Legislative and Regulatory Reform Bill

– in the House of Lords at 11:35 am on 26th October 2006.

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Report received.

Clause 1 [Power to remove or reduce burdens]:

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, Amendment No. 1 is grouped with Amendments Nos. 11 and 13, in my name and that of my noble friend Lord Maclennan of Rogart. Clause 1(1) provides that:

"A Minister of the Crown may by order under this section make any provision which he considers would serve the purpose in subsection (2)".

Subsection (2) says:

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

The amendment would remove from Clause 1(1) the words "he considers", so that Clause 1(1) would read:

"A Minister of the Crown may by order under this section make any provision which would serve the purpose in subsection (2)".

In other words, this turns the test for the validity of the order from a subjective test to an objective one.

Under the subjective test in the Bill, the order, which is of course secondary legislation and therefore subject to review by the courts, can be quashed by a court on judicial review if, but only if, the Minister is acting irrationally, so that no reasonable Minister, who would properly consider the relevant information, could have concluded that the order would serve the purpose in subsection (2). Under an objective test, the order could be quashed if the court was satisfied that, on the balance of probabilities, the order would not serve that purpose, even though the contrary view may be arguable.

The Bill gives Ministers a wide power to legislate by order, with a restricted parliamentary process and no opportunity to amend the draft order apart from forcing the Government to withdraw a draft order and produce a revised order. The Bill, in its initial stages, was extremely controversial, and I accept that the Government have introduced new checks into the Bill to help to prevent abuses of powers. Owing, however, to the unusual nature of the powers conferred by the Bill, the further check that Amendment No. 1 would provide is needed. The test should not be whether the Minister's view is daft, but whether, when looked at dispassionately, it is predictable that the order will more likely than not satisfy the purposes in Clause 1(2). That seems to be the proper test.

Amendment No. 11 applies the same principle to the order made under Clause 2, which is in a very similar form, and the same reasoning applies. Amendment No. 13 applies similar provisions in relation to Clause 3, which contains five provisions at present that have to be satisfied before the procedure under the Bill can be used. Those conditions are plainly essential to prevent an abuse of powers under this Bill. For that reason, I believe that having an objective test is even more important in relation to Clause 3 than it is to Clauses 1 and 2. I note that Section 3 of the Regulatory Reform Act 2001, which provides similar conditions to the conditions under Clause 3(2)(c), (d) and (e), contained a subjective test, but the powers under the 2001 Act were considerably more limited than the powers under this Bill.

Further, the Government intend to introduce Amendment No. 14, which will add a further condition that,

"the provision is not of constitutional significance".

I will strongly support Amendment No. 14, but I believe that what is of constitutional significance is plainly a matter for the decision of judges rather than for the opinion of Ministers. It will not be an easy question to decide with a constitution as flexible and as uncertain as ours. Decisions on what constitutes matters of constitutional significance will need to be consistent, based on full argument by experts and with written judgments to which access can be had. It is inappropriate to leave this matter to the decisions of Ministers who may have different views. I believe that the case for all three of these amendments is strong. I beg to move.

Photo of Lord Norton of Louth Lord Norton of Louth Conservative

My Lords, I support the amendment. I spoke to it in Committee and there is nothing I wish to add. I look forward to the Minister developing a fuller response than he did in Committee, which was focused on the parliamentary process rather than on the points that were raised by the noble Lord, Lord Goodhart, the noble and learned Lord, Lord Lloyd of Berwick, and my noble friend Lord Onslow. The noble Lord, Lord Goodhart, has touched on points to which I shall return in a later amendment, which I do not want to rehearse here. I endorse everything that the noble Lord, Lord Goodhart, has said and agree with the propositions that he has advanced.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, in Hansard of Monday 3 July, I supported the amendments proposed by the noble Lord, Lord Goodhart. I do so again for the reasons set out in col. 24 of that date.

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

My Lords, we return to familiar territory and a debate which the noble Lords, Lord Goodhart and Lord Norton of Louth, sponsored at an earlier stage of the Bill. Obviously, we have had time to reflect and give the matter further consideration. For an order to be laid under Clauses 1 or 2, the Minister must consider that it serves the purpose outlined in Clause 1(2) of,

"removing or reducing any burden, or the overall burdens, resulting ... from ... legislation", or Clause 2(2) to secure that,

"regulatory functions are exercised so as to comply with the [five] principles", of better regulation. The Minister must consider that any provision under Clause 1(1) or 2(1) that does not merely restate an enactment satisfies the preconditions in Clause 3(2) whenever they are relevant.

The effect of this is not to reduce in any way the onus on the Minister to base his decisions on reasonable opinion. We contend that these tests are real ones because the Minister is under a public law duty to be reasonable when forming a view of whether or not the provisions of an order are within the terms of the order-making powers in Clauses 1 and 2 and meet the preconditions in Clause 3(2). The effect is, however, to retain what is in the Government's view the right balance between the judgment of the Minister and Parliament, and the power of the courts. The Government are firmly of the opinion that this balance is for Parliament to decide on the basis of detailed information submitted by the Minister regarding whether any proposed order will deliver appropriate regulatory reform and meets the preconditions in Clause 3, and for the courts to step in only in the unusual instance that a Minister has breached his public law duty to be reasonable in his opinion.

In Committee the noble Lord, Lord Goodhart, acknowledged that it is well established law that the Minister's opinion can be quashed by the courts if it is found to be irrational, and that argument has been repeated this morning. If this amendment were to stand part of the Bill, however, the courts could override both the Minister and Parliament about whether an order is for the purposes set out in Clauses 1 or 2 and meets the preconditions in Clause 3. The noble Lord, Lord Borrie, is not with us today, but in Committee he argued that this cannot be right, and in his words would,

"elevate judicial accountability over political accountability. That would be quite inappropriate".—[Hansard, 3/7/06; col. 21.]

I put it another way: it would subcontract out constitutional matters to the courts, and I ask simply whether that is the right policy approach.

As the Delegated Powers and Regulatory Reform Committee appears to agree in its notable report on the Bill, the Government believe that the effect of the reference to ministerial opinions does not in any way weaken the requirement for the Minister's opinion to be reasonable and subject to rigorous challenge. It simply ensures that the detailed challenges and decisions over, for example, what constitutes a necessary protection in a particular case or how to balance the removal of an obstacle to productivity against an increase in financial costs for some are judgments which should be made only by a Minister, subject of course to Parliament's agreement. They should not themselves be matters on which the court can substitute the opinion of the Minister and Parliament with its own judgment. It seems to me as a Minister that this is right. It is appropriate that relevant parliamentary committees make judgments about whether a particular order meets these tests and, as the Commons Regulatory Reform Committee puts it, about matters some of which are essentially political, while the court should be empowered to do so only on extreme—to be reasonable and fair—and very rare occasions when the Minister may have disregarded the public law duty to be reasonable in his opinion. The courts should not be able to substitute the Minister's opinion with their own.

