Small Business, Enterprise and Employment Bill (HC Bill 117)

(3) The Secretary of State must publish any guidance or revised guidance issued
under this section.

(4) In this section “reviewer” has the same meaning as in section 17.

Business impact target

20 5Duty on Secretary of State to publish business impact target etc

(1) Before the end of the period of 12 months beginning with the commencement
of a Parliament, the Secretary of State must publish—

(a) a target for the Government in respect of the economic impact on
business activities of qualifying regulatory provisions which come into
10force or cease to be in force during the relevant period, and

(b) an interim target applying at the end of the period of three years
beginning with the commencement of the Parliament.

(2) In this section and sections 23 to 25 the target mentioned in subsection (1)(a) is
referred to as the “business impact target”.

(3) 15At the same time as publishing a business impact target and an interim target,
the Secretary of State must publish—

(a) a determination under section 21(2), and

(b) a methodology to be used for assessing the economic impact mentioned
in subsection (1)(a).

(4) 20Subsection (5) applies when the Secretary of State is—

(a) determining a business impact target for publication under subsection
(1)(a), or

(b) making a determination under section 21(2).

(5) The Secretary of State must, in particular, have regard to—

(a) 25the effect of regulation on economic growth and competitiveness,

(b) the need to minimise any disproportionate impact of regulation on
activities carried on by smaller scale businesses or voluntary or
community bodies,

(c) the aim of delivering efficiency in regulating business activities while
30keeping the costs to businesses or voluntary or community bodies to a
minimum.

(6) In this section and sections 22 to 25—

• the “relevant day” means the day after a polling day for a parliamentary
  general election; and

• 35the “relevant period” is the period beginning with the relevant day and
  ending with the polling day for the next parliamentary general election.

(7) Subsection (6) is to be read in accordance with the Fixed-term Parliaments Act
2011.

(8) This section and sections 21 to 26 (the “target provisions”) apply only where the
40commencement of a Parliament mentioned in subsection (1) above occurs—

(a) not more than 12 months before the target provisions come into force,
or

(b) after the target provisions have come into force.

(9) Subsection (10) applies if an early parliamentary election is to take place in
accordance with section 2 of the Fixed-term Parliaments Act 2011 before the
end of the period of 12 months beginning with the commencement of a
Parliament.

(10) 5Any duty imposed by the target provisions which would apply at any time
before the commencement of the next Parliament is to be disregarded.

21 Sections 20 and 22 to 24: “qualifying regulatory provisions” etc

(1) This section applies for the purposes of sections 20 and 22 to 24.

(2) “Qualifying regulatory provisions” means regulatory provisions which the
10Secretary of State determines are to be qualifying regulatory provisions for the
purposes of section 20(1)(a).

(3) A “regulatory provision”, in relation to a business activity, means a statutory
provision which—

(a) imposes or amends requirements, restrictions or conditions, or sets or
15amends standards or gives or amends guidance, in relation to the
activity, or

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

(4) 20But a “regulatory provision” does not include a statutory provision if or to the
extent that—

(a) it makes or amends—

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

(ii) 25provision in connection with provision falling within sub-
paragraph (i);

(b) it makes or amends provision in connection with procurement;

(c) it makes or amends provision in connection with the giving of grants or
other financial assistance by or on behalf of a public authority;

(d) 30it makes or amends provision which is to have effect for a period of less
than 12 months.

(5) Where a statutory provision comes into force or ceases to be in force for some
but not all purposes, references to regulatory provisions or qualifying
regulatory provisions coming into force or ceasing to be in force are to be read
35as referring to those provisions in so far as they have come into force or ceased
to be in force for those purposes.

(6) Subject to subsection (7) a “statutory provision” is—

(a) a provision of an Act,

(b) a provision of subordinate legislation made by a Minister of the Crown,
40or

(c) any other provision which has effect by virtue of the exercise of a
function conferred on a Minister of the Crown by an Act.

(7) A “statutory provision” does not include—

(a) a provision which would be within the legislative competence of the
45Scottish Parliament if it were contained in an Act of that Parliament (see
section 29 of the Scotland Act 1998),

(b) a provision which could be 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) a provision falling within the legislative competence of the National
5Assembly for Wales (see section 108 of the Government of Wales Act
2006).

