Legislative and Regulatory Reform Bill

18:07:00

Lord Bassam of Brighton
My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (The Countess of Mar) in the Chair.]

Baroness Wilcox
moved Amendment No. 47A:

Before Clause 4, insert the following new clause-
 

“EXEMPTION OF ECONOMIC REGULATORS
 

An order under this Part may not abolish or modify the regulatory functions conferred on, or exercisable by, any of the following-
 

(a) the Gas and Electricity Markets Authority;

(b) the Office of Communications;

(c) the Office of Rail Regulation;

(d) the Postal Services Commission;

(e) the Water Services Regulation Authority.”

The noble Baroness said: This amendment deals with a significant aspect of Part 1 of the Bill—the protection of the principal economic regulators. As I hope I made abundantly clear at Second Reading, the principal economic regulators have very significant powers over the essentials of our daily life and the operation of the economy. They deal with water, energy, communications and transport. These are networks and supplies that must be maintained and operated on sound and sustainable economic and public interest criteria. It is for that reason and the overwhelming need for private investment to be maintained and encouraged in these essential industries that Parliament has made the principal economic regulators independent of political control, with clear, objective, statutory duties that do not wave in the political wind. It is also why Parliament has given them jurisdiction to establish the demands on the systems that they regulate to determine the condition, capacity and capability of the networks in question and then to set prices that customers must pay. Those two things—independence and jurisdiction—are essential if we are to ensure that private investors will have sufficient confidence in the regulatory system to provide the working and investment capital that these industries will always need on fair and affordable terms.

As I said on Second Reading, this is no idle or academic point. I referred at some length to the Government’s behaviour towards the Rail Regulator over the winding up of Railtrack. The Rail Regulator at the time has since explained that it was the rigour and timescales of the legislative process that protected his jurisdiction and independence and caused the Government to back off, with their unconstitutional threat of legislation.

The Government admitted that they could not have got the neutralising Bill through in time; they might not have got it through at all. That is why the present chairman of the Office of Rail Regulation has written to the Chancellor of the Duchy of Lancaster protesting at the scope of Part 1 of the Bill. He has warned of the very same real hazards of which the former rail regulator warned: the jeopardy to private investor confidence which is created by a power of a Minister to interfere with the independence or jurisdiction of the principal economic regulators.

The Minister may say tonight, “Of course, the principal economic regulators must be independent. The Government have always accepted that it is important and we would never touch them”. He may say that but as the Committee knows that has not been the reality of hard experience as I have shown now and at Second Reading. Even if we accept that the Government are committed to the independence of the principal economic regulators, we must protect them from any possibility of the Bill being used against them.

I have taken the wording for this amendment from the Government’s own drafting in Part 2. There the Government have seen fit to exclude the economic regulators from the principles of good regulation. Why they should do so is perhaps strange. I hope we shall debate this more fully when we come to that part. There does not seem to be much harm in getting the regulators adhering to the principles in Clause 23(2), but I am open to any explanation from the Minister as to why they are so exempt. My colleagues in another place pursued this point and did not receive a satisfactory answer. Leaving Part 2 to one side for the time being, I ask: why are the economic regulators not exempt from Part 1? I can think only that the Government deliberately want to keep the economic regulators within their grasp and we on these Benches believe that that is quite wrong. I beg to move.

Lord Norton of Louth
I wish to speak to Amendment No. 47B in the same group. When I chaired the Constitution Committee of your Lordships’ House, the committee looked at the role of the independent regulators appointed by statute. In particular, we looked at the relationship between accountability and independence. Regulators have to be independent to do their jobs and that requires Ministers giving up some freedoms to protect the decision making of regulators. At the same time, regulators have a duty to explain, to be exposed to scrutiny and to be subject to the full rigours of the possibility of legal challenge. They have to fulfil their statutory duties.

The independence of regulators, as my noble friend has already said, is crucial. It is important that independence is seen to exist. Perhaps I may quote from paragraph 121 of the committee’s report:

“Our evidence suggests once again the broad range of support that underpins a regulatory framework that separates ministerial roles and responsibilities from those of independent regulators, and that this fact should be well communicated on a regular basis by Government. Water UK, for example, told us that ‘For Ministers and regulators frequently to reassert the independence of the regulator on economic decisions is helpful; and, after all, we had a survey of investors recently and 96 per cent of them said that they regarded the independence of the regulator as being very important, so just a frequent reassertion of it would be helpful’”.
 

It was also clear from our evidence that, on the whole, Ministers welcomed and supported that independence. They saw that the independence of regulators is a vital ingredient in maintaining consistency, for ensuring that regulatory decisions are taken by competent authorities—which, as we noted, accords well with current and prospective developments in the European Union—and for promoting confidence about regulation among those investing in regulated industries, as well as customers on whose behalf it is carried out. It is also extremely important for promoting confidence among those bodies that are regulated.

In evidence to the committee, the Department of Trade and Industry said that,

“the independence of economic regulators from Government—insulating decisions from short term political factors—is a fundamental contributor to regulatory certainty and prerequisite for continuing to attract private finance to regulated sectors”.

The independence of economic regulators is thus recognised as crucial and as the report stressed, it is not at the expense of accountability. On the whole, we found that Ministers recognised and welcomed that independence.

18:15:00

That brings me to the provisions of the Bill. The amendment moved by my noble friend Lady Wilcox seeks to protect the functions of the economic regulators. My amendment is designed to probe the Government about what they intend to do to protect the independence as well as the jurisdiction of the economic regulators. As my noble friend has said, some of the economic regulators have concerns that the provisions of the Bill could be used to amend the statutes creating them and the framework within which they operate. Orders could be used to constrain their jurisdiction or to limit their independence. As my noble friend Lady Wilcox said, and as she argued at Second Reading, it is not a hypothetical possibility. She mentioned the clash between the Transport Secretary and the Rail Regulator in 2001 which showed that in exceptional circumstances a Minister may try to limit the independence of a regulator.

Thus, there is a need to protect the independenceof the economic regulators and—picking up onmy earlier point about reassertion of that independence—to be seen to be doing so. There needs to be a change to the Bill to reassure investors as well as the regulated bodies that that independence will be protected and that it will not be subject to the possibility, at any time, of a Minister deciding to use the order-making power to get round the decision of a regulator.

My amendment is designed to cover independence as well as jurisdiction in order to prevent a Minister transferring the functions of a regulator to another agent. The regulatory powers have to stay in the hands of the independent regulator. Like my noble friend Lady Wilcox, I have no doubt that the Minister will reiterate the Government’s commitment to the independence of the economic regulators and say that there is no intention to use powers in the Bill to affect their independence. The problem, as has been variously reiterated in our debates, is that the Minister's words cannot bind a future Government. The need for an amendment is especially crucial in this case to demonstrate that the Bill cannot be used for that purpose. This Bill brings into being the sword of Damocles. It needs to be removed.

Lord Lloyd of Berwick
I support both these amendments. The economic regulators clearly fulfil a very important role in our society today, especially the five economic regulators that are identified in the amendment tabled by the noble Baroness, to which the noble Lord, Lord Norton of Louth, has added a sixth. They also have great power. If they are to do their job properly it seems to me that they must be free of all government interference. They must not be lent on to reach any particular decision in any particular case. Their independence must be plain for all to see. I suspect that is agreed on all sides of the Committee.

When we were considering the Constitutional Reform Act, we wrote into Clause 1 that all Ministers must uphold the independence of the judiciary. Those were the very words that we put into Clause 1. Obviously, regulators are not judges in the ordinary sense, but they fulfil a quasi-judicial role. For that reason they must not only be independent, which I am sure they are, but they must also be seen to be independent, to use that well worn cliché. That is why, of the two amendments before the Committee, I prefer that of the noble Lord, Lord Norton of Louth, because the clause heading in his amendment refers specifically to “Independence of economic regulators”. I would go rather further than the noble Lord and I would spell out in clearer language in the body of the clause itself what it is we want. We should say in simple terms that an order under Part 1 of the Bill shall neither restrict the jurisdiction nor undermine the independence of the economic regulators. That is quite simple and short. It would do the job and I would leave it at that.

The amendment of the noble Baroness does not go far enough, because it does not refer in any way to the independence of the regulators. That of the noble Lord, Lord Norton of Louth, is better, and does at least refer to independence, but I would sooner see it in the body of the clause rather than in the clause heading.

Lord Borrie
I share the view of the noble and learned Lord, Lord Lloyd of Berwick, that, of the two amendments, the amendment of the noble Lord, Lord Norton of Louth, is to be preferred. The amendment is in his name and that of my noble friend Lord Berkeley, who is unfortunately not able to be in his place today.

Several of the agencies listed in the amendments were created when former publicly owned industries were privatised. Because an element of monopoly was created, a regulator was needed to control monopoly abuse with a measure of price control. That was the case with gas, electricity, the railways and water. Of course, I entirely agree with what each of the three speakers so far has emphasised. The word “independence” is absolutely vital: independence from the industry and ministerial control, except the minimum necessary to establish one’s financial needs to the Treasury each year; but otherwise independent of the Government.

It may be that, at some stage during the lifetime of one of these agencies, competition in the industry develops to such an extent that regulation is either no longer needed—that might sound rather extreme—or, at any rate, need not be so stringent. Therefore, the regulations imposed by or upon the agency may need to be changed. Both of the amendments are somewhat extreme, in that no detail of any kind could be altered except by statute when a regulatory reform order would surely be quite useful in dealing with the detail. The speeches of the noble Baroness and the noble Lord, Lord Norton of Louth, were not attacking detail but were concerned with independence and interfering with the principles and basic functions of the agencies.

Ofcom is referred to. Some of us were here during the lengthy debates on the Communications Bill, which became the 2003 Act. It involved a massive merger of a number of separate agencies dealing with television and radio, the Broadcasting Standards Commission and so on. It is a huge piece of legislation and regulation. The legislation imposed rules on Ofcom. Of course, as the years have gone by, Ofcom itself has imposed regulation on those subject to its jurisdiction. It occurs to me that after two or three years, let alone 10 years or so, there may also be a need to deal with the detail of regulation in a way which does not necessarily have to involve full-scale primary legislation.

Indeed, either Ofcom or the other regulators mentioned in these amendments may be desired by the agency itself in order to perform its tasks better. To seek an order under the Act would surely be sensible. We have not yet debated the various preconditions, safeguards, consultation and so on. I will not go into that, because we will be debating it at length in due course. I ask those of your Lordships who are inclined to favour a detailed amendment like either of the amendments before us to bear in mind that there are lots of safeguards with regard to any order made under the Bill.

I favour Amendment No. 47B because it is more cautious and gentle than that of the noble Baroness. I could not help notice, having previously had a connection with the Office of Fair Trading, that it has been added in, whereas it was not in the original one. It reminds me of a point on which I can support the noble Lord. Not long ago, the Hampton report proposed that quite a fundamental part of the Office of Fair Trading’s work—consumer affairs and protection—should be hived off and handed, together with local authority trading standards matters, to a new agency called the consumer and trading standards agency.

That idea was shot down by the Treasury, much to the relief of those presently in charge of the Office of Fair Trading, who have been able to retain their consumer affairs jurisdiction. I support what the noble Lord, Lord Norton, was saying on this matter. If something substantial was proposed in terms of the remit given by statute to any of these agencies, then it ought to be attempted not by way of a regulatory reform order but by something else.

I hope that the Minister will say a word or two about another part of the amendment of the noble Lord, Lord Norton, dealing with freedom and independence from having the “wishes” of the Minister imposed on a regulator. Do the Government feel that that has any effect on something quite common in legislation, that agencies should be subject to a ministerial direction—the technical term—in certain circumstances? The noble Lord is probably trying to get at ministerial directions which inhibit the independence of these agencies. I feel a measure of support for him on that.

Lord Jenkin of Roding
My words shall follow closely and appropriately from what the noble Lord, Lord Borrie, has said. He singled out the word “wishes”. I give a case in point.

What is popularly known as Ofgem is rightly referred to here as the Office of Gas and Electricity Markets. When electricity prices went down to the point where a number of generators were going bust—including, of course, British Energy—I raised with the then chairman of Ofgem, Callum—laterSir Callum—McCarthy whether he was paying enough attention to an amendment in the Utilities Act 2000, which I proposed in this House and was carried with a majority of two, to impose on that body an obligation to have regard to the long-term stability of the industry. I asked him how he could justify what he was doing, forcing the prices down to the point where firms were going bust and not paying attention to what was in that Act. I have quoted his answer in the House before, and he has never denied it. It was at a semi-public occasion at the Institute of Economic Affairs. He said, “I recognised that Ministers did not want that clause, and I have therefore not paid too much attention to it”. I regarded that as a shocking thing for a regulator to say. But it illustrates the point of my noble friends and the noble Lord, Lord Borrie, that there is always a temptation, either on the part of Ministers to let it be known what their wishes are, or on the part of regulators who try to divine what the Minister’s wishes might be. I yield to no one in my determination that regulators should be wholly independent of both influences.

The relevance of the Bill is that Ministers should not be able to influence the regulator by the order-making procedure under the Bill. In case the Minister is going to argue that this fear is unreal because nobody would do that, I quote the example of Sir Callum McCarthy. Of course, the Government opposed the clause. The noble Lord, Lord McIntosh of Haringey, argued fiercely against it, but he lost the argument in the House, and it is in the Act. It is very important that we should take whatever steps we can in this Bill to strengthen and reinforce the independence of regulators.

18:30:00

Lord Desai
Subsection (1) of the new clause to be inserted by Amendment No. 47B states:

“An order under this Part may not diminish”.
 

I remember that, during the passage of the Financial Services and Markets Bill, the posts of chairman and chief executive officer were combined in one person. A small order may need to be placed by a Minister to separate the two roles. That would not be an attackon the independence of the regulator, but the amendment might prevent even such a simple thing. Unlike the noble Lords opposite, I believe that the Bill will do only very small things; it is designed to make the passing of simple orders easier, because it is currently difficult. This amendment would make the passing of a simple transfer order impossible. There would be no regulatory reform ever.

The Earl of Onslow
I can help the noble Lord on that issue. On the first day in Committee, we got an admission from the noble Lord, Lord Bassam, that the Bill is to do with primary legislation only and has nothing to do with secondary legislation. I suspect that the noble Lord, Lord Desai, is talking about matters arising out of secondary legislation that primary legislation already gives the Minister power to change. It has to be emphasised that we are talking about amending primary legislation only.

My view is that we should be extremely careful, because Ministers can never be trusted. Even my noble friend Lord Jenkin, who was an excellent Minister, should not have been trusted on principle. That is what Parliament is for: not to trust Ministers. When the noble Lord, Lord Bassam, replies, I am sure that he will say that this amendment is not necessary because the Government will not use the power. If it is not necessary and he is not going use it, he can accept the amendment. We do not trust him. Well, let us assume for the sake of argument that we make an exception and trust him of all the Ministers who have ever served the Crown. None the less, we do not trust anybody else. He cannot give that commitment. Either the power is necessary and will be used—in which case, the Minister should tell us when—or it is not necessary and the Government do not want to use it, and therefore they should not have it.

Lord Selsdon
I had not intended to intervene, but I wish to raise the subject of investor confidence. These days, investors have no confidence in Ministers. Noble Lords will recall that 40 per cent of essential services—public utilities—are German owned and25 per cent French owned. International investors, who may not understand the complexities of British political and economic life, rely on stability and the independence of the regulators.

I return to the bizarre and disgraceful incident of Railtrack. Investors had confidence in it until the Government decided that they would step in. Overnight, the rating of the United Kingdom in the international bond market went from AAA to zilch. That was because the bond market, which is critical to long-term investment in public utilities, wants stability. As noble Lords will recall, the bond market plays an important role in financing most acquisitions or investment in public utilities. We are talking of 25-year money at fixed rates placed with institutions—pension funds and others. Such institutions are not thinking of a five-year change of Government; they are thinking about long-term, secure investment. To some extent, they are institutions acting on behalf of institutions, and they require stability and the knowledge that the regulator not only is independent but is perceived to be independent. Thus, if we do not pass an amendment such as this—and I do not wish to go into the technicalities of one or the other—and if the response of the Minister in this debate is not trustworthy and confidence-giving, there will be a little rattling in the bond market. We are not necessarily talking about equity investors; we are talking about the long-term market, which is very sensitive to security and stability.

Lord Goodhart
We on these Benches have not yet committed ourselves to support these amendments. However, I found the arguments in support of them, particularly Amendment No. 47B, extremely persuasive. The Minister will have to be very persuasive indeed to persuade me that these Benches should not support Amendment No. 47B or an equivalent amendment at a future stage of the Bill.

Lord McKenzie of Luton
In responding to Amendment No. 47A, I shall speak also to Amendment No. 47B, although I recognise that their thrusts are slightly different. I thank noble Lords who have participated in this discussion.

I must say at the outset that I am unable to accept either of the amendments, for reasons that I hope will convince all noble Lords. I am a bit surprised that the noble Baroness, Lady Wilcox, moved Amendment No. 47A, because it appears to be in conflict with her party’s policy intentions in another place. During the Standing Committee debate on 9 March, the Conservative opposition spokesperson on the Bill in the other place, the member for North East Hertfordshire, Mr Oliver Heald, said:

“It would be wrong to let off the ‘Ofs’”—
 

which he had previously described as,

“Ofgas, Ofwat and the rest of them”.

He went on to say:

“We need to have a system where the main regulators in this country set the standard, trailblazing for good principles of the sort set out in clause 19—transparency, accountability, proportionate behaviour, consistency—and targeting their actions. They should not be the ones who lag behind”.
 

Clause 19 is now Clause 23. I recognise that the opposition Front Bench in another place raised this during a clause stand part debate on Part 2, but I think that the policy intentions of the Opposition in another place are clear. I repeat that Mr Heald said that the “Ofs”,

“should not be the ones who lag behind”.—[Official Report, Commons Standing Committee A, 9/3/06; col. 271.].

The Government wholeheartedly agree that the economic regulators should not be the ones who lag behind in the context of the better regulation agenda. 

It is true that the economic regulators are excluded from the provisions in Part 2. Noble Lords may findit useful if I restate the specific reasons forthis exclusion. Part 2 implements certain recommendations in Philip Hampton’s report Reducing administrative burdens: effective inspection and enforcement. That report made recommendations for reducing administrative burdens by promoting more efficient approaches to regulatory inspection and enforcement without compromising regulatory standards and outcomes. Economic regulators were excluded from the scope of the Hampton report because they had been the subject of a series of recent studies and because they concentrate on economic solutions to market failures rather than inspection and enforcement by regulators, which is the main focus of Part 2. The provisions in Clause 1 and, for that matter, in Clause 2 are wider in purpose and do not relate only to inspection and enforcement.

The Government believe that businesses must have the right to raise concerns if economic regulators are carrying out their functions in ways that are, for instance, overly bureaucratic, or if they are not exercising their functions in line with the five principles of good regulation. If there are sound reasons for suggesting any modifications of their statutory functions for the purposes of removing or reducing burdens, or for modifying the way in which those functions are carried out, it should be possible to address these by order as it would be possible for any other regulator.

Regulators, including the economic regulators, operate within not a stagnant but an ever-evolving and diverse environment. They need to be flexible and responsive to the challenges presented by the markets in which they operate. They must not be,

“the ones who lag behind”.

In fact, they must be the ones who are ahead of the game. In some cases this might require a modification of one or more of their regulatory functions. If noble Lords would care to go to the websites of some of the regulators and look at what is in their corporate plans and at the range of changing circumstances that the regulators recognise they face in the coming years, they will, I hope, understand the thrust of that point. 

This amendment would take away from economic regulators a legislative vehicle that would enable such a valuable modification, even if it were required and requested by the regulator. Indeed, a recent article in the Observer said that, by definition, a regulatory body is bureaucratic, so the question is whether it could be less so. In principle, it should be possible, where appropriate, for Government and Parliament, in consultation with the regulators, to agree any sensible modification of their functions in the same way as they could for any other regulator. That is what Clause 1 would permit.