Noble Lords asked in Committee whether there is any reason why this subjectivity is more significant now than in the Regulatory Reform Act 2001. The Government believe that there is a reason. The Minister, exercising the power under Clause 1, must now assess financial and economic issues, along with the rebalancing of costs based on risk analysis, for example. In this Bill we are now talking about economic, financial and other practical analyses of what constitutes a burden and what is proportionate inspection and enforcement rather than legal burdens which can be more readily identified by lawyers from the face of enactments as the 2001 Act required.

It is not for lawyers or the courts to decide whether orders are intra vires. So retaining the subjective opinion is even more important to ensure that the right balance is maintained between on the one hand the judgment of the Minister and Parliament, and on the other, the power of the courts. The important preconditions in the Bill relating to necessary protections, rights and freedoms have of course been taken over from the 2001 Act. In each case the 2001 Act provides that an order could be made if the Minister making it is of the opinion that it did not remove necessary protections, rights or freedoms from people which they can rightly and reasonably expect to keep. The existing limitation on the order-making power in Section 3 of the 2001 Act concerning fair balance is also a matter on which the Minister is required to have the necessary opinion.

Indeed, it is right that the preconditions in Clause 3(2) follow that precedent and are subjective. Whether or not the provision made by order, taken as a whole, strikes a fair balance between the public interest and the interests of anyone adversely affected by it is essentially, we argue, a matter of judgment; it is certainly not a matter of objective fact. It may also be worth noting that the 2001 Act permits the making of such consequential or transitional provision as the Minister thinks appropriate—a subjective test rightly mirrored by the subjective tests in Clause 1(8) and (7) of the Bill.

Parliamentary committees can require an order to be subject to the super-affirmative procedure, if it is not already, and can recommend that a Minister should make specific amendments. Ultimately, if Parliament's disagreement with the Minister's view is insurmountable, it has a statutory right to veto an order if it does not agree with the Minister's opinion. That is a powerful veto. The Government have also given an undertaking that they will not force through orders in the face of opposition from Parliament.

These procedural safeguards further ensure that orders will not deliver inappropriate reform. We argue that it is for Parliament to hold us to account, not the courts. We think it is right that essentially political decisions on policy matters should be located there and not within the courts—but, of course, with the public law test of reasonableness firmly in place.

For those reasons, and to protect the interests of Parliament, we argue that the noble Lord should withdraw the amendment.

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 have always accepted that the subjective test is a real test but, equally, it is plainly not as strong a test as an objective test. The Minister has based a good deal of his argument on the proposition that the amendment would enable the courts to override a Minister and Parliament, but they can do that anyway. It has always been recognised that secondary legislation can be quashed even if it is an affirmative instrument which has received parliamentary attention. This goes way back in history because only primary legislation is exempt from review by the courts. So, therefore, whether or not these amendments are accepted, the judges will have potentially the ultimate decision.

We are concerned here with a much more limited question—that is, whether the test should be a subjective or objective one. For the reasons I gave in opening the debate on these amendments, I believe that it should be an objective test. I wish to take the opinion of the House.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 116.

Division number 1

See full list of votes (From The Public Whip)

Resolved in the negative, and amendment disagreed to accordingly.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 12:03 pm, 26th October 2006

moved Amendment No. 2:

Page 1, line 8, at end insert "in the exercise of a regulatory function"

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, as the noble Lord, Lord Goodhart, mentioned, the Bill had a very inauspicious start in another place. It aroused widespread suspicion and was christened by some as the "Abolition of Parliament Bill". The Government have now wisely and quickly recognised that, despite earlier attempts to legislate in this way by order, this Bill was not going to get through Parliament. Nevertheless, because that was its origin, one has to look at what is left of the Bill—the Government have introduced it in the Lords in a substantially modified form—with extreme care and some suspicion. Even with the amendments that the Government have made or will make, this is still effectively a ministerial law-making Bill and Parliament must look extremely carefully at the powers conferred and their purpose.

Ministers are relying altogether too heavily on the limited safeguards built into the Bill, such as the vetoes of Committees of either House and the Government's undertakings, which they have given fairly freely, about what they intend to do with the Bill. But undertakings do not bind successive Governments. The Bill will be on the statute book for all successive Governments, and we need to make certain that its wording and purpose are clearly defined so that it is clear what orders are to be permitted under the Bill. Therefore, I suggest that we include a provision that the purpose is to deal with regulatory functions, as defined later in the Bill.

The amendment would restrict the Bill to the exercise of regulatory functions. It is important that this should be recognised in the Bill as its purpose. I regard the amendment as very important, and I hope that the Government may be persuaded to accept it. If not, perhaps we may have to return to the matter. Why not put in the Bill what the Government have said in their oral undertakings to this House—that the purpose is to deal with regulation? I beg to move.

Photo of Lord Kingsland Lord Kingsland Shadow Lord Chancellor, Constitutional Affairs, Shadow Lord Chancellor, Parliament

My Lords, I support my noble friend's amendment. Like my noble friend, I am extraordinarily puzzled as to why the Government have not chosen to constrain Clause 1(2), as he suggests. I can see from Clause 1(4) that there is such a constraint in relation to,

"any burden which affects only a Minister of the Crown or government department, unless it affects the Minister or department in the exercise of a regulatory function".

I am bewildered as to why the Government have chosen to constrain the situation in respect of a Minister but not in respect of other non-ministerial bodies. That distinction in the Bill is irrational and dangerous, because it will give non-ministerial bodies the power to interfere in areas beyond regulatory matters.

My noble friend Lord Jenkin has produced an extremely elegant solution to this problem by adding a few words in Clause 1(2) which constrain all other bodies in the same way as the power in Clause 1(4) is constrained.

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

My Lords, the noble Lord, Lord Jenkins, explained to your Lordships' House as he saw it what the effect of the amendment would be. We understand it slightly differently from the noble Lord; we think that the amendment would make it possible to remove or reduce burdens only from those exercising regulatory functions. Burdens could be removed only from regulators. This would exclude cutting red tape for the regulated, businesses, small and medium-sized enterprises and others that make up the essential backbone of the UK economy, and the voluntary and the charitable organisations that contribute so much to society. The noble Lord, Lord Kingsland, says it is an elegant solution, but its effect would be quite widespread. The Government are committed to removing and reducing burdens from the regulated, not just from regulators. For those reasons, we have to resist the amendment.

Perhaps the noble Lord has another effect in mind for the amendment. The intended effect may be to restrict the order-making power in Clause 1 so that burdens can be removed or reduced only if they result from the exercise of regulatory functions. If that is the intended effect, I would again want to resist the amendment for the following reasons. It would be a substantial and, in our view, arbitrary restriction on the order-making power in Clause 1, as it would be used to preclude the removal or reduction of burdens in legislation that did not result from the exercise of a regulatory function. For the purposes of the Bill Clause 32 defines regulatory functions, and I assure the House that there are areas of the law that impose burdens for those businesses—I mentioned voluntary and charitable organisations before—that do not result from the exercise of a regulatory function. That is illustrated by the fact that many of the legislative reforms made by the regulatory reform order under the 2001 Act, which have delivered substantial savings to the United Kingdom economy, would not have been possible if this amendment had applied.

