Oral Answers to Questions

Debate between Gloria De Piero and Rory Stewart

Tuesday 9th October 2018 Commons Chamber

[The Minister of State, Ministry of Justice (Rory Stewart)]

As the Secretary of State has made clear, we feel very strongly that we should look and act on the evidence that a short-term prison sentence is more likely to lead to reoffending than a community sentence, and that therefore, in a sense, it endangers the public. The point of a sentence of any kind must be primarily to prevent offending happening in the future. For that reason, we will look very carefully at emphasising community sentences.

[Gloria De Piero (Ashfield) (Lab)]

It defies belief that a spouse convicted of attempting to murder their partner can have any financial claim on their assets as part of a divorce settlement. Does the Minister agree with that principle and will she meet me to look into changing the law to ensure that there is no financial entitlement in all but the most exceptional of those cases?

Civil Liability Bill [ Lords ] (First sitting)

Debate between Gloria De Piero and Rory Stewart

Committee Debate: 1st sitting: House of Commons
Tuesday 11th September 2018 Public Bill Committees

[The Minister of State, Ministry of Justice (Rory Stewart)]

Vulnerable road users will be excluded from the Bill and from secondary measures on the small claims court limit. A vulnerable road user is anybody who is neither driving a motor vehicle nor a passenger in one; in other words, the definition includes pedestrians, horse riders, motorcyclists or anyone else on the road who is not in a motor vehicle.

[Gloria De Piero]

I thank the Minister for putting that on the record.

We absolutely agree that there is a need to act against insurance cheats; no one supports fraudsters. The amendment would not affect the pursuit of those who are claiming fraudulently. By accepting this amendment, the Government can still hit their target. Through this amendment, we simply want to protect those who are injured in the course of their work through no fault of their own. Before it is suggested that this somehow drives a coach and horses through the Government’s intentions, we are not talking about huge numbers of cases.

Thompsons Solicitors deals with workers’ injuries day in and day out. The majority of its work is for the trade unions. Just 16% of its case load consists of injuries from road traffic accidents, and of that number whiplash cases comprise less than 20% of the total. Once we eliminate the large number of these claims that are not work-related, we are left with a tiny percentage of claims related to whiplash that people have suffered in the course of their work.

I have seen no complaint of fraud levelled by the Government against workers nor any suggestion that they are anything to do with the compensation culture of which there has been so much talk, although notably Lord Young said in his report, “Common Sense, Common Safety”, that in any case that view was a perception and not a reality. The Association of British Insurers, which has been very active around this Bill, has produced no examples of fraudulent claims by workers.

This amendment is an opportunity for the Government to exempt employers’ liability claims from the Bill and at the same time exclude them from the small claims limit. If the Government refuse to exempt workers, are they saying that any whiplash claim is evidence of fraud, whoever it is made by? If so, why have they not banned all whiplash claims? If they refuse to exempt workers, are they saying that the police officer, the paramedic, the school bus driver or the firefighter who suffers whiplash while working hard for our communities is scamming it?

Given that the Government have exempted vulnerable road users—horse riders, pedestrians and cyclists—from both the Bill and the associated small claims changes, what is their justification for not exempting workers? Are they saying that vulnerable road users are worthy of more protection than workers? Perhaps the justification is that the cyclist, the pedestrian and the horse rider do not take out motor insurance for their road use, but neither does the professional driver. If the justification for the exemption of vulnerable road users is that they are uniquely exposed, surely the professional driver is, too? For instance, there is the police officer in a high-speed chase or the HGV driver who is on the road for eight hours a day. The reality is that the Government have exempted vulnerable road users because including them would be politically untenable.

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[Gloria De Piero]

It would be grotesque nonsense for a cyclist or a pedestrian injured through no fault of their own to find themselves subject to a tariff and a £2,000, let alone a £1,000, small claims limit when the target is whiplash and, in turn, apparently fraud. The same applies to workers. What on earth have they to do with whiplash for the purposes of fraud? If the Government will not move on this point, the only conclusion one can draw is that there is one rule for the small number of those wealthy enough to own a horse and another for the tens of thousands who drive for a living, many of them not in well-paid jobs—say, the paramedic or the refuse collector—who run the risk of whiplash when going about their jobs.

It is deeply disappointing that the Government are sneaking through crucial parts of their changes via a statutory instrument in order to avoid this sort of scrutiny. I wish to make perfectly clear today where the Opposition stands on workers for the entire package of measures. Workers, like vulnerable road users, should be excluded from both the Bill and the small claims increases.

