Select Committee on Regulatory Reform First Special Report

3  Part 1 of the Bill

Introduction

36. It should be emphasised at the outset that - for reasons explained below - we have serious concerns that the Bill gives rise to a clear risk that neither the limitations on the procedure nor the periods for committee examination of draft orders will be adequate.

37. This section of our report breaks down Part 1 into thematic topics rather than clause by clause analysis, making specific recommendations and highlighting specific issues for consideration according to the following themes:

• Constitutional implications - streamlining of procedures
• Controls in (and not in) Part 1
• Controls on subject matter
• Preliminary procedural hurdles
• Parliamentary controls - general
• Parliamentary controls - substance
• Parliamentary controls - procedures

Constitutional implications - streamlining of procedures

HOW THE BILL INCREASES MINISTERIAL POWERS

38. In general, Ministers have powers bestowed on them by Acts; each time a new power is bestowed, it needs to be passed in the same way as any other Act provision. That is affected in a constitutionally significant way by Part 1 of the Bill. In simplified outline, the main provisions of Part 1 empower any Minister by order to make provision amending, repealing or replacing any legislation, primary or secondary, for any purpose, and to reform the common law to implement Law Commission recommendations. In summary, therefore, that Part, in providing mechanisms for streamlining legislative procedures, strengthens the powers of Ministers - whichever party is in office - in relation to other Members of Parliament. It does do so by giving Ministers a concurrent general power to legislate without the constraints that primary legislation normally imposes; in particular, the need to fit Bills into the parliamentary timetable, the existence of standing committee and report stages in both Houses and the discipline arising from the Commons scope doctrine.[16] As each of those constraints can be overturned if Part 1 of the Bill is enacted and powers under it are widely used, it follows that examination is needed as to whether Part 1 is acceptable in principle, and as to whether the constraints against its use for ill considered or at worst oppressive legislation are satisfactory.

EXISTING FORMS OF STREAMLINING

39. Before turning to the specific streamlining measures in this Bill, consideration needs to be given to other existing legislative examples of where Ministers can legislate without the constraints that primary legislation normally imposes, in order to form a view on the extent to which the Bill can be considered evolutionary or radical. There are three main existing forms of streamlining - 'Henry VIII' provisions, certain provisions of the European Communities Act 1972 and the powers granted under the Regulatory Reform Act 2001:

• Individual Acts of Parliament will not infrequently contain "Henry VIII clauses" as they are commonly known. Such provisions give the Executive power to amend the substantive provisions of the Act itself by subordinate legislation, and are not restricted to making only new law within more or less narrowly defined limits set out in the "parent Act" . As an example 20 years old, the Building Societies Act 1986 set out, in Schedule 8, the specific non-lending services that societies had the capacity to offer; Schedule 8 was amendable by statutory instrument under that Act but only within outer limits set out in the Schedule; in that way Members of Parliament were able to look at the power and think: is this a power we are happy to delegate to Ministers? The grant of such powers is now closely scrutinised by the House of Lords Delegated Powers and Regulatory Reform Committee on an individual basis; and the inhibition on excessive use is that such powers are generally subject specific.
• The European Communities Act 1972 gives Ministers powers to legislate extensively by statutory instrument. Subject to inhibitions against taxation, retroaction, excess delegation and excess penalties, the statutory instruments made under the provisions of the Act, which can be negative or affirmative, can include any provision that might be included in primary legislation. The inhibition on abuse is that the power is limited to the implementation of measures already agreed in the European Community and dealing with connected matters. As those measures generally leave only limited discretion to member states, the options available to a UK Government, at the time the statutory instruments are made, are usually narrow and at times almost non-existent;
• The Regulatory Reform Act 2001 provides a general power to reform primary legislation by statutory instrument, but subject to various limits and procedures which were identified in the Government's review. Particular constraints arise from the need to cover burdens and activities, and the exclusion of burdens affecting only Government departments, as well as the super-affirmative procedures required for Regulatory Reform Orders ('RROs'). Even so, at the time the 2001 Bill was debated an undertaking (which has no legal force) was given that RROs would not be used for controversial measures. It is common ground that the undertaking has been observed so far.

