House of Commons - Regulatory Reform

Select Committee on Regulatory Reform Second Report

2 Assessment of the proposal against the tests in the Legislative and Regulatory Reform Act 2006 and in Standing Order No. 141(3)

13. The relevant tests in the LRRA for an order submitted under section 2 are that:

i. There has been proper consultation on the proposal (section 13)

ii. The conditions of section 2 are met; that is (in paraphrase), that the order serves the purpose of securing the exercise of regulatory functions in compliance with the principles of transparency, accountability, proportionality, consistency, and targeting

iii. Various conditions in section 3(2) are met. These are:

the policy objective intended to be secured by the provision 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 by it
the provision does not remove any necessary protection
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
the provision is not of constitutional significance

14. Each of the tests at ii and iii is matched by an equivalent test in House of Commons Standing Order No. 141(3). In addition, the Standing Orders require the Committee to consider whether a draft LRO gives rise to an issue under relevant criteria for consideration of statutory instruments as laid down in Standing Order No. 151(1).[17]

Adequate consultation

15. The initial consultation took place between 5 December 2006 and 5 March 2007, with 162 responses.[18] A summary follows:-

a) 80% of respondents agreed that the HSC and the HSE should merge. Those who opposed merger were concerned about the possibility of conflict between policy and delivery elements, and whether key partnerships (especially with local authorities) would be affected. The DWP has commented that recent years have seen much energy devoted to improving the relationship between the current HSE and local authorities and that its commitment to the objective of making best use of collective resources is undiminished.[19]

b) 69% favoured an entirely non-executive model. Those who opposed it favoured a mixed executive and non-executive Board on the basis that it would produce more collective and better-informed decision making.

c) 83% favoured increasing the size of the governing body to 11 members. Those against either favoured retention of the current model or thought that the increase would make decision making more difficult.

d) 96% agreed that individual enforcement and prosecution decisions should continue to be made by officials.

e) 82% agreed that a merged body should be known as the HSE. Those against were worried about confusion with the existing, subordinate organisation.

16. The positive response to the HSC consultation led to a second, Ministerial consultation which ran from August 2007 until 31 October 2007.[20] The Ministerial consultation involved 134 organisations, with responses received from 26. (Annexes A and B to the Report on the consultation set out the names of consultees and respondents). The explanatory document indicates that the low response rate probably followed from the relatively high response rate to the earlier consultation.

17. The second consultation addressed different questions from those in the first. Notwithstanding that, some respondents took the opportunity to comment on the key principles of the merger. The main areas of concern (as highlighted by the DWP) were the increase in the Board membership from nine to 11, consultation on appointments to the new Board, and whether the Board should consist entirely of non-executive members. Some respondents felt that the increase in governing body membership numbers was not large enough and would not facilitate introduction of groups who might currently be underrepresented. In addition, there was concern that the new HSE would be both partner to and statutory master of local authority enforcement bodies. There was also concern that the merger might cause budget reductions.

18. Responding to those concerns, in the Report[21] following the Ministerial Consultation, the DWP stated that executive members will be present at meetings of the new HSE Board. It also noted that the merger is not financially driven.

19. Following the Ministerial consultation, three amendments were made to the draft Order. Firstly, there is now a legislative requirement to publish the document by which the HSE Board authorises the exercise of its powers by individual members, committees and staff.[22] It is felt that this will reinforce the HSE Board's impartiality on enforcement issues.[23] Secondly, the DWP is not proceeding with the removal of an HSW Act provision that permits the withholding of all or part of reports produced in relation to investigations and inquiries. The reason is that reports are in any case already subject to the Freedom of Information Act, and removal of the provision would have created an inconsistency. Thirdly, a requirement to observe Better Regulation principles of the LRRA will not be included in the Order. Instead, the principles will be incorporated into the working practices of the organisation, which will in any event be required to observe them once the Legislative and Regulatory Reform (Regulatory Functions) Order 2007 comes into force.[24]

20. The DWP has stated that it will develop working practices in consultation with relevant parties to ensure that there is understanding of, for example, how the HSE Board will challenge the senior management team and how information exchange with local authorities will be different (both of these matters having been raised in the consultation).

21. We therefore believe that the proposal has been the subject of, and taken appropriate account of, adequate consultation.

