Before the Minister moves that the first order be considered, perhaps I may remind noble Lords that, in the case of each order, the Motion before the Committee will be that it considers the order in question. I should make it clear that the Motion to approve the order will be moved in the Chamber in the usual way.

rose to move, That the Grand Committee do report to the House that it has considered the Armed Forces (Service Complaints Commissioner) Regulations 2007.

The noble Baroness said: These regulations were laid before the House in October and are being made under powers in the Armed Forces Act 2006. As Members of the Committee will know, that Act represents the first complete overhaul of the service justice system in more than 50 years. As well as providing a single system of service law, it introduces a number of significant and important changes. Today’s debate is about one of those important changes; namely, the new system for dealing with complaints by individual service personnel who think themselves wronged in any matter relating to their service in the Armed Forces.

Historically, service personnel have had few enforceable rights in relation to their conditions of service, and it is for that reason that there is a system that allows service personnel to submit complaints related to their service. The system is designed for the individual and there is, therefore, no provision for group complaints. The key features of the new service complaints procedure are that complaints will be resolved at one of three levels. At the highest level, the Defence Council, complaints may be dealt with by a service complaint panel, for which certain categories of complaint will include an independent person and there will be a Service Complaints Commissioner, which is also a new development.

I shall say a little more about the features. The three levels at which a service complaint may be resolved are, first, the prescribed officer, who will usually be the commanding officer unless he is implicated in the complaint, in which case the complaint would be made to the CO’s immediate superior. The second level is the superior officer; and the third is the Defence Council, whose function in considering complaints has been routinely undertaken by the single service boards but will now include service complaint panels.

When the commanding officer receives a complaint he has three options. First, if he lacks the power to deal with it, he may refer the complaint to the superior officer or to the Defence Council. Secondly, if he decides to deal with it and the complaint is well founded, he will decide what redress should be granted. Thirdly, he can reject the complaint. The superior officer has the same options as the commanding officer: to deal with the complaint, to refer it to the Defence Council or to reject it. It is important to note that if the complainant is not satisfied with the redress to be granted or if the complaint is rejected, he can have the complaint referred to the next highest level for consideration.

Against that background, the regulations which we are debating will establish a number of improvements, including procedural changes, to ensure greater fairness and consistency across the services and to reduce the time taken to resolve complaints. They will also exclude some types of complaint, for example where there is an established alternative system to deal with complaints.

Above all, the regulations introduce two elements of independence and transparency into the system. First, they establish independent members on panels which at the highest level will normally deal with complaints about bullying, harassment, discrimination and other types of inappropriate behaviour. Secondly, they bring in the appointment of a Service Complaints Commissioner.

The Armed Forces (Redress of Individual Grievances) Regulations begin by excluding certain matters from the redress system. As I mentioned previously, this is where an alternative system exists. So, for example, complaints about pensions and compensation are excluded, as are judicial and legal decisions, because those are subject to judicial review and it would not be appropriate to allow lay interference in judicial procedures.

Each service complaint considered by the single service boards, acting on behalf of the Defence Council, involves significant time and effort spent by senior staff in reaching decisions. That imposes a heavy administrative burden and risks causing delay. The Armed Forces Act 2006 therefore provides for the Defence Council to delegate cases to service complaint panels. It also provides that a panel must have at least two members, one of whom is at least of the rank of brigadier or equivalent, although it is our intention that panels will normally consist of two officers of at least that rank, normally from the same service as the complainant. Service complaint panels will operate with the full delegated powers of the Defence Council relevant to the case under consideration.

The regulations ensure that complaints by or about senior officers will be dealt with by a panel that contains at least one officer of the same rank as or a higher rank than the officer concerned. The regulations will ensure that, in the interests of fairness, certain people are excluded from being members of service complaint panels. They include members of the Defence Council, the single service boards and chaplains of the three services, as well as any officer who may have been involved in any way with the complaint that is being considered.

It will be the normal expectation that complaints reaching the highest level will be dealt with by service complaint panels. There will be exceptions, however, because the service boards will always retain some cases, including, for example, complaints about security vetting, a decision or action by a very senior officer of three or four-star rank and the termination of an officer’s service.

The service boards may also decide to retain other cases where the normal expectation would be to delegate them to a panel. This is an important aspect of the system, since it allows the single service boards to exercise their stewardship of the services and to influence decisions that have an effect across the whole service. Examples of such cases may be a complaint about changes to specialist pay or an allowance, a challenge to a job evaluation outcome for a particular branch or trade, or a complaint about the policy of not allowing women to serve in submarines or the infantry. Decisions by panels, exercising powers on behalf of the Defence Council, will be final.

An important new element, in line with the Act, is the introduction of an independent member to the service complaint panels dealing with complaints relating to: bullying, harassment or discrimination; dishonest, biased or other improper behaviour; allegations of failure in clinical care; allegations of the misuse of service police powers; and the rejection of a complaint following referral of an allegation by the Service Complaints Commissioner.

The introduction for the first time of an independent element into the redress process is an important change. We believe that it will give service personnel much greater confidence in the system. This independent element also recognises the recommendations made by the Defence Select Committee and by Nicholas Blake QC in his Deepcut report. Both stressed the importance of demonstrating that bullying, harassment and other forms of inappropriate behaviour have no place in the Armed Forces, and underline the importance of dealing with these things effectively and openly.

Independent panel members are being recruited using the normal public appointments process. We have stipulated that they cannot be members of the Regular or Reserve Forces, but that they should bring experience and expertise relevant to considering and deciding cases relating to bullying, harassment, discrimination and other types of inappropriate behaviour about which we are particularly concerned. I should add that at present an officer has the right to require a report on his complaint to be referred to the Queen if he is not satisfied with a decision at the Defence Council level. That right will still exist under the new system, except where any decision on a complaint is taken by a service complaint panel.

Your Lordships will recall the recent announcement of the appointment of Dr Susan Atkins as the Service Complaints Commissioner. This is a statutory appointment made by the Defence Secretary, and Dr Atkins comes to the post having worked with the Equal Opportunities Commission and having set up and run the Independent Police Complaints Commission. The Defence Select Committee and Mr Blake recommended the appointment of a commissioner, and envisaged the role as being similar to that of an ombudsman. As Ministers said at the time, and I reiterate now, we welcome this further independent element in the service complaints process. However, we could not agree to the commissioner’s role including the ability to intervene in the consideration of complaints, to investigate complaints or to reopen cases. Those actions would have undermined the chain of command, which we have properly placed at the heart of ensuring the effective discipline and welfare of members of the Armed Forces.

What we have provided, through the Act and this secondary legislation, is a commissioner with real powers to make a difference. The commissioner will provide an alternative point of contact for service personnel, their families and friends, and any other member of the public who wishes to make an allegation that a service person has suffered a wrong in their service. This will be particularly helpful to those who do not feel confident about approaching the chain of command directly.

The Service Complaints Commissioner regulations provide that any communication received by the commissioner alleging that a member of the Armed Forces has been wronged through bullying, harassment, discrimination or any other form of improper behaviour may be referred to the chain of command for action. Such an allegation would normally go to the commanding officer of the individual alleged to have been wronged, but would go to another officer if the commanding officer were the subject of or implicated in the complaint. A referral from the commissioner places certain duties on the commanding officer. These include checking whether the person alleged to have been wronged wants to make a service complaint, whether that person knows how to go about it, and the time limits that apply.

The commanding officer must also notify the commissioner of the individual’s decision on whether to make and go forward with a complaint; whether the complaint was excluded under the redress of individual grievances statutory instrument; or whether it was not allowed to proceed, for example for being outside the time limit for a service complaint. The commissioner must also be informed by the commanding officer if the complaint has been withdrawn by the complainant; if the complaint has been referred to a superior officer or the Defence Council; and of any decision in relation to the redress sought.

The commissioner will provide the Defence Secretary with an annual report on the efficiency, effectiveness and fairness with which the complaints process has operated during the period. The report will also cover the exercise by the commissioner of the function of referring allegations and other factors that the commissioner or the Defence Secretary considers appropriate. These reports will, of course, be laid before Parliament. We believe that an annual report, written by an independent Service Complaints Commissioner and made available to Parliament and the public, will make a significant contribution to the overall effectiveness and transparency of the system.

