Legislative and Regulatory Reform Bill

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The Chairman: Before I call the next speaker, I think that the last point made by the hon. Gentleman is slightly wide of this legislation. Although I am happy for the Minister to make a passing reference to it, I hope that his response will not take too long.

Mr. Chope: I hope that when the Minister responds to our introductory debate on part 3, he will enlighten us about where we stand in relation to what has been described as a period of reflection following the rejection in a referendum by two member states of the European constitution. We are in the extraordinary position that the European Union Bill, which had its First Reading on 24 May 2005, has not been withdrawn.

The Chairman: Order. I always enjoy the hon. Gentleman’s contributions. If he refers only briefly—very briefly—to the matter, I shall allow him to continue, but he is rather wide of the subject.

Mr. Chope: I will be very brief. The point is that the provisions of clause 24 are almost identical to provisions in the European Union Bill. The long title of that Bill is:

    “To make provision in connection with the Treaty signed at Rome on 29th October 2004 establishing a Constitution for Europe; and to require a referendum to be held about it.”

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Those matters are no longer part of the Government’s agenda. Notwithstanding that, provisions in the European Union Bill are to be found in part 3 of the Bill before us.

As I understand it, the purpose of the equivalent provisions in the European Union Bill was to streamline the way in which European legislation was brought before the House—in light of the confirmation of the treaty. As the treaty has not been confirmed, and as we are still in a period of reflection—it continues under the present Austrian presidency and expires at the end of it—can the Minister explain why we seem to be jumping the gun? Part 3 is legislating for purposes that, in May 2005, were expressly being made to facilitate the implementation of the European constitution. The constitution is not being implemented, so why is it still necessary to include those provisions in this Bill?

Mr. Murphy: I will try to stay in order.

Mr. Love: Can the Minister tell us when the referendum will be? It is the only question that he has not yet been asked.

The Chairman: Order. The hon. Member for Christchurch ultimately and accurately clarified that the point he was making was closely associated with the Bill. I call Mr. Murphy.

Mr. Murphy: Thank you, Sir Nicholas—and I congratulate the hon. Member for Christchurch on being able to do so.

I shall try to remain in order as I respond to the points raised. The hon. Member for Somerton and Frome asked earlier how we scrutinise EU legislation. All I can say is that I sat on European Standing Committee A, European Standing Committee B and European Standing Committee C for more than two years. On average, those Committees met once a week. They were pretty lonely gatherings—none the less enjoyable, of course.

The hon. Gentleman asked how the scrutiny of EU business could be enhanced. It is important that all who consider themselves to have a positive view of our relationship with Europe should grapple with that question. We need to heighten the level of interest in the scrutiny of European legislation through those Committees and their successors. That is something that should be dealt with across parties. I am not acting as a politician today, Sir Nicholas, nor should I be under your stricture to answer the point. The hon. Gentleman says that all parties are seeking more effective ways to scrutinise and to engage in the European debate and how it interrelates with Parliament.

The other points made about the provisions of clause 24 do not relate to the constitutional treaty. The hon. Member for Christchurch was right to say that in paragraph 8, the explanatory notes say that the provisions were and would remain included in the European Union Bill that would have provided for a referendum on the EU constitutional treaty. Notwithstanding the fact that that Bill has been
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postponed until a date yet to be determined, the new clause will enable us more effectively to implement technically the provisions already made in Europe.

I shall give an example of that. I shall not bore the Committee; we have only until 4 pm, so I will not read out all of this one statutory instrument. However, the Producer Responsibility Obligations (Packaging Waste) Regulations 2005 define the waste directive as

    “Council Directive 75/442/EEC on waste as amended by—”

and then lists a series of directives. The clause seeks to ensure that we do not have to go through that ineffective way of technically implementing decisions agreed in Europe. That way is cumbersome, but that is not the most important thing.

