HL Deb 10 December 1996 vol 576 cc1037-55

8.58 p.m.

House again in Committee.

Clause 18 [Lump sum and periodical payments]:

Lord Mackay of Ardbrecknish moved Amendment No. 40: Page 9, line 10, at end insert ("in consequence of the same accident, injury or disease").

The noble Lord said: The amendment makes it clear that the provisions of Clause 18, dealing with cases where more than one compensation payment is made to the same victim, concern only payments in respect of the same accident, injury or disease. The amendment makes clear our intentions to carry forward existing provisions as far as is possible. I commend the amendment to the Committee. I beg to move.

Earl Russell

The Minister has given us a very welcome clarification, for which I thank him. I am happy to support the amendment.

On Question, amendment agreed to.

[Amendment No. 41 not moved.]

Clause 18, as amended agreed to.

Clause 19 [Payments by more than one person]:

9 p.m.

Baroness Hollis of Heigham moved Amendment No. 42: Page 10, line 13, at end insert— ("( ) Regulations under this section shall he made only after consultation by the Secretary of State with interested persons, including persons who appear to him to be representative of employers, employees, disabled people, consumers, the insurance industry, lawyers and other persons providing advice services.")

The noble Baroness said: At an earlier stage in the evening Amendments Nos. 42 and 46 were ungrouped from the cluster beginning with Amendment No. 31. I apologise if that was not made clear.

Amendment No. 42 is, I hope, a simple, straightforward amendment. It deals with a situation where there is more than one defendant or compensator. Normally at the moment they get together and one acts for the other, and the victim and the DSS get their money in the appropriate way. As the clause stands, it looks as if the DSS is asking for each compensator—when there are several involved—to be separately billed, so to speak. Why is that necessary?

Lord Mackay of Ardbrecknish

I am grateful to the noble Baroness for giving way. We are on Amendment No. 42, which is about consultation. I rather think that because the amendment has been discussed rather late the noble Baroness is now speaking to her intention to oppose Clause 19.

Baroness Hollis of Heigham

That is absolutely true but we have to discuss what is wrong with the clause before we can then say—if the Government are not willing to reconsider the clause—that we can at least encircle it with regulations. We are asking whether Clause 19 is necessary. If it is not necessary, we shall ask for regulations. As the clause stands, it looks as if the DSS is asking for each compensator to be separately billed. We do not understand why the clause is necessary. As long as the DSS gets its money, does it need to alter the well established practice that the various defendants sort the matter out themselves? Why add to the work, the paper and the bureaucracy? Are the Government aware of any problems that the present arrangements do not adequately cover? What we are proposing—we have to do it this way round—or the matter on which I seek to probe the Minister, is whether he needs Clause 19. If he insists that Clause 19 must stand part of the Bill, we shall go through our usual hoops and suggest that we need consultation on it because we do not understand why it is necessary or why the existing arrangements need to be altered. I beg to move.

Earl Russell

Like the noble Baroness, I am not sure why this provision is needed. I can see the Minister arguing perhaps that there must be some way of providing for a situation where the parties are unable to reach an agreement with each other. If he would consider redrafting the clause to make it a reserve power, to operate in that eventuality only, that might be a little more acceptable than this blanket, bureaucratic intervention in a bottom up procedure which normally works perfectly well.

Lord Mackay of Ardbrecknish

The problem I have is encapsulated by the noble Earl's final point. He said that the procedure normally works perfectly well. Unfortunately we have to try to take account of the abnormal situation where it may not work perfectly well. That is the problem here. Whether or not we have regulations, and how I should consult on them, are matters that are intertwined. I shall say a few words about Clause 19 and then discuss whether or not I should be obliged to consult along the lines suggested in the amendment.

Clause 19 provides for regulations to be made where compensation payments are made by more than one person to the same injured person in respect of the same accident, injury or disease. Under the present scheme, recovery is always made from the victim's compensation. It is therefore straightforward to calculate the amount recoverable from a later payment by taking into account any amounts recovered from earlier payments. Therefore it is fairly straightforward at the present moment because we do not make the divisions that we intend to make hereafter. Under the reformed scheme, however, the expense of the recovery of benefits may be met in part by both the compensator and the victim in varying proportions, depending on the claim in question. It will not always be known to the Secretary of State, nor even agreed between the negotiating parties, what proportion of the cost of benefit recovery expense has to be met by each party.

Under the reformed scheme, it will therefore be a more complex matter to determine fair and workable rules to govern the movement of funds where more than one lump sum compensation payment is made. In most cases it will be agreed between the compensators what proportion should be paid by each, and they may even collaborate to make a single payment.

Where the parties agree—as the noble Earl pointed out, that is normally the case—the normal procedure is that one of the parties makes the single payment for both. In those circumstances there is no problem and Clause 19 would not come into play at all because the Secretary of State has no desire to become involved in matters which are primarily the concern of the negotiating parties. However, it is possible that left to their own devices those parties may not always negotiate an amicable settlement. This clause provides scope to deal with that situation.

