11.This Bill had its Second Reading on 5 July and has two main purposes.
12.A delegated powers memorandum has been provided by the Department for Work and Pensions and HM Treasury.
13.We draw three delegated powers to the attention of the House.
14.The Bill does not give the body a name. The body will obtain its name from negative-procedure regulations made by Ministers. Meanwhile it goes by the label “single financial guidance body”. The delegated powers memorandum gives several reasons for naming the body in regulations rather than on the face of the Bill.
15.We do not find these reasons convincing:
16.The name of any statutory body is something on which Parliament can be expected to have a view. There is a public interest in that name being in the public domain and on the face of the Bill from the outset. The delegated powers memorandum gives only one precedent for a body being named in regulations, namely the National Employment Savings Trust (NEST) Corporation. By contrast, there are ample precedents for naming a new body from the outset, in primary legislation.
17.Given the usual presumption that the name of a new public body will be set out on the face of primary legislation, there ought to be strong reasons for departing from this norm. We take the view that the Department’s reasons do not meet this threshold and that it is an inappropriate delegation of power to allow Ministers, rather than Parliament, to name this new public body.
18.Clause 5 allows the Secretary of State to issue guidance to the single financial guidance body. The body “must have regard to” the guidance. The guidance is not subject to any Parliamentary scrutiny. There is a clear distinction between guidance that the recipient is free to disregard and guidance to which the recipient must have regard or must follow. People required by statute to have regard to guidance will normally be expected to follow the guidance unless they have cogent reasons for not doing so. Accordingly we take the view that guidance issued under clause 5 should be subject to Parliamentary scrutiny, with the negative procedure providing an appropriate level of scrutiny.
19.Although the new single financial guidance body will be created by Parliament, clause 14 allows Ministers by affirmative-procedure regulations to abolish the body and transfer its functions to any other person.
20.The normal principle is that what Parliament has created, Parliament alone should dissolve. In this case, the Minister:
21.Where Parliament has previously legislated to abolish public bodies it has provided procedural safeguards. Under the Public Bodies Act 2011, a Minister proposing to abolish a public body must consult the body concerned and others affected by the proposal; he then has to allow 12 weeks for responses. The Minister has to lay before Parliament a detailed explanatory document. A committee of either House of Parliament may require an enhanced affirmative procedure and the power to abolish is time-limited. None of these procedural safeguards is included in the current Bill.
22.The power to abolish the body and transfer its functions to any other person is a very broad power. For example, it is important that the guidance is independent of any commercial interests. However the power to transfer functions to another body is, on its face, unlimited.
23.The Committee raised similar concerns in its report on the Enterprise Bill, 9th Report of Session 2015–16, where the power was to abolish the Small Business Commissioner by statutory instrument. In response, the Government acknowledged the Committee’s concerns and tabled amendments that made the abolition of the Commissioner dependent on a 12-week consultation, the laying before Parliament of an explanatory document in addition to draft regulations, and an enhanced affirmative procedure if required by either House.
24.We take the view that it is inappropriate for the Bill to confer on Ministers a power to abolish the single financial guidance body. It is all the more unsatisfactory because the power is unaccompanied by the sorts of procedural safeguards found in the Public Bodies Act 2011 and the Enterprise Act 2016.
2 Department for Work and Pensions and HM Treasury, Financial Guidance and Claims Bill [HL]: Delegated Powers Memorandum: [accessed 13 July 2017]
3 For example, the Environment Agency in the Environment Act 1995, the Law Commission in the Law Commission Act 1965 and the Small Business Commissioner in the Enterprise Act 2016.
4 Delegated Powers and Regulatory Reform Committee (9th Report, Session 2015–16, )
5 Enterprise Act 2016,