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I shall now discuss
in detail Amendments Nos. 112B and 113. These amendments seek to
question
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- “The duty to have
regard to these principles is subject to any other legal requirement,
such as a statutory duty or a requirement of EC law, which will take
priority over the
principles”.
Amendment No. 113 attempts to give more teeth to Part 2. By ensuring that a report on the operation of that part is laid before Parliament, we will be able to keep a check on what regulators are up to and how they have been behaving. I expect that the work entailed in compiling such a report would already be taking place. The Better Regulation Executive in conjunction with the Better Regulation Commission would surely be up to date with what was going on with the regulators, so there should be no reason not to expect a formal report to Parliament on an annual basis.
Lord Bassam of Brighton: I will work through the grouped amendments and the stand part clauses. I am not entirely sure what the noble Lord, Lord Norton of Louth, is trying to achieve with his amendment because it would mean that the only principle of good regulation left in Clause 23 would be the one to ensure that regulatory activity should be targeted only at cases in which action is needed. I am aware that the noble Lord chaired the Lords Select Committee on the Constitution when it produced its report The Regulatory State: Ensuring its Accountability, but I am not clear from my understanding of that report whether the noble Lord has another target in mind in moving his amendment.
I am not here to
defend whether the Better Regulation Task Force, now the Better
Regulation Commission, accepted this recommendation from the committee,
but I am here to defend the fact that all five principles of good
regulation are sensible principles that should underpin regulatory
activities. I challenge the noble Lord to dispute the importance of
those five principles of good regulatory practice. They are widely
regarded as the gold standard for judging regulation, and they are the
baseline standard that our Government want to set for the exercise of
regulatory functions. However, they are not unprecedented, and they can
also be found in the Communications Act 2003, where they apply to the
regulatory functions of Ofcom. Given the variety of functions that
regulators have and the variety of
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Would the noble Lord have it that regulatory activities should be targeted only at cases in which action is needed but that these activities are carried out in a disproportionate, unaccountable or inconsistent manner? We insist that the regulatory environment that we are trying to foster is one in which regulators do not use a sledgehammer to crack a nut, and where there is a clear understanding of accountability and the need for consistency. Regulatory activity should be targeted only at cases in which action is needed, but the action taken must be proportionate to the problem or risk involved. The noble Lord’s amendment implies that so long as you are targeting the right nut, then however you crack it is fine.
I think I understand the rationale for Amendments Nos. 112B and 113A. The noble Baroness seems to require the duty to have regard to both the principles and the code of practice to be more onerous than it currently is. While I am delighted that the noble Baroness is as eager as we are that there is a statutory duty to have regard to the principles of good regulation and the code of practice in the Bill, I do not share her view that we should remove subsections (3) and (4) of Clauses 23 and 24. The effect of these subsections is that the statutory duty to have regard to the principles and the code of practice is subject to any other legal requirement affecting the exercise of the regulatory function, such as another statutory duty or Community law requirements. That means that, in the event of overlapping obligations, any other legal requirement affecting the exercise of the regulatory functions to which Clauses 23 and 24 apply takes priority over the duty to have regard to the principles and the code. That ensures legal certainty for those exercising regulatory functions.
This clause is not a let-off for regulators, as was suggested in another place. Regulators will not be able to use their founding legislation to ignore the principles. They will have to have regard to the principles and the code of practice, once issued, when exercising any functions which have been listed in an order under Clause 26 wherever the exercise of the function is not already affected by a legal requirement. Where there is a conflict, this Bill will provide the Government with more tools to act and intervene.