David Howarth (Cambridge) (LD): I believe that the Minister is answering the question put to him by two hon. Members about whether the new clause would effect changes to Community instruments that took place after the Act in question came into force. As there will be, I hope, a long period of reflection after Committee and before Report, I suggest to the Minister that he and his officials try to clarify the clause slightly by inserting something like, “at the time of the passing of that Act” after the word “has” in the second line. That would make it absolutely clear that what was being considered was what had happened before that Act came into being and had nothing whatever to do with what might happen after that point.

Mr. Murphy: The hon. Gentleman makes a sensible suggestion in a sensible way, and I shall reflect with officials on whether that would be a necessary and effective thing to do. A second clause 24 would not automatically change our law every time that a Community instrument was updated. That is not the effect of the clause. I shall reflect on the hon. Gentleman’s point, because of his experience and the way that he made it.

As I mentioned to the hon. Member for North-East Hertfordshire, the amendments are extraordinarily complicated and technical. They are about how we implement decisions that have already been taken. They do not in any way affect, influence or take a view of those decisions, but simply implement them in a more coherent way.

There is already one explanatory memorandum, but it may be helpful to offer an additional technical one, not only for Committee members but for other Members of the House who may not have paid close attention to some of the details of part 3. In that way, before Report, hon. Members on both sides of the House—those on this Committee and those who have not had the good fortune to be invited to serve on it—will be able to make their own observations about the technical aspects of clause 3. That would certainly be worth doing.

I shall bring my comments to a conclusion. Clause 24 will not make any changes to policies made in Europe and will not change what can be legislated for in Europe. It will not lead to more regulation from Europe; it simply provides that a reference in UK legislation to a Community instrument such as an EC
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directive or regulation will have effect as a reference to that instrument, as amended, at the date on which the UK legislation is passed. I hope that that reassures hon. Members, who have asked entirely reasonable questions.

Question put and agreed to.

Clause 24 ordered to stand part of the Bill.

The Chairman: Perhaps it would be appropriate for me to remind Committee members that our proceedings have to come to an end at 4 o’clock. I hope that that fact will be borne in mind, because we still have a number of other clauses, amendments and new clauses to deal with.

Clause 25

EEA agreement and EEA state

Question proposed, That the clause stand part of the Bill.

1.45 pm

Mr. Heald: I only have a brief point to make. At the end of the clause there is a provision relating to Scotland and Acts of the Scottish Parliament. I want to check whether that has been discussed with the Scottish Parliament and it is content.

Mr. Heath: I want to make a rather pedantic point, unfortunately, which is also rather complicated, about whether the European economic area agreement, or any modifications to it, are Community treaties. We know that the EEA agreement was entered into by member states of the European Union, the European Coal and Steel Community and the European Free Trade Association, but unlike sovereign states there is no legal persona that is the European Union. Had the referendum gone ahead and the constitution been proceeded with, the EU would be a legal personality; but it is not. Therefore, we have an agreement of member states.

Under the provision, with which I have no basic quarrel other than this technically that I am looking into, there is a definition of the EEA agreement:

    “the European Economic Area signed at Oporto on 2nd May 1992, together with the Protocol adjusting that Agreement signed at Brussels—

fair enough—

    “as from time to time modified or supplemented by or under the Community Treaties.”

The difficulty is that amendments to that are not Community treaties per se, in that they are entered into by the European Union as such, because it cannot do so—only member states can do that—and amendments to the EEA are, by definition in British law, not defined as Community treaties under section 1(2) of the European Communities Act 1972. How do I know that? I have in my hand the European Communities (Definition of Treaties) (Agreement on Enlargement of the European Economic Area) Order 2004, which was necessary to allow the participation of the Czech Republic and the republics of Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland,
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Slovenia and the Slovak Republic within the EEA at a time when they were not member states of the European Union.

The second provision of the 2004 order is:

    “The treaty specified in the Schedule to this Order is to be regarded as a Community Treaty.”