[Rory Stewart]

It is a great privilege to serve under your chairmanship, Mr Stringer. Thank you again for the serious involvement that has gone into the debate. It has been a real privilege, as somebody who is not a legal specialist, to see how many well informed and distinguished colleagues we have on both sides of the House contributing to these interesting questions of definition.

Many of the amendments we are dealing with today reflect the work of the House of Lords and, in fact, of Opposition Members of the House of Lords—Labour Members, Liberal Democrat Members and Cross Benchers—who introduced many of the clauses into this Bill, which were not originally there and which we are now discussing. With your permission, Mr Chair, I will move quickly through amendments 8 and 9 and new clause 9 and then discuss why we feel clause 1 should stand part of the Bill.

The definition of whiplash, which is dealt with in amendment 8, was placed in the Bill after extensive debate pushed by the Delegated Powers and Regulatory Reform Committee of the House of Lords. In the initial version of this Bill, we had not sought to define whiplash. The DPRRC argued carefully and at great length that it felt strongly that it was inappropriate to have legislation of this sort if a definition was not in the Bill. The Committee felt it was not appropriate for any individual, whether a Minister or a chief medical officer, to make this definition on their own. It should be made by Parliament as a whole and it should be made fully explicit.

After a great deal of debate in the House of Lords, we conceded this point. The clause was inserted and everybody—Cross Benchers, Opposition Members of the House of Lords—nodded the amendment through. It was then inserted. The reasons for this are both those brought forward by the DPRRC and, I would add, to assuage some of the concerns put forward by the Opposition. Clause 2 also allows for a review of the definition by the chief medical officer, along with others, every three years to make sure it remains in touch with medical science and medical expertise. The definition is in the Bill and not purely provided by medical experts because, as the House of Lords argued, this is a medico-legal definition. In other words, it is not simply a question for medical specialists; it relates to the operation of law and the way in which the law of tort would operate.

The final reason for which I ask that amendment 8 be withdrawn is that I am afraid it refers only to the chief medical officer for England, whereas, of course, the legislation applies to England and Wales. That is why we feel strongly that clause 2, which refers to the chief medical officer for England and the chief medical officer for Wales and, indeed, the Lord Chief Justice and the Law Society in consulting on the definition of whiplash every three years, is the appropriate way to proceed. On that basis, I respectfully ask that amendment 8 be withdrawn.

It is easy to understand why amendment 9 was tabled and that the Opposition would be concerned. Again, we would respectfully argue that the key point is that the injury has occurred and not why the individual is in the car. The question of why they are in the car would be a distinction without a difference. There are many pressing reasons why somebody might be in a car. I, like many Members here, represent a rural area. Somebody might be in a motor car, for example, because they were having to drive their child urgently to a hospital. They might be in a motor car for any number of reasons that left them with little choice but to be in the car. It would seem invidious to distinguish between them and somebody else who is in the car for the purpose of employment, purely on the basis of the injury. The key is the injury and the fact that the third party who is liable for that injury is held liable.

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[Rory Stewart]

The key point, which goes against both Government and Opposition Members, is not the likelihood of having an accident. That should not affect the level of compensation that someone receives. That should be relative to one thing only: the nature of the injury and the prognosis. It should not be relative to why someone is in the car, how well or how frequently they drive or why they are driving. On that basis, I politely ask that amendment 9 be withdrawn.

New clause 9 reiterates some of the arguments in amendment 9; in other words, it focuses on the question of people injured during the course of their employment. However, it also references vulnerable road users. I have attempted to argue the relevance of someone driving a vehicle in the course of their employment in our discussion on amendment 9. On vulnerable road users, we respectfully request that new clause 9 be withdrawn for the reason I gave in my intervention on the hon. Member for Ashfield—vulnerable road users are already exempted by the Bill, so new clause 9 will be otiose.

On that basis, I respectfully ask that clause 1 stand part. This was a good and serious reform introduced with strong cross-party support by the House of Lords, driven by the DPRRC, which provides a much more accountable, transparent and predictable definition of whiplash to guide the legislation. We owe the Lords a huge debt of gratitude for that. We ask, on the basis that Members of the House of Lords from the Labour party, the Lib Dems, the Cross Benches and the Conservative party all agreed to it, that clause 1 stand part of the Bill.

[Gloria De Piero]

I have listened to the Government’s arguments, but do not accept them. The Bill’s objective is to reduce fraud. I have not heard anybody suggest that workers injured in the course of their employment are scammers. However, I have heard from Labour Back Benchers that workers drive all day and do not have a choice about whether to drive. I will divide the Committee on the amendments.