I give an example. The regulatory reform order, which removed a law dating from the 19th century that arbitrarily restricted professional and other groups from forming partnerships of more than 20 people, would not have been possible. That order was sought by stakeholders, passed by Parliament, led to savings of £10,000 per relevant partnership and contributed, in our view, to the competitiveness of the United Kingdom economy. This amendment would have precluded the delivery of the reform, because the burden on business did not result from the exercise of a regulatory function, but from 19th-century legislation.

Another regulatory reform order, which modernised and streamlined procedures for renewing or terminating business tenancies, and led to estimated savings to business of about £19 million a year, would also not be possible if Clause 1 were amended in the way the noble Lord, Lord Jenkins, suggests. Again, the reason for that is that the burden reduced resulted not from the exercise of a regulatory function but from legislation that imposed requirements no longer considered necessary.

Looking to the future and the further reform identified as necessary to boost UK competitiveness, the Department for Trade and Industry hopes to repeal the Limited Partnerships Act 1907 and amend the Partnerships Act 1890, in order to provide much-needed clarity regarding the law on limited partnerships, which are the dominant investment vehicle used in the UK for venture capital and private equity investment funds. It is estimated that private equity investment accounts for 1.1 per cent of UK GDP, with businesses backed by private equity employing some 3 million people. Clarifying the law on limited partnerships is therefore expected to have a substantial and positive impact on investment capacity in the UK, and on the competitiveness of the economy as a whole.

Business has sought this reform to ensure that limited partnerships remain attractive vehicles for venture capital investment in the UK in an increasingly competitive market. Businesses have told us that they believe these reforms will maintain the UK's pre-eminent position within Europe. The reform is likely to have a substantial and positive effect on our competitiveness, precisely the kind of reform orders we should be able to deliver. Yet the noble Lord's amendment would preclude any such reform, because again in this instance the burden is neither on a regulator nor from the exercise of a regulatory function, but the result of outdated legislation. If I have properly understood the intended effect of the amendment, such reforms, despite their clear benefit to our economy, would not be possible because they remove burdens arising from legislation and not from the exercise of a regulatory function or from a regulator.

In summary, either of these restrictions would be arbitrary and would preclude a Minister from reducing or removing burdens that were sensible, desired and sought by business and by those in the voluntary and charitable sector. So, for those very practical, hard-nosed reasons, which could have a serious consequence if we were to go down this route, and notwithstanding the elegance of the amendment, I invite the noble Lord, Lord Jenkins, to withdraw it.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 12:15 pm, 26th October 2006

My Lords, if the noble Lord had been kind enough to pronounce my name correctly, I would have much more sympathy with what he is saying. It has no "s" on the end.

I have listened to the Minister with care and I think he is construing regulatory functions altogether too narrowly. I would have thought all the examples that he has quoted are of statutory regulation. He quoted the Partnerships Act; it was intended to regulate the function of lawyers. I will certainly look at the wording again but, as I said in moving the amendment, the Bill lacks a clear statement of its purpose. The Government have said that its purpose is to lift the burdens of regulation. We support that, but our fear is that, without that being clearly stated at the beginning of the Bill, there will be a temptation for Governments faced with a congested parliamentary programme—as all Governments have been, certainly those I have been a member of—to say, "Why can't we do this by order under the Legislative and Regulatory Reform Act?". That is what we want to avoid.

I want to come back to this at a later stage, having considered what the noble Lord has said, but my noble friends on the Front Bench and I attach a good deal of importance to what we are trying to achieve here. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

moved Amendment No. 3:

Page 1, line 13, leave out from "otherwise," to end of line 14 and insert "which affects the carrying on of any lawful activity"

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

My Lords, I apologise to the noble Lord, Lord Jenkin, for mispronouncing his name. It was a slip of the tongue.

This is a minor and technical amendment, but one which provides a specific response to points made by noble Lords in Committee. The amendment makes explicit that which is implicit in the present draft of the Bill; namely, that the ability to remove sanctions for doing or not doing something in the course of an activity does not permit the removal of sanctions from activities such as drug-dealing, people-trafficking or other unlawful activities.

This is an important and essential safeguard against any inappropriate use of the order-making power and should ensure that any change to sanctions for unlawful activity must be delivered by primary legislation, subject to detailed parliamentary debate.

It is possible, by order, to repeal offences, or reduce or remove sanctions for offences which relate to the carrying-on of any lawful activity. This is not new and was possible under the Regulatory Reform Act 2001. It has been shown to be a necessary power to deliver better regulation so that offences can be repealed and sanctions reduced or removed where they are no longer considered to be targeted or appropriate.

The Bill also carries over the ability under the present legislation by order to replace sanctions with new sanctions, or to create a new offence that is punishable on indictment up to a limit of two years' imprisonment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 4 not moved.]

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

moved Amendment No. 5:

Page 2, line 2, leave out from "department" to end of line 3.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, my amendment to Clause 1(4) would remove the words,

"unless it affects the Minister or department in the exercise of a regulatory function".

The 2001 Act specifically excluded any burden that affects only a Minister of the Crown or government department. The Explanatory Notes to that Act explained that it allowed for the relieving of burdens from anyone, including Ministers and government departments,

"but not where only they would benefit".

Those are the crucial words. That provision is not repeated in the Bill that is before us. It is not right that Ministers or central government departments should be, as it were, self-lawmaking in the exercise of their own regulatory functions in removing burdens from themselves. That is not what the measure is supposed to be about; it is about removing burdens from the economy, business and those who are affected by regulation. When the Hampton committee reviewed this matter, it indicated that in practice it may be possible in most cases to find a third party who was affected, so that the reforms were not for the sole benefit of the Minister or department. I understand that there have been some examples of that under the provisions of the 2001 Act. However, it may not always be the case.

I should have thought that in these circumstances we ought to repeat the restriction on the order-making power—that this power should not be used simply to allow Ministers to remove burdens from themselves. If Parliament has by legislation imposed a duty on a government department or Minister, no doubt for very good reason, it is not right that a Minister should come along later with an order and say, "We do not want it to apply to us", which is the effect of the measure. That is not right. We should retain the distinction that was made in the 2001 Act that the power cannot be used where only Ministers and their departments would benefit. I hope that on reflection the Minister will accept that. I beg to move.

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

My Lords, I am grateful to the noble Lord, Lord Jenkin, for moving the amendment. I am slightly intrigued, as I thought that the noble Lord, Lord Kingsland—who is not present at the moment—was rather keen on this provision, but I let that rest.

The amendment would rule out altogether orders being able to remove or reduce burdens that affect only a Minister or government department. Clause 1(4) makes it clear that burdens that fall only on a Minister or government department may be removed only in the narrow situation where the burden affects the Minister or department in the exercise of one of its regulatory functions. The provision is therefore a safeguard that ensures that, for instance, it will not be possible to make an order that reforms the provision of public services such as healthcare or education because it is considered a financial cost and therefore a burden on the Government. It is right that orders should not be able to make such reform of the provision of public services. However, I cannot see that it is sensible to prevent orders from making sensible reforms in relation to those regulatory functions that government departments exercise.

As the noble Lord, Lord Jenkin, knows, departments carry out a number of regulatory functions, such as the company law regulatory functions within DTI, or the regulatory functions exercised by the Pesticides Safety Directorate as part of Defra. It is the Government's view that their regulatory functions should be conducted in as cost-effective and efficient way as regulatory functions exercised by other independent regulators are.

