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Regulatory Reform Bill Hl
23 January 2001
Volume 621

House again in Committee on Clause 1.

On Question, Whether Clause 1 shall stand part of the Bill?

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We debated this clause at some length but it is appropriate that we have this opportunity to return to some of the major effects of Clause 1 in terms of the Bill as a whole. There is obviously deep concern on this side of the Committee as to the scope and extent of this Bill and its implications.

There are two points that I wish to make in particular. The first concerns the policy that underlies this clause. The second concerns the methods by which we are accustomed to legislate, the changes that this clause will make to those methods and the constitutional impact which those changes will have unless appropriate safeguards are put in place.

My first point is this. The purpose of regulation is to advance the public interest; it is not to promote state control. This Government have spoken more and more frequently in recent days of imposing regulation with a "light touch". That is their phrase, not mine. While that may be their stated intention, that is not the impression that I get from this clause. It is true that the Bill speaks of the public interest, but it also speaks of burdens and much more of the imposition of burdens than the relieving of them. It seems to me that this Bill and the powers envisaged by this clause anticipate regulation in ever increasing circles so that legislation—and I use that word in its very widest sense—might become the province no longer of Parliament but any number of public and semi-public bodies. I am left with a distinct impression that control of the individual by the state by means of a network of statutorily authorised regulated bodies—I am tempted to call them busy bodies—lies at the very heart of the policy of this Government as expressed in this Bill. That emphasis is in marked contrast to the Act of 1994 which had as its sole purpose the removal of regulation.

This Bill—proposing as it does the creation of a power to impose fresh burdens and to do so by means of subordinate legislation through a network of regulatory authorities, not effectively answerable to the legislature—is a different animal entirely. Comparisons between this Bill and the 1994 Act in terms of overall effect are, for these reasons alone, wholly inapt. Any attempt to compare the safeguards provided in this Bill with those contained in that Act for the purpose of demonstrating an adequate level of security would be wholly inappropriate.

Of course we are in favour of the advancement of public interest. It is clearly expedient that we should all be protected from bad practice and equally clear that we should all receive the benefit of good practice. We accept that this may be achieved by means of regulation. This aim of enhancing the public good by regulation is only achievable at the expense of those upon whom the burden of compliance with regulation is cast. It is they, those who must bear the burden of compliance, who are immediately affected by it. It is they whose jobs are made more difficult and whose lives are often turned upside down by it.

As presently framed, this Bill, and this clause in particular, seem to me to divert attention away from those who will suffer from the impact of new regulation or, at the very least, to mask the effect this Bill will have upon our lives. Regardless of the appropriateness of primary or secondary procedures, how are we to know what is a suitable candidate for the procedure envisaged by this Bill?

My second point is of greater constitutional significance. To extend the power to legislate regarding burdens affecting persons is to extend the power to create subordinate legislation too widely. We are all agreed that subordinate legislation is a valuable legislative tool. However, it should not be permitted to be used as a by-pass enabling those who are so minded to avoid the less speedy and altogether more traffic-congested route of primary legislation where such is the appropriate route. Primary legislation benefits from—or perhaps suffers from depending upon your perspective—the sometimes critical nature of public debate. Secondary legislation, on the whole, does not. Furthermore, whereas the passing of primary legislation is a process attended with a degree of thoroughness and intellectual rigour, there is perhaps a tendency for the same processes not to be brought to bear in the case of secondary legislation. These are both good reasons to prefer the paths of primary legislation where appropriate.

The Select Committee on Delegated Powers and Deregulation was told by the Minister that there would be a practical limitation upon the choice of areas upon which to practice the use of the power granted by this clause. That limitation will take the form of an "elephant" test. What that means is this. We may not be able to define an elephant but we know one when we see one; likewise, an area appropriate for regulatory reform. We are told that this is the test which will be applied by Ministers before subordinate legislation is thought fit to be introduced under the scheme envisaged by this Bill. This test is proposed because no satisfactory threshold definition can be drafted.

What all this means is that the test that is proposed is so ill-defined as to be of no practical effect and certainly it provides no impediment to an abuse of the power. It is, in truth, no test at all. We believe that this is a wholly inappropriate approach—even when used informally as a threshold test for the application of subordinate legislative procedures—to the amendment of primary legislation especially in a field so wide-ranging as that envisaged by the Bill.

What means are we to be given to enable us to identify our elephant? That is something that we should be told. This Bill does not bear comparison with the Act of 1994 and it takes little imagination to recognise the opportunity for the arguments, once it is passed, that may be applied to justify wide-ranging subordinate legislation along lines as yet unimagined. Much concern has been expressed, for example, that these powers could be used to abolish or at least radically revise licensing laws, that is, beyond the proposals listed by the Cabinet Office which are currently under preparation that could be implemented by this route. That is one small example.

Let the Bill make its aim of reform clear, lest we are all at risk of being submerged in a flood of regulation for regulation's sake. I beg to move.

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I rise to make one or two points on the motion that the clause stand part. It is appropriate that we do so largely for the reason that was touched upon by the noble and learned Lord, Lord Falconer, in opening our proceedings earlier. Because of the way the amendments have been scattered around—some touch on rather important issues—there has been no one amendment on which we can stand back and reflect upon the measure of a particular clause as a whole. It is appropriate that we take the opportunity to stand back and remind ourselves of the nature of the Bill.

There are two important points I should like to make. First, this is a Bill with important constitutional implications. We should, therefore, see it as a constitutional Bill, one that should be subject to very special scrutiny by your Lordships' House.

There is a problem that is part of a wider problem. It is something I plan to touch upon in another debate tomorrow. It is that in this country in post-war decades we have lost the capacity to engage in constitutional discourse, to talk about the constitution as a constitution. We used to have it and we lost it in post-war decades. Despite various attempts at constitutional reform and despite the various attempts that have been made over the past 20 or more years, we have not recovered that capacity to talk about the constitution. We need to recover it, and to recover it quickly, if we are to discuss the constitution in terms of not just how it is changing but where we think it is going and the shape that we believe it should take in the future. There is a real danger that we discuss constitutional issues in a rather disparate way. That is exacerbated when we have to discuss a Bill through specific amendments. That is a general point but it is relevant in the context of the Bill. It is a constitutional Bill. It has to be seen in that wider context. I look to the Government for a little greater sensitivity as to the constitutional implications of the measure.

That leads into my second point, which is related but distinct. This is not a managerial Bill. It has managerial implications and there is the danger that one sees it solely as a managerial Bill rather than as a constitutional Bill with managerial clauses. That is an important point. If one sees it narrowly in that sense, it becomes easy to become complacent about the Bill. One then sees it as a mechanism for achieving particular good intentions. As I said earlier, we are not arguing about the Government's intentions but about whether this is the appropriate means for realising those intentions. There is the danger of seeing this as a nice managerial Bill. There is also the danger of complacency, particularly if one takes the view, "This is what we want to achieve. The Bill allows us to achieve it". The problem is that the provisions of the Bill allow the Government to achieve far more than what the Government intend by the measure. That is what we have to be sensitive to.

What could the Bill be used to achieve in terms of what the Government have not been contemplating? As the example given by the Minister revealed, the Government intend it to achieve deregulation. The examples given are frequently difficult to disagree with. The problem with the examples that are given relates to the wider totality of other cases that could come up in the future. There is the danger of simply relying on ministerial assurances. I realise that a balance has to be drawn and that not everything can be written into legislation. In many respects, we proceed on the basis of there being to some extent a self-denying ordinance of the part of government in respect of how we proceed and that provides the context within which Parliament can operate.

None the less, given the nature of this measure, there has to be that wider sensitivity. What worries me is that, in respect of Clause 1, the Government have not indicated any give in relation to the worries that have been raised. There has been an explicit acknowledgement that paragraph (c) of Clause 1(1) is free-standing in relation to the other subsections. Potential problems derive from that. That is the kind of sensitivity we need to have. We need to think through the matter. To what extent can the Bill be ring-fenced in order to achieve the intentions for which the Government have argued they want to use the Bill? That is not at issue. What is at issue is whether the Bill could be used to achieve other purposes.

At this stage, I do not want to delay the Committee any further. I just want to put down a marker. Given the nature of the Bill, we have to be sensitive to what the Bill could be used for. I urge the Government to be sensitive to the concerns that have been raised. If they cannot promise to go away and come back with something, they should at least promise to go away and reflect on the matter.

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We have heard a great many words about the circumstances in which the noble and learned Lord the Minister believes that it would be appropriate to use the Bill. What I have not heard from him is when he believes that it would not be appropriate to use the Bill. I return to the matter of policy. The noble and learned Lord has placed total reliance on the work of the Delegated Powers and Deregulation Committee—and quite rightly so. That is the parliamentary backbone to the Bill. However, as I said at Second Reading, it is already an overworked committee. At the very least, its manpower will need to be increased in order to encompass what the noble and learned Lord wants to do with the Bill.

As I have probably just proved in my previous three sentences, I am a bear of very little brain. Therefore, I shall have to do as the noble and learned Lord enjoined us to do at the beginning of the debate on Clause 1 and take the amendments and his utterances as a whole. I cannot do that at this moment. I shall read them very carefully. But I have no doubt that I shall come back to Clause 1(1)(c), which has the effect of imposing burdens of various kinds. It still seems to me that the noble and learned Lord's defence of the provision was that he was seeking to transfer burdens rather than creating new ones. I shall read carefully what the noble and learned Lord said, but that is my instinct at the moment.

