Select Committee on Liaison First Report

Further Appendices to the Report



Memorandum submitted to the Liaison Committee
by Mr Peter Pike MP, Chairman of the Deregulation Committee


1.  The Liaison Committee, in its First Report of Session 1999-2000, Shifting the Balance: Select Committees and the Executive, recommended that all appropriate Select Committees should produce an annual report. This would cover progress on past recommendations and any difficulties encountered in the work of a Select Committee. Deregulation, one of the three scrutiny committees,[7] is one of the "cross-cutting" committees which complement the departmental select committees.

2.  Although deregulation activity has been low, it has nevertheless been an interesting year for the committee, and in this Memorandum we recount our experiences during session 1999-2000 and the early weeks of session 2000-01, during which we attempted to conclude business carried over from the earlier session.

3.  My first task as Chairman last session was to present a Memorandum and give oral evidence to the Procedure Committee in its enquiry into Delegated Legislation.[8] The value of the procedure was emphasised, together with statistics to demonstrate its waning use from the last Parliament to this (42 Proposals compared with 10) and from the previous sessions in this Parliament, to the current session (five and four Orders and one Proposal respectively).

4.  It is in response initially to the invitation to share best practice that the Deregulation Committee has submitted this Memorandum. Indeed the First Report from the Liaison Committee (at paragraph 57) refers to the "co-operation between the Deregulation Committee and the Cabinet Office's Better Regulation Unit in seeking an effective and workable widening of the deregulation procedure", and we summarise here our experience of pre-legislative scrutiny of the draft Regulatory Reform Bill.[9]

5.  More generally, however, we continue to express our regrets that departments have not made better use of these unique powers, which in themselves encapsulate pre-legislative scrutiny of draft deregulation orders. The passage of a Regulatory Reform Act during this session may well release a flood of new subordinate legislation of this kind in the next Parliament, however.

Pre-legislative scrutiny of the draft Regulatory Reform Bill

overview of the timetable

6.  The Cabinet Office presented a consultation paper[10] to the Committee in March 1999, to which we responded in our First Special Report,[11] in April 1999. The Government then replied in the summer of 1999 and this was published as the First Special Report,[12] of Session 1999-2000.

— the informal stage (January-March 2000)

7.  In a letter dated 13 January 2000, the Parliamentary Secretary at the Cabinet Office, Mr Graham Stringer, wrote to me enclosing a draft Bill, thus honouring the commitment, contained in the Government's response, "to show the Committee the draft clauses of the Regulatory Reform Bill if at all possible".5 The Committee duly met to consider the first draft of the Bill and complied with the Minister's request to provide comments, which it did by means of a letter from myself, dated 1 February. We expressed our appreciation of the opportunity to comment on the draft clauses, and of the fact that a number of earlier comments had been taken note of and amendments made to the original proposals; we drew to the Minister's attention continuing concerns and reservations on specific clauses.

8.  Our sister committee in the Lords, the Delegated Powers and Deregulation Committee (DPDC), had in the meantime responded to the Minister, with a particular concern about the breadth of the proposed power to remove "restrictive effects". The Minister replied to the Commons Committee on 11 February, dealing with a number of our concerns and explaining that the "width" of the power contained within the Bill was being revisited.

9.  We then received a further letter on 28 February, accompanying a second (revised) draft Bill and supporting document. The Minister also informed us that this current draft was being put to the DPDC for their consideration. The Deregulation Committee met and considered the revised draft and I set out our response in a letter of 9 March, noting that our requested amendments had not been incorporated into the second draft. This informal phase is summarised in paragraphs 16-26 of the Second Special Report of last Session.[13]

the formal stage (April-July 2000)

10.  The next communication was a letter from the Parliamentary Secretary, informing us that it had been decided that the Regulatory Reform Bill should be published in draft, by Command Paper,3 for reference to the Committee and to the Lords' Committee. The intention was still to introduce the Bill as soon as parliamentary time allowed, and a report by 19 May was requested. The Minister also responded in detail to a number of the our concerns.

11.  The Committee took evidence from the Parliamentary Secretary on 9 May. He was accompanied by the Legal Adviser to the Regulatory Impact Unit and the Head of the Regulatory Reform Bill team. The evidence session was somewhat disappointing in its outcome. An undertaking to consider the resolution of outstanding issues was given by the Minister. These were: the simplification of the law; the potential for measures taken under a regulatory reform order to be designated as subordinate provisions orders; the inclusion on the face of the Bill for the requirement for regulatory impact assessments and the duty of review and annual report to Parliament.

