Public Bodies Bill [HL]

Lord Taylor of Holbeach Excerpts

Tuesday 23rd November 2010 Lords Chamber

[Lord Clark of Windermere]

My Lords, I wish to follow the noble Lord, Lord Norton, because his point about the role of Parliament is absolutely critical. In a sense, we heard the legal expert, the former Law Lord, discussing earlier today in a learned way the basic thrust of what the noble Lord, Lord Norton, and I are saying. Ultimately, we are talking about the power of the legislature and the power of the Executive, and it is very important that we pursue the lines set out by the noble Lord, Lord Norton, and the noble Baroness, Lady Thomas, who explained the matter expertly and lucidly.

I very much welcome government Amendments 173 and 174 because they elaborate and outline in much more detail the orders which follow Clauses 17 and 18, which specifically relate to the forestry commissioners—the individuals. Of course, under these powers the Bill says that the constitutional arrangements of the commissioners can be changed by ministerial edict. That raises an important point because I think we will find that at least one of the commissioners is appointed by Her Majesty. It is interesting to see whether Ministers can take this power simply by an order. I put that in a positive way for Ministers to have a look at.

I am also interested in Amendment 174 because, as I understand it, it inserts a new clause after Clause 18. I seek information from the Minister: does this mean that Clause 19 becomes redundant? Does the second part of government Amendment 174 become the new Clause 19? That appears to be the case, but I would welcome guidance on that. I shall not detain the House any longer.

[Lord Taylor of Holbeach]

My Lords, this group of amendments concerns the central question of parliamentary scrutiny and procedure in relation to the order-making powers in the Bill. This group includes government Amendments 118, 126, 130, 173, 174 and 179. Perhaps I can reassure the noble Lord, Lord Clark of Windermere, that that is exactly what happens. It institutes a parallel framework for those sections of the Bill dealing with the Forestry Commission. The numerical sequence is exactly as he described. Amendment 122, in the name of my noble friend Lord Lester, and Amendments 3B, 120, 124, and 125 in the names of the noble Baroness, Lady Royall, and the noble Lord, Lord Hunt, are also in this group. In this debate, I will discuss in particular government Amendment 118, which relates to orders made under the powers in Clauses 1 to 6. Amendment 130 replicates this amendment in relation to orders made under Clause 11, and Amendments 173 and 174 make a similar provision in relation to the forestry provisions in the Bill.

We also intend to create similar provisions in relation to the powers conferred on Welsh Ministers by Clause 13, and are in discussions with the Welsh Assembly Government about how best to achieve this. As part of this process, I give notice of my intention to oppose the Question that Clauses 10, 12 and 19 stand part, as they are now replaced by the government amendments.

Government Amendment 126 specifies that an order made under Clause 11 may not be included in the same instrument as another order made under the Bill. Government Amendment 179 is a consequential amendment to Clause 28, which defines references to various periods of scrutiny used in earlier government amendments.

In the previous group, I noted the high level of consensus which had emerged regarding the requirement to consult in relation to the powers in this Bill. Similarly, there is much consensus around the idea that Ministers should ensure that Parliament is properly informed about the content and background of orders, through the laying of a draft order accompanied by an explanatory document, detailing the reasoning for the order and including the results of the external consultation which preceded it. In addition, government Amendment 118 requires this document explicitly to address how the matters in Clause 8 had been addressed.

I note that Amendment 124, which is tabled in the names of the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Royall of Blaisdon, specifies that the explanatory document should include a regulatory impact assessment, and I appreciate the intent behind this addition. The use of impact assessments is set out by the Better Regulation Executive in the Department for Business, Innovation and Skills. Departments are required to assess any policy of a regulatory nature that would affect the private sector, the third sector or public services against the impact assessment framework and are required to publish that assessment when the proposal enters Parliament. On this basis, I do not believe it is necessary to repeat this requirement in the Bill. Similarly, I do not believe it to be appropriate to set out in statute that Ministers should provide other information which they consider will be of assistance to Parliament given the difficulties in definition and the potential breadth of information that that would involve. However, these reservations notwithstanding, I hope that the noble Lords opposite will recognise the shared intent behind our amendments in this area and feel able to support the government amendments in question.

I now turn to the question of parliamentary procedure for orders made under this Bill as discussed, in particular, in Amendment 125 and in government Amendments 118, 130 and 174. At Second Reading, I made a commitment to noble Lords that the Government would produce a parliamentary procedure that will ensure enhanced parliamentary scrutiny. The government amendments I have tabled meet this commitment by giving Parliament the opportunity, within 30 days of the laying of a draft order, to require that an enhanced procedure is required for approval of the order. Parliament will make that decision. This enhanced procedure would require a 60-day period of consideration, rather than the standard 40 days for the affirmative procedure, and for the Minister to have regard to any representations, resolution or recommendation from Parliament in relation to the draft order before seeking approval by a resolution of both Houses. This procedure would give both Houses of Parliament an extended opportunity to scrutinise and comment on these orders, and I hope it provides the reassurance the House is seeking.

