This is a House of Lords and House of Commons Committee joint report.
At its meeting on 21 February 2024 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 six of those considered. The instruments and the grounds for reporting are given below. The relevant departmental memoranda are published as appendices to this report.
Procedure: Made negative
1.1The Committee draws the special attention of both Houses to these Regulations on the ground that there is doubt as to whether they are intra vires in one respect.
1.2These Regulations amend a range of legislation dealing with organic products, hops and poultry meat by extending the applicable grace period so that requirements in retained EU law, now “assimilated law”, continue to apply in relation to Great Britain until 1 February 2025. One of the enabling powers is section 38(5) of the Agriculture Act 2020. Section 39 of the 2020 Act requires consent from the Scottish Ministers, Welsh Ministers and DAERA where regulations are made by the Secretary of State and contain provision that is within the legislative competence of the Scottish Parliament, the Senedd Cymru and the Northern Ireland Assembly respectively. The Committee asked the Department for Environment, Food and Rural Affairs to explain whether it considered that consent was required and whether consent was obtained before these Regulations were made.
1.3In a memorandum printed at Appendix 1, the Department explains that consent was not obtained as the Department considered that the Regulations made provision in relation to the reserved matters of international relations and import and export control. The Committee queries this analysis.
1.4In relation to Scotland, the reserved matter relating to international trade is found under the heading “Foreign affairs etc.” in paragraph 7 of Part 1 of Schedule 5 to the Scotland Act 1998 as follows—
International relations, including relations with territories outside the United Kingdom, the European Union (and their institutions) and other international organisations, regulation of international trade, and international development assistance and co-operation are reserved matters.
1.5Taking the ordinary meaning of the words used (see Imperial Tobacco Ltd v Lord Advocate [2012] UKSC 61), “international relations” would not appear to encompass export and import, especially given the specific reserved matter of import and export.
1.6The Committee was more concerned about whether these Regulations fell into the reservation dealing with import and export control (Section C5 of Schedule 5 to the 1998 Act), which is as follows—
Import and export control
The subject-matter of the Import, Export and Customs Powers (Defence) Act 1939.
Prohibition and regulation of the import and export of endangered species of animals and plants.
Exceptions
Prohibition and regulation of movement into and out of Scotland of—
(a) food, animals, animal products, plants and plant products for the purposes of protecting human, animal or plant health, animal welfare or the environment or observing or implementing obligations under the Common Agricultural Policy, and
(b) animal feeding stuffs, fertilisers and pesticides (including anything treated as if it were a pesticide by virtue of section 16(16) of the Food and Environment Protection Act 1985) for the purposes of protecting human, animal or plant health or the environment.
1.7The 1939 Act deals with the import and export of goods, however, animals and plants were not taken to fall within the controls on “goods” and therefore the second reserved matter of endangered species of animals and plants was inserted (see the Explanatory Notes to the 1998 Act). This instrument does not deal with endangered species of animals or plants and the definition of “organic products” in article 1(2) of Regulation 834/2007, which is relevant for regulation 2 and 4 of this instrument, includes live agricultural products. These plant products would therefore not appear to be covered by the 1939 Act and would appear to fall within the legislative competence of the Scottish Parliament. Even if this were not the case, it is also very possible for products that would be covered by this instrument to come within the exceptions outlined in (a) and (b) above. For these reasons, the Committee doubts whether the reserved matter of import and export is sufficient in the context of this instrument and as a result, it would appear that consent was required before making this instrument. The Committee accordingly reports this instrument for doubt as to whether it is intra vires.
Procedure: Made Negative
2.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.
2.2These Regulations make changes that are consequential to the Non-Domestic Rating Act 2023 and update several out-of-date statutory references concerning non-domestic rating.
2.3Regulation 6 amends regulation 4(2)(b)(i) of the Non-Domestic Rating (Payment of Interest) Regulations 1990 (S.I. 1990/1904), to substitute a reference to “Part 4A” for “Part 4” of the Financial Services and Markets Act 2000. However, article 4 of the Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472) had already provided that all references in subordinate legislation to Part 4 of that Act were replaced by references to Part 4A. The Committee asked the Department for Levelling Up, Housing and Communities to explain.
2.4In a memorandum printed at Appendix 2, the Department explains that it overlooked S.I. 2013/472 and acknowledges that regulation 6 is not required, and will be revoked.
2.5The Committee accordingly reports regulation 6 for defective drafting, acknowledged by the Department.