Amendment No. 113 is
an unnecessary amendment, which the Government cannot accept. Philip
Hampton, in his report Reducing administrative burdens: effective
inspection and enforcement, recommended that the Government
establish a Better Regulation Executive at the centre of Government. We
accepted those recommendations in the Budget Statement in 2005. Noble
Lords will know that the BRE has been established and is working with
regulators to devise how best it can hold regulators to account for
their performance against the principles of regulation. Alongside this
assessment work of the BRE, regulators will continue to be held to
account for their financial performance by the National Audit
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For example, following an invitation from the Treasury under Section 12 of the Financial Services and Markets Act, the National Audit Office is reviewing the economy, efficiency and effectiveness with which the Financial Services Authority has used its resources, when discharging its statutory functions. Moreover, the draft regulators compliance code, which the Government seek to place on a statutory footing under the provisions of Clause 24, proposes that regulators be required to publish clear standards for service and performance, against which they measure their performance each year, and publish the results.
We feel that enough is being done to ensure that regulators are held to account with regard to the exercise of their regulatory functions and that Amendment No. 113, if accepted, would add an unnecessary layer of bureaucracy to the existing mechanisms by which the Government hold regulators to account. For those reasons, I insist, or, rather, suggest that noble Lords opposite do not press their amendments.
For many of the reasons that I have set out, we would also oppose the removal of Clauses 24, 25 and 26. The code of practice procedure is important. The Minister must follow particular requirements when proposing to issue or revise the code of practice. The procedural requirements are broadly similar to those in place for revising the code of practice set out in Section 10 of the 2001 Act.
Clause 26 enables a Minister of the Crown to specify by order which regulatory functions are functions to which the duties have to have regard to the principles in Clause 23 and the code of practice in Clause 24 and its application. We welcome the general support that we have had from opposition parties, but I would draw to the attention of noble Lords opposite the importance of Clause 26, which ensures that the Minister or the Assembly must consult any persons whose functions are to be specified in the order made under that, and consult other persons as the authority making the order considers appropriate. An order made under this power must be made by statutory instrument, and where the Minister makes the order, it will be subject to the affirmative resolution procedure, by virtue of subsection (9).
Clause 26 stands or falls with Clauses 23, 24 and 25 and will enable us to deliver the recommendation of Philip Hampton’s report through changing the way in which regulators behave. For those reasons Clause 26 should stand part of the Bill.
The noble Baroness asked why the detail of the code is not on the face of the Bill. We have produced an initial draft of the code. We are working with regulators on its detail and it is subject to change. So we require that flexibility in order to be able to change it—very much having listened to the views of formal consultees. Formal consultation on the code will take place after Royal Assent but that does not diminish our commitment to ensuring that we pay careful attention to the representations made to us.
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Lord Norton of Louth: The Minister probably made a Freudian slip when he said that he “insisted” that the amendments should not be pressed. He said that he did not understand my amendment. That is all right, because I did not understand his answer. What my amendment was getting at was a means to an end and the Minister seems to think that I was challenging the end. I was not. No one is disputing the principles embodied in this part of the Bill. What I was addressing was whether those are best achieved through a statutory or voluntary code. A voluntary code can potentially ensure their achievement. That was what I was really getting at. I expected that the Minister would give a fairly full response and would have understood what I was getting at—and, therefore, that I would feel that there would be no need to pursue this matter. But, in light of what he said, I shall need to reflect on it. What I have done in terms of the amendments did not get at the point. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 112B not moved.]
[Amendment No. 113 not moved.]
[Amendment No. 113A not moved.]
[Amendment No. 113B not moved.]
Viscount Colville of Culross moved Amendment No. 114:
- (1) Where
subordinate legislation (as defined in paragraph 1A(2) of Schedule 2 to
the European Communities Act 1972 (c. 68) as inserted by section 30 of
this Act) creating any obligation or offence is made under section 2(2)
of the European Communities Act 1972 or any other statutory power (or
both) in order to give effect to a Community instrument, the
subordinate legislation shall include a description of the subject
matter of every such obligation or offence imposed by the Community
instrument.
- (2) Any
description under subsection (1) shall be taken, in any proceedings
before any court or tribunal, to be indicative only and shall not
prejudice the power of the court or tribunal to interpret the meaning
of any expression in the Community
instrument.”