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[Rory Stewart]

The hon. Lady puts her finger exactly on the current situation. Currently, the decision is in the hands of the insurance companies. The argument in the legislation is to take that decision away from the insurance companies; it will prohibit them from making an offer without a medical report. That was supported by the Opposition as well as the Government, and that is exactly the intention of the legislation. That is another reason why we will resist amendments 10 and 11.

[Gloria De Piero]

Does the Minister accept that, although the small claims limit has remained at £1,000, the way that was calculated changed in 1999?

[The Chair]

Order. Can I just say to the hon. Lady that the Minister had sat down? It is appropriate to intervene when the Minister is on his feet. If the Minister wishes to make a statement in response, I will take it.

[Rory Stewart]

This is a good challenge. It is not, respectfully, relevant to amendments 10 and 11, but relates to the question of something that will be done by the Procedure Committee, if it were to proceed through secondary legislation—a proposal to raise the limit from £1,000 to £2,000. The hon. Lady is correct that in 1999, changes were made to how the £1,000 limit was calculated, which adds an extra level of complication.

There is also a debate between us on whether CPI or RPI should be used to move that initial 1991 definition and, if so, to what amount. Should the hon. Lady wish to proceed, that is appropriate—not for this amendment or the Bill, but for subsequent measures.

[Gloria De Piero]

We do not intend to divide on this but we will raise these issues again on Report and Third Reading.

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[Rory Stewart]

The answer is exactly for that reason. Because they are so hard to detect, they are almost impossible to fight, and therefore insurance companies have historically made that decision. They often do not even get a medical report because it hardly seems worth while to do so. When somebody comes forward with a whiplash claim, the procedure has often been to settle without going to court in order to reduce the legal fees and the associated costs, exactly because it is incredibly difficult.

Whiplash claims are extremely controversial medically. A lot of articles are written about this—I quoted the New England Journal of Medicine in the House, which is particularly stark. Cassidy’s article argues very strongly that the absence of compensation for pain and loss of amenity is associated with a much improved prognosis and reduced duration in the whiplash injury itself. In other words, the New England Journal of Medicine points to the fact that this is not purely a medical phenomenon. It has social and legal dimensions, of which compensation is a part.

[Gloria De Piero]

Is the Minister familiar with the quote from the head of the City of London police insurance fraud enforcement department? He said in the Insurance Post:

“It would be wrong to say that I believe there is a compensation culture or an insurance fraud culture in general.”

Another expert denied?

[Rory Stewart]

Such arguments would be more powerful if Opposition Members could explain why the number of whiplash claims has gone up by 40% since 2005, when the number of motor vehicle accidents has declined by 30% and cars have got much safer? A lot of things have been introduced in cars since 2005. Nearly 85% now have the safety features specifically designed to reduce whiplash that only 15% had in 2005. There are fewer accidents and much better protection around the individual.

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[Rory Stewart]

Fundamental to decisions that the Ministry of Justice has to make under any Government is the need to think seriously about balancing different types of interest—in this case the interests of the claimant, the third party and the taxpayer, as well as those of road users and people who take out motor insurance. It is therefore appropriate for us to question the overall cost of the system, and—particularly for motorists in rural areas—the fact that the premium could be as much as £35 a year extra, and considerably more for a young driver, because of the hundreds of thousands of people each year who make whiplash claims.

[Gloria De Piero]

Insurers have never mentioned fraud as a material risk in their financial report. If it were such a serious concern, would they not be required to report it to the Financial Reporting Council?

[Rory Stewart]

The question of what constitutes a material risk in a financial report is driven primarily by the financial stability of the company, so the question of whether fraud is defined in that way relates purely to the cost of the fraud. The question is a financial one, not one of honesty.

Amendments 12, 13, 14 and 15 relate to the Judicial College guidelines. This debate has had quite a long consultation period—it has been going on for more than three years. We are grateful to the Association of Personal Injury Lawyers and many others, including the Law Society, who have fed in to this consultation, and we have arrived at a compromise. The Opposition were extremely uncomfortable with the initial proposals, and we have made a lot of concessions—that is why I will be asking hon. Members to withdraw their amendments.

The initial proposals by the Chancellor of Exchequer in his Budget speech were to remove general damages entirely, and for no compensation to be offered for pain, suffering and loss of amenity. There was also a proposal to have no judicial involvement whatsoever in setting levels of compensation, and the third element of controversy was about whether it was appropriate to have tariffs at all.

