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Legislative and Regulatory Reform Bill

My Lords, in a solitary moment of emotion in an otherwise dispassionate and well argued speech, the noble Lord, Lord Holme of Cheltenham, turned to the government Benches and cried, ““How on earth did this Bill see the light of day?”” I think that I can provide the answer to the noble Lord. It lies in the attitude of the Government to our fundamental freedoms. We have only to glance at the recent meretricious record of the Government on our long-standing constitutional protections. Your Lordships will recall that in 2004, in the Bill dealing with asylum appeals, the Government attempted to remove the power of the courts to review the decisions of asylum tribunals. They sought to oust judicial review. Mercifully, because of the revolt of the judges, the Government withdrew from the brink. More recently, another attempt was made when, effectively, the Government sought to suspend habeas corpus by introducing a measure in another place which would allow detention without charge for 90 days. That was defeated by a revolt of the Government’s own Back Benchers. We have even more recent evidence of a fundamental freedom being threatened—the attempt by the noble and learned Lord the Attorney-General to introduce a piece of delegated legislation which would have removed the right of jury trial in fraud cases. Taking those three issues—the ousting of the court, the suspension of habeas corpus and the attempted removal of jury trial—is it so surprising that the Government presented a Bill to abolish Parliament? Effectively, that is what the Bill in its original form would have done. As I understand it, the distinction between primary legislation and delegated legislation is that Parliament is supreme and, therefore, it can do anything; but a Minister can make delegated legislation only within the constraints of a parliamentary statute. The original draft of this Bill abolished, effectively, that distinction. The Bill simply required the Minister to make legislative reforms; so there was a complete elision between the tradition that law is made by Parliament and the delegated law-making authority of Ministers. Thankfully, that was stopped by a combination of the growing recognition, first, by the Liberal Benches and then by the Conservative Benches, that the Bill contained a cancer, and, secondly, a remarkable campaign in the press. The sum of those two things made the Government think again. As a number of my noble friends have said, that fact should not be forgotten when we consider the provisions of the Bill. There are still certain proposals that echo what the Government originally attempted to do. The noble Lord, Lord Holme of Cheltenham, also drew attention, quite rightly, as chairman of the Select Committee on the Constitution, to the issue of pre-legislative review. Is it not remarkable, unlike the Bill of 2001 which had proper pre-legislative review and proper consultation, that neither of those was undertaken before this Bill saw the light of day? There was no draft Bill and there was no pre-legislative consultation. It is worth reading to your Lordships what the committee chaired by the noble Lord, Lord Holme, said on this point. I quote from paragraph 19 of the report of the Select Committee on the Constitution, which was published on 8 June:"““We are concerned by the way in which a bill with constitutional implications has been handled. The consultative process was lamentable: for example, the consultation document on reform of the Regulatory Reform Act 2001 did not capture the full extent of the Government’s proposals as they emerged in the original version of the bill. It is unfortunate, too, that the opportunity was not taken to give pre-legislative scrutiny to the bill, in sharp contrast to the approach taken in 2000 to the Regulatory Reform Bill, where pre-legislative scrutiny was commended as ‘a model of this process’””." A number of your Lordships have asked the question—I think particularly of the contribution made by my noble friend Lord Goschen—do we really need the Bill at all? What can the Bill do that its predecessors cannot do? The Minister must answer that question when he replies on behalf the Government. This point was considered in the Delegated Powers and Regulatory Reform Committee report, chaired by the noble Lord, Lord Dahrendorf, who I am very pleased to see in his place. Paragraph 16 of that report states:"““Neither the Government’s review, nor any evidence to Parliament which has accompanied this bill, has demonstrated that there are significant structural flaws in the 2001 Act. We asked the Government for examples of proposals which they wished to deliver under the 2001 Act but were not able to do so due to the wording of the current test: other than the examples in Annex C to their memorandum, they have not been able to do so. Given this, it is our opinion that the block to regulatory reform is departmental priorities rather than the ‘burden’ test in the 2001 Act””." So it is quite clear that the Delegated Powers and Regulatory Reform Committee has reached a clear view on that—opposite to the view that the Government have advanced today in their opening. To what extent is a Bill of this kind an answer to the kind of problems that have been identified, for example, by my noble friend Lord Sainsbury of Preston Candover, and by the noble Lord, Lord Macdonald of Tradeston? I have been looking at the report by Mr Philip Hampton, which has not received much attention in this debate. It is called Reducing administrative burdens: effective inspection and enforcement. Chart 2.2, on page 11, sets out the 10 largest national regulators by volume of inspection and enforcement staff. These are, in order of the greatest number of employees, the Environment Agency, the Health and Safety Executive, the Financial Services Authority, Companies House, something called CAA-SRG—I confess I do not know what that is—the Rural Payments Agency, the Meat Hygiene Service, the Office of Fair Trading, the Housing Corporation, environmental health, and trading standards. Those regulators are at the coal face of industry. How will the Bill relate to what they do? Can the noble Lord, Lord Bassam, tell me what concerns the Government have about the current way in which the Environment Agency is regulating the people whom it regulates? Why is that regulation so costly? What can this Bill do specifically to reduce the burden of regulation by the Environment Agency on those whom it regulates? I shall not ask him to do that for the other nine, and he can choose another body if he wishes. I believe that the House would like to hear how what is set out in the Bill will be relevant