'(1) Any sum awarded to a victim of crime by means of a Compensation Order shall be paid to the victim within 14 days of the award.

(2) Magistrates' Courts Committees shall put in place arrangements for Compensation Order payments to be made in full where the offender fails to make any required payment within 14 days of the payment date decided by the Court.'.—[Mr. Heath.]

Brought up, and read the First time.

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

This new clause deals with compensation orders, which, the Committee will remember, deal with compensation awarded to the victims at the conclusion of a trial. A court must consider making a compensation order for loss, injury or damage. The orders are normally for less than that which the Criminal Injuries Compensation Board would consider and they are not intended to act as a recompense for the damage caused, because they must be within the means of the offender. There are difficulties with compensation orders in that default on them occurs to an even greater extent than default on fines—it is, in fact, almost ubiquitous. The system is unsatisfactory.

The principal losers from the current system are often police officers. It often happens that a compensation order, which might not amount to a great deal of money, is ordered to be paid to a police officer, who, I suspect, shrugs his shoulders and thinks, ''Well, that's the last I will see of that,'' because that has been his experience in so many cases. The difficulty is that the compensation order requires the offender to pay into the court and for the court to pass that on to the person to whom the compensation order is made. Therefore, if the offender does not pay to the court, no compensation is paid to the injured party.

The evidence that the system is simply not working is manifold. I think that the Police Federation has carried out a study of the problem across the country, in which it looked at various police authorities. The examples are quite shocking. Some 73 compensation orders were reviewed in West Mercia, but in 33 those cases no payment at all towards the award had been received. In North Wales, in 16 cases over 12 months looked at, only three of the offenders involved were making any attempt to pay compensation. I could go on to list the various police forces around the country and the lack of response.

A potential way of dealing with the problem is to have a victims fund, from which payments could be made and to which reimbursements could be made by the payment that the offender makes to the court in due course, as and when that is collected. That proposal came out of the review of the victims charter back in February 2001, which said:

''we know that some offenders still fail to pay up. To ensure that victims receive the full amount awarded to them by the Court promptly in every case, we are looking carefully at whether to establish a 'Victims' Fund' to ensure that victims receive the financial compensation they deserve from offenders more quickly. We would have to give considerable thought to the creation of any fund.''

Such considerable thought clearly is still being given to the proposal, as it has still not emerged since February 2001, despite the warm welcome that almost every respondent to that consultation paper gave.

That fund could work in a variety of ways. It could work through the constabulary in the case of police officer compensation, because the total amounts involved are negligible compared with the annual expenditure of a constabulary. However, the most important thing is that the person injured should receive the compensation that the court orders that they should receive, and should not wait for years after

the event, only to receive nothing whatever. That is a self-evident proposition that I commend to the Committee.

Perhaps the Government intend to do something about this problem. I should be interested to know what is happening in relation to the promised victims and witnesses Bill. There has been much confusion about whether a victims Bill is in the offing, whether the present Bill is the victims Bill under another name, and whether something will happen in the current Session. Since the Queen's Speech and the Government's leaflet, ''A Better Deal for Victims and Witnesses'', which does not mention a victims fund but sets out plans for a Bill, we have heard nothing more from Ministers, business managers or anyone else. One thing that the Government can make absolutely clear today is whether another Bill entitled something like the ''Victims and Witnesses Bill'' or ''Witnesses and Victims Bill'' will be presented in this Session to deal with the relevant issues, or whether the Criminal Justice Bill is thought to suffice for those purposes. I am none the clearer from what has been said so far.

Irrespective of whether a Bill will be presented, new clause 29 is at least a way of dealing with the issue through magistrates courts committees. A relatively small amount of money is involved—something of the order of £50 or £100. Larger sums are considered by the Criminal Injuries Compensation Board. A relatively small fund could therefore provide satisfaction to those who are injured and entitled to compensation without causing cash flow difficulties for any Department or agent of the state.

If the Minister is not minded to accept the new clause, I hope that he will say whether the concept of a victims fund to deal with compensation orders is in the Government's mind and, if so, how it might be implemented. Can we expect in this Session a Bill on this broad area of concern, and if not, what is happening about compensation orders? Does the Minister find it satisfactory that in the great majority of cases, it appears that those who are awarded compensation for personal injury never receive a penny?

The hon. Gentleman has again identified a relevant issue. It is a sad fact that although compensation orders—I speak principally of what happens in magistrates courts—are made quite regularly, the payment rate has historically been very low. That has meant that, in particular, many police victims of assault have not been compensated. The proposal for a victims fund is interesting. I do not have a view on it, but the hon. Gentleman has done us a service in making the suggestion so that the Government can give it consideration.

The Government should also consider the need to give court orders more teeth. Some weeks ago we debated outstanding fines, and I outlined the laborious process that every court must go through to get money from an unwilling defendant, including considering attendance centre orders, money payment supervision orders, distress warrants, deduction of benefit,

attachment of earnings and the like. I tried to explain to the Minister the sheer frustration that courts face in trying to get the money from people.

