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et cetera. Really, this amendment seeks to do what the Select Committee recommended in our report; namely, that there should be some reference in the Bill to Nolan principles. We have already dealt with Nolan principles, but this amendment would ensure that all
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This amendment is not only in line with the recommendation of the Joint Committee, but a number of other bodies have said how strongly they support such an amendment. Of course it follows on from our discussions about the independence of the legal profession. The Bar Council has stated that it believes that this amendment would enshrine the Nolan processes without explicitly referring to them by name, and would ensure that we get the best possible people. In our Joint Committee we recommended that Nolan itself should be in the Bill. We recommended that recruitment by Nolan processes should be included explicitly on the face of the draft Bill. But I think we would recognise that this amendment in effect does that a little more discreetly, because from time to time these principles may well be changed, improved or further amended, so by putting “Nolan” in the Bill we may be unnecessarily restrictive. The Select Committee’s belief that adherence to the Nolan principles should underpin all government appointments is strongly held. For the actuality and the appearance of independence, it is important to maintain that there should be a statutory requirement in the Bill to ensure that those principles are followed.
In effect, the amendment would underpin the independent nature of the members of the board. It is a provision that at all times a majority of members of the board should be lay persons. That is why the previous amendment was so important in ensuring that the definition of “lay person” would not exclude people who in the past have had some legal training or experience. Whatever one feels about the Legal Services Board, I think we are all unanimous in believing that its members have to be the best possible people. That is why we need to ensure that the right processes are followed.
Comments are always made—indeed, there has been a recent report by a think tank—that some appointments are political or include members of a particular political party. We all want to rise above that in setting up the Legal Services Board, which is why I have much pleasure in moving an amendment that I believe will secure that aim. I beg to move.
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Lord Thomas of Gresford: We on these Benches support the amendment. I hope that the Minister will at least give an assurance at this stage, but in our view it is better, as the noble Lord, Lord Hunt, has said, for these principles to appear on the face of the Bill.
Baroness Ashton of Upholland: I am grateful for the explanation of what noble Lords are seeking to achieve. I agree that the principles should apply—there is no difference between us on that point. As I indicated when I referred to the code of practice, the Commissioner for Public Appointments produces quite a lengthy document—65 pages—which includes the appointment criteria and processes. We would not wish to put this in the Bill; we do not believe that it is required. As the noble Lord, Lord Hunt, said, we
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I know that noble Lords are seeking an assurance on this. Any appointment to a public body by a Minister falls within the remit of the commissioner, who has the duty to scrutinise it. The code of practice is committed to ensuring that appointments are made on merit and are subject to independent scrutiny. They must comply with equal opportunities requirements and are subject to probity, openness, transparency and proportionality. The commissioner and the role of the Office of the Commissioner for Public Appointments is engaged when Ministers seek to make appointments, and the commissioner has a duty to scrutinise them.
The responsibility and duty of the commissioner, engaged by ministerial appointment, combined with the code of practice plus our commitment to the principles provide what noble Lords seek. We would not wish to put such a provision in the Bill because we do not want to run the risk of criteria changing over time and because we think it is unnecessary. That is not to say that we do not agree with the principles behind the amendment, but we do not think it is necessary.
Lord Hunt of Wirral: I am slightly bemused because I heard the noble Baroness say that we should not put in the Bill something that might change; there might be other ways of making appointments. I remind the Minister that the amendment refers to people being appointed on merit,
- “in accordance with the principles appearing to them to represent the best practice in making appointments”.
Baroness Ashton of Upholland: There is an issue which I did not mention but have been thinking about. I talked about the principles upon which we operate and about the Office of the Commissioner for Public Appointments, which works across government. The implication of the amendment could be that a Minister appointing in this set of circumstances did not agree with those principles and would prefer something else. I am not suggesting that any Minister would go by a different set of principles, but let us go through the theoretical proposition. I am a bit nervous about the language that the noble Lord has chosen because it implies that a choice rests with the individual. We believe that there are clear guidelines and principles for appointments made by Ministers; the commissioner has a duty to engage with the Minister at the moment of appointment. The Minister is in that process, because that is the right and proper process; I agree that processes change over time—indeed, the code of practice has been updated to reflect changes in thinking—but I would not want to give the individual Minister the right to disagree with the principles and do something different, and the amendment provides the potential to achieve that.
