Legal Services Bill [HL]

I am reminded by the Chairman that that would be within reason, and of course we are always reasonable. I thank Members of the Committee for the way in which we have talked around this very important amendment. I agree with the sentiments expressed by the noble Lord, Lord Hunt, and other Members of the Committee that it is very important, because it is new, that we know what happens while it develops. Not only should the board know, but Parliament should know. I agree that it would be very valuable to view how things are working out and allow a chance to consider whether further refinements are needed. The noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Thomas of Gresford, talked specifically about whether we could stop alternative business structures and whether we could deal with particular classes of ABS. The answer to both is yes. If a firm’s existence is contrary to the regulatory objectives, the licence can be withdrawn. If all ABSs were working contrary to the regulatory objectives, all licensing authorities could be shut down under this legislation. The licensing authorities’ power to modify licences applies to any or all within their reach, so if general problems arise general modifications can be made in a specific class or in the generality as a whole. I am happy to consider the study and report as proposed in subsections (1) to (3). We may need to make some refinements, so I hope that the noble Lord will allow me to take these subsections away to consider them. I listened carefully to what was said about a sunset clause. Noble Lords spoke of the chilling effect and the difficulties for consumers as well as for investors, and I agree with those arguments. It is difficult to envisage how this would work, particularly given that, after five years, ABS firms could be unlawful. That would greatly inhibit the possibility of their even being set up, let alone being able to develop. However, I realise that part of the intention is to ensure that the Government come back to Parliament to justify what has happened. The amendment requires a report after three years, leaving two years with no obligation to do so, and I shall want to look at that. Further, there is nothing to prevent Parliament from conducting its own investigations. My thinking is that perhaps we should have a report after five years, and I am happy to talk to the noble Lord, Lord Hunt of Wirral, about how to structure that. If necessary, legislative changes could then be proposed. While I would not wish to see a sunset clause in the Bill, there should be an opportunity to make changes if they are thought necessary. That is better for the long-term planning of ABS structures and gives greater certainty while dealing with the point that Parliament should be given a chance to review how the development is working. On that basis, I hope that the noble Lord will agree to my proposal.