Public Bodies Bill [HL]

Debate between Baroness Thomas of Winchester and Lord Hunt of Kings Heath

Monday 4th April 2011 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, we come to a very important group of amendments that is concerned with the procedure-making processes in Parliament when it comes to an order. As we have already debated, it is very important, when a Minister seeks to make an order, that it enjoys stringent parliamentary scrutiny. We welcomed the Minister’s amendments to introduce greater scrutiny than was envisaged when the Bill was first drafted. There is no doubt that what he describes as extensive parliamentary scrutiny is an advance. However, I want to encourage him to go a little further.

The Minister will, of course, be aware of the advice that your Lordships’ House has received from the Delegated Powers and Regulatory Reform Committee, which reported to the House on four occasions. I refer noble Lords to the committee’s report of 7 March that reminded the House of the key differences between the noble Lord’s amendment that has been made to the Bill and my amendment. The report said that there are two key differences between the Government’s enhanced procedure and the provision in the Legislative and Regulatory Reform Act 2006 that introduced the super-affirmative procedure on which my amendment is based.

The committee said that under the 2006 Act,

“if a committee of either House recommends that no further proceedings be taken on a draft order, then any further proceedings are automatically stopped unless and until the recommendation is rejected by that House itself”.

The committee also reminded us in March that under the 2006 Act,

“a Minister wishing to proceed with an order unaltered after having been required to have regard to representations must lay a statement before Parliament giving details of any representations received”.

The committee pointed out that this matter would also enjoy enhanced scrutiny.

When we discussed this matter in Committee, at col. 1723, the noble Lord, Lord Taylor, essentially said that because Schedule 7 had been removed, the scope of the Bill had been significantly narrowed and a more restrictive scrutiny procedure was therefore required than that in the regulatory reform Act. I understand where the Minister is coming from, but I do not agree with his conclusions. Even with the safeguards that the Minister has introduced and the removal of Schedule 7, the Bill still gives considerable powers to Ministers. When one looks through the Bill, the powers to abolish, to make changes to the financial arrangements, and to change the governance arrangements are considerable. The use of the super-affirmative procedure is, therefore, entirely appropriate.

I know that the noble Lord’s department has said that it believes that the super-affirmative procedure that I propose would risk derailing the Government’s reform programme, but I want to make it absolutely clear that I support the regular review of these public bodies. I have never had any difficulty whatever with the principle of the Bill. No public body should believe that it is entitled to exist for all time. It is right that public bodies should be reviewed. I have no problem at all with that principle in the Bill. However, we come back to the point of ministerial powers. I remember being reminded, when I was sitting or standing where the noble Lord is sitting at the moment, that ministerial powers need to be fettered. Under the Bill, many organisations doing public work can be affected by the use of ministerial power. Parliament needs and deserves the most stringent scrutiny powers possible. The super-affirmative procedure is not new. It is used within the confines of the Legislative and Regulatory Reform Act.

The noble Lord says that if we were to pass such an amendment, it would have an impact on the other place and its procedures. My argument is: let us see. Let this House pass the amendment, agree to the super-affirmative order and see how the other place responds. We are not at the last point of this Bill’s journey through Parliament and it would not be unreasonable for noble Lords to express the view that orders under the Bill should be considered under the super-affirmative procedure. I beg to move.

[Baroness Thomas of Winchester]

My Lords, I hope that the noble Lord, Lord Hunt, will forgive me if I do not go down the path of discussing his amendment in detail, as I am the chair of the Delegated Powers and Regulatory Reform Committee. However, I will say that this group of amendments gives us the chance to discuss the wider issue of parliamentary scrutiny arrangements of orders made under the Bill.

The House should not try to pin down the Minister today on exactly how scrutiny under the Bill should be conducted, particularly as the other place has yet to consider the Bill. However, it is important to set out a few questions that should be asked at this stage. Under the Bill, every draft order has a 40-day period during which a committee of either House looks at it. This committee must report on the order within 30 days. Under the revised Bill, the committee can require an order to undergo a full, enhanced scrutiny procedure. At present, the Lords committee charged with looking at all orders coming before the House is the Merits of Statutory Instruments Committee, which has been spoken about a lot this afternoon. It may draw orders to the attention of the House either because they may be of interest or because they may imperfectly achieve the policy objective. The committee is already busy and meets nearly every week. The first question might be whether this is the right committee to look at orders made under the Bill, whether under the enhanced scrutiny procedure or not.

In the Delegated Powers Committee’s fifth, sixth and 11th reports, the enhanced scrutiny procedure on orders under the Bill was compared, as the noble Lord, Lord Hunt, said, to the super-affirmative procedure in the Legislative and Regulatory Reform Act 2006. As this is the nearest procedure to the one we are discussing, it may be worth restating that legislative reform orders come before the Delegated Powers Committee, but are significantly different in character from orders under the Bill. The two main differences are that the LRO procedure is not used for highly controversial matters, and that if a committee of either House recommends that no further proceedings are taken on a draft order, then proceedings are automatically stopped unless the House decides otherwise. The committee has looked at only 12 LROs since the 2006 Act.

