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Viscount Astor moved Amendment No. 3:

("( ) The Secretary of State shall lay a copy of any such directions before each House of Parliament.").

The noble Viscount said: My Lords, it will be remembered that I moved this amendment in Committee. At that time, the Minister gave a reasonably helpful answer; but, unfortunately, he has had time to reconsider the thoughts that he expressed in Committee and has come forward with what I can only describe as an extremely unhelpful and rather retrograde step with regard to this clause and my amendments. I shall explain to your Lordships how and why.

Your Lordships are aware that Clause 2 gives the power to the Secretary of State to give general or specific directions in writing to the authority. It also gives him the power to request information about activities that he may require.

In Committee I asked the Minister why directions were required and whether they would be a matter of public record. He replied,

    "I believe that the standard arrangement is for the Secretary of State to be able to give directions to non-departmental public bodies. If necessary, that could include the placing of a cap on fees. Therefore, they are general reserve powers ... Directions are not statutory instruments; they are merely a mechanism for a more informal way of establishing priorities and registering concerns".--[Official Report, 30/1/01; col. 591.]

In Committee the Minister was helpful. He further stated at col. 592:

    "I would hope that such directions would be a matter of public record because they would be helpful to all concerned. It is important that we are clear about what we are trying to do with orders and directions".

At that stage the Minister was kind enough to say that he would reflect on the matter. Unfortunately when the Minister went back to the Home Office all his natural inclinations for open and reasonable government and all his years of saying that the Labour Party wanted more openness in government deserted him. I am afraid that he was totally subverted by the system. He was kind enough to write to me, as he said he would. However, his letter was extraordinary as it seemed to be a total denial of what I thought he ever stood for. He reminded me that he had acknowledged the arguments in favour of a general presumption of openness. However, he further stated:

    "I remain of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary, for example, directions naming individuals or particular companies and consequently we should not place a requirement on the face of the Bill for all directions under Clause 2 to be published".

That is the most extraordinary statement, as the Minister said in Committee that the directions could include such matters as the placing of a cap on fees, how the authority should conduct itself, or what issues

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it should take into account. He said that those were the kind of matters on which the Home Secretary could give directions. But now we see that the Home Secretary has no confidence in the authority that he is creating, even before he has created it. He can say to the authority, "You are the authority. You will decide who gets a licence and who does not. But in certain circumstances I will direct you not to give someone a licence because I do not think that you should". Therefore, the Home Secretary and the Home Office will pre-empt the role of the authority even before it is created.

What is even worse, the directions will be secret. Apart from the Home Secretary and the authority, no one will know what the directions state or the names contained in them. We have a situation where the Home Secretary will by-pass the very authority he is creating. However, the position is worse than that because if one is denied a licence because the Home Secretary or someone in the Home Office considers that you should not have one, how do you appeal? There is a detailed appeal mechanism in Clause 10. Indeed, the Minister will move Amendment No. 19 to Clause 10 to make the appeal process clearer. If someone has been turned down for a licence not because the new authority says that he cannot have one, but because the authority has received a secret direction from the Home Secretary to that effect, how does that affect that person's rights of appeal? I am not a lawyer and I very much hope that the noble Lord, Lord Thomas of Gresford, will come to my aid and tell me whether an appellant's rights will be affected in such circumstances. How will the authority explain that that person cannot be given a licence when it has been given some secret direction from the Home Secretary to that effect? How does such a person appeal against that decision? It seems to me that there is a denial of basic rights here.

However, the position is yet worse. The Home Secretary may discover reasons why someone should not be given a licence, for example, because that person has a criminal record. Under the Bill the authority will have the right to acquire that information. It will be able to hold informal discussions with the Home Office and agree with the Home Secretary not to issue a licence. Central government have reserved the power to issue these directions.

The Minister tried to move an inch, but, I am afraid, only an inch. He stated:

    "In the overwhelming majority of circumstances it would be right for directions to be a matter of public record. I am happy to place this on the record again at Report stage if you would find it helpful".

We always find the Minister helpful when he wants to be helpful. He further stated:

    "I plan to establish an authority on the assumption that openness in this area would be a presumption unless sensitive circumstances (which I would expect to be extremely rare) suggest otherwise".

