Legislative and Regulatory Reform Bill

– in the House of Lords at 3:19 pm on 13 June 2006.

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Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip 3:19, 13 June 2006

My Lords, I beg to move that this Bill be now read a second time.

I welcome Peers to this debate on this important Bill. I look forward to a fruitful debate that reflects the considerable expertise on this subject in your Lordships' House. The purpose of the Bill is to provide an alternative legislative mechanism to Bill procedure for the Government to deliver swiftly those better regulation initiatives that are not highly controversial. Business and other organisations tell us time and again that they need there to be such an alternative procedure. The CBI, for instance, in a statement made yesterday, considers that the Bill provides the right structure for quick regulatory reform of unnecessary or over-complicated regulation and a risk-based approach to the making and enforcement of regulation. Miles Templeman, director-general of the Institute of Directors, and representatives from the British Chambers of Commerce and the Forum of Private Business have told me and other Ministers in person that they want this Bill and they want this Bill to deliver.

The Bill is but one part of a much wider, more ambitious government agenda to effect real change in the UK's regulatory environment, and it must be considered within that broader context. Therefore, in opening this debate, I will provide noble Lords with some of the broader context before setting out the main provisions of the Legislative and Regulatory Reform Bill.

I am most grateful for the constructive reports on the Bill by both the noble Lord, Lord Dahrendorf, and his committee, and the noble Lord, Lord Holme of Cheltenham, and his committee. We welcome the conclusion of the Delegated Powers and Regulatory Reform Committee that the order-making powers in Clauses 1 and 2 are not inappropriate. We note the committee's strongly held view that implementation of Law Commission recommendations by order is not appropriate. I shall return to that issue later, but I assure noble Lords that the Government will consider it very carefully and will continue to listen to noble Lords' views on this and other matters. As always, these committees have provided lucid and comprehensive reports in a very short space of time. I am sure that these reports will be an invaluable aid to our deliberations today and throughout the passage of the Bill. The Government will consider the recommendations made in the reports very carefully.

The Government have already demonstrated their willingness to listen in another place. It is essential that we achieve the right balance in this Bill between effective powers and the appropriate parliamentary scrutiny of any order. I very much look forward to hearing the views of noble Lords today on how that can best be achieved.

Noble Lords will agree that it is crucial for the continued competitiveness of this country that any Government pursue as many measures as possible to ensure that regulation is kept to an absolute minimum so that businesses—multinationals and small businesses—as well as the public and voluntary sectors can concentrate their efforts where they add most value. The United Kingdom is one of the best places in the world to do business. Independent surveys consistently place the United Kingdom high in any ranking table of competitiveness. For instance, a survey by the World Bank published in September 2005 rated the United Kingdom second in the EU and ninth in the world for best business conditions. This and other independent reports show that the United Kingdom is doing well, but in a cut-throat global economy with emerging markets full of youthful vigour it is essential for all United Kingdom citizens that we ensure that the UK retains its competitive edge.

This Government have acknowledged that more needs to be done to change the actual culture of regulation across Government. In the March 2005 Budget, the Chancellor of the Exchequer, therefore, set out a radical programme of reform to reduce regulatory burdens. That radical programme of reform includes the acceptance in full of the recommendations made in the report by Philip Hampton, chairman of J Sainsbury plc, on how to deliver effective regulatory inspection and enforcement, as well as those recommendations in the Better Regulation Task Force's report Less is More, which recommended ways to control the development of new regulations. The report also urged the Government to complete the review of the Regulatory Reform Act 2001, with particular reference to the need to improve the delivery of non-controversial proposals for simplification. The Bill is of course the result of the consultation and review of that Act, which was carried out last year.

The Government's radical reform agenda tackles onerous regulation in a number of other innovative ways. The Government are committed to measuring and reducing what it costs business in time, money and effort to comply with particular regulations in their Administrative Burden Reduction Project. Once the burdens have been identified and quantified, every government department and regulator will set targets to reduce them. Final targets should be announced around the time of the 2006 Pre-Budget Report. The outcome of this work and the concerted push across government departments for better regulation will be reflected in concrete simplification plans containing specific deregulatory measures from each government department to be published later in the year.

Further initiatives that contribute to the Government's strategic commitment to reduce red tape include a new website, launched in September 2005, allowing stakeholders to submit electronically regulatory reform proposals, a number of which have been taken forward by government departments. The website is only one of the routes through which stakeholders can submit proposals. Over 270 proposals have been received of which, after careful consideration, so far 28 have been taken forward by departments.

The initiatives also include an independent review led by the noble and learned Lord, Lord Davidson QC, investigating the transposition of European regulation into the UK and whether "goldplating" needs to be addressed more rigorously. An interim report will be published next month.

In addition, Richard Macrory, professor of environmental law at University College, London is conducting a review to consider options for the reform of regulatory sanctioning regimes.

There are also the regulatory impact assessments, under which government departments and regulators must assess the total cost of any proposed future legislation for their potential impact on those who will be affected it.

It is in the context of those and other wide-ranging and entirely novel initiatives that this Bill must be considered. The Bill, therefore, is intended to be one of a number of mechanisms for turning the aims of better regulation into reality for the end users on the ground—those in business who create wealth and jobs in our economy and those in our public services and in voluntary and charitable organisations who work to improve the lives of our citizens. If we deliver on those better regulation objectives, the benefits will be considerable. The Better Regulation Task Force has estimated that we could boost British national income in the long term by as much as 1 per cent a year.

The UK is not alone in its effort to deliver wholesale reform and instil a real culture change in regulation. The Dutch are far advanced in reducing regulation and have already reaped substantial benefit to their economy. And, as noble Lords will be aware, following in particular the recent debate on the excellent report by the European Union Committee, chaired by the noble Lord, Lord Grenfell, better regulation is also a priority for the European Union. The Commission has dropped more than 65 proposed pieces of legislation and has undertaken to simplify up to 1,400 individual pieces of Community legislation, with the aim of lightening the burden of EC legislation. This Government and other member state Governments continue to support and encourage the Commission and the European Parliament further to pursue such better regulation initiatives.

After that somewhat lengthy bit of scene-setting, I will turn to the specific ways in which the Legislative and Regulatory Reform Bill will contribute to that culture change in regulation across government.

The Bill before us now is not the one that noble Lords may have heard about with concern when it was first introduced in another place. The Bill has been amended substantially by the other place. Most significantly, the Bill now contains powers that are focused clearly on delivering better regulation initiatives.

The Bill will replace the Regulatory Reform Act 2001. That Act has made some real difference, but it has fallen short of the hopes that were established when it was created. There have been fewer orders than expected, both generally and in relation to the implementation of Law Commission recommendations in particular.

I believe that the Bill before the House will be more fit for purpose than the order-making power in the 2001 Act has proved to be. In broad terms, that is because the rationale for using the better regulation powers will be focused on practical outcomes, including on removing or reducing the burdens of financial costs, administrative inconvenience, or obstacles to efficiency, productivity or profitability.

Part 1 of the Bill contains three order-making powers. They will not be the appropriate or even necessary mechanism for every better regulation initiative, but in many instances they will provide real tools, where appropriate, for departments to pursue their ambitious plans for removing unnecessary regulatory burdens without having to compete for precious time on the Floor of this House.

Better regulation initiatives that the order-making powers will allow us to deliver include: the reduction or removal of administrative burdens such as form-filling or information-giving requirements; ensuring that inspection is risk-based to reduce the burden on those who comply with regulation and concentrate inspection on those who do not; simplifying and making more transparent and less onerous the ways in which people and businesses need to apply for consent from public authorities; the exemption in certain key instances of small and medium enterprises, charities and others from burdensome regulation to allow them to concentrate their effort where it is most needed; ensuring that regulatory activities are carried out in a way that is transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; the delivery of mergers to the extent that they reduce burdens by, for example, reducing the burden on the regulated who are currently on the receiving end of multiple inspections by different regulators; and finally, of course, the delivery of Law Commission recommendations.

These are wide powers. The Government have no intention to use them inappropriately but understand the importance of defining when they could be used. The Government have therefore included in the Bill stringent safeguards for the use of the order-making powers. As I shall explain, these safeguards will ensure that the order-making powers will not be used inappropriately.

One of the most important safeguards in the Bill is the power for relevant committees in either House to veto orders. The veto is linked to the purpose of the powers and the preconditions for their use. The Government have noted the recommendation in the report of the Delegated Powers and Regulatory Reform Committee that the veto should be exercisable on any grounds. We have also noted the Select Committee on the Constitution's view that allowing relevant committees in either House to veto orders on any grounds would strengthen parliamentary procedures appropriately.

As we said in another place, the Government want to get all procedures for parliamentary scrutiny of draft orders right. We have said that we would continue to listen about how best to achieve this. Having listened and having spoken to a number of committee chairmen in another place, I am pleased to announce to noble Lords that the Government accept the view of the Delegated Powers and Regulatory Reform Committee and the Select Committee on the Constitution and are content to remove from the Bill the criteria for use of the veto. I am confident that this power of committee veto on any grounds will still allow the Government to work together with relevant committees in both Houses to deliver the reform for which orders are intended.

However, I urge noble Lords to accept that we must always keep uppermost in our minds the fact that the order-making powers and the procedures for their use must work in practice to deliver real regulatory change on the ground. In suggesting amendments, I urge noble Lords not to lose sight of the overarching, practical objective of the Bill: the order-making powers must deliver regulatory reform.

The CBI has made very clear the need for this balance between due parliamentary procedure and the ability to deliver better regulation. In a statement made yesterday, it urged parliamentarians debating the Bill not to lose sight of its intended outcome—for an elected Government to be able to deliver more and swifter deregulatory measures for the benefit of business and society at large.

The Bill includes other stringent safeguards to ensure that the order-making powers in Part 1 are used only for those initiatives that are appropriate. These safeguards consist of rigorous preconditions that must be met before an order is made, as well as requirements that proposals must be subject to public consultation and rigorous parliamentary scrutiny procedures that should apply before an order can be made.

The preconditions in the Bill state that an order can be made only if the Minister considers the following: that the policy objective cannot be satisfactorily attained without legislation; that the order is proportionate to its aim; that the order strikes a fair balance between the public interest and the interests of anyone adversely affected by it; that the order does not remove any necessary protection; and that the order does not remove any right or freedom that persons might reasonably expect to keep.

In addition, I can reiterate two key government undertakings: the Government will not deliver highly controversial measures by order and we will not force through orders in the face of opposition from the parliamentary committees. There is also the substantial safeguard that orders may not remove a burden falling only on a Minister or government department unless it affects the Minister or department in the exercise of a regulatory function. Examples of the latter are the pesticides directorate, which is part of Defra, or Companies House, which is part of the DTI, each of which exercise regulatory functions. This guarantees that the Bill cannot be used to remove core functions from government, such as the provision of free education or healthcare, simply because they impose a financial cost on government.

Finally, the Bill precludes the order-making powers in Part 1 from amending the Human Rights Act or Part 1 of the Bill itself.

Before I turn to other parts of the Bill, there are three specific areas of Part 1 on which I should like to comment briefly: the ability to confer by order the power of legislating; the implementation of Law Commission recommendations; and the effect of the Bill on the constitutional convention whereby Parliament does not legislate on matters internal to the Church of England without its consent.

As the Government also made clear in another place, we acknowledge the view, which has since also been expressed in the Delegated Powers and Regulatory Reform Committee report, that further discussion is necessary to consider options to restrict the ability of certain orders to confer the power to legislate on any person.

None of us doubts that the Law Commissions do excellent work, but all of us know that their work is often not implemented quickly. This problem is long-standing and has not gone unnoticed. As long ago as 1993, the Hansard Society described Law Commission Bills as probably among the most carefully prepared of all Bills: these legislative cakes are properly baked. Conflicting views have usually been reconciled and objections overcome. Therefore, unless they arouse opposition on political, moral or social grounds, they should be ready for a simple passage into law.

There has of course been some progress in implementing Law Commission recommendations. Parliamentary procedures, such as the Special Public Bill Committee—the Jellicoe committee—have been developed. However, these have not provided a really effective means of breaking the backlog of unimplemented reports. That was recognised by John Halliday in his quinquennial review of the Law Commission in 2003. He recommended that the search for procedural reform to implement Law Commission recommendations should not be abandoned. The Government have acted on that recommendation. We have consulted on the proposal that there should be an order-making procedure for implementing Law Commission recommendations. The outcome of the consultation was favourable.

Of course, we accept that some Law Commission recommendations are not suitable for anything other than a full Bill procedure, such as, for example, the commission's recent report on cohabitation. We believe that the veto and the other safeguards in the Bill provide adequate controls over the possible misuse of this power. We have, however, noted the serious reservations—

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, the noble Lord has been touching on the very important point of the ability to amend or repeal legislation. For those of us who have doubts, this is the core of those doubts. It would help the House enormously if, in his opening remarks, the noble Lord could tell us whether there are any Acts that the Government would like to repeal using this procedure and what those Acts are.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I thought I had made it clear that that was not the intention of the Bill. Perhaps if the noble Earl follows the debate and the rest of my comments, that will be clear. I also suggest that he reads Hansard very carefully to follow the line of our argument.

Perhaps I may continue on the subject of the Law Commission. We have noted the serious reservations entered by the noble Lord, Lord Dahrendorf, and his committee about Clause 3. We have also noted the concerns expressed by the noble Lord, Lord Holme, and his committee. This is, no doubt, an area that will occupy a considerable part of our debates and it is right that it should. Our aim is to find practical ways to bring the benefits of Law Commission recommendations to citizens and businesses, whether by the proposed order-making procedure or otherwise. We will of course work with parties opposite to try to achieve that end.

I suspect that we will spend a good deal of time on Clause 3. I know that some noble Lords find it objectionable in principle, but I urge them to be pragmatic and to work with us to achieve a result that will deliver the real benefits of appropriate Law Commission recommendations to the widest possible group of people and businesses in the shortest practicable time. We will, as we have done throughout the course of the Bill in another place, listen carefully to the views expressed by noble Lords on this and other issues.

Finally, on Part 1, I would like to make it clear that the Government are also mindful of the long-standing constitutional convention in relation to the Church of England, whereby Parliament does not legislate on matters internal to the Church without its consent. We will, of course, uphold that convention and we will make that explicit in the Bill where necessary.

Part 2 of the Bill enshrines in statute five principles to which a person must have regard when exercising those regulatory functions that are specified by order. The principles are the Better Regulation Commission's five principles of good regulation, and provide that regulatory activities must be carried out in a way that is transparent, accountable, proportionate, and consistent, and that they should be targeted only at cases in which action is required. Those principles are widely regarded as the gold standard for judging regulation not only by government departments, regulators and organisations in the UK, but also in several other countries, including Ireland and Germany.

Given the variety of functions that regulators have and the variety of contexts in which they operate, inconsistency of approach is a real risk and can cause difficulties for those regulated. We would therefore like to set a baseline standard for regulatory work and these principles support the Government's aim of bringing about risk-based, proportionate and targeted regulation.

This part of the Bill also enables a Minister to issue and revise a code of practice which sets out the best practice for regulators. The duty to have regard to a code of practice when a regulator develops his policies will ensure that the good practice in the code effectively filters through to the regulator's activities, whether planning inspections, preparing a strategy on advice, or allocating resources between different regulatory functions.

I am confident that, through the principles of good regulation and a code of best practice for regulators, we will deliver on our commitment to promote effective, risk-based enforcement which will make a real difference on the ground to those who are regulated, without compromising the UK's excellent regulatory outcomes that make this country such an attractive place for international business.

The provisions in Part 3 will make it much more straightforward for Ministers and departments to transpose EC regulations and to keep domestic legislation implementing Community law up to date, as well as making it easier for organisations and individuals to understand and work with these changes. Part 3 concerns only the transposition of EC regulation into UK law. The provisions make no changes to the policy made by the European institutions in Brussels and will not lead to an increase in regulation.

I want to leave noble Lords in no doubt that we need this Bill. Business needs the Bill; our dedicated public servants need the Bill; and our hard-working voluntary and charity workers and citizens need the Bill. Miles Templeman, director-general of the Institute of Directors, John Cridland, deputy director-general of the CBI, and representatives from the British Chambers of Commerce and the Forum of Private Business have, on several occasions, told me, in person, and other Ministers, that they want this Bill to deliver. The Bill is an important mechanism in maintaining our country's competitiveness, in safeguarding our economic prosperity, in reducing burdens on public services and in improving the lives of all citizens. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Bassam of Brighton.)

Photo of Baroness Wilcox Baroness Wilcox Shadow Minister for the Cabinet Office, Constitutional Affairs, Shadow Minister, Work & Pensions 3:43, 13 June 2006

My Lords, as the Minister has said, this Bill has arrived in this House in a considerably better state than when it arrived in the other place. We on these Benches are grateful to the Government for listening to the concerns voiced by many parliamentarians, led by the noble Lord, Lord Grocott, who warned that the wide-ranging powers initially proposed in the Bill would far exceed the bounds of what would be constitutionally acceptable to this House. As a result of the concessions that the Government made in the other place, we now have what is tantamount to a fresh Bill to be considered by your Lordships' House. The other place had precious little time to consider the new government amendments, and some parts of the Bill received little or no attention at all, so the onus is all the more on this House to scrutinise it extremely carefully.

The House will do that against a background of the deepest suspicion about where the Government are coming from. If the Bill team had spent a fraction of the time on deregulation that they spent on constructing the Bill and then pulling it to pieces, right now we would be much better off. Deregulation comes down to, "Don't just talk about it; get on and do it". The trouble is that this Government just do not do that. Removing burdens from business is critical if this country is to retain a competitive edge over other countries in today's globalised economy.

I cannot help but feel rather circumspect about whether this Bill really signifies a new dawn of deregulation from this Government. It is all very well producing a mechanism to deregulate, but unless that is accompanied by a fundamental change of culture in Whitehall departments to reduce the amount of new regulations produced, it will achieve very little. The proof of the pudding will be in the eating, and since 1997 the pudding cooked up by this Government has got bigger, heavier, stodgier and terrifyingly more costly every year.

Since 1997 we have heard about the launch of the Better Regulation Task Force, regulatory impact assessments, the Chancellor's Better Regulation Action Plan and the establishment of the Better Regulation Executive. One can produce as many initiatives as one likes, but the measure of success is proved only by the effect on the ground. The British Chambers of Commerce's burdens barometer estimates that the cost of new regulations introduced on business since 1997 now totals £50 billion, up from £39 billion a year ago. On average under this Government, regulations are introduced at the rate of 15 a day, a far higher rate than under the previous Government.

The World Economic Forum says Great Britain has fallen from fourth to 13th in the list of the world's most competitive countries. When you talk to the business community, particularly small businesses, it is clear that the burden of regulation is one of the main problems it has to contend with when trying to maintain its competitiveness. When on average something in the region of 3,800 regulations are passed annually, one can see that deregulation is only a small part of the equation. The real solution lies in cutting down the amount of regulation produced in the first place.

As Sir David Arculus said last December when he stood down as chairman of the Better Regulation Task Force,

"Bad regulations are like moles on the lawn . . . While you are dealing with one, a dozen more are appearing behind your back. The best way to stop bad regulation . . . is to dig down to the root of the problem".

He also highlighted the huge cost of regulation, which he said exceeds £100 billion. He estimated that a third of that was probably administrative costs. It is encouraging that the Government accepted his recommendation that they should embark on a project to measure the administrative costs of regulation and set up a public target for reducing them. I would welcome an update from the Minister on how far that work has progressed.

I have always felt that this Government purposefully learnt the language of business to win the election, but that they have never understood its heartbeat. Creating initiatives and setting up the statutory structures for quick regulatory reform of over-burdensome regulations looks good—and no doubt gives the Minister something tangible to go back to the Prime Minister with, to show that his department is "delivering"—but I suspect it is far harder, and perhaps beyond the reach of statute, to actually get into the weeds of every department and change the culture of regulation. That is down to the managerial and political determination of the individual Minister.

