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Lord Skelmersdale: My Lords, I am grateful to the Minister for giving way. Will he accept that everything he said relates to the first time round, to the primary order? Subsequent to that, under Clause 4, there are likely to be, in many if not in most cases, supplementary orders flowing from the primary order. Therefore none of what he said about the processes attached to the primary order will last the test of time. By definition, the primary order will have to be amended at some stage.

Lord McIntosh of Haringey: My Lords, I was going to come to that point. It was raised not only by the noble Lord, Lord Skelmersdale, but also by the noble Lord, Lord Norton, and my noble friend Lord Borrie. The noble Lord is referring to the subordinate provisions.

In our view those provisions are key to the regulatory reform order-making process. In order to secure it, we are open to suggestions for amending that part of the Bill. Perhaps we could provide for such orders to be made by either positive or negative resolution. Either type of order could flow from this

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provision. But we rely on the advice of the committees in each instance as to whether or not matters should be identified as subordinate and, if so, which procedure is appropriate. This is a matter we can certainly debate in Committee. But it gives me the opportunity to repeat the assurance given by my noble and learned friend in May of last year. At that time the Government undertook to continue to respect the convention that no measure under the Deregulation and Contracting Out Act should be forced through in the face of the committee's opposition. The noble Lord, Lord Goodhart, and the noble Viscounts, Lord Goschen and Lord Bridgeman, asked for that assurance and I am happy to repeat the undertaking today.

I turn to the issue of sunset provisions. There are two kinds of sunset provision. They can apply to the Bill as a whole or they can apply to individual orders. We listened carefully to what was said about sunset provisions. Of course it is always an interesting idea and was canvassed in the course of the passage of the Deregulation and Contracting Out Bill. It is raised again in the 18th report of our own Select Committee. But we see serious disadvantages in accepting a sunset clause for the whole Bill. My noble and learned friend clearly set that out.

The difficulty is that departments which are to be encouraged to use the regulatory reform order procedure will be persuaded to do so if they see that procedure as continuing into the future. If they think that they have not reached the point of putting a measure before Parliament before the sun sets--perhaps a considerable time before the time of sunset is advertised in the meteorological reports--then they will not do it. We might have--if we had, for example, a five-year sunset--only a three-year effective period.

Lord Goodhart: My Lords, I am grateful to the noble Lord for giving way. Is it possible to overcome that problem to a large extent by, for instance, allowing the renewal order for the Act to be passed, say, 12 to 18 months before the sun was due to set?

Lord McIntosh of Haringey: My Lords, that is an interesting suggestion and no doubt an amendment can be tabled and we can debate it. But it was not so much the time scale that concerned me, though I used the timescale as an advantage. The difficulty is the uncertainty as to whether the provisions will continue. We accept that there is concern about the matter and that there are arguments, which we would like to debate in Committee, about the review of these important powers and at what stage that should be undertaken. I do not in any way want to close off debate on this important matter.

I noticed that the previous government opposed an amendment to the 1994 Bill as it went through Parliament and my present judgment is that they were right to do so. It introduces a note of uncertainty into the future of the power, a constraint which makes it less effective.

The noble Lord, Lord Norton, made a different point about a sunset order for all orders on the face of the Bill. That may happen and it may be appropriate

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to do that. We are doing it for Part I of the Electronic Communications Act 2000--I shall be speaking to that in a few moments--and we have done so for the Football Disorder Act 2000. But we must balance the benefits of ending outdated regulations against the burdens of uncertainty and change. I am not convinced that a blanket sunset provision for orders would be appropriate, although I would not want to set the face of the Government against sunset orders where they seem to be appropriate.

I appreciate everything said by my noble friend Lord Harrison about the dangers of gold-plating European legislation and the many other valuable points he made about it. However, the Bill is concerned with domestic legislation and if we began to widen the scope we should be in serious trouble.

I turn to the issue which was raised in particular by the noble Lords, Lord Dahrendorf and Lord Norton. I am not accusing them of being paranoid, any more than I was really accusing the noble Lord, Lord Skelmersdale, but it is a fear of the control-freak government. No one is suggesting that this Government are a control-freak government--people shy away from that and quite right, too! However, I must emphasise that the legal safeguards on what is proposed in the Bill are very strict. I have already referred to the need for proportionality, for necessary protection, for a fair balance and for not damaging reasonable expectations. If we were to flout any of the restrictions and safeguards, we should be under risk of successful judicial review and we would hardly use a measure of this kind for that purpose.

I turn to the question of whether the Minister should make the decision and the fear that such a decision would mean that the test was not objective. That was raised by the noble Lords, Lord Kingsland and Lord Goodhart. It is for the committees to accept or reject that decision and therefore it comes back to the legislature rather than to the executive. The noble Lord, Lord Goodhart, recognised that the necessary protection is a concept taken over from the Deregulation and Contracting Out Act 1994 and it has been seen to work well. Where the Delegated Powers and Deregulation Select Committee and its sister committee have criticised proposals, in each case the Government have amended them to take account of the committee's views.

