House of Lords - Merits of Statutory Instruments

Select Committee on Merits of Statutory Instruments Forty-Ninth Report

The work of the Committee in Session 2005-06

Introduction

1. Since this Committee was first appointed in 2003, it has been its practice to make a report to the House at the end of each session to explain developments in its working practices and to draw together issues of importance which have arisen in the course of the session. This Report seeks to do the same. We first provide some statistics about our weekly scrutiny of statutory instruments (SIs) and explain how our working practices have developed this session and how we intend them to develop next session. We use this Report to publish the Government's response to the Report from our inquiry into the management of secondary legislation. Although that inquiry Report remains the most comprehensive and detailed statement of our concerns, all of which remain current, we use the remainder of this Report to make some further observations about the SIs that we have seen during this session.

Scrutiny of instruments

FLOW

2. The Committee meets each week when the House is sitting, to ensure that we report on each SI in good time to allow members of the House to pursue any issue we identify. Our workload varies from week to week because the laying of SIs remains prone to peaks and troughs (see Appendix 1). High numbers of SIs are laid each March, in the run-up to the new financial year, and the total of 225 SIs for March 2006 was at least twice as high as the total for any other month. We consider this to be poor planning by departments, because such peaks of activity affect the ability of the House to give proper scrutiny to so large a volume of instruments. The March peak precedes one of the common commencement dates[3] and the start of the financial year, but we believe that the laying of these instruments could be much better staggered over the preceding weeks. We addressed this issue more fully in our Report on the management of secondary legislation.[4]

VOLUME

3. During this Session, we held 46 meetings and published 49 reports on a total of 1731 statutory instruments (187 affirmative and 1,544 negative). Despite this workload, the Committee has maintained good humour and a consensual approach. We drew 41 affirmative instruments and 139 negative instruments to the special attention of the House: a reporting rate of 22% for affirmative instruments and 9% for negative instruments. Of the negative instruments which we reported, 37 were debated or otherwise engaged with by the House: an engagement rate of 27%.

OUTPUT

4. The terms of reference of the Committee are set out on the inside front cover of this Report. There are four grounds on which the Committee may draw an instrument to the attention of the House. This session, we have used each ground as follows:

124 (89.2%) on the ground of public policy interest alone;
5 (3.5%) on the grounds of legal importance and public policy interest;
5 (3.5%) on the grounds of imperfectly achieving policy objective and public policy interest;
3 (2.1%) on the grounds of inappropriately implementing European Union legislation and public policy interest;
2 (1.4%) on the ground of imperfectly achieving policy objective alone.

The majority of instruments have been drawn to the special attention of the House on the second part of ground (a), namely "that it… gives rise to issues of public policy likely to be of interest to the House". We now take the view that there are some instruments which raise issues about which the House would wish to be aware but are not of such significance or controversy that they are appropriate for debate. We will try to identify such SIs in the "overview of activity" in our Reports, rather than drawing them to the special attention of the House.

5. During this session, we have developed our output in ways which, we hope, have better served the House. Each week we now send an e-mail summary of our Report to approximately 100 subscribing members of the House (and others). This concise version comprises the headline paragraph for each of the instruments reported, accompanied by an electronic version of the complete Report for those who wish to read on. We have had positive feedback about the service; any member who would like to receive this e-mail should contact merits@parliament.uk.