12.  The Parliamentary Secretary replied to our concerns in his letter of 11 May, which is appended to the Minutes of Evidence published with the Second Special Report.7 This reply was not satisfactory, and matters remained unresolved. We concluded in our Report:

    "Overall the draft Regulatory Reform Bill represents a sensible and welcome step forward in the process of facilitating greater use of the Deregulation procedure, which to some extent takes account of our concerns. There remain, however, a number of points which the Government still needs to address. If these are not resolved before the formal introduction of the Bill, we think it likely that we or others will wish to move amendments in committee to test the points further in debate. The lengthy consultation process in which we, our counterparts in the Lords, and the Cabinet Office, have been engaged is a welcome and healthy example of full pre-legislative scrutiny in action, and we commend the Ministers concerned for their encouragement of this process. But it also indicates that there are practical limits to such scrutiny; some issues remain unresolved, and can only be resolved when a real Bill is put to the vote in the House."

13.  The Parliamentary Secretary replied in a letter of 28 June 2000 (published as an annex to the Third Special Report).[14] In addition to re-affirming his stance on previously discussed matters, he asked for confirmation that the Committees would be content to endorse the carry over of consultation in train or completed before the Bill received Royal Assent. We confirmed that we did not wish to place any unnecessary hurdle in the way of a proposal or draft order. This point and our continued disappointment are reflected in the Third Special Report, published on 11 July.

14.  A further informal meeting was held between Cabinet Office officials and the Legal Adviser and Clerk during the recess, to discuss a possible procedural solution to allay the Committee's concerns on the question of subordinate provisions orders. It was not anticipated that the Minister would write on this matter; our expectation was that the next development would be presentation of the Bill.

15.  The Regulatory Reform Bill was finally presented, in the House of Lords, at the beginning of the new Session in December 2000. The Bill is identical to that published in draft in April, and takes on board none of the changes proposed during the formal pre-legislative scrutiny exercise by either ourselves or the Lords Committee. Although we now have some reason to expect that concessions may be made before the Bill completes its passage, this very extended process of consultation demonstrates that there is a limit to the extent that Government will yield, once its proposals are made public; and that, whatever the aspirations of the Whips, pre-legislative scrutiny does not obviate the need for thorough scrutiny of the resulting Bill by the two Houses.

Use of the Deregulation Powers

experience in this session

16.  It has been another disappointing year for the Committee. We were promised a number of proposals for draft orders earlier in the session, but these have not materialised, and we have not been given any explanation for their delay, although it is reasonable to assume that a number of Departments may be waiting for the wider powers which will become available under the new Bill.

17.  There have been a number of PQs — initially a flurry in late January, put down by Mrs Curtis-Thomas, asking individual Departments what orders each had made under the Deregulation and Contracting Out Act (DCOA) 1994, and requesting information on plans to introduce further orders. No specific plans were mentioned in any of the replies but a bland assurance "to continue to look for opportunities to use such orders to remove unnecessary restrictions" featured in some of the written answers. On 17 November[15] the Minister replied to a Written Question put down by Mr Bercow, requesting information on the numbers of deregulation orders passed in the last three years. The reply was that there had been 12 in 1997, five in 1998 and four in 1999.

18.  The dearth of proposals in this session cannot be attributed solely to uncertainty and reluctance to proceed in the interim. The Cabinet Office emphasised that it was "business as usual" whilst awaiting introduction of the draft Bill and receipt of Royal Assent, and made clear that consultation in process under the current Act could be carried over and resulting proposals for orders considered within the expanded order-making power.

19.  Moreover the under-use of the power gives weight to the Committee's recommendation that there should be a duty of annual review of the powers.

Sunday Dancing and Licensing

20.  Although we have considered only one proposal for a deregulation order in this session , it covered the somewhat controversial subject of Sunday Dancing and Licensing, some aspects of which the previous committee had considered.[16] That proposal was rejected at the time primarily on the grounds of inadequate consultation.

21.  We duly considered the current proposal (reporting on 14 March 2000)[17] where our main concern was the necessary protection of residents. Further written evidence was taken and our counterparts in the Lords also took oral evidence from the Leader of the London Borough of Kensington and Chelsea accompanied by officials, and Home Office officials in a joint session. The upshot of this was a recommendation from the Lords Committee[18] that the draft order be amended to make the proposed changes to the licensing arrangements (special hours certificates) subject to an "opt-in" provision: in other words, a Local Authority would determine whether the provisions should apply within its boundaries, and would effectively have a veto over extended licensing hours on Sunday nights.

22.  Although this seemed an eminently practical solution to the dilemma of balancing the differing interests, we took the view in paragraphs 44-49 of our Report11 that such an "opt-in" arrangement was almost certainly ultra vires, in that it would constitute a sub-delegation of powers. The Lords Committee, however, in their Report of 15 March,12 made it clear that the Order would be rejected if it were not amended to allow for the "opt-in".

23.  This left the Home Office with a dilemma. It is also worth pointing out that a White Paper on Licensing[19] was presented in April 2000. One facet of licensing covered was new arrangements for "an accountable licensing authority". The White Paper said;

    "The Better Regulation Task Force favoured the new joint responsibility going to the local authorities, on the grounds that licensing is not a judicial function."