The Government believe that orders should be able to remove or reduce burdens from departments where they are carrying out regulatory functions, in the same way as orders can for other regulators. So, for instance, it should be possible for orders to make changes that reduce the cost or administrative inconvenience for a department exercising its regulatory functions. Where there is a need to make regulatory functions more efficient or to reduce administrative burden and costs for them arising from legislation, it should be possible to do that by order. Whether or not the particular regulatory function is part of a department should be irrelevant. For example, it should be possible to remove an obstacle to the efficiency of Companies House by order, just as it would be possible in relation to the efficiency of the Environment Agency.

In summary, making an arbitrary distinction between regulatory functions exercised by government departments, where the Government are the regulators, and those exercised by independent regulators, as the noble Lord, Lord Jenkin, proposes, cannot logically be right. For those reasons, I suggest that the noble Lord might consider withdrawing his amendment.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, I have listened carefully to what the Minister has said. I would have thought that in all the examples that he gave there would clearly be burdens on other people and, therefore, there could be no difficulty with making orders under the Bill to reduce those burdens. I am concerned about cases where Parliament has imposed a clear burden on a government department for a particular purpose, but where the Government are now trying to relieve themselves of that obligation. However, I will consider what the noble Lord has said. Perhaps I may need to come back to this at a later stage but, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

moved Amendment No. 7:

Page 2, line 15, at end insert "and does not include any legislation (whether or not in force) which was passed at least one year before the day on which the order is made"

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative

My Lords, the amendment seeks to bring back a provision from the 2001 Act—that an order cannot be made too soon after the Act or regulation has been passed. The argument is that time should be given to see whether the order is effective or burdensome. The 2001 Act stated that an order could not be made for two years and I can understand that that may well have been considered too restrictive. Therefore, in the amendment I suggest that a period of one year would be sufficient.

It takes time after Parliament has passed a Bill, created an Act and approved regulations to assess what the effects actually are. Is the order over-burdensome, in which case it should be amended, or does it achieve its purpose without imposing unreasonable or disproportionate burdens? My amendment would give the Government an opportunity to take stock for a short time. It seems absurd to be able to pass a regulation and then, within a few weeks or months, say, "Oh well, we got it all wrong and we now want to make an order to amend it or remove it". That would not smack of good government and a year seems to be a reasonable period to allow the Act or order to have an effect. If it then appears to impose an unreasonable or disproportionate burden, as set out in the Bill, an order can be brought forward. I beg to move.

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

My Lords, I shall deal with both amendments in the group together. The noble Lord has described them well. They would move the order-making power in Part 1 of the Bill back in the direction of the 2001 Act by providing for a similar provision to the two-year rule. While the 2001 Act has enabled some 30 worthwhile reforms, it has proved ineffective for a number of reasons. This is why we are discussing this new Bill, which moves away from the prescriptive nature of the 2001 Act, and it is why the Government cannot support this amendment. We want to avoid imposing unnecessary and arbitrary restrictions on the order-making process, which is what the amendment would do.

One example of the negative effect of the two-year rule in the 2001 Act was in relation to the Regulatory Reform (Gaming Machines) Order 2003. This order was originally expected to save that industry £9.5 million annually. Unfortunately, part of the proposals had to be dropped because it was prevented by the two-year rule, as the relevant provisions had been amended by a prize uprating order, which is occasionally necessary to increase the maximum amount that certain gaming machines can pay out. Dropping this part of the proposals reduced the estimated savings to the gaming machines industry by £1.85 million annually.

I recognise that the amendment would be less restrictive than the two-year rule in the 2001 Act, but we do not wish the Bill to prevent businesses, the public and voluntary sectors from benefiting fully from the Government's regulatory reform proposals. As I am sure the noble Lord is aware, every order under Part 1 is subject to statutory consultation, and the results of that consultation will influence both the Minister and Parliament in coming to a decision on the content of the draft order that is laid and on the appropriate level of parliamentary scrutiny for that order. The results will also influence whether Parliament wishes to approve the order or whether it exercises its right to veto it. Surely that is a satisfactory degree of scrutiny for any potential proposal that might seek substantively to amend legislation that is less than a year old.

I recognise that the noble Lord is seeking to ensure that the amendments encourage the Government to produce well thought-out legislation that should not need to be amended within a year of it being enacted. However, although he is as eager as we are to improve the way that we make policy, I do not believe that this amendment is the appropriate mechanism for doing so. I remind the House that the Government continue to review the way that policy is made and that the Better Regulation Executive is currently developing proposals to improve the effectiveness of the regulatory impact assessment process. We continue to review legislation, and we have given an undertaking to review this Bill no more than five years after it is enacted.

I am sympathetic to the noble Lord and understand that he does not wish to encourage sloppiness in the drafting of measures or in the way in which they are brought forward or introduced. However, we all have to accept that from time to time a law of unintended consequences is at work in legislation. Although the noble Lord does not seek to impose as rigorous an approach as was contained within the 2001 Act, nevertheless, I continue to hold that the amendment would be an unnecessary restraint on improving the process and ensuring that we have a genuinely deregulatory approach. For those reasons, I hope that the noble Lord will withdraw his amendment.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 12:30 pm, 26th October 2006

My Lords, no opposition Back-Bencher can hope to dredge up examples of the detailed effect of the earlier legislation in the way that the collective memory of a government department can. I heard what the noble Lord said. We will obviously need to think about this but, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip

moved Amendment No. 9:

Page 2, line 21, leave out paragraph (c).

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip

My Lords, I shall speak also to the other amendments in this group. Amendment No. 9 is a minor and technical drafting amendment, which merely deletes an unnecessary paragraph in Clause 1(7). Noble Lords will see that paragraph (c) repeats a provision already made by paragraph (b).

Amendment No. 35 is also a minor and technical drafting amendment. It would align the definition of "EEA agreement" to be inserted into the Scotland Act 1998 (Transitory and Transitional Provisions) (Publication and Interpretation etc. of Acts of the Scottish Parliament) Order 1999—the Scotland Act order—by Clause 26(3) of the Bill with the definition of "EEA agreement" to be inserted into the Interpretation Act 1978 by Clause 26(1) of the Bill. That would simplify the definition to be inserted into the Scotland Act order and make it less cumbersome to use in practice. The amendment has of course been agreed with the Scottish Executive.

The purpose of subsections (1) and (3) of Clause 26 is, among other things, to amend the Interpretation Act and the Scotland Act order respectively by inserting a new standard definition of "EEA agreement", which means that references in domestic legislation to the EEA agreement will automatically be to the most up-to-date version of that agreement. The definition of "EEA agreement" to be inserted into subsection (1)(a) will allow Acts of Parliament, and subordinate legislation made under them, to refer automatically to the most up-to-date version of the EEA agreement. The definition of "EEA agreement" to be inserted into the Scotland Act order will allow Acts of the Scottish Parliament and Scottish subordinate legislation to refer automatically to the most up-to-date version of the EEA agreement.

As currently drafted, the definition of "EEA agreement" to be inserted into the Interpretation Act by Clause 26(1) refers to that agreement as,

"modified or supplemented from time to time".

