APPENDIX
Proposal to allow a small additional increase
in burdens on some parties in the interests of the greater good
COMMITTEE REPORT
7. The Committee did not object to this proposal,
but emphasised that any draft order coming before them which might
impose a new burden would be examined with particular attention
paid to consultation and an assessment of proportionality. The
Committee referred to a point made by Lord Haskins in an evidence
session in June 1998, that transferring a burden from large to
small business may give the former a competitive advantage. The
Committee also explored the concept of proportionality in some
depth, noting Professor Miers' view that it would "if used
as a test quickly assume the substance if not the form of a legal
prescription".
GOVERNMENT RESPONSE
8. The Government regards this as one of the most
important proposals for amendment of the Act in terms of making
it more useful and more widely applicable. Given this, the Government
particularly welcomes the Committee's support. There is general
agreement that the process of consultation and scrutiny of proposed
deregulation orders by the Deregulation Committees of both Houses
works well; despite concerns raised when the Deregulation and
Contracting Out Act 1994 was introduced, the process is now widely
respected. The proposal to allow orders to impose small additional
burdens in the interest of the greater good would not weaken these
safeguards. The Government has every confidence that the Committees
would apply the same degree of objectivity and challenge any draft
orders that they considered would impose an unacceptable burden.
9. As set out in the consultation document, the Government
takes seriously the requirement for every deregulation order to
be accompanied by a full regulatory impact assessment. It also
shares the Committee's concern that departments bringing forward
any proposed orders which would impose a new burden should have
consulted appropriately, and will emphasise this point in guidance.
This would be part of a significant re-write of the existing guidance
to those considering bringing forward proposed deregulation orders,
which will emphasise the scope of the new powers and their safeguards.
The additional requirements for documentary evidence to be laid
before Parliament, which it is proposed to include in legislation
when Parliamentary time allows (the existing requirements being
detailed in section 3(4) of the 1994 Act), will also be discussed
in the guidance document. The Government will take steps to promulgate
this guidance widely, to ensure that maximum appropriate use is
made of the deregulation order-making procedure.
10. On Lord Haskins' point, the Government is sensitive
to the needs of small business and the burdens that regulations
can impose on them; these are issues that are also addressed in
the recent consultation document on the new Small Business Service.
11. The Government welcomes the Committee's consideration
of the concept of proportionality. The Lords Committee recommended
including on the face of the Bill the criteria by which Ministers
would decide that an additional burden was acceptable, and that
these criteria might include the concept of proportionality and
the assurance that a draft order would not adversely affect a
right or freedom which those concerned might reasonably expect
to be able to continue to enjoy. The Government welcomes this
recommendation, which ties in closely with the Commons Committee's
wish to include an assessment of the extent to which a proposed
order protects individuals' rights and freedoms, which is discussed
below in paragraph 46.
12. Some of the other respondents to the consultation
document suggested that proportionality should be defined in the
legislation. The Government does not think that it would be helpful
or practical to seek to define proportionality. It is already
a well-established legal concept which is used in a similar way
to the concept of "reasonableness".
13. However, the Government agrees that it would
be right to make clear what is intended by use of this concept.
Overall, it envisages the following steps being taken in considering
whether a new burden would be acceptable:
- firstly, the overall effect of the order must
be deregulatory, with reduced burdens overall. Hence the order-making
power could not be used to lift an onerous licensing requirement
on the few if it imposed a new onerous requirement on the many.
This would act as an overriding test;
- secondly, as stated in the consultation document,
any new burden imposed by an order must not adversely affect a
right or freedom which those concerned might reasonably expect
to be able to continue to enjoy. This would rule out a number
of potential orders which otherwise would be acceptable as being
for the greater good. For example, it could be argued that an
order removing constraints on aeroplanes landing and taking off
at night would be deregulatory, would lift a burden on airlines
and potential passengers and would be beneficial to the economy
in allowing increased flows of tourists and businesspeople and
more efficient use of resources (hence reducing the need for new
airports). However there is a strong counter-argument that such
an order would remove the freedom of those living near airports
to enjoy peaceful nights, which is a freedom they could reasonably
expect to be able to continue to enjoy. If this argument is accepted,
the order would fail the test. Clearly, consideration of such
orders would need to concentrate on what constituted "reasonable
expectation";
- thirdly, the new burden imposed must be proportionate
to the mischief which it is intended will be overcome by the order;
it must result in net benefit in terms of the [social] objectives
of the provisions. For example, to revert to the example used
in the consultation document, in rationalising a food shops licensing
system it might not be considered proportionate to require those
which did not previously have to have a licence to obtain one;
it may be considered more proportionate (and therefore more appropriate)
to set up a new system of negative licensing, class (rather than
individual) licensing, or perhaps a registration system instead.
14. It is worth noting that the Financial Services
and Markets Bill sets out an express proportionality test at clause
2(3)(c): "the principle that a burden or restriction which
is imposed on a person, or on the carrying on of an activity,
should be proportionate to the benefits, considered in general
terms, which are expected to result form the imposition of that
burden or benefit." This may prove a useful precedent.
15. Turning to procedure, the consideration of whether
a new burden would be proportionate would not, of course, fall
solely on the Committees. In the first instance it would be for
Ministers individually, then collectively, to decide. All interested
parties would have an opportunity to comment on the proposal and
the Committees of both Houses will be invited to reflect on the
reasonableness of what is proposed. In so doing they would be
able to refer to the documentary evidence submitted by departments
to the Committees under section 3(4) of the existing Act, which
under an amended Act would require an assessment of the proportionality
of any new burden which an order would impose. This is the approach
followed under existing provisions when considering whether "necessary
protection" is maintained.
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