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Legislative and Regulatory Reform Bill
3.32 pm
Lord Bassam of Brighton: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved accordingly, and, on Question, Motion agreed to.
House in Committee accordingly.
[The LORD SPEAKER in the Chair.]
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Clause 1 [Power to remove or reduce burdens]:
[Amendment No. 28 had been withdrawn from the Marshalled List.]
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Goodhart: By objecting to Clause 1, it looks as though I am trying to wreck the Bill, but that is not the intention. My intention is simply to probe the circumstances and I want to know, in particular, why we are having this considerably extensive new Bill instead of merely amending the Regulatory Reform Act 2001. We debated this issue to some extent on the Motion moved last week concerning whether the House should go into Committee—the noble Lord, Lord Jenkin, and others spoke on that occasion—but I think that it is necessary to go over these issues fairly briefly again.
I believe that it would have been much better to begin with amendments to the 2001 Act. Following changes to the Bill, in what way does it differ from that Act? Several of the differences are set out in a letter of 27 June from the Minister to me and in the annex to that letter. I accept that Parts 2 and 3 of the Bill are new and that they would be additions rather than amendments to the 2001 Act, but perhaps I may compare what we now find in Part 1 of the Bill with what is in the Act.
Four changes have been proposed by the Government. First, they say that the procedure under the 2001 Act is too onerous. That may well be true, and I acknowledged that at Second Reading. It is supported by two examples in the annex to the Minister's letter. Therefore, we shall need amendments to replace some sections of the 2001 Act with Clauses 13 to 20 of the Bill but I do not believe that that would be a fundamental change. Secondly, under the 2001 Act, there is a need to remove a legal burden. There is no power to remove an administrative or financial burden which does not remove any legal burden. Again, I accept that as desirable, but it requires only a short and simple amendment to the 2001 Act.
Thirdly, there is an inability under the 2001 Act to use the procedure under that Act to change legislation within the previous two years. No example is given of any problem that has arisen, but it simply requires the removal of a few words in Section 1(2)(a) and (4) of the 2001 Act. Fourthly, there is an inability under the 2001 Act to confer powers of delegated legislation by order. It is highly questionable whether that is desirable, but again if it were desirable it could be dealt with by a short amendment. Finally, there is the absence of any power under the 2001 Act to remove burdens arising other than from the carrying on of activities. That again needs only a very short amendment.
Therefore, four short amendments are
needed to the substantive provisions of the 2001 Act plus a rather more
substantial amendment to the sections dealing with procedure. Why did
the Government not start from there instead of pressing for excessive
powers to amend primary legislation? The suspicion
is
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Lord Norton of Louth: I too oppose Clause 1 standing part of the Bill. The clause now constitutes the principal mischief in the Bill. In essence, it is a Trojan horse; it may never be used as such but the potential is there. The institution under threat from the inclusion of the clause is Parliament itself. Why is this clause before us? We have not had a satisfactory answer, either in respect of process or substance? By process, I refer to the Bill being brought before us without being subjected to any pre-legislative scrutiny. The explanation given is that the Bill is urgent. History demonstrates that any Bill brought forward by Government on the grounds of urgency requires the most careful scrutiny. What urgency attaches to the provisions of this clause? There is a case for getting rid of red tape and unnecessary bureaucracy, but that is not in itself sufficient to justify bringing forward this measure and trying to get it passed in best “Yes Minister” style, before Parliament has had an opportunity to grasp its full implications.
Picking up on what the noble Lord, Lord Goodhart, said, if there are particular burdens that need to be removed urgently, what are they? In our discussions so far we have not been awash with examples. Which of the few examples listed in the annex to the Minister's letter of 27 June justify rushed legislation? At best, the Minister has made the case for some action to be taken, but not for it to be treated as urgent. Indeed I remind the Minister what his colleague, the noble Baroness, Lady Ashton, said only a few minutes ago about the Electoral Administration Bill: we should make changes that affect our democratic arrangements only with great care. I believe that this Bill impinges on our system of representative parliamentary government.