PURPOSE OF STREAMLINING MEASURES IN PART 1

40. The purpose of streamlining is explained succinctly in paragraph 5 of the Explanatory Notes to the Bill. That paragraph refers to the Government's review of the 2001 Act and its conclusion that:

the powers were too technical and limited, that the scope of RROs should be extended to deliver non-controversial proposals for simplification and that the whole process for delivering an RRO and subsequent scrutiny could be made more proportionate.

STREAMLINING POWERS IN PART 1

41. Part 1 accordingly contains the following streamlining powers-

• Clause 1 empowers Ministers to make orders for the purpose of reforming legislation, primary or secondary. It also empowers them to make orders to implement Law Commission recommendations, either exactly or with alterations.
• Clause 2 specifies that the orders can - save as qualified by the constraints described below - include any provision that might be included in primary legislation, including delegation of legislative powers.

STREAMLINING MECHANISMS IN PART 1

42. It also contains the following streamlining mechanisms -

• Clause 10 gives the Minister making the order the option to choose from negative, affirmative and super-affirmative procedure in respect of any such order.
• Under negative procedure (clause 14) a draft is laid before Parliament and the order can be made unless within 40 days either House passes a resolution against it.
• Under affirmative procedure (clause 15) a draft has to be laid before Parliament for at least 40 days and the order can be made after that if and only if each House has passed a resolution approving it.
• Under super-affirmative procedure (clause 16) a draft has to be laid before Parliament for at least 60 days and the Minister making the order must have regard to any reports of relevant committees and any resolution of the House in respect of the draft, following which the order can be made if and only if each House has passed a resolution approving it.

SUMMARY OF STREAMLINING

43. In summary, therefore, the novel streamlining features are as follows:

• the constraints from RRO procedure in respect of burdens and activities are dropped, as is the block on amending and repealing provisions less than two years old;
• the scope for legislative sub-delegation is added;[17] and
• the option of negative and affirmative procedures is included.

ASSESSMENT OF STREAMLINING

44. We conclude that these provisions alone are radical rather than evolutionary measures - a conclusion reinforced by the recent exchange at Prime Minister Questions between this Committee's Chairman and the Prime Minister.[18] The scope of what might be achieved under any of the procedures identified above, which previously would have needed primary legislation, is in terms of subject matter virtually unlimited. For example, orders could potentially cover the replacement of personal voting by postal/computerised voting or the replacement of 'first past the post' by some system of proportional representation.[19] Any comfort that measures taken, being secondary legislation, could not possibly contravene the Human Rights Act 1998 would be largely illusory: if those measures repeal or amend primary legislation or apply it with modifications they would, under the 1998 Act, count as primary themselves. The House is accordingly bound to consider, as a first question, whether the radical shift of balance of power from Parliament to Ministers effected by Part 1 of the Bill is desirable in principle. The remainder of this section of the Report relates to specific limitations on the extent of that shift and therefore depends on the answer to that question not being a clear 'no'.

Controls in (and not in) Part 1

CONSIDERATION OF CONTROLS

45. There are three different types of inhibitions in Part 1- subject matter, preliminary procedural hurdles and Parliamentary controls. The following paragraphs of this Report examine them at in turn, together with possibly relevant provisions which technically could have been included but have not been included (though something on the lines of those provisions could be included by amendment if Parliament so wishes).

CONTROLS ON SUBJECT MATTER

46. There are four specified areas of subject matter that fall automatically outside the range of what can be covered in a Part 1 order:

• clause 5 prohibits orders in general from imposing new taxation or increasing it;
• clause 6 limits the criminal penalties that can be imposed under an order;
• clause 7 prohibits orders from authorising novel forcible entry, search, seizure and evidence compulsion powers; and
• clauses 8 and 9 contain restrictions in respect of devolved matters.

EXPECTED MINISTERIAL UNDERTAKING

47. It is highly likely that the more general inhibition intended is a legally unenforceable one against using order procedure to enact 'highly controversial' measures - an inhibition that does not appear in the Bill but was stated by the Minister introducing the Bill (in his evidence session with the Committee)[20] as planned to be the subject of an undertaking. In respect of that undertaking, he relied on a similar assumption to that relied on by Lord Falconer when referring to 'controversial' measures and why they were not excluded in terms from the Bill that became the Regulatory Reform Act 2001: that highly controversial measures are like elephants - easy to identify but impossible to define. Whether that argument remains apt in the case of this Bill calls for further consideration by the House.

