Criminal Injuries Compensation Scheme 2012

Debate between Lord Davies of Coity and Baroness Royall of Blaisdon

Wednesday 25th July 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I will also speak briefly to the draft Victims of Overseas Terrorism Compensation Scheme 2012. I am grateful to the Minister for his presentation of the two draft instruments before us. I am also grateful to the Association of Personal Injury Lawyers, the trade unions—USDAW and the CWU—and the Association of Convenience Stores for their excellent briefings, all of which expressed deep concerns.

The Minister said that we needed a system able to respond to the needs of victims, and then he made it sound like a very reasonable step to cut £50 million from the criminal injuries compensation scheme. He did not say so, but I suggest that the catalyst for the proposed changes is the cuts faced by the justice department and the notion that we are all in it together. As is evident from the amendment, we on these Benches fundamentally disagree. Victims do not choose to be victims; they have suffered through no fault of their own, and in proposing the draft Criminal Injuries Compensation Scheme 2012 the Government are putting deficit reduction before humanity. I do not underestimate the need to reduce the deficit, although the Government have cut too far and too fast. Nor do I dismiss the need to introduce changes to the scheme from time to time. As the noble Lord rightly said, my own Government considered changes but we chose not to make them. I am sure that when the noble Lord was himself in opposition, he applauded that fact.

Why are the Government seeking to exclude 42% of innocent victims of crime from the scheme and making life more difficult for those who might still be eligible? Like the Association of Personal Injury Lawyers, I believe that the withdrawal of compensation from innocent victims of crime goes against the very purpose of criminal injuries compensation and ignores a view held by successive Governments for decades that victims of crime deserve more than words. What is happening to similar schemes in other European countries that are also coping with a financial crisis? Are they cutting entitlements for victims or do they regard compensation for victims as a matter of national honour? I suspect that they would not agree that innocent victims of violent crime should bear the brunt of austerity.

In the foreword to the Government’s consultation on the criminal injuries compensation scheme—CICS—the Lord Chancellor and Secretary of State for Justice says that the current scheme for providing compensation to victims of violent crime,

“has never been properly funded”,

and must be put on a “sustainable footing”. As the Minister said today, the document painted a picture of schemes that were not sustainable and had historic liabilities of nearly £400 million. However, as he will know, these figures are disputed.

The 2011-12 accounts, together with an analysis of the previous three years’ figures, show that the scheme is both stable and sustainable, with an average annual cost to the MoJ of existing tariffs of £192 million, and that historic liabilities have been reduced to 73 cases, estimated at less than £153 million. So why is the budget being cut by £50 million? In relation to the consultation, I also take issue with the very partial and extraordinarily subjective references to the results of the consultation in the Explanatory Memorandum, which do not reflect many of the real concerns expressed during the consultation.

The noble Lord gave a clear explanation of the CICS and the band system, but frankly it is not acceptable that the first five bands, which represent almost 50% of all payments, are going to be cut. They will be not cut just a little, but abolished. In human terms this means that more than 18,000 people a year who have quite serious and permanent injuries will receive nothing.

These include injuries such as partial deafness, post-traumatic epileptic fits, and burns and scarring causing minor facial disfigurement. To date these people, if their claims are successful—which is not easy—might receive between £1,000 and £2,500 compensation. The Minister said this is a small amount. Indeed, for some of us it is, but for others this money is not just compensation and recognition of an injury. It means being able to cope, not having to cross the line into a personal financial crisis, and retaining the dignity and self-esteem that enables them to continue to work or to seek work.

Among the people we are talking about are shop workers, far too many of whom are subject to physical assault, and the thousands of post men and women who are attacked by dogs every year. Of course, the other bands are not unscathed. Indeed, compensation for claims between £2,500 and £11,000 would be slashed by up to 60%. These claims are for injuries such as permanent brain injury resulting in impaired balance and headaches, fractured joints resulting in continually significant disability, and punctured lungs.