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I am grateful for this reprise of the relevant parts of the Second Reading debate. I do not in any way object to having the fundamental issues behind Clause 1 exposed in the Committee. It is a welcome opportunity. It is true that debate has been somewhat fragmented, although to some extent I blame the noble Baroness, Lady Buscombe, for that. We could have had larger groupings with more coherent content.

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It would be more appropriate for the noble Lord to thank me because I think it was important to take some of these issues separately. They are of profound importance to us on this side of the Committee.

9 p.m.

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I do not doubt the importance and I do not doubt the sincerity. I just think that it would have been easier if we had proceeded subject by subject rather than speaker by speaker. That is a tiny and unworthy thought and I do not pursue that issue. However, I pursue very seriously indeed the issue raised by the noble Baroness in her speech. She said that she has two problems with Clause 1. The first is the policy behind the clause and the second is the process of legislation. I want to comment on both of those points.

The noble Baroness started by saying that our claim is—she is right—to advance the public interest and to do so by a light touch of legislation. She then said that in contrast to those stated aims, we are imposing more burdens—unlike the 1994 Act which concentrated on the removal of burdens. I think that I have represented the noble Baroness correctly. What the noble Baroness suggests is simply not the case. What has happened is that in the six years or so since the 1994 Act was passed, the Act has run out of steam. It has run out of steam for the most obvious reason: it does not apply to any legislation passed after the 1993–94 Session.

I acknowledge that that could be overcome readily not by a new regulatory reform Bill, but simply by an amendment to the 1994 Act to bring it up to date. But it has also run out of steam because it has become apparent in the intervening years that, whatever good work had been done in the few years immediately following the Act, we have come to the end of what can be done using those methods and that the kinds of problems which we need to address with regulatory reform, with deregulation, are more complex than had originally been thought. The answer does not simply consist of removing or reducing regulation; it does not simply consist of removing anomalies or inconsistencies, as provided for in paragraphs (a) and (d). If we are to take serious regulatory problems seriously, they need a combination of the obvious and simple things which were already provided for in the 1994 Act, with bolder attempts to rationalise a regulatory system, with the intention of reducing burden. That is what paragraphs (b) and (c), which have come under such criticism, are for.

I am not sure that I was right in speaking of the greatest good of the greatest number. I think Bentham was a simplifier. I am a simplifier in a way, but I do not think that that applies to this legislation. However, I do think that the principle of reculer pour mieux Sauter is appropriate here. In other words, it is necessary, in order to achieve our wider objectives, in order to achieve a significant number of those 51 proposals which have been presented to the Committee, to envisage the possibility of continuing or re-enacting some regulatory burdens in order to achieve a greater removal of other burdens, and of introducing new burdens on some people in order to reduce the aggregate amount of burden on those people or on other people. That is the only way in which, on the really complex problems such as fire safety—and many others are immediately apparent—we shall achieve those objectives.

In that sense, to the extent that we have extended the scope of the 1994 Act, it is not out of any intention to increase the amount of burden in total, or even in detail. The intention is to use the whole range of facilities and abilities and powers available to us to more effectively reduce burdens than the 1994 Act made possible.

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The noble Lord has hit upon the point where the problem arises, because he keeps saying "intentions", and what we are concerned with is the potential effects of the clause. That is the big difference. The noble Lord is making a case for going beyond the 1994 Act. I have no problem with that. It is a question of how far one goes, particularly since the Delegated Powers and Deregulation Committee said that in order to achieve the objective the Bill created unprecedentedly wide powers, not just wide powers. Therefore, it is being taken to a new paradigmatic plane in terms of powers. The problem is not with intentions; it is with the potential effects.

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I was responding to the noble Baroness, Lady Buscombe, who sought to identify a difference between our intentions and what we are doing. I acknowledge what the noble Lord, Lord Norton of Louth says. I acknowledge that if it were possible to provide a simple test for the wide powers which I think it is agreed are necessary in order to extend the demolition of burdens we would adopt it. The noble Lord, Lord Norton of Louth, said in his Second Reading speech that he thought he could provide it. I do not think he has done so in the amendments he has put before the Committee. If he did, we would listen very seriously. I am not saying for a moment that we would necessarily accept it, or believe that it would have to be on the face of the Bill, but I understand the natural suspicion—after all, I spent 14 years in opposition prior to four years in government—of government intentions and the natural suspicion of future government intentions. I understand the desire to have some sort of screening test. If any of us can come up with something that is workable and plausible and does not actually restrict the beneficial scope of the Bill, we shall listen very carefully to what is proposed. That is the first issue, the issue of power, following the agenda of the noble Baroness, Lady Buscombe.

The next issue is what the noble Baroness calls the constitutional issue, which is the issue of the process of legislation. The noble Baroness says that this is too wide an extension of subordinate legislation. Let me first sound a note of doubt about the efficiency of public debate on primary legislation. Again, having spent 14 years in opposition as well as four years in government, I have seen how primary legislation can go through on the nod without adequate scrutiny late at night. I have seen the way in which the scrutiny depends on chance in primary legislation. I think that the very detailed procedures here—their length, the extent to which they involve public consultation, which is not necessarily involved in primary legislation, the extent to which they involve committees of both Houses, the extent to which they come back in draft and are then produced in detail, with a series of consultations—in many ways provide better public debate than primary legislation. So I do not accept the argument that there is anything backdoor or undercover about the measures proposed in the Bill. Primary legislation is in many ways easier than the super-affirmative procedure proposed here. I think that. Ministers in any government will discover that and will retreat to primary legislation. I can assure the Committee that the Labour Government in their second term, when it starts, will have just as crowded a primary legislation programme as before, for exactly that reason.

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I do not want to prolong this debate, but I should like to pick up on the point about parliamentary scrutiny. I take the noble Lord's point that there is a very real balancing act in terms of the benefits proposed under this measure replicating the 1994 Act and existing methods of primary legislation. I see the argument and recognise the benefits that derive from the process that the noble Lord is outlining. However, one has to weigh that against the fact that primary legislation concentrates the Government's mind far more in that they have to find a slot. Primary legislation, whether one likes it or not, none the less has the potential of gaining the oxygen of publicity, because more time is usually spent on the Floor. That is an important point.

The other point concerns the extent to which Members can be involved, particularly in the other place. The process is very much confined to committees. I have nothing against committee scrutiny—that is invaluable; it is when it is then linked to debate in the Chamber. There are limited opportunities for that, particularly in the other place when it comes both to debate and amendment. That is where the difference arises.

I recognise what the Minister is saying. I recognise that there are benefits in that process against primary legislation. What I draw from that is that there is a case for reforming the way in which we deal with primary legislation in order that the scrutiny through that process is improved.

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I love this stuff, but we are getting beyond the scope of the Bill. I shall gladly come and take part in a debate with Lord Norton of Louth, at Hull or anywhere else. If I were not in government, I might charge a fee!

I started from the point that the contrast that was being made by the opposition between what is claimed to be a stealthy backdoor procedure and the public debate of primary legislation is not all that it seems. I shall not press the argument further than that.

In this Bill we have the special scrutiny demanded by the noble Lord, Lord Norton. I think he is anticipating his speech tomorrow. If we are to ensure that the effect of the Bill is not merely managerial but improves the effect of the Government's relationship with the citizens of this country—which it is capable of doing—we must take seriously any specific amendments which help to achieve that. The amendments that we have had before us today go no way towards achieving that.

Clause 1 has survived unscathed the scrutiny of the Committee. I hope that the Committee will agree that it should stand part of the Bill.

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I do not think it is quite true that Clause 1 has gone unscathed. It is clear that there has been a lot of opposition to the drafting of Clause 1 in view of the points that have been raised. I should like to thank my noble friends Lord Norton of Louth and Lord Skelmersdale for their support.

This is not only about the extent to which the Bill can be used to ring-fence the purposes currently intended; it is, in essence, what the Bill could permit which is the problem. What my noble friend Lord Norton of Louth had to say in relation to the future of our constitution should give Ministers cause to reflect on the wider totality of cases that may arise in the future.

When the Deregulation and Contracting Out Bill was passing through Parliament, the then Opposition was apoplectic with rage in regard to its constitutional ramifications. It is therefore worth making the point that our response to this Bill has been measured and, dare I say, proportionate. The Bill raises serious and significant constitutional concerns. We would be remiss if we did not expose them to scrutiny.

Let me conclude my thoughts on Clause 1 for today by referring to the final report of the Select Committee on Delegated Powers and Deregulation dated 18th December 2000. In its conclusion it stated:
"The potential gains are considerable—but so too, without stringent safeguards, would be the risks inherent in this unprecedentedly wide power".
On that basis, for today, I shall not press my objection to Clause 1 standing part of the Bill.

Clause 1 agreed to.

Clause 2 [ Meaning of "burden" and related expressions]:

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moved Amendment No. 21:

Page 2, line 28, leave out ("includes") and insert ("means").

