§ 9.54 p.m.
§ Report received.
§ Clause 3 [Regulations and amendments relating to the computerised system and exempt transfers]:
Lord Bruce of Donington moved Amendment No. 1:
Page 3, line 42, leave out subsection (5).
§ The noble Lord said: My Lords, at the Committee stage of this Bill, I sought to introduce an amendment that made it obligatory that any regulations that were made by virtue of the Bill under Section 1 should be by affirmative resolution. This proposal did not find favour with the House. Arguments were advanced that, on technical matters of this kind, it was not necessary for the affirmative resolution procedure in respect of a statutory instrument to be applied.
§ As we all know, this is a Bill that seeks to make a unique change, albeit over a limited sphere, in the way in which contracts are concluded involving the purchase and sale of a limited number of Government securities. It is not therefore a matter in which any vast political passions are aroused, and indeed it will affect only a limited number of people—but it is a unique event. It marks a new departure.
§ I ventured to advance the view to your Lordships that any regulations made under Section 1 should therefore be subject to the affirmative resolution of the House. That did not find favour, so I have now sought by this amendment to introduce a procedure whereby for the first three months after the date on which the provisions come into operation the affirmative procedure should be applied. I was rather hopeful that it would be acceptable to the Government.
§ During the last few years the number of statutory instruments has been quite considerable. In the year 1979 there were no less than 120 statutory instruments subject to the affirmative procedure and some 750 to the negative. In 1980, the figure was 115 to the affirmative and 790 subject to the negative procedure. In 1981 the figure of affirmative had sunk to 90 and the figure of the statutory instruments subject to the negative procedure remained once again at 790. These are quite formidable numbers of statutory instruments.
§ This Bill is an enabling Bill, the main operation of which and the mode of its operation are going to be determined by statutory instrument. I should have thought that it would be in all prudence to see that, at any rate for the first three months, this procedure should be followed. The use of the affirmative procedure means that the instrument concerned is brought more prominently before the attention of the House. It has to come before the Floor of the House and therefore it attracts the interest of your Lordships. In case the authenticity of the form of the amendment may be in any doubt, I have leaned very heavily on the form that has been used by the Government themselves in the Merchant Shipping (Liner Conferences) Bill; and my amendment has been derived from Clause 13. As your Lordships will be aware, 1070 this is quite a recent precedent because it was brought from another place only on 14th July. One is, therefore, relying on no very ancient precedent but one that very recently the Government have themselves decided to adopt before this House.
§ I repeat, this is not a contentious matter. It is a matter that concerns the supervision that Parliament always ought to be able to give to statutory instruments as well as to Bills that come before either this place or another place. I am well aware that in taking the attitude that I have ventured to take in your Lordships' House this evening I am perhaps fashioning a rod for my own back, as and when my own party comes into office, which, of course, it will. Nevertheless, I hold that the power of Parliament is an important power and that it should always be there to check all executives, whether they be Conservative, Liberal or Labour. I have always held that view and any reference to those speeches that I have had the honour to present to your Lordships will, I believe, confirm that that has always been my view.
I should like to put the argument in as least contentious terms as possible. For myself, if I were to put it into my own words perhaps it might be unduly inflammatory. May I therefore refer your Lordships to a book that was published while I was still at school called The New Despotism, by the late Lord Chief Justice Lord Hewart, in which he encapsulated, in far more moderate and sedate terms than my temperament would perhaps permit me to utter, the exact meaning that I have in mind. He advanced his argument in this form:
(1) The business of the executive is to govern.
(2) The only persons fit to govern are experts.
(3) The experts in the art of government are the permanent officials who exhibiting an ancient and too much neglected virtue 'think themselves worthy of great things being worthy.'
(4) That the expert must deal with things as they are. The four-square man makes the best of the circumstances in which he finds himself.
(5) Two main obstacles hamper the beneficent work of the expert. One is the sovereignty of Parliament and the other is the rule of law.
(6) A kind of fetish worship prevalent amongst an ignorant public prevents the destruction of these obstacles. The expert therefore must make use of the first in order to frustrate the second.
(7) To this end let him under parliamentary forms clothe himself in despotic power and then, because the forms are parliamentary, defy the law in the courts.
(8) This course will prove tolerably simple if he can (a) get the legislation passed in skeleton form; (b) fill up the gaps with his own rules, orders and regulations; (c) make it difficult or impossible for Parliament to check the said rules, orders and regulations; (d) secure for them the force of statute; (e) make his own decision final; (f) arrange the fact that his decision shall be conclusive proof of its legality; (g) take power to modify the provisions of the statute; (h) prevent and avoid any sort of appeal to a court of law.