Every Minister should have on his desk a sign saying, "Just say no"; it is allowed, and it is possible. Civil servants are quite right to advise that there may be risks, but it is for a good Minister to see the dangers and have the real political wisdom of trusting to common sense and leaving some things well alone. Perhaps if the Government had focused more on the internal processes and administration of their departments rather than churning out headline-catching legislation, they would not have found themselves in the mess they are in now with the Home Office and the National Health Service.

I have concentrated so far on the effect on business of over-regulation because the Bill at least presents a step in the right direction towards delivering a lighter regulatory burden on business, and we must not lose sight of that. However, its potential to deliver more and swifter deregulatory measures is hard to gauge. It would be useful to hear from the Government during the forthcoming debates on the Bill some concrete examples of which regulations they would like removed. We have had 44 government Bills this Session. How many of them have deregulated? How many regulations have gone? Every one of those Bills could have had a whole part devoted to deregulation and, at least, both Houses could have amended and improved them. It would also be useful to get some confirmation of the numbers of regulatory reform orders that the Government envisage would be passed under the new order-making powers of the Bill. Under the Regulatory Reform Act 2001, the Government seem to have managed only about 28, according to the figures in their regulatory impact assessment of the Bill published today. That was despite a far higher target being set. We wait with anticipation to hear what the new targets will be, once Ministers have these new powers.

If we apply a cost benefit analysis to the Bill, its potential benefit and effectiveness are hard to predict, since they are reliant on the political will of Ministers to take advantage of the Bill's powers and use them effectively. But the cost in constitutional terms is easier to see: the Bill risks reducing the ability of Parliament properly to scrutinise measures that will amend primary legislation. The constitutional risks of the Bill are now somewhat reduced, but despite the removal of the sting from the Bill, some of the poison still remains. We agree with the view expressed by the Select Committee on the Constitution at paragraph 45 of its report that,

"additional safeguards can be introduced to protect matters of constitutional importance without undermining the policy goals of the bill".

In particular we hope to examine carefully, to see whether we can improve, the parts of the Bill that define the operation of ministerial power and permit the sub-delegation of power.

Very weighty concerns have been raised about the potential application of the Part 1 order-making powers to the principal economic regulators—that is, the ones with the greatest powers in energy, telecommunications and broadcasting, water and railways—and the overall competition authority, the Office of Fair Trading. Part 2 sets out principles that should be adhered to when a person exercises regulatory functions. It then specifically excludes the principal economic regulators. That is right, because the principal economic regulators already adhere to and espouse all the principles that Part 2 seeks to promote. Part 2 is for the smaller, less significant regulators, and that is how it should be. But the rightful exclusion of the principal economic regulators from Part 2 throws into sharp relief the fact that they have not been excluded from Part 1. Yet Part 1 is by far the more significant part. It allows the Minister, after cursory and highly abbreviated parliamentary procedure, to alter by administrative fiat fundamental parts of the constitutions of the principal economic regulators. As was pointed out last week by the chairman of the Office of Rail Regulation, Part 1 could be used to diminish or even extinguish the independence of the principal economic regulators. It could also be used to alter their jurisdictions, for example by transferring critical parts of them to other non-independent—that is, politically controlled—agencies of the state.

This is no idle or academic point, and the adverse consequences of the use of such powers may be very significant. It happened—or rather, it very nearly happened—when the Government found in 2001 that, to carry out their plans to put Railtrack into administration, they had to contend with the independence and jurisdiction of the Rail Regulator, the statutory predecessor of the Office of Rail Regulation. I need not remind the House of those events, but the political determination to destroy the independence of the regulator was firm and we should always remember that.

What this regrettable and disgraceful incident shows is that a Government—this Government—could and did manifest their intolerance of the independence and jurisdiction of one of the essential supports of a privatised industry in this way. The then Rail Regulator published his commentary on this Bill in an article in the Financial Times in March this year. He referred to the threats of neutralising legislation in these terms:

"When in 2001 the then Transport Secretary improperly threatened me with legislation to remove my independence as Rail Regulator, it was the rigour and timescales of the Parliamentary process which offered the most potent protection. He simply could not do it in time, and had to resort to other equally controversial measures to get his way in the collapse of Railtrack. If the Legislative and Regulatory Reform Bill had been enacted at that time, the juggernaut of executive government would have had considerably more power to be rid of an inconvenient part of the constitution".

This is a very significant issue. Private investors depend heavily on those regulators being beyond political control, taking decisions on the companies' investment programmes, price controls, access to their networks and so on against objective public interest criteria set down in their founding statutes, without regard to ministerial intervention or short-term political whims. Investors know that if their regulators' roles, statutory duties or constitutional positions are to be altered, such a fundamental change must first go through the full process of parliamentary scrutiny and be properly and openly debated. They know that something so great in its significance cannot be steamrollered through, and that the ambitions of a control-obsessed Executive can and should be tested and checked in a considered and proportionate way. That is how it should be. We should never allow it to be otherwise.

The Government are well aware of the Official Opposition's concerns about the provisions relating to the implementation of Law Commission proposals. The Government blame the lack of legislative time to get Law Commission proposals on to the statute book. But ultimately that is a problem of the Government of the day's priorities and not necessarily a reason to sacrifice proper parliamentary scrutiny of any proposals introduced by primary, rather than secondary, legislation.

There are other lingering doubts over the order-making powers in Part 1, for example whether they are appropriate for consolidatory and codifying measures. In this matter and indeed on the whole question of the appropriateness of the proposed powers in Part 1, this House will find the 20th report of the Select Committee on Delegated Powers and Regulatory Reform an invaluable guide. I feel that it is right to give notice to the Government that we shall pursue its comments in Committee.

There are further concerns about the procedure in Clauses 13 to 19, by which any order is approved by Parliament. We will look to ensure that these orders are guaranteed the correct scrutiny they deserve by Parliament, and whether the so-called veto, which is in fact a mere recommendation, that can be exercised by a committee over a draft order is strong enough. I welcome the Minister's indication that the Government will accept the recommendations of the Delegated Powers and Regulatory Reform Committee regarding fettering the discretion of the committee to consider a draft order. We hope the Government will go further and accept all its recommendations.

Part 3 relates to the implementation of European Community obligations. We will examine carefully whether more can be done to limit the practice of gold-plating in the implementation of European regulations and directives. I am sure that the Government and the Opposition agree that regulations should contain no more than is absolutely necessary when implementing EU directives, and I would be interested to hear from the Government what steps they suggest to achieve this.

In conclusion, we support attempts by the Government to ensure that deregulation can be achieved swiftly and efficiently. We owe it to the economic well-being of this country to get the regulatory culture of Whitehall changed for the better, and if this Bill proves to be a useful tool to achieve that so much the better. But the right balance has to be struck between achieving those aims and ensuring that Parliament still maintains effective scrutiny and control of any draft orders introduced by Ministers. The Bill is not yet in a fit state to be passed by this House, but we hope that the Government will continue to listen so that by the time it leaves here, it will do so as a constitutionally sound but effective deregulatory weapon.

Photo of Lord Goodhart Lord Goodhart Spokesperson in the Lords (Shadow Lord Chancellor), Constitutional Affairs, Advisory Team On Legal Matters, Cross-Portfolio and Non-Portfolio Responsibilities 4:00, 13 June 2006

My Lords, the Government apparently originally thought that this Bill would be straightforward and uncontroversial. On first publication, it seemed that many people agreed. There was certainly no great initial reaction from the Official Opposition in the House of Commons. They seemed to have thought that deregulation was a good thing, that this Bill was about deregulation, and therefore that this Bill must be a good thing. It was only when my honourable friends in the House of Commons, Mr David Heath and Mr David Howarth, pointed out the dangers implicit in the Bill as it then stood that the Conservatives sat up and took notice, for which I am glad. It took very much longer for the Government to accept that the Bill had real problems.

All through Committee in the House of Commons, the Government insisted that the Bill did not need serious alteration. It was only on Report in the Commons that they accepted that big changes were needed. Probably even then that was only because the government Chief Whip in your Lordships' House told them that they would not get the Bill through this place. The changes introduced by the Government at that stage altered the Bill from being wholly unacceptable to a Bill that is acceptable in principle but still in need of major surgery. The Bill allows primary legislation to be removed, amended or even created by secondary legislation. That power needs to be kept under very close controls. It is of course true that, in doing this, the Bill is not doing something entirely new. The process began with the Deregulation and Contracting Out Act 1994, which was replaced and extended by the Regulatory Reform Act 2001. I was a member of the Delegated Powers and Regulatory Reform Committee at the time and also spoke from these Benches when the then Bill went through your Lordships' House, so I can remember it very well; it was fairly controversial.

I accept three propositions. First, it is useful to have a system by which technical and uncontroversial amendments can be made to Acts of Parliament without taking up parliamentary time by primary legislation. If there were no such system, desirable amendments would be delayed or not made at all. Secondly, I accept that the Government have not up to now attempted to abuse their powers under the 2001 Act. Only in one case has the Delegated Powers and Regulatory Reform Committee reported that the Act was being used inappropriately. In that case, the Government withdrew the draft order. However, your Lordships' House cannot of course assume that the present Government, or still less any future Government, will never abuse the powers. We cannot allow this Bill to go through on that basis.

Thirdly, I also accept that the Regulatory Reform Act has not proved as useful as was hoped. By the end of 2005, only 27 regulatory reform orders had been made against a government target of 60. The reasons for that are not clear. It may be in part because procedures under the 2001 Act are cumbersome. It may be because some restrictions in the 2001 Act have made it difficult or impossible to use the regulatory reform procedure for what may be regarded as legitimate purposes. I accept therefore that it is arguable for some extension of powers under the 2001 Act to be made, and we do not oppose this Bill in principle. However, to begin with we need an explanation of why this result could not be achieved simply by making amendments to the Regulatory Reform Act 2001 rather than by an entirely new Bill to replace it.

Turning to the content of the Bill, I believe that we must remove the special provision for Law Commission Bills. I speak as a great admirer of the work of the Law Commission and I am fully aware of the backlog of useful reform proposals waiting enactment for years, and sometimes never going through. Originally I thought that Clause 3 would provide a reasonable way of enacting Law Commission reforms more quickly and that the clause would become acceptable if any differences between the order and the Law Commission proposals had to be approved by the Law Commission itself. I am now persuaded that this view is wrong. It is wrong in principle for orders to be used to create new primary legislation by a process which does not admit to amendments being made during its passage through Parliament; Clause 3, of course, does exactly that. It does not matter that the proposal came originally from the Law Commission rather than from the Government. If the Law Commission proposal creates new legislation, I believe that the reform order procedure is wrong in principle. If the proposal merely alters existing legislation, it may well be that the reform order procedure can be used to enact Law Commission proposals, as has already happened on occasion under the 2001 Act. It is simply one of the procedures; others enable Law Commission legislation to be fast-tracked, but there should be no exemption for the Law Commission from general restrictions in the Bill.

I move on to the remaining provisions that need to be altered before the Bill can be considered acceptable. Here I shall touch only on the most important. First, we need to ensure that the test of whether the reform order procedure can be legitimately used is objective and therefore not subjective. The test should not be whether the Minister considers it appropriate to use the reform order procedure, but whether it is in fact reasonable to do so. In a letter I have received from them, the Government say that the test is already objective, but I am not convinced of that and no doubt we shall need to consider it when we reach further stages.

Next, we need to restrict the ability under this Bill to confer powers on other people. As it stands, that is far too wide. We have heard jokes about this power, such as the one which would delegate powers to President Chirac. While that may not be a very likely proposition, it is an example of how serious the problem here is. In particular, the Bill enables an order to confer powers to legislate on people other than Ministers themselves. Powers to make secondary legislation by statutory instrument should be reserved to Ministers of the Crown and should not be capable of being either delegated or transferred to other people. For others, the power to legislate should be limited to what is loosely called "tertiary legislation"; that is, the making of rules, codes of conduct, by-laws and other similar provisions. Nor should Ministers be able to use the reform order procedure to confer on other people powers which they themselves could not have exercised.

I note and welcome the fact that in Clause 4 the Government have reintroduced restrictions on powers originally in the 2001 Act, but the wider powers in this Bill require yet further constrictions. In particular, we wish to see provisions to ensure that the regulatory reform order procedure has no adverse effect on matters of constitutional importance such as the rule of law or the independence of the judiciary.

In Clause 9 there is a provision that the reform order procedure cannot be used to alter the Act itself or the Human Rights Act. That plainly does not go far enough. The Select Committee on the Constitution, under the chairmanship of my noble friend Lord Holme of Cheltenham, has set out in paragraph 53 a list of the statutes of a constitutional nature, from Magna Carta to the Constitutional Reform Act 2005, which are of particular constitutional importance and therefore should not be capable of being altered by the reform order procedure.

Listing statutes is not entirely satisfactory because there can be disagreement about what the relevant statutes are. For example, I certainly wish to see added to this list—if we make lists—the Freedom of Information Act as an Act of constitutional importance. Some Acts which are not of general constitutional importance may include provisions which are of importance. Others, such as the Constitutional Reform Act, include matters of obvious and highly significant constitutional importance but also matters which are perhaps not of such importance—for example, the procedures for dealing with complaints against judges by the ombudsman.

The Select Committee on the Constitution suggests as an alternative what is probably a better system. This involves referring not to particular statutes but to principles such as the powers of and succession to the Crown and many other matters. Further alternative procedures might be available—for example, that something similar to the procedure for money Bills under the Parliament Act 1911 might be used, which would give the Speaker of each House a power, after obtaining advice, to certify that a draft regulatory reform order made alterations of constitutional importance.

Again, there should be limitations not only on the power to create new offences but on the abolition of existing offences which carry a serious penalty. For example, reform orders without such restrictions would give the power to decriminalise statutes dealing with drug possession or allow assisted suicide for the terminally ill. I support the latter but it is plainly a matter for a proper Bill in Parliament and not for a regulatory reform order.

Finally, I turn to the question of procedure. First, there should be no amendment whatever under this Bill of primary legislation by the negative resolution procedure. We need either the affirmative or the super-affirmative procedure. The use of the negative procedure is not appropriate because it does not necessarily involve any parliamentary debate or approval of the amendment to the primary legislation.

The so-called veto in Clauses 17, 18 and 19 is plainly not genuinely a veto. I welcome, as did the noble Baroness, Lady Wilcox, the Government's decision not to limit the grounds on which a Select Committee can make its recommendation, but that does not deal with the matter adequately. At present, there is no proper veto at all. The veto arises only if the committee makes a recommendation that the order should not proceed and that recommendation is not overridden by the vote of either House as a whole. Therefore the veto would be of very little use indeed in the House of Commons because Select Committees have a government majority and the Government will usually have a majority in the House. The provisions as they stand would be more effective in your Lordships' House, where the Government do not have a majority on Select Committees or in the House as a whole. But we have to remember that the powers of this House are, and remain, under serious threat and must be discounted for that reason. We need to make sure that the veto of a Select Committee will be effective.

If this Bill had come to your Lordships' House in its original form, we would have proposed that the whole of Part 1 should simply be chucked out, as being totally and constitutionally unacceptable. The Government have moved half-way but a lot of work still needs to be done on the Bill before, to use the current cliché, it becomes fit for purpose. We will do our best to achieve that and we look forward to vigorous debates when the Bill proceeds to its further stages in your Lordships' House.

Photo of The Bishop of Coventry The Bishop of Coventry Bishop 4:15, 13 June 2006

My Lords, we on these Benches accept that the deregulatory aims of the Bill are commendable, with benefits to businesses, charities and the voluntary sector. However, we share the widespread belief that, despite the Government's amendments in another place, the means to achieve these aims continue to pose certain threats to proper parliamentary scrutiny of legislation and could all too easily give rise to a number of unintended consequences. Among those are some that bear specifically on the role of the established Church, which has already been mentioned by the Minister and to which I will return in a moment. First, however, I want to comment on the broad issues raised in Part 1.

Arguments about the procedures authorised in Part 1 have centred on two main areas: the specifying of legislation that is properly eligible for fast-track treatment and the safeguards against misuse of the procedures. I welcome the new Clause 1 as a great improvement on the original, with its focus on the removal or reduction of burdens, although the relation between reducing the overall burden and particular burdens remains a matter of dispute.

I welcome, too, the clarification afforded by the new Clause 2 on regulatory functions. The previous two speakers have already referred to Clause 3 on the power to implement the Law Commission recommendations. Whatever the final decision, Clause 3(2) contains the apparently innocuous phrase "with or without changes". I suggest that this needs to be thoroughly explored to ensure that controversial measures are not slipped through. Anxieties have to some extent been allayed by the removal of the possibility of using this part of the Bill to amend itself or the Human Rights Act. On all these matters, it is good that the Government have heeded their critics.

That said, some substantial worries remain. On the face of it, the preconditions laid down in Clause 4 provide an important filter for measures not subject to the full power of scrutiny. However, Clause 4(1) requires only that the Minister should consider that the conditions are satisfied in the particular case—a highly subjective test, if I may say so. It has been said in another place that Ministers have an established duty to act reasonably, but your Lordships need to be assured that the preconditions would provide an objective set of restrictions and would not allow Ministers to act without being able to show good reason. It can also be imagined that the interpretation of the phrase "necessary protection", which is not to be removed, could be highly contentious. One person's protection could easily be regarded as another's burden, not least in the field of employment.

These definitional restrictions are rightly reinforced by procedural safeguards. I am encouraged that the Government have responded to the views not only of individuals but of committees, which expressed grave concerns about the looseness of the original proposals. The provision in Clause 17 for either House to require the super-affirmative or affirmative procedure in preference to the Minister's choice of the negative resolution procedure is clearly right. The most difficult point at issue is now whether the statutory power of veto given to the committee of either House is adequate—again, a point mentioned by the two previous speakers.

It seems reasonable that either House should have the power to override the veto of one of its own committees, but the grounds in Clauses 18 and 19 on which the committee may exercise the veto seem very narrowly drawn and do not permit the discretion for which one would look in preventing inappropriate use of the procedure. I am aware that the Government argue that the definition of the veto is related to the powers conferred on Ministers, but it troubles me that some Members of the Procedure Committee in the other place remain dissatisfied with these proposals and I hope that this matter will be pursued in Committee in this House with the aim of ensuring that an effective veto is in place.

Turning to Part 2 of the Bill, we on these Benches support the general aim of ensuring that regulatory functions are carried out, as Clause 23 requires, in accordance with the principles of accountability, transparency, proportionality and consistency, and that they are targeted at cases only where action is needed subject to other duties and requirements. We accept the provision for Ministers to issue revised codes of practice, subject to parliamentary approval, but we suggest that the duty in Clause 25 to consult on codes of practice should specifically extend to representatives of those carrying out activities subject to regulation, as well as representatives of those regulating. I here declare an interest as an office holder of a regulatory body potentially subject to the provisions of Part 2—namely, the Church of England. The Government have stated that these provisions give effect to the recommendations of the Hampton review on reducing administrative burdens on businesses and are not intended to apply to institutions such as the Church of England. However, it appeared to us that the Bill as drafted could apply to the activities of bishops, church courts and disciplinary tribunals and indeed to the legislative role of the General Synod.

Since the Government have assured us that they do not intend that Part 2 should apply to the Church of England, we seek a suitable amendment to the definition of regulatory functions in Clause 34, which would exclude from its scope the regulatory activities of the Church. I am grateful for the Minister's assurance on this matter and for the constructive conversations that we have already had. While this ecclesiastical issue seems headed for a happy outcome, it illustrates the dangers that arise when a measure with far-reaching constitutional and practical consequences is introduced without adequate consultation and preparation. The Government have, rather late in the day, listened to their critics, but it seems that your Lordships' House still has much work to do before the Bill is, in the words of the noble Lord, Lord Goodhart, fit for purpose.