The noble Lord said: This clause purports to define. That being so, it should define and not merely include. The appropriate word to use is "mean". The meaning of the word "burden"—surely the most important single word in the Bill—must be accurately and clearly defined. If the word "burden" is only said to include these meanings, what else is to be included? Are we to be told—or is that to be left to the imagination? If other burdens are envisaged as falling within the ambit of the Bill, let us identify them. I beg to move.

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I agree with the noble Lord that the definition of "burden" is key to the way the power in the Bill will work and to ensuring that we are able to implement important and wide-ranging reforms. I do not think that the amendment as proposed would add anything. The word "includes" has been put into Clause 2 quite deliberately. It ensures that, while the definition of "burden" given in Clause 2 gives the framework within which each order would operate, "burden" retains its natural meaning. That is obviously the right way to do it. It would be wrong to impose artificial restrictions on the word. It is one that we all understand.

The word "includes" is taken from Section 1 of the 1994 Act. That is where the approach came from. Experience with that Act has shown that the safeguards are more than robust enough to prevent any abuse. There has been no difficulty in defining the meaning of "burden".

Additionally, the effect of the amendment would be to limit the removal as well as the imposition of burdens. So the scope for deregulatory measures, which is important to both sides of the House, could well be diminished. I ask the noble Lord to reflect on my response and to withdraw his amendment.

9.15 p.m.

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I am grateful to the noble and learned Lord the Minister; however, I must confess that I am not happy about what he has said. For example, even if one looks at what is included in Clause 2(1), one is surprised to see that one of the definitions of "burden" is,

"preventing the incurring of expenditure".
That seems to be an unusual expression of a burden. If paragraphs (a) and (b) of Clause 2(1) are not totally comprehensive, can the Minister give some examples of other categories of burden that might be envisaged by the Bill?

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The use of the words,

"preventing the incurring of expenditure",
is to deal with the vaccine damage type case, where the regulation imposes conditions pursuant to which compensation payments can be made. An expenditure cannot be incurred unless the conditions are satisfied. That has the effect of imposing burdens on the payee. That is why the definition is included.

A very common form has been used in Clause 2(1). One deals in the definition section with matters that might otherwise cause room for doubt. The prevention of expenditure is a matter which, at first blush, would not be thought of as a burden, but once it has been explained it can be seen as such. Clarity is achieved by including such definitions.

There are many things that could be burdens that are not specifically defined: appeals mechanisms are one such example; an absolute prohibition on doing something is plainly a burden. But it would be otiose, and unwise, to try to include everything. The best bet must be to rely on the ordinary meaning of a word that people well understand.

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My Lords, I am much obliged to the Minister for elaborating on his original explanation. I shall reflect on his remarks and I may return to the matter on Report. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 21 to 24 not moved.]

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moved Amendment No. 25:

Page 2, line 35, leave out ("only").

The noble Baroness said: I have a number of concerns about the use of the word "only" in this part of the clause. Indeed, the variety of my concerns is perhaps surprising, given that we are here concerned with a single word.

First, it will not have escaped the attention of the Committee that there appears a similar phrase in Clause 1(5)(b). Only there, the words "only" and "affects" are transposed. I do not know whether it is intended that this short phrase should carry the same meaning in each instance, but I must tell your Lordships that as a matter of correct interpretation it does not.

Where the phrase appears in Clause 1, it is permissive in its effect and removes what might otherwise have been thought to be an inhibition. It allows the imposition of a "burden" (in the technical sense) upon a Minister or government department, even though such, by reason of the definition in Clause 2, ought not to be so described.

I have no difficulty with that approach and the meaning is clear. What is not clear is the meaning to be given to the words as they appear in Clause 2. First, the definition in Clause 2 is infinitely narrower than if the words were, "does not include any burden which affects only a Minister of the Crown". That is so because, in the Bill as presently drafted, the word "only" qualifies the word "burden", and so means that not only does the burden affect "only" a Minister of the Crown, but it affects no one else and nothing else at all. I have tried to identify a burden which "only" affects a Minister and has no other effect on anyone or anything whatsoever, and I confess that I am unable to do so.

I now turn to my second point. It is possible that this intensely narrow construction is not what is intended and that, in truth, the words should be transposed. I shall assume that that is so. Perhaps I should say at this point that this is a probing amendment. But, even if it is, these words produce an exceptionally narrow exception to the definition of the word "burden". We have already heard that the word "affects" in Clause 1 is to be given as wide a meaning as possible. That being so, the words "burden which affects only a Minister of the Crown" are again productive of only the narrowest exclusion from the definition of the word "burden" in the case of a burden imposed on a Minister. There can be very few burdens indeed that affect, in the very broad sense that is intended, only the Minister.

It follows that the word "burden", as here defined, is likely to include almost any burden borne by a Minister of the Crown. The Government accept that this Bill should not be available to Ministers as a vehicle by which they may divest themselves of their responsibilities to provide essential services. The prevention of its use for that purpose is indeed the aim of this part of this clause. Unfortunately, upon careful analysis, it does not seem to me to fulfil that purpose.

I have one further concern, which is a serious one. Whatever may be the limit on the use of this Bill as a vehicle for the removal of burdens upon Ministers, there is one use that is not limited in any way, which is to relieve Ministers of the obligation to observe the requirements imposed upon them with regard to the passing of secondary legislation. I take as an example the burden placed upon a Minister by Clause 4 of this Bill to lay a draft order before each House of Parliament, as part of any regulatory reform process. That seems to me to represent a burden. It may be said that it is a burden borne solely by the Minister, and thus not susceptible of "regulatory reform", but it takes little imagination to think of a form of words that could impose such a burden on the Minister and AN Other.

Once such a burden had been jointly imposed, the Minister could make use of the power granted by this Bill to divest himself of that burden. I cannot imagine that it is the intended purpose of this Bill to permit such an activity, whatever other safeguards may be in place to prevent it. But I cannot presently see how it can be said not to be within the power that this Bill will create. The truth may be that insufficient thought has gone into the drafting of this part of the Bill. Plainly, while the aim is worthy, the result is inadequate. I beg to move.

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I am grateful to the noble Baroness for the opportunity to set out the justification for the drafting of the Bill on this point. As currently drafted, the Bill provides, in the tailpiece to Clause 2(1), that "burden",

"does not include any burden which only affects a Minister of the Crown or government department".
I deal immediately with the point that the word "only" is in a different place in the sentences at line 35 and line 22 on page 2. I have heard the explanation given by the noble Baroness. To follow it, I shall need to read it. It was, albeit very sophisticated, incredibly complicated. I am not suggesting that it was unclear. I accept that it is a tricky argument and that it has therefore been necessary to explain it in some detail. The placing of the word "only" does not seem to me to make any difference. The noble Baroness suggests that it does. I shall therefore take time to explore and consider the points that she has made. I appreciate that there may be validity in the point that if it appears in a difference place and it tends not to have the same meaning, it may not look right and that one may need to do something about it. That may be a valid point, which I shall consider.

I deal with the points of substance. The Bill is drafted with the tailpiece in Clause 2(1) to prevent Ministers divesting themselves of their responsibilities. Perhaps I may give an example. The Department for Culture, Media and Sport had intended to use a regulatory reform order to remove the requirement on the Secretary of State to run part of Osborne House as a convalescent home for members of the Armed Forces and the Civil Service.

Under the Osborne Estate Act 1902, as amended by the Osborne Estate Act 1914, the Secretary of State is currently obliged to open to the public that part of Osborne House which, was occupied by Queen Victoria, and to use the remainder of the House and grounds for the benefit of members of the Armed Forces and the Civil Service. The lifting of the second of those obligations will enable the Secretary of State to find new uses for those parts of the house and grounds currently used as a convalescent home, for the benefit of a much wider range of people.

However, the measure cannot be effected under an RRO (a regulatory reform order) because it would remove a burden that applies only to the Secretary of State at the DCMS. He is the only person under an obligation to run Osborne House as a convalescent home for members of the Armed Forces and the Civil Service. As a result, any change in his obligation must be effected by primary legislation because the obligation is created by the earlier Act to which I referred. Indeed, that is now happening. The matter is before this place at present by way of the Culture and Recreation Bill.

There are many burdens on Ministers that affect others; for example, the provisions of the Bill as drafted mean that we could enable disabled drivers to renew their vehicle excise duty licences by telephone. Although this is a great burden on 900,000 disabled motorists, it is the burden on the DVLA that currently prevents them from being able to verify entitlement by using the Benefits Agency computer. That is what prevents them from obtaining licences in that way. Therefore, it is vital that we do not restrict the provision in the way proposed by the amendment. I trust that the noble Baroness will reconsider her amendments, just as I shall seriously consider the point she made about the position of the word "only". In the light of my response, I hope that the noble Baroness will feel able to withdraw her amendment.

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I thank the Minister for his explanation, and especially for his agreement to reflect upon what I said in relation to the placement of the word "only" in the Bill. I hear what the noble and learned Lord said in relation to the substantive part of my introductory remarks. In turn, I shall reflect upon that aspect of the matter. On that basis, I beg leave to withdraw the amendment this evening.

Amendment, by leave, withdrawn.

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moved Amendment No. 26:

Page 2, line 36, at end insert ("nor any burden contained within an Act of Parliament affecting the powers, privileges, tenure or responsibilities of the Crown, Her Majesty's Courts or either House of Parliament").