A police officer may, for example, suffer an assault—not a major one, but a black eye, being spat on, or a bruised shin—and the defendant may be convicted. I do not think that police officers often go the Criminal Injuries Compensation Board, as it is probably not police practice to do so. If they are not a unique category, they are an unusual one, because some victims will go to the Criminal Injuries Compensation Board. However, the court might make a compensation order in favour of a police officer for a modest sum—often as low as £50 or £100—which is intended to mark the court's displeasure and acknowledge the need to give the officer some recompense for getting hurt, albeit mildly, in the execution of his or her duties. It is frustrating that, as often as not in those circumstances, the money is not paid.

What extra teeth could the court have? Many who sit in judgment would like to be able to say to a defendant, ''You will pay the police officer £100, and if you do not pay it in a fortnight you will be back before me and you will go to prison, and that will be the end of the story.'' That would be a bold approach, but it will never be put into practice, even though the cold wind of a prison sentence blowing down a defendant's neck is likely to enhance the chances of getting the money.

Many district judges say what they should not say to defendants who do not pay, because they know that they cannot follow through. They say, ''If you do not pay in 28 days you will come back before me''—which is uncertain—''and if you do, you know what is going to happen to you, don't you?'' The defendant might begin to shake and reply, ''Yes, I will go to prison.'' The judge has not said that that will be the case, but that is what he is trying to imply.

If one gives people short terms to raise money, they will raise it—it is as simple as that. There are stories of defendants in the box saying, ''I am on benefits, I have got no cash, and I am out of work,'' and in answer to a series of questions they then say, ''Yes, I smoke 40 cigarettes a day, drink 16 pints a week and run a mobile phone.'' People scratch their heads in disbelief about where the money comes from and where it is going.

The courts have some powers under the Crime (Sentences) Act 1997 to impose penalties for non-payment of compensation orders. The problem is that the compensation order lapses when that process is applied. Therefore, the police officer still gets nothing for his pains—literally—in executing his duty.

That is a very good point.

I wish to make a final point. During the debate, I remembered that a fund exists in court; it is infrequently used but it is a very good fund, although I have forgotten its name and where its money comes from. When trial judges come across instances of bravery by a member of the public—in tackling a

would-be thief as he leaves a shop, for example—they can propose to make an order that the person receive £500 or £1,000, as a mark of the court's appreciation. Although I have forgotten which fund is used for that, I know that courts that make those orders find that they are paid immediately because the money is available. I am unsure whether such a source of money could include a fund for victims, as the hon. Gentleman suggests.

The hon. Gentleman has made a good point. There are categories of people who do not receive their compensation awards, and it is high time that the onus shifts on to the defendant to pay what he or she is ordered to pay, with draconian sanctions if the payment is not made immediately or within a reasonably short period. I hope that the Government will accept that that is a valid point. By highlighting this issue, the hon. Gentleman's new clause helps to move the debate forward, and I am keen to hear the Government's response.

The hon. Gentleman's new clause highlights a problem that has existed for some time. As he told the Committee, compensation orders are an important way of bringing home to offenders the harm that they have caused to others by committing their crimes, and they aim to provide some recompense—although, for the reasons that we have heard, not necessarily full recompense, because in setting the monetary penalty the courts must have regard to the circumstances of the offence and the offender, including his ability to pay the sums awarded. In practice, that usually means that the offender is allowed time to pay by instalments, and some do not pay at all.

It might help the Committee if I say that 102,400 offenders were ordered to pay compensation in the criminal courts in 2000, and the total value of the orders imposed was £21.4 million. The average per offender was £150 in the magistrates courts, and £1,292 in the Crown court. It is believed that about a quarter of the compensation awarded is typically paid in the first 30 days, but there is no recent research, so that is an estimate. The remainder is paid subsequently, or, in the case of default, the debts accumulate.

That is why there have been attempts from time to time to find ways of getting compensation to victims more quickly. Usually, those attempts have taken the form of establishing a fund to pay compensation up front and subsequently to collect the money from offenders. The new clause is silent on the precise mechanics, but I assume that a similar arrangement is envisaged. The fundamental problem until now—under Governments of both parties—has been the cost, although I hear what the hon. Gentleman says. Advance payments from public funds—the hon. Gentleman nods, indicating that this is what he is considering—would, in effect, provide offenders with a loan at public expense until they choose to pay the compensation themselves. That is what we would be talking about in practice. Such a loan would become irrecoverable if the offender were to default.

In the light of the figures that I have given, there is a real issue about costs. Once such a scheme was in place, there might be a tendency for courts to make more awards because they knew where the money was coming from. They might also award higher amounts as a result of weighing what the offender could afford against the pot of money from which compensation for police officers and others would come. The cost could therefore quickly mount up.