to what we hope those agencies will do to the people whom they regulate. Unless we can have an answer to that, I do not understand why we are wasting our time here tonight. This is all about regulatory culture, as my noble friend Lady Wilcox said, but as far as I can see, there is nothing whatever about regulatory culture in the Bill. Assuming that we will not vote against the Bill at Second Reading and that we shall advance to Committee stage, it is only fair that I let the Minister know what line we will take on amendments. Our first concern is with the scope of Clause 1, which is entitled:"““Power to remove or reduce burdens””." I have two observations on that. First, why is the title not ““Power to remove or reduce regulatory burdens””? As my noble friend Lord Onslow said, the scope of that clause is immense. Apart from the Bill, when it subsequently becomes an Act, and the Human Rights Act—exceptions are made for both of those categories—Clause 1 could amend any piece of primary legislation or any piece of the secondary legislation. Given the concerns expressed in your Lordships’ House today, would it not be better if the Government limited the scope of Clause 1 to regulatory burdens? That, after all, is what the Bill is supposed to be about. I also draw the Minister’s attention to Clause 1(2):"““That purpose is removing or reducing any burden, or the overall burdens, resulting directly or indirectly for any person from any legislation””." Focusing on the expression ““or the overall burdens””, as I understand it, power can be used to increase burdens on a particular group under this Bill provided that, overall, there is a net reduction. If the Minister agrees with me about that interpretation, how does he justify it? How can a deregulating Bill actually, in certain phases of deregulation, increase the regulatory burden on certain individuals? A question dealt with, in my respectful submission, totally satisfactorily by the noble Lord, Lord Goodhart, was about which areas should be excluded from the Bill. We already know that the Bill can no longer amend itself. As a result of considerable pressure, we now know that the Government have accepted that they cannot amend the Human Rights Act 1998. In paragraph 53 of the report of the noble Lord, Lord Holme of Cheltenham, we find a long list of measures, referred to by the noble Lord, Lord Goodhart, which ought also to be excluded from the Bill. I should be most grateful if the Minister would tell us in his closing speech whether he accepts paragraph 53 in total or, if not, which particular measures in that paragraph he agrees ought to be excluded and which should not. The veto has excited much attention from many of your Lordships around the House—if I mention my noble friend Lord Jenkin of Roding, I hope that I do not do any other noble Lords a disservice by not mentioning them. The veto measures in the Bill, even with the Government’s concession this afternoon, for which we are of course grateful, are simply not adequate protection. The fact that a committee of another place—or, indeed, your Lordships’ House—can issue a veto is of no comfort at all if that committee is run politically; because all that is necessary is for the whip majority to vote for the measure. Moreover, there is also a provision in the Bill allowing a decision of another place to override the decision of the committee, even if the committee issues a veto. I should be interested to know what the Minister will propose to extricate himself from that difficulty. I suggest one possible solution: to follow the suggestion of the noble Lord, Lord Macdonald, and, rather than have a committee of another place deal with this matter, have a Joint Committee in which no single party has an overall majority. There might be a sufficient number of, for example, Cross-Benchers from your Lordships’ House to sit on it. In those circumstances, with a Joint Committee that is not dominated by any one party, a decision to veto, or not, would have a great deal more credibility and would be much more likely to be accepted by both Houses of Parliament and more generally in the outside world of regulators and regulatees. We shall certainly return to the veto issue in Committee. I entirely endorse everything that has been said about the Law Commission proposals, from the Liberal Democrat Benches, our own Benches and from the noble and learned Lord, Lord Lloyd of Berwick. That matter was also addressed in the Delegated Powers and Regulatory Reform Committee’s report at paragraph 63. I hope I shall not be over-tiring your Lordships if I read it out:"““For these reasons, we conclude that it is inappropriate for Law Commission recommendations to be implemented by order and we recommend that the House seek the removal of clause 3 from the bill. Such legislation (if outside the scope of clause 1) is better made by bill, where all members of the House may participate and propose amendments; and amendments may be made by, and reconciled between, the two Houses in the usual way.””" That ought to be absolutely conclusive as far as the Government are concerned. It could not have come from a more authoritative source. The Government want to expedite Law Commission measures, and I entirely endorse everything that has been said about the importance of raising their profile, particularly those which are uncontroversial. However, it has at its disposal the Jellicoe procedure, which was used four times between 1964 and 1967, three times with complete success. The fourth failed only because the Bill was plainly controversial to certain parties in another place. It was said by the noble Lord, Lord Garden, in winding up, that not much attention has been paid to the EC dimension. I say only that one of the great problems we have had with EC measures, particularly directives, is that many civil servants—it is unfair for me to criticise civil servants—many government Ministers have not been able to resist the temptation to implement directives in a way that raises the compliance requirements contained in the directives themselves. We shall therefore be tabling an amendment in Committee obliging the Government to implement directives to the standards contained in the directives and no higher. In that way, there is a reasonable chance of our being able to compete on a level playing field with every country in the European Community subject to the same rules. As my noble friend Lady Wilcox said towards the end of her speech, surely the best way of confronting this problem is to produce fewer regulations in the first place. The biggest contribution the Government can make to improving competition in this country and lowering the regulatory burden is, starting tomorrow, to stop regulating.