The noble Lord said: According to the Explanatory Notes to the Bill the new order-making power is intended to be wide enough, but no wider than necessary, to deal with regulatory reform measures that the Government wish to achieve. That point is stressed more than once in the Explanatory Notes. As we discussed earlier, the Government wish to achieve the removal of unnecessary burdens and, in some cases, regulatory reform in order to achieve an even playing field.

We are told that it is the Government's policy intention to direct the order-making power to the benefit of business, charities, the voluntary sector, individuals, legal persons and the wider public sector. In order to achieve that aim, they propose a wider gateway than that created by the 1994 Act. The Explanatory Notes also say that in order to ensure that the gateway is no wider than necessary to achieve reform of regulatory regimes, the gateway will be limited by two particular requirements.

The first requirement is that the reform must be carried out "with a view to" the "objects" set out in Clause 1(1)(a) to (d). Given the discussion that has already taken place on subsection (c), I am not sure how this constitutes a significant limitation.

The second requirement is that the reform must meet the policy test of "appropriateness". The noble and learned Lord, Lord Falconer of Thoroton, told the Delegated Powers and Deregulation Committee that there is no precise line to be drawn between matters in respect of which it is appropriate to legislate by way of order and other matters in respect of which it would not be appropriate. He said that it would be for Ministers to decide whether or not the use of the power would be appropriate. As my noble friend Lady Buscombe has already said, he used the elephant test: you know it when you see it. I appreciate that both Chambers would be called upon to agree with the Minister that what was before them was, indeed, an elephant. However, I am not sure whether that is a particularly novel safeguard. I would have thought that the test of appropriateness applied to every single measure brought before this Chamber and another place. We have to decide whether a particular measure or procedure is appropriate, and so to subject an issue to that test may be seen as no more than a statement of the obvious. We would be entitled to wonder what sort of government we have if such a test were not applied.

The gateway is therefore not limited other than by Ministers' good intentions and good intentions have to be put alongside the observation of the comment by the Delegated Powers and Deregulation Committee in paragraph 35 of its Fifteenth Report in the last Session. I quote:

"It would be open to a future Government of a presently unknown political complexion to propose changes of potentially great significance by means of an order."

Indeed, as it notes in the concluding paragraph, the Bill could allow much of the legislative programme to be implemented by orders rather than by Bills. That is not the intention of the Government: we have assurances of that. However, those assurances are not sufficient to meet the claim. Some might regard them as necessary, but they are not sufficient to meet the claim that the order-making power is no wider than necessary to obtain the regulatory measures that the Government wish to achieve. The order-making power in the Bill is much wider than is necessary to achieve the Government's ostensible purpose.

The question then arises: how can the provisions of the Bill be crafted in such a way as to limit them to those necessary, and no more than that, to achieve what the Government wish to achieve? The Minister argues that it is not possible to limit the provisions further and that we must rely on the appropriateness test. To be fair to the Minister, the Delegated Powers and Deregulation Committee has also said that it has not found a way to limit the provisions of the Bill while at the same time enabling the substantial reform of the statute book which it would facilitate. I acknowledge that.

As I said on Second Reading, it may be an impossible task but we must not let this Bill through simply on the basis that we believe it to be so. I therefore place before your Lordships an attempt to limit the Bill. It is one of two options that I believe we can pursue. The first, embodied in this amendment, is to identify what are in effect class exemptions. The term will be very familiar to the noble and learned Lord the Minister. I have sought to identify Acts covering particular aspects of our constitutional arrangements that should not, indeed must not, be changed by means of secondary legislation.

I appreciate that the amendment is not exhaustive. By that I mean two things. The first is that Acts covering other aspects of our constitutional arrangements, such as devolution, are not, but perhaps should be, included. Secondly, even if we extend the scope of my proposed amendment, it will still not include everything that should be exempt from change by secondary legislation.

This amendment is an initial attempt to limit the scope of the order-making power. I bring it forward to prompt discussion. If there is agreement that there is a move in the right direction, it may be felt that it should be extended to include other class exemptions. Another amendment could be brought forward on Report. As I concede, it will almost certainly be impossible to draw a clear line between what should and should not be excluded. In that respect, the noble and learned Lord is quite right. However, that is not an argument against putting certain areas beyond the reach of the Bill. The Minister will doubtless reiterate that the amendment covers areas that the Government have absolutely no intention of seeking to change through the order-making power of this Bill. In that case, I see no reason why the Minister should not accept the amendment. Furthermore, unpalatable as the truth of the assertion may be to the Minister, I would remind him that no government are in power in perpetuity. The Minister's assurances do not carry forward to a future government.

If the Minister would like an example, since we are very keen this evening on examples, I will offer one. I can think of another one, which should come straight to the minds of Ministers. The Bill as it stands could be used by a future government to achieve the purpose of the Parliament Acts (Amendment) Bill introduced by the noble and learned Lord, Lord Donaldson. The burden imposed on this House by the Parliament Act 1949 could be removed by order. Some in your Lordships' House may well find that attractive, but I doubt if the noble and learned Lord does.

Another example has occurred to me, which I suspect will focus the minds of Ministers enormously. It occurred to me that one could use the powers of this Bill. A future Conservative government, if the Ministers were so minded and thought it was in the public interest, could undo the provisions of the House of Lords Act. It imposes a burden on excluded hereditaries. Why not get rid of that burden? As I said, it could be seen as being in the public interest. I do not believe that it is caught by any of the stipulations in the Bill; therefore, it could be done in that way. Some people may believe that that is most unlikely, but it does not have to be likely, merely to demonstrate the truth of the assertion that I am advancing.

If the approach which I have adopted in this amendment—the class exemption approach—is felt to be flawed, the second option would be to exclude from the provisions named Acts listed in a schedule to the Bill. It would be quite possible, for example, to stipulate that any Act passed before 1900 is excluded and then to list all the Acts passed in the 20th century which should also be excluded: the Parliament Acts, the Life Peerages Act, the House of Lords Act, particular Representation of the People Acts, the European Communities Act, and so on. That approach would perhaps provide more flexibility. It may be the approach that we wish to consider if the one adopted in this amendment is not acceptable.

Whichever approach is taken, we must amend the Bill in order to ensure that its provisions justify the claim that the order-making power is no greater than is necessary to achieve the Government's stated intentions. I believe that this amendment at least moves us in the right direction. I beg to move.

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I put my name to this amendment for a very simple reason. Obviously I agree with the general tenets advanced by my noble friend Lord Norton of Louth. However, the real reason why I put my name to this amendment was the extraordinary comment, as I see it, in paragraph 57 on page 18 of the Explanatory Notes to the Bill, which states:

"The remainder of subsection (1)"—
that is what the noble and learned Lord called the "addendum", or whatever, to Clause 2—
"excludes from the definition of 'burden' any burden that only affects a Minister of the Crown or government department".
We have dealt with that and understand it. However, the note goes on to say,
"This means that, while local authorities, schools, hospitals, non-departmental public bodies and other public sector bodies could be the sole beneficiaries of an order, Ministers and government departments cannot be the sole beneficiaries".
However, the problem is that local authorities, schools, hospitals, non-departmental public bodies and other public sector bodies are in the province of a Minister of the Crown. I do not see why there should not be different arrangements for Ministers of the Crown to those which exist for the bodies which come under the individual Ministers of the Crown.

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I too have just been reading paragraph 57 of the Explanatory Notes. I read the part which the noble Lord, Lord Skelmersdale, did not read out. It says that,

"while local authorities, schools, hospitals, non-departmental public bodies and other public sector bodies could be the sole beneficiaries of an order, Ministers and government departments cannot be the sole beneficiaries; someone else must … benefit".
The difference is that Ministers and government departments are involved in putting through legislation and making decisions; all the rest provide the services. It seems to me entirely appropriate that deregulation powers should apply to public sector bodies which provide services, because that benefits those for whom the services are provided. Therefore, I do not find paragraph 57 at all extraordinary.

In a sense, with this amendment we are going back over our discussions in relation to the issue of Clause 1 stand part. Clearly I did not make an adequate impression on the noble Lord, Lord Norton. I hoped that I had, but I accept that it is entirely legitimate to return to the issue of ministerial intentions and how those intentions are adequate. The noble Lord, Lord Norton, has exposed the problems in relation to this issue now as he did, and as I did, when we debated Clause 1. The difficulty is in how to craft—to use his word—a test which excludes those matters which should not be included.

The defence that I used when debating Clause 1, which I repeat now, because it is fundamental to the Bill, was twofold. First, the Bill is concerned only with burdens and a large number of the constitutional matters that the noble Lord has raised could be described as burdens only by the most extreme stretch of the imagination. Secondly, the procedures and safeguards in the Bill are such as to make it unattractive to seek to choose this route in contrast to primary legislation unless there is a genuine advantage, not particularly to government but to the populace as a whole.

The noble Lord, Lord Norton, has acknowledged that the Delegated Powers and Deregulation Committee said that this appeared to be an impossible task. I repeat my offer and the offer made by my noble and learned friend Lord Falconer that if anyone comes up with an adequate definition we shall listen seriously to it, but nobody has yet. It is quite clear, as the Bill confirms, that we would not and could not use the Bill for constitutional changes.

