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17 Oct 2007 : Column 720

I am not sure that we are going to get further on the matter. The Government believe that this is the most appropriate way forward. I look forward to the comments of the noble Lord, Lord Kingsland.

Lord Kingsland: My Lords, I am most grateful to the Minister. I understand his dilemma very well. When I said that this matter had been introduced in another place out of the blue and had not been considered at all by your Lordships’ House, I did not in any way mean to criticise him personally. Indeed, there are often circumstances in the middle of a Bill’s passage in which, because of an event over which one has no control, one has suddenly to introduce an element that was not considered by one or other of the two Houses. I would not want him to think that I was trying to make a party-political point.

Nevertheless, the problem with introducing this at such a late stage is that we cannot have the normal exchange of views—the normal process of iteration—which often brings us, especially in your Lordships’ House, to an amicable conclusion. The difficulty is that this is the one and only time we have to consider this matter.

I have much sympathy with what has been said on all sides of the House. The concern of the noble Lord, Lord Sawyer, about the definition in our amendment in relation to matters connected with the provision of advice on employment is a perfectly sound observation. I cannot be sure exactly what the scope of our amendment will be. Indeed, nobody can be sure of the scope of any of the clauses in the Bill.

I have tried, as accurately as possible, to distinguish those services that legitimately ought to be given by a trade union to its members in the context of employment and the other services, which were extremely well defined by the noble Baroness, Lady Turner of Camden. She reminded us that trade unions have traditionally offered—even advertised—services with a view to attracting members. That is precisely the area at which this amendment is targeted. We think, as the noble Lord, Lord Thomas of Gresford, said, almost in aphorism, that those individuals deserve the same standard of protection as every other consumer in the country. Many of those services are totally unconnected with the employment function that it is the duty of the union to protect.

In those circumstances, I am inclined to ask the opinion of the House, realising that, if we win, the Government will have an opportunity to look at the matter again.

4.40 pm

On Question, Whether the said amendment (No. 4A) shall be agreed to?

Their Lordships divided: Contents, 174; Not-Contents, 138.

Division No. 1


Addington, L. [Teller]
Ampthill, L.
Anelay of St Johns, B. [Teller]
Ashcroft, L.
Astor of Hever, L.
Attlee, E.

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Barker, B.
Best, L.
Bilimoria, L.
Blackwell, L.
Bledisloe, V.
Bonham-Carter of Yarnbury, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Bridges, L.
Brooke of Sutton Mandeville, L.
Brookeborough, V.
Browne of Belmont, L.
Burnett, L.
Byford, B.
Campbell of Alloway, L.
Carnegy of Lour, B.
Cathcart, E.
Chidgey, L.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Crathorne, L.
Crickhowell, L.
De Mauley, L.
Dean of Harptree, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elles, B.
Elliott of Morpeth, L.
Erroll, E.
Falkner of Margravine, B.
Feldman, L.
Ferrers, E.
Fookes, B.
Freeman, L.
Geddes, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Greaves, L.
Greengross, B.
Griffiths of Fforestfach, L.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Hannay of Chiswick, L.
Harris of Richmond, B.
Hayhoe, L.
Henley, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Hooson, L.
Howard of Rising, L.
Howarth of Breckland, B.
Howe, E.
Howell of Guildford, L.
Hunt of Wirral, L.
Inglewood, L.
James of Blackheath, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Jopling, L.
Kimball, L.
King of Bridgwater, L.
Kingsland, L.
Kirkwood of Kirkhope, L.
Laing of Dunphail, L.
Laird, L.
Lawson of Blaby, L.
Lee of Trafford, L.
Lindsay, E.
Linklater of Butterstone, B.
Liverpool, E.
Livsey of Talgarth, L.
Luke, L.
Lyell, L.
Lyell of Markyate, L.
McAlpine of West Green, L.
McColl of Dulwich, 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.
Marlesford, L.
Masham of Ilton, B.
Methuen, L.
Miller of Hendon, B.
Morris of Bolton, B.
Murphy, B.
Naseby, L.
Neill of Bladen, L.
Neuberger, B.
Newby, L.
Newton of Braintree, L.
Northesk, E.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Onslow, E.
Oppenheim-Barnes, B.
Palmer, L.
Park of Monmouth, B.
Patel of Bradford, L.
Perry of Southwark, B.
Pilkington of Oxenford, L.
Platt of Writtle, B.
Plumb, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rees, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rogan, L.
Roper, L.
Rotherwick, L.
Saltoun of Abernethy, Ly.
Sanderson of Bowden, L.
Sandwich, E.
Seccombe, B.
Selkirk of Douglas, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Steel of Aikwood, L.
Stewartby, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Swynnerton, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.