The changes that we are discussing today have the potential to affect every service person and we take very seriously the responsibility to ensure that our service personnel are briefed on changes of this kind. Consistent with that, significant effort will go into ensuring that all service personnel are made aware of the changes that the new system will bring.

A new joint service publication about redress of individual grievances will be published shortly and made available electronically to all service personnel. A defence notice will be issued to publicise the changes further. In addition, leaflets will be published to provide service personnel with a clear explanation of their rights and how to use the complaints system. All three services are making arrangements for their personnel to be briefed in detail nearer to the time when the changes are introduced.

I should like to make a final observation about the statutory instruments that we are considering today. The Government have given an undertaking that Ministers moving instruments subject to the affirmative procedure will tell the Committee whether they are satisfied that the legislation is compatible with the rights provided in the European Convention on Human Rights. I am pleased to confirm that the two statutory instruments before us today are compliant with the European convention. I look forward to hearing the Committee’s views on this important issue and I hope that it will be possible to make progress on this very shortly. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Armed Forces (Service Complaints Commissioner) Regulations 2007. 28th Report from the Statutory Instruments Committee, Session 2006-07.—(Baroness Taylor of Bolton.)

I thank the Minister for introducing these two regulations which are, of course, interdependent. In doing so she amplified somewhat, and clarified a little, the recent Written Statement on the subject and the Explanatory Memorandum as published with the draft regulations.

I wish to make it clear straight away that although we on this side of the Committee do not intend to object to these regulations, we are seriously unhappy with the consequences which seem bound to arise from them. Notwithstanding the assertion at paragraph 7.7 of the Explanatory Memorandum that,

“The regulations, their applications and effects have been developed in full consultation with the armed forces”,

we have very good reason to believe that there are profound concerns at very senior levels about the outcome of that consultation. Parliament and the Minister should be aware that all is not quite as the words used would suggest.

While we accept that the Government have an obligation to give effect, in a suitable way, to the recommendations of Nicholas Blake QC—who is now, I believe, a judge—in his Deepcut inquiry, we have continuing doubts, which we foreshadowed when we debated these clauses of the primary legislation, whether the insertion of these arrangements into the chain of command is an entirely suitable way to render military law, justice and administration more user-friendly.

Our fear is that this arrangement may turn out to be no more than a trouble-maker’s charter. We shall therefore want to watch very carefully how the arrangements, which the orders established, work in practice. Our present view is that at a future date, and in the light of experience, we will want to advocate substantial changes in the arrangements.

In particular, I thank the noble Baroness for confirming that the commissioner-designate is Dr Susan Atkins and for telling us something of the qualifications that the Government believe she has for the job. She lacks, of course, the one qualification which Nicholas Blake said was essential; namely, practical knowledge and experience of the military world into which she will have power to intervene. That was made very clear in an Answer to my honourable friend the Member for Aldershot at col. 485W in yesterday’s Commons Hansard. The Minister admitted that Dr Atkins does not have any direct knowledge or experience of the Armed Forces.

In the light of that Answer, will the Minister clarify what comprehensive induction and orientation Dr Atkins will receive before January next year? What procedure was followed in making this appointment, particularly given that she is the interim chief executive of the Appointments Commission? What are the terms and conditions of the appointment? Is it full-time or part-time, and what is its duration? What is her salary, and what are the budgeted costs of her office for this purpose?

We have a number of further specific questions, some of which relate directly to how Parliament, and this House in particular, will monitor the workings of the commissioner. What do the Government foresee will be the likely scale of cases brought to the commissioner? How is it anticipated that she will categorise these cases? At what intervals will she report? The Minister mentioned an annual report. Although an annual report published long after the event, as proposed, is a necessary record, we feel that that is not adequate and satisfactory for the purposes of parliamentary oversight. How promptly will these reports be disclosed to Parliament? Will a dedicated website be established and kept up to date so that Parliament, members of the Armed Forces and the interested public are able to form a continuing picture of how this is going?

If the whole thing is to work well and in a satisfactory manner, there needs to be a publicly accessible description of the scheme, expressed in simple and comprehensible language, rather than in the tortured complex of language, references and exclusions in which, it would seem, statutory instruments have to be drafted.

There should be such a website and it should display the progress of the commissioner’s work in a suitably summarised form. It should explain the procedures and should include, for reference, the relevant sections of the Act—Sections 334 to 339—and the terms of these orders. It should also include, for information and reference, the terms of the set of Defence Council regulations which, we are told in paragraph 2.1 of the Explanatory Memorandum, form part of the arrangements but which do not come before Parliament for approval.

I make these suggestions to underline the fact that although our serious concerns about the whole arrangement remain, our strong belief is that if the Armed Forces are to have this imposed on them, the arrangements should be as helpful as possible to members of the Armed Forces, their families and professional advisers, as well as to Members of both Houses of Parliament.

I am slightly more positive about these regulations than the noble Lord, Lord Astor. Virtually all those involved have come to accept that something had to be done about complaints procedures in the Armed Forces. We certainly have some sympathy with the notion that bullying, dishonest behaviour, harassment and so on must be dealt with, and we can support the idea of bringing procedures into line with the rest of society, although we probably would have liked the regulations to go slightly further. Signposting and the monitoring of progress is restrictive, with everything being referred back to the Ministry of Defence instead of being made more public. We would have preferred something more independent, perhaps in relation to the commissioner. But, generally speaking, the regulations mark a step in the right direction. While I do not think they can be regarded as the final line to be drawn under these matters, Members on our Benches have largely concluded that we are taking a step forward with them and going in the direction we should.

It is important to bear in mind that if we are to try to improve the lot of service men and women, their rights and privileges as such should be brought more into line with those outside the armed services. We therefore give the regulations a guarded welcome.

I thank the Minister for that helpful explanation. I have just a couple of questions for clarification, and if I have missed something and the answers are already in front of me, I apologise. My first question concerns the regulations covering the redress of individual grievances. Quite understandably, the regulations provide for at least one officer appointed to the panel being of the same rank as or of equivalent rank to the complainant. That provides for a mixed-service panel. However, can the Minister confirm that it is the intention of the Ministry of Defence that for a single service individual who has made a complaint, the panel will be made up of those in the service of the complainant as far as is practicable? I believe that it is important to both the service and the individual that the service concerned is closely involved in the process.

My second question concerns the independent member. The Minister stressed that independence was very important and that there would be no question of the independent member being a member of the Reserve Forces or anything like that. However, I am not clear whether an independent member could be a retired officer, perhaps retired from the services for some years. If there was a reasonable gap, it would mean that the independent member would have a greater knowledge of the services than someone coming in totally from the outside.

My third question relates to the Service Complaints Commissioner. Is the commissioner able to take a view about whether a complaint submitted to her, in this case, should invariably be heard by her, or can she take the view that complaints of a certain sort should be dealt with by the normal service process, including a service complaints panel if necessary? It is not clear whether the commissioner has that flexibility, or indeed whether the Minister thinks that that would be desirable. I believe that it should be available, but I should like to be clear about it.

I, too, have just two or three questions, and I should like to thank the Minister for the very good meeting we had in the Ministry of Defence. At that meeting I gave a possible example of troublemakers en masse. I just want to be sure that the commanding officer’s powers of rejection are strong enough so that something that could be a bit of trouble—or perhaps big trouble—can be nipped in the bud. It does not look so good if he simply passes it upwards. It looks to the men and women under his command as if he is not strong enough or big enough to handle it.

I thank everyone for their contributions, and will try to answer the points that have been made. We are talking about a new area, so it is understandable that some people will have such concerns about the impact of a new system.

The noble Lord, Lord Astor, started by suggesting that the services were not happy with the procedure that we have suggested. I emphasise that there has been a great deal of consultation on the actual processes to be adopted, and there have been significant discussions across the board. The principles and policies that we are putting forward in these statutory instruments have been endorsed by the service personnel executive group, which acts on behalf of the principal personnel officers of the three services, who are members of their respective service boards. I hope that that will allay some of the fears of several of your Lordships, who have expressed concern on the basis of their experience of the old system or of the Armed Forces generally. We are not simply imposing a new system on the Armed Forces without any consultation or consideration of the difficulties that might develop. We have done this carefully, taking on board any considerations that have arisen through those channels. I hope that that particular aspect will reassure the noble Lord, Lord Astor, and others who have had similar concerns.

