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The Minister explained in some detail to your Lordships the role that the Cabinet Office transposition guide plays, in decisions taken in government services, on whether to introduce additional burdens in implementing legislation. It seemed to us, from the way in which the Minister described the criteria laid down in the transposition guide, that this was, on the whole, fairly good guidance for administrators and the Government. I am therefore seeking at Third Reading to transpose into an amendment what the Minister said on Report. I beg to move.
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Lord Bassam of Brighton: My Lords, I congratulate the noble Lord, Lord Kingsland, fulsomely on a very canny amendment that would make the transposition guide an add-on. However, I shall take noble Lords through the issue and explain why we cannot accept it.
As the noble Lord explained on Report, the purpose of his original amendment was to ensure that, in implementing Community obligations into domestic law, the Government did not go beyond the minimum required by the Community obligation. This would have created a legislative barrier to gold-plating European Community obligations when they are transposed into domestic law. On Report, the noble Lord stated that the requirements of the Cabinet Office guidance to the effective transposition of European directives into domestic law gave him pause for thought on the absolutism of his amendment. I suspect that Amendment No. 11 is a response to that.
As my noble friend Lord McKenzie explained on Report, the transposition guide makes it explicitly clear that, only in certain exceptional circumstances and where it is justified by a robust cost-benefit analysis and extensive consultation with stakeholders, should departments consider implementation that goes beyond the minimum required by a European directive. The transposition guide also makes it clear that any over-implementation must be made public. For example, to ensure transparency, all UK legislation laid before Parliament that gives effect to any European directive must be accompanied by a transposition note, which must contain an explicit statement on any over-implementation that has taken place during the transposition process.
The guide also makes clear that the Select Committee on the Merits of Statutory Instruments can report to this House on any statutory instrument that it considers to have inappropriately implemented a European directive, including where there has been unjustified over-implementation.
Although the requirements of the transposition guide are an essential part of ensuring that all legislation used to give effect to a European directive is thoroughly scrutinised and that any over-implementation is justified robustly, referring to the guide in the manner proposed in Amendment No. 11 would present problems. For example, as the transposition guide is guidance, it is written in terms appropriate to that status. It is not on the statute book and therefore is not written in statutory language; it therefore lacks the legal clarity and certainty required of legislation.
This lack of clarity and certainty would cause difficulty for domestic courts. As a result of Amendment No. 11, it would be possible, for example, to challenge the lawfulness of subordinate legislation implementing Community obligations on the basis that it did not conform to the guide. The court would, on occasion, need to inquire into whether any cost-benefit analysis justifying gold-plating was robust. That would create new areas of uncertainty and of legal challenge. Furthermore, as
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As Amendment No. 11 requires that subordinate legislation does not,
- “impose or increase any burden on any person which does not conform with the Cabinet Office Transposition Guide”,
departments would be legally required to comply with any amendments to the guidance, in spite of the fact that they had not been approved by Parliament. A future Government could therefore create a legal requirement that all departments over-implement European Community obligations, simply by amending the transposition guide. While I cannot envisage any Government doing that, it underlines the effect of this amendment, which I am sure the noble Lord had not intended.
Given that the amendment would cause uncertainty for the courts and allow for legislative changes without the need for parliamentary scrutiny, we cannot support it, and although I congratulate the noble Lord on its cleverness, I urge him to withdraw it.
Lord Kingsland: My Lords, I am extremely grateful to the Minister for his response and not surprised at what he said. He did, however, admit that the transposition guide lacked clarity and certainty. I find that rather worrying. On Report, he advanced the Cabinet Office transposition guide as the complete answer to the concerns I expressed about gold-plating.
Lord Bassam of Brighton: My Lords, I said that the transposition guidance lacked the legal clarity and certainty required of legislation. I said not that it lacked clarity and certainty but that it did not have the sort of clarity and certainty that we require of legislation. There is a difference.
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Lord Kingsland: My Lords, I do not understand the distinction between clarity and certainty that has legal force and clarity and certainty that does not. You either have clarity and certainty or you do not. If a document is clear and certain, it seems just as likely to be binding in law as a clear and certain document that has been declared binding in law. If I may respectfully say to the Minister, he is making a distinction without a difference. He is not demonstrating the confidence in the transposition guide that he manifested so trenchantly on Report.
There may be good reasons for rejecting my amendment, but I do not think they have been advanced from the government Dispatch Box. However, we are at Third Reading, and attached as I am to the text of my amendment, like the noble Lord, Lord Goodhart, I will not press it.
I think that I am right in saying that this is the last amendment of Third Reading; therefore, events will be moving quickly to a close. I believe that the Minister will agree that this Bill has had a rather bumpy ride in another place and in your Lordships' House. It has generated more than the usual amount of controversy.
