Select Committee on Delegated Powers and Deregulation Twenty-Eighth Report



1.  In March 1999 the Cabinet Office issued a consultation document on its proposals to amend the Deregulation and Contracting Out Act 1994. Forty-seven individuals or organisations responded to these proposals,[1] including both Parliamentary Deregulation Committees. We reported on those proposals in our fourteenth report of this session. The Government's original proposals, and our response to them, are outlined in Annex 1 to this report.

2.  The Government has prepared a full response to our report, which we appreciate. This response is published in Annex 2 to this report.

3.  The Government has now indicated that it intends to carry forward the following proposals as described in the consultation document:

  • the proposal to allow deregulation orders to impose limited additional burdens in the interests of the greater good - The Committee is pleased that the Government has accepted our recommendation and intends providing a list of worked-through examples of situations where this power might be used. We also welcome the Government's acceptance of the Committee's recommendation that the legislation should establish the circumstances under which such an order might be brought forward, and that any such order should strike a fair balance between the general interest of the community and the rights of the individual, should not be disproportionate and should not adversely affect any right or freedom which those concerned might reasonably expect to be able to continue to enjoy. Like the Government, we also attach considerable importance to the safeguards which would be put in place, including widescale consultation, a regulatory impact assessment and examination by the two Parliamentary scrutiny Committees;
  • the proposal to allow the use of deregulation orders to remove or reduce burdens on government - We note the considerable additional detail provided on this proposal in the Government's further consultation document. This proposal remains a potentially far-reaching power for Government to remove or reduce a burden on itself, and we would examine it with particular care in any draft bill;
  • the proposal to allow the order-making power to apply to legislation passed after 1994 - The Government has not accepted our argument for a three-year cut off rather than an open-ended power.

4.  The Government has amended some of the proposals in the light of the consultation exercise:

  • the proposal to allow the use of orders to remove burdens imposed by common law has been withdrawn and the proposal to allow orders to apply to regulations under section 2(2) of the European Communities Act 1972 has been re-cast. Instead of both the above proposals the Government intends to introduce a "more focussed provision which would allow Ministers to use orders to amend, extend or supplement statutory provision so as to further enable or facilitate things which the provision in question does not prohibit but which could not otherwise be done" - The Committee is impressed by the examples which the Government gives of possible action under this head but is unsure how the scope of the power is to be defined. In the circumstances the Committee must wait until draft legislation is proposed;
  • the Government does not intend to carry forward the proposal to amend the scrutiny procedure for orders - We welcome this response;
  • the proposal on clarification of the law has been subsumed by a wider approach, "which stemmed from the House of Lords Delegated Powers and Deregulation Committee's suggestion that a power should be included to fast-track uncontroversial Law Commission proposals. The revised proposal will allow certain proposals from the Law Commission and others which are aimed at modernisation, clarification and simplification of the law to be progressed via the order-making power" - We warmly welcome this positive response to our proposal, and are grateful also to the Law Commission for supporting it.


5.  In September 1999 the Government issued a further consultation document on the revision of the enforcement provisions contained in section 5 of the 1994 Act.[2] Section 5 gives Ministers powers that can be exercised by Order to:

  • require that when, outside formal enforcement action, an enforcement officer tells a business that it should take some remedial action, the business is entitled on request to a written statement making clear what action is necessary and why;
  • require enforcers, where they take immediate enforcement action which would impose a significant cost, to provide a statement as soon as practicable explaining the reasons for the immediate action;
  • require enforcers to issue business with a notice that they are "minded to" take enforcement action; the business would then be entitled to have its point of view heard and taken into account within a specified period before any formal action was taken;
  • require that when formal action is taken, the business should be told exactly what rights it has to appeal; and
  • apply relevant provisions to third parties who have a direct economic interest.

6.  No order has ever been made under section 5, but the approach was applied indirectly in a number of areas, notably food safety, housing standards and health and safety (the latter by means of statutory guidance which has since been reviewed and a decision taken to dispense with the procedures).[3]

7.  In December 1996 the then Deregulation Unit[4] issued a consultation document on proposals for the extension of section 5 enforcement procedures to trading standards, care services and environmental health. In their responses local authorities were strongly opposed to the proposals to extend section 5, whereas the majority of business responses welcomed the proposals. However, local authorities made it clear that they were not opposed to the principles behind section 5, but to the incorporation of them in legislation. The Government subsequently decided not to pursue the section 5 procedures and developed a voluntary Enforcement Concordat instead, following consultation with business, the voluntary sector, the "enforcement community" and consumer groups.