Amendment 125, which is tabled in the names of the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness, Lady Royall of Blaisdon, would introduce a new parliamentary procedure for these orders, going beyond the extensive super-affirmative procedure described in the Legislative and Regulatory Reform Act 2006 by giving a Committee of either House the opportunity not only to reject an order, but to amend it or to recommend that the proposals be taken forward only through primary legislation. I recognise the sentiment from which this amendment springs, but I cannot support it for a number of reasons.

First, it is my belief that the parliamentary procedure it proposes fundamentally changes the role of Parliament, and of this House in particular, in dealing with secondary legislation. This may be something that many noble Lords would welcome, but it is surely not a debate which should be resolved within the confines of deliberation on the Public Bodies Bill. In this regard, I wish to draw the House’s attention to the initial report on the Bill by the Delegated Powers Committee published on 12 November. The report described the suggestion that orders might be amended as “virtually unprecedented” and highlighted the difficulties inherent in seeking to produce a workable procedure of this nature, particularly in the event that the two Houses disagreed on the content of an order.

Secondly, a comparison to the Legislative and Regulatory Reform Act 2006 is telling. The order-making powers in that Act are far broader in scope than those in this Bill, which are restricted not only to a particular branch of statute—that relating to public bodies—but also to the specific bodies defined in each schedule. Perhaps I may say that I am very grateful for the intervention of the chairman of the Delegated Powers Committee, my noble friend Lady Thomas of Winchester, and for her contribution to this debate. It has been useful to have direct input from that committee—hot off the press, one might say—and it reinforces the importance of our debate about this procedure. I am also grateful for the acknowledgement that the Government have sought to address the Delegated Powers Committee’s concerns. The DPC’s second report suggests that the inclusion of the super-affirmative procedure in the 2006 Act, and the degree to which Section 2 of that Act is comparable to this Bill, provides a justification for the more restrictive parliamentary procedure. However, given that the super-affirmative procedure provision in the 2006 Act are designed to apply in general to the much wider powers in that Act, I maintain that this would not be a proportionate procedure for the Public Bodies Bill.

To suggest that this Bill requires a more restrictive scrutiny procedure than the Legislative and Regulatory Reform Act therefore seems to me to be a somewhat disproportionate response, particularly in the light of the additional safeguards that we have sought to introduce. However, I acknowledge the differing position of the Delegated Powers Committee in this regard. I have listened carefully to the contributions made by the noble Lord, Lord Adonis, and my noble friend Lord Norton of Louth, which rather backed up the arguments presented by the committee. I acknowledge the differing position of the Delegated Powers Committee in this regard and will consider this matter further.

The question of disproportionality is none the less raised again by the fact that, under Amendment 125, the proposed procedure would apply to each and every order made under this Bill. As was stated repeatedly at Second Reading, and has continued to be stated to me by many noble Lords since, there is broad agreement for many of the reforms in this Bill. The application of the procedure proposed by the Opposition, particularly in such an inflexible manner, would constitute an excessive hindrance on the reform programme of the Government, as well as requiring significant parliamentary time. Our approach, however, gives Parliament the flexibility to select an enhanced procedure, while maintaining for government the reasonable ability to act to implement its programme.

I finally wish to address the question of this House’s ability to veto statutory instruments made by affirmative procedure. By convention, we do not vote such instruments down, and I know that this is a source of concern from noble Lords who believe that this Bill excludes them from the decision-making process. I can assure the House that this is not the case. The enhanced procedure we have proposed, in conjunction with the additional safeguards and the requirement for consultation, would significantly strengthen the scrutiny of orders under this Bill both inside and outside Parliament. In addition, I would make this point: no body can be subject to the powers under this Bill unless Parliament gives its approval to its inclusion in the schedules.

Many noble Lords have already taken the opportunity, by amendment, to exercise their right to debate the inclusion of particular bodies, and the Government will be held to account in this fashion. Similarly, any new body created following the passage, subject to the will of Parliament, of the Bill could itself only be added to the schedules via primary legislation. The Government are taking the opportunity, in primary legislation, to seek approval from Parliament to make a specific set of bodies subject to a specific set of powers. I believe that the approach we have proposed through the government amendments in the group is both sensible and proportionate, striking a balance between Parliament’s ability to scrutinise and the Executive’s ability to take forward its programme for government. In the light of these comments and in the context of my previously stated commitment to further consider the comments of the Delegated Powers and Scrutiny Committee on matters of procedure, I would ask the noble Lord to consider withdrawing his amendment.

