APPENDIX 3
Letter from the Minister for Regulatory
Reform to the Chairman of the Committee
THE OPERATION OF THE REGULATORY REFORM ACT
2001: FURTHER QUESTIONS
Thank you for your letter of 2 July 2003, in
which you have asked several further questions relating to paragraph
3.2 of our memorandum on regulatory reform order making over the
last financial year. I am glad to note that you also found the
evidence session productive, and I also look forward to further
developing my working relationship with the Committee.
I have addressed each question individually
below, and trust these answers will clarify the issues you have
raised. I also thought it would be useful to open discussion on
the issue of making changes to a regulatory reform order (RRO)
between the two stages of scrutiny, which are not in response
to representations. This is an issue which has recently been raised
by the Committee Clerk, and we would find it useful if the Committee
could let us have their thoughts on the matter.
What is your understanding of the scope of section
2(2) regulations, and the scope for implementing EU obligations
under the Regulatory Reform Act?
We understand that 2(2) regulations can amend
primary legislation but cannot address matters which are not related
to the relevant EU obligations. It is possible under the Regulatory
Reform Act (RRA) to reform an entire regulatory regime found in
primary legislation, whether or not parts of the regime implement
EU obligations. We would only consider using a Regulatory Reform
Order (RRO) where the aim is to rationalise a full regime, rather
than just implement EU obligations.
We aim to produce guidance on the implementation
of EU Directives later this year which will cover this area in
a lot more depth, and we will involve the Committee when drafting
this.
Do you agree with our interpretation of the powers
of the Regulatory Reform Act in respect of tidying up and modernisation
of overlapping and out-of-date legislation?
We do agree with the Committee's interpretation
of the powers of the RRA. The paragraph you refer to in your letter
was intended to be a summary of the potential scope of the RRA.
The kind of reforms we mention, including the tidying up and modernisation
of legislation, can only be attempted should the proposal be within
the vires of the RRA and meet the usual legal tests, such as ensuring
a burden is being removed or reduced.
What is your understanding of the extent to which
regulatory reform orders can be used to broaden the statutory
powers of a person or body?
I have attached our recently published guidance
note on burdens at Annex A, which details our understanding of
how RROs can broaden powers. We agree that it would be doubtful
that the RRA could be used to add powers to undertake activities
which a body did not previously engage in. The examples given
in the memorandum were to show that a broadening of powers is
possible via an RRO but again, this has to be viewed in the wider
context of falling within the vires of the RRA, and each proposal
would have to be looked at on a case by case basis.
On what grounds do you consider that a regulatory
reform order could be used to set up a new agency to oversee a
simplified regime?
A RRO may repeal an existing regulatory regime,
including a body responsible for enforcing the regime. Removing
the powers to impose a burden, such as a power to impose a penalty
or requirement is removing a burden for the purposes of the RRA
(section 2(2) of the RRA). If all a body's powers are removed
it may be dissolved as an incidental or supplemental matter under
section 1(6) of the RRA. There would be no point in preserving
a body which had no remaining functions. The same RRO could create
a number of new burdens, including the power to impose a new penalty
or requirement, conferred on a new body created for that purpose
under section 1(6). There would be a new regulatory regime, including
a new body responsible for enforcing it, subject of course to
all the statutory tests for the creation of new burdens being
met.
Amendments made to an order between first and
second stage scrutiny that are not in response to representations
received.
The RRA does not address the issue of changes
being made to an RRO between first and second stage scrutiny,
otherwise than in light of representations. The fact that the
RRA assumes that changes will be made in response to representations
does not preclude changes being made for other reasons.
Our view is that although departments should
be expected to get their order right the first time round, should
a department wish to make a beneficial amendment, then that amendment
should be able to be made. It would be illogical to ignore changes
that improved the working of the order, so long as the change
could not be seen in any way to alter the scope of the proposal
that was originally consulted on. Such an amendment would have
to be justified in the accompanying document, and the Committees
would of course be free to take a view on it. But we do not think
it would be sensible that in every case where the department suggested
a change that the order would have to be relaid for first stage
scrutiny.
Should the suggested change affect the persons
consulted so that they might have expressed a different view in
response to the consultation, then the department should be expected
to undertake further consultation on the issue. If it is unclear
whether or not the proposed change is one of substance, we consider
it would be right to seek without prejudice advice from the Committees
on the specific amendments, the reasons for making the changes
and their potential effect.
I hope this has clarified the meaning of our
memorandum, and look forward to hearing from you in due course
regarding the issue I have raised above.
9 July 2003
| 
