Select Committee on Delegated Powers and Deregulation Thirty-Seventh Report



99. This session, regrettably in our view, only one draft bill has come before a House of Lords Committee for pre-legislative scrutiny. This was the draft Regulatory Reform Bill which would, if enacted, be one of the most far-reaching delegations of legislative power ever.

100. In 1994 the Committee reported twice on the Deregulation and Contracting Out Bill, and described the power conferred by Chapter I of Part I of that Bill as "unprecedented in time of peace". That power pales into insignificance when compared to the powers which the Government has proposed to take in the draft Regulatory Reform Bill.

101. This bill is different to other bills. It does not outline a detailed framework for future secondary legislation. It is, as the Government acknowledges,[86] an enabling bill, creating a power to legislate by order which would extend to the topics covered by the majority of bills introduced in recent years. Depending on how this power was used by successive Governments, it would be capable of bringing about a major change in the long-standing arrangements for the parliamentary consideration of legislation.

102. This draft bill would thus allow Ministers to do almost anything by a new form of delegated legislation, rather than by primary legislation. It includes an entirely new power to impose an additional burden (rather than only to reduce or remove a burden, as in the present Deregulation and Contracting Out Act). Unlike the present Act it would also apply to post-1994 legislation.

103. The differences between the proposed new order-making power[87] and the power under the Deregulation and Contracting Out Act 1994 are set out in the following Table.

Table 2: A comparison of the 1994 Act and the Draft Regulatory Reform Bill
Deregulation Orders under the 1994 Act are capable of: Regulatory reform orders under the draft Bill would be capable of:
[Not covered by 1994 Act.] "imposing additional burdens where necessary, provided they are proportionate and they strike a fair balance between the public interest and the interests of those affected by the new burden";
[Not covered by 1994 Act.] "removing inconsistencies and anomalies in legislation";
[Not covered by 1994 Act.] "dealing with burdensome situations caused by a lack of statutory provision to do something";
The 1994 Act applies only to legislation passed before the Deregulation and Contracting Out Act 1994; "applying to legislation passed after the Bill if it is at least two years old when the order is made and has not been amended in substance during the last two years";
The 1994 Act is in terms of removing or reducing burdens 'affecting any person in the carrying on of any trade, business or profession or otherwise' "relieving burdens from anyone except Ministers and government departments (where only they would benefit)";
[Not covered by 1994 Act.] "allowing administrative and minor detail to be further amended by subordinate provisions orders, subject to negative resolution procedure".

104. We considered various versions of this draft Bill at our meetings on 19 and 26 January, 2, 3 and 8 May, 4 and 25 July and 1 November. We reported on it twice this session, in our 15th[88] and 24th reports.[89] Most of our concerns about the bill, in its various drafts, relate to the width of the powers rather than to the deregulation procedure as such, about which we have very few concerns.

105. The latest draft of the bill is a great improvement on previous versions. But the Committee remains concerned about the Government's proposal for a dramatic widening of the power to legislate by order. Whilst unable to greet the revised draft with even modified rapture, we have said that we would not expect to report in terms suggesting that the proposal was unacceptable if a bill on similar lines were introduced.

106. When Parliament considered the Deregulation and Contracting Out Bill, there was an accompanying document giving carefully worked out synopses of examples of the way in which the power would be used, many of which resulted in deregulation proposals. This proved helpful in demonstrating to Parliament how the powers would be used and enabled Ministers to show that the advantages to be gained justified the risks of conferring apparently wide powers. We have said on a number of occasions that a similar document would be of even greater value in relation to the parliamentary consideration of the Draft Regulatory Reform Bill, because this bill would give Ministers even wider powers. As yet, however, no such document has been produced.

