Select Committee on Delegated Powers and Deregulation Twenty-Eighth Report


ANNEX 2

Government response to the 14th Report from the House of Lords Select Committee on Delegated Powers and Deregulation (Session 1998-99) on Proposed Extension of the Deregulation and Contracting Out Act 1994

Executive Summary

The Government intends bringing forward legislation to amend the Deregulation and Contracting Out Act 1994 (DCOA), to remove constraints on wider application of the deregulation order-making power under sections 1-4 of that Act. Following a consultation exercise on the proposed changes, (to which the Committee Report was a response) these proposals have now further crystallised.

The Government has amended some of the proposals in the light of the consultation