Select Committee on Delegated Powers and Deregulation Sixth Report


  5 November 1997

  By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.


  1.    This complex bill contains many delegated legislative powers, which are outlined in the Department's memorandum, printed with this report. The bill contains four powers subject to affirmative procedure; the remaining powers (other than the commencement power in Clause 72(3)) are subject to negative procedure.

Henry VIII powers

  2.    Clause 3(2) and (3) allow the Secretary of State to amend the general exclusions set out in Schedule 3. Affirmative procedure is applied by clause 67(3).

  3.    Clause 19(2) gives the Secretary of State power to amend the list of exclusions in Schedule 1; again affirmative procedure is applied.

  4.    Clause 44(5) is a transitional power to deal with the consequences of abolishing the Monopolies and Mergers Commission and transferring its functions to the new Competitions Commission. Negative procedure applies (clause 67(4)), which the Committee considers appropriate for a transitional provision of this kind.

  5.    Clause 66 inserts a new power in the Fair Trading Act 1973 allowing the Secretary of State to extend the provisions of that Act concerning "the supply of services" to activities concerning the use of land and to make consequential amendments to the 1973 Act. This power is subject to affirmative procedure, which the Committee considers appropriate.

  6.    Clause 71 contains a wide power to make consequential and supplementary provision. Subsection 2(b) and paragraph 2(2) of Schedule 13 make it clear that this power extends to modifying enactments. The power is subject to negative procedure (clause 67(4)), which the Committee considers appropriate for a power which is limited to making consequential and supplementary provision.

Other "affirmative" powers

  7.    Clause 35(7) provides that a penalty for infringing a prohibition under Chapter I or II of the bill may not exceed 10 per cent of the turnover of the undertaking. The subsection also enables the Secretary of State by order to specify how the turnover is to be determined. The Department's Memorandum explains that affirmative procedure was thought appropriate because of the impact of an order on the amount of a penalty.

  8.    The Chapter I prohibition (on agreements preventing, restricting or distorting competition) does not apply to designated professional rules. The Secretary of State has to establish and maintain a list of such rules (paragraph 2 of Schedule 4). The list is to be established and alterations effected by orders subject to negative procedure. Paragraph 6 of Schedule 4 provides for the revocation of the designation of a set of rules. The Memorandum explains that affirmative procedure was thought appropriate for this power "since it would involve a departure from Parliament's general intention as to the treatment of professional rules under the bill."


  9.    Clause 47(2) gives the Secretary of State power to make rules with respect to appeals and appeal tribunals and Part II of Schedule 8 reveals how extensive this power is. There is nothing in the bill to make the rules a statutory instrument or to impose any form of parliamentary control, but the Memorandum states that Ministers intend to bring forward an amendment correcting this and providing negative procedure. The Committee considers that such an amendment is necessary.

Paragraph 4(3)(b) of Schedule 1

  10.    Schedule 1 is concerned with exclusions from the prohibitions in Chapters I and II of the bill. Paragraph 1 is a general exclusion of an agreement which produces a merger of two enterprises. This protection can be removed by a direction given by the Director under paragraph 4(1). The Director can only deny the exclusion to a particular merger agreement if the conditions in paragraph 4(2) are satisfied. One of these is that the agreement is not "a protected agreement". Whether an agreement is a protected agreement depends on whether it falls within a category prescribed in regulations made by the Secretary of State (paragraph 4(3)(b)). Regulations are subject to negative procedure. The Memorandum explains (paragraph 13) that Ministers hope to come forward with amendments which would set out the categories in the bill and enable this power to be dropped.


  11.    The Committee draws the attention of the House to the Henry VIII powers, which in the Committee's view are acceptable, and to the need for the promised amendment to clause 47. There is nothing else in the bill which the Committee wishes to draw to the attention of the House.


  12.    This bill applies negative procedure to all powers other than commencement powers (clauses 3(5) and 19(2)) and the power in paragraph 4 of Schedule 2, which is subject to affirmative procedure.

Henry VIII powers

  13.    There are Henry VIII powers in paragraphs 2(2) and 12(b) of Schedule 1. The first allows the variation of the number (specified in paragraph 2(1)(b)) of members of the new Parades Commission. The second allows changes to the financial year of the Commission (determined by paragraph 12(5)).

  14.    These powers are made subject to negative procedure, which the Committee considers appropriate for simple amendments of this kind.