It is worth noting that, although this amendment is said to apply to Clause 2 as well as to Clause 1, it would not be possible under Clause 2 to modifyor abolish a regulatory function. Indeed, the Government have tabled Amendment No. 38 to make that even clearer. Clause 2 can be used to modify the way in which a regulator’s functions are exercised, but the functions themselves would have to stay intact and could not be abolished. That being the case, I will concentrate on the effect of this amendment on what provision can be made under Clause 1.

The Government simply do not accept that not excluding the economic regulators from Part 1 will lead to market uncertainty. Including them in Part 1 will not lead to any heightened sense of insecurity for the market. Clause 1 provides an order-making power for the purpose of removing or reducing burdens. This power will be used only where appropriate, after full consultation and where proposals meet the relevant preconditions—for example, that orders are proportionate to the policy objectives behind them and fairly balance the public interest against the interests of any person adversely affected by them.

To paraphrase the Member for North East Hertfordshire during the Standing Committee debate on 9 March, to exclude the economic regulators from Part 1 of the Bill would be potentially to “let off” the big boys—the big regulators that have been set up by statute. Often they are the ones that people are most worried about. Would the noble Baroness, Lady Wilcox, be happy that, even if a specific and worthwhile proposal for reform of a regulatory function had been identified, the regulator could just go on acting in an excessive way and the powers that we are debating today could not be taken advantage of?

I stress that the Government have no current intention of abolishing or even merging any of the economic regulators. The Government believe that those regulators are successful in carrying out their functions. Let us think specifically about a hypothetical order that would modify or abolish the functions of an economic regulator. If there was any doubt about whether such an order might undermine market security, or, in the language of the Bill, that it might create new obstacles to productivity, including innovation and competition, or impose new obstacles to the efficient working of the regulator in carrying out its functions, it would be unlikely that that order was for the purpose of removing or reducing burdens such as obstacles to productivity or efficiency.

Further, the preconditions in Clause 4 mean that, if a proposal to modify or abolish some of the functions of an economic regulator would be likely to remove necessary protections or fail to satisfy one of the other preconditions, surely the Minister would reasonably consider that the preconditions were not met and therefore that the order could not be made.

However, let us assume that this hypothetical and unreasonable Minister seeks to consult on his proposal. He would be under a statutory obligation to consult those affected by the proposal. He must therefore consult the body whose functions he is seeking to abolish or modify. The economic regulator would surely respond with evidence of where market security was at risk, and other consultees would be likely to agree. In these circumstances, the Government’s undertakings not to pursue highly controversial proposals by order and not to undermine the independence of regulators would come into play, and the Minister would reconsider the wisdom of pursuing his proposal by order.

18:45:00

For argument’s sake, however, let us assume that the Minister persists and lays the order contrary to overwhelming evidence that suggests that the order should progress no further. The explanatory document that the Minister must lay alongside the order must give details of any consultation and any representations received. It must further give an assessment of what burdens would be removed or reduced and why he considers that the preconditions, including necessary protection, are satisfied. The role of the parliamentary committees, based on this and other evidence, is to judge whether they agree with the Minister’s opinion. Members of the Committee will agree that, in the circumstances that I have described, the committees would be likely to find the order to be an inappropriate use of the power. If the committees did not agree that it removed or reduced burdens, they would question whether it was within the vires of the power. In such a case, they could of course exercise their statutory veto to block the order.

There is a further undertaking that the Government will not push an order through in the face of opposition from the relevant parliamentary committee. So the order would then fall unless overturned by a resolution of the House. Let us assume, though—

Lord Lloyd of Berwick
I am very grateful to the noble Lord. The point that he made earlier was that this amendment would prevent an order being put through even where the regulator wanted it. Surely that difficulty could be met easily enough by inserting the words “without the consent of the regulator” in the proposed amendment.

Lord McKenzie of Luton
We are dealing with the amendments that are before us and not with amendments to those amendments. It is important that we deal with the Bill as it is currently drafted.

Let us assume that the order has been made. In this circumstance, if the fears about market security prove justified, those whose economic interests were adversely affected would be able to seek a judicial review of the order, and it would be within a court’s powers, if it deemed the Minister’s opinion irrational, to strike the order down.

So while an order could amend or abolish the functions of an economic regulator, this would clearly be possible only where the evidence, including economic arguments and cost benefit analysis, clearly demonstrated that the removal or modification of those functions was for the purpose of removing or reducing burdens, where the important preconditions in Clause 4 were satisfied and where the order did not breach the Government’s undertaking to preserve the independence of regulators.

Lord Norton of Louth
What would the effect on confidence be while all this was going on?

Lord McKenzie of Luton
The situation would be the same as it is under the 2001 Act. I will come on to the independence of regulators and the role of Parliament. I do not think that the way in which the 2001 Act has operated has given rise to any difficulties in this regard.

In reality, any proposals that relate to economic regulators are likely to be more straightforward. I am thinking, for example, of the consultation already under way for an RRO under the 2001 Act powers—from which, of course, there is no exclusion for the economic regulators—to change the Financial Services and Markets Act 2000. That Act sets out the functions and duties of the Financial Services Authority, which, as Members of the Committee will know, operates within a highly sensitive market. The proposed RRO would provide for better-targeted FSA regulation that is more risk based, and includes proposals to remove unnecessary or disproportionate consultation burdens placed by the FSA on industry. Surely that is exactly what we should be trying to achieve by such a measure. The order will also enable the FSA to deregulate more freely by issuing waivers and modifications to rules in a wider range of circumstances.

In this context it is worth mentioning that the safeguards described above have worked well under the 2001 Act. I understand that the mere existence of the order-making power in that Act, from which the economic regulators are not excluded, has not led to any uncertainty within the markets in which those regulators operate—nor should it. This Bill contains stringent safeguards and is more focused on the delivery of better outcomes than was the 2001 Act, so it should provide an increased level of certainty for the listed economic regulators.

The amendment is an unnecessary restriction which would mean that the listed regulators themselves—including the Office of Fair Trading, which is listed in Amendment No. 47B but not Amendment No. 47A—would not be able to propose by order amendments to their functions even where that might be beneficial to enable more efficient delivery of their objectives.

To look at one of the differences between Amendment No. 47A and Amendment No. 47B, Amendment No. 47A deals with orders that we cannot “abolish or modify”. Modifying them by adding to them would not be permitted under the amendment. Whatever else one thinks of that amendment, it is difficult to see why any regulator would want that provision in the statute. Amendment No. 47B bears close relation to Amendment No. 47A but is more specific, in that it deals with not only changes to the functions of the economic regulators but the independence from Ministers of directors and members of the regulators and how such directors and members can be removed from office. Subsection (3) in Amendment No. 47B concerns a removal from office of the director and other members of a regulator. The Committee will be aware that the chairman and members of those regulators are, in accordance with the statute setting them up, all appointed by the Secretary of State. In some cases, the statute specifies that the terms of appointment shall be determined by the Secretary of State.

The Committee may also be aware that the Secretary of State already has the statutory right to remove a chairman or other member on grounds such as misconduct or incompetence. I am therefore unclear what additional protections the amendment is intended to achieve. If it is about the Government misusing the powers in the Bill—for example, if they seek to remove a hypothetical director-general of an economic regulator as swiftly as possible—making an order under the Bill is not the way to do that, as the Committee will know. There are stringent safeguards in place and rigorous scrutiny for all orders that a Minister proposes.

The point has been made that orders must havethe consent of the economic regulators. They would be consulted and their views expressed in the Explanatory Memorandum. The Bill is about regulators operating efficiently, but also about the regulated not being subject to unnecessary burdens. We need the flexibility to consider all views and Parliament would then determine where the balance lies. The regulator’s view will not necessarily be the only or predominant one. That seems to me to be absolutely right.

On the issue of primary and secondary legislation raised by the noble Earl, Lord Onslow, just to be clear, orders can be used to amend or repeal primary and secondary legislation. Our point is that a Minister is unlikely to use an order under the Bill only to amend secondary legislation, as departments already have power to amend or repeal such legislation. On the issue of the wishes of Ministers, I should like to understand how noble Lords can explain how imposing an obligation to comply with the wishes of the Crown could remove or reduce burdens under the clause or to promote the five regulatory principles under Clause 2. I do not see how that can happen. On independence from the wishes of the Minister, there are stringent safeguards in place to prevent an abuse of ministerial power.

Given the potential better regulation benefits for the economic regulators, the stringent safeguards in Part 1, and the fact that the 2001 Act has not led to an environment of uncertainty in the markets in which these regulators operate, I urge the noble Baroness, Lady Wilcox, to withdraw her amendment.

Baroness Wilcox
I fear that I find the Minister's answer unsatisfactory. I shall read it carefully. I tabled my amendment with the lightest touch. This debate has been extremely useful because it has confirmed to me that there is something sinister lurking behind the surface of the Bill. I tabled it as a probing amendment only; the Minister knows that.

Lord McKenzie of Luton
Can the noble Baroness tell me specifically what it is that she thinks is sinister lurking behind the Bill?

Baroness Wilcox
The present chairman of the Office of Rail Regulation wrote to the Chancellor of the Duchy of Lancaster protesting about the scope of Part 1. He has warned of exactly the same hazards of which the former Rail Regulator warned—the jeopardy to private investor confidence created by the power of a Minister to interfere with the independence or jurisdiction of the principal economic regulators. I have not heard anything from the Minister that has changed my opinion that he is likely to be able to do that again. He may say that there is no intention to do so, but words cannot bind a future Government. If that is what he is telling me that the Bill will do, I cannot see that that is the case.

Lord McKenzie of Luton
Can the noble Baroness identify any circumstances under the operation of the 2001 Act that have given rise to market uncertainty?

The Earl of Onslow
Perhaps I may help my noble friend. It is very simple. We do not trust Ministers. If you are me, you do not trust any Minister, however good, jolly, smiling and sweet they look at the moment. Governments cannot be trusted and if you give them more power—this point is so basic—they will use it. If you give children a toy, they will play with it. It is as simple as that. That is what some of us on this side of the House are getting upset about. It is not about the minutiae; it is not the disgraceful behaviour of the regulator to which my noble friend Lord Jenkin referred; it is the fact that we do not trust Governments.

Lord McKenzie of Luton
Does the noble Earl accept that under the Bill, it is not just the whim of a Minister that would carry these things forward; a very extensive process, which I have outlined, must be gone through? A Minister could not just, on a whim, act inappropriately.

Baroness Wilcox
I thank my noble friend Lord Norton of Louth for tabling his amendment, which is stronger than mine. We have heard today from the Liberal Democrats that even the noble Lord, Lord Goddard, seems a little more inclined towards our amendment.

Lord Goodhart
Goodhart.

Baroness Wilcox
I am so sorry, I apologise. I was getting upset and excited.

Lord Goodhart
I hope that the noble Baroness does not see me as an incarnation of the famous Lord Chief Justice.

Baroness Wilcox
I am sure that if the people who have spoken from this side—and the noble and learned Lord from the Cross Benches—in support of this amendment read the result of this debate in Hansard, that will enable us to return with a stronger amendment. However, for the moment, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendment No. 47B not moved.]

Clause 4 [Preconditions]:

Lord Bassam of Brighton
moved AmendmentNo. 48:

Page 4, line 4, leave out “, 2(1) or 3(1)” and insert “or 2(1), other than provision which merely restates an enactment,”

On Question, amendment agreed to.

[Amendments Nos. 49 and 50 not moved.]

Lord Goodhart
moved Amendment No. 51:

Page 4, line 16, at end insert-
 “( ) the provision has no adverse effect on the rule of law or the independence of the judiciary”

The noble Lord said: This group of amendments contains a number of alternatives, all with the same objective: to ring-fence certain matters—broadly speaking, those of constitutional importance—so that they cannot be altered by order under this part. The Government have accepted that that procedure should not be used to introduce controversial changes to laws. I hope that they would also accept that it should not be used to introduce significant changes to the constitution because, where constitutional change is proposed, it should be debated in full, even if there appears to be a broad consensus. We therefore want to exclude the use of the procedure under the Bill to make constitutional changes, because the test of what is or is not a constitutional matter is very difficult to define in a statute. An important defence against the use of this procedure to effect constitutional changes will be the powers of Select Committees to recommend that a draft order should not be proceeded with. We will consider amendments later to strengthen that power.

19:00:00

I believe it is possible and desirable to give some guidance in the statute on what are constitutional matters. Amendment No. 51 starts by specifically ruling out provisions that have an adverse effect on the rule of law or on the independence of the judiciary. Everyone in the Committee must agree that these are central pillars of the constitution. This procedure should therefore plainly not be used if that provision would have an adverse effect on the rule of law or the independence of the judiciary, even very slightly.

I shall move on to the wider aspects of the constitution. The amendments in my name and that of my noble friend Lord Maclennan of Rogart offer three different ways of identifying whether an order gives rise to issues of constitutional importance. The first is Amendment No. 51, which would simply make it one of the necessary conditions in Clause 4 that the provision is not of constitutional importance. It would then be a matter for the courts on judicial review to decide whether that condition was satisfied or that the order was ultra vires because it was of constitutional importance. That is the simplest of the possible alternatives. I recognise that it is perhaps too simple. It is not easy to identify which matters are of constitutional importance. Some are obvious, but many are in the penumbra. It would be a very difficult decision for the judge to take, and it arguably brings the judiciary into possible conflicts with Parliament that are best avoided if possible.

The second alternative is provided by Amendment No. 62, which shifts the decision on what is a matter of constitutional importance from a judge to the Speakers of each House. The Speakers will, to a considerable extent, know a great deal about the constitution because they are engaged in it day by day. I assume that they could and would take advice from leading experts on the constitution before taking a decision. A conclusion reached by the Speaker of either House that the order was of constitutional importance would then block further progress. That also has the advantage of getting rid of possible conflict with the judiciary. There might be some uncertainty in the early stages about how the Speakers would apply the test of constitutional importance, but a body of precedent would be built up over time.

The third possible course is Amendment No. 63, which is based on a proposal discussed at paragraph 56 of the 11th report of the Select Committee on the Constitution in this Session. That report set out a list of matters of constitutional importance that should not be changed by order under the Bill. I have adopted that list and slightly redrafted it. It starts with the powers of, and succession to, the Crown, which is obviously of the highest constitutional importance. I shall not read the rest of the paragraphs. All these matters are sufficiently important to justify inclusion in the list. There may be others—indeed, I would welcome suggestions of any proposed additions.

Amendment No. 64, tabled by the noble Lord, Lord Norton of Louth, would operate on the same principle underlying Amendment No. 63. It is more concise, which is an advantage, than AmendmentNo. 63, which is less complete, which is a disadvantage.

The remaining amendments—Amendments Nos. 75 and 75A, which are not in my name and that of my noble friend—use a different system for the same purpose. I shall deal with them briefly now. That purpose is to provide a list of statutes that cannot be altered by the order, rather than a list of issues. It is much better than nothing, but it suffers from the defects pointed out in paragraph 55 of the Select Committee’s report, to which I have already referred. It means, among other problems, that the list would have to be updated every time a new statute of possible constitutional importance was introduced, which might lead to unnecessary arguments about whether the statute should be listed. In many cases—this is an important distinction—statutes contain provisions of constitutional importance alongside provisions that are plainly not of constitutional importance. I have in mind the Constitutional Reform Act 2005, perhaps particularly because I was engaged on it for many months. The Act contains central provisions on the appointment of the judiciary by a judicial appointments commission and on the composition and functions of the Supreme Court, which are plainly of five-star constitutional importance. But there are other provisions in the Bill, such as those relating to the role of the judicial ombudsman, which are much less important and may not be of constitutional importance.

I hope there will be a debate on the various alternatives, and I would certainly listen to that debate with interest before I decided which of these various suggested alternatives I might bring back on Report. I beg to move.

Lord Norton of Louth
My Amendment No. 64 is included in the group, as the noble Lord, Lord Goodhart, has already said. My proposed new clause is my contribution to the attempt to ensure that the Bill is as narrowly drawn as possible and cannot be used to infringe on the basic arrangements of our constitution. Ministers have reiterated that that is not the Bill’s intention but, as we keep pointingout, ministerial assurances cannot bind future Governments.

The attempt to put the basic tenets of the constitution beyond the reach of the Bill may be done by reference to specific measures of constitutional law, generically through reference to the basic framework of our constitution, or through both. The two approaches are not mutually exclusive, which is an important point to stress. In his response to the Constitution Committee and to what my noble friend Lord Kingsland said on Second Reading, the noble Lord, Lord Bassam, argues in his letter of 27 June that the Bill is designed to achieve better regulation and that the amendments made in the other place put it beyond doubt that the Bill could not be used for any other purpose. He argues, therefore, that it could not be used, as he puts it, “for inappropriate constitutional change”. The problem with this argument is that he assumes that better regulation and constitutional change are mutually exclusive. That they are not may even be inferred from his use of language when he refers to “inappropriate” constitutional change, which implies that appropriate constitutional change may be permissible.

The Minister’s contention that constitutional change is already beyond the provisions of the Bill is not sustainable. If the Bill is to be confined to reducing regulatory burdens that are not contentious, it needs to be as tightly drawn as possible, with the provisions of the constitution put clearly beyond its reach. As I have said, this may be done using a specific or a generic approach, as the noble Lord, Lord Kingsland—I am sorry; I mean the noble Lord, Lord Goodhart, who is in danger of being confused with rather a lot of other noble Lords or former noble Lords—has said.

The Constitution Committee offered a list of measures that might be excluded. As it recognised, that may not be an entirely straightforward exercise. The noble Lord, Lord Bassam, picked up on this in his letter in arguing against such an approach. However, his arguments are not persuasive. He draws on the Constitution Committee in saying that there may be difficulties in identifying which Acts are constitutional and which are not, and that there may be provisions in Acts of constitutional importance that are not in essence constitutional. My response would be to note that one can have a list of measures clearly recognised as constitutional, as demonstrated by the Constitution Committee in paragraph 53 of its report and as embodied in Amendment No. 75A, and that any gaps in coverage may be dealt with by utilising the generic approach. As I have said, the two are complementary. Doubtless there will be provisions of the Acts adumbrated in Amendment No. 75A that are not of constitutional importance, but one has only to look at the statutes listed to realise that relatively few of them are likely to contain provisions that need to be amended for the purpose of better regulation. The noble Lord, Lord Goodhart, indicated some that may, but I see no reason why the Acts listed should not in their totality be excluded from the provisions of this measure.

As the noble Lord has already indicated, my new clause is not dissimilar in aim to Amendment No. 62, but seeks to achieve it through a somewhat different route. Under Amendment No. 62 it would be for the Speaker of either House to determine whether a proposed order covered a matter of constitutional importance; under my amendment the courts would have to make such a determination by reference to a broad definition of the constitution. As is the case for Amendment No. 62, my amendment could be agreed in addition to rather than instead of Amendment No. 63. It draws on and modifies some existing definitions of a constitution and seeks to provide an overarching one. However, as the noble Lord, Lord Goodhart, indicated, it could be argued that it does so at the expense of precision. That does not matter unduly because if the Bill is designed to remove burdens that are not overly contentious in the furtherance of better regulation, no orders are ever likely to come close to being challenged for infringing the terms of the proposed new clause, so I argue that the Government have nothing to lose by accepting the amendment. Incorporating this provision will ensure that the measure cannot be abused by future Governments.

What we are discussing is absolutely crucial in terms of ensuring that the Bill is ring-fenced and capable of achieving only the purpose for which the Government say it is intended. If the Minister argues that my amendment or those advanced by the noble Lord, Lord Goodhart, are deficient in their drafting, the onus will rest on him to come back with an amendment that meets the very real concerns that have been expressed, not only inside but outside Parliament. We cannot allow this measure to go through with what is in effect still largely a blank cheque approach for future Governments.

