Public Bodies Bill [HL]

Lord Phillips of Sudbury Excerpts

Monday 4th April 2011 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I shall speak to Amendment 60B. I cannot resist following up the compliments of the noble Baroness, Lady Hayter, and the noble Lord, Lord Soley, but when I recall that my noble friend Lord Taylor comes from Holbeach, he is now known for ever in my mind as the “Lincolnshire poacher” because he is the man who took the wretched Schedule 7 right out of the Bill. I thank him for that.

My amendment is designed to try to make the addition to the Bill proposed by the noble Lord, Lord Taylor, a little more manageable for the user, if I can put it that way—and I am not thinking of the judges. My noble friend anticipated what I might say by giving the example of two pensions bodies for which he felt the proposal might be efficient but not economical. He studiously avoided referring to the other epithet to be found in his amendment: “effectiveness”. My claim is that “effectiveness” covers precisely the point that he is seeking to maintain.

I am concerned about the duplication created by the words “efficiency” and “economy”. Indeed, I looked up all three words in the dictionary, and “efficiency” is part of the meaning of “effectiveness”. Given that the law of the land is that Parliament does nothing in vain, I wonder whether we are not creating a problem in the repetitive nature of “efficiency, effectiveness and economy”. Instead of eliminating “efficiency”, I suppose I could have eliminated “economy”, but I feel strongly that this is a bit like saying of the Minister that he is strong and powerful and effective. Someone reading those attributes might say, “Well, it is the sheer muscle power that must rule the roost in that description of his virtues”. What concerns me a little is that the same sort of approach may be taken not by a court but by a Minister himself or herself: namely, that efficiency and economy are the overriding requirements. In fact, I believe that effectiveness is always the most important virtue of the three. Effectiveness surely goes to the achievement of the purposes to which the effectiveness relates. You can be as economical and efficient as you like, but effectiveness is key.

I shall not labour the point, but I would like the Minister to consider what I have said about the example that he gave and, if he can—here I challenge him—to come up with an instance in which the elimination at Third Reading of the word “efficiency” or, if he prefers, “economy”, would in any way encumber a Minister in what he or she has to do under this very important clause. I beg to move.

[The Lord Speaker (Baroness Hayman)]

It might be of assistance to the House if the noble Lord would choose whether to move his amendment at the appropriate point. At the moment we are still considering Amendment 60AA, moved by the noble Baroness, Lady Hayter, as an amendment to Amendment 60A.

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[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.

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[Lord Neill of Bladen]

My Lords, the noble Lord, Lord Adonis, expressed the view that there should be an opportunity for parliamentary review when the Minister has decided that the situation is one in which he wants to make an order. Imagine the situation; there has already been consultation with whoever are the proper people to be consulted and, in the light of that, the Minister has concluded that it would be appropriate to make an order. What we are contemplating now, under Amendment 69, is the fact that under the Bill the Minister has time to consider whether he will tell Parliament what he wishes to do, complying with the obligation of setting out an explanation of what he is up to and what the evidence tells him, or whether he will just not tell the Houses what his intentions are, if this is going to be embarrassing or if he does not have the time. That is a discretion that ought not to be conferred. If the consultation has led the Minister to a particular conclusion and he is about to make an order, it is entirely appropriate that we, as Parliament, retain the power to look at his reasons and form our own view about the matter.

[Lord Phillips of Sudbury]

Is the noble Lord suggesting that Clause 11(2), which requires an explanatory document to be produced to Parliament before the order is laid for consideration, is different from what he is suggesting?

[Lord Neill of Bladen]

No, my Lords. The word “must” is already in Clause 11(2), and attention has been drawn to that fact. There is no “must” in line 3 on that page, which is where there ought to be a requirement. That is what the amendment is dealing with.

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[Lord Mackay of Clashfern]

My Lords, the point that is covered by “may” rather than “must” is that, in the light of the consultation, even if the Minister wants to make an order, he may well think it is right to do something else first; for example, have further consultations and make modified proposals before he proceeds with the order. That is why, in this context, the word “may” is often used when many of us might have thought it was going to happen anyway. That is the reason and I believe it is a good reason.

[Lord Phillips of Sudbury]

My Lords, I hate to disagree with a noble and learned friend and former Lord Chancellor, but I have to disagree with the noble and learned Lord, Lord Mackay. It is quite clear that this is posited on the basis that, having had the consultation, having considered all things, the Minister then considers it appropriate to proceed with the making of an order. That is perfectly clear. He is then en route to making an order. It then goes on to say,

“the Minister may lay before Parliament”,

but surely, once the Minister is committed to making an order, he must lay it before Parliament.

[Lord Mackay of Clashfern]

I am sorry to respond, because this is Report and it is the last thing I want to do, but it seems to me that the point is that it says, “make an order”, it does not mean to say that it is an order in anything like the form that is thought of so far. The consultation might well open up new possibilities altogether. The Minister wants to make an order, he wants to proceed, he may do it this way or he may do something else in the way of further consultation and then go ahead with an order different in substance from what he had proposed in the original consultation. That is the reason for it.