In other words, it was not, but the order put to Parliament was to allow it to be regarded as such. That is a rather technical point, but there is a circular definition of Community treaties that is perhaps to be avoided. I do not expect the Minister to give me a chapter-and-verse response without notice, but I ask him to consider the matter and ensure that he is satisfied that the legal definitions are in order and we do not have a circular argument about what comprises a Community treaty. I think that the Minister gets the point that I am trying to make and may, indeed, have an answer.

Mr. Murphy: To the extent that the hon. Gentleman gets the point, I think that I also get it, but it is, as he says, a complicated and potentially circular argument. The only information that I can offer him—his research may have made him aware of this—is that section 1 of the European Economic Area Act 1993 made the EEA agreement a Community treaty for the purposes of the European Communities Act 1972. I shall analyse the hon. Gentleman’s additional comments.

Mr. Heath: The principal point is that the EEA agreement was made into a Community treaty by virtue of the 1993 Act, but subsequent changes to it are not, unless there is another bit of primary legislation or an Order in Council that enables them to be.

Mr. Murphy: The whole Committee accepts the point that the hon. Gentleman has made. The clause amends the Interpretation Act 1978 to provide that references in domestic legislation to the “EEA agreement” will automatically refer to the current version of that agreement. There is no need to have a prolonged discussion on the clause unless hon. Members wish to do so.

The hon. Member for North-East Hertfordshire made the point about the devolution settlement. My understanding is that the Scottish Executive are content with the approach in clause 25 and how it affects the devolution settlement. As a Scot, I am continuously sensitive to ensuring that our deliberations respect the devolution settlement.

As has been said, the EEA agreement was signed in 1992 and was adjusted by the protocol signed in Brussels on 17 March 1993. References to the “EEA state” and “EEA agreement” are made thousands of times in primary and secondary legislation. Although changes to membership, and therefore to the agreement, do not happen often, when they do, updating thousands of references is an extraordinarily time-consuming and resource-intensive effort. The clause seeks to ensure that such a process is no longer necessary and that we refer to the EEA in its current
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form. We should not need to replace all those thousands of different references. Given those comments, I move that clause 25 stands part of the Bill.

Question put and agreed to.

Clause 25 ordered to stand part of the Bill.

Clause 26

Power to make orders, rules and schemes

Question proposed, That the clause stand part of the Bill.

Mr. Heald: Clause 26 adds to the ways in which the law in the European Union can be brought into English law under section 2 of the European Communities Act 1972. Currently, that has to be done by regulations, but the clause would add orders, rules and schemes to that provision.

What sort of changes does the Minister envisage being made by “orders, rules and schemes”—those are the words that will be added—rather than by regulations? Will he explain what orders, rules and schemes are in this context? What procedures would be used to introduce them? Can he give examples of a particular change that would be best made by an order, rule or scheme? In other words, what is this all about?

The 1972 Act refers to regulations. The Minister now wants to add these other categories, and we should probe him as to what he has in mind. Subsection (5) gives Ministers powers to change Acts or subordinate legislation to include references to orders, rules and schemes. Did such things exist at the time that such Acts were made? In other words, to what extent is this provision retrospective as regards orders, rules and schemes? For example, if we wanted to change Acts that were introduced in 1995, 1996 or 1997, were orders, schemes and rules in place at the time? Are such terms known specifically under the English law?

Mr. Murphy: Sir Nicholas, what is it about? I have already offered to supply an explanatory memorandum. Obviously, all members of the Committee have followed every detail of the specific clauses under part 3, but those hon. Members who have not had the benefit of serving on the Committee might not have so acquainted themselves.

As for rules, regulations, orders and schemes, paragraph 1500 in volume 6 of “Halsbury’s Laws of England” states that the

    “contents of rules, regulations and orders are, in fact, often indistinguishable in nature”.

If that were the case under English law, to put it flippantly it is mostly the case in some aspects of European law. I reassure the hon. Gentleman that the provision will not affect policy made in Europe or what can be legislated for in Europe. It will not lead to more regulation from Europe but, when we have already agreed to European legislation, clause 26 will help to streamline the process of transposing those EC obligations into United Kingdom legislation.