We have made significant concessions on the first two points—in the House of Lords for the second proposal, and before that stage for the first proposal. Under pressure from many people, including Opposition Members, we have accepted that there should be general damages, and that principle has been reinserted. Secondly—this is why I will ask for support for clause 4—we will push ahead with the proposal that the Lord Chief Justice should be consulted on the level of the tariffs. That brings in the judiciary so that it will not be done purely by the Lord Chancellor, which brings us to the question of whether there should be tariffs at all.

A tariff system is relatively unusual in English common law although, as the hon. Member for Enfield, Southgate pointed out, an equivalent exists for criminal injury compensation cases, which creates some paradoxes and contradictions. At the moment, someone who suffers a criminal injury could receive a different level of compensation than if they suffer exactly the same injury without a criminal act. The same is true if someone in a motor vehicle suffers from a terrorist attack. The Government could give someone considerably more compensation if they are the victim of a terrorist attack than if they suffer the injury in a different way.

However, tariffs are not unusual: they have been introduced very successfully in Italy, France and many other European jurisdictions. Under the proposals in the Bill, there will be judicial discretion on the tariffs. That is judicial discretion that we have consulted on closely and will return to under later amendments. It is in line with what the European Court of Justice believes should be the appropriate degree of judicial flexibility when applied to a tariff system.

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[Rory Stewart]

This goes to the heart of the concerns that the judiciary raised when the first criminal injury compensation schemes were introduced and, indeed, when compensation for a terrorist act was introduced. As the hon. Gentleman suggests, it is perfectly legitimate to question whether, within the tradition of tort in the English common law, it is appropriate to distinguish between an injury suffered at the hands of a criminal or a terrorist and an injury simply suffered at the hands of another third party who is liable, but that is a much deeper philosophical jurisprudential debate than I think we can proceed with here. With that, I respectfully request that the amendments be withdrawn or not pressed and I ask the Committee to support Government amendment 4.

[Gloria De Piero]

I am afraid that I am going to disappoint the Minister. We feel so strongly, because we are led by the independent experts, by the Select Committee on Justice and by some people in the Minister’s own party, whom I quoted earlier, that we believe that the Committee needs to divide on amendments 12 to 16.

Question put, That the amendment be made.

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[Gloria De Piero]

This amendment would allow judges to increase the amount of damages payable where they determine the tariff amount to be insufficient compensation, rather than capping judges’ ability to increase compensation awards to a percentage specified by the Lord Chancellor, as the Bill currently does. Once again, I want to point out the long-standing tradition of trusting judges, rather than having politicians interfere with the discretion of the courts—a tradition that the Government are inexplicably undermining with this Bill.

Clause 5(3) states that if the court thinks there should be an uplift from the tariff because of the severity of the injury, the amount by which the court can increase the payment is limited according to a cap set by the Lord Chancellor. Not only are the courts being fettered by a tariff, but when they consider the tariff to be inappropriate, they will get their judicial wings clipped again. This reduces judges to little more than errand boys for the Lord Chancellor.

Many Lord Chancellors these days are not lawyers. They will rely on the advice of their officials, who need not have legal training either. If the Tories do not trust the judges, who do they trust? What are they scared of? What evidence do they have that judges will behave badly and award huge sums? What court cases can they point to in which that has happened? I can find none at all, and nor can the experts whom my team and I have consulted.

I suspect the insurers fear that without a cap, every tariff award will be taken to court, where judges will apply an uplift and blow up their tariff. If that is what they fear, it suggests that they secretly accept that the proposed tariffs are too low. Perhaps the reason for all these restrictions—all these fetters on what a judge can decide for themselves—is that the Government and the insurance industry are running scared that judges will, indeed, rebel against them. Not because judges are intrinsically rebellious—far from it, some would say; they are conservative with a big and a small c—but because they have a duty to be impartial and deliver justice, and the Government’s proposed tariff does not even remotely do that. Amendment 18 would restore judges’ lost autonomy.

[Rory Stewart]

I thank the hon. Lady for her speech. This amendment relates to the fundamental question of the tariff system and the relationship between the judiciary and the tariff system. Clause 5 provides a pragmatic compromise between a strict tariff system and judicial discretion by allowing the judges to lift that tariff in exceptional circumstances. However, as the European Court of Justice accepted in the arguments made in the Italian case, there needs to be a limit. If there were no limit to judges’ discretion, the tariff system would become unworkable.

