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The noble Lord said: My Lords, as the noble Lord, Lord Goodhart, mentioned, the Bill had a very inauspicious start in another place. It aroused widespread suspicion and was christened by some as the Abolition of Parliament Bill. The Government have now wisely and quickly recognised that, despite earlier attempts to legislate in this way by order, this Bill was not going to get through Parliament. Nevertheless, because that was its origin, one has to look at what is left of the Billthe Government have introduced it in the Lords in a substantially modified formwith extreme care and some suspicion. Even with the amendments that the Government have made or will make, this is still effectively a ministerial
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Ministers are relying altogether too heavily on the limited safeguards built into the Bill, such as the vetoes of Committees of either House and the Governments undertakings, which they have given fairly freely, about what they intend to do with the Bill. But undertakings do not bind successive Governments. The Bill will be on the statute book for all successive Governments, and we need to make certain that its wording and purpose are clearly defined so that it is clear what orders are to be permitted under the Bill. Therefore, I suggest that we include a provision that the purpose is to deal with regulatory functions, as defined later in the Bill.
The amendment would restrict the Bill to the exercise of regulatory functions. It is important that this should be recognised in the Bill as its purpose. I regard the amendment as very important, and I hope that the Government may be persuaded to accept it. If not, perhaps we may have to return to the matter. Why not put in the Bill what the Government have said in their oral undertakings to this Housethat the purpose is to deal with regulation? I beg to move.
Lord Kingsland: My Lords, I support my noble friends amendment. Like my noble friend, I am extraordinarily puzzled as to why the Government have not chosen to constrain Clause 1(2), as he suggests. I can see from Clause 1(4) that there is such a constraint in relation to,
I am bewildered as to why the Government have chosen to constrain the situation in respect of a Minister but not in respect of other non-ministerial bodies. That distinction in the Bill is irrational and dangerous, because it will give non-ministerial bodies the power to interfere in areas beyond regulatory matters.
My noble friend Lord Jenkin has produced an extremely elegant solution to this problem by adding a few words in Clause 1(2) which constrain all other bodies in the same way as the power in Clause 1(4) is constrained.
Lord Bassam of Brighton: My Lords, the noble Lord, Lord Jenkins, explained to your Lordships' House as he saw it what the effect of the amendment would be. We understand it slightly differently from the noble Lord; we think that the amendment would make it possible to remove or reduce burdens only from those exercising regulatory functions. Burdens could be removed only from regulators. This would exclude cutting red tape for the regulated, businesses, small and medium-sized enterprises and others that make up the essential backbone of the UK economy, and the voluntary and the charitable organisations that contribute so much to society. The noble Lord, Lord Kingsland, says it is an elegant solution, but its effect would be quite widespread. The Government are committed to removing and reducing burdens
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Perhaps the noble Lord has another effect in mind for the amendment. The intended effect may be to restrict the order-making power in Clause 1 so that burdens can be removed or reduced only if they result from the exercise of regulatory functions. If that is the intended effect, I would again want to resist the amendment for the following reasons. It would be a substantial and, in our view, arbitrary restriction on the order-making power in Clause 1, as it would be used to preclude the removal or reduction of burdens in legislation that did not result from the exercise of a regulatory function. For the purposes of the Bill Clause 32 defines regulatory functions, and I assure the House that there are areas of the law that impose burdens for those businessesI mentioned voluntary and charitable organisations beforethat do not result from the exercise of a regulatory function. That is illustrated by the fact that many of the legislative reforms made by the regulatory reform order under the 2001 Act, which have delivered substantial savings to the United Kingdom economy, would not have been possible if this amendment had applied.
I give an example. The regulatory reform order, which removed a law dating from the 19th century that arbitrarily restricted professional and other groups from forming partnerships of more than 20 people, would not have been possible. That order was sought by stakeholders, passed by Parliament, led to savings of £10,000 per relevant partnership and contributed, in our view, to the competitiveness of the United Kingdom economy. This amendment would have precluded the delivery of the reform, because the burden on business did not result from the exercise of a regulatory function, but from 19th-century legislation.
Another regulatory reform order, which modernised and streamlined procedures for renewing or terminating business tenancies, and led to estimated savings to business of about £19 million a year, would also not be possible if Clause 1 were amended in the way the noble Lord, Lord Jenkins, suggests. Again, the reason for that is that the burden reduced resulted not from the exercise of a regulatory function but from legislation that imposed requirements no longer considered necessary.
Looking to the future and the further reform identified as necessary to boost UK competitiveness, the Department for Trade and Industry hopes to repeal the Limited Partnerships Act 1907 and amend the Partnerships Act 1890, in order to provide much-needed clarity regarding the law on limited partnerships, which are the dominant investment vehicle used in the UK for venture capital and private equity investment funds. It is estimated that private equity investment accounts for 1.1 per cent of UK GDP, with businesses backed by private equity employing some 3 million people. Clarifying the law on limited partnerships is therefore expected to have a substantial and positive impact on investment capacity in the UK, and on the competitiveness of the economy as a whole.
Business has sought this reform to ensure that limited partnerships remain attractive vehicles for venture
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In summary, either of these restrictions would be arbitrary and would preclude a Minister from reducing or removing burdens that were sensible, desired and sought by business and by those in the voluntary and charitable sector. So, for those very practical, hard-nosed reasons, which could have a serious consequence if we were to go down this route, and notwithstanding the elegance of the amendment, I invite the noble Lord, Lord Jenkins, to withdraw it.
