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The question is whether there could be circumstances where problems had arisen with one of the objectives and it was felt that action should be taken. The
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The adjective “significant” was proposed, although the noble Lord, Lord Kingsland, said that other adjectives could be used. Again, the difficulty for the board is that “significant” when considered from the legal perspective—noble Lords know that I am not a lawyer but I do take legal advice—could hinder the board from operating. For example, if the board were working with a small regulator, could a case where only very few people were affected, albeit extremely adversely, be considered significant? Ultimately it would be for the courts to decide, but from the perspective of this legislation, we do not want to put the board in a position where it feels disempowered to act because of the word “significant”. However, we believe that the objectives sought by the noble Lord, Lord Kingsland, in this amendment are already achieved in the Bill.
Noble Lords are right to want to ensure that the board operates properly, that it considers carefully what is happening and why, that it does not take inappropriate action, is light touch in its operations and conforms to good regulatory practice. All that is already set out in the Bill; therefore there is nothing between us in terms of what is required.
Viscount Bledisloe: My Lords, I should like to understand what the Minister was saying a little earlier. Is she saying that the condition proposed by the amendment, “an adverse impact on the regulatory objectives taken as a whole”, would only be met if all the objectives were adversely affected? I do not understand it that way. As I understand it, you look at the totality of the objectives and ask whether some of them are adversely affected and whether that consideration is not outweighed by improvement to the other objectives. Surely that is what one is meant to be doing. If the Minister is really saying that the provision can only be triggered if all the objectives are adversely affected, I see great force in her argument, but I do not think that that is what the amendment begins to say.
Baroness Ashton of Upholland: My Lords, the noble Viscount—for me, anyway—makes my point. “Taken as a whole” means taken as a whole; if a regulatory objective that said “supports the constitutional principle of the rule of law” were being damaged in some way, but every other objective was being met in a way that we would applaud, the board, according to what I believe the noble Viscount said, could not act. I am saying that the board must be able to act. Of course—I have been explicit about this, and I think I have been quoted on it—the balance with what is happening, which is where the example of the noble Lord, Lord
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Viscount Bledisloe: With respect, my Lords, the Minister misunderstood the intent of the amendment, as I understand it, and its wording. “Taken as a whole” is very different from “all the objectives”. If the Bill said, “had an adverse impact on all the regulatory objectives”, I would see her point, but it does not. I think she seriously needs to think again about the effect of the amendment.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Viscount—
Lord Campbell of Alloway: My Lords, I have a simple question. Does the Minister really understand what is being said, and said particularly well by the noble Lord, Lord Brennan: what we are creating is, so to speak, a structure for a judicial approach? That is the basis; we are not saying any more than that.
Baroness Ashton of Upholland: My Lords, I understand my noble friend Lord Brennan—he has given me some of his time to discuss this—and the noble Viscount. But I wish to explain how the reasons for which noble Lords seek this provision in the legislation are already dealt with in the Bill therefore they need not move their amendments. The amendments as framed would not have beneficial implications for the regulatory framework that we seek to set out. That is the fundamental difference between us. I am arguing that the amendments are unnecessary to achieve what is required and can therefore safely be withdrawn without fear that there will be a problem in the running of the Legal Services Board.
Viscount Bledisloe: My Lords, I understand the Minister—
Lord Evans of Temple Guiting: My Lords, we are on Report, and the Minister has now sat down.
Viscount Bledisloe: My Lords, am I in order or not?
Lord Kingsland: My Lords, the noble Viscount has already deployed his immense gifts for oratory to very considerable effect. He has helped to sharpen and define exactly what the issue is between us and the Government.
In my opening remarks, I drew your Lordships’ attention to some observations made by the noble and learned Baroness, Lady Butler-Sloss, at Second Reading, when she pointed out that almost inevitably, where you have eight objectives, there will be some conflict between them: some will pull in one direction, some will pull in another. At the end of the day, a balanced view has to be taken about whether the importance of
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We have had a number of exchanges with the Government about these issues; the time has come to test the opinion of the House.
5.30 pm
On Question, Whether the said amendment (No. 119) shall be agreed to?
