HL Deb 08 August 1972 vol 334 cc949-75

2.53 p.m.


My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.

Moved, that the House do again resolve itself into Committee.—(Earl Jellicoe.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 2 [General implementation of Treaties]:

LORD SHACKLETON moved Amendment No. 30: Page 2, line 36, leave out ("or department".

The noble Lord said: We now come to Clause 2(2) and this Amendment is essentially a probing one with which I can deal briefly. It raises some quite important issues and I want to make sure that I have understood the explanations which the noble and learned Lord the Lord Chancellor and others have given on this topic. I should like to conduct a small viva to ensure that I understand at any rate this part of an otherwise incomprehensible Bill. I hope that I may have the attention of the Lord Chancellor, of my tutor, so that he can inform me whether I am right or wrong in what I say.


The noble Lord's tutor at the moment is the Leader of the House and not the Lord Chancellor.


That is unfortunate for me because, with the greatest respect to the Leader of the House, I am not sure that he is not equally uncertain of his ground in this matter. However, I will press on hopefully. I understand that subsection (2) provides that whether or not they are directly enforceable, the regulations to which the provision refers require an Order for their implementation. I hope that it will not be necessary for me to repeat my remarks and that the Leader of the House, who is speaking with one of his colleagues on the Government Front Bench, will give me his attention.


I was intending no discourtesy to the noble Lord. I have two ears and I can listen to two people at the same time.


That is one of our fears about this Government; if they occasionally turned an ear in the direction of the Opposition and heeded our advice they might improve the Bill. I understand that under the clause with which we are dealing there arise a number of obligations, liabilities and restrictions, some of which are directly applicable and some of which are not. I also understand that the division between the two depends not on the general function or nature of the Order but on whether it requires some further implementing action by the Government to make it effective. If I have the position right, then regulations made by the Commission or Council—or for that matter any other activities, even treaties, that are made; we are at the moment dealing specifically with regulations or directives—call for an Order to give them effect. Such an Order is subject under the Bill to the Negative Resolution procedure and it can be made either by a Minister or a Department. I am fully aware that all sorts of regulations are made by Departments without Ministerial intervention. If I am wrong, I am sure that the Leader of the House will put me right. I think I am right because this explanation would seem to warrant the use of the words "or department" in the subsection.


It is important to get this right from the word "go". If the noble Lord will read the provision carefully he will see that one can adopt either the Negative or Affirmative Resolution procedure. I had to be guided through this and I appreciate that it is complicated. I intervene because the noble Lord said that the Negative Resolution procedure would apply. In fact, as I say, it can be either the Affirmative or Negative Resolution procedure.


I hope the noble Earl is right.


He is.


The noble Earl's colleagues on the Government Front Bench confirm that he is right. That being so, may I be assured that under this subsection not merely Ministers but Departments will make Orders? If so, will they be of a kind which will be subject to Parliamentary control, whether by the Affirmative or Negative Resolution procedure? I appreciate that there are Orders of various kinds which never come before Parliament. I may be wrong about that because even in England, before considering the E.E.C., this is a complicated matter.

In this case I am concerned to know whether Departments will have power to make Orders. We are entering an unknown field and few of us have any real idea of the sort of Orders that will be made. It would be helpful if the noble Earl would distinguish between the sort of Orders to be made by Departments as opposed to those which will be made by Ministers. I take it that Departments would be Departments like the Customs Department which although technically come under the Treasury, are in a sense a sort of "hived-off" body. In that case, would it not be better if Ministers were to make the Orders? We had expressions of opinion last night that Ministers were going to keep closely in touch with Parliament and make arrangements for Parliament to consider what was being done. The Government refused to accept our extremely reasonable Amendment to ensure that Parliament was informed of some of the new liabilities, obligations and so on. None the less we were given assurances that the Government were determined to do this. I should like to know why and whether Departments should be enabled to have this power and how it will operate. As I say, it is essentially a probing Amendment although it does raise some of the issues of this subsection. I beg to move.

3.1 p.m.


It may be useful if I come into the discussion at this stage, I am not quite certain whether as a pupil or as a tutor, but if as a pupil then I am borne up by two illustrious tutors on my left and on my right. I should perhaps, in answer to what the noble Lord, Lord Shackleton, has said, briefly explain the scope of the orders or regulations likely to be made under Clause 2(2). My noble friend, Lord Colville of Culross, has already made it clear that there are in fact only a handful of existing obligations which will need to be implemented under Clause 2(2). We believe that Part II and Schedule 4 of the Bill cover all the significant changes in our domestic law which are necessary to execute our obligations, and the matters which will fall to be dealt with under Clause 2(2) are small in number, for the most part small in significance, but rather varied in scope. They cover the waterfront from marketing standards for eggs, the licensing of proprietary pharmaceutical products, the classification of wood in the rough and crystal glass, to aid to nongovernmental vocational training schemes.


Before the noble Earl finishes the end of that list, could he say which of the items on the list he has just given will, in the case of an offence, attract a penalty of two years in prison or £400 fine?


So far as I know, none.


Could the noble Earl then say why provision is made in sub-paragraph (1) of paragraph 1 of Schedule 2. which refers to Clause 2 subsection (2)?


