2 Scope of the Bill
7. The central provisions of the first part of the
Bill introduce a new power under which Ministers may make orders
which amend primary legislation. This power replaces the powers
in the Regulatory Reform Act under which RROs have been introduced.[6]
The new power, however, is not subject to the constraints and
restrictions which apply to RROs. In particular an order under
the new power—
- need not have as its purpose
the relief of specific burdens;
- is not limited to legislation which is more than
two years old or has not been amended in the last two years;
- may confer upon Ministers or others a power to
make further subordinate legislation under it;[7]
- may implement the recommendations of any of the
United Kingdom Law Commissions.
Such an order may not—
- impose or increase taxation;
or
- create a new offence punishable by, or increase
the penalties for an existing offence so that it is punishable
by, more than two years imprisonment on indictment, or on summary
conviction imprisonment for a term exceeding the normal maximum
or a fine exceeding level 5 on the standard scale, or authorise
forcible entry or the compelling of evidence, unless the order
implements the recommendations of one of the Law Commissions.
8. Before proposing an order, a Minister must also
be satisfied that five preconditions have been met. These are
that—
(i) the policy objective intended to be secured
by the provision could not be satisfactorily secured by non-legislative
means;
(ii) the effect of the provision is proportionate
to the policy objective;
(iii) the provision, taken as a whole, strikes
a fair balance between the public interest and the interests of
any person adversely affected by it;
(iv) the provision does not remove any necessary
protection; and
(v) the provision does not prevent any person
from continuing to exercise any right or freedom which that person
might reasonably expect to continue to exercise.
9. When a Minister presents a draft order to Parliament
it must be accompanied by an explanatory document which, among
other things, must set out why he believes that the preconditions
have been met. The Regulatory Reform Committee considered how
this procedure might in practice restrict the order-making powers
in the Bill. They concluded—
The rationality of those views [i.e. why the
Minister believes that the preconditions have been met] 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.[8]
10. The Committee proposed a range of amendments
to the Bill, including three separate options for strengthening
the parliamentary scrutiny of draft orders. Overall they concluded
that the Bill 'has the potential to be the most constitutionally
significant Bill that has been brought before Parliament for some
years.' [9]
11. The Minister, however, argued in the second reading
debate that the safeguards in the Bill were stronger than had
been the case in the Regulatory Reform Act and that they preserved
the proper role of Parliament—
I have insisted that the formal preconditions
on orders are retained or adapted to remove the narrow and technical
concept of burdens. Indeed, those safeguards now apply comprehensively
to capture all of the impacts imposed by orders. There is also
a new safeguard—no order will be made where there is a better
alternative to legislation[10]
…the preconditions in the Bill are stronger
than those in the 2001 Act. They have a wider application, applying
to all types of provision made by order, not just to those affecting
burdens. A Minister wishing to make an order under the new power
must ensure that those stringent safeguards are observed.[11]
He also repeated the undertaking that he had made
in his evidence to us that the Government would not seek to 'introduce
anything highly controversial' by means of an order under the
Bill and would not proceed with an order which the relevant committee
in either House had recommended should not be proceeded with—
The relevant Select Committee would … operate
a power of veto and the Government would be told to think again
and seek an alternative legislative vehicle, if they were still
minded to proceed with the suggestion.[12]
He gave similar undertakings to the standing committee
on the Bill.
12. It is important to distinguish between the Government's
intentions in introducing the Bill and the precise text of the
Bill itself. The Minister repeatedly emphasised to us his desire
to use the powers under the Bill in a consensual way to deliver
amendments to the law 'to improve the UK's regulatory performance.'[13]
He identified two particular initiatives to which the Bill would
contribute. The first was what he referred to as the 'admin burdens
project' which 'is seeking to analyse the global figure in the
UK economy of administrative burdens on business and then, having
identified that figure, for the first time ever setting targets
for its annual reduction.' The second was the requirement which
had been placed on every government department to 'come up with
their own simplification plans of unnecessary bureaucracy, unnecessary
admin burdens, outdated legislative arrangements.'[14]
He also emphasised that the Bill 'was not about redrawing any
constitutional arrangement.'[15]
13. The Bill as drafted, however, is not restricted
to the purposes outlined by the Minister; neither is there the
explicit provision of a power of veto for the relevant committee.
