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Lord Elton: My Lords, since the recommendation was made in 1999 to have a Select Committee to advise your Lordships on the impact on the United Kingdom of treaties which are subsequently ratified, I wonder whether I am the only Peer who still much regrets the

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decision to wait. I should have thought that the present juncture, with the Treaty of Nice awaiting ratification, made it rather important that we have such a committee.

The Chairman of Committees: My Lords, I appreciate what the noble Lord, Lord Elton, says, but a number of factors were considered by the committee. Recently, there has been a considerable increase in the number of committees, including the one I have just mentioned. We are about to start an animal research committee and, of course, the Constitution Committee was introduced last week. The new arrangements in the House of Commons are just coming into effect. I think that the committee felt that it would be wise to await judgment on how such procedures in the other place work before we take a final decision on the issue of a committee in your Lordships' House.

On Question, Motion agreed to.

House of Lords' Offices: Select Committee Report

The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That the First Report from the Select Committee (HL Paper 27) be agreed to.--(The Chairman of Committees.)

Following is the report referred to:

    1. Appointment of Sub-Committees and the Advisory Panel on Works of Art

The Committee appointed the following Sub-Committees and Panel--

Finance and Staff Sub-Committee
B. Andrews L. Astor of Hever L. Colwyn L. Craig of Radley L. Filkin L. Harris of Greenwich L. Harris of Haringey B. Jay of Paddington L. Mackay of Ardbrecknish (Chairman) L. Renfrew of Kaimsthorn L. Rodgers of Quarry Bank L. Strathclyde with the Clerk of the Parliaments.
Administration and Works Sub-Committee
L. Carter L. Colwyn L. Craig of Radley L. Evans of Parkside L. Harris of Greenwich L. Henley B. Hilton of Eggardon L. Mackay of Ardbrecknish (Chairman) B. Massey of Darwen L. Monson L. Phillips of Sudbury L. Renfrew of Kaimsthorn B. Richardson of Calow B. Seccombe

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with the Clerk of the Parliaments and the Gentleman Usher of the Black Rod.
Library and Computers Sub-Committee
L. Ahmed L. Butterworth E. Erroll L. Evans of Watford L. Hobhouse of Woodborough E. Listowel L. Lucas L. Methuen E. Northesk B. Rendell of Babergh L. Renfrew of Kaimsthorn (Chairman) B. Wilkins with the Clerk of the Parliaments.
Refreshment Sub-Committee
L. Ahmed L. Burnham L. Carter L. Colwyn (Chairman) B. Darcy de Knayth V. Falkland L. Geddes L. Harris of Greenwich B. Pitkeathley L. Stone of Blackheath V. Tenby with the Clerk of the Parliaments.
Advisory Panel on Works of Art
L. Freyberg L. Gavron B. Hilton of Eggardon (Chairman) L. Jacobs L. Lloyd-Webber B. McIntosh of Hudnall L. Mancroft L. Palmer B. Rawlings Ly. Saltoun of Abernethy with the Clerk of the Parliaments.

On Question, Motion agreed to.

Regulatory Reform Bill [H.L.]

3.10 p.m.

The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.--(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

Clause 1 [Power by order to make provision reforming law which imposes burdens]:

Lord Goodhart moved Amendment No. 1:

    Page 1, line 6, leave out ("(3) and") and insert ("(2A) to").

The noble Lord said: My Lords, in moving Amendment No. 1, which is purely a paving amendment, I shall speak also to Amendments Nos.

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13, 24, 25, 37, 38 and 40. This group of amendments goes to the heart of what I believe is the central issue on the Bill.

We need to spend a minute or two on the background of the Bill to explain the significance of this group of amendments. We on these Benches welcomed the objective of the Bill. Indeed, my noble friend Lord Razzall said so in the debate on the gracious Speech. The Bill will enlarge the powers in the Deregulation and Contracting Out Act 1994 and enable those powers to be used to improve post-1994 legislation as well as pre-1994 legislation. However, in our view the Bill should be used for broadly deregulatory purposes or for the rationalisation and clarification of existing powers. It should not be used as a general power to enlarge burdens by order.

The Government presented the Bill as a deregulatory Bill. In Committee I referred to a number of passages in the speech made at Second Reading by the noble and learned Lord, Lord Falconer of Thoroton. The fact that the objects of the Bill are primarily seen as deregulatory was made even clearer by the noble Lord, Lord McIntosh of Haringey, on day one of Committee. Perhaps I may briefly refer to his speech. He stated:

    "it is necessary, in order to achieve our wider objectives ... to envisage the possibility of continuing or re-enacting some regulatory burdens in order to achieve a greater removal of other burdens, and of introducing new burdens on some people in order to reduce the aggregate amount of burden on those people or on other people".

He went on to state:

    "In that sense, to the extent that we have extended the scope of the 1994 Act, it is not out of any intention to increase the amount of burden in total, or even in detail. The intention is to use the whole range of facilities and abilities and powers available to us to more effectively reduce burdens than the 1994 Act made possible".--[Official Report, 23/1/01; cols. 223-24.]

