The plan floated by Mr Gove in October would have imposed a 1 per cent levy on the City’s biggest law firms to help close a revenue shortfall in the criminal court system. Following committed industry lobbying, it is now understood that the Treasury has shelved the plan. ‘The Treasury doesn’t like different departments having their own tax-raising powers. It’s no longer on the table,’ commented one senior partner at a major UK law firm.
The levy was originally proposed as a way to cover the cash lost from the controversial and now abandoned criminal court charge, introduced by Mr Gove’s predecessor Chris Grayling. The charge on convicted criminals was supposed to draw £65m to £90m annually into the criminal court system. The MoJ itself is one of the hardest-hit departments in the Cameron government’s austerity plan, with its budget set to plummet from £9.1bn in 2010/2011 to £6bn by 2019/2020.
In October, Mr Gove had asked the City and its law firm leaders to ‘look into their consciences’ with regards to the levy, describing justice as a ‘community’ and not a ‘marketplace’. Despite reports that the levy has been abandoned, a spokesperson from the MoJ affirmed yesterday that ‘nothing has changed’ in the Mr Gove’s agenda:
‘The justice secretary has been clear that those who benefit financially from our legal culture must do more to help protect access to justice for all. We have begun constructive discussions with the sector about how we can best achieve this aim and will continue to explore a wide range of options with them,’ they said.
According to City sources, increasing the amount of pro bono work required from major firms is reportedly one option under consideration by the MoJ.
Sources: Legal Business; Legal Cheek
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