There is no attempt to limit the order making power in terms of
whether or not what is proposed is highly controversial. Instead,
as the Regulatory Reform Committee put it, 'the Bill provides
Ministers with a wide and general power to amend, repeal and replace
all primary and secondary legislation, including legislation that
may have been approved recently. There are few limits to this
power.'[16]
14. Orders may implement the recommendations, with
or without amendment, of any one or more of the United Kingdom
Law Commissions. Such orders are not subject to the restrictions
in respect of criminal offences and forcible entry which we described
in paragraph 7 above. Although in standing committee the Minister,
speaking in support of this provision, argued that to remove it
'would mean that some well considered and worthwhile reforms
recommended by the Law Commission after detailed research and
extensive consultation could be implemented only by primary legislation,'
he was sufficiently sympathetic to the amendments moved by Members
seeking to remove the special status given to Law Commission recommendations
to add—
However, I believe that Law Commission recommendations
that include criminal penalties above the levels specified in
clause 6 and that are suitable for implementation by order are
likely to be rare indeed. I also believe that where higher penalties
are recommended, they might well make the orders highly controversial
and therefore inappropriate for delivery by order.[17]
Accordingly he undertook to consider the matter further.
We welcome this undertaking. The appropriateness of pursuing
a proposal for legislative reform by means of an order under this
Bill should be judged by its substance, not its source.
15. The Bill explicitly provides that orders under
it may amend private legislation. We asked the Minister if he
could give some examples of how this power might be used. His
response (in the form of a letter following the evidence session)
offered only one example: an order to secure the winding up of
the Covent Garden Market Authority and return of the market to
the private sector.[18]
Apparently such an order would be hybrid if it was introduced
as a bill. In the standing committee the Minister raised the possibility
of pursuing harbour revision orders through this means, thereby
denying the possibility of a public inquiry.[19]
The Standing Orders governing the procedures for hybrid and private
bills are complex and the proceedings can be protracted, but their
aim is to ensure that those individuals or bodies whose rights
or interests are to be specifically removed or adversely affected
by the bill (known as 'petitioners') have the opportunity to present
their case to Parliament. If the order-making powers in this
Bill are to be used to amend private legislation it is essential
that petitioners should continue to have the opportunity to present
their case to Parliament before any such order is made. In our
view this will require all such orders to be subject to the super-affirmative
procedure and in many cases might also require extensions to the
time limits provided under the Bill.
16. We agree with the Regulatory Reform Committee
that the Bill as introduced is prima facie of major constitutional
significance. It was for this reason that our Chairman wrote to
the Leader of the House requesting that Part 1 of the Bill be
committed to a Committee of the Whole House. At Business Questions
on the day of the Bill's second reading the Leader of the House
said that he was still considering the request.[20]
In the event, however, the Government persisted with the programme
motion which it had previously tabled in connection with the Bill
and which committed the Bill to a standing committee.
17. We regret that the Government chose not to
commit Part 1 of the Bill to a Committee of the Whole House. We
agree with the Regulatory Reform Committee that as drafted the
Bill is of major constitutional significance. It is a long-standing,
and widely supported, convention that such Bills are taken in
Committee of the Whole House. We are also concerned that the current
programme motion allows only one day for report and third reading.
The Minister undertook in the standing committee that he would
bring forward amendments on a number of matters at report stage.
Given the constitutional importance of this Bill, we believe that
one day may not be sufficient for proper consideration at report.
We recommend that the Government consider amending the programme
motion to allow two days for report stage and third reading.
18. The procedural implications of the Bill will
be directly influenced by its scope. The House will expect significantly
greater and more elaborate procedural safeguards over the use
of a new power whose scope represents a fundamental change in
the way Parliament deals with legislation than over the use of
a power which is no more than an incremental development of an
existing and well-established procedure.
19. There are two particular procedural characteristics
which distinguish the House's treatment of primary from its treatment
of secondary legislation. Primary legislation is subject to consideration
over several separate stages and is capable of being amended.
Furthermore a Bill passes through the two Houses sequentially
so that amendments made in one House can be considered by the
other. Secondary legislation is debated once (generally in a standing
committee on Delegated Legislation). It cannot be amended. It
is then either approved without further debate (in the case of
affirmative instruments) or allowed to continue in force with
no further parliamentary proceeding (in the case of negative instruments).
It is considered in parallel by both Houses in the same form.
20. The introduction of the super-affirmative procedure
for RROs extended the procedures for secondary legislation so
that they took on a little of the characteristics of the procedures
for primary legislation. RROs are subject to two stages of consideration,
firstly in the form of a proposal and secondly as a draft order.
The Regulatory Reform Committee is charged with reporting to the
House on each proposal and in doing so may recommend that it be
amended before being introduced as a draft order. But the Government
is not obliged to accept the Committee's amendments and the RRO
is considered only once (as a draft order) by the House as a whole.
Indeed, if the Committee agrees that the draft order should be
made and does so without dividing, the question for its approval
is put without debate. In fact there has not been a single debate
to approve an RRO since the introduction of the Regulatory Reform
Act in 2001.[21]
21. The present Bill not only proposes an enlargement
of the scope of the order making power compared to the 2001 Act,
it also provides that such orders may be made by negative or affirmative
procedure in addition to the super-affirmative procedure described
above to which all RROs are subject. The Bill provides that the
Minister who introduces the draft order also recommends which
parliamentary procedure it should follow. Either House may then
require that it should be subject to a more demanding procedure
instead. We consider this provision in more detail below.
