Small Business, Enterprise and Employment Bill (HC Bill 11)

20 Duty on Secretary of State to publish reports

(1) The Secretary of State must publish a report in respect of each reporting period
during the relevant period.

(2) The report must assess the economic impact on business activities of the
5qualifying regulatory provisions which have come into force or ceased to be in
force during the reporting period.

(3) The report must include—

(a) a list of all the qualifying regulatory provisions which have come into
force or ceased to be in force during the reporting period,

(b) 10an assessment of the economic impact on business activities of each of
the qualifying regulatory provisions falling within paragraph (a) made
by reference to the methodology published under section 18(3)(b) (but
see section 21(2)),

(c) an assessment of the aggregate economic impact on business activities
15of all of the qualifying regulatory provisions falling within paragraph
(a),

(d) if there have been preceding reporting periods during the relevant
period, an assessment of the aggregate economic impact on business
activities of all of the qualifying regulatory provisions which have come
20into force or ceased to be in force during the reporting period in
question and all of the preceding reporting periods,

(e) an assessment of the contribution of the actions taken by each
Government department to the aggregate economic impact mentioned
in paragraphs (c) and (d), and

(f) 25a list of all the regulatory provisions (as defined in section 19(3)) which
have come into force or ceased to be in force during the reporting
period which do not fall within paragraph (a).

(4) The report must describe the actions taken by Government departments to
mitigate any disproportionate economic impact on activities carried on by
30smaller scale businesses or voluntary or community bodies of regulatory
provisions (as defined in section 19(3)) which have come into force during the
reporting period.

(5) Subsection (6) applies in respect of regulatory provisions (as defined in section
19(3)) which—

(a) 35have come into force during the reporting period, and

(b) implement an EU obligation or any other international obligation of the
United Kingdom.

(6) The report must include—

(a) a description of any provision made in the provisions in question which
40goes beyond the minimum provision necessary for implementing the
obligation, and

(b) the reasons for that provision.

(7) Each of the following is a reporting period—

(a) the period beginning with the relevant day and ending at the end of the
45period of 12 months beginning with the commencement of the
Parliament,

(b) the next successive period of 12 months,

(c) the next successive period of 12 months,

(d) the next successive period of 12 months, and

(e) the period which begins at the end of the period mentioned in
paragraph (d) and ends at the end of the relevant period.

(8) But subsection (9) applies if an early parliamentary general election is to take
5place in accordance with section 2 of the Fixed-term Parliaments Act 2011
during a reporting period mentioned in any of subsection (7)(b) to (d) (the
“election reporting period”).

(9) Subsection (7) has effect as if—

(a) any provision relating to the election reporting period and any
10subsequent reporting periods mentioned in paragraph (c) or (d) were
omitted, and

(b) paragraph (e) referred to the period which begins at the beginning of
the election reporting period and ends at the end of the relevant period.

(10) A report must be published—

(a) 15no later than one month after the end of the reporting period, if the
report is in respect of a reporting period mentioned in any of subsection
(7)(a) to (d);

(b) before the dissolution of Parliament, if the report is in respect of a
reporting period mentioned in subsection (7)(e).

(11) 20Where a report is in respect of a reporting period mentioned in subsection
(7)(e), the references to qualifying regulatory provisions or regulatory
provisions which have come into force or ceased to be in force during the
reporting period include qualifying regulatory provisions or regulatory
provisions which are expected to come into force or to cease to be in force
25during that reporting period.

(12) The Secretary of State must lay any report before Parliament.

21 Additional matters to be included in reports

(1) This section makes provision supplementary to section 20.

(2) An assessment in respect of a qualifying regulatory provision may be included
30in a report by virtue of section 20(3)(b) only if the assessment is verified by the
body appointed under section 22.

(3) Subsection (4) applies if an assessment in respect of a qualifying regulatory
provision is not included in a report in respect of a reporting period mentioned
in any of section 20(7)(a) to (d) because of subsection (2) above.

(4) 35The report in respect of the immediately following reporting period must
include an assessment of the economic impact on business activities of that
qualifying regulatory provision.

(5) Subsection (6) applies to any report in respect of the reporting period
mentioned in section 20(7)(c).

