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Merits of Statutory Instruments Committee: Secondary Legislation

rose to move, That this House takes note of the report of the Merits of Statutory Instruments Committee on the Management of Secondary Legislation [29th Report, HL Paper 149, Session 2005-06]. The noble Lord said: My Lords, I shall say a few words initially—because I know that is why noble Lords have come—about what the committee does and what we believe our purpose is. The committee was an innovation set up by the House in April 2004, built out of the concern that the vast volume of secondary legislation that passed through Parliament often received scant attention in the Chamber itself because of the volume of legislation that was passed. We believe that the House was right to have that concern. Therefore the committee’s job, at its nub, is as a sieving committee to try to identify secondary legislation that may be of interest to the House, is of potential importance and potentially has flaws in it. Not to be too grandiloquent, we are a sieve—and we try to do our sieving function with efficiency and humour. The committee was chaired by my noble friend Lord Hunt of Kings Heath before he was returned to government. I followed him in May this year. I hope that there is no truth in the rumour that goes around that the Chief Whip awards the chairmanship of the Merits Committee to Ministers who have misbehaved as a gulag and an encouragement to others. In fulfilling our scrutiny function we seek to make essentially political judgments. We try to identify across the committee’s experience whether an issue may be of interest to at least some in the House. That does not necessarily mean that we expect the House to stimulate a debate on it, although we are often interested when that happens; but we think it important that the House has a fairly efficient means of drawing things to its attention without scanning the vast volume of legislation that looks as if it may be of interest in public policy and political terms or because it appears to have faults in it. In the last Session we reported 41 affirmative instruments to the House and 139 negative instruments. Perhaps reporting the negative instruments is more important than reporting the affirmatives, because the affirmatives naturally come before the House while the negatives are lost in oblivion unless we have some process of bringing them to the House’s attention. After that brief résumé of what we do, I give warm thanks to the members of the committee with whom I have had the pleasure to work in my period and to the Clerks who so supportively and expertly helped and advised us. Sometimes when a Member asks what you are doing in the House and you say, ““I serve on the Merits Committee””, a sad sort of smile crosses their face—of pity and wonder that one can cope with the almost Sisyphean task resulting from the mountain of paper that lands on one’s desk. Because we meet weekly the volume of paperwork is enormous, but the attendance record of the committee is remarkably high and the attention to detail is remarkably high, too—sometimes even higher than the chairman would wish. Lastly, the commitment of the committee and its good humour could hardly be bettered. In practice, much of the work of the committee takes place outside the committee meetings, because our Clerks engage vigorously with departments, as we want them to, to draw additional information from officials, clarify areas of doubt and at times to put direct challenges to them prior to our meetings. That is a crucial if unseen part of our work. We also try to be balanced and to give praise as well as censure to departments, because we believe that we have a role in that respect. Perhaps I do not have to say a lot—although that always means that the speaker is going to say a lot—about why it matters that we scrutinise in this way. The fundamental point is that statutory instruments themselves matter, as they are the expression of the power of the state in all its force, detail and volume. They impose burdens, obligations and often costs on a variety of members of society. On the positive side, they are intended to be for a purpose—to create a mechanism by which the Government can achieve their objectives. So the policy debate is whether the statutory instruments achieve the policy objective in practice in the most economical and efficient way possible. I paint the broader picture of what statutory instruments are about and why they matter without necessarily advancing the argument that that is the central focus of our work. We have a more humble focus. The way in which the Government legislate in practice through statutory instruments and whether they achieve their policy objective—and whether they do that with the least burden and cost commensurate with the policy objective—matters a lot to civil society. There is therefore a question that is not in our remit on which departments need to spend more time reflecting: whether in the policy delivery debate, which is essentially one of the biggest difficulties that all Governments face, this is the best way in which they can achieve their policy objective. As has been said by many, the default mechanism is that if you want to achieve a policy objective you should legislate, regulate and create statutory instruments. The evidence is not perfect that that is always the best way in which to achieve one’s policy objective. Why did we decide that there should be an inquiry? After the committee had been going for some time and we had scrutinised hundreds and hundreds of instruments, the picture was patchy. By and large, instruments are well made by departments within their remit at that point in the legislative process. However, too often there was evidence that they were not well made, and we wanted to get under the skin of how departments managed their secondary legislation to see whether there were lessons that we could learn from that and lessons that they should learn so asto do things better, for all the reason that I have touched on. We have been reinforced on the importance of this—again, this is a point of context—by the stance that the Better Regulation Task Force