Select Committee on Delegated Powers and Deregulation Fourteenth Report


21 APRIL 1999

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.


Deregulation orders

1.  Sections 1-4 of the Deregulation and Contracting Out Act 1994 give Ministers a unique power to make affirmative Orders repealing legislation which imposes burdens on "business".[1] These orders are known as "deregulation orders". In brief, deregulation orders can only remove or reduce burdens on business. Deregulation orders were seen as a means of cutting red tape which unnecessarily restricted businesses, or imposed unjustified costs on them.

2.  Subsection (1) of section 1 (power to remove or reduce certain statutory burdens on businesses, individuals etc.) of the Deregulation and Contracting Out Act 1994 reads as follows:

      "1.—(1) If, with respect to any provision made by an enactment, a Minister of the Crown is of the opinion—

          (a) that the effect of the provision is such as to impose, or authorise or require the imposition of, a burden affecting any person in the carrying on of any trade, business or profession or otherwise, and

          (b) that, by amending or repealing the enactment concerned and, where appropriate, by making such other provision as is referred to in subsection (4)(a) below, it would be possible, without removing any necessary protection, to remove or reduce the burden or, as the case may be, the authorisation or requirement by virtue of which the burden may be imposed,

      he may, subject to the following provisions of this section and sections 2 to 4 below, by order amend or repeal that enactment."

It follows that a deregulation order may not impose a burden on business, nor may it reduce a burden on government.

3.  When, as the Delegated Powers Scrutiny Committee, we reported on the Deregulation and Contracting Out Bill in 1994, we described its order-making provisions as "unprecedented in time of peace".[2] Both we and the Procedure Committee recommended a number of additional safeguards for the use of these powers in the form of an enhanced degree of scrutiny of deregulation orders under the bill. These included, exceptionally, the amendment of the bill to provide for the extension from 40 to 60 days of the period for consideration of proposals for draft deregulation orders.[3]

The work of the deregulation committees

4.  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;[4] 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.[5] In the Lords a motion to approve a draft order can only be moved after we have made a second report on it.[6]

5.  The first deregulation proposal was deposited on 5th April 1995. The Committee has only rejected two proposals.[7] In total, by the end of March 1999 we had reported on 51 deregulation proposals, as shown in the following table.

1  The Act uses the words "any person in the carrying on of any trade, business or profession or otherwise". Back
2  8th report, session 1993-94, HL Paper 60. Back
3  9th report, session 1993-94, HL Paper 63. Back
4  Stage 1. Back
5  Stage 2. Back
6  Standing Order 70(1)(b). Back
7  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). This report, and the oral and written evidence which the Committee received on the deregulation proposal, was referred to repeatedly during the second reading debate on the Sundays (Dancing and Licensing) Bill [HL] on 15 January 1997. Back

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