Select Committee on Deregulation Fourth Report


The Deregulation Committee has made further progress in the matter referred to it and has agreed to the following Report:—




1. On 26 March 2001 the Government laid before Parliament three proposals for Orders to be made under section 1 of the Deregulation and Contracting Out Act 1994. These proposals, which are dealt with in this Report, are the last to be made under the provisions of the 1994 Act. Although the latter has now been replaced by the Regulatory Reform Act, which received Royal Assent and came into effect on Tuesday 10 April, the new Act allows the carry-over of proposals under the 1994 Act procedure so long as they had completed the first stage of consultation and had been laid before the new Act came into force. The current batch of proposals was accordingly laid, in something of a rush, in anticipation of possible Royal Assent only a few days later if an early General Election had been announced in the last week of March.

2. In the early days of the Deregulation procedure there was agreement that there should be "a regular and paced flow" of proposals and draft Orders for the two parliamentary committees to consider[10]. This developed into a convention that as far as possible no more than one proposal or draft Order would be laid before Parliament in any one week, in order to allow this Committee and its counterpart in the Lords (the Delegated Powers and Deregulation Committee) to cope with the flow of business, within the specified timetables, and with the limited staff resources at their disposal. We did not insist on this arrangement in the unusual circumstances prevailing in March (the imminence of Royal Assent to the replacement Bill, and the apparent likelihood of a Dissolution). However, we do not regard this as a precedent, and the need to avoid peaks and troughs in the work of the committees will be even more important when proposals and draft Orders begin to come forward under the provisions of the new Act, which is expected to lead to proposals of considerably wider breadth and greater complexity. We accordingly expect the Government to aim towards an even flow of regulatory reform business and so far as possible towards the objective that no more than one proposal for a Regulatory Reform Order or one draft Order will in normal circumstances be laid before Parliament in any one sitting week.

3. At the request of the two parliamentary committees the Government also agreed in 1995 to provide a monthly report of progress on deregulation proposals planned, in the consultation stage, or laid before Parliament, with target dates for the completion of each stage[11]. This report, which became known as the "Forward Look", was periodically published as an Annex to our own Reports[12], and was a useful source of information for Members as a whole as well as an invaluable aid in planning the work of the parliamentary committees. As the number of deregulation proposals and draft Orders declined, the provision of the "Forward Look" document was discontinued: since then it has on occasion been difficult to ascertain what proposals if any remained in the pipeline, and there has been relatively little advance notice of the arrival of proposals or draft Orders for consideration by the committees and the two Houses, although the Cabinet Office Regulatory Impact Unit has been helpful in providing information to our staff when it has become available to them. In the new circumstances likely to prevail after the expected General Election, when the number of complex regulatory reform proposals is likely at least to match the number of deregulation proposals brought forward after the 1994 Act, we will expect the Government to reinstate a monthly report on the same lines as the "Forward Look", with effect from June 2001 at the latest.

4. Uncertainty about the date of a General Election has also circumscribed our own consideration of the current batch of proposals: we had originally expected to have time before Dissolution only for a brief initial examination of the proposals, in the expectation that most of the sixty-day statutory period allowed for our work at this stage[13] would fall after the new House had assembled, following the then anticipated Election date of early May. If, however, a General Election is now to be held in June, only a relatively small amount of the statutory period will remain, probably insufficient to allow adequate time for a successor committee to be appointed and to familiarise itself with the current proposals, whatever the good intentions of the party managers. We have therefore sought to reach conclusions on the current proposals during the post-Easter period, although rather more time would have been desirable in normal circumstances; in particular we have not had the opportunity to take oral evidence in time to inform this Report. We hope that similar circumstances will not arise in the future.

5. Of the three proposals dealt with in this Report, that from HM Treasury on behalf of the Office for National Statistics (for the Deregulation (Correction of Birth and Death Entries in Registers or Other Records) Order 2001) is relatively straightforward and involves no significant issues of policy or procedure.