The noble Lord, Lord Astor, also asked about the commissioner. I hope that he will welcome the appointment of Dr Atkins. She is extremely experienced, as I pointed out earlier, and was recruited through the normal Civil Service Commissioners’ recruitment code. The competition was open. Recruitment consultants trawled for people with the right kind of background, and I would have thought that work with the police complaints system was quite a good foundation for doing work of this kind. Dr Atkins’ appointment is for three years, and it is envisaged that she will work for approximately two and a half days a week. The salary, pro rata, is £105,000. She begins her appointment on 1 December, but is already taking a great deal of interest in this issue and is undergoing some of her induction and familiarisation with the Armed Forces, which again I hope will allay some of the concerns about her background. It is important—I am sure she thinks that it is important—that she visits establishments and talks to people in the three services. That is exactly what is happening at the moment.

The costs of the new system will be found within the existing departmental budget. A small secretariat is being provided, but we must remember that there have always been complaints and that, on occasion, they have taken up a great deal of resources, especially when they have gone to defence counsel and been complex and dependent on people’s time.

It is of course impossible to say at this stage what number of complaints we anticipate. During the past year, there have been 233 service complaints raised by Army personnel; in the Navy, there have been 73 complaints referred up from the commanding officer; for the RAF, there have been 220 service complaints during the past two and a half years. Because we do not have a system common to all the services, those figures are not kept in exactly the same way. It is difficult to predict the future outcome; I give those figures just so that there is a baseline and a starting point with which to compare future figures.

I was grateful to the noble Lord, Lord Addington, for his comments welcoming the new system. There will always be people who want to go further and provide more independence; I think it right that we try to get a balance so that we have a system that has the confidence of everyone. That is very much what we are about in drawing up the statutory instruments.

The noble and gallant Lord, Lord Craig, raised three questions, which I hope that I can answer. He mentioned the question of an officer having someone of the same rank on the panel and talked about the implications of mixed-service panels. His request was that the service of the complainant should be the one from which panel members were drawn. He was very cautious, because he said, “as far as is practicable”. That is exactly what we would say: as far as is practicable, that should be the situation.

The noble and gallant Lord went on to ask about an independent member of the panel and whether that could be a retired officer. Yes, it could, although I think that we would expect panel members to be drawn from a wide variety of backgrounds. They will get induction and training and they will bring their different backgrounds, which I hope will be helpful. He also asked whether the commissioner could refer downwards a complaint made to her. That is the case. If a complaint is made to the commissioner, she will refer it to the complainants’ commanding officer, who will in the first instance look at that complaint to see what needs to be done. It can come back up the system, but in the first instance, it would go to that starting point.

I thank the noble Viscount, Lord Slim, for his comments about the meeting. I thought that it was useful and I appreciate what he said. He also expressed the concern expressed by the noble Lord, Lord Astor, about the possibility for a troublemakers’ charter, but I hope that what I have said about the involvement of the services will be reassuring on that point. I hope that the mechanisms that we have built into the system will provide some security for the armed services that it is a system that they can use to everybody's benefit. The noble Viscount asked specifically about the training of lay members. As I mentioned, they will have to undergo training and induction. I know that he may have some reservations about independent members on the panel, but I remind him that there will always be two panel members from the armed services, so it is not a question of total independence or a total lack of experience.

I hope that those comments will reassure your Lordships that the department has considered this very carefully and has sought to strike the right balance in the new system, which we hope will benefit everyone.

On Question, Motion agreed to.

I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Grand Committee do report to the House that it has considered the Armed Forces (Redress of Individual Grievances) Regulations 2007. 28th Report from the Statutory Instruments Committee, Session 2006-07.—(Baroness Taylor of Bolton.)

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Legislative and Regulatory Reform (Regulatory Functions) Order 2007.

The noble Lord said: The Government laid two complementary instruments—the draft Regulators’ Compliance Code and the draft Legislative and Regulatory Reform (Regulatory Functions) Order 2007—before Parliament on 15 October. I will speak to the two orders together. The purpose of these instruments is to deliver the Government’s commitment to promote effective, risk-based enforcement, which will make a real difference on the ground to those who are regulated without compromising the UK’s excellent regulatory outcomes. There has been full consultation.

The draft code is made under Section 22 of the Legislative and Regulatory Reform Act 2006, while the draft order is made under Section 24. Section 22 enables a Minister to issue a code of practice relating to the exercise of regulatory functions, and requires any person exercising a specified function to have regard to the code in exercising the function. Section 24 allows a Minister to specify by order the functions to which the code and the five principles in Section 21 apply. These principles are that regulatory activities should be carried out in a way that is transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.

The draft code gives effect to the recommendations in the Philip Hampton report, Reducing Administrative Burdens: Effective Inspection and Enforcement, while the five principles of good regulation derive from the Better Regulation Commission’s report, Less is More. The Government accepted these recommendations and introduced the Legislative and Regulatory Reform Act to implement them. Part 2 of the Act incorporates the five regulatory principles and allows the Hampton’s enforcement principles to be implemented through a statutory code.

When the House debated the 2006 Act, Peers warmly welcomed both the Hampton principles and the principles of good regulation, and supported Part 2 of the Act. As the draft order and code derive from Part 2 of the 2006 Act, we hope that Peers, having scrutinised and debated these draft instruments, will bear in mind particularly the benefits that the regulatory and enforcement principles may bring.

We believe that a lot has been achieved in the past years by many regulators since the Government launched a radical and far-reaching agenda for better regulation. Since the Hampton report, for instance, the Environment Agency’s risk-based assessments have enabled it to identify more of those who need inspection and have led to a 20 per cent reduction in the total number of inspections. That can only be good for honest and hard-working businesses in terms of lower compliance costs, as well as allowing regulators to be more efficient and effective in their work.

However, we need to do more. We need to promote a real and lasting change in a regulatory culture that embeds a light-touch, risk-based approach to enforcement among all regulators. This will deliver further significant benefits to business in terms of better focused inspection activity, the increased use of advice for business, reductions in form-filling requirements and more consistent penalties. These benefits will not be at the expense of regulatory outcomes. This is because a risk-based, targeted and proportionate approach to enforcement will enable regulators to direct limited regulatory resources to areas of greatest need, while reducing burdens on low-risk, honest and compliant businesses. We therefore hope that this is a win-win for regulators, for most of those whom they regulate and, indeed, for society.

I emphasise the extent and depth of consultation with all interested parties since March 2007—for over six months. As a consequence of those consultations, parts of the code we are now debating have been altered. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Legislative and Regulatory Reform (Regulatory Functions) Order 2007. 28th Report from the Statutory Instruments Committee, Session 2006-07.—(Lord Bach.)

I am extremely grateful to the Minister for that thorough explanation of the order and the code. He will probably not be aware that, when I was doing some background reading on this, I saw that, on 2 November 2006, the House debated the then Legislative and Regulatory Reform Bill and followed it up with the then Companies Bill, to which we shall turn shortly. Those pieces of legislation were taken on the Floor of the House at the same time but were very different in that only 11 amendments were tabled on Third Reading of the first Bill, whereas 1,029 Commons amendments were tabled to the Companies Bill. I note that the Minister’s predecessor, the noble Lord, Lord Sainsbury, claimed three scalps or personal records: the most Commons amendments to a Lords Bill ever; the most Commons amendments taken in a single day; and the most amendments—more than 300—taken in a single grouping.

We on these Benches welcome this important if in part slightly technical instrument. The principle must be entirely praiseworthy. We are concerned at the increasing regulatory burden; one has only to open a newspaper on any day to see descriptions and discussion of how the regulatory burden has increased and is increasing. The impact on British life is felt in the economic sphere and is considerable and far reaching. It greatly saddens me when I read about school trips being cancelled because of problems with regulations or village halls being closed because they cannot comply with construction regulations. The weakening of the richness of educational experience and of the social fabric is a great shame. I have described it in debates as the barnacle principle: that although a single barnacle on a ship makes very little difference indeed, as the number of barnacles increases the ship’s speed through the sea is slowed. I am sure that, as the Minister hinted, at some point we will need a much more widespread and far-reaching debate on the nature and level of risk that society is prepared to tolerate. In the mean time, we support a measure that encourages proportionate and flexible regulation.

I turn to the specifics of the regulation in the code. First, however, I make a point which, although the Minister may consider it a drafting point, may indicate an underlying approach. The code begins with a paragraph on the purpose. Paragraph 1.1 states that,

“the Government believes that, in achieving these … regulation and its enforcement should be proportionate and flexible enough to allow or even encourage economic progress”.