The amendment includes the Crown, the courts and Parliament, but can anyone imagine how we could make a regulatory reform order to make a change., for example, to the law of primogeniture for the Crown or to the quinquennial Act for the lifetime of a Parliament? Of course not, and that applies to more fundamental issues such as the mode of trial legislation that relates to the courts. That legislation, which came before Parliament in the past two sessions, is not a suitable subject for regulatory reform orders and nobody could conceivably claim that it was. That Act would not get through the procedures provided in the Bill because it would be rejected by public consultation, by the committees and, in the end, by Parliament.

On the other hand, I am not at all expert on the Crown, not even the one that sits in the Tower of London, so I do not know what examples the noble Lord, Lord Norton, has of measures that wicked Ministers may put forward affecting the Crown, but not Ministers of the Crown. I know that there are plenty of examples of reforms of court procedures that would be suitable for regulatory reform orders. In respect of Parliament I have not heard of any examples of the kind of parliamentary legislation that the noble Lord has in mind.

I applaud the attempt. I am willing to listen to future attempts, but this amendment does not achieve anything like the purposes that it sets out to achieve.

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I find that a disappointing answer and I give three reasons for saying so. First, the noble Lord said that the amendment would not have the effect that I claimed because of the definition of "burdens". However, the definition of "burdens" under Clause 2(1) is enormously broad. I also draw attention to the fact that in its opening line the clause uses the word "includes". I believe that the definition is such that most legislation falls within the scope of this measure. That is the first and quite fundamental point.

The second point is that the Minister advanced examples of when it would not be appropriate to use the amendment in relation to those areas that I have mentioned. That is fine, but I am not concerned with that. I am concerned with those examples of when it could be used. To give instances of when it could not be used does not exclude the possibility of its use in relation to other aspects of the areas covered by my amendment.

My third point is, as the noble Lord rightly said, that consultation is in doubt. I have already conceded what I recognise is a serious point about parliamentary scrutiny. Consultation in the process is advisory. Of course, it has to be fed in and the Minister has to report, but that is the extent of it. If the two Houses of Parliament were in favour of the proposal, it could go through.

The Minister's response to my argument is extremely disappointing for the reason that I have just given. He referred to our clause stand part debate on Clause 1. My argument in this context is closely linked with the points that I advanced then. I have the specific problem that I have mentioned, but I also have a wider problem. The Minister said, "Yes, if anyone comes forward with a way to limit the effect, that would be fine". However, his comments make it clear—this follows on from the report by the Select Committee on Delegated Powers andDeregulation—that he does not think that there is any way to ring-fence the matter. That is extremely disappointing. That returns us to my point about greater sensitivity on the part of the Government. They should say, "No, we do not think that that proposal meets the point, but we are sensitive to it and we shall further reflect on it". I concede that the Minister said, "Yes, come forward", but that is very much a reactive stance. It does not really engage with the argument about the constitution.

9.45 p.m.

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In that case, I apologise. It was certainly not my intention to suggest that it is only for the noble Lord, Lord Norton, or the Delegated Powers and Deregulation Committee, or anyone other than the Government, to think about a test. Clearly, that issue concerns the Government—the matter will actively concern us between now and later stages of the Bill's passage.

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I want to pursue that extremely important point. On the Minister's first suggestion, I was not implying that he said that it is only up to others to take the approach that he described, or that only the Government could think it through. The second part of his answer involved the way in which the Government will reflect on what I regard as a very important issue. I argued that constitutionally this is an extraordinarily important Bill. I hope that the Minister will return to the Dispatch Box and go a little further than he did earlier.

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I may not do so in a positive manner. The noble Lord suggested two ways of ring-fencing, the first of which involved what he called class exclusions. He will appreciate the difficulties that are associated with that. To be honest, he will appreciate the difficulties that are associated with his first attempt at class exclusions. His second approach involved ostensive exclusions. He gave the example of legislation enacted before 1900 or particular Bills. He will appreciate the difficulty with that; we all share them.

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The Minister has not quite assuaged me, because he did not really respond to or pick up on my second point, which I offered as an alternative. Strictly speaking, he is correct, because I was moving Amendment No. 26, rather than the alternative that I suggested. He might say, "The alternative has something to offer". There are advantages to both approaches. The Minister's point is that there are disadvantages to both. The advantage with the second approach is that it is slightly more finely honed in some respects, although it would create a substantial schedule. However, that is not in itself a conclusive argument against it, because there was an enormously long schedule to the Freedom of Information Bill, when we debated it. That is one route forward.

The Minister might say, "Yes, we are sensitive to the matter; we shall go away and think about it actively. We shall not simply be open to suggestions". If he did so, I should be prepared to withdraw the amendment.

However, without such a commitment, I should be inclined to press the amendment. I want a slightly more positive response from him.

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I do not want to have to respond under such pressure. Frankly, I do not mind if the noble Lord divides the Committee; that would not displease me at all. I thought that I had said that I accepted that a serious issue is involved, and that it is the Government's responsibility to pursue the matter actively between now and later stages of the Bill's passage. If that does not meet the noble Lord's wishes, he must do as he thinks fit.

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I am grateful for that response. It goes somewhat further than the previous answer.

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It was not intended to.

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I shall do the Minister a great favour and pretend that I did not hear his last comment. His previous comment at the Dispatch Box is on the record. My concern is not with forcing a Division for the sake of it but to try to engage the Government in discourse on what I believe to be a crucial point. Prompting the Government to do that will be an achievement.

I do not care whether I do so by persuasion, by Division or whatever, but I find the Minister's previous response encouraging. It takes us forward and I look forward to further discussions between now and Report. I believe that I have pushed the Government further forward in a way which I appreciate. On the basis of the Minister's final point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [ Limitations on order-making power]:

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moved Amendment No. 27:

Page 3, line 1, leave out from ("if") to third ("the") in line 2.

The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 31. I begin with a few words of explanation. When I saw the draft groupings this morning I noticed that Amendments Nos. 27 and 31 were grouped separately, and that seemed to be appropriate. Subsequently, the revised groupings, which had been settled without further consultation with me, grouped those amendments with others which had only a tenuous link. I therefore asked for them to be degrouped, although I am conscious that as the debate has developed a certain amount of the argument was made by the noble Baroness, Lady Buscombe. I apologise for failing to make clear to her my intention.

The purpose of the amendments is to remove the reference to the Minister's opinion in subsections (1) and (2) of Clause 3. The amendments are central to the Bill because they deal with an important feature of it. The amendments will make the test which must be satisfied objective rather than subjective. In reply to the noble Baroness, Lady Buscombe, the Minister said that the amendments would lead to judges being given too much power by way of judicial review. It is said that as the clause now stands the courts can intervene if a Minister's opinion is irrational.

However, it is said that if the Minister's opinion is rational, it should be for the Minister to decide whether the order strikes a fair balance between the public interest and the interests of the person being subjected to the burden under Clause 3(2). It is also said that it is always open to either House to refuse to approve the order if it disagrees with the Minister.

I do not find that argument totally persuasive but I believe that there is some force in it. If I were satisfied that your Lordships' House would retain a power to block the orders, my reaction might be different. But one must face the shadow of the Wakeham report whose proposals the Government have shown every sign of wanting to enact. If the Wakeham proposals were adopted as they now stand, this House would have no power to block an order; indeed, it would have no power to delay it for a significant period. Any order blocked in this House could be sent back to the Commons immediately and the views of your Lordships would be overridden. As a result, a government with a working majority in the other place would be subject to no effective control by Parliament. That is why I believe that control by the judges is needed.

But there is a further and somewhat different objection to the reference in Clause 3 to the Minister's opinion. Although it does not formally so provide on the face of the legislation, the procedure requires the order to be referred to Select Committees of both Houses. In this House that would be at present the Delegated Powers and Deregulation Committee which, if deregulation became more active, might be required to split into two separate committees. When that committee looks at a proposal for deregulation it does not consider the Minister's views on whether the draft order removes necessary protection, or whether those views are rational or irrational. The committee looks at the question itself and expresses its view. That is what happened in the previous Session with the draft order concerned with Sunday licensing. I and other members of the committee did not believe that the draft order provided necessary protection for local residents where licensed premises were situated in residential areas. As a result, the order was revised to take our views into account and a suitable arrangement was reached. Therefore, the Minister's views do not stand alone and he must persuade the Select Committee that they are correct.

If the committee believes that the draft order removes any necessary protection, or fails to strike a fair balance, the Minister must either amend the draft or risk defeat on the Motion to approve, whatever his own opinion. Therefore, the references to the Minister's opinion in Clause 3(1) and (2) do not really represent what happens on the ground. In reality the opinion of the Minister is not decisive. The position is, therefore, already more objective than that for which the Bill provides. I believe that it would only be to give effect to the true position if that fact was recognised by removing the reference to the Minister's opinion. The Bill as it stands puts forward an analysis of the situation which does not represent reality, and I believe that it should.

I also believe that that has a very important impact on the question of judicial review. If the Select Committee agrees with the Minister that the order satisfies the statutory requirements it is most unlikely that a court will hold that the statutory requirements have not been satisfied, even if it looks at it on an objective basis. Conversely, if there is a division between the two it is likely that the order will not take effect. In practice one would not have a situation in which the Minister forced his own opinion on the House against the advice of the committee. There is no serious likelihood that the courts will intervene here, even if it is stated as an objective matter. Therefore, I believe that to state it as an objective test provides better constitutional protection and reflects the reality of the situation. I beg to move.