We still wait for a compelling, substantive case to be made for the provisions of this clause. As I pointed out at Second Reading, the motivation for this clause is that officials find the mechanisms under the 2001 Act overly difficult. The problem, as I argued, lies within government, not Parliament. The Minister’s letter of 27 June, to which frequent reference was made in our earlier discussions, concedes that the Government consider the provisions onerous and complex. As the noble Lord, Lord Bassam of Brighton, points out in the annex to the letter, departments “perceive” that RROs are disproportionately onerous.
Even if we accept that the existing mechanisms are problematic for officials, that does not make a case for the clause as drafted. It may make the case for finding some alternative methods to the existing one, but it does not demonstrate that the provisions of this clause create a preferable method. All the Government have done so far is make a case against the provisions in the 2001 Act. They have not made a case for the provisions in Clause 1.
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There are alternatives. The noble Lord, Lord Goodhart, pointed out that one could have an amendment to the 2001 Act. At Second Reading, my noble friend Lord Goschen raised the prospect of a deregulation Bill. If such a Bill was brought forward on a regular—say, biennial—basis, it would avoid all the problems associated with the clause. It would be confined to those burdens that the Government say they wish to be removed. Minor burdens incorporated into such a Bill would presumably require little attention; more significant ones would attract greater scrutiny. It would probably lessen the burden on departments, since they would not need to bring forward the mass of different orders that they will presumably have to bring forward if the provisions of the clause are as necessary as we are told. Above all, a regular deregulation Bill would avoid the major constitutional implications arising from the provisions of the Bill; principally, this clause.
In short, the Government have made a case for some change to facilitate deregulation, but have not made a compelling case for Clause 1. As it stands, the clause’s potential renders it dangerous.
Lord Jenkin of Roding: I, too, have questioned the clause’s necessity, and will certainly not repeat the arguments I adduced both at Second Reading and when I spoke on the Motion to go into Committee. The noble Lord, Lord Goodhart, was kind enough to say that he agreed with everything I said but that he could not support me. That is a familiar syndrome from those Benches.
The problem we face—certainly on this side of the Committee—is that, in crude terms, the Government have form on enabling legislation. That is why my noble friend Lord Onslow, who will no doubt be joining us at some stage, has said that he deeply mistrusts giving these legislative powers to Ministers to be exercised by order. When one adds the powerful arguments of my noble friend Lord Norton on why we have not yet been told what the urgency for the Bill is, I maintain the view that the Government would do much better to take the Bill away. After all, it has had a pretty chequered passage in another place. When we discuss the amendment of my noble friend Lord Waddington, we will come to some of the arguments adduced on his case: the Government have had massive changes of mind—not just once, but twice and three times—on what they want to see in this Bill.
The clause contains a dangerous power: the power for Ministers to legislate, and to repeal and amend existing legislation, by order. To my mind, it is incumbent on this House to demand a clear exposition from the Government—a much clearer one than anything we have had from the Minister—justifying the immediate need for it instead of a much simpler, shorter Bill, amending the 2001 Act, as the noble Lord, Lord Goodhart, said.
We are faced
with the demand that this legislation should be rushed through in this
Session of Parliament. The Report stage will be in October on the
timetable scheduled for the Bill. It will then have to go back to
another place for consideration of the substantial amendments that will
have been made
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I believe that this Government would, after the changes made in the Commons, have taken the matter away were it not that this would have been seen as a most tremendous loss of face. One thing that the Prime Minister in particular and his Ministers in general simply cannot abide is any thought that they should lose face any further than they have already. I totally support the case made that we should not let this clause go through.