17 Oct 2007 : Column 722

Tope, L.
Tordoff, L.
Trefgarne, L.
Trimble, L.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wade of Chorlton, L.
Wakeham, L.
Wallace of Saltaire, L.
Walmsley, B.
Walpole, L.
Walton of Detchant, L.
Warnock, B.
Wilcox, B.
Williamson of Horton, L.


Acton, L.
Adams of Craigielea, B.
Adonis, L.
Ahmed, L.
Alli, L.
Amos, B.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B. [Lord President.]
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Billingham, B.
Bilston, L.
Borrie, L.
Boyd of Duncansby, L.
Bradley, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
Darzi of Denham, L.
David, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Drayson, L.
Dubs, L.
Eatwell, L.
Elder, L.
Evans of Parkside, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jones, L.
Jones of Whitchurch, B.
King of West Bromwich, L.
Kirkhill, L.
Lea of Crondall, L.
Leitch, L.
Lipsey, L.
Lofthouse of Pontefract, L.
Macaulay of Bragar, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
McKenzie of Luton, L.
Mallalieu, B.
Massey of Darwen, B.
Maxton, L.
Moonie, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Manchester, L.
O'Neill of Clackmannan, L.
Ouseley, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rendell of Babergh, B.
Richard, L.
Robertson of Port Ellen, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Gilmorehill, B.
Soley, L.
Stern, B.
Stevens of Kirkwhelpington, L.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Thornton, B.
Tomlinson, L.
Triesman, L.
Truscott, L.
Tunnicliffe, L.
Turner of Camden, B.
Vadera, B.
Warner, L.
Warwick of Undercliffe, B.

17 Oct 2007 : Column 723

Watson of Invergowrie, L.
Wedderburn of Charlton, L.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Young of Norwood Green, L.

Resolved in the affirmative, and amendment agreed to accordingly.

4.52 pm
(a) Schedule 3 (exempt persons), or(b) paragraph 13 or 18 of Schedule 5 (additional categories of exempt persons during transitional period).”

Lord Hunt of Kings Heath: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 5 to 9. I have already spoken to these amendments.

Moved accordingly, and, on Question, Motion agreed to.

(b) that it is appropriate to take the action proposed under subsection (1) in all the circumstances of the case (including in particular the impact of taking the action on the other regulatory objectives).” (b) that it is appropriate to give the intervention direction in all the circumstances of the case (including in particular the impact of giving the direction on the other regulatory objectives).”

17 Oct 2007 : Column 724

(b) that it is appropriate to cancel the body's designation in relation to the activity or activities in question in all the circumstances of the case (including in particular the impact of cancelling the designation on the other regulatory objectives).” (b) that it is appropriate to cancel the approved regulator’s designation in relation to the activity or activities in question in all the circumstances of the case (including in particular the impact of cancelling the designation on the other regulatory objectives).”

Lord Hunt of Kings Heath: My Lords, I beg to move that the House do disagree with the Commons in their Amendments Nos. 10 to 14, but do propose Amendments Nos. 10A, 11A, 11B, 12A, 13A, 14A and 14C in lieu. Perhaps I may point out that there was a mistake and a corrected amendment, Amendment No. 14C, has been tabled in lieu of Amendment No. 14B, which has been removed from the Marshalled List.

These amendments bring us to the important question of the threshold limits on the exercise of broad powers and allow for the board to regulate proportionately and effectively. In this and the next group of amendments we will debate the appropriate style of the overarching regulator. I understand fully that this is very important. One wishes to get the benefits of having an overarching regulator, but in a way that does not cramp the style or micromanage the individual regulatory bodies. Getting the balance right is very important.

We all recognise the importance of a board which, in accordance with Sir David Clementi’s recommendations, is an effective oversight regulator that allows the approved regulators to get on with their jobs but is able to take appropriate action where those regulators fail to do so. Consideration has been given to ensuring that, within that, we have a sensible relationship and that we do not raise the threshold so as to prevent the board from acting or to cause doubt or argument about its ability to act. Equally, we do not want the board trying to micromanage the activities of the regulatory bodies. We believe that this group of amendments provides that essential balance. I beg to move.

Moved, That the House do disagree with the Commons in their Amendments Nos. 10 to 14, but do propose Amendments Nos. 10A, 11A, 11B, 12A, 13A, 14A and 14C in lieu.—(Lord Hunt of Kings Heath.)