2001 ACT INHIBITIONS

48. It first should be pointed out that the 2001 Act was limited in scope to reforming legislation imposing burdens in relation to activities, and that burdens only affecting the Government could not be reformed. Here, however, there is no such inhibition; subject to respect for devolved legislatures and the inhibitions on penalties, taxation and entry etc. powers, the potential scope of orders is unlimited.

A POTENTIAL PRECEDENT - LIMITS ON POWERS OF SCOTTISH PARLIAMENT

49. It is relevant here, for illustrative purposes, to consider limits on the legislative powers given to the Scottish Parliament. Some power limits were subject specific - e.g. intellectual property - on the ground that there could not sensibly be different internal regimes in different territories. Others powers however were excluded because they were judged to exceed the degree of legislative independence which formed the basis of the devolution settlement. The Scotland Act 1998 contains a number of such limits on the powers of the Scottish Parliament and Executive. It can be seen, for example, from section 29 of that Act and Schedules 4 and Schedule 5 to it, that (subject in some cases to specific exceptions) -

• the Scottish Parliament and Executive cannot enact provisions incompatible with the ECHR or modify the Human Rights Act 1998;
• they cannot enact provisions incompatible with European Community law or modify the pivotal provisions of the European Communities Act 1972;
• they cannot legislate in respect of the Crown;
• they cannot legislate in respect of Parliament;
• they cannot legislate in respect of the Union of Scotland and England;
• they cannot legislate in respect of the senior Scottish courts;
• they cannot legislate in respect of the registration and funding of political parties;
• they cannot legislate in respect of international relations;
• they cannot legislate in respect of the civil service;
• they cannot legislate in respect of defence;
• they cannot legislate in respect of treason.

POSSIBILITY OF ADDING RESERVATIONS ON SUBJECT MATTER

50. It would clearly be possible, by a series of exclusions which go well beyond the few specifically mentioned within Part 1 of the Bill, to reserve specified areas of legislative competence to primary legislation, and to keep them away from the proposed concurrent legislative power of individual Ministers. Such exclusions would not need to replicate the Scottish Parliament ones. In 2001, Lord Falconer avowed that he would be happy for RRO powers to be vested in Ministers of a government of a different political colour from the current one[21]; however, in the light of the radical extension of powers now proposed and in particular the absence of any outer limit on subject matter, the question of amending the Bill to specify at least some limits needs to be considered. Reservation could largely be achieved by the insertion of a new clause in the 'restrictions' area of Part 1 (clauses 4 to 7) to introduce a Schedule of 'off limits' areas. If it were desired to include a tightening of the power of legislative delegation, amendment of clause 4 would also be called for. We invite the House to consider whether the Part 1 of the Bill should be amended to reserve further specified areas from the scope of the new powers (and, if so, to identify the areas to be reserved).

Preliminary procedural hurdles

Consultation

51. The first procedural hurdle (under clause 11) is that of preliminary consultation of those affected, and that is parallel to the control in the 2001 Act and remains apt.

EXPLANATORY DOCUMENT

52. Clause 12, which needs to be considered with clauses 3 and 13(1) and (2), specifies the explanatory document that has to be prepared for Parliament before an order is made. That document is likely to be of primary significance for consideration by the Parliamentary Committees charged with reporting on the draft orders laid under the proposed Act.

INFORMATION TO BE INCLUDED

53. The document, which has to be laid with the draft order, has to contain the following:

• an introduction and explanation of the order;
• a statement whether the order is made for the purpose of legislative reform, implementing Law Commission recommendations or both;
• where provision involves free standing reform (i.e. it goes beyond restating the law in different terms or implementing Law Commission recommendations), an explanation why the Minister considers that:
  • —  the policy objective could not be satisfactorily secured by non-legislative means;
  • —  the effect of the provision is proportionate to the policy objective;
  • —  the provision, taken as a whole, strikes a fair balance between the public interest and the interests of any person adversely affected;
  • —  the provision does not remove any necessary protection;
  • —  the provision does not unreasonably prevent any person from continuing to exercise any right or freedom; and
  • —  the provision simplifies legislation, modernises it, makes its overall effect less onerous, removes inconsistencies and/or removes anomalies (if and in so far as the Minister thinks it does so);
• where provision restates the law in different terms, an explanation why the Minister considers that the provision would make the law more accessible or more easily understood;
• where provision implements a Law Commission recommendation -
  • —  an identification of the recommendation;
  • —  an identification of the manner in which the provision implements it; and
  • —  details of and reasons for any deviation from the recommendation;
• to the appropriate extent, a prediction of savings and costs and other benefits and disadvantages;
• an identification and explanation of any powers to legislate delegated by the order and their procedural requirements (if but only if the powers are conferred on Ministers they have to be either standard affirmative or negative unless they replicate a previous provision);
• details of any consultation, representations and changes in consequence; and
• a recommendation (with reasons) as to whether negative, affirmative or super-affirmative procedure is to apply for consideration of the order.

