Public Bodies Bill [HL]

Baroness Thomas of Winchester Excerpts

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.

[Lord Phillips of Sudbury]

My Lords, my Amendment 69AA is the second amendment in this group. I think that there has been some inadvertent misgrouping in this complicated Bill and I suspect that this amendment would have appeared more happily in the first group of amendments, alongside government Amendment 69A. However, with your Lordships’ indulgence, and since I have no intention of putting this to the vote, I will proceed to seek to persuade the House that this small amendment would serve a large purpose.

In the first group of amendments, the Minister laid great stress on the fact that no order can be made unless there is an Explanatory Memorandum produced so that Parliament can judge what is going on with regard to the order. Earlier today, the Government got through this House with approbation Amendment 60A, which changes Clause 8 and introduces various specific qualities that must be met by any order before it can be enacted: effectiveness, efficiency, economy and securing appropriate accountability to Ministers. Those are quite expressly, by the provisions of Clause 11, to be included in the Explanatory Memorandum. Not included in the Explanatory Memorandum, but a fundamentally important aspect of the protections in this Bill, are the provisions of Clause 16(3). I will read it because it is quite short. It simply says:

“Provision made by an order under the preceding provisions of this Act must be proportionate to the reasons for the order”.

I do not think that anybody sitting here tonight will need convincing that proportionality is one of the most important pillars on which good legislation is built, but there is no reference to proportionality in the provisions of the Bill dealing with the Explanatory Memorandum.

That is still the case after the amendments have been read into Clause 11. Clause 11 as amended requires the explanatory document to introduce and give reasons for the order. The first of those in the earlier government amendment is that,

“the order serves the purpose in section 8(1)”.

There is no reference to Clause 16(3). In simple terms—I do not think that this is contentious; indeed, it seems to me to be an improvement in the Bill, whichever way one looks at it—I want a requirement that the Explanatory Memorandum must also include the Minister’s justifications in terms of proportionality for introducing the order, so that that can be considered along with efficiency, effectiveness, economy and accountability. Whichever way that plays out in the Bill as it will emerge tonight, I hope that my noble friend will accept the amendment in principle so that it can be brought back at Third Reading in the proper place.