22. The Government justifies the need for the Bill
by reference to difficulties encountered in making progress with
RROs and with securing parliamentary time for Law Commission bills.
The Government's consultation document, A Bill for Better Regulation,
suggested that greater speed of delivery would flow from allowing
orders under the Bill to be made by affirmative or negative procedure.[22]
The implication of this statement (which is repeated in three
of the four questions on parliamentary scrutiny) is that the parliamentary
procedures had led to significant delays in making RROs.
23. The Regulatory Reform Committee published in
its report a table which set out how long each stage of every
RRO had taken, from the launch of the public consultation to the
making of the final order. The table distinguishes between the
time taken by parliamentary and by non-parliamentary consideration
of the RRO. It contains 27 RROs. The parliamentary proceedings
of only one of those took more than 50 per cent of the total time,
and of only seven (i.e. just over a quarter) more than 25 per
cent of the total time. All of these orders, of course, were made
under the super-affirmative procedure which is the most protracted
of the parliamentary procedures provided in the Bill. Overall
parliamentary scrutiny, including days when the House was in recess,
accounted on average for less than 20 per cent. of the total time
from the consultation to the order being made.
24. It might have been expected that the proportion
of the total time taken by non-parliamentary proceedings would
have declined over time as the Government became more familiar
with the procedures for RROs. In fact the contrary has been the
case; in respect of no order made since March 2003 (and 16 have
been made) have the parliamentary proceedings taken more than
22 per cent of the total time. When he was challenged in standing
committee on the relative lengths of time taken by the parliamentary
and the non-parliamentary stages, the Minister said—
It would not be appropriate to link the scrutiny
period to the gestation period[23]
So we should emphasise that the figures quoted above
do not include the time taken by the Government to decide on,
draft and bring forward a proposal for an RRO before the launch
of the public consultation.
25. We asked the Minister why he thought the Regulatory
Reform Act had failed to meet its objectives. He gave two reasons.
Firstly the definition of the burden to be relieved or reformed
was too narrow: it had to be a legal burden and could not for
example be an administrative burden.[24]
We are not clear why it should be necessary to amend primary legislation
to lift a non-legal, purely administrative burden. His second
reason was that culturally there was little incentive for either
politicians or civil servants to put effort into preparing an
RRO. To be the head of a bill team was 'a position of some responsibility
and prestige.' The same was not true of a person in charge of
bringing forward an RRO.[25]
26. Failure to implement Law Commission recommendations
has been similarly attributed to parliamentary difficulties. The
Minister has blamed pressure on the legislative programme for
the fact that on average those recommendations accepted by the
Government take seven and a half years to implement.[26]
More than ten years ago, however, the House introduced a Standing
Order designed to accelerate the passage of Law Commission bills.[27]
Since then just four Law Commission bills have been introduced.
The most recent was the Trustee Delegation Bill [Lords]
in 1999. It took a total of seven minutes on the floor of the
House (at report and third reading stages) and was passed without
amendment.
27. The Government has identified areas of legislative
activity where progress has been slower than it, and others, would
have liked. It has apparently decided that that progress will
be accelerated by truncating the parliamentary scrutiny of the
legislation. But it has not produced evidence that the delays
and obstacles have been caused by that parliamentary scrutiny.
If the tests required of an RRO were too restrictive, they could
have been amended rather than abolished. Other problems such as
Whitehall's cultural approach to regulatory reform will not be
solved by this Bill.
6 The Bill repeals all the major provisions of the
Regulatory Reform Act. Back
7
In the case of Ministers this power can only be exercised by statutory
instrument subject to the negative procedure. Back
8
HC (2005-06) 878, paragraph 54. Back
9
HC (2005-06) 878, Summary. Back
10
HC Deb 9 February 2006 c1053. Back
11
HC Deb 9 February 2006 c1055. Back
12
HC Deb 9 February 2006 c1058. Back
13
HC Deb 9 February 2006 c1060. Back
14
Q5 Back
15
Q6 Back
16
HC (2005-06) 878, Summary. Back
17
Stg Co Deb ,Standing Committee A ,7 March 2006 c168-9. Back
18
Ev (p 53) Back
19
Stg Co Deb ,Standing Committee A ,28 February 2006 c64-72. Back
20
HC Deb 9 February 2006 c1013, Back
21
A debate on the Fire Safety Order was held in Westminster Hall
during the Regulatory Reform Committee's consideration of the
proposal, but the debate was not triggered by the Committee dividing
on the draft order. Back
22
A Bill for Better Regulation: Consultation Document, July
2005, p21. Back
23
Stg Co Deb, Standing committee A, 7 March 2006 c224. Back
24
Q 4 Back
25
Ibid Back
26
Stg Co Deb, Standing committee A, 7 March 2006 c167. Back
27
SO No. 59. Back
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