Instruments reported
At the Committee’s meeting on 24 February 2021 it scrutinised a number of instruments. It was agreed that the special attention of the House of Commons should be drawn to two of those considered in accordance with Standing Orders. The instruments and the grounds for reporting them are given below. The relevant departmental memoranda are published as appendices to this report.
1S.I. 2020/1438: Reported for defective drafting and for failure to comply with proper legislative practice
Trade Preference Scheme (EU Exit) Regulations 2020
1.1The Committee draws the special attention of this House to these Regulations on the grounds that they are defectively drafted in three respects and fail to comply with proper legislative practice in one respect.
1.2These Regulations, which are subject to the negative resolution procedure, establish a UK trade preference scheme for developing countries (the Generalised Scheme of Preferences, or “GSP”) to replace the corresponding EU scheme once the Brexit transition period has ended. The GSP comprises three frameworks, each of which covers different countries and goods and has different rules for determining the applicable rates of import duty.
1.3Part 7 contains the main provisions governing the Enhanced Framework, including the criteria for eligibility and, at regulation 17, the process for applying to be part of that framework. Regulation 17(2) requires the Secretary of State to notify the applicant country of the outcome of its application in accordance with regulation 17(4), which envisages three possible outcomes: the applicant country (a) has not met the key criteria for eligibility; (b) has met them but is required to take further steps to participate; or (c) has met them and is not required to take any further steps. Where further steps are required, regulation 17(5) provides that the Secretary of State must notify the applicant country if it has satisfactorily taken those steps. Notifications under regulation 17(4)(a) and (c) must include reasons for the Secretary of State’s decision; there is no similar requirement for notifications under regulation 17(4)(b) and (5). The Committee asked the Department for International Trade to explain the discrepancy. In a memorandum printed at Appendix 1, the Department explains that it requires reasons only when a final determination has been made and a country has reached the end of the application process. It asserts that regulation 17(4)(b) anticipates a further notification under regulation 17(4)(c) (presumably where regulation 17(5) applies, although the Department does not expressly say so), and that “it is expected that the Secretary of State will provide reasons for the determinations” in that notification. The Committee remains concerned that it is not sufficiently clear that the “further notification” to which regulation 17(5) refers is a notification with reasons in accordance with regulation 17(4)(c). It is also of the view that, as a matter of principle, it is as important for reasons to be given for an interim decision as for a final one. The Committee accordingly reports regulation 17(4)(b) and (5) for defective drafting.
1.4Regulation 21 permits the Secretary of State to publish a suspension or a variation notice to suspend a country from the GSP, suspend the preferential import rate on specified goods from a GSP country or vary a preferential import rate. Regulation 26 sets out the procedure that must be followed before such a notice is published. Regulation 26(2)(b) creates an exception to this requirement “in a case where regulation 21(4) applies”. The Committee asked the Department to explain what difference these words are intended to make, given that regulation 21(4) is an interpretation provision. In its memorandum, the Department acknowledges the error (the cross-reference should have been to regulation 21(2)(b)) and undertakes to correct it as soon as practicable. The Committee welcomes the undertaking and accordingly reports regulation 26(2)(b) for defective drafting, acknowledged by the Department.
1.5The Committee also asked the Department to provide the paragraph number that appears to be missing at the end of paragraph 7(a) of Schedule 4 to the Regulations. In its memorandum, the Department acknowledges the error (the cross-reference should have been to paragraph 2 of Schedule 4) and undertakes to correct it as soon as practicable. The Committee welcomes the undertaking and accordingly reports paragraph 7(a) of Schedule 4 for defective drafting, acknowledged by the Department.
