APPENDIX
GOVERNMENT MEMORANDUM OF RESPONSE ON REGULATORY REFORM
ORDER-MAKING: CABINET OFFICE, MAY 2002
DEREGULATION AND REGULATORY REFORM COMMITTEE'S
FIRST SPECIAL REPORT,
SESSION 2001-02
1. INTRODUCTION
1.1 This memorandum addresses issues relating to regulatory reform order-making as raised in:
· the 1st Special Report[1] of the 2001/02 Session by the Deregulation and Regulatory Reform Committee; and
· Lord Alexander's letter of 19 December 2001 as chairman of the Delegated Powers and Regulatory Reform Committee commenting on the Commons Committee's 1st Special Report.
1.2 It also provides an overview of the first year's operation of the Regulatory Reform Act 2001.
2. 1ST SPECIAL REPORT
2.1 The Government welcomes the Report as further illustration of the Committee's helpful, scrupulous and collaborative approach towards regulatory reform order-making, which will prove instrumental to the successful implementation of the Regulatory Reform Act 2001.
2.2 Turning to the matters raised in the Report, the Government has the following points to make.
Pre-scrutiny consultation with the Committee
2.3 The Government is grateful for the Committee's willingness to entertain requests from Departments for 'without prejudice' guidance on particular issues relating to the use of the RRO procedure in advance of formal scrutiny of proposals.
2.4 This is a very helpful initiative that should go a long way to reassure Departments where there is uncertainty as to the Committee's likely views on particular technical points and on issues of appropriateness. It is particularly valuable given that we are still in the early stages of the Act's life. In view of the front-loaded nature of the order-making process, it should also reduce the prospect of abortive work and increase the speed with which Departments can come forward with proposals.
2.5 As the Committee will know, in the short time since the Committee made the offer of informal advice, it has already been taken up in the following instances:
· the proposal to remove a requirement for a sugar beet research programme, where DEFRA sought the Committee's views on the extent to which consultation undertaken prior to the 2001 Act could be held to satisfy that Act's consultation requirements;
· the proposal for a new Health Protection Agency, where the Department of Health sought views on the appointment of Board members to help with preparations but in advance of the Agency being placed on a statutory footing;
· the proposal on deregulation of bingo legislation, where the Department of Culture Media and Sport proposed to reject a Committee recommendation given the favourable responses to the issue as consulted on in the Budd report.
2.6 The Government is grateful for the helpful advice offered in these cases by both Committees, and is happy to re-assure them that it will continue to treat the advice offered by both Committees under this mechanism as 'without prejudice' to the formal scrutiny stages of the proposal.
2.7 The Government also fully accepts that this mechanism should not be treated as a substitute for proper analysis by Departments, but rather as a complement to it in cases of doubt.
Timetabling
2.8 The Government agrees that both it and Parliament should work to achieve an even flow of order-making. In particular, the Government also welcomes the Committee's:
· desire to see full and appropriate use of the regulatory reform order-making procedure;
· willingness to entertain requests to accept more than one order a week in the short term—this has occurred twice to date in relation to the 1st stage[2] proposals for the Golden Jubilee and for disposals of dwelling houses on 28 November 2001, and the 2nd stage draft of the Golden Jubilee licensing order and for the voluntary-aided schools order on 25 and 26 of February 2002 respectively; and
· acknowledgement that there is a difference in the level of resources required by the Committees to scrutinise draft orders at 2nd stage as opposed to proposals at 1st stage scrutiny, as contended at paragraph 15 of the Government's previous memorandum.[3]
2.9 In relation to the final point about the workload at 2nd stage scrutiny, the Government's view is that the Committees' reports on draft orders to date have demonstrated that 2nd stage proposals will generally raise far fewer, if any, issues for the Committees than those at 1st stage, as follows:
· the Special Occasions order[4] where the Department shared with the Committee both the legal advice given by Treasury Counsel and a re-worked draft of the order before the 1st scrutiny stage had finished—this was in order to ensure a smooth passage at 2nd stage scrutiny;
· the Golden Jubilee Licensing order,[5] where no substantive issues were identified; and
· the Voluntary-aided Schools proposal,[6] where the Committee suggested a minor change which was the extension of an existing policy and some technical drafting changes.
Indeed, where a problem did arise early in the 2nd stage scrutiny of the proposal concerning the correction of birth and death entries in registers,[7] the Government withdrew the draft order in question. It then re-tabled it suitably amended in order to avoid putting the Committee in the position of having to report with an adverse recommendation at 2nd stage.
2.10 However, the Government remains concerned at the implications for its programme of regulatory reform of the Committees' capacity constraints. While the Lords sits for around 40 sitting weeks, the Commons sits on average for 36 weeks in the Parliamentary year. The Committees have both indicated a strong initial preference that, in the interests of ensuring a steady flow of work, no more than one proposal at either scrutiny stage should be tabled per sitting week.