22. DWP states that legislation is necessary to effect the changes. We agree.

Compliance and appropriateness

23. We consider that the draft Order is appropriate for delegated legislation.

24. Section 2(4)(c) of the Legislative and Regulatory Reform Act 2006 specifically permits transfer of functions between bodies. As required by section 2, the proposal neither confers any new regulatory function nor abolishes an existing one. Paragraph 3.7 of the August 2007 consultation document states that: "a few changes will be made to the functions and powers of the new Executive". These are explained in Annex 2 to Appendix B. The substantive changes all have the effect of improving accountability, control or working practices, and there is no proposal for any overall expansion of functions or powers beyond those of the current HSE and HSC. There do not, therefore, appear to us to be any concerns about the proposed changes.

25. In light of the reasoning for the draft Order set out above (which are given more fully in the consultations and explanatory document and which have been expanded on in the responses to the Committee's questions contained in the appendices to this Report), we are satisfied that the proposal would indeed serve the section 2 purpose of securing that regulatory functions are exercised to comply with principles of transparency, accountability, proportionality, consistency, and targeting.

Proportionality

26. The proposed provisions are limited to giving effect to the merger. There would be no change in substantive health and safety law or in enforcement. All rights and liabilities of the HSC and the current HSE would be transferred in their entirety to the new HSE, and no statutory functions would be created or removed. (Section 2(6) of the LRRA in any case prevents LROs being used to effect such change).

27. We agree that the draft Order is proportionate to the policy objectives.

Balance of interests

28. The majority of respondents to the first consultation believed that increased consultation with key stakeholders when populating the new HSE Board would be a positive step in the public interest. Respondents also felt that the proposal would allow the new HSE to operate more effectively. Staff members in the service of the existing HSE would have their terms and conditions transferred to the new Executive. We agree that the draft Order maintains a fair balance between competing interests.

Preservation of necessary protection and exercise of rights and freedoms

29. There will be no substantive change in health and safety law and we therefore agree that the proposed Order does not remove any necessary protection and does not interfere with the exercise of rights and freedoms.

Constitutional significance and Territorial Extent

30. The provisions of the draft Order are of no constitutional significance.

31. Health and safety is a topic reserved to the UK Parliament under the devolution settlement, and there are no seats on the current HSC for members from the devolved authorities. However, the draft LRO proposes that the HSW Act be amended to allow the Secretary of State, if he so wishes, to appoint members of the new HSE after consultation with the Welsh and Scottish Ministers.[25] Since the Welsh and Scottish Ministers are not obliged to respond to consultation, their consent is not required to the proposed LRO, but as a matter of practice they have been consulted and are content with the LRO. Section 9 of the LRRA prohibits an LRO from making provisions that are within the legislative competence of the Scottish Parliament unless they are consequential, supplementary, incidental or transitional. The proposed changes to the Scotland Act 1998 that are contained in the LRO are of such nature. Except for the few minor provisions referred to in section 84(1), the HSW Act does not extend to Northern Ireland and no proposed change to the arrangements for Northern Ireland is contained in the LRO.

Compatibility with EU obligations

32. The Minister has stated that the provisions of the proposed Order are compatible with EU obligations and the European Convention on Human Rights.[26] We agree.

Standing Order No. 151(1) issues

33. We are required to determine whether the special attention of the House should be drawn to the draft Order on a number of grounds. Broadly, these amount to: whether the draft Order imposes a charge on public revenue; whether it seeks to avoid challenge in the courts; whether it purports to have retrospective effect; whether there was unjustifiable delay in the laying of it before Parliament; whether there is doubt that it is intra vires or makes unusual or unexpected use of powers; whether there is need for elucidation; and whether it suffers from defective drafting. We do not consider that any such issues arise.

17 See paragraph 33 of this Report Back

18 See Annex 1 to the DWP letter of 12 February 2008 for the identities of the consultees. The letter is at Appendix B to this Report. Back

19 See Report on Ministerial Consultation, paragraph 13, cited in full at footnote 21 Back

20 http://www.dwp.gov.uk/publications/dwp/2007/hsmerger/hs-at-work.pdf Back

21 http://www.dwp.gov.uk/publications/dwp/2007/hsmerger/hse-consult-report.pdf Back

22 Paragraph 9(5) of proposed replacement Schedule 2 to the HSW Act (see page 10 of the draft Order) Back

23 Full reasoning is given in the explanatory document, paragraphs 40-47 Back

24 Planned for 6 April 2008. A further change-exclusion of HSE power to authorise secondary legislation-is mentioned in paragraph 71 of the revised explanatory document. However, that was not connected with the consultation process. Back