Lord Jenkin of Roding
Amendment No. 75, in my name and that of my noble friend Lady Carnegy of Lour, adopts the list approach—my noble friend once again sends her apologies that she cannot be with us. This point was addressed in the report of the Select Committee on the Constitution, and I base my arguments on paragraph 23:

“Constitutional safeguards cannot depend on ministerial assurances…The rule of law and the principle of constitutional government require the security of procedures and limitations which are set out expressly on the face of any enactment which empowers Ministers to change the statute book by order…The legitimate desire of any government to deliver change should not be allowed to undermine the need for careful consultation and scrutiny of proposals that may have the effect of altering basic constitutional machinery”.
 

That committee and the Regulatory Reform Committee considered the suggestion that there should be a list of exempted statutes. It is interesting to note Clause 9, entitled “Excepted enactments”, which is very short and well worth reading:

“An order under this Part may not make provision amending or repealing any provision of—
 

(a) this Part, or

(b) the Human Rights Act 1998”.

Why pick out the Human Rights Act as one which should not be susceptible to amendment by order? One could argue that a number of very important constitutional Acts should equally have the protection of express exception from Clause 1. My noble friend and I have listed some of them in Amendment No. 75.

My noble friend Lord Kingsland has set out a much longer list. Certainly we could discuss which enactments should be regarded as so fundamental to the constitution of this country that they should not be able to be amended by order. That brings me to this question: why does the Bill single out the Human Rights Act 1998? If it is right to exempt it, surely it is logical to look at other issues of significance to the constitution of this country, the rights and duties of its citizens and the rights of Parliament, and exempt them as well. The list in our amendment includes enactments such as the European Communities Act 1972, the Scotland Act 1998 and the Northern Ireland Act 1998, and my noble friend Lady Carnegy specifically asked me to mention its last two proposed exemptions:

“the continued existence of the High Court of Justiciary as a criminal court of first instance and of appeal … the continued existence of the Court of Session as a civil court of first instance and of appeal”.

The Law Society of Scotland has placed particular emphasis on ensuring that those bodies cannot be affected by the order-making power in Clause 1, which is why our amendment is drafted in this way.

My noble friend Lord Kingsland has set out a much longer list, and I shall be interested to hear about it. This debate gives us an opportunity to consider whether something should be done—the Government have already conceded that by specifying the Human Rights Act—and whether by a list or by a generic turn of phrase to include all these provisions, as my noble friend Lord Norton of Louth suggests. It is beyond peradventure that somewhere in this Bill we need a very clear exception so that the order-making power cannot be used to amend fundamental constitutional statutes. The noble Lord, Lord Bassam, in his letter, placed great weight on the report which suggested that this would create a sort of blunderbuss approach and asked what would happen if a new Act needed to be added. We need to address that point, but I do not regard it as a conclusive argument against putting a list in the Bill. Amendments Nos. 75 and 75A are both good ways of approaching this.

19:15:00

Lord Borrie
Of the various choices helpfully put forward by the noble Lord, Lord Goodhart, I favour Amendment No. 62 in the name of the noble Lord, Lord Norton of Louth. I do not suppose he would say that it is perfect or comprehensive, and if there were any doubt it would depend on judicial interpretation. However, the noble Lord, Lord Jenkin, has made a powerful point in referring to Clause 9. If the Bill mentions the Human Rights Act 1998, why can it not mention other constitutional legislation which, it could be argued, is equally important?

An attempt has been made to list types of constitutional laws, in Amendment No. 63 in particular. I do not like that because I expect that any of us, when looking at each item carefully, could be critical. I would be particularly critical of proposed subsection (2)(h) in Amendment No. 63, which refers to,

“the statutory powers of local authorities”.

Local authorities deal with a huge body of legislation which covers everything from sewage to highways to transport to goodness knows what. Such legislation could hardly be regarded as of constitutional importance or be anywhere near as important as the other matters listed in the amendment such as the powers of the Houses of Parliament, the duration of Parliament and so on. The trouble with a list is that if it is not comprehensive you will miss something out; and if, as I suggest, the list includes inappropriate matters such as the statutory powers of local authorities, one has objections. I think the approach of the noble Lord, Lord Norton, is much better.

I fear that the Government may take help from Clause 4, which relates to preconditions. The clause contains various phrases which are no doubt important, but it is terribly vague on their meaning. It may be said that orders cannot be made under this Bill which would prevent someone continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise—such as, I suppose, the right to jury trial in many instances—and Clause 4(2)(d) provides that orders cannot be made which would remove any necessary protection. That is incredibly vague.

I hope the Minister will have something more positive to say about the amendments’ legitimate objective of ring-fencing matters relating to the constitution. This has been done in Clause 9 for the Human Rights Act; it can surely be done for other matters. Rather than a list, I would prefer the broad phrases suggested by the noble Lord, Lord Norton of Louth.

Lord Henley
I suspect that all noble Lords who have spoken so far—I do not know whether this will necessarily apply to the Minister—have been singing, dare I say it, from the same hymn sheet but using different words. We have got the tune right and somehow before Report we have to get the words right.

Different approaches have been suggested but perhaps I may start with the methods proposed by the noble Lord, Lord Goodhart. Generally we support one of his three approaches set out in his Amendments Nos. 52, 62 and 63, although we think there are problems with some of them. For example, Amendment No. 62 proposes a mechanism whereby in this House the Lord Speaker would adjudicate on whether a provision is of constitutional importance. I do not want to reignite debate about the role of the Lord Speaker, but that would widen the role ofthe Lord Speaker considerably, possibly to an unacceptable degree. Any extension of the Lord Speaker’s role should be considered carefully. It should not be a part of any other Bill; the whole House should consider the matter at an appropriate stage, as and when it arises. It should not be slipped into a Bill such as this.

In addition to the three approaches of the noble Lord, Lord Goodhart, an alternative generic approach has been proposed by my noble friend Lord Norton, and a list method has been put forward by my noble friends Lord Jenkin of Roding and Lady Carnegy. A further variant on the list version is contained in Amendment No. 75A, in the name of my noble friend Lord Kingsland. The list suggested in my noble friend’s amendment is based on the Select Committee’s report and mirrors the list of enactments contained in paragraph 3; that is why it is longer than the one suggested by my noble friend Lord Jenkin. Perhaps the two lists could be merged, particularly to include the last two enactments in AmendmentNo. 75, put forward at the insistence of my noble friend Lady Carnegy.

Most of the Committee seems to agree that there should be such a safeguard. We look forward very much to hearing from the Minister but I have a sneaking feeling that the important thing is for us to put our heads together before Report to reach an agreed approach. Whether we come forward with a list system or a generic system, we could put it to the Government on Report. In the mean time, I would like to hear what the Minister has to say.

Lord Bassam of Brighton
This has been an interesting debate on an issue which, I recognise, has caused some concern in the past: the imagined potential of this Bill to interfere with the constitution. I thought we had got beyond that point but clearly it is a concern, and I shall deal with the proposed remedies, which differ considerably. There are three from the Liberal Democrats, in one bundle of amendments; two different ones from Conservative Front Benches and Back Benches; and another. It is a difficult but interesting attempt by noble Lords to come up with the same tune, which I think is the expression used by the noble Lord, Lord Henley.

Listening to the contributions, I thought we were talking about a rather different Bill because I do not recognise it as other noble Lords describe it. While I can understand the noble Earl, Lord Onslow, being suspicious of all ministerial pronunciations, in the end we have to trust the Government to mean what they say about the intention of their legislation. It is certainly not our intention—it never has been—to make inappropriate constitutional changes by using the order-making power in Clause 1.

This Bill is, in many respects, very different from the Bill as it was when it was brought before another place because we have reflected long and hard on the constitutional concerns raised. We have taken those concerns very carefully into account and amended the Bill in such a way, I would argue, as to ensure that if ever there was a suspicion that this or future Governments could use this Bill in a controversial way to amend elements of the constitution, we have put that suspicion beyond peradventure.

Clause 1(3) defines the burdens that can be removed or reduced by the order-making power. It is very difficult to see how constitutional change could be squeezed into that definition. In any event, robust preconditions inserted through Clause 4 must be satisfied before an order can be made. Notably, these preconditions include: that the provision made by the order strikes a fair balance between the public interest and the interests of any person adversely affected by it; that it does not remove necessary protections; and that it does not prevent any person continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise. These preconditions could fairly be used to prevent the kind of constitutional mischief for which noble Lords imagine a Government might want to use the Bill.

19:30:00

Furthermore, Clauses 17, 18 and 19 provide that parliamentary committees can veto orders. The Government have already tabled amendments that remove the criteria on which the veto can be exercised. This is a powerful check, giving the whip hand to Parliament should it disagree with the Government on the appropriateness of an order. It therefore seems that there is a risk that these amendments cry wolf. Can the order-making power in Clause 1 be used for constitutional change beyond the declared purpose of better regulation? I have expressed the view that it cannot. We are fortified in our view by the reports of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee of your Lordships’ House. The Delegated Powers and Regulatory Reform Committee said that the Clause 1 power is not inappropriate. The Government consider the amendments in this group to be unnecessary, and there are very great difficulties in framing amendments of this kind.

At Second Reading, the noble Lord, Lord Goodhart, reflected on this conundrum. His Amendments Nos. 51, 52, 62 and 63 do not list a set of constitutional enactments—if such a class of legislation could be said to exist—which he acknowledged would be difficult, if not impossible, to define.

The noble Lord, Lord Kingsland, raised this issue at Second Reading in relation to listing constitutional or protected enactments. I have set out the Government’s view on this in a letter which has been extensively circulated. The noble Lord’s Amendment No. 75A lists those Acts identified by the Constitution Committee. This list drew on a similar list drawn up by the Joint Committee on the Civil Contingencies Bill. However, the committee also identified a number of other Acts passed since the passage of that Bill—the Constitutional Reform Act, the Identity Cards Act, the Equality Act and the Racial and Religious Hatred Act—which the noble Lord’s amendment does not include.

What of changes to local government? I have heard noble Lords in this House argue that a new piece of local government legislation that relates to finance or the structure of local government in a sense treads on constitutional territory. What of the creation of the Greater London Authority? Was that a constitutional act? Definitions and inclusions on lists are very difficult: defining such a list is like asking how long is a piece of string. Where would it begin and end? This list shows that difficulty.

If we were to include the Equality Act and the Racial and Religious Hatred Act, then why not the Sex Discrimination Act, the Race Relations Act,the Disability Discrimination Act, the Equal Pay Act or the minimum wage legislation? Where is the boundary between an Act with constitutional implications and an Act that relates to the fundamental building blocks of our constitution? What of the many other Bills on which the Constitution Committee has reported? What ofthe Armed Forces Bill, the Police and Justice Bill, the Serious Organised Crime and Police Bill, the Prevention of Terrorism Bill and the Inquiries Bill, on which the committee reported in the current and previous Session of Parliament? Is the constitution solely contained in Acts of Parliament? That is a concept we need to focus on. What about concepts such as parliamentary sovereignty?

Furthermore, as the noble Lord acknowledged, it would be foolish to put some Acts off limits when it may be necessary to make minor and sensible changes to them for the purposes of better regulation—what I might call an appropriate constitutional change. The noble Lord, Lord Norton of Louth, did not seemto think that there might be any appropriate constitutional changes. There may be issues of minor importance which are not highly controversial and not ruled out by Clause 4 that it would be perfectly acceptable to change in this way.

How would such a list be kept up to date? For instance, the amendment of the noble Lord, Lord Kingsland, includes the Government of Wales Act 1998. But as Members of the Committee are aware, Parliament is considering a Bill that would supersede the 1998 Act in shaping Welsh devolution.

At Second Reading, the noble Lord asked me my view on the list contained—

Lord Jenkin of Roding
I do not think this point was made, but it is perfectly obvious. If a Bill is going through Parliament and it becomes apparent that if enacted it would be appropriate to add it to the list of Acts that are excluded from being amended by order under this legislation, it would be a very simple matter to have an additional clause in the Bill, adding it to the list. I do not see that this is an obstacle. We could do that each time one came up. Most would not but some would.

Lord Bassam of Brighton
Who would decide which was appropriate to be included in the list and how would that decision be fairly made?

The Government’s view is to concur exactly with the Constitution Committee’s view expressed at paragraph 55. It said that,

“there are a number of practical difficulties with this approach of simply listing Acts of Parliament”.

Lord Norton of Louth
The Minister seems to be arguing against the principle of having a list. In that case, do the Government intend to remove Clause 9 from the Bill?

Lord Bassam of Brighton
I shall come to Clause 9 in due course; it raises a fair point.

I have set out the committee’s important point along with our view. Presumably because of these difficulties, the noble Lords, Lord Goodhart and Lord Maclennan, have tabled amendments setting out other ways of affording protection against the Clause 1 power being abused to make major constitutional changes. Amendment No. 62 does this by providing a hurdle over which Ministers and the Speakers of either House must jump: the Speakers of either House can certify that an order is of constitutional importance which has the effect of vetoing the order. 

Amendment No. 62 would effectively introduce a new precondition providing that orders cannot be used for measures of constitutional importance. However, the existing preconditions have already filtered out the possibility that an order could be used for a matter of constitutional importance. As the noble Lord, Lord Goodhart, explained very clearly, the amendment provides that the Speaker of either House could determine that a matter was of “constitutional importance” on application from a Member of that House. If the relevant Speaker determined that an order was of constitutional importance, he would issue a certificate to that effect and the order would be halted in its tracks. The intention of the clause is that the Speaker’s decision would not be justiciable since it would be protected by an ouster clause.

We argue that this does not work. There is no comparison with the role of the Speaker of the Commons in certifying that a Bill is a Money Bill—a demonstrable fact. Nor is it comparable to the role of the Speaker in relation to the Parliament Act, where the Speaker’s role relates solely to ensuring that certain procedures had been followed. The amendment risks drawing the Speakers of either House into a highly subjective, highly political debate. I suggest that this is undesirable, not least in your Lordships' House where noble Lords have given no indication that they would support a Speaker having a substantive role of this sort. The noble Lord, Lord Henley, made that point very effectively. Given recent debates, I suggest that the proposition that the Lord Speaker makes this judgment in your Lordships' House would attract a good deal of controversy from the Benches opposite.

It is interesting that Amendment No. 62 puts the matter of judgment in the hands of the Speakers rather than the parliamentarians. AmendmentNo. 63, also tabled by the noble Lords, Lord Goodhart and Lord Maclennan, provides a new clause that would prohibit an order made under Clause 1 making any alteration to a range of matters that might be described as constitutional.

The list provided in Amendment No. 63 is certainly an improvement on a broader list of constitutional subjects, which would lead to some very difficult issues around judging “purpose”. But it does not avoid the difficulties of defining what is or is not constitutional change, and in seeking to define a constitutional change or issue, it creates new problems of definition.

That also applies to Amendment No. 75 tabled by the noble Lord, Lord Jenkin of Roding. This is a mixture of a few individual statutes and certain subjects. It therefore falls foul of the difficulties identified by the Constitution Committee in listing individual statutes and constitutional areas. On the former, for instance, it does not include the legislation governing devolution for Wales but it does for Scotland.

Amendment No. 75A, in the name of the noble Lord, Lord Kingsland, provides, yet again, a different list. It includes the Government of Wales Act 1998 but the very fact that the list is so different from the lists in Amendments Nos. 75 and 63 illustrates the difficulty of deciding what would be an appropriate list. Again, that point was made by the Constitution Committee.

Amendment No. 64 of the noble Lord, Lord Norton of Louth, takes a less expansive view of what is “constitutional” and therefore might require special protection. It sees “constitutional” more in terms of the relationship between the main branches of the state. We might therefore see the proposed new clause as protecting the constitutional relationship under the Bill of Rights from change by the order-making power in the Bill. However, the problem remains that such a list is partial. In addition, the Constitution Committee recognised the difficulties with devising a schedule of exempted areas. It states that a schedule would be “something of a blunderbuss approach”. That is an adequate description. The committee notes that not all provisions in Acts with constitutional implications affect our constitutional arrangements and concludes that,

“it might be thought wrong to exclude such provisions from the general operation of the bill”.

Amendment No. 51 would introduce a new precondition so that the order-making power could not be used adversely to affect the rule of law or the independence of the judiciary. As the Bill stands, I cannot see how any order could do such things. As a matter of course, Ministers have to act under the rule of law. By definition, Ministers cannot do anything for which they have no legal authority. It is therefore hard to see how Ministers could promote an order that adversely affected something they were bound to follow.

It is also hard to see how it would be possible adversely to affect the independence of the judiciary. Under Clause 4, a Minister cannot make an order which he considers removes a necessary protection. It is therefore difficult to envisage how a Minister could conclude that an order which adversely affectedthe independence of the judiciary satisfied that precondition. Furthermore, it is hard to see how Parliament would agree to such an amendment, and it is difficult to see how such an order would survive judicial consideration of vires, given that secondary legislation is subject to judicial scrutiny.

The Government are satisfied that such fundamental changes could not be made by order under the Bill. The Clause 1 and Clause 2 powers are circumscribed: they can be used only to make sensible reforms removing or reducing burdens or promoting regulatory principles. This is guaranteed both by the preconditions and by the power of Parliament to veto an order. Since the order-making power in Clause 1 cannot be used for constitutional change, these amendments are otiose. There is no need to make any protection against orders being used for that end.

The noble Lords, Lord Jenkin and Lord Borrie, and others made reference to the exemption of the Human Rights Act and Part 1 of the Bill from reform by order. It is true that the Government amended the Bill in the Commons to put amendments to the Human Rights Act off limits. This is not, though, because this is a constitutional statute which differs from other statutes, but because secondary legislation must be compliant with the Act. Therefore, it would be an illogical absurdity were the order-making power to be used to amend the Human Rights Act and so remove the safeguards provided by that Act. Similarly, it would be strange if orders could be used to remove the limits on the order-making powers contained in Part 1. For those reasons and others that have been adduced, I cannot accept the amendments. However, I accept that they were moved not only in good spirit but for very good reasons. I hope that I have answered the various points relating to noble Lords’ quite understandable concerns to protect our constitution.

Lord Goodhart
We have had a substantial debate on this issue. It is clearly important. I have to say that I am unable to agree that the orders of constitutional importance are necessarily and automatically filtered out by the conditions in Clause 4 as they now stand. It is a significant issue and it will need to be taken further.

The problem, as has been demonstrated by this debate, is that there is no single method of dealing with this problem which is ideal. All create some problems of their own. But there has been a clear demonstration of the view that some amendment is necessary, and that is reinforced by the clear statement in the report of the Constitution Committee that the existing protection was inadequate.

In those circumstances, there will have to be further consideration. I certainly hope and expect that, before the Bill comes back on Report, the noble Lord, Lord Kingsland, and I, together, I hope, with the noble Lords, Lord Norton of Louth and Lord Jenkin of Roding, who have their own amendments in this group, will be able to get together and decide on a single amendment which can be put forward and which we think is the best way of dealing with this problem. But that is a matter for the future. For the present, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

19:45:00

[Amendments Nos. 52 and 53 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 54:

Page 4, line 17, leave out subsection (3).

The noble Lord said: This amendment, together with Amendments Nos. 48, 58, 59, 77, 78, 80 to 83, 88, 118 and my opposition to the Question that Clause 22 stand part of the Bill, are consequential to the removal of Clause 3 from the Bill, to which the Committee has already given its agreement. I greatly regret that, in speaking to the Question that Clause 3 stand part of the Bill, my noble friend Lady Ashton omitted to note these amendments formally. I therefore find it necessary to move them this evening. I apologise to the Committee for that. It was a simple omission on her part and entirely understandable in the circumstances. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 55 to 57 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 58:

Page 4, line 22, leave out “, 2(1) or 3(1)” and insert “or 2(1)”

On Question, amendment agreed to.