24.  We had expected that the Home Office would have given priority to the resolution of this matter and would have ensured timely laying of a draft order. We had given it fair wind, having asked only for the eligibility of residents to apply for revocation of Special Hours Certificates and for improved guidance on the "special nature of Sundays".

25.  In the event, despite prompting for the laying of the Order by both the Lords Chairman, Lord Alexander of Weedon, and myself, in letters exchanged between July and November, a complete order was not laid and on 28 November, three days before Prorogation, we received the draft Deregulation (Sunday Dancing) Order. The draft Order covered only the provisions of the Sunday Observance Act 1780 and did not include the licensing provisions. Subsequently, on 8 December, the licensing part of the proposal was laid, in the form of the draft Deregulation (Sunday Licensing) Order 2000.

26.  We considered the two draft Orders on 12 December, and unanimously recommended[20] that they should be approved, although we drew attention to the fact that the Orders had been laid so late, that, contrary to earlier expectations, they would have minimal effect on the opening hours of licensed premises on this New Year's Eve, which falls on a Sunday.

27.  The Motion for the approval of the Deregulation (Sunday Dancing) Order was tabled in the Commons on 18 December and the debate on the Order scheduled for 21 December in the Lords. The Home Office took the decision, despite the haste with which the Deregulation (Sunday Licensing) Order was laid, to delay the tabling of the Motions for the approval of this Order in the two Houses until the New Year.

The Lords and the Commons Committees

28.  Our Standing Orders provide for the communication of "its evidence and any other documents relating to matters of common interest ... and to any committee appointed by the Lords to examine deregulation proposals and draft orders and any sub-committee thereof."[21] We have found this exchange of papers of great benefit in considering both the draft Regulatory Reform Bill and the Sunday Dancing and Licensing Proposal.

29.  The Standing Orders also allow for joint meetings with the Lords DPDC. We have not felt it necessary to do so in this session, given the exchange of papers.

Future use of the deregulation process

30.  On 27 November[22] the Parliamentary Secretary was asked to state what proposals the Government planned to bring forward under the wider powers of the Regulatory Reform Bill, and an impressive and interesting list, from fire safety through constraints on professional partnerships to further deregulation of licensing, was set out. On the same day, I received a letter from the Parliamentary Secretary, setting out the list and expressing his hope that the Bill would be introduced in the near future. He also expressed his thanks for the constructive role played by the Committee, in ensuring that the draft Bill had undergone an exceptional level of scrutiny.

31.  The Cabinet Office released a press notice on the same day, covering the meeting held by the Prime Minister with entrepreneurs, in which he announced a package of business-friendly initiatives, in which some 20 reforms would be delivered by regulatory reform orders; and the Minister for the Cabinet Office, Mo Mowlam, listed the benefits of the process, emphasising that regulatory reform orders were subject to thorough public consultation and rigorous Parliamentary scrutiny.

32.  Assuming that the Regulatory Reform Bill receives Royal Assent in the early Spring, there now seems good reason to anticipate a significant increase in activity, and in respect of a range of rather more significant legislative proposals. A number of changes to the Committee's order of reference will be necessary, and others desirable, following the passage of the Bill, and the Committee will make recommendations to that end in the New Year.

December 2000

7   The two others being the European Scrutiny Committee and the Joint Committee on Statutory Instruments.  Back

8   First Report, Delegated Legislation, HC 48 (includes HC (1998-99) 930-i).  Back

9   Cm 4713. Back

10   Proposed Amendments to the Deregulation and Contracting Out Act 1994. Back

11   The Future of the Deregulation Procedure; HC (1998-99) 324 and HC (1997-98) 709-i and-ii. Back

12   Government Response to the Deregulation Committee's First Special Report, Session 1998-99, on the Future of the Deregulation Procedure; HC (1999-2000)177. Back

13   Pre-legislative Scrutiny of the draft Regulatory Reform Bill; HC (1999-2000) 488. Back

14   Further Report on the draft Regulatory Reform Bill; HC (1999--2000) 705. Back

15   Official Report, col. 812W. Back

16  The Deregulation (Sunday Dancing) Order 1995; HC (1994-95) 817. Back

17  Proposal for the Sunday Dancing and Licensing Order 2000; HC (1999-2000) 334. Back

18   Proposal for the Draft Deregulation (Sunday Dancing and Licensing) Order 2000; HL (1999-2000) Paper 46.  Back

19   Time for Reform: Proposals for the Modernisation of our Licensing Laws. Cm 4696. Back

20   The draft Deregulation (Sunday Dancing) Order 2000 and the draft Deregulation (Sunday Licensing) Order 2000; HC (2000-01) 37. Back

21   SO No. 141. Back

22   Official Report, col. 369. Back

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