POSSIBILITY OF LEGAL CHALLENGE ON THE BASIS OF TESTS IN PART 1

54. It can be seen that some of the requirements on the Minister when making his explanatory statement simply call for factual detail, and compliance is straightforward and easily tested. Other requirements call for a statement of views the Minister has formed, which themselves (clause 3) are an essential precondition of the making of the order. The rationality of those views is capable of being the subject of judicial review - not on the basis (which Parliament might apply) of whether the judge would have formed the same or different views but on the basis of whether they were within the range of views that a Minister acting reasonably might have formed. As in the case of any current RRO, a challenger would normally have an uphill struggle in demonstrating that a Minister had acted irrationally, particularly if the Committee had recommended the appropriateness of the order.

POSSIBILITY OF ADDING CONTROVERSY AND/OR APPROPRIATENESS TEST

55. Given the generality of the terms in which the tests are expressed, and that fact that they are matters for the Minister to consider, there is no doubt that some type of controversy or appropriateness test could be fitted into the Bill without significantly altering the purpose or structure of the Bill. For example, clause 3 and clause 12 could between them be amended to require the Minister, before commencing the procedure to make the order, to form the view that the policy objective intended to be secured was not a significantly controversial one and that the subject matter was appropriate for Part 1 procedure; the Minister could also be required to retain that view in the light of consultation; and to give reasons in the explanatory statement for why the Minister formed and retained that view. However, we do not favour that as a solution. It seems to us that this would involve passing to the courts the task of forming judgments about the outer edges of what is essentially political. There are other and more appropriate ways of reducing reliance on an unenforceable undertaking - i.e. an express reservation of subject matter (see above) and strengthening of Committee and parliamentary controls and procedures (see below).

Parliamentary controls - general

CHOICE OF PROCEDURES

56. Under the terms of the Bill as introduced, when an order is proposed, the initial choice between negative, affirmative and super-affirmative procedure will be a matter for the Minister introducing the order - see clause 10. The Bill additionally provides for Parliament itself to change the procedure recommended by the Minister (clause 13). The way this works is as follows.

• If the Minister recommends super-affirmative procedure that is that.
• If the Minister recommends affirmative resolution procedure, the recommendation becomes a statutory fact at the end of a 21 day period unless beforehand either House has resolved that super-affirmative procedure applies, in which case super-affirmative procedure applies.
• If the Minister recommends negative resolution procedure, the recommendation becomes a statutory fact at the end of the 21 day period unless beforehand either House has resolved that affirmative or super-affirmative procedure applies, in which case the procedure resolved on applies;
• a resolution of either House is achieved by -
  • —  a vote of the House in question; or
  • —  a recommendation of a committee charged with reporting on the order, in a case where the House in question has not rejected the committee's recommendation within the period in question.

Two issues arise here - substance and procedure. Suggestions for reinforcement of Parliamentary control are made in relation to both.

Parliamentary controls - substance

LIMITS ON CONTROL POWERS

57. On substance, the scope for Ministers to enact radical measures by reduced procedures is constrained by the possibility of a vote of either House or even a Committee recommendation to go for a fuller procedure. However, there are two significant absences - i.e. first, there is no scope for a resolution that a measure is not appropriate for Part 1 procedure at all; and secondly there is no scope for any committee of either House to insist on the making of amendments. These are considered in turn.