Lord Bassam of Brighton
moved AmendmentNo. 59:

Page 4, line 23, leave out from “enactment” to end of line 24.

On Question, amendment agreed to.

[Amendment No. 60 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 61:

Page 4, line 28, at end insert-
 “( ) In this section and sections 5 to 8, to “restate” an enactment means to replace it with alterations only of form or arrangement (and for these purposes to remove an ambiguity is to make an alteration other than one of form or arrangement).”

On Question, amendment agreed to.

Clause 4, as amended, agreed to.

[Amendments Nos. 62 to 64 not moved.]

Clause 5 [Subordinate legislation]:

Lord Bassam of Brighton
moved AmendmentNo. 65:

Page 4, line 29, at end insert-
 “(A1) An order under this Part may only confer or transfer a function of legislating on or to-
 (a) a Minister of the Crown; (b) any person on or to whom functions are conferred or have been transferred by an enactment; or (c) a body which, or the holder of an office which, is created by the order. (A2) An order under this Part may not make provision for the delegation of any function of legislating.”

On Question, amendment agreed to.

Lord Bassam of Brighton
moved AmendmentNo. 66:

Page 4, line 36, leave out from “is” to “; or” in line 37 and insert “an instrument to which section 5(1) of the Statutory Instruments Act 1946 (c. 36) applies (instruments subject to annulment by resolution of either House of Parliament)”

On Question, amendment agreed to.

[Amendment No. 67 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 68:

Page 4, line 40, leave out “Subsection (1) does” and insert “Subsections (A1) to (1) do”

On Question, amendment agreed to.

Lord Bassam of Brighton
moved AmendmentNo. 69:

Page 4, line 40, at end insert-
 “(5) For the purposes of this section a “function of legislating” is a function of legislating by order, rules, regulations or other subordinate instrument.”

On Question, amendment agreed to.

Clause 5, as amended, agreed to.

Clause 6 [Taxation]:

Lord Goodhart
moved Amendment No. 70:

Page 5, line 2, leave out “or increase” and insert “, remove or alter”

The noble Lord said: This is really a probing amendment. Clause 6(1) says:

“An order under this Part may not make provision to impose or increase taxation”.

That leaves it open to reduce or remove taxation. It is obvious that to impose a new tax or make an increase would require primary legislation, but given that taxation is one of the most important powers of Government, I wonder why it should not be also required to exclude all changes to taxation from the operation of this Bill. Can the Minister give an example of a possible reduction in taxation or elimination of a tax that would justify the use of an order rather than through a Finance Bill or something similar?

I wonder, too, what the meaning of “taxation” is. There is no definition in the Bill, and I wonder what it includes. For example, does it include national insurance contributions, which are technically not regarded as a tax? Does it include customs duties, since there is a question whether duties are a form of taxation or, although also acting to raise money, something different from taxation? What is the definition of taxation here? I beg to move.

Lord Henley
I appreciate that the noble Lord’s amendment is a probing one. Although I would normally tend to favour any mechanism that was designed for the reduction of tax I agree with him that it would be appropriate that, just as the Bill prevents any increases in tax, it should not allow for any decreases through this mechanism, and that the appropriate mechanism would be a Finance Bill. In what I think was his first outing as the new Parliamentary Under-Secretary of State for the Cabinet Office, Mr Pat McFadden seemed to indicate that that was what should happen. I should be very grateful for confirmation of that from the Minister.

When Pat McFadden responded in the House of Commons, he said:

“It is not possible to use the powers to create a new tax, but it will be possible to reduce a tax if it meets the procedures and safeguards. In practice, however, tax reform would be dealt with in either a Finance Bill or a tax law rewrite project”.—[Official Report, Commons, 15/5/06; col. 720.]
 

If that is the case, why does it not say that in the Bill? That would seem a more appropriate way in which to deal with these matters.

Lord McKenzie of Luton
I hope that I can help on the points that have been raised. I understand the thrust of the amendment, which is probing. At the moment, the clause prevents an order from imposing or increasing taxation. It is not the intention that orders should be used to remove taxes or lower tax rates. Under the amendment, orders could not remove or alter taxation.

I note this amendment and assure noble Lords that the Government agree that orders under Part 1 should not be able to remove taxes or lower tax rates, which is why we are keen to have this discussion today. We will consider carefully options for making it explicit in the Bill that orders cannot remove taxes or reduce tax rates. However, it is important to get the detail right. In particular, it is important that we do not inadvertently rule out being able to deliver a merger of regulators which would reduce or remove burdens on the regulated by reducing the multiple inspections of regulated firms, for example. If we are transferring regulatory functions from one regulator to another, it will often be necessary also to make provision relating to the transfer of assets and liabilities. It will also often be necessary to make associated provision relating to the tax treatment of those transfers—and only those transfers. Noble Lords may wish to refer to the example of Schedule 10 to the Railways Act 2005.

As I say, it is not the intention that orders should remove taxes or lower tax rates, but it is important that any amendment to Clause 6 does not rule out the possibility of such mergers. When an order under Clause 1 is considered appropriate by Parliament and its committees to deliver such a merger for the purpose of removing or reducing burdens, it is important that the order can also make the necessary provision varying the incidence of taxation in that particular case.

On the basis of that explanation, I hope that the noble Lord will be satisfied. He asked, too, about the definition of taxation. For these purposes, taxation is the compulsory levying of money for state revenue, either nationally or locally, when the levy is not a fee or charge to recover the costs of supply in a specific service to which the fee or charge relates. Fines are not taxation; they are penalties for unlawful activities. It should be noted that there are precedents for using the term “taxation” as it is used in this Bill.

For the purposes of Clause 6 it is important that, to prevent the imposition or increase of any tax, the meaning of taxation is not restricted to any particular taxes and is not narrowly defined. I hope that the use of that precedent in that way will reassure noble Lords. With the thrust of what we are trying to achieve, we shall need to bring something back to meet the narrow circumstances that I outlined, with the need to have some tax provisions, possibly associated with mergers of regulators.

Lord Jenkin of Roding
The Minister mentioned the question of merger of regulators, in the context of the amendment. I remind Ministers that I was promised a letter specifically about the merger of the HFEA and the Human Tissue Authority, and I hope that I am going to get it.

Lord McKenzie of Luton
I apologise to the noble Lord if that letter has not yet arrived. Together with my noble friend Lord Bassam, I shall do what I can to expedite it.

Lord Goodhart
I thank the Minister, who seems to accept the principle behind the amendment and wants to make an exception only in very limited circumstances, such as those he has described, such as the tax consequences of something else—the merger between regulatory offices, for example—which is not in itself intended as an alteration of taxation. This is something that I am entirely satisfied with in principle, so I hope that the Government will bring back something that achieves their purpose, without giving a general power to reduce or remove taxation. I may in due course bring the amendment back simply to keep the Government on their toes and to ensure that we see something from them. I would obviously withdraw my amendment in favour of theirs. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 71 not moved.]

Clause 6 agreed to.

Clause 7 [Criminal penalties]:

[Amendments Nos. 72 and 73 not moved.]

Clause 7 agreed to.

[Amendment No. 74 not moved.]

Clause 8 [Forcible entry etc]:

Lord Henley
moved Amendment No. 74A:

Page 5, line 40, at end insert-
 “( ) enable the requisition, confiscation or destruction of property; ( ) prohibit, or enable the prohibition of, or require, or enable the requirement of, travel or movement to or from a specified place or places; ( ) prohibit, or enable the prohibition of, specified activities; ( ) confer jurisdiction on a court or tribunal (which may include a tribunal established by any regulations);”

The noble Lord said: I shall also speak to Amendment No. 74B. These amendments would insert more protections into Clause 8. Subsection (1) currently inserts only two prohibitions to the order-making power. An order cannot authorise any forcible entry, search or seizure or compel the giving of evidence. The Explanatory Notes are particularly unhelpful on this; when explaining why these provisions appear, they merely state:

“The restriction in clause 8(1) on making provision authorising forcible entry, search or seizure, or compelling the giving of evidence, derives from the 2001 Act (section 3(5))”.

20:00:00

The reliance on the 2001 Act as some kind of precedent to justify the Bill has been a somewhat disingenuous tactic throughout our debates. I hope the Minister will not merely recite that justification, which is implicit in the Explanatory Notes. Just because the Government succeeded in getting their Bill passed in 2001, that does not mean we should cease to scrutinise any similar measures in this new Bill. The Minister has often referred to how the Bill will be more effective than the 2001 Act. Any protections or safeguards, therefore, have to be considered against these new powers to test whether they are sufficient. With that in mind, will the Minister explain exactly why those particular protections have been singled out in Clause 8, as opposed to anything else?

The Committee will see that in AmendmentNo. 74A my noble friend has suggested a list of possible protections to be built into Clause 8, in addition to the two that were already there. She took as her starting point the Civil Contingencies Act 2004, where, in Section 22(3), the Government have provided a frankly alarming shopping list of things they would like to do by emergency regulations. I hope that transposing the powers suggested in that Act into protections in this Bill will be a useful starting point in discussing what protections are needed here in Clause 8.

As always, I am not suggesting—as, I suspect, my noble friend Lord Onslow would—that this Government would use the order-making powers in Part 1 as a substitute for using the powers in the Civil Contingencies Act. My point is that if the Government believe that these types of powers are necessary only in an emergency, why can they not provide a safeguard, written into the Bill, that these types of powers will never be included in the order-making powers the Bill proposes?

I turn now to Amendment No. 74B. Clause 8(2) provides for the circumvention of the protections provided by Clause 8(1), and states that subsection (1) does not prevent an order from extending any power for purposes similar to those to which the power applied before the order was made. Does that not effectively render any protection in subsection (1) redundant? In other words, so long as the purpose of the power is similar to a previous power, it can be extended, regardless of the fact that it would authorise search and seizure of property or compel the giving of evidence.

No doubt the Government will again pray in aid the 2001 Act. However, that is not a satisfactory argument by itself to justify the appearance of this provision. Section 3(5) of the 2001 Act stated that an order could not do anything that would authorise forcible entry or compel the giving of evidence,

“unless a provision to that effect is contained in an enactment repealed by the order and the powers conferred by the provision to that effect contained in the order are exercisable for the same purposes as the powers conferred by the repealed enactment or for purposes of a like nature”.

I accept that this has the same effect as Clause 8(2), but I would be interested to hear who decides whether the new extended powers to be granted by the order are for purposes similar to the previous powers. I imagine that in the end it would be the courts themselves. The key question is to what extent “similar” allows a margin of flexibility for the Minister making the order-making power. Would not “identical” be more appropriate, if Clause 8 is to have any point whatever? I beg to move.

Lord Bassam of Brighton
Amendment No. 74B seeks to restrict the power of an order to make provision authorising forcible entry, search or seizure or the compelling of the giving of evidence, except where an order is merely restating an existing provision in an enactment that does one of those things. This amendment removes the ability of an order to extend existing powers for purposes similar to those to which they already apply. The noble Lord, Lord Henley, has carefully set that out.

I understand the noble Lord’s concern about the scope of the power in Clause 8(2). However, the provision, as he has noted, is not new; it is a carryover from the 2001 Act. The Government believe that that is correct, to retain the flexibility that Clause 8(2) provides. I shall describe why that is the case. I ought to add in parenthesis that I am not aware that the provision in the 2001 Act has ever been used, and it would only ever be our intention to ensure that the provision would be used sparingly.

There may be occasions when both the Government and Parliament agree it is appropriate for an order to extend existing powers for purposes similar to those to which they already apply. I give an example: where an existing statutory power is conferred on a particular body authorising it to search and seize certain types of goods from cars and vans. Extending it for a similar purpose could mean so that trains could be searched by that body. In the case of an order under Clause 1, the order would of course need to remove or reduce burdens. Where an order reformed a particular inspection regime and replaced it with a less burdensome one, the changes to the regime might require an existing power authorising forcible entry, search or seizure to be extended slightly to fit better with the new regime.

Amendment No. 74A lists additional restrictions on the powers an order may authorise. The restrictions given are unnecessary and, without listing specific activities, it is unclear what effect the third condition would have. There are existing protections against the misuse of the order-making power in Clause 1, both within and outside the extent of the Bill. The effect of the Human Rights Act 1998 is that it is unlawful, for instance, for a Minister to make secondary legislation that includes orders under Part 1 which are incompatible with the convention rights. For example, in Article 1 of Protocol 1 to the European Convention on Human Rights already protects property rights.

Regarding both Amendments Nos. 74A and 74B,I reiterate that orders must also satisfy the preconditions in Clause 4. In particular, provisions must not remove any necessary protection or prevent any person continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise. Ultimately, though, Parliament may veto an order it considers inappropriate on any grounds, so the power of veto is a powerful tool indeed.

I have already made clear on a number of occasions that we have given an undertaking not to deliver highly controversial proposals by order, and not to force orders through in the face of Committee opposition. I also stress the importance of viewing the powers in Clause 8 in the context of better regulation. Investigative powers should not have a negative impact on good businesses. Rather, they should be used only in a targeted way; for example, against rogue traders. For those reasons, I cannot support the amendment, and I hope the noble Lord will feel able to withdraw it.

The noble Lord asked who decides if the purposes are similar, which is a fair point. It is the Minister making the order, subject to the decision of both committees, which have the power of veto, and subject to the views of the court in the case of a judicial review—perhaps one arising from a criminal prosecution. That fairly settles the question that he reasonably asked.

Lord Henley
I thank the Minister for that response, but it was not satisfactory. In the end it comes down to his relying on the same arguments as were put forward for the 2001 Act, and simply saying that the provisions will continue on that basis. I will look carefully at what he had to say, but I have a sneaking feeling that we will have to come back to this on Report and see if we can get a slightly better answer out of him. At this stage, though, it is probably best if I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 74B not moved.]

Clause 8 agreed to.

Clause 9 [Excepted enactments]:

[Amendments Nos. 75 and 75A not moved.]

Clause 9 agreed to.

Clause 10 [Scotland]:

The Deputy Chairman of Committees (Lord Geddes)
I must advise the Committee that if Amendment No. 76 is agreed to, I cannot call Amendment No. 77 due to pre-emption.

Lord Jenkin of Roding
moved Amendment No. 76:

Page 6, line 11, leave out from “not” to end.

The noble Lord said: This is a probing amendment therefore I do not think that the pre-emption will apply. With Clause 10 we move north of the border. The clause ensures that orders made under Part 1 may not affect devolved matters. However, the words which the amendment seeks to omit make an exception for consequential, supplementary, incidental or transitional provisions. Would such provisions not require the consent of the Scottish Parliament under the Sewel convention? Ministers may be able to confirm that. What would happen to an order if that consent were withheld because, for instance, somebody in the Scottish Parliament persuaded his colleagues that it was not just purely consequential or supplementary but was a substantial issue? Let us suppose that that Parliament wanted further changes to the order. What would happen? The amendment seeks to probe the Government on that.

It is entirely right that devolved matters should not be the subject of this Bill, but this is an exception where problems may arise, and I should be most grateful for an answer. I beg to move.

Lord Norton of Louth
I support my noble friend as I have added my name to the amendment. It raises important questions about situations where consequential amendments are made but the Scottish Parliament has not invited Westminster to legislate for it. The legal position is clear—the provision would extend to Scotland—but are there not political and constitutional implications? We are trying to tease out whether those implications have been thought through.

20:15:00

Lord McKenzie of Luton
I understand that this is a probing amendment and I hope that I can satisfy noble Lords why the provision is in the Bill in this form.

Clause 10 makes clear how the Bill works in relation to matters devolved to the Scottish Parliament. The general position is that orders made under this Bill cannot make provision in areas devolved to Scotland. As has been recognised, the only exception to this, as Clause 10 sets out, is that orders can make consequential, supplementary, incidental or transitional provision even in areas devolved to Scotland, so long as the need for this arises out of provision made by the order for purposes which are reserved to Westminster. Orders cannot make any free-standing provision in matters devolved to Scotland.

The intention behind Amendment No. 76 maybe to prevent an order making consequential, supplementary, incidental or transitional provision which would be within the legislative competence of the Scottish Parliament were it contained in an Act of that Parliament. An example of where the ability to make such provision is needed is where an order, in amending Westminster legislation, re-numbers some of its provisions, or if the name of a body is changed or a body is abolished. If a Scottish Act cross-referred to those provisions, the changes to the numbering made by the order would mean that the Scottish Act then referred to the wrong provisions. Under the Bill the order could be used to tidy up the Scottish Act by updating the references to correspond to the correct provisions. This would mean that there was no need for the Scottish Parliament to legislate to make the consequential amendments needed. The amendment appears intended to remove this useful ability, but I hope that the Committee will now accept that it is useful.

The ability to make such changes is fully in accordance with the convention agreed between Westminster and the Scottish Parliament. This convention requires the consent of the Scottish Parliament where the Westminster Parliament intends to legislate on devolved matters, but it is agreed that such consent is not required when legislation deals with devolved matters only incidentally to, or consequentially upon, provision made in relation to a reserved matter. This position is set out in Devolution Guidance Note 10 issued by the Department for Constitutional Affairs, which has responsibility for devolution.

I hope that I have dealt with the points raised, but I shall try to answer any further questions, should they be asked.

Lord Jenkin of Roding
I am grateful to the noble Lord. I shall want to study carefully what he has said but he has gone a long way to explain that the Sewel convention will not apply to such incidental matters. I think that that answers my question. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton
moved AmendmentNo. 77:

Page 6, line 11, leave out “, 2(5) or 3(5)” and insert “or 2(5)”

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Northern Ireland]:

Lord Bassam of Brighton
moved AmendmentNo. 78:

Page 6, line 15, leave out “, 2(5) or 3(5)” and insert “or 2(5)”

On Question, amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 [Wales]:

[Amendment No. 78A not moved.]

Clause 12 agreed to.

Clause 13 [Procedure: introductory]:

Lord Goodhart
moved Amendment No. 79:

Page 6, line 34, at end insert-
 “( ) An order under this Part which creates any new primary legislation or amends or repeals any existing primary legislation must be made in accordance with the affirmative resolution procedure or the super-affirmative resolution procedure.
 ( ) In this section “primary legislation” has the same meaning as in the Human Rights Act 1998 (c. 42).”

The noble Lord said: This amendment raises an issue of considerable importance. Its purpose is to ensure that all changes to primary legislation by orders made under the Bill must be made either by the affirmative resolution procedure or the super-affirmative procedure.

Power to amend primary legislation by secondary legislation—the notorious Henry VIII clause—is now fairly frequent but it must be used with great care and restraint. As a former member of the Delegated Powers and Regulatory Reform Select Committee, I recall that there are some cases where the Select Committee has approved a power inserted in a Bill to amend primary legislation by negative resolution, but those cases are very strictly limited to transitional or consequential amendments resulting from the implementation of the Bill which contains those powers. This Bill is conferring a very wide general power to make orders. The nature of the orders which will be made under this Bill and the degree to which those orders will alter primary legislation is totally unpredictable. It is essential that orders under the Bill which alter primary legislation should be subject to debate in both Houses, which requires the affirmative or super-affirmative procedure to ensure that it happens. That matter should be put beyond doubt by this amendment and not dealt with on a case-by-case basis.

I accept that there may be a few cases where some of the changes in an order are so minor that the useof the negative resolution procedure would be appropriate if looked at independently of the general principle, but those are likely to be a very small minority. In any event, non-contentious orders can go through both Houses very quickly even if the affirmative resolution procedure is used. It is better to make it clear that any change in primary legislation by procedure under this Bill should be by the affirmative resolution or super-affirmative resolution procedure and prevent future Governments trying to extend their ability to make or alter primary legislation through the negative resolution procedure. This Bill, after all, takes powers from Parliament and gives them to the Government. Of course, nothing in the amendment excludes the possibility that orders can be made by the negative resolution procedure if no change to primary legislation is involved.