The intention is that the regulation-making powers in the clause should be used to facilitate the creation of such rules. Regulations made under the clause should mirror as far as possible the current provisions in the 1992 Act. The regulations will be subject to the negative procedure. That is why we feel we need Clause 19. It is not a measure we believe will be used often, but in a limited number of circumstances it is possible that two or more compensators may not be able to agree on the recovery part of the settlement.

If I have to have this clause, it has been suggested that I should incorporate the amendment moved by the noble Baroness as regards consultation with a number of different interested parties. That comes well within the remarks I made at the beginning of our Committee stage today on the general subject of consultation. The regulations made under the provisions of this Bill will be subject in the longer term to referral to the Social Security Advisory Committee. I have also signalled our intention to consult interested parties where appropriate before the first set of regulations under the provisions of the Bill is made. I can give the Committee an assurance that we shall consult with all these people who seem to us to have an interest and involvement in these matters. We shall take their advice and opinion before we come to a conclusion about the format of any regulations under the clause.

I seem to say this on every occasion, but I hope that with that assurance the noble Baroness will feel it unnecessary to put on the face of the Bill a list of people whom the Secretary of State might consult in the circumstances of the regulations.

I hope that I have explained why we believe that it is necessary to have Clause 19, in the event, in certain limited cases, of the compensators not being able to agree and the Secretary of State therefore being in a difficult position on the recovery of benefits as regards which one and how much.

Earl Russell

I am grateful to the Minister for that reply. The Committee stage seems to be working, as it should, towards narrowing the differences between us.

I am extremely grateful that the Minister accepts that there is no need for the Secretary of State to intervene in an arrangement reached between the parties which works. I am grateful that he accepts that that is normally the way it works. But what he says is a great deal more acceptable than the clause as drafted. If it were possible to narrow the gap between those two, I should find it thoroughly acceptable.

My next question is this. Why does the Secretary of State have to impose order as regards those cases where clearly something must be done where agreement is not reached voluntarily; and why not the courts? Why does it need to be an Executive authority when it might have been a judicial one? No doubt there is a reason in the Minister's mind. However, I must admit that at present that reason is obscure to me.

Lord Mackay of Ardbrecknish

I believe that we are discussing cases where so far as concerns the victim there is no need to go to court, but the compensators cannot agree among themselves about how the recovery of benefit will be divided up and paid. I understand the noble Earl's point that the Secretary of State could then go to court. But I am not sure that that would not then drag in the victim. I shall have to think about it. Clearly the court may well say, "Surely we should have some indication about how these matters should be divided up in order to allow the recovery of benefit from the appropriate compensator".

As always I shall give some thought to what the noble Earl says. I accept that as regards the limited number of cases about which we speak I appear to be dealing with the issue in a fairly cumbersome way. Equally, I suspect that if we were to refer these matters to the court, even on the infrequent occasions that they occur, the courts might think that to a certain extent we were passing the buck.

However, as I have been invited to do on a number of occasions, I can discuss these matters with my noble and learned clansman's department.

Baroness Hollis of Heigham

We thank the Minister for his responses. At least we have the consultation, even if we still have the clause.

On a point of clarification, will the Minister confirm his reply that where the compensators agree that one should act for all of them, that is fine, and that the provision comes into play only as a safety network? I understand that to be the case.

If there is no agreement between the defendants, the defendants sue each other. I do not think that the assumption was that the Secretary of State would sue the compensators separately. The defendants will sue each other and the court would sort it out either through third party proceedings or through a contribution notice. Will the Minister take away the issue? I do not have strong views but clearly neither the victim nor the DSS is involved in disputes between insurers. They agree to sue each other and the courts sort it out between them. That may be a more appropriate procedure than the one the Minister envisaged. I do not feel strongly about it. It is a question of what is expeditious and reliable in these cases. Does the Minister wish to comment?

Lord Mackay of Ardbrecknish

On thinking about it, it seems to me that in those circumstances in which we are involved and wishing to recover benefit. we have the problem of which compensator to recover the benefit from. I am not sure how the compensators would decide who sues whom.

However, I am content to reflect on the issue. I believe that we are agreed that in the small number of cases in which those circumstances are likely to come about, we need some provision so that the Secretary of State can recover the money.

Baroness Hollis of Heigham

I agree with the Minister that we must have a fail-safe situation. In the light of his undertaking to review and consider whether there is a more effective and expeditious way to resolve the problem, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 agreed to.

Clause 20 [Amounts overpaid under section 6]:

9.15 p.m.

Baroness Hollis of Heigham moved Amendment No. 43: Page 10, line 34, at end insert— ("( ) Regulations under this section shall be made only after consultation by the Secretary of State with interested persons, including persons who appear to him to be representative of employers, employees, disabled people, consumers, the insurance industry, lawyers and other persons providing advice services.").

The noble Baroness said: The amendment concerns overpayment. It touches on an issue, although with different parties, with which we dealt in Amendment No. 28. I hope that we shall have the same helpful, conciliatory, supportive and understanding response from the Minister as we happily enjoyed then.

We are not entirely clear about the intention of this clause; perhaps the Minister can help us. It seems to suggest that if someone—the compensator, I presume—has overpaid moneys to the DSS, the DSS may (though not necessarily must) repay the overpayment. Is that correct? If so, why is it not "must"? If that is a correct reading of the intention of the clause, why should the Government keep the excess?