POSSIBILITY OF VETO

58. The Bill includes provision for either House (either as a whole House or via committee procedure) to vary the procedure from the one recommended by the introducing Minister to a higher level of scrutiny, provided this is done within the first 21 days of the order being laid. This could be strengthened - without overturning the purpose or structure of the Bill - to make it possible to provide for a veto, similarly achievable, during the same period. We should also note that although the 2001 Act inhibits altering a RRO within 2 years, there is no such inhibition in the Bill. It might make sense to apply a 2 year moratorium to inhibit introduction, following a veto, of an Order aiming for substantially the same effect as one rejected. That would, in effect, give the House the opportunity of overturning a Minister's decision to go for order procedure rather than introduce a Bill. Given the very wide powers granted to Ministers, the expressed intention to grant an undertaking not to abuse the system and the difficulty, indicated above, of putting a controversy or appropriateness test on the face of the Bill, there appears to be no good reason why a veto should not be written into the Bill, together with a constraint on re-introducing the substance of the order (otherwise than as a Bill) in the next two years. In practice, it would not subject Ministers to constraints beyond those which they have been respecting to date and have indicated that they plan to respect in the future, and at the same time it would create a straightforwardly enforceable protection against abuse.

59. We recommend that Part 1 of the Bill should be amended to provide scope for an effective veto, on the following basis:

• first, during the preliminary period for procedural consideration, it should be possible -
  • for either House of Parliament by resolution, or
  • for the relevant committee of either House charged with reporting on the order by recommendation (if not rejected by House resolution),
  • not only to vary the Minister's recommended procedure on a given draft order, but also to determine that the Part 1 procedure should not apply to it at all;
• secondly, if that determination has been made, no further draft order to the same effect (or to the same effect but for modifications) should be laid within two years of the determination date.

POSSIBILITY OF AMENDMENT

60. The question of whether a committee should have power to insist on amendments being made to the draft order is more complicated. In our view, such a power could go some way to compensate for the loss - in so far as Part 1 procedure replaces primary legislation - of standing committee and report stages. As the Bill stands, there is no scope for amendment at all in relation to negative and affirmative instruments, while the position in relation to super-affirmatives is that, at any time during the 60 day period, either House can resolve on changes or the responsible committee of either House can recommend them. If such a recommendation were made, the Minister would have to have regard to those changes, which means that proposed amendments must be actively considered and rejection of the proposals must be reasoned, but the Minister is legally free not to adopt them. At first glance that may seem reasonable, given the answerability of the Minister in court for the instrument as finally made and the fact that the two Houses may reach different conclusions. However, it has to be remembered that what is being considered is a draft, and it is always open to the Minister - if any recommendation to amend is wholly unacceptable to him or her - to choose to proceed with the matter by primary legislation. In other words, if both Houses, in relation to a given instrument, were to recommend the same amendments (whether by committee or by resolution), it ought to be possible to reinforce the powers of both Houses by requiring the Minister not to lay the order unless it incorporated the amendments. That could be achieved by preserving the right of either House and/or its responsible Committee to require a change to super-affirmative procedure (in an instrument with a lesser procedure offered by the relevant Minister) and by some amendment to clause 16 (and presumably a possible co-ordination procedure built into the standing orders of the relevant parliamentary committees of either House). We invite the House to consider whether - in the case of super-affirmative instruments (however introduced by the relevant Minister) - the Houses or their committees should have their power of suggesting amendments reinforced by a provision to the effect that, if the amendments were agreed by both Houses, the Minister would either have to take the amendments on or discontinue his proposal to legislate by order.

Parliamentary controls - procedure

PROCEDURAL DETAILS

61. The Bill specifies timing constraints on Parliamentary procedures according to the following table:

Table 3 - Timing

Date[22]	Significance
X	Draft Order laid
X+21	Time limit for either House (or its responsible committee) to decide not to follow the Minister's recommended procedure.
X+ 40	Time limit for either House to resolve that a negative draft order should not be made, failing which order can be made by the Minister
	Exhaustion of period for laying a negative or affirmative draft order
	Start of period (no end specified) in which a resolution of both Houses can approve an affirmative draft order, in which case order can be made
X+ 60	Time limit, in the case of a super-affirmative draft order, for either House to make a resolution (or for its responsible committee to make a recommendation) in relation to a super-affirmative order and ensure that the Minister takes it into account, and for anyone to make representations that similarly will have to be taken into account
	Exhaustion of period for laying a super-affirmative procedure draft order
	Start of period (no end specified) in which procedure for making a super-affirmative order can be made; this requires the Minister to lay a document specifying details of any representations, and (if there are proposed revisions to the draft order originally laid) those revisions, following which a resolution of both Houses can approve the draft in its latest form; the order can be made once the draft has been so approved.

