House of Lords Reform Bill

Debate between Jack Straw and Lord Beamish

Tuesday 10th July 2012 Commons Chamber

[Mr Jack Straw (Blackburn) (Lab)]

As the House will be aware, I spent the last four years of the previous Labour Government leading on the issue of Lords reform. The House voted decisively in March 2007 for an 80% or a 100% elected second Chamber and against all other alternatives. I then chaired the cross-party working group, which worked hard and constructively to develop detailed proposals for reform. The Deputy Prime Minister has taken that work forward. Many, though not all, of the Bill’s proposals have come, as my hon. Friend the Member for Stockport (Ann Coffey) pointed out, from the proposals that we brought forward. That includes the key proposal—I am sorry that I do not have time to go into all the arguments in its favour—for single, non-renewable 15-year terms and a ban on those elected to the other place from being able to stand immediately for this place. Although there is much in the Bill that could and should be improved, I support the measure, and I shall vote for it if the House divides tonight.

In the limited time available, I want to focus on one key omission from the Bill—a proposal for a referendum. During our period in government, I probably piloted through this House more constitutional Bills than any other Minister.

[Mr Kevan Jones (North Durham) (Lab)]

Don’t we know it!

[Mr Straw]

I had such wonderful support from my right hon. and hon. Friends for all those measures.

On some, such as the Human Rights Bill and the Freedom of Information Bill, there was an understanding across the Chamber that it was appropriate for Parliament to have the final say. On others, however, there was a growing consensus that matters affecting the location and balance of powers in our constitutional arrangements required the endorsement of the British people because the fundamentals of the constitution belong to the people and not to us.

Among the measures I sought to introduce was the European Union constitution Bill, which made very significant changes in respect of our obligations within the EU. The Labour Government’s initial view was that we should do what successive Governments had done, most notably over Maastricht, and have this House make the final decisions. In making that case, as in previous debates on the principle, I advanced arguments against introducing a referendum for that Bill that were similar to those put forward by the Deputy Prime Minister. Those arguments related to cost, complexity and the fact that two of the main parties—his and mine—supported the measure. I have to say, however, that behind that—unwritten and unspoken—was the fear, particularly among my colleagues who were enthusiasts for the measure, that the British people might give the wrong answer. I believe that that fear also lies behind the refusal of a referendum in this case, even though I want a referendum and will passionately argue for a yes vote in any referendum.

Legal Aid, Sentencing and Punishment of Offenders Bill

Debate between Jack Straw and Lord Beamish

Tuesday 1st November 2011 Commons Chamber

[Mr Straw]

I said earlier today outside the House that I believe the reason why the OFT has decided rather late in the day to hold an investigation into market conditions in the motor insurance industry is that it is deeply embarrassed by the position that it took in 2004. In no sense could it be said that referral fees encourage fair trading. They are essentially a fraud on the consumer. Lord Justice Jackson, in his magisterial report, completely demolished the OFT’s case in favour of referral fees.

The other body that should examine its processes is the Legal Services Board. I accept readily the reason why the Secretary of State felt obliged to wait for its consideration of referral fees, but its consumer panel released the most extraordinary report stating that referral fees worked in the public interest. If we examine the basis of its research, we find that a third of the people whom it surveyed had received compensation for things like whiplash.

On any objective consumer evidence, and there is plenty of it, it is perfectly plain that the public collectively do not like what they are learning about how the wider insurance industry operates. They reckon they are being defrauded, and that is absolutely true. In motor insurance, for example, a conservative estimate is that at least £2 billion of the total premium income of £9 billion is additional costs caused by the merry-go-round of referral fees.

[Mr Kevan Jones]

My right hon. Friend is correct that in 2004, referral fees were put on a legal footing. However, many years before that it was quite clear that referral fees were being paid in various guises. My hon. Friend the Member for Bassetlaw (John Mann) and I raised the scandal that was going on in the miners’ compensation scheme. When we were arguing for that practice to be banned, the Government of the time did not do a great deal about it.