Procedure: Not subject to parliamentary procedure
3.1The Committee draws the special attention of both Houses to this Order on the ground that it fails to comply with proper legislative practice in one respect.
3.2This Order designates Customs Site No. 3 Liverpool as a special area for customs purposes (a “free zone”), and appoints Colloids Limited as the responsible authority for it, under section 100A of the Customs and Excise Management Act 1979.
3.3Under article 5(j), one of the conditions imposed on the responsible authority is to take reasonable steps to ensure that no unauthorised activity is carried out in the free zone. The term “unauthorised activity” is not defined in the Order, nor in the enabling legislation, the Customs and Excise Management Act 1979. The Committee asked His Majesty’s Revenue and Customs to explain what was meant by this term.
3.4In a memorandum printed at Appendix 3, the Department explains that “unauthorised activity” means an activity specified in regulation 3(2)(b)(v) or 3(2)(c) of the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 (S.I. 2018/1249) that is not carried out in accordance with an authorisation or approval under those Regulations.
3.5While the Committee considers that the reader of this Order may reach the same conclusion, it is not immediately apparent, and requires having to look at a number of different legislative instruments to identify the likely intention. Where the intention is for a term to refer to a particular legislative provision, it is better practice to specifically identify that provision in order to avoid any confusion. In the Committee’s view the provision should have been identified in this case, and the Committee accordingly reports article 5(j) for failure to comply with proper legislative practice.
Procedure: Made Negative
4.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.
4.2These Regulations relate to the Register of Overseas Entities created by the Economic Crime (Transparency and Enforcement) Act 2022. The Register displays the beneficial ownership information of overseas entities that own or buy land within the United Kingdom. The intention behind these Regulations is to exempt certain pension schemes from particular requirements contained in the 2022 Act.
4.3Regulation 2 defines the pension schemes that are to benefit from these exemptions as those having at least 250 beneficiaries. Regulation 3 exempts a pension scheme “which is a person” from the requirement to provide additional information. The Committee asked the Department for Business and Trade to explain what the phrase was meant to include. In a memorandum printed at Appendix 4, the Department explains that the enabling power for regulation 3 only allows the exclusion of “persons” and therefore the inclusion of “which is a person” only catches pension schemes that are legal or natural persons.
4.4The enabling Act provides that regulations may specify “a person of a description” (paragraph 9(1) of Schedule 6 to the 2022 Act). The Committee does not agree, without more, that “person” only entails legal or natural persons. Neither the instrument nor the enabling Act provides a definition for “person” and therefore, the definition in the Interpretation Act 1978 will apply. Schedule 1 provides that the word “person” includes “a body of persons corporate or unincorporate”. This is a non-exhaustive definition and whilst the definition applies “unless the contrary intention appears”, there does not appear to be any contra-indication in the 2022 Act that would result in the definition not applying. If the Department wished to narrow “persons” to only legal or natural persons, this policy intention has not been achieved by the instrument.
4.5However, the Committee is unclear whether the Department intended to exclude any pension scheme by adding those words. In contrast to regulation 3, regulation 4 provides an exemption simply for “pension schemes” (as defined by regulation 2). And yet, the Explanatory Memorandum does not distinguish between pension schemes that fall within regulation 3 and those that fall within regulation 4, merely providing that “large pension schemes” are exempted from requirements. The same is true of the Government’s guidance, which simply refers to these Regulations exempting “large pension schemes” (Guidance for the Registration of Overseas Entities on the UK Register of Overseas Entities: Technical guidance for registration and verification, section 3.10). There is no indication that there may be pension schemes that fall within the definition of a “pension scheme” in regulation 2, which nonetheless do not benefit from regulation 3. This indicates to the Committee that the words “which is a person” may not in fact except any pension scheme from benefitting from that provision. The result is that regulation 3 contains an unnecessary element of confusion in a context where failure to comply with the related requirements is a criminal offence. The Committee accordingly reports regulation 3 for defective drafting.
Procedure: Made Negative
5.1The Committee draws the special attention of both Houses to these Regulations on the grounds that they are defectively drafted in one respect and require elucidation in one respect.
5.2These Regulations amend the requirements for certain official documents to accompany goods on entry into Great Britain and for the performance of official controls in relation to some categories of animals, plants and other goods.