107. The explanatory notes state that the proposed power is "no wider than necessary" to achieve regulatory reform. In oral evidence to us Lord Falconer of Thoroton readily acknowledged that there is no precise line drawn in the draft bill between matters in respect of which it is appropriate to legislate by way of order and other matters in respect of which it would not be so appropriate, nor is it the Government's intention to try to draw one. It will, he said, be for Ministers to decide whether or not the use of the new power would be "appropriate" (Q 13), likening the task of so deciding to the difficulty of defining an elephant. "You cannot describe it but you know it when you see it" (Q 13). When asked whether he would "be content to rely totally on a successor administration's definition or interpretation of what was appropriate and what an elephant was" Lord Falconer replied "Yes, I would" (Q 16). He also relied on the safeguard that both Committees would be expected to comment if they considered a proposal inappropriate. It would therefore be open to a future Government, of a presently unknown political complexion, to propose changes of potentially great significance by means of an order.

108. The Government regards the two Parliamentary Deregulation Committees as valuable protections against the abuse of this unprecedently wide power. In particular, it contemplates the two Committees deciding whether the use of the power is appropriate (Q 53). Clearly the Committees would provide some protection. But from our own standpoint we do not consider - however flattering it might be to do so - that the fact that we carry out this work to the best of our ability within the existing framework is lasting protection against the misuse of the extremely wide powers now proposed. Although to date the Government has always acted on our recommendations regarding draft deregulation orders, it is not obliged to do so, but only to take account of our reports. The legislation allows the Minister to continue regardless of the views of either Committee (though those views will, of course, inform the subsequent debates on the resolutions to approve the draft Order).

109. Paragraph 7 of the Explanatory Notes to the draft bill states that "on no occasion has a Minister ignored an adverse report from either Committee; the proposed order has always been re-cast or withdrawn accordingly. The Government intends to continue this practice in its use of regulatory reform orders." Clearly this is important and welcome.

110. We also noted that the few examples which the Government has given of ways in which the new power would be used involve significant pieces of legislation, each equivalent to a bill.[90] The proposal to reform the fire safety regime in particular, which is currently spread across about 120 pieces of primary legislation and a similar number of statutory instruments,[91] would involve the Committee in a major scrutiny task, and it is likely that the Committee would receive a substantial amount of evidence on the detailed policy elements of such proposals. The Committee's work has already expanded in recent years and it is inevitable that we would need additional resources to make such scrutiny possible.

111. Our conclusion on the draft bill was as follows:

    "During a protracted consultation process the Government has listened to our concerns and dropped many of its original proposals whilst strengthening the safeguards in the bill. The main issue which the present draft bill raises - the considerable widening of the power to legislate by order - is one for the House as a whole to decide.

    The preservation of the supremacy of Parliament is a matter of crucial constitutional importance. The Government has so far been unable to circumscribe the legislation so as to limit it to those objectives which they say they wish to achieve, and the power has been left open-ended. For this reason the Government attaches great significance to the substantial safeguards including the two Parliamentary Deregulation Committees, to which they look for guidance as to whether each use of the power will be appropriate. Only Parliament itself can decide whether this guidance from the Committees and the unfettered and important power of either House to refuse to approve the final draft order makes this unprecedentedly wide power acceptable."

112. The draft Regulatory Reform Bill raises matters of fundamental constitutional importance for the House as a whole to consider. We have no doubt that the House will wish to debate as a matter of great importance any Regulatory Reform Bill which may be introduced in a future session.

86   See paragraph 92 of the explanatory notes: "As an enabling Act, it [the Bill] will itself have no financial effect." Back

87   Proposed in Cm 4713, Publication of the draft Regulatory Reform Bill (April 2000). Details of the background to the proposals in the Bill are on the Cabinet Office website at The Command paper is available on the Internet at Column 2 of the Table is taken from paragraph 10 of the explanatory notes to the draft bill. Back

88   HL Paper 61. Back

89   HL Paper 86. Back

90   On 27 November 2000 the Government announced by means of a written answer in House of Commons (but not House of Lords) Hansard a list of some 22 "proposals under preparation that could be implemented under the Regulatory Reform Bill": see House of Commons Hansard, col. 369W. Back

91   See paragraph 29 of the Explanatory Notes to the draft Bill. Back

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