Photo of Lord Desai Lord Desai Labour 4:23, 13 June 2006

My Lords, I welcome the Bill and to some extent I am astonished by some of the debates about it. Lawyers live on a high plane of generality and they have a fervid imagination. I served for four years on your Lordships' Delegated Powers and Regulatory Reform Committee and, believe me, I know how difficult it is to have a regulation to keep pubs open until midnight—before the present provision was passed. The first order that came before us was to extend the opening of pubs up to midnight for the Golden Jubilee celebrations. Noble Lords should look at page 60 of the excellent report of that committee—I should add that I am not a lawyer; I am an applied economist and I look at evidence first. It turns out that the Regulatory Reform (Golden Jubilee Licensing) Order 2002 took 374 days to pass. My absolute favourite, however, is that the Regulatory Reform (Sugar Beet Research and Education) Order 2003 took 1,924 days to pass. When the party opposite talks about cutting red tape and the CBI says that we should cut red tape, they imagine a simple procedure such as Her Majesty the Queen opening an exhibition by cutting a red ribbon. Cutting red ribbons is different from cutting red tapes.

This Bill is far from being intended to make grand constitutional changes, like the Magna Carta—and I think that the Magna Carta contained some dubious propositions, but I do not want to go into that. The list of the regulatory reform orders that the Government tried to pass are more than humble; they are extremely simple, ordinary things that we would all like to do. The amount of time and energy that it takes on behalf of all of us, and all the various so-called stakeholder groups who are involved, is so large and costly that people should really find a better way of amending burdensome regulation than we have so far found.

The reason why less than half the regulatory reform orders targeted by the Government succeeded in being passed is not that the Government were lazy. You only have to look at the timetable for how long it takes for the simplest thing to go through the consultation procedure—and, when it has gone through that procedure, how often there are unintended consequences and unexpected vested interests that come to testify against, say, keeping pubs open beyond midnight. Then you realise that what we have created for ourselves is a fantastically complicated tangle of even the simplest regulations. We do not have a simple red tape to cut but a spaghetti junction of red tape. Therefore, we must seriously find a way in which to do something drastic about this.

As always, the noble Lord will interrupt.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Spokesperson in the Lords (Id Cards & Charities Bill), Home Affairs

My Lords, I thank the noble Lord for giving way. He has said several times now that the extension of licensing hours is a simple and humdrum business. Is that really his case? I should have thought that that was precisely the sort of issue that had the widest possible public concern and needed the sort of laborious consideration that the provisions provide.

Photo of Lord Desai Lord Desai Labour

My Lords, that exactly illustrates my point. If you cannot even keep pubs open one hour beyond their original closing hour on one day in 50 years, what is the hope of cutting any red tape at all? As the noble Baroness, Lady Wilcox, and the noble Lord, Lord Goodhart, said, we all want to do efficient things and cut red tape but, as soon as the Government try to do anything, they say, "Ah, we're not going to let you do anything like that. We'll have to do it in the House and spend lots of time on it—and we much prefer primary legislation to regulatory orders because we don't trust you". Then, of course, the same people say that Governments legislate too much. Why do they legislate too much? Because it has become very difficult to do the simplest thing through regulatory reform orders.

While I welcome the Bill, I feel that it does not go far enough, not in terms of the constitutional safeguards and all that; that will only make the problem more entangled and less likely to be effective. Everything that has been said so far will make red tape more difficult to cut, although it will allow you not to have the Magna Carta amended, the probability of which under any Government is negligible. We are putting up safeguards against remote possibilities and not looking at the realities on the ground where we are creating obstacles for ourselves in making simple changes.

I welcome what the Government said about the veto. I do not know whether we can greatly shorten the consultation procedure, but once a regulatory reform order has been presented, its passage would be greatly expedited if we were satisfied that it could be scrutinised by a committee of your Lordships' House or of another place, that the committee could occasionally recommend non-acceptance of the order, and as long as the House can approve it. What people are telling me now is that most of the suggestions are constitutionally very fine and noble and will no doubt make many lawyers very happy but that they will not speed up the efficient elimination of burdensome regulation.

I therefore suggest that we should look at what regulatory reform orders have already been proposed and why it has been so difficult to pass them. What has taken the maximum time in passing them? Rather than worrying about the likely constitutional consequence of the Government getting away with murder, let us consider how little the Government were trying to change and how difficult it was for them to do even that. The sugar beet research corporation should have been abolished 50 years before. It should never have been started. But it took us 2,000 days to discuss a very simple administrative change. We have to leave the lofty heights of constitutional procedure and come back to the ground where we are creating a state in which it will become impossible not only for businesses but for ordinary people to operate because regulation is extremely burdensome and very difficult to remove.

Photo of Lord Sainsbury of Preston Candover Lord Sainsbury of Preston Candover Conservative 4:32, 13 June 2006

My Lords, I come down from the lofty heights. In 1993, I was the deregulation adviser to the President of the Board of Trade and, as such, co-ordinated the deregulation initiative at that time. That was a very long time ago and there are a vastly greater number of regulations—I would hate to think how many—now than there were in 1993. However, despite the fact that my deregulation experience was in another era, I believe that there are lessons to be learnt from the exercise that we undertook at that time which are relevant to the importance of this Bill and are to do a little bit with what the former speaker was saying concerning the nitty-gritty of making deregulation work.

I say that presuming that the Bill, suitably amended, will enable simplification, amendment, reduction and removal of regulations to be effected more easily and with less delay than has been possible up to now. There is no question in my mind but that establishing how the huge burden of excessive regulation on business, public services and charities can be lightened without any adverse effects on consumers, and the public interest generally, is a most difficult and huge task. I suggest that it needs the input of industry, commerce, small firms and large companies. They are better placed to assess the priorities of deregulation than are government departments.

We tackled that in 1993 by establishing seven task forces covering all sectors of commerce and industry, plus two other committees to study the particular concerns of small business and the voluntary sector. The task forces were required to report within six months. One of the important benefits of setting such a time limit was that we were able to attract as members of the task forces some very senior executives who knew that there was a strict time limit to their commitment. There were 71 members of the different task forces including chairmen and managing directors of large and small companies, and directors and members of trade associations. The other benefit of a tight timetable was that it forced the task forces to use their judgment to establish what they believed were the priority areas for reform, for in six months there could not be sufficient time to review the whole huge regulatory system.

We reported in January 1994, identifying 605 proposals for regulatory change. At that time we reported that 250 of our proposals had been taken up and 280 were under detailed consideration by Government. Having highly experienced participants in each of the seven sectorial task forces brought considerable expertise to the review of existing regulations and lent great authority to their proposed priorities. I suggest that there are lessons to learn from that form of intensive consultation to provide Government with good advice in reducing the regulatory burden. The small business special committee that ranged across all sectors provided a particularly valuable insight into the regulations that hurt the small firm most.

Of course, the other lesson to learn from our experience at that time relates to how many of our proposals actually got fulfilled. That I do not know, having retired in early 1994 from my year-long assignment as deregulation adviser. The Deregulation and Contracting Out Act 1994 did not have the success for which we had hoped of speeding the removal or modification of regulations. I suspect that only a very small proportion of the proposals that the Government of the day judged to be in the national interest were carried through. I very much hope that history will not be repeated with this Bill if the Government really intend to act rather than just to discuss the need to simplify, improve or remove regulation.

As well as making specific recommendations, the task forces put forward three principles that should guide departments when reviewing existing regulations for the future. I suggest that those principles are as relevant today as they were in 1994. The first is to think small; make sure that small firms can cope with the regulation. The second is to avoid regulations that are out of proportion to the benefit to be obtained. The third is to make regulations goal-based rather than over-prescriptive. All three are obvious common sense, but I fear that there is little evidence these days that those principles have much influence on those in Whitehall or in Brussels who draft the endless stream of regulations imposed not only on business but on every part of our national life. The first of the principles—think small—is especially important because it is always the small companies, businesses and charities that are hardest hit by the cost and difficulties imposed by excessive regulation.

In respect of assessing the need for new regulations, we highlighted in our 1994 report two essential prerequisites that I believe are even more important now than they were in the past. The first is having a robust, authoritative and professional assessment of compliance costs in every new regulation proposed. That compliance cost should also take account of the impact of the regulation on small companies and charities. Government departments may assess the cost impact of their policies, but that is not the same as producing a detailed compliance cost of particular new regulations, which is what is needed. The second prerequisite is often equally important—a full assessment of risk, which, wherever possible, should be a careful statistical exercise establishing the level of risk that the proposed regulation is intended to address.

One of the five principles of good regulation enshrined in the Bill is transparency. I suggest that if in future the Government insist on proper compliance costs and risk assessment and make those transparent to Parliament and all interested parties, we may well be better able to judge the need and value of new regulatory proposals. How that can be applied to the vast number of regulations stemming from Brussels, I do not know. It requires a stronger voice than just the UK's to persuade the EU bureaucrat that the citizens of Europe would benefit from similar transparency of compliance cost and, where appropriate, risk assessment.

What I believe is needed above all else and is wanted throughout the country by us all, not just by businessmen, is the political will to stem the tide of ever more regulation and bureaucracy and to change the regulatory culture that dominates Whitehall and Brussels.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, before the noble Lord sits down, I want to ask him a question that relates to what I asked the noble Lord, Lord Bassam, who obviously did not understand what I was saying. In the noble Lord's deregulatory task force, how many of his recommendations needed regulatory as opposed to legislative cure? Did he need to reform or repeal any Acts of Parliament, or could it all have been done by regulation?

Photo of Lord Sainsbury of Preston Candover Lord Sainsbury of Preston Candover Conservative

My Lords, I do not remember exactly; it is a long time ago. A very high proportion did not require an Act.

Photo of Lord Holme of Cheltenham Lord Holme of Cheltenham Liberal Democrat 4:41, 13 June 2006

My Lords, it is a great pleasure to follow the noble Lord, Lord Sainsbury, and his wise words derived from experience about the need to curb the regulatory state in all its aspects. I am afraid that I may not be able to avoid returning to those lofty constitutional heights, as it is my honour to serve as chairman of your Lordships' Constitution Committee, but I hope that I will do so in the practical sense that we have just heard.

I am conscious that the Government want, as they so often do nowadays, to move on and not to examine too closely the origins of the Bill. I have two questions. How and why did this Bill in its original form—which has been called the "Abolition of Parliament Bill"—ever see the light of day? Secondly, given that it mercifully has been substantially amended in the light of widespread disquiet, is it now satisfactorily balanced? Is it, in the words of the Minister, "fit for purpose"?

Perhaps it would be helpful if I prefaced my remarks, which on the whole will be critical of the Government, by saying that their avowed purpose of making it easier and speedier to streamline and rationalise regulation—to deregulate—is in my personal view thoroughly sensible. If that is properly provided for, it will be likely, as has been evident already this afternoon, to command widespread cross-party support. In this context, I recommend the Constitution Committee's report on the regulatory state. I welcome the proposal of the Liaison Committee that your Lordships establish a Select Committee on the accountability of regulators so that we can take a sort of overview of the burgeoning power of this sector and make sure that good practice is properly shared.

I acknowledge that, as was said on Report in another place, once the Government finally realised that they were standing shoulder deep in a hole of their own making, they had the wit to stop digging and to try to clamber out. I am afraid that that is as far as politeness will extend on my part this afternoon. In every way, this could stand as a case history of how not to introduce a Bill with constitutional implications. My committee described the consultation process as "lamentable", but I am afraid that we were guilty of understatement.

Why was there no pre-legislative scrutiny of the Bill as there was of the Regulatory Reform Bill in 2000? Why was the Committee stage not taken on the Floor of another place? Why was there no joined-up interdepartmental thinking with the DTI on the Company Law Reform Bill, which embarrassingly foreshadowed these extraordinary ministerial powers with no cross-reference whatever to this Bill? As we know, that provision was withdrawn at the last minute. Why was there no early warning system in Whitehall to tell the Government that they had produced a constitutional monstrosity? My committee in its own small way did its best in January by writing to the Lord Chancellor, the guardian of constitutional matters within the Government, but on 7 February we received a reply of unwavering blandness, protesting the good intentions of the Government.

This road has been paved with good intentions. Indeed, later in the Bill's passage through the other place, ministerial assurances were given in profusion, not least by Jim Murphy, the Minister responsible, that these extraordinary powers would never be abused. But ministerial assurances are walls of sand. I do not for a moment doubt the good faith, integrity and the personal "intentions" of Ministers, but, first, Ministers change, secondly, governments change and, finally, political memories are short and selective. That is why constitutions are about laws, not men, and it is why the bulwarks against the arbitrary misuse of power have to be made of constitutional concrete, not the shifting sand of good intentions.

Some have seen the original Bill as a straightforward power grab by the Executive at the expense of Parliament. I am more charitable. It is more likely to be a question of what so many people in business complain about in regulation—the phenomenon of gold-plating. This Bill was gold-plated; the Government tried to anticipate every eventuality and that process made the legislation too wide-ranging. Whatever the reality, I very much hope that the Government have learnt their lesson. When the Minister responds to the debate, can he assure us that Bills with deep constitutional implications will not be treated in such a reckless and cavalier manner in future?

In case the Government are not sure what is constitutional, which is not always easy with our unwritten constitution, our report on the Bill, House of Lords Paper 194, provides two checklists that the Government might care to refer to in identifying what is likely to have constitutional significance, as my noble friend Lord Goodhart has stated.

So, what now? Our report suggests that the balance of the Bill, even as amended, between rapid reform—which is often needed in the regulatory sphere—and proper parliamentary control is still not right. We have made several suggestions as to how that might be redressed and I welcome the concession made by the Minister in his opening remarks. The nature of amendments that are passed is, of course, a matter for your Lordships' House and, no doubt, amendments will be produced along the lines that we suggest and in other ways. The key issue is how the two watchdog committees can ensure that they bark and bite to good effect.

I sincerely hope that the Government will maintain their tardy discovery of flexibility and continue to pay attention—and I welcome the assurances made this afternoon—to the legitimate concerns of Parliament. The need to reconcile the demands of a benign deregulatory impulse with the careful operation of parliamentary procedures and the principles of democratic government is a topic worthy of the skills and experience of Members of your Lordships' House. I hope that we reach a successful conclusion.

Photo of Lord Lloyd of Berwick Lord Lloyd of Berwick Chair, Ecclesiastical Committee (Joint Committee), Chair, Ecclesiastical Committee (Joint Committee) 4:48, 13 June 2006

My Lords, the noble Lord, Lord Desai, said that we are all against red tape. If this Bill was confined to the reduction or, still better, elimination of red tape, I would have no problem with it. There is no reference, which I would like to see, in Clause 1 to "red tape". Instead, there is a reference to what is called a "burden" and sometimes an "overall burden". I doubt whether the average person who reads Clause 1 for the first time would understand what the Bill is about. However, I put that to one side.

I have no difficulty with Clause 1(3)(a), (b) and (c), which refer to:

"financial cost . . . administrative inconvenience" and obstacles

"to efficiency, productivity or profitability", which were covered by the noble Lord, Lord Sainsbury of Preston Candover, in his important speech, with all his experience. I do, however, have considerable difficulty with subsection (3)(d). Surely the power to remove a criminal sanction for doing anything in the course of any activity must be far too wide for a deregulation Bill. That point was made very clearly by the noble Lord, Lord Goodhart.

I do not wish to do anything other than to address Clause 3. It appears that that clause has nothing whatever to do with deregulation. As so often happens, it seems to have been tacked on to the Bill almost as an afterthought, although it deals with a subject that seems to be, if anything, of even greater importance than deregulation. The creation of the Law Commission, which was the brainchild of Lord Gardiner when he was Lord Chancellor, was one of the best things that that Labour Government ever did. Lord Scarman, as noble Lords will remember, was the first chairman of the Law Commission, and many other judges have filled that role since then. I like to think that there was an unwritten agreement between the Lord Chancellor and Lord Scarman that if the Law Commission did its job well—I think that everyone accepts that it has done so extremely well since it was set up—successive Governments on their part would provide sufficient parliamentary time to put its recommendations into effect. From the beginning, it is sad to say, successive Governments have fallen down on their part of the bargain so that a backlog has built up of the kind that we see today. In May this year, 26 reports were outstanding, some from as long ago as 1991. Fourteen of those 26 have already been accepted in principle by the Government but still nothing has been done. That is indeed a dismal story—almost as dismal as the story told by the noble Lord, Lord Sainsbury, in relation to his attempt to deregulate all those years ago.

Why has nothing been done? There is always the same excuse: that the Government cannot afford the parliamentary time. Here I refer of course to all Governments—let us call them the Executive—and not to one Government rather than another. Yet, although they say that they have no time for these important matters, they have somehow found time, as we all know, to pass 25 criminal justice Bills in the past 12 years. Something has gone wrong with governmental priorities in this respect.

Now, the Government have at last decided to do something for which we—and, I am sure, the Law Commission—must be grateful. However, I believe that they have set about it in the wrong way. The views that I am about to express are my own, as noble Lords would expect, but they are views that I formed—here I plead guilty—without having had the advantage of reading the reports prepared under the chairmanship of the noble Lords, Lord Dahrendorf and Lord Holme of Cheltenham. For once I have come to a conclusion without reading all the evidence. Law reform, as Lord Gardiner used to say, is far too important not to be dealt with on the Floor of this House. We cannot leave it to the Law Commission, good though it undoubtedly is, to legislate on our behalf. It is, I think, a job for us. Again, I find myself in complete agreement with the noble Lord, Lord Goodhart.

It is interesting that the Government have gone a very long way towards accepting that principle. They have undertaken that Clause 3 will not be used for what they call controversial, or sometimes highly controversial, reports. But what use is that? At once, it raises the question: who decides which of the reports are controversial? When that undertaking has been given, how can it be enforced? Nothing in Clause 3 says that the Minister's powers under that clause are limited to implementing non-controversial reports. Why not, if that is its meaning? Let us put those words in and, if the Government then have difficulty in defining what they mean by non-controversial reports, that is only because the line they are seeking to draw between controversial and non-controversial reports is simply not a line that can be drawn.

Then it is said that there is no need to worry about all this, which I do, because the Select Committee will be able to make recommendations, which must then be accepted. That is the so-called veto, but what sort of veto is it? As the Bill stands, the committee can make recommendations only within very narrow limits. One is that the order does not serve the purpose set out in Clause 3(2), but, again, what good is it? However controversial the Law Commission report may be, it will still contain a recommendation, so that particular safeguard carries one nowhere. That is equally true of the conditions set out in Clause 4(2). As the Bill stands, the committee will have no power to say, "This is a highly controversial Bill", and presumably, should it arise, it would be so advised by the Table.

Therefore, it is crucial that the Government look again at the committee's powers to make recommendations. I respectfully suggest that one recommendation it must be able to make is that the Law Commission report is controversial. Even then, that will not do a great deal because the recommendation can always be reversed by a resolution of the House. So, once again, even if it is reversed, who is to say whether it is controversial? The very fact that it is reversed by a resolution of the House must surely mean that it is still a controversial Bill.

What is the answer? It can only be that we must exclude from the Bill the parts that refer to Law Commission reports. I am all in favour of Law Commission reports, which are entirely technical in the sense of tidying up legislation. They should be able to go through via a fast-track procedure, but that procedure is surely to be found not in this Bill but in the existing Standing Orders of the House. Those enable such matters to be considered, if necessary, by a body of which I used to have the honour to be chairman—namely, the Joint Committee on Consolidation Bills. That suggestion was made in the other House. It may be that the Standing Orders of the other House are slightly wider than ours but, one way or the other, that is the way to deal with truly non-controversial reports and not the way proposed in the Bill.

Photo of Lord Whitty Lord Whitty Labour 4:59, 13 June 2006

My Lords, I support the Bill and, rather controversially this afternoon, I would probably have supported the original Bill, at least in large part. Although I recognise some of the points that have been made about safeguards, I take a rather different approach from some noble Lords in relation to regulation. If I were strictly accurate, I would probably have to declare a large number of past and present interests because I have been a proponent of more legislation and more regulation in a number of respects, from workers' rights through to environmental legislation, animal welfare and, currently, consumer rights. I make no apology for that because part of being in government is to regulate.