We looked afresh at the problem only last year. A working group, involving officials from interested Departments and the voluntary sector, including Victim Support, looked at the possibility of establishing such a fund. However, it was unable to devise a scheme that was genuinely self-financing rather than imposing a potentially significant and growing additional cost on the taxpayer. That, in essence, is where we stand. If we could find a way of dealing with the problem, many of the difficulties would disappear. However, despite the best endeavours of several Governments, that has not happened.

I want to respond quickly before my hon. Friend winds up and to encourage him by suggesting three things that may or may not have been part of the Government's considerations.

First, there are parallels with the insurance world. This is not an exact comparison, and I appreciate that insurance is a private sector service. None the less, the existence of the Motor Insurers Bureau, for example, means that if the Minister or I have a collision, and the other vehicle turns out to be uninsured, the faultless party will not go without recompense. That is an established system, and the collective of those who deal with car insurance picks up the deficit that would otherwise result if one sued an uninsured party.

One could draw a parallel with the present set of issues as regards the public purse. One could study the collection of fines and the recovery of criminal assets—we have just had further announcements about that, and we welcome the implementation of the legislation that we passed last year—and money that comes into the public domain could be collected and set aside to pay compensation. One could say that such a scheme was the first claim on those funds, and money could be returned where it should be by paying compensation. In addition, it seems to me that the public would be quite willing for their money, which becomes the Government's money via taxes, to be used for that purpose because they recognise the need for victims not to go unrewarded.

The last point concerns the danger of courts suddenly awarding compensation under a scheme and costs going up. Of course, that is a risk, but the Minister will know that the civil law system that applies to criminal injury—a system that straddles criminal and civil liability—has operated two or three schemes over the last 20 or 25 years, under the Criminal Injuries Compensation Authority and the Criminal Injuries Compensation Board. Those schemes used to be more generous but covered fewer circumstances but now offer less of a maximum award

and cover wider circumstances. Such a scheme can always be regulated and brought before Parliament for approval. It can be the subject of advice from magistrates, judges, victims' organisations and others.

My view, and that of my hon. Friend the Member for Somerton and Frome, is that if we worked at the new clause, we could achieve something that the public would find far more satisfactory than the present situation. I urge the Minister not to give up this quest. If he wants assistance and encouragement from Liberal Democrat Members, we will be happy to help. I am sure that there would be general willingness around the House to work out a scheme that would command public confidence.

I am grateful to those Members who contributed to the debate. I still express a preference for a central fund, which is the appropriate way to deal with the issue.

I want to deal with the scale of the issue. First, no one wants to excuse criminals from paying what they are ordered to pay, so the process should not be seen as a substitution of state funds or as compensation awarded against an offender.

Secondly, the current situation is particularly irksome, especially for police officers. It metaphorically slaps them in the face, following the punch in the face that they received from the offender in the first place. It suggests to them that we will make an order but we are not interested in whether the offender complies with it. It says, ''Yes, you have ended up with a black eye and a couple of days off work because you exercised your powers in the pursuance of your duty, but the courts and the public do not care very much.'' I find that totally unacceptable, as would most people.

If there are doubts about how the system might operate through the courts, now is surely the time to ask serving police officers and police authorities whether they think that there is a suitable mechanism. A scheme was established in Durham through the constabulary and the police authority in which the authority undertook to underwrite all compensation orders made to officers by the courts if they were not fully paid full within one month of being made. The police authority was not removing the offender's initial opportunity to make the payment, but if nothing happened a payment was made and then recouped.

Between 1 May 1997 and 13 April 1998, officers made 13 applications to the police authority for payment, and the total sum involved was £3,625. Of that, offenders subsequently repaid £1,340, and there was a deficit of £2,338. That is a relatively small amount for one constabulary to repay its officers for their hard work and the personal injuries that they have suffered. If the scheme were extended to the other 43 police authority areas in England and Wales, it would not cost a huge amount. Any individual authority other than the Metropolitan police—even the biggest police authorities outside London—would have to set aside no more than, say, £10,000 as a

potential liability. The fund would not be sufficiently large to cause great concern to the Exchequer, either national or local.

The suggestion of my hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes) to set aside some of the income from fines or the recovery of the receipts of crime is appropriate, and the Minister might consider it further. The Government have not pursued it with sufficient assiduity. Perhaps it is a peripheral issue, but we owe it to police officers and others who are awarded payments to make sure that they receive their entitlement.

I shall not press the matter to a vote, but I am looking to the Minister to discuss it with the Minister for Policing, Crime Reduction and Community Safety, the right hon. Member for Southampton, Itchen (Mr. Denham), to see whether a satisfactory solution can be found. It should not be beyond the wit of either the Home Office or the court system to devise a scheme that would enable those who are entitled to compensation to receive something from society for—literally—their pains. I beg to ask leave to withdraw the motion.

Motion and new clause, by leave, withdrawn.