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I shall illustrate matters further to inform and enlighten the Committee. As a general rule, it is possible for statutory instruments of the same type—two orders or two sets of regulations—that are subject to the same parliamentary procedure, both affirmative resolution for example, to be combined into a single instrument to avoid having to make two separate statutory instruments. Section 2(2) of the European Communities Act 1972 provides a power to implement European Community obligations into UK law by statutory instrument.

When a Minister is exercising the power to implement Community obligations, he can in general currently do so only by making regulations, not other types of secondary legislation. Regulations made under the power of section 2(2) of the 1972 Act can be combined into a single instrument with regulations made under the power in another Act, but cannot be combined with another type of statutory instrument such as orders, rules or schemes. Instead, two separate instruments would have to be made even if they were intended to create a single, seamless regulatory framework governing one particular area.

If the clause were not in place, the people being regulated would need to refer to both instruments. It is much more convenient and accessible to include all the provisions that made up a single regime or cover a particular area in one instrument in such a manner. The clause addresses the problem. It provides that the power under section 2(2) of the European Communities Act can be exercised by a Minister making orders, rules or schemes as well as regulations. The clause sets out the procedure.

Mr. Chope: A provision under clause 3 of the European Union Bill of the current session ensured that, when such an instrument was coming forward, the Minister would have to make a statement about whether it complied with the principle of subsidiarity. Can the hon. Gentleman assure us that that will still remain the Government’s policy and that such powers will not be used unless they are accompanied by a principle of subsidiarity compliance statement, which is not referred to under this Bill?

Mr. Murphy: I sense that I am testing the Committee’s patience by going into the technical details, but I can confirm the hon. Gentleman’s point. I hope that I have reassured him. The clause is another example of a sensible tidy up of the way in which decisions made in Europe are implemented into UK law.

Mr. Heald: I am grateful to the Minister. Now that he has explained his view of the meaning of regulations, rules and orders, we are on familiar territory.

However, what about the schemes? Anyone who hears the expression “schemes”—[Interruption.]—is automatically a little worried and possibly wants to frustrate them, as the hon. Member for Somerton and Frome said. I am aware of only one reference under the law to schemes. The Fisheries Act 1981 brought in a scheme that was not popular universally. However, it
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was described under that Act as a scheme. Is that the only one of which he is aware, or is it a term that is used more widely than in the Fisheries Act?

2 pm

Mr. Murphy: By way of information for the hon. Gentleman, schemes normally prescribe overall plans for the attainment of objectives described in general terms. I accept that that is very technical, and I know that the hon. Gentleman accepts that. Rules usually deal more with procedural matters, such as the procedures of a court of tribunal. Volume 6, paragraph 1500 of “Halsbury’s Laws of England”says:

    “the contents of rules, regulations and orders are, in fact, often indistinguishable in nature.”

Mr. Heald: I think “Halsbury” is totally wrong about that. In 1932, the report of the Committee on Ministers’ powers—the Donoughmore Committee—made it clear that regulations, rules and orders have distinct meanings. The report said that they

    “should not be used indiscriminately . . . The expression ‘regulation’ should be used to describe an instrument by which the power to make substantive law is exercised, and the expression ‘rule’ to describe the instrument by which the power to make law about procedure is exercised. The expression ‘order’ should be used to describe the instrument of the exercise of (A) executive power or (B) the power to take judicial and quasi-judicial decisions.”

So it seems to me that “Halsbury” is actually being rather sloppy.

Mr. Murphy: I am not in a position to assess whether “Halsbury” was being sloppy, I am simply here to inform the Committee about the specifics in the clause. As I understand it, any power in an Act to make secondary legislation will specify the type of instrument that can be made, and there is not a completely clear distinction between the different types of instrument, as I said earlier about the distinction between schemes and rules.

