My Lords, in this context, I draw attention to the paragraphs in the Delegated Powers and Regulatory Reform Committee report which deal with tertiary legislation because it is important that this aspect should be understood. The Bill confers powers on Ministers to make law by regulations, and the secondary legislation can do anything that Parliament can do. This would allow people, bodies or Ministers to make further subordinate legislation—tertiary legislation—without any parliamentary procedure or any requirement for it to be made by statutory instrument. Where tertiary legislation is not made by statutory instrument it evades the publication and laying requirements of the Statutory Instruments Act 1946 but it is still the law.
Nothing in the Bill limits the power of creating tertiary legislation. It can be used for any purpose—for example, to create new bodies with wide powers, which could introduce criminal offences in many of the areas currently governed by EU law, including aviation, banking, investment services, chemicals, agriculture, fisheries and medicines. They may only provide the skeleton provisions in relation to a particular activity, leaving the detailed regime to be set out in tertiary legislation made not by Parliament or Ministers but by one of the new bodies so created.
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The committee made the important point that there is no two-year limitation period imposed by paragraph 28 of Schedule 8. The two-year limitation would not apply.
Perhaps I may illustrate this by recounting something which happened to me on 1 February. It was a quiet Thursday and I was asked to take through this House on behalf on my party the Legal Services Act 2007 (General Council of the Bar (Modification of Functions Order) 2018. Essentially, it is an application by the Bar Standards Board, in the name of the Bar Council, to obtain statutory powers for itself. The Bar Standards Board had disciplined barristers in the past on the basis of the contract between them but now feels that it should have statutory powers, so this application was made.
The Bar Standards Board was granted the powers to make disciplinary arrangements, including disciplinary rules in relation to barristers. Paragraph 6(2) states:
“The disciplinary arrangements…may, amongst other things, make provision for”,
the disbarment of a barrister. You might expect that. It continues by referring to,
“the imposition of a fine”,
on a barrister,
“not exceeding £250 million in relation to a relevant authorised person which is a body and £50 million in relation to an individual”.
In my career I can remember a High Court judge imposing a £1 million fine on my client—I did not do a very good job—for polluting the Mersey, which was thought to be the largest fine that had ever been imposed. However, here, by tertiary legislation, the Bar Standards Board has the power to administer a fine of up £250 million. If these regulations are passed, this will not come back to Parliament for approval but to the Legal Standards Board—and that is it.
The Minister, the noble Baroness, Lady Vere, who had the unfortunate duty of replying, said this:
“The maximum levels of fines may appear to noble Lords to be very high, as indeed they do to me—I cannot conceive of having that much money—but we must understand that some of the alternative business structures in particular will contain significant amounts of capital and may grow quite large … It is important that we have the right incentives to make sure that people do not contravene the rules”.
So barristers, if they contravene the rules, can be fined up to £25 million. She continued:
“The amounts are absolute maximums and it will be for the BSB to consider and consult on what fining regime and fine levels it should have in the future. As with all proposed rules, the fining regime will need to be approved by the Legal Standards Board. This safeguard keeps coming back: the Legal Standards Board has to approve the issues that we are talking about today”.—[Official Report, 1/02/18; col. 1729.]
That has nothing to do with Brexit—but translate that way of thinking into the tertiary legislation that could arise under this Bill, with the possibility that a body, without any time limitation, could impose fines and criminal offences of up to two years imprisonment with little regulation. Those are the dangers the House is facing.