Legal Services Bill [HL]

My Lords, I am always trying to address concerns raised by the noble and learned Lord, Lord Mackay of Clashfern, with great trepidation. I hope that I will succeed, but I do not pretend that I have great confidence. As the noble and learned Lord said, this is about light-touch regulation. As for the language of the noble Lord, Lord Maclennan of Rogart, I blame his education at Balliol; I hope he reads this. I was and have been sympathetic to many of the issues raised because there is nothing between us in wanting to establish the right relationship with the supervisory regulator, one which is light touch but with powers to act if necessary. The question is always how to translate that into legislation, as noble Lords who have stood at this Dispatch Box in more eminent positions than mine will know. It is also important that, in trying to further define pieces of legislation, one ends up changing, altering, constraining and restricting how a body may operate. The Bill sets the board as an oversight regulator, and makes it supervisory in nature. We recognise the significant benefits in this model. It is entirely right that approved regulators have the freedom to make the right regulatory decisions, in keeping with their duties under Clause 27 and in line with best regulatory practice. But should the board need to—and I hope it does not—it must be able to take effective action. Trying to further define what is called the ““B+ model?, with which noble Lords will be familiar, in statute may be potentially restrictive. In Committee, I expressed concerns about the amendment to Clause 48, in particular about the formulation of limbs (b) and (c) which sets new thresholds over and above those already in the Bill. For each of the regulatory powers, the board must already meet statutory criteria and we have set out clear procedures that must be followed before a power is used. Let us not forget that Clause 48 already obliges the board to make policy statements in respect of how it will exercise its powers under the Bill, and these will need to be consistent with the principles of transparency, proportionality and the other better regulatory principles in Clause 3, which apply to the exercise of all the board’s functions, including the making of policy statements. Within the legislation, we have already met the objectives that the amendments seek to meet, through the role of the regulatory bodies in Clause 27 and how Clause 3 operates. My difficulty is that the amendments move us beyond that, to constrain and change in a way we would not be able to accept. I have enormous warmth towards the objectives behind these amendments, but they do not take us any further forward. Rather, they constrain.