However, the definition of "EEA agreement" to be inserted into the Scotland Act order by Clause 26(3) refers to the EEA agreement as,

"from time to time modified or supplemented by or under the Community Treaties".

Amending the definition of "EEA agreement" to be inserted into the Scotland Act so that it also refers to that agreement as,

"modified or supplemented from time to time", will prevent any confusion that may have resulted from the existence in domestic legislation of two differently worded definitions of "EEA agreement". The amendment would remove the phrase,

"from time to time modified or supplemented by or under the Community Treaties", from the definition to be inserted into the Scotland Act order and would replace it with,

"modified or supplemented from time to time".

That would simplify the definition of "EEA agreement" to be inserted into the Scotland Act order and align it with the definition to be inserted into the Interpretation Act 1978.

The current definition to be inserted into the Scotland Act order refers to the agreement on the EEA signed at Oporto, together with the protocol signed at Brussels, as from time to time modified or supplemented by or under the Community treaties. That definition works because any modification of the agreement that is not a Community treaty can be designated as one under Section 1(3) of the European Communities Act 1972. However, this is cumbersome, as it requires the making of an Order in Council. The amendment would make the definition simpler and would remove the need for an Order in Council by removing the reference to "Community Treaties" and allowing the definition of "EEA agreement" to capture all amendments and modifications to the agreement without the need for an Order in Council.

I now turn to two final minor and technical amendments—Amendments Nos. 38 and 41—which have been agreed with the Department for Social Development in Northern Ireland. They are intended simply to update a reference in the Deregulation and Contracting Out (Northern Ireland) Order 1996 so that it refers to Sections 1 or 2 of the Legislative and Regulatory Reform Act 2006, rather than Section 1 of the Regulatory Reform Act 2001. Article 17(1) of the order refers to Section 1 of the Regulatory Reform Act 2001. As the LRRB is repealing and replacing that Act, the reference in Article 17 will need to be updated to refer to Sections 1 or 2 of the 2006 Act.

Article 17 enables the Department for Social Development in Northern Ireland to maintain parity with the DWP in the field of child support, social security and pensions. These amendments would simply enable that to continue to be the case. The principle of parity in the field of social security, child support and pensions is enshrined in Section 87 of the Northern Ireland Act 1998. In effect, that means that benefits should be available throughout the UK at the same rate and be subject to the same conditions of entitlement. An example of where the power in Article 17 was used to maintain parity in this way was the Deregulation (Carer's Allowance) Order (Northern Ireland) 2002. This order renamed the invalid care allowance and made a number of other changes to the renamed carer's allowance in line with the changes made by the Secretary of State for Work and Pensions in the Regulatory Reform (Carer's Allowance) Order 2002. I ask noble Lords to accept these technical amendments. I beg to move.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Non-affiliated

My Lords, I am in a quandary in relation to Amendment No. 9. I apologise for my late involvement in the Bill, which was caused by ill health. Generally, I applaud the intention of the Bill, but it is poorly served by the sweeping nature of some of its contents. I declare an interest as chief executive of a regulatory body—the Environment Agency—although the Bill goes much wider than simply environmental legislation and regulation.

I had hoped that when the Minister rose to explain the dropping of subsection (7)(c) he would say that it indicated the Government's commitment to not using this legislation to substantially alter the powers of statutory regulators—or, indeed, to abolish statutory regulators—through secondary legislation when they had been set up by primary legislation, often after considerable debate. I know that the Government have given assurances both in another place and in this House at earlier stages of the Bill about not using this legislation to abolish regulatory organisations set up by statute. I was pleased to see a letter from the Parliamentary Secretary at the Cabinet Office to the chairman of the Food Standards Agency, which states:

"You will be aware that the Government has stated during the passage of the Bill that it is not our intention to erode the independence from Government of those regulators set up by statute".

I know that the Government have also given assurances about full consultation if proposals significantly alter—

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Non-affiliated

My Lords, I wish the Minister will give me some indulgence, as I have not had the opportunity to speak before.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip

My Lords, I apologise for intervening, but I wonder whether the noble Baroness is speaking to the amendment that I moved. There is a later amendment, which I think covers the issue that she seeks to address.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Non-affiliated

My Lords, the point that I want to make is that, in spite of assurances about full consultation, the Government have not been willing to specify that secondary legislation that would significantly alter the powers of the statutory regulator would be subject to the super-affirmative procedure. This is the only opportunity on Report to ask the Minister to humour me and to give further assurances that the legislation is not intended to be a means by which a regulatory body set up by primary legislation can be significantly altered in its role and powers, or indeed be swept away by secondary legislation.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip 12:45 pm, 26th October 2006

My Lords, we shall come to that issue, which I imagine will be debated extensively after the break. I hope to deal fully with the issues raised by the noble Baroness. I note, in particular, that she raised the issue of the super-affirmative procedure, which we shall return to shortly.

Amendment agreed to.

[Amendment No. 10 not moved.]

Clause 2 [Power to promote regulatory principles]:

[Amendments Nos. 11 and 12 not moved.]

Clause 3 [Preconditions]:

[Amendment No. 13 not moved.]

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

moved Amendment No. 14:

Page 3, line 33, at end insert-

(f) the provision is not of constitutional significance."

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

My Lords, I shall also address Amendments Nos. 15, 16, 25, 26 and 27 in this group.

Amendment No. 14 creates a new precondition, which prevents a Minister from making provision in an order which he considers constitutionally significant. The only exception to this is that orders may restate constitutionally significant provisions, but only where this would make the law more accessible or easily understood. I am sure that noble Lords would agree that that is a highly desirable objective.

The order-making powers in Part 1 are clearly focused on delivering better regulation, as we have explained to the House many times before. There are already important safeguards in the Bill, as we have made clear, such as the existing preconditions and restrictions in Clauses 3 to 11, the public consultation required by Clause 13, and the parliamentary procedures provided for in Clauses 12 and 14 to 18, including Parliament's statutory veto. The Government have also undertaken not to use the order-making powers to make highly controversial changes.

Given all these protections, can the order-making powers in Clauses 1 and 2 be used to deliver significant constitutional change? The Government's view is that they cannot. We are supported in our view by the reports of the Select Committee on Delegated Powers and Regulatory Reform and the Constitution Committee of your Lordships' House. The committees said that the powers in Clauses 1 and 2 were not inappropriate.

However, after our debates in Committee it was apparent that concerns remained that the order-making powers could be used to bring about fundamental constitutional change. The Government are clear that those concerns are misplaced and that the Bill could not be used to make such constitutional changes. We have, however, listened to those concerns and tabled this amendment to put the issue beyond any possible or reasonable doubt.

If this amendment is agreed to, it will be added to the other preconditions which the Minister must consider to be satisfied for an order to be intra vires. We consider that a precondition is the most effective mechanism to meet noble Lords' concerns. It avoids the problems associated with the approach taken by the noble Lords, Lord Goodhart, Lord Norton and Lord Jenkin, in Amendments Nos. 15, 16, 25, 26 and 27. It will also work well in practice.