6. We are pleased to note the impact which the Committee's Reports have continued to have in the House, frequently being referred to in either debates or questions.[5] We also welcome increased contact from external interest groups who have commented to us about individual SIs. We have received representations both from other members of the House and from external bodies. While we have to be careful not to become a conduit for re-fighting old battles, we value such comments as they add to our understanding of the issues dealt with by the instruments. On occasion, when they have been felt to add particular value to the debate, we have published such commentaries in our Reports for the benefit of the House. An example arose in relation to the Dental Charges Regulations,[6] where we received comments from both the British Dental Association and the National Consumer Council, indicating widespread concern about aspects of the proposed fee structure. Similarly, we received comments about a set of regulations affecting the Child Support Agency[7] from a charity, One Parent Families. Such contributions serve to highlight practical implications of the proposed legislation of which the Committee might not otherwise have been aware. We incorporated these comments into our Reports, and we note that they were taken up in the subsequent debates and that Ministers gave assurances from the despatch box on the issues highlighted. We wish to encourage such approaches. To that end, our secretariat visit trade organisations and lobby groups; and our website has information on how to make useful submissions to the Committee. The secretariat also continues to give regular talks to Government departments, to help Whitehall better to understand our needs and those of the House.

7. In the next session, we intend to develop our scrutiny of SIs to take oral evidence on perhaps the six most significant over the course of the session. We hope that the transcripts of these sessions will add value to the House's consideration of the instruments.

Correspondence with Ministers

8. Our scrutiny of SIs has led us frequently to correspond with Ministers. The majority of that correspondence has been published in our weekly Reports. In this Report, we print at Appendix 2 the remaining unpublished correspondence.

Inquiry: the management of secondary legislation

9. Our Special Report on the work of our Committee in Session 2004-05 recommended as follows:

"In order to assist our understanding of the management of the statutory instrument process and to enable us to report to the House on this matter, we propose that this Committee, in the new session, should conduct an inquiry with a view to finding out how the statutory instruments process is managed across Government departments; how decisions are taken within departments on, for example, consolidation and grouping of instruments; why there are peaks and troughs in secondary legislative activity; and how they can be ameliorated to ensure that proper scrutiny can take place."[8]

10. The Procedure Committee endorsed our recommendation that such an inquiry should be conducted, and on 20 July 2005 our terms of reference were amended accordingly. We conducted such an inquiry from September 2005 to March 2006 and published our findings as our 29th Report (HL Paper 149) on 27 March. We received the Government's response on 10 October 2006 and we print it at Appendix 3.

11. We hope to secure a debate on our Report early in the new session. At this stage it is worth noting that the Government response, while acknowledging scope for improvement, leaves much to the initiative of individual departments. We intend to monitor how departments respond to our Report through a series of oral evidence sessions starting in the autumn of 2007. Our Report made one recommendation to ourselves: to publish guidance for departments on how best to prepare an Explanatory Memorandum, so as to address the issues likely to concern the Committee. We have done so. The document has been placed on our website, and the secretariat make continuous efforts to further its dissemination through Whitehall. We expect Departments to look to the guidance as a clear statement of our priorities.

Observations about statutory instruments and related matters

CONTENT OF EXPLANATORY MEMORANDA

12. A key tool in our assessment of the impact of any SI are the Explanatory Memoranda (EMs), which Departments lay alongside instruments.[9] We have monitored their evolution since we took up scrutiny in April 2004, and find that they are generally of a high standard.[10] We have been pleased to note the greater use of combined EMs, that is a single EM that explains a group of related instruments. This avoids unnecessary repetition of common background but still sets out how each individual instrument contributes to the overall policy objective. Used sensibly, such EMs can significantly enhance the reader's understanding of a set of new regulations.[11]

13. Where we have found shortcomings in explanatory memoranda, these have often been because the official drafting the EM has assumed too much knowledge in his readership and has, for example, used technical terms without explanation.[12] We are particularly concerned if an EM omits an adequate account of the consultation that has preceded the finalisation of an SI: for example, when an EM states that there has been consultation, but gives no substantive information about the concerns expressed by respondents or about how the department has responded to those concerns. We always pursue any such omission. We consider that consultation always improves the quality of the legislation laid before Parliament[13]; and the absence of a statutory requirement to consult is no reason to suggest that consultation should not be considered or would not add value to the process. Even when an instrument deals with a small number of stakeholders we expect to see some information on whether and, if so, how they have been consulted, and on the views and representations they have made and the extent to which those views and representations have been accepted.