Similarly, where the DSS has overpaid benefit to the victim—or the claimant—the DSS may claim back deductions after the event. We are rather uneasy about that. Clearly, if the victim has been obviously negligent or fraudulent in the giving of information, there should be a complete right of recovery; but I do not think that the situations of the compensator being repaid by the DSS and the victim repaying the DSS are analogous or comparable.

If the DSS has overcharged the compensator, that is the fault of the DSS and it should make good the compensator's loss. If the DSS has overpaid the victim, where there is no negligence or fraudulent intent on the part of the victim, possibly, for example, because a pension was awarded on the basis of a 20 per cent. disability and it turns out that the person has only a 15 per cent. disability, the victim will in good faith have lived off that money and may well not have the resources to refund the difference.

It is worth labouring the point because all the evidence shows that the DSS is notoriously inaccurate in its delivery of benefits. I recognise the fact that a lot of the benefits are complicated; they are means-tested and circumstances change. But the Minister will surely not challenge the fact that something like 30 per cent. of CSA cases are still wrongfully assessed and the latest auditor's report shows that something like 25 per cent. of all income support calculations are inaccurate, faulty or wrong. Similar rates of negligence apply to other means-tested areas of benefit, including family credit. The Minister knows that; I know that; the information is in the public domain.

We believe that the DSS is likely to be more careful in its calculations if it knows that, if it makes a mistake where the victim is neither negligent nor fraudulent, it may be stuck with the consequences. We accept that this is a difficult and delicate point and that discretion needs to apply as to what is reasonable under the circumstances. Clearly, in some cases the victim should repay; in other cases it would generate real hardship. Where it is the fault of the DSS, it should be stuck with its mistake.

If that is what the Government propose, it is essential that there be consultation about regulations to ensure that the victim is not left in considerable uncertainty and ultimately, through having to repay benefit, in considerable hardship. I beg to move.

Lord Mackay of Ardbrecknish

In looking at the question of consulting on the regulations, perhaps I may say a few words about this clause. It deals with complex and difficult situations. It might help the noble Baroness in deciding what to do about her amendment if I go through them.

The clause deals with the situation whereby, other than as a result of a review or an appeal on a benefit recovery issue, the amount of recoverable benefits paid to the Secretary of State is in excess of the amount for which the compensator is liable.

Under the current scheme there is provision for treating a deduction from the victim's compensation payment as a recovery of benefit overpayment. This provision also enables the Secretary of State to make a refund where no recoverable benefit overpayment is outstanding.

The situation under the reformed scheme will not be so straightforward because it will usually not be clear whether an overpayment or recoverable benefit can be treated as a recovery of benefit overpayment; neither will it always be clear whether the overpayment of recoverable benefit has effectively been made wholly by the victim, wholly by the compensator, or partly by both. There are two areas where the situation may not be entirely clear.

Subsections (1), (2) and (3) of the clause provide for regulations to be made to enable the Secretary of State to treat the amount overpaid as a recovery of an overpayment or to refund an overpayment of recoverable benefits to the compensator, the victim, or both.

Subsection (4) provides that the regulations may also provide for a recalculation of the amount of the reduction of the compensation payment, for giving credit for any amount already paid and for the payment of any balance to, and the recovery of any excess from, any person.

Subsection (5) clarifies that the provision does not apply where a certificate of recoverable benefit has been revised on review or appeal. These are the kinds of cases we dealt with under Clause 14.

I am sure that Members of the Committee will agree that these matters are complex; the scenarios we are discussing are complex and give rise to a range of complex situations. We want to ensure that we introduce rules which are both fair and workable. We shall indeed consult with interested parties before deciding on the details of how the regulations will work.

I hope that what I have said will be helpful. I am quite prepared to believe that it might be more helpful once the noble Baroness has a chance to read it tomorrow. Some parts of my explanation were hard to follow, even as I was reading them, because of overpayments of recoverable benefits and recovery of benefits overpayment. I hope that what I said helps the noble Baroness. Added to that, I give her the assurance that I have given on a number of occasions that of course we shall be consulting interested parties before deciding the details of the regulations. For all the usual reasons, I should prefer to leave it at that assurance rather than put it on the face of the Bill.

Baroness Hollis of Heigham

I thank the Minister. I shall look forward to reading his elegant prose when I read Hansard tomorrow. The Minister has explained Clause 21 and its purport in what I had intended to call more transparent prose, but I am not sure about that because it has sometimes been more opaque. I take his substantive point that this is not something that can be laid down other than to say that there may be a "may" clause; that is to say that areas of discretion may come into play. We also take his assurance about the regulations.

I am still concerned about the situation of a recovery of overpayment to the victim when the DSS has been at fault in its assessment and where the victim was neither negligent nor fraudulent, and in good faith received the money and perhaps in good faith has lived off it. Under what circumstances in that situation would the Minister envisage recovery? What would he expect to do where hardship resulted? Can we have some guidance on that situation?