Lord Kingsland: Two fundamental matters distinguish what was in this Bill, as it originally appeared in another place, from the 2001 Bill. The first one was the attempt by the Government to blur the distinction between primary and secondary legislation. The second was to introduce a new procedure for Law Commission proposals. The first was abandoned on Report in another place. The second is to be abandoned this afternoon by the noble Baroness when she speaks to Clause 3.
What is left is, essentially, the 2001 Bill in slightly different form. Is there anything we can do to rescue the Government from their dilemma of having to carry on with the time-consuming passage of this Bill? Yes, there is. It is to transform Clause 1. How should we transform Clause 1? We should transform it by reminding ourselves why the Government said they were introducing the Bill in the first place. They said they were introducing the Bill to implement the Hampton report.
It is a very important report, which has many wise things to say about regulation. Its fundamental message is that regulation should be proportionate to risk. That is the core message that we receive from its author. Where do we find that message in the Bill? Nowhere. Where should it be? It should be in Clause 1. Instead of that we have essentially the same language from the 2001 Act which the Government have repeatedly described as an Act that has failed.
So I share the views of all those who have spoken to this clause stand part Motion this afternoon: that we should remove the text of Clause 1, keep what is in the 2001 Act, and use Clause 1 to state in a very clear way the principles that appear in Hampton. This clause should be about deregulation. Why is it cast so widely when the purpose of the Bill is, solely, to promote deregulation?
Lord
Bassam of Brighton: I am grateful as ever to
those noble Lords who have contributed to this short debate, but it is
a rerun of a debate we had at Second Reading, and, as the noble Lord,
Lord Jenkin of Roding, said, a debate we had before we entered into the
Committee stage. There appears to be a measure of agreement among noble
Lords on the Opposition Benches, although perhaps not absolute
agreement.
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So there is a measure of agreement, but there is also a measure of disagreement in the views of opposition Members as to how we should improve or modify the Bill. At the heart of it, for opposition Members, the question remains why we did not simply amend the 2001 Act. Of course, we could have done and the Bill clearly builds on the strengths of that Act. However, if we had amended the 2001 Act, the legislation would have been spread over two enactments. It would have been messy and, I would argue, difficult to use by departments which must deliver better regulation. If anything can be learnt from the experience of the 2001 Act, it is that it must be clear how departments can deliver better regulation by order.
What is really important here is evidence about why the Bill should work better, and deliver more than the 2001 Act, and specifically what the Government intend to deliver through the Bill. This is what I shall focus on in responding to the points made by Members of the Committee.
What is clear from the debate in this House is that we all agree that there is a need to deregulate. What has been lacking so far is the actual and swift delivery of wide-ranging better regulation measures to effect real change on the ground. The order-making power in Clause 1 will allow us to remove or reduce burdens in a way that the 2001 Act did not.
The definition of burden in the Bill is substantially different from that in the 2001 Act. It is outcome-focused—focused on why legislation should be reformed, rather than on how legislation can be reformed. What I mean by that is that the 2001 Act required disproportionate and sometimes nugatory analysis. The department proposing an order had to carry out a large amount of legal analysis on whether the proposal removed, reduced, re-enacted or imposed specific legal restrictions, requirements, conditions, sanctions, or limits on statutory powers. The analysis required by the 2001 Act often had little to do with the desired better regulation outcome of, for instance, reduced costs on business or charitable organisations. It is certainly not as direct as the current definition of burden, which will require Ministers to focus on the financial costs or obstacles to productivity that the order would reduce or remove.
Those stakeholders whom we consulted argued forcefully that orders should be an outcome-focused tool to deliver better regulation. To cite but one of those consulted, the Federation of Small Businesses, it told us:
- “The concept of a burden as a
legal one means that there is a wide gap between what the small
business man or woman would consider to be a burden and what a
legislator—or even an enforcer—would consider to be a
burden”.
