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Lord Kingsland: I am most grateful for the extremely constructive observations of the noble and learned Lord in responding to this amendment. I shall read his remarks carefully. If I have correctly understood them I believe that I have good grounds for begging leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Goodhart moved Amendment No. 13:

Page 52, leave out lines 28 to 33 and insert--
("( ) The Commission shall publish the plan and the Lord Chancellor shall lay a copy before each House of Parliament.").

The noble Lord said: Amendment No. 13 covers very much the same ground as the group of amendments that the Committee has just discussed but it goes rather further. The amendment requires the commission to publish the report as its own report independently of the Lord Chancellor. This raises a difficult question, which I believe will become more prominent when we come to Clause 4 of the Bill, as to the proper relationship between the legal services commission and the Lord Chancellor. On the one hand the commission is an independent body

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with statutory duties placed upon it by the Bill, as the noble Lord, Lord Kingsland, pointed out. Yet it is made subject in all material respects to control by directions given by the Lord Chancellor. Therefore, the question is whether it is really an independent statutory body or simply an executive agency under the control of the Lord Chancellor. At this stage I shall not go into the question of which it should be, but when the Committee comes to Clause 4 I shall put forward the arguments as to why the commission should retain a substantial degree of independence from the Lord Chancellor. It is in that context that this amendment is moved.

If the Committee looks at paragraph 15(1) of Schedule 1 the commission must prepare a plan at the beginning of each financial year. It then sends a copy of that plan to the Lord Chancellor. Under sub-paragraph (3) if the Lord Chancellor approves it well and good, and he tells the commission to publish it. However, if he does not approve it not only can he direct the commission to revise it but he can direct as to how it is to be revised. Therefore, for all practical purposes it becomes a plan not of the commission but of the Lord Chancellor. The only action that the commission can take if it does not like what the Lord Chancellor tells it to do is to resign. This appears to be a very peculiar situation.

It is not my intention to press this amendment on this particular occasion because I wish to consider the matter in the context of the amendments that the noble and learned Lord the Lord Chancellor intends to table in relation not only to the specific paragraph just mentioned by the noble and learned Lord, Lord Falconer of Thoroton, but also in the context of the wider amendments that the Lord Chancellor is to table in the light of the report of the Select Committee on Delegated Powers and Deregulation. However, this matter causes me some concern and when the Committee comes to Clause 4 I shall take the matter a little further.

The Deputy Chairman of Committees (Baroness Lockwood): I point out to the Committee that if Amendment No. 13 is agreed, I cannot call Amendments Nos. 14 to 16 under the pre-emption rule.

Lord Falconer of Thoroton: As the noble Lord, Lord Goodhart, has clearly explained, this amendment goes further than the previous group of amendments just debated. It would remove the mechanism by which the Lord Chancellor is able to approve the commission's annual plan before it is published and laid before each House of Parliament. The commission's annual plan will set out how it intends to fund services and exercise its other functions. The plan will summarise the original findings and advice of the regional legal services committees which will have been published in full as regional strategies following wide consultation. Further detail about the basis of the plan will be available under the open government code of practice.

In drawing up the plan, the commission will work within the parameters of priorities set by the Lord Chancellor through directions made in accordance with Clauses 4(1) and 7(1) of the Bill. Unless the commission fails in any important respect to address those

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priorities it is highly unlikely that the approval mechanism set out in the Bill will result in the Lord Chancellor wishing to impose any significant or controversial changes.

However, because the commission will have very wide discretion in determining detailed priorities and in the way that it procures legal services within a broad framework of national priorities set by the Lord Chancellor, I believe that it is essential that the Lord Chancellor is able to satisfy himself that the commission's strategy delivers value for money and meets the need for services that has been identified in a way that accords with government policy. The approval mechanism contained in the Bill, which means that the Lord Chancellor is involved before publication, is designed to deliver the appropriate level of assurance. We believe that it represents the right relationship between the legal services commission and the Lord Chancellor. I therefore invite the noble Lord to withdraw his amendment.

Lord Goodhart: As I indicated in moving the amendment, it is not my intention to press the matter if only because I wish to see the further amendments that the Government intend to table. This is a matter that I shall consider carefully and may bring back again. On this occasion I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 14 to 16 not moved.]

Schedule 1 agreed to.