Lord Mackay of Ardbrecknish

When it comes to benefits in general, if we are at fault and we overpay then the recovery does not usually trigger in. I suspect that the same situation would occur in this case. Indeed, I am right to make that transposition from what I know to be the situation as regards benefits in general to this particular case where one is recovering a benefit overpayment almost at second hand. If we make a mistake, we—as we do in the benefit system—just live with it.

Baroness Hollis of Heigham

I thank the Minister for that response. If there are other loose threads on this issue I do not doubt that we shall return to them at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

Clause 21 [Compensation payments to be disregarded]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 44 and 45: Page 10, line 42, leave out ("sent to him in accordance with regulations"). Page 11, line 5, leave out ("4(2)") and insert ("4").

The noble Lord said: I have already spoken to these two amendments. I beg to move them en bloc.

On Question, amendments agreed to.

Clause 21, as amended, agreed to.

Clause 22 agreed to.

Clause 23 [Power to amend Schedule 2]:

Baroness Hollis of Heigham moved Amendment No. 46: Page 12, line 10, at end insert— ("( ) Regulations under this section shall be made only after consultation by the Secretary of State with interested persons, including persons who appear to him to be representative of employers, employees, disabled people, consumers, the insurance industry, lawyers and other persons providing advice services.").

The noble Baroness said: This amendment also visits the issues in Schedule 2 on which we touched earlier; namely, the heads of compensation and the lists of benefits which may be deducted for them. As they stand, we have no problem. They are obviously sensible.

We are worried that the Bill gives the Secretary of State the power to change the heads of compensation and the benefits to be deducted accordingly. I understand that the Government need some reserve powers when benefits change and there is movement from, for example, family credit to a different kind of benefit, from invalidity to incapacity benefit or from income support to JSA, and so on.

We are not just worried about renaming when there are genuinely new benefits on the schedule of benefits that the DSS has in its repertoire. We are concerned with something rather different; namely, that the Bill gives the Secretary of State the power to change the heads of compensation and the benefits to he deducted accordingly. We fear that it is in the Government's interest to increase the heads and therefore to increase benefit clawback. We are worried that it might be abused.

As I said, it is obviously sensible to have some flexibility. Another government might want to introduce, for example, a partial disability benefit and would need to be able to amend the schedule. So that the schedule is not amended malevolently in order to increase recoupment and clawback, we again urge that any such changes be based on regulations which have been subject to extensive consultation. Perhaps the Minister will give his view on that issue. I beg to move.

Earl Russell

The noble Baroness made an important point in relation to altering the heads of compensation, and I am grateful to her for bringing it to our attention. I am sure that the noble Baroness remembers, as I do, the regulations we had in the last Session on benefit for single parents. They allowed the Minister to vary the heads of premium for single parents without any further recourse to this Chamber, save through the uprating instrument which, as we both reminded the Minister, is practically impossible to oppose.

The Minister assured us, as I am sure he remembers well, that the Government had no present intention of abolishing the separate premium for single parents. Those words, carefully construed, I accept were perfectly true. But we now know that that is not a complete enumeration of the story. We now know what has been done with those words, as indeed I felt might be the case, which was the reason I divided the Chamber at that time.

Do we here have another blanket power given to the Secretary of State whereby he could, if he were strapped for cash—as Secretaries of State are from day to day—vary one of the basic principles of the whole Bill? That would cause many of us a great deal of concern. This also relates to the long-standing difficulties that exist at the moment between the Government and the courts.

I have drawn attention before to the exceptionally permissive style of drafting which is creeping into legislation. Basically, under the principle of the Cambises clause, the Secretary of State may do whatever he likes. This is an example of a Cambises clause. The Secretary of State may do a great many things under it and he cannot be directly challenged under the words of the statute. But that means that the only way a power exercised under a statute drafted so loosely can be challenged is through judicial review.

I have heard Ministers in this Chamber complaining about judicial review. I wonder whether this is a case of John Stuart Mill's remark about the inability of the analytical mind to recognise its own handiwork. If legislation is this loosely drafted, how else can it be challenged?

Lord Mackay of Ardbrecknish

The point of Clause 23 is that it allows the Government and Parliament on some future occasion to make amendments specifically to Schedule 2 of the Bill. Indeed, when we discussed at an earlier stage an amendment from the noble Baroness regarding the second head under compensation, I pointed out that if any problems arose along the lines she mentioned and these heads of compensation were found, in the light of experience, to need some change, then the clause we are discussing gives us the ability to make that change.

In the memorandum we sent to the Delegated Powers Scrutiny Committee we clearly pointed out and accepted that this was a Henry VIII clause, providing as it does for amendment to primary legislation by secondary legislation. But we have done that so that the schedule can be kept up to date without the need to pass further primary legislation. The two columns—the head of compensation awarded to victims and the other column, the benefits which correspond to them—may change over time.

This regulation power will be used to deal with that eventuality. In that way it should be possible to avoid the difficulties which arose under the post-1948 scheme. That scheme was an inflexible one under which changes to benefits needed to be provided for by amendment to primary legislation. The need for such amendments was sometimes missed and unequal treatment of claims resulted. It is true that whatever happens in the future everyone knows that it is unlikely that the benefits on column two will remain exactly as named. There may be changes to those benefits, there may be additional benefits or variations of one kind or another. It seems to me eminently sensible that we have the power by secondary legislation to amend that column.

