5 Preconditions and tests
25. Section 3(2) of the LRRA requires the Minister
to be satisfied that the draft Order meets certain preconditions.
These are that:
- the policy objective could
not be better secured by non-legislative means;
- the effects of the proposed changes to the law
are proportionate to the policy objective;
- the proposed changes strike a fair balance between
public and private interests;
- the proposed change to the law does not deprive
anyone of a necessary protection;
- it will not prevent anyone from continuing to
exercise a right or freedom that they might reasonably expect
to continue to be allowed to do;
- it is not of "constitutional significance".
We believe that the draft Order meets all these
preconditions.
26. However, we will comment briefly on the point
about removing a necessary protection. As previously explained,[22]
the Government considers that investment decisions carry with
them an element of risk in the same vein as business enterprises
and should not be subject to extra protection. It was never the
Department's intention to regulate buy-to-let lending secured
on the property where the owner or relative intends to occupy
less than 40 per cent of the property. The Explanatory Document
remarks:
"The purpose of the proposals is to ensure that
the original policy intention is achieved. In doing so no necessary
protections are being removed".[23]
We support this view.
27. We are also required to consider the draft
Order against certain tests set out in Standing Order 141(3).
These largely restate the preconditions above, but add a requirement
for us to consider whether the idea appears to be an inappropriate
use of delegated legislation, whether the consultation has been
adequate (which we will discuss subsequently), whether the draft
order fails any of the tests applied to other types of delegated
legislation by the Joint Committee on Statutory Instruments (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 about vires or makes unusual or unexpected use of powers;
whether there is need for elucidation; and whether it suffers
from defective drafting). We must also assess whether the draft
Order appears to be incompatible with European Community law.
We conclude that the draft Order does not contravene any of
the relevant tests.
22 Para9. Back
23
ED, p28, para34. Back
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