The reason we put these two methods in the Bill and left other criteria and approaches for the regulations is based on legal advice. Perhaps the Committee would allow me to set it out.
Although there is no specific reference to the exercise of discretion in the Bill, all regulation-making powers and the regulations state that the Secretary of State “may make provision”, which obviously involves the exercise of discretion. Decisions on the allocation of permits will involve an element of discretion in both setting the criteria and applying them to determine which operator gets a permit. Discretion in the Secretary of State’s decision must be in accordance with public law principles, so it must be lawful, rational and procedurally fair, and decisions may be challenged by way of judicial review where they do not comply with those principles.
To be clear that the Secretary of State is able in certain circumstances to allow the use of first come, first served or random allocation, they have been included in the Bill. Where the criteria set out in regulations and guidance are not sufficient to allocate all the permits, the Secretary of State is able to use that discretion to allocate permits on a first come, first served basis. It is best included in the Bill in accordance with public law principles.
I understand the noble Lord’s point. We have had extensive discussion on this. It is based on very clear legal advice that if we were not to include it, we could not use it at any point. Although we do not want to use it for the allocation of permits, because I entirely agree that that would not be fair, I will take it back and discuss it further with the legal team to clarify. I understand why it standing alone in the Bill causes concern.