On column one I go back to the point I made earlier, where, by the light of experience, if it is discovered that there are real problems with the heads of compensation, again it seems sensible that we should be able, by secondary legislation, to change the composition of the paragraphs on the head of compensation column.

I fully accept that these are Henry VIII clauses, so we have made them subject to an affirmative order of the House, and I can assure the Committee that, as I have already done, I can easily confirm that it would be our intention to consult interested parties, where appropriate, in the event of any possible change needing to be made. Indeed, on the first set of regulations under this Bill we will be consulting pretty widely.

I hope I have explained why we need the power. It is quite narrow. There is a very good case for it. I fully appreciate that it is a Henry VIII power. I have given my assurance that we will be consulting on any changes we propose to make in the future on these matters. At the end of the day the House has the stronger secondary legislation of an affirmative order to discuss, to deal with and indeed, as the other place certainly does, to divide on these matters.

I hope that that explanation and assurance will allay the fears of both the noble Baroness, when it comes to consultation, and the noble Earl, when it comes to the Henry VIII matter.

9.30 p.m.

Earl Russell

I am grateful to the Minister for what he has said about the power to divide on these matters. If points of this nature are to be dealt with by secondary legislation then that power is going to be necessary. When the Minister refers to it being found by experience, can he tell us whose experience?

Lord Mackay of Ardbrecknish

If it is the second column, then a government in the future will have changed the benefit, and it will be a fairly straightforward matter. They will want to change either the name of the benefit or add a benefit to column two.

As far as the experience is concerned, that will be what the consultation will be about. As the genesis of this Bill has been the Select Committee in another place, it might well be, if problems were to arise, that that Select Committee or a Select Committee of your Lordships' House might look at it, or indeed that people might come to government and say: "It isn't working in the way that was intended and there are problems". Maybe even the courts might say that they think that the Government ought to have a look at this. There are number of places where, so to speak, we might find a trigger mechanism for beginning the thought process that might lead to this. Ultimately, we are very clear and I hope that I have made it absolutely clear that we would consult widely if we were to make any change.

Baroness Hollis of Heigham

I thank the Minister for that response. First, we welcome his commitment about consultation. Secondly, of course, he is right that one needs flexibility through regulation to align the new benefits that may be introduced in the future to displace some of the benefits that are currently listed. I entirely accept that. That may be one of those situations where regrettably a Henry VIII issue does come into play.

I am much more concerned, not about the need for some flexibility because benefits are continually being monitored, reviewed and altered, but that the Government may more malevolently seek to realign or introduce further heads of compensation, to increase the degree of clawback, and thus subvert the good intent of this Bill. To give an example, the Government, as I understand it, have indicated informally that they are not expecting to recoup for medical expenses if they have been paid for privately, but suppose a future government wanted to offset an award for medical expenses perhaps against free medical prescriptions. That would be a major change to the Bill, one that was unwelcome to claimants and compensators, and one, I suggest to the Minister, that could be made under his regulatory powers, not in the name of simple flexibility, but in a rather more malevolent way, to increase clawback and payments and compensators. As the Bill stands, the Minister could do that by regulation. Frankly, I do not think he should be allowed to do so.

Lord Mackay of Ardbrecknish

Perhaps I may help the noble Baroness and show that I have no malevolent intention. We fully intend that any changes made to Schedule 2 under this power should in any case follow the broad principle that compensation should be reduced only if a corresponding benefit has been paid as a consequence of the same accident, injury or disease. I hope that allays the noble Baroness's fear.

Baroness Hollis of Heigham

We shall reflect on it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clauses 24 to 28 agreed to.

Clause 29 [Regulations and orders]:

Earl Russell moved Amendment No. 47: Page 14, line 33. leave out subsection (2) and insert— ("( ) A statutory instrument containing the first regulations or first order under any section of this Act (other than an order under section 33) shall not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament. ( ) A statutory instrument containing subsequent regulations or a subsequent order under any section of this Act (other than regulations under section 23) shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble Earl said: This amendment again deals with the regulation making power. Perhaps I may clarify matters a little for the Minister. I understand perfectly clearly that there are some situations where the regulation making power is needed and indeed is the only appropriate way of dealing with things. My concern is that the power should be subject to parliamentary control. In that respect I am extremely grateful to the Minister for what he has already said. However, what is covered by this amendment is the affirmative/negative distinction. The amendment seeks to provide that the first regulations under each of the powers in the Bill shall be affirmative in order to find out exactly what is being done and how the power is being exercised. Since the debates on the Jobseekers Bill it has been an increasingly common principle in this House to apply that way of dealing with the regulation making power to new examples of its creation. I wonder whether this is a case in point.