Your Lordships’ House should not allow this Bill to be used to change primary legislation by a process that involves no necessity for approval by Parliament as a whole. The negative resolution procedure will involve a review of the draft order by a committee, but not by either House as a whole, which I regard as an unsatisfactory procedure. I beg to move.

Lord Bassam of Brighton
Amendment No. 79 was originally part of a larger group of amendments, and I shall reflect that by providing some background. It is right to remind ourselves what the Delegated Powers and Regulatory Reform Committee said in general about the procedures issue, which is clearly the backdrop. It concluded in its report that the powers in the Bill were not inappropriate, and it has expressed broad support for the procedures for scrutinising orders set out in the Bill. On the mechanism for determining the appropriate procedure for orders, it concluded:

“The bill is clear that it is Parliament, not the Minister, which has the final say on what the procedure is to be”.
 

It agreed also that it is appropriate that the Bill contained provision to allow the House to overturn a recommendation of its committee. It found,

“it is right that a committee’s recommendation that an order should not proceed…should have the consequence of preventing further proceedings unless and until the House says otherwise”.

That is a sound principle.

That provides the backdrop to the amendment, which seeks to prevent any order made under Part 1 being delivered by the negative resolution procedure if it amends or repeals existing primary legislation. It would remove the option of the negative resolution procedure for orders. The very purpose of the order-making power in Clause 1 is to provide a vehicle for reducing or removing burdens imposed by primary and secondary legislation, and most, if not all, orders made under Clause 1 will amend or repeal primary legislation. The Government believe that, where orders are evidently straightforward, it is right that there is the option of delivering them by a more proportionate procedure, subject of course to Parliament’s approval. As the Delegated Powers and Regulatory Reform Committee’s report stated, the Bill is clear that it is Parliament and not the Minister, as I just said, which has the final say.

The range of procedures provided for in the Bill is intended to encourage delivery of smaller or simpler proposals such as those seeking to reduce administrative burdens. One example is the Regulatory Reform (NHS Charitable and Non-Charitable Trust Accounts and Audit) Order 2005. That was delivered under the 2001 Act, and removed the unnecessary burden imposed by primary legislation on National Health Service charitable trusts of having to prepare two separate sets of accounts. That duplication was simply an anomaly. The order dealing with the anomaly was not complex and could have been adequately scrutinised under the negative or affirmative procedure. The amendment therefore imposes an unnecessary degree of inflexibility on the order-making process. Why do we need to put a very simple change, such as that which I have just given as an example, through the mill of an overly complex process when it is not controversial and where there is a very simple way of doing it?

We need something that is appropriate and proportionate to the problem that it is dealing with; that is what the negative procedure can on occasion be. It is not our desired intent to circumvent parliamentary approval; I have made that quite clear. The Delegated Powers and Regulatory Reform Committee has accepted that point. I cannot accept the amendment, although I understand the noble Lord’s caution and reason for moving it. I hope that he will reflect on those points before considering his next step.

Lord Goodhart
I am grateful to the Minister for his answer. I remain unconvinced by it, because under the 2001 Act the super-affirmative procedure needed to be used in every case, which is excessive. However, it is an important principle that Parliament as a whole should have an opportunity to discuss amendments to primary legislation. One should not need to pray against an order to bring that about. We are well aware now that the affirmative resolution procedure can be dealt with very quickly. We now have in your Lordships’ House an arrangement under which the affirmative resolution instruments can be dealt with in Grand Committee and then brought back to your Lordships’ House for formal approval, so it does not take up any significant time. In those circumstances, I am still of the opinion that this is a desirable amendment, and I am minded to bring it back at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 agreed to.

Clause 14 [Consultation]:

Lord Bassam of Brighton
moved Amendments Nos. 80 to 83:

Page 7, line 10, leave out paragraph (d) and insert-
 “(d) in such cases as he considers appropriate, consult the Law Commission, the Scottish Law Commission or the Northern Ireland Law Commission, and”

Page 7, leave out line 14.

Page 7, line 15, leave out subsection (2).

Page 7, line 20, leave out “or (2)”

On Question, amendments agreed to.

Clause 14, as amended, agreed to.

Clause 15 [Draft order and explanatory document laid before Parliament]:

Lord Norton of Louth
moved Amendment No. 84:

Page 7, line 45, at end insert “, and
 ( ) a statement whether in the opinion of the Minister the order is compatible with the European Convention on Human Rights.”

The noble Lord said: Amendment No. 84 requires a Minister to make a statement that in his opinion an order is compatible with the European Convention on Human Rights. I tabled my amendment before the noble Lords, Lord Goodhart and Lord Maclennan, tabled their Amendment No. 85. I am sure that their drafting is more appropriate than mine, and I certainly will not object if the Minister says that he intends to accept Amendment No. 85 rather than Amendment No. 84.

Under Section 19(1)(a) of the Human Rights Act, a Minister introducing a Bill must declare whether, in his view, the Bill is compatible with the convention rights. That is an express duty, and it places an onus on the Minister to consider convention rights when bringing a Bill forward. It is not a case of simply going through the motions, since the Joint Committee on Human Rights will not necessarily accept that the Minister is correct in believing that the Bill is compatible. A Minister may have to justify his claim.

The Joint Committee has been extremely active in considering whether Bills comply with the convention and other human rights instruments to which the United Kingdom is a party. In the first three years of its existence, it drew the attention of each House to about 100 Bills out of the 300 it considered. There has been considerable correspondence with Ministers, all of which has been published. As a consequence of its work, it has helped to build up in Government what its first chairman, Jean Corston, now the noble Baroness, Lady Corston, termed “a culture of justification” rather than one of assertion.

If we accept that the Section 19 requirement is appropriate and has served a useful purpose, there should be a similar requirement in respect of orders made under this Bill. As the Constitution Committee pointed out in its report on the Bill, Parliament is delegating its authority to change the statute book. The committee states, at paragraph 59:

“We see considerable merit in requiring Ministers to treat draft orders in similar ways to bills in relation to explaining and certifying compliance with Convention rights”.

Providing for such a requirement will deliver the same benefits as with Bills. In this case, the orders willbe drawn up in departments, rather than by parliamentary counsel. The knowledge that an order has to carry a compatibility statement and that the statement may be subject to scrutiny by the Joint Committee will help to focus minds, contributing to the development of the culture so ably identified by the noble Baroness, Lady Corston.

The case for this provision is both clear and compelling. I beg to move.

20:30:00

Lord Goodhart
It is absolutely right that a compatibility test should be required here in the same way as is the case for a Bill. It is already an accepted practice that when affirmative resolutions are madeto approve secondary legislation, a statement of compatibility should be made by the Minister introducing them.

My amendment is similar in intention to that moved by the noble Lord, Lord Norton of Louth. The difference is that my amendment specifically requires that the Minister should make a positive statement that the provisions are compatible with the Human Rights Act. If a Minister acting in good faith is unable to make that statement, the Government should proceed by primary legislation, not by order, because it is self-evident that the proposal must be controversial.

Therefore, it would be an abuse of power to use procedure under the Bill for purposes that are recognised as being incompatible with convention rights. We should not be more generous in allowing an incompatible order to stand when the Minister acts in good faith, but under a mistaken view of the Human Rights Act. My amendment is based on a provision having the same purpose as that in the Civil Contingencies Act 2004. The width of the powers given by the Bill justify more rigid treatment than the limited Henry VIII powers, exercisable for the specific purpose of the Act that confers that power.

Lord Henley
I have never been reassured when I have seen the names of some Ministers attached to some Bills, certifying that they comply with the Human Rights Act. I am thinking of some Bills that have emanated over the past few years from the Home Office. Having said that, if it were a requirement for Bills to have such certification from Ministers, I do not see why such a requirement should not also be added to measures made under this Bill. Therefore, I support my noble friend and the noble Lord, Lord Goodhart.

Lord McKenzie of Luton
I thank the noble Lords, Lord Norton of Louth and Lord Goodhart, for their amendments and for raising this topic—and the noble Lord, Lord Henley, for his contribution—although I would hope that noble Lords will be convinced that these amendments are unnecessary.

As Ministers of the Crown are public authorities for the purposes of the Human Rights Act, and Section 6 of the Human Rights Act makes it unlawful for a public authority to act in a way that is incompatible with the convention rights, all orders made under this Bill must be compatible with the convention rights. There is simply no alternative.

Noble Lords have referred to and are familiar with the Section 19 statement that appears on the front of every government Bill presented to your Lordships’ House. In nearly every case, including this Bill, that is a statement of compatibility under Section 19(1)(a) of the Human Rights Act. It certifies that, in the opinion of the Minister in charge of the Bill, the provisions of the Bill are compatible with the convention rights. But there is a real and practical purpose to having such a statement, for it is possible to make an alternative statement under Section 19(1)(b) of the Human Rights Act.

A statement under that section would be a statement that, although the Minister cannot make a statement of compatibility, the Government nevertheless wish the House to proceed with the Bill. Section 19(1)(b) statements are rare. In fact, only once have the Government had to give such a statement on first introduction of a government Bill into Parliament. But the point of the statements under Section 19 is that it remains possible for Parliament, if it so chooses, to pass primary legislation that is incompatible with the convention rights.

It is, however, proper that if the Government are going to ask Parliament to legislate incompatibly, we should be absolutely clear when they are doing so. In this way, the Section 19 statement serves as a starting point for the scrutiny of the Bill by Parliament.

I know that, as a matter of procedure, the Government make statements of compatibility for secondary legislation that is subject to the affirmative resolution or super-affirmative procedures, or which amends primary legislation. As your Lordships may recall, the undertaking that the Government would do so was made to your Lordships’ House by the late Lord Williams of Mostyn. Similarly, in another place, my honourable friend Jim Murphy undertook that the Government would, again as a matter of practice, give statements of compatibility for orders made under this Bill. I do not seek to go back on those undertakings.

It is important to realise, however, that such statements of compatibility only confirm that which already must be the case—that in the Minister’s view the order is compatible with the convention rights. Whereas Parliament has the power to make incompatible primary legislation if it wishes, a Minister is not permitted to make secondary legislation that he does not believe to be compatible.

Lord Goodhart
Is that correct? Surely, the Human Rights Act provides that secondary legislation amending primary legislation should be treated for the purposes of the Human Rights Act as itself being primary legislation. Therefore, the Minister can then introduce an order under this Bill amending primary legislation that would be treated as primary legislation for the purposes of the Human Rights Act and, therefore, could not be quashed by the court—it would simply be declared incompatible. That comes up in relation to an amendment that I will move later.

Lord McKenzie of Luton
The advice is that, whatever the nature of the secondary legislation, Ministers have to comply and the legislation has to be compatible. In light of the noble Lord’s comments, we should look at that again. If his point was right that may well change the position. No Minister may, by virtue of Section 6, ever make incompatible secondary legislation. Perhaps we should follow this up outside our debate.

While I stand by our undertakings, I would not wish to enshrine in statute a procedure that is, with the greatest respect to those undertakings, confirming something that is already compulsory. Indeed, it could even give the false impression that it would be legitimate for the Minister to make secondary legislation that he considers to be incompatible with convention rights. While I understand completely the intention behind Amendments Nos. 84 and 85, and while I reiterate the undertakings that the Government have given, I invite the noble Lord to withdraw the amendment.

Lord Norton of Louth
I am not particularly persuaded by the Minister for two reasons. The noble Lord, Lord Goodhart, referred to the first reason; as he said, we will come back to the issue of status. It clearly needs to be investigated. Secondly—this is why I prefer the amendment of the noble Lord, Lord Goodhart—I can see a case for arguing that when a Minister indicates, they have complied with the duty they have to comply with, particularly in the context of the argument that I developed about a culture of justification. I have concerns but I do not intend to push my amendment, not least because I defer to the noble Lord’s amendment and I find persuasive the reasons that he gave. I do not intend to persist with my amendment but I suspect that the noble Lord may wish to come back later in light of what has been said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 85 not moved.]

Lord Howard of Rising
moved AmendmentNo. 85A:

Page 8, line 10, at end insert “or increase or impose any burden or burdens”

The noble Lord said: This amendment is designed to ensure that any explanatory document that accompanies the draft order also includes an indication of where burdens may be increased or imposed. It is clear that the Bill has the capacity to increase burdens as well as to reduce them. None of us would like to see increased burdens. The amendment is entirely straightforward and would ensure that, at the very least, Parliament is fully informed of the effect of a draft order before deciding which procedure under Clause 16 should apply. I beg to move.

Lord Bassam of Brighton
The power to remove or reduce burdens resulting from legislation is provided in Clause 1. As well as removing or reducing burdens, new burdens could also be added.

It is important that orders should be able to impose new burdens. When an order removes a burden, this will often need to be replaced with a smaller, better perfected and more proportionate and refined burden. For instance, perhaps a business is currently inspected five times a year for its compliance with a particular regulation, which takes up to five man-hours. This amendment would prevent an order removing this requirement and replacing it with a requirement for the business to carry out self-assessment once a year, which takes up one man-hour, as this would be a burden to which the business was previously not subject.

The ability to add new and, in this case, more proportionate burdens was a key improvement of the 2001 Act over its predecessor, the Deregulation and Contracting Out Act 1994. More than two-thirds of orders that have been made under the 2001 Act imposed new but more refined and appropriate—and, I would argue, ultimately more proportionate—burdens.

Clause 15 provides that for orders under Clause 1, the Minister must lay an explanatory document before Parliament, including an assessment of the extent to which the orders would remove or reduce any burden or burdens. Amendment No. 85A adds to that requirement so that the explanatory document must also detail any burden or burdens imposed by the order.

I do not oppose the principle that the order-making process should be transparent. I could fairly argue that that is what we are trying to establish. In practice, where orders add any new burdens as defined in Clause 1, the Government would expect any reduction or increase in burdens to be detailed in the proposal’s impact assessment, which will be made publicly available. The parliamentary committees would likely consider the burdens imposed or increased as part of their scrutiny of individual orders.

I understand and appreciate the principle behind Amendment No. 85A. I simply argue that it is disproportionate in its effect and is already covered by the process that we have put in place that will, of course, strengthen our impact assessments. I believe that the noble Lord and I are in the same area as regards our intent, but we have got there first.

20:45:00

Lord Howard of Rising
I thank the Minister for that answer. If the Government expect to include a full explanation, I cannot see that they can have a problem in including on the face of the Bill that it should include any burdens that may be added, which at the same time can describe the burdens that are being omitted. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton
moved Amendments Nos. 86 and 87:

Page 8, line 12, leave out “powers to legislate” and insert “functions of legislating”

Page 8, line 13, leave out “those powers” and insert “the exercise of those functions”

On Question, amendments agreed to.

The Deputy Chairman of Committees (Lord Geddes)
I must advise the Committee that Amendment No. 88, while in the prime name of the noble and learned Lord, Lord Lloyd of Berwick, is also in the name of the noble Lord, Lord Bassam of Brighton.

Lord Bassam of Brighton
moved AmendmentNo. 88:

Page 8, line 18, leave out subsection (3).

On Question, amendment agreed to.

[Amendment No. 89 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 90:

Page 8, line 39, at end insert-
 “( ) In subsection (2)(e) “function of legislating” has the same meaning as in section 5.”

On Question, amendment agreed to.

Clause 15, as amended, agreed to.

Clause 16 [Determination of Parliamentary procedure]:

Lord Norton of Louth
moved Amendment No. 91:

Page 8, line 41, leave out subsections (1) to (6) and insert-
 “( ) Once a draft order is laid before Parliament under section 15, the super-affirmative resolution procedure under section 19 shall apply, unless within 30 days either House of Parliament determines that, for orders laid under sections 1 or 2, the negative resolution procedure under section 17 or the affirmative resolution procedure under section 18 should apply, in which case that procedure shall apply.”

The noble Lord said: Mine is the lead amendment in what is a rather large group of amendments. The purpose of my amendment is to ensure that Parliament exercises the responsibility to determine the procedure to be adopted in respect of an order under the Bill. As the Bill stands, the Minister responsible for an order recommends that it be considered under the negative, affirmative, or super-affirmative resolution procedure. Within the set time limit, either House can determine that an order be considered under a higher procedure if recommended for consideration under either of the first two procedures.

I appreciate that ultimately Parliament can determine the procedure. However, I wish to shift the onus from the Minister to Parliament and for Parliament to adopt a proactive rather than a reactive role. My reasons are twofold. First, in terms of principle, I believe that Parliament should have greater responsibility than it presently has for determining its business. The British Parliament, or rather the British House of Commons, is distinctive among legislative chambers in the extent to which the Executive determine the business of the House. Experience elsewhere shows that allowing a chamber greater say over its own timetable does not prevent the Government getting their business. However, it can be of value, in ensuring that the time is more effectively used in subjecting Government to scrutiny. I certainly believe that Parliament itself should be, as far as possible, the master of its own procedure. That is my starting point.

My second point is specific to this provision. As the Bill stands, there is a danger of Parliament missing the significance of a particular order. A Minister may recommend that an order be subject to the negative resolution procedure and each House may assume that it is not of great import, focusing instead on orders recommended for one of the other procedures. If a committee does not recognise its significance, I doubt whether the Chamber will do so. A great deal rests on the vigilance of the committees.

Under my amendment, Parliament would determine the procedure with the default option being the super-affirmative resolution procedure. To my mind, that has the double benefit of giving greater responsibility to Parliament—it moves to a proactive rather than a reactive role—and it ensures that no order slips under the net, with an order of some significance getting through under the negative resolution procedure. Under my amendment the responsibility rests on each House to check an order as soon as it is laid by a Minister and to decide whether it merits being moved from the super-affirmative to the affirmative or negative resolution procedure. It places a far greater onus on Parliament and it means that no order is neglected.

I have a great deal of sympathy with Amendment No. 79 in the name of the noble Lords, Lord Goodhart and Lord Maclennan. They make an important point regarding primary legislation and I fully support the case that they make. I do not think that their amendment is necessarily incompatible with mine. I can see a case for ring-fencing orders that create or repeal primary legislation, subjecting them to the affirmative or super-affirmative resolution procedure. I think we could possibly bring together the two amendments to ensure that orders are subject to the appropriate level of resolution procedure, with the level of ministerial discretion or involvement in determining that limited or removed altogether. The more we can do to strengthen the involvement of Parliament in the process the better. I beg to move.

Lord Goodhart
A large number of amendments in this large group are in the names of myself and my noble friend Lord Maclennan. I refer to Amendments Nos. 92, 93, 97 to 100, 103 to 105, 108, 110 and 111.

Before I get onto my own amendments, I find the amendment of the noble Lord, Lord Norton of Louth, extremely persuasive. It is important that powers to deal with orders of this kind should as far as possible be parliamentary rather than ministerial, given that the amount of scrutiny that Parliament will be able to give them would be far less than for primary legislation. My only comment on the noble Lord’s amendment is that the super-affirmative resolution procedure should apply unless within 30 days both Houses of Parliament determine that another resolution would be appropriate.

Our amendments as a whole aim to ensure that any recommendation made by a Select Committee would be final. Amendment No. 92—which would not be moved if Amendment No. 91 were approved—would mean that a final decision on whether the Minister’s selection of the appropriate method was correct would rest with the committee and could not be overruled by Parliament as a whole. Similarly, on our other amendments, we are concerned that a committee’s decision to recommend that an order should not be proceeded with in either House should, again, be final.

The procedure under this Bill should be broadly consensual. If there is enough opposition to persuade the Select Committee to recommend that the order should not be proceeded with, it is inappropriate to proceed further. The prospect of votes being called in either House to override that recommendation, especially when those votes are whipped, is an unattractive one. Our amendments would allow an immediate restart of the reconsideration process. I prefer the amendment of the noble Lord, Lord Kingsland, for a two-year moratorium on reintroduction of an order of this kind, with one exception. A recommendation made less than two years before the end of a Parliament should not bind a subsequent Parliament. Otherwise, however, I accept the amendments in this group on that point as preferable to my own as regards the time at which orders can be resubmitted. For these reasons, it is desirable that a committee’s recommendation on these issues in either House should be final.