Codes, procedural rules and guidelines

  15.    Clause 4 requires the Commission to issue a code of conduct about public processions. Clause 5 requires the Commission to issue a set of rules about the practice and procedure of the Commission. Clause 6 requires the Commission to issue a set of guidelines as to its powers under clause 8 to impose conditions of public processions. Codes, rules and guidelines which are not made by a minister raise questions about parliamentary control and the availability to the public of texts. Fortunately these questions are addressed by Schedule 2 which applies to the three types of instruments made by the Commission. The result is that Parliament will see each in draft and the draft cannot come into force unless it is the subject of an order, made by the Secretary of State, which has been approved by both Houses. A consequence of this will be that the text of the Code, rules or guidelines will be set out in the statutory instrument embodying the order.

  16.    Variations to a code, rules or guidelines are governed by different provisions in the Schedule. The only difference is that variation orders are subject to negative not affirmative procedure. The justification for relaxing parliamentary control in this way is argued in the Memorandum.

  17.    The Committee considers that this is a proper case for the initial order to be subject to affirmative procedure. There is a difficulty with amendments (variations), since while minor variations may not justify that degree of scrutiny and expenditure of parliamentary time, in the case of substantial changes the affirmative procedure might be more appropriate. The House may therefore wish to consider whether the bill should be amended to allow Ministers the option of using either the affirmative or the negative resolution procedure for variations, thereby giving appropriate flexibility for the right amount of parliamentary control.

  18.    There is a further possible cause for concern in that the subject matter of the bill is a highly sensitive area, where what to some people might seem "minor" variations might to others be amendments of the utmost importance. In the event of the negative resolution procedure being used for variations it will be for members of the House to exercise vigilance in bringing areas of particular sensitivity to the attention of the House.


  19.    There is nothing else in the bill which the Committee wishes to draw to the attention of the House.



  20.    This bill seeks to incorporate the European Convention for the Protection of Human Rights and Fundamental Freedoms into United Kingdom law. The bill is a constitutional innovation; its importance is emphasised in the White Paper "Rights Brought Home : The Human Rights Bill" (Cm 3782) which was published at the same time as the bill. The Committee's terms of reference limited its consideration of the bill to the delegated legislative powers created by the bill and to the implications of the bill for delegated legislation generally.

  21.    Clause 3 provides that, "so far as it is possible to do so", primary and secondary legislation (whenever enacted) is to be interpreted so as to produce results compatible with Convention rights. The effect of subsection (2)(c) appears to be that a court may declare invalid a provision in delegated legislation if the instrument could have been made under the enabling powers without breaching the Convention. When the fault can be traced back to the primary legislation the only remedy available is for the court to make a declaration of incompatibility under clause 4(4). In such a case the validity, continuing operation and enforcement of the instrument is not affected (clause 4(6)(a)).

Remedial orders

  22.    Another form of a declaration of incompatibility relates to circumstances where it is primary legislation alone which is found to be incompatible with the Convention (clauses 4(1) and (2)). Both kinds of declaration can lead to action under clause 10, as can a decision of the European Court of Human Rights. Under that clause a minister may by order make such amendments to primary and subordinate legislation as he thinks appropriate to remove the incompatibility which has been identified. Such an order is a "remedial order" and the width of the power can be seen from clause 11. The procedure is laid down in clause 12 and is affirmative unless the urgency of the matter requires that the order be made without waiting for the draft to be approved. In such a case the order lapses after 40 days unless previously approved by both Houses.

  23.    This is a Henry VIII power of the utmost importance, which the Committee wishes to draw to the House's attention. The House may take the view that the "fast track" procedure to remedy speedily laws which have been held by the courts to be incompatible with the Convention is necessary. The orders could, however, affect significant change in sensitive and important areas of existing law. We have noted the Lord Chancellor's statement to the House at second reading that the power could only be used under strictly limited circumstances. Without strict limitations, a secondary power of such potential width would be unacceptable. In view of the significance of the Lord Chancellor's statement we repeat his words here:

  "... the power to make a remedial order may be used only to remove an incompatibility or a possible incompatibility between legislation and the convention. It may therefore be used only to protect human rights, not to infringe them. And the Bill also specifically provides that no person is to be guilty of a criminal offence solely as a result of any retrospective effect of a remedial order."[1]

  24.    The bill, quite rightly in the Committee's view, requires the affirmative resolution procedure. This procedure, however, does not allow the House to amend an order. Given that the power has to be open-ended in order to meet any need that could arise, and that it might be used to make extensive changes to existing legislation, the House may wish to consider whether there is a case for developing a new procedure to scrutinise such orders modelled on that for the second stage parliamentary scrutiny of deregulation orders. Such a procedure could allow for a limited period in which the proposal to make a remedial order could be considered by both Houses of Parliament, with the opportunity that would give for amendments to be proposed.

