, for reasons explained, I urge the noble and learned Lord and other noble Lords—

Power of Attorney

Baroness Kramer Excerpts

Wednesday 2nd February 2022 Lords Chamber

[Lord Stewart of Dirleton (Con)]

My Lords, the OPG is working with solicitors, other professional bodies and other bodies within the community to make sure that persons considering becoming donors and taking out powers of attorney are aware of these protections.

[Baroness Kramer (LD)]

My Lords, as an MP I had the case of an elderly and very wealthy lady afflicted with dementia who was removed from the luxury home that she had chosen and could afford by her attorneys, who were also her heirs. She was put in a much cheaper home in order to protect their inheritance. The lady was so traumatised that she died within weeks. The Office of the Public Guardian could do nothing, because the new home met CQC standards. Is there a way to give it powers and to look at the misuse of the power, rather than just acting in cases of clear illegality?

[Lord Stewart of Dirleton (Con)]

The OPG currently has powers to make reference to the police, in terms of fraud, to instigate investigations, including using other bodies such as local authorities or the National Health Service. Again, on the reference to the consultation that is to report in the spring, we look to strengthen the ability of the OPG to intervene in such cases.

Damages (Personal Injury) Order 2017

Baroness Kramer Excerpts

Tuesday 18th July 2017 Lords Chamber

Whichever side one takes on the merits of the actual decision—now of course subject to this further consultation ex post facto—the exchange exposes a lamentable failure on the Government’s part to make use of the secondary legislation process in a reasonable and competent manner. Given the approaching tidal wave of such powers under Brexit, it is a disturbing illustration of the Government’s failure to apply due process. I hope it can be corrected here, but at the moment I have to say that the Opposition could not support the noble Lord’s Motion. However, he is absolutely right to canvass some of the issues that the Government have to address, and which I hope will receive a rather fuller and better-explained response than on the previous attempt to correct a situation that has been left standing for far too long.

[Baroness Kramer (LD)]

My Lords, I congratulate the noble Lord, Lord Hodgson, and thank him for bringing forward his regret Motion on this order. So much of the detail has been described to the House that I am not going to repeat it, but there can be almost no one who looks at a discount rate of minus 0.75%, even for a risk-free investment, who does not come to the conclusion that the number is simply preposterous. For the Government to implement a result that is preposterous seems to me entirely inappropriate, not just for this Government but for any.

For many years I was a banker. There were times when it was necessary to price instruments, and I would turn to one of the junior bankers who worked with me and ask them to go away, go through the analysis and come forward with a conclusion. You would find one or two who were wedded to a particular formula that had been brought to their attention at some point during their training, and were absolutely certain that by applying the formula they would come to an appropriate result, even though when one looked at the result it was completely inappropriate for the situation and the purpose. That is what we have here: an allegiance to a formula—which was probably the wrong formula from the day that it was brought in but is certainly an inappropriate formula today—that the Government are insisting on applying simply because it is the existing formula. Frankly, I can think of no worse way in which to manage any aspect of finance in this economy.

The Government may take the view that the impact of making a preposterous and inappropriate decision does not matter very much. I think that it does, as I think does most of this House. Of course it is crucial that anyone who has been severely injured and is awarded damages over a long period should not be undercompensated, but there is no rationale either for overcompensation. If I understand correctly, this does not change the award; it is with the translation of the award into a lump sum that the discount rate comes into play.

The impact on insurance premiums matters. I admit that I am less concerned about the profits of insurance companies than about the impact of rising insurance premiums on many of the people who have to take out insurance. The noble Lord, Lord Hodgson, referred to young people who are now having to pay significantly more for motor insurance. It has been proposed that the price could be as much as an additional £1,000 a year, a very significant sum. We have already seen a significant rise in insurance premiums, partly due to changes in the Government’s tax regime. I point out to the noble Lord that if you are a young person living in a rural community you may have no choice but to drive if you want to have a job and go to school, as we have cut back on rural bus services, so there is an ongoing impact that is quite significant.

There is also very little discussion of the impact on various different departments. I think that the MoD suffers badly from this change in the discount rate, although I have no idea what the figure is. Presumably the National Health Service is impacted significantly as well. All that rolls back on the taxpayer, so there are real implications of getting the discount rate wrong.