I also recognise that on our statute book and in our enforcement culture we have had a substantial amount of bad regulation and bad enforcement practices arising from that regulation. Despite the efforts of this House under successive Governments, that also applies to primary legislation. Much primary legislation is badly conceived and much of it, including recent primary legislation, has not been as well drafted as it should be, to put it mildly.

By bad regulation, I do not necessarily mean bad in motive or objective, nor do I necessarily mean bad in terms of the costs that are imposed on business, as in some areas we need to make bad practice more expensive. I am not even talking primarily about red-tape costs, although I accept that argument. I was the Minister in Defra who set the target for cutting red-tape costs by 25 per cent and I am in favour of generalising that across government. Primarily, what I mean by bad regulation is unclear, conflicting, technically outdated, over-prescriptive, disproportionate regulation and, above all, regulation that is incomprehensible to the average expert, let alone to the average layman. Therefore, as a result of all those faults, it is ineffective and not cost-effective regulation.

I am clearly in favour of better regulation, not necessarily less regulation. We have been regulating for some considerable time. Consumer protection legislation goes back to the Middle Ages. I declare my chairmanship of the National Consumer Council, although neither I nor the noble Baroness, Lady Wilcox, was present when weights and measures legislation first came in. We have been legislating on health and safety for 200 years, on the protection of workers for about the same period and on environmental protection for about 100 years. But in the past four or five decades, the pace has increased hugely and the parliamentary process still uses procedures that were established largely in the Victorian era.

Contrary to what is sometimes alleged in this House, in this country there is a vast amount of parliamentary scrutiny compared with many other jurisdictions, both of Anglo-Saxon and of Roman provenance. Of late, much more is placed on the face of primary legislation than is the case in other jurisdictions; indeed, much of our secondary legislation would be regarded as administrative or tertiary law in many parts of the world.

I am not advocating any change to that system, but the implication of pursuing that means that there is an enormous workload on Parliament, on parliamentary draftsmen and, in particular, on this House which makes scrutiny a centre of its endeavours. Dealing all the time with new proposals for legislation, many of which have wide support, there is a tendency to squeeze out serious consideration of the efficacy of existing legislation and the way in which that legislation is enforced.

We have a situation in which minor issues on the face of a Bill cannot be changed without virtually the full primary legislative procedure. My noble friend Lord Desai referred to one or two in regard to the regulatory reform orders. I, as Minister, was faced with a situation in which we could not change the way in which Kew Gardens charged entrance fees without going through primary legislation and my noble friend Lord Desai referred to how it took us 2,000 days to abolish the beet sugar research corporation. It is nonsense that this House should have to go through the full procedure to make those minor changes.

We also seem to be incapable of producing consolidation legislation. Almost everyone out there asks, "Where is the Act that governs my business, my area of interest, my activity?", and yet, every piece of new legislation or new regulation with which we deal is actually only the top strata of some archaeological structure that amends the previous Act which itself amends the one before, and so on, ad infinitum. Yesterday, to great praise, and certainly with my support, the Solicitor-General announced that the Government will try to make new laws clearer and in everyday English. As long as the structure of the legislation is there like that, however, then there is a difficulty in conveying what that legislation is trying to do.

We have made various attempts to try to rationalise this situation. The creation of the Law Commission was one such attempt, and the noble and learned Lord, Lord Lloyd, has pointed out its effectiveness and the fact that it has a huge backlog. I do not follow him to his conclusion, but we should recognise that the Government and Parliament must take the Law Commission's work more seriously. There are all those outstanding measures on which they have made detailed recommendations.

I have mentioned consolidation. There are understandable demands for consolidation elsewhere, some of them based on Law Commission reports, where the work has effectively already been done. Yet Parliament cannot find time to deal with them. Regulatory reform orders were hailed as a great breakthrough—

Photo of Lord Goodhart Lord Goodhart Spokesperson in the Lords (Shadow Lord Chancellor), Constitutional Affairs, Advisory Team On Legal Matters, Cross-Portfolio and Non-Portfolio Responsibilities

My Lords, I am grateful to the noble Lord for giving way. Does he not accept that there are measures for consolidation Bills going through, with virtually no discussion at all, much more quickly than they would if they were introduced as reform orders? The problem is presumably a shortage of parliamentary draftsmen able to work on consolidation Bills.

Photo of Lord Whitty Lord Whitty Labour

My Lords, compared with the number of areas in which it would be beneficial for us to have consolidated legislation, there are relatively few that go through in that form. They have to be totally consensual. The problem with even consolidating legislation is that some past controversies re-emerge. Yet we would not be changing the law; we would simply be simplifying it and presenting it in one place. I do not know whether the noble Lord, Lord Goodhart, has sat in on the proceedings of the Company Law Reform Bill, as I have from time to time. It is producing the longest piece of legislation we have ever had in this country, apart from Finance Bills, and is taking almost the longest time to go through Committee here and in another place.

Even when we look at alternatives to prescriptive legislation—economic and market measures, of which I thoroughly approve—we must go into further, new and more simplified regulation. To deliver a lot of consumer protection, for example, we need more competition, but we need the regulation to provide the OFT with the powers so to intervene. We need to update the role of the OFT and other competition authorities from time to time. Where we are, as a result of privatisation or the liberalisation of a market, trying to create an initially artificial market, we need new regulations to deal with that. As the market develops, we will need to change those regulations and relieve some of their more burdensome aspects, which must be done rapidly and flexibly. Parliament does not really have the procedure to do that.

When we are changing institutions, the Hampton report has been referred to as how we should consolidate the number of regulators into six or seven main ones. To do that takes an unconscionably long time, however. The noble Lord, Lord Haskins, who is due to speak shortly, made proposals about rural delivery a few years ago. They met almost universal approval, yet are still going through Parliament for us to create a single organisation in one relatively small area of rural regulation.

Even economic regulators, about which a number of noble Lords have spoken, need to adapt to the market, and Parliament and Ministers must make further adjustments to their role. I declare my membership of Ofwat's board, although I am not speaking as a board member today. I recognise that it needs economic certainty to a greater degree than other areas but I would not entirely support its exclusion from Part 1 of the Bill, though I would look on slightly more safeguards in that area with favour.

I said at the beginning that I would have been a supporter of a wider Bill. That is because we could only use this accelerated, simplified procedure in areas where we were relieving a burden, which must be fairly specifically defined in the Bill. There will be other areas, however, in which rationalisation of past regulation is extremely desirable, where the burden may not be that obvious; the burden of the ministry of inconvenience could be extended. Were we, in my previous area of concern, to go for a programme of rationalising agricultural regulation, that might not relieve the total burden on farmers, but it would make life a lot easier if they were dealing with one regulator, one system of regulation and one whole-farm approach to agricultural planning.

As regards environmental regulation, which will face us soon and is one of my major concerns, we must consider what we will need to do on climate change. We will need to adapt very rapidly not just to whether market measures and past regulations work, but also to what is happening physically to our environment. We took 2,000 days to abolish the beet sugar research corporation, but we cannot afford to take that period of time to introduce the rationalisation or improvement of regulations relating to the environmental challenges that face us.

This House has a problem. We rightly believe in greater scrutiny, but we also believe in more effective government. We need to look at other ways of achieving that, which may be different from those the Bill prescribes; I do not think it is the last word on this subject. We need a bit of imagination and innovation about how our procedures and processes can deliver the change that government and society require without the lengthy procedures and unnecessarily detailed period of scrutiny that we go through. The noble Lord, Lord Holme, referred to looking overall at the performance of regulators. That may be part of the solution, but unless we face up to the fact that our apparently constitutional insistence on old forms of scrutiny cannot deliver modern government that responds to market, environmental and social developments, the kind of regulations that everybody is deeply opposed to will remain on the statute book. They are a cost to business and eventually to consumers and may be dangerous to society as a whole.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 5:12, 13 June 2006

My Lords, I sense a division in philosophy in the speeches made so far. Most noble Lords have concentrated on the desirability of getting more effective deregulation, but some have said that that must not be at the expense of proper parliamentary scrutiny. I align myself firmly with the second group, as my brief remarks will show. The noble Lord, Lord Whitty, pointed out that we want to do two separate things that are in conflict with each other: to deregulate and to ensure proper scrutiny. That is what this debate is about.

I shall make two points. First, when the Bill was originally introduced, it was not the first time that a Labour Government attempted to circumvent the parliamentary process by the use of a general enabling Bill. As originally introduced, it was such a Bill. I share the view of the noble Lord, Lord Holme of Cheltenham, that it is astonishing that it was ever allowed to see the light of day. Secondly, we are all familiar with the aphorism that "the price of liberty is eternal vigilance", and the Bill will provide textbooks with a copper-bottomed example of how that can work. A start was made in another place, but more needs to be done.

A less familiar aphorism, but one that I have long believed, was contained in a remark made by a former colleague of mine in another place, Sir Derek Walker-Smith, who became, for a brief while, Lord Broxbourne, a Member of this House. In debate, he used to say that liberty is often to be found secreted in the interstices of procedure. I cut my teeth on the 1965 to 1970 Labour Finance Bills and a great deal of the debates on those Bills was about procedure. Sir Derek's intention was to rebut the Government Front Bench's defence that something was only a matter of procedure and therefore not important. This Bill is a classic example of that.

Like my noble friend Lady Wilcox, I approach this Bill with the "deepest suspicion"—I quote her words—because Labour has tried to bring in such provisions before. With the help of the Library's excellent researchers, I have been able to clarify my recollections and run them to earth. The notion of general enabling Bills as a means of bypassing parliamentary processes originated—as so many mischievous thoughts did—with the late Richard Crossman, when he was Leader of the House in another place. He recorded this in his diaries. I will read it because it is worth recollecting. He said:

"I had Wedgy Benn in to discuss his legislative plan—a really useful meeting because I found that in the next Session he wants five Bills for his new Department. Since this is impossible I asked him whether he couldn't have a general enabling Bill".

He went on to say that his Permanent Secretary, Sir Otto Clarke, had already vetoed that. But it was Crossman who originally put forward the idea of a,

"streamlined enabling Bill where only an Affirmative Order would be required for each policy".

In a diary entry a few months later, Richard Crossman, again in relation to Mr Benn's enabling Bill, said:

"I said I'd much prefer to give him the power to deal with these things by Order in Council. Tony won the first round in Cabinet, which committed us to the White Paper he wanted . . . then he had a meeting with the First Secretary"— noble Lords will remember that that was George Brown

"and the CBI where it could not be denied that the CBI was utterly opposed to this kind of Government action. If we were to get the Bill past them we should have to make clear that it was for assistance to private industry and not an enabling act for the extension of socialism".

He went on to say that that was why the whole idea was dropped.

Labour lost in 1970. It was re-elected in 1974, and the idea of general enabling Bills was resurrected this time at the instance of the new Leader of the House of Commons, Mr Ted Short. The Times stated that:

"Senior ministers strongly believe that the forthcoming review of parliamentary procedures will have to include a detailed examination of the possibility of allowing governments to bring in general enabling Bills".

Indeed, that is what happened. Mr Short trailed the idea in a number of speeches and broadcasts.

When the matter came before the Select Committee on Procedure—interestingly, a number of very distinguished Members of this House served on that Select Committee, including my noble friends Lord Baker, Lord Lamont and Lord Renton and the noble Lord, Lord Radice, from the Labour Party—Mr Short gave extensive evidence, in which he made the case for enabling Bills. I do not have time to read it. By the time the committee reported, Mr Short had become Lord Glenamara and was in this House. What the committee said about the proposal was brief and to the point. In paragraph 2.30 of its report the Select Committee said:

"We would not welcome such a development. The control of delegated legislation by means of Motions for annulment has already broken down, and the fact that Statutory Instruments are incapable of amendment by the House means that they are no substitute for defining the will of Parliament in statutes".

That was the last we heard of it.

As was pointed out in the excellent report of the Delegated Powers and Regulatory Reform Committee published last week, it is now clear that there are of course appropriate cases where the misnamed Henry VIII clause has become part of our usual process. In paragraph of its report the committee quotes the statement of my noble friend Lord Waddington when he was Lord Privy Seal:

"The Government has set out its position on 'Henry VIII' provisions in several debates . . . Its view is that in a limited range of circumstances a power to amend primary legislation by order may be justifiable".

I stress the words "limited range of circumstances" used by my noble friend. As originally drafted, this Bill could by no stretch of the imagination fall within that description.

So what do we do about it? If we accept that there is a case for legislating in these circumstances by order, one comes back to my aphorism: liberty is often to be found secreted in the interstices of procedure. This House will now have to examine that. As my noble friend pointed out, the government amendments in another place were produced at a very late stage and had totally inadequate consideration. We will now have to do that.

Anyone who has studied the report of the Delegated Powers and Regulatory Reform Committee, to which I referred a moment ago, and the admirable report of the Constitution Committee, to which the noble Lord, Lord Holme of Cheltenham, referred, will have been impressed, as I have been, by the complexity of the detail of the procedures now embodied in the Bill as it was introduced into this House. Who is entitled to do what and at what stage? Within what parameters and subject to what constraints and timetables? All this will require the closest scrutiny if we are to get it right. It is in the detail of those procedures—the "interstices", to quote again Sir Derek Walker-Smith—that the safeguarding of Parliament's role and the liberty of the subject must lie.

I want to mention only one example, because it has been mentioned by many speakers. It is entirely unclear how the power of veto, resting with appropriate committees in each House, will work. Let us suppose that an order comes here first and is vetoed. It will not go any further. There can be a vote in the House, but if the vote supports the committee, that will be the end. If an order is introduced in another place and the committee imposes its veto, it can be overturned in the Commons on a general Motion. The Government can then proceed with their order. But what happens if this House again imposes the veto and the House upholds it. The order will have passed through the House of Commons and will have been frustrated in the House of Lords. There is nothing in this Bill to say what should then happen. That is one example, but there are many others where the details of procedure have to be looked at.

My noble friend Lord Sainsbury of Preston Candover rightly said that everyone wants simpler, clearer regulation. Everyone knows that much past regulation needs to be pruned and simplified. Most people now accept that in this—again, I quote my noble friend Lord Waddington—"limited range of circumstances" a specific enabling Bill is probably unavoidable. But this has to be carefully circumscribed if the Bill is not to become the Abolition of Parliament Bill, as some have described it. Given earlier attempts by past Labour Governments to introduce general enabling legislation, it behoves us to look at this Bill very carefully.

The other day I received a letter from a lady I do not know, Alison Arbuthnot, writing from SW6 in London. She ended her letter thus:

"Dictatorships do not emerge overnight; they creep up on those who are not concentrating. So far in this country we have avoided the worst excesses of dictatorship by a relatively happy tension between the legislature (Parliament), the executive (Government) and the judiciary . . . but we cannot take this for granted".

The price of liberty, my Lords, is eternal vigilance.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Spokesperson in the Lords, Scotland, Spokesperson In the Lords (With Special Responsibility for Civil Service Reform), Cabinet Office 5:25, 13 June 2006

My Lords, this debate shows how most of us are reflecting on our experience of regulation and deregulation. It is not surprising that in the temper of the times, the focus has been on the necessity to deregulate rather than to regulate. My executive experience, gained in ministerial posts almost 30 years ago, was rather of the necessity for regulation. I am as conscious of its necessity as I am of the mood of the times. The noble Lord, Lord Whitty, was candid enough to reflect on his recent experience of that kind, but with the passage of the years it seems that there have been rather different approaches to regulation which have given rise to some of the difficulties that this Bill attempts to confront.

Perhaps the most significant piece of regulation for the protection of consumer interests with which I was engaged was the Consumer Credit Act 1974, which was controversial in a sense, although the controversy was at the margin. The proposal that there was a need for such legislation flowed from a series of careful studies undertaken in a number of different forums. Reports came from distinguished non-party people, from the European Union and so forth. All of that preceded the enactment of the Bill with the result that there was broad agreement on what needed to be done. I think it is fair to say that it lasted well and very few people suggested that much deregulation was required as a result of the Act.

One of the challenges we face today is that of governments reacting to particular problems too quickly, without sufficient deliberation, and not looking at the matter which requires regulation in the wider context; indeed, looking at it in an unsystematic way with the result that incoherence develops and burdens become unacceptable. If we are to tackle the problem of over-regulation, I believe that at least as much attention needs to be given to the case for regulation prior to bringing forward the legislation that will enact it.

A second reason for this speedy reaction to a problem seems to be the instinctive desire of governments to demonstrate through some change in the law that they have the measure of it. I do not think that that is a partisan point. Too often these matters are treated in a partisan sense by the government of the day, without sitting down and addressing them in a round table atmosphere so as to gain consent for a proposed solution before the matter is even introduced to Parliament. That, for me, was the very powerful message of the speech made by the noble Lord, Lord Sainsbury of Preston Candover, with respect to deregulation. But it is also a message with respect to regulation, and the application of tests, compliance costs and risk assessments would certainly go a long way towards reducing this contentious problem to size.

Another general consideration which it is appropriate to raise at Second Reading—we shall in the later stages of the Bill have the opportunity to consider the impact of its detailed proposals—is how on earth this measure ever came before Parliament at all. It is the most astonishing piece of legislation, even in its revised form as brought before this House. In introducing it, the noble Lord, Lord Bassam, said that the Bill before us was not what noble Lords may have heard about. I think that is to suggest that noble Lords pay perhaps rather less attention than we do to legislation coming before Parliament. But the trouble is that we cannot simply draw a line under what was considered in another place as though it had no bearing on what we are considering now. This reflects very clearly the thrust of the Minister's concerns and, since the original Bill was introduced, there has been a step by step withdrawal from the more extreme positions that have been espoused.

We are far from having a measure which, by agreement across the Chamber, can be consented to. Frankly, there is no division of opinion around the House about the desirability of deregulation where procedures are burdensome and unnecessary or incoherent, but the ways and means of achieving it are immensely important if our democratic procedures are not to be dangerously undermined.

It was bizarre that the Bill was not recognised to have any constitutional import when clearly it had the effect of cutting down the scrutiny that Parliament would give to legislation. In days of yore, such matters were considered on the Floor of another place and its Members took their time. Far from having that treatment, the Bill had eight days in Committee of guillotined debate as though it was just any sort of routine measure. That also strikes me as hard to justify.

I put it to the Minister, humbly and with a certain degree of force, that when the powers of Parliament are being tackled in this way, even as an indirect consequence of the Government's intentions—however well intentioned they may be and however well intentioned they may think the legislation is—they would do well to consult not only the business interests affected outside but the parliamentary interests inside this House and another place prior to bringing forward legislation. I have on many occasions in this House advocated a cross-party approach to constitutional legislation, for that is what will result in it lasting.

The provisions of the Bill as it stands seem very far from perfect. In addressing their detail we will be greatly assisted by the reports that have been received from the two committees which have given the matter detailed consideration. I notice in particular that the Delegated Powers and Regulatory Reform Committee, in its 20th report, has suggested that the veto arrangements should be looked at with particular care—indeed, it has suggested that, as they stand, they should be deleted—partly because if the veto is exercised by a committee, it is only a provisional veto and can be rejected by either House, as I read the Bill.

That is not the only problem with the veto provision as it stands. If, far from exercising their veto, the committees were not to choose to exercise their veto, that would have the contrary effect of precluding other Members of the House from participating fully in a debate in which it is quite possible that there would be an important minority opinion to be expressed. That seems to me to be almost as serious as the power exercised to preclude the procedures which are advocated to accelerate debate. I hope that issue, too, will be looked at with care because Members of Parliament in another place, when they are elected, are not understood by their constituents to have absolutely no power over a matter because a committee of the House has been given delegated responsibility to decide it.