I know that the Minister will tell me that that repeats the principle outlined in paragraph 3 of the code, on page 3, on the economic progress principle. However, it is a rather sad reflection that we say “or even encourage”. Economic activity is the lifeblood of what we are seeking to achieve in this country, and it should not really be added here as an afterthought. The provision could say “allow or encourage” or, if the Minister wanted to try for a major prize, say “allow and encourage”. That approach seems rather more appropriate.

That is enough of the trivia. The order is a fascinating read. If anyone needed to be convinced of the regulatory burden, 24 closely packed pages of authorities, bodies, statutes, UK and European regulations are a convincing answer. I believe that the News of the World once advertised itself by saying, “All human life is here”. Well, all human life is certainly in this order. I was tempted to ask the Minister to explain its application to the Pedlars Act 1871 or, even more surprisingly, to the Hypnotism Act 1952, but I shall not surrender to that temptation. However, there are two important issues of principle. Article 4 of the regulatory functions states:

“Article 2 shall not apply to any regulatory function … (a) so far as exercisable in Scotland, if or to the extent that the function relates to matters which are not reserved matters”.

That is a slightly dense use of prose, and there are two negatives, but as I understand it, it means that matters that are devolved to Scotland are not covered by the order.

Similarly, Northern Irish matters that are handled in Northern Ireland are not covered by it, and the same applies to Wales. If I am right about that—I should be delighted to be told that I am not—serious situations could develop that will undermine a good deal of what the Government are seeking to achieve by this order and this code. I illustrate that briefly by way of an example. Part 1 of the schedule on page 3 states:

“All the regulatory functions exercisable by the … Charity Commission for England and Wales”.

Charity law is a devolved matter. A Scottish charity law has recently been passed. The Scottish charity law regulator goes by the name of OSCR—the Office of the Scottish Charity Regulator. The Scottish Parliament is passing detailed regulations that are burdensome and expensive to comply with. They are being enforced, appropriately, by OSCR. They are being passed by the Scottish Parliament without reference to the Charity Commission in London.

Let us consider the position of a UK-wide charity, for example the Red Cross or Cancer UK. I should make it clear to the Committee that I have not been asked by the Red Cross or Cancer UK to raise this, but I pick them as two well known charities. They have to comply with two sets of regulations where previously they complied with one. They are taking extensive and expensive legal advice on this. When people are approached by the RNLI lifeboat lady holding a tin in the street, I wonder whether they realise that at least part of the money they are giving will be devoted to obtaining advice to deal with this double layer of regulation. So, far from being deregulatory, the instrument permits an increase—two layers—in regulation.

However, that is not the whole story, because the Welsh Assembly—following the Scottish example—has already begun to consider whether it should have powers over charities that operate in Wales. The Government are on record as saying that they propose to introduce a charities law for Northern Ireland, which will presumably have its own regulator. There could therefore be four sets of regulations for national charities to comply with. I was a poor student, especially in mathematics, but I remember two concepts: one was called LCD, the lowest common denominator; and the other was called HCF, the highest common factor. My hope was that what the Government propose here would lead to the LCD, the lowest common denominator, but I fear that they will end up with the HCF, the highest common factor, in charities law, where charities have to comply with the most burdensome regulations to avoid undue administrative burden. That is not in the interests of donors, who give their money to help the charity itself. It is clearly not in the interests of charities, whose management has to spend time finding ways to deal with the matter. It is clearly not in the interests of recipients, because they want to receive charitable endeavour, not have it wasted on professional fees.

I hope that the Minister can explain how the Government propose to tackle that. I am not clear why we could not have reached agreement with the Scottish Parliament, the Welsh Assembly and the Northern Ireland Government to buy into those provisions. Surely minimising regulatory burdens cannot be just an English concern. This is a serious matter, and I look forward to hearing from the Minister about it.

The second point of principle can be summed up in that fine old country phrase, “Fine words butter no parsnips”. There are lots of fine words here, but what will the follow-up be? Most of us on this side of the House believe that regulatory impact assessments are usually fairly desultory or inadequate at the outset and are rarely, if ever, properly reviewed. The code and the order will require considerable review and follow-up. I remind the Minister of what was said by the Merits of Statutory Instruments Committee. It said:

“We welcome the code as a clear written expression of the ‘better regulation agenda’”—

as do we—

“in the context of regulatory activity, but it will be important that the Government monitor what it in practice it achieves, not least in the face of competing legislative requirements”.

I am sure that the Minister’s officials have read the House’s report on UK economic regulators, which was published on 20 October. There is a lot of stuff in this report, but there are two or three quotations that the Minister ought to be prepared to address. Paragraph 1.5 states:

“We recommend that regulators should jointly develop methodologies to quantify the impact they have in line with current best practice”.

Paragraph 1.8 states:

“Regulators should strengthen their cost/benefit analyses, using quantitative estimates where they can be made robustly, and should improve the presentation of their IAs with clearer sign-posting and a commitment to conciseness and clarity”.

Paragraph 1.10 states:

“Post-implementation evaluation should be conducted with greater frequency ... on occasion an independent body ... should monitor the quality of assessments and the objectivity shown by regulators in completing them.

“Post-implementation evaluation should always be made publicly available”.

Finally, paragraph 1.29 states:

“The question of who regulates the regulators has not been answered and will not go away. There is a need for a committee to pursue cross-sector best practice and to ensure that the recommendations”,

are met.

I began by saying that we support the principle behind the regulation, and we do—we want flexible, proportionate regulation—but some serious issues have been overlooked here. Devolution—the devolved Assemblies and devolved powers—is one. How can we ensure that that does not drive a coach and horses through what the Government are seeking to achieve? There is also the need for serious evaluation in one year, two years or three years from now.

I join the noble Lord, Lord Hodgson, in saying that we on these Benches support the code and the order. I shall start by picking up on the point that the noble Lord, Lord Hodgson, made. As the Minister will be aware, Members on these Benches have long argued that, as with all regulations, the devil is in the detail and that what is essential from the Government’s point of view is that we should have a full impact assessment before any regulation is brought in. We have also argued for sunset clauses. In this provision, the Government are almost moving towards what we have asked for, in the sense that we have a full impact assessment, which is the document that I have in my hand. Also, taking into account what was said by the noble Lord, Lord Hodgson, we almost have a sunset clause, in the sense that the full impact assessment answers the question, “When will the policy be reviewed to establish the actual costs and benefits and the achievement of the desired effects?”. The answer is April 2011. So we are getting close in the approach to these provisions to what we on these Benches have been arguing in favour of for some time, which we have put into our last two general election manifestos.

Turning to the regulations, it is clear that the Hampton principles are similar to apple pie and motherhood—who could be against them? Of course, the devil will undoubtedly be in the detail. From practical experience, I shall take just two examples. The first is Hampton principle 6, which is going to be endorsed in these regulations, which states that:

“No inspection should take place without a reason”.

I look forward very much to the Health and Safety Executive implementing principle 6 of the Hampton principles, because anyone involved in business would say that many visits made by the Health and Safety Executive are time-wasting and are made for no apparent reason. So again, it will be for the devil to be found in the detail to see whether the HSE adopts principle 6.

A very contemporary example is principle 9, that:

“Regulators should be accountable for the efficiency and effectiveness of their activities”.

I look forward to that principle being adopted in the activities of the Financial Services Authority in relation to Northern Rock. It will be a matter for judgment and subsequent action to see whether the FSA observed principle 9 or whether it will be called to account as the Northern Rock saga unwraps itself—if that is the correct phrase in this particular circumstance.

In general, however, I welcome the Government’s adoption of the full impact assessment and almost getting a sunset clause. Obviously, I welcome the principles, but by 2011 we will know whether this has had any practical effect.

I thank both noble Lords for their useful and helpful contributions to the debate, and particularly for their support for the order and the code. I am especially delighted to have pleased the noble Lord, Lord Razzall, so much on sunset clauses. He and I had a brief exchange in the House yesterday on this subject, and I seem to have satisfied him within 24 hours. Both noble Lords quite rightly spoke in general terms about regulation, and it is true that over-regulation has affected not only this Government, but all Governments which have gone before them. Indeed, it was noticeable in the House yesterday how those who had had senior roles in previous Governments of a different political persuasion nodded vigorously when the point was made that this is a difficult issue for the Government. It always will be so in a civilised society, because there is a need for regulation to protect consumers and employees.