In addition, victims of violent crime who are still eligible for compensation under the new scheme and who are unable to work due to their injuries will also suffer as a result of changes to the scheme. The Minister suggested that changes along these lines were necessary for simplification. However, people will be worse off due to the changes in the arrangements for future loss of earnings, which will now only pay statutory sick pay—currently £85.85 a week. If someone were to work a 37-hour week on the minimum wage before they were injured, they would be worse off by £139.15 per week, which could result in serious financial hardship.

Then, there is the failure to take into account the current employment market. To be eligible for a loss of earnings payment, the victim will have to have been in regular paid work for at least three years immediately before the date of the incident giving rise to the injury. What would happen to a person who sustained the injury while moving between temporary jobs, or who had a period of unemployment in those three years?

I recognise that, as the noble Lord, Lord McNally, said, the Government have proposed to retain awards at their current level in respect of domestic violence, sexual offences and physical abuse, and I welcome that. But what compensation would a woman be entitled to if, for example, she were the victim of rape and other physical abuse such as a broken arm and the loss of an eye? Would she be entitled to compensation for rape and each of the other two injuries sustained?

There are many questions to be answered about the proposed new scheme, but most importantly I believe that thousands of innocent victims of crime will be considerably worse off through no fault of their own, and because of the pernicious cuts in legal aid that have been debated long and hard in this House they will find redress much more difficult in future. For these reasons, I hope that noble Lords will support my amendment.

I turn briefly to the draft Victims of Overseas Terrorism Compensation Scheme, which is welcome, and I endorse the views expressed by the Minister. I am glad that the Government intend to show solidarity with British and European Union victims who are part of our community and have been caught up in acts of terrorism overseas, by making payments to those who have been seriously injured and who could not have reasonably anticipated the significant threat to their safety or security when travelling abroad.

I pay tribute to my noble friend Lord Brennan, who cannot be in his place today, who introduced a Private Member’s Bill in 2007 which led to a section on victims of overseas terrorism in the Crime and Security Act 2010, and as a consequence, as the Minister said, to the statutory instrument before us today.

One important question for the Minister is: why is the scheme not retrospective, so that payment can be made to the victims of acts of terrorism in Bali, Sharm el-Sheikh and Mumbai? I understand that the cost of such payments would be between £3 million and £5 million, and to exempt the victims would seem to me rather mean-spirited. However, the Minister said that there would be an ex-gratia scheme backdated to 2002. I would be grateful if he could give me some further information on that point. I look forward to the answers from the Minister, and I beg to move.

[Lord Davies of Coity]

My Lords, we have all heard about the big society. We have all heard that we are all in this together.

I am driven to the belief that the proposed cuts in the draft Criminal Injuries Compensation Scheme 2012 are another example of the most vulnerable people in our society being expected to make the greatest sacrifices.

Before coming to your Lordships’ House 15 years ago, I was an officer of USDAW, the Union of Shop, Distributive and Allied Workers, for 28 years, the last 12 of which were as general secretary. Then as now the retail sector was dominated by women workers, a large number of whom were part-time workers struggling to combine employment and home responsibilities and duties. All these workers are in the front line when criminal activity is perpetrated by the most vicious of criminals. Yet this coalition Government are now going to deny criminal injuries compensation to many of these workers.

The Union of Shop, Distributive and Allied Workers, which has never merged and has represented shop workers for over 150 years, demonstrates that this Government have ignored in their consultation all opposition to these proposed cuts. Some 50% of victims currently eligible for compensation will receive nothing if these cuts go through. Over 40% of the remainder would see their compensation reduced by £1,500 to £2,000. This is not a great sum for a millionaire, but by any standard a great sum to a shop worker already on low wages and injured by vicious criminals. If this proposal goes through, what next, I ask? Child labour, then slavery?

If there is to be a vote on this draft Criminal Injuries Compensation Scheme 2012, I for one will be voting against the government cuts.