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Legislative and Regulatory Reform Bill

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””.—[Official Report, 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.