I do not wish to pass judgment on “Halsbury” or anyone else, including the hon. Gentleman, whose legal background we have already heard about in some detail. I have offered to provide the Committee with an additional explanatory memorandum dealing with some of the specifics that everyone acknowledges are detailed and complicated. It may also be helpful to place copies in the Libraries of both Houses.

Mr. Heath: Sir Nicholas, I suppose it is excessively pedantic to ask why the spelling of byelaw has changed in last couple of years, and why we now have an extraneous “e” in it which never used to be there.

The Chairman: I am sure that the Minister will wish to respond to that highly relevant and important matter.

Mr. Murphy: The hon. Gentleman is right—it is an extremely pedantic point.

Question put and agreed to.

Clause 26 ordered to stand part of the Bill.

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Clause 27

Power to make ambulatory references to Community instruments

Mr. Jim Murphy: I beg to move amendment No. 56, in clause 27, page 15, line 24, after ‘instrument’ insert:

    ‘or any provision of a Community instrument’.

The Chairman: With this it will be convenient to discuss Government amendments Nos. 57 to 60.

I give notice that I shall seek the Committee’s permission to put amendments Nos. 57 to 60 together, and I hope that the Committee will give me that permission if it will speed up proceedings.

Mr. Murphy: Forgive me for not following the detail of your strictures, Sir Nicholas; do you wish me to move all the amendments simultaneously?

The Chairman: The Minister can move Government amendment No. 56 and speak to the other amendments as well.

Mr. Murphy: Thank you; that is very helpful.

Mr. Heald: It seems to me that the amendments are just drafting improvements. Does the Minister agree?

The Chairman: I am sure that the Minister is just about to say that.

Mr. Murphy: The first sentence of my notes says:

    “Sir Nicholas, these are drafting amendments.”

In making that helpful point, the hon. Gentleman has unexpectedly delayed the Committee for 15 seconds or so. However, we have time; we have another two hours.

These are technical drafting amendments that are aimed at improving a technical clause to make it more precise. I could, if hon. Members wish—[Hon. Members: “No.”] I could, if hon. Members wish, sit down and make no further comment; or I could of course go through every amendment in great detail. I sense that the Committee, which has been in a good mood all day, is in the mood for me not to speak to the amendments in great detail. I do so formally, therefore, on the basis that they are drafting amendments to make the provisions in the clause more precise.

The Chairman: I have to carry out my duties strictly in accordance with the appropriate procedure. I therefore put the question.

Amendment agreed to.

Amendments made: No. 57, in clause 27, page 15, line 26, leave out

    ‘(whether or not for that purpose)’.

No. 58, in clause 27, page 15, line 27, leave out ‘the Community instrument’ and insert

    ‘that instrument or that provision’.

No. 59, in clause 27, page 15, line 33, after ‘made’ insert

    ‘after the coming into force of this paragraph’.

No. 60, in clause 27, page 15, line 34, at end insert

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    ‘passed or made before or after the coming into force of this paragraph’.—[Mr. Murphy.]

Clause 27, as amended, ordered to stand part of the Bill.

Clauses 28 to 30 ordered to stand part of the Bill.

Clause 31


Question proposed, That the clause stand part of the Bill.

The Chairman: With this it will be convenient to discuss the following:

New clause 6—Expiry—

    ‘Part 1 of this Act shall cease to have effect at the end of the period of five years beginning with the day on which it is brought into force.’.

Mr. Heald: New clause 6 fulfils a promise that I made in my speech on Second Reading, when I said that I should propose a sunset clause for the order-making part—part 1—of the Bill. Many hon. Members in Committee agree that we make inadequate use of post-legislative scrutiny in this country. In circumstances where a Minister puts forward a Bill and there is considerable controversy about it, it may be appropriate to introduce a period after which post-legislative scrutiny should take place.

We in Parliament are getting better at considering Bills in advance, and I am a strong supporter of pre-legislative scrutiny. To be fair to the Government, they have published more than 40 bills in draft form, many of which have been considered by Committees in advance. A sunset clause is for the other end: the consideration of matters afterwards. The Minister knows that great concern is developing about part 1, particularly because there are no adequate safeguards for such a wide, general order-making power.