It could be necessary in the future, but I think the tutor might be allowed to go on without this viva voce at this particular stage. I understood that this was a probing Amendment and my noble friends have explained why a very general power of subordinate legislation is required in this Bill. But, as I understand it, that is not the point at issue here at the moment. What is, or could be, at issue is who should be able to exercise this power. As the Bill is at present drafted, either a designated Minister or a designated Department can make the regulations for the purposes set out in this particular Clause 2(2).

Perhaps I could explain the background. There is in fact a fairly simple explanation. In the first place there is nothing unusual in giving powers to specified Departments in addition to or as opposed to specified Ministers. That is a perfectly normal proceeding for which there are innumerable good precedents, and the reason for it is a very simple one. Although there must always be—and nothing in this clause will detract from this—a Minister answerable to Parliament for the actions of each Department, certain Government Departments are, for reasons often rather deep if not buried in history, not actually in the charge of a single Minister but of a board or of a number of commissioners. I cite the following examples: the Treasury, the Inland Revenue, Customs and Excise and the old Board of Trade. It is not only normal but is essential for powers of subordinate legislation to be conferred on such authorities, since they cannot be discharged by a Minister as in the case of other Departments. To show how normal this practice is I would instance only a couple of examples. There is the income tax legislation, for example, which empowers the Board of the Inland Revenue to make regulations about P.A.Y.E. and double taxation relief; and the Customs and Excise Act 1952 contains a number of powers for the Commissioners to make regulations about the import and export of goods.

So much for conferring powers on specific Departments. But, of course, as the noble Lord, Lord Shackleton, has spotted, a more general provision is built into Clause 2(2). This is because we cannot at this moment precisely foresee which Government Departments will need, in all instances, to exercise this regulation-making power. As I explained, it is not likely to cover a very wide spectrum, but the precise spectrum cannot be foreseen at this present time. The situation we have to face is that this Bill covers the whole present and future field of Community obligations and inevitably cuts across normal departmental frontiers. As time goes on, therefore, we cannot exclude the possibility that other Government Departments than we can foresee at the present time may need to make regulations under this provision, and that is why the powers are potentially made available to any Minister and any Department.

Frankly, I cannot see anything wrong about this, more especially since we have built in pretty substantial safeguards here to which the noble Lord, Lord Shackleton, referred and which I could perhaps for a second expand upon. I have already pointed out that it is absolutely normal form that Government Departments make regulations where they are empowered by Statute to do so. Such power is normally conferred for purposes specified in the parent Statute and is then exercisable without any intermediate procedural stage. It is precisely because it is not possible to anticipate here and now the occasions when regulations under Clause 2(2) may be needed that the subsection provides—as built into this subsection specifically—an intervening procedure. That is why we have built an additional safeguard into Clause 2(2) and propose to stipulate that no regulations may be made by any Government Department until that Department has been properly designated by an Order in Council. The Order in Council in question has to designate the Department and the purpose for which the regulation is required. The Order so designating the Department will come before Parliament in the way prescribed in Paragraph 2(2) of Schedule 2. It will, as I have mentioned, be subject to either the Affirmative or the Negative Resolution procedure, as the case may be. When I first read Paragraph 2(2) of Schedule 2 I thought it was only the Negative Resolution procedure, but if noble Lords read that sub-paragraph carefully it becomes apparent that it is the Affirmative or the Negative Resolution procedure. Likewise—and this is the second safeguard—there is no question of the departmental regulations themselves in any way by-passing Parliament. They, in their turn—there is a "double safety catch" here, as it were—will be subject to Parliamentary scrutiny, in this case again either in accordance with the Affirmative or the Negative Resolution procedure, just as all subordinate legislation is at present. I have sought to explain the background to this matter. I think I have covered the points which the noble Lord, Lord Shackleton, put to me in an interrogative form, and I hope that noble Lords will be satisfied with my explanation.


May I ask the noble Earl a question? He has spoken with his customary clarity, but there is one point which appears to be absent in his exposition. I follow the meaning of what he says—that a power to implement regulations can be vested in a Department but it is obviously inspired by the Minister responsible. But can the noble Earl point to any piece of legislation, any Parliamentary Bill, where the term "Department" is used in this context? I cannot recall in any legislation with which I have been associated any reference to a Department in this particular context. The power has been primarily and essentially vested in the Minister, even as regards implementation, either preceding a debate on an Affirmative or a Negative Resolution in Parliament or without any debate at all.


It is a very fair point that the noble Lord, Lord Shinwell, has put to me, and, speaking off the cuff, I cannot point to any part of our legislation where a Department as such, and only as such, is specified. What one normally gets specified is the Treasury or the Inland Revenue or Customs and Excise, or indeed in many cases, hundreds of cases, the old Board of Trade. That is because, as I sought to point out in my introductory remarks, there one is able to foresee and specifically provide for the particular Minister or Department. Here we are providing for a more generalised power. I have sought to show why that is necessary, but I have sought also to point out that there is the safety catch here that the Order in Council will then specify the particular Department.


I am ready to accept what the noble Earl has said, but would it not have assisted clarification if instead of using the expression "Minister or department" in this clause, it had specified quite clearly that the power is vested in the Minister and that the Minister has the power to assign to a department, either his own or some other department, the power to implement? If it were expressed in that form no objection would be taken to it, because obviously at some time or other a department has to undertake certain implementation as a result of a decision by the Minister or as a result of debate in Parliament.