The noble Viscount said: I am so glad that this amendment is not grouped with anything. Nobody in the Committee can be expected to understand what it concerns except those who sit on the Merits of Statutory Instruments Committee. That includes, or did include, the noble Lord, Lord McKenzie of Luton. I have given detailed comments to the noble Lord, Lord Bassam, about what I am going to say so I hope that he will be able to follow it. I do not expect anybody else to understand it at all.
It is all about
transparency. There are two keynotes in this Bill. One of them is the
removal of burdens, including, among other things, criminal sanctions.
That involves criminal sanctions not only on
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Departments in drafting statutory instruments are complying with neither of those principles. That is especially a matter for Defra but the DTI is not exempt; it is when it is transposing EU directives or regulations that it falls into the trap that I am about to describe. I have given the noble Lord, Lord Bassam, some examples, which I hope he haslooked up.
I shall begin with an example from the Department of Trade and Industry—2006/1719. It states in Regulation 2:
- “Any person who,
except under authority of a licence ... infringes the prohibition
on the acceptance of technical assistance in Article 4 of Regulation
(EC) No 1236/2005 shall be guilty of an
offence”.
From Defra, I have chosen two examples. First, there is 2005/3280, which states:
- “Any person who
contravenes or fails to comply with any of the specified provisions of
Regulation 183/2005 set out in paragraph (2) is guilty of an
offence”.
Paragraph (2), one of the provisions with which one has to comply, specifies Article 6(1) as read with paragraphs (2) and (3). That is described as the HACCP system. It then goes on to Article 7(1), on documents concerning the HACCP system. Nowhere in the statutory instrument is the HACCP system explained. In fact it is a hazard analysis and critical control points system; but one can find that out only if one reads the Explanatory Memorandum, which of course is not published with the statutory instrument at all and can be obtained only separately. There are also Community codes of good practice. We do not know what will be in those, and presumably if one fails to comply with them, that will also be a criminal offence. But we do not know what they are. The provision is about animal feed. However, it does not apply only to those commercially producing animal feed, but also to individual farmers.
Recently, we have had
statutory instrument 2006/1228, which came into force on 3 May 2006. It
revoked a previous statutory instrument, 2006/68, which came into force
on 1 March this year. It concerns what I fully appreciate is an
extremely serious problem: TSE—transmissible spongiform
encephalopathy. It is a licensing provision for
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To understand that, there is no alternative but the internet. Trading standards departments are fairly busy. They do not deal only with animals but with all kinds of other frauds, counterfeit goods and heaven knows what. Recently I was talking to the head of a trading standards department in a very large rural community. He said that, quite apart from what they themselves need to know as enforcement officials, farmers want to know what they can or cannot do. I do not know how many of them have time to look up 29 European Union instruments on the internet—compiling the amendments to all the annexes as they go about their daily business. I remember the noble Baroness, Lady Carnegy of Lour, saying recently that farmers are under great pressure these days and I am sure that she is right.
It does in fact go wrong. I am told by my noble friend Lady Mar, who had been listening to “Farming Today” on the BBC, that, a fortnight ago, there was a case in Flint concerning the European Union cattle passports. A man named Mark Payne, I think, was charged with 19 offences of failing to keep proper records. I think that the district judge found that there was no foundation in English law for the offences. It was said to be legal grey area going back to 2000. I asked the noble Lord, Lord Bassam—and now ask the noble Lord, Lord McKenzie—whether I could have further information on the case. I think it is quite an important illustration of what happens.
Why will government departments not put the ingredients of the offence into the statutory instrument? Well, it has been perfectly plainly explained by Defra. It says that,
- “because EU
Regulations are directly applicable in all countries, normal drafting
practice is to avoid repetition of EU provisions in domestic
legislation, as it may result in duplication or in the meaning of the
Regulations being obscured”.