I appreciate that the distinction between the affirmative and the negative is not quite as crucial in this place as it is in another because in another place very often what is negative really cannot practically be debated at all. But if, as happens in this wicked world, people find more need for legislation, it is not impossible that the body of regulations might go on increasing, as over the past few years it has done. I have already had the experience in this Chamber of wanting to pray against regulations and finding it impossible to get down a prayer within the requisite number of days. I am sure the Minister remembers the last case that happened, which I think was as recently as last July. One avoids that danger, which I believe is likely to be an increasing one, by the use of the affirmative procedure for the first example of the use of a new regulation making power. That is what the amendment attempts to do. I beg to move.

Lord Mackay of Ardbrecknish

This amendment refers to the first regulations under the Act; in other words, to the regulations that will have to be brought forward in the next Session of Parliament in order to allow us to get the Bill up and running and into implementation for victims as quickly as we possibly can. I shall return to my reason for making that point, but it is an important one to make.

The regulations we are talking about are not regulations some time down the road when, perhaps after the Act has been working for a while, we decide we need to consider some changes. They are the regulations which will be needed in order to get the new scheme up and running. I hope I have made it clear on a number of occasions that the consultation exercise we shall undertake will be all embracing and will include all those people who have an interest—I had better not say "legitimate interest" because it may sound as if I am going to pick only the people who agree with me: I certainly do not intend that—in the matters before us when we come to consider the regulation making power. I believe that we have been very open in our discussions with the various parts of the industry and those people who work in this field. That will certainly continue.

We are asked to make all the regulations the first time round—in other words, in the next Session of Parliament—by affirmative regulations. As the noble Earl rightly pointed out, there was a previous piece of legislation where we decided to do it that way. I do not believe that that would be a very good use of parliamentary time because I and my colleagues certainly have every intention of keeping both Houses very busy in the first Session of the new Parliament with some splendid legislation, which I have no doubt we shall bring forward. The first year of a new Parliament is always particularly busy.

Therefore, I believe it is a little unnecessary to go for the affirmative regulations which inevitably mean that they absolutely have to be debated in both Houses, unlike negative regulations where they have to be debated only if somebody in the House does not feel very happy about them and wants to have an issue aired. I would like to believe that, after we have consulted, many of the regulations will be perfectly acceptable to absolutely everybody and therefore we shall be able to pass them without necessarily taking up the time of Parliament. Indeed, as I have said, even if we deal with the matter by negative procedure, which is what I propose, with the exception of the matter that we have talked about a few moments ago, there is a mechanism for Parliament to challenge their implementation.

With that explanation I hope that the noble Earl does not believe that I am being underhand. As many of the regulations will be pretty close to the ones in the current scheme, I believe that it would be imposing an undue burden to ask for them all to be dealt with by affirmative regulations in what inevitably will be a very busy Session of Parliament.

Earl Russell

I would not dream of accusing the Minister of being underhand on the issue. In fact, he is quite remarkably frank and perhaps slightly franker at moments than he realises. I take the point about consultation, and I am extremely glad to hear it. But the Minister should stop and listen for a moment to what he has just been saying. He said that it will be possible, in a crowded Session, to make new laws—and these were his actual words—"without taking up the time of Parliament". If the Minister were to listen to those words from the Back Benches I wonder what he would hear. However, I shall not make a further issue of the point tonight. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 29 agreed to.

Clause 30 agreed to.

Clause 31 [Power to make transitional, consequential etc. provisions]:

Baroness Hollis of Heigham moved Amendment No. 48: Page 15, line 25, leave out subsection (2).

The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 49 standing in the name of my noble friend Lady Turner. This is a probing amendment. We want to get on the record the Government's interpretation. Obviously, the clause deals with transitional arrangements. Our first amendment is to delete entirely subsection (2) because we fear that, as it reads, the principle of retrospectivity contained in Clause 2 could be undermined. We do not believe that that is the Government's intention, but we believe that they need to spell out what their intentions are. We are giving the Minister an opportunity which I am sure he will warmly embrace.

Should the first amendment fail, our second amendment provides for consultation on any regulations which attempt to disapply Clause 2. I beg to move.

Earl Russell

Clause 31(2) is worth a little of our attention. It is our old friend the Humpty-Dumpty clause where words mean whatever I say they mean. Let us consider the clause for a moment:

Regulations under this section may (among other things) provide

  1. (a) for compensation payments in relation to which, by virtue of section 2, this Act does not apply to be treated as payments in relation to which this Act applies,
  2. (b) for compensation payments in relation to which, by virtue of section 2, this Act applies to be treated as payments in relation to which this Act does not apply".
It is clear how this clause got the name Humpty-Dumpty. I am sure the Minister remembers well his baptism of fire over the Humpty-Dumpty clause in the Jobseekers Bill. As I recollect it, it was Clause 6. That clause was recommitted and had to be redrafted. Why is it that when this Committee, the Delegated Powers Scrutiny Committee and a good many others outside the Chamber express themselves so forcefully about this means of legislation not very much later we see a practically identical formula?

