Select Committee on Delegated Powers and Deregulation Special Report



51.  The Deregulation and Contracting Out Act 1994 provides a two-stage process for the parliamentary scrutiny of deregulation orders. A document containing the proposal is laid under section 3(3) of the Act in the form of a draft of the order, together with explanatory material;[37] and we and the Commons equivalent committee have 60 days in which to consider and report on it. The Government then lay under section 1(4) of the Act a draft order, either in its original form or amended to take account of the two committees' views, for approval by resolution of each House.[38] In the Lords a motion to approve a draft order can only be moved after we have made a second report on it.[39]

52.  Unlike the House of Commons, this House has not made a Standing Order setting out our scrutiny task in detail and regulating our work.[40] Our scrutiny of deregulation proposals is governed therefore by our terms of reference and by the 1994 Act. The first deregulation proposal was deposited on 5th April 1995. Since then, this Committee has only rejected two proposals.[41]

53.  The main thing to be said about the Deregulation procedure during the 1997-98 session is that it has been little comparatively little used. This session we reported on 7 Stage 1 Deregulation orders and 5 Stage 2 Deregulation orders—a sharp drop from the exceptionally busy 1996-97 session,[42] when we reported on 16 Stage 1 proposals, and 15 Stage 2 draft orders. It is not—and should not be—the task of this Committee, with its scrutiny function, to make formal suggestions for deregulation proposals. We would, however, have expected the deregulation procedure to have been used rather more than it has been over the past 18 months.

54.  We are glad to record, as we did in our last two special reports, that the Government have always agreed to make the amendments which we have proposed to deregulation proposals. As a result, second-stage scrutiny, when a draft order is laid for approval by both Houses, has invariably been straightforward.


55.  A development to which we attach considerable importance is the increased use of regulatory appraisals. Regulatory appraisals are always conducted on deregulation proposals. The existence of regulatory appraisals was emphasised by the Department of Trade and Industry in its defence of the Fireworks Bill. More general use of this discipline can only lead to more considered, and therefore better, regulation.


56.  As we have explained above, for the "first stage" scrutiny the two Parliamentary Committees have 60 days in which to consider each proposal and to report on it. It has been suggested recently that this period is unnecessarily long, and could be shortened in order to speed up the deregulation process. When deregulation proposals are straightforward and uncontroversial we try to report on them as soon as it is practical to do so, bearing in mind the need to invite views from interested parties. During the 1997-98 session in the case of the proposal for the draft Deregulation (Occasional Licences) Order 1998, which was extremely limited in scope, the Committee was able to report in little more than two weeks.[43]

57.  The proposal for the draft Deregulation (Weights and Measures) Order 1998, however, needed almost the entire 60-day period. After taking a considerable amount of both oral and written evidence on this proposal the Commons Committee agreed its report on it on 28 July, which was the 58th day of the 60-day parliamentary scrutiny period. Although this Committee had reported on the proposal the previous week, we consider this an illustration of how the 60-day scrutiny period can be entirely necessary.


58.  The draft order which was laid before the House of Lords on 9 December 1997 related to two separate issues linked only by their connection with taxis and private hire vehicles. These were to:

59.  The Department of Transport opened consultations on four proposals on 16 October 1996, requesting replies by 13 December 1996. All the responses on the Northern Ireland part of the proposal were in favour, and the Committee considered that part of the consultation—and indeed that part of the proposal—entirely satisfactory. This was not the case with the consultation on the part of the proposal relating to substitute train services, which the Committee considered inadequate. The Department received 48 substantive responses concerning this proposal, 27 in favour and 21 either against or with reservations.

60.  The Department's consultation list focused on licensing authorities, the railway operating industry and taxi and private hire vehicle interests. To the Committee's surprise, no passenger group was included in the Department's consultation list. This was curious on two grounds. First, such groups might have been expected to have a view to express on the question of the maintenance of necessary protection under the proposal. Second, the explanatory memorandum suggested that "the main beneficiary [of the proposal] may well be the public which gets a better service", again without consulting any of the Rail User Groups to see whether they thought that this would be the case.

61.  The Committee's initial discussion of this aspect of the proposal therefore focused on the issue of the maintenance of necessary protection for passengers, particularly that of potentially vulnerable groups of passengers, including women and disabled people (who might not be easily accommodated in private hire vehicles). In the light of the limitations of the Department's consultation list it invited a number of organisations to submit written evidence on this subject.

62.  One of those whom the Committee invited to submit evidence was the Office of the Rail Regulator. The letter dated 16 January which the Committee received from the Director, Passenger Services Group of that Office concluded that the proposal would have no practical effect and therefore no necessary protection would be lost as a result. This letter prompted the Department to review the need for the proposed order relating to private hire vehicles being used for substitute rail services. On 28 January—seven weeks after the proposal for the draft order had been laid before Parliament—the Committee received notification that the Minister had decided not to proceed with this aspect of the proposal.

63.  In the Committee's view, the Department's preparation of the substitute rail services part of the proposal provides some lessons for the future. First, the extent of the Department's consultation was inappropriately limited, concentrating on licensing authorities and those with a vested business interest in the supposed burden which the proposal might remove and not focusing on user groups. Secondly, the Department's legal advice at the time that the proposal was laid before Parliament appeared not to have been up-to-date. The Committee considered that in the circumstances the Department's decision not to proceed further with this part of the proposal was the best course of action for it to take.[44]


64.  We understand that the Government is considering proposals for reform of the deregulation process. We are not opposed, in principle, to minor reforms of this process. In the Committee's view, however, the comparative dearth of deregulation proposals during the 1997-98 session had little, if anything, to do with any inherent defects in the deregulation process, and far more to the fact that the newly-elected Government had big manifesto commitments and therefore deregulation was not a priority.

65.  Primary legislation would be required to affect any major reform of the deregulation process. We understand that the Chairman of the House of Commons Deregulation Committee, Mr Peter Pike MP, has suggested that, if primary legislation to amend the 1994 Act were to be brought forward, a draft Bill could be referred to the House of Commons Committee. If a draft Bill to reform the deregulation process were to be prepared, this Committee would also wish to have the opportunity of examining it.

66.  The Government's withdrawal in its entirety of one of the stage one proposals on which we reported this session, and of a major part of another suggests, in our view, that greater attention needs to be paid to seeking adequate legal advice before proposals are put through the time-consuming and potentially costly consultation process, as well as greater co-ordination by the Cabinet Office's Better Regulation Unit.[45]

37  Stage 1. Back
38  Stage 2. Back
39  Standing Order 70(1)(b). Back
40  See Commons Standing Order 124A. Back
41  The first proposal which the Committee rejected was that for the Draft Deregulation (Sunday Dancing) Order 1995 (15th Report, session 1994-95, HL Paper 102). In the 1996-97 session we reported that it would be inappropriate to proceed with the proposal for the Draft Deregulation (Civil Aviation Act 1982) Order 1997 as there appeared to be a doubt whether it was intra viresBack
42  That session was a short one, of about five months. Back
43  This proposal was later withdrawn by the Government following questions from the House of Commons Deregulation Committee. Back
44  12th Report, HL Paper 67. Back
45  Previously known as the Deregulation Unit. Back

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