Their Lordships divided: Contents, 184; Not-Contents, 132.
Addington, L.
Anelay of St Johns, B.
Ashdown of Norton-sub-Hamdon, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Beaumont of Whitley, L.
Blackwell, L.
Blaker, L.
Bledisloe, V.
Bonham-Carter of Yarnbury, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Bruce-Lockhart, L.
Burnett, L.
Butler-Sloss, B.
Byford, B.
Campbell of Alloway, L.
Carlile of Berriew, L.
Carnegy of Lour, B.
Cathcart, E.
Cavendish of Furness, L.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Cotter, L.
Courtown, E.
Cox, B.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
De Mauley, L.
Dean of Harptree, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elliott of Morpeth, L.
Elton, L.
Falkland, V.
Ferrers, E.
Finlay of Llandaff, B.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Fraser of Carmyllie, L.
Garden, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geddes, L.
Gilmour of Craigmillar, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Hanningfield, L.
Harris of Richmond, B. [Teller]
Hayhoe, L.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hogg, B.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Hylton, L.
Inglewood, L.
James of Blackheath, L.
Kalms, L.
Kimball, L.
King of Bridgwater, L.
Kingsland, L.
Kirkwood of Kirkhope, L.
Lamont of Lerwick, L.
Leach of Fairford, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lindsay, E.
Linklater of Butterstone, B.
Listowel, E.
Liverpool, E.
Livsey of Talgarth, L.
Low of Dalston, L.
Lucas, L.
Luke, L.
McAlpine of West Green, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
Mackie of Benshie, L.
Maclennan of Rogart, L.
McNally, L.
Mar, C.
Mar and Kellie, E.
Marland, L.
Marlesford, L.
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Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Monson, L.
Montgomery of Alamein, V.
Montrose, D.
Moore of Lower Marsh, L.
Morris of Bolton, B.
Moynihan, L.
Neill of Bladen, L.
Neuberger, B.
Newton of Braintree, L.
Noakes, B.
Northbourne, L.
Northbrook, L.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Palmer, L.
Palumbo, L.
Park of Monmouth, B.
Patten, L.
Perry of Southwark, B.
Pilkington of Oxenford, L.
Ramsbotham, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rees, L.
Rennard, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
St John of Fawsley, L.
Saltoun of Abernethy, Ly.
Sandwich, E.
Seccombe, B.
Selsdon, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Shephard of Northwold, B.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Steinberg, L.
Stewartby, L.
Stoddart of Swindon, L.
Strathclyde, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thatcher, B.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tope, L.
Tordoff, L.
Trimble, L.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wade of Chorlton, L.
Wakeham, L.
Waldegrave of North Hill, L.
Wallace of Saltaire, L.
Walpole, L.
Walton of Detchant, L.
Wilcox, B.
Williams of Crosby, B.
Windlesham, L.
Young of Graffham, L.
Acton, L.
Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Amos, B. [Lord President.]
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Bilston, L.
Boyd of Duncansby, L.
Bradley, L.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Colville of Culross, V.
Corbett of Castle Vale, L.
Crawley, B.
Cunningham of Felling, L.
David, B.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Donoughue, L.
D'Souza, B.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. [Lord Chancellor.]
Falkender, B.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Ford, B.
Foulkes of Cumnock, L.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greengross, B.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howells of St. Davids, B.
18 Apr 2007 : Column 256
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Janner of Braunstone, L.
Joffe, L.
Judd, L.
Kilclooney, L.
King of West Bromwich, L.
Kingsmill, B.
Kirkhill, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Mitchell, L.
Moonie, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Murphy, B.
Parekh, L.
Patel, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Puttnam, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Royall of Blaisdon, B.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Finsbury, L.
Snape, L.
Soley, L.
Stone of Blackheath, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Thornton, B.
Truscott, L.
Tunnicliffe, L.
Turnberg, L.
Turner of Camden, B.
Wall of New Barnet, B.
Watson of Invergowrie, L.
Whitaker, B.
Williams of Elvel, L.
Williamson of Horton, L.
Woolmer of Leeds, L.