2.11 As previously rehearsed, this means an effective maximum throughput of some 18 orders per year.[8]
2.12 As the Committee will know, a list of 51 examples of potential orders accompanied the Regulatory Reform Bill's 2nd Reading in the Commons. This has been refreshed with the publication in February 2002 of the Regulatory Reform Action Plan,[9] which sets out proposals for up to 63 RROs. The Committee may find it helpful, in the interests of transparency, to see the reconciliation given at Annex A and Annex B. It is worth pointing out that 29 out of these publicly announced reforms cite 2003 as a possible completion date. A further 18 do not have a definite completion date but a significant proportion of these are likely to be ready to undergo Parliamentary scrutiny in 2003. It would seem reasonable to assume that there is a possibility of there being perhaps up to 40 RROs that the Government may wish to see completed in 2003, more than double that of the present capacity of the scrutiny process based on its one-a-week policy.
2.13 The Government notes the Committee's position that, given its experience to date, it remains to be convinced that such a large number of proposals will be brought forward that the one-per-week restriction will be a problem. The Government accepts that there is no imminent risk of blockage. Nevertheless, as the Government has made clear the launch of the RRAP is just the starting point of its new Regulatory Reform drive and a considerable increase in the number of new proposals for RROs coming forward is expected for 2003. The Government notes that, at this rate of progress, these RRO commitments could take three years or more to deliver. This would be disappointing given that the purpose of the proposals is to secure wide-ranging beneficial reforms.
2.14 The Government considers it prudent, rather than premature, for all those involved to plan ahead to prevent the order-making programme clogging up. The alternative is to wait for a blockage before deciding to do something about it. It is, of course, for the House to determine the arrangements for scrutiny but the Government believes that there is a real risk of logjams developing in the medium term.
2.15 Instead of a formal one-per week rule even with the possibility of exceptions, the Government would prefer moving to an effects-based approach that would allow proper scope for more than one order to be considered in any one sitting week, especially:
· where the proposal, whether at 1st or 2nd stage scrutiny, is small or uncomplicated; or
· in relation to a 2nd stage proposal where the Committee made no recommendations or only in relation to minor or technical issues at 1st stage scrutiny; or
· where the Government proposes to accept all the recommendations of the Committees at 2nd stage scrutiny. The Government accepts that the proposal at this stage is a draft Statutory Instrument, and must be subject to due process. However, it is likely to be clear in most cases following the 1st stage report what needs to be amended and how. For those cases, the Government does not consider that the work involved in checking compliance to be such as to require exclusivity. It recognises, though, that where the Department has changed the legal text substantially, whether through a large number of minor changes or through a major re-drafting as was the case with the Special Occasions order, a greater degree of scrutiny will be needed. And, for those cases, the Government would hope to show re-drafts to the Committee at an early stage in order to reduce the burden, again as happened with the Special Occasions Order. The Government notes with appreciation, for example, that the Committees were particularly prompt in dealing with the significant re-drafting required at the 2nd stage of the Special Occasions Order; or
· where the recommendations of one Committee conflict or are inconsistent with those of the other, the Government has negotiated a solution acceptable to all concerned prior to laying for 2nd stage scrutiny. In such cases, the approach could be agreed through use of the informal 'without prejudice' advice mechanism.
2.16 To that end, the Government suggests that there may be merit in the Committee considering the following options. They are offered as suggestions rather than firm proposals:
· the Committees could indicate in their 1st stage report, either in particular cases or for each instance, whether the work involved at 2nd stage was:
— unlikely to be onerous and that the Committee would not object to it being tabled alongside other proposals; or
— likely to be sufficient, given the nature of the recommendations made, that it should be taken on its own.
· the Department could indicate, either in the Explanatory Document at 1st stage scrutiny or when giving notice of the intention to lay, that they consider a particular proposal to be:
— so straightforward or small that the additional work involved would be marginal, with sufficient resources available for other proposals to be considered, all other things being equal; or
— so large and/or complicated that a buffer zone would be needed. This might apply, for example, in the case of the proposal for the reform of fire safety legislation, and would mean that no other proposals would be tabled at the same time. This would enable the Committees to concentrate exclusively on the issues raised, all other things being equal—and would, we envisage, be the exception;
It would, of course, be entirely for the Committee to decide whether it could accept the Government's request. In cases of doubt, the Government could seek the advice of the Committees under the 'without prejudice' procedure prior to tabling the proposal for scrutiny.
2.17 It may be that the Committee can devise other approaches that could help reduce or remove this perceived blockage, and which would preserve flexibility and are easy to administer. The Government would welcome firm proposals from the Committee as to suitable ways in which to pre-empt a backlog building up.