10 p.m.

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The noble Lord, Lord Goodhart, has an uncanny knack of firing at a vital part of a Bill and shooting it dead. It would be most unfortunate if this vital part of the Bill where reference is made to the Minister's opinion in Clause 3(1) were shot dead. For example, I believe that on the matter of determining how to strike a fair balance between the public interest and the interests of the persons affected by the burden being created, it is extremely apt for a Minister to so determine, providing the Minister is adequately accountable to Parliament. At this stage of our debate I need not stress the many parliamentary scrutiny provisions.

It is not suitable that judicial review should go beyond the power to determine that the Minister's view is wholly unreasonable and perverse. If it was possible to ask the court on an objective test, such as that which the noble Lord proposes, to determine what is the fair balance and the various other matters in Clause 3(1), that would not be at all apt.

At one point in the speech of the noble Lord, Lord Goodhart, I was encouraged when he said that he was not totally persuaded by the noble and learned Lord's earlier answers to the noble Baroness, Lady Buscombe. But he went on to refer to particular passages in the Wakeham report on House of Lords reform and the power of the House of Lords to reject such orders as we are discussing in the Bill. The future of the Wakeham report is speculative. The future of one or two of its paragraphs is highly speculative. Here, today, we must deal with issues as they are. It is clear from the provisions in the Bill that the Government's intentions are that there should be adequate parliamentary scrutiny by both Houses of Parliament.

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I rise to speak in support of the noble Lord, Lord Goodhart. The two amendments stand in my name also. It would be otiose for me to repeat the arguments that I made when speaking to the amendments grouped with Amendment No. 19. I look forward to hearing what the noble and learned Lord says in response, regardless of what the noble Lord, Lord Borrie, said about the Wakeham report being speculative. Its implications are real. There is every possibility that key aspects of the Wakeham report will be adopted by this House. Therefore, it is important that the noble and learned Lord responds to this particular point.

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I agree with the point made by my noble friend Lord Goodhart about the Wakeham report. I do not see how the noble Lord, Lord Borrie, can rest content with a situation whereby, if my noble friend's worst fears are found to be true, an enormously powerful function in relation to secondary legislation would be removed from this House. Surely, the right course for us is to protect against what would be an unacceptable concentration of power in the House of Commons. Therefore, unless the noble and learned Lord can give us some assurance on this—that might be difficult because he is not the arbitrator of the future consideration of the report and subsequent legislation—caution is the right course.

The issue of an objective or subjective test is one that is dealt with in Amendment No. 29 standing in my name. I do not propose to speak to that amendment, but I am content to support my noble friend Lord Goodhart on his two amendments.

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I do not intend to repeat the arguments we have just had but will deal instead with the new points raised by the noble Lord, Lord Goodhart. We have already had a debate on this matter in which the burden of my argument was that this is a parliamentary procedure and that it would be wrong to involve the courts in making judgments on a basis which is not simply, "Is it irrational?" or what the right or wrong answer is in relation to necessary protection.

The noble Lord, Lord Goodhart, advanced two separate arguments in addition to those already advanced. First, he said that it was appropriate for the courts to have a greater role because we do not know what will happen in relation to the Wakeham report. With the greatest respect to the noble Lord, Lord Goodhart, I submit that that is a totally wrong approach to take in principle. We must decide on the basis of the current position what are the appropriate ways to deal with regulatory reform orders. If both Houses of Parliament take the view that it is preferable for this to be a process where Ministers form an opinion about the relevant matters and then submit that opinion, in effect, for consideration by the detailed parliamentary processes that are described, Parliament will decide whether to go ahead with the order. It will be broadly unattractive for the courts to become involved as a separate player in determining, for example, whether there are necessary protections. That is the view that we take at present.

If reform of the House of Lords came forward, which might well happen if, after an election, there was to be a second term for the Labour Government, then surely the right course at that stage would be for Parliament to consider what was the appropriate course to take in relation to regulatory reform orders. The idea that we legislate against what might happen in the future, in a form we know not, at a time we know not, does not, with respect to the noble Lord, Lord Goodhart, seem an appropriate way to deal with the matter.

For the reasons I have given I should say that it is not a good approach to bring in the courts when otherwise they would not be appropriate simply because of some possibility of the kind identified by the noble Lord, Lord Goodhart. That is how I deal with his first argument.

I turn to his second argument. He was tantalising in his speech because he gave me the impression, wrongly as it transpired, that but for the Wakeham point he was with us. Having suggested that that was the position, he went back to a prepared script. I am not saying that he read it, but he went back to the old mind-set before he had heard the argument. He added one point to the argument. He said that if the committee rejected the view of the Minister it would not go ahead. If, on the other hand, the committee accepted the view of the Minister then there was no prospect—assuming it to be an objective test— of the courts striking down the Minister's opinion. One has no idea whether he is right or wrong. What every Member in the Committee knows is that the courts would approach the issue in a totally different way from the way in which the deregulation committees would approach it. They would hear evidence; there would be litigants fighting out the issue. I can conceive of situations where the courts, looking at the matter through their eyes, having regard to the evidence presented to them and to the adversarial process, could easily come to a different conclusion from that reached by the Minister in his opinion and the committee, which I accept is not bound by the opinion of the Minister, which can look at the matter completely afresh.

With respect to the noble Lord, I do not think his answer that if both committee and Minister reach the same conclusion the courts may never intervene is right. The Wakeham reason is a bad reason. His second reason is based on an over-optimistic view of how the courts would operate.

I return to where we started in this debate. This is a parliamentary process and it should be for Parliament to decide whether it likes and is prepared to approve the orders and it is for Parliament to decide whether the Bill should become law.

I want to make one final point. It was not raised by the noble Lord but it is germane to this matter. The "in the opinion" approach is the one adopted by the 1994 Act. In that Act, on the question of necessary protection, which is one of the important points raised by Members of the Committee, it was decided by the Government that the appropriate course was to start the process by the opinion of the Minister on those issues. That reflects the reality. It has worked well in practice. One would need a good deal of persuading that a different approach was appropriate.

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Perhaps I may interrupt the Minister to suggest that it was working in practice because the parameters of the 1994 Act were much more narrowly defined. That is the fundamental difference between the 1994 Act and what we are discussing today.

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I found the Minister's response disappointing. I cannot agree with him. I do not think that we can stick our heads in the sand and ignore Wakeham. It is not as if this is purely hypothetical. This concerns the report of a Royal Commission which was placed before Parliament and on which the Government have indicated they look with some favour. Whether the particular provision with which I am concerned will meet with the favour of the Government is uncertain. It is there and I do not think that we can ignore it, whatever is the appropriate weight to put on it.

On the question of necessary protection, the noble and learned Lord suggested that the Select Committee and a court would look at it in very different ways. He said that a court would hear evidence. But so may the Select Committee. The Select Committee has the power and does indeed hear evidence. We heard evidence on the Sunday licensing order. It is highly likely that, in the case of an order which aroused a great deal of public interest or possibly some controversy, the Select Committee would take evidence and would approach these questions In very much the same way as a judge would approach them. Therefore, I do not think that the arguments stand up.

However, I do not wish to divide the Committee on this occasion. We may wish to come back to the issue again, particularly in view of the support given by the Conservative Front Bench. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendment No. 28 not moved.]

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In calling Amendment No. 29, I have to point out to the Committee that, if it is agreed to, I cannot call Amendments Nos. 30 to 35 inclusive.

[ Amendment No. 29 not moved.]

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moved Amendment No. 30:

Page 3, line 7, after ("if") insert ("it is necessary in order to achieve the objects set out in subsection (1) of section 1 and").

The noble Lord said: It may well be that the Minister will accept that he has already conceded the point that lies behind the amendment. He will recall our discussion earlier in the day—it seems a long time ago now—about whether proportionality is a precondition to the test set out in Clause 3(2). The noble and learned Lord will remember that I asked him whether the test in relation to striking a fair balance between the public interest and the interest of the person affected by the burden being created was in addition to the test of proportionality. If I remember rightly, he agreed.

Proportionality is a component part of paragraphs (b) and (c) of Clause 1(1), but not of paragraphs (a) and (d). Given that the Minister is already on record on the question of the relationship between proportionality and Clause 3(2), I seek only his agreement to go on record in relation to paragraphs (a) and (d) of Clause 1(1) to the same effect. If he is prepared to do that, I shall be happy to withdraw the amendment.

10.15 p.m.

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I have to suspect a trap, and I think it will be better if I respond to the amendment as it is on the Marshalled List and see whether the noble Lord, Lord Kingsland, feels that my response squares with anything that he thinks my noble and learned friend has said.

The amendment would add the "necessary" test, which we have debated in relation to Clause 1, to Clause 3(2) which currently ensures that any order creating a new burden should, in the Minister's opinion, maintain a fair balance between the public interest and the interests of the persons affected by the burden being created.

What the amendment proposes is to make the imposition of any burden possible only if it is necessary in order to remove other burdens. This would be a major restriction on reform. In other words, it goes against the formulation in Clause 1(1)(a) to (d), which we have already debated at considerable length. What we are seeking with the Bill is the power to reform entire regulatory regimes. We have given the example of fire regulations, and there are obviously many more. It is simply not possible to do this under the narrow restriction that the amendment would impose.