Lord Henley
This is a rather complicated group, headed by my noble friend Lord Norton’s Amendment No. 91, with a large number of amendments and a diverse collection of noble Lords putting their names to each. We have a number of amendments down on behalf of the Conservative Front Bench, some of which seem to have the support of the Liberal Democrats. I notice that Amendment No. 95 also has the Government’s support. The noble Lord, Lord Goodhart, has been good enough to say that he likes Amendment No 94A tabled in the name of my noble friend Lord Kingsland, although he has not yet put his name to it. I suspect that it may be necessary for certain conversations to take place between now and Report, and we will have considerable time to decide how to proceed with these amendments at a later stage of the Bill.

At this stage, it may be worth setting out what is behind our amendments in this group. We have given notice that we intend to oppose the Question that Clause 19 stand part of the Bill, and we have tabled Amendments Nos. 94A and 95, and added our names to Amendments Nos. 92, 97, 108 and 111. I shall speak first to those amendments and then to the Question on whether Clause 19 should stand part. However, I assure the Minister that I have no intention of dividing the Committee on that issue.

Amendments Nos. 92, 97, 108 and 111 turn what is merely a recommendation by a committee of either House into an absolute veto. In the debate in another place on the appropriate parliamentary procedureto be applied to these orders, the words “recommendation” and “veto” were sometimes used interchangeably. Noble Lords should be clear that, at present, the committee’s only power is to recommend that no further proceedings be taken on any draft order. Either House can then by resolution reject that recommendation and the order can go through. We on these Benches think that that is not a satisfactory safeguard. We believe that the inherent potential for abuse in these order-making powers means that the committee should be given the power to reject the orders. To leave its recommendations vulnerable to a vote of either House does not provide constitutionally sound protection.

I should modify my support for these amendments by saying that I am aware of the argument against turning a committee’s recommendations into a veto: it deprives the House of an opportunity to decide for itself whether an order is appropriate. I also appreciate that it might make a committee more timid in its remarks and recommendations if it felt that it was the final arbiter of what should happen to an order. In our discussions on the substantive constitutional safeguards that should be in the Bill, the Government have not yet made any concessions, and that is disappointing. In the absence of such concessions, bolstering the recommendation of the committee is the only option left. However, we believe that it is a last resort. We fully accept that if other constitutional safeguards are incorporated into the Bill, the necessity for an absolute veto might be lessened.

The committee’s composition would be an important factor. The convention in this House is that the Government do not enjoy a majority in committees but, as we all know, the arrangements in another place are different. By convention, the usual channels decide to which committee legislation or subordinate legislation should be referred. I would be grateful to hear from the Minister the kind of committee he envisages will deal with these orders. I imagine that the expectation is that the committee chaired by the noble Lord, Lord Dahrendorf, would consider these orders, but I put it to the Minister that there is a case for these orders to be considered by a Joint Committee of both Houses.

Amendment No. 94A proposes an alternative way of strengthening the committee’s recommendation that no further proceedings should be taken on a draft order. Currently there is nothing to prevent an order which the committee has considered inappropriate being retabled in the same Session of Parliament. As we made clear when discussing the previous group, there needs to be a means of investing the committee with a more powerful sanction than merely the recommendation in Clause 15. If the Minister knew that it was absolutely critical to get the terms of the order drafted appropriately in the first place, and that if it was not he would risk losing the opportunity for the next two years of getting the order through, then it might act as a disincentive for a Minister to introduce an order that pushed the boundaries of what might or might not get past the committee.

21:00:00

I turn now to the Question on whether Clause 19 should stand part of the Bill. We think that the Bill should not be allowed to proceed further without consideration of the question of the appropriateness of the super-affirmative procedure. This procedure was first introduced in the 2001 Act. Although it made a brief appearance in Part 31 of the Company Law Reform Bill, the Government then decided to remove such procedures from that legislation. That decision seemed to be on the basis of a recommendation of the Delegated Powers and Regulatory Reform Committee in its ninth report. At paragraph 40, the committee considered what it called the “proportionality of procedure”. It stated:

“Although not taking much time on the floor of the House, the mechanism proposed is no quicker than a bill…For a small measure, it is no more proportionate than a short bill, particularly when preparation of the supporting documentation is taken into account. But we do not see how the timetable could be abridged without violating the safeguards which this process is intended to give”.

Surely the same arguments could be applied to any new regulatory reform orders under this Act. No doubt, the Government will try to say that the super-affirmative procedure ensures that any draft order will receive added scrutiny and is at least an improvement on the affirmative procedure. However—try as the Government might to dress up the affirmative procedure as something more onerous with the prefix of “super” and the added 60 days scrutiny by committee—they are still proposing to reform primary legislation by an order introduced as a statutory instrument rather than by primary legislation.

The committee said in paragraph 38 of its report that,

“whatever the Government’s intention as to amendability, it is impossible for the two Houses to reconcile any proposed amendments due to the fact that the instrument is considered in parallel by the two Houses. In this regard, it cannot be considered a substitute for a bill”.

That is the key point and endorses everything I have said. I am interested to hear from the Minister how that problem can be overcome.

Lord Borrie
The noble Lord, Lord Norton of Louth, is of course right in saying that Parliament must determine which of the variety of possible procedures should be followed, but I would add the word “ultimately”. Surely it is appropriate in our Parliament, where Ministers are also Members of Parliament and take a lead in determining business, that they should be the ones who propose. Parliament should then dispose and determine the result.

I oppose the suggestions of the noble Lord, Lord Goodhart. I think it would be quite inapt in our Parliament to elevate a Select Committee to the position of determining matters that should ultimately be within Parliament's right to determine. It is not at all right that that should be so. “Recommend”, it seems to me, is the suitable word to use. Anything else would be a way of subverting the normal life of Parliament. I can understand why the device has been proposed, but its use would not be in accordance with our conventions.

Lord Bassam of Brighton
This is an important group of amendments which, as the noble Lord, Lord Henley, said, range far and wide in their cover. There is a thread pulling them all together in that they deal with the Bill’s procedural requirements for making orders, including the statutory veto provided to parliamentary committees.

In the interests of clarity, I shall address the government amendments first, as noble Lords would expect. Government Amendments Nos. 94, 95, 101, 106 and 109 deal with the statutory veto that the Bill provides to relevant parliamentary committees. In the light of concerns that have been expressed during the Bill’s passage through Parliament, including those of the Delegated Powers and Regulatory Reform Committee, the Government resolved to remove the criteria to which the statutory veto is currently tied—a measure to which government Amendments Nos. 95, 101, 106 and 109 give effect.

A number of noble Lords have supported Amendment No. 95, which removes from the Bill the criteria for exercising the veto for orders subject to the negative resolution procedure. I assume that noble Lords would agree that, if the conditions for exercising the veto should be removed, it is right that that be the case for all orders, irrespective of the procedure to which they are subject. An alternative arrangement would be inconsistent and is likely to be unacceptable to Parliament and its responsible committees. On that basis, I hope that noble Lords are satisfied by the government amendments on the issue.

Government Amendment No. 94 also makes a minor drafting change to Clause 17 to clarify that the effect of exercising the veto, where orders are subject to the negative resolution procedure, is that the Minister cannot make the order. I commend both sets of amendments to the House.

Government Amendment No. 110A is minor and technical, and mirrors a similar provision in the 2001 Act. Clause 15(2)(f)(ii) requires the disclosure of details in the explanatory document laid before Parliament of representations received as a result of the consultation required by Clause 14. However, that is subject to Clauses 15(4) and (5). The first provides that the Minister must not disclose information which the consultee asked not to be disclosed, if the disclosure of it would amount to an actionable breach of confidence, were it not for parliamentary privilege. The second provides that where the consultee provides information about another person, the Minister need not disclose that information if it appears to the Minister that the disclosure could adversely affect the interests of the other person, and the Minister has not been able to obtain the third party’s consent to disclosure of the information which could affect them. Clause 15(6) makes clear that neither of these restrictions prevents disclosure to a committee charged with reporting on the draft order which asks for the information.

Clause 19—the super-affirmative procedure—requires the Minister to disclose details of representations made during the 60-day period of scrutiny about the draft order. There is, however, no provision restricting that obligation similar to the provisions in Clause 15. So the Minister would have to disclose that information even if the disclosure would involve a breach of confidence or would adversely affect the interests of a third party.

Amendment No. 91, moved by the noble Lord, Lord Norton of Louth, provides for all orders to be subject to the super-affirmative resolution procedure unless either House of Parliament requires a less onerous procedure. I understand why the noble Lord moved the amendment and I am grateful to him because, in doing so, he accepted my point when we were debating Amendment No. 79, which is that it is Parliament, rather than the Minister, who is, if you like, in control of the process. I remind noble Lords that the Bill already provides that Parliament can, in all cases, request that an order proceed via the more onerous super-affirmative procedure.

As an example of that, I cite the example of the Regulatory Reform (National Health Service Charitable and Non-Charitable Trust Accounts and Audit) Order 2005. That demonstrates how this works. Some orders are straightforward, and in such cases there seems little value in preventing a Minister from even recommending that an order should proceed by the affirmative or negative procedure.

Amendment No. 91 provides that the method for determining the appropriate level of parliamentary scrutiny should be left to the House to determine, thus removing explicit reference to the committees’ ability to recommend a more rigorous procedure. I understand that the noble Lord wishes to remove that detail from the Bill.

Our view is that, following government amendments tabled on 27 June, the Bill contains the right level of detail to ensure legal certainty about the order-making process. The inclusion of detail is necessary, as it clarifies the procedural requirements for delivering proposals via the order-making powers and ensures that the procedures in the Bill present a useable mechanism for delivering reforms by order. For that reason, I cannot support the noble Lord’s amendment.

Amendments Nos. 92, 97, 103, 108 and 110 seek to remove the ability of a House of Parliament to overturn recommendations made by its responsible committee. Amendment No. 92 would make a committee recommendation for the level of scrutiny indisputable, and Amendments Nos. 97, 103, 108 and 110 would make a veto exercised by the committee final. Like the noble Lord, Lord Borrie, I express my concerns about the effects of the amendments. Making provision that a committee decision could override the opinion of the rest of the House and bind it would be an unprecedented step that may be unworkable in practice. Ultimately, it is a matter for the House to decide whether and how often it might want to overrule the recommendations of one of its committees. However, the Government do not consider it appropriate to rule this out entirely and leave no flexibility for the House to decide. The recent Delegated Powers Committee report supported this view. It found that,

“it is right that a Committee’s recommendation that an order should not proceed…should have the consequence of preventing further proceedings unless and until the House says otherwise”.

So it must be for either House of Parliament, or perhaps both of them, to make that final determination. That must be right. In saying that, we respect the right and proper parliamentary process and, for that reason, I cannot accept the amendments.

Amendments Nos. 93, 98, 100 and 104 seek to remove the time restrictions on when committees can exercise their statutory veto over orders. As a result, the parliamentary scrutiny committees could veto an order as soon as it was laid before Parliament. The time restriction for exercising the veto is in place to encourage committees to explore all the options before fully rejecting an order, to consider increasing the level of procedure to which the order is subject, to undertake full scrutiny and, in the case of the super-affirmative procedure, to undertake further consultation and recommend amendments to the order. The civil registrations regulatory reform order is a good example of what we consider to be thebest approach. Here, parliamentary committees recommended that the order should not proceed, but only after extensive and careful consideration. We simply want to build on this experience, which is an invaluable guide to how matters should develop in the future.

Amendments Nos. 99, 105 and 111 seek to clarify that if an order is vetoed under the negative, affirmative or super-affirmative procedures, the Minister may return to the consultation process and subsequently re-lay the same draft order before Parliament. By contrast, Amendments Nos. 94A, 103A, 108A, and 110B specify that if Parliament vetoes an order, no order may be tabled in the terms of the original draft for a period of two years.

On Amendments Nos. 99, 105, and 111, there are no restrictions in the Bill concerning the resubmission of a draft order, so the amendments are unnecessary. Both sets of amendments, however, although approaching the issue from different perspectives, give rise to an important question about the future of a proposal that has been vetoed by Parliament. My response to the amendments is that this Government and any future Government would not be inclined to reintroduce a proposal in exactly the same form after it had been vetoed by Parliament. Parliament would obviously be liable to veto the order again, and a Government would be unlikely to allocate the time or resources required to restart the process. Equally, however, it is right and proper that if, following additional consultation, evidence exists to substantiate a proposal, it should be possible to re-lay an order before Parliament, perhaps in a slightly amended form and at a later date. In other words, if it can be improved, if there is time to improve it, and if there is evidence, it seems unreasonable and inflexible to prevent that from happening. One would expect the order to be an important element of the deregulatory programme. We are not trying to create a situation where the Government might try with a minor amendment to slip something through on which they failed the first time; it is a matter of making a substantial improvement to the proposal and ensuring that the evidence is there to substantiate it.

The noble Lord, Lord Henley, gave notice of an intention to oppose Clause 19. This clause sets out the requirements for making orders subject to the super-affirmative procedure. As I am sure noble Lords are aware, it is a well tried and tested process which has proved suitable for more complex regulatory reform orders. In its recent report, the Regulatory Reform Committee commented that a strength of the process is that regulatory reform orders received more detailed scrutiny than they would if they had been included in a large Bill. The Government anticipate that the super-affirmative process will continue to provide appropriately in-depth scrutiny for those more complex orders. I admit that the rationale for removing the most onerous level of parliamentary process from the Bill is not clear to me. As a Government we are committed to ensuring that orders receive effective and proportionate levels of parliamentary scrutiny. Central to that, however, is ensuring that, where orders require more comprehensive scrutiny, they can be made subject to the super-affirmative procedure. For that simple reason, which I should have thought is one to which we could all sign up, we wish to retain the provision for orders to be made under this procedure. I therefore propose that Clause 19 should stand part of the Bill.

The noble Lord, Lord Henley, made the point that the super-affirmative procedure was withdrawn from the Company Law Reform Bill. It was withdrawn when the order-making power was removed from the legislation. As I am sure noble Lords are aware, the procedure is a part of many different pieces of legislation, including the Human Rights Act 1998. The noble Lord also asked an important question about the nature of the committees the Government consider should be responsible for scrutinising orders under the powers in this Bill. We had considered that the Regulatory Reform Committee and the Delegated Powers and Regulatory Reform Committee would continue to perform that role, but we have absolutely no objection in principle to other committees such as departmental Select Committees becoming involved in the process. It would be a very appropriate way for them to ensure that the process is thorough, and they would bring to these considerations their specific, detailed knowledge. We want to continue a constructive dialogue with the chairs of those committees on this issue.

21:15:00

Lord Norton of Louth
I have listened with considerable interest to the debate, which has covered a wide range of amendments. However, as the Minister indicated, there is a common theme among them, hence the grouping. I am grateful to all noble Lords who spoke to my Amendment No. 91. Earlier tonight I thought that I was on a roll with the noble Lord, Lord Borrie, since he was kind enough to make some positive comments about my amendments. On this amendment, he is quite right in his description of current practice, but I am afraid that here he is being a conservative and I am being a radical because I want to change the practice. What we do is largely out of line with what happens elsewhere, but as a general principle Parliament should have greater control over its own business. I refer not to the substance of what the Government are bringing forward, because that is for them, but it is up to Parliament itself to determine the procedures for looking at what the Government wish to do. Business committees are common in other parliaments, including the Scottish Parliament. We should look at how we can strengthen Parliament by ensuring that it has much greater control over its own business. My amendment is very much in line with what I have been arguing for some time regarding what should happen within Parliament.

I have listened with great interest to the Minister, although to some extent I think he has offered what I tend to refer to as a Mandy Rice-Davies response—he would say that, wouldn’t he?—because it will make life harder for departments. I see no harm in that at all. In fact, I see it as an argument for pursuing the amendment.

I do not wish to pursue my amendment this evening, not so much because of what the Minister said but because of the point that the noble Lord, Lord Goodhart, made. I want to reflect on the drafting and come back to it. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 92 not moved.]

Clause 16 agreed to.

Clause 17 [Negative resolution procedure]:

[Amendment No. 93 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 94:

Page 9, line 39, leave out from “that” to “the” in line 40 and insert “the Minister not make an order in the terms of”

On Question, amendment agreed to.

[Amendment No. 94A not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 95:

Page 9, line 41, leave out subsection (5).

On Question, amendment agreed to.

[Amendments Nos. 96 to 99 not moved.]

Clause 17, as amended, agreed to.

Clause 18 [Affirmative resolution procedure]:

[Amendment No. 100 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 101:

Page 10, line 31, leave out subsection (4).

On Question, amendment agreed to.

[Amendments Nos. 102 to 105 not moved.]

Clause 18, as amended, agreed to.

Clause 19 [Super-affirmative resolution procedure]:

Lord Bassam of Brighton
moved AmendmentNo. 106:

Page 11, line 31, leave out subsection (6).

On Question, amendment agreed to.

[Amendments Nos. 107 to 108A not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 109:

Page 12, line 12, leave out subsection (11).

On Question, amendment agreed to.

[Amendment No. 110 not moved.]

Lord Bassam of Brighton
moved AmendmentNo. 110A:

Page 12, line 24, at end insert-
 “(12A) Subsections (4) to (6) of section 15 shall apply in relation to the disclosure of representations under subsections (3)(b) and (8)(b)(i) of this section as they apply in relation to the disclosure of representations under subsection (2)(f)(ii) of that section.”

On Question, amendment agreed to.

[Amendments Nos. 110B and 111 not moved.]

Clause 19, as amended, agreed to.

Clauses 20 and 21 agreed to.

Lord Goodhart
moved Amendment No. 111A:

After Clause 21, insert the following new clause-
 “APPLICATION OF HUMAN RIGHTS ACT 1998
 Orders made under this Part shall be treated for the purposes of the Human Rights Act 1998 (c. 42) as subordinate legislation and not as primary legislation (whether or not they amend primary legislation).”

The noble Lord said: The purposes of this amendment are related to those in Amendment No. 85, which I moved earlier. It is a technical but important amendment, recommended by the Joint Committee on Human Rights in its 17th and 21st reports of the current Session.

Under Section 21(1) of the Human Rights Act, an order which amends primary legislation is itself treated as primary legislation and cannot be quashed on the grounds of incompatibility with convention rights. It is certainly my understanding that that is the correct interpretation. The Government appeared earlier to take a different view and suggested that such an order could be quashed on the grounds of incompatibility, but I do not think that that is correct. I believe that the effect of Section 21(1) of the Human Rights Act is that an order which is introduced under this Bill cannot be quashed on the grounds of incompatibility; it can only be declared incompatible.

Confusingly, it appears that an order made under this legislation can be quashed on other grounds. For example, it is ultra vires on grounds other than incompatibility, such as failure to comply with a statutory procedure or to meet the conditions set out in Clause 4. It seems plainly inappropriate that such a distinction should be drawn. It would be an abuse of the order procedure under the Bill deliberately to make a provision which was incompatible with the Human Rights Act. Such provision would be in breach of what is plainly one of the core statutes of our constitution. If incompatible legislation is to be passed, which Parliament has the power to do under the Human Rights Act, then it should be part of primary legislation only after it has had full consideration in both Houses of Parliament. I beg to move.

Lord Bassam of Brighton
Before I turn to the detail of Amendment No. 111A, I think it right to deal again with the issue of incompatibility with convention rights. It was first raised under Amendment No. 85 and dealt with by my noble friend Lord McKenzie of Luton. It may assist the Committee if I return to this point; it clearly vexes the noble Lord, Lord Goodhart.