The last point I wish to address at this stage relates to the work of the Law Commission. I sat at the feet of Lord Gardiner as a young man in Parliament and I am greatly impressed by the work of the Law Commission. I have drawn attention over the years to the difficulty that there has been in enacting its recommendations, but I think it is quite spurious to suggest that because it has deliberated long and carefully and its recommendations are normally highly sensible and defensible, they can be categorised as technical and uncontroversial. There have been examples—some of which were mentioned in debates in another place—where the Government have wished to intervene and modify, or even act entirely contrary to, the recommendations of the Law Commission. It seems to me that we, in this democratic institution of Parliament, should not delegate our democratic responsibilities to an appointed body such as the Law Commission. However wise such a body may be, the rights of minorities to raise points that may have occurred only to minorities is crucial to the effectiveness of our system. I hope therefore that the proposal in Clause 3 will be struck from the Bill.

Photo of Lord Haskins Lord Haskins Crossbench 5:39, 13 June 2006

My Lords, regulation has become one of the great economic topics of our day. In some ways we should be grateful that this is the case, rather than having to fret about more serious matters such as high unemployment, high inflation and high public sector deficits, although I suspect that the economic clouds which are building up at the present time may put regulation in better proportion. Nevertheless, if Sir Digby Jones, the outgoing director of the CBI, is to be believed, British business is about to be overwhelmed by an avalanche of red tape.

When I was chairman of the Government's Better Regulation Task Force, I was required to review the whole regulatory environment and I came to a number of conclusions. Yes, in a modern, affluent democracy there is a high level of regulation to protect consumers, workers and investors from being harmed or exploited. This has its roots in the great dynamic economy of Victorian England. In modern times, environmental regulation has, in my view correctly, been growing rapidly. Few would argue about the benefits of the clean air legislation of the 1950s which transformed the air of our great cities. A great American judge, Wendell Holmes, once remarked that taxation is the price we pay for civilisation. He might as well have said the same about regulation.

However, when I last looked at this matter a few years ago, Britain was in fact the least regulated of all the major OECD countries, including the United States. One reason why international financiers rush to do business in London and why this city may well overtake New York as the global centre for international finance in the foreseeable future is the light, flexible, but also effective regulatory environment. So Sir Digby Jones's conventional wisdom that British international competitiveness is at risk because of over-regulation does not, in my view, hold water. Maybe the real answer to our low productivity lies with his own members, who continue to invest less in technology and training than their major competitors elsewhere.

Interestingly, my experience of most new regulation in recent years have been demands coming mainly from the middle classes, whether it be the risk-averse consumers whose fears are cleverly exploited by the Daily Mail or the environmental doomsters whose anxieties are championed by the Guardian.

I should like to compete with the noble Lord, Lord Sainsbury of Preston Candover, in going down memory lane and throwing in a few regulatory reminiscences of my own. I am delighted to hear about the Government's and the EU's continued commitment to the principles of good regulation—proportionality, transparency, accountability, consistency and targeting. I sometimes wake up shouting those words in the night. They were in fact devised by me in a deckchair one summer's afternoon in Yorkshire, in a desperate attempt to find a way through this regulatory nightmare. Little did I believe that a matrix decided for my own benefit should achieve such widespread acceptance.

The third problem is that we are not very good at getting rid of redundant regulations which might or might not have served a purpose when they were first introduced but which are clearly irrelevant today. The journalist Simon Jenkins provided me with one such gem. In the 19th century, a regulation was introduced which required that in public places—hotels, pubs, and so on—there should be two doors between lavatories and the rest of the building. At the time that was justified in order to reduce the risk of cholera. A century and a half later, this regulation still flourishes, even though the risk it sought to mitigate has long since gone.

The problem is that to get rid of most of this nonsense—and there is plenty of it—it has been necessary to use time-consuming primary legislation. This is anathema to government departments and Ministers, whose greatest ambition in life is to introduce new legislation rather than getting rid of old legislation. The competition between departments to get Bills into the Queen's Speech is another reason for the legislative morass which exists today. A modern parliamentary law-maker in full flood is the embodiment of self-satisfied egocentricity, but not, I believe, closely concerned with the realities of daily life.

The Regulatory Reform Act 2001 was introduced to facilitate the elimination of redundant regulation, but it lacked the necessary teeth to tackle the problem. In its original shape, the present Bill was much too draconian, passing far too much power to the Executive, especially dangerous when the latter, on occasions, show scant respect for parliamentary democracy. But Parliament should be much more concerned with the Government's zeal for new regulation and should breathe a not-very-convincing sigh of relief when they propose to deregulate.

It seems to me that Britain has three areas of concern about regulation. First, we have, especially in recent years, created far too much new legislation which, in turn, requires new regulations. The Government have, I gather, enacted no fewer than 42 new Bills related to crime with, at best, questionable effect. There has been a plethora of new legislation related to health and education. It seems that Ministers and senior civil servants see new regulations as the solution to every problem. Pity the enforcers, trying to keep up with the latest torrent of regulations; they are as confused and bewildered as those at the receiving end of the regulations. I have no doubt that many of the problems endemic in the Home Office and the health service today are caused by all this regulatory complexity. It is time that the Government stopped introducing new legislation and concentrated instead on improving the effective delivery of existing regulations, including, as the Bill should address, the elimination of bad or redundant regulation.

Secondly, our senior civil servants believe that falling foul of a judicial review, which exposes shortcomings in their wonderful legislative skills, is the most humiliating experience known to man. As a result, they go to extreme lengths to close every conceivable loophole when drafting legislation. I remember, when helping to get the Bill to introduce the minimum wage going, that in order to thwart me, a senior civil servant in the DTI triumphantly brought up the example of a Stoke-on-Trent pensioner who was working half-time doing a newspaper round and would not be protected by the Bill as it stood. To his dismay, we overrode him, and as far as I know, things are all right in Stoke-on-Trent.

Sadly, many Members of both Houses of Parliament delight in such obscure, hypothetical possibilities and, as a result, add unnecessary complications to our laws. Britain suffers particularly from this gold-plating disease, when it affects the translation of EU directives into British law. Many of the regulatory problems attributed to the EU are of our own making. Just look at the mess in the Rural Payments Agency.

I believe that the amended Bill introduces sufficient checks and balances to meet these democratic concerns, and I hope that, if passed, it will make a significant contribution to a more effective regulatory environment. I am also pleased that the Government are implementing Philip Hampton's recommendations, and I welcome their intention to place on a statutory footing a code of practice for regulators. Changing the way in which regulators approach the way they regulate will have a huge impact on the ground, especially for small and medium enterprises, where the effects of regulation are most felt. I do, however, share the concerns of the noble and learned Lord, Lord Lloyd of Berwick, about Clause 1(3)(d), which leaves the Government with draconian powers.

The Bill does not address the much more serious problem of internal public sector regulation, created by the control freaks in a fruitless attempt to run everything from Whitehall. The most serious victims of red tape in this country are the hapless head teachers, GPs, prison governors, immigration officers, Rural Payments Agency staff, local authorities and regional quangos. These poor people are overwhelmed by demands from central government. A vast amount of time is being wasted as they seek to satisfy the expectations of those who create a multitude of targets and initiatives at the centre.

A lethal mixture of ministerial self-indulgence and Civil Service risk-aversion has created this state of affairs, and this will continue as long as Britain clings to the most over-centralised, top-down form of government in the democratic world. That is the real challenge for radical reforms, but I fear that it will not be taken up.

Photo of Baroness Carnegy of Lour Baroness Carnegy of Lour Conservative 5:48, 13 June 2006

My Lords, it is to the Prime Minister's credit that after 10 years in office, his enjoyment of pressing for reform grows no less. The problem seems to be the carelessness with which he and his Government go about it. As a leader in the Guardian said last week, Mr Blair,

"often talks of reform as though it were an invisible atmospheric gas, with unquestionable health-giving benefits for everyone prepared to inhale".

It was reasonable in 2001 to try to find a new way to reform out-of-date legislation. But when the then Regulatory Reform Bill went before Parliament, it caused enormous alarm, diminishing as it did the power of MPs to legislate. In addition, the 2001 Act has not worked as intended; it has been used disappointingly little. So here we are, five years later, with a replacement Bill that is still full of enormous flaws. What a saga this is.

First, I want to say a quick word about Scotland. The Law Society of Scotland has a number of anxieties; some are general points, and others specifically relate to Scotland. I flag up three examples, but I will not ask the Government to comment now; they are much better dealt with in Committee. Clause 3 would allow Scottish Law Commission reports on matters reserved to Westminster to be implemented with or without change by order at Westminster. The Law Society has detailed queries about how Clause 3, read alongside Clause 10, will interact with the Scotland Act 1998. Reflecting a concern in the Constitution Committee report, the Law Society of Scotland wonders whether Clause 9, which prevents Part 1 changes being made by order to the Human Rights Act 1998, should not also include other Acts—examples which the Law Society suggests are the European Communities Act 1972, the Supreme Court legislation in 2005 and the Scotland Act 1998, along with other Acts implementing United Kingdom devolution.

The Law Society also has questions about Clause 10, which allows changes to be made by order on matters devolved to Scotland, albeit when they are consequential, supplementary, incidental or transitional in purpose. We will return to those and other Law Society points in Committee.

I now turn to the workability of Part 1, because I have considerable anxieties based on my experience of four years helping to operate the present system as a member of the Delegated Powers and Regulatory Reform Committee. My thoughts underline some of the points made by the noble Lord, Lord Desai, which he derived from similar experience. I wonder whether Part 1—the lifting of burdens by order and the procedures for so doing—will work any better than the current arrangements. Justifying the new proposals in another place, the Minister seemed to think—and the noble Lord, Lord Bassam, reiterated the point when he opened the debate—that the problem with the current system was simply one of departmental culture on this point. He said that civil servants and their Ministers prefer making changes to regulation in a way that is visible and openly debated, as happens with a Bill in Parliament.

The regulatory reform order process is, by contrast, largely invisible. It consists of negotiation behind the scenes with the committees in both Houses, and lengthy public consultation with numerous bodies. The regulatory reform process is not seen in the way that parliamentary discussion is seen. The Minister said that there was a culture in the department of it being better to wait for a Bill, even if that means long delay, rather than take the regulatory reform order route. So, said the Minister, there has to be a cultural change. This Bill is designed to make that change.

The dearth of regulatory reform orders may partly be attributable to this culture, but my own experience—and that of the Delegated Powers and Regulatory Reform Committee—makes me believe that there are many other reasons for departmental lack of love for the 2001 Act. First, to fit into an RRO under the current system, a proposed legislative change must be expressed in terms of lifting or reducing a burden. That is often quite a puzzle and results in difficult and convoluted drafting which can itself be criticised. Secondly, it requires full and lengthy debate. After all, public consultation replaces parliamentary examination and discussion of an order. The discussion has to be taken very seriously. It can be extremely tedious for civil servants and result in a lot of queries from the committees behind the scenes.

Thirdly, a reform order is required to deal with uncontroversial reform, yet sometimes in the course of consultation, the proposal turns out to be more controversial than at first thought. That presents a great problem. Fourthly, at the end of the day, one of the two regulatory reform committees may decide to stop the order altogether so that it never gets to Parliament.

The Delegated Powers and Regulatory Reform Committee's excellent report shows the length of time it is taking to process RROs. The case of the sugar beet order has been talked about, but it is interesting that, over the four years since the Bill was instituted, the average time between the beginning of consultation and the introduction of an order to Parliament has been 571 days. It is surely not surprising on time and effort alone that at least departments that regularly put forward big Bills prefer to wait for a Bill rather than implement a regulatory reform order.

As the House scrutinises Part 1, it is important that noble Lords ask themselves whether the proposed new arrangements will cure the problem. Will departments use RROs more? If the answer is no, is it not better to start again and amend the 2001 Act rather than go ahead with this Bill? A few existing problems have been addressed, but the contortions required for turning a legislative change into a burden to be lifted are still there. The lengthy behind-the-scenes consultations and negotiations with committees are still there. Also, because the Regulatory Reform Committee in the House of Commons will have a chairman on the government side, in effect the ability of that committee to block an order is still there. What is new that will make government departments learn to love reform orders more? We shall see as we get to Committee.

Photo of Lord Lipsey Lord Lipsey Labour 5:58, 13 June 2006

My Lords, I am not sure that many people in this House this evening will have been able to see the recent production of Arthur Miller's "The Crucible" in London, because clearly everyone has been studying this Bill in greater detail than I can claim to have done. However, I did go last week and I see so many analogies between that play and what happens here. First of all, some silly girls misbehave in the woods and squeak about it in a rather hysterical manner afterwards. Back in town, some citizens see political advantage in making use of this to cry witchcraft. Before long, a major court is established to hear the cries of witchcraft and very soon Salem is on the edge of destruction. In this case, the girls in the wood are the hysterical press commentators, who whipped up an extraordinary storm against this Bill. When it culminated in six silly Cambridge law professors suggesting that somehow Magna Carta was at risk in consequence of it, I thought that we were wholly out of the real world in which some of us like to exist. I am afraid that I feel that the Conservatives made an enormous error, having been rightly and strongly a party of deregulation. After deciding not to vote on this Bill at Second Reading in the Commons, when the Bill was watered down considerably, they then decided to vote against it at a later stage, which I feel was seeking political advantage. I shall not go further with any analogies with the Salem courts, but I feel that much of the fuss about this Bill has been hugely exaggerated, for reasons I shall explain.

I shall go through one or two logical points. First, there is too much regulation in this country. Everyone who has spoken, with the possible exception of the noble Lord, Lord Whitty, agrees with that—and certainly I do. Secondly, it is extremely hard to deregulate. That is because civil servants, brought up as they have been in a culture of regulation, see it as cheaper than spending public money—and anyway there is not the Treasury to stop them doing it. They have a predisposition to regulate when faced with a problem.

As for industry, it talks with forked tongues. Of course, it is against regulation in general—and you hear all this stuff about £50 billion. But if you look at each specific industry and the regulations that affect it, you usually find that the existing firms in that industry are the strongest defenders of those regulations. Why? Because they act as a tremendous barrier to entry by small firms and outsiders. As for Ministers, they naturally prefer to expend their political capital in doing something rather than undoing something that somebody else has done. So there is a strong difficulty in deregulation, which makes me think that we should be very careful about erecting big parliamentary barriers against doing it.

I may delude myself, but I feel that over the past 18 months or so, for the first time deregulation is beginning to get a momentum. A real effort is being made to change Whitehall culture. The five principles dreamed up by the noble Lord, Lord Haskins, in his deckchair are now on every wall in Whitehall. The process is gaining momentum; for example, it is completely inconceivable that the Government would bring forward now the absurd regulations on the control of care homes and their standards that only four years ago they were forced to withdraw when clearly they would have closed most of the care homes in the country. There is an opportunity here, and we must not let an over-concern with the minutiae of how Parliament deals with it stand in the way.

I have heard all that has been said about parliamentary procedures. Of course, there is a narrow argument to be had about whether the protections in Clauses 13, 16, 17, 18 and 19—the super-affirmative procedure and all that—are sufficient. They are all there; the Government have given an awful lot. But when it comes down to it, Parliament can stop anything happening that it wants to. It is not confined to voting on the orders that might be involved; it can move to reduce a Minister's salary or force his resignation, for example. If any Government did what the silly professors said was being done and brought forward a Bill to abolish Magna Carta, abolish jury trials or lock every citizen up for life and all those sorts of things, Parliament would of course stop it, and it would not require the detailed menu for doing so that is the focus of this Bill.

There is a school of thought in both Houses that sees the best defence for the respect of Parliament as being to hang on to every power and tradition you have—to ancient traditions and ceremonies. I do not believe that that is going to affect what the British people in the end decide they think of Parliament. What the people want is what we can deliver for them—that is the era in which we live. Deregulation is about delivery—of growth and jobs and, very importantly, of practical freedom to people in how they go about their daily business and run their daily businesses.

The Bill may require some adjustment of balance, although most noble Lords may wish to adjust it in a different direction from the one that I would prefer. But it represents a modern approach, whereby we put in due safeguards for Parliament and its rights but they are not allowed to stand in the way of due expedition in getting rid of the onerous regulations that weigh down our society and impede us in many of the ways that make our daily lives less pleasant.

Photo of Lord Norton of Louth Lord Norton of Louth Conservative 6:05, 13 June 2006

My Lords, I have listened with considerable interest to the speeches of those who support the Bill. They proceed on the basis that there is a problem with achieving deregulation. This Bill is designed to achieve deregulation. It replaces the 2001 Act, which has not been used inappropriately to carry through great controversial changes. Therefore, they say, this Bill should be supported. But making the case for deregulation does not make the case for this particular Bill. The Bill not only offers the wrong solution but is premised on a questionable view of where the problem lies. The noble Lord, Lord Whitty, says that we should look at alternatives to existing procedures. I do not disagree with the point that he makes—this Bill is an alternative. I do not believe that it is a desirable alternative.

The noble Lord, Lord Lipsey, has misunderstood fundamentally the protection that parliamentary procedure provides against a government majority in the other place. He proceeds on the basis that Parliament can decide to do what it wants; in other words, the majority view will prevail. However, if the Government have a majority in the other place, what is to constrain them other than the procedures of the institution itself? That is the fundamental point that he completely fails to grasp.

This Bill is remarkable for what it was and what it is. It is remarkable for what it was at the time of introduction—the comments of the noble Lord, Lord Lipsey, notwithstanding. As Barry Winetrobe, reader in law at Napier University, wrote in the March issue of the SCOLAG Legal Journal, echoing the views of other legal experts, the Government's proposal,

"is a constitutionally lethal combination of a skeletal, framework or enabling Act and 'Henry VIII' powers to amend existing legislation by ministerial order. No amount of ministerial assurances or 'concessions' on scope or parliamentary scrutiny can get away from the central point that the job of making the law is being transferred from the Legislature to Ministers".

What is of considerable concern is not just the contents of the Bill as originally introduced but the reaction of the Government to criticisms of the measure. It appeared to take them by surprise. That it did so should give us pause for reflection. It reflects, in my view, a problem not just with the attitude of government but also the structure of government. There is a Department for Constitutional Affairs that is, in effect, still a Lord Chancellor's Department. There is, I fear, no department with a fundamental understanding of the basic tenets of our constitution and the role of Parliament within our constitutional arrangements. That is apparent from the letters from the noble and learned Lord the Lord Chancellor and Jim Murphy reproduced in Appendix 1 to the report of the Constitution Committee. We need at some stage to address this wider issue.

I turn to the problem with the Bill as it is. It remains fundamentally flawed. Amendments made to the Bill in the other place have provided some restriction in scope and strengthened parliamentary scrutiny, but they do not go far enough. The provisions remain inadequate for three principal reasons—those of time, institutional scrutiny and powers. As such, the Bill replicates the problems with the 2001 Act, but on a greater scale. Each House will now have the potential to consider every order made under the Bill; there is a mechanism to increase the level of parliamentary approval and also to block the order. On the face of it, that is a major improvement. The problem is that, whatever the level chosen, the process is time limited and institutionally constrained. An essential resource in Parliament's arsenal in relation to government is not simply the vote, crucial though that is, but time and institutional mechanisms for debate. Measures are considered over a period of time through structures designed to probe, to force government to justify the particular provisions as well as the principle of the measure, and if necessary to amend it.

As we have heard, Clause 1(7) permits an order to amend or repeal any enactment. The only measures exempted are Part 1 of the Bill and the Human Rights Act. Leaving those aside, an order may—and it is the potential that is important—make a fundamental change to our constitutional arrangements. Even under the super-affirmative resolution procedure, as under the 2001 Act, there will be a maximum of only 60 days to consider it. That may seem sufficient time, but bear in mind that the normal institutional mechanisms of scrutiny, deliberation and probing are not engaged. The scrutiny will be by a designated committee, which can be overridden by a vote in the Chamber. The House having the ultimate say is justifiable on constitutional grounds but in this instance that is vitiated by the fact that it is a single vote, divorced from any sustained scrutiny by the House itself.

