Informal pre-legislative scrutiny
16. The first draft Bill: The Government has
more than met its commitment to consult Parliament before proceeding
to legislation. In accordance with this commitment, the Government
made available to us, and to our sister Committee in the Lords,
the first text of a Regulatory Reform Bill, at the beginning of
January of this year. It was clear at this stage that the amendments
now planned to be made to the 1994 Act were so substantial that
the Government had wisely decided to replace the existing legislation
with an entirely new Act. We considered this first draft at our
meeting on 25 January 2000, and submitted our views on the draft
by means of a letter from our Chairman to the Minister, on 1 February
(the text of which is included in the Annex).
17. Although the Government had met many of the points
which we had raised during the earlier consultation exercise,
we expressed continued doubts over three proposals contained in
the first draft of the Bill:
First, the
draft sought to introduce a new concept of "an enactment
[which] has a restrictive effect on a person" as the key
definition of provisions which might be eligible for repeal or
amendment under the Deregulation process. We were concerned that
the term "restrictive effect" lacked clarity, but nonetheless
concluded at that stage that additional safeguards — of
proportionality, fair balance, and reasonable expectations —
would probably provide sufficient safeguards against abuse of
the procedure, so long as the Government could elucidate the circumstances
in which the concept would be applied, in advance of the formal
consideration of the Bill, and preferably by changes to the final
text.
Second, although accepting
that a regulatory reform order might impose a small increase
in existing burdens or impose small burdens on parties not previously
affected we doubted whether the draft Bill at that stage was so
limited and warned the Minister that we would be most unlikely
to accept as legitimate any imposition of an additional burden
other than a small one.
Third, Clause 8 of the
first draft Bill (equivalent to Clause 7 of the draft bill now
presented to Parliament) would have enabled a Minister to withhold
from Parliament, as well as from publication, the substance of
any representations made in response to a consultation exercise
under the Deregulation process, either at the request of the respondent
concerned (on grounds of confidentiality) or if the Minister himself
considered that the interest of third parties might be adversely
affected by such disclosure. While we recognise the need to protect
individuals in such circumstances, we could not accept that a
prohibition on disclosure could apply also to the Committee (or,
in a particularly sensitive case, to the Chairman) without undermining
one of the basic principles on which the Deregulation process
is based — namely that all contributions to the consultation
process should be available to inform the two parliamentary committees
in their consideration of proposed regulatory reform orders.
Fourth, while welcoming
the proposed extension of the application of the Deregulation
process to more recent legislation enacted since the 1994 Act
itself, we expressed concern at the apparent inclusion of the
new Regulatory Reform Act itself within the scope of the powers,
with the implication that Ministers would be able, by order, to
extend their own power to adopt regulatory reform orders.
18. We also put forward two main recommendations
to the Government to strengthen the first draft of the Bill:
- We suggested that the then Clause 2(7), which
encouraged Ministers to have regard to the desirability of "modernising
and simplifying the law" should be reinforced by requiring
Ministers to have regard to the need to draft legislation which
is comprehensible to the persons likely to be affected by it.
- We also suggested the imposition of a duty on
the Secretary of State to report annually to Parliament on the
use made of the regulatory reform powers during the previous year
and his intended work programme for the coming year. As part of
this process the Minster should also be under a duty to consider
representations from the public on regulatory reform and to explain
in his report whether they have been followed and, if not, the
reasons.
The view of the Lords Committee
19. In contrast to the general welcome which we were
able to give to the first draft Bill, our sister Committee, in
its role as a delegated powers committee, expressed concerns that
the draft Regulatory Reform Bill excessively extended the order-making
powers.
20. Among the proposals on which the Lords Committee
appeared to have had serious reservations were the power to impose
an additional burden; the power to create new criminal offences;
the proposal to remove restrictions on Ministers alone; and the
power to extend the Act to post-1994 legislation.
The second draft Bill
21. Following this extensive round of consultation
with the two committees the Government put forward at the end
of February a revised draft of the Regulatory Reform Bill, primarily
to allay the concerns of the Lords Committee. This draft introduced
fresh issues which revived some of our concerns.
22. The principal change to the Bill at this second
stage was the removal of the term "restrictive effect",
about which both committees had expressed reservations. Instead,
the second text gave the Minister the power to reform legislation
"which has the effect of imposing burdens affecting persons
in the carrying on of any activity", burden being defined
as in the 1994 Act and, additionally, as including "any limit
on the statutory powers of any person". The Government also
helpfully provided illustrations which we had requested.
23. In response to the concerns of the Lords Committee,
the second text introduced a two year rolling cut-off before new
legislation could be subject to a regulatory reform order. Clause
1 (2) (a), the relevant Clause, referred to "any Act
which was passed at least two years before the day on which the
order is made". We sought clarification that this would exclude
the Regulatory Reform Act itself. Clause 2 (1) (a) also responded
to the Delegated Powers Committee by ensuring that burdens could
not be removed from Ministers or departments alone but must include
burdens on others as well as the Minister or department.
24. However we had reservations about certain amendments
in the revised second text.[19]
One of these was Clause 1(1) (d), permitting the reform of legislation
which imposed a burden with a view to the removal of "inconsistencies
and anomalies". We were concerned at the potential breadth
of this power and its imprecision, and sought clarification of
the Government's intentions.
25. Second, we had doubts about Clause 5 (equivalent
to Clause 4 of the published draft Bill). This Clause would enable
a provision of a regulatory reform order designated as subordinate
to be subsequently amended by a negative procedure statutory instrument
without being subject to the stringent procedures of the Regulatory
Reform Bill. We indicated that we were " minded to object
strongly to this proposal..." unless more satisfactory explanations
were forthcoming.
26. The second draft Bill also failed to take account
of two further matters raised by the Committee. With regard to
the first matter, "modernising and simplifying the law",
the Committee had recommended this should be strengthened by requiring
Ministers to have regard to the need to draft legislation which
is comprehensible to those likely to be affected by it. The Minster
previously indicated that he was "sympathetic to this point,
and [he would] give it further consideration prior to introduction
of the Bill." Nevertheless no mention was made of this matter
in the text of the second draft. Similarly the Minister, in his
letter accompanying the second draft text,
"noted with interest
[the Committee's] suggestions for maximising use of the new power,
involving imposing duties on Ministers to keep their legislation
under review and to produce an annual report on previous and projected
use of the power. I should like to give these points further consideration
before introduction of the Bill".
These two issues are considered in greater detail
below (paragraphs 31-35 and 73-77).
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