8.  In the first 18 months of the Concordat's existence 141 local authorities in England and Wales (about a quarter of the total) adopted the Concordat for all their enforcement functions. This leaves 300 local authorities who have not yet signed up in England and Wales.[5] There are 21 local authorities who have signed up in Scotland, approximately two-thirds of the total of 32. Twenty-three fire authorities have signed up, approximately 40 per cent of the total of 58. In addition, 22 central government agencies have signed up to the Concordat, representing around half the total. The Government expects the remaining 20 agencies to sign the Concordat "by the end of the year".[6]

9.  In September 1999 the Regulatory Impact Unit issued a further consultative document, "Proposals to Improve the Quality of Enforcement Services: A Consultative Document on Section 5 of the Deregulation and Contracting Out Act 1994". The current proposal, which we examined from the viewpoint of the creation of a delegated power, is to replace Section 5 with a discretionary power for Ministers to set out a code of good enforcement. The intention is that the Government would only use these powers if it proved impossible to achieve widespread adoption of the existing Enforcement Concordat[7] on a voluntary basis. Our understanding, based on information from the Regulatory Impact Unit, is that the new powers would not go beyond the setting out of a Code of Practice based on the Concordat. Any secondary instrument would not carry a penalty. There would not be an obligation on enforcement bodies to follow the code but if they did not courts and tribunals could take this into account along with the other circumstances of the case if the enforcement body took formal action. The proposal is designed to provide assurance to business and others that enforcers will follow good enforcement principles and procedures.

10.  The new powers would be subject to the negative resolution procedure, which was the procedure accepted by Parliament for the power in the existing section 5.

11.  Local authorities and central government enforcement bodies are being encouraged by the Government to adopt the Concordat, which was published on 5 March 1998.[8] Both the Cabinet Office and the Department of Trade and Industry, which is consulting separately on the creation of new powers to facilitate effective enforcement and secure compliance with consumer law,[9] hope that all those enforcement agencies which have not yet signed the Concordat will do so shortly.[10]

12.  The Committee has considered the proposal for a delegated legislative power contained in the new consultation document and sees no objection to it. We agree with the premise that the way in which regulations are enforced is as important as the regulations themselves. Clearly the voluntary approach will only be effective in achieving consistency in enforcement practice[11] if the overwhelming majority of enforcement agencies implement the Concordat within a reasonable timeframe. We note that in the first 18 months of the Concordat's existence only a quarter of local authorities signed up to it, which is presumably why the Government is seeking the powers. No doubt Parliament, in examining any bill or draft bill, will want to be told the current figures for local authority subscription to the Concordat and, if the percentage is still low, to examine possible reasons for this.

13.  We wish to draw the attention of the House to both consultation papers. We thank the Government for its courtesy in involving the Committee in the consultation and keeping us informed throughout the process. From the perspective of this Committee this has been a model consultation exercise, with the views of those consulted being carefully weighed by the Government and the subsequent proposals modified to take account of those points made by consultees which the Government accepted. We look forward to having the opportunity to comment on a draft bill if parliamentary time allows. [12]

1   The response by the Better Regulation Task Force, which took the form of a letter dated 14 May 1999 from its Chairman, Lord Haskins, to the then Minister for the Cabinet Office, is published on the Internet at the Cabinet Office's web site. We were encouraged to note that several of the points made in that letter were similar to those in our own report, since the two responses were prepared entirely independently of each other. Back

2   Proposals to Improve the Quality of Enforcement Services: a Consultative Document on Section 5 of the Deregulation and Contracting Out Act 1994 was published on 28 September 1999. Back

3   September 1999 consultation document, page 3. Back

4   Subsequently renamed the Better Regulation Unit and now the Regulatory Impact Unit. Back

5   By 20 October 1999 only three authorities in Wales had fully adopted the Enforcement Concordat out of a total of 22. A further two authorities have adopted the Concordat for environmental health and trading standards only (further information supplied by the Cabinet Office Regulatory Impact Unit). Back

6   September 1999 consultation document, page 3, footnote 5, and supplementary information supplied to the Committee by the Cabinet Office Regulatory Impact Unit. Back

7   This is printed in Annex 3 to this Report. Back

8   See, for example, Cabinet Office press release 16 June 1999, "Businesses benefit as key enforcement agencies adopt Concordat of good practice". Back

9   See the White Paper "Modern Markets: Confident Consumers", published on 22 July 1999 (, especially chapter 7, "securing compliance".  Back

10   "Within the next year", according to paragraph 7.3 of the DTI consultation paper. Back

11   As the Chairman of the Better Regulation Task Force said when publishing the Task Force's Enforcement Review on 20 April 1999, "regulations cannot succeed unless those affected understand how to comply, and those charged with enforcing them act consistently and effectively." (Cabinet Office Press release "Regulation Watchdog says Government needs to act on enforcement". Back

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

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