I do not think that would be so, because the department in these cases, the sort of cases I have instanced, is a separate entity with separate powers. The Minister has ultimate responsibility and responsibility to Parliament, as I have pointed out, but in the sort of specific instances with which the noble Lord is familiar and to which he has referred it is the department which is then indicated in legislation.


If I may raise a point on what the noble Earl has said in reply to my noble friend Lord Shinwell, would it not be as well if he gave further consideration to the observations of my noble friend on this issue? After all, the Minister is responsible for the department, and we have witnessed time and time again Ministers having to tender their resignation on behalf of their department and their Ministry because of something that has gone wrong. I have in mind the Crichel Down case, which many noble Lords will remember, without going any further into that issue. After all, the Minister is responsible for the department. I think that the noble Earl would be very wise before he reaches his conclusion, as he seems to have done, if he gave this further consideration.


Have I got the matter right? In these special cases we are talking about the Minister does not direct the policy. Parliament has said that the department, within certain limits, shall make regulations and the policy dealing with the regulations. It may be then that something goes wrong. Then the Minister who is the head, maybe indirectly the head, of that department is responsible to Parliament. But in the first instance the Minister in certain cases is not responsible for making that policy. Am I right about that?


Surely the noble Lord is inaccurate in that respect. No department has the power to make regulations unless with the consent of the Minister. Is not that the position? I think this question might have been put to the noble Earl the Leader of the House. Is this a precedent? If it is a precedent, say so, and I can understand the reason for it. But if it is not a precedent, if this power has never been embodied in any previous Act of Parliament, we are entitled to know the reason why it is here. If it is a precedent for some special reason associated with the paragraphs of Schedule 2—I have looked at that, and there is such a variety of implementations of regulations of a character that are unprecedented, for example, power to send people to prison and so on—I can understand that reason. If this is a precedent, if this is a unique piece of legislation, we understand the reason why.


I think I can answer the noble Lord, Lord Shinwell, very simply. There is no precedent being established in this sense, that the Statute Book is studded with instances in which regulation-making powers are conferred upon specific departments. The innovation here is that it is a more generalised provision and the department is not specified. It will be specified in the Order in Council, and that will be subject to Affirmative or Negative Resolution procedure.


Would the noble Earl forgive me if I raised one point? I am frequently wrong, and I may be wrong again. My recollection is that a number of persons are normally designated in the Statute or the Order as having power to make Statutory Instruments. This was certainly the case some years ago. But what is a department? How does a department make the law? If the senior civil servant wants to make a regulation or an Instrument and all the other civil servants in the department disagree with him, does he carry it by seniority, or whom does he consult? I do not know of any Ministry, except the Board of Trade which used to have a Board which never sat, which has even the sort of committee functions which would make it possible for a consensus of opinion to provide a semi-statutory procedure.


May I ask your Lordships to read subsection (2) leaving out the words "Minister or" and keeping in the word "department"? It says, "Minister or department", and if we left out "Minister or" it would read: Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, and any designated department may by regulations, make provision— (a) for the purpose of implementing any Community obligation… It is not dealing with a domestic matter; it is dealing with an obligation which people in this country might know nothing about. The department would have the same power as the Minister.

3.20 p.m.


Your Lordships know I do not raise mischievous questions, but I am rather troubled about this particular clause. The noble Earl, Lord Jellicoe, has told us that it is normal for some Departments to be able to make regulations, but those regulations which it makes are within the confines of English law. We are now dealing with something quite separate. He argued that it was quite customary for the Inland Revenue and the Department of Customs and Excise to make regulations, but if he turns to Schedule 2 he will see that those two Departments are specifically excluded from the provisions of this particular clause. Therefore, the Government must have in mind some other Departments—Agriculture, Trade, Environment, and so on. The noble Earl has failed so far to indicate to us which particular Departments will be endowed with this power. The clause itself talks of "any department". That carries with it a very wide scope indeed. It is very serious because, as Schedule 2 indicates, anybody who contravenes Clause 2 is liable to be sent to prison for a period of up to two years. In the first place, this is putting the British people in the grip of the civil servants of Whitehall. Perhaps that is acceptable. But it goes further than that, and puts them in the grip of the civil servants in Brussels. I think that is much further than the majority of people would like the British Parliament to go.

It has been said that the Order in Council will specify which particular Departments will have this power; but that Order in Council will be issued well in advance of the particular Department exercising its power to make regulations. It seems to me that we are putting far too much power in the hands of Whitehall and of Brussels, and taking far too much power away from the hands of Parliament.


By dint of looking under the table I have discovered what might be a helpful precedent. I do not suppose that this is an Act which is any longer in power, but if one looks at Section 13 of the Industrial Organisation and Development Act 1947, a measure passed by a previous Labour Administration, one finds that there is power to make Orders, and the section says: Anything required or authorised by or under this Act to be done by, to or before the Board of Trade may be done by, to or before the President of the Board, any secretary, undersecretary or assistant secretary of the Board, or any person authorised in that behalf by the President. So that there are precedents, I think, for other than Ministers in the case of the Board of Trade. I simply produce this as an example of previous legislation to meet the point of the noble Lord, Lord Shinwell.


Will the noble Viscount tell us whether that power was given to those civil servants to make regulations under British law, or under Brussels law?