In so far as we disagree about whether there should be a tariff system in the first place, I completely understand where Opposition Committee members are coming from. However, given that the fundamental cornerstone of the Bill is that there should be a tariff, we need to strike a pragmatic compromise between the tariff and giving some discretion to judges. Therefore, we propose that the Lord Chancellor will set a percentage of discretion for judges to uplift the tariff. We also propose that he will consult the Lord Chief Justice on the appropriate level of discretion. We will look carefully at the rulings of the European Court of Justice and the decisions that it has made in other countries where tariffs exist to arrive at that figure.

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[Rory Stewart]

Clearly, a system of the sort we propose, which is modelled on the existing tariff systems in places such as France and Italy, is designed to set in law, through the actions of an accountable Minister, the level of the tariff. The argument is absolutely right. As the hon. Lady suggests, that will remove discretion from judges except in exceptional circumstances. The reasons for that are to do with our policy objective of dealing with the whiplash claim culture. Our intention is to reduce the damages paid for minor whiplash injuries, which are defined in the Judicial College guidelines as those that last less than two years. That will result in general damage payments lower than those currently awarded by judges. However, in exceptional circumstances, judges will be able to increase the award.

[Gloria De Piero]

What is the fear here? Is it that judges will make awards above the tariff set?

[Rory Stewart]

The Judicial College guidelines are simply a historical record of awards by the courts. It is a fact that those awards to date have been higher than the awards we propose in the tariff. The policy intention is to reduce the general damages paid, particularly for people at the three-to-six-month level. As we get closer to the two-year level, awards under the tariff come closer to the Judicial College guidelines, but at the lower end, as was suggested, there is a disagreement between the Government and the current practice of judges about the appropriate award for pain, suffering and loss of amenity.

There has been a lot of discussion about experts, but right hon. and hon. Members must remember that we are discussing general damages, not money for loss of earnings or to pay for physiotherapy. We are discussing a judgment of exactly how many pounds and pence someone should receive for a whiplash injury—for the subjective experience of pain in their neck or shoulder. It is difficult to argue that there is particular expertise on the question of the subjective experience of pain. Indeed, as the hon. Member for Enfield, Southgate suggested, it is impossible for anyone—whether they are a Minister, a judge or a doctor—to suggest that the money that is paid can remove the pain. The pain remains. Money paid in general damages is intended simply as an acknowledgement of the existence of pain, suffering or loss of amenity. It cannot, as would be the case with special damages, remove the pain itself. On that basis, I politely request that the amendments be withdrawn and the clause be accepted.

[Gloria De Piero]

We do not accept the Minister’s arguments, so will divide the Committee.

Question put, That the amendment be made.

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[Rory Stewart]

Perhaps we can return to that very interesting point on Report. It has not been raised in any of the amendments tabled so far, but I would be very interested to see an amendment tabled and to discuss the matter outside this Committee.

On the basis of the arguments I have made about MedCo, I respectfully request that the Opposition withdraw amendments 19, 20 and 21.

[Gloria De Piero]

Will the Minister say a bit more about the advice he has received from counsel and about why he will not accept the amendments?

[Rory Stewart]

It is pretty straightforward. MedCo is a non-profit organisation set up relatively recently as a portal funded by the insurance industry. We intend the Bill, like any law we pass, to have sustainability and resilience. Potentially, it will last 50 or 100 years. It is very difficult, looking forward over that period, to be confident that the exact portal or organisation by which doctors qualify to provide an assessment of whiplash will be called MedCo—it may be called something else. The measure provides the flexibility, through regulations from the Lord Chancellor, to define the form of evidence, the person, the accreditation and the regulation necessary to proceed. We think it would give a hostage to fortune to put the brand name of a specific non-profit on the face of the Bill. On that basis, I request that amendments 19, 20 and 21, and new clause 3, be withdrawn.

Civil Liability Bill [ Lords ] (Second sitting)

Debate between Gloria De Piero and Rory Stewart

Committee Debate: 2nd sitting: House of Commons
Tuesday 11th September 2018 Public Bill Committees

[Gloria De Piero]

Does the Minister accept that, since the changes made in 2012, insurance companies have saved £11 billion?

[Rory Stewart]

I am not in a position to accept or reject that figure—I am not familiar with that figure and I am not clear how it has been arrived at. I am happy to look at that in more detail before Report stage of the Bill.