AMENDMENTS AND CONSOLIDATION

14. We have repeatedly commented in our Special Reports[14] that the task of assessing the policy underlying instruments is made more difficult when the original instrument has been subject to several layers of amendment. This must also make it difficult for those trying to operate under the legislation to get a clear and complete statement of the current law. We have noted with pleasure an increased trend for departments to explain their consolidation plans in their EMs. We also much welcome the practice of referring the reader to a departmental website where an informal consolidated version of the legislation is available for free public access.[15] Although not everyone yet has access to the internet, this is by far the most effective way to provide consolidated texts short of formal consolidation.

TRANSPOSITION OF COMMUNITY OBLIGATIONS

15. Many SIs create or modify criminal offences, often as a result of European Community obligations. The current drafting practice is to do so by reference to the originating Community instrument, a practice we find unsatisfactory when the Community instrument itself is inaccessible or has been repeatedly amended[16]. We consider that those affected by regulations (particularly those required to obey or enforce them) should be able to understand their obligations from the face of the instrument itself. In this regard we look forward to the report from Lord Davidson of Glen Clova's review of the United Kingdom's implementation of European Union legislation, which may make relevant recommendations. In all cases we also look for evidence in the EM of what guidance the department or others[17] is providing to stakeholders to explain the new obligation to ensure that it is fulfilled. The Committee's test of clarity and guidance is higher for an instrument which creates penalties and sanctions for non-compliance by individuals.

PLANNING

16. A number of instruments would have benefited from better planning or coordination. Over the session a large number of instruments were laid to make consequential changes to legislation to reflect the coming into force of the Civil Partnerships Act on 5 December 2005, several of them well after that deadline. We consider that this exercise would have profited from better liaison between Departments and that many of the more obvious consequential changes could have been included in the original Act. The Takeovers Directive (Interim Implementation) Regulations 2006 (SI 2006/1183) were another case in which the need for secondary legislation arose out of insufficiently robust planning. Provisions substantively implementing the European Takeovers Directive were contained in Part 22 of the Company Law Reform Bill. However, since the Bill would not have completed its Parliamentary passage before the May 2006 deadline, the "Interim Regulations" were brought forward to implement the Directive on an interim basis until the relevant provisions in the Company Law Reform Bill came into force.

17. We were also concerned at the attitude of the Department of Health in the case of a series of seven SIs relating to Arm's Length Bodies which had appeared at the last possible moment to meet the 1 April deadline. In a letter of 24 March 2005 to Lord Warner, we asked whether they could have been consolidated and why they could not have been presented at a less pressurised time of year. In his response of 5 April 2005[18] he told us that he has asked the relevant officials "to consider the legislation required for the future changes set out in the Implementation Framework to do their best to avoid excess work pressures on [our] Committee in the future". Yet during the current Session another batch of six[19] similar instruments appeared, also at the last possible minute. We pursued the matter through correspondence (see Appendix 2), but our concerns have not been fully allayed.

CORRECTIONS

18. Another familiar theme has been the frequency with which defects in SIs need to be rectified by the issuing of correcting instruments. During this session, the percentage of purely correcting instruments was [3.64%]. Where both purely correcting instruments (which are therefore reprinted free of charge) and instruments which are both substantive and include a correction are counted, the figure increases to [4.85%]. Both represent a welcome decrease on the figures for last year, which were 5.3% and 5.6% respectively. Appendix 4 to this Report provides an analysis of corrections by Department. While we note that some Departments appear to have taken greater care with their checking procedures, others did not. We noted with concern that some of the later SIs in the series relating to the DWP's Financial Assistance Scheme were making substantial corrections to ones laid only weeks before.[20] One particular policy area of the Home Office, the regulation of the Private Security Industry, provided a clear example of the consequences of inadequate procedures and checking; the Home Office produced a number of additional SIs to correct oversights and errors. We drew this to the attention of the Minister[21] and the exchange of correspondence is included at Appendix 2.

