Select Committee on Deregulation and Regulatory Reform First Special Report


The Deregulation and Regulatory Reform Committee has agreed to the following Special Report:—



1. On 11 May 2001, our predecessor Deregulation Committee published its fourth and final Report of the 2000-01 Session, entitled The Final Deregulation Proposals.[4] As the title suggests, the Report was chiefly concerned with the three final proposals for orders under the Deregulation and Contracting Out Act 1994.[5] However, the Report also made a number of important points concerning the consideration to be given to proposals and draft Orders under the new Regulatory Reform Act.

2. On 24 October 2001, the Government submitted to us a memorandum replying to those points, and making further comments on the handling of regulatory reform orders. That memorandum is published as an Appendix to this Special Report. The remainder of this Special Report contains our response to that memorandum.

Pre-scrutiny consultation with the Committee

3. The first concern expressed by the Government about future order-making was the prospect of abortive work, particularly in view of the "heavily front-loaded" nature of the regulatory reform order-making process, and of the scale of some of the RRO proposals. The memorandum referred to "the risk of misunderstandings or the prospect that the Committees might consider particular technical solutions underpinning large orders to be flawed," and worried that these may only come to light after a proposal has been laid for scrutiny. It expressed the hope that there might be occasions where differences on particular technical issues could be identified earlier on in the process, saying, "The Government would welcome any suggestions from the Committee as to how best to approach this issue."[6]

4. In view of these concerns, we would be happy to entertain requests from the Government for guidance on technical issues connected with the use of the regulatory reform procedure in advance of formal scrutiny of a proposal. Examples of questions which might arise could be: interpretation of the "two-year rule", as with the recent Special Occasions Order; questions of appropriateness for the procedure (eg. where a proposal might not cause controversy amongst lay people, but would do so among special interest groups); or other points of compliance with the Regulatory Reform Act, European law or the Human Rights Act.

5. However, we make it clear that any advice given would have to be entirely without prejudice to the formal scrutiny of any resulting proposal. The Government would have to be aware, in making any such request of the Committee, that even technical issues can be difficult to judge in the abstract, and when set in the particular context of an Order the Committee's opinion may change. We note, and welcome, the fact that the Government memorandum accepts this point.[7]


6. Our predecessors' Report recommended that the Government "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."[8] The memorandum acknowledges that "both [the Government] and Parliament should work to achieve an even flow of regulatory reform order-making".[9] However, it also expresses concern about the potential limiting of the number of regulatory reform orders which could be made in any one session which could be caused by the requirement not to lay any more than one proposal or draft Order in one sitting week. It compares the supposed maximum number of Orders which could be made in a standard Parliamentary session - 18 - with the maximum number of Deregulation Orders made in one year under the Deregulation and Contracting Out Act, namely 23, in 1996.[10]

7. Our predecessors' recommendation in its Fourth Report was aimed chiefly, it appears to us, at ensuring a regular flow of Orders, not at restricting (artificially or otherwise) the number of Orders which could be brought forward by the Government in any given year. The context of that recommendation was the necessity for that Committee to consider very quickly before the dissolution of Parliament three proposals for deregulation orders which had been laid before the House all at once, a situation which it was very anxious should not recur. We are very keen to stress, as was our predecessor Committee, that we wish to see full and appropriate use of the regulatory reform procedure, just as does the Government. Indeed, we are impatient to see brought forward further proposals relating to the 51 examples of potential areas of regulatory reform provided by the Government during the passage through Parliament of the Bill which became the Regulatory Reform Act. In no way was this recommendation intended to curtail the Government's ability to ensure that this happens.

8. Nevertheless, we have yet to be convinced that such a large number of Orders will be brought forward by the Government that this 'restriction' will be a problem. We therefore believe that the Government's concerns are premature. There will be time enough to consider the problem, if problem there be, when there is more than one proposal before the Committee. We note that although there are potentially a further eight items to come before the Committee in the four weeks to Christmas (in addition to the draft Order laid before the House on 16th November and the proposal laid on the 20th), the Government indicates in its memorandum that there may be some slippage to this timetable, and indeed there already has been (draft Orders relating to housing transfers and restaurant licencing, for example, not yet having appeared, though they were intended to be laid last month).[11] Indeed, this is an example of precisely the sort of situation which our predecessor's recommendation was aimed at avoiding. Since the House reconvened following the summer recess, four weeks have passed in which no proposals or draft orders were laid: we do not therefore believe any blame can be attached to us for the fact that there is now a potential logjam.