The imposition of a burden, however well justified and reasonable, can rarely be linked in a simplistic way to the removal of a burden somewhere else. Overlapping and over-complex pieces of legislation do not allow such a link to be made. The amendment would impose an unnecessary straitjacket.

The safeguards already on the face of the Bill are more than stringent enough to prevent any misuse. As we have heard, every new burden must be proportionate, and every order creating a burden must maintain a fair balance between the public interest and the interests of those affected by the burden. This is in addition to the two tests taken from the 1994 Act: the maintenance of the necessary protection and the preservation of rights and freedoms. Those are tough tests, and they have stood the test of time.

The amendment would unnecessarily limit the Bill, and it would bring no real benefits. I hope that the noble Lord will not press it.

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I am much obliged to the noble Lord the Minister for his comprehensive response to the amendment, but I do not think that the amendment has the effect that he thinks it has. I do not believe that it has the effect of adding back an additional obligation in Clause 1. It simply seeks to confirm that the tests set out in Clause 1 must be met before the tests set out in Clause 3(2) are met.

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I cannot agree. The amendment would add a "necessary" test to the face of the Bill. Orders could be made only if they could be shown to be necessary to meet all the objectives of Clause 1. Of course that is significant. The amendment would imply that a burden would have to be necessary in order to remove another burden or replace an anomaly. We have made it clear all along that the four elements in paragraphs (a) to (d) of Clause 1(1) stand on their own and cannot necessarily be linked.

If we were to accept the amendment we would be rewriting Clause 1.

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I am much obliged to the noble Lord the Minister for his further clarification. If I were to draft an amendment for Report reflecting what I believe my amendment was intended to achieve, and not what the noble Lord believes it was intended to do, would he give it serious consideration?

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I give all the noble Lord's amendments serious consideration.

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Despite the fact that my experience of the noble Lord's treatment of my amendments has not been entirely the same as his, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 31 to 34 not moved.]

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moved Amendment No. 35:

Page 3, line 8, leave out from ("whole,") to end of line 10 and insert ("are in the public interest and that the public interest substantially outweighs the interests of the persons affected by the burden being created").

The noble Lord said: The clause as presently drafted provides that an order under Clause 1 may create a burden affecting a person in the carrying on of an activity only if the Minister is of the opinion that the provisions of the order, taken as a whole, strike a fair balance between the public interest and the interests of the person affected by the burden being created.

I say straightaway that I appreciate this is not a free-standing provision. The interests of those affected by an order achieve some protection, as we have heard already, under subsection (1) of the clause. So an order may not remove any necessary protection; nor, as the Minister said, prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue to exercise. Those are important limitations on the order-making power. We have just discussed whether they should be subject to the opinion of the Minister, but I accept that they are important and necessary limitations.

However, the reason I bring the amendment forward is that I think that there may be a case for extending the protection of those likely to be affected by the order-making power. Instead of making it a simple balancing test, I believe that the public interest needs to outweigh substantially the interests of those affected by an order. I believe that that is necessary given the nature and scope of the Bill.

As we have already discussed—and as the Minister will doubtless remind us at some length—with this measure we are saying that secondary legislation may be employed to add or remove burdens. We are saying that through this order-making power criminal offences may be created, in some cases carrying a maximum penalty of two years' imprisonment. The use of secondary legislation in this way may be acceptable if the measure is fairly tightly drawn or has a fairly specific purpose, as with the Deregulation and Contracting Out Act 1994. However, in terms of scope, the Bill is not tightly drawn. As I have already argued, the definition of a burden means that most statutes fall within its scope. Given that, the potential for persons to be affected by orders made under this Bill is vast—and I stress the word "potential". For some the effect will be beneficial; that is the point of the Bill. However, for others it may be detrimental.

Clearly I can see the force of the argument that the public interest should be put against the detrimental impact. I understand completely the reasons for the subsection. However, my argument is that, given the nature of the Bill, the interests of those affected by an order perhaps need greater protection than would be the case with primary legislation, or even with secondary legislation deriving from a clearly specified object of the parent Act.

With primary legislation, or even orders under a clearly focused Act, we are likely to have some idea of the consequences, detrimental as well as positive, that the measure may have for particular individuals. With this Bill at this time, we have no idea as to the impact—certainly not the negative impact—which it may have on certain individuals. The balance between the public interest and the interests of those affected by an order may be an extremely fine one. Those affected may have had no idea that they might be affected adversely by an order made under this measure. Given that, there is a case that the thresholds designed to protect individuals need to be higher in this Bill than is the case with other measures. Injecting the higher hurdle created by my amendment builds in a degree of protection.

If a proposed order does not satisfy this test but a Minister believes that, on balance, the public interest does outweigh the interests of those affected, it is open to the Government to introduce primary legislation. As I argued earlier, that will give the issue a much higher visibility. I appreciate that the scrutiny of orders under the Bill will be intensive, but requiring the introduction of primary legislation imposes a greater burden on government and is likely to attract far more attention than is the case with orders dealt with under the provisions of the Bill.

Given the scope of the Bill, I believe that there is a case for giving the benefit of the doubt to provisions designed to protect the individual, perhaps more so than the present provisions of the Bill. As I say, I recognise that some safeguards are built into subsection (1), but my amendment goes a little further by introducing another important safeguard. I beg to move.

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This is an interesting proposal and I am grateful to the noble Lord, Lord Norton, for attempting it. I see what he is trying to do and I am not unsympathetic. However, I should like to place his proposal in the context of Clause 3 as a whole.

Clause 3 is a series of limitations on the scope of Clause 1. Subsection (1) is about necessary protection, which we have debated—or, in the case of some of the amendments on the Marshalled List, not debated. Subsection (2) relates to the fair balance between the public interest and the interests of persons affected by the burden. That is the provision that the noble Lord, Lord Norton, seeks to strengthen. Subsection (3) goes on to limit the penalties if criminal offences are created. Subsection (4) again limits the punishment for offences that are triable either way. Subsection (5) prohibits provisions for forcible entry or compelling the giving of evidence. I think it will be generally agreed that all of these are restrictions, and in some cases severe restrictions, on what can be done in regulatory reform orders.

In this amendment, the noble Lord seeks to strengthen the "fair balance" test. The issue of providing adequate safeguards against potential future misuse of the order-making power is important. In effect, it is almost the only issue that we have debated all day. The Bill contains a wide power that is matched by tough safeguards governing the use of the power. I believe that the noble Lord, Lore Norton, recognises that. Those safeguards are robust and were created with that protection in mind.

The amendment proposes that the test of "fair balance" should be removed and that it should be replaced with a new test of "public interest". Let me first assure the Committee that the existing test of fair balance takes account of the public interest. The current position is that a new order may create new burdens only if, in the Minister's opinion, they strike a fair balance between the public interest and those affected by the imposition of the burden. The Minister must apply his mind to the public interest and may not create a new burden unless he believes that a fair balance is struck between the effects of the burden and the public interest.

I suppose that, strictly speaking, "fair balance" is neutral; it could mean that the burdens are greater than the benefits but the Minister may consider that to be a fair balance. I do not think that he would get away with that. I do not think that a common-sense interpretation would suggest that he would gel: away with it in consultation, in the committees and before Parliament. It clearly means that the fair balance must be to the benefit of the public interest.

The amendment seeks to strengthen that provision by adding the words "substantially outweighs". I do not think that that adds anything. What it does is to make the test a different one, so that the public interest,
"substantially outweighs the interests of the persons affected by the burden being created".
That means that we should have a quantitative test where the existing test is qualitative. It would allow a benefit for the many to override almost any detriment to the few, provided that there were few enough. I do not think that would be fair. It may be fair to impose a minor obligation on the many, even if the benefit is limited. Bearing in mind the number of parameters that must be taken into account, the existing test is a better one. It will ensure that the balance between the public interest and those affected by the new burdens is fair.

I am grateful for the opportunity to say that, and I am grateful to the noble Lord for bringing this amendment forward. However, I hope that he will not press it.

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I am grateful for the Minister's response. It has clarified matters, certainly in my own mind, in terms of the clause. As he rightly said, and as I conceded, there are other safeguards written in. In terms of drafting, I had certain doubts about the phraseology that I was employing. Therefore, I do not want to press the matter. In an earlier amendment, I was trying to push the Government; with this one, I was trying to give them a gentle nudge to call attention to the point. I am extremely grateful to the Minister for his response, which I believe meets the points that I have made. In the light of what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.30 p.m.

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moved Amendment No. 36:

Page 3, line 15, at end insert (", or
(c) in the case of a new criminal offence which replaces an existing offence, with any sentence greater than the maximum which could have been imposed for the existing offence").

The noble Lord said: This is a short point. The Delegated Powers Committee has always taken the view that it is inappropriate to use delegated powers to increase the maximum sentence provided in any statute. Under this Bill, it is not possible completely to avoid the creation of new offences. But it seems to me that where the offence that is created merely replaces an existing offence, and where that offence is punishable by a maximum penalty less severe than that referred to in Clause 3(3)—for instance, if the existing offence is not punishable by imprisonment at all—it would be inappropriate to use this power to enable the maximum sentence to be increased up to the limit provided in Clause 3(3). It would therefore be desirable to exclude the possibility of using these powers to increase the sentences for existing offences, where these are re-enacted. I beg to move.