The noble Lord queried whether a Minister may ever make secondary legislation which is incompatible with convention rights. In this respect, it is important to draw a distinction between what is unlawful and the remedies for unlawfulness and incompatibility. Under Section 6 of the Human Rights Act:

“It is unlawful for a public authority to act in a way which is incompatible with a Convention right”.
 

Under Section 6(3) of the Act, a Minister of the Crown is clearly a public authority. He must therefore exercise the function of making secondary legislation in a compatible manner, regardless of what the secondary legislation does. Therefore, all orders, including all those under this Bill, must be compatible with the convention rights. The distinction between primary and secondary legislation becomes important only in respect of the remedies available when a legislative provision is found to be incompatible with the convention rights.

Under Amendment No. 111A, any amendment made by order to primary legislation would be treated as secondary legislation for the purposes of the Human Rights Act. Under the Act, secondary legislation may be struck down by a court if it is incompatible with the convention rights, as is understood. Primary legislation, including where it is amended by order, may not be struck down but instead may be the subject of a declaration of incompatibility. The noble Lord seeks to replicate a provision in the Civil Contingencies Act 2004. However, the considerable difference with orders under that Act is that they have only a short-term effect, usually a maximum of 30 days. Orders under this Bill would permanently amend the law.

One of the reasons for the declaration of incompatibility procedure is to limit the impact of the Human Rights Act on legal certainty. People should be able to rely on primary legislation. If it were possible for Acts of Parliament to be struck down by the courts, leaving aside the issue of Parliament’s position, it would give rise to serious questions about the legality of actions taken in reliance on provisions that were later found to be unlawful. I should reiterate that it is already unlawful to make secondary legislation that is incompatible with convention rights. As I explained, this protection is contained in the Human Rights Act and needs no repetition.

21:30:00

The Government could not make the order if they did not believe that it was compatible with convention rights. Where primary legislation, including that as amended by secondary legislation, has been declared incompatible by the courts, the Government have always responded positively by proposing appropriate remedial action to Parliament.

I do not seek to disguise that this is a difficult choice to make between legal certainty on the one hand and enhanced remedies for incompatibility with the convention rights on the other, but as my right honourable friend the Chancellor for the Duchy of Lancaster indicated in her letter to the Joint Committee on Human Rights, the Government are not persuaded at this stage that a provision such as Amendment No. 118 is appropriate.

I have listened with great interest to the points raised by the noble Lord. I should like to consider them further before we return to this part of the Bill on Report, but I make that observation without a commitment to embrace the noble Lord’s amendment or to move from the Government’s current position. I hope that, having heard that, the noble Lord will feel able and confident to withdraw his amendment.

Lord Goodhart
I shall of course withdraw the amendment today, but I have every intention of bringing it back. The line which the Minister has taken seems highly questionable. It was certainly not taken by the Joint Committee on Human Rights when it proposed that my amendment should be introduced. Indeed, the Government seemed not to assume that that line was correct when they introduced a similar provision into the Civil Contingencies Bill. The fact that orders made under the Civil Contingencies Act would last only a short period while orders made under this Bill could last indefinitely is wholly irrelevant to the issue raised by the amendment. Although the line taken by the Government is perhaps arguable, it is far from certain and should be strengthened and confirmed by the amendment which I moved today and expect to move again at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 negatived.

Baroness Wilcox
moved Amendment No. 112:

After Clause 22, insert the following new clause-
 “LIMITATION OF ORDER-MAKING POWERS
 Part 1 of this Act shall cease to have effect at the end of the period of five years beginning with the day on which it is brought into force.”

The noble Baroness said: If the Government will not accept any of the constitutional safeguards in the amendments tabled, we propose that they consider a sunset clause. Powers in the Bill must go beyond the 2001 Act. That has formed the basis of the Government’s position on this Bill throughout. Parliament needs to see how these powers have been used. If it transpires that the Bill has had as little effect as the 2001 Act, we must consider whether we should return to that Act as the default position. To do otherwise would leave on the statute book extremely wide, unnecessary powers. I beg to move.

Lord Norton of Louth
I support my noble friend. The amendment is extremely important, as there is a clear and compelling case for reviewing such an important Act within a set period. I take issue only with the point she made that if we did not get any of the constitutional amendments we should have this one. My point is that we need both, because an awful lot could be done if this legislation were to be used in an inappropriate way within the five years. It is not an alternative; it is actually complementary to some of the amendments that we have considered. But in itself it has my full support.

Lord Bassam of Brighton
I am sure that noble Lords will not be at all surprised to hear that I am not a fan of this amendment and that I am firmly set in my opposition to it. The idea of sunsetting Part 1 does not make a lot of sense to me. The government amendments tabled ahead of and accepted on Report in the Commons mean that the order-making power is clearly focused on better regulatory outcomes. Simply to set an arbitrary date for the expiry of Part 1 would, for the reasons I am about to adumbrate, be wholly inappropriate.

It is my firm belief that there is no need for a sunset clause. The safeguards contained in the Bill, coupled with the rigorous parliamentary scrutiny that any proposal will undergo, and the ability for Parliament to veto orders, are sufficiently robust. There is no need to introduce the level of uncertainty that a sunset provision would bring. We can be confident that we are passing a robust Bill that will stand the test of time.

The approach that we need to take is one of partnership of regulators and regulated working together. What message would we be sending the business community and the public and voluntary sectors if we arbitrarily stopped working with them on this? I think this would be the only conclusion that they could draw were we to insert a sunset clause. Are we to say that the Government are interested only in the short term? Of course we are not. This is a long-term approach to legislation and regulation, and any Government would be foolish not to look to the future.

We have talked a lot about changing the culture, and a lot of that means that we have to get departments to invest resources in pursuing reforms that may in the end not prove possible. Will departments do that if there is a five-year cut-off point? An important element of the culture change we see as necessary is one of confidence in methods for delivery, and knowing we are achieving what is needed, and that work can continue without an arbitrary deadline preventing it. People should be able to rely on primary and secondary legislation—a point made on a number of occasions already during today’s debates. We want to avoid a situation where those who are regulated by an order do not have confidence in its provisions and think that it will simply be overturned and lapse. I hope that orders will be able to deliver wide-ranging reforms such as those that I have elucidated in connection with the Regulatory Reform (Fire Safety) Order. It is important that, for instance, the large numbers of businesses complying with the fire safety order have confidence in its provisions. We want Parliament to pass a power that it has confidence in now and, this being the case, should have confidence in for the future.

The Government have already given the undertaking that a Minister of the Crown will report to the House within five years after enactment on the operation and effectiveness of the Bill. If the sunset clause was included in the Bill, then even if at the end of five years Parliament wanted this power to continue, it would simply expire; no further orders could be made and the 2001 Act certainly would not revive them. We would have two options in those circumstances, neither of which is edifying or compelling: either to introduce new primary legislation for a new order-making power, or to have sensible and beneficial proposals that would have been made by order having to wait to be made by primary legislation instead. Those appear to me very cumbersome ways in which to deal with things that we believe are best dealt with in this respect. I doubt whether noble Lords have given this careful consideration, particularly in terms of its impact on businesses.

There is nothing in Amendment No. 112 to ensure that orders already made under Part 1 will remain in place—if, indeed, that is the intention. If they do not remain in force, everything done by them, including amendments to primary legislation, would in effect be repealed. I can only assume noble Lords intend existing orders to remain in force, otherwise all the efforts of departments and the beneficial reforms made over five years would be completely wasted. Unless there is an express provision to that effect, however, the position cannot be entirely free from doubt. That is why we have a saving provision in our Bill to make it completely clear, when we repeal the 2001 Act, that orders made under it will continue to have effect.

Similar amendments to introduce a sunset clause were tabled when both the 1994 and 2001 Acts were going through Parliament, and during the passage of the 1994 Act the then Conservative Administration—wisely, in my view, although perhaps I would not have thought so at the time—resisted them. I think they were right to do so. What was good enough for a good old-fashioned Tory Administration in 1994 was good enough for us in 2001, and should be good enough in 2006. Noble Lords opposite should stick to their original intentions and withdraw this amendment.

Baroness Wilcox
Obviously I am bitterly disappointed at the Minister’s reaction. I am happy to have been supported by my noble friend Lord Norton of Louth. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 [Principles]:

Lord Norton of Louth
moved AmendmentNo. 112A:

Page 13, line 17, leave out paragraph (a).

The noble Lord said: This amendment seeks to tease out of the Government the justification for embodying principles of better regulation in statute and having a statutory code of practice. There is no argument about the importance of the principles embodied in Clause 23(2)(a), nor of the value of having a code of practice. What is at issue is whether the principles are best realised through a voluntary or a statutory code.

Applying the principles of better regulation did not create a problem when applied at the level of general functions. As the Bill is drafted, however, it opens up the prospect of particular regulatory decisions being challenged in the courts for failing to fulfil one of the enumerated principles. On the face of it, that may seem quite justifiable. However, I draw a parallel with what we see happening at the moment at the European level with Ordnance Survey material. There would seem to be an obvious case for making such material publicly available, but the Government have now realised that there are security implications if all the material is made available, and are seeking to achieve some change to the proposal.

Similarly, with regard to this clause, the principle of transparency would appear to be incontestable. However, what if it were utilised for the purpose of acquiring material about the activity of regulators in tackling suspected criminal activities? The same applies to the principles. There is an arguable case that they could be utilised to undermine regulators in the fulfilment of their functions. I know a number of regulators are unhappy about this part of the Bill, and would prefer a voluntary agreement rather than a relatively inflexible statutory code.

I have therefore put down my amendment and given notice of my intention to oppose the Questions that Clauses 24 to 26 stand part of the Bill. I appreciate that there are probably better ways of getting at what I seek to achieve. I do not regard that as crucial, since my purpose is essentially to eke out of the Government a justification for Part 2. Not surprisingly, we focused very much on Part 1, but it is important that we ensure that this part is adequately probed and considered. I think the regulators’ concern deserves a response. I beg to move.

Lord Bassam of Brighton
I shall respond to the amendments as well as the issue of Clauses 24 to 26 standing part.

Baroness Wilcox
They are not grouped together.

21:45:00

Lord Bassam of Brighton
I understand that Amendments Nos. 112A, 112B, 113 and 113A are grouped with the Questions that Clauses 24, 25 and 26 stand part. My intention was to speak to the whole lot.

Baroness Wilcox
First, I wish to speak to Amendments Nos. 112B, 113 and 113A, which were not spoken to by the noble Lord, Lord Norton of Louth.

I question why we are leaving yet again to codes of practice matters that could reasonably be stated in the Bill. The Government generally try to leave too much to guidance and codes of practice, and sometimes it is hard to see why. If they are concerned that putting guidance into statute will lead to more cases of decisions of Ministers or public bodies being judicially reviewed, I suggest that that concern is misguided. The courts look at adherence to guidance anyway when assessing whether the decision of a Minister or action of a public body was irrational or procedurally incorrect. Although guidance is not binding in the same way as a statutory duty, the courts will none the less consider that there is a legitimate expectation that such guidance will be followed.

With that in mind I question why much of the content of the code is not placed in the Bill. The Cabinet Office has kindly supplied the draft code in advance of this debate, so I welcome the fact that at least we can debate Clauses 23 and 24 with it available. Section 2 of the draft code begins with the statement:

“This section is based on the principle that no inspection should take place without a reason”.
 

Why cannot that be placed in the Bill as a legal requirement? I read on:

“Regulators must use risk assessment to programme all inspection activity”.
 

Where is the drafting problem there in getting those exact words into Clause 23?

Section 3 deals with data requirements. This is the bane of every business’s existence—endless form-filling and sending in of returns. The code contains a very pithy statement; that,

“if two regulators require the same information, they must, in so far as possible, share data so that it is only collected once”.

Why cannot that be expressed as a legal requirement? It would allow businesses to tell a regulator to go back to another regulator and get the information from it, rather than making the business do all the work again just because the regulators were being inefficient. I have delved into the code enough; it contains useful advice which ought to be in the Bill.

I shall now discuss in detail Amendments Nos. 112B and 113. These amendments seek to question the extent to which these principles will apply to regulators. The Explanatory Notes state at paragraph 82:

“The duty to have regard to these principles is subject to any other legal requirement, such as a statutory duty or a requirement of EC law, which will take priority over the principles”.
 

This worries me slightly because at first sight Part 2 sounds very positive: here we have set out in statute some sensible principles with which no one could really disagree. If the regulators do not have to operate according to these principles—if their statutory duties are incompatible with that—how much regulatory activity would therefore be exempt from the operation of these principles? I understand that this subsection would exempt the economic regulators, particularly those explicitly referred to under Clause 26(5). Whether those exemptions in Clause 26 are appropriate is another matter; I seek to find out the extent to which these principles will have any real effect.

Amendment No. 113 attempts to give more teeth to Part 2. By ensuring that a report on the operation of that part is laid before Parliament, we will be able to keep a check on what regulators are up to and how they have been behaving. I expect that the work entailed in compiling such a report would already be taking place. The Better Regulation Executive in conjunction with the Better Regulation Commission would surely be up to date with what was going on with the regulators, so there should be no reason not to expect a formal report to Parliament on an annual basis.

Lord Bassam of Brighton
I will work through the grouped amendments and the stand part clauses. I am not entirely sure what the noble Lord, Lord Norton of Louth, is trying to achieve with his amendment because it would mean that the only principle of good regulation left in Clause 23 would be the one to ensure that regulatory activity should be targeted only at cases in which action is needed. I am aware that the noble Lord chaired the Lords Select Committee on the Constitution when it produced its report The Regulatory State: Ensuring its Accountability, but I am not clear from my understanding of that report whether the noble Lord has another target in mind in moving his amendment.

I am not here to defend whether the Better Regulation Task Force, now the Better Regulation Commission, accepted this recommendation from the committee, but I am here to defend the fact that all five principles of good regulation are sensible principles that should underpin regulatory activities. I challenge the noble Lord to dispute the importance of those five principles of good regulatory practice. They are widely regarded as the gold standard for judging regulation, and they are the baseline standard that our Government want to set for the exercise of regulatory functions. However, they are not unprecedented, and they can also be found in the Communications Act 2003, where they apply to the regulatory functions of Ofcom. Given the variety of functions that regulators have and the variety of contexts in which they operate, inconsistency of approach is a real risk and could cause difficulties for those regulated businesses.

Would the noble Lord have it that regulatory activities should be targeted only at cases in which action is needed but that these activities are carried out in a disproportionate, unaccountable or inconsistent manner? We insist that the regulatory environment that we are trying to foster is one in which regulators do not use a sledgehammer to crack a nut, and where there is a clear understanding of accountability and the need for consistency. Regulatory activity should be targeted only at cases in which action is needed, but the action taken must be proportionate to the problem or risk involved. The noble Lord’s amendment implies that so long as you are targeting the right nut, then however you crack it is fine.

I think I understand the rationale for Amendments Nos. 112B and 113A. The noble Baroness seems to require the duty to have regard to both the principles and the code of practice to be more onerous than it currently is. While I am delighted that the noble Baroness is as eager as we are that there is a statutory duty to have regard to the principles of good regulation and the code of practice in the Bill, I do not share her view that we should remove subsections (3) and (4) of Clauses 23 and 24. The effect of these subsections is that the statutory duty to have regard to the principles and the code of practice is subject to any other legal requirement affecting the exercise of the regulatory function, such as another statutory duty or Community law requirements. That means that, in the event of overlapping obligations, any other legal requirement affecting the exercise of the regulatory functions to which Clauses 23 and 24 apply takes priority over the duty to have regard to the principles and the code. That ensures legal certainty for those exercising regulatory functions.

This clause is not a let-off for regulators, as was suggested in another place. Regulators will not be able to use their founding legislation to ignore the principles. They will have to have regard to the principles and the code of practice, once issued, when exercising any functions which have been listed in an order under Clause 26 wherever the exercise of the function is not already affected by a legal requirement. Where there is a conflict, this Bill will provide the Government with more tools to act and intervene.

Amendment No. 113 is an unnecessary amendment, which the Government cannot accept. Philip Hampton, in his report Reducing administrative burdens: effective inspection and enforcement, recommended that the Government establish a Better Regulation Executive at the centre of Government. We accepted those recommendations in the Budget Statement in 2005. Noble Lords will know that the BRE has been established and is working with regulators to devise how best it can hold regulators to account for their performance against the principles of regulation. Alongside this assessment work of the BRE, regulators will continue to be held to account for their financial performance by the National Audit Office and the Audit Commission, and for policy by their sponsoring departments, whose decisions in this area will be assessed by the BRE.

For example, following an invitation from the Treasury under Section 12 of the Financial Services and Markets Act, the National Audit Office is reviewing the economy, efficiency and effectiveness with which the Financial Services Authority has used its resources, when discharging its statutory functions. Moreover, the draft regulators compliance code, which the Government seek to place on a statutory footing under the provisions of Clause 24, proposes that regulators be required to publish clear standards for service and performance, against which they measure their performance each year, and publish the results.

We feel that enough is being done to ensure that regulators are held to account with regard to the exercise of their regulatory functions and that Amendment No. 113, if accepted, would add an unnecessary layer of bureaucracy to the existing mechanisms by which the Government hold regulators to account. For those reasons, I insist, or, rather, suggest that noble Lords opposite do not press their amendments.

For many of the reasons that I have set out, we would also oppose the removal of Clauses 24, 25 and 26. The code of practice procedure is important. The Minister must follow particular requirements when proposing to issue or revise the code of practice. The procedural requirements are broadly similar to those in place for revising the code of practice set out in Section 10 of the 2001 Act.

Clause 26 enables a Minister of the Crown to specify by order which regulatory functions are functions to which the duties have to have regard in relation to the principles in Clause 23 and the code of practice in Clause 24 and its application. We welcome the general support that we have had from opposition parties, but I would draw to the attention of noble Lords opposite the importance of Clause 26, which ensures that the Minister or the Assembly must consult any persons whose functions are to be specified in the order made under that, and consult other persons as the authority making the order considers appropriate. An order made under this power must be made by statutory instrument, and where the Minister makes the order, it will be subject to the affirmative resolution procedure, by virtue of subsection (9).

Clause 26 stands or falls with Clauses 23, 24 and 25 and will enable us to deliver the recommendation of Philip Hampton’s report through changing the way in which regulators behave. For those reasons Clause 26 should stand part of the Bill.

The noble Baroness asked why the detail of the code is not on the face of the Bill. We have produced an initial draft of the code. We are working with regulators on its detail and it is subject to change. So we require that flexibility in order to be able to change it—very much having listened to the views of formal consultees. Formal consultation on the code will take place after Royal Assent but that does not diminish our commitment to ensuring that we pay careful attention to the representations made to us.

Lord Norton of Louth
The Minister probably made a Freudian slip when he said that he “insisted” that the amendments should not be pressed. He said that he did not understand my amendment. That is all right, because I did not understand his answer. What my amendment was getting at was a means to an end and the Minister seems to think that I was challenging the end. I was not. No one is disputing the principles embodied in this part of the Bill. What I was addressing was whether those are best achieved through a statutory or voluntary code. A voluntary code can potentially ensure their achievement. That was what I was really getting at. I expected that the Minister would give a fairly full response and would have understood what I was getting at—and, therefore, that I would feel that there would be no need to pursue this matter. But, in light of what he said, I shall need to reflect on it. What I have done in terms of the amendments did not get at the point. For the moment, I beg leave to withdraw the amendment. 

Amendment, by leave, withdrawn.

[Amendment No. 112B not moved.]

Clause 23 agreed to.

[Amendment No. 113 not moved.]

Clause 24 [Code of practice]:

[Amendment No. 113A not moved.]

Clause 24 agreed to.

Clauses 25 to 28 agreed to.

[Amendment No. 113B not moved.]

Clauses 29 to 31 agreed to.

