Select Committee on Constitution Eleventh Report


Letter from the Chairman to the Lord Chancellor, 23 January 2006

The Committee, which I chair, has noted with interest the publication of the Legislative and Regulatory Reform Bill. Whilst, in due course when it comes before the House of Lords, we shall of course carry out in-depth scrutiny of its provisions, on a preliminary reading the bill appears to be of first class constitutional significance. The Committee has therefore asked me to write to you, in your capacity as the Government's guardian of the constitution, to outline the nature of the concerns raised by the proposed legislation, and to do so before second reading in the Commons.

As you know, the Committee eschews comment on the policy underlying measures it scrutinises. We will not therefore seek to question the objective, as explained in the Cabinet Office's press release, to tidy up and improve the processes involved in regulation and reduce red tape. But we are concerned by the potential of the Bill's proposals, if enacted, markedly to alter the respective and long-established roles of Ministers and Parliament in the legislative process. This is because Part 1 of the Bill seeks to confer unprecedentedly wide powers on Ministers to make Orders to amend, repeal and replace any legislation (and to grant powers in respect of rules of the common law in relation to Law Commission recommendations), with only a very restricted role for Parliament in the process. The reforms thus have the potential to be so far reaching that especial consideration will need to be given by the Committee to the risk of inadvertent and ill considered constitutional change.

May I add that it is disappointing that the Bill was not first published in draft, as this is the sort of constitutional reform measure that would benefit greatly from effective pre-legislative scrutiny?

I am sending a copy of this letter to Jim Murphy MP at the Cabinet Office.

Reply from the Lord Chancellor to the Chairman, 8 February 2006

I am replying to your letter of 23 January on the Legislative and Regulatory Reform Bill. I am grateful for an early indication of the Committee's thinking on the Bill and for the opportunity to comment on it.

Your letter expresses concern about what the Committee sees as the unprecedentedly wide order making powers that would be available to Ministers to seek amendments to primary legislation and, in the case of orders implementing Law Commission recommendations, the common law. The Committee considers that these proposals would alter the respective and long-established roles of the Ministers and Parliament in the legislative process. You describe the role of Parliament in the process of scrutiny of the orders envisaged in the Bill as "very restricted".

I accept that the power to make orders in the Bill is wide ranging. However, in developing the proposals set out in the Bill the Government has been mindful at all times of the need to balance the objectives of the Bill with the need for sensitivity in managing the relationship between the executive and the legislature. It might therefore be of assistance to the Committee if I set out some of the thinking behind the Bill.

The Bill replaces the Regulatory Reform Act 2001, in which I have a special interest, as I was the Minister responsible for its passage through the House of Lords. The 2001 Act itself succeeded the Deregulation and Contracting Out Act 1994. Both Acts were intended to remove onerous restrictions upon business by the appropriate use of Henry VIII powers. The 2001 Act extended these powers so that they could reform entire regimes and remove restrictions from the public sector as well as business.

During the passage of the 2001 Act through Parliament, the Government undertook to review its operation. This review took place last year. We found that the powers and procedures available under the 2001 Act had not enabled us to meet its objectives. This conclusion was reached after careful consideration and was supported by consultation on proposals for reforming the 2001 Act. The Bill currently before Parliament therefore develops the powers in the 2001 Act in order to allow Government and Parliament to support business and the public and voluntary sectors in their work by providing improved means to deliver the Government's Better Regulation objectives. Similarly, the proposal in the Bill to give effect to Law Commission recommendations will enable the Government and Parliament to deliver worthwhile and carefully considered law reform in a timely fashion. This is something that has not proved possible under the 2001 Act, despite the expectations of Ministers and the scrutiny committees.

In bringing this package of reforms before Parliament the Government shares the Committee's sensitivity to ensuring that any power to amend primary legislation via orders is used proportionately and that the possibility of abuse is minimised. The Government considers that its proposals balance the need for effective delivery with effective safeguards to guarantee appropriate levels of scrutiny. The Procedures in the Bill are designed to ensure a level of scrutiny proportionate to the size, complexity and relative level of controversy of each proposed order and to determine this on a case by case basis. Furthermore, Parliament has the final say in what degree of scrutiny is appropriate and could, for example, require that all Orders be made superaffirmative. The onus is therefore on the Government to justify why less onerous scrutiny is appropriate.

