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Baroness Nicol: My Lords, we are grateful to the right reverend Prelate for his introduction of this wide-ranging Measure. I am sure that I speak for all noble Lords when I say that we wish him a very happy retirement. He is not, I understand, going to Oxford but to Cambridge. I am quite sure that he will be very happy there.

I want to give a particular welcome to Clause 2, which the right reverend Prelate introduced at some length. He explained the background to it and I need not go over that again. But I feel that it introduces a very welcome degree of flexibility into the range of candidates eligible for appointment as Regius Professor. It will help to ensure that the appointment will be of the highest academic quality. It will allow the appointment of a distinguished Church historian from another denomination, if necessary, and—dare I say?—it might even allow the appointment of a woman. In the long run it can only strengthen the Faculty of Theology in Oxford. I particularly welcome it.

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As the right reverend Prelate said, the other Measures are also to be welcomed. None of them is controversial, with the exception of Clause 6 and the difficulty that arose over that was met by the most reverend Primates. We support the Measure.

Lord Teviot: My Lords, as a member of the Joint Parliamentary Ecclesiastical Committee, I welcome the Measure. The Measure is extremely thorough and Clauses 2 and 6 were well dealt with. It shows how efficient and thorough is the General Synod. There are over a dozen clauses in the Measure and nothing has been left out.

I join with the noble Baroness, Lady Nicol, in wishing the right reverend Prelate the Bishop of St. Albans a good and happy retirement. I remember his maiden speech. It was very interesting and amusing.

Lord Strathclyde: My Lords, from these Benches may I briefly congratulate the right reverend Prelate on the way in which he introduced the Motion. I should also like to join in the words of the noble Baroness, Lady Nicol, and my noble friend Lord Teviot, and demonstrate that on this side of the House we also are entirely in agreement with the Motion.

The Lord Bishop of St. Albans: My Lords, I thank your Lordships very much for those kind words and for noble Lords' appreciation of the whole work of the Ecclesiastical Committee. It is very rare that the General Synod receives accolades and therefore the words that came from behind me warmed my heart. I shall go into retirement feeling a new person. I only regret that when other people at my age are becoming Members of your Lordships' House, I am leaving it.

On Question, Motion agreed to.

Criminal Injuries Compensation Bill

3.20 p.m.

The Minister of State, Home Office (Baroness Blatch): My Lords, I beg to move that this Bill be now read a second time.

Your Lordships will need little reminding of the importance of this Bill. Its aim is to provide statutory backing for the payment of compensation to the blameless victims of violent crime. The Bill will provide the framework for an enhanced tariff scheme. That new scheme will concentrate on a simple tariff approach for the majority of victims, while ensuring that generous compensation is paid to those most seriously affected by their injuries. In this way we believe the enhanced tariff scheme provides the right balance between meeting the needs of victims while protecting the interests of taxpayers.

We have, of course, had a non-statutory criminal injuries compensation scheme since 1964. It provides compensation from public funds to the blameless victims of crimes of violence and to those injured in attempting to catch criminals or prevent crime. When the scheme was introduced the government of the day made it clear that they did not accept that the state was liable for injuries caused to people by the criminal acts

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of others. But they did believe that the public felt a sense of responsibility for, and sympathy with, the blameless victim. They felt, therefore, that it was right for that feeling to be given practical expression by the provision of a monetary payment on behalf of the community. We remain of that opinion.

Since 1964 the scheme has been run by the Criminal Injuries Compensation Board. In the first full year of the scheme's operation—1965-66—the board received 2,452 applications and made 1,164 awards, totalling just £403,000. That would be around £4 million at today's prices. In the most recent year for which audited figures are available—1993-94—the board received 73,473 applications. It made 65,293 awards and paid out no less than £165 million. Our criminal injuries compensation scheme is the most generous in the world. We pay out more than the whole of the European continent taken together and we pay out more than the whole of the United States taken together.