RATIONALE FOR RANGE OF TIME LIMITS

62. We appreciate that the range of time limits set out in Part 1 of the Bill has an underlying rationale, relating to the differences in procedure and decisions to be made. The 21 day period (presumably derived from the convention that no statutory instrument will normally be brought into effect less than 21 days after being laid before Parliament)[23] is purely to decide on appropriateness for procedure. The 40 day period (the standard period set out in the Statutory Instruments Act 1946) is to deal with comments on merits of orders where there is no scope for amendment by the Committee, and the 60 day period (reflecting the current RRO procedures) is to deal with orders where there is some scope for amendments by the Committee. Thus a simple merger of the 21 and 40 day periods into a single 40 day period in relation to a draft order suggested (and ultimately accepted) as negative would leave no time for the House to vote against the order after the establishment of the order as negative had crystallised. So we accept that a straight merger of all the periods would not alone be a realistic option.

PARTIAL REDUCTION IN SCRUTINY PERIODS

63. We note nonetheless that that two of the periods for committee consideration are significantly less than is now available for consideration of RROs (60 days on the face of the 2001 Act). That reduction in the time for Parliamentary scrutiny appears to arise at least in part from the unfounded belief that existing Parliamentary procedures - rather than failures of Government in identifying and bringing forward proposals - have been the cause of the relatively small number of RROs made so far. It is important that any committee charged with responsibility for scrutinising Part 1 orders should retain the ability to carry out the tasks it needs to in order to report to the House on the basis of informed conclusions; it may need not only to scrutinise the text and consultation responses, but also to formulate questions to the relevant Department, allow it time to provide considered replies, arrange any oral evidence sessions needed and consider the outcome of those sessions before drafting and approving its report. Under current procedures this leaves very few days, if any, of the existing 60 day period, and we note with interest that the Cabinet Office Website states that it requires 90 days in which to assess practical proposals for regulatory simplification that are submitted by 'business, the voluntary and community sectors, public sector front line staff and any of their representatives'.

RISKS INVOLVED IN FAST TRACKING

64. An example that the Government has used in justifying fast tracking is the Regulatory Reform (Museum of London)(Location of Premises) Order 2004, which they regard as an order that did not need the full range of RRO scrutiny. We consider that the example, as scrutinised by the previous Committee, appears, if anything, to prove the contrary. In fact, the Museum of London Order was found to contain errors in both the evidence offered by the Minister in relation to the figures provided in the Regulatory Impact Assessment and in the way in which the Department provided information about the bodies consulted. In addition to providing the usual reports on the proposal and draft order, our predecessor Committee also produced a special report on the Order.[24] This illustrates the point that even seemingly straightforward orders require detailed scrutiny. Even if there are suitable cases for fast tracking, it seems at present unlikely that they will be so insignificant as to make (the 40 day) negative procedure appropriate. It therefore seems at least feasible that the responsible committee will use the initial 21 day period to recommend super-affirmative procedure for all orders, simply to ensure maximum control. Finally, the range of measures that now might be offered for consideration is virtually unlimited, and could cover wholesale reform of the law in any sector; even with a 60 day period there is a risk that responsible Committees might be overwhelmed either by specific orders or by the quantity coming through at the same time.

Three possible solutions

65. While we recognise the pressure on Government to increase the pace of regulatory reform, we are equally mindful of the need to balance this with effective scrutiny of individual proposals. We are not persuaded that Parliamentary Committees charged with reporting on proposals and draft orders should, as a matter of routine, be expected to report to either House on the final versions in considerably less time than the Better Regulation Executive needs when assessing an initial proposal. We recommend that the Bill should be amended to reinforce Parliamentary procedures in relation to Part 1 orders, so as to reduce the risk of effective scrutiny being by-passed. We offer three options (mutually exclusive in structural terms), in ascending order of preference, for consideration by the House. The first option is closest to the current text of the Bill, the second goes further and the third further still. But none of them fundamentally alters the Bill and none of them extends the scrutiny period beyond what the Cabinet Office states that it needs itself.