I turn to a point raised by the noble Lord, Lord Vinson, who has had to leave because he has the last seat on the last plane. He said that we should stick to Section 5 of the Deregulation and Contracting Out Act but my noble friend Lord Borrie rightly reminded us that the old Section 5 procedures were, in the event, hardly used. In December 1996 there was a consultation exercise on its use. The feedback for the enforcers was that enforcers--mainly local authorities--felt that the Xminded to" provisions involved in Section 5 were too bureaucratic and could be manipulated by illegitimate businesses. Instead, we preferred to draw up the enforcement concordat,

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which was the result of extensive consultation with business, the voluntary sector, the enforcement community and consumer groups.

The noble Lord, Lord Borrie, asked whether the 75 per cent figure for those who signed up to the concordat was correct. My answer is twofold. First there is a full list of those who have signed up on the Cabinet Office website. Secondly, the figure is rising. We are on target for 85 per cent compliance by the end of this year. I am sure that we can beat that. Surely under those circumstances it is better to secure agreement to a concordat rather than reviving provisions that were not effective.

There may well be other issues that noble Lords have raised that ought to be responded to, but in view of the hour, I think that your Lordships would wish me to write to those noble Lords to whom I have not responded. I see the Opposition Chief Whip expressing his approval.

The Bill is enormously important. None of us would be here unless it were. We have been very interested in and grateful for the comments that have been made, particularly as almost everybody--except, I think, the noble Lord, Lord Kingsland--said that they supported the general principles behind it. Let us ensure that when the Bill leaves this House those general principles, which have achieved widespread approval, survive and that the detail is as good as it can be.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

Companies Act 1985 (Electronic Communications) Order 2000

4.17 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 23rd October be approved [29th Report from the Joint Committee, Session 1999-2000].

The noble Lord said: My Lords, I had thought that those noble Lords who were so keen on the constitutional principles might be interested in staying to hear something about how it works in practice. However, the draft order removes obstacles in the Companies Act 1985 to electronic communications made by a company and its members. This is the first order brought forward under Section 8 of the Electronic Communications Act 2000. After describing the order's main provisions, I shall set out the Government's current plans under Section 8 of the Act.

A number of provisions in the 1985 Companies Act either require communications to be made in writing or are unclear as to whether electronic means can be used. The draft order amends those provisions. The order will permit three types of electronic communications: from companies to the Registrar of Companies when they are incorporating or re-registering; from companies to their shareholders--for example, sending out the annual report and accounts;

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from shareholders to their company--for example, when the shareholder is appointing a proxy. As required by the Electronic Communications Act, the draft order is permissive. It enables but does not require companies and shareholders to use electronic communications. Companies must ask their members to opt into electronic communications rather than to opt out. The order sets out how a company may satisfy its obligations under the 1985 Act by sending electronic rather than hard copies of documents. For example, when sending the annual report and accounts the company must have been notified by the shareholder of an address for electronic communications. By sending the report and accounts electronically the requirement in the Act to send the copy is satisfied, and no further paper copy is required.

The order leaves considerable flexibility for companies and their members to decide on the best means of electronic communication and the method for agreeing to it. Companies need that flexibility to accommodate their varying circumstances and adapt to developments in technology, so guidance rather than legislation is appropriate. I welcome the initiative of the Institute of Chartered Secretaries and Administrators in preparing best practice guidance for companies that choose to take advantage of the order. That guidance was published in December this year.

In accordance with the undertaking given by the Attorney-General last year, I confirm that in my view the proposed amendments to the Companies Act are compatible with the European Convention on Human Rights. This order is a good example of the way in which Section 8 of the Electronic Communications Act 2000 can be used to reduce burdens on companies and individuals while improving the service that they provide or receive. Section 8 contains a power to remove obstacles in other legislation to the use of electronic communication and storage in place of paper. That is a major element in delivering the Government's policy to promote electronic commerce and meet their target for making government services available electronically. That includes connection to the Internet of all schools and libraries by 2002, with 100 per cent of all government services to be deliverable on line by 2005.

Our current plans for the use of Section 8 include orders for the following purposes: to facilitate electronic conveyancing; the electronic submission of trade statistics to the Office for National Statistics; to permit the electronic submission of a statutory off-road declaration in respect of a vehicle; to allow electronic authentication of public records for court proceedings; to give legal recognition to the official legislation website version of statutes; and to allow the electronic submission of information by oil companies under the Petroleum Act 1998. The Electronic Communications Act will at last bring the statute book into the information age of the 21st century. The draft order before us was widely welcomed by companies when it was issued for consultation earlier this year. I beg to move.

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Moved, That the draft order laid before the House on 23rd October be approved [29th Report from the Joint Committee, Session 1999-2000].--(Lord McIntosh of Haringey.)

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