Compensation Bill [HL]

moved Amendment No. 15A:"Page 3, line 16, leave out paragraph (a)." The noble Viscount said: My Lords, in this group of amendments, I will speak, first, on the matter of directions. Clause 3(4)(a) gives the Secretary of State powers to give directions to the regulator, and the regulator must comply with them. I shall not attempt to deal with the position that would apply if the Secretary of State was, for the time being, the regulator, because I suppose that he would not be inclined to give himself directions. I wish to discover why the Secretary of State needs this power and how he intends to use it. According to the academic studies of their function, directions are normally included in Acts of Parliament to achieve compliance with administrative matters—often matters such as accounts and the provision of information. There is evidence that they may be intended to be available for instructions of last resort if a public body appears to the Secretary of State to be manifestly failing to meet its duty of accountability via the Secretary of State to Parliament on behalf of the people. This can be described as a reserve power, which is to be used only on rare occasions, when reasonableness has gone out of the window. However, in this case, there are some wider issues, because there is greater uncertainty about why directions might be needed. As the Delegated Powers and Regulatory Reform Committee said in its seventh report, a number of significant aspects of the regulatory scheme—I will not read out the list—are left to delegated legislation. We discussed the matter in Grand Committee. Although we have had some clarification this afternoon, a considerable number of points in the list remain unclear. The committee went on to say that,"““of even greater significance is the cumulative effect of the powers in the bill as a whole, because of the lack of a sufficiently coherent policy framework in the bill itself. This means that the powers could be used in future to introduce controls which should, in our view, be the subject of the full scrutiny which a bill provides””." The committee does not comment on the power to give directions, as directions are not, in a formal sense, secondary legislation. Although the academic studies indicate that they may be so regarded, there is in fact no parliamentary procedure in relation to them or a record in this House of directions made. All of that makes it appropriate that the Minister should tell the House why the power is needed and how she expects it to be used. The other amendment in the group is on a rather different point, relating to subsections (9) and (10), whereby the Secretary of State becomes the regulator. That is a fallback position, which is to be available after a Bill is enacted. However, as the Delegated Powers and Regulatory Reform Committee has told us, it is open to wide interpretation and leaves many important matters to secondary legislation. Even after what we have been told this afternoon, there is still a high degree of uncertainty and some disarray among those who consider themselves to be providers of claims management services. As the Minister will know from comments made in Grand Committee, I would be hesitant about putting the Government in the position of having created a profession of claims management service providers. It seems to me that there is neither a coherent market nor a level of qualification that would enable the people who are operating in that market to become a unified profession. There are complex matters to be settled in this fragmented and evolving provision of services. Decisions must be made about how prescriptive the regulation needs to be or how light the touch. Indeed, the very need for regulation is to a degree regrettable, given assurances from the Chancellor to business and in the light of the task with which the Better Regulation Executive has been charged. It would be helpful if, in the light of what the Minister has said this afternoon on regulation, she could tell the House that, when the October date is met, the Secretary of State will not rush into the statutory instrument programme. Rather, the period of discussion and consultation should continue and succeed in identifying as many of the trading problems as possible. As I think the earlier report recommended, existing legislation and institutions, such as the Office of Fair Trading, to which the Minister has referred, should be used wherever possible to deal with the problems. It seems to me that, in principle, there are two ways of going about bringing this situation under control. One is to move rapidly into an ex ante regulation system, under which you make everyone become authorised. The other way—which, given the flexibility in the Bill, could be used for a while—is to have exemptions, at least temporarily, as a lot of people are going to be exempt if I understand correctly what we have been told, and to concentrate on remedying the abuses that can be found. The approach should be, as I think the Minister has indicated, a combination of working with the industry and the CSC, to the extent that it can be helpful, and of operating within known practices for the remedying of abuses. Not the least of the thoughts that have been put to us is that, if there are nasty advertisements, well, there is an Advertising Standards Authority and a number of Acts of Parliament under which, if you are not treating the customer correctly, you can be brought to book. I beg to move.