It is vital that that regulation is not overburdening, is not too costly and is worth its weight. As is clear, the Government are determined to reduce the level of regulation where they can. They need to bring better regulation to the fore. We are determined to do that. This code is just one part of delivering the Hampton agenda and the wider regulatory reform agenda. For example, we will shortly be publishing the simplification plans for the second year, which capture all the elements of the Government’s agenda to effect real change. As the noble Lord, Lord Hodgson, said, words are easy here, but he is looking for action; and it is action that we are looking for too.

That action includes simplification plans to reduce the administrative burdens of regulation for businesses, where the Government have set a target of 25 per cent, and the public sector where the Government have set a target for the reduction of bureaucracy at 30 per cent. We mean to carry that out. The points that both noble Lords have made about regulation are well taken.

The noble Lord, Lord Hodgson, made a detailed point about devolution. The Act defines much of this. We do not have the power in the order to apply the code to devolved matters, so I am afraid that the answer to his questions is “Yes”. The article quoted is a repeat of Section 24(3) of the 2006 Act. I hope that he will be pleased to hear that we are seeking agreement through other means with the devolved Administrations to do exactly what he says. For example, we have just agreed with the Northern Ireland Administration that they will adopt the code voluntarily, because they see the benefits for their economy and businesses. Wales is similarly minded to adopt the code voluntarily, and we are in discussion with the Scottish authorities. I cannot put it higher than that. I hope that that goes some way to satisfy the noble Lord that we take his point about the need to have common codes, if we can, across the devolved Administrations and England.

I am delighted that the noble Lord, Lord Hodgson, did not ask me details about either the Peddlers Act or the Hypnotism Act. Of course I would have been in a position to answer all his questions if he had wanted to ask about those Acts.

I do not claim that merely because the name of the new department includes the words “regulatory reform” that that in itself is anywhere near a solution to the problems that have been raised today, but I think that it is just a sign or symbol of the importance that the Government place on the issue. I know that we can be sure that both parties opposite will keep us to the mark on the issue.

The Merits Committee, referred to by the noble Lord, Lord Hodgson, was fairly favourable towards this code and it liked the way that it was written. I emphasise that the overarching aim of these instruments is to ensure that regulators work to minimise burdens and enforce regulations in a risk-based, targeted and proportionate way. We can effectively protect our environment, reduce accidents, protect workers or promote a competitive, efficient economy only if we have appropriate, good-quality regulation that is proportionately and flexibly enforced. We believe that this approach will bring real benefits to many groups: first to regulators because they can target their resources more effectively, to honest and compliant businesses because the costs to them of regulatory enforcement will fall, to society in general because the rogue operators—and they do exist—will be more effectively targeted and tackled, and to the economy in general, because removing burdens from businesses will enable the UK to retain its competitive edge in a globalised economy. Hopefully, the approval of this code will be one of the weapons that we use to reduce the burden of regulation in this country.

On Question, Motion agreed to.

I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Grand Committee do report to the House that it has considered the Regulators’ Compliance Code. First Report from the Statutory Instruments Committee.—(Lord Bach.)

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Company and Business Names (Amendment) (No. 2) Regulations 2007.

The noble Lord said: The Government made the Company and Business Names (Amendment) (No. 2) Regulations 2007 on 5 November and they came into force on the following day, and I shall explain in due course why. These regulations add the words “Government”, “NHS”, “HSC”, and “HPSS” to the list of terms that require the Secretary of State’s approval before any person with a place of business in Great Britain trades in Great Britain under a name that includes them. The only exception is if the term is part of the surname, forename, or initials of the trader doing business under his own name or one of the partners in a partnership doing business under the partners’ names. The regulations also require the Secretary of State’s approval before a company can be registered in such a name. The Northern Irish Government have a made a similar provision, so these restrictions will apply throughout the United Kingdom. As laid down in the parent legislation, and to ensure continuing effect, the regulations require approval by a resolution of each House within 28 sitting days of their coming into force.

Perhaps I may briefly explain some of the controls over all traders’ business names and over companies’ registered names. Business names are those under which anyone trades, whether the trader be a company, an individual or a partnership. There are some restrictions on the choice of business name. These are not many, but they are important for the protection of the public. For example, a trader cannot use a business name ending in “plc” unless, of course, it is a public company registered under that name. A similar restriction applies to the use of the word “limited”. Traders must have the Secretary of State’s approval before they carry on business under certain names. Prior approval is required for names that suggest a connection with Her Majesty’s Government or a local authority and for a name that includes a word or expression specified in regulations. As regards business names, for some terms, the regulations require the applicant to seek the views of a specified body before seeking the Secretary of State’s approval.

A company’s registered name is its legal name. It is the name under which a company appears on the index of company names held by the Registrar of Companies. There are more controls on company names than on business names to ensure that each company name is unique. It is in addition to the requirement for approval before registration for a company name that suggests a connection with Her Majesty’s Government or a local authority or includes a specified word or expression. This requirement is very similar to that for business names. It is for the same purpose; that is, the protection of the public.

In practice, when prior approval is required for either a company’s registered name or business name, the application is considered by the Registrar of Companies on behalf of the Secretary of State. The registrar may take account of the views of others whether or not the regulations require the applicant to seek the views of a specified body with regard to the proposed use of a particular word or expression.

The regulations specifying the words and expressions that require prior approval are made under the Business Names Act 1985 and the Companies Act 1985. The specified words include words which imply national or international pre-eminence, such as “British”, “international” and “European”; words which imply business pre-eminence or representative status, such as “association”, “council”, and “federation”; words and expressions which imply specific objects or functions, such as “trade union”, “stock exchange” , “register” and “trust”; certain other words which could be used in names so as to mislead the public, such as “police”, “abortion” and “university”; and, since 6 November, the words we are considering, “Government”, “NHS”, “HSC”, and “HPSS”.

I have a sense of having been hit repeatedly over the head with a rather heavy hammer. I thank the Minister for that extremely thorough explanation of this technical piece of company law. The noble Lord, Lord Razzall, and I are Companies Act 2006 freaks. We spent 14 or 15 happy days in this room. This presumably now moves into the 2006 Act. It is referred to here as Section 29(1) of the Companies Act 1985. I assume that there is a schedule of derivations and destinations which will tell us where it ends up in the 2006 Act. Can the Minister tell us where this information ends up in the 2006 Act? It would be very helpful if the Minister’s officials could send an updated list of derivations and destinations to those of us who are participating today. We shall return to these issues in future debates and it would help us to produce sensible questions and comments for the Minister if we could have that information.

That having been said, it is clearly sensible that there should be a power to stop individuals and companies being set up in a way that gives greater weight to them or implies associations that do not in fact exist. I also understand the pre-prohibition requirement to stop the unscrupulous dashing in during the gap between the regulations being published and coming into force. My only surprise is that we have got as far as this without the words “Government” and “NHS” being on the list. I know that “royal” and “national” are on the list because I was once involved, along with the Bank of England, in setting up a company with the word “national” in its title. It took an inordinate amount of time to unravel it, even though the Bank was keen on the formation of the particular company.

I have one query on the detail of the regulation. Paragraph 2.3 of the Explanatory Memorandum states:

“The Regulations will not affect any company that already has a name including ‘Government’ or ‘HPSS’, ‘HSC’ or ‘NHS’”.

The same goes for any business. There is no retrospective effect in these regulations. Am I right in believing that if an organisation has such a name in its title, it has got it? I ask this because if it is retrospective, that is another issue. The paragraph goes on to state:

“There is a transitional provision for those to whom such a business is transferred”.

“Transferred” is an interesting word. What does it mean, because transfer can occur in several ways? It could be an outright sale of the business that carries the name, a change of owner with a new beneficial owner taking over the assets of the business, or it could just be part of a corporate reorganisation whereby a body is transferred from one subsidiary of the group to another with no effective change in ownership or control. It seems unfair because a company’s name is an asset acquired in good faith and therefore possibly capable of sale, but certainly to prohibit a transfer within a group of companies with no change in ownership would be unduly restrictive. Perhaps the Minister could explain the background to this and give details of the proposed length of any transitional period. I do not see the length of the transitional period set out in the Explanatory Memorandum, although I may have missed it.