(6) 40The report must include an assessment of the extent to which the interim target
has been met.

(7) Subsection (8) applies to any report in respect of the reporting period
mentioned in section 20(7)(e).

(8) The report must include an assessment of the extent to which the business
impact target has been met.

22 Appointment of body to verify assessments and lists in reports

(1) The Secretary of State must appoint an independent body to verify—

(a) 5the assessment to be included in a report by virtue of section 20(3)(b), and

(b) that all of the regulatory provisions in a list included in a report by virtue of
section 20(3)(f) are regulatory provisions (as defined in section 19(3)) which—

(i) have come into force or ceased to be in force during the reporting period
in respect of which the report is made, and

(ii) 10do not fall within section 20(3)(a).

(2) The body appointed under this section must publish a statement recording any
verification made by virtue of subsection (1)(b).

(3) The appointment of the body must be made before the date on which a
business impact target is published in relation to the relevant period.

(4) 15The appointment of the body must be for the duration of the relevant period.

(5) “Independent body” means a body which, in the opinion of the Secretary of
State, is independent of the Secretary of State.

(6) The body appointed under this section must have expertise in assessing the
likely economic impact of regulation on business activities (including activities
20carried on by smaller scale businesses or voluntary or community bodies).

(7) Subsection (1)(b) is to be read in accordance with section 20(11).

23 Amending the business impact target etc

(1) Before the end of the relevant period the Secretary of State may amend one or
more of—

(a) 25the business impact target;

(b) the interim target;

(c) the determination under section 19(2);

(d) the methodology to be used for assessing the economic impact
mentioned in section 18(1)(a).

(2) 30Section 18(5) applies when amending the thing mentioned in subsection (1)(a)
or (c).

(3) If the Secretary of State amends any of the things mentioned in subsection (1)
the Secretary of State must—

(a) publish the thing as amended,

(b) 35amend any report already published so that it takes account of any
amendments, and

(c) lay any amended report before Parliament.

(4) The requirements in sections 20(2) and (3), 21 and 22(2) apply in relation to an
amended report.

24 40Sections 18 to 22 etc: interpretation

(1) This section applies for the purposes of sections 18 to 22 and this section.

(2) “Business activities” means any activities carried on—

(a) by a business for the purposes of the business, or

(b) by a voluntary or community body for the purposes of the body.

(3) References to a business or a voluntary or community body do not include a
5business or a voluntary or community body which—

(a) is controlled by a public authority, or

(b) is acting on behalf of a public authority in carrying out the activities.

(4) The Secretary of State must publish a statement as to how it is to be determined
whether a business or a voluntary or community body is controlled by a public
10authority.

(5) Each of the following is a “voluntary or community body”—

(a) a trade union;

(b) an unincorporated body—

(i) whose members include at least 21 individuals, and

(ii) 15which does not distribute any surplus it makes to its members;

(c) a charity;

(d) a company limited by guarantee which does not distribute any surplus
it makes to its members;

(e) a registered society within the meaning given by section 1 of the Co-
20operative and Community Benefit Societies Act 2014;

(f) a society registered or deemed to be registered under the Industrial and
Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.));

(g) a community interest company;

(h) a charitable incorporated organisation within the meaning of Part 11 of
25the Charities Act 2011 or within the meaning of the Charities Act
(Northern Ireland) 2008 (c. 12 (N.I.));

(i) a Scottish charitable incorporated organisation within the meaning of
Chapter 7 of Part 1 of the Charities and Trustee Investment (Scotland)
Act 2005 (asp 10)2005 (asp 10).

(6) 30In this section—

• “public authority” has the same meaning as in the Freedom of
  Information Act 2000 (see section 3 of that Act); and

• “trade union” has the meaning given by section 1 of the Trade Union and
  Labour Relations (Consolidation) Act 1992 or Article 3 of the Industrial
  35Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5)S.I. 1992/807 (N.I. 5)).

Secondary legislation: duty to review

25 Duty to review regulatory provisions in secondary legislation

(1) This section applies where—

(a) an Act confers a power or duty on a Minister of the Crown to make
40secondary legislation, and

(b) the Minister exercises the power or duty so as to—

(i) make regulatory provision in relation to any qualifying activity
(see sections 26 and 29), or

(ii) amend regulatory provision made in relation to any qualifying
45activity.