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I hope that, this time, government words lead to action. We remain unconvinced that this Bill was ever necessary to reduce the burden of red tape and excessive regulation that suffocates British business. We still feel that the departments could do much more, by secondary not primary legislation. However, we have decided to give the Government the benefit of the doubt. I hope that we see real improvements. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass. I thank the noble Lord and his Front-Bench team—we had four or even five members of the loyal Opposition performing at any given time. On reflection, while undoubtedly there was a time when the Bill generated controversy and hostility in another place, it was less the case here. That is because the Government were very careful in listening to the concerns of the regulators and regulated businesses, large and small. Their representations were very important to us.
The Bill is in better shape now than it was previously. We look forward to a period of support from both opposition parties for the implementation of the legislation. It will have significance and will enable us to do things that I think we would all support to make it easier for businesses to grow, flourish and develop. It will provide us with a flexible, workable tool to make necessary changes to smooth the passage of business, local government, charities and those who provide goods and services in the United Kingdom.
We have always maintained that this Bill is all about delivery, and the Better Regulation Executive and the Better Regulation Commission work well to advise and assist us in that.
I thank the noble Lord, Lord Kingsland, and, in particular, the noble Baroness, Lady Wilcox, for her contributions on the Bill, as well as the noble Lords, Lord Howard of Rising, Lord Henley and Lord Goodhart. I also thank the Bill team, who advised us very skilfully during the passage of the legislation.
Moved, That the Bill do now pass.—(Lord Bassam of Brighton.)
Lord Goodhart: My Lords, before the Bill finally passes, I should like to raise one point for the record. Noble Lords who have taken an interest in this Bill
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I strongly approved of that and had hoped that it would be possible to have a final form of the proposed new procedure announced during the passage of this Bill either on Report or today. As I understand it, although the principle has been accepted all around, some details of the procedure have not yet been finalised with the result that it is not yet possible to make this announcement. However, I hope that very shortly it will be possible to announce new arrangements for Law Commission Bills. I think that we all accept that current procedures have made it impossible for a significant number of useful Bills to obtain parliamentary approval. I hope that the Minister will confirm that. It is certainly my understanding, and I was told by the noble Baroness, Lady Ashton, yesterday, that that is the position.
Finally, this Bill went to the House of Commons in a completely unacceptable form, which was not initially realised. A lot of credit for pointing out the very serious defects in the Bill rests on two of my honourable friends in the other place—Mr David Heath and Mr David Howarth—who campaigned strongly on this issue. As a result, the Government have recognised that there were very serious difficulties and have come up with a Bill which we now recognise, as does the noble Lord, Lord Kingsland, as being satisfactory and acceptable. I believe that there are now no amendments to the Bill which are not acceptable to the Government, so it will not return to us from the other place.
Lord Kingsland: My Lords, the noble Lord, Lord Goodhart, has rightly paid tribute to the energy of the noble Baroness in pursuing an alternative solution to the one initially proposed by the Government. Because he is so modest, he has not mentioned his own role in developing the initial idea, to which I now want to pay tribute. I would also like to pay tribute to the work that the noble and learned Lord, Lord Lloyd, and others have done. It has been very much driven by your Lordships’ House, rather than the Government, which is entirely to be applauded.
Lord Bassam of Brighton: My Lords, I join in that general congratulation. The initiative that was sparked by the debate on Clause 3 has been extremely valuable. I confirm that what the noble Lord, Lord Goodhart, has said is right. As we speak, the alternative procedures are being developed and deliberated on. I am confident that my noble friend Lady Ashton will give voice to the progress that has
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On Question, Bill passed, and returned to the Commons with amendments.
Companies Bill [HL]
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The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Sainsbury of Turville.)
Lord Hodgson of Astley Abbotts: My Lords, when we first met in Grand Committee on this Bill on 30 January, after Second Reading on 11 January, it was the first of 13 Grand Committee sittings during which we discussed no fewer than 1,926 amendments, made a short 700 changes to the Bill and, along the way, caused the collapse of the traditional methodology used by the Public Bill Office for numbering amendments—another first for this Bill. I had no foreknowledge of the prescience of the remark that I made in that first Committee meeting. I said:
“A journey of a thousand miles begins with a single amendment”.—[Official Report, 30/1/06; col. GC 1.]
If that was the right quotation for then, the appropriate one for today must be:
And what a breach it is: we have a Bill now with three volumes instead of two and 1,264 clauses instead of 885, and it still requires us to consider 1,029 amendments in a single sitting.
I readily accept that in part the increase, and some 600 of the amendments, are as a result of the Government taking on board our advice on consolidation when the Bill first passed through this House. I thank the Minister for that and for his helpful letter of 30 October explaining the background. I also thank the Bill team for making that final push to transfer so many more clauses from previous Companies Acts into this one. The huge number of amendments with which we now have to deal as a result of this consolidation may be making these later stages of the Bill rather more unwieldy than is usual. The name change may have confused some people; nevertheless, history will show that the effort was worth while.