I have listened to the Minister with care and I think he is construing regulatory functions altogether too narrowly. I would have thought all the examples that he has quoted are of statutory regulation. He quoted the Partnerships Act; it was intended to regulate the function of lawyers. I will certainly look at the wording again but, as I said in moving the amendment, the Bill lacks a clear statement of its purpose. The Government have said that its purpose is to lift the burdens of regulation. We support that, but our fear is that, without that being clearly stated at the beginning of the Bill, there will be a temptation for Governments faced with a congested parliamentary programmeas all Governments have been, certainly those I have been a member ofto say, Why cant we do this by order under the Legislative and Regulatory Reform Act?. That is what we want to avoid.
I want to come back to this at a later stage, having considered what the noble Lord has said, but my noble friends on the Front Bench and I attach a good deal of importance to what we are trying to achieve here. I beg leave to withdraw the amendment.
This is a minor and technical amendment, but one which provides a specific response to points made by noble Lords in Committee. The amendment makes explicit that which is implicit in the present draft of the Bill; namely, that the ability to remove sanctions for doing or not doing something in the course of an activity does not permit the removal of sanctions from activities such as drug-dealing, people-trafficking or other unlawful activities.
This is an important and essential safeguard against any inappropriate use of the order-making power and should ensure that any change to sanctions for unlawful activity must be delivered by primary legislation, subject to detailed parliamentary debate.
It is possible, by order, to repeal offences, or reduce or remove sanctions for offences which relate to the carrying-on of any lawful activity. This is not new and was possible under the Regulatory Reform Act 2001. It has been shown to be a necessary power to deliver better regulation so that offences can be repealed and sanctions reduced or removed where they are no longer considered to be targeted or appropriate.
The Bill also carries over the ability under the present legislation by order to replace sanctions with new sanctions, or to create a new offence that is punishable on indictment up to a limit of two years imprisonment. I beg to move.
The 2001 Act specifically excluded any burden that affects only a Minister of the Crown or government department. The Explanatory Notes to that Act explained that it allowed for the relieving of burdens from anyone, including Ministers and government departments,
Those are the crucial words. That provision is not repeated in the Bill that is before us. It is not right that Ministers or central government departments should be, as it were, self-lawmaking in the exercise of their own regulatory functions in removing burdens from themselves. That is not what the measure is supposed to be about; it is about removing burdens from the economy, business and those who are affected by regulation. When the Hampton committee reviewed this matter, it indicated that in practice it may be possible in most cases to find a third party who was affected, so that the reforms were not for the sole benefit of the Minister or department. I understand that there have been some examples of that under the provisions of the 2001 Act. However, it may not always be the case.
I should have thought that in these circumstances we ought to repeat the restriction on the order-making powerthat this power should not be used simply to allow Ministers to remove burdens from
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Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Jenkin, for moving the amendment. I am slightly intrigued, as I thought that the noble Lord, Lord Kingslandwho is not present at the momentwas rather keen on this provision, but I let that rest.
The amendment would rule out altogether orders being able to remove or reduce burdens that affect only a Minister or government department. Clause 1(4) makes it clear that burdens that fall only on a Minister or government department may be removed only in the narrow situation where the burden affects the Minister or department in the exercise of one of its regulatory functions. The provision is therefore a safeguard that ensures that, for instance, it will not be possible to make an order that reforms the provision of public services such as healthcare or education because it is considered a financial cost and therefore a burden on the Government. It is right that orders should not be able to make such reform of the provision of public services. However, I cannot see that it is sensible to prevent orders from making sensible reforms in relation to those regulatory functions that government departments exercise.
As the noble Lord, Lord Jenkin, knows, departments carry out a number of regulatory functions, such as the company law regulatory functions within DTI, or the regulatory functions exercised by the Pesticides Safety Directorate as part of Defra. It is the Governments view that their regulatory functions should be conducted in as cost-effective and efficient way as regulatory functions exercised by other independent regulators are.
The Government believe that orders should be able to remove or reduce burdens from departments where they are carrying out regulatory functions, in the same way as orders can for other regulators. So, for instance, it should be possible for orders to make changes that reduce the cost or administrative inconvenience for a department exercising its regulatory functions. Where there is a need to make regulatory functions more efficient or to reduce administrative burden and costs for them arising from legislation, it should be possible to do that by order. Whether or not the particular regulatory function is part of a department should be irrelevant. For example, it should be possible to remove an obstacle to the efficiency of Companies House by order, just as it would be possible in relation to the efficiency of the Environment Agency.
In summary, making an arbitrary distinction between regulatory functions exercised by government departments, where the Government are the regulators, and those
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Lord Jenkin of Roding: My Lords, I have listened carefully to what the Minister has said. I would have thought that in all the examples that he gave there would clearly be burdens on other people and, therefore, there could be no difficulty with making orders under the Bill to reduce those burdens. I am concerned about cases where Parliament has imposed a clear burden on a government department for a particular purpose, but where the Government are now trying to relieve themselves of that obligation. However, I will consider what the noble Lord has said. Perhaps I may need to come back to this at a later stage but, in the mean time, I beg leave to withdraw the amendment.
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