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Legal Services Bill [HL]

I am pleased that my noble friend Lord Kingsland has raised the question of cost. As we plough through the regulatory impact assessment, we of course become aware that: "““The estimate assumes that the underlying nature and volume of regulatory activities under the new LSB will not be substantially different from those performed under the current regulatory framework””." That is the basis on which the new regulatory framework is proceeding. Sir David Clementi said several times that this is not the FSA, but a new regulator—the Legal Services Board—with a clearly defined supervisory function. In our Select Committee report we questioned the costing, particularly in the light of some of the evidence we received. The Bar Council, for example, argued that the assumption in the RIA was, "““incompatible with the way the Bill is drafted, and would not be sustainable even if there were a genuinely light touch regulator””." The then President of the Law Society told us that: "““Our perception is that the costings are actually based on the light touch model that Sir David Clementi and the Lord Chancellor have in mind, which we do not think is in the Bill””." Other witnesses were concerned that the Legal Services Board might move away from the light touch model over time. PricewaterhouseCoopers’s conclusions about the costs of the Bill are explicitly based on the assumption that the LSB will operate at a level of activity not substantially different from that performed under the current framework. If one compares the RIA with the Bill, there are clear differences, and I suppose what my noble friend is doing so cleverly in this amendment is stressing that the role of the board is to ensure that the approved regulators act in a way which is compatible with the regulatory objectives—a clear supervisory approach over the front-line regulators. If this amendment were put in the Bill, how much more sensible would be the relationship between the RIA and the Bill itself? That lies at the heart of the concerns so clearly expressed by my noble friends Lord Kingsland and Lord Campbell of Alloway, and that is why I agree with what they have said.