Under British law, as occurs under Clause 2(2) of the Bill.


Surely the noble Viscount will agree that an enactment of that kind, or that part of an enactment of that character, must be preceded in some part of the legislation to which he has referred by a section which empowers the Minister to issue directions to the persons mentioned by the noble Viscount, who then are empowered to carry out the regulations, to implement them, or whatever is desired?


Not, so far as I could see, under that Labour Government Act.


Is the noble Viscount not running away from the idea that, so far as a Minister's responsibility for a Department is concerned, the Minister is responsible for everything that comes under that canopy? That is his responsibility or he ought not to be there; his appointment would never have been made. It is no use coming out with legal interpretations on a particular issue such as this, because this has been a political matter and it has been settled by forms of legislation over the years. It has been established by custom by every Government that I have known under six successive Prime Ministers, and I have seen how legislation works in the other place, and how these laws are made.

3.25 p.m.


I speak very much as a layman here. I think that the noble Lord, Lord Slater, was confusing two things. In my original answer to the noble Lord, Lord Shackleton, I explained that there must always be a Minister answerable to Parliament for the actions of each Department. But there are different types of Department. The noble Lord, Lord Slater, was talking about the Minister of Agriculture in the Crichel Down case; that is a Department specifically, constitutionally and politically under a Minister's control. Here we are talking about a specific and particular form of Department: Government Departments which, as I have said, for reasons often deep in antiquity, are not actually constitutionally in the charge of a single Minister but of a Board or a number of commissioners, and there is this small number of them. This is the area which is meant to be caught by this particular subsection and why "Minister or department" is specified in the subsection.


I think noble Lords opposite had better give up on this Amendment. I am afraid that they have not passed the examination. We shall try to give them an opportunity at a later stage. I am a little surprised that noble Lords have not actually produced specific examples. I do not doubt that there are some. The noble Viscount, fortunately—I will not call it a crib—was able hastily to look up an example, which was not in fact a particularly good example for this purpose. But I understand, and have always understood, that Departments could make regulations. Our anxiety is that we do not know what kind of regulations they are making. Although again I fully accept that a Minister is answerable, what has worried us, and has increasingly worried us, is that there is no alternative but to enforce a number of them. They are enforceable Community rights in this matter.

Furthermore, I was concerned that the noble Earl said that the type of Orders that would be made were essentially—I cannot remember his exact phrase—minor matters. Yet my noble friend pointed out that in the field of penal matters the only limitation was that a sentence in a criminal offence had to be one of less than two years. This does not necessarily seem to me to be a very minor matter, but I do not know. Furthermore, if—and this is something else that we have elicited—these are minor matters, then the major ones under subsection (1) are not susceptible, as I understand it, to the Order in Council procedure at all, unless the Government opt to do this other than within the limitations again imposed by Schedule 2—although, as I understand it, Schedule 2 refers really to subsection (2). The obligation to make an Order is only in relation to those which, for some reason, are not directly applicable, or which cannot be applied without the intervention of an Order. If these are minor matters, is the noble Earl saying that all the other obligations on which no Order is necessary are even more minor matters? In the course of this discussion we have elicited some ignorance on the Government Front Bench in this matter, and further concern about the lack of clarity. I think we shall have to return to this at a later stage.

Basically our worry is that even though a Minister may ultimately be responsible, the action taken may possibly, if I understand it, be under a directive. Is it possible that a directive could give rise to such an Order? If I understand aright, it might do, and the directive might cover a very fundamental issue, and it might not be a minor matter at all. I am bound to say that I think the Government Front Bench are not prepared on this matter, or they are being less than frank; but since I regard them as honourable men I think they are just not properly prepared.


I wonder whether I could reply briefly to the noble Lord, Lord Shackleton, who is not, I think, conducting this particular discussion with his usual fairness. I sought to give him a full reply to what he professed to describe as a probing Amendment. I gave him a full reply and a carefully considered reply, and I am not aware that I have given any supplemental replies which are other than correct. But he asked—and since he is so anxious for homework to be done he may like to do a little homework himself—for certain examples of enactments conferring powers of subordinate legislation on specified Departments. I refer him to Section 204 of the Income and Corporation Taxes Act 1970, conferring powers on the Board of Inland Revenue; to Section 517 of the Income and Corporation Taxes Act 1970; to Section 3(6) of the Finance Act 1971; to Section 31 of the Purchase Tax Act 1963; to Section 40 of the Customs and Excise Tax Act 1952; and to Section 454(1) of the Companies Act 1948. I could continue with a very considerable list, but that may be enough for the noble Lord to go on with.


I never denied that there was this power. I expressed surprise that when the noble Earl was asked to give an example he was not able to do so. He has now had a chance either to communicate with outside advisers or to look through his brief, but it would have helped us to have one or two examples at the beginning. I accepted that there was this power, but not all noble Lords did so. Although this is certainly a probing Amendment, we have not been particularly helped in this matter and it may well be that we shall wish to register our protest.


None of the examples cited by the noble Earl, Lord Jellicoe, was of Brussels legislation; it was British legislation. That is the whole issue. We want to have control over British legislation. Furthermore, all the examples that he gave were completely irrelevant, because they all dealt with taxation of one kind or another. Paragraph 1(1) of Schedule 2 states: The powers conferred by section 2(2)…shall not include power— (a) to make any provision imposing or increasing taxation".