§ I do not agree in every respect, in fact in most respects, with the political utterances which the late Lord Chief Justice delivered of himself from time to time. But on his interpretation of the rule by regulation, and the dangers attaching to it, I find myself in profound sympathy with him. My amendment would make it perhaps a little more possible for this House to exercise its vigilance than the Bill provides without the amendment. I beg to move.1071
§ Lord Glenarthur
My Lords, I enjoyed listening to the noble Lord's quotation of those extracts. I confess that my late night reading has been a little short in the last couple of weeks and although he mentioned that he would quote that to me, I am afraid I have not had a chance to look at it myself. He will not be surprised to hear that the Government cannot accept the amendment which, as he says, seeks to apply the affimative resolution procedure to orders made under Clause 3 of the Bill for a period of three months from the coming into force of the powers in the Bill in relation to the book entry transfer system.
The amendment is not dissimilar from one tabled by the noble Lord, Lord Bruce, in Committee on 30th June. That was resisted on the grounds that to subject the regulations made under Clause 3 to the affirmative resolution procedure would be inappropriate and time-consuming. The position has not changed since then and the Government remain of the view that regulations of a highly technical nature, which is what they are, of the sort to be made under Clause 3, could sensibly and properly be submitted to Parliament by means of the negative resolution procedure, as it is proposed to do in the Bill.
Perhaps I might point out at this stage that to make the procedure subject to the negative rules under Clause 3 parallels exactly the Government's stock regulations in that they follow the negative resolution procedure, and the noble Lord will find the statutory basis for that enshrined in Section 47 of the Finance Act 1942.
Leaving aside the general merits of the proposal, the amendment does not achieve in practical terms what I think the noble Lord sets out to do. We have no way of knowing at the present time whether the principal orders under Clause 3 will be made before the expiry of three months, but even if that were the case, I can see nothing in the amendment to stop a Government from postponing the introduction of the regulations until after the deadline had passed if they were determined to avoid parliamentary debate. Earlier this evening we had a perfectly good example of the way in which the negative procedure can be used to debate the sort of issues which the noble Lord seeks now to make subject to the affirmative resolution procedure.
The amendment as it stands is unlikely therefore to produce the sort of further parliamentary safeguards he has in mind and which we consider unnecessary. I can only reiterate at this late hour what I said in Committee; namely, that the regulation-making power conferred by Clause 3 is to establish the technical framework for computerised transactions. It affects settlement of contracts already made; it does not change the form of contract. I hope that clears up a point the noble Lord made. The Government have no plans to bring into the regulations things which should properly be considered elsewhere. That is not the purpose of the Bill. I hope that on the basis of this further explanation of the Government's intentions in respect of the regulations, the noble Lord will withdraw the amendment.
Lord Bruce of Donington
My Lords, I am grateful to the Minister for his succinct reply. When he said it would be open to any Government to postpone 1072 making any regulation under the clause until the three months had expired, that assumes they have something to hide. It assumes that they are so afraid of the affirmative procedure that they would deliberately choose the negative procedure as a means of avoiding discussion in Parliament. I do not very much care for that. I do not very much care for that at all; nor do I accept the view that because a matter is technical, it should somehow be beyond the power of the ordinary parliamentarian, whether in this place or in another place, to have a full opportunity to give his affirmation. There is nothing mysterious about the term "technical". Every profession erects around itself its own mystique. Lawyers are particularly good at it, and accountants have not been unknown to adopt the same kind of technique. But why, because a matter is dubbed with the term "technical", should that put it somewhere into the intellectual stratosphere?
Ignorance of law is supposed to be no excuse. Surely, it should be the function of the legislature itself to understand the legislation that it is passing, to understand the regulations that are being brought forward. Parliament ought not to avoid an issue purely because it contains matters which might loosely be described as "technical"; otherwise all our Bills would be drawn up in such technical terms that the legislature itself could never understand them. In which case everything could go through on that basis under the negative procedure.
I must say in this connection that over the years there have been certain aspects of the Finance Acts—and I do not exempt Governments of my own political persuasion in this regard—that have been so complex that even most astute Members in another place have not been able to understand them. In the case of the Companies Act 1981 I can testify that there were at any rate some Members on the Government side who did not understand their own Bill. This is the kind of danger into which we are getting.
I have no desire to detain your Lordships any longer, and I certainly shall not divide the House. However, I give the noble Lord notice that I shall return to this matter again, and that he might find that his insistence on the adoption of this particular procedure in this Bill may be used by others—not necessarily by me—to his disadvantage and to the disadvantage of his party. Having said that, and having expressed my regret that my endeavours to help the noble Lord, and to help the whole business of parliamentary government, have not been accepted, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 2 not moved.]