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.
COMPETITION
BILL [HL]
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."
Rules
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.
Recommendation
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.
PUBLIC PROCESSIONS ETC. (NORTHERN IRELAND) BILL [HL]
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.
Recommendation
19. There is
nothing else in the bill which the Committee wishes to draw to
the attention of the House.
HUMAN RIGHTS BILL [HL]
Introduction
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.
Recommendation
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 (http://www.parliament.uk), where further information about the work of the Committee is also available. Back
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