Under the current scheme awards are assessed on the basis of common law damages: that means what an applicant might expect to be awarded in a successful action for damages in the civil courts. Calculation of awards on that basis requires finely judged assessments of the degree of suffering and financial loss. That tends to make speedy decision taking more difficult. It also makes it harder to predict and control the costs of the scheme. We all know that under the energetic and able leadership of my noble friend Lord Carlisle, the board has been determined to improve the workings of the scheme. I should like to take this opportunity to pay tribute to my noble friend and his colleagues on the board for all they have done. It has been much appreciated. But, despite those sterling efforts, the backlog of unresolved cases has risen inexorably. It now stands at nearly 110,000. At the same time, the costs of the scheme have continued to increase at a rate that is no longer sustainable for a scheme funded by the taxpayer.

It was against that background that we decided to introduce a new tariff-based scheme in April 1994. That tariff scheme moved away from the one based on individual assessment. It provided for payments to be made on the basis of a scale of awards which grouped together injuries of comparable severity and allocated a financial value to them, based on awards made previously by the board.

The new scheme ran from 1st April 1994 to 5th April 1995, when the Judicial Committee of this House ruled that the method of the tariff scheme's introduction had been unlawful. The scheme was immediately withdrawn and the former scheme reinstated. But I must emphasise here that the legal judgment related solely to the method of the tariff scheme's introduction; it was not concerned with the merits of the scheme itself.

We remain firmly of the view that a tariff-based approach is the right way forward. A tariff scheme is easier for victims to understand. It is easier to operate; and that means that applications can be dealt with more quickly. It also enables costs to be controlled and predicted more easily.

But in revisiting the tariff approach we have, of course, taken careful note of the criticisms made of the earlier scheme, both in this House and elsewhere, and

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in particular the concern that too simple a tariff approach could have a detrimental effect on those most seriously affected by their injury. We think our new, enhanced tariff scheme meets the major points of concern that were expressed. It will ensure that in the more serious cases payment is made for loss of earnings and earning capacity and for the costs of special care. And, in cases where the victim has, tragically, lost his life, not only will family members receive a fixed tariff payment, but, where they were financially dependent on the victim, they will also receive payment for that loss of dependency and support.

The Bill provides the framework for the new scheme and sets its broad parameters. It makes it clear that it is a tariff-based scheme, but that the tariff would be augmented in appropriate cases by payment for loss of earnings, special care and dependency. It makes it clear that the more important features of the scheme—namely, the tariff itself and other provisions bearing on quantum—will be subject to parliamentary scrutiny. They will require the affirmative resolution of both Houses of Parliament before they can be included in the scheme.

The Bill will also repeal the provisions in the 1988 Criminal Justice Act which would have made the common law damages scheme statutory. It is intended that the Bill should come into force on Royal Assent and that, following parliamentary approval of the details to which I referred, the new scheme should start on 1st April 1996.

Following detailed consideration of the Bill in another place, I suspect that the details of the new scheme are already well known to many noble Lords present today. However, other noble Lords may find it helpful if I briefly rehearse the main features.

There will be a basic tariff of awards. Each injury description is allocated to one of 25 tariff levels which will attract a fixed payment ranging from £1,000 to £250,000. All successful applicants will receive an award from the tariff. But in addition, those who are incapacitated as a result of their injury for more than 28 weeks will be entitled to separate, additional payment for loss of earnings or earning capacity. There clearly needs to be a qualifying period to trigger that extra payment and to differentiate between those who have been most seriously affected by their injury and those whose injuries are less severe. We believe that 28 weeks is the most appropriate trigger, since that is the period for which statutory sick pay is payable by employers. Of course, those who do not qualify for statutory sick pay during that time should qualify for incapacity benefit, or other state benefit as appropriate.

In cases of incapacity for more than 28 weeks there will also be payment for special expenses. That will be payable from the date of the injury and it will cover the costs of special care and future care. In general, if something qualifies for special expenses under the present 1990 scheme, it will qualify for special expenses under the enhanced tariff scheme. Thus the sort of things it will cover include the costs of home mobility equipment, fees for care at home or in a nursing home,

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and the cost of private medical treatment if, in all the circumstances, both the treatment and the cost are reasonable.