I am reminded of an incident shortly after I joined the House. The noble Baroness, Lady Darcy, was looking at the qualifications for members of the Universities Funding Council. She asked that there be deleted a provision that people should not be qualified to sit if they were disabled or otherwise incapacitated from doing their job. Very reasonably, she argued that that provision was entirely redundant. The Minister deleted it without a moment's hesitation. The identical words came back in another Bill and were deleted. They came back in another Bill and were deleted, until the noble Lord, Lord Carter, asked where these words came from. It was discovered that there existed a series of model articles for drafting Bills in which those words were included. Thanks to the noble Baroness and the noble Lord, Lord Carter, those words were taken out of the model articles and we have had no trouble with them since. Cannot the same thing happen to the Humpty-Dumpty clause?

9.45 p.m.

Lord Mackay of Ardbrecknish

I am grateful to the noble Earl. When I studied this Bill I indicated to my advisers—I might even have taken on a small wager—that the noble Earl would undoubtedly raise this matter. They promptly took me on. (I will now have to make up what the wager was.) I could not have remembered that it was Section 6 of the Jobseekers Act. I marvel at the memory of the noble Earl in all these matters.

The intention of this amendment is to prevent the making of regulations under Clause 31 of the Bill which might modify Clause 2 which applies the reformed scheme to agreements or awards made on or after the point of change. I would like to assure the noble Baroness and the noble Earl that we have no intention of using the regulation-making powers in Clause 31 in such a way. The provision for transitional or consequential arrangements and savings are a common feature of social security legislation. They enable cases to which the new provisions do not apply to be dealt with under previous legislation. In any event, I have already said that we intend to consult on the detail of regulations to be made. I give that commitment to consult.

If one has a situation in which a payment has been agreed prior to the date on which the new procedures come in but it has not yet been paid and perhaps an appeal is to be made, there must be a method for working out under what rules the appeal is to proceed. Does it take place under the old regulation or the new regulation? In such cases we require regulations to make sure either that all cases can be treated as new cases, although they appear to be pretty close to settlement before the new date, or that new cases can be treated as old cases. That is why this Humpty-Dumpty clause, as the noble Earl has described it, appears here. I hope he accepts that this simply allows for the difficult point of transfer from the old to the new scheme. There may be cases so far advanced that the old rules have to be kept, although in other circumstances one may decide that the new rules should apply, or vice versa. There is nothing more sinister than that in it. I fully accept that it is a complex way to do it, but I can assure the noble Baroness and the noble Earl that we will consult about the exact detail in the regulations to do with the cases which are at that critical stage in their path towards settlement when the due date of the commencement of the new proposals comes in.

I hope that that explanation will allay any fears and perhaps the next time I have a piece of legislation I shall ask the draftsman to draft it slightly differently.

Earl Russell

I thank the Minister warmly for that last line. I was never worried about his intentions. When one drafts a clause one sends out a piece of legislation like a rocket into space. One does not know where it may go nor what it may meet. Leaving loose powers around is as bad as leaving unexploded mines, so I was extremely glad to hear the Minister's final comment and I thank him.

Baroness Hollis of Heigham

I may wish to dissociate myself slightly from the noble Earl's comment. I believe that there is a lot to be said for loose powers under differing circumstances and I would not regard that as a Humpty-Dumpty statement. The previous occasion on which we engaged in a debate on Section 6 of the JSA brought forward some notorious lie that all income can be treated as capital and all capital can be treated as income, whichever the Secretary of State prefers at the time. I remember that we had some fun with that argument. We understood that the provision related to the transitional stage during which cases had not completed their passage and therefore there was a need to continue to operate the old system. We welcome the Minister's clarification of that point and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 49 not moved.]

Clause 31 agreed to.

Clause 32 agreed to.

Schedule 3 [Consequential amendments]:

Lord Mackay of Ardbrecknish moved Amendment No. 50: Page 18, leave out lines 39 to 44 and insert ("subsections (1), 1A), (3) and (6) are omitted.").

The noble Lord said: In moving Amendment No. 50 I shall speak also to Amendments Nos. 57 and 58. Amendments Nos. 50 and 57 remove an outdated provision which allows a compensator to reduce a compensation payment by 50 per cent. of the value of any industrial injuries benefit, industrial disablement benefit or sickness benefit paid in the defined period where the amount of the compensation payment is below the small payments limit and is not therefore subject to the current recoupment provisions.

As I have explained, we do not propose to set a small payments limit in the reformed scheme. Should we decide to do so in the light of experience once the reformed scheme is operational, compensators will no longer be allowed to reduce compensation payments which are below that limit. This means that victims who have received sickness benefit, industrial injuries benefit or industrial disablement benefit will be in the same position as all other victims who have received state benefit and who do not have their compensation payments reduced in the circumstances I have described.

The third amendment is a technical one which repeals a provision in the Jobseekers Act 1995 which is no longer required because of the provisions of this Bill. I commend the amendments. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 51: Page 19, line 29, leave out ("(aa)") and insert ("(ab)").

The noble Lord said: In moving Amendment No. 51 I shall speak also to Amendments Nos. 52 to 56, which are of a similar algebraic nature. The amendments are technical and merely substitute correct subparagraph numbers into amendments to Section 170 of the Social Security Administration Act made in the current draft of the Bill. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 52 to 56: Page 19, line 31, leave out ("(ab)") and insert ("(ac)"). Page 19, line 32, after ("1997") insert ("; and"). Page 19, line 34. leave out ("(aa)") and insert ("(ab)"). Page 19, line 35, leave out ("(ab)") and insert ("(ac)"). Page 19, line 37. at end insert ("; and").