With Bills, the House can consider and make amendments. Under the procedure in this measure, as with the 2001 Act, neither House can amend an order. A Minister may reconsider a draft order as a result of representations made to him, but it is ultimately up to the Minister as to what is included. Under Clause 19(2), the Minister "must have regard to" representations as well as resolutions or recommendations emanating from Parliament, but—as we have variously discussed in this House—the requirement to "have regard to" is a soft one in law. The Minister can choose to proceed with the order as originally introduced. A government secure in their majority in the Commons may then seek the approval of the other place, in a single Division, to an order making a draconian change to the law of the land. As such, the provisions of the Bill undermine the basic equilibrium of legitimacy that underpins the parliamentary process. The Government have a right to get their business, but the Opposition have a right to be heard. This measure could be used to undermine the rights of the Opposition.

The Government claim that the orders made under this measure will not cover anything of major constitutional significance—cited in aid is the fact that the 2001 Act has not been used in any sense in that way; that these will be dealt with by the normal legislative process; and that Ministers will consider very carefully all representations made to them when orders are brought forward. Indeed, the noble and learned Lord, Lord Falconer, said it about the 2001 Act and he and other Ministers have said so in respect of this Bill. The problem with this, as we have heard this afternoon and as the Constitution Committee has observed, is that an assurance by a Minister in a letter or at the Dispatch Box does not bind Ministers in the future—be they Labour or Conservative Ministers—and, as long as the words of the Bill are unambiguous, the courts will not look at what the Minister has said.

When the Hunting Bill was going through and was then enacted through the provisions of the Parliament Act, various people took umbrage and said, "That's not what the Parliament Act was designed for". My response was that it is not relevant what it was designed for; it is the words of the measure that matter. That is it. It is quite possible that this Bill in, say, 20 years' time could be a godsend to a government who might be intent, say, on leaving the European Union.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, is it not possible, then, that the Hunting Act could be repealed by this Bill if it becomes an Act?

Photo of Lord Norton of Louth Lord Norton of Louth Conservative

Indeed, my Lords, but that would be a bit too late. But the noble Earl makes my point for me. I think it fair to say that the Parliament Act is quite a significant measure of our constitution. It could arguably reduce quite a significant burden.

So if we are to proceed with the Bill, then further changes are clearly necessary. But why are we proceeding with this Bill? Why has it been brought before us? There has to be a compelling case for the introduction of a measure that confers significant powers on a Minister and limits the scope of parliamentary scrutiny. What is the compelling case? The review of the 2001 Act, published last year, is cited as the basis for the measure. Who was consulted in the course of this review? To quote from the Explanatory Notes at paragraph 4, dealing with Part 1 of the Bill:

"The review was informed by detailed feedback from Government departments which have been involved in the making of RROs under the 2001 Act, and by the findings of the Better Regulation Task Force . . . The Task Force's report made some recommendations . . . as to what the Government's review of the 2001 Act should cover".

The task force's report basically recommended that the Government undertake their review of the 2001 Act as a matter of urgency and look at whether the scope of the regulatory reform orders could be widened, especially to deliver non-controversial orders for simplification. It also recommended looking at whether the whole process for developing an RRO and subsequent scrutiny could be more proportionate. That set some broad terms for the review, but the review itself then rested on, as the Explanatory Notes make clear,

"detailed feedback from Government departments which have been involved in the making of RROs"— in short, hardly the most detached body of commentators. Even so, as the Public Administration Committee in the other place has noted, the review recommended a far more limited reform of the 2001 Act than is embodied in this Bill. Indeed, although finding problems, not least that the application of safeguards was overly complex, the review noted that, at a basic level, the current framework is effective.

The case thus appears to rest on weak foundations. There is no clear evidence that there is a problem with parliamentary scrutiny. In so far as there is a problem with achieving a reduction in regulatory burdens, the cause lies elsewhere. Andrew Miller, chairman of the Regulatory Reform Committee in the other place, said on Report that what the Minister should glean from the debate and his reading on the matter,

"is the fact that, while the Regulatory Reform Act 2001 has not proved as effective as it might have, the blame lies not with the House but with Government Departments".

There was, he said, an inertia in the system:

"It is extremely difficult to achieve momentum, however determined a Government may be".—[Hansard, Commons, 15/5/06; col. 733.]

As the Procedure Committee in the other place noted in its report on the Bill, referring to parliamentary scrutiny of RROs, the Government,

"has not produced evidence that the delays and obstacles have been caused by that parliamentary scrutiny. If the tests required of an RRO were too restrictive they could have been amended rather than abolished. Other problems such as Whitehall's cultural approach to regulatory reform will not be solved by this Bill".

In short, the Bill is premised on the belief that Parliament is the problem, whereas the real problem lies within government, not within Parliament. We have not heard a compelling case for the Bill, nor, I might add—a point already touched upon—a compelling case for introducing it without the benefit of pre-legislative scrutiny. The flawed nature of the Bill tends to reinforce the observation as to rushed Bills being bad Bills.

Given that, it is incumbent on the Minister to explain why this Bill, or at least Part 1 of it, is being pursued in the way that it is. If it is to be pursued, then there need to be many changes to it. I will just briefly adumbrate the most important because most of the points have already been made by noble Lords.

The scope of the Bill needs to be tightened further. The measures exempted from its provisions need to be extended considerably—a point picked up by the Constitution Committee—either generically or by reference to specific Acts. Clause 3, as we have heard, covering Law Commission proposals, needs to be subject to far more stringent limitations. The power given to Ministers to cherry-pick commission proposals, to use such proposals to change the common law, and the absence of adequate parliamentary scrutiny are unacceptable individually and in combination constitutionally indefensible. Rather like the Delegated Powers Committee, I am not persuaded that the clause should remain in the Bill. There are, after all, mechanisms already in place for dealing with Law Commission proposals.

The decision as to the level of parliamentary scrutiny should rest, in the first instance, with Parliament and not with a Minister; in other words, the onus needs to be reversed. The other change that I would have proposed, but which the Minister has indicated that the Government will accept, is to strip out of the Bill the limitations on committees in the criteria they can employ in considering orders. That should never have been in in the first place. It limited the discretion of Parliament in determining what its own committees could do and it raised the potential for a legal quagmire by embodying in statute limitations on parliamentary committees and raising the prospect of being judicially reviewable.

The amendments made to the Bill in the other place have made it less bad than it was but there is still a great deal to be done. There is a problem in achieving deregulation, but I am not persuaded that this is the way to deal with it. Even with amendments, the Bill will be a hostage to fortune. I hope we do not live to regret it.

Photo of Lord Howard of Rising Lord Howard of Rising Deputy Chief Whip, Whips, Shadow Minister, Treasury 6:20, 13 June 2006

My Lords, much of what I wanted to say has already been said rather more elegantly and eloquently than I could have done, so I shall try to be brief.

Any Bill which proposes to transfer power from Parliament to the Executive erodes the freedom of the individual and is bad news. However laudable the purposes of the Bill—I yield to no one in my dislike of bureaucracy and red tape—it does not justify diminishing the power of Parliament in favour of the Government or of any commission. No discussion of desirable objectives or technicalities of vetoes can get away from the fundamental point, which is that the role of Parliament is to be reduced.

Any Act created to bypass Parliament for the purpose of abolishing bad laws will also enable good laws to be disposed of. Who is to say which laws are good and which are bad? It is the decision of a Minister who has an extremely wide brief.

The Bill refers to "administrative inconvenience" as grounds for using power given under the Act. I am not clever but I can think of almost no law that is not administratively inconvenient. However good the intentions and undertakings given at the outset, all powers are sooner or later abused by government. Usually that takes some time. In the case of the present Government, it seems to happen almost immediately. There are almost daily examples of recent Acts of Parliament being used for purposes for which they were not intended: an Act designed to counter terrorism that was used to threaten bankers with extradition; the arrest of an elderly gentleman for barracking at a political party conference; police threats over the wording on a t-shirt; the arrest next to the Cenotaph of readers of a list of British dead in Iraq. I could go on. There is a constant stream of examples.

I ask your Lordships to consider the potential for abuse which exists under the proposed legislation. I am sure that does not apply to the present Government, but what about future Governments who will not feel bound by today's conventions and will examine the small print to find ways to use the powers of the Bill—should it become an Act—in a manner which is not now intended? As my noble friend Lord Norton of Louth has said, the Bill is flawed. Legislation which diminishes the role of Parliament in favour of the Executive or any other body is a step on a slippery slope, which this House should resist.

This Government have introduced an endless stream of new laws together with statutory instruments at a rate of about 4,000 a year. If the Government have a genuine interest in reducing regulation, they should control their passion for new laws and give parliamentary time to repealing laws they consider inappropriate.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Labour 6:24, 13 June 2006

My Lords, I took over responsibility for better regulation in 2001, as Minister for the Cabinet Office, just as the Regulatory Reform Act came into force. I recall the great enthusiasm with which we looked forward to the effects of the regulatory reform orders. However, as the noble Lord, Lord Desai, and the noble Baroness, Lady Carnegy of Lour, so eloquently said, the reality was sadly different from what we expected, despite all the effort that was put into the matter. The noble Baroness, Lady Carnegy, referred to an average of 571 days being taken in this regard. The great sugar beet saga was referred to by the noble Lord, Lord Desai. I believe that legislation on births, deaths and marriages was also an issue. The delay over relatively trivial matters eventually persuaded departments that the relevant effort was not worth while. That would be very sad if it were the conclusion; it was obviously made after I left the Government in 2003.

It is important to try to keep these matters within the perspective that the noble Lord, Lord Sainsbury of Preston Candover, introduced when he talked about the 1994 Act. The description he gave of the consultation that went on with business was exactly the way to proceed at that time. Business and others would have wished the Government well in their pursuit of more effective regulation, but those hopes too in 1994 were dashed. Michael Howard said that the Conservatives were less effective at deregulating than they should have been. Michael Portillo said that the Conservatives,

"were rather notable regulators. We passed volumes of new rules and laws interfering with almost every aspect of business and social life".

Angela Browning said, after spending three years as a Minister under the Conservative Government, who tried to reduce regulation in business, that they would be the first to say that they did not do very well. Kenneth Clarke said:

"We kept trying, we never really succeeded".

I have every sympathy with those Conservative Ministers given my own experience in Government, but I am sure that positive advances were made by that Conservative Government and we tried to build on them. We should give credit for the advances that have been made. Therefore, it is wrong to put emphasis on the number of statutory instruments. Over 90 per cent of those instruments have almost no relation at all to business—in fact, a very small percentage would affect business. Therefore, that is a misleading indicator of how well we are doing.

It would be better to look at the advances made by the Better Regulation Task Force. The noble Lord, Lord Haskins, is present. Everyone who has looked at this area in detail will give credit to the foundation work that he did, and to the work of Sir David Arculus in carrying forward the difficult task of better regulation. I say from a government perspective that I as a Minister was left in no doubt of the very high priority accorded to this matter by both the Prime Minister and the Chancellor. We had a regulatory reform action plan—I am sure that it was rather similar to that described by the noble Lord, Lord Sainsbury—of which we managed to implement about 400 measures.

Like the noble Lord, Lord Sainsbury, I have spent most of my life in the private sector. When I asked for specifics of the problems that business faced, I had hoped for a better response than the one which I eventually received. It was very difficult to get businesses to come forward with specifics that we could address. I notice that the new chairman of the Better Regulation Commission, Rick Haythornthwaite, makes the same complaint. The noble Lord, Lord Lipsey, said that there was a suspicion that complexity was welcomed by some large companies as it constituted an entry barrier. I have never come across that in my business experience. However, I share the disappointment of others that business has not been more active in this debate. Therefore, I welcome the role played by the CBI and John Cridland in insisting that your Lordships and Parliament do not lose sight of the intended outcomes to try to reduce the regulatory burden on business.

The regulatory burden will be helped by the work being done following the Hampton report on the reduction of inspection regimes. Particularly coming from a background in the media, I have been impressed by Ofcom's role as a super-regulator. The two FSAs—finance and food—have also been impressive in what they have begun to do. The reductions that are following already are pretty impressive. Britain, in giving the lead that it has built up over the past couple of decades in this area, has been able to influence Europe. Our regulatory impact assessment regime, while in no sense yet fully satisfactory, at least is far in advance of anything that we can see elsewhere in the EU. I notice that Commissioner Verheugen has adopted a number of British proposals and is trying to push those through.

The Dutch experience, which was examined by the Better Regulation Task Force, was interesting too. The Dutch reckoned that about 3.6 per cent of GDP went on an administrative burden. In British terms, that would be a very large amount of money. I welcomed from the Back Benches the action plan put forward by the Chancellor in the Budget in 2005 to get departments to introduce simplification plans, which we hope will in implementation save us about 1 per cent of GDP. I will leave a lot of the constitutional questions to the lawyers, who are far better versed in these matters than I am but, again from my ministerial experience, I particularly appreciated the chairmanship of the committees both here and in another place that dealt with regulatory matters. The noble Lord, Lord Dahrendorf, was particularly helpful to me as a Minister. I wonder whether there might be a Joint Committee to replace those committees, which would have the resources and the authority to try to drive through the simplifications that we all need.

Under the action plan for better regulation, measuring and reducing burdens, lighter risk-based inspection, streamlining inspectorates to cut down on repeat requests, and better regulation in Europe are all under way. I hope that what can be achieved under this plan will build on the efforts of this Government and Governments past in what is surely a shared endeavour. Certainly, business would be looking for better regulation and less of it.

Photo of Viscount Goschen Viscount Goschen Conservative 6:33, 13 June 2006

My Lords, today's debate has something of a Groundhog Day feel about it. Five years ago in debates on the then Regulatory Reform Bill, I noticed such characters as my noble friends Lord Norton and Lord Kingsland, the noble Lord, Lord Phillips of Sudbury, and many others making very similar points. Those concerns hold as good now as they did then. I refer to the remarks made by the noble and learned Lord, Lord Falconer, the Lord Chancellor, when he was the Minister of State at the Cabinet Office. He said in opening the debate on the Regulatory Reform Bill:

"The Bill will provide a major tool for this and future governments to reform entire regulatory regimes and to tackle unnecessary, overlapping, over-complex and over-burdensome legislation. It builds on the acknowledged strengths of the deregulation order-making procedure, including the rigorous parliamentary scrutiny of proposed orders, and provides additional safeguards. It facilitates reducing the burden of regulation".—[Hansard, 21/12/00; col. 850.]

It seems that obsolescence in current Government legislation stands at approximately five years before there needs to be a total review of what a Bill is designed to achieve. That is precisely the effect of this Bill. On that occasion, Parliament was asked to hand over a constitutional blank cheque—a skeleton key to the statute book—with the objective of making a substantial change to the regulatory environment. To what effect? The Minister now says that the number of orders has fallen short of our hopes, that there have been fewer orders than expected, and that the arrangements are now not fit for purpose. What has gone wrong?

My first concern is that the Government are looking for cover—for another initiative to point to when in reality the burden of legislation continues to grow apace. Most noble Lords who have spoken have referred to the fact that the statute book becomes fuller and fuller every year. We have seen 25 criminal justice Bills, as an example of the level of legislation that we have to cope with. Much of it is ill thought-out. The central argument advanced by the Minister is that the Government lack the legislative tools to do their job of deregulation. That is the same argument that we have heard in respect of failures in crime, education, health and many other areas. As my noble friend Lady Wilcox said, the answer lies in better administration and better use of existing powers, rather than in more laws. I have concerns about giving a general "get out of jail" card to the Government. I do not feel that is the answer, and I am concerned that it would be used as an excuse in Parliament during the consideration of legislation where, perhaps, the exact right answer had yet to be found. Just as in my day one occasionally got a note from officials saying, "Don't worry; there is always judicial review", which I thought was a weak argument, we may hear the argument, "Don't worry; it will all get swept up later in the Legislative and Regulatory Reform Act procedure, so we do not need to get it exactly right in primary legislation". That is dangerous.

My principal worries, like those of many other noble Lords, lie with the major transfer of powers from Parliament to the Executive, which is both unnecessary and dangerous. Like the noble Lord, Lord Goodhart, I have not heard a convincing explanation of why the aims of the Bill could not be achieved by a modest and targeted amendment to the 2001 Act, if the purpose is truly deregulatory. I hope that the Minister will find time to address that point.

Given the Government's somewhat chequered history towards constitutional legislation, as demonstrated by the piecemeal approach towards the reform of your Lordships' House, there is very little reason to give them the benefit of the doubt when we are asked to sign over wide-ranging powers and to allow primary legislation to be amended by order. Even if there was the benefit of the doubt, we should ignore it, because ministerial assurances are virtually worthless over a long period of time, and they cannot bind successor Administrations. Like many other noble Lords, I believe that our standard parliamentary procedures of primary legislation, not ministerial order, should be the mechanism through which the law of the land should be changed.

Given the long and serious similar controversy that raged during the passage of the 2001 Act, it seems quite inconceivable that the Government would have believed that the original Bill would have been accepted by this House, or even that the heavily amended version would not be highly controversial here. The central problem with the Bill, and any like it that seeks to achieve the same aim, is that it attempts to cater for every eventuality and in so doing its scope is made much too broad. It must be much too broad in order to cope with all the unforeseen circumstances. When we were considering the 2001 Act, the Government were loath to bring forward many examples of the sort of situation that they wanted to address and of course, as my noble friend Lord Onslow remarked, the same is true here.

My strong preference would be for something very much more straightforward, perhaps a single deregulation Act each Session which swept up any deregulatory measures and small changes to legislation that were needed. Yes, that would be an additional Bill, but one out of 40 or so Bills—2 per cent or thereabouts—would be well worth while. We would not have to change our procedures and allow a dangerous expansion of the powers of Ministers by order.

Photo of Viscount Eccles Viscount Eccles Conservative 6:39, 13 June 2006

My Lords, I serve as a member of the Merits of Statutory Instruments Committee, which this year published a report on the management of secondary legislation. Sometimes in my industrial past, when negotiation had reached a point of disarray we enjoyed a cooling-off period. We were given time to reconsider and to ask ourselves how we came to be where we were. How do we come to be where we are?

In essence, this Bill started as a response to awareness in Whitehall and Brussels that the over-regulation of business was weakening British and European ability to compete in the global market. That was the thrust behind the two reports referred to often this afternoon, Less is More and the report of the Hampton review. Both focussed on business and the removal of burdens to enhance its ability to compete. It was the recommendations of those reports that led to the proposal in the Queen's Speech to "streamline regulatory structures"—a phrase that could have come straight out of the Hampton report—and to,

"make it simpler to remove outdated or unnecessary legislation", which could equally be attributed to Sir David Arculus in Less is More. Therefore, it was reasonable to expect that there would be proposals to deregulate business with transparency and in an accountable, proportionate and constituent manner.

Instead of a focused policy to improve the position of business, this enabling Bill appeared. The argument put in its defence started from a narrow base. The view was that business needed deregulation but it was impossible to describe how that would be achieved and that, nevertheless, Ministers needed much greater powers than those in existing legislation—and that, by the way, the 2001 Act had not been made to work, because there had been only 21 regulatory reform orders. Existing legislation was thus blamed for failing to achieve objectives that had not been government policy until very recently.

Just a year ago, the Chancellor drew attention to the Victorian regulatory model that contained "the implicit regulatory principle", which,

"has been 100 per cent inspection of premises, procedures and practices".

He went on to sketch out a risk-based philosophy for business regulation that valued transparency and the "light touch". Policy change was in the air, but this Bill does not logically follow from what has been said, any more than it follows on from the Queen's Speech. We need a much clearer idea of political direction and of how what is to be done can most effectively be done. For that to happen, we need to recognise that the regulatory position is more complicated and controversial than the Government have argued.

The first issue is the volume of regulation and recognition of the total stock of regulation. Today, the Merits Committee considered some 30 statutory instruments, which is the weekly average, out of an annual total of 1,200. Clearly, the Regulatory Reform Act 2001 is almost irrelevant in its effect on the totality of regulation, and it is illogical to argue that policy direction has changed today as a result of the 2001 Act. A different analysis is needed, commensurate with the size of the issue.