In fatal cases there will be a fixed fatal award of £5,000 per qualifying claimant, unless there is only one qualifying claimant in which case the award will be £10,000. But in addition, where the claimant was financially dependent on the victim, payment will be made for the loss of that dependency—in other words, for the loss of the breadwinner's wage. And a child will be eligible for payment for loss of parental support. Reasonable funeral expenses will continue to be paid in all appropriate cases. The upper limit for awards under the enhanced tariff scheme will be £250,000, double that payable under the old tariff scheme.

Finally, I should mention a most important feature of the new arrangements. That will be the ability to make payments by what are known as "structured settlements". For higher value awards it will enable the claimant to opt for payment by the purchase of annuities which will provide a stream of index-linked payments for life, or other specified period. Those payments will be tax-free. It will considerably enhance the net value of the award to the victim. And I can tell your Lordships that we shall use the Bill to ensure that the benefits of structured settlements can be extended to claimants under the current scheme whose claims have not yet been settled. That will, in fact, necessitate our making a small change to the current scheme plus an amendment to this Bill, which we shall bring forward in Committee.

The tariff itself is based on that used in the earlier tariff scheme which had to be withdrawn. It was derived from nearly 20,000 awards made by the board which enabled us to group the injuries into bands of comparable severity and to set an appropriate level of payment. We have made some adjustments to the tariff in the light of experience of operating the tariff scheme in 1994-95, including the addition of new or amended injury descriptions. The new tariff lists over 300 injury descriptions and is, we believe, now pretty comprehensive.

The new scheme will be administered by a body similar to the Criminal Injuries Compensation Authority, which administered the earlier tariff scheme. The Bill will enable the administration of the scheme to be market tested at a future date, although we have no plans for that at the present time.

The Bill provides for a two-stage appeals process similar to that under the earlier tariff scheme. The first stage will be an internal review of the case by a more senior member of the authority. The second stage will be a right of appeal to an independent appeals panel. This will comprise members of the present board, and people with experience in medicine, business, commerce, or with a trade union background or other broader relevant experience. The workings of the appeals panel will come under the supervision of the Council on Tribunals.

Apart from dealing with appeals from individual claimants, we regard the panel as an important source of expertise and advice. We have therefore made it clear in the Bill that the panel has an advice-giving role. That

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means that the Secretary of State may consult the panel whenever he feels it would be helpful, while the panel may in turn give advice to the Secretary of State on such matters and whenever it considers it appropriate to do so.

The rules of eligibility and the procedures for making applications and appeals will remain very much as they were under the 1994 tariff scheme. And that scheme, of course, closely followed the rules of the common law damages scheme. However, the time limit for making applications will be extended from the earlier tariff scheme's one year, to two years. And, as before, the authority will be able to waive that time limit in exceptional circumstances.

I mentioned earlier that the costs of the common law damages scheme were increasing at a rate that was no longer sustainable. In fact, as the Financial Memorandum to the Bill makes clear, we estimate that without reform the annual liability to compensation by the year 2000-2001 would be in the order of £460 million. Under the enhanced tariff scheme, the liability will, of course, continue to grow year by year, but at least at a less rapid rate. By 2000-2001 we think that the annual liability will be in the order of £260 million, and that the total payable under the tariff scheme to then will be about £1.1 billion. That is still an enormous amount of taxpayers' money by any standards and, indeed, we will retain our place in the league tables. It is not surprising, therefore, that our scheme is, and will remain, the most generous scheme anywhere in the world.

We believe that the enhanced tariff scheme provides the right balance between the needs of victims and the interests of taxpayers. It has the benefits of a tariff-based approach which will enable most claimants to get their money quickly and without undue fuss. But it also ensures that the most seriously injured are generously catered for, by paying loss of earnings and the costs of any special care, and by making provision for structured settlements. I hope the House will recognise that we have listened very carefully to the criticisms of the earlier tariff scheme, that we have made a number of very significant improvements, and that the new tariff scheme is much the better for it. No doubt others might wish to go further—we shall hear much of that during the course of the afternoon—but any prudent government must have regard to resource constraints and I believe that, within those constraints, the new tariff scheme is a good and generous one. It is good for victims, and it is good for the taxpayer. This Bill provides the necessary framework for the scheme, and I commend it to the House.

Moved, That the Bill be now read a second time.—(Baroness Blatch.)


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