Legal Services Bill [HL]

I am afraid I am running true to form for the time being. It is not that I feel holed below the water-line but perhaps I need to resolve a little drip. I say to the noble and learned Lord, Lord Mackay, that I am not so foolish as to try to do other than to listen very carefully to what he says about the drafting of the clause. I shall look at the drafting, which is important. I am grateful to him because if he finds the drafting difficult, it is worth looking at it again to ensure that it is as clear as possible. On the licensing rules applying to others, they apply only to bodies that authorise the licences and the Legal Services Board rules apply only to bodies that it licenses and not to other licensing authorities. I am not sure whether that makes it any clearer and I shall try to give him further details. I am certainly happy to look at the issues that he has raised. I have a lot of sympathy with the intentions behind the amendments so I want to set out how we have dealt with the concerns raised. I completely take the point that one of the themes running throughthe Committee stage of the Bill is ensuring that the supervisory role of the LSB—the noble Lords, Lord Kingsland and Lord Hunt, certainly referred to this—is important and that the board intervenes only where it needs to. I accept that. Earlier today and on other Committee days we have spoken about the partnership approach. We think we have set this out to prevent the board acting prematurely as a licensing authority. Schedule 12 is important in that context. We have three sets of circumstances in which bodies can approach the board for licences: first, where there are no competent licensing authorities for the service that a body wants to provide and none is applying to be designated, so there is a gap in the market, if I can put it that way; secondly, where there are competent authorities, but they have determined that they do not have suitable regulatory arrangements, and none is planning to make such arrangements; and, thirdly, where there are non-commercial bodies, such as not-for-profit bodies, where licensing authorities have suitable arrangements but none is offering terms that are appropriate for those bodies. In addition, the board is not obliged to grant licences when any of those conditions are met. It still has to consider the merits and it may turn down the body. I completely accept the need to deal with the concern that the board should not be able to license bodies where other licensing authorities have said that they do not consider they can do so safely. There are two different interpretations of what we might mean by ““safe”” or ““unsafe”” in this context. It may be that for individual bodies rejection generally does not allow them to approach the board. Schedule 12 is constructed to avoid that. It applies only where the general circumstances do not allow bodies to be licensed—not where bodies have had unfavourable decisions. The only exception is non-commercial bodies, such as not-for-profit agencies, for which special provision is made in order to maintain the health of the not-for-profit sector. The other meaning one could put on this is that licensing authorities do not feel able or competent to license and regulate those bodies because of how they are structured. That is covered by the second ground in Schedule 12; it is what ““suitable regulatory arrangements”” means, although it may also be that licensing authorities want to build up experience in more unusual forms of alternative business structure firms. They may not have suitable arrangements for two broad reasons; the authorities may not have prepared licensing rules for the services in question, either because they are not an authority’s intended market or because they are unfamiliar; or they may be a combination of services that authorities feel cannot be safely licensed. The intention behind the amendment is that the board should not be able to license bodies either. It sounds fine in principle, but licensing authorities will be experts and if, having considered the situation, they conclude that licensing is not safe, I would expect the board to respect that. I remind the Committee again that the board is not obliged to issue licences. It may not have suitable licensing rules and may conclude that none can be devised. It is important to consider the possibility that licensing authorities have not created regulatory arrangements for a full range of services. I have indicated that it is particularly important for providers such as not-for-profit bodies. It is unlikely that they would not be catered for, but we must ensure within the Bill that we have thought of the possibility that that could happen. We agree with the thrust of wanting the board to step in only as a last resort, and Schedule 12 is designed for that purpose. I hope that, on reflection, the noble Lord will agree that we have got that right and will feel able to withdraw the amendment.