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Baroness Williams of Crosby: My Lords, may I bring the noble and learned Lord back to the issue of the royal prerogative? In his stout defence, quite rightly, of accountability to Parliament, would he not agree that the fact that Parliament has no voice whatever on the treaties signed by Her Majesty’s

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Government is a very substantial problem in a modern democracy? Does he agree that it is high time that the two Chambers of our Parliament began to set up machinery to enable Parliament to be heard on the issue before the signing of significant treaties?

Lord Falconer of Thoroton: No, my Lords, I do not agree with that proposition. The noble Baroness is right to some extent, in that it is for the Executive to conduct the foreign policy of this country. If they conducted foreign policy that went beyond that which was acceptable to Parliament, they would quite quickly lose the confidence of the Commons. Secondly and separately, if after a treaty has been signed it is intended to make it part of the law of this country, Parliament needs to make that happen, and that requires parliamentary approval.

Special Advisers

2.58 pm

Lord Campbell-Savours asked Her Majesty’s Government:

Lord Davies of Oldham: My Lords, the employment of special advisers in Her Majesty’s Treasury is in accordance with the Code of Conduct for Special Advisers and the Model Contract for Special Advisers. The Government’s position on the funding of special advisers remains as set out in their response to the Session 2000-01 report of the Public Administration Select Committee on special advisers.

Lord Campbell-Savours: My Lords, was not the attack by the Chancellor of the Exchequer’s special adviser on the MPs for Darlington and North Tyneside totally in breach of paragraph 14 of the Code of Conduct for Special Advisers, paragraph 15c of the contract of employment of special advisers and paragraphs 12 and 13 of the Civil Service Code? Why, when 11 Written and Oral Questions have been asked over four and a half months, does the Treasury still refuse to respond on this issue? Does not the deafening silence of the Treasury on these breaches make a mockery of the solemn undertaking given to Parliament in 2004, which guaranteed the accountability of Ministers to Parliament for the actions of special advisers?

Lord Davies of Oldham: My Lords, the relevant Minister is responsible both for the appointment of special advisers in his or her department and for their conduct. My noble friend would not expect me to discuss a specific case at the Dispatch Box, but let us be absolutely clear that parliamentary accountability

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rests with the Minister who has appointed the special advisers. When there have been contributions and Questions, such as those that my noble friend has asked over a protracted period, lessons are learnt by special advisers about the dangers of communications with the press and the importance, as my noble friend has reiterated, of keeping out of public political controversy.

Lord Maclennan of Rogart: My Lords, given that the number of special advisers has more than doubled since this Government took office and given that their role in the public service was secretively enhanced by amendment to the Civil Service Order in Council in 2005, will the Government now enact a Civil Service Bill to remove the possibility of recruiting personnel into the Civil Service outside normal merit-based arrangements?

Lord Davies of Oldham: My Lords, this country glories in the fact that its Civil Service is non-political. Also, of course, we have 3,900 senior civil servants. It is important that political advisers who give political advice are separate from that apolitical—non-political—Civil Service. That is why we have special arrangements for them, both in their appointment and in accountability for their actions through the Minister.

The Countess of Mar: My Lords, has the special adviser concerned either resigned or been sacked? If not, can the Minister say what the point is of having the codes, listed by his noble friend, in the first place?

Lord Davies of Oldham: My Lords, the codes are to ensure that political advisers know exactly what their responsibilities are. It is for the Minister to form a judgment on whether the code has been transgressed. Although my noble friend has contended that the code has been transgressed, the judgment of the Minister is different from that of my noble friend.

Lord Marlesford: My Lords, as I learnt from my experience as a member of an earlier and much smaller brood of special adviser, the less one said outside Whitehall, the more one could discover inside Whitehall and, therefore, the more use one could be to Ministers. Does the Minister agree?

Lord Davies of Oldham: My Lords, I hesitate to suggest that that is the basis of the code, but I certainly think that special advisers are all too well aware, first, of the basis of the code to which they are obliged to subscribe and, secondly, as the noble Lord has indicated, that their public role is circumscribed by that code. If they err in any respect—and I am not saying that they ever do—it is to be anticipated that there will be a public reaction.

Lord McNally: My Lords, would the Minister confirm that some special advisers have gone on to live worthwhile and productive lives? Does not any fault of the current pack of special advisers to the Treasury pale into insignificance compared with that

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of the special adviser who stood at the shoulder of Mr Norman Lamont while we lost billions across the exchanges on Black Wednesday? If noble Lords cannot remember his name, I can tell them that it was Cameron—David Cameron.

