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Lord Rodgers of Quarry Bank: Perhaps I may express support for the motive behind the amendment moved by the noble Lord, Lord McIntosh, and do so in the light of what was said by the noble Lord, Lord Carlisle of Bucklow. I fully understand what he said about comparing the tariff with a normal figure for damages under industrial injuries. It was a very fair point and one which the Minister indicated, as I understand it, will be looked at.

I approach these matters very much as a layman. Although the Minister has said today, as on previous occasions, that this is a very generous scheme—and no doubt it is on a comparable basis with schemes available elsewhere—when I look at some of the tariffs I do not believe that I would feel that they were very generous if they applied to me. If noble Lords themselves were subject to criminal injury, I do not believe that they would feel that the compensation was adequate. It may be that I am very fastidious and unworldly in this respect, but the idea that one gets compensation to the extent of £40,000 for the loss of a tongue is absolutely extraordinary. For the loss of both legs the sum is £100,000. Would we be prepared to see ourselves lose a tongue for £40,000 or two legs for £100,000?

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As I say, the tariff may be generous taken as a whole—but £100,000 for the loss of both eyes? Would any of us feel that that was adequate compensation for the loss of a facility of that kind? We have to say that because the courts approach these things in a very hardheaded way. They have precedent and they have to take that view. I say this in view of what the noble Lord, Lord Carlisle, has said, in case his remarks are thought to be representative of the views of the Committee. A number of the individual items are totally inadequate as compensation for the degree of injury which is described.

At the bottom end of the scale some of the figures are perfectly acceptable. Indeed, I am surprised that compensation is payable at all for some very minor injuries. But at the top of the scale one can see what it would mean to the life of a man or woman to be injured in this way. This comes back to a matter we discussed about being 15, 16 or 17 years of age, at the beginning of one's life. I do not believe that the message should go out that these levels of compensation are seen to be generous.

The noble Lord, Lord McIntosh, is now of course exercising excessive prudence in relation to public expenditure. He says that he does not want to open the floodgates. He is saying that now in case he is in the position of the noble Baroness within a relatively short time. It is not for me to judge whether that will be so. But I do not want it to go on record that, expensive though this scheme might be seen to be by some criteria, the compensation offered to those who suffer injuries will ever be considered to be true compensation for what has happened to them.

I ask this question of the Minister. Although it may sound very naive, it is genuine. In the light of that, what really is the purpose of compensation? It may be an elementary question for those who deal with these matters from day to day in courts and tribunals. But what is £50,000 or £100,000 meant to do? If the Minister, myself or any other Member of this Committee lost our eyes, what would £100,000 mean to us? I shall be interested to hear what the Minister has to say.

Baroness Blatch: The noble Lord, Lord McIntosh, continues with the self-indulgence of inviting the Committee to pass amendments to spend more money, and then says that it should not be taken too seriously because he does not wish to talk about money at the moment. This is another amendment which is very open-ended. The noble Lord has said that he believes that at the end of the day it would not be very expensive. But one has to add this to the other amendment.

The noble Lord, Lord Rodgers of Quarry Bank, was interesting in what he had to say. It is never possible properly to compensate somebody for losing their legs or their tongue or ending up a quadriplegic. The scheme is not attempting even to try fully to compensate someone: I do not believe it can be done. It is attempting to represent society's concern for blameless victims of crime. Society has seen fit, through its taxes and other money, to put in place a compensation scheme which

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will be approved by Parliament in order to make some amends for discomfort, medical needs and possible incapacity to work.

I remind the House yet again that the original common law scheme contained within it an element for loss of earnings and care. That has remained in our calculations. It has not been stripped away. In addition to that and quite separate from it, I refer to the example of the noble Lord, Lord Rodgers of Quarry Bank, of the person who loses a tongue or who loses his legs. The noble Lord mentioned only the tariff amount. That amount is only one part of what a person would receive. In addition to that £100,000 or £40,000, there would be compensation for medical care, loss of earnings, loss of pension and so forth.

As the Committee knows, our intention is that the scheme should set an overall cap for awards. Already my noble friends have said that there is the generous figure of £500,000. That is double the amount set up under the earlier tariff scheme which had to be withdrawn. It is pertinent to the examples given by the noble Lord, Lord McIntosh of Haringey, to take into account the fact that for the first time it is possible to purchase an annuity with that £500,000. The income stream generated from that annuity would be entirely tax free for life for the victim of criminal injury.

If we were talking about legal liability on the part of the state to pay damages for acts which its employees have committed, there could be no such limit. But that is not the case here. As I said earlier, the scheme pays compensation as an expression of society's concern for and sympathy with the victim. It is not reasonable to expect a state-funded scheme to make good each and every loss a victim may have suffered. That would place an undue burden on the taxpayer, on whom the cost of the scheme ultimately falls.