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As we have stated on a number of occasions, the Bill, and Clause 1 in particular, does not stand in isolation and neither can we consider it in a narrowly-focused way. The Bill is part of a much wider government agenda of cutting the red tape that is such a burden on the public sector, businesses, charities, and so on. As part of this agenda, the Government are also measuring the costs of all administrative burdens. The outcome of this work and the concerted push across government departments for better regulation will be reflected in concrete simplification plans from each department, to be published later in the year. In those plans, government departments will identify deregulatory measures, which they will deliver with the most appropriate measures available to them.
The Government have also accepted in full Philip Hampton’s report on more efficient approaches to regulatory inspection and enforcement, in which he recommended the merger of regulators into seven thematic groups. The Government’s better regulation aims have become more ambitious since 2001, when the present Act was devised. We have found that the 2001 Act does not offer the appropriate alternative mechanism that the radical programme of reform demands.
It may be helpful if I cite four examples of generic better regulation proposals which orders under the 2001 Act could not deliver: first, the reduction of administrative burdens if no legal burdens in the narrow technical sense of the original Act are reduced or removed; secondly, delivering uncontroversial Hampton mergers to reduce the burden of inspection and compliance on the regulated; thirdly, the limited power to sub-delegate, which meant that under the 2001 Act carrying risk-based inspections and enforcement through to the detailed level of regulations was more difficult; and fourthly, reducing the burdens on individuals or others that affected them passively rather than actively.
There is recognition here and at EU level of the need to identify and remove administrative burdens. That is why the Government have done their ground-breaking analysis of the cost of all administrative burdens on the regulated. In their simplification plans, departments will set challenging targets to remove unnecessary administrative burdens.
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Lord Berkeley: I am very grateful to my noble friend for giving way. I have understood his long and very clear explanation of the benefits of deregulation to the Government, to charities and many other organisations, but he has not once mentioned the effect that it may have on the customers and others on the other side of the coin. Why were these regulations introduced in the first place? Is he investigating at the same time the effect that it will have on the people who might come off worst if these changes are made?
Lord Bassam of Brighton: That is a fair point, and one that is acknowledged in the legislation. It is one of the protections that are part of the process to be gone through. Regulations are put in place from the best of motives. Sometimes it is discovered subsequently that the measure of regulation is not appropriate, does not work, is excessively burdensome and adds costs. The noble Lord asks about the consumers. Some regulations probably cost consumers because of how they operate.
We have attempted in the Bill to improve and strengthen the procedures put in place under the 2001 Act, which built on the 1994 Act put in place by noble Lords opposite when they were in Government. We are trying to ensure this time around that the important work that we have done so far under the 2001 Act can be built on so that it works better and is more precise and better defined. In that way, the protections are there when they need to be and we can remove unnecessary costs and burdens on business and make the regulatory regimes much simpler and easier to understand. This will enable us to bring together the important regulatory bodies, which really should be working together as a single regulator, to work much more coherently and simply.
Noble Lords opposite have a very simple choice to make: either they can join the Government in the important practical work of enhancing and improving our regulatory regimes and ensuring that we do not have regulatory burdens, or they can continue to force the Government to muddle along by deleting the clause. I have not heard a convincing argument from noble Lords opposite against the Government’s deregulatory programme. I rather thought that they shared our agenda. If they do not, they and their colleagues on the Liberal Democrat Benches may try to strike out the clause. That retrograde step would send out entirely wrong messages not just within the political system but to the business communities, in particular, and voluntary organisations, which are very much behind this Bill and our attempt to improve the regulatory framework in this country. I hope that the Committee will think long and hard before attempting to wreck or disassemble our Bill, which has virtue and value. That is not just the opinion of the Government, it is more widely held outside your Lordships’ House. I recommend that Clause 1 stand part of the Bill.
Lord
Norton of Louth: I am not sure that the Minister
has been listening to the debate. We have put forward an alternative.