However, the Bill is likely to generate a lot of work—and, at some point, an entirely new procedure. Therefore, it must be decided quite soon which committee should undertake the enhanced affirmative procedure if it is required. Although this will, of course, be a matter for the Procedure Committee and ultimately for the House, I believe it is worth thinking about now.

There are some fundamental questions to be asked about how a committee should carry out its work before either House decides on a suitable committee structure. Should it simply review the evidence taken during the consultation? Should it take evidence itself? That could be an expensive process. The only purpose in the Bill is, as we heard this afternoon, to improve the exercise of public functions, although it must have regard to the objectives of achieving increased efficiency, effectiveness and economy—the Minister’s triplet—and securing appropriate accountability to Ministers. Suppose the committee decides that the broad purpose of improving the exercise of public functions is not met, will the Minister think again? After all, he only has to have regard to a committee’s recommendations. Obviously the order will have to be passed by both Houses and there is always the possibility of it being voted down. That this House is reluctant to do this should not be taken for granted.

Turning very briefly to the procedure in the other place, the two Houses have different ways of looking at statutory instruments and different committee structures from each other. The only joint committee in this area is the Joint Committee on Statutory Instruments, which just looks at the vires of an instrument with the parent Act. Although a superficially attractive idea, a joint committee is very difficult to establish. I understand that this is too early for any hard-and-fast decisions on how orders made under this Bill are to be scrutinised by Parliament, but it is not too early for Parliament to be thinking hard about the implications of the proper scrutiny of the delegated powers in this Bill.

Public Bodies Bill [HL]

Debate between Baroness Thomas of Winchester and Lord Hunt of Kings Heath

Tuesday 23rd November 2010 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, we are very much making progress as we reach Amendment 3B at quarter to nine tonight. This is an important amendment, and with it I speak to my Amendments 120, 124 and 125.

In view of all our discussions I think that noble Lords will agree that, when it comes to a Minister deciding to bring an order before Parliament, the information made available to Parliament and the parliamentary scrutiny procedure assume great importance. My Amendment 124 seeks to ensure that sufficient information is provided to Parliament. In it, I propose five new subsections that would ensure that Parliament would be able to have a sufficient explanation, an explanation of the consultation, information about representations, and the kind of information that is important when it comes to dealing with an order. Perhaps more importantly, my Amendment 125 seeks to put in place an appropriate parliamentary procedure for scrutiny. My amendment is broadly based on the Legislative and Regulatory Reform Act 2006 and what is described as a super-affirmative procedure in it. I do not want to repeat what has been said before but that Act is highly relevant to our discussions on this Bill, because it gives extensive powers to Ministers to remove or reduce burdens resulting from legislation, including primary legislation.

I agree with the report of the Delegated Powers Committee when it said that,

“the insertion of a super-affirmative procedure cannot bring a misconceived delegated power within the bounds of acceptability”.

It went on to say:

“A single stage of consultation is clearly no substitute for the detailed scrutiny afforded by the use of a bill (the process by which the functions of many of the bodies listed in this Bill were debated and decided)”.

If we were to continue with the use of this Bill, the committee suggests that,

“the government, not Parliament, would retain the sole ability to make amendments to orders”,

although my noble friend Lord Dubs has tabled an amendment that seeks to create a procedure whereby orders can be amended. I agree with the committee that, if the legislation is rotten to its core, the insertion of a super-affirmative procedure cannot bring it,

“within the bounds of acceptability”.

However, we are trying to solve the conundrum of ensuring that these bodies are reviewed on a regular basis, which we all want. The noble Lord, Lord Renton, talked earlier about the need for a process whereby there can be minor changes; again, that seems eminently sensible. A super-affirmative procedure may be one way in which one can make the Bill more acceptable and certainly give more effective parliamentary scrutiny.

The LRR Act allows for a more extensive parliamentary scrutiny process. Section 12 sets out procedural requirements for making orders. The Minister has to consult on the order, and then lay a draft order and explanatory document before Parliament. The order’s procedure can be a choice of negative, affirmative or super-affirmative. Essentially, the Minister has to recommend, in an explanatory document accompanying the draft order, which parliamentary procedure should apply and his or her reasoning for that. The level of scrutiny recommended should depend on the views of the Minister on the complexity and impact of the order. That may be informed by representations on the proposals received during the consultation process, and the Minister’s recommendation on whether a procedure should be negative, affirmative or super-affirmative shall apply, unless either House of Parliament requires a more onerous procedure.