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[Rory Stewart]

The premiums dropping will be assessed and published in the normal fashion. The requirement in new clause 2 is much more complex. The new clause requires a prodigious amount of information about all forms of income streams, the number of claims and the number of premium holders so the Treasury and the Financial Conduct Authority can develop a sophisticated and detailed picture in order accurately to address the concerns of Opposition Members that, over the period—particularly the three-year period that will be affected by the introduction of the Bill—insurance companies will not pass on savings to consumers. We believe they will, which is why we are comfortable pushing for this unprecedented step of gathering that information to demonstrate that the market works.

On that basis, I politely request that the Opposition withdraw their amendments and support Government new clause 2, which after all was brought together by Opposition Members of the House of Lords and others, and which achieves exactly the objectives that the Opposition have set out.

[Gloria De Piero]

The Minister talked a lot about where the Committee disagrees, but there are things we can all accept as fact—the facts that insurance profits are up massively and that these changes will save insurance companies £1.3 billion, for instance—and we all want premiums to come down. We believe only amendment 17 and new clause 6 will deliver that, so we seek to divide the Committee.

Question put, That the amendment be made.

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[Gloria De Piero]

I beg to move, That the clause be read a Second time.

New clause 1 deals with one of the most important effects of this package of measures. It says that the whiplash small claims limit can increase only in line with inflation based on the consumer prices index. It specifies that the limit can increase only when inflation has increased the existing rate by £500 since it was last set.

The Government have been disingenuous in trying to sneak through these changes to the small claims track limit by using delegated legislation, which restricts the proper scrutiny that such significant changes deserve. With the new clause, we ask the Government to do the right thing and to put it on the face of the Bill, enshrining the terms that a plethora of experts agree on: the use of CPI over the retail prices index when it, and using 1999 as a start date for any recalculation of the limit for a small claims track.

The White Book that I showed the Minister shows that there was a 20% increase in the small claims limit in 1999 when special damages were removed from the calculation of the limit. Lord Justice Jackson, in his “Review of Civil Litigation Costs: Final Report” said that the only reason to increase the personal injury small claims limit would be to

“reflect inflation since 1999. As series of small rises in the limit would be confusing for practitioners and judges alike.”

He made it crystal clear that the limit should remain at £1,000 until inflation warrants an increase to £1,500.

The Government admitted to me this morning that there is a difference of opinion in their own ranks about which of these years should be the benchmark. We say again that they must listen to the Lord Justice Jackson and the Justice Committee chaired by one of their own, the hon. Member for Bromley and Chislehurst (Robert Neill), who agrees with him. We should state on the face of the Bill that 1999 must be the start date for any recalculation of the small claims limit, not 1991. The Government accepted all the key recommendations in the Jackson report save the recommendation that there should be an increase in the small claims limit to £1,500 only when inflation justifies it.

To turn to another aspect—the Government have admitted that it has caused a dispute among Ministers—I want to make the case, as I have done before, that CPI and not the RPI is the correct measure to apply for inflation. It seems that the Government use RPI when it suits and use CPI when it suits. CPI is what we use for the pensions and benefits paid to injured workers while they are pursuing justice for that injury through the claim. Even the Chief Secretary to the Treasury agrees with me. When asked at the House of Lords Economic Affairs Committee whether she agreed that RPI was an inadequate measure, she said:

“We certainly agree that it is not the preferred measure of inflation. CPI is a much better measure of inflation… we agree that it is not the preferred method, and we are seeking to move away from RPI”.

Why are we moving towards it here? The Government say they wish to apply RPI to the small claims limit because RPI is applied to updating damages—the same damages that they are taking an axe to with the new tariff.

Perhaps some in the Conservative party are persuaded, like me, that CPI is the best option, because of yet another expert who has lined up to say so. On 30 January 2018, the Governor of the Bank of England, Mark Carney, said:

“At the moment, we have RPI, which most would acknowledge has known errors. We have CPI, which is what virtually everyone recognises and is in our remit.”

It is perfectly clear that we need to enshrine CPI as the key measure on the face of the Bill. The amount of £1,000 from 1999 would now be worth either £1,440 if CPI is applied, or £1,620 if RPI is applied. Lord Jackson said that it should not go up to £2,000, as the Government suggests, until inflation warrants it.

I trust the Minister will not be as dismissive as Lord Keen was when he said in his evidence to the Justice Committee:

“We do not feel that there is a material difference between setting it at £1,700 today and seeing it drop behind inflation next year, and setting it at £2,000 without the need to review it again for a number of years.”

Try telling the nurse, the caretaker or the bus driver that there is no material difference between £1,700 and £2,000. For those on real wages, that has a real impact.