has set itself, cautioning against the mindset that legislation is always the default solution to problems, and noting the position of the Government themselves that they wish to achieve less regulation and less burdensome regulation. Of course, that has a bearing on the work of the Merits Committee. Only on Monday, the Prime Minister committed the Government at the CBI to a 25 per cent reduction in red tape, form-filling, inspection and record-keeping. If that is to be achieved—I am sure that most of us hope that it is—it will mean less regulation and statutory instruments and fewer and better regulations. As my noble friend Lord Hunt is now in his place, I should repeat the praises that I granted him before—but I shall probably do that afterwards, at the end. The inquiry that we set up, which was the first to be held by the committee, sought to cause a number of witnesses to give evidence to us from government departments, Ministers, senior officials, the Better Regulation Executive and the Better Regulation Task Force, as well as representatives who might speak for wider civil society such as the CBI, the National Council for Voluntary Organisations and others, to get a view of how the world seemed to them and what they felt about it. Our focus was essentially on whether departments achieve the clarity that they should on their secondary legislation, whether the process of consultation was adequate and effective, and how departments planned and timetabled their secondary legislation to avoid—which they do not often do—the enormous end-of-term or end-of-Session rush of legislation. That matters not just because the committee does not want to be overburdened but because it weakens the ability of Parliament to scrutinise the Executive’s actions, which matters a lot. We wanted to engage with the Government about what they were going to do to minimise some of those peaks and troughs so that legislation could be better scrutinised by Parliament and to ensure that there was effective timing of introduction of secondary legislation, such as the 21-day period of laying, to give the House adequate time. I shall not cover all the areas that the committee covered as I shall be well supported in the debate by many of the eminent members of our committee, but I shall talk on one theme, which was a leitmotif running through our inquiry—the search for who is responsible. We sought to find who was responsible in government overall for the process. The Cabinet Office clearly had some responsibility; it issued guidance that departments were meant to follow. However, it was pretty chary about going much further than that, and about going into the territory of saying it was going to be vigorous about trying to ensure that the guidance was followed and that there was a learning process about making secondary legislation better. HMSO, surprisingly to us, had a significant role, but it was essentially limited to the standards for the drafting and presentation of legislation. It gave us good and clear evidence, but its remit was that and no further. We were also surprised that the Better Regulation Executive put secondary legislation off limits. It said it was not getting involved in looking at secondary legislation at all; that was not its focus. We question that. We can see that it will prioritise its work to the regulatory burdens that have the most impact, but not occasionally to fish into the detail of secondary regulations seems to us to miss a point of the BRE’s function. You need to put a mineshaft down periodically to have a look at the detail and see what is going on. There was a less than crisp picture of how the Government themselves led the scrutiny of the secondary legislation process across government. We put that to them and we had a response, which Ishall come to. We also took evidence from three departments, either because we thought they appeared to have some very good practice or because there was room for improvement. I shall not name names and leave you to guess which was which.One of the most interesting and touching of the questions was when we asked one department, ““Which official in your department is responsible overall managerially for the quality of secondary legislation?””. It took months to get a reply. That was eloquent in terms of what was going on there. We have had the Government’s response. I do not want to damn it too much with faint praise, but it would be fair if I said that the committee’s response to it was lukewarm. In essence the Government have said, ““We have issued the guidance. It’s there. Wetrust that the departments, which are effectively fiefdoms””—not their words, but mine—““will do it, and we can leave it to them. All will be well””. I wish we believed that. Some of us might say that the ability to join up across government and enforce or promote good standards effectively was a reflection of the surprising weakness of the centre of government in some respects, rather than its excessive centralism. So we have not been overwhelmed by the Government’s response. It is not that they disagreed with the goals of what we said in our report—by and large, we were all in the same territory and saying, ““This is what should happen””—but we were doubtful whether we saw the commitment to the means to achieve the goals we thought were important. I also draw attention to the response of one government department to our report. The Home Office came in for a lot of stick, and it continues to do so. It has not been the easiest of years for it. The response we have had from the Permanent Secretary to the committee’s report, which we have received in the last day or so, is very clear. It raises the bar for a Permanent Secretary by saying, ““I will make my department respond to what the committee has said, and I own that””. I commend him on that. He has plenty of other things on his plate at present, and it is good to see a Permanent Secretary standing forward in that respect. I shall touch on what we think should be done better, and what we will be keeping an eye on in the future. There are two levels of consultation. There is the technical level, where you allow consultation on the draft instrument itself. Departments are