I do not understand why the Government persist in applying a formula that they know is entirely inappropriate and comes up with a preposterous result, particularly when they have almost completed a consultation, with a review to follow which, we hope, will mean that they go back to the drawing board in a matter of weeks to try to right this set of wrongs.

I would become very angry with a junior banker who blindly applied a completely inappropriate formula. When it is a Government blindly applying a completely inappropriate formula, it begins to be unforgivable.

[Lord Faulks (Con)]

My Lords, I congratulate my noble friend Lord Hodgson on bringing these matters to the attention of the House. I ought to preface my few comments by declaring an interest: I am a practising barrister and much of my practice is concerned with the application of the discount rate in calculating damages. Some of my clients will benefit from this and others will not, but I hope to be able to stand back to make a few general comments about the appropriateness —or, I fear, the lack of it—of the proposed changes.

As several noble Lords have pointed out, this came about in rather unusual circumstances. The noble Baroness, Lady Kramer, is quite right: it is adherence to a formula which is inappropriate. There may be some internal mathematical integrity about the exercise, but it bears little relation to the proper approach to the assessment of damages. We approach them on the basis that there should be full compensation, and nothing that I say should derogate from that—we think that claimants ought to be properly compensated—but how do we assess what the compensation should be?

It has always been said that by giving a claimant a lump sum, the one thing you are certain about is that the damages will be inappropriate. Either the sum will be too much, because the claimant dies earlier than expected, or it will not be enough. Either way, that is undesirable. That is one reason why judges often said that it would be much better for there to be periodical payments. From about 1996, periodical payments became part of the picture. With great respect, I rather disagree with the noble Lord, Lord Beecham, who seemed rather to distance himself from the advantages of periodical payments. Perhaps he did not—he was referring to the Law Society’s dislike of the overreliance on periodical payments.

If we are to approach the assessment of compensation on the basis that claimants should not be taking too much by way of risk, surely periodical payments offer a significant advantage. For example, the largest head of damage is often the future cost of care for a badly damaged claimant. Most claimants nowadays will seek periodical payments. Sometimes the cost may be £100,000 or even £200,000 for a long life, and life expectation has been increasing, particularly for brain-damaged babies and others severely affected. Periodical payments provide security, but if claimants are now to say, “No, I would prefer to have a lump sum”, they are, as it were, saying, “I do not want the security provided by periodical payments”. What then is the sense of awarding damages on the basis that they are an entirely risk-free investor? That simply does not make any sense.

The noble Lord, Lord Beecham, referred to the often somewhat unedifying disputes that exist between claimants’ lawyers on the one hand and insurers on the other. I distance myself from that and concentrate on the position of the NHS. The noble Baroness, Lady Kramer, referred to the MoD. The NHS will feel the effects of this measure very considerably. Speaking to a colleague of mine, a schedule of damages was priced before the discount rate operation at £9 million. It is now £23.5 million. Very often a standard brain-damaged baby case might have been on a lump sum calculation £10 million; it is now going to be £30 million. That is partly because life expectation of those claimants has vastly increased, but it is a result of the discount rate alteration.

Personal Injury Claims: Motor Vehicle Incidents

Baroness Kramer Excerpts

Wednesday 1st March 2017 Lords Chamber

[Lord Keen of Elie]

My Lords, I agree with the observation that the level of the discount rate reflects a very conservative assumption about how a person would deal with a large lump-sum payment of damages in order to protect their future position. That has to be the subject of review, because it is clearly outdated.

[Baroness Kramer (LD)]

My Lords, surely the review and the consultation should have come before the change in the discount rate, which is, as the Minister has heard from around the House, absolutely preposterous. As he knows, it is a fixed number based on three-year index-linked government securities, a commodity in which nobody who is investing funds for an injured claimant will put their money—it is less than you would earn by putting it into a local bank account. The fact that the number is preposterous means a big increase in premiums for motorists and a billion pound additional burden for the NHS, as well as an unnamed additional burden for the Ministry of Defence.

[Lord Keen of Elie]

My Lords, I am glad that the noble Baroness acknowledges that the basis of the calculation of the discount rate clearly requires review. However, the Lord Chancellor was under a legal obligation to deal with the discount rate and we are now concerned to ensure that we consult fully and address the question of how it should be calculated in future.