[Lord Adonis]

The Committee will be extremely grateful to the noble Lord for indicating that he will consider this matter further and we applaud the degree of consultation that he is affording noble Lords. However, when he says that Clauses 1 to 6 confer specific powers on Ministers in respect of specific bodies, while he is clearly right in respect of the specific bodies because they are listed in the schedules, it is very debatable whether the powers are specific. For example, in Clause 3 the power is “to modify constitutional arrangements”. It states:

“A Minister may by order modify the constitutional arrangements of a body or office specified in Schedule 3”.

The clause is not at all specific as to what powers the Government will seek to take. That, it seems to me, is the whole point at stake in this debate. The powers given in Clauses 1 to 6 are extremely wide-ranging; they are not specific. If they were specific, your Lordships would be able to debate them and seek to amend them. So it is precisely for that reason that the fifth report of the Delegated Powers and Regulatory Reform Committee states in its opening paragraph:

“The Committee considers that the powers contained in clauses 1 to 5 and 11 as they are currently drafted are not appropriate delegations of legislative power. They would grant to Ministers unacceptable discretion to rewrite the statute book, with inadequate parliamentary scrutiny of, and control over, the process”.

That seems to justify entirely the further look at these wide-ranging powers that the noble Lord has promised us, as well as at the case which has been made by many noble Lords for an exceptional parliamentary procedure to deal with an exceptional delegation of power, which this Bill proposes to give to Ministers.

[Lord Taylor of Holbeach]

Perhaps I may respond to the noble Lord. I am grateful to him for making the point, which is perfectly valid. It is true that the powers are general in their scope within the context of a constitutional arrangement. It may well be that it will concern changes in governance and so on of a body, or its representation in the case of a body listed in Schedule 3—that is, how the governing bodies are appointed. There could be a number of different aspects. I agree that they will differ and, by necessity, that is why this has been put in the most general of terms.

We would argue that we are indeed trying to construct a special form of scrutiny for the orders that will be tabled under this Bill, and that is what our amendments seek to address. I have accepted that the comments of the Delegated Powers and Regulatory Reform Committee published this morning mean that we need to look at this again because we want to try to do this within the context of parliamentary accountability. That is the purpose of seeking to reconsider this matter. I think that I have set out the arguments for why we are where we are and what we are seeking to do with our enhanced procedure for parliamentary scrutiny. However, it is important that whatever we determine here has to be compatible with the procedures of the other House because we would not want ping-pong on statutory instruments. That would be pretty difficult, so we need a process which is capable of operating across Parliament. That is an important consideration of which we are mindful.

[Lord Hunt of Kings Heath]

My Lords, I join with other noble Lords in thanking the noble Lord, Lord Taylor, for his response and for his willingness to have a look at this in the light of our debate. That is very encouraging. I am also grateful to him for the government amendments he has just spoken to, which are an advance on what is currently in the Bill. Again, that is encouraging.

However, the giveaway line in the government amendments is where it is stated that if within 30 days either House decides the order requires further scrutiny, the order cannot be proceeded with until a period of 60 days has elapsed. During that time the Minister “must have regard to” any representations—which, in the end, means that the Minister can disregard as much as he regards. The problem we have is that the government amendments do not go anywhere near the scale of scrutiny we believe is required or as the noble Baroness, Lady Thomas of Winchester, clearly expressed. Crucially, they do not contain the veto option which exists in the Legislative and Regulatory Reform Act 2006, as my noble friend Lord Adonis made clear, and it is that option that immeasurably strengthens parliamentary authority.

I know that the noble Lord, Lord Taylor, said in his letter to the Delegated Powers and Regulatory Reform Committee that he believes there is a difference between this Bill and the LRR Act because of what he describes as the more restrictive matter of the Public Bodies Bill. However, as he knows, the Delegated Powers and Regulatory Reform Committee has analysed this and believes that the 2006 Act is narrower in at least two respects when compared with the powers contained in the Bill. In his further discussions the Minister might wish to reflect on his and the Select Committee’s views on that.