If I may briefly reply to the noble Lord, Lord Leather-land, the examples dealt with the administration of taxation; not with taxation. I could give a further list which has nothing to do with taxation, with its administration or with any other part of it, but I think that would rather weary the Committee at the present time.


On a point of information, I am not quite certain who designates. Subsection (2) states that: …at any time…Her Majesty may by Order in Council, and any designated Minister or department may by regulations, make provision… I suppose that under that formula a designated Minister could designate his own Department. That is not excluded. But I gather that there are certain Departments which cannot be designated by a Minister. By whom are they then designated? Is it by Her Majesty in the Order in Council, or is it by Parliament?


By Her Majesty in the Order in Council, and the Order in Council has to be subject to the Affirmative or Negative Resolution procedure.


Will the noble Earl agree that it would be rather foolish to pass legislation which meant that a Minister had no power whatever; but that in all probability a First Secretary within a Department could, for example, have power to appoint an Ambassador to Belgium, to France, to America or to somewhere else? That could come about. That is why we want to be sure of our ground in regard to the powers of a Minister, and in regard to those of the Department for which he is responsible.

3.34 p.m.

On Question, Whether the said Amendment (No. 30) shall be agreed to?

Their Lordships divided: Contents, 53; Not-Contents, 127.

Balogh, L. Greenwood of Rossendale, L. Segal, L.
Bernstein, L. Hale, L. Serota, Bs.
Beswick, L. Hirshfield, L. Shackleton, L.
Blyton, L. Hoy, L. Shinwell, L.
Brockway, L. Hughes, L. Slater, L.
Buckinghamshire, E. Jacques, L. Somers, L.
Burntwood, L. Janner, L. Stocks, Bs.
Champion, L. Kings Norton, L. Stow Hill, L.
Crook, L. Leatherland, L. Strabolgi, L. [Teller]
Davies of Leek, L. Lindsay of Birker, L. Summerskill, Bs.
Douglass of Cleveland, L. McLeavy, L. Taylor of Mansfield, L.
Faringdon, L. Maelor, L. Watkins, L.
Gaitskell, Bs. Moyle, L. Wells-Pestell, L.
Gardiner, L. Pargiter, L. White, Bs.
Garnsworthy, L. [Teller] Phillips, Bs. Williamson, L.
Geddes of Epsom, L. Popplewell, L. Wright of Ashton under Lyne, L.
Granville of Eye, L. Raglan, L.
Gray, L. Rusholme, L. Wynne-Jones, L.
Aberdare, L. Alexander of Tunis, E. Balerno, L.
Ailwyn, L. Amherst, E. Balfour, E.
Albemarle, E. Ashbourne, L. Barnby, L.
Belstead, L. Gridley, L. Northchurch, Bs.
Berkeley, Bs. Grimston of Westbury, L. Nugent of Guildford, L.
Bethell, L. Hailes, L. Ogmore, L.
Blackford, L. Hailsham of Saint Marylebone, L. (L. Chancellor) Onslow, E.
Blake, L. Perth, E.
Brecon, L. Harvey of Prestbury, L. Polwarth, L.
Brooke of Cumnor, L. Hatherton, L. Rankeillour, L.
Brooke of Ystradfellte, Bs. Hawke, L. Rathcavan, L.
Burnham, L. Hemingford, L. Reay, L.
Clwyd, L. Hereford, Bp. Reigate, L.
Colgrain, L. Hewlett, L. Robbins, L.
Colville of Culross, V. Hood, V. Roberthall, L.
Cork and Orrery, E. Howard of Glossop, L. Rochester, Bp.
Cottesloe, L. Hunt, L. Rothes, E.
Craigavon, V. Hurcomb, L. Ruthven of Freeland, Ly.
Cranbrook, E. Hylton, L. St. Just, L.
Croft, L. Hylton-Foster, Bs. Saint Oswald, L.
Daventry, V. Ilford, L. Sandford, L.
de Clifford, L. Ironside, L. Seear, Bs.
Denham, L. [Teller] Jellicoe, E. (L. Privy Seal) Selkirk, E.
Derwent, L. Kemsley, V. Shannon, E.
Digby, L. Kilmany, L. Sinclair of Cleeve, L.
Drumalbyn, L. Kindersley, L. Stamp, L.
Dundee, E. Latymer, L. Stonehaven, V.
Eccles, V. Limerick, E. Strathclyde, L.
Effingham, E. Linlithgow, M. Stratheden and Campbell, L.
Ellenborough, L. Long, V. Swaythling, L.
Elles, Bs. Lothian, M. Tanlaw, L.
Elliot of Harwood, Bs. Loudoun, C. Thomas, L.
Elworthy, L. Lovat, L. Tweedsmuir, L.
Essex, E. Lucas of Chilworth, L. Vernon, L.
Exeter, M. Macleod of Borve, Bs. Vivian, L.
Ferrers, E. May, L. Wakefield of Kendal, L.
Fortescue, E. Middleton, L. Waldegrave, E.
Gage, V. Milverton, L. Willingdon, M.
Gladwyn, L. Mottistone, L. Wolverton, L.
Goschen, V. Mowbray and Stourton, L. [Teller] Wynford, L.
Gowrie, E. Yarborough, E.
Greenway, L. Napier and Ettrick, L. Young, Bs.
Grenfell, L. Netherthorpe, L.

