This is a report by the House of Commons Select Committee on Statutory Instruments
Select Committee on Statutory Instruments
Date Published: 15 July 2022
At its meeting on 13 July 2022 the Committee scrutinised a number of instruments in accordance with Standing Orders. It was agreed that the special attention of the House of Commons should be drawn to one of those considered. The instrument and the grounds for reporting are given below. The relevant departmental memorandum is published as an appendix to this report.
1.1The Committee draws the special attention of this House to these Regulations on the ground that they fail to comply with proper legislative practice in two related respects.
1.2These Regulations, which are subject to the negative resolution procedure, update references to preferential tariff reference documents applicable in respect of preferential trade arrangements with various countries or territories. The Regulations are made under Part 1 of the Taxation (Cross-border Trade) Act 2018 by the Treasury and the Secretary of State. The Treasury makes these regulations under section 11(1), (2) and (4), and section 11(7) states that “in considering what provision to include in the regulations, the Treasury must have regard to any recommendation made to them by the Secretary of State.” Section 28 states that in exercising any function under any provision made by or under Part 1, the Treasury and the Secretary of State “must have regard to international arrangements to which Her Majesty’s government in the United Kingdom is a party that are relevant to the exercise of the function.” Neither section 11(7) nor section 28 is cited in the preamble and the Committee asked the Department for International Trade (on behalf of the Treasury) to explain why. In a memorandum printed as an Appendix, the Department asserts that sections 11(7) and 28 specify considerations to be taken into account when making regulations but are not pre-conditions to the exercise of the power to make those regulations and that therefore it is not necessary to cite these provisions in the preamble. The Committee reads these provisions as conditions to be fulfilled, and notes that, although there has been inconsistent practice, previous instruments (notably S.I.s 2020/1457, 2021/871 and 2021/693) did cite sections 11(7) and 28 in the preamble. The Committee accordingly reports the preamble to these Regulations for failure to comply with proper legislative practice.
The Committee has considered the instruments set out in the Annex to this Report, none of which were required to be reported.
S.I. Numbers |
S.I. Title |
S.I. 2022/628 |
Customs (Miscellaneous Amendments) Regulations 2022 |
S.I. 2022/643 |
Designation of Freeport Tax Sites (Plymouth and South Devon Freeport) Regulations 2022 |
S.I. 2022/690 |
Research and Development (Qualifying Bodies) (Tax) (Amendment and Further Prescribed Bodies) Order 2022 |
S.I. 2022/723 |
Registered Pension Schemes (Authorised Member Payments) Regulations 2022 |
1. The Committee asked HM Treasury for a memorandum on the following point:
Explain why the pre-conditions in sections 11(7) and 28 of the Taxation (Cross-border Trade) Act 2018 are not recited in the preamble.
2. This memorandum has been prepared by the Department for International Trade (DIT) on behalf of HM Treasury.
3. DIT does not consider the provisions in sections 11(7) and 28 of the Taxation (Cross-border Trade) Act 2018 (“the Act”) to be pre-conditions that the Act requires before regulations can be made for the reasons set out below.
4. In DIT’s view, sections 11(7) and 28 of the Act specify considerations to be taken into account when making regulations but are not pre-conditions to the exercise of the power to make those regulations. Therefore, in DIT’s view it is not necessary to cite these provisions in the preamble.
5. Sections 11(7) and 28 can be contrasted with sections 9(3) and 17(8), both of which are cited as pre-conditions in the preamble. Sections 9(3) and 17(8) state that the “power to make regulations…is exercisable only on the recommendation of the Secretary of State”. In contrast, section 11(7) does not set a pre-condition to the actual making of regulations, but rather, specifies matters to which regard must be had in considering what provision to include in regulations. Similarly, section 28 specifies matters to which regard must be had when exercising any function under Part 1 of the Act.
6. DIT notes that section 28 is often not cited in regulations made under Part 1 of the Act. A recent example is S.I. 2021/1489 which, among other things, makes amendments to six regulations made under Part 1 of the Act, including S.I. 2020/1457, which S.I. 2022/613 amends.
Department for International Trade
5 July 2022
Jessica Morden, in the Chair
Dr James Davies
Draft Report (Fifth Report), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1.1 to 1.2 read and agreed to.
Annex agreed to.
A Paper was appended to the Report as an Appendix.
Resolved, That the Report be the Fifth Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Adjourned to a day and time to be fixed by the Chair.