[Mr Straw]

The Government should have done, and as I have sometimes said in respect of that period, my alibi is that I was abroad. I am the last to suggest that the problem has been created by the current Government. I accept that although the Labour Government did many wonderful things, the consequence of a number of things, some of which we introduced and some of which, such as the OFT report, were forced on us, has been the creation of a dysfunctional system.

[Mr Jones]

Will my right hon. Friend give way again on that point?

[Mr Straw]

Very briefly, but others wish to speak.

[Mr Jones]

The fact that this has become an issue for middle England is quite ironic, but I am angry that when my hon. Friend the Member for Bassetlaw and I raised it in respect of poor mining communities, people did not think it was a great priority. Does my right hon. Friend agree that it is ironic that if we had tackled the problem at that time, the scandals in the motor industry that he has outlined would have been put to bed years ago?

[Mr Straw]

That might be so—it is good to know that my constituency is representative of middle England.

Similarly unacceptable practices take place in motor repairs. In bottom-line referrals, accident management companies require repairers to give them a discount of up to 25%. The repairers then increase their prices to take account of that bottom-line referral fee. Royal and Sun Alliance outrageously practised a type of subrogation whereby it set up an internal subsidiary, which contracted repairers for, say, £1,000 for a repair, and then added 25%, which was charged to the main company—RSA Ltd—which then charged the at-fault insurer. Product mandating is another unacceptable practice. Deals are struck with, for example, paint manufacturers, and repair companies are required to use specific brands of paint. That has led to a 67% increase in the cost of paint since 2003.

We must act on all those matters, and I hope the Minister will say briefly what will happen on the RTA portal if he gets the chance. I know that he has indicated that he hopes to take action, but is he sympathetic to what I suggest in respect of whiplash and many other matters?

I come now to the issue between the Minister and me. I welcome new clause 18, and I am grateful to the Secretary of State and the Minister for introducing it. However, for my hon. Friend the Member for North Durham (Mr Jones), the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and I, there are two issues. First, in my judgment, the breadth of the ban must go wider than personal injury claims. It could be excluded in one or two discrete areas, but in the generality of cases, as the right hon. Gentleman said—he has a great deal of experience—abuse also happens elsewhere.

Secondly, on the question of whether there should be a criminal offence, I noted what the hon. Member for Cardiff North (Jonathan Evans) and my hon. Friend the Member for North Durham said about what happened before 2004, and in a sense, they have made my point. My understanding is that the prohibition on solicitors charging referral fees was in the solicitors conduct rules and that it was not a criminal offence. Those rules changed; it was not that a criminal offence was abolished. I am glad that the Secretary of State proposes to make greater use of the regulatory authorities, and I would not for a moment suggest that that is unnecessary, because it is very necessary. However—this is where, with respect, I found his argument least convincing—there are many other areas of regulation, including, for example, of financial institutions, when conduct that is in clear breach of regulations leads to both a fine or penalty by civil regulatory authorities and a criminal offence. That is particularly true given the vicarious liability requirements imposed by section 7 and others of the Bribery Act 2011.

I applaud what the Secretary of State is doing as far as it goes, but for the life of me, I simply do not understand why, given that he recognises the inadequacy of the 2004 regulatory system and many other things, he does not back that with the criminal law.

Independent Parliamentary Standards Authority

Debate between Jack Straw and Lord Beamish

Wednesday 16th June 2010 Westminster Hall

[Mr Straw]

My view is that the basic structure of the Act is probably satisfactory, and I have heard no suggestion to the contrary. I just remind Members that, if we are going to have an independent authority—

[Mr Kevan Jones]

Jack, sit down.

[Mr Straw]

No. If we are going to have an independent authority, we have got to give it some independence.

There are two fundamental problems. One is the structure of the allowance system that the authority has decided on; that is something that it decided on. Having done that, the second problem is the system of administration.