Resolved in the negative, and Amendment disagreed to accordingly.

3.44 p.m.

LORD STOW HILL moved Amendment No. 31: Page 2, line 38, after ("for") insert ("the purpose of making any Regulation or Regulations duly issued, whether before or after this Act comes into force, by the Community Institutions, binding in every respect and directly applicable in accordance with the law of the United Kingdom, as required by Article 189 of the E.E.C. Treaty or ")

The noble and learned Lord said: As this Amendment relates closely to Amendment No. 32, I hope it will be for the convenience of your Lordships, and save time, if I move Amendment No. 31 and also deploy the arguments for Amendment No. 32. This, again, is purely a probing Amendment designed to secure information from the Minister as to how subsections (1) and (2) are to work. I am afraid that it is again a dry-as-dust inquiry and I apologise to the Committee, but I think that the question raises issues of importance to under- takings carrying on business. I seek by the Amendment to write into the text of Clause 2(2) provisions that it should be possible by subordinate legislation to give effect to regulations, directives and decisions. I need say no more about the language of the Amendment than that. I do not cleave to the language; I simply put it on the Order Paper in order to base my inquiry upon it.

I suppose that when considering the Rome Treaty one has constantly to refer again and again to Article 189, which, in a sense, is the article from which practically all the directly and indirectly applicable Community legislation springs. I would remind the Committee of its provisions. It deals with three types of legislation: first, regulations which are to have general application—and I quote: It shall be binding in every respect and directly applicable in each member State."; secondly, directives. I quote: A directive shall be binding in respect of the results to be achieved upon every member State but the form and manner of enforcement shall be a matter for the national authorities. Thirdly, decisions: A decision shall be binding in every respect upon those to whom it is directed.

May I first put my question relating to regulations? I may be mistaken, but I had thought that Clause 2(1) would have the effect of (if I may use a slightly loose term, which I do pace the noble and learned Lord the Lord Chancellor; but this is the effect of it) making regulations part of our law. I know he does not quite accept that term; but it is near enough as a description. I had thought that Clause 2(1) would not only relate to the regulations already passed at the date of entry—in other words, the 41 volumes of them—but would also make part of our law regulations to be passed hereafter. I drew the inference that that was the case from the words in the second line of Clause 2(1): form time to time created or arising". I thought that the words "from time to time "would have that effect.

Now I come back to what the noble and learned Lord the Lord Chancellor said. At one stage he said that some regulations were not susceptible of being automatically incorporated in our law in that sense, because they themselves required further legislation to give them effect. I think I am correctly repeating what the noble and learned Lord said. The first question is therefore this. When, earlier in the last debate, reference was made to regulations being given effect by subordinate legislation under subsection (2), did the Minister have in mind that type of regulation; namely, a regulation which could not be said to be automatically directly applicable because it was incomplete in its terms and required some further legislation to implement it? That is the first question.

Secondly, directives. I do not quite know where in Clause 2 there is provision enabling effect to be given to directives as they are described under Article 189, unless it is in Clause 2(2); in other words, unless Clause 2(2), with its power to use subordinate legislation—to avoid an ambiguous term— for the purposes of implementing any Community obligation… is designed inter alia to include the provision that must be made in order to comply with Article 189 in relation to directives, namely, to produce the result which is aimed at by the directive. That, I suppose, would require either subordinate or direct legislation in this country; I do not see how else it could be done. The question I would like to ask is whether Clause 2(2) is designed to enable effect to be given to directives, as they are described in Article 189, by the use of subordinate legislation. May I say at once that I do not complain if that is the case; I simply ask—is it? I ask that sort of question because I think that large numbers of people, technical and otherwise, would wish to know how this is to work, and in particular how it is to work in relation to the implementation of directives.

The third question is possibly a little more difficult; it relates to decisions. May I remind the Committee that a decision is binding in every respect upon those to whom it is directed? Assume a company carrying on business in this country asks what its position would be in relation, for example, to Article 85. I have previously taken Article 85 as an example because I think it is such a very good one. That is the Article which prohibits certain practices, in effect, on the basis that they are restrictive. In particular, it prohibits the application of unequal conditions to parties undertaking equivalent engagements in commercial transactions. In other words, it says that the company must not favour one customer against another. Perhaps that is not a completely accurate summary of it, but it is, I should have thought, near enough.

So let it be assumed that the company in question has a number of customers and that it grants one customer more favourable terms than another. What happens? A decision is made. One first asks oneself, who can make the decision? If one looks at Article 155 one finds, as I see it, that the Commission can make a decision. It is to have power itself to take decisions. I suppose that means to take a decision which is within the description contained in Article 189. So one starts with the position that this company carrying on business with its various customers, giving different treatment to each, may find itself with a decision made against it by the Commission. There need be no reference, as I understand, to the Council of Ministers. Indeed, one would not expect it; it would be wholly impracticable to expect that every decision of that sort should have to be considered by Ministers. There would be far too many of them and Ministers could not be expected to take up their time on that sort of issue.