  25.    The House may also wish to note that primary legislation and subordinate legislation are defined in clause 21 in terms which do not correspond to commonly accepted meanings. For example, some orders in Council are treated as primary legislation while an Act of the Parliament of Northern Ireland is treated as subordinate legislation. Some of the consequences may be surprising: for example, a court could strike down a Northern Ireland Act under clause 3 (because a declaration of incompatibility is only relevant where the fault stems from the enabling legislation and this can hardly be the case where the subordinate legislation is itself an Act).

Other significant delegated powers

  26.    There are Henry VIII powers in clauses 1(4), 14(5), 15(5) and 16(7). Orders under clause 1(4) are subject to affirmative procedure. Orders under clause 14(5), 15(5) or 16(7) have to be laid before Parliament but are not subject to parliamentary control.

  27.    All these powers are concerned with amendments to the bill to take account of changes in the United Kingdom's position with respect to the Convention and its protocols. Clause 1(4) is concerned with new protocols. Clause 14 is concerned with derogations, the 1988 derogation from Article 5(3) (right of person arrested to be brought promptly before a judge) is set out in Part 1 of Schedule 2. Clause 15 is concerned with reservations (the United Kingdom's existing reservation is set out in Part II of Schedule 2). Clause 16 is concerned with the period during which a derogation is to have effect.

  28.    Although the powers under clauses 14 (5), 15(5) and 16(7) are not subject to parliamentary control the Committee considers this appropriate as the powers are, in effect, consequential and limited to adapting the text of the bill to match changed international obligations. Parliament will, however, have control over derogations (see paragraph 29 below).

  29.    Clause 14(1)(b) provides that any future derogation shall have effect for the purposes of the bill only if designated for the purpose in an order made by the Secretary of State. Such an order expires after 40 sitting days unless approved by both Houses (clause 16(3)). The existing derogation ceases to have effect for the purpose of the bill five years after the commencement of clause 1(2) unless extended by order for a further five years. A new derogation has effect for the purposes of the bill for five years from the date of the designating order. Its life can be extended for a further five years by order. There can be further extensions of any derogation. Any extension order is subject to affirmative procedure (clause 20(3)).

  30.    The Committee considered whether there was a risk that this arrangement for five year extensions might lead to a derogation remaining in force for the full period even though the need for it had ceased earlier. Ministers will no doubt be able to assure the House that there is in place machinery for the need for derogations to be under frequent review, and that as soon as the need ends the derogation will be withdrawn.

  31.    There is power to make procedural rules in clause 2(3). Rules are needed to support subsection (2) of that clause, which provides that Strasbourg decisions may be put in evidence here "in such manner as may be provided by rules." In the case of courts the rules are rules of court made under existing powers. In the case of tribunals, the rules are to be made by the appropriate Minister. There is nothing in the bill to require these rules to be made by statutory instrument or to subject them to parliamentary control.

  32.    A similar omission affects the more significant power to make rules conferred by clause 7(8). These rules will determine which courts have jurisdiction in proceedings against a public authority under clause 6.

  33.    The Memorandum states that Ministers intend to bring forward an amendment correcting this and providing negative procedure. The Committee considers that such an amendment is necessary.

Other powers

  34.    Clause 5(1) extends existing powers to make rules of court to cover the procedure for giving the notice required by that provision.

  35.    Clause 18(8) allows provision to be made by order to resolve the problems (pension rights, limits on number of judges) which could arise if judges serve for a time in Strasbourg. Orders are subject to negative procedure (clause 20(4)).

  36.    There is a commencement power in clause 22. As usual it is not subject to Parliamentary control.


  37.    Despite the immense constitutional significance of this bill, it contains no other delegated powers which the Committee wishes to draw to the attention of the House.[2]

1   House of Lords Deb., 3 November 1997, col. 1231. Back

2   This report is also published on the Internet at the House of Lords Select Committees Home Page (, where further information about the work of the Committee is also available. Back

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Prepared 6 November 1997