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If one contrasts this approach to what happens with ordinary criminal legislation in your Lordships’ House, one sees that it is very different. Members of the Committee will remember, for instance, the Theft Acts, or the recent Fraud Bill, both of which originated with the Law Commission. I do not remember anyone saying that anybody likely to be affected by these criminal provisions need only go back to the Law Commission’s report to find out what the offence consisted of—of course not. We have always put what are the several ingredients of the offence in the legislation, so that people know exactly what they are not allowed to do. That is not so in the case of European Union legislation.
I do not want to be totally unconstructive about this. If there is a difficulty over obscurity or different interpretations in different countries, then maybe Defra has the solution. There is one in the over 30-month scheme, which comes originally from regulation 719/96, but was most recently amended by statutory instrument 2005/2109 in England—I am not sure whether it applies to Wales. It now has a parallel column, setting out the article in the original European Union regulation and, in the other column, what is called “the subject matter”: the requirement or prohibition. That does not appear to cause duplication or obscuration. If not, why can it not be used as a general approach? I put in the amendment that any such explanation would not be used in a criminal court by way of interpretation. It would simply help those being dealt with under these various instruments.
Can the Minister tell me, what is the policy on duplication and obscurity? Is this Bill not the very vehicle to try to import some transparency into the process? As the parliamentary Clerks responsible for statutory instruments in their various departments evidently will not depart from this probably quite long-standing technique, should Parliament not deal with it now? I am not going to ask anybody to decide upon it tonight, but it must be addressed and I look forward to what the Minister has to say. I beg to move.
Lord Henley: In offering support from these Benches to the amendment of the noble Viscount, Lord Colville, I first say how much we all admire his staying power. He has sat through all three days of Committee, and we have finally reached Amendment No. 114. Secondly, I ought to declare an interest as, many years ago, I sat at the noble Viscount’s feet as his pupil. I was possibly the worst pupil he ever had to endure, but at least I learnt enough to be able to say that I think I understood what he was getting at with his amendment seeking greater transparency. He explained it to us with such clarity that it is easy for all of us on these Benches to say how much we support his amendment and hope he will return to it on Report.
Too many restrictions,
regulations and offences are created and passed with far too little
scrutiny or wider awareness of the contents because of the amount of
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Lord McKenzie of Luton: I thank the noble Viscount for moving this amendment and for taking us through some detailed examples. He is right that I spent some happy months on the Merits Committee, although I am not sure that some of the fun we had perusing the intricacies of the instruments was always the best use of my time.
I fear that my response may be inadequate to the challenge the noble Viscount has posed me, but he has given us cause for reflection for subsequent stages. The purpose of the amendment is to make it possible, by reading UK legislation, to tell what one is obliged to do, or what one must not do, to avoid an offence, without the need for cross-reference to EC legislation. I have no doubt that he would want this amendment to add clarity for those dealing with statutory instruments that transpose Community obligations into domestic law.
However, the second subsection of the amendment appears to undermine the noble Viscount’s intention. Its effect is that any description of subject matter, as required by subsection (1), would be indicative only. In practice, that would mean that in cases before courts or a tribunal—for example, criminal prosecutions—the court could still interpret the words in the relevant Community instrument so as to establish precisely what one is obliged to do, or what one must not do, to avoid an offence. The provisions of the amendment would not remove the need to refer to the relevant EC instrument, as it is that and not any description made under the requirements of subsection (1) of this amendment that will be determinative before the courts.
This could lead to confusion, not clarity, for those dealing with SIs implementing Community instruments, as the inclusion of “descriptions” may lead some to believe that they do not need to refer to the relevant Community instruments. It should also be noted that even if descriptions made under the requirements of this amendment were not merely indicative, the description in the Community instrument would still be deemed definitive by a court. Therefore, one would still have to refer to the relevant Community instrument.