9. In addition, and more fundamentally, however, we note the importance of ensuring that an appropriate level of scrutiny is given to all proposals and draft Orders - particularly given the scale and complexity of some of the proposals for regulatory reform orders which have been suggested (and indeed noted in the Government's memorandum[12]). The restriction of one proposal or draft order per sitting week is therefore not 'artificial', as suggested by the Government, but based on the nature and scale of the task which the House has given us.

10. However, bearing in mind our desire to see full and appropriate use of the procedure, we wish to be helpful. We restate our view that the Government should 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. However, if a situation should occur in which this requirement has caused, or is likely to cause, a serious log-jam, the Committee will be prepared in the short term to entertain requests from the Government that it accept more than one item in any given sitting week (acknowledging particularly the comments made at paragraph 15 of the Government's memorandum about the level of resources required properly to scrutinise draft Orders as opposed to proposals). In the medium- to long term, if it appeared that the Committee risked becoming overloaded by the volume of work proposed to be put forward to it by the Government, then, as noted in the memorandum,[13] clearly it would be for the House to make the necessary arrangements; but for the time being the House has allowed for only one Committee and it is for us, as that Committee, to ensure that the requisite level of scrutiny of each proposal and draft Order is possible.

"Forward Look"

11. Our predecessors recommended that the Government reinstate the previous practice of publishing 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.[14] The Government agreed to provide such a report on a regular basis; but noted that "there would be little practical value in producing a formal report during Recesses." Further, the Government agreed to provide information only on a quarterly basis, undertaking to report for January to March, May to July and October to November.[15]

12. We accept that there is little point in producing a document in months when the House is not sitting. However, we are not convinced that reporting only three times a year, as suggested in the memorandum, is going to be sufficient to ensure proper planning of the Committee's work, especially given the likelihood of slippage referred to in paras 20 and 23 of the Government's memorandum. We therefore restate our request for a monthly report, in the months January to March, May to July and October to December.


13. Our predecessors suggested that the regulatory reform procedure "should not be used for implementing substantial policy changes requiring the much higher­profile attention paid by Parliament to primary legislation."[16] This statement, the Government said, "caused us some difficulty", suggesting that it could be interpreted as meaning that the regulatory reform procedure is inappropriate for implementing any substantial policy change as that is what bills are for. The memorandum explores in some detail the question of appropriateness,[17] the test of which is not of course written onto the face of the Bill, but is rather a question first for Ministers to consider, and then for the Committee to determine under its Standing Order.[18]

14. We appreciate that, as the Government's memorandum says, appropriateness was thoroughly explored during debate on the Bill, and indeed during pre-legislative scrutiny by both Committees. However, we note that it was also clear throughout passage of the Bill through Parliament that scrutiny by the Parliamentary Committees is a fundamental safeguard, and that the Committees were the guardians of the procedure. This is also recognised in the Explanatory Notes to the Act.

15. We note also that Parliament did not have the details of any proposals in front of it when the Bill was passing though Parliament. To take fire safety legislation as an example: whilst on occasion reference was made in debate on the Bill to changing the basis on which the regime operates, on other occasions, both during debate on the Bill and during pre-legislative scrutiny, the impression was given that it was chiefly a matter of rationalising the existing legislation (see, for example, Graham Stringer in evidence to the Deregulation Committee on 9 May 2000, Q4). To continue the "elephant test" analogy used by Ministers during debate on the Bill (see para 17 below), Parliament has so far seen only a small part of this particular animal, and is not yet, therefore, in a position to say whether it is an elephant or not. This is not to say that the Committee necessarily believes that reform of the fire safety regime in the way indicated would not be appropriate for a Regulatory Reform Order; merely that it reserves the right to examine all proposals on their merits.

