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Mr. Henry Bellingham (North-West Norfolk) (Con): I hope that my hon. Friend will consider the case of the Financial Services Authority, which brought into it a number of different regulators. Far from offering a light touch and more efficiency, it grew into a massive empire that has caused many more problems for the vital financial services of this country.

Stephen Hammond: My hon. Friend's intervention is rather timely. As some hon. Members will know, the financial services were my trade before I came to the House. There were two amusing things about the Financial Services Authority: it instituted a huge amount of extra legislation across the City, including money laundering legislation, and it failed to produce any protection for people making the biggest transaction of their lives, namely, taking out a mortgage. It instigated huge amounts of regulation of, and interference in, the business-to-business sector, but none at all to protect people undertaking their biggest financial transaction.

Part 1 of the Bill gives me major concern, so I hope that the Minister will tell us what safeguards he intends to incorporate into it. More importantly, I hope that he will use the Bill—after it has been heavily amended—to deregulate rather than to regulate.

4.49 pm

David Howarth (Cambridge) (LD): I want to speak about part 1 and confine my remarks to the constitutional aspects of the Bill. This seems to me to be extraordinary legislation. It proposes changes to the legislative process that in any other country in Europe, and perhaps in the world, would require a constitutional amendment. That is one of the reasons that part 1 has to be taken on the Floor of the House.

Obviously, I welcome, as we all do, the Minister's assurances that his test of whether something is controversial or highly controversial, and the mechanism of the Committee veto, will offer extra safeguards, but the problems are clear with those two safeguards. There is at the moment no definition of "controversy" in the Bill and the Committee majority mechanism does not deal with the controversy point. It is possible for a matter to be highly controversial with only a minority of members. A Committee could easily decide in favour of taking the order through
 
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the procedure introduced by the Bill, even though the matter was highly controversial in other parts of the House. My hon. Friend the Member for Somerton and Frome (Mr. Heath) mentioned the fact that matters could be controversial for Back Benchers but not necessarily for the Front Benchers of the main parties. Therefore, as the hon. Member for Plymouth, Devonport (Alison Seabeck) said, there needs to be some extra safeguards, including subject matter safeguards.

May I suggest one other possible mechanism: the mechanism of call-in, whereby a certain number of Members—any Members, perhaps 50 or 70—could call in a decision so that it could not go through the procedure laid down in the Bill, but had to go through full legislative scrutiny?I make that suggestion for another reason. One aspect of the Bill that seems quite disturbing is that it allows not just the addition of new crimes, with up to two years imprisonment or a level 5 fine, but it allows the Government to use the procedure to undertake structural change. Often, legislation does not regulate or add crimes, but sets up bodies and gives them powers. Among those bodies are, of course, local authorities. It strikes me that under the Bill as presently drafted, structural and functional reform of local government could be achieved without proper legislative scrutiny. Therefore, simply through using that mechanism, the balance of the constitution itself between local and central Government could be changed.

The Government will say, "Would that not be controversial?" That comes back to the point about the weakness of that test. Even the structure of the courts could be changed because they are no longer a matter of common law; they are a matter of statute. Any creature of statute, which technically includes any company, could be changed by these provisions.

Rob Marris: Not the Hudson's Bay Company.

David Howarth: Not common law companies, but almost any other body could be.

The Minister has dealt with questions about changes to the Terrorism Bill, bringing back the 90 days detention without trial and the rights of defendants being changed. He says that, obviously, those are highly controversial, and they are, but the questions remain not just about fundamental rights, but about the structure of the constitution itself, which the Bill appears to allow to be changed.

My view and that of, I think, many hon. Members is that one makes constitutional change not on the basis of the powers that one would want for oneself, but on the basis of the powers that one would want one's political opponents, indeed one's political enemies, to have. I am sure that on that basis the Bill should not proceed. The safeguards are very weak. Those in clause 3 are weak legally because they are expressed in a subjective way—it is a matter of the Minister being satisfied as to whether the various conditions have been fulfilled. In the view of many constitutional experts, that is not enough.