Lord Kingsland: My Lords, I thank the Minister for the change that, in particular, Amendment No. 12A introduces. He will be aware that what I take to be the substance of that amendment formed part of one of the amendments which was incorporated in the Bill in your Lordships’ House before it went to another place.

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I know that the right honourable gentleman the then Home Secretary considered Amendment No. 12A at the Committee stage in another place but, for some reason I have not yet fathomed, it did not find its way at Report stage into the Bill. The Minister has now rectified that omission by bringing it forward at this stage, and I am extremely grateful to him for doing so.

I should like to be absolutely clear about the text. Paragraph (b) of Amendment No. 12A states,

In the Bill as it first emerged, it was enough to trigger the involvement of the Legal Services Board for an adverse impact to be experienced simply by one of the eight regulatory objectives. As I understand it, the amendment now states that the Legal Services Board has to conduct a kind of cost-benefit analysis; that is to say, it has to look at the initial adverse impact in the context of any positive impact that might be had on the other seven objectives.

One of the examples mooted in your Lordships’ House during our many debates on this subject was about a measure which had an adverse impact on competition but a correspondingly beneficial effect on access to justice, and it was up to the Legal Services Board to determine whether there was a net benefit. That is my understanding of what we sought to do here. It is also my understanding of what the amendment, which the Minister has kindly presented to your Lordships’ House, achieves. I should like the Minister to confirm that.

Lord Thomas of Gresford: My Lords, we, too, are grateful to the Government for considering the debates that we had in this House and in another place and for moving towards the position that we adopted on these Benches. This is a very considerable improvement on the Bill as originally drafted and we support the Government in what they have done.

5 pm

Lord Hunt of Kings Heath: My Lords, I thought the noble Lord, Lord Kingsland, put it very well; better, in fact, than my speaking note. He is quite right about the approach that is taken and I am grateful for his support.

On Question, Motion agreed to.

(a) take account of the desirability of resolving informally matters which arise between the Board and an approved regulator, and(b) specify how, in exercising the functions mentioned in that subsection, the Board will comply with the requirements of section 3(3) (regulatory activities to be proportionate, consistent and targeted only at cases in which action is needed, etc).”

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Lord Hunt of Kings Heath: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 15.

This group of amendments covers the area we have just discussed—the essential balance between the role of the overarching regulator and the individual bodies. Previous debates on this issue centred on the need to establish the appropriate relationship between the board and the approved regulators, and that gave rise to amendments that covered three main issues. First, the board should consider the “B plus” model of regulation by recognising that the primary responsibility for regulation rested with the approved regulators. Secondly, the board should apply a test that the approved regulator had taken unreasonable action or inaction before it could exercise its powers. Thirdly, the board must seek to resolve matters informally before resorting to the exercise of a power.

While there were technical drafting reasons, as there often are, why the Government could not accept those particular amendments, we agreed with two of the three underlying principles so that the board would be making it clear in the policy statement how it would avoid micromanagement or second-guessing of approved regulators. All agreed, as do I, that that would be highly undesirable.

We were not able to accept the requirement for the board to fetter its discretion to act so that it must be satisfied before it can use any of its powers that the action or inaction of the approved regulator to which the power would be directed is unreasonable. Of course it is sensible that the board should consider the reasonableness of an approved regulator’s actions before exercising its powers. Unreasonable action or stubbornness in refusing to take action when it is clearly called for will raise for the board the question of whether it should act. There may be occasions, however, when an approved regulator might act or refuse to act in a way that the regulator argues is not outside the bounds of what a reasonable regulator might choose to do but the overall effect has, or seriously risks having, a harmful effect on the regulatory objectives. Our concern is that we would not want to prevent the board taking such action in such circumstances.

Moved, That the House do agree with the Commons in their Amendment No. 15.—(Lord Hunt of Kings Heath.)

(c) ensure that the Board exercises its powers only where it considers that the action or inaction of an approved regulator is not an approach which the approved regulator could reasonably have taken.””

Lord Kingsland: rose to move, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 15, at end insert “but do propose Amendment No. 15A as an amendment to Commons Amendment No. 15”.

The noble Lord said: My Lords, I thank the Minister for Amendment No. 15, which, once again, is a considerable improvement on the original text as well as being expressed far more elegantly than

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before. However, despite his tranquilising observations, I still wish to press Amendment No. 15A.

The noble Lord will no doubt recall from the homework he will have had to do over the summer that all this started with the report of Sir David Clementi. Towards the end of his report Sir David said in terms that,

In the Government’s response to that, they said that the MSB should intervene only if an approved regulator was “clearly failing”. Yet that philosophy was not reflected in the Bill as it arrived in your Lordships’ House.

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