Suppose a decision has been made. The effect of Clause 2(1), as I understand it, would be that Article 85 and Regulation 17 which has been approved by the Community in order to give effect to Article 85—would certainly be, as the result of Clause 2(1), part of our law. Therefore the language which I quoted from Article 85 would, in effect, be part of the law of this country. If one asks what is then the position of that company against which a decision in the assumed circumstances has been made, one has to look at Article 192; and one finds that that Article provides that: Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it takes place. The decision is one which, in terms of Article 155, is broadly designed to further the purposes of the Community. That is perfectly sensible. I do not cavil at it at all, and I am not asking these questions in a spirit of criticism but because I want to know how the thing works.

A decision in the assumed circumstances has been made by the Commission—I do not want to use language about it being Civil Service—by a non-elected body of people of high authority who, no doubt, have given most careful and honest consideration to the individual case. But it is in no sense a legal judgment. It is their decision, taken as a result of their study of the circumstances of the case; perhaps after representations have been made by or on behalf of the company, perhaps not. I suppose there would be a regular practice developed in that regard, and I should have thought that the Commission would normally wish to hear representations made on behalf of all concerned, the customers and the company. But it is a decision made by this non-legal body. One asks then what is to happen? As I have said, enforcement is to be available in the English courts under Article 192. I suppose that the complaining party could sue in English courts. They might lose. What happens then?

There is a power under Article 173 for that company to appeal to the European Court. "Any natural or legal per- son "may appeal "against a decision directed to him". There seems, at first sight, to be something like a dual jurisdiction. The company, I suppose, having had a decision made against it, could at once appeal to the European Court under Article 173 and the Court might reverse the decision; I do not know. At the same time, I suppose that the claimant might issue a writ against the company under Article 192 in the courts of this country and the courts might dismiss it. holding that Regulation 17 and Article 85 were not so framed as to sustain a claim based on that commission. I believe I am right in thinking that in any event all that would come before the courts would be the question, aye or nay, has a decision been made?

The courts would not be able to investigate the grounds of the decision. I do not know whether that is right or wrong; I imagine it is so, as I read Article 192. But it seems to me that unless we have some statement from Ministers, at any rate as to the way they think this is designed to work, we may get into a considerable state of confusion. If I may summarise my own view, a decision is made by the Commission; the complaining party can go to the courts of our country and say, under Article 192, which also becomes part of our law, "Here is a decision which I produce. I do not ask you, the court, to investigate its ground. I simply ask you, the court, is this a decision?" And if the answer is "Yes", then the court must enforce that decision.

It would have to look at Article 192 to see whether that Article does produce that result. It would be irrelevant on that view whether, upon an interpretation of Article 85, the English court would have differed from the Commission. I think that is right. And the company against which the decision is made, if it feels that the decision is unjust, has the remedy that it can appeal to the European Court. It might be inconvenient to do that because you might get a decision which involved a comparatively small sum of money and the step of going to the European Court might involve considerable expenditure and delay. I dare say that cannot be helped, and one has to face it. But I should be grateful if the noble Viscount, Lord Colville of Culross, would give me such information as he is able. I am afraid that this is a packet of questions and if the noble Viscount feels that he would like to consider them further I shall understand perfectly. But I hope he will agree that the matters are of importance because they affect practically every company which trades in this country. I have spoken in order to give the noble Viscount time to get his papers in order. I hope that he has now succeeded in doing that, and so perhaps I may resume my seat.

4.0 p.m.


The noble and learned Lord, Lord Stow Hill, has asked his usual collection of very interesting and very relevant questions and I will see whether I can answer them. I would preface my remarks by pointing out to the noble Lord and to the Committee that the drafting of the Bill is not designed specifically to deal with the form of the instrument which comes from the European Communities. We do not say that subsection (1) of Clause 2 deals with regulations and that subsection (2) deals with directives and decisions. The way we have put it in the drafting is to deal with rights, obligations, powers and all the rest, from whatever source they may arise. The noble Lord is perfectly right to suggest that, within that framework of expression in the Bill, one can broadly categorise the way in which Community instruments will be given effect. Inevitably there will be exceptions from the general rule, but I think it is not misleading to deal with the situation, on the whole, as the noble Lord did.

Let me deal first with regulations. The noble Lord is perfectly right when the says that if those regulations are directly applicable, as they practically always are, Clause 2(1) will automatically incorporate them. I accept his terminology as part of the English law, subject to the explanation which my noble and learned friend the Lord Chancellor gave yesterday about the theory of this. The slight question which I think arose in the noble Lord's mind was on a point which I attempted to explain directly after dinner last night. It related to the sort of regulation which, although called a regulation, sometimes has a hybrid nature, being partly regulation and partly, as it were, directive, in that one may find at the end of the so-called regulation that there is a requirement, in directive form, that enforcement of the provisions of the regulation shall be left to the member-States to implement by their own internal domestic legislation. Therefore the vast majority of the regulations imposing the obligations creating the rights and so on will be directly applicable, but it will still need some subordinate legislation whereby the enforcement is actually dealt with in this country. And, of course, the same applies in the other States. One will therefore get a hybrid situation in which part of the regulation—the part requiring States to provide that enforcement procedure—is indirectly applicable and has to be dealt with under Clause 2(2). That is the usual situation, and I hope it explains to the noble Lord how the slight anomaly to which my noble and learned friend drew attention can arise and how it would be dealt with.