meant to allow 12 weeks for that process. It is crucial that they do it, and that they listen to the responses. We believe consultation should be more positive than that, however. We saw that good consultation—there is some evidence of this from the DTI—was when a department brought stakeholders and wider civil society into discussion before it even drafted the instrument to talk with them about the policy objective it was trying to achieve, and had an active discussion with them about what might be the best way of achieving it. In other words, it consulted not about the commas and the semicolons, but about the objectives. It tried to think about whether there were better ways through an active engagement with those groups. We think there is a lot of scope for doing more of that, and we are not convinced that there is a strong enough central mechanism to promote it—see previous remarks. We also think it important that, although not putting excessive burdens on business is important, there is a recognition that others are affected by secondary legislation. We came across a particular example, which others may speak on, where significant burdens were being placed on ordinary citizens. The Government therefore have to find mechanisms for consulting them as well. It is not always easy, but it is certainly possible. Charities and local government are also affected by secondary legislation, and should not be ignored during the consultation process. Consultation matters massively. It is an issue to which we pay great attention in Explanatory Memorandums; we are looking to see evidence of the quality of the consultation that has been done and of the responses that have been given. Our officials are diligent in going into more detail about that. We know why simplification is difficult, but, at times, seeing tier on tier of amendments to the original secondary legislation makes it almost impossible for some parts of civil society to understand what is going on. Others of our committee who are much more expert will no doubt speak on this, but the importance of simplification and consolidation needs to be stressed again and again to officials. The problem is that we all see the world from our own position, not from the position of those we are affecting. Legislators and officials who are acting preparatory to legislators need more imagination at times, to think about what it feels like if you are a small business in Wigan and you have a shower of this stuff hitting you. How are you meant to understand and engage with it? They should have that imagination, not because it is a decent and human thing to do, but because if they want their regulations complied with, which is what it is all about, they have to try to make the process of compliance as comprehensible, transparent and simple as possible, otherwise they just will not get compliance. Simplification, clarity, transparency and accessibility matter because they go to the heart of the policy objective. My last point is on EU directives. We gave evidence as a committee to the House of Lords EU Committee on why EU legislation was an example of how consultation had to be done differently. Essentially our argument was that when Ministers—having been there, I know it is the last thing on one’s mind—are negotiating late at night, with what used to be 12 or 15 others but is now 25, before they can get agreement at the European level they have to have involved those who will be affected by the consequential directives and regulations that will flow from that ministerial decision. Why so? Because if you do something wrong on a domestic piece of legislation, it is conceivable that you can change it. However, it is almost impossible to change European legislation when you are required to get 24 other states to agree. We saw examples where departments, which we commended for it, had brought those who would be affected by a measure right into the discussion before Ministers agreed. We thought the way that was done was superb, and that it needs to be done more often, otherwise you are just locked on to a directive or a regulation, and you are just amending the detail. There is nothing you can do about it in practice, however much you consult about the detail. I am out of time. The message to government departments: please attend to this—it matters. Please own the need to improve. Please give it serious attention at the top of departments in the way that I have already suggested. Seek to avoid such legislation when you can, and evaluate the effectiveness. In other words, have some process where, periodically, you take an instrument—perhaps a controversial one—and see whether there is evidence that it actually worked or did not. All too often, that is not done, so there is no learning process within government. The message to the House is: please engage; please support us, because it is a lonely and sad life we lead in our little gulag; please also do not mistake the convention of the House. I think that the noble Lord, Lord Kingsland, for whom I have the greatest respect, misquoted the convention on secondary legislation. The Companion states: "““The House of Lords has only occasionally rejected delegated legislation””." It does not say it should not; it does not say it could not. It makes the statement of fact that it happens ““only occasionally””. I think the view of the committee is that the House has probably too infrequently rejected delegated legislation. Without wishing to cause a heart attack to the Chief Whip, I should add that there are occasions when it should be rejected. That does not collapse Parliament or the Government. It usually leads to the Government rushing back with an amending piece of secondary legislation which sorts out the problem. It does not half concentrate the attention. So, without wishing to upset my very good friend the Chief Whip, I do not think we should misquote the Companion in this respect. We should use our powers in the interests of the public with discretion, but periodically. Moved, That this House takes note of the reportof the Merits of Statutory Instruments Committeeon the Management of Secondary Legislation[29th Report, HL Paper 149, Session 2005-06].—(Lord Filkin.)