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Those are helpful words but, as your Lordships know, they are only useful if some lawyer in court is able to quote Pepper v. Hart on some specific point of law with regard to how one interprets the Bill. A lawyer may be able to say, "We know what the Minister meant on Report and therefore this is how the measure should be interpreted". However, that does not help the person when the authority turns down his application for a licence. In those circumstances he can appeal only on the basis of his own perceived or actual personal circumstances. Pepper v. Hart concerns how someone defines the Bill and how the authority should act under the terms of the Bill.

I am extremely concerned by the directions. They seem to go against natural justice. The noble Lord referred to,

    "directions naming individuals or particular companies".

This is not a case of stating that one person should have a licence but not another or stating the terms on which a licence should be given. It is a case of telling the authority whom not to give a licence to. Why would the Home Secretary ever use that power? There is only one reason; namely, to allow the Home Secretary to override the authority's decision to give someone a licence. He would only give a direction if he disputed a licence decision of the authority.

That seems to me an even more extraordinary state of affairs. This is an extremely important issue and one that is extremely worrying. It contravenes all the Government's pledges on openness and the Minister's comments on Second Reading and in Committee that the new authority would operate in an open and fair way. I hope that the Minister will think carefully about the matter and give a more helpful answer than he did in his letter. I beg to move.

Lord Thomas of Gresford: My Lords, we have to sympathise with the Minister that his natural liberal instincts are swallowed up in the Home Office by the Secretary of State who is proud not to be liberal but to be reactionary, as he demonstrates week in week out in the policies that he announces.

The Minister wrote to all noble Lords concerned with the Bill. However, I did not understand what was meant by the expression--the noble Viscount quoted it--that the Minister remains of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary--for example, directions naming individuals or particular companies--and that consequently the Government should not place a requirement on the face of the Bill for all directions under Clause 2 to be published.

I could not understand what was meant by,

    "directions naming individuals or particular companies".

Having listened to the noble Viscount, I begin to have some idea of the concept underlying it. It can mean only that the Secretary of State gives a direction to the

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authority not to grant a licence for a particular activity to a named individual or to a particular company. If that should happen without the named individual or particular company knowing that it has happened--if it is done "under the carpet", as it were--and reasons were not given, there would undoubtedly be a breach of natural justice. The first principle of natural justice is that a person against whom an adverse decision is made should know the reasons for it. If he does not know what the reasons are he cannot properly appeal.

I support fully the noble Viscount's argument. I look forward to hearing whether the Minister can resurrect those instincts which he so clearly displayed in Committee.

8.30 p.m.

Viscount Goschen: My Lords, I, too, regret that the Minister was mugged on his way through the portals of the Home Office. He must be more careful next time.

I agree with all the points made by my noble friend Lord Astor. The most interesting relates to appeals and how the appeals process can work if a secret order has been given that someone should not receive a licence. Clause 10(1) states:

    "The Secretary of State may by order make provision for the bringing of appeals".

I was not clear whether that meant that only the Secretary of State was able to do so. If he had made the original secret direction, presumably he would not bring such an appeal.

Clause 2(2) states:

    "Before giving directions under subsection (1), the Secretary of State shall consult the Authority".

The authority is trusted to consult without a duty on the face of the Bill to do so. However, the Secretary of State has to have his duty written on the face of the Bill. Does that imply that Parliament trusts the authority but not the Secretary of State? Some clarification from the Minister would be helpful.

I understand the natural desire of Home Office officials to issue the Minister with a "get out of gaol free card" to sew into the lining of the back pocket of his coat for some eventuality that may arise in the future which had not been considered. There seems a conflict between the Secretary of State and the authority; otherwise the Secretary of State, the Home Office, would be able to have informal discussions with the authority, saying, "It has come to our notice through our various agencies that intelligence (or whatever) has been gathered and such a person is an unfit person according to the criteria to hold a licence. Here is a summary of the information". The authority could act on that through its own investigative powers. If an appeal were brought it could rely on its own judgment. But for the Secretary of State to give a direction about a specific case can mean only that the authority has rejected informal advice and is now being told what to do.

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There are circumstances in which non-departmental public bodies are given directions. For example, the Rail Regulator is given directions on how he should exercise the powers of his office. They refer to general matters about the carrying out of his duty rather than specifics.

We need more information from the Minister. I, too, welcomed his 42-paragraph letter. From my experience, it is the all-time record for a communication from a Minister. Clearly he was saving on stamps. We need further explanation of the type of circumstances beyond those discussed by the noble Lord, Lord Thomas, and my noble friend Lord Astor which warrant this somewhat nuclear power.

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