Letter from Mr Peter Pike MP, Chairman
of the Deregulation Committee
The Committee is pleased to have had the opportunity
to comment on the draft clauses of the Regulatory Reform Bill,
and trusts that the Minister will find our response, which is
set out in the order of the draft clauses on which we wish to
make comment, useful.
Clause 1- Introductory
The Committee welcomes the abandonment of the Government's
earlier proposal to extend the power in the existing Act to permit
removal or reduction of burdens imposed by common law, and is
content with the requirement that regulatory reform orders are
anchored in a statutory provision.
We are also content that the proposal to enable regulations
made under the European Communities Act 1972, to extend legislation
necessitated by a European Community obligation to related areas
where it would constitute a burden not to have a common approach
in all areas, does not feature in the draft Bill.
We note that in place of these proposals is a new
concept of "an enactment [which] has a restrictive effect"
which includes not only the existing notion of imposing a burden
but also a new notion of not authorising or enabling a person
to do something which is related to the subject matter of the
enactment.
We are concerned at the lack of clarity as to what
constitutes a "restrictive effect". It is not clear
to us whether Clause 1(1)(b) is intended to enable an Act which
authorises a person to undertake some activity to be extended
so that the person can undertake some related activity, or whether
the intention is that a person outside the scope of an Act could
be authorised to do some or all of the things which the Act authorises
other persons to do. It may, of course, be that both approaches
are intended. In that case this would be a broad power which,
as well as not requiring any burden in the sense of the existing
legislation to be identified, would enable statutory arrangements
to be extended so long as there is a relationship between the
subject matter of an Act and the subject matter to which it is
extended. Worked-through examples of potential orders which, in
its response to our First Special Report on this topic, the Government
said it would provide in due course, would have simplified our
consideration of this clause.
Despite the lack of clarity at this stage, the Committee
has nonetheless concluded that, having regard to the additional
safeguards of proportionality (clause 3 (1)(a)), fair balance
(clause 3 (1)(b)) and expectation of exercise of rights (clause2(2)),
the proposed concept of restrictive effect is acceptable, provided
that the Government makes clear the circumstances in which it
will be used either before introduction (if possible by way of
textual amendment) or during the Bill's parliamentary passage.
Clause 2 - Power to remove or reduce restrictive
effect of enactment
We are content with Clause 2(1) which corresponds
to an earlier proposal to enable ambiguities in legislation to
be removed.
In accordance with the conclusions of our First Special
Report, Session 1998-99, we do not oppose Clause 2(3), which extends
the list of beneficiaries of the order to include a Minister or
any other person exercising functions of a public nature.
We do not object to Clause 2(7) which encourages
"modernising and simplifying the law". We concluded
that it should be strengthened by requiring Ministers to have
regard to the need to draft legislation which is comprehensible
to the persons likely to be affected by it.
Clause 3 - Limitation on power to create burdens
We emphasised during the consultation process that
we did not object, subject to certain safeguards, to the extension
of the order-making power to permit the imposition of additional
burdens whilst providing for wider deregulation. We stressed that
the Committee would pay particular attention to each consultation
exercise and would assess proportionality and proceeded on the
basis set out in the consultation document which stated the case
for allowing small increases in burdens, or impositions
of small burdens on some parties, where a larger
burden is being removed on other parties. We are not persuaded
that clauses 3(1)(a) and (b) reflect this approach; it could be
argued that the imposition of a large burden on a small number
of persons in exchange for the removal of a small burden from
a considerably larger number of persons satisfied the tests in
Clause 3. We put the Minister on notice that we would be most
unlikely to accept as legitimate any imposition of an additional
burden other than a small one.
The Committee is content in principle with the test
of "fair balance" between the public interest and the
interests of the person affected and with the third additional
test found in clause 2(2) enshrining the expectation that a person
may continue to exercise any right or freedom which he might reasonably
expect to continue to exercise.
On Clause 7 our only comment is that Ministers proposing
regulatory reform orders should be placed under a statutory obligation
to make, and lay before Parliament, rigorous regulatory impact
assessments of the consequences of those proposals for persons
likely to be affected, in addition to the matters already specified
in that Clause.
Clause 8 - Representations made in confidence
or containing damaging information.
Because we set great store by the consultation exercise
we approve of the continued protection of individuals who wish
to safeguard the confidentiality of their responses. But we do
not accept that a prohibition on disclosure should prevent the
Committee (or, in a particularly sensitive case, its Chairman)
having the same access as the Minister to the representations
as originally submitted.
Clause 10 - Interpretation
The Committee sees no reason why the Act should be
limited to pre-1994 legislation and the Bill reflects this. However,
the inclusion of the Regulatory Reform Act itself, and the existing
Act in so far as it remains in force, within the scope of the
power is surprising. We take the view that this would have the
consequence that Ministers would be able, by order, to extend
their own power to adopt regulatory reform orders. If this is
intended, it is, in our view, wholly objectionable. If it is not,
this Clause ought to be amended clearly to exclude this Act and
its predecessor.
We have two further matters to convey. Firstly, we
feel strongly that it will be a great pity, if, with the introduction
of the new powers, very few regulatory reform orders are made.
The Committee takes the view that the Bill should be strengthened
by imposing -
i) on individual Ministers
a duty to keep under review the legislation for which they are
responsible to identify enactments having a restrictive effect
suitable for amendment by regulatory reform orders; and
ii) on the Secretary of State in charge of the
Cabinet Office a duty to report annually to Parliament on the
use made of these powers during the previous year and his intended
work programme for the coming year. We further take the view that
he should 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.
Secondly, and on a more minor note, the Committee
sees no objection in principle to changing its name in and steps
will be taken to consider this further during the passage of the
Bill through the House.
We regret that the tightness of the Bill timetable
has meant that this "informal" approach to pre-legislative
scrutiny has had to be taken at this stage of the consultation
process. We urge the Minister to delay slightly introduction to
enable those who were consulted on the proposals to comment (with
tight deadlines) on the draft Bill. Nevertheless, we thank the
Minister for this opportunity to comment on the draft and trust
that our views and wishes can be taken into account.
1 February 2000
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