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The Lord Chancellor: My Lords, I know it is claimed that CFAs encourage ambulance chasing, but the whole point is that they are no win/no fee agreements. Lawyers will make a profit only if they bring strong cases. That is why trade union solicitors run efficient, profitable businesses on this basis. I believe that CFAs and litigation insurance has brought hundreds of thousands of people with strong cases into access to justice who formerly did not qualify for legal aid. Provided claims management companies are taking on good cases--which is what they will do in their own interests--advertising extends access to justice.

As regards organisations such as Claims Direct, no one has suggested to me or to my department that the content or presentation of the advertising is in any way improper. I should, of course, be concerned if that were so. This is a matter which the noble Lord could take up with the Independent Television Commission, or indeed with the Advertising Standards Authority, the chairman of which, the noble Lord, Lord Rodgers of Quarry Bank, is the leader of the noble Lord's party in this House.

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Lord Tomlinson: My Lords, I ask my noble and learned friend the Lord Chancellor a simple supplementary question: is he saying clearly that conditional fee agreements increase access to justice?

The Lord Chancellor: My Lords, I say that unquestionably. They bring hundreds of thousands of people into access to justice for the first time. Traditionally in this country only the very poor on legal aid or the very rich could afford to litigate because if they lost they could not afford the costs involved. Middle income Britain can now bring forward strong claims under conditional fee agreements. I also believe that a stronger settlement culture is taking root both as a result of the civil justice reforms and of conditional fee agreements.

Lord Renton: My Lords, are conditional fees reducing the cost of legal aid and, if so, to what extent?

The Lord Chancellor: My Lords, no, the legal aid budget remains at £1.6 billion a year. Conditional fee agreements have enabled a refocusing of the sums spent on legal aid, not a reduction.

Lord Clement-Jones: My Lords, will the noble and learned Lord confirm that the changes have promoted more settlements at the expense of court litigation?

The Lord Chancellor: My Lords, weak or trivial cases do not go forward under conditional fee agreements as, it has to be said, they did on legal aid. The strength of the cases that go forward, combined with the liability of the unsuccessful party for the costs plus the uplift, promote more settlements. Also, the civil justice reforms, often known as the Woolf reforms, are having a similar effect. Independent research shows that 89 per cent of lawyers favour the reforms; and there is greater co-operation between the parties, faster resolution of claims and a less adversarial atmosphere in the courts.

Lord McNally: My Lords, I still see a tinge of complacency in the noble and learned Lord's answers. Does he admire the state of litigation in the United States? Time will tell whether he is right, or I am. I suspect that in 10 years' time many of our services will be as paralysed as they are in the United States.

The Lord Chancellor: My Lords, the noble Lord must appreciate the big difference between practice in this country where we have conditional fee agreements in civil cases tried by judges alone and that in the United States where juries try civil claims with all the sympathy for plaintiffs that that entails and where contingency fees apply under which the plaintiff's solicitor gets, as we call it, a slice of the action as distinct from an uplift on the fees.

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Hospitals: Private Finance Initiative

3.21 p.m.

Lord Clement-Jones asked Her Majesty's Government:

    What action they propose to take in response to the recent King's Fund report on hospitals built under the private finance initiative.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the private finance initiative is an important element in our drive to build 100 new hospitals. We agree that further guidance is needed in the light of the findings of the National Beds Inquiry.

Lord Clement-Jones: My Lords, I thank the Minister for that somewhat obscure reply. The Minister and his colleagues are relying heavily on the PFIs as a means of delivering the new NHS national plan in respect of new and improved facilities. The report from the King's Fund, an impeccable source, casts considerable doubt on the long-term benefits of the PFI in particular as regards the lack of flexibility in PFI contracts.

Will the Minister and his department now undertake a full review of whether the PFI will provide the benefits in which he and his colleagues so clearly believe?

Lord Hunt of Kings Heath: My Lords, no, we shall provide further guidance in relation to PFI to ensure that all schemes take account of the increase in the number of beds that we wish to see as a result of the national plan. Overall, PFI brings us an ability to expand a hospital programme. It also brings an ability to keep control, as we failed to do in the past, in terms of cost over-runs and time over-runs. Overall, it is an important asset to the delivery of the national plan.

Lord Rea: My Lords, when hospital developments are planned, whether through the PFI or, preferably, through the public sector now that our finances are in good order, do the Government bear in mind the need to do that as part of a package, including the development of a community health service and the social and economic characteristics of the population to be served which are crucial determinants of the type and number of beds needed?

Lord Hunt of Kings Heath: My Lords, the King's Fund report totally ignores the fact that a PFI proposal cannot be taken forward unless it has the support of the local health community and the regional office of the NHS executive. It is not the case that PFI schemes are simply taken forward by an individual trust without regard to the strategic needs of the health service as a whole.

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Lord Astor of Hever: My Lords, in the light of the BMA's estimate that the Government's PFI plans will lead to the loss of 5,000 NHS beds, will the Minister confirm that there will be no reduction in the total number of NHS beds?

Lord Hunt of Kings Heath: My Lords, I am always wary of BMA estimates. There has been a reduction in the number of beds in the health service over many years. In 1984/85 there were 325,000 in the health service. In 1995/96 the figure was reduced to 206,000. That was under the stewardship of the noble Lord's party.

The National Beds Inquiry makes it abundantly clear that overall we now have to increase the number of beds we wish to see in the health service: 2,100 extra general and acute beds; and 5,000 intermediate care beds. We are reviewing each of the large PFI schemes at present to ensure that what they propose is consistent with our desire to increase the number of beds overall, although individual PFI schemes may well show some reductions. We shall look carefully at that.

Lord Mackie of Benshie: My Lords, will the Minister tell the House what the private financier expects in return for his initiative? Is it 20 per cent or 30 per cent as against bonds at about 8 per cent?

Lord Hunt of Kings Heath: My Lords, no, but clearly a private financier wishes to enter into an agreement on a viable proposition. The advantage for the National Health Service is that we have access to more capital; we can transfer the risk of cost over-runs and time over-runs; and we can expand the number of hospitals that we bring into use in the National Health Service. PFI is but one element of the expansion in our capital stock. We shall still use traditional public finance approaches where appropriate. Overall, I believe that PFI enables us to expand the NHS in as fast a time as possible.

Lord McColl of Dulwich: My Lords, is the Minister aware that since 1960 7,000 to 8,000 beds have been taken out of the NHS every year irrespective of which Government have been in power? Will the Minister admit that, by pretending that it is the former Government who closed the beds, he makes himself a stranger to the truth?

Lord Hunt of Kings Heath: My Lords, no, I do not recognise that. If the charge is made, as it was, that we are reducing the number of beds, it is only right for me to inform the House of the stewardship of the former Government. Of course as technology and science have changed in the health service we have seen a reduction in the number of beds--in fact since the health service was started.

The past year has shown that we did not have enough capacity to deal with pressures on the system.

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That is why we set up the National Beds Inquiry. That is why we shall expand intermediate care and increase the number of general and acute beds by 2,000. At the same time, PFI enables us to expand our capacity overall alongside public finance so that we can build those 100 hospitals.

Child Poverty

3.28 p.m.

Baroness Thornton asked Her Majesty's Government:

    Following the announcement last week of a significant reduction in child poverty, what plans they have to ensure that this progress is maintained and further reductions made.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I am delighted to tell the House that measures in our last four Budgets will have lifted 1.2 million children out of poverty by next year. Our target is to lift at least a quarter of all children out of poverty by 2004 as part of our commitment to eradicating child poverty in a generation.

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