(2) The Minister must—

(a) make provision for review in the secondary legislation in which the
regulatory provision is made (see section 27), or

(b) publish a statement that it is not appropriate in the circumstances to
5make provision for review in that legislation (see section 28).

(3) This section does not apply if or to the extent that the power or duty is to be
exercised so as to—

(a) make or amend—

(i) provision imposing, abolishing or varying any tax, duty, levy or
10other charge, or

(ii) provision in connection with provision falling within sub-
paragraph (i);

(b) make or amend provision in connection with procurement;

(c) make or amend provision in connection with the giving of grants or
15other financial assistance by or on behalf of a public authority;

(d) make or amend provision which is to cease to have effect before the end
of the period of 5 years beginning with the commencement date; or

(e) make or amend provision which is subject to review by virtue of
existing provision in the secondary legislation.

(4) 20In this section and section 26 “public authority” has the same meaning as in the
Freedom of Information Act 2000 (see section 3 of that Act).

26 Section 25(1)(b): interpretation

(1) This section applies for the purposes of section 25(1)(b).

(2) “Qualifying activity” means any activity carried on—

(a) 25by a business for the purposes of the business, or

(b) by a voluntary or community body for the purposes of the body.

(3) For the purposes of subsection (2) the references to a business or a voluntary or
community body do not include a business or a voluntary or community body
which—

(a) 30is controlled by a public authority, or

(b) is acting on behalf of a public authority in carrying out the activity.

(4) The Secretary of State must publish a statement as to how it is to be determined
whether a business or a voluntary or community body is controlled by a public
authority.

(5) 35“Voluntary or community body” has the meaning given in section 24.

27 Section 25(2)(a): “provision for review”

(1) This section applies for the purposes of section 25(2)(a).

(2) “Provision for review”, in relation to any regulatory provision, is provision
requiring the Minister to—

(a) 40carry out a review of the regulatory provision, and

(b) publish a report setting out the conclusions of the review.

(3) A review of any regulatory provision which implements an EU obligation or
any other international obligation of the United Kingdom must have regard to

how the obligation is implemented in the other Member States or countries
which are subject to the obligation.

(4) A report must, in particular—

(a) set out the objectives intended to be achieved by the regulatory
5provision,

(b) assess the extent to which those objectives are achieved,

(c) assess whether those objectives remain appropriate, and

(d) if those objectives remain appropriate, assess the extent to which they
could be achieved in another way which involves less onerous
10regulatory provision.

(5) The first report must be published before the end of the period of 5 years
beginning with the commencement date.

(6) Subsequent reports must be published at intervals not exceeding 5 years.

28 Section 25(2)(b): appropriateness of making provision for review

(1) 15This section applies for the purposes of section 25(2)(b).

(2) The circumstances in which the Minister may determine that it is not
appropriate to make provision for review include those in which—

(a) a review would be disproportionate taking into account the economic
impact of the regulatory provision on the qualifying activity, and

(b) 20a review would be undesirable for particular policy reasons (such as
there being an exceptionally high need for certainty in the longer term).

(3) The Secretary of State may publish guidance about the factors to be taken into
account in determining whether it is appropriate to make provision for review.

(4) The Minister must have regard to any guidance.

29 25Sections 25 to 28 etc: supplementary

(1) This section applies for the purposes of sections 25 to 28 and this section.

(2) “Commencement date” means the date on which the secondary legislation
making or amending the regulatory provision comes into force for any
purpose.

(3) 30“Minister of the Crown” has the same meaning as in the Ministers of the Crown
Act 1975.

(4) “Regulatory provision”, in relation to any qualifying activity, means—

(a) provision imposing requirements, restrictions or conditions, or setting
standards, in relation to the activity, or

(b) 35provision which relates to the securing of compliance with, or the
enforcement of, requirements, restrictions, conditions or standards
which relate to the activity.

(5) But where any of section 27(2), (3), (4)(a) or 28(2) applies by virtue of section
25(1)(b)(ii), the references to regulatory provision are to the regulatory
40provision as amended by the secondary legislation made by the Minister.