(8) In this section—

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

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

• “subordinate legislation” has the same meaning as in the Interpretation
  Act 1978.

22 Duty on Secretary of State to publish reports

(1) 15The 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
qualifying regulatory provisions which have come into force or ceased to be in
force during the reporting period.

(3) 20The 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) an assessment of the economic impact on business activities of each of
the qualifying regulatory provisions falling within paragraph (a) made
25by reference to the methodology published under section 20(3)(b) (but
see section 23(2)),

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

(d) 30if 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
into force or ceased to be in force during the reporting period in
question and all of the preceding reporting periods,

(e) 35an 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) a list of all the regulatory provisions (as defined in section 21(3)) which
have come into force or ceased to be in force during the reporting
40period 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
smaller scale businesses or voluntary or community bodies of regulatory
provisions (as defined in section 21(3)) which have come into force during the
45reporting period.

(5) Subsection (6) applies in respect of regulatory provisions (as defined in section
21(3)) which—

(a) have 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
5goes 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
10period 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) 15the 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
place 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
20“election reporting period”).

(9) Subsection (7) has effect as if—

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

(b) 25paragraph (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) no 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
30(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) Where a report is in respect of a reporting period mentioned in subsection
(7)(e), the references to qualifying regulatory provisions or regulatory
35provisions 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
during that reporting period.

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

23 40Additional matters to be included in reports

(1) This section makes provision supplementary to section 22.

(2) An assessment in respect of a qualifying regulatory provision may be included
in a report by virtue of section 22(3)(b) only if the assessment is verified by the
body appointed under section 24.

(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 22(7)(a) to (d) because of subsection (2) above.

(4) The report in respect of the immediately following reporting period must
5include 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 22(7)(c).

(6) The report must include an assessment of the extent to which the interim target
10has been met.

(7) Subsection (8) applies to any report in respect of the reporting period
mentioned in section 22(7)(e).

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

24 15Appointment of body to verify assessments and lists in reports

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

(a) the assessment to be included in a report by virtue of section 22(3)(b),
and

(b) that all of the regulatory provisions in a list included in a report by
20virtue of section 22(3)(f) are regulatory provisions (as defined in section
21(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) do not fall within section 22(3)(a).

(2) 25The 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) The appointment of the body must be for the duration of the relevant period.

(5) 30“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
carried on by smaller scale businesses or voluntary or community bodies).

(7) 35Subsection (1)(b) is to be read in accordance with section 22(11).

25 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) the business impact target;

(b) 40the interim target;

(c) the determination under section 21(2);

(d) the methodology to be used for assessing the economic impact
mentioned in section 20(1)(a).

(2) Section 20(5) applies when amending the thing mentioned in subsection (1)(a)
or (c).

(3) 5If 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) amend any report already published so that it takes account of any
amendments, and

(c) 10lay any amended report before Parliament.

(4) The requirements in sections 22(2) and (3), 23 and 24(2) apply in relation to an
amended report.

26 Sections 20 to 24 etc: interpretation

(1) This section applies for the purposes of sections 20 to 24 and this section.

(2) 15“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
business or a voluntary or community body which—

(a) 20is 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
authority.

(5) 25Each 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) which does not distribute any surplus it makes to its members;

(c) 30a 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-
operative and Community Benefit Societies Act 2014;

(f) 35a 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
the Charities Act 2011 or within the meaning of the Charities Act
40(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) In this section—

Small Business, Enterprise and Employment BillPage 26

• “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
  5Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5)S.I. 1992/807 (N.I. 5)).

Secondary legislation: duty to review

27 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
10secondary 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 28 and 31), or

(ii) amend regulatory provision made in relation to any qualifying
15activity.

(2) The Minister must—

(a) make provision for review in the secondary legislation in which the
regulatory provision is made (see section 29), or

(b) publish a statement that it is not appropriate in the circumstances to
20make provision for review in that legislation (see section 30).