5.3Regulations 5 to 8 amend the Trade in Animals and Related Products Regulations 2011 and corresponding legislation in Wales and Scotland (S.I. 2011/2379 and S.I. 2012/177) so that certain categories of products of animal origin, animal by-products and derived products will be required to be accompanied by a commercial document containing specified information, while the remainder will be required to be accompanied by a UK health certificate in the form published online. The products that fall within the former are those that meet the conditions in sub-paragraph (1A) or are listed in sub-paragraph (1B). One of the products listed in sub-paragraph (1B) is a dairy product or colostrum-based product that has been subject to a heat treatment referred to in Section 9 of Annex 3 to Regulation 853/2004. As there is no heat treatment defined in Section 9, the Committee asked the Department for Environment, Food and Rural Affairs to explain. In a memorandum printed at Appendix 5, the Department explains that the relevant regulations should have instead referred to Section 4 of Annex 3. The Committee accordingly reports regulations 5(3)(c), 6(3)(c), 7(3)(c) and 8(3)(b) for defective drafting acknowledged by the Department.
5.4Regulation 7 amends the Welsh language text of S.I. 2011/2379 and contains an error confirmed by the Department. The Committee asked the Department to explain what arrangements are in place to ensure that the Welsh language contained in regulation 7 and Schedule 3 is accurate. The Committee have previously been provided with an assurance by the Wales Office in relation to the draft National Assembly for Wales (Representation of the People) (Amendment) Order 2016 (see the Committee’s Seventeenth Report of Session 2015–16). In its memorandum, the Department explains that it has put in place arrangements that ensure a high level of assurance in respect of the standard of Welsh legislative text included in legislation. This is externally checked by bilingual legislative text editors. In this instance, the Department used the Foreign, Commonwealth & Development Office’s translation services. The Committee is grateful for this information and accordingly reports this instrument for requiring elucidation, provided by the Department’s memorandum.
Procedure: Made Negative
6.1The Committee draws the special attention of both Houses to these Regulations on the ground that they are defectively drafted in one respect.
6.2These Regulations amend the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012. Paragraph 8(9) of Schedule 1 to the 2012 Regulations lists matters that are to be disregarded when assessing a person’s income. Regulation 5(2)(f)(i) amends that list by adding payments from “the Victims of Overseas Terrorism Compensation Scheme”. As paragraph 8(10)(a) contains a similar list of payments to be disregarded when calculating income, the Committee asked the Department for Levelling Up, Housing and Committees to explain whether the policy intention had been to also include payments from the Scheme into that list.
6.3In a memorandum printed at Appendix 6, the Department confirms the omission and explains that the amendment will be made for future financial years. The Department further explains that it is too late to make the amendment for this financial year due to duties placed on billing authorities and that it will instead write to all billing authorities in England to remind them of their discretionary powers under council tax legislation to reduce the council tax of individual taxpayers as they see fit. This may of course lead to some billing authorities not exercising that discretion. Be that as it may, the Committee reports regulation 5(2) for defective drafting, acknowledged by the Department.
At its meeting on 21 February 2024 the Committee considered the instruments set out in the Annex to this Report, none of which were required to be reported to both Houses.
S.I. Numbers |
S.I. Title |
Draft |
Data Protection Act 2018 (Amendment of Schedule 2 Exemptions) Regulations 2024 |
Draft |
National Minimum Wage (Amendment) (No. 2) Regulations 2024 |
Draft |
Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024 |
Draft |
Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2024 |
S.I. Numbers |
S.I. Title |
S.I. 2024/45 |
Biodiversity Gain Site Register Regulations 2024 |
S.I. 2024/48 |
Biodiversity Gain Requirements (Irreplaceable Habitat) Regulations 2024 |
S.I. 2024/50 |
Biodiversity Gain (Town and Country Planning) (Modifications and Amendments) (England) Regulations 2024 |
S.I. 2024/58 |
Criminal Legal Aid (General) (Amendment) Regulations 2024 |
S.I. 2024/62 |
Criminal Procedure (Amendment) Rules 2024 |
S.I. 2024/66 |
School and Early Years Finance and Childcare (Provision of Information About Young Children) (Amendment) (England) Regulations 2024 |
S.I. 2024/78 |
Immigration (Restrictions on Employment and Residential Accommodation) (Codes of Practice) (Amendment) Order 2024 |
S.I. 2024/80 |
Retained EU Law (Revocation and Reform) Act 2023 (Consequential Provision) Regulations 2024 |
S.I. 2024/101 |
Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2024 |
S.I. 2024/120 |
Official Controls (Import of High-Risk Food and Feed of Non-Animal Origin) (Amendment of Commission Implementing Regulation (EU) 2019/1793) (England) Regulations 2024 |
S.I. Numbers |
S.I. Title |
Draft |
County Durham (Electoral Changes) Order 2024 |
S.I. Numbers |
S.I. Title |
S.I. 2024/40 |
Building Safety Act 2022 (Commencement No. 6) Regulations 2024 |
S.I. 2024/44 |
Environment Act 2021 (Commencement No. 8 and Transitional Provisions) Regulations 2024 |
S.I. 2024/84 |
Income Tax (Indexation of Blind Person’s Allowance and Married Couple’s Allowance) Order 2024 |
1)The Committee has asked the Department for Environment, Food and Rural Affairs for a memorandum on the following point(s):
1. Explain whether the Department considered that consent was required under section 39(2) of the Agriculture Act 2020 (and if not why not).