BREACHES OF THE 21-DAY RULE

19. We place considerable weight on the convention that Departments bring SIs into force no sooner than 21 days after the date on which those SIs are laid; this delay means that Parliament has the opportunity to assess the impact of SIs and, if necessary, to signal any concerns before that impact occurs. In most cases, Departments observe the rule; if they depart from it but offer compelling reasons for doing so (e.g. food safety issues), we would not expect to object; but we are not happy to countenance breaches of the rule which give the impression of avoiding administrative inconvenience rather than responding to genuine urgency. During the present Session, we had particular concern about the approach taken to this rule by the Department for Environment, Food and Rural Affairs, and this came to a head in a letter of 28 June 2006 to Lord Rooker, pointing out that some 10% of the 150 or so SIs from that Department scrutinised during the session had breached the rule, including three seen that week where the EM had offered justifications that were not considered persuasive. We were pleased, therefore, to receive a reply of 12 July 2006 from the Minister, in which he explained that his Department had tightened up internal procedures and said that DEFRA's Ministers would sign SIs in breach of the rule only if they had been given "clear and compelling reasons of operational urgency" for doing so. The correspondence is reproduced at Appendix 2.

3 The Government have appointed two common commencement dates (CCDs) in each year (6 April and 1 October) for the introduction of new legislation which affects business. CCDs are intended to provide business and stakeholders with greater clarity about forthcoming regulatory changes. Back

4 29th Report (Session 2005-06), HL Paper 149. Back

5 See, for example, the debate on the Registration of Fish Buyers and Sellers and Designation of Fish Auction Sites Regulations 2005 (SI 2005/1605) (HL Deb 20 July 2005 cols 1585-1592); and the debate on the Human Tissue Act 2004 (Persons who Lack Capacity to Consent and Transplants) Regulations 2006 (HL Deb 15 June 2006 cols 399- 404). Back

6 NHS Dental Charges Regulations 2005 (SI 2005/3477); 17th Report (Session 2005-06). Back

7 Contracting Out (Functions Relating to Child Support) Order 2006 (SI 2006/1692) - 37th Report (Session 2005-06). Back

8 Special Report (Session 2004-05), HL Paper 106, paragraph 18. Back

9 These are published electronically on the OPSI website alongside the instrument they explain http://www.opsi.gov.uk/stat.htm. Back

10 The EM accompanying the Criminal Procedure (Amendment No 2) Rules (SI 2006/2636) was an example of good practice. Conversely, we considered, for example, that the EMs provided with the Detergents Regulations (SI 2005/2469) and with the Civil Partnership (Treatment of Overseas Relationships) Order 2005 (SI 2005/3042) fell short of the required standards of clarity and information. In the case of the Local Probation Boards (Appointment and Miscellaneous Provisions)(Amendment) Regulations 2006 (SI 2006/2664) a first, inaccurate EM was later replaced. Back

11 A good example of such a combined EM was provided in support of the Adoption Support Services Regulations 2005 (SI 2005/691) and several associated SIs dealing with adoption policy. Back

12 An example of a technical term unlikely to be understood by the layman occurred in the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006 (SI 2006/1969), which referred to "dematerialised instructions": we were advised that this should be understood to mean "e-mails". Back

13 The Committee commended the Police Act 1996 (Local Policing Summaries) Order 2006 (SI 2006/122) in which the consultation process included piloting and consumer panels; efforts had been made to seek the views of the "man in the street". We similarly commended as good practice the consultation for the draft Mental Capacity Act 2005 (Loss of Capacity during Research Project) (England) Regulations 2006. We also considered the preparatory process to the Boiler (Efficiency) (Amendment) Regulations 2006 (SI 2006/170) to be an example of good practice: DEFRA had undertaken consultation sufficiently early for its results to influence negotiations in the EU. Back

14 25th Report (Session 2003-04) paragraph 52; 17th Report (Session 2004-05) paragraphs 22 -23. Back