Clause 3 - Limitations on order-making power
Regulatory Reform Bill [Lords]
4:30 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
Amendments Nos. 8 to 11 are designed around the specific objective of removing from the structure of the Bill the provision that, in applying the four tests, which are subsequent to the objectives of the order-making power in clause 1, a Minister must form an opinion. The amendments would make the four tests less subjective and more objective.
It may be helpful if I refer to each amendment and make it clear which does what. Amendments Nos. 8 and 9 are substantive; amendments Nos. 10 and 11 are consequential. Amendments Nos. 8 and 9 both relate to clause 3(1), which concerns two tests. The first test is that the order should not ``remove any necessary protection''. The second test in clause 3(1)(b) is a new test that goes beyond the Deregulation and Contracting Act 1994. It states that the order should not
``prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue exercise.''
That, for convenience, is called the reasonable expectations test.
Those two tests are currently in the structure of the Bill. A Minister making the order must be of the opinion that the order does not remove either reasonable expectations or necessary protection. The purpose of amendment No. 8 is to remove the subjective view of the Minister on those two matters.
Amendment No. 9 concerns clause 3(2)(a) and (b), which describe the two other tests. Paragraph (a) states that the first test should
``strike a fair balance between the public interest and the interests of the persons affected by the burden being created''.
Paragraph (b), the desirability test, states that the order may create a burden if the Minister is of the opinion
``that the extent to which the order removes or reduces one or more burdens, or has other beneficial effects for persons affected by the burdens imposed by existing law, makes it desirable for the order to be made.''
In subsection (2), we are talking about circumstances where burdens have been created.
In respect of Amendment No. 9, it is difficult to be sure under what circumstances the two tests would be used. Ministers propose to introduce the new tests but they have obviously not been tested in the context of the Deregulation and Contracting Out Act 1994. There is no reason to suppose that ``a fair balance'' as determined by a Minister would be challengeable by the courts. I am equally unsure why it would be a problem to remove the opinion of the Minister in those circumstances, and to term the Bill so that the order would be one that struck a fair balance and was desirable in the agreed views of the Minister, the Select Committees and the House. Any court that wished to challenge the two tests would have to prove that they had not been applied, or had been applied unreasonably.
To insert the reference that the Minister is ``of the opinion'' is to take the tests that the courts would have to apply a step further. The question would be not simply whether the tests had been applied unreasonably, but whether no reasonable Minister could have arrived at such an opinion and that is not what we want. The Committee wants the exceptional power and scrutiny provisions provided by the Bill to be used in circumstances where there is a clear demonstrable instance of benefit, which is not controversial or likely to be challenged. That is the more difficult ambition of amendment No. 9.
Amendment No. 8 is more straightforward and I would like the Minister to explain why he will not accept it. The test of necessary protection already exists in section 3(4)(b) of the 1994 Act and it is not subject to the Minister's opinion. As far as I am aware, in the 48 instances in which the deregulation and contracting out orders have been used, that test has not been challenged by the courts and has worked well. I do not understand why it is necessary to put into the structure of the Bill the test of a Minister's opinion. If necessary protection is proof against legal challenge, and Ministers in the past have exercised the power well, why can the test of reasonable expectation not be the subject of a similar provision, without the intrusion of a Minister's opinion?
I apologise to the Committee if I appear to be labouring the point, but there is a difficulty. Clause 3(1) states that the Minister making the order must be
``of the opinion that the order does not . . . prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue to exercise.''
It is surely abridging the reasonable expectations test that we set out to protect. If a person has reasonable expectations, a court will uphold them, even if Ministers, the Select Committee and the House should fail to uphold them as we would hope. However, including
``the Minister is of the opinion'',
creates a circumstance, for a person with reasonable expectations, in which it would be necessary to demonstrate in court that the Minister was not of that opinion. In such a case, those reasonable expectations might be frustrated, without any possibility of a successful legal challenge.
Although we are working somewhat in the dark on amendment No. 9, I cannot see the necessity of including the test of a Minister's opinion. It strikes me as objectionable. I hope that I might stir my colleagues and other hon. Members to support amendment No. 8, which concerns necessary protection and reasonable expectations. It seems clear that, in line with the legislation that the Bill replaces, the intrusion implied by the words is not only unnecessary but undesirable.