The key importance of the LRR Act is in the nature of the super-affirmative procedure, because that Act provides for a committee of either House, charged with reporting on the draft order, to recommend that no further proceedings be taken in relation to the draft order, unless that recommendation is rejected by a resolution of the House. It is sometimes known as the veto procedure, although it is clearly not an absolute veto. None the less, it is a pretty powerful mechanism for scrutinising such orders. I should have thought that any Government who were faced with a view of a committee charged with considering the order that it should not go ahead would have to think very seriously about whether they wished to go forward with that order.

My amendment builds on the super-affirmative procedure and gives a number of options for a committee of either House to recommend to either House that the order be approved in its current form, or that it be amended, or that no further proceedings should be taken in relation to the draft order, or that it is more appropriate that it be progressed through primary legislation. My amendment specifies that unless the recommendation is that the order be approved, it cannot be progressed unless the recommendation is rejected by a resolution of the House. If the recommendation is that the order be amended, it may not proceed unless the recommendation is rejected or the House approves the order, as revised by the committee.

I have sought to build on the super-affirmative procedure and include some more flexibility in it. This is one of the key planks to reaching a consensual agreement on the Bill in your Lordships' House. I know that the noble Lord, Lord Taylor, is bringing some amendments, but they do not go as far as mine. It would be well worth thinking about whether a kind of super-affirmative procedure—if not with my amendment, then, I am sure, in a later amendment—can be provided for. However, the key principle here is that a Select Committee of either House should be able to take an order away, and if that committee decides that it is not appropriate for the order to go forward and that primary legislation might be more appropriate, although it is not an absolute veto, a measure such as this would provide great reassurance to your Lordships’ House.

[Baroness Thomas of Winchester]

My Lords, I am taking the highly unusual step of intervening briefly at this stage as chair of the Delegated Powers and Regulatory Reform Committee. Our latest report on the government amendments, because of the lateness of their tabling, was placed in the Printed Paper Office only this morning. I am grateful to the staff for preparing the document so quickly after our second meeting on the Bill yesterday.

If ever the committee was set up for a Bill, this was the Bill because of its skeletal nature. In our report, our view—as has been stated many times today—was unequivocal: the powers contained in Clauses 1 to 5 and 11 are not appropriate delegations of legislative power, as they would give Ministers of this and future Governments unacceptable discretion to rewrite the statute book, with inadequate parliamentary scrutiny of, and control over, the process. The committee's original report was careful not to recommend any particular course of action for the Government to take to amend the Bill to strengthen parliamentary control—contrary to what the Minister said in his letter to us. However, we set out a range of options, which were to be seen not necessarily as alternatives, as we believed that one or more might prove necessary. One option was for a form of the super-affirmative procedure that has already been enshrined—as we have also heard many times today—in the Legislative and Regulatory Reform Act 2006. The Government have now tabled a form of this procedure. My purpose in speaking now is to address their amendments.

In our report published this morning, we welcomed the government amendments as a step in the right direction, because they enhance parliamentary scrutiny. However, they do not address the fundamental problem that, in the committee's view, the delegated powers in the Bill—the purposes of which are not specified or limited—are not appropriate delegations of legislative power. In other words, although Ministers of this or any future Government must “have regard” to certain matters, they are not constrained by any legislative provisions. This makes the super-affirmative procedure in these amendments very different from the procedure in the Legislative and Regulatory Reform Act 2006—as other noble Lords pointed out in the earlier debate. In that Act, parliamentary scrutiny is much more effective. For example, if a committee of either House recommends that no further proceedings should be taken on a draft order, any such proceedings are automatically stopped—as the noble Lord, Lord Hunt of Kings Heath, said—until and unless the recommendations are rejected by the House itself in a procedure commonly called the veto. In the super-affirmative procedure of Amendment 118, which the Government are proposing, the Minister need only have regard to any resolution of either House—a very different matter.

I will not list all the differences between the procedures in the 2006 Act and those in the Bill, as they are set out in our sixth report. Of course, there are differences in the two procedures for orders in the Bill, in Clauses 1 to 6 and in Clause 11. I will give one example to illustrate why there could be a problem with the second lot of procedures. Under Clause 11, the Minister may wish to make an order containing proposals for several bodies to be transferred from Schedule 7 to Schedule 1. During consultation, many representations may be made about one body. The Minister may be urged to amend the draft order, but to do so he must go through the whole 30, 40 or 60-day procedure again. This is unlike the procedure for earlier clauses. Rather than holding up the fate of the other bodies in the order for another two or three months, he may decide that, although he has had regard to all the contributions that he has heard, considerations of time override all representations and so he may decide to make the original order after all. It is clear from the Minister's letter to the committee that time is the crucial factor in the way that the Bill has been drafted. I understand that, having announced that there is to be a bonfire of the quangos, the Government want to light the bonfire as soon as possible. However, it is the duty of the committee of which I am chair to make sure that the match is not lit before Parliament has more effective control over the whole process.