Before I conclude, I want to stray a fraction wider. We are considering here a regulation which is going to be administered by Companies House. There is, of course, some controversy about Companies House and its ability to handle its existing duties under the Companies Act 2006. The Minister will have seen the Financial Times of 8 November reporting that:

“Companies Act put on hold until 2009”.

A large measure of that is that Companies House, despite the fact that we have been considering the changes arising from that Act for something between seven to nine years, is unable to meet the timetable that the Government originally gave.

That is not an academic point, because when we considered the Companies Bill in Committee, we learnt of scams from overseas boilerhouses, which got hold of lists of private shareholders and cold-called them to sell them shares in one company or another. It is unsatisfactory that people should be able to prey on the unsophisticated and the vulnerable, and, as I said, we received a number of examples of that during Committee consideration of the Bill. It is disappointing that we will not be ready to make the appropriate changes until 2009. As 2009 will be 365 days long, perhaps the Minister can tell us whether he thinks that it will be January 2009 or December 2009, because there is quite a big difference. I appreciate that that is outside the exact detail of the regulation, so if he wants to write to me, I shall be delighted, but we need to keep the pressure up on that point.

If the Minister is going to write, he will be aware that a number of other issues about the implementation of the Act are starting to cause major concern within the legal community. I should be extraordinarily grateful if he could respond on the issue of the chairman’s casting vote, which is apparently disappearing; the question of limited liability, where the new model articles apparently do not contain a reference to limited liability, which is required to make a company limited under the new Act; and, most technically, the interplay between Sections 152 and 323, which appears to prohibit a custodian from voting shares for which he or she is responsible both for and against. If he or she is acting for more than one investor, one investor may say, “Please vote for this”, and another may say, “Please vote against”. The way in which the Act is now being interpreted is that it is not possible to do that, you can vote only one way. That is one problem that we have with the proposal to require institutions to explain how they have voted.

I will not weary the Committee with the detail of that rather technical point, but there was an article in the Times on 6 November headlined,

“Investor protest as ‘simplified’ company law prevents free votes at AGM”.

I have had a couple of letters from major institutions explaining their concerns about that. Time is of the essence as the juggernaut of implementation rolls on, so if the Minister were able to give us a little more visibility on those other issues, that would be extremely helpful. We have no problem with the regulations as they stand; we understand why it has had to be done post-event; but it would be helpful if he could say something about the issue of transfer and what that means precisely.

I was simply going to say that we on these Benches agree with these eminently sensible regulations. I cannot resist commenting with admiration on the ability of the noble Lord, Lord Hodgson, to ask the Minister questions that have absolutely nothing to do with the regulations.

I share with the noble Lord, Lord Razzall, his admiration for that ability of the noble Lord, Lord Hodgson. Not being a veteran of the Companies Bill, now the Companies Act, I begin to see how it has marked all those who took part in its many days of consideration.

The new powers are to be found in the Companies Act under Section 55, which covers company names, and the other section is—wait for it—Section 1,194, for business names. I hope that that answers the first question of the noble Lord, Lord Hodgson. On the question about retrospective effect, there is none. On transfer, the expression in Section 2(2)(b) of the Business Names Act 1985 places no restriction on the meaning of the word “transfer”.

On most of the points made by the noble Lord about the Companies Act, I will write to him. I cannot promise to answer all the questions that he posed to me today, but we will have a good look at them to see whether we can help and of course we will distribute the letter that we write to him to the noble Lord, Lord Razzall, and other veterans of that campaign.

The final implementation date of the Companies Act is 1 October 2009, so the noble Lord, Lord Hodgson, now knows which of the 365 days of that year has been chosen. I am not in a position to answer his other questions on the Companies Act; I do not think that he would expect me to do so.

Will the Minister’s letter explain transfer? That was an extremely elegant glide down for an easy single to third man, if I may use the cricketing term, in the sense that it did not actually say what transfer meant. Does it require a change of control or not? Is an intra-company transfer from one subsidiary to another okay but outright sale not okay? I understand that that may be a difficult question for him to answer on the fly, but it would be helpful if we could have it clear in any letter that the Minister will write.

That will certainly be included in the letter. I thank both noble Lords for their support.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Criminal Proceedings etc. (Reform) (Scotland) Act 2007 (Powers of District and JP Courts) Order 2007.

The noble Baroness said: I am delighted to move this order. I wonder whether this is the first time that I have had the opportunity to serve under the chairmanship of my noble friend Lady Gibson. I hope that I will be able to behave myself properly in her Committee.

The order is made under Section 104 of the Scotland Act, which allows for necessary or expedient changes in consequence of an Act of the Scottish Parliament. The order is made in consequence of the Criminal Proceedings etc. (Reform) (Scotland) Act 2007, an Act of the Scottish Parliament that received Royal Assent on 22 February 2007. The accompanying Explanatory Memorandum wrongly stated that Royal Assent was given on 27 February. Noble Lords will be keen to know that detail. The Act contains provisions to establish justice of the peace courts, which will gradually replace district courts in Scotland.

Under the Act, many of the cases that JPs currently deal with will not be handled in court, allowing JPs to hear more serious cases that are usually heard in sheriff courts. To make that happen, the Act includes a number of provisions to improve the training and recruitment of JPs and to introduce a system of appraisal for JPs. The Act also gives Scottish Executive Ministers the power to increase JPs’ custodial sentencing powers from two months to six months.

While the Act will make provisions within devolved competence to facilitate the transition from district courts to JP courts, provisions will also need to be made in reserved law. The order will make available powers to impose sanctions under the Road Traffic Offenders Act 1988. Currently, Section 10(2) of that Act prevents Scottish district courts from trying some offences involving the endorsement of driving licences unless they are fixed-penalty offences. In addition, Section 50(b) of the 1988 Act provides that district courts cannot impose disqualification from driving, except where there are 12 or more penalty points to be taken into account. Those restrictions were put in place as it was previously considered that justices of the peace were not trained to a sufficient level to deal with such cases.

In line with the changes that are being made to the lay justice system in Scotland, the Government and the Scottish Executive believe that it is right that JPs have all the appropriate powers at their disposal when hearing cases before them. This order will therefore amend the Road Traffic Offenders Act 1988 to ensure that justices of the peace can disqualify drivers and endorse driving licences. The same powers will also be made available to the remaining district courts to ensure that, during the phased transition of the JP courts, there are no regional disparities between the sentences that can be imposed.

Finally, the Committee will have seen the Explanatory Memorandum to this order, which details the background to this policy. In an unusual move, the Merits Committee—of which I am proud to have been a member—praised the way in which the previous Scottish Executive had developed this policy in response to public consultation. That is worth noting.

I hope that the Committee will agree that this order is a sensible use of the powers of the Scotland Act and that the practical result is to be welcomed. I commend the order to the Committee.

Moved, That the Grand Committee do report to the House that it has considered the Criminal Proceedings etc. (Reform) (Scotland) Act 2007 (Powers of District and JP Courts) Order 2007. 27th Report from the Statutory Instruments Committee.—(Baroness Morgan of Drefelin.)

I thank the Minister for introducing the order, which of course applies only to Scotland. The Scottish Parliament has made quite a name for itself for promoting innovation, and this is one innovation where it is good to think that Westminster can be of some assistance.

The subject of the Road Traffic Offenders Act 1988 was one of the many areas of road transport that was not devolved to Scotland, and as such it is an important part of ensuring that drivers in the United Kingdom know that they will always be subject to the same criteria of regulation, wherever they are. The problem arises that when they contravene the regulations in Scotland they will be subject to Scottish laws. There is a proposal that the sanctions for various driving offences, for example speeding, may be dramatically increased, so there may be many more cases where the courts will have to apply obligatory endorsement of driving licences. Without today’s order, this would have required the case to be taken in a sheriff court, which would cause even more delay than is experienced in these courts already. The innovation of allowing for new JP courts to be empowered to deal with these cases, as envisaged by the Scottish Parliament, seems a useful solution, and as such we on these Benches support this measure.

One possible curiosity in this measure is that Article 2(2) must be one of the first times that the powers in the Scotland Act have been used by Westminster to amend an Act of the Scottish Parliament. Perhaps the Minister can enlighten us on that.