(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
25other 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
30other 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) 35In this section and section 28 “public authority” has the same meaning as in the
Freedom of Information Act 2000 (see section 3 of that Act).

28 Section 27(1)(b): interpretation

(1) This section applies for the purposes of section 27(1)(b).

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

(a) 40by 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) is controlled by a public authority, or

(b) 5is 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) “Voluntary or community body” has the meaning given in section 26.

29 10Section 27(2)(a): “provision for review”

(1) This section applies for the purposes of section 27(2)(a).

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

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

(b) 15publish 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) 20A report must, in particular—

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

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

(c) assess whether those objectives remain appropriate, and

(d) 25if those objectives remain appropriate, assess the extent to which they
could be achieved in another way which involves less onerous
regulatory provision.

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

(6) 30Subsequent reports must be published at intervals not exceeding 5 years.

30 Section 27(2)(b): appropriateness of making provision for review

(1) This section applies for the purposes of section 27(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) 35a review would be disproportionate taking into account the economic
impact of the regulatory provision on the qualifying activity, and

(b) a 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
40account in determining whether it is appropriate to make provision for review.

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

31 Sections 27 to 30 etc: supplementary

(1) This section applies for the purposes of sections 27 to 30 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
5purpose.

(3) “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
10standards, in relation to the activity, or

(b) provision 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 29(2), (3), (4)(a) or 30(2) applies by virtue of section
1527(1)(b)(ii), the references to regulatory provision are to the regulatory
provision 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
20as to whether a Minister of the Crown complied with section 27(2).

Definitions of small and micro business

32 Definitions of small and micro business

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

(a) 25uses the term “small business” or “micro business”, and

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

(2) In the underlying provision “small business” means an undertaking other than
a micro business (see subsection (3)) which meets the following conditions
(“the small business size conditions”)—

(a) 30it has a headcount of staff of less than 50, and

(b) it has—

(i) a turnover, or

(ii) a balance sheet total,

of an amount less than or equal to the small business threshold.

(3) 35In the underlying provision “micro business” means an undertaking which
meets the following conditions (“the micro business size conditions”)—

(a) it has a headcount of staff of less than 10, and

(b) it has—

(i) a turnover, or

(ii) 40a balance sheet total,

of an amount less than or equal to the micro business threshold.

(4) The Secretary of State may by regulations (referred to as “the small and micro
business regulations”) make further provision about the meanings of “small
business” and “micro business”.

(5) This section and the small and micro business regulations are to be read subject
5to any modifications made by the underlying provision in any particular case.

(6) In this section—

• “balance sheet total”, “headcount of staff”, “micro business threshold”,
  “small business threshold” and “turnover” have such meanings as may
  be prescribed by the small and micro business regulations;

• 10“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);

• “undertaking” means—

  (a)

  15a person carrying on one or more businesses;

  (b)

  a voluntary or community body within the meaning given by
  section 26;

  (c)

  a body which is formed or recognised under the law of a
  country or territory outside the United Kingdom and which is
  20equivalent in nature to a body falling within the definition of
  voluntary or community body.

(7) The small and micro business regulations are subject to negative resolution
procedure.

33 Small and micro business regulations: further provision

“(1) 25The small and micro business regulations may make provision—

(a) about the calculation of the headcount of staff, turnover and
balance sheet total of an undertaking, including provision about
the period (“assessment period”) in respect of which they are to
be calculated;

(b) 30for the headcount of staff, turnover and balance sheet total, or a
proportion of such, of any undertaking which satisfies such
conditions as may be prescribed in relation to another
undertaking (the “principal undertaking”) to be treated as part
of the principal undertaking’s headcount of staff, turnover and
35balance sheet total.

(2) Conditions which may be prescribed under subsection (1)(b) include, in
particular, conditions relating to—

(a) the extent of ownership (whether direct or indirect) of one
undertaking by one or more other undertakings;

(b) 40the degree of control exercised (whether directly or indirectly)
by one or more undertakings over another.

(3) The small and micro business regulations may make provision about—

(a) the assessment period or periods in respect of which an
undertaking must meet the small business size conditions or the
45micro business size conditions in order to be a small business or
(as the case may be) micro business;