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Lord Hunt of Wirral moved Amendment No. 66:

The noble Lord said: This amendment gives the Minister the opportunity to give us more detail about the timing of the regulations. I sense that the noble Lord, Lord Goodhart, did not get a specific response to his question in that regard, and we now have an opportunity to press the Minister a little further, because we come to what I would describe as the entertaining group of "may" or "shall" amendments. Lest anyone reading the Marshalled List should think that we have descended to pure semantics, the brevity and uniformity of this and the subsequent amendments, and the fact that for the convenience of the Committee we are taking them together in one group, masks the seriousness of the issues at stake. I know that this Committee will not fall into that trap.

We are now entering into the detail of what the regulations made under the Act will look like. I hope that the Minister will feel able to let us know at least when the House is likely to see the first draft of any such regulations to be laid. If I recall, last week in Committee the Minister said:

that is, the regulations—

So we have already had something of an indication. But in considering these amendments, I hope that the Minister will feel able to give us more detail and specify which regulations, in which order, and when, because a substantial task lies ahead of the Government and the Chamber. I hope that we shall be able to see the regulations in good time before the Bill leaves this place.

In considering Amendments Nos. 66 and 67, I hope that it will be for the further convenience of the Committee if we also discuss Amendments Nos. 78, 79, 80, 88, 90, 91 and 97. While the overall point is the same—namely, that these should be mandatory requirements and not discretionary ones—I hope that the Committee will forgive me if I focus briefly on what each one does, especially the first few amendments.

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Amendment No. 66 would make mandatory provision for the Lord Chancellor to regulate the procedure for authorisations under Clause 3 and the functions of the regulator. If that is not a requirement, one asks what is the purpose of Part 2? Amendment No. 67 makes the contents of the Schedule mandatory. It seems perverse or even nonsensical to set out such detail in the Schedule—three and a half pages of it to date—but not to require it to be implemented. After all, the Schedule is largely permissive itself. Surely its implementation must not be open to debate. I believe that much of what we are now discussing lies right at the heart of the criticism that is made of successive governments: that they try to take powers to
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themselves in drafting regulations without really placing them before the proper parliamentary scrutiny that they deserve. Under the Bill as presently drafted, not only will the Secretary of State be free to make whatever regulations he might see fit to make under this clause, but it would also be possible to make no regulations at all. This is an important matter at the heart of whether the Bill can be made effective and should be on the face of the Bill.

Amendment No. 78 makes mandatory, as opposed to discretionary, provision for the application procedure for authorisation. That must be right. We have to have a set method for applying for authorisation. Amendment No. 79 similarly requires the regulations to specify criteria that must be applied when the regulator is considering applications for authorisation. Throughout the Schedule, there are detailed provisions about what the regulations are to contain, but those provisions remain, at present, on a discretionary basis, despite the level of detail. It is hardly surprising that the Delegated Powers and Regulatory Reform Committee was unhappy.

Amendment No. 180 is very close to the previous amendment on the criteria to be applied by the regulator on applications. I cannot see anything here that ought to be left to the discretion of the regulations. Of course, the detail of the criteria will remain something for the Lord Chancellor to consider when the regulations are drawn, but the regulations will have to descend to the level of detail set out here.

Amendment No. 88 leaves out "may enable" and inserts "shall require". As a variation on the theme, this amendment makes it mandatory for the regulator to prescribe rules for the professional conduct of authorised persons. There seems no purpose at all in making this power discretionary. This is partly about tone and partly about substance. It is so important to demonstrate that we mean business on this and that it should be done clearly here in the Bill.

I have added my name to Amendments Nos. 90, 91 and 97 and the noble Lord, Lord Goodhart, may wish to comment on those amendments. I beg to move.

Lord Goodhart: Some time ago, I promised myself that I would never allow myself to become involved in one of the numerous debates about "may" or "shall". However, on this occasion I find myself, to my surprise, departing from my previous intention and tabling my amendments. Amendment No. 90 applies to paragraph 9(2) of the Schedule. The effect is that regulations must make provision about the manner in which rules are to be prepared and published and about the consequence of failure to comply with the rules. That seems to be inevitable and something that must absolutely go into any regulations. I have not extended the substitution of "shall" for "may" to the various details—for example, what should be included, whether there should be consultation or the submission of the draft to the Secretary of State for approval—although I certainly have every expectation that that would happen.
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Amendment No. 91 deals with paragraph 10(2) which requires that regulations must include provisions about the manner in which a code is to be prepared and published. Amendment No. 97 requires that regulations must make, or permit the regulator to make, provisions for investigation and the hearing of complaints. Those are all matters that are clearly necessary and as long as we are not able to see a draft of the regulations, it would be desirable to put pressure on the Government in this respect by substituting the word "shall" for the word "may". Therefore, I support the previous amendments that were moved by the noble Lord, Lord Hunt.

Viscount Eccles: On several occasions during this Committee session the Minister has used the word "flexibility". On this side, we are probably interested in more certainty and would be willing to see some of the flexibility given up to make the job of understanding exactly what the Bill will enact somewhat easier and to avoid what I would certainly perceive as a lively risk of unintended side-effects. The more we work through what the Bill is trying to do, and the way in which it is trying to do it, the more certain it becomes that it is absolutely loaded with relatively small, but bothersome, unintended side-effects.

Baroness Ashton of Upholland: I am interested to see that the noble Viscount, Lord Eccles, returns again to his theme of unintended side-effects. I am very concerned that we do all we can to address his concerns. My point on flexibility, above everything, is that, to ensure that we have effective regulation in the areas that have most concerned noble Lords, we need to create a flexible regime; it is not to provide uncertainty. In my view, flexibility is a very different concept from uncertainty. I need to have a further conversation with the noble Viscount to explore a little more the areas of greatest concern to him, either to reassure him or to look at the legislation.

I love the arguments surrounding changing "may" to "shall" and "shall" to "may". I have spent so much of my life on that and they provide an important series of debates in any piece of legislation. It forces the Government to consider very carefully what we are trying to achieve. I cannot give the noble Lord, Lord Hunt, a proper timetable on regulation tonight, but I shall endeavour to do so very soon. I always desire to give as much information as possible and particularly to bring forward secondary legislation wherever possible to meet noble Lords' concerns so that they can see what is available. The rigours of Parliamentary Counsel time and the need to deal with the issue as fast as possible do not make it possible for me to do so at the moment. However, I shall return with a proper answer for him.

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