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Bridget Prentice: The Government have listened carefully to the debates on thresholds and the persuasive arguments put forward in both Houses. I recognise the concerns expressed by Members that the board should consider the wider impact on the regulatory objectives before taking action, and I believe that the amendments reflect consensus on that important issue. The Bill now strikes the right balance, allowing the board to take decisive action where there has been, or is likely to be, an adverse impact on a regulatory objectives, but preventing the arbitrary use of its powers. The amendments do just that. They were welcomed when they were debated in the other place, and I welcome them here and commend them to the House.
Mr. Henry Bellingham (North-West Norfolk) (Con): I am grateful to the Minister for her comments. We are looking at the role of the Legal Services Board and its oversight of the approved regulators in terms of the modus operandi of its duty to intervene and the decisions by the approved regulators on when and how it intervenesthe so-called trigger points. It is important to look at the key principles. First, the board must recognise that the primary responsibility for regulation rests with the approved regulators. The board should apply the test that the approved regulators had taken unreasonable action, or had not acted, before it could exercise any powers, and it must seek to resolve any matters informally before resorting to exercising them.
Throughout the whole process, there has been a substantial amount of debate about where and how the board should intervene and the trigger points. If one looks back to Sir David Clementis report, he had in mind a small oversight role as regards regulation. He was concerned that the board should not try to second-guess or micro-manage what the approved regulators were trying to do. I am glad that the Minister has made it clear, through the Government amendments that have been tabled, that the regulatory objectives will be considered as a whole. I believe that she has listened carefully to what was said in the other place, in Committee, and by us. The amendment tabled by the Minister, which is slightly different from the one that was agreed in the House of Lords, says:
and, in preparing that statement, the Board must have regard to the principle that the Board should not exercise any of those functions by reason of an act or omission of an approved regulator unless the act of omission was unreasonable..
What we have here, to some extent, is the insertion of the Wednesbury test of unreasonableness, about which there was a substantial amount of discussion by various legal experts. We now have a format that will ensure that there is no unnecessary micro-regulation or involvement by the board as regards the various approved regulators, who will be allowed to get on with their jobthe work that they know best. Indeed, those approved regulators have built up a substantial amount of respect with the different organisations that they represent and that they are involved with regulating.
This is another example of where discussion and a degree of effective collaboration between the Opposition parties and the Government has resulted in what we want. There was substantial debate in the other place, and in Committee. I would like to say how grateful I am to those outside organisations that have been so assiduous and conscientious in advising us on this aspect of the Bill, particularly the Bar Council and the Law Society, and some of the smaller organisations that also have the status of approved regulators.
The provisions are important because if there were a board that tried to look at every single last detail of the approved regulators, and tried to second guess exactly what they were doing day in and day out, it would have been a recipe for over-burdensome bureaucracy and far too much red tape and unnecessary involvement. However, the Government have listened carefully to the organisations that will implement the new Bill, and I am pleased to say that they have not just listened, but responded. They have introduced an amendment today that gives us exactly what we wanted originally. Rather than saying to the Minister, We should have had that long ago, I say that we have it now because there was proper consultation and discussion. I am grateful to the Minister for what she has done, and we are very pleased with the outcome.
Hon. Members may recall that when we discussed the issue of the boards policy statements in Committee we were broadly in agreement with the amendments made in the other place, but we were not able to accept the requirement for a policy statement to ensure that the board would not act unless satisfied that the act or omission of the approved regulator was not an approach it could reasonably have taken, because that could have restricted the board from taking action in appropriate circumstances.
Hon. Members will know that my noble Friend Lord Hunt of Kings Heath recognised in his opening speech that the issue is important and it has been the subject of a great deal of scrutiny and debate at almost every stage of the Bills passage. Some will argue that we should go further in respect of concurrence. Reflecting on the points made in earlier debates, it is clear to me that there is genuine concern about what consultation with the Lord Chief Justice might involve. That is why my noble Friend was at pains to set out the detail of how it would work. He confirmed that I had written to the Lord Chief Justice to consult him on the process we are undertaking for the appointment of the chair of the board, and he said that I would write again shortly with respect to other members of the board, which is absolutely the case.
The consultation with the Lord Chief Justice focused on the criteria against which candidates for the position of chair are judged, and he was asked to look at the draft specifications for the chair. He was invited to comment on the process we are undertaking, including the composition of the appointments panel and how we will be carrying out the campaign in line with the Office of the Commissioner for Public Appointments guidance. He was also invited to suggest names of potential candidates that recruitment consultants may wish to contact. I understand that he will be discussing that with the Judicial Executive Board before writing back to me.
This detailed consultation is an important part of the appointment process, and I understand the strength of feeling behind setting out what we mean by consulting the Lord Chief Justice in the Bill. I sympathise with that view, which is why I have tabled amendments that would require the Lord Chancellor to consult the Lord Chief Justice on the appointments process as well as the final appointment. I hope that that gives assurance that consultation with the Lord Chief Justice will not only extend to the person to be appointed, but will embrace the arrangements for the process leading up to it. That process will apply to every appointment made, not just the first.
I can reassure the House that it is entirely a matter for the Lord Chief Justice to decide whether he makes public any disagreement he might have with the Lord Chancellor over the appointment of the chair and members of the board. Although I believe that the arrangements I have just set out will reassure hon. Members that consultation with the Lord Chief Justice, rather than concurrence, is the right approach, I want to mention some other reasons why we have adopted this approach.
First, the approach is consistent with the original recommendation of Sir David Clementi. Secondly, it is consistent with the recommendations of the Joint Committee on the draft Legal Services Bill. Thirdly, it ensures proper accountability over the appointments process because we continue to engage the oversight and regulation of the commissioner for public appointments. Importantly, we provide proper parliamentary accountability because the Lord Chancellor can be called to explain his actions to Parliament in a way in which the Lord Chief Justice cannot. Fourthly, we have transferred the function of making those appointments from the Secretary of State to the Lord Chancellor, in whom we have entrenched those functions. That is important because, under section 3 of the Constitutional Reform Act 2005, the Lord Chancellor has the specific duty to have regard to the need to defend judicial independence and
the need for the public interest in regard to matters relating to the judiciary or otherwise to the administration of justice to be properly represented in decisions affecting those matters.
As I said when we last looked at this issue, those are very good reasons why we cannot accept concurrence; it conflicts with accepted best practice. Consultation does not. I hope that the amendments I have tabled ensure that the appointments do not conflict with best practice, but that the Lord Chief Justice is involved in not only appointments to the Board, but in the process of making those appointments.
The view of the Opposition parties in this place and the decision of the other place was that the formal role of the Lord Chief Justice should be clearly set out through the requirement that appointments to the board were to be made through the Lord Chancellor with the concurrence of the Lord Chief Justice. We supported that in Committee and on Report, and it remains our ideal position. However, the Government have now moved away from a simple reference to consultation and provided some clarification of what consultation with the Lord Chief Justice must involve. Specific reference has also been made to the fact that
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