I mentioned in an intervention that many Law Commission matters are controversial and political, not just technical. I agree with the Minister, however, that it is a shame that a large number of Law Commission Bills
 
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and sensible and rational reform proposals still lie on the shelf. Perhaps the reason for that is that the Government have been overactive in bringing forward their own Bills. More importantly, recent Parliaments have not had many fifth years. Traditionally, Law Commission Bills were used to fill the fifth year of a Parliament when the Government had run out of things to pass laws about. I agree, however, that a better system is necessary to pass Law Commission Bills, but it is not necessary to combine that with a proposal in part 1 of the Bill that is a constitutional danger.

Many other Members have mentioned the fundamental objections, but I have one more point on the question of deliberation and discussion. My reaction against the Bill was mainly prompted by thinking about what the Government really believe about the value of discussion. The Bill achieves a reduction in discussion from that for full primary legislation to one of the procedures used for secondary legislation. As a new Member, it struck me that our function is more than just voting. One of our functions is to deliberate and discuss, and to influence the Government's thinking.

The hon. Member for Cannock Chase (Dr. Wright) was sceptical as to whether the way in which we do that now is the best way. That does not mean, however, that what we do now is lacking in value. I think that it has great value. I think that discussion is a fundamental part of democracy. The Government think so, too—I have sat through Report stages of Bills in which the Government have brought forward a great number of amendments, many of which refer back to discussion on Second Reading or in Committee. I have even witnessed my hon. Friend the Member for Somerton and Frome have an amendment accepted at Report stage of the Criminal Defence Service Bill. Therefore, discussion does matter, and it does work.

The procedure proposed in the Bill is one under which amendment is impossible. The proposals can be changed by the Government, but there is no procedure to amend a statutory instrument in the course of its discussion by Parliament. It therefore misses out on all the creative advantages of discussion—the Government do not always have all the answers or all the possible points of view; like we all do, they have a limited capacity to imagine what problems there might be.

Rob Marris: As someone who, I think, holds the all-comers record, with 45 Back-Bench amendments accepted to a Government Bill on one occasion, let me remind the hon. Gentleman that the Minister said in his opening remarks that draft regulations would be put before the House. The hon. Gentleman is right that, unfortunately, statutory instruments are not amendable under our current procedures, but draft regulations could be discussed. Would he like to see, as I would, a provision for draft regulations to be put before the House in advance of being included in the Bill?

David Howarth: Indeed, that would be an improvement. Of course, the disadvantage with draft regulations is that to amend them, we must start again. Under certain scenarios, following the procedure under the Bill would be slower than passing primary legislation. Nevertheless, the hon. Gentleman is correct that such a procedure would be an improvement.
 
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The Minister, in his opening remarks, said that one of the safeguards would be that there would be a lot of "consultation with stakeholders"—to use that horrible phrase. I do not think that that is enough. The difference between consultation and discussion and deliberation in the Chamber is that consultation does not include any element of challenge, of "back and forth". Consultation means that someone receives information without having to talk back to those who are being consulted, and is not normally challenged by them. That is the main advantage of discussion—it is creative and produces new proposals. There is a more fundamental advantage, however. Discussion and deliberation in public is part of democracy itself. The more public discussion there is, the more the Government are held to account.

The Government need reasons for their proposals that they can discuss in public—reasons that go beyond their own narrow interest. Rather than giving reasons that apply only to members of the governing party, they must give reasons in the House that are intended to persuade, and to attract support across the political spectrum. In fact, that is precisely what the Minister tried to do this afternoon. It was a very good example of how discussion in Parliament is in itself an important part of the democratic process. The embarrassment that Ministers sometimes feel when they do not have good reasons for their proposals—reasons that they can explain to others—is a constraint that favours the democratic ideal. Academics sometimes call the process the "civilising force of hypocrisy".

Part 1 of the Bill is entirely unsatisfactory. Like many other Members, I hope that radical amendments will be tabled in Committee and on Report. I should like at least to feel that there is some vestigial sense of the separation of powers—that there is a difference between Parliament and Ministers. I have winced on a couple of occasions when Secretaries of State at the Dispatch Box have answered questions by saying, in effect, "I will legislate". No, they will not legislate; we will legislate. I hope that that will remain the case in future, and that on Third Reading those of us who object to the Bill in its current form will be able to support it.

5.2 pm

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