Resolved in the affirmative, and amendment agreed to accordingly.
5.43 pm
Lord Kingsland moved Amendment No. 120:
On Question, amendment agreed to.
Lord Kingsland moved Amendments Nos. 121 to 123:
On Question, amendments agreed to.
Schedule 7 [Directions: procedure]:
Baroness Ashton of Upholland moved Amendments Nos. 124 and 125:
Schedule 7, page 150, line 36, leave out from “The” to “thinks” in line 37 and insert “Lord Chancellor must give the Board such advice as the Lord Chancellor”
On Question, amendments agreed to.
Lord Kingsland moved Amendments Nos. 126 to 128:
18 Apr 2007 : Column 257
On Question, amendments agreed to.
[Amendment No. 129 not moved.]
Clause 35 [Public censure: procedure]:
[Amendment No. 130 not moved.]
Clause 36 [Financial penalties]:
Baroness Ashton of Upholland moved Amendment No. 131:
“(a) that an approved regulator has failed to comply with a requirement to which this section applies, and”The noble Baroness said: My Lords, I wish to speak also to Amendments Nos. 136, 137, 140 to 145 and 175. In Committee, noble Lords presented a number of characteristically persuasive arguments questioning the way in which the board’s fining power is intended to operate. Having had the opportunity to reflect on those arguments, I am persuaded of the case for change. I am therefore bringing forward amendments to limit the circumstances in which the board may exercise its power to fine to those instances where an approved regulator has failed to separate its regulatory and representative functions in accordance with rules made under Clause 29, failed to comply with a direction made under Clause 31, or failed to comply with Clause 50 or rules made under that clause relating to practising certificate fees. These are all issues over which the approved regulator has both the responsibility for the issue and the ability to control outcomes. In these instances, it is clearly right that the board should be able to issue a penalty if it considers that that is the most effective course of action.
Consumer groups have argued strongly against constraining the fining power; they see the board’s power to impose a financial penalty as an important part of a regulator’s toolkit and one that, when used, will send a clear and public message to consumers that regulators have the ability and willingness to act on their behalf. To an extent we accept that view, but noble Lords will see that I have tabled amendments to determine the circumstances.
We have also lengthened the time within which an approved regulator can appeal a financial penalty from 42 days to three months. We accept the view of the noble Lord, Lord Kingsland, that the timeframe within which to appeal should reflect the timeframe for judicial review.
I hope that noble Lords will recognise that the Government have listened to their concerns and that we have moved to constrain the fining power and to extend the arrangements to challenge the use of that power. I believe that, in doing that, we have gone as far as is reasonable. I hope that noble Lords will accept these amendments. I beg to move.
Lord Kingsland: My Lords, we thank the Government for tabling amendments to restrict the power to fine to circumstances where an approved regulator fails to comply with a direction, or breaches the provisions concerning separation of regulatory from representative
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On Question, amendment agreed to.
Lord Kingsland moved Amendments Nos. 132 to 134:
On Question, amendments agreed to.
Lord Kingsland moved Amendment No. 135:
“( ) that the approved regulator has failed to comply with a direction made under section 31,”The noble Lord said: My Lords, we are extremely grateful to the Government for the amendments that they have just brought forward. However, they have not yet accepted the general principle that fines should be imposed only where no lesser sanction is appropriate. They have, of course, included that principle in Clauses 40 and 44, which deal with intervention and the cancelling of approved regulators’ designations; and in other contexts, they have accepted that the power to fine is significantly different from the powers to give directions, to set targets and to censure. For example, the Bill provides for appeals against fines. In dealing with an amendment moved by my noble friend Lord Campbell of Alloway concerning judicial review, in respect of Legal Services Board directions, the Minister said that,
- “the fining power within the Bill is, we believe, a stronger power. Noble Lords and those who are being regulated may also feel that it is stronger, more definitive and has potentially greater and far-reaching consequences. We therefore wanted to add the ability to go to appeal specifically around that power. So we did so, by saying that there would be leave to go to the High Court to appeal on that power”.—[Official Report, 23/01/07; col. 1013.]
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