Secondly, there is the discussion of the phrase "highly controversial"—two subjective judgments in one. About half the 1,200 annual statutory instruments would be judged controversial by one stakeholder or another, and with good reason. Nor do many of the 1,200 directly affect global competitiveness, a point made by the noble Lord, Lord Macdonald. For example, an affirmative resolution is needed to rebalance the respective rights of those who permanently occupy mobile homes that are parked on protected sites. Between 120,000 and 200,000 occupiers are affected on some 2,000 sites. Why do we need to give Ministers the opportunity to override the present procedure for regulatory change?

Recently, instruments have been laid in preparation for an outbreak of avian flu among poultry. Powers are in place to gas, or to shut down ventilation systems in, poultry houses. It is unlikely that the "light touch" concept is helpful in assessing emergency appropriateness, and in what way would the Bill improve accountability in that situation?

Thirdly and finally, instruments are being considered by Parliament on the donation of bone marrow and stem cells. No complicated medical procedure is immune from controversy and change. How would this Bill improve accessibility and ensure transparency?

Regarding the Law Commission and the common law, I say only that the Bill seems to represent the seizing of an opportunity to assuage the commission's understandable frustrations, but it would make no sense to argue that the commission was dealing with uncontroversial matters. How about one page in the annual report on property and trust law on the subjects of compulsory purchase, termination of tenancies for tenants in default and trustee exemption?

This enabling Bill does not result from close analysis, has had no pre-legislative scrutiny and is not clear in its policy objectives. Instead, it is a response to frustrations—not least those that afflict Ministers and, as usual, the principal frustration is a perceived lack of parliamentary time. As Ministers have said, slots are not available. When in a charitable mood, we might conclude that the perceived shortage of parliamentary time was the reason for this Bill. The trouble is that that would be an inadequate reason. Other legislation and ways of proceeding are available.

The Bill, as amended, contains inappropriate powers and its policy objectives are uncertain. I look forward to Committee, but wish that this Bill would go away. We do not need it, and we would save time to do other more mundane but more practical things.

Photo of The Earl of Onslow The Earl of Onslow Conservative 6:47, 13 June 2006

My Lords, I was 100 per cent against the Bill until the speech of my noble friend Lord Norton of Louth, when he informed us that the Hunting Act could be repealed under it. So, perhaps my opposition to the Bill is not as vicious as it might have been; but I hope that that viciousness will return.

Everyone agrees that regulation is a problem. Surely, bad regulation arises out of regulation, not legislation. It is the regulations that are at fault. Such regulations have been drafted and given legal power by primary legislation; so, surely, it is possible under existing primary legislation to get the regulations right. I asked the noble Lord, Lord Bassam, during his opening speech—which was so full of glorious clichés that I might apply to be cliché writer for the Minister by appointment—which Acts he thought needed to be repealed as a result of this Bill. He stated that I had got the question wrong. I have not got the question wrong.

At Clause 1(1), the Bill states:

"A Minister of the Crown may by order under this section make any provision"— and it continues in subsection (2)—

"resulting directly or indirectly for any person from any legislation".

That says that if the Bill is enacted the Government can, using this procedure, repeal primary legislation. So I ask the Minister again whether he knows of any Acts that he and his Government would like to repeal. Please may we have an answer? If he does not know the answer, it is disgraceful to say, "Hey ho, let's introduce a Bill that will give us the power to repeal Acts of Parliament. We don't know that we need to use it yet and we promise that we won't anyway". I would not trust my noble friend Lord Kingsland with that power under any circumstances whatever or any Government if that could be avoided. The Government's power to repeal legislation is already in the Civil Contingencies Act, which the noble Lord, Lord Jenkin of Roding, did not get to because his historical analysis stopped with Richard Crossman.

It is not as if the Government are not so fond of legislation. They have pandered to the hippophagist tendencies of the French and forced horse passports on us for the first time since the horse was domesticated in central Asia is about 2000BC.

I heard on the wireless today that if you are an old person watching television in a private room in an old people's home, you have to get a separate television licence, but that if you watch television in the public rooms, one licence covers everyone. Each private room in an old people's home has to have a television licence. I cannot see that that regulation needs primary legislation to be repealed. The Minister shakes his head but I heard that in an interview with the television licence people on the way up here in the car.

The idea that the Government can be trusted with even the concept of reducing regulation is slightly scary. Furthermore, they cannot be trusted with the constitution either. The noble Lord, Lord Lipsey, has no concept of a Whig and balanced constitution. He thinks that it does not matter that Ministers of the Crown can repeal legislation. What are we in Parliament for except to stop Ministers of the Crown, who are supposed to be responsible to us?

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I am sorry to be drawn by the noble Earl; one should know better by my age. Honestly—the idea that I made any such statement is completely ridiculous. My point was that Parliament is perfectly capable of stopping Ministers in many ways, as is shown by the fact that there is an increasing number of revolts by the governing party and an increasing risk of the Government's defeat, which keeps Ministers decently inhibited.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, thank goodness that there is that minor check. The problem is that Ministers should not have that power. I draw to the noble Lord's attention a quotation from the great Gibbon, who says:

"The principles of a free constitution are irrevocably lost, when the legislative power is nominated by the executive".

That is Gibbon on Augustus Caesar. Those rules are as serious now as they were then.

This Bill must be given very, very serious—and, I hope, damaging—consideration in Committee. It is too much to allow Ministers to have that power, even when it is circumscribed in the way that it is. We are all in Parliament to stop Ministers doing things. Ministers must get from Parliament the authority to do things and do so properly. They cannot expect us to lie back and let them have these over-inflated powers.

Photo of Lord Garden Lord Garden Spokesperson in the Lords, Defence 6:53, 13 June 2006

My Lords, four themes have been addressed from the various sides of the House. We have talked about the history of the Bill and the way in which it developed, the need for deregulation, the constitutional implications and the procedures in the Bill. I shall not spend long on the history; the Bill has had a controversial genesis. My noble friends Lord Goodhart, Lord Holme of Cheltenham and Lord Maclennan of Rogart, and the noble Baroness, Lady Wilcox, described the passionate feelings about the Bill as it was. I am afraid that the comparison by the noble Lord, Lord Lipsey, of Cambridge professors and those cast as Salem witches did not help us to understand the real difficulties with the former Bill. I am grateful that the Government have drawn back from that.

All noble Lords who have spoken have agreed that we want to facilitate better regulation, to deregulate where we can and to reduce unnecessary administrative burdens. Those views are shared by those on these Benches and by the organisations that the Minister listed in his opening remarks. Nevertheless, any proposals that weaken the role of Parliament in legislation must be scrutinised very carefully, as we heard from the noble Lords, Lord Jenkin of Roding and Lord Norton of Louth, who reminded us of the importance of parliamentary procedure in all of this.

One difficulty with our debate is that a number of legislative proposals are wrapped up in a single Bill. One of those deals with better regulation, another covers dealings with the Law Commission and a third deals with the regulations; and then there is the European Union, of which we have not heard that much this afternoon. I shall deal with each of those in turn, starting with the regulatory reform proposals.

The Regulatory Reform Act 2001 was designed to reduce burdens affecting persons in the carrying on of any activity. We are now looking at an update to that Bill. As a member of the Delegated Powers and Regulatory Reform Committee, I have seen the somewhat limited outcome of the 2001 Act. We have had various numbers quoted at us: 27 by the end of 2005. I think that we are up to 32 RROs now, which is about half of the Government's target.

The Cabinet Office has apparently concluded that the reason for that low achievement is primarily because the 2001 Act was at fault. I have not this afternoon heard an argument that really convinces me that that is the reason. The noble Baroness, Lady Wilcox, and the noble Lord, Lord Norton of Louth, argued that the reason is probably more likely to have been a lack of effort by departments to use the Act's provisions. That is surprising, given that the Minister explained to us that if we did better in deregulation, we could increase GDP by 1 per cent. That appears to be a reasonable incentive for the Government to do a bit more. They should be able to do so within the terms of the legislation. The trouble is, as we all know, that there are always more urgent and more interesting things to do in Whitehall in terms of making new legislation rather than getting rid of or consolidating old legislation or reducing burdens.

I understand from the briefing—I am grateful to the Minister for arranging for that to reach us before the debate—that there will be a new government-wide initiative to encourage departments to meet higher better-regulation targets. However, having heard the experience of the noble Lords, Lord Macdonald of Tradeston, Lord Sainsbury of Preston Candover and Lord Haskins, perhaps we had better not hold our breath in the hope that this will make an enormous difference—things may continue as they have done. If we put that effort in, we should be able to achieve things under current legislation or perhaps, as my noble friend Lord Goodhart argued, we could amend the 2001 Act in view of whatever shortcomings are perceived. However, it is hard to see, when one compares the 2001 Act with this Bill, what the dramatic changes are that will make special things happen.

The noble Lord, Lord Desai, and the noble Baroness, Lady Carnegy of Lour, talked about the time involved. However, the chart that the noble Baroness showed us suggests that the time at which the delays happen is a problem not of law or of the committee but of the process. We can all support the idea that we need to reduce burdens and to improve the process but it is not clear that there is anything in the Act that will do that. The new definitions of burdens are sort of helpful, although I agree with the points made by my noble friend Lord Goodhart and the noble and learned Lord, Lord Lloyd of Berwick, about subsection (3)(d) not being terribly appropriate. However, we can consider that in Committee.

The one area that has not been discussed this afternoon by your Lordships is that of raising the two-year time ban. The Constitution Committee considered this and thought that a buffer zone of two years was a good idea. I am not sure that I necessarily agree with that; there may be cases where we want to move more quickly and we could amend the current Act in order to do that.

With regard to the specifics of the regulatory reform orders under the Bill, I have a significant concern on the question of sub-delegation in Clause 1(7)(a). I think that the Minister offered to look at that point in Committee, but we cannot accept that we can sub-delegate to any unspecified person.

In general on the regulatory reform part of the Bill, the noble Viscount, Lord Goschen, got it right: we have not seen any evidence that we need a new Bill. We could just amend the 2001 Act to get whatever was necessary, but I think we accept that we will go through the process and that we will end up with some legislation which ultimately, I trust, will be all right.

That brings me to the second area of the Bill on which we have much greater concerns—that is, the area of the Law Commission. Again, the proposal that we should be looking at ways to facilitate Law Commission proposals and get them into law has general support in your Lordships' House. But, as with the regulatory reform part of the Bill, the question is: what is stopping that? Is it that we do not have those processes? Why do Law Commission proposals languish? Presumably, as several noble Lords have said, the problem is partially that the Government do not give them sufficient priority in the legislative programme.

Greg Knight, chairman of the Commons Procedure Committee, reminded Members of the other place that there is already an accelerated procedure to enact Law Commission recommendations, but that has not been used since 1999. Both the Constitution Committee and the Delegated Powers and Regulatory Reform Committee reports give us helpful reminders on fast-track procedures for consolidation and simplification, which offer better models. In any event, controversial Law Commission recommendations would not be suitable to be dealt with under this Bill, and I very much support the line taken by the noble and learned Lord, Lord Lloyd of Berwick, on the question of the Law Commission area. When one thinks of the constitutional aspects, it is a very serious cause for concern that Clause 3(2) allows Ministers to change Law Commission recommendations when making an order, as that opens up the legislation to be whatever the Government decide. Effectively, it is a power to make any laws without primary legislation if the Law Commission produces a recommendation in that area.

To sum up on the Law Commission reports, I draw the House's attention to paragraphs 62 and 63 of the Delegated Powers and Regulatory Reform Select Committee report. They are clear about why a statutory instrument is not an appropriate vehicle for implementing Law Commission recommendations and the report is crystal clear in concluding that,

"it is inappropriate for Law Commission recommendations to be implemented by order and we recommend that the House seek the removal of clause 3 from the bill. Such legislation (if outside the scope of clause 1) is better made by bill, where all members of the House may participate and propose amendments; and amendments may be made by, and reconciled between, the two Houses in the usual way".

In summary, the Clause 3 proposals sit badly in a Bill which should be about better regulation. The clause would confer powers on Ministers to bypass Parliament in amending common law. Given that many Law Commission recommendations are likely to prove controversial when they come to be debated, the utility of this section of the Bill is very difficult to see, even at the practical level.

With regard to the regulatory functions under Part 2, I do not see any major concerns. However, I noted the concerns expressed by the right reverend Prelate the Bishop of Coventry, and I think that we will have to look at those in Committee. In Part 3, which covers the EU, the legal instruments have not generated a great deal of debate today, and I think that in general they will prove to be acceptable.

Finally, I turn to the procedures. It seems to me that four main issues concern us here: the level of parliamentary scrutiny; the timing available for the scrutiny; the so-called veto by the committees; and the specific powers of the committees. I turn, first, to the level of parliamentary scrutiny. We have had some debate today about whether it should be an automatic super-affirmative procedure, as is currently the case, or whether, as is recommended in the Bill, lower levels should be available. My noble friend Lord Goodhart argued against negative procedures. Given that Parliament will retain the power to decide on the proportionate procedure, we will probably be able to come to some compromise in that area.

The noble Lord, Lord Norton of Louth, expressed concern about the time available for scrutiny. It seems to me that 30 days is sufficient for either House or committee to consider the proposed procedure and to amend it if necessary. If there is any doubt, there can always be the default of opting for the super-affirmative procedure. The 60 days for the super-affirmative proposals may not always be sufficient, as some noble Lords have said, but it is a reasonable target time to set. Unavoidable delays sometimes arise but the committees could always exercise their veto if Ministers tried to use the 60-day time limit to push forward legislation that had not been reported on.

The veto power is an interesting innovation. It is called a veto power of a committee of either House, and the noble Lord, Lord Jenkin of Roding, questioned how it would work. It seems to me that it is not that different from what happens now, although it is put into the Bill. It is not a veto such as that exercised by the permanent members of the UN Security Council, given that each House of Parliament can overrule it. Currently, the committees operate well with Ministers undertaking that they will not force through an order in the face of opposition from a committee. Of course, as we all know, those undertakings are only good for as long as the Ministers or the Government last, and this gives us a little more assurance in that regard. But it still leaves the power ultimately with each House, and that seems to me to be important. Putting the undertakings on a statutory basis through the device of the veto is therefore welcome. However, we must be clear that the committees will take all the relevant factors into account in considering the appropriateness of any given order. I was delighted to hear the Minister assure us in his opening speech that he is to remove the various caveats on that under Clauses 17(5), 18(4) and 19(6) in the Bill. The committees must be able to look at all aspects of an order in deciding whether it is an appropriate procedure.

The noble Lord, Lord Macdonald, suggested that we consider having a single committee. That idea needs to be thought about quite carefully to see whether it would reduce the degree of control, but it can be explored in Committee.

It seems to me that the Government have moved considerably to meet the concerns expressed about the original Bill, and we have even had some movement today on some of the concerns about the new Bill. Although I believe that we could have solved the perceived problem of deregulation without this controversial legislation, I am sure that the areas dealing with better regulation can be made to work.

The proposals for dealing with Law Commission recommendations are inappropriate, and I trust that we shall not see Clause 3 when the Bill has finished its Committee stage; or perhaps, given that he has been so flexible today, the Minister would like to withdraw it when he replies to the debate.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament 7:09, 13 June 2006

My Lords, in a solitary moment of emotion in an otherwise dispassionate and well argued speech, the noble Lord, Lord Holme of Cheltenham, turned to the government Benches and cried, "How on earth did this Bill see the light of day?"

I think that I can provide the answer to the noble Lord. It lies in the attitude of the Government to our fundamental freedoms. We have only to glance at the recent meretricious record of the Government on our long-standing constitutional protections. Your Lordships will recall that in 2004, in the Bill dealing with asylum appeals, the Government attempted to remove the power of the courts to review the decisions of asylum tribunals. They sought to oust judicial review. Mercifully, because of the revolt of the judges, the Government withdrew from the brink. More recently, another attempt was made when, effectively, the Government sought to suspend habeas corpus by introducing a measure in another place which would allow detention without charge for 90 days. That was defeated by a revolt of the Government's own Back Benchers. We have even more recent evidence of a fundamental freedom being threatened—the attempt by the noble and learned Lord the Attorney-General to introduce a piece of delegated legislation which would have removed the right of jury trial in fraud cases.

Taking those three issues—the ousting of the court, the suspension of habeas corpus and the attempted removal of jury trial—is it so surprising that the Government presented a Bill to abolish Parliament? Effectively, that is what the Bill in its original form would have done. As I understand it, the distinction between primary legislation and delegated legislation is that Parliament is supreme and, therefore, it can do anything; but a Minister can make delegated legislation only within the constraints of a parliamentary statute. The original draft of this Bill abolished, effectively, that distinction. The Bill simply required the Minister to make legislative reforms; so there was a complete elision between the tradition that law is made by Parliament and the delegated law-making authority of Ministers.

Thankfully, that was stopped by a combination of the growing recognition, first, by the Liberal Benches and then by the Conservative Benches, that the Bill contained a cancer, and, secondly, a remarkable campaign in the press. The sum of those two things made the Government think again. As a number of my noble friends have said, that fact should not be forgotten when we consider the provisions of the Bill. There are still certain proposals that echo what the Government originally attempted to do.

The noble Lord, Lord Holme of Cheltenham, also drew attention, quite rightly, as chairman of the Select Committee on the Constitution, to the issue of pre-legislative review. Is it not remarkable, unlike the Bill of 2001 which had proper pre-legislative review and proper consultation, that neither of those was undertaken before this Bill saw the light of day? There was no draft Bill and there was no pre-legislative consultation. It is worth reading to your Lordships what the committee chaired by the noble Lord, Lord Holme, said on this point. I quote from paragraph 19 of the report of the Select Committee on the Constitution, which was published on 8 June:

"We are concerned by the way in which a bill with constitutional implications has been handled. The consultative process was lamentable: for example, the consultation document on reform of the Regulatory Reform Act 2001 did not capture the full extent of the Government's proposals as they emerged in the original version of the bill. It is unfortunate, too, that the opportunity was not taken to give pre-legislative scrutiny to the bill, in sharp contrast to the approach taken in 2000 to the Regulatory Reform Bill, where pre-legislative scrutiny was commended as 'a model of this process'".

A number of your Lordships have asked the question—I think particularly of the contribution made by my noble friend Lord Goschen—do we really need the Bill at all? What can the Bill do that its predecessors cannot do? The Minister must answer that question when he replies on behalf the Government. This point was considered in the Delegated Powers and Regulatory Reform Committee report, chaired by the noble Lord, Lord Dahrendorf, who I am very pleased to see in his place. Paragraph 16 of that report states:

"Neither the Government's review, nor any evidence to Parliament which has accompanied this bill, has demonstrated that there are significant structural flaws in the 2001 Act. We asked the Government for examples of proposals which they wished to deliver under the 2001 Act but were not able to do so due to the wording of the current test: other than the examples in Annex C to their memorandum, they have not been able to do so. Given this, it is our opinion that the block to regulatory reform is departmental priorities rather than the 'burden' test in the 2001 Act".

So it is quite clear that the Delegated Powers and Regulatory Reform Committee has reached a clear view on that—opposite to the view that the Government have advanced today in their opening.

To what extent is a Bill of this kind an answer to the kind of problems that have been identified, for example, by my noble friend Lord Sainsbury of Preston Candover, and by the noble Lord, Lord Macdonald of Tradeston? I have been looking at the report by Mr Philip Hampton, which has not received much attention in this debate. It is called Reducing administrative burdens: effective inspection and enforcement. Chart 2.2, on page 11, sets out the 10 largest national regulators by volume of inspection and enforcement staff. These are, in order of the greatest number of employees, the Environment Agency, the Health and Safety Executive, the Financial Services Authority, Companies House, something called CAA-SRG—I confess I do not know what that is—the Rural Payments Agency, the Meat Hygiene Service, the Office of Fair Trading, the Housing Corporation, environmental health, and trading standards.