2. Explain whether consent was obtained before these Regulations were made.
2)Under section 39(2) of the Agriculture Act 2020 (“the Act”) the Secretary of State may only make regulations under section 38 of the Act containing provision within devolved legislative competence with the consent of the relevant devolved authority.
3)Section 39(1)(b) of the Act refers to the Scottish Ministers, (c) the Welsh Ministers and (d) to DAERA.
4)Consent was not obtained from the relevant authorities referred to in section 39(1) of the Act before SI 2023/1246 was made. This is because the Department considers this SI to make provision in relation to a reserved matter (international relations and trade). Schedule 5 of the Scotland Act 1998 sets out reserved matters in relation to Scotland which include international relations (Part 1, para 7) and import and export control (Part 2, section C5). Section 108A of the Government of Wales Act 2006 sets out reserved matters in relation to Wales at Schedule 7A which include international relations (Part 1, para 10) and the regulation of import and export control (Part 2, Section C5, para 71).
5)Two previous Statutory Instruments extended grace periods for marketing standards and organics checks and relied on powers under s38(5) of the Act in the same manner:
i. The Common Organisation of the Markets (Marketing Standards and Organics Products) (Transitional Provisions) (Amendment) Regulations 2021 (S.I. 2021/1396); and
ii. The Common Organisation of the Markets in Agricultural Products (Marketing Standards and Organic Products) (Transitional Provisions) (Amendment) Regulations 2022 (S.I. 2022/609).
Department for Environment, Food and Rural Affairs
6 February 2024
1)The Committee has asked the Department for Levelling Up, Housing and Communities for a memorandum on the following point(s):
Explain why regulation 6 is required, given that article 4 of S.I. 2013/472 provided that references in subordinate legislation to Part IV of the Financial Services and Markets Act 2000 were replaced by references to Part 4A of that Act.
2)The Department overlooked S.I. 2013/472 and acknowledges that regulation 6 is not required. The Department acknowledges that this was a drafting error, apologises and is grateful to the committee for drawing it to the Department’s attention.
3)The Department plans to lay a further amending instrument relating to non-domestic rating in April and will use that opportunity to revoke regulation 6. That instrument will be offered free of charge to all known recipients of the instrument and contain the appropriate headnote.
Department for Levelling Up, Housing and Communities
5 February 2024
1)The Committee has asked His Majesty’s Treasury for a memorandum on the following point:
In relation to article 5(j), explain what is meant by “unauthorised activity”.
2)This memorandum has been prepared by His Majesty’s Revenue and Customs on behalf of His Majesty’s Treasury.
3)An ‘unauthorised activity’ under article 5(j) of The Free Zone (Customs Site No. 3 Liverpool) Designation Order 2023 means an activity specified in regulation 3(2)(b)(v) or 3(2)(c) of the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 (S.I. 2018/1249) that is not carried out in accordance with an authorisation or approval under those Regulations.
His Majesty’s Revenue and Customs
6 February 2024
1)The Committee has asked the Department for Business and Trade for a memorandum on the following point(s):
In regulation 3, explain what is meant by “which is a person”.
2)Regulation 3 is made under paragraph 9(1) of Schedule 6 to the Economic Crime (Transparency and Enforcement Act) 2022 (the ECTEA):
The Secretary of State may by regulations provide that, for the purposes of any provision of this Schedule specified in the regulations, a person of a description so specified is not to be treated as a registrable beneficial owner of an overseas entity.
3)The power is limited and may only be used to exclude a “person”. Schedule 2 to the ECTEA defines what constitutes a “registrable beneficial owner” as individuals, legal entities and governments or public authorities. The word “person” in paragraph 9(1) of Schedule 6 therefore refers to the legal and natural persons who could be registrable beneficial owners.
4)Pension schemes may be formed in many different ways, some of which may not be a “person” under paragraph 9(1) of Schedule 6. Therefore regulation 3 was drafted to only include those pension schemes which are persons.