The latest of many submissions that I have seen from people and organisations that are worried about the Bill comes from the Maranatha community. It says that the Bill has been presented as a low-key, tidying-up measure, but in any other European country a proposal with such far-reaching effects would require an amendment to the constitution. It goes on to say that the Bill as proposed threatens to undermine what remains of parliamentary democracy, and that it could be used to endanger the liberty or freedom of speech of any individual, group or organisation. The Maranatha community submits that the Bill should not continue in its present form.

Members of a gentle Christian community have put forward that view because they are worried that some future Minister—not this particular Minister—might have the power to affect the protections available to individuals or ethnic or religious groups. They do not want that sort of change to be made unless the traditional full procedures of the House and all the protections that those involve are available to them as individuals and to us as parliamentarians.

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As we have discussed, the background to the Bill is that the Government consulted on a deregulatory Bill with non-controversial changes. The Bill that has followed that consultation does not meet the terms on which the consultation was taken. What we have now is the wide, fast-track power to amend, repeal or introduce primary or secondary legislation by order for any purpose. The Bill does not refer to using the power for deregulation. Indeed, clause 12(2) openly contemplates the use of the fast-track power to increase costs to business or to cause disbenefits, and requires the Minister to assess them in a statement to be filed with the draft order. That is not what business expected. As John Cridland of the CBI commented recently, the intended outcome should be

    “to deliver more and swifter deregulatory measures for the benefit of business and society”.

The Bill is controversial because that wide order-making power is not being given for a clear or well-defined purpose such as deregulation. It is being given for any purpose. That must be changed.

Clause 4 gives that fast-track power not just to a Minister but to any person. I assumed that that proposed mechanism was designed to build on the suggestion in the Hampton review that regulators’ regulation-making powers should be merged, a suggestion which I support. However, when I suggested that the Bill should say that, the Minister replied, “The Bill doesn’t say that partly because our ambitions are wider than that.” What are those wider ambitions?

The Bill needs three kinds of safeguard, and I have tabled amendments on three things. First, purpose: it should only be possible for the fast track to be used to deregulate or make non-controversial simplifications or pass Law Commission Bills. Secondly, reserved matters: it should not be possible to use the fast track for constitutional, important or controversial changes. Those should be reserved for our usual procedures. Thirdly, procedural veto: there should be a procedure whereby a Committee or the Houses of Parliament can simply veto use of the fast track for inappropriate measures.

Until the Bill is amended to provide safeguards, it is unlikely to be passed. During Committee debate, the Minister has promised to make changes, but so far we have not seen those amendments, although a meeting has been arranged. He has welcomed the Select Committee report suggesting changes, but it is worth noting that many of my amendments—there have been dozens of them—have been based on the Select Committee’s findings and have followed its wording almost exactly, and those amendments have not found favour with him. Unless proper protections are put in place, the Bill will have profound implications for democracy and will be a move towards government by ministerial fiat.

We have bent over backwards in Committee to provide the Minister with opportunities to put things right. It is not just me; the Liberal Democrats have tabled amendments on the same themes, and all parties on the Opposition Benches have supported them.

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2.15 pm

There is a need for a Bill to help with deregulation, and the Government’s own consultation showed support for the sort of Bill for which we are arguing. But concern is growing on both sides of the business world, with business organisations pressing for the necessary safeguards and not wishing to lose a Bill that could help with deregulation, and the TUC expressing concern that the Bill should not be too widely drawn in case another Government with a different political perspective were to remove valuable protections that it holds dear.

I am not saying that a sunset clause is my preferred option. I would prefer to see amendments of the sort that I have tabled being accepted by the Minister. Maybe he will want to redraft them, but I want those safeguards in the Bill. As a last resort, if we go ahead and have a Bill, it must be limited in time so that we can reflect on whether the order-making powers have created the sort of problems that many think they will create, myself included.

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