There is widespread agreement on the benefits that cutting red tape can bring to the public, private and third sectors. This Bill aims to improve the process for delivering better regulation by removing the arbitrary technical restrictions which prevented the earlier Act from being an effective tool for delivering better regulation. It is important that we should not create new arbitrary restrictions. Amendment No. 14 is targeted on making clear that the Bill cannot be used for the delivery of significant constitutional reform by order, but will not prevent the use of orders to deliver better regulation.

For instance, the precondition in Amendment No. 14 permits the amendment of statutes that might be thought of as "constitutional" merely to reform, say, requirements to serve a notice which were administratively inconvenient, where that minor but worthwhile reform was not constitutionally significant and met the other preconditions, including those protecting necessary protections, rights and freedoms.

Similarly, the new precondition in Amendment No. 14 will permit trivial or consequential amendments to be made to statutes that are constitutional in nature, for example by allowing the correction of cross references to other Acts or names which have been changed. A further benefit of the precondition is that, as with the other preconditions in Clause 3, it is right for the Minister to have to make this judgment—although the judgment is also rightly subject to various safeguards and checks. It is the Minister who promotes the order, and therefore he who must be satisfied before he does so that what he is proposing is within his powers. But, to comply with the public law duties placed on him, the Minister's opinion must be reasonable and this may be challenged through the courts.

Once the Minister has taken a view on the proposals, they will then go out for statutory public consultation, as required by Clause 13. Consultees will have an opportunity to comment on all aspects of the proposals, which could include whether they believe the proposal is constitutionally significant. The Government have made a commitment not to deliver highly controversial proposals by order, and consultees' views will form part of the Minister's assessment on matters of controversy. If, after the consultation, the Minster decides to proceed with the making of the order, he will lay a draft order before Parliament. The Minister must explain why he considers that the constitutional precondition and the other preconditions are satisfied in the explanatory document that must also be laid before Parliament, under Clause 14(2). Parliament will then consider the appropriateness of the order, taking into account whether the preconditions are met and whatever other factors it considers relevant. Parliament has the veto over orders, so ultimately it can reject proposals that it finds inappropriate for delivery by order.

I want to go over the amendments in this group that we cannot support. In Committee, noble Lords acknowledged the difficulties with a list of excluded enactments or subject areas. We rejected this approach, which is set out in the various amendments. At Second Reading, the noble Lord, Lord Goodhart, acknowledged that it would be nigh impossible to define a set of constitutional enactments—if such a class of legislation could be said to exist—or constitutional areas. Defining such a list is difficult. One must judge where it might begin and end. Amendments Nos. 25 and 26, which are consequential on Amendment No. 27, show the difficulties of this approach.

The list of excluded Acts in Amendment No. 27 is much shorter than those we considered in Committee and differs from the list of statutes and areas in Amendment No. 25. The difference between the lists shows the lack of consensus on the issue. Amendment No. 27 creates a list of excluded Acts regarding devolution. The Government are content that the new precondition would prevent any constitutionally significant amendments to the Scotland Act and the Government of Wales Acts, just as it would prevent constitutionally significant amendments to any other enactment.

We are therefore content that orders could not be used to effect significant constitutional changes to the UK's devolution settlements and that Amendment No. 14 puts that beyond doubt. However, as I mentioned, the new constitutional precondition would allow minor amendments which are not of constitutional significance. The Government believe that we should not prevent orders from delivering useful better regulatory reforms which are not constitutionally significant to statutes, which could include the Scotland Act and Wales Acts. Our Amendment No. 14 is therefore better targeted than Amendments Nos. 25 and 27.

I do not understand why the noble Lords, Lord Goodhart and Lord Maclennan, have singled out the right to trial by jury in Amendment No. 16. Clause 3 already prevents Ministers from making orders containing provisions which they consider would remove necessary protections, or prevent a person from continuing to exercise any right or freedom which they might reasonably expect to retain. Therefore, the Government are already of the opinion that the right to trial by jury is a necessary protection, and a right which someone might reasonably expect to keep. I cannot see how an order could be used to effect such change. I give the assurance that the right to a jury trial is already protected in that sense.

As I have said before, defining the parameters of an appropriate list of statutes or areas would be cumbersome. It would amount to trying to write or codify the constitution, which is what Amendment No. 15 of the noble, Lord Norton, and Amendment No. 25 of the noble Lord, Lord Jenkin, attempt to do. This is a significant project, as I am sure noble Lords would agree. If we are to debate the parameters of the constitution, this Bill is not the context in which we should do so.

The House of Lords Constitution Committee recognised the difficulties with devising a schedule of exempted areas, and states that a schedule would be something of a blunderbuss approach. It notes that not all provisions in Acts with constitutional implications affect our constitutional arrangements, and concludes that,

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

This is precisely the problem with Amendments Nos. 15, 25 and 27.

The amendment tabled by the noble Lord, Lord Norton of Louth, sets out areas which he thinks should fall within the scope of the "constitutional significance" amendment. Not every proposal for change in these areas will necessarily be of constitutional significance; they might be exceedingly trivial. If they are significant, they will fall within the scope of the precondition without further definition. Unless they deal with issues which fall within the general purposes of the Bill, they will be doubly ultra vires.

The amendment adds nothing to the protection of rights and freedoms in the Bill, which, of course, include the precondition concerning rights and freedoms. It is already unlawful for a Minister to make an order that is incompatible with convention rights under Section 6 of the Human Rights Act. Clause 9 also prevents amendments to the Human Rights Act itself. Adequate safeguards concerning the Human Rights Act already exist, and so the provision is, in this respect, otiose. Furthermore, the Government consider that it would be foolish to put some Acts off limits when it may be necessary to make minor or consequential changes to them for the purposes of better regulation.

I note that the list in Amendment No. 15, tabled by the noble Lord, Lord Norton, would rule out any reform of the Executive, preventing useful better regulation reforms to government departments which act as regulators. Clause 1(4) prevents orders from inappropriately removing burdens which fall only on Ministers or government departments. It provides that burdens falling only on Ministers or departments can only be removed in so far as they are burdens which affect the Minister or department in their exercise of a regulatory function, as we discussed earlier.

Fears were expressed that the Bill would somehow allow departments to cease providing public services. Clause 1(4) ensures that, for instance, it would not be possible to make an order stopping the provision of a public service because it was considered a cost and a burden. As Cabinet Ministers have argued on many previous occasions, any substantial policy change to core public services would be utterly unsuitable for delivery by order. However, some amendments to enactments relating to the Executive could be usefully delivered by order. The Government have a number of regulatory functions such as the company law regulatory functions within the DTI and the pesticides directorate, to which we have referred before. The Government believe that orders should be able to remove or reduce burdens from departments where they are carrying out regulatory functions, in the same way as they can for regulators.

Amendment No. 15 would seem to permit major reforms to the Civil Service or local authorities. Abolition of local authorities would fall foul of my Amendment No. 14, but Amendment No. 15 seems to define constitutional significance in a way which would no longer rule this out. This shows the strength of the government amendment. The new constitutional precondition rules out the elephant of constitutional significance—which we all recognise when it arrives—while avoiding the difficulties of attempting a definition.