[Rory Stewart]

Relatively rapidly, I would say that we have five types of disagreement with the amendments. Broadly speaking, those are political, philosophical, economic, financial and constitutional. The political disagreement is that the amendment would go to the heart of the Bill. The entire concept of the Bill is to try to effect a change in the current practice and process around whiplash claims by moving the claim limit to £5,000. That is part of the entire package—the tariffs and small claims limits are related to that.

Philosophically and fundamentally, we are not arguing that the shift to £5,000 is fundamentally a question of inflation. There are many other reasons why the small claims limit has been moved in the past. Indeed, in relation to some types of claim, as you will be aware Sir Henry, as one of our learned friends, some of the claims have been moved to £10,000, which goes a long way beyond inflation.

Largely, the driver of whether or not something is on a small claims track is to do with the nature of the claim, not the nature of inflation. However, if we worked on the narrow question of inflation, the Judicial College guidelines are currently on RPI as opposed to CPI. I respect the arguments that the hon. Member for Ashfield made but that is not the fundamental argument the Government are making.

The amendment would have curious financial implications. It would create a strange syncopated rhythm, whereby movements in CPI are not necessarily reflected in the triennial review except in £500 increments which, over time, mathematically will lead to peculiar results.

The fundamental reason we oppose the amendment is the final argument I mentioned, which is constitutional. This is business for the Civil Procedure Rule Committee, as it always has been, and it is not suitable to put in the Bill. On the basis of those political, philosophical, economic, financial and constitutional arguments, I respectfully request that the amendments be withdrawn.

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[Gloria De Piero]

The Government have refused to allow the small claims changes, which will have a fundamental impact on access to justice for hundreds and thousands of injured people every year, into the Bill. New clause 7 is designed to ensure that vulnerable road users are exempted as the Minister has promised. New clause 8 would do little more than reflect the recommendations of Lord Justice Jackson in his civil justice review. The Minister agreed this morning that there had been a change to the small claims limit in 1999. New clause 8 says that 1999 is the date from which any change to the small claims limit should be calculated and that the increase should be by no more than £500 at any one time. As I have said, that reflects the recommendations of Lord Justice Jackson.

There is a difference between us on the appropriate level of inflation. We say CPI—the consumer prices index. There is absolute logic in that because that is the inflation rate applied by the Government to benefits paid to injured people. It is also, of course, the rate that the Governor of the Bank of England recommends.

[Rory Stewart]

Given that we are coming towards the end of the proceedings, I again pay tribute to right hon. and hon. Members on both sides of the Committee for the quality of debate. It has been quite testing personally: a lot of very learned friends have asked a lot of fundamental questions, ranging from inflation rates to the good challenges from my friend the right hon. Member for Delyn (David Hanson), who keeps me on my toes. I thank them very much for their various contributions.

With the final group of amendments, we come to questions that relate to some of the debates that we have had already, in different forms. This in effect is a subset of the arguments made on new clause 1. As right hon. and hon. Members will remember, new clause 1 involved an argument that the reductions should be made in relation to all personal injury claims. These proposals take the same arguments and apply them to two subsets of people who are injured: vulnerable road users and people injured in the course of employment. On both those things, there are some differences between us, again, on the correct level at which to set the rate, but there are also some important concessions that are worth bearing in mind. They were made in the House of Lords and in the subsequent process.

In relation, first, to people injured in the course of employment, personal injury claims that are not as a result of whiplash, we have listened very carefully to right hon. and hon. Members. They will remember that in the initial consultations there were suggestions about raising the limit to £10,000 or £5,000. The agreement has been that for non-whiplash-related injuries, it is kept at £2,000.

There is some discussion about whether it is correct to see that in terms of CPI or RPI—the retail prices index—but broadly speaking, it is not very significantly different from the rates that were set in the 1990s when inflation was applied, although there is some disagreement between the two sides of the House, to the extent of a few hundred pounds, on the extent of headroom put on top of inflation. There could be a broader argument, which was raised earlier, about the fundamental principle that compensation should be paid for the injury rather than on the basis of why somebody was present on the scene, whether in the course of employment or another activity. However, that goes beyond the scope of the amendment.

The real concession has been made in relation to vulnerable road users, which I hope hon. Members on both sides of the House will welcome. We listened carefully to representations made primarily not by people who own horses—although I remind hon. Members that there are more than a million horses in the United Kingdom, so it is not quite as much of a minority pursuit as some might like—but by cyclists, who led a strong campaign arguing that they are particularly vulnerable on the roads. They are: they are not encased in a sheet of metal. We accept that the same argument also applies in spades to pedestrians—as a proud pedestrian, I feel that very strongly—and to people on motorcycles, who are not encased in metal either.