Adverse Reports
2.18 The Standing Orders do not appear to make provision for what should happen if, as a result of its 2nd stage scrutiny, the Committee were minded to report approving a draft order, but subject to the Department making certain changes or to some other recommendation. The Government is concerned that, if one or other Committee reported adversely at 2nd stage scrutiny but made recommendations as to the ways in which the proposal could be made acceptable, the Department concerned may need to re-start the scrutiny process, whether at 1st or 2nd stage. This could cause additional and unwelcome delay. The Government would appreciate the Committee's views on the options.
Forward Look
2.19 The Government is happy to issue monthly work plans as the Committee requests and indeed issued the first of these on 4 January covering the period up to the beginning of February. They are now given a wide circulation within Whitehall in order to ensure that stakeholders are aware of RRO activity.
2.20 The Government welcomes the Committee's intention to publish the monthly work plans in its reports.
Appropriateness
2.21 The Government notes the Committee's statement that it is:
"1/4 happy to reassure the Government that the Committee has no intention of subverting the intentions of Parliament in passing the Regulatory Reform Act by unduly restricting the scope of that Act".
2.22 In particular, it appreciates the Committee's clarification of its predecessor's comments in their 4th and final report.[10] It agrees with the Committee's view that the procedure should not be used for implementing policy changes so substantial (in the sense of being both "large and controversial") as to require the much higher-profile attention paid by Parliament to primary legislation.
2.23 Bearing in mind the wide-ranging nature and extent of the sorts of reforms Parliament envisaged in passing the Regulatory Reform Act 2001, the Government agrees with the Committee's conclusion that it will consider the appropriateness of proposals on a case-by-case basis based upon its competency to come to the necessary judgements on behalf of the House.
2.24 The Government is, in turn, happy to reassure the Committee that it has no intention of using the RRO procedure as a "form of primary legislation by stealth". It finds it hard to see how an RRO could, in fact, be used stealthily, given the rigour, openness and transparency of the procedure. Indeed, it agrees with the Committee's comment in its 8th Report[11] that proposals such as the Carer's Allowance proposal "would in practice receive less scrutiny if considered in the context of a wider Bill."
2.25 The Government also views the appropriateness criterion as self-policing in that it will not be difficult to determine whether a proposal was so "large and controversial" as to require debate on the floor of the House.
Standing order procedures in the event of disagreement
2.26 The Government welcomes the Committee's statement and recommendation in its report that:
"20. We accept that it may be the case that agreement cannot be reached about particular aspects of a proposal; and we accept that the House has provided for procedures which can be used in the event that that happens. We also welcome the Government's undertaking that the procedure should not be used in cases where the Committee expresses outright opposition to the draft order as a whole. However, we regard it as unfortunate that the Government should not have made it clear that it was its intention to use the procedure in the way described here either in debate on the Bill or, more particularly, in the debate on the Standing Order changes which were made as a result of passage of the Regulatory Reform Act.
"21. We believe it would go some way to showing that the Government is acting in good faith, and within the spirit of the undertakings given to the House "not to force orders through in the face of opposition from the Committee," if the Government were to undertake to provide for a free vote in such circumstances; and we so recommend. That way the arguments could be tested and the House come to a decision without any suggestion that the Government was forcing an Order through by using its Parliamentary majority."
2.27 The Government has not sought to conceal anything, and hopes that the dialogue with the Committee since the bill was enacted over the precise nature of the undertaking, long before any pressure of events, will be taken as evidence of good faith.
2.28 The Government notes that the Liaison Committee in its 1st Report[12] re-iterates the point on behalf of the Committee:
"26. We have also received Reports from two select committees which operate in the legislative area. [1/4..] The Deregulation and Regulatory Reform Committee, the successor to the Deregulation Committee, raises particular issues concerning its relations with the Government. In particular, it is seeking to ensure an even flow of items before the Committee, and to protect the freedom of its members to support the Committee's recommendations in a subsequent vote on a substantive motion. The latter issue could be one of concern to us as well, if select committee Reports were to be debated in this way, as our predecessors recommended."
2.29 The Government would like to emphasise that its concern is only over what would happen to those proposals where the Committee may well agree with the main thrust of the proposed order, as expressed in their 1st stage report, but where they recommend that the order be not approved at 2nd stage. This may be because of a disagreement in principle with the Government on an aspect of the proposal. It envisages that these will be very much exceptions to the rule.