(6) “Secondary legislation” means orders, regulations or rules made under any
Act.

(7) The validity of any secondary legislation is not to be affected by any question
as to whether a Minister of the Crown complied with section 25(2).

Definitions of small and micro business

30 Definitions of small and micro business

(1) 5This section applies where any subordinate legislation made by a Minister of
the Crown (the “underlying provision”)—

(a) uses the term “small business” or “micro business”, and

(b) defines that term by reference to this section.

(2) Where this section applies, in the underlying provision—

(a) 10“small business” means a business which falls within the definition of
small enterprise given by the Annex to Commission Recommendation
2003/361/EC of 6 May 2003 in the form in which it was published in
the Official Journal on 20 May 2003 (“the Annex”);

(b) “micro business” means a business which falls within the definition of
15microenterprise given by the Annex.

(3) For the purposes of subsection (2) the Annex is to be read—

(a) as if Article 3(5) were omitted, and

(b) subject to any modifications made by the underlying provision.

(4) In this section—

• 20“Minister of the Crown” has the same meaning as in the Ministers of the
  Crown Act 1975;

• “subordinate legislation” has the same meaning as in the Interpretation
  Act 1978 (see section 21 of that Act).

CMA recommendations

31 25CMA to publish recommendations on proposals for Westminster legislation

(1) Section 7 of the Enterprise Act 2002 (provision by CMA of information and
advice to Ministers etc) is amended as follows.

(2) After subsection (1) insert—

“(1A) The CMA may, in particular, carry out the function under subsection
30(1)(a) by making a proposal in the form of a recommendation to a
Minister of the Crown about the potential effect of a proposal for
Westminster legislation on competition within any market or markets
in the United Kingdom for goods or services.

(1B) The CMA must publish such a recommendation in such manner as the
35CMA considers appropriate for bringing the subject matter of the
recommendation to the attention of those likely to be affected by it.”

(3) After subsection (2) insert—

“(3) In this section—

• “market in the United Kingdom” includes—

  (a)

  40so far as it operates in the United Kingdom or a part of
  the United Kingdom, any market which operates there

  Small Business, Enterprise and Employment BillPage 27

  and in another country or territory or in a part of another
  country or territory; and

  (b)

  any market which operates only in a part of the United
  Kingdom;

  5and the reference to a market for goods or services includes a
  reference to a market for goods and services; and

• “Westminster legislation” means—

  (a)

  an Act of Parliament, or

  (b)

  subordinate legislation (within the meaning given by
  10section 21 of the Interpretation Act 1978).”

Liability of bodies concerned with accounting standards

32 Exemption from liability for bodies concerned with accounting standards etc

(1) After section 18 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 insert—

“18A 15Power to confer exemption from liability

(1) The Secretary of State may by order or regulations provide for the
exemption from liability in subsections (3) and (4) to apply to specified
bodies or persons (referred to in this section as “exempt persons”).

(2) The order or regulations may provide for the exemption to apply
20subject to specified conditions or for a specified period.

(3) Neither the exempt person, nor any person who is (or is acting as) a
member, officer or member of staff of the exempt person, is to be liable
in damages for anything done, or omitted to be done, for the purposes
of or in connection with—

(a) 25the carrying on of those section 16(2) activities of the exempt
person that are specified in relation to that person, or

(b) the purported carrying on of any such activities.

(4) Subsection (3) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) 30so as to prevent an award of damages in respect of the act or
omission on the grounds that it was unlawful as a result of
section 6(1) of the Human Rights Act 1998 (acts of public
authorities incompatible with Convention rights).

(5) In this section—

• 35“section 16(2) activities” means activities concerned with any of
  the matters within section 16(2);

• “specified” means specified in an order or regulations under this
  section.

(6) Orders and regulations under this section—

(a) 40are to be made by statutory instrument;

(b) may make different provision for different cases;

(c) may make transitional provision and savings.

(7) A statutory instrument containing an order or regulations under this
section is subject to annulment in pursuance of a resolution of either
House of Parliament, subject to subsection (8).