I shall be brief. My colleagues and I certainly welcome this sensible order. As I understand it, it is intended to bring some cases down from the high courts in Scotland to the sheriff court because of the backlog in the courts system. It therefore seems absolutely logical that the sheriff court should in turn be relieved of cases that it deals with, and that they will go to the new JP courts which are replacing district courts. I am in total sympathy with that general provision. It speeds up the whole process of justice in Scotland, so these changes are welcome.

Further, I particularly welcome what the Minister said about there being no regional disparities once the training sessions get under way to ensure that that does not happen, especially when dealing with road traffic offences. I have only one slight doubt; the decision to allow the new JP courts to impose disqualification from scratch, as distinct from simply as a result of totting up offences. To disqualify someone from driving is quite a serious matter. Has this been carefully considered, and can I be assured that the training that we have been promised is going to take place? I think I am right in saying that the first of these courts will be set up in the Lothian and Borders region, part of which I represented in the Commons. I am therefore naturally concerned that such a frankly draconian power should be carefully handled.

My last point picks up on what the noble Earl was saying for the Opposition. It is slightly unsatisfactory that the whole Road Traffic Act legislation as administered in Scotland is still a matter for the Westminster Parliament. I keep hoping that we will get a proper review of the Scotland Act in due course. I was active in its passage through this House and very active in the Scottish Constitutional Convention. It was always my understanding that after two Parliaments, or 10 years, we would have a thorough review of the Act. In that review, I imagine that it would be sensible to consider transferring Road Traffic Act legislation to the Scottish Parliament. The noble Earl may have referred obliquely to this, but it does not mean that we should have different penalties or standards in different parts of the UK. Although I do not know whether this is true, I am told that in years gone by you could tot up nine points on your licence in Northern Ireland and another nine points in England and still not have your licence removed because of the different jurisdictions. We do not want to reach that situation, but it is not beyond the wit of man to devise a system whereby the actual legislative process is devolved to the Scottish Parliament but the co-ordination of penalties is left in place so that they are uniform throughout the United Kingdom.

With those few comments, I repeat my welcome for this order.

I thank noble Lords for welcoming this order. I start by responding to the question put by the noble Earl. He asked whether this is the first time the Westminster Parliament has sought to amend a Scottish Parliament Act. I cannot give him the answer. My guess is that the noble Lord, Lord Steel, may well be able to provide it, but I will check the point and come back to the noble Earl. I reassure him that the order makes a minor, consequential amendment that has been agreed by the Scottish Executive. I say for the record that the schedule to the 2007 Act sets out a modification to Section 10(2) of the Road Traffic Offenders Act 1988, substituting the words,

“Justice of the Peace court”,

for “district court”. It has not yet been brought into force, and as Section 10(2) of the Road Traffic Offenders Act is repealed by this order, clearly the modification of Section 10(2) in the Act of the Scottish Parliament will be unnecessary. The order will remove it. I hope that I have explained why we are amending a Scottish Parliament Act, and stress that it is consequential and has been agreed by the Scottish Executive.

I shall respond briefly to the questions put by the noble Lord, Lord Steel. I reassure him that a great deal of thought has been given to the training of justices of the peace to ensure that they have given time and consideration to taking on more serious cases. I am sure the noble Lord is well aware that residential training courses have been held at which JPs have worked through particular case studies. It is envisaged that virtually all JPs will have been through the additional training programme before taking on their new powers. Much thought is being given to the transition to the new powers.

I will comment briefly on the review of the Scotland Act. I am not sure that I am in quite the right place, as it were, or even have the right pay and rations to respond fully and knowledgeably enough to the noble Lord on that point. There are currently no plans to review the Scotland Act. The points that he makes about driving offences—we have initiated an interesting little debate about that today—will no doubt be continued in future discussions. Indeed, we have a transport Bill in the Chamber at this very moment.

We believe that the Scotland Act provides the flexibility needed for the management of Scotland’s settlement and recognises that consequential changes sometimes need to be made to the law in England, Wales and Northern Ireland, and to UK reserved law. We currently have a system that is operating effectively between the Scottish Executive and the Westminster Government, although obviously every time we have an order before us, we have the opportunity to debate these matters further.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Environmental Permitting (England and Wales) Regulations 2007.

The noble Lord said: The draft regulations are being made to streamline and simplify our arrangements for environmental permits by integrating the systems for waste management licensing and pollution prevention and control. In doing so, they cut red tape and provide an easier and more flexible permit. They allow regulators and business to focus on protecting the environment at a lower cost.

The regulations provide an opportunity to reduce administrative burdens on business and regulators and are consistent with the Government’s better regulation policy. They respond to various drivers to review the different approaches to environmental regulation and to establish a more efficient regulatory system.

In 2005, the Better Regulation Task Force challenged Defra to improve our environmental permitting regulations. The Hampton report the same year challenged us to take a more risk-based approach to regulation. Later that year we responded to these drivers by launching the Environmental Permitting Programme, with the Environment Agency, the Welsh Assembly Government and other stakeholders. The aim was to reduce administrative burdens on business, in particular through a single permit system. The Environmental Permitting (England and Wales) Regulations are the result of this initiative and close consultation with industry and other stakeholders.

The regulations replace and simplify more than 40 pieces of law with one set of clear regulations. I understand that in adding up the pages in the 40 pieces of law the total is more than 500. Noble Lords will see that this document is just over 120 pages, so they are reduced to less than one-third of their length, but they still deliver the environmental protection that we care about. They deliver a single permit system for waste management and industrial pollution by streamlining and combining the two separate systems that are currently running. A single system makes it easier when it comes to applying for a permit, changing it and ultimately surrendering it. These changes will have benefits for a wide range of businesses, but particularly smaller enterprises which often have limited time and resources to spend on form filling. It is anticipated that this simplification will bring cost savings of around £76 million over 10 years through administrative burden reduction and wider economic benefits. I am not just tossing that figure out. We have a system for making sure that we monitor the savings gained through the regulations to gauge their effectiveness, and we can report on that.

The new permit system will make it easier for regulators to do their job of protecting the environment and easier for business to comply. These regulations have been widely welcomed by industry and have been consulted on more times than I can ever recall happening with a set of regulations. There have been five consultations on the programme. It is worth putting that on the record, because enormous work has gone into making sure that we can get the savings. The first public consultation took place between February and May 2006, before I turned up back at Defra. The second took place between September and December 2006; the third between January and April earlier this year—I can give details of what each concerned if required—the fourth, relating to the guidance to local authority regulated sites, took place from June to September this year; and the fifth took place between July and October this year. So there has been full consultation through the process. There was the initial push to get something done. Defra wants to cut regulation. People think that we wake up each morning considering that if we can introduce a new regulation that day we will have done our job. That is not the case; it is the other way round. That mindset and culture pervades the department. We are trying to simplify. This is a classic example of being able to simplify regulations and ease the burden on industry without—I emphasise this—sacrificing our environmental protection.

Moved, That the Grand Committee do report to the House that it has considered the Environmental Permitting (England and Wales) Regulations 2007. 27th Report from the Statutory Instruments Committee.—(Lord Rooker.)

I thank the Minister for introducing these regulations. We support any measures that will reduce the burden of regulation and save regulators and industry both time and money. These regulations are further welcomed in that they will integrate and replace more than 40 statutory instruments dealing with environmental permitting with this single instrument. However, there are a number of issues on which I think the Committee will be glad to receive clarification.

Does this measure really reduce the burden of regulation or simply repackage it by encompassing the 40 statutory instruments and 11 EU directives? Time will tell. Estimates in the regulatory impact assessment suggest that there will be around 8,000 agricultural waste licences by spring 2008, and Defra estimates that these regulations will make savings of, I believe, £55 million, but I am very pleased to hear that the figure has gone up to £77 million. Does this saving of £77 million include the cost of burden to industry or is it just the saving to Defra?

The original proposal that the regulator should decide whether extra information is needed for disputed applications was amended in view of concerns voiced by respondents to the consultation on the EPP. It was changed so that an independent appeal body would decide instead. There still remain questions over what shape this appeal body will take, what it will be called and how it will be administered. Perhaps the Minister can tell the Committee how he envisages the appeal process will be undertaken, and how long it will take.

It appears that in efforts to reduce the regulatory burden, there will now be at least three different versions of the panels, the EPP, the standard rules and the bespoke environmental permit, that could potentially perform the same function. Is this really a genuine simplification process? In addition, an IT system is scheduled to be put in place by February 2008. Given the past record of the Government’s IT systems, there is a potential risk that this will lead to costly and problematic delays, and I have to say that disks might go missing. No doubt, hard copy documents and forms will be used to run parallel with the new electronic system until such time as it is found to be functioning as desired.