Lord Davies of Oldham: My Lords, in order to save the noble Lord’s blushes, perhaps we should constrain ourselves to the past decade and a half and not go any further back as far as special advisers are concerned. I cannot recall anyone who has made a more noble contribution to the nation than that made by those in the role of special adviser properly discharged. Special advisers do a proper job, which is highly valued. That is why successive Governments have been concerned to ensure the continuation of the role within the framework of clearly prescribed codes.


3.05 pm

Lord Grocott: My Lords, with the leave of the House, at a convenient time after 4 pm a Statement on Iraq will be repeated by my noble friend Lord Drayson.

House Committee

Economic Affairs Committee

The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the two Motions standing in my name on the Order Paper.

House Committee

Moved, That Lord Baker of Dorking be appointed a member of the Select Committee in the place of Lord Renfrew of Kaimsthorn, resigned.

Economic Affairs

Moved, That Lord Griffiths of Fforestfach be appointed a member of the Select Committee in the place of Lord MacLaurin of Knebworth, resigned.—(The Chairman of Committees.)

On Question, Motions agreed to.

Parliament (Joint Departments) Bill [HL]

Report received.

Legal Services Bill [HL]

3.06 pm

Report received.

Clause 1 [The regulatory objectives]:

The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland) moved Amendment No. 1:

“( ) protecting and promoting the public interest;”

The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 31, 32, 115, 116 and 331.

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The Government have given very serious consideration to the view expressed by noble Lords in Committee that recognition of the public interest should be given greater prominence in the Bill. I thank all those who took part in those debates and who subsequently gave me the benefit of their advice on how I might take this issue forward. I was very persuaded by the views expressed, and I now bring to your Lordships’ House this group of amendments to alter provisions in the Bill which deal with the public interest in a way that I hope noble Lords will feel able to support.

In Committee, noble Lords felt that there were two principal ways in which we could achieve this objective, and I want to explain why I have taken the approach that I have. I resisted the initial thoughts of the noble Lord, Lord Kingsland, who sought to add the public interest to the objective of protecting and promoting consumers’ interests, which noble Lords will find at Clause 1(1)(c). I said in Committee that I was concerned that that had the potential to create confusion because, as noble Lords indicated, the consumer interest and the public interest may not always coincide. Although we expect to see a healthy tension between individual objectives, I want to try to prevent the creation of tension within each objective. Therefore, I was more attracted to the proposition of the noble Lord, Lord Thomas of Gresford, who cannot be with us today. He proposed creating a new regulatory objective to protect and promote the public interest, which I felt had the clear advantage of recognising the need to protect and promote the public interest as an important objective in its own right.

As a consequence of setting out this duty as a regulatory objective, it is necessary to remove the existing duty to have regard to the public interest at Clauses 3, 27 and 113. I beg to move.

Lord Carlile of Berriew: My Lords, in the absence of my noble friend Lord Thomas of Gresford, who is in sunnier climes—although, I hasten to say, working very hard—I thank the Minister for the important concession made in these amendments. The specificity of the public interest within the statute is, in our view, a matter of considerable importance, and it is of course of paramount importance that the Government have accepted that. So we support the amendments.

Lord Kingsland: My Lords, we, too, support the Government’s amendment, although, more generally, we are extremely disappointed by their reaction to other key clauses in the remainder of the Bill.

Our original amendment was to link the consumer interest and the public interest simply because we felt that, by aligning the two, the Legal Services Board would be compelled to balance the two fundamental concepts that ought to lie at the root of the Bill. However, I am extremely happy to yield to the greater perspicacity of the noble Lord, Lord Thomas of Gresford.

I am not surprised that the Government have been able to concede this point to your Lordships. It would have been extremely difficult for the noble Baroness to

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refuse to insert in the Bill as one of its objectives that the public interest would be respected. I note that the noble Baroness nods as I speak. Nevertheless, we are of course extremely pleased to see the amendment there.

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord. I always like to try to begin on a high however much the noble Lord may fear that I will descend to a low from his perspective. With regard to the public interest, I do not think that there has ever been anything much between us on the issues, which we will find as we go through the Report stage; it is a question of how to achieve them. I listened with great care to the need to stamp the question of public interest further in the Bill. There was never a desire on my part not to recognise it. We have found a way through and I am grateful for the support.

On Question, amendment agreed to.

[Amendment No. 2 not moved.]

Lord Kingsland moved Amendment No. 3:

The noble Lord said: My Lords, the noble Baroness will recall the exchanges on this amendment over the Dispatch Box in Committee. In particular, I hope that she will recall that two questions were at issue. The first was whether the competition objective ought to be subservient to the first three objectives in Clause 1(1); that is, whether it ought to bite only if the Legal Services Board was satisfied that the first three objectives had been achieved. The noble Baroness’s response, consistent with responses on Clause 1 in other respects, was to say that in her judgment all seven—now eight—objectives of the clause should carry equal weight, and that the Legal Services Board should exercise its judgment freely as between the appropriate weight given.