I ask the Committee to agree that £500,000 is a very large sum of money. It has already been queried. Fewer than 10 of the board's awards in 1993-94 under the present scheme exceeded that amount. But it is no argument to say that, if that is the case, the potential cost of removing the cap cannot be very great. We need the certainty to control costs that the facility of setting an upper ceiling on awards will give. We cannot have an open-ended system under which costs in any one year cannot be predicted or controlled. I remind the Committee again that with a new facility to make payment by structured settlements—that is the purchase of tax-free annuities which this Bill introduces—the value of high awards to claimants during their lifetime will be considerably increased. For all those reasons I hope that the amendment will not be pressed.

9 p.m.

Lord McIntosh of Haringey: The Minister claims that I am simply asserting that there will not be significant extra expenditure if the amendment is agreed to. That is not the case. I have given exact figures for 1993-94, which is the most recent year for which I have figures. It is clear that the number of such cases in that year would have been seven and that the total amount

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of money involved would have been £1.38 million. In terms of the total cost of the scheme, that is not a significant amount by anybody's standards.

Indeed, it is not as if removing the cap is removing the basis upon which the compensation is paid. I am not claiming for a moment that there should not be any restraint on what should be awarded for loss of earnings or future loss of earnings, for care or for future care. I am saying—if the Minister is listening—that without making any change in the tariff, without in any way relaxing the financial constraints which exist both in the tariff itself and in the calculation of special expenses, it would be just, equitable, not expensive and common sense to remove an arbitrary limit of £500,000. I acknowledge that £500,000 is a larger limit than in the interim illegal scheme, but it is also the case that there was no limit before and that there was no exploitation of the lack of a limit under the previous scheme.

It is not the case that very large numbers of people will have their awards totalled. Such awards will be made only under severe scrutiny by claims officers, systems managers and adjudicators. There will not be a free-for-all of any kind. I find the Minister's attitude to this modest reform quite inexplicable. Although I beg leave to withdraw the amendment, I cannot promise that I shall not return to it at a later stage.

Amendment, by leave, withdrawn.

[Amendment No. 23 not moved.]

Clause 2, as amended, agreed to.

[Amendment No. 24 not moved.]

Lord Archer of Sandwell moved Amendment No. 25:

After clause 2, insert the following new clause—

Compensation for loss of earnings

(". Where the applicant has lost earnings or earning capacity for less than 28 weeks as a direct consequence of the injury, an additional award of compensation in respect of loss of earnings will be made in a sum equivalent to the difference between the applicant's actual income and the higher rate of statutory sick pay applicable to that period.").

The noble and learned Lord said: We return to dealing, by way of an amendment to the Bill, with a quarrel that we have with the scheme. Paragraph 22 of the draft scheme provides for compensation for loss of earnings after earnings have been interrupted for 28 weeks. That provision was introduced by the Government on second thoughts and will indeed benefit the more seriously injured. I say at once that we welcome it.

However, those who suffer loss of earnings for less than 28 weeks may suffer real hardship. I assume that the period of 28 weeks was chosen because up to that period there is statutory sick pay. However, that is hardly a fortune. It may amount to substantially less than the victim's normal earnings. If the victim is committed to, say, periodical mortgage repayments or similar outgoings, it may lead to a financial crisis at a time when the victim is least able to cope with such financial and family problems.

Some employers have a contractual sick pay scheme to make up the shortfall but, unhappily, that is far from true of all employers. There is, if anything, some

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correlation between being in the kind of employment which subjects one to high risk and not having a contractual sick pay scheme. Self-employed people do not receive statutory sick pay at all, yet a taxi driver is at greater risk of criminal injury than most of us. That is equally true of sub-postmasters and sub-postmistresses.

From the figures which I have been privileged to see by courtesy of the Library in another place, it appears that by the 28-week rule as many as 12 million people could be excluded from the scheme who in consequence may suffer real hardship. There are some 3 million self-employed people; some 3 million who at present are below the lower earnings limit; 1 million who are on short-term or temporary contracts and so do not qualify; some 2 million people have employers who do not have such a sick pay scheme; and 3 million people have not worked for an employer for long enough to qualify. Therefore, it does not follow that because many people will qualify for sick pay up to 28 weeks, those who are disabled for less than 28 weeks have no problem.

I cannot believe that the Government intended that situation to arise. The 28-week rule must have looked a fairly simple and just way of effecting a division. I am sure that, on reflection, the noble Baroness will accept that it is not. I beg to move.

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