A phase 1 survey will be conducted in April 2009 to assess whether, for applicants for permits during 2008-09, the benefits are accruing as expected. It is hoped that at this stage the system will be flexible enough to make any necessary changes and improvements. Also, a full survey and questionnaire will be conducted through stakeholder workshops in April 2011 to ascertain whether costs have been reduced, the permitting process has become quicker and easier, the guidance has improved and environmental standards have been maintained. Presumably all this will require individuals to maintain records and spend time filling out forms. Have these elements been taken into account when assessing whether the burden of regulation has actually decreased? I look forward to a positive outcome.

I thank the Minister for his explanation of these regulations, which are not too transparent as you read them. I also particularly congratulate the noble Earl, Lord Cathcart, on his mastery of the detail. I shall be slightly broader in my questions. Along with everyone else, we warmly welcome this attempt to make the regulations in this area simpler and more concise. In the past I have been involved in the legislation around European directives, and I was particularly impressed to discover that these regulations will subsume 11 of them into quite a reasonably sized document, although at 129 pages it is twice the size of the Climate Change Bill, which is being brought forward to help to change the world. Perhaps the future is more promising in this regard.

I was going to ask the Minister about the saving of £76 million over 10 years, as mentioned in the Explanatory Memorandum. I do not know what the procedure usually is for checking to see whether such savings have been delivered. I welcome this, but I should like to understand a little more about the procedure. I was also impressed by the number of rounds of consultation, and the summaries in the explanatory document make for interesting reading. Some 110 people responded in the first round; 75 in the second round; 53 in the third round and eight in the fourth round. No number is given for the fifth round, so I do not know whether anyone actually made it to the finishing line, but while the graph will not quite be negative, it is good that a certain amount of consultation was held.

The accompanying notes also explain that the Environment Agency came in for some criticism over its targeting for compliance in these areas by taking a risk-based approach. I am more used to that in relation to the Financial Services Authority and that sort of area, where it has been very successful on the whole in determining by fairly straightforward formulae what the biggest risks are, the organisation, and what should be looked at most closely, thereby ensuring that, for the resources that are put into environmental protection, the maximum risk is taken out. I would be interested to know whether there has been any success there.

I am sorry that I was little late. I did not spot that the proceedings on the regulations started so soon. Anything that simplifies this is extremely welcome, and I hope that it works. I know about this only because I have tried to register waste exemptions for farming. The waste exemptions for road planings on farm tracks—I think the relevant regulation is paragraph 19 of Schedule 3—were a nightmare, to be honest. You had to register one thing, then you had to get another form, then there appeared to be an exemption, and no one was sure whether they had got it. Anything that simplifies this and makes life easier for people in businesses who are not natural form-fillers and are mostly terrified by the forms and do not understand them is most welcome. I therefore welcome anything that goes in that direction.

I will do my best to answer the questions that have been asked. I am sorry; the answers have been put in reverse order. Single sites can have a single regulator, although it depends on the circumstances. I leaned back and asked my officials whether this included farms, because there is nothing more I would like to say to farmers than that they could have a single regulator. They may have; as I said, it will depend on the circumstances. We must differentiate in some ways. Farms are small but sometimes complicated businesses, and we seek to reduce the form filling, although I would not want to overplay this for agriculture. Under the regulations, the greatest savings in this area will be for small and medium-sized businesses, probably with multi-sites and one licence to cover them. There will be many more savings, but probably fewer for single sites.

The noble Earl is absolutely correct that the whole idea is to simplify the situation and get down to having less regulation and less form filling on farms. We are abandoning 40 different pieces of legislation with more than 500 pages, wrapping them up in these new regulations, with their 120-odd pages, without losing sight of any environmental protection issues. It is important to put that on the record. As I said, single sites can have a single regulator, depending on the circumstances.

The Environment Agency is putting into place a system that will allow it to deliver the new regulations—without an IT system, I have to say—if there is a delay; so the benefits to customers will still be there. The noble Earl is quite right that the track record of the new implementation of IT in Whitehall is frankly appalling. It is worse now, and I feel bad about that. Before I became a Minister, I had two years at the Public Accounts Committee and we had several IT disasters between 1989 and 1991. When I became a Minister in 1997, I took three or four reports from the NAO to MAFF. I asked, “When are we going to start the cattle movement system?”, which was not blue sky but IT-based. I said, “Here are some disaster reports, which we should avoid”. In some ways we did. Nevertheless, our record is not good.

I shall not comment on disks. I saw only the Chancellor’s Statement. Because of the Climate Change Bill I had to turn the television off. I wanted to send the officials away because I wanted to watch the rest of it, but I shall have to do that later. On the fifth consultation there were 44 responses. As Members of the Committee will see on page 9 of the RIA proposals, each consultation was specific, so one would expect the numbers to vary. There are three types of permits; namely, the exemption permits with the lowest risk, the standard permits that are low risk and the bespoke permits with the highest risk. It seems to be a real risk-based regulation. One-size-fits-all regulations would have everyone wrapped up in red tape. People will want to be double-sure, will watch their back and will close every gap. That is not risk-based, it is being ridiculous. That would be over-regulation and double regulation, of which we already have too much. So I am very pleased to bring these regulations forward on behalf of my ministerial colleagues, and the industry has welcomed the changes.

I freely admit that, in the scale of government money, to claim that we are saving £76 million over 10 years is chicken feed: it is £7 million a year. It is like the third decimal point in any department’s adding up, and it can be lost. However, we have to make this a reality. I was very pleased to learn from the officials that we have put in a checking system. It is important to show those who have encouraged us to deregulate that these are genuine savings. The £55 million is reckoned to be the administrative burden reduction and the £21 million reduction is from wider benefits, which is how the £76 million is calculated. The savings to industry are estimated at £35 million. It is very difficult to put calculations on this, because we are estimating the number of forms that will have to be completed. A time is put on filling in the form and rough costs are calculated. As far as I know, there has been no industry backlash on this. By and large, the industry is very supportive of the regulations, and I am sure that it will want to make them work.

I have good news and bad news for the noble Earl on appeals. I must not be rude, but the bad news is that the length of appeal depends on the subject matter. The good news is that the Planning Inspectorate will deal with it. I know that the Planning Inspectorate can come under severe criticism, but it is not its own fault for the load it carries in operating the planning process. From a technical, an administrative and a government point of view, the Planning Inspectorate is a first-class body of people, so we can be satisfied that the planning process will be in good hands. The amount of time taken depends on the burden, the workload and the subject matter.

I was asked about the removal of the “due diligence” defence. The existence of strict liability in environmental regulations is the result of a deliberate choice made by successive Administrations to secure higher environmental standards in those areas than would otherwise be the case. That is probably the short answer with a bit of gold-plating. The due diligence defence can enable industry to avoid responsibility for the consequences of the actions that they have chosen to conduct. That is because operators need to do only what they think is reasonable to prevent those consequences, rather than what was objectively possible, even though on occasions severe damage can be caused to the environment or human health. So there are these issues where one takes a different look at the situation.

The Environment Agency wants to use the regulations to drive its risk-based approach to regulation. It is an opportunity to use resources more wisely. I hope that we will get more value for the money we spend. It would be nice if we spent less money. In other words, the Environment Agency staff would be more occupied on the job rather than chasing up individual forms that have been filled in. The agency also gives important advice to industry in its widest sense as well as farmers. It is much better that staff are doing that than chasing up forms, so it is very important to cut their number.

On the next steps, we will be publishing Defra’s annual simplification plan before Christmas. It has been signed off as far as I am aware and has gone around. We are on course to deliver our annual report to Parliament on simplifying regulations. These regulations will be covered by it. We are now looking at the EPP2, perhaps water discharge consents, radioactive substance regulation and a host of other changes. We expect and hope to be consulting shortly, which is shorthand for as soon as resources permit and we have something to consult on. The process of trying to cut down regulation and the number of forms people have to fill in is ongoing in the department. It is a genuine effort by Defra to cut the red tape burden, and that is wholly to be commended.

On Question, Motion agreed to.

That completes the business before the Grand Committee this afternoon. The Committee stands adjourned.

The Committee adjourned at 5.41 pm.