As the noble Baroness has not tabled an amendment on this issue, it is reasonable to conclude that that remains the Government’s position. It is now up to us to decide whether to put the matter to a vote. However, there was another dimension to the amendment, to which the noble Baroness promised to give further consideration. Clause 1 provides that the competition responsibilities of the Legal Services Board apply only to anti-competitive behaviour by “authorised persons”.

It is perfectly understandable that that should have been the Government’s approach as the Competition Commission and the OFT have no responsibilities in that area. However, the Bill is by no means silent on the responsibilities of those organisations. The Minister will recall that there are detailed provisions in Clauses 56 to 60 about the responsibilities of the OFT and the Competition Commission over the competitive behaviour of the regulators themselves. An extremely elaborate procedure is laid down whereby the OFT draws up a report and reports to the Secretary of State. There is then a provision for the Secretary of State to go to the Competition Commission for a further report on the same matter.

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3.15 pm

We have two competition authorities, therefore, dealing with the responsibilities of the regulators on the one hand and the authorised persons on the other. My concern, as the Minister well knows, is over the confusion and conflict between the competition responsibilities of the OFT, the Secretary of State and the competition authority on the one hand and the Legal Services Board on the other. It is hard to see how you can compartmentalise anti-competitive behaviour in a regulator which will inevitably have an effect on the competitive behaviour of an authorised person. How, in those circumstances, can you unpack the anti-competitive conduct so as to divide the responsibilities as clearly as the Bill does? I beg to move.

Lord Campbell of Alloway: My Lords, briefly, I support the amendment. It is a requisite for the reasons given by my noble friend Lord Kingsland, but it is more than that. It is a form of consolidation between old Amendments Nos. 1 and 2, in which there was an element of division. For various reasons which I shall not repeat, I went for old Amendment No. 1 but my noble and learned friend Lord Lyell of Markyate went for old Amendment No. 2. In effect, the amendment removes any form of discrepancy in the drafting, achieving a result which ought to be accepted by the House for the reasons given by my noble friend.

Lord Maclennan of Rogart: My Lords, briefly, I support this amendment for the reasons I set out in Committee. The Minister was then good enough to say that she did not disagree with what I was saying. That led me to think that she would in due course consider what had been said and that there would be a positive response. I hope that that will be forthcoming.

Baroness Ashton of Upholland: My Lords, agreeing with what the noble Lord, Lord Maclennan of Rogart, says is something I always try to do, not least because he offers a great deal of sense in our debates, along with other noble Lords who have spoken. That does not necessarily mean, however, that I feel the need to amend the Bill; rather, as you would expect, it means that I would take it away and consider whether we ought to do more.

David Clementi was clear that you should not try to rank the regulatory objectives in the Bill, prioritising some over others, because that could create difficulties. Rather, he said, it was for the regulatory body to determine what weight to give at various points, depending on the issue before it. The Government have taken that approach, in line with what he said. He concluded that,

We have consistently said that, and have acted upon the Joint Committee’s recommendation that the Explanatory Notes should make it explicit that the objectives are not listed in order of importance. We took it on board and dealt with it as appropriately as we could.

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Effective competition is an important part of ensuring that good services are provided. The briefing given out by Which? quotes something from the Financial Times which struck me as I read it over the weekend—that:

which I guess includes me,

Those are important aspects of the provision of good, high-quality services. They may not be of a higher importance than the other objectives in all circumstances, but they are none the less important in certain circumstances. Therefore, we have deliberately not ranked the objectives, but left it for the regulatory body, which we think is the right place, to determine in the specific circumstances we are dealing with what weight to give—as the noble Lord, Lord Kingsland, said, the appropriate weight. That is why I resist the amendment.

As regards the difference between what happens in the later clauses—I think the noble Lord, Lord Kingsland, mentioned Clause 55—in terms of the anti-competitive role of the Office of Fair Trading and what is going on in the earlier clauses, Clause 1 applies to services provided by authorised persons, and Clauses 3 and 27 require the board and approved regulators to apply these objectives. Any rule maintained by an authorised body which restricts competition can be duly struck down by the board. It can do so following advice from the OFT under Clause 56. Clause 1, in particular, ensures that competition is understood by authorised persons and that they operate bearing in mind competition. Regulatory bodies and the role of regulation with the OFT comes in later clauses.

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