The provisions of this amendment would also create an unnecessary legislative burden, as any description of a “subject matter”, as required under the provisions of this amendment, would have to be updated each time the relevant Community instrument was amended. The creation of such a legislative burden does not fit with the tenor of Part 3, which is designed, in part, to reduce bureaucracy with respect to the implementation of European Community obligations in domestic law. For those reasons, the Government cannot accept the amendment.
The noble Viscount asked whether courts
in England interpret differently from courts elsewhere in
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Notwithstanding that, and the technical difficulties in proceeding as the noble Viscount suggests, he has given us food for thought about trying to get more clarity in the statutory instruments to make sure they are more user friendly.
Lord Jenkin of Roding: I had not intended to take part in the debate but I was overwhelmed by the noble Viscount’s arguments. Earlier in life I sometimes had to deal with successive instruments which referred further and further back until major research was needed to find out what they were about.
I detected a sign of some movement in the reply of the noble Lord, Lord McKenzie, that he wanted to reflect on the problems. I do not believe that the bureaucratic burden on which he seemed to lay so much weight, in arguing against the amendment, should prevent departments that implement European regulations spelling out clearly in layman’s language what they mean: the offence being defined and the penalties. You could always add, as one frequently sees “this is a description only”. We get that in the Explanatory Memorandums supporting Bills, which say that you have to look at the actual clauses but outline what they means.
The noble Viscount referred to the huge torrent of European legislation that pours out. We have heard the example of farmers, but it has happened to employers and others affected by the legislation. Unless its meaning is spelt out in simple layman’s language, my guess is that most people give up and don’t do it. As the noble Viscount said, if there is an occasion when we really ought to address what has become a very serious burden for those affected by the legislation, it is this Bill, where we are trying to lift the burden of regulation.
One of the biggest burdens is trying to understand, if I may use unparliamentary language, what the bloody hell it is all about. The noble Viscount is saying that an explanation should be available with the document, in it or attached to it. I thought he made an extremely strong point and I hope that Ministers will take this up, because—and I say this to my noble friends on the Front Bench—we should return to it at a later stage.
The noble Viscount was congratulated on having sat through three days of Committee; I think he deserves a much better and more positive response than he got from the government Front Bench.
Lord
Desai: I was in the Merits of Statutory
Instruments Committee with the noble Viscount. It was only his
assiduous work in looking up all the previous connections of what was
in front of us that made the Committee understand what we were doing.
Without him we would never have understood the
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Lord McKenzie of Luton: I revert to one point: if we proceed down this path, would we not have to update the instrument each time the community instrument itself was amended? That itself is a considerable bureaucratic condition.
Lord Jenkin of Roding: So what! Sorry, I am interrupting the noble Lord from a sedentary position, but at this time of night perhaps one is almost allowed to do that. It is a burden on the noble Lord’s officials, but it is lifting the burden on the farmers who have to understand it. That is what it is about. We want to make sure that the people to whom the regulations apply understand what they are being asked to do or not to do.
I am grateful for the support of the noble Lord, Lord Desai, who also served on the committee. We need to address this problem. Where better than in this Bill?
Lord McKenzie of Luton: In view of the hour, perhaps I can revert to a point that I made earlier. We have some concern about the precise technical prescription, but we have sympathy with the thrust of the noble Viscount’s point. Perhaps we will have a chance to think again about this; I am sure that we will return to it later in our deliberations.
Viscount Colville of Culross: I am extremely grateful to the noble Lords, Lord Jenkin and Lord Desai, for adding their voices to the debate.
I am not sure that I am very sympathetic about legislative burdens. The Government have gone to Brussels and agreed these things. Now they propose to impose them on people running businesses in this country, but they will not explain what it is that they have submitted to. The Minister said that he did not like the second paragraph in my amendment. Very well, I have given him the reference. What is wrong with Statutory Instrument 2005 No. 3522, the Older Cattle (Disposal) (England) Regulations 2005, which contains in its schedule—this is what I was copying in my amendment—provisions applicable to operators of slaughterhouses? Under the heading,
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