Although the Bill could not be used to make significant constitutional change, Amendment No. 14 will put beyond any doubt that the order-making powers could not be used to enact significant constitutional change. It also avoids the difficulties with a list of constitutional enactments or subject areas, which were highlighted by the Constitution Committee.

I have explained why the Government believe that their approach is the most appropriate and wholly adequate without further bolstering. I therefore commend Amendment No. 14 to the House, and suggest that, on reflection, noble Lords do not move Amendments Nos. 15, 16, 25, 26 and 27. I beg to move.

Photo of Lord Norton of Louth Lord Norton of Louth Conservative

moved, as an amendment to Amendment No. 14, Amendment No. 15:

Line 2, at end insert-

"( ) For the purposes of subsection (2)(f), a measure of constitutional significance is one that affects the structures, powers and compositions of organs of the state (the Crown, the executive, Parliament and the judiciary), the relationship of those organs to one another, or the rights and freedoms held by the individual at common law or under the provisions of the Human Rights Act 1998 (c. 42)."

Photo of Lord Norton of Louth Lord Norton of Louth Conservative

My Lords, the government amendment is welcome but runs up against the obvious problem that the Minister has touched upon but not really dealt with: what constitutes a measure of constitutional significance? He says that we will all recognise it when it arrives. I do not think that is the basis for legislating.

We have come up against this problem before, not least when debating the then Political Parties, Elections and Referendums Bill, as the Minister will remember, when there was an attempt to provide for referendums on issues of constitutional significance. The problem was recognised in Committee, prompting the Minister's amendment. If we are to have the government amendment, however, we need to know precisely what it encompasses.

The Government have a problem defining what their amendment encompasses. When the then Lord Chancellor, the noble and learned Lord, Lord Irvine of Lairg, appeared before the Constitution Committee of your Lordships' House, he conceded that the Government did not have a definition of a constitution, but also that the one offered by the committee was as good as any. When his successor, the noble and learned Lord, Lord Falconer—Secretary of State for Constitutional Affairs as well as Lord Chancellor—appeared before the committee, he, too, reiterated that the Government did not have a definition of a constitution. Under Amendment No. 14, Ministers are thus precluded from using orders to amend measures of constitutional significance, without any clear definition of what falls within the scope of that term. One cannot rely on each Minister to determine what it means, as the noble Lord, Lord Bassam, seems to imply. Hardly any Minister has any grounding in the subject, and relying on consultations, as the noble Lord suggests, will not advance us any further. What one Minister deems to be of constitutional significance may not be so construed by another.

The purpose of my amendment to Amendment No. 14 is to provide a clear stipulation of what the term "constitutional significance" encompasses. As the Minister noted, I have adopted what I referred to in Committee as "the generic approach". As I argued then, it is not incompatible with the approach of listing measures to be excluded because they are deemed to be of constitutional importance. However, given the Minister's amendment, I think the generic approach is the appropriate one.

I concede that what I propose is not a watertight definition, which is the point the Minister developed. It is impossible to generate such a definition, but I think that it is sufficient to demonstrate what should be out of bounds for the order-making powers in the Bill, and that it is necessary in the light of the government amendment. I am not sure that one can have Amendment No. 14 without Amendment No. 15; it is a case of both or neither.

The definition I have employed is not watertight, but it is not too dissimilar to the one that the noble and learned Lord, Lord Irvine of Lairg, said was as good as any he had seen. In Committee, the noble Lord, Lord Bassam, appeared to misunderstand what was embodied in the definition; he then thought it was confined to the relationship of the different organs of the state to one another, which clearly it is not. It is a more encompassing definition.

I hope that, on reflection, the Minister will realise that this amendment is helpful to Ministers. It helps to prevent them straying into territory that they should avoid and thus reduces the chances of a challenge to the decision. The noble Lord may argue—as he did in Committee and has already done today—that Ministers will not stray into that territory. However, the amendment he moved is designed to provide in the Bill that that territory is out of bounds, and my amendment helps to define the territory.

I can see that the Minister has gone a considerable way to meet the concerns expressed in Committee, and I am grateful to him for his letter on the subject. His amendment is a necessary but insufficient condition if provisions of constitutional significance are to be excluded from the order-making powers of the Bill. I beg to move.

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 1:00 pm, 26th October 2006

My Lords, Amendments Nos. 16 and 27 in this group are tabled in my name and that of my noble friend Lord Maclennan of Rogart. I strongly welcome Amendment No. 14, which provides a useful additional block against abuse of the process provided for by the Bill. However, I do not welcome it quite as strongly as I would have welcomed my Amendment No. 13 being accepted. This is the simplest and best solution to the problem debated in Committee. It is certainly preferable to having a list of constitutional statutes and, probably, to having a list of topics of constitutional importance. In any event, I could not support Amendment No. 26 because a list of constitutional statutes would need constant updating, and many statutes contain provisions that are constitutionally important alongside those that are not.

Amendment No. 15, tabled by the noble Lord, Lord Norton of Louth, is considerably more valuable. I have some difficulties with it and, if it is to go into the Bill, it would need to be looked at more carefully. For example, the statutory powers of the Executive would not be touchable, but some minor steps to extend or, perhaps more importantly in this context, restrict powers would plainly not be of constitutional significance. Indeed, one of the main purposes of the Bill could be said to be to remove unnecessary powers of the Executive. To that extent, the amendment arguably defeats part of the purpose of the Bill. On the other hand, the definition does not include the Scottish Parliament or the Welsh Assembly in the definition of the organs of the state, but any move in Westminster to impose restrictions on the powers of the devolved legislatures would, in the present circumstances, plainly be a matter of constitutional importance.

I tabled Amendment No. 16 to fill a possible gap because I was not entirely satisfied that the rights to a trial by jury were covered by the Bill. However, I heard the Minister say that the Government's understanding is that the existing conditions in Clause 3 would have that effect and would prevent any step to remove an existing right to trial by jury. I am happy to accept that statement and shall not press this amendment.

Amendment No. 27 adds the devolution statutes relating to Scotland and Wales to a list of statutes in Clause 8 that cannot be altered by order under the Bill. I tabled this amendment to meet the concerns of some Members of the Scottish Parliament. I understand that the Scottish Parliament was assured that changes to the devolution settlement—in particular, any changes to the Scotland Act—would be interpreted as being provisions of constitutional significance. The Minister said that the Bill would permit changes to the Scotland Act that are not of constitutional significance. Having looked at the Scotland Act, I can see that there are some changes that, on the face of it, could be regarded as not being of constitutional significance. But there is concern in Scotland that the Westminster Parliament should not be free to use this special procedure to make any changes to the Scotland Act. The Scotland Act is, in a sense, the possession of the Scottish Parliament in the same way as it is clearly the possession of the United Kingdom Parliament in which we sit. In those circumstances, unless the Minister is prepared to give an assurance that the Scotland Act will be untouchable under the Bill and that any changes to it will be regarded as being of constitutional importance, I would need to take further instructions from my colleagues in the Scottish Parliament to see whether they are satisfied with that position. At present, I am not satisfied with what the Minister has said on that subject.