We are delighted to confirm that vulnerable road users will be excluded in respect of the small claims limit and the Bill. On that basis, with many thanks to everybody for their prodigious and learned contributions, I politely ask that the amendment be withdrawn.

[Gloria De Piero]

I will disquiet the Minister one more time and press the new clause to a Division.

Question put, That the clause be read a Second time.

Oral Answers to Questions

Debate between Gloria De Piero and Rory Stewart

Tuesday 10th July 2018 Commons Chamber

[Rory Stewart]

The important thing to understand about the small claims process is that the shift from £1,000 to £2,000 is simply to ensure that the original 1991 legislation keeps up with inflation—the RPI increase—in line with the Judicial College guidelines. This is not about people with catastrophic, life-changing injuries, but about people with injuries below the £2,000 level. We are making sure that the small claims process is fair, transparent and easy for the public to access without expensive lawyers.

[Gloria De Piero (Ashfield) (Lab)]

In its report on the small claims limit increases, the Justice Committee noted the

“compelling evidence of the obstacles that would be faced”,

and concluded that the changes would

“represent an unacceptable barrier to access to justice.”

Will the Minister listen and think again before pursuing another attack on workers?

[Rory Stewart]

I am always prepared to meet the hon. Lady and to listen. I emphasise again that this is simply a change in line with RPI. The small claims limit was set at £1,000 in 1991. The proposal is now to move it to £2,000, which is simply in line with the retail prices index, so that we have the same fair policy today that we had in 1991.

Rural Communities

Debate between Gloria De Piero and Rory Stewart

Tuesday 17th April 2012 Westminster Hall

[Rory Stewart (Penrith and The Border) (Con)]

I join everyone in congratulating my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this important debate. The enormous number of people here is testimony to the importance of the subject.

Speaking on behalf of Cumbria, I want to say that we need to recognise, when we talk about Government support for rural areas, that there is already significant Government support for them. We cannot start the debate pretending that rural areas are somehow entirely neglected or forgotten. It is correct that there should be Government support for them, but we should recognise that in per capita terms—and of course, it is driven by our need—Government support can be considerable. In our part of Cumbria, for example, we run two district hospitals for a population of 300,000 people. We have the smallest high school and the smallest sixth form in England. That means that the per capita costs of running those services are high. That is a form of cross-subsidy from other parts of the country.

Therefore, we should not over-push the argument. We should not stand up again and again in the House of Commons and present ourselves as victims. To do so is dangerous. If we present ourselves as victims and demand more and more transfer payments, and start to take on board the arguments about productivity and the connection between rural areas and the City of London, for example, we will create unpleasant tensions. We will end up with people in London saying “Why should we subsidise rural areas?” We do not want to get into that conversation. We will, in short, find that we are having the same conversation that we are now having with Scotland, which has become poisoned by the question of how much money is moving north of the border, and how much is moving south.

Nor should rural areas try to imitate cities. One of the most dangerous things that we have been doing in Cumbria has been to pursue industrialisation policies that are entirely unsuitable for rural areas. Of course it is true, as my hon. Friend the Member for Sherwood (Mr Spencer) said, that we need to be sure that the economy flourishes in rural areas. However, that does not mean going into an area such as Penrith and The Border, where currently we have close to full employment, and building businesses for which we have no workers, shipping them in from other parts of the country, then saying we have a housing shortage and building another 400 houses, and then saying we do not have jobs for the people in those 400 houses, and building more businesses. That may be convenient for district councils that could generate money from that kind of operation, but it is not what is demanded by our area, our population, or our economy.

Instead, we need to look at the country as a single complementary unit—complementary in the sense that city and rural needs are different, but also in the sense that we are one community, one country and one nation. We are not about transfer payments. We cannot allow people in London to see themselves as some city state that is paying for the rest of the country. We must understand that our contribution is valuable.

[Gloria De Piero (Ashfield) (Lab)]

I suspect that many people in London would, however, be surprised to find out that in rural areas such as mine people cannot get a school bus. I am thinking specifically of the 7.55 am bus from Sutton in Ashfield to Tibshelf, which has been removed, throwing mums’ lives into chaos. Would the hon. Gentleman agree that getting a school bus is not just desirable but essential?

[Rory Stewart]

Absolutely, and I thank the hon. Lady for raising that point.

With the caveat that we do not want to present ourselves as victims, it is essential to demand the basic services that other people in the country take for granted. Those could be buses, or access to hospitals or schools.