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There have been further case-by-case developments in which the concept of proportionality has been used as a kind of touchstone in the application of the Wednesbury test, but the examples are relatively few and far between and the law still seems to be in the early stages of development. Yet here we are being asked to introduce the concept of proportionality into a Bill with wide-ranging implications, without any form of definition at all. It is simply assumed that all will know and understand the term. This is to do with clarity.
As I indicated at Second Reading, as far as I am able to understand the matter, "proportionate" has a quasi-technical meaning, although it is far from precise. It connotes the striking of a balance between the interests of the individual and the interests of the public at large, and in addition that any particular burden is to be no greater than that which is judged necessary to achieve a particular object; in other words, one is required to engage in a balancing act in order to determine the net effect. But how is such a balancing act to be used as the test under the Bill to determine whether or not a burden should be imposed in the first place? I suggest that it is no answer to say, for example, that because the net effect of private burden versus public benefit is nil, that is a reason for introducing the burden in the first place. That would amount to regulation for regulation's sake. It must follow that there should be a threshold test based on the measure of the net benefit achieved.
What is missing in the formulation of this clause is a primary requirement that the imposition of a burden should be necessary, not merely that it should be proportionate. Let us consider an example. A requirement may be imposed that in order to practise a particular trade, a licence is required for which a fee should be paid. The level of the fee may be reasonable in the context of the profits of the trade and the regulatory burden that it places upon the persons involved. But it should be a requirement of any regulatory reform which brings with it the imposition
In the light of the deregulatory aims of the Bill--I stress those words--we propose that the measure should be one of necessity. If the Government argue that proportionality subsumes necessity, they should say so in terms; alternatively, if the addition of the word "necessary" has merely declaratory force, let the Government so declare. In this way any doubts will be dispelled. I beg to move.
Lord Campbell of Alloway: I support my noble friend's amendment. Surely, the Minister accepts that one may have a provision where the burden is clearly proportionate to the benefit but it is wholly unnecessary. When one approaches this situation, does one not initially have to decide whether what one intends to do is necessary in all the circumstances? Although I may oversimplify it, this matter goes to the root of the problem. Does the Minister accept the proposition that there may be a burden that is proportionate to the benefit which in the circumstances is wholly unnecessary?
Lord McIntosh of Haringey: I do not intend to stand up and say that the Government favour unnecessary reforms to legislation. To that extent I agree with the argument, but not the amendment. The noble Baroness, Lady Buscombe, was good enough to respond to my challenge earlier this week to provide an example of a case which was proportionate but unnecessary. I shall turn to that in a moment.
Without being a lawyer, I should like to say a word about the meaning of "proportionality" and whether it is too subjective to provide a quantifiable test. I am grateful to the noble Baroness for her quotation from 1985. I believe she will agree that, whether or not Lord Diplock is quoted, proportionality is a recognised legal term which means that any new burden that an order imposes must be in proportion to the benefit gained from it. Therefore, an order cannot be used to impose any new burdens without a clear indication that they are justified. However, it would not make any sense for the Bill to define proportionality too narrowly; for example, it would be too limiting to say that there should be a fixed ratio between benefits and burdens that could not be exceeded. Perhaps we can turn to that point in more detail when we consider a later amendment. It should be for Parliament and its committees responsible for the implementation of the Bill to decide in each individual case whether the proportionality test has been met. I have then to ask whether there are any meaningful examples of a case where "proportionality" is met but "necessary" is not. The noble Lord, Lord Campbell, is very clear that there are examples, but does not give any.
The noble Baroness, Lady Buscombe, gave me an example of where, in order to practice a trade, one has to impose a licence and require a fee for that licence. She suggests that that is an identifiable measure of net benefit. That is exactly what is meant by proportionality. That is exactly what is achieved by
Lord Kingsland: I thank the Minister for giving way. Is he aware that the phrase he has just used, that if it is not necessary to do something it is necessary not to do it, is a phrase first used some 300 years ago by the great Conservative political philosopher Viscount Falkland?
Lord McIntosh of Haringey: I am aware that there is a history to that phrase. I would not have used it in parenthesis if I had not been aware of that, although I did not know it was Viscount Falkland who said it. I am grateful to the noble Lord, Lord Kingsland, for educating me on that.
Clause 1 is concerned with the scope of the Bill. That scope is at all times subject to the safeguards and the processes which are provided later in the Bill. A major element of the consultation and parliamentary scrutiny process will be to ensure that the reform is necessary. In that sense, I accept the use of the word. But the proportionality test already covers that issue.
Lord Phillips of Sudbury: I have no wish to prolong this matter, but it is an important point. The Minister indicated that scrutiny by Parliament would be partly through the Delegated Powers and Deregulation Committee and partly through Parliament itself. Does the Minister accept that if the word "necessary" is not in Clause 1 of the Bill it will not be an issue which the Committee would or should consider and it will then only be a matter for parliamentarians to consider?
Lord Campbell of Alloway: I wonder whether that is quite right. The Minister said there is nothing needed; there is no meaning that can be given to the word "necessary" if noble Lords accept the amendment because there are safeguards later on in the Bill. That is a fairly circuitous argument. Surely there is no objection to including the word "necessary" on the basis that the submissions made by noble Lords are right? Supposing they are wrong? It is an obvious measure of clarification; it is a matter of logic. What is the objection to it?
As the noble Baroness, Lady Buscombe, correctly said, proportionality requires any burden to be no greater than necessary. That is why proportionality is adequate for the purpose and does not require the word "necessary" to be on the face of the Bill.
Viscount Goschen: The wording of Clause 1(1)(b) says that the burden must be proportionate to the benefit. Does the Minister accept, therefore, that if there was an example where a burden was lifted, a benefit, say in monetary terms, of £5 million, and another burden was imposed, say of the equivalent value, that could be said to be proportionate? The burden would be proportionate to the benefit which is expected to result and it would be perfectly in proportion. However, under those circumstances it might not be necessary to impose that second part of the burden on some particular group. Therefore, there is an example where there is proportionality but there is not necessity.
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