The Minister also said that my amendment would change the role of Parliament and he prays in aid the first report of the Delegated Powers and Regulatory Reform Committee published on 12 November. The Select Committee is well able to respond to that but I believe it is a misinterpretation of what the Select Committee report is saying. My reading of it is that after expressing concern about the lack of scrutiny, the Select Committee puts forward a number of ideas for how Parliament might enhance that scrutiny, one of which is the super-affirmative procedure; another is a procedure which would allow Parliament to amend proposed orders under the Bill; and another is a sunset clause. The noble Lord is guilty of putting together the super-affirmative suggestion and the procedure to allow amendments and to pray them in aid in saying that my amendment falls because it would allow for amendments. I am not aware of any wording in my amendment which states that the House can amend the orders. I have built on the super-affirmative procedure contained in the Legislative and Regulatory Reform Act. That is why I do not think I am guilty of advancing the powers of Parliament in the way the Minister suggests.

The noble Lord raised the important question of the powers of this House in relation to secondary legislation. He said that, by convention, this House does not vote down statutory instruments. I dispute that interpretation. I refer him to paragraph 10.02 of the Companion which states clearly:

“The House of Lords has only occasionally rejected delegated legislation”.

It then goes on to say:

“The House has resolved ‘That this House affirms its unfettered freedom to vote on any subordinate legislation submitted for its consideration’”.

The Minister may be aware that there has been an interesting discussion between the noble Lord, Lord Strathclyde, the Leader of the House, and the Select Committee on the Merits of Statutory Instruments on this very matter.

The question is the extent to which the Leader now accepts the recommendations of the Joint Committee on Conventions chaired by my noble friend Lord Cunningham, which were accepted by your Lordships' House after debate. That committee’s report made it very clear that there were circumstances in which it was perfectly proper for this House to seek to defeat secondary legislation; for example, in relation to a skeletal Bill. I am convinced that it is perfectly proper for this House to seek to defeat any order under this Bill as it is now written.

[Lord Taylor of Holbeach]

Perhaps I may take the noble Lord back to that section of my speech which addressed this issue. I was merely making a point of observation. I think that the only statutory instrument to have been voted down in my time in this House was the casinos order. I think that it is reasonable to say that we do not do it. Whether we should is a different issue altogether. My point was that many noble Lords might welcome a debate about that, but it is surely not a question that should be resolved within the confines of deliberation on the Public Bodies Bill. The right place is in the sort of discussions to which the noble Lord referred; it is not this Bill.

[Lord Norton of Louth]

My Lords, I do not want to digress too much into academic discussion on conventions, but the fact that we have not done it does not necessarily make it a convention. For many years, MPs did not defeat the Government in the House of Commons, but it was not a convention that MPs did not vote against the Government. Just because we have not gone through with doing this—I have never accepted that there has been a convention—it does not mean that this House is not perfectly free if it wishes to reject secondary legislation. It is not, as is sometimes claimed, a nuclear option; it is a popgun option. It is perfectly open for the Government to come back with a fresh order, so I see no reason why we should not exercise our due powers.

[Lord Hunt of Kings Heath]

My Lords, that is a very helpful intervention. The Minister said “by convention”. I am afraid that I interpret that to mean that it is a convention of this House that we do not vote down statutory instruments, which I must refute.

[Lord Taylor of Holbeach]

I think that I might change my wording to “custom”.

[Lord Greaves]

Perhaps the noble Lord, Lord Hunt, might consider that the relevant statistic is the number of occasions on which the House divides on such instruments rather than the number of occasions on which the Division results in their being voted down. It is clear that the House divides on instruments rather more often than it votes them down, largely as a result of this Liberal Democrat group putting matters to the vote in the previous Parliament. The number of such Divisions is not huge, but there has been a handful of them in my recollection rather than none at all. If the House accepts that it can divide, it must accept that it is capable of voting instruments down.

--- Later in debate ---

[Lord Liddle]

My Lords, I support this amendment and I agree very much with the comments of the noble Lords, Lord Greaves and Lord Maclennan. Amendment 180 is much needed if we are to have a rational and sensible process for deciding how we deal with public bodies. I return to the example of economic development. This is a classic case of a decision to abolish a body being taken without anyone thinking about what to do with its functions, what the costs and economic disbenefits are likely to be, and what will happen to the liabilities and assets.

The fact is that none of these questions was answered before the Government announced this decision. They are trying to make it up as they go along. That is not satisfactory. I know about this because of my interest as chair of Cumbria Vision. It is a very sad thing to see because the rhetoric is all about localism and setting up local economic partnerships that are supposed to be more local than the regional development agencies but the Government are devolving very few, if any, functions to the local economic partnerships. What is actually happening is that most of the things that were done in the regions are being centralised into government departments. Is that really sensible public policy-making? Should not the Government have been subject to the discipline embodied in this amendment in terms of explaining clearly what they were doing when they announced this decision?