6. The two remaining proposals, both from the Home Office, return to potentially contentious areas of regulation which have each been the subject of a number of earlier deregulation proposals and Orders—the areas of gambling legislation and of liquor licensing. In both cases, we have been concerned, as so often before, about the adequacy of the consultation exercises conducted by the Home Office. We have also been concerned in each case about the appropriateness of the deregulation procedure for what the Home Office wants to be done—not because there are questions of vires, nor because the individual changes proposed can by themselves be regarded as "substantial", but because of doubts about the cumulative effects of a series of deregulation Orders (and in the future of possible Regulatory Reform Orders) each of which has a small but nonetheless liberalising effect on gambling and licensing law: taken together, we have asked ourselves, do not these series of small changes come close to representing quite substantial shifts of policy in these sectors, and if so should not the Home Office be proceeding by way of primary legislation?

7. We have of course been aware of the risk that the deregulation procedure could be used not simply as a means of relieving specific burdens on industry or commerce (as the 1994 Act intended), but also as a means of effecting policy changes of greater moment—a risk which rightly preoccupied Members during the passage of the original Bill in the previous Parliament. However, given the fairly narrow frame of the 1994 Act procedures the scope for any significant exploitation of the procedure in this way has been limited. This will be very much less the case under the wider remit for delegated legislation of this kind provided by the Regulatory Reform Act, and the risk of the abuse of the system in this way is likely to be much greater. We therefore expect our successor Committee to monitor the cumulative effects of regulatory reform proposals from particular Government Departments, and to bear these possibilities in mind when considering the appropriateness of proposals for treatment as delegated legislation, albeit of a "super-affirmative" kind.

8. While all concerned in the deregulation business (this Committee included) have routinely congratulated each other on the superior quality of scrutiny achieved under the new procedure, it nonetheless remains a fundamental principle of the system in its revised form, as in its original form, that the procedure should not be used for implementing substantial policy changes requiring the much higher-profile attention paid by Parliament to primary legislation. It is vital that that distinction should remain, and that Departments should not be enabled to circumvent the intentions of Parliament by a form of primary legislation by stealth. The Committees of both Houses will need to be particularly vigilant when the anticipated stream of regulatory reform proposals begins to flow in the next Parliament.

9. In particular we are inclined to believe that our successor Committee will need to give serious consideration

      (i)  to the possibility of referring some, or perhaps all, proposals for regulatory reform orders to the relevant departmental select committees for their opinions before it reports its recommendations thereon to the House, thus allowing colleagues with particular acquaintance with the Department concerned to assess the Department's intentions in a specific case in the context of its overall policy objectives; and

      (ii)  to the possibility of occasionally appointing its own specialist advisers to provide briefing on particularly complex or potentially contentious proposals, particularly in cases when such specialist advice is not available to the departmental committee concerned, or when the regulatory area covered by a proposal has not been previously investigated by the departmental committee:

both possibilities are already included in the powers provided in the Committee's Order of Reference, but so far neither has proved necessary. Under the new regime we suspect that they may well be needed.

10   Select Committee on the Scrutiny of Delegated Powers, Special Report, Session 1995-96 (HL 120), para 13, Q 4 (Chancellor of the Duchy of Lancaster, Mr Roger Freeman MP). Back

11   Deregulation Committee, First Special Report (Consideration of Deregulation Proposals and draft Orders), HC 311, Session 1994-95, para 13; First Report (Consideration of Deregulation Proposals and draft Orders: The Government's Reply to the First Special Report of the Committee), HC 409,Session 1994-95, para 4 and p xiv. Back

12   See Deregulation Committee, Sixth Report (The draft Deregulation (Methylated Spirits Sale by Retail) (Scotland) Order 1998), Session 1997-98, apparently the last occasion on which this document was made available to us. Back

13   The 1994 Act (like the Regulatory Reform Act 2001) allows a period of sixty days for parliamentary consideration of each proposal for a draft Order, not including any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days. Back

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