Department for Business and Trade
31 January 2024
1)The Committee has asked the Department for Environment, Food and Rural Affairs for a memorandum on the following points:
1. In relation to regulation 7(3)(c), inserting new sub-paragraph (1A), confirm that “yn is-baragraff (1)(b)(i)(bb)” should be “yn is-baragraff (1)(ba)(i)(bb)”.
2. Explain what arrangements are in place to ensure that the Welsh language contained in regulation 7 and Schedule 3 is accurate, noting the previous assurances provided by the Wales Office in a voluntary memorandum to the Committee in relation to the draft National Assembly for Wales (Representation of the People) (Amendment) Order 2016 (see the Committee’s Seventeenth Report of Session 2015–16).
3. Explain whether the reference to “heat treatment referred to in point 2(1) of Chapter 2, Section 4 of Annex 3 to Regulation 853/2004” should instead refer to Section 9 of Annex 3 (regulation 5(3)(c) inserting new sub-paragraph (1B)(b), regulation 6(3)(c) inserting new sub-paragraph (1B)(b), regulation 7(3)(c) inserting new sub-paragraph (1B)(b) and regulation 8(3)(b) inserting new sub-paragraph (3B)(b)).
Response to point 1
2)The Department acknowledges that this was a typographical error and that the insertion of new sub-paragraph (1A) in regulation 7(3)(c) should refer to “yn is-baragraff (1)(ba)(i)(bb)”. The Department is seeking to correct this at the earliest opportunity.
Response to point 2
3)The Department has put in place arrangements that ensure a high level of assurance in respect of the standard of the Welsh legislative text it includes in legislation and that this is externally checked by bilingual legislative text editors to ensure the equivalence of the English and Welsh texts. In relation to this instrument, the Department used the Foreign, Commonwealth & Development Office’s translation services for the translation, who have extensive experience in providing translations of legislative texts. The translation was externally checked in accordance with the process set out above.
Response to point 3
4)The Department acknowledges that this was a typographical error and that point 2(1) of Chapter 2, Section 9 of Annex 3 to Regulation 853/2004 should have been referred to and not point 2(1) of Chapter 2, Section 4. The Department is seeking to correct this at the earliest opportunity.
Department for Environment, Food and Rural Affairs
6 February 2024
1)The Committee has asked the Department for Levelling Up, Housing and Communities for a memorandum on the following point:
Explain whether “the Victims of Overseas Terrorism Compensation Scheme” should have been inserted into paragraph 8(10)(a) of Schedule 1 to S.I. 2012/2885 (in light of the amendment made by regulation 5(2)(f)(i)).
2)The Department accepts that this was an oversight and that a reference to this scheme should also have been inserted into paragraph 8(10)(a) of Schedule 1. The Department is grateful to the committee for drawing this to its attention and will look to rectify the error at the next available opportunity.
3)Billing authorities must have their council tax reduction schemes (or revised schemes) in place no later than 11 March in the preceding financial year and a scheme cannot be amended after the start of a financial year. Billing authorities are currently in the final stages of preparing their schemes before approval by the full council. Therefore amending the Regulations for the financial year commencing on 1 April 2024 is not now practicable. The Department will make the amendment in the instrument which will be laid early in 2025 to make amendments for future financial years.
4)The relevant disregard of income from this scheme is in relation to the income of a non-dependant member of a household of a pension age applicant for a council tax reduction. In broad terms, under the Regulations a non-dependant is a person who resides with an applicant, or with whom the applicant resides, but who is not a member of the applicant’s family, a child to whom they are not related, etc. Pending amendment of the Regulations, the Department will write to all billing authorities in England to remind them of their discretionary powers under council tax legislation to reduce the council tax of individual taxpayers as they see fit. As council tax reduction schemes cannot be amended after the start of a financial year, this is an established mechanism used by the Department and billing authorities, for example where new compensation schemes are established during that year.
Department for Levelling Up, Housing and Communities
5 February 2024
Jessica Morden, in the Chair
Lord Beith
Lord Chartres
Peter Grant
Lord Sahota
Baroness Sater
Lord Watson
Draft Report (Twelfth 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 6.3 read and agreed to.
Annex agreed to.
Papers were appended to the Report as Appendices 1 to 6.
Resolved, That the Report be the Twelfth Report of the Committee to both Houses.
Ordered, That the Chair make the Report to the House of Commons and that the Report be made to the House of Lords.
Adjourned till Wednesday 28 February at 3.40 p.m.