On Question, amendments agreed to.

Schedule 3, as amended, agreed to.

Schedule 4 [Repeals]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 57 and 58: Page 20, line 4, at end insert—

("1948 c. 41. The Law Reform (Personal Injuries) Act 1948. In section 2, subsections (1), (1A), (3) and (6).
1985 c. 66. The Bankruptcy (Scotland) Act 1985. In section 31(8), the words "and to section 89(2) of the Social Security Administration Act 1992".")
Page 20, line 23, column 3, leave out ("paragraph 52") and insert ("paragraphs 52 and 54")

On Question, amendments agreed to.

Schedule 4, as amended, agreed to.

Clause 33 [Short title, commencement and extent]:

Earl Russell moved Amendment No. 59: Page 15, line 43, at end insert— ("( )Any day appointed by the Secretary of State under subsection (2) shall be on or before 1st November 1997.").

The noble Earl said: I am sure that the Committee will be thankful that this is the last amendment but it is worth just a few words.

Again, this deals with what was described recently as a loose power. This is the commencement clause which provides that a number of the sections are to come into force: on such day as the Secretary of State may by order appoint".

My attention was first drawn to that as a general issue by a memorandum submitted by Professor Sir William Wade which was quoted in the first report of the Delegated Powers Scrutiny Committee in 1993. He drew attention to the open-ended commencement in the 1988 Criminal Justice Act and pointed out that that was a potentially arbitrary power. In the light of what has happened to that Act since, those observations can only be regarded as prophetic.

I raised that point briefly on Second Reading. The Minister replied as usual by defending his intentions. With apologies to the noble Baroness, I do not wish to argue about the Minister's intentions. I accept entirely that he intends to bring this Act into force. But what is happening now is that the Minister or any subsequent Minister—and I assure the noble Baroness that I am not worrying about her intentions either but we never know what might happen in the future—could decide in circumstances which no one could now foresee that he did not want to bring this Act into force at all. Therefore, I should like there to be a terminus ante quern in this clause to say that this Act must be brought into force before a certain date.

In the amendment I have provided the date of 1st November 1997. The Minister said that he intends to bring the Act into force by October. If the Minister were to tell me that the amendment is too tightly drawn and that because a lot of what needs to be done is technical and might take longer, I should listen to that argument and come back on Report with a slightly more distant date which I hope would allow the Minister the necessary flexibility because I accept that there are cases in which flexibility is needed.

I want to have a firm date. If the Minister does not like this date, I should like to have another which suits him better. But I am not happy with leaving the situation open-ended. I beg to move.

Lord Mackay of Ardbrecknish

I am sure that the noble Baroness and I are both very grateful that the noble Earl has indicated that whatever happens at the next election, he is sure that whichever one of us stands here—and of course, I expect to stand here—he would obey. I notice that he did not explore the scenario that he might stand here.

Earl Russell

I thought that was implied in my tabling of the amendment by which I would expect to be bound, just like everyone else.

Lord Mackay of Ardbrecknish

I think we should leave that matter where it is and turn to the amendment. As the noble Earl pointed out, the amendment would place on the face of the Bill the fact that the scheme would have to come into force no later than 1st November 1997. The noble Earl has already accepted that I have indicated quite firmly that it is our intention that the reform scheme should come into force in October 1997. Clause 33 is a standard commencement clause. It will allow the Secretary of State to appoint a suitable date for implementation of the reformed scheme.

I believe that the noble Earl rather predicted my arguments. Nonetheless, I believe that they are valid. There could be difficulties in pinning a particular date for the implementation of the Act because, for reasons that I cannot foresee, difficulties could arise which might make it impossible to implement the scheme on the time-scale proposed—namely, 1st October next—whereas the noble Earl would tie me to 1st November 1997. If that were to happen, we would require further primary legislation in order to amend the commencement provision before the Act could be brought into force. Otherwise, the Government might be in breach of their statutory duty if they failed to implement before 1st November.

I appreciate the noble Earl's legitimate concerns about the implementation of the Bill; indeed, he has raised the issue on a number of previous occasions, although I do not believe that he has ever tabled such a tightly-worded amendment. With my assurance that it is our absolute and firm intention that the reform scheme should come into force in October and that any delays would be for the most exceptional reason, I hope that the noble Earl will feel able to withdraw his amendment.

I have to say that I shall resist the temptation to even suggest an alternative later date which the noble Earl might be tempted to bring forward on Report.

Earl Russell

I accept what the Minister said about the possibility of unexpected delays and obstacles. However, I am awfully sorry that he is not going to accept the temptation to think about a later date which might allow for such possibilities. I also accept what the Minister said as regards this being a standard commencement clause. But that is precisely what worries me. The Minister assumes throughout that the decisions will all be made in his office. Indeed, that has been his attitude about the regulation-making power and many other such matters. The idea that Parliament makes the law is very much on its last legs. I appreciate that there are difficulties in keeping it going, but I would miss it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 agreed to.

House resumed: Bill reported with amendments.