Those regulators are at the coal face of industry. How will the Bill relate to what they do? Can the noble Lord, Lord Bassam, tell me what concerns the Government have about the current way in which the Environment Agency is regulating the people whom it regulates? Why is that regulation so costly? What can this Bill do specifically to reduce the burden of regulation by the Environment Agency on those whom it regulates? I shall not ask him to do that for the other nine, and he can choose another body if he wishes. I believe that the House would like to hear how what is set out in the Bill will be relevant to what we hope those agencies will do to the people whom they regulate. Unless we can have an answer to that, I do not understand why we are wasting our time here tonight. This is all about regulatory culture, as my noble friend Lady Wilcox said, but as far as I can see, there is nothing whatever about regulatory culture in the Bill.

Assuming that we will not vote against the Bill at Second Reading and that we shall advance to Committee stage, it is only fair that I let the Minister know what line we will take on amendments. Our first concern is with the scope of Clause 1, which is entitled:

"Power to remove or reduce burdens".

I have two observations on that. First, why is the title not "Power to remove or reduce regulatory burdens"? As my noble friend Lord Onslow said, the scope of that clause is immense. Apart from the Bill, when it subsequently becomes an Act, and the Human Rights Act—exceptions are made for both of those categories—Clause 1 could amend any piece of primary legislation or any piece of the secondary legislation. Given the concerns expressed in your Lordships' House today, would it not be better if the Government limited the scope of Clause 1 to regulatory burdens? That, after all, is what the Bill is supposed to be about.

I also draw the Minister's attention to Clause 1(2):

"That purpose is removing or reducing any burden, or the overall burdens, resulting directly or indirectly for any person from any legislation".

Focusing on the expression "or the overall burdens", as I understand it, power can be used to increase burdens on a particular group under this Bill provided that, overall, there is a net reduction. If the Minister agrees with me about that interpretation, how does he justify it? How can a deregulating Bill actually, in certain phases of deregulation, increase the regulatory burden on certain individuals?

A question dealt with, in my respectful submission, totally satisfactorily by the noble Lord, Lord Goodhart, was about which areas should be excluded from the Bill. We already know that the Bill can no longer amend itself. As a result of considerable pressure, we now know that the Government have accepted that they cannot amend the Human Rights Act 1998. In paragraph 53 of the report of the noble Lord, Lord Holme of Cheltenham, we find a long list of measures, referred to by the noble Lord, Lord Goodhart, which ought also to be excluded from the Bill. I should be most grateful if the Minister would tell us in his closing speech whether he accepts paragraph 53 in total or, if not, which particular measures in that paragraph he agrees ought to be excluded and which should not.

The veto has excited much attention from many of your Lordships around the House—if I mention my noble friend Lord Jenkin of Roding, I hope that I do not do any other noble Lords a disservice by not mentioning them. The veto measures in the Bill, even with the Government's concession this afternoon, for which we are of course grateful, are simply not adequate protection. The fact that a committee of another place—or, indeed, your Lordships' House—can issue a veto is of no comfort at all if that committee is run politically; because all that is necessary is for the whip majority to vote for the measure. Moreover, there is also a provision in the Bill allowing a decision of another place to override the decision of the committee, even if the committee issues a veto.

I should be interested to know what the Minister will propose to extricate himself from that difficulty. I suggest one possible solution: to follow the suggestion of the noble Lord, Lord Macdonald, and, rather than have a committee of another place deal with this matter, have a Joint Committee in which no single party has an overall majority. There might be a sufficient number of, for example, Cross-Benchers from your Lordships' House to sit on it. In those circumstances, with a Joint Committee that is not dominated by any one party, a decision to veto, or not, would have a great deal more credibility and would be much more likely to be accepted by both Houses of Parliament and more generally in the outside world of regulators and regulatees. We shall certainly return to the veto issue in Committee.

I entirely endorse everything that has been said about the Law Commission proposals, from the Liberal Democrat Benches, our own Benches and from the noble and learned Lord, Lord Lloyd of Berwick. That matter was also addressed in the Delegated Powers and Regulatory Reform Committee's report at paragraph 63. I hope I shall not be over-tiring your Lordships if I read it out:

"For these reasons, we conclude that it is inappropriate for Law Commission recommendations to be implemented by order and we recommend that the House seek the removal of clause 3 from the bill. Such legislation (if outside the scope of clause 1) is better made by bill, where all members of the House may participate and propose amendments; and amendments may be made by, and reconciled between, the two Houses in the usual way".

That ought to be absolutely conclusive as far as the Government are concerned. It could not have come from a more authoritative source. The Government want to expedite Law Commission measures, and I entirely endorse everything that has been said about the importance of raising their profile, particularly those which are uncontroversial. However, it has at its disposal the Jellicoe procedure, which was used four times between 1964 and 1967, three times with complete success. The fourth failed only because the Bill was plainly controversial to certain parties in another place.

It was said by the noble Lord, Lord Garden, in winding up, that not much attention has been paid to the EC dimension. I say only that one of the great problems we have had with EC measures, particularly directives, is that many civil servants—it is unfair for me to criticise civil servants—many government Ministers have not been able to resist the temptation to implement directives in a way that raises the compliance requirements contained in the directives themselves. We shall therefore be tabling an amendment in Committee obliging the Government to implement directives to the standards contained in the directives and no higher. In that way, there is a reasonable chance of our being able to compete on a level playing field with every country in the European Community subject to the same rules.

As my noble friend Lady Wilcox said towards the end of her speech, surely the best way of confronting this problem is to produce fewer regulations in the first place. The biggest contribution the Government can make to improving competition in this country and lowering the regulatory burden is, starting tomorrow, to stop regulating.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip 7:27, 13 June 2006

My Lords, I have something of an impossible task this evening.

Noble Lords:

Hear, hear.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

I thought that there would be some agreement, my Lords. I have now listened for some four hours to contributions and comments from all sides of your Lordships' House. I have got to the stage where I cannot quite make up my mind exactly where the main focus of interest in the Bill will lie.

The noble Lord, Lord Garden, set out a fair summary of the four generalities of issues raised in the debate. But noble Lords opposite, in particular, seem uncertain as to whether they wish to get rid of the whole Bill or parts of the Bill, welcome some of the Bill, welcome even more bits of the Bill or simply raise fundamental constitutional objections. I find that slightly confusing because, on 13 April, after some amendments had been placed in another place, the Conservative Party issued a press release welcoming the Government's approach to amending the Bill and the further focus on delivering the better regulation agenda. Some of the contributions from the Benches opposite have certainly welcomed our approach; others have, as I said, been rather more fundamental in their approach.

There were, at the outset, some warm words from the noble Baroness, Lady Wilcox, among some slightly less warm words. She said that we had listened to concerns and that the Bill was fresh and a step in the right direction. The noble Baroness said that you had to have political will in the deregulatory field and that, rather than just talking about it, you had to do it. I entirely endorse that approach; it is exactly what we are attempting to do with this Bill.

The noble Lord, Lord Goodhart, reminded us that this was initially a rather uncontroversial measure. He then said that it became rather more controversial when Members in another place—principally, I think, Mr Heath and Mr Howarth from the Liberal Democrat Benches—decided that it was controversial and deeply flawed because of what they saw as profound constitutional implications.

So the debate has ranged far and wide. I particularly enjoyed the contribution from the noble Lord, Lord Haskins, which was a necessary corrective view of the Government's intentions. In the same vein, I enjoyed the supportive contributions of my noble friends Lord Lipsey, Lord Macdonald and Lord Whitty. Their support is based on a profound understanding of what the Government are trying to do so far as deregulation is concerned. My noble friend Lord Macdonald is very experienced in this field, particularly with his business expertise, and he reminded us that former government Ministers from the Conservative Party let the cat out of the bag when they told the public that they got gold stars by becoming heavily exercised regulators in their time.

The problem, if there is a profound problem, has been with us not just during the life of this Government, but across Governments. But this Government are committed to having a long look at the way in which regulation works and trying to create procedures that unpick that, as were the Conservative Government in the early 1990s. I was grateful to the noble Lord, Lord Sainsbury of Preston Candover, for his contribution, which focused on practical considerations. I well remember the work of the task forces and, although at times I would have disagreed with some of their propositions and proposals, I think that they were going in the right direction. In some ways, the Bill builds on that work, because its genesis goes back to 1994 and the first deregulatory measure in legislation, the Deregulation and Contracting Out Act of that year. There is agreement that it is important to create an effective legislative vehicle for delivering better regulation, and I hope that we will have the constructive debates that some Members of your Lordships' House have focused on in their contributions today.

Much of the debate focused on Clause 3, which provides the power to implement Law Commission recommendations. I listened particularly carefully to the contribution made by the noble and learned Lord, Lord Lloyd of Berwick, which was echoed by the noble Lords, Lord Kingsland, Lord Holme, Lord Norton, Lord Garden and Lord Goodhart, as well as by many other noble Lords. So I think that I should start by focusing more of my time on that part of the Bill. I think that we would all agree that it has taken Governments in general too long to implement worthwhile law reform proposals recommended by the Law Commission, of which the noble and learned Lord, Lord Lloyd of Berwick, gave some useful examples. The Law Commission's annual report for 2005 showed that there are 16 currently accepted but unimplemented Law Commission reports and that the average waiting time for enactment of Law Commission reports is now over seven years. An example of Law Commission recommendations that could be implemented by order are those on third party rights against insurers. That perhaps illustrates the value of Clause 3 as currently drafted.

I would have been deaf indeed if I had not heard the breadth of concern expressed by Members of your Lordships' House about the power in Clause 3. As the noble Lord, Lord Garden, and other noble Lords said, the Delegated Powers and Regulatory Reform Committee raised a fundamental question about the appropriateness of the power to implement Law Commission recommendations by order. The noble Lord, Lord Kingsland, suggested that I might acknowledge that this evening and offer to remove Clause 3. I am not going to do that, but I am going to ensure that we give careful consideration to the comments that have been made so that we can meet and match the concerns that lie behind them.

I ought to say that my noble friend Lady Ashton will be dealing with this part of the Bill, and I will be working with her to study closely the comments made on Clause 3. I have no doubt that in Committee much time will be spent carefully going through the various amendments that will be tabled. I want to put on record our thanks to noble Lords for having raised those concerns, because I recognise their constitutional importance. I think it only fair to say that we need to spend more time taking careful note of Law Commission proposals, not least because they can uncontroversially make valuable changes to the law. However, Law Commission proposals require careful consideration, and the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Goodhart, said that we have to find a mechanism for ensuring that non-controversial Law Commission proposals can find their way more rapidly on to the statute book. I remain wedded to Clause 3 in its current form, but we will give careful consideration to the argument made on that point.

During my original contribution, the noble Earl, Lord Onslow, raised the issue of the sort of measures and proposals that the Government might wish to repeal using this legislation. He asked which Acts of Parliament will be repealed. It is right to focus on specifics, and there are some that I can put forward this evening. Specific examples of measures that we may seek to abolish as a consequence of carrying through the legislation were attached to the Government's memoranda to the Delegated Powers Committee. Of course, it is possible to repeal Acts of Parliament under the 2001 Act. There are many examples of parts of legislation that we may wish to get rid of, review or amend in some way. For instance, the Charity Commission plans a review of the financial thresholds at which certain audit and registration requirements are required of charities. The DTI plans reviews to simplify—

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, I thank the Minister for coming back with real answers. Can those Charity Commission levels of finance be changed by regulation, or does the primary legislation have to be amended? That is what I have been trying to get at.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, in some instances that may well be exactly what needs to be done. That is why this approach is being considered and has been used in the past. It is worth looking at some of the measures that have been amended under the 2001 Act. I do not think that the noble Earl would find them hugely controversial. I could read the list out for him now, but that would be otiose.

To give some more examples, the DTI has planned reviews to simplify and consolidate legislation relating to employment, the construction industry, weights and measures and consumer rights in order to provide for greater transparency and consistency. My guess is that there will be very few arguments about using this process to simplify legislation and make it more transparent. To quote another example, which the noble Earl probably knows more about than I do, Defra is committed to repealing arcane rules and regulations on selling game: the Game Act 1831 and the Game Licences Act 1860 are two particular targets. Simply by doing that, it will reduce the burden, as has been suggested by stakeholders—I presume that means sellers of game—via the internet.

Photo of Lord Garden Lord Garden Spokesperson in the Lords, Defence

My Lords, this list is terribly interesting, but why can current legislation not be used? We are ready and waiting to give you your RROs.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I will come to that question, but I want to answer the question asked by the noble Earl, Lord Onslow, about the sorts of legislation or the Acts that we might consider suitable targets for this approach. There are many others. For example, Defra wants to deliver proportionate, risk-based inspection. There is a proposal to merge the Drinking Water Inspectorate with one of the Hampton thematic bodies as well as merging the Pesticides Safety Directorate with one of the Hampton larger thematic bodies.

I could go on with that list, and I am sure that the noble Earl would be fairly riveted by it. That is why we feel that we need this approach. I am sure that if noble Lords visited the website—the Cabinet Office's portal on this—they could enter into it many other worthwhile examples of regulations that have outlived their value and their usefulness on matters that could now be much more simply dealt with by an amendment using this process.

I want to go over the issue of the veto that was raised by the noble Lords, Lord Maclennan, Lord Kingsland and Lord Norton of Louth, as well as many others. The controversiality issue and the veto are fairly central to our debates and will be as we go through the legislation in Committee. Controversy is notoriously difficult to define. It is easy to spot topics such as murder on which recommendations would obviously be inappropriate for delivery by order and those that would be good candidates for delivery by order, such as the Law Commission report on perpetuities and excessive accumulations. But it is the grey area in between those extremes that causes concern. Controversy is of course a matter of degree. What is controversial changes over time. As I think the noble Viscount, Lord Goschen, made clear, parts of the 2001 Act were considered to be controversial at the time, but it is not always possible to describe what controversial may mean over the longer period.

Ministers will of course take a view on whether a proposal is highly controversial. The consultation process should also provide evidence on the level of controversy of proposals. One recommendation of the Select Committee on Delegated Powers and Regulatory Reform provides a further option for a check on the level of controversy of individual proposals. As observers will have noticed, the Bill now provides a statutory power for the parliamentary committees to block orders on a case-by-case basis. This provides an important new safeguard on the use of the order-making powers.

The statutory veto can be exercised only where a committee considers that an order fails to meet a set of criteria set out in the Bill—the purposes of the order-making powers in Clauses 1, 2 and 3 and the preconditions in Clause 4. Indeed, the preconditions in Clause 4, such as those on necessary protections and rights and freedoms, are elements of what would make an order highly controversial.

There is nothing in the Bill to prevent committees from objecting to an order on any basis that they choose, as under the 2001 Act. That is one of the reasons why we feel it necessary to bring forward these sets of proposals. I am happy to reiterate the Government's commitment not to force orders through in the face of opposition from committees. The noble Lord, Lord Kingsland, made something of that point in his concluding contribution.

Having listened and spoken to a number of committee chairmen in another place, I am pleased to announce to noble Lords that the Government accept the view of the Delegated Powers Committee and the Constitution Committee and are content to remove from the Bill the criteria for use of the veto.

Why do we need the better legislation powers? That was very much at the core of comments and debate this afternoon. In simple terms, we need these powers to deliver valuable regulatory reforms—a principle which many have averred. It will help us to create a regulatory environment—the culture to which the noble Lord, Lord Kingsland referred—that allows businesses to innovate and facilitates our aim of creating first-class public services. Orders under the Bill will cut red tape for the private sector, making our businesses more competitive in today's global economy. They can also help us to free up nurses, teachers, doctors and police officers from unnecessary paperwork.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, I apologise for interrupting the Minister, but can he help me? I have been listening to the debate and the questions that have been raised. The noble Lord gave his list of examples, which included dealing with game licences and so on. None of those examples seemed to be at the cutting edge of the competitive forces facing British industry; all of them seemed to be uncontroversial and could be included in a Bill that would possibly pass on the nod. Can he actually answer the question that the noble Lord, Lord Garden, and others have asked? What is it necessary for this Bill to achieve? Is not the problem—and I recall this from being a Minister—that the departments are terrified that they will lose their particular slot in the legislative programme if they put forward things which are perhaps of less concern? Could this not be resolved by the Government being a little more organised, perhaps by using the good offices of the Deputy Prime Minister?

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, the noble Lord obviously knows a great deal more about legislative slots than I do. He was a Minister in a powerful Government with a large majority. I have no doubt that he argued passionately at each instance for the measures that he believed were right and I have no doubt that he added to the burden of legislation. That is why we need this piece of legislation, just as the Conservative Government in the early 1990s thought that they needed legislation to improve the quality of regulation.

I take very seriously the question, "Could we not simply reform the 2001 Act?" That observation was made by the noble Lord, Lord Goodhart, and was echoed from the Benches opposite. What we say about the 2001 Act is simply this: we wish to build on the Act. It has proved useful to an extent. The statistics on its operation show that 28 useful reforms have been delivered by the regulatory reform order process, which is the order-making power contained in the 2001 Act. But that process has proven to be too technical and complex, which has meant that many worthwhile reforms could not be delivered and that those that have been delivered have involved a disproportionate amount of legal analysis in their preparation. My noble friend Lord Desai told us how many—

Photo of Lord Goodhart Lord Goodhart Spokesperson in the Lords (Shadow Lord Chancellor), Constitutional Affairs, Advisory Team On Legal Matters, Cross-Portfolio and Non-Portfolio Responsibilities

My Lords, I am grateful to the Minister for giving way. Given that the 2001 Act may be regarded as a little too complex and technical, could we not deal with it simply by amending it to make it a little less complex and technical?

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Government Whip, Government Whip

My Lords, I would be interested to see how the noble Lord, Lord Goodhart, proposes to do that. No doubt, in Committee, he will demonstrate his talent for drafting amendments that simplify things. I am glad that the noble Lord wishes to engage in the process and that he wants to be constructive about it.

Clause 1 provides a new definition of burdens that can be removed or reduced by order. That formed the core of the 2001 Act, but Clause 1 seeks to provide an outcome that focuses on the specific power. The 2001 Act described how legislation could be reformed by removing legislative restrictions. The order-making power in Clauses 1 and 2 of this Bill focus on why legislation should be reformed. In a sense, part of the challenge for the Government is to ensure that we carry that legislation through and that we change the culture so that departments will not have to carry out the onerous legal analysis to the same extent when preparing orders. Instead, they will be able to analyse what administrative burdens or costs—an issue raised by the noble Lord, Lord Sainsbury—need to be removed or reduced and how we can remove or reduce obstacles to improve productivity, efficiency and profitability, something which most noble Lords who have spoken in the debate appreciated and were concerned about.

We need to make better and faster progress on regulation. That is why my right honourable friend the Chancellor of the Exchequer in his 2005 Budget made particular reference to and accepted the recommendations made in Philip Hampton's report. It is part of the reason why we feel that we need to do more to change the culture across Whitehall. It is that mix of legislation—raising the standard, making the issues plain and changing approaches and attitudes—which will bring forward not just good legislation but also a renewed engagement with the entire issue.

I have been speaking for 22 minutes, minus the time for those helpful interventions. Many questions were asked during the debate. I have a book-load of answers, which I am more than happy to provide in a consolidated format for purposes of simplification. But my time could be more profitably used in providing written answers to specific questions. I am conscious that I have not covered all the ground that noble Lords would wish, which is why I make that commitment.

This has been a helpful discussion. I believe that we can have a constructive dialogue in Committee. We can meet many of the fundamental concerns raised by noble Lords on the constitutional issue, which I do not see as being so significant now that the Bill is before your Lordships' House in its amended form. I look forward to that constructive debate. I hope that all noble Lords who participated in this long Second Reading debate will see the virtue and value of what we bring forward. I commend the Bill to your Lordships' House.

On Question, Bill read a second time.