That is a clear statement of the Government's purpose behind the Bill. It is one which I believe is entirely satisfactory. But the Bill as drafted gave us cause for concern. Clause 1(1) sets out the four objects of the Bill. Each are clearly free-standing. We have no problems with Clause 1(1)(a):

    "the removal or reduction of any of those burdens";

nor with paragraph (b):

    "the re-enacting of provision having the effect of imposing any of those burdens, in cases where the burden is proportionate to the benefit which is expected to result from its retention";

nor with paragraph (d):

    "the removal of inconsistencies and anomalies".

However, we have major problems with paragraph (c):

    "the making of new provision having the effect of imposing a burden which--

    (i) affects any person in the carrying on of the activity, but

    (ii) is proportionate to the benefit which is expected to result from its creation".

That plainly gave a free-standing power to increase burdens without any requirement to link that increase with the reduction of other burdens. Clause 3 provides valuable safeguards against the abuse of the powers conferred by Clause 1, but none of those safeguards in

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Clause 3, as it now stands, requires any link between the increase of burdens on some, and the reduction of burdens on those people or others.

It is not enough to say, as Clause 3(2) does, that there must be a balance between the public interest and the interest of persons affected by the new burden. That is not meaningless, obviously, but is a condition which can be almost always satisfied because governments are not in the habit of imposing burdens for the sake of imposing them; they impose them because they think that there is benefit to be obtained from that. That is not in any real sense a safeguard.

The power in Clause 1(1)(c) therefore went beyond what we regarded as the proper purpose of the Bill. It also plainly goes beyond the Government's own intentions as stated in earlier debates on the Bill, both by the noble and learned Lord, Lord Falconer, and the noble Lord, Lord McIntosh of Haringey. We therefore tabled amendments which were debated in Committee. The effect of those amendments was intended to be to remove Clause 1(1)(c) as a free-standing object but to allow the creation of new burdens where those new burdens were proportionate to the benefits resulting from the removal or reduction of other burdens. That amendment bears some similarity to what is now Amendment No. 9 tabled by the Conservative Front Bench, though there are significant differences.

Originally we tabled those amendments again at Report. At that point the Government approached us and indicated that although they were not willing to accept the wording of our amendments, they were willing to accept the principle of linkage between new burdens on the one hand and on the other hand the benefit to persons affected by the existing burdens. The upshot of those discussions was the amendments which appear in this group, which I understand the Government are willing to accept.

We therefore need to go through the amendments in a little detail. As I said, Amendment No. 1 is purely a paving amendment. The two key amendments are Amendments Nos. 13 and 25. Amendment No. 13 adds a new subsection (2A) to Clause 1 and states:

    "An order under this section must include provision made by virtue of subsection (1)(a)".

In other words, any regulatory reform orders must include some element of deregulation. That is a significant step forward, but on its own it is pretty obviously not enough. There is no linkage or balance between deregulation and new regulations. Therefore, a small deregulation element could frank the imposition of extensive new burdens.

Further amendment is therefore necessary and it is achieved by Amendments Nos. 24 and 25 which add a new condition to Clause 3(2). That provision requires the Minister to be,

    "of the opinion that the provisions of the order ... strike a fair balance between the public interest and the interests of the persons affected by the burden being created".

That is not adequate. However, Amendment No. 25 requires that the Minister must also be satisfied that the extent to which burdens under existing law are

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removed or reduced justifies the making of the regulatory reform order. In other words, there must be not merely some reduction in the burdens but a reduction sufficient to justify the order as a whole. One cannot decide whether that new condition is satisfied without looking at the balance between deregulation and new regulation.

The amendment refers not only to the removal or reduction of burdens but also to other beneficial effects for persons affected by the existing law. That means that one can take into account not only the direct removal of burdens but also the fact that the changes, while not formally removing a burden, might make it easier to discharge.

It is also true that the new condition in Amendment No. 25, set out in the new paragraph (b), is a subjective test not an objective one because it is a matter for the opinion of the Minister. However, if that opinion is plainly unsubstantiated by the facts, it will be a matter for judicial review. More important in practice, the document which must be laid before Parliament under Clause 6 must explain how that condition is satisfied. That requirement appears in Clause 6(2)(f).

That explanation will be examined by the Delegated Powers and Deregulation Committee in your Lordships' House and by the Deregulation Committee in the other place. If those committees do not agree that the conditions in what will become Clause 3(2)(b) are satisfied, the proposal will go no further.

The other amendments in the group, Amendments Nos. 37, 38 and 40, are consequential and do not need to be treated separately.

I believe that the Government's acceptance of the principle of linkage between new regulation and deregulation--that linkage being contained in these amendments--removes our only substantial objection to the Bill. Those amendments having been made, we should be happy to see it passed. I beg to move.

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