5.30 p.m.

Clause 2 [Power to replace Commission with two bodies]:

[Amendment No. 17 not moved.]

The Deputy Chairman of Committees (The Countess of Mar): I understand that Amendment No. 18 has been wrongly marshalled.

Clause 2 agreed to.

Clause 3 [Powers of Commission]:

[Amendment No. 18 not moved.]

Lord Simon of Glaisdale moved Amendment No. 19:

Page 2, line 32, leave out subsection (2).

The noble and learned Lord said: I believe I am right in thinking that Amendment No. 19 has been called. Amendment No. 22 is grouped with the amendment and is consequential. Amendment No. 19 seeks to leave out subsection (2) of Clause 3.

Subsection (1) states that,

    "the Commission may do anything which it considers--

    (a) is necessary or appropriate for, or for facilitating, the discharge of its functions",
and so on. That is all-embracing. Subsection (2) states that it may in particular do that which is set out in paragraphs (a), (b), (c), (d), (e), (f) and (g),

    "to give the Lord Chancellor any advice which it may consider appropriate in relation to matters concerning any of its functions".

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If one wanted a striking example of a completely unnecessary provision, that last paragraph is it. However, subsection (2), which specifies the particulars of subsection (1), is quite unnecessary. A few Sessions ago, I used to complain of particulars being unnecessarily given of a generality. My noble and learned friend Lord Mackay of Clashfern used to say disarmingly, "I admit it is not strictly necessary, but it is useful to let Parliament know the powers which will be exercised".

There are many other more economical ways of letting Parliament, or the public who read Hansard, know, without having a lengthy subsection which is printed and re-printed at vast expense at every stage of the Bill and then the statute. In my respectful submission, we can happily get rid of subsection (2); and we shall be very pleased to do so in a Bill which is by no means free from prolixity.

Paragraph (c) of subsection (2) refers to the power to make loans. Is a grant with a condition as to repayment not a loan? If it is, it has already been covered in the previous paragraph.

Paragraph (d) refers to the power to invest money. But subsection (3) provides that the commission has no power to borrow money or,

    "to acquire or hold shares in bodies corporate".
Does that really mean that the commission may not invest in equities but must solely invest in gilts? The noble Lord, Lord Goodhart, knows much more about the issue than I do, but even a trustee has for the past 30 years been enabled to invest in equities. Why not the unfortunate commission? I have tabled a later amendment to deal with that. At the moment, I am content with trying to get rid of the unnecessary subsection (2). I beg to move.

The Deputy Chairman of Committees: I should inform the Committee that if Amendment No. 19 is agreed to, I cannot call Amendments Nos. 20 and 21 because of pre-emption.

Lord Goodhart: As the noble and learned Lord, Lord Simon of Glaisdale, mentioned my name, perhaps I may say that I should not think it appropriate for the legal services commission to invest in equities. It is in no way comparable with the ordinary situation of a trustee. Nor do I agree with the noble and learned Lord, Lord Simon of Glaisdale, except to the limited extent that I should have thought it more appropriate to find general power provisions of this kind in Schedule 1 rather than in the body of the Bill.

Lord McIntosh of Haringey: I appreciate the concern of the noble and learned Lord, Lord Simon of Glaisdale, to shorten the Bill. He would achieve a considerable shortening through Amendment No. 19. His score so far is that if he wins on "or" against "and", he will have reduced the Bill by one letter rather than by one word. So he is certainly entitled to go for broke on this amendment.

The argument that the noble and learned Lord put sounds reasonable because subsection (1) is fairly all-embracing. However, there are good precedents, not

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only in legislation, for the provision in subsection (2). The Lord Chancellor is given this power under the Legal Aid Act 1988. Anyone familiar with the memorandum and articles of companies knows that although there is always a catch-all provision which states that in accordance with the objectives they can do what they like, it is considered helpful, as in this case, to spell out the detail of what companies may do--otherwise that may be challenged and be the subject of unnecessary litigation. Therefore, I suggest to the noble and learned Lord that it would be desirable here to follow precedent and allow the subsection to stand as part of the Bill.

The noble Lord, Lord Goodhart, makes the point that one might have a separate schedule for it. However, I suspect that that might be more complicated. I think that the noble Lord referred to including the provision in a schedule.

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