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This is a short but important point about criminal offences and powers under regulatory reform orders. The noble Lord's proposal would create a new safeguard in relation to any criminal offence created by an order in the place of an existing criminal offence, or offences, which that order repealed.

Although there is a superficial attraction in the noble Lord's points, his proposal does not sit easily with the type of reform proposals that this Bill will, and I believe should, be capable of delivering. The Bill is capable of achieving large-scale reforms. I return to the fire safety example. A regulatory reform order could sweep aside much of the existing legislation and create a single fire safety regime that could be understood by everyone. It would move to a common sense, risk-based approach and, in the course of doing so, would almost inevitably repeal quite a large number of criminal offences. But, in order to function effectively, the new, streamlined, risk-based regime would doubtless create new offences. It would be very difficult to compare old and new criminal offences that may deal with different sorts of mischief. A new approach would also bring with it a different sort of approach to the criminal law in relation to offences.

Similarly, we can envisage a situation in which we might want to replace a number of technical offences with civil sanctions, thus entirely sweeping away some aspects of criminality, while a part of that reform imposed a higher criminal penalty for deliberate wrongdoing. They are perfectly sensible situations, for which we believe that the existing safeguards in the Bill provide adequate protection. Those safeguards include the provision that no new criminal offence can, on indictment, be punishable with more than a two-year prison term and, on summary conviction, with no more than a level five fine or a six-month term of imprisonment. Obviously, that is an additional safeguard to all the others we have already discussed and, indeed, to all the other processes we have debated on many occasions in this place.

Although I believe it to be an important issue and one that should rightly be aired, when one considers what the Bill is trying to achieve and the protections that already exist I do not think that this would be an appropriate safeguard. Therefore, I invite the noble Lord to withdraw his amendment.

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I am grateful to the noble and learned Lord for his response. I, too, believe this to be an issue of some importance. I am glad that the noble and learned Lord acknowledged that fact. However, I can see some difficulties arising in this respect. It is probably an issue that we shall have to leave to be covered by the appropriate scrutiny of the Select Committees, and, perhaps, other bodies. In those circumstances, it is not my intention to press the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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moved Amendment No. 37:

Page 3, line 30, at end insert—
("(6) An order under section 1 must be followed two years later with a report to Parliament giving the actual cost of implementation compared to the original estimated cost, and if the actual cost is more than 25 per cent. higher than originally estimated, the Minister is to take the necessary steps to annul the order.").

The noble Baroness said: This is very much a probing amendment, which we have tabled in order to flag up what we believe is a real need to introduce a duty to review the workings of the orders. A regulatory assessment, to which I shall speak in regard to particular data in the Bill, and detailed proposals (such as those that will be required to be set down in relation to Clause 6) are fine as far as they go. However, can the Government foretell the future? One wonders.

Regulatory impact assessments are estimates—more accurately, "guesstimates"—and are usually compiled by civil servants, who are doing the best they can. Indeed, no more than that can be expected of them. But the proof of the pudding is in the eating. Hence this probing amendment in which we have allowed for a two-year period in which to assess how the order has fared. After two years, we believe that the pudding will be well and truly eaten. In which case, instead of having mere "guesstimates", as set down in the regulatory impact assessment, we shall know the true position. For example, we shall know if a mistake has been made in the order. In such a case, we believe that the Government should be mature enough to own up and accept that the original cost estimates were wrong: the grounds upon which the original decision to make an order was based were wrong because they were based upon an incorrect assessment.

However, the question is whether it is possible to draw the line at, say, a 25 per cent increase, as we propose in the amendment. We say, in the amendment, that if,

"the actual cost is more than 25 per cent higher than originally estimated, the Minister is to take the necessary steps to annul the order".

Alternatively, perhaps the Minister can offer other suggestions as to how we approach the matter and how we devise an appropriate line to be drawn whereby we say, "Well, we have introduced an order; but, after two years, it is clear that the original cost estimates were wrong. Therefore, there must be some form of review".

We suggest that there should be an opportunity for the Minister to take the necessary steps to annul the order, as set out in our amendment. This means that if the original order turns out not to be entirely wrong—indeed, it may have been good in parts—it need not be annulled without another order replacing it; in other words, the decision to make the order in the first place may have been correct, but the order could, and should, be improved upon based on new and correct information, as well as being subject to a two-year review of its workings. In such a case a new and improved order could be introduced once the Minister had taken steps to annul the old order. I beg to move.

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The amendment raises two issues that the Government take most seriously. I am grateful for the opportunity to say something about them. First, how do we know whether or not it has worked; and, secondly, what do we do if we have got it wrong? I do not in any way regret the fact that the amendment has been put forward in this way. I realise that it is a probing amendment and I shall, no doubt, have some criticisms to make about the detail, but the issues remain important.

The amendment would require a report to be made to Parliament two years after an order came into force which would detail the actual costs of the regulatory reforms. Then it would "sunset" the order if the costs proved to be 25 per cent more than originally estimated.

Let me first talk about the issue of a report. I have to do it in the context of saying that this is a Bill about regulatory reform. It is not a backdoor route to making new legislation: it simply amends existing legislation. So in the case of fire safety, which we have gone on using because it is the easiest but there are plenty more, there are 120 statutes and as many statutory instruments. We want to make it easier for all and to move to a risk-based system.

This is a different thing from what might otherwise be done by a consolidation Bill, which does remove the different origins of legislation but does not change the effect of them. The sort of re-balancing that we would achieve in a regulatory reform order would undoubtedly mean that some people would pay less and others more, while there would be no change for some. It is not an easy exercise to estimate the cost in these cases; but, more fundamentally, on that point the amendment says nothing about the benefits that a regulatory reform order had brought. Surely the costs should be assessed in relation to the benefits delivered. For example, if we had an order in which the cost turned out to be 30 per cent higher but the benefits were 100 per cent greater than estimated, the amendment, taken literally, would mean that the order would have to be annulled. I am sure that is not the intention.

I certainly agree that we should not neglect to check these things. All departments should keep their legislation under review. That is why we have set up a panel for regulatory accountability and why we have regulatory reform Ministers in each of the main regulatory departments. And of course behind that we have my noble friend Lord Haskins, with his better regulation task force, keeping an eye on them and keeping them on their toes. I think anyone who has read his reports knows that he is no respecter of persons and certainly no respecter of Ministers or of governments.

In addition, the guidance on regulatory impact assessment says that the RIA must detail the arrangements for review. Of course this is only appropriate in certain cases. To take an example at random, how would you look at the cost of implementing the removal of the restriction that requires the publication of corn returns data in the London Gazette? Or what about an order relaxing the licensing requirements for New Year's Eve 2001? There is no sense annulling that in 2003.

One can see that I have difficulties about the wording of the amendment, because it will be a rare case when the order has no merit at all. Uncertainty is bad for business. It would create greater uncertainty if businesses waited with bated breath at the two-year stage to see whether the costs enabled them all to continue, and the effects of sunsetting a regulatory reform order would be to leave the statute book full of holes. Measures that had been repealed or annulled by the regulatory reform order would not be automatically reinstated and that would cause complete confusion.

I realise that the noble Baroness said that "necessary steps" could allow an order to be amended rather than annulled, and I agree entirely with that. Surely it would be better to amend an order that was not working in the way that had been intended and it is perfectly possible for a department to amend its regulatory reform order with another one under the Bill as drafted.

I do not think that we could accept the kind of uncertainty and sometimes perverse results which would arise from an amendment anything like the one we have before us. I do not accept that there is anything magical about two years or 25 per cent, or anything like it, but I do accept that it is incumbent on government to review the effectiveness of regulatory reform orders, and we have measures in place to do that. I accept that we have to bear in mind the possibility that if something is going wrong, we have to put it right. However, we have the power to do that by amendment. I hope that I can take the noble Baroness, Lady Buscombe, at her word when she says that this is a probing amendment.

10.45 p.m.

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Indeed, it is a probing amendment. However, I did not agree with the Minister when he said that it was remiss of me not to include the word "benefit" in relation to the amendment. The costs are relative to the benefits.

There could be tremendous benefits, but benefits which no one could afford. I believe that that point should be made. In addition, as I said at the beginning, the purpose of the amendment was to flag up the need to question whether the opportunities to review the workings of the order are sufficient. Obviously I shall read with care what the Minister said on that point.

I turn to the Minister's comment that it is rare for an order to have no benefit at all. Many in the business community would say that we continue to witness regulations coming on to the statute book which have no benefit. Therefore, it may be wishful thinking to believe that none of the orders that will be passed in the future will have no benefit—or is it burden?—at all. Perhaps I am wrong in what I have said.

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The noble Baroness, Lady Buscombe, is of course quite right that there is a difference between, for example, tax legislation—the Finance Bill—which undoubtedly imposes financial burdens on some people, and regulatory reform orders whose whole raison d'être is otherwise.

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I believe that the Minister can see where I am coming from. This amendment was tabled purely for the purpose of probing and the need to question how we intend to review the workings of the order. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

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I beg to move that the House do now resume.

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

House resumed.

House adjourned at twelve minutes before eleven o'clock.