(8) An order or regulations under this section may be included in a
5statutory instrument which may not be made unless a draft of the
instrument is laid before, and approved by a resolution of, each House
of Parliament.”

(2) Omit section 18 of that Act (exemption from liability for bodies to whom grants
are paid).

(3) 10In section 66(2) of that Act (provisions extending to Northern Ireland) for “18”
substitute “18A”.

Part 3 Public sector procurement

33 Regulations about procurement

(1) 15The Minister for the Cabinet Office or the Secretary of State may by regulations
impose on a contracting authority duties in respect of the exercise of its
functions relating to procurement.

(2) For the purposes of this section “the exercise of functions relating to
procurement” includes the exercise of functions in preparation for entering
20into contracts and in the management of contracts.

(3) Subject to subsection (4), “contracting authority” means a contracting authority
for the purposes of regulation 3 of the Public Contracts Regulations 2006 (S.I.
2006/5), or any regulation replacing that regulation, as from time to time
amended.

(4) 25But such an authority is not a contracting authority for the purposes of this
section if its functions are wholly or mainly devolved functions, namely—

(a) Scottish devolved functions, that is to say functions the exercise of
which would be within devolved competence (within the meaning of
section 54 of the Scotland Act 1998);

(b) 30Northern Ireland devolved functions, that is to say functions which
could be conferred by provision included in an Act of the Northern
Ireland Assembly made without the consent of the Secretary of State
(see sections 6 to 8 of the Northern Ireland Act 1998), or

(c) Welsh devolved functions, that is to say functions which could be
35conferred by provision falling within the legislative competence of the
National Assembly for Wales (as defined in section 108 of the
Government of Wales Act 2006).

(5) Regulations under this section may, in particular, impose—

(a) duties to exercise functions relating to procurement in an efficient and
40timely manner;

(b) duties relating to the process by which contracts are entered into
(including timescales and the extent and manner of engagement with
potential parties to a contract);

(c) duties to make available without charge—

(i) 45information or documents;

(ii) any process required to be completed in order to bid for a
contract;

(d) duties relating to the acceptance of invoices by electronic means
(including a prohibition on the charging of fees for processing such
5invoices, the publication of reports relating to the number of such
invoices received or the electronic systems that must be used by a
contracting authority);

(e) duties to publish reports about compliance with the regulations.

(6) A person making regulations under this section must before making the
10regulations undertake such consultation as the person considers appropriate.

(7) The Minister for the Cabinet Office or the Secretary of State may issue guidance
relating to regulations under this section.

(8) A contracting authority must have regard to any guidance for the time being
in force under this section.

(9) 15Guidance or revised guidance given under this section must be published.

(10) Regulations under this section are subject to negative resolution procedure.

34 Investigation of procurement functions

(1) In this section “a Minister” means the Minister for the Cabinet Office or the
Secretary of State.

(2) 20A Minister may investigate the exercise by a contracting authority of relevant
functions relating to procurement.

(3) A Minister may by notice require a contracting authority to provide such
documents or other information, in such form or manner as the Minister may
direct, as the Minister may require for the purposes of an investigation under
25this section.

(4) A contracting authority must—

(a) give a Minister such assistance with an investigation as is reasonable in
all the circumstances of the case;

(b) comply with a notice under subsection (3) before the end of the period
30of 30 days beginning with the day on which the notice is given.

(5) In this section—

• “contracting authority” has the same meaning as in section 33, but does
  not include a Minister of the Crown or a government department;

• “a relevant function relating to procurement” is a function to which—

  (a)

  35the Public Contracts Regulations 2006 (S.I. 2006/5S.I. 2006/5) apply,
  disregarding for this purpose the operation of regulation 8
  (thresholds),

  (b)

  the Defence and Security Public Contracts Regulations 2011 (S.I.
  2011/1848) apply, disregarding for this purpose the operation
  40of regulation 9 (thresholds), or

  (c)

  the Public Contracts (Scotland) Regulations 2012 (S.S.I. 2012/
  88) apply, disregarding for this purpose the operation of
  regulation 8 (thresholds);

• a reference to regulations includes a reference to any regulations
  45replacing those regulations, as from time to time amended.