One of my aims in the debates on the Bill and in my discussions with stakeholders, whether they are from the legal professions, consumers or colleagues, is to ban the phrase “light touch”. This is not about light touch, but about proportionality. I want everyone, if I can persuade them, not to use the words “light touch” or any reference to touch, but the term “proportionate regulation”. I will then feel that I have achieved something.
We very much recognise that the smaller regulators in particular—ITMA and CIPA have been quoted extensively—might want statutory assurances about how they will be considered under the new framework. It is perfectly understandable that they might be concerned about that, but there can be no question but that an effective regulator must have regard to at least some of the considerations listed in amendment No. 213.
There is therefore nothing between us on the question of whether regulation should be proportionate. Clearly it should. Where we differ is on whether we consider it important to try to define it in the Bill. Indeed, in quoting CIPA and ITMA, the hon. Gentleman recognised that the board, the Office for Legal Complaints and the approved regulators must be able to take a proportionate approach on a case-by-case basis, which is the aspect on which we should concentrate our attention. I am concerned that trying to define what the board should take into consideration might cast doubt on whether other important factors also apply in a particular case.
In amendment No. 213, the hon. Gentleman highlights a number of different considerations that he regards as essential to the exercise of proportionate regulation. However, the key point is that there might be equally applicable and important factors that are not contained in the amendment. Setting out those considerations in the Bill could suggest that they had greater weight than other, non-statutory factors, which might be more important in relation to a particular regulatory decision.
To give the Committee an example, I am sure that hon. Members are all aware that the principle of proportionality is well established in legislation. Section 2(3) of the Legislative and Regulatory Reform Act 2006 establishes that
“regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent” and that they
“should be targeted only at cases in which action is needed.”
Those concepts are not defined in the 2006 Act, and we have simply replicated that model in the Bill.
It is of the utmost importance that the board, the regulators and the Office for Legal Complaints should be free to consider what is proportionate when making their regulatory decisions. It is equally important for the protection of the interests of the consumer, whether a multinational firm or the man or woman in the street, that proportionate regulation should be considered on a case-by-case basis. Placing definitions in legislation of what is proportionate in a particular case would serve only to restrict the scope of that principle.
Amendment No. 254 would ensure that the board could distinguish between those who are experienced consumers of legal services and those who are not, for the purposes of determining what level of regulatory control should apply. It might be considered as risk-based and proportionate to fix the arrangements in regulations, but fixing the arrangements in the Bill, so that they could be changed only by primary legislation, would mean losing that opportunity for flexibility that we have been carefully building throughout the Bill. I would argue that the board’s regulatory approach is to target those areas that need attention.
How a consumer copes in a given environment, based on their experience, is only one of the variables that we take into account in determining the level of protection. We have taken the view that the starting point should be blanket protection for all consumers, which can then be adapted to fluctuations in the legal services market and can respond to consumer needs on a case-by-case basis where appropriate.
I appreciate the sentiment behind amendment No. 214. We have consistently made it clear that we embrace the B-plus model of oversight regulation. Although I understand why the hon. Gentleman wants to make that explicit in the Bill, I am not convinced that that would achieve what he wants. In fact, it would lead only to more intrusive and burdensome regulation. I am sure that he, of all people, would not want us to go down that road. There would be a risk of judicial review if the board did not discharge its own duties to ensure that the approved regulators acted compatibly with all the regulatory obligations all the time.
It is important that the oversight regulator does not micro-manage and second-guess the actions of the approved regulators, as Members on both sides of the Committee will agree. I fear that the amendment would increase the scope for such micro-management by the board, by giving it a statutory duty to ensure that the approved regulators act in a particular way that is compatible with all the regulatory objectives all the time. The Bill already gives effect to the oversight model of regulation. When there are adverse impacts on the regulatory objectives, the board will have the right powers to take action. I do not see any reason or merit in going further than we have done.
I remind the Committee that the Government tabled amendment No. 6, which puts the board under a statutory duty to publish a policy statement setting out how it intends to have regard to the principle that its principal role is the oversight of approved regulators when formulating its policy statements. That provision, which also requires the board to take into account the desirability of resolving matters informally whenever possible, might provide the kind of principle that the hon. Gentleman seeks. Our position is that policy statements remain the best place to set out the relationship with the approved regulator; they can be adapted as necessary to ensure that the consumer is afforded the protection of proper regulation for the services that they pay for.
Turning to new clauses 10 and 11, we have discussed amendments to the board’s duty to consider the views of approved regulators, as well as of consumers. The Government have made clear their position on the issue. The Bill provides equal opportunities for representations by consumers and practitioners, through the approved regulators, to be considered by the board. That has been expressed differently in the Bill, according to the bodies involved, and for good reason. Unlike the legal profession, which already has in place well-established, well-organised and well-funded bodies that are more than capable of representing the views and interests of its members, consumers do not have such a voice—[Interruption.] I sound as if I am about to lose mine. We therefore thought it necessary to establish the consumer panel to represent consumers’ interests to the board.
Approved regulators already have sufficient opportunities under the Bill to represent practitioners’ views. For example, in addition to the provisions requiring the board to consider representations, clause 3 specifically requires the board to have regard to key principles, including any other principle that appears to represent the best regulatory practice. In line with such practice—the Better Regulation Executive’s code of practice and consultation, for example—the board should consider representations, especially if they come from those affected by its functions. We do not need to set out any practice in the Bill which could, in effect, become outdated and irrelevant. It would narrow the focus of the board’s consultation too much if it were limited to the extent to which its general policies and practices were consistent with its duties under clause 3, or to the degree to which the board proposed activities and targeted them appropriately, whether or not the programme of work was proportionate.
Those principles apply, too, to any work plan, and it is unnecessary to put that duty in the Bill. The board has a duty under clause 3 to ensure that its activities are targeted and used only when appropriate and necessary. Given the duty for the board’s accounts to be laid before Parliament, there is sufficient financial accountability, so I urge the hon. Gentleman to withdraw his amendment.