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Lord Hunt of Wirral: I was anxious not to interrupt the Minister because I felt the more she spoke, the more she would come round to the amendment. She has put forward the view that Ministers should not be allowed to depart from the principles which appear to the Government to represent the best practice in making appointments to public office. I agree with her—that is why I have moved the amendment.
Baroness Ashton of Upholland: They are not departing from it, not because of this legislation but because of custom and practice, convention, and the role of the Office of the Commissioner for Public Appointments. I am not disagreeing with the principle of what the noble Lord is trying to do, but I think his amendment takes us to a slightly different place and appointments would already be covered by those principles via other legislation and conventions.
Lord Hunt of Wirral: I am very grateful to the Minister for giving us a different dimension which I confess I had not really thought deeply enough about. It is clear to me that I should go away and think more carefully about this. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Thomas of Gresford moved Amendments Nos. 20 to 23:
On Question, amendments agreed to.
Lord Thomas of Gresford moved Amendments Nos. 25 to 30:
On Question, amendments agreed to.
Schedule 1, as amended, agreed to.
Clause 3 [The Board's duty to promote the regulatory objectives etc]:
Lord Kingsland moved Amendment No. 31:
“( ) The Board must, so far as is reasonably practicable, act in partnership with the approved regulators.”
The noble Lord said: One of the recommendations of the Joint Committee was that the draft Bill should ensure that, consistent with the Government’s policy, lead responsibility should rest with the approved
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“The Government agrees that the intention of the Legal Services Board should be to work in partnership with the authorised regulators, leaving them with the responsibility for day to day regulation. The Legal Services Board should exercise its powers only where approved regulators are clearly failing”.
The wording of the amendment flows from that initial view of the Joint Committee, subsequently endorsed by the Government in their response.
Behind the amendment is the fact that the Bill appears to say nothing about the way in which the Legal Services Board should approach its task. But from what the Government have been saying about the Bill as we have moved towards the parliamentary stage, it seems clear—to me, at any rate—that the existing professional bodies should act as the frontline regulators and the Legal Services Board should act in a supervisory role, intervening only if it believes that a frontline regulator is failing in some way or another to fulfil its task. The amendment seeks to reflect that in the Bill.
In the absence of this amendment, or one like it, in our view the Bill will fail to reflect the balance that the Government say they want to achieve between the frontline regulator doing the hands-on work and the Legal Services Board acting in an overseeing role, intervening only when the frontline regulator fails to fulfil its task. I readily accept that the noble Baroness may feel that an amendment differently worded would better reflect the balance of power between the Legal Services Board and the frontline regulators. I should be perfectly happy to consider—indeed, I would probably accept—any such amendment. I am extremely anxious to hear from the noble Baroness, first, whether she agrees with my interpretation of the relationship between the two and, secondly, whether she is prepared to endorse what the Government said in their response to the Joint Committee or some other form of words which would equally reflect the Government’s response. I beg to move.
Lord Thomas of Gresford: My name is attached to this amendment and, of course, we support it from these Benches. It provides a way of ensuring that the Legal Services Board will act with a light touch. It would be extremely unfortunate if a Legal Services Board decided to interfere directly and to constantly make directions and orders and so on to the Law Society, the Bar Council and any other regulatory bodies in such a way as to take over their functions. To us, the idea of acting in partnership is to be commended, and I hope that the Minister will accept it.
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Lord Hunt of Wirral: I strongly agree with both my noble friend and the noble Lord, Lord Thomas of Gresford. We spent some time in the Joint Committee talking about the phrase just used by the noble Lord: “light touch”. We heard that phrase on many occasions. I recall with a fond memory that, when my
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It is very interesting to hear those who are subjected to statutory regulation by the FSA talk about light touch in theory but heavy bureaucracy in practice. Often the engine room will listen to its leadership but will resort to what is called the “box-ticking phenomenon”, in which one suddenly finds oneself enmeshed in a bureaucratic nightmare of regulation. I am sure that the Minister will say that that is far from the intention in setting up the Legal Services Board. Indeed, when the Joint Committee made this recommendation, which has given rise to the amendment, it said that it wanted to accept the Government’s policy that lead responsibility should rest with the approved regulators.
Against that background, we sought to put forward this idea of partnership. The term “partnership” is readily understood: the regulating bodies should act in harness, and the lead regulator should not interfere in a micro-management sense and certainly should not intervene unless there is clear evidence that the approved regulators are failing. In addition, not only should there be clear evidence that they are failing but their failures should have been brought to their notice and directions should have been issued with which they neglected to comply.
