Regulatory Reform Bill [Lords]

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Mr. Stringer: I thank my hon. Friend for that point. When I said that the Committees had not divided, I meant that they had not divided on the final report that is put before both Houses. I hope that that is clear, and I ask the hon. Member for Weston-super-Mare to withdraw the amendment.

Mr. Cotter: I feel much better since the hon. Member for South Cambridgeshire stood up for me. Such support from Conservative Members is quite surprising. The Minister has not, however, been too harsh. The hon. Member for Eccles also mentioned strictness, so we seem to be getting off to a harsh and strict start.

It was important to discuss the question of the two Committees achieving the right balance when the Bill is implemented. That is of great concern, but it has been emphasised by our debate. In the light of the Minister's comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Lansley: I beg to move amendment No. 1, in page 1, line 9, after ``is'', insert ``necessary and''.

The Chairman: With this is will be convenient to take amendment No. 3, in page 1, line 14, after first ``is'', insert ``necessary and''.

Mr. Lansley: Amendments Nos. 1 and 3 relate to clause 1, which contains the objectives on which the rest of the Bill essentially hangs. It is important that we make those objectives as clear and accurate as possible.

The amendments relate to separate parts of clause 1. Amendment No. 1 relates to line 9, which concerns the re-enactment of provision—the amendment of a scheme of regulation—and burdens imposed on any persons by that re-enactment. As drafted, the clause provides that any imposed burden must be

    ``proportionate to the benefit which is expected to result''.

The purpose of the amendment is to specify that the burden must be both necessary and proportionate.

The same applies to paragraph (c)(ii) and the making of new provisions. Unlike the Deregulation and Contracting Out Act 1994, the Bill does not simply allow the reduction and removal of burdens and in that process secure amendment of the specific provision in question. It goes wider and allows new burdens to be imposed in creating a scheme of regulation. Paragraph (c) deals with that and anticipates that, if an order imposes a new burden that will affect any person, it must be

    ``proportionate to the benefit which is expected to result from its creation''.

The purpose of amendment No. 3, as of amendment No. 1, is to ensure that the burden will be both necessary and proportionate.

During our previous debate, I referred briefly to provisions in clause 3(2) which provide that Ministers must subject orders that create burdens to various tests. There should be a fair balance between the public interest and the interests of persons affected by the burden being created, and there should be a balance between the burdens removed or reduced and the beneficial effects overall to ensure that it is desirable for the order to be made, having weighed that against new burdens created. Those are the subjective tests, to which we shall return, so I shall not dwell on them now. They relate not to the original question of what objectives should be set out in clause 1, but to the tests of proportionality, fair interest and desirability to which Ministers will subject orders under clause 3.

I return to the objectives. On Second Reading, we were critical of the Bill in principle and of the way in which it enabled new burdens to be created. We want the Bill to have a wholly deregulatory effect. I shall not elaborate on that, but if it is to have a reregulatory effect and create new burdens, that should be constrained to the greatest possible extent. The addition of the word ``necessary'' so that there is a requirement that, when burdens are imposed, they must be both necessary and proportionate, would deliver precisely the effective constraint on Ministers that is contemplated as we go down a different path from the 1994 Act.

I hope that it is self-evident that, if something is considered to be proportionate, it does not follow that it is necessary. There may be circumstances in which Ministers wish to reregulate and create a new scheme of regulation, considering the additional burdens to be imposed, either in re-enactment or new provisions, to be proportionate to the benefit which flows or the reduction and removal of burdens elsewhere. However, the point is not whether Ministers have a general sense of the overall proportionate nature of the reregulation, but whether, when creating burdens and using a power that was originally designed for deregulation, Ministers create new, unnecessary burdens. Just as the word ``necessary'' is applied to protection elsewhere in the Bill--there should be retention of necessary protection--the test of necessity should be applied when any new burdens are created. That should be at the heart of the order-making power. Ministers should create burdens, whether by re-enactment or new provision, only when they are necessary to deliver other benefits or to reduce or remove burdens elsewhere.

In our view, it is important that the word ``necessary'' be inserted in the two relevant places in clause 1. One principal benefit is that Ministers would be constrained in their use of the order-making power, thus keeping it closer to the purposes for which it was intended. Moreover, as the Minister rightly pointed out in the previous debate, Ministers will translate whatever is said in relation to the objects mentioned in clause 1(1) into justification in the document to be laid before Parliament, which is provided for in clause 6. The amendment would add a new test to the burdens that will be created or imposed, in that the document would have to demonstrate that they were necessary as well as proportionate. On that basis, I hope that the Minister will respond positively to the amendments.

Mr. Stringer: If I may begin with a slightly flippant remark, the hon. Gentleman will not be surprised to hear that Government have no intention of introducing unnecessary burdens. Similarly, I would be surprised to discover that he considered that a complete and adequate answer to the points that he raised.