It is not a simple choice in the way that he has outlined. In so far as
he has made a case for this clause, it is in explaining what the
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Lord Bassam of Brighton: The noble Lord presses the issue of mischief. We have listened carefully throughout the debates in another place, which is why we have brought forward amendments designed to allay some of the wilder fears and concerns that somehow the Government were using this Bill to negate the value of Magna Carta and undermine all previous constitutional legislation. Clearly, that was not our intent. In the end, this is humble legislation intended to do humble things, as I have described in some of our earlier debates and discussions.
If Members of the Committee seriously think that they can improve the Bill by taking out Clause 1, they misunderstand our intentions on deregulating. We want coherent regulatory frameworks and a sensible parliamentary procedure to ensure that, when measures are required to make the regulatory framework simpler and easier for people to work, they do that job.
Lord Goodhart: I am sure that both sides of the Committee recognise the need to deregulate, but in doing so we do not wish to put a weapon in the hands of the present or any future Government which could be used to abuse that objective. I remain unconvinced by what the Minister has said. Saying, for example, that orders should be outcome-directed, seems, basically, jargon. There should be a modest modification of the definition of burdens which appears in Section 2(1) of the 2001 Act. I am not sure that there is such a great difference between the definitions of the 2001 Act and this Bill, which the Minister suggests would make it inappropriate to use the old definition with some modification.
The reasons put up by the Minister for not using the 2001 Act are inadequately argued. As I indicated, this was introduced as a probing measure. It is therefore not my intention to vote against the Question that Clause 1 stand part. We will obviously consider what the Minister has said to see whether there is any practicable course to enable us to use this Bill to amend the 2001 Act, which is where I think it should have started.
Baroness Wilcox moved Amendment No. 29:
- A Minister of the
Crown shall annually lay a report before Parliament detailing, for each
government department that made an order under section 1 in that
year-
The
noble Baroness said: The new order-making powers in Clause 1 are
significant. If Parliament does confer these powers on Ministers, it is
important that they are held to account and use them in the way
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Baroness Carnegy of Lour: I support the amendment moved by my noble friend. It should not be difficult for the Government to accept it. They will know which burdens have been removed, which have been simplified and which have been imposed. From that they will know the impact of the orders. If they do not know these things, they should.
Hope springs eternal, but I wonder whether any more orders will be brought forward under Clause 1 as it stands. As I said at Second Reading, my experience of the previous system makes me wonder whether there are sufficient improvements here to achieve the swift delivery of lots of orders, a point made by the noble Lord in the previous debate. If there are many more orders, it is particularly important to ensure that the outcome is brought before Parliament once a year so that we can see whether this clause, one which makes us all anxious, has the effect the Government are hoping for.
Lord Norton of Louth: I support my noble friend’s amendment, which is an extremely sensible and rather modest proposal. If Clause 1 is to remain, this should be the first of several amendments accepted by the Government. The amendment would provide two benefits: first, it would impose a useful discipline on the Government in drawing the material together, which might be valuable in itself; secondly, it would inform Parliament about what is being done under this measure so that we will have at least this mechanism for evaluating whether it is having the effect the Minister has said is intended.
Lord Goodhart: My name is attached to this amendment, which we support. The considerable power conferred on Ministers by this Bill, if passed, needs to be monitored properly by Parliament and therefore requires an annual report as proposed here.
Viscount
Bledisloe: I am a little puzzled by the
amendment. I assume that the noble Baroness’s purpose is to
encourage departments to make orders that would remove burdens. It you
make an order removing a burden, you will have put into the report what
you have done. The one person who would not get into the report is the
person who does nothing. If
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Lord Jenkin of Roding: The noble Viscount, Lord Bledisloe, makes a very good point and no doubt we shall wish to return to it. It is not only Ministers and government departments who will need the information my noble friend’s amendment would provide, but also all those from whom burdens will have been lifted—notably those in industry and commerce, which are the bodies calling for more deregulation.
My mind was drawn back to the speech made at Second Reading by my noble friend Lord Sainsbury of Preston Candover who, when he was describing his experience in 1993, said:
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