16. We therefore repeat that both Committees will remain vigilant in ensuring that Departments do not circumvent the intentions of Parliament by a form of "primary legislation by stealth".[19] Nevertheless, we are at the same time 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. We acknowledge the ambiguity of the relevant sentence in paragraph 8 of our predecessor's Fourth Report of last Session, and are happy to make clear that, as far as we are concerned, it should be interpreted as meaning "the procedure should not be used for implementing policy changes so substantial as to require the much higher-profile attention paid by Parliament to primary legislation". In determining, as we must under the Standing Order, whether a proposal appears to make an inappropriate use of delegated legislation, the question we will have to ask is: are we in the Committee competent to come to the necessary judgements in respect of this proposal on behalf of the House; or are these matters the detail of which it must be for the whole House to debate and, if necessary, vote upon?

17. We note particularly the comments of the Lords Committee in their 15th report of the 1999-2000 Session, as set out in paragraph 45 of the Explanatory Notes to the Act:

    Lord Falconer readily acknowledged that there is no precise line drawn in the draft bill between matters in respect of which it is appropriate to legislate by way of order and other matters in respect of which it would not be appropriate, nor is it the Government's intention to try to draw one. It will, he said, be for Ministers to decide whether or not the use of the new power would be 'appropriate' (Q.13), likening the task of so deciding to the difficulty of defining an elephant. 'You cannot describe it but you know it when you see it' (Q. 13).

As this quotation suggests, ultimately the appropriateness of proposals for the regulatory reform procedure can only be decided on a case-by-case basis. Nevertheless, we agree that the explanation at para 30 of the Government's memorandum (and at para 47 of the Explanatory Notes to the Act) is a useful one:

    the super­affirmative order­making procedure, with its thorough consultation and weighing of evidence, is well suited to the objective consideration of complex issues. It is ideal where the judgement of experts is required; for issues on which a group of reasonable people, given the relevant facts, would be likely to reach consensus without compromise

 and we are happy to proceed on that basis.

Other issues

18. The Government's memorandum also raises two further issues relating to the making of regulatory reform orders, on which we comment below.

Standing order procedures in the event of disagreement

19. The memorandum notes that Standing Order No. 18 (Consideration of draft deregulation, etc. orders) provides a mechanism for debate in the House to decide cases in which agreement between the Committees and the Government cannot be achieved. Reaffirming that the Government will continue to aspire to unanimity with the Committees on particular proposals, it nevertheless goes on to argue that there may occasionally be cases where the Government disagrees with a particular recommendation by the Committee and, after failing to negotiate a mutually acceptable solution, considers that the matter should be put to each House.[20]

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.[21] 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.

Interpretation of vires

22. We note the Government's comments in paragraph 37b of the memorandum regarding the order-making power in the Bill, and particularly those concerning the proposed guidance note on the meaning of 'burden' which is being prepared. We suggest that it would be helpful if the Government were to share that note with the Committee in draft form before it is circulated, in order that any disagreements might be resolved at an early stage.


23. Finally, we thank the Government for its response to our predecessor's Report, and share its hope for an open and constructive relationship in delivering an impressive programme of order-making.

4  HC 450 Back

5  Proposal for the Deregulation (Correction of Birth and Death Entries in Registers and other Records) Order 2001; Proposal for the Deregulation (Bingo and Other Gaming) Order 2001; Proposal for the Deregulation (Restaurant Licensing Hours) Order 2001. Back

6  Memorandum, para 6 Back

7  Memorandum, para 6 Back

8  Fourth Report, para 2 Back

9  Memorandum, para 9 Back

10  Memorandum, paras 9 and 10 Back

11  Memorandum ,para 23 Back

12  Memorandum ,paras 6, 28, 31, 32 Back

13  Memorandum, para 14 Back

14  Fourth Report, para 3 Back

15  Memorandum, para 19 Back

16  Fourth Report, para 8 Back

17  Memorandum, paras 24-36 Back

18  S.O. No. 141(6)(A)(a) Back

19  See Fourth Report, para 8. Back

20  Memorandum, para 37a Back

21  ibid Back

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