At its meeting on 18 March 2020 the Committee scrutinised a number of instruments in accordance with Standing Orders. It was agreed that the special attention of both Houses should be drawn to three of those considered. The instruments and the grounds for reporting them are given below. The relevant departmental memoranda, are published as appendices to this report.
1.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in two respects.
1.2These Regulations establish a scheme for payments to be made to persons living with permanent disablement caused by a Troubles-related incident in Northern Ireland. It appeared to the Committee that some wording was missing from regulation 49(3) (inserted paragraph 1(a)) and the Committee asked the Northern Ireland Office to explain. In a memorandum printed at Appendix 1, the Department confirms that the wording “is incapable” should be added after “person” in paragraph 1(a) and undertakes to make an amending instrument before the provision comes into force. The Committee accordingly reports regulation 49(3) for defective drafting, acknowledged by the Department.
1.3The Committee also asked the Department to explain why regulation 34(1) does not allow appeal against a determination under regulation 43. In its memorandum, the Department explains that it is the policy intention that where a review is undertaken under regulation 43 and a new determination is made, that determination should be capable of being appealed under regulation 34. The Department is of the view that it is arguable that the current drafting supports that intention but concedes that the point could be clearer and undertakes to address the point in the amending instrument referred to above. The Committee sees arguments either way: it could be argued as the Department does that a new determination by virtue of regulation 43 is a new determination under the provision under which the original determination was made and is therefore capable of appeal; but it could be argued that the provision for an internal review is an alternative to appeal. The Committee is therefore pleased to note that the Department intends to amend to clarify the point. The Committee accordingly reports regulation 34 for defective drafting, acknowledged to some extent by the Department.
2.1The Committee draws the special attention of both Houses to these Regulations on the grounds that they fail to comply with proper legislative practice in one respect and that they require in elucidation in one respect.
2.2These Regulations were made on 31 January and laid before Parliament on 3 February. With the exception of Part 2, they come into force on the 21st day after the day on which they are made. This departs from the accepted convention that negative instruments should be laid before Parliament at least 21 days before they come into force. The Committee asked the Department for Business, Energy and Industrial Strategy why these Regulations did not comply with this 21-day rule. In a memorandum printed at Appendix 2, the Department acknowledges and apologises for the error. The Committee has stressed the importance of the 21-day rule as part of the access to justice arrangements of UK legislation—see the Committee’s First Special Report of Session 2017–19: Transparency and Accountability in Subordinate Legislation. The Committee accordingly reports these Regulations for failing to comply with proper legislative practice, acknowledged by the Department.
2.3Regulations 15(3) and 17(2) amend the definition of “key audit partner” so that it is no longer an exact copy-out of the definition in Directive 2006/43/EC (“the Audit Directive”), which the Regulations transpose into UK law. The Committee asked the Department to explain whether and how the new definition continues to properly implement the Audit Directive. In its memorandum, the Department confirms that it does: in the Audit Directive the terms “statutory auditor” and “audit firm” are distinct, while in the United Kingdom “statutory auditor” is used in relation to both an individual (who may be appointed as the “senior statutory auditor”) and a firm (the entity appointed as the statutory auditor). The new definition therefore reflects UK audit practice and its approach to transposing other provisions of the Audit Directive—wherein a “key audit partner” will not always be a “statutory auditor”—while remaining consistent with the Audit Directive in that it still refers to a person in an audit firm involved in statutory audits. The Committee finds this explanation helpful, and accordingly reports regulations 15(3) and 17(2) for requiring elucidation, provided by the Department’s memorandum.
3.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.
3.2These Regulations amend S.I. 2015/1544 to make provision for compensation payments to be made to gas and electricity customers when the supplier has failed to meet new performance standards. In regulation 5 (inserted regulation 6ZA(3)(a) and (c)), the standard is met if the supplier completes an action “within a period of 15 working days beginning with the day of receipt” or “no later than 32 working days from receipt” of certain information. It was not clear to the Committee whether, if the supplier received the information after working hours, time would begin to run on the calendar day that the information was received or on the next working day. It asked the Department for Business, Energy and Industrial Strategy to explain. In a memorandum printed at Appendix 3, the Department explains that in relation to this performance standard, when the supplier receives the relevant information “on a working day after working hours”, the 15 or 32-day period includes that working day. The memorandum also includes an annex by the Gas and Electricity Markets Authority (GEMA), which drafted the Regulations. GEMA asserts that new regulation 6ZA(3)(a) should be read as referring to “the calendar day of receipt … even if the information is captured by the supplier’s information systems out of normal working hours” (it does not address the Committee’s question about the 32-day period in sub-paragraph (c)). GEMA also cites its consultation document: “The 21 [later changed to 15] day period would be timed from receipt by the supplier of the last piece of information requested from the customer. If this information is sent electronically or provided over the telephone or in person by the customer, it is reasonable to consider this as being equivalent to the date on which the last information is provided to the supplier by the prospective customer” (emphasis added). It appears to the Committee that there is a difference between the Department’s explanation, which refers to information being received on a working day after working hours, and GEMA’s, which refers to information being received on a calendar day out of normal working hours—which could include a Saturday, Sunday or Bank Holiday. Whichever explanation is to be preferred as the true legislative intent, the inconsistent explanations offered show that the regulations are not presently clear beyond reasonable doubt and require amendment to clarify the point. The Committee accordingly reports regulation 5 for defective drafting.
Published: 20 March 2020