1.6The Committee noticed a large number of minor errors in the instrument (as set out in the table in Annex 2). It asked the Department to explain why these were not identified and corrected at proofreading stage. The Department acknowledges and apologises for the errors, which it asserts were “due to the pressures of finalising legislation for the end of the Transition Period”. It undertakes to rectify these errors, as appropriate, as soon as practicable. The Committee of course appreciates the enormity of the necessary preparations for the end of the Transition Period and the pressures on all involved. But pressure of time can never amount to an acceptable excuse for making bad law. Even obvious typographical and similarly small-scale errors can be a source of confusion and even misunderstanding for readers of legislation, who are entitled to expect that legislation will not be enacted until it has been thoroughly checked. The Committee accordingly reports these Regulations for failure to comply with proper legislative practice due to the prevalence of minor drafting errors, acknowledged by the Department.
1.7(The Department also provides a helpful explanation of when regulation 11(5)(b) is intended to apply, in response to the Committee’s question on that point.)
2S.I. 2020/1545: Reported for defective drafting
Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020
2.1The Committee draws the special attention of this House to these Regulations on the ground that they are defectively drafted in three respects.
2.2These Regulations, which are subject to the negative resolution procedure, amend several pieces of VAT legislation to make changes that are necessary as a result of Brexit, and in particular to implement the Protocol on Ireland/Northern Ireland to the Withdrawal Agreement between the United Kingdom and the European Union.
2.3Regulation 30 amends the Value Added Tax (Special Provisions) Order 1995 (S.I. 1995/1268), including by amending article 12—which provides for VAT relief on imported works of art, antiques and collectors’ items—and inserting a new article 12A. Article 12, as amended, excludes VAT relief where a person takes possession of those goods in Great Britain or the Isle of Man and they are removed to Northern Ireland. Article 12A modifies article 12 so that it applies where the goods are removed from Northern Ireland to Great Britain. The amendment and the modification are clearly incompatible, but there appeared to the Committee to be no express provision setting out the circumstances in which article 12A is intended to apply. It asked the Treasury to explain. In a memorandum printed at Appendix 2, Her Majesty’s Revenue and Customs (replying on behalf of the Treasury), asserts that “the intention is that the modifications in new article 12A are to apply in the circumstances set out in that provision, namely where goods are removed from Northern Ireland to Great Britain”. The Committee accepts that this must be the intention (and that a court would be forced to construe the conflicting provisions in that way), but the provision as drafted does not achieve it. It should have been expressly stated that where the goods in question are removed from Northern Ireland to Great Britain, the modifications in article 12A apply and not the amendments in article 12; the heading to new article 12A is inert and cannot achieve that substantive effect. Without such express provision, both the amendments to article 12 and the modifications to it made by new article 12A apply simultaneously and are contradictory. The Committee accordingly reports regulation 30 for defective drafting.
2.4Regulation 74 amends the Value Added Tax Regulations 1995 (S.I. 1995/2518) by inserting a new Part 16ZA, which provides for importations, exportations and removals in respect of Northern Ireland. New regulation 133E provides for VAT relief on cars bought by “any person” in Northern Ireland and later exported. New regulation 133D makes similar provision for overseas visitors. Both new regulations contain the same definition of “overseas visitor”. As the term itself is only used in regulation 133D, the Committee asked the Department to confirm that the definition in regulation 133E(3) is unnecessary. In its memorandum, the Department acknowledges the error and undertakes to correct it at the next available opportunity. The Committee welcomes the undertaking and accordingly reports regulation 74 (inserted regulation 133E(3)) for defective drafting, acknowledged by the Department.
2.5New regulation 133G (also inserted by regulation 74) provides for the revocation of zero-rating where a taxable person: (a) fails to comply with an obligation; or (b) fails to provide correct information. The Committee asked the Department to confirm that the words “unless the taxable person can satisfy the Commissioners that there was a reasonable excuse for the failure to comply or the failure to provide the correct information, as appropriate” should appear after—rather than in—paragraph (b) so as to modify both paragraphs. In its memorandum, the Department acknowledges the error and undertakes to correct it at the next available opportunity. The Committee welcomes the undertaking and accordingly reports regulation 74 (inserted regulation 133G) for defective drafting, acknowledged by the Department.
Published: 26 February 2021 Site information Accessibility statement