The Government has already made clear its intention that it will not use the powers in the Bill to implement highly controversial proposals or to press on with proposals to which the committees object.

Taking these provisions with the preconditions on the exercise of the powers, the obligation to consult on proposals to make an order and to lay draft orders and explanations before both Houses, I am confident that the Bill will provide sufficient guarantees that the powers are used appropriately.

I note your disappointment that the Bill was not subject to pre-legislative scrutiny. I share your view of the value of this process. Equally there are difficult decisions to be taken on which Bills can be made available for pre-legislative scrutiny, bearing in mind the Government's and Parliament's priorities. In this case the proposal for a Bill was the subject of public consultation last summer. One feature of the responses to that consultation was that the need to deliver the Better Regulation agenda was urgent. The Government therefore concluded that it should bring forward its proposals for legislation to enable the delivery of that agenda as soon as possible.

As ever, the Government will of course pay close attention to the views of individual Parliamentarians and Committees of both Houses as the Bill progresses through Parliament. We have already received the report of the Regulatory Reform Committee and are considering it carefully. The Government therefore looks forward to engaging with the Committee on the Bill.

I am copying this letter to Jim Murphy.

Letter from Jim Murphy, MP to Andrew Miller, MP, 12 April 2006

As you know, the Legislative and Regulatory Reform Bill has potential to make a real impact on reducing burdensome regulation. This Bill is the third attempt by a government since 1994 to have an Act that can improve the way we regulate for the public sector, businesses, charities and the voluntary sector. We must get this third attempt right if we are not to put our shared ambitions on the better regulation agenda at risk.

As I've mentioned before, the Regulatory Reform Committee and its equivalent in the Lords have played an important role in constructively scrutinising the proposals in the Bill. And I would like to thank you for the important contribution you made during the Bill's committee stage.

The Bill's passage so far has served to confirm the general consensus that the 2001 Act is not up to the job of delivering the action on red tape that businesses, public servants and voluntary workers tell me they need. That's because the 2001 Act is too narrowly defined and too complicated to use. The new Legislative and Regulatory Reform Bill aims to deal with these shortcomings.

However in its current form, the Bill has caused some people to voice concern about the order making power of the Bill. Some of the wilder concerns have ranged from government being able to use the power to abolish trial by jury to repealing the Magna Carta. These and other farfetched concerns about our constitutional arrangements could never happen as a result of this Bill. Similar wild accusations were made in 1994 and 2001 and proved to be groundless.

However, I have listened to more measured concerns about using the power for changes to legislation that deliver no better regulation benefit. Again I must stress that this Bill is to deliver our better regulation agenda and nothing else.

I am writing to you today to confirm my intention to move this debate on to the real agenda of better regulation and to remove any cause for concern that the Legislative and Regulatory Reform Bill could ever be used for anything other than achieving our better regulation objectives.

Let me be quite clear, safeguards already in the Bill ensure that the order-making power cannot be used to remove necessary protections, rights or freedoms. And I have already made a commitment to give Parliament a statutory veto on the face of the Bill. In addition, I am now looking into making the power more clearly focused on delivering better regulation objectives. But I am determined that the power is framed in such a way that we still are able to deliver real change, including the initiatives that departments will be proposing in their forthcoming simplification plans and the benefits of our ambitious admin burdens reduction programme. There is real determination in Government to deliver on these commitments.

The types of initiative we would want to use the Bill for include the simplification and consolidation of legislation so it is easier for business, the public and voluntary sectors to work with; ensuring that inspection is risk-based to reduce regulatory burdens; the streamlining of consent regimes to make them more transparent; the reduction of administrative burdens and the exemption in certain key instances of SMEs, charities and others from burdensome regulation.

I hope to bring forward appropriate amendments by Commons Report Stage to achieve these aims.

All those who want to see real action taken to lighten the regulatory load on business, our public services and the voluntary sector will be reassured by focussing the order making power on better regulation objectives. There will now be a clear expectation from businesses, the public sector and voluntary workers that this Bill receives broad support.

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