FIRST OPTION - MAINTENANCE OF FULL RANGE OF PROCEDURES AND TIME LIMITS (LENGTHENED IN ONE CASE), WITH SCOPE FOR EXTENSION

66. As a starting point, it should be appreciated that the limit of 21 days to decide not to follow Ministers' recommended procedure appears particularly artificial. All that is needed at the end of the initial time limit is sufficient time, before the expiry of the 40 day period, for a vote of either House (with a debate if necessary) that a negative procedure instrument should not be made. The Committee considers that 10 days should be sufficient for that, and it would change the 21 day limit into a more realistic 30 day limit.

67. To deal with the risk of the responsible committee being overwhelmed, that alteration could be reinforced by enabling either House by resolution or committee recommendation (not rejected by resolution), before the end of the 30 day period, to re-start the clock by adding a maximum of 30 days to each limit (i.e. the 30 becoming 60, the 40 becoming 70 and the 60 becoming 90). That would need amendment to clauses 14 to 16 but should be manageable in drafting terms and could be reconciled with the recommendation above for a House veto and with our suggestion of mandatory amendments where agreed by both Houses. We invite the House, as a first option, to consider amending Part 1 -

• to change the 21 day time limit (for not following the Minister's recommended procedure ) into a 30 day time limit, and then -
• to provide that the parliamentary time limits for consideration of a Part 1 order should be adjustable upwards, with a maximum adjustment of 30 days, on -
  • a resolution of either House, or
  • a recommendation of the responsible committee of either House (not rejected by such a resolution).

SECOND OPTION - REMOVING NEGATIVE PROCEDURE AND MERGING TIME LIMITS, WITH SCOPE FOR EXTENSION

68. If, on the other hand, the option of negative orders were removed, it could be far easier to simplify and strengthen control by merging periods. The choice that the Bill presents between affirmative and super-affirmative procedures is - as the Bill stands - realistically a choice between an instrument with or without scope for amendment; the decision to choose one procedure over the other is likely to be best made by the responsible committee once it has formed a view that amendments are desirable - i.e. toward the end of a 60 day scrutiny period.

69. On that basis, scrutiny could be preserved by having an automatic 60 day period for choosing between affirmative and super-affirmative procedure (with the same period for exercising the veto recommended above[25] and the amendment power suggested above), again with the option of an extension of a maximum of 30 days to reduce the risk of insufficient time where orders are particularly complex or numerous. Again that should be manageable in drafting terms.

70. This option would more closely resemble the 2001 Act position by retaining at least a 60 day period for scrutiny, which in our view is the minimal period that we consider necessary for parliamentary scrutiny of such orders, and it should be noted from the debates on the 1994 and 2001 Acts that the choice of 60 over 40 days' scrutiny was a conscious decision of Parliament (see Appendix 2).

71. We invite the House to consider, as a second option providing for stronger reinforcement of Parliamentary control, amending Part 1 -

• to remove the option of negative procedure,
• to merge all time limits into a 60 day limit both for scrutiny and for either House not to follow the Minister's recommended procedure, and also
• to provide that the Parliamentary time limits for consideration of a Part 1 order should be adjustable upwards, with a maximum adjustment of 30 days, on

a resolution of either House, or

a recommendation of the responsible committee of either House (not rejected by such a resolution).

THIRD OPTION - REMOVING NEGATIVE PROCEDURE, INTRODUCING A DEFAULT SUPER-AFFIRMATIVE PROVISION AND MERGING TIME LIMITS WITH SCOPE FOR EXTENSION

72. A more radical possibility - and closer still to the 2001 Act position - is to have a default rule[26] of super-affirmative procedure - with the option within a standard 60 day procedure for either House by resolution (or the responsible Committee of either House by recommendation unless rejected by resolution) to turn the order into an affirmative one in a simple case, or - at the other end of the scale - to exercise the power of veto recommended above or the power of amendment suggested above. Again there should be the option of an extension of a maximum of 30 days to reduce the risk of insufficient time where orders are particularly complex or numerous. Introduction of a default rule would probably call for more extensive amendment than the previous two options but ought still to be manageable, and the particular argument in favour is that the new powers planned to be granted to Government are so wide that any shift from fuller scrutiny ought always to require a conscious decision.

73. We invite the House to consider, as a third option providing for still stronger reinforcement of Parliamentary control, amending Part 1 -

• to delete the negative option,
• to introduce a default rule of super-affirmative procedure,
• to merge all time limits into a 60 day limit (both for scrutiny and for either House not to follow the default procedure), and also
• to provide that the Parliamentary time limits for consideration of a Part 1 order should be adjustable upwards, with a maximum adjustment of 30 days, on -

a resolution of either House, or

a recommendation of the responsible committee of either House (not rejected by such a resolution).