2.30 The Government further hopes that the following points will help re-assure the Committee:
· the procedures in Standing Orders exist for a purpose—the Government does not envisage that they will be used except in exceptional circumstances. This is because of the very nature of the super-affirmative process: RRO proposals are generally non-controversial and non-party-political, grounded in thorough consultation and exposed to rigorous scrutiny. Given that each House is co-equal, the ethos is one of conciliation, co-operation and co-decision—and the Government expects that this will remain the case;
· the Regulatory Reform Committees—and their predecessors—in both Houses have always been un-Whipped (and indeed the Government notes that, in its entire history, the Commons Committee has only divided once on Party lines in relation to the Trades Unions subscriptions check-off deregulation order). For the Government's part, that will continue to be the case;
· the Government is happy to repeat the commitment made during the passage of the Bill that it would not proceed with a motion to approve in the face of a hostile or wholly adverse report from the Committees (see paragraph 15 of the Explanatory Notes):[13]
But it gives me the opportunity to repeat the assurance given by my noble and learned friend in May of last year. At that time the Government undertook to continue to respect the convention that no measure under the Deregulation and Contracting Out Act should be forced through in the face of the committee's opposition. The noble Lord, Lord Goodhart, and the noble Viscounts, Lord Goschen and Lord Bridgeman, asked for that assurance and I am happy to repeat the undertaking today.[14]
2.31 In line with its undertaking, the Government would not proceed in the case of an entirely adverse report. The Government would, of course, reserve the right to withdraw the measure or to re-introduce it as a bill.
2.32 The Government was of the opinion that the Standing Order procedure could usefully have been used to resolve impasse. But the prospect seems so unlikely as not to be worth providing for. The Government expects that, where it disagrees with a Committee recommendation on a 2nd stage report, it would first seek to respond to the Committee's report in order to see whether a resolution was possible. It envisages that the exchange would continue until a solution was found. Where no resolution was forthcoming, the Government accepts that, in practice, by far the most likely outcome would be for it to withdraw the order, rather than press the point to a formal debate. It recognises that, in doing so, it would sacrifice a beneficial reform.
2.33 However, as the Committee says, "it may be the case that agreement cannot be reached about particular aspects of a proposal;" and "the House has provided for procedures which can be used in the event that that happens." The Government is happy to pledge that these procedures would only be used in the most extreme circumstances. It cannot undertake never to put a draft Order to the House in spite of an adverse recommendation, since it is impossible to predict the future. Nor can the Government pledge to withdraw the Whip since, for such a debate to happen, the Government would have to be convinced that the matter was highly significant, and the Committee's recommendation completely unworkable.
2.34 It is our hope that a debate on a motion to disagree with the Committee's report would never happen. In the unlikely event that such a debate ever takes place, the Government undertakes that it would provide the House with a document setting out its reasons for disagreeing with an aspect of the Committee's report so that Members could begin to consider the arguments before the debate itself.
Interpretation of Vires
2.35 The Government intends to issue a guidance note on the meaning of the term "burden" and is happy to share this with the Committee in draft form before making it generally available.
2.36 The note is currently in early draft since it draws on experience of order-making and needs to be cleared widely within Government.
Conclusion
2.37 The Government thanks the Committee for its helpful and constructive response to its initial memorandum. It hopes that the further reassurances given will satisfy the Committee.
1 HC389, http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmdereg/389/38902.htm Back
2 Proposals are laid "in the form of a draft" for an initial 60 day scrutiny period (1st stage) after which the Committees report. They are then tabled as draft orders for a further period of up to 15 sitting days (2nd stage), after which the Committees again report. If the Committees recommend approval, there is then a motion to approve in each House. Once both Houses have approved the order, it can be made. Back
3 As annexed to HoC 389, http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmdereg/389/ 38904.htm Back
4 HoC 388, http://www.publications.parliament.uk/pa/cm200102/cmselect/cmdereg/388/ 38803.htm Back
5 HoC 677, http://www.publications.parliament.uk/pa/cm200102/cmselect/cmdereg/677/67703.htm Back
6 As for footnote 5 above. Back
7 http://www.cabinet-office.gov.uk/regulation/act/proposals.htm#Births Back
8 Orders have to go through 2 scrutiny stages. Only one proposal in "the form of a draft order" or one draft order can be tabled in any one sitting week. This effectively halves the time available, producing a total average maximum throughput of around 18 orders per annum. Back
9 http://www.cabinet-office.gov.uk/regulation/actionplan/docs/rrap.pdf Back
10 HoC 177, http://www.parliament.the-stationery-office.co.uk/pa/cm199900/cmselect/cmdereg/177/17702.htm Back
11 HoC 691, http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmdereg/691/69102.htm Back
12 HoC 590, http://www.publications.parliament.uk/pa/cm200102/cmselect/cmliaisn/590/59004.htm Back
13 http://www.legislation.hmso.gov.uk/acts/en/2001en06.htm Back
14 Lord McIntosh of Haringey, Lords Hansard, 21 Dec 2000: Column 899, and Lord Falconer re-affirmed this intention in his evidence to the Delegated Powers and Deregulation Committee as cited in its 15th Report (HL 61 of the 1999/2000 session). Back
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