So we are really talking about finding words that will express “light touch” in simple phraseology, and I cannot think of anything better than “act in partnership”, unless the Minister can suggest some other words. Certainly, this is very much in line with government policy and all the words that we have heard about light touch. Here is an opportunity for the noble Baroness to do what we have not paid sufficient tribute to her for doing already—that is, to accept amendments. The Minister set a marvellous example to all her ministerial colleagues in listening to the argument and suddenly deciding, “Yes, I will accept”. If one is allowed to refer to the Box and the noble Baroness’s advisers, I saw a sign of shocked silence when she accepted the previous set of amendments. I am not saying that they were caught by surprise but they just looked surprised. Please may they look surprised yet again by the noble Baroness accepting this amendment.
Lord Neill of Bladen: At Second Reading, I said that it would be a nice idea to get the concept of “light touch” into the Bill. I think that I expressed my feelings about my own incompetence as regards how that could possibly be done. It seems to me that this is about as good a shot as you can have at expressing “light touch”. There may be a slight difficulty with the words,
I can see that trouble could develop if the board had established a policy over a particular area or with one part of the profession and if adopting a different policy or some other bit of it was under discussion. There could be potential conflicts ahead where the
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Baroness Ashton of Upholland: I was reading some of the comments of my honourable friend Bridget Prentice when she appeared before the Select Committee. She was keen to get rid of overused words such as “light touch”. Certainly, in my experience over many years, “partnership” is another of those words that are difficult to define. We all know what we mean, but if we are to include it in the legislation as a duty on the Legal Services Board, we have to be very clear about what we mean.
I say at the outset that I completely accept the principle that says, “We are creating a regulatory regime in which different people perform different functions and work cohesively together”. In a sense, that is one definition of “partnership”. I have no objection to being very clear that we want the Legal Services Board and the frontline regulators, if they do not mind me calling them that, to be able to work together consistently. We have had some very useful discussions—for example, yesterday with the Law Society—about how rules are dealt with, which I am keen to pursue. I intend to talk to colleagues about that this week.
In principle, I have no objection to this at all. I am not keen to put a duty of partnership on the Legal Services Board without a clear definition of what we mean. The noble Lord, Lord Neill, has raised an additional problem that we would have to think about. But I cannot accept the amendment, and I hope that the noble Lord will not refer again to things I do when I should not do them, as I will end up with no job if I am not careful. Perhaps we can try to be explicit about what we mean, which may be more about what I say rather than what we put in to the Bill, to be fair. We have no difficulties about putting out some specific points. I have said to the leadership in the professions, particularly in the Law Society and the Bar Council, although not exclusively to them, that I am very keen and happy for useful things to be said during the passage of the Bill so that matters can be made clear, although we cannot include them in the Bill as they would change the legislation. I hope we can have those discussions so we can be sure that we have clarified matters.
I agree with the principle of working together in a regulatory regime and of ensuring that the Legal Services Board works effectively with those organisations. But I am not sure about a duty of partnership in statute, because I think that that is different. I am keen to make matters as clear as possible and to consider other options, especially for the future.
Lord Kingsland: I am most grateful to the Minister. I believe she has fully understood the point that we have tried to make. Between now and Report stage, she will reflect on the wording. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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Lord Kingsland moved Amendment No. 32:
The noble Lord said: The Minister might find a certain irony in the fact that in Amendment No. 31 we were urging her to accept an amendment which contained the expression,
but in Amendment No. 32 we ask her to remove that expression from Clause 3. As I hope will become clear, our approach is wholly rational in relation to both amendments.
Amendment No. 32 refers to Clause 3, which concerns the Legal Services Board’s duty to promote the regulatory objectives set out in Clause 1(1). Clause 3(2) states:
Our submission is that if one expunges the expression,
from Clause 3(2), the Government will still get exactly what they want from the clause. We believe that the expression,
unnecessarily qualifies Clause 1(1). What is the point of setting out the regulatory objectives in Clause 1(1) if one does not require the board to respect them in Clause 3(2)? If the expression is left in the clause, clearly one removes the obligation, in some circumstances, for the board to act in accordance with the regulatory objectives.
I believe that Clause 3(2)(b) fulfils exactly what the Government ought to want from the clause. The board ought to respect the regulatory objectives, but equally it ought to have the discretion to determine the most appropriate manner for meeting those objectives. As long as the board has discretion to determine the way in which an objective is met, surely that is sufficient. Surely in those circumstances the board can meet its obligation to meet the objective if it has the flexibility to decide the manner in which the objective is met.
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