Overall conclusions on text of Part 1

74. We have considered Part 1 of the Bill from the perspective of our current responsibilities and, while we expect that other Committees with different terms of reference may also wish to comment on particular constitutional and procedural aspects of the Bill, we share the Government's overall objective of wishing to remove the burden of unnecessary regulation. Nonetheless, we observe that the recommendations and issues for consideration highlighted above arise as a result of the Government's assessment that streamlining legislative procedure is of major importance and that constraints can be left to be covered by the relevant Minister's undertaking. The Cabinet Office's Final Regulatory Impact Assessment in effect addresses four possibilities: doing nothing; altering parliamentary procedures alone; adding extras to the 2001 Act; and providing for radical change by conferring on Ministers a power with no outer limit on coverage, as in Part 1 of the Bill. In summary, this Special Report offers for consideration a fifth possibility: leaving the outer limit on coverage unspecified while identifying areas that should be off limits, as not appropriate for delegated legislation, and also tightening aspects of Parliamentary control. All of the recommendations and issues highlighted for consideration in this section identify ways in which the Bill can be amended at Committee and/or Report Stage in a way that ought to be manageable if the principle of the Bill is accepted by the House.

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16   There is a rough constitutional symmetry in the balance between the inconvenience of current constraints to a government programme and the fact that Governments are regularly voted into office with an absolute House of Commons majority but on the basis of a minority of votes cast. Thus:

first, the need to fit Bills into the Parliamentary timetable results first in the need for some co-operation between government and opposition parties, and secondly in some understanding between Commons and Lords: the interplay between the two Houses itself provides an inhibition against ill thought out legislation brought forward in haste.

secondly, during standing committee and report stages any amendment within the scope of a Bill can be put down and will be eligible for debate, without initiators being limited to Government; that results in the assumption that potentially difficult issues cannot be sidestepped - they have, or at least may have, to be faced before a Bill is passed.

thirdly, the Commons scope doctrine imposes a constraining decision on those introducing Bills - either they need to confine its area of operation, or they risk debate being sidetracked by the introduction of amendments in respect of areas that they have not considered at all. Back

17   Clause 4 of the Bill provides that a power to legislate conferred by an order under Part 1, if conferred on a Minister and not replicating an existing power, is limited to normal affirmative and negative statutory instrument procedure. There is however no constraint on the conferring of a power on an official body, an individual official, a private company or a private individual to legislate in a way that by-passes those procedures. Back

18   HC Deb 11 January 2006 c284  Back

19   It is of course possible, if the undertaking not to enact controversial measures given in 2001 had been ignored, that some such measures might have been shoehorned into burden/activity reform, thus generating super-affirmative procedure. The question whether they would then have been accepted by a court as genuinely within powers was never tested, but it is clear that the burden/activity concept has been seen as a significant constraint on powers. There are - as in 2001 -a number of opinions a Minister needs to form before making such orders, but those are subjective and limited only by judicial review - see below. Back

20   Q23 Back

21   Delegated Powers and Regulatory Reform Committee, Fifteenth Report of Session 1999-2000, HL61, para 35. Back

22   In calculating time in relation to the 21, 40 and 60 day limits no account is to be taken of any time during which Parliament is dissolved or prorogued or adjourned for more than 4 days (clause 17). Back

23   See Statutory Instrument Practice, Office of Public Sector Information Back

24   Second Special Report from the Regulatory Reform Committee, Session 2003-04, HC818 Back

25   The fact that affirmative and super-affirmative procedure will automatically call for a vote in the House does not make a veto superfluous in this case. The difference is that it would be an option for recommendation by the responsible Committee of either House within the relevant period (unless the Committee's recommendation were rejected by a resolution from that House in the same period), and a significant factor would be whether the order was appropriate for Committee as opposed to Bill procedure. In contrast, the eventual vote needed to make an order in the form of the draft would be expected to depend far more on the perceived desirability, on balance, of the policy underlying the order. Back

26   The expression 'default rule' means a rule which the Bill would apply automatically, but with provision for alteration in an individual case by a method also specified in the Bill. Back

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Prepared 6 February 2006