Before I turn to the central issue, I shall deal with the hon. Gentleman's comments about judgments that have to be made. He implied that the proportionate test is a subjective one, but it is not. The Bill does contain subjective tests, but the proportionate test is not one of them. It is a legally understood term, and courts are used to balancing one matter against another.

I should also point out that the issue was discussed at length in the other place. Lord Falconer asked whether anyone could produce an example of something that was unnecessary but proportionate, or vice versa, but no example was given. The necessary test is bound up in a definition of ``proportionate'' that explains the matter neatly: if it is not necessary to do something to secure the benefit, it is necessary not to do it in order to be proportionate. In case members of the Committee would like me to repeat that definition, I shall do so: if it is not necessary to do something to secure the benefit, it is necessary not to do it in order to be proportionate. In other words, something unnecessary is likely to be disproportionate, and if it is proportionate it will pass the necessary test.

I hope that that is a clear exposition of the way in which ``proportionate'' incorporates ``necessary'' in the test. The term is not subjective, and it is difficult to imagine an unnecessary burden that is also proportionate. In the light of those points, I hope that the hon. Gentleman will withdraw the amendment.

11.30 am

Mr. Lansley: I am grateful to the Minister for his response—indeed, I even understood it.

The Minister said that his was a flippant remark, but he will not be surprised that we take the view that, although it may not be the Government's intention to introduce unnecessary additional burdens, in practice, the introduction of burdens through regulations is often unnecessary. However, that is a subjective test. At the risk of becoming tortuous, the issue turns on whether, owing to the nature of the quasi-legal meaning of the word ``proportionate'', the word ``necessary'' is not necessary. In plain English, if Ministers intend that we should introduce only burdens that are both necessary and proportionate, why cannot the Bill stipulate that?

You, Mr. Cook, will have heard, even more often than I have, hon. Members say, ``I am not a lawyer, but'', then go on to advance lawyers' arguments as to why we should proceed in a certain direction. The purpose of the Bill is to convey the Government's intention in relation to the imposition of burdens. I stress the point that the Bill enters entirely new territory, and is distinct from the Deregulation and Contracting Out Act. It deals with imposing burdens in ways that are not necessarily precisely intended to reduce and to remove other burdens. It also imposes burdens in places where they are intended to deliver benefits, not necessarily to reduce and to remove burdens. We must therefore be careful about specific phrasing. Our understanding of the word ``proportionate''—

Mr. Ian Stewart (Eccles): The hon. Gentleman does not follow through with his own party's arguments about the importance of deregulation. Does not he accept that all Governments, when placing burdens for the good reasons that he has explained, at some point have to review those regulations, because they may have run their course and become irrelevant? That is why the deregulatory aspect is necessary.

Mr. Lansley: The hon. Gentleman tempts me into a different debate, which we may have later on, concerning the extent to which, when regulatory burdens are imposed—even Conservative Members would not contend that there were no proper circumstances in which regulations should be imposed—they should be tested for their necessity, subsequently for their effectiveness, and removed if they do not meet those tests. The point of this test is to consider regulations not in the sense of subsequent examination, which we shall cover at a later stage, but at the point in the process at which an exceptional power—the super-affirmative procedure, which was originally intended for a deregulatory purpose—is used for a reregulatory purpose, imposing new burdens simply because it is believed that benefits will flow from doing so: benefits that will not necessarily be connected and proportionate to the reduction and removal of other burdens.

The subsequent subjective test should consider the desirability of the imposition of new burdens through the order, together with the reduction and removal of burdens, to ensure that there is an overall benefit in deregulatory terms. We shall come to that debate later. These matters are connected, but not so much so that we cannot disentangle them.

Where burdens are imposed using this exceptional power, we should be clear about what we are setting out to do. I am not a lawyer, but the present understanding of the use of the word ``proportionate'' may be interpreted by a court such that, if it took the view that the creation and imposition of a burden were not necessary in order to secure a benefit, it may strike it out. As we often discover, it does not necessarily follow that all the tests that courts might apply are applied wholly accurately in framing an order that is presented to the House by Ministers.

We must stress to Ministers that, in the scrutiny of legislation—not least that carried out by the Select Committee on Deregulation—we should look for the word ``proportionate'' to be accompanied by the concept of a test of necessity. The layman's view of what is proportionate in respect of the creation of burdens and the delivery of benefits could be different from the definition that courts might apply. As part of the tests set out in the Bill, we want a test of necessity, and we want that idea to be reflected in the scrutiny procedure. I take the layman's view that, if one wishes something to be both necessary and proportionate, one should say so in the Bill. I will press that point if my hon. Friends support me.

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