Photo of Baroness Carnegy of Lour Baroness Carnegy of Lour Conservative

My Lords, the noble Lord, Lord Goodhart, has made an important point. Amendment No. 25, which was tabled by my noble friend Lord Jenkin, who probably feels he need not speak to it at this point, lists a number of Acts as a means of defining that which is of constitutional importance. That would solve the problem that the Members of the Scots Parliament see. They are thinking rightly when they say that they do not want the Scotland Act fiddled about with by regulatory reform orders at Westminster, although the Scotland Act is, of course, Westminster legislation. It is excellent that the Minister, having argued strongly in Committee against doing anything about the issue, has now moved an amendment to exclude matters of constitutional importance from Part 1. The definition by list, which the Law Society of Scotland suggested previously and is again suggesting, has weaknesses. It is difficult to have an exclusive list. But, at the same time, it solves the problem raised by the noble Lord, Lord Goodhart, so we have a difficulty.

My noble friend Lord Norton made a very powerful argument for clarifying what Amendment No. 14 would do. I too wondered whether legislation passed by the Scots Parliament and the Welsh Assembly would be included in the amendment. Of course there is ancient legislation in Scotland, which may have to be changed, and the question is how to do that when it concerns devolved matters.

The Government should look very carefully at what my noble friend Lord Norton said. His wording may not be absolutely correct, but I suspect that he has thought deeply about this subject, on which he knows a great deal. The Minister should not brush it off lightly but see whether he can return at Third Reading with something similar.

Photo of Lord Henley Lord Henley Shadow Minister for Constitutional Affairs & Legal Affairs, Constitutional Affairs

My Lords, we are grateful that the Minister, despite the strong manner in which he expressed himself in Committee, has listened to the arguments put to him and come forward with Amendment No. 14. With my noble friend Lord Norton and the noble Lord, Lord Goodhart, we are grateful also for the further reassurances given by the Minister. I support my noble friend Lord Norton because I think that his approach is a better one. Since the Minister seems prepared to move, perhaps between now and Report—

Photo of Lord Henley Lord Henley Shadow Minister for Constitutional Affairs & Legal Affairs, Constitutional Affairs

My Lords, I am grateful for the correction from my noble friend. The Minister could give further thought to the amendment of my noble friend Lord Norton and see whether he could further improve the Government's response.

Photo of Lord Desai Lord Desai Labour

My Lords, this is a very interesting situation. We all agree that this Bill should not be allowed to alter the constitution, but we really do not know what the constitution is. We can neither find a one-line definition of what we can prevent nor decide whether the admirable effort of the noble Lord, Lord Norton, meets the requirement. This proves that we need a written constitution.

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

My Lords, I am grateful for those words of support from the Front Benches opposite for the Government's amendment. The noble Lord, Lord Goodhart, said that he strongly welcomed it, and the noble Lord, Lord Norton, from the Back Benches and the noble Lord, Lord Henley, said that they welcomed it.

We all recognise that the debate has moved on. We listened very carefully to what was said at an earlier stage in the Bill and have come up with this new precondition. I am not attracted to the attempt by the noble Lord, Lord Norton, to link Amendments Nos. 14 and 15. It is a seductive offer, but one I shall have to decline. I cannot agree that the constitutional precondition fails to offer real protection unless the Bill defines constitutional significance. The other preconditions offer real protections—for example, they offer necessary protections without defining what those necessary protections might be. That was the approach adopted in the 2001 Act, and we think that it provides a genuine protection.

The approach of the noble Lord, Lord Norton, would cause some uncertainty to enter into our intentions, because it is unclear to what extent the piece of legislation would have to affect these areas to be prohibited from reform by order. That could lead to the Part 1 power being interpreted rather narrowly, and might limit its usefulness. In the time we have been debating and considering the legislation, I have sensed that that is not what Parliament wants. It is not the best way to proceed if we are to use those powers in terms of creating the right atmosphere for deregulation.

We do not think that it would be appropriate for the Government to try to pre-empt the views of not only Parliament but consultees in suggesting a list of areas—or statutes for that matter—which Ministers, consultees, Parliament and so on would find constitutionally significant. We do not think that that approach recommends itself.

The noble Lord, Lord Goodhart, raised an issue about Scotland, which was echoed by the noble Baroness, Lady Carnegy of Lour. We do not accept that all changes to the Scotland Act would be of constitutional significance. As she said, the Scotland Act is a Westminster Act. We are content that the new precondition would prevent amendments to the Scotland Act and the Government of Wales Act which were constitutionally significant, just as it would prevent amendments which were constitutionally significant to any other enactment. We are content that orders could not be used to effect significant constitutional changes to our devolutionary settlement. Our Amendment No. 14 puts that beyond doubt.

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 1:15 pm, 26th October 2006

My Lords, I quite see that some changes could be made to the Scotland Act itself which would not be of constitutional significance. Does the noble Lord not accept that the constitutional significance really attaches itself to any change because of the fact that there are two Governments involved in the Scotland Act—the Government of the United Kingdom and the Government of Scotland? That could—I suggest would—make any change a matter of constitutional significance, even if the change looked at on its own is not particularly significant.

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

My Lords, I understand the argument the noble Lord puts forward but, because of the narrowness of the issues we are considering and the approach we have adopted, I think that he will accept that most of the things we propose to do by order are, of their nature, minor and technical legislation. It does not fundamentally breach the important principle. For that reason, I think we are on safe territory, but I will reflect on the point noble Lords make. Clearly, we do not wish to unsettle in any way the beauty of the constitutional arrangement that currently exists, and I certainly would not want to upset the noble Baroness, Lady Carnegy of Lour, on this because she is very fierce on these subjects. We know that we have to take very carefully into account any issues of constitutional importance which are raised in Scotland.

Photo of Baroness Carnegy of Lour Baroness Carnegy of Lour Conservative

My Lords, the Minister said that the Government were on safe territory, but I am not sure that they are.

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

My Lords, I said that I would give further thought to the point between now and Third Reading. In general, we are satisfied that the value of the precondition and the particular position of the devolution settlement provide sufficient protections, but the noble Lord, Lord Goodhart, has made a very subtle point that I will consider further.

Photo of Lord Norton of Louth Lord Norton of Louth Conservative

My Lords, as my amendment to the government amendment is before the House, I shall respond briefly to the Minister. I shall also respond to points made by other noble Lords.

By putting a particular provision into the Bill, the Government are putting it into law. We should be extremely wary about allowing a measure to be introduced that has an implicit elephant definition—in other words, we know it when we see it—which is to be determined by consulting people who are approached when order-making powers are being prepared. That is not the way in which to proceed. It causes too many problems. The Minister says that he thinks he is on safe territory. My point is that the territory is not defined. This needs to be pursued. Having said that, I listened with great care to what the noble Lord, Lord Goodhart, and my noble friend Lady Carnegy of Lour said, and I see that certain points in my amendment need to be addressed. Therefore, I shall not pursue it now, but there is a case for returning to it to ensure that what the Government are putting into the Bill, which I welcome, is taken further so we know what it actually means. For the moment, I beg leave to withdraw the amendment.

Amendment No. 15, as an amendment to Amendment No. 14, by leave, withdrawn.

On Question, Amendment No. 14 agreed to.

[Amendment No. 16 not moved.]