Now we come to the situation in which one does not have law which automatically applies under Clause 2(1). The noble Lord, Lord Stow Hill, instanced these correctly by referring to directives. One has an instrument issuing from the Communities which requires further work on the part of the member-States to incorporate it into their law. Of course that law will be put into effect by means of different procedures in the various countries. Here we will do it in a number of ways. I should like to remind the Committee again about these, because, although the noble Lord, Lord Shackleton, is not in his place at the moment, this has relevance to the last Amendment. First, there is absolutely nothing in the Bill to prevent an indirectly applicable directive or other Community instrument from being given effect in this country by substantive legislation. It does not have to be done under this Bill if it is considered to be so important. Indeed if it involves things which are beyond the limits of paragraph (1) of Schedule 2 it cannot be done under Clause 2(2) by way of Order in Council or regulation. That is the point of the restriction in Schedule 2. Of course it can sometimes, in fact very often, be done under the powers which repose in Governments or Ministers, or perhaps Departments occasionally, under existing legislation. There may be existing Acts which enable the Government to use the powers already in their possession to give effect to this directive coming from the Communities. That is the second method.

The third and fourth methods arise under Clause 2(2). The third is the straight Order in Council, which deals perhaps with an individual directive and is considered to be so important that it should be dealt with on its own as a specific Order in Council. Then there is the fourth method. I think my noble friend Lord Jellicoe was right in saying that when it came to Departments it would probably be very minor things they were dealing with. The fourth method would be dealt by regulations made by a designated Department, the designation of the Department and the delineation of its areas of responsibility having first been done by Order in Council under Clause 2(2). It would then make the regulation which it is allowed to make by virtue of that Order in Council. Those are the four methods whereby something like a directive could be given applicability in this country and would become part of what would then, of course, be our domestic law, indirectly applicable Community law. That is the way in which Article 189 would work here in that field.

As to decisions, the situation is a little more complicated because they take a fairly large number of forms. The noble Lord will see that under Article 191 there are directives and decisions and that these will be notified to those to whom they are addressed and that they will take effect upon such notification. An enormous number of these will be administrative, and they may very well not create any rights or obligations relating to individuals or companies in any country at all. They may relate to member-States, or they may tell one to do this or that if one is a country belonging to the Community, but they do not get down to the level of the individual.

Let me take the most important kind of decision which the noble Lord had in mind. This is where his connection with the commercial community in this country is so important. I refer to the decision which might occur and is dealt with in Article 192 which the noble Lord mentioned—one imposing a pecuniary obligation on persons other than States. In the first place, this is enforceable because the Treaty says so, but the decision itself is susceptible of appeal to the European Court at the instance of the person to whom it is directed. I think in the first place there is a hearing before the Council before they make the decision, but after that there is a rehearing from scratch before the European Court at the instance of the person in relation to whom the decision is made. This is provided for in the Treaty. If, at the end of that time, the European Court says,"Yes, it is right that there should be a pecuniary penalty"and decides that the penalty should be so much, that penalty is enforceable, but not by the European Court, because Article 192 says: Enforcement shall be governed by the rules of civil procedure"— and it is very important to note the words"civil procedure"— in force in the State in the territory of which it takes place. That means that we shall probably have to make the necessary alterations to the rules of court in this country to enable that to be done. That could be done under Clause 2(2), probably by the Order in Council method. It would be an important alteration and should be dealt with immediately. If it were an English concern against whom the decision had been made it would then be enforced by the normal civil procedure in this country. That is the effect of Article 192. I do not think there is an appeal back to the European Court because the European Court has already dealt with the matter, but there will be an enforceable obligation that the enforcement will be carried out here.

I think that covers the range of questions which the noble Lord asked in relation to decisions. I am bound to say that not a lot of this is directly concerned with the facts of the noble Lord's Amendment, but I think he was less worried about those than to get the answers to his questions. If I have not dealt with the Amendments directly I hope he will forgive me, but I have sought to answer the questions that he asked.


I am grateful to the noble Viscount. He has given me a careful and reasoned answer, and I know he will understand if I say that I want to consider its language and think about it. The only slight point that I would make is this. The noble Viscount outlined four procedures that might be used, some under subsection (2), and one at any rate was the use of Statute where the particular provision fell outside the scope of subsection (2).




Then I misunderstood the noble Viscount, and I must study his language carefully.


Perhaps I can explain it to the noble Lord. Where we have domestic legislation which empowers the Minister, say, in the agricultural field, to make regulations which happen to cover the content of a directive that comes from the Community, there is no particular point, and indeed little merit, in using Clause 2(2) of this Bill—although I think technically it could be done—because we already have powers under our domestic legislation specifically designed for and specifically susceptible to doing that thing. If they are regulatory powers, they are almost certainly covered by the Affirmative or the Negative Resolution procedure. Therefore there is a ready built-in system under the domestic law whereby it can be done. It is necessary to use Clause 2(2) only where we have not already powers or where we do not think it is sufficiently important to introduce substantive legislation quite separate from all other Acts, including this one, to implement the directive or whatever it may be from the Community.


I am grateful to the noble Viscount for that explanation. It entirely satisfies me except that I shall wish to study it closely. With the permission of the Committee, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.


In order to give effect to the Statement which is to be made, it might be convenient if I rise to move that the House do now resume.

Moved accordingly, and, on Question,

Motion agreed to.

House resumed.

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