As regards expected costs and their impact, I put down a Written Question to the noble Baroness, Lady Wilcox, in which I asked for information on costs, how many people were likely to lose their job and what the impact on this, that and the other would be. I received the Answer that no such information was available or was being sought, or something like that. That is not a satisfactory due process. The Government must do better than that as regards other bodies. That is why these amendments being put forward from this side of the House are so important. I hope that they will draw support from all sides of the House.

[Lord Taylor of Holbeach]

My Lords, Amendments 4 and 180 in the names of the noble Lord, Lord Hunt, and the noble Baroness, Lady Royall, which were introduced by the noble Lord, Lord Rosser, seek to introduce a requirement for the Secretary of State to make a statement to Parliament setting out how the functions of all the bodies listed in Schedules 1 to 6 would be carried out in the future, and the expected costs and liabilities associated with the proposed changes to bodies listed in those schedules. This statement could then be followed, after one month, with a statutory instrument that would commence the Act.

It is right and proper that, before approving a specific change to a particular body or office, the House should have access to appropriate information on that change, including information relating to functions and costs. I support the spirit in which I believe this amendment is tabled. However, I do not believe that it is required. As has been discussed at length in earlier debates today, it is a shared intention of the Committee that, when laying a draft order under the powers in the Bill, Ministers will publish an explanatory document setting out the reasons for making the order. Indeed, one glance at government Amendment 118 makes clear the detail that will be required to accompany a draft order. Orders at this stage will also have gone through the impact assessment process, and this impact assessment will be published at the time the order enters Parliament, in line with existing practice. I am therefore confident that existing requirements will ensure that Parliament is fully informed on the content and implications of orders before being asked to approve them.

I do not believe it to be appropriate to amend the Bill in this fashion; I believe that it would add limited value to the process and would, in so doing, risk an unnecessary delay to the reform programme that the Bill seeks to enable. Therefore, while I appreciate the intention of the amendment, I hope that the noble Lord will feel able to withdraw it.

[Lord Maclennan of Rogart]

I wonder whether my noble friend would consider the possibility, if not of accepting the amendment in this form, of some expansion of Amendment 118, to which he specifically referred, to enable the matters under discussion to be considered as part of the explanatory documents. Explanatory documents have always varied in quality and content, and it makes sense that these specific pieces of information should be given and that there is a standard for performance in respect to that.

[Lord Taylor of Holbeach]

As noble Lords will know, an amendment follows on from this that concerns functions—not this evening, I hasten to add; this is just a trailer for Monday—so we will look at another amendment that reinforces the message of this amendment and the intervention by my noble friend Lord Maclennan.

We do not intend to hide anything but there is a difference between presenting a statement covering the whole Bill before the Bill is implemented, and explanatory documents giving full information each time a statutory instrument is laid. The Government take the view that that is the focus that Parliament requires, and that to seek to provide a comprehensive review of all reforms in the Bill before it can be enacted would be an unnecessary delay, and not necessarily a particularly precise operation. That is why I suggested to the noble Lord, Lord Rosser, that he withdraw his amendment.

[Lord Rosser]

My Lords, I thank the Minister for his response, and other noble Lords who have participated in this brief debate. During it, reference was made to difficulties in obtaining the kind of information sought under the terms of the amendment. Yet that is presumably information that the Government have already, or how were decisions made on which bodies it would be advantageous to place in Schedules 1 to 6 if some decisions had not already been made as to whether their functions needed to be continued in future, or whether their functions could be placed better elsewhere and what the costs would be? There is some difficulty in accepting that the Government do not already have the information sought in the amendment.

One argument that the Minister just put forward was that there would be delay to the programme, but surely that should not be the primary consideration. The primary consideration should be providing the information necessary for this House to make decisions on what the Government intend to do, to scrutinise those actions and to query them. In the light of what the Minister said, it is clear that his motive is not to provide this House with sufficient information in good time to make reasoned judgments; his only consideration appears to be to get through his programme as quickly as possible. An open, transparent and accountable Government need to declare their hand, thinking and reasoning before the Bill comes into force, to ensure proper time for debate based on considered statements by the Government setting out which functions of which bodies will go, which functions will be transferred and to whom, how they will be carried out in future and the costs involved.

I am sorry that the Minister has not been prepared to go further. As I said, I believe that the Government already have much of this information, and the concern is that when the information is provided it will not be in sufficient time for proper debate and consideration before the Government seek to push the order through Parliament. I am disappointed with the Minister’s reply. He could have gone further; he has been urged to. I hope that he will reflect on the matter; I certainly will. In the mean time, I beg leave to withdraw my amendment.