As a final piece in the jigsaw, for which I am sure that this House will be grateful, perhaps the Minister could explain what will be left behind in the 1985, 1989 and 2004 Acts. What is planned to happen to those areas? When does he hope that we will finally complete the repeal of those three Acts?
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So much for what the Bill consists of: the next question worrying industry, commerce and practitioners is when it will all happen. The Minister’s colleague in the other place, Margaret Hodge, sent us all a letter dated 16 August. She wrote:
“In both Houses, Committee members examining the Company Law Reform Bill ... asked a number of questions about how the Bill will apply to existing companies. I intend to publish the enclosed paper this week, which sets out both our general approach to transitional issues and a possible timetable for commencement of the bill’s provisions ... We have sought views on these issues by mid-September so that we are able to inform Parliament in October of the outcome at Report stage in the Commons.
I should emphasise that this will be the first opportunity for interested parties to comment on transitional issues. We shall consult further formally on the full range of transitional arrangements after Royal Assent. We shall do this well before commencement of the bill’s provisions. We hope it will be possible to commence the majority of the Bill’s provisions on 1 October 2007”.
At some time today, it would be helpful to the House and the country if the noble Lord could update us on progress on that proposal. To be specific: first, what has been the general reaction to consultation? Secondly, since inevitably much of this is an enabling Bill, when does he expect to publish draft regulations? Thirdly, and most importantly, are the Government still sticking to their implementation target of 1 October 2007?
Finally, and unfortunately, much as I would like to stand here and make a wholly positive speech, I regret that I have to say that despite the enormous number of constructive and very welcome amendments that we are considering today, there are some which quite frankly should not be there. After such a long consultation period with so many days in Committee both in this House and in another place, it is extraordinary that the Government have attempted at a very late stage to bounce through an amendment without proper scrutiny or debate. This would be regrettable but perhaps not serious if it was an issue on which there was a large measure of consensus, but that is not the case. The reporting on the supply chain in the business review is a controversial issue that has sparked huge controversy and debate in the media over the past couple of weeks.
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At the opening meeting of the Grand Committee on 30 January, the Minister opened with some fairly disobliging remarks about my party and myself. He said:
“Before I turn to the first amendment, I had hoped that we could debate this Bill on a relatively non-partisan basis. We all share a common objective of updating and modernising company law, and wherever possible deregulating. This Bill has been drafted on the basis of a great deal of expert advice and the widest possible consultation. Large sections of the Bill are highly technical. I had the hope that we could all work together to produce a Bill that provides the best possible conditions for the success of British industry ... I do not believe in politics-free politics, but I do believe that politicians should keep their attention firmly fixed on what is best for the economy and for the country”.—[Official Report, 30/1/06; cols. GC 1-2.]
I hope he will forgive me if I say that the way he and his colleagues have dealt with the supply chain matter runs counter to everything he said then.
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My honourable friends in the other place have had it far worse than we have. We at least have had two and a half weeks in which to consult interested parties before tabling amendments; our colleagues did not even have two and a half days. This Government have become renowned for their dismissive attitude towards Parliament and the principles of well considered and well written legislation. For this to be so clearly illustrated in such a flagrant way is extraordinary.
It is hard to accept that having to consider 1,029 amendments in a single day will lead to a Bill which, in the Minister’s words, will,
- “provide the best possible conditions for the success of British industry”.—[Official Report, 23/5/06; col. 794.]
This helter-skelter finish to our proceedings will, I fear, inevitably lead to unforeseen problems. The issues identified in the report from the Delegated Powers and Regulatory Reform Committee are probably only the beginning. The Government will have much to answer for. We on this side approach this final stage of the Bill as we have approached all the stages. We ask of each amendment: is it deregulatory, is it comprehensible, does it think small first, and does it provide the right balance between risk and reward to encourage men and women of the highest quality to work in British industry and commerce? We look forward to seeing how this latest set of amendments measures up to these yardsticks.
Lord Razzall: My Lords, before we go on to the substance of the amendments, perhaps I may follow the remarks of the noble Lord, Lord Hodgson. While listening to him I was struck by the phrase, “Methinks he protests too much”. From his speech one would have assumed that we were going to be faced with 100 amendments from the Conservative Benches stating the reasons against the government amendments made in another place. I shall deal with the one matter of specific detail he referred to, which is Amendment No. 245. I had assumed from his remarks that the Conservative Party would have put down an amendment to Amendment No. 245 indicating that it did not wish that particular clause to be carried, but it has not done so. A quite specific amendment has been tabled and we will support it. But, having listened to the words of the noble Lord on it, I assume that the Tory party will simply oppose the government amendment when it comes to a vote.
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