Viscount Colville of Culross
moved Amendment No. 114:

After Clause 31, insert the following new clause-
 “PROVISIONS AS TO SUBORDINATE LEGISLATION
 (1) Where subordinate legislation (as defined in paragraph 1A(2) of Schedule 2 to the European Communities Act 1972 (c. 68) as inserted by section 30 of this Act) creating any obligation or offence is made under section 2(2) of the European Communities Act 1972 or any other statutory power (or both) in order to give effect to a Community instrument, the subordinate legislation shall include a description of the subject matter of every such obligation or offence imposed by the Community instrument.
 (2) Any description under subsection (1) shall be taken, in any proceedings before any court or tribunal, to be indicative only and shall not prejudice the power of the court or tribunal to interpret the meaning of any expression in the Community instrument.”

The noble Viscount said: I am so glad that this amendment is not grouped with anything. Nobody in the Committee can be expected to understand what it concerns except those who sit on the Merits of Statutory Instruments Committee. That includes, or did include, the noble Lord, Lord McKenzie of Luton. I have given detailed comments to the noble Lord, Lord Bassam, about what I am going to say so I hope that he will be able to follow it. I do not expect anybody else to understand it at all.

It is all about transparency. There are two keynotes in this Bill. One of them is the removal of burdens, including, among other things, criminal sanctions. That involves criminal sanctions not only on businesses, charities and everything else but also, I was delighted to hear the noble Lord, Lord Bassam, saying on 3 June, on individuals. The Bill alsohas a keynote of promoting, in Clause 2(3)(a), transparency.

Departments in drafting statutory instruments are complying with neither of those principles. That is especially a matter for Defra but the DTI is not exempt; it is when it is transposing EU directives or regulations that it falls into the trap that I am about to describe. I have given the noble Lord, Lord Bassam, some examples, which I hope he haslooked up.

I shall begin with an example from the Department of Trade and Industry—2006/1719. It states in Regulation 2:

“Any person who, except under authority of a licence … infringes the prohibition on the acceptance of technical assistance in Article 4 of Regulation (EC) No 1236/2005 shall be guilty of an offence”.

The penalty in a magistrates’ court is up to level 3 on the standard scale. What is that? It does not say. I am not particularly sorry for the people who are being attacked by this regulation; they are those who provide materials or instruments that can be used for torture or cruel and inhuman treatment, such as thumbscrews and cattle prods. Nevertheless, whoever they are, they are entitled to know what the offence is that they are not allowed to commit but it does not say what that is in the statutory instrument.

From Defra, I have chosen two examples. First, there is 2005/3280, which states:

“Any person who contravenes or fails to comply with any of the specified provisions of Regulation 183/2005 set out in paragraph (2) is guilty of an offence”.

The penalties vary; on indictment it would be up to two years in prison or an unlimited fine or, in the lower courts, less.

Paragraph (2), one of the provisions with which one has to comply, specifies Article 6(1) as read with paragraphs (2) and (3). That is described as the HACCP system. It then goes on to Article 7(1), on documents concerning the HACCP system. Nowhere in the statutory instrument is the HACCP system explained. In fact it is a hazard analysis and critical control points system; but one can find that out only if one reads the Explanatory Memorandum, which of course is not published with the statutory instrument at all and can be obtained only separately. There are also Community codes of good practice. We do not know what will be in those, and presumably if one fails to comply with them, that will also be a criminal offence. But we do not know what they are. The provision is about animal feed. However, it does not apply only to those commercially producing animal feed, but also to individual farmers.

Recently, we have had statutory instrument 2006/1228, which came into force on 3 May 2006. It revoked a previous statutory instrument, 2006/68, which came into force on 1 March this year. It concerns what I fully appreciate is an extremely serious problem: TSE—transmissible spongiform encephalopathy. It is a licensing provision for premises, which have to be maintained and operated in accordance with what is called “the Community TSE Regulation”. There are provisions for inspections and prohibition on the movement of animals, or parts of them, a breach of which carries the normal range of penalties allowed under the European Communities Act. “The Community TSE Regulation”, with which one has to comply, consists of 29 European Union instruments, including the original one—999/2001—which has at least 11 annexes, of which Annex III has been amended five times since then, and Annex XI seven times. It applies to farmers as well as to slaughterhouses and cutting plants, and some of the enforcement falls to trading standards departments.

To understand that, there is no alternative but the internet. Trading standards departments are fairly busy. They do not deal only with animals but with all kinds of other frauds, counterfeit goods and heaven knows what. Recently I was talking to the head of a trading standards department in a very large rural community. He said that, quite apart from what they themselves need to know as enforcement officials, farmers want to know what they can or cannot do. I do not know how many of them have time to look up 29 European Union instruments on the internet—compiling the amendments to all the annexes as they go about their daily business. I remember the noble Baroness, Lady Carnegy of Lour, saying recently that farmers are under great pressure these days and I am sure that she is right.

It does in fact go wrong. I am told by my noble friend Lady Mar, who had been listening to “Farming Today” on the BBC, that, a fortnight ago, there was a case in Flint concerning the European Union cattle passports. A man named Mark Payne, I think, was charged with 19 offences of failing to keep proper records. I think that the district judge found that there was no foundation in English law for the offences. It was said to be a legal grey area going back to 2000. I asked the noble Lord, Lord Bassam—and now ask the noble Lord, Lord McKenzie—whether I could have further information on the case. I think it is quite an important illustration of what happens.

Why will government departments not put the ingredients of the offence into the statutory instrument? Well, it has been perfectly plainly explained by Defra. It says that,

“because EU Regulations are directly applicable in all countries, normal drafting practice is to avoid repetition of EU provisions in domestic legislation, as it may result in duplication or in the meaning of the Regulations being obscured”.

That was in a letter that the department sent last month to the committee which I sit on. What does it mean? Are we to suppose that there will be different interpretations of the directive, or regulation, in Portugal, in Latvia and in this country? The result, of course, must be an enormous burden on farmers, as well as many others. As farmers run small businesses, they are well within the ordinary scope of this Bill. Are they supposed to go straight from the milking parlour to the internet to see what is the latest regulation to affect their trade and how they carry out their farming? It is not reasonable to suppose that they could do so. The result is that the whole of these provisions are completely opaque. That is why the Bill ought to deal with this sort of matter.

If one contrasts this approach to what happens with ordinary criminal legislation in your Lordships’ House, one sees that it is very different. Members of the Committee will remember, for instance, the Theft Acts, or the recent Fraud Bill, both of which originated with the Law Commission. I do not remember anyone saying that anybody likely to be affected by these criminal provisions need only go back to the Law Commission’s report to find out what the offence consisted of—of course not. We have always put what are the several ingredients of the offence in the legislation, so that people know exactly what they are not allowed to do. That is not so in the case of European Union legislation.

I do not want to be totally unconstructive about this. If there is a difficulty over obscurity or different interpretations in different countries, then maybe Defra has the solution. There is one in the over 30-month scheme, which comes originally from regulation 719/96, but was most recently amended by statutory instrument 2005/2109 in England—I am not sure whether it applies to Wales. It now has a parallel column, setting out the article in the original European Union regulation and, in the other column, what is called “the subject matter”: the requirement or prohibition. That does not appear to cause duplication or obscuration. If not, why can it not be used as a general approach? I put in the amendment that any such explanation would not be used in a criminal court by way of interpretation. It would simply help those being dealt with under these various instruments.

Can the Minister tell me, what is the policy on duplication and obscurity? Is this Bill not the very vehicle to try to import some transparency into the process? As the parliamentary Clerks responsible for statutory instruments in their various departments evidently will not depart from this probably quite long-standing technique, should Parliament not deal with it now? I am not going to ask anybody to decide upon it tonight, but it must be addressed and I look forward to what the Minister has to say. I beg to move.

Lord Henley
In offering support from these Benches to the amendment of the noble Viscount, Lord Colville, I first say how much we all admire his staying power. He has sat through all three days of Committee, and we have finally reached Amendment No. 114. Secondly, I ought to declare an interest as, many years ago, I sat at the noble Viscount’s feet as his pupil. I was possibly the worst pupil he ever had to endure, but at least I learnt enough to be able to say that I think I understood what he was getting at with his amendment seeking greater transparency. He explained it to us with such clarity that it is easy for all of us on these Benches to say how much we support his amendment and hope he will return to it on Report.

Too many restrictions, regulations and offences are created and passed with far too little scrutiny or wider awareness of the contents because of the amount of subordinate legislation that comes out of Europe. Any steps that can help us to maintain a grasp of what is being imposed on all of us throughout the Community are to be welcomed. These Benches support the amendment tabled by my noble friend.

Lord McKenzie of Luton
I thank the noble Viscount for moving this amendment and for taking us through some detailed examples. He is right that I spent some happy months on the Merits Committee, although I am not sure that some of the fun we had perusing the intricacies of the instruments was always the best use of my time.

I fear that my response may be inadequate to the challenge the noble Viscount has posed me, but he has given us cause for reflection for subsequent stages. The purpose of the amendment is to make it possible, by reading UK legislation, to tell what one is obliged to do, or what one must not do, to avoid an offence, without the need for cross-reference to EC legislation. I have no doubt that he would want this amendment to add clarity for those dealing with statutory instruments that transpose Community obligations into domestic law.

However, the second subsection of the amendment appears to undermine the noble Viscount’s intention. Its effect is that any description of subject matter, as required by subsection (1), would be indicative only. In practice, that would mean that in cases before courts or a tribunal—for example, criminal prosecutions—the court could still interpret the words in the relevant Community instrument so as to establish precisely what one is obliged to do, or what one must not do, to avoid an offence. The provisions of the amendment would not remove the need to refer to the relevant EC instrument, as it is that and not any description made under the requirements of subsection (1) of this amendment that will be determinative before the courts.

This could lead to confusion, not clarity, for those dealing with SIs implementing Community instruments, as the inclusion of “descriptions” may lead some to believe that they do not need to refer to the relevant Community instruments. It should also be noted that even if descriptions made under the requirements of this amendment were not merely indicative, the description in the Community instrument would still be deemed definitive by a court. Therefore, one would still have to refer to the relevant Community instrument.

The provisions of this amendment would also create an unnecessary legislative burden, as any description of a “subject matter”, as required under the provisions of this amendment, would have to be updated each time the relevant Community instrument was amended. The creation of such a legislative burden does not fit with the tenor of Part 3, which is designed, in part, to reduce bureaucracy with respect to the implementation of European Community obligations in domestic law. For those reasons, the Government cannot accept the amendment.

The noble Viscount asked whether courts in England interpret differently from courts elsewhere in Europe. Courts in different member states may take a different view on the interpretation of Community law, but they are all interpreting and bound by the same law, and ultimately the interpretation of Community law is a matter for the European Court of Justice. If a case reaches the ECJ its interpretation would bind the domestic courts of all member states.

Notwithstanding that, and the technical difficulties in proceeding as the noble Viscount suggests, he has given us food for thought about trying to get more clarity in the statutory instruments to make sure they are more user friendly.

Lord Jenkin of Roding
I had not intended to take part in the debate but I was overwhelmed by the noble Viscount’s arguments. Earlier in life I sometimes had to deal with successive instruments which referred further and further back until major research was needed to find out what they were about.

I detected a sign of some movement in the reply of the noble Lord, Lord McKenzie, that he wanted to reflect on the problems. I do not believe that the bureaucratic burden on which he seemed to lay so much weight, in arguing against the amendment, should prevent departments that implement European regulations spelling out clearly in layman’s language what they mean: the offence being defined and the penalties. You could always add, as one frequently sees, “This is a description only”. We get that in the Explanatory Memorandums supporting Bills, which say that you have to look at the actual clauses but outline what they mean.

The noble Viscount referred to the huge torrent of European legislation that pours out. We have heard the example of farmers, but it has happened to employers and others affected by the legislation. Unless its meaning is spelt out in simple layman’s language, my guess is that most people give up and don’t do it. As the noble Viscount said, if there is an occasion when we really ought to address what has become a very serious burden for those affected by the legislation, it is this Bill, where we are trying to lift the burden of regulation.

One of the biggest burdens is trying to understand, if I may use unparliamentary language, what the bloody hell it is all about. The noble Viscount is saying that an explanation should be available with the document, in it or attached to it. I thought he made an extremely strong point and I hope that Ministers will take this up, because—and I say this to my noble friends on the Front Bench—we should return to it at a later stage.

The noble Viscount was congratulated on having sat through three days of Committee; I think he deserves a much better and more positive response than he got from the government Front Bench.

Lord Desai
I was in the Merits of Statutory Instruments Committee with the noble Viscount. It was only his assiduous work in looking up all the previous connections of what was in front of us that made the Committee understand what we were doing. Without him we would never have understood the statutory instruments we were dealing with. All he is saying is that perhaps we should all help farmers by laying the regulations before them in simple terms so that they can understand what is happening to them. I commend the amendment to my noble friend on the Front Bench.

Lord McKenzie of Luton
I revert to one point: if we proceed down this path, would we not have to update the instrument each time the Community instrument itself was amended? That itself is a considerable bureaucratic condition.

Lord Jenkin of Roding
So what? Sorry, I am interrupting the noble Lord from a sedentary position, but at this time of night perhaps one is almost allowed to do that. It is a burden on the noble Lord’s officials, but it is lifting the burden on the farmers who have to understand it. That is what it is about. We want to make sure that the people to whom the regulations apply understand what they are being asked to do or not to do.

I am grateful for the support of the noble Lord, Lord Desai, who also served on the committee. We need to address this problem. Where better than in this Bill?

Lord McKenzie of Luton
In view of the hour, perhaps I can revert to a point that I made earlier. We have some concern about the precise technical prescription, but we have sympathy with the thrust of the noble Viscount’s point. Perhaps we will have a chance to think again about this; I am sure that we will return to it later in our deliberations.

Viscount Colville of Culross
I am extremely grateful to the noble Lords, Lord Jenkin and Lord Desai, for adding their voices to the debate.

I am not sure that I am very sympathetic about legislative burdens. The Government have gone to Brussels and agreed these things. Now they propose to impose them on people running businesses in this country, but they will not explain what it is that they have submitted to. The Minister said that he did not like the second paragraph in my amendment. Very well, I have given him the reference. What is wrong with Statutory Instrument 2005 No. 3522, the Older Cattle (Disposal) (England) Regulations 2005, which contains in its schedule—this is what I was copying in my amendment—provisions applicable to operators of slaughterhouses? Under the heading,

“Provision of Commission Regulation (EC) No. 716/96”,
 

Article 1(2) states:

“Requirement that heads, internal organs and carcasses be permanently stained”.
 

Then there is a whole list. What is wrong with that? Why does the Department for Environment, Food and Rural Affairs produce that sort of document if the Government say that it is an administrative burden? What is wrong with the system that they have introduced?

All that I suggested was that the Government might give an indication. Very well, if the Minister and the Government do not like it, we can take it out but the fact remains that the people on whom these impositions fall will have to undertake a major research project, as the noble Lord, Lord Jenkin, said, before they can find out what is the offence that they might have committed. I find that unacceptable. Of course, I shall not press the amendment tonight, but I am very glad to hear a fairly sympathetic response from the noble Lord, Lord McKenzie, and I hope that we can return to the matter later. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 [Repeals and savings]:

Lord Bassam of Brighton
moved AmendmentNo. 114A:

Page 20, line 29, leave out subsections (2) and (3) and insert-
 “(2) The repeals in the Schedule do not affect the application of the 2001 Act in relation to the making of an order under section 1 of that Act giving effect (with or without variations) to proposals in a document laid before Parliament under section 6(1) of that Act before the day on which this Act comes into force.”

The noble Lord said: Amendments Nos. 114A to 114D make minor and technical changes, at the core of which is Amendment No. 114C, which ensures that subordinate provision orders can still be made under the 2001 Act to amend existing regulatory reform orders, despite the Bill’s repeal of the 2001 Act. The other amendments are minor, related amendments to clarify the drafting. In view of what we have just heard from the noble Viscount, I should have thought that they are commendably sensible and practical amendments. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton
moved Amendments Nos. 114B to 114D:

Page 20, line 36, leave out “Nothing in this Act affects” and insert “The repeals in the Schedule do not affect”

Page 20, line 39, at end insert-
 “(4A) The repeals in the Schedule do not affect-
 (a) any power to make an order under section 1 of the 2001 Act pursuant to section 4(4) of that Act (a “subordinate provisions order”) in relation to the subordinate provisions of any order under section 1 of that Act continuing in force by virtue of subsection (4); or (b) the operation of sections 1 to 4 of that Act in relation to the making by virtue of paragraph (a) of any subordinate provisions order.”

Page 20, line 40, leave out “Nothing in this Act affects” and insert “The repeals in the Schedule do not affect”

On Question, amendments agreed to.

Clause 32, as amended, agreed to.

Clause 33 agreed to.

Clause 34 [General interpretation]:

[Amendment No. 115 not moved.]

22:30:00

Lord Bassam of Brighton
moved AmendmentNo. 116:

Page 21, leave out lines 25 to 40 and insert-
 “(2) In this Act “regulatory function” means-
 (a) a function under any enactment of imposing requirements, restrictions or conditions, or setting standards or giving guidance, in relation to any activity; or (b) a function which relates to the securing of compliance with, or the enforcement of, requirements, restrictions, conditions, standards or guidance which under or by virtue of any enactment relate to any activity. (3) In subsection (2)(a) and (b) the references to a function-
 (a) include a function exercisable by or on behalf of the Crown; (b) do not include- (i) any function exercisable by any body of, or any person holding office in, the Church of England; or (ii) any function of conducting criminal or civil proceedings. (4) In subsection (2)(a) and (b) the references to an activity include-
 (a) providing goods and services; and (b) employing or offering employment to any person.”

The noble Lord said: I can deal with the amendment fairly briefly. It exempts the Church of England from the provisions in Part 2 on the exercise of regulatory functions, and ensures that the order-making power in Clause 2 cannot be used in relation to the regulatory functions of the Church. This is consistent with the long-standing constitutional convention that the Government will not legislate on anything within the competence of the Church of England, which has de facto delegated powers, without first reaching agreement with it. My understanding, as one would expect, is that the amendment is very agreeable to the Church of England. The right reverend Prelate the Bishop of Coventry raised the issue on Second Reading. Officials have been in discussion with the Church authorities on this point for some time, and my understanding is that the Church is entirely happy with the proposition. I beg to move.

On Question, amendment agreed to.

Clause 34, as amended, agreed to.

Clauses 35 to 37 agreed to.

Schedule [Repeals]:

Lord Bassam of Brighton
moved AmendmentNo. 117:

Page 23, line 31, at end insert-
 ------------------------------------------------------------
|“Wireless Telegraphy Act 2006|In Schedule 8, paragraph 9.”|
------------------------------------------------------------

The noble Lord said: Amendment No. 117 is a minor change to what will become the Wireless Telegraphy Act 2006. The Wireless Telegraphy Bill is a consolidation Bill and is drafted on the basis of the law as it now stands. On that basis, it includes provision in relation to the Regulatory Reform Act 2001 in that it disapplies the two-year rule in that Act, which endeavours to prevent a regulatory reform order amending or repealing a provision that is less than two years old or has been substantially amended in the past two years. The disapplication means that the two-year rule would not stop a regulatory reform order making provision for wireless telegraphy just because that provision has been consolidated in the Wireless Telegraphy Bill. As our Bill will repeal the 2001 Act, the provision in the Wireless Telegraphy Bill serves no purpose, and I entreat Members of the Committee to accept the amendment without demur, because it will be very helpful indeed. I beg to move.

On Question, amendment agreed to.

Schedule, as amended, agreed to.

In the Title:

Lord Bassam of Brighton
moved Amendment No. 118:

Line 2, leave out from “legislation” to “; to” in line 4 and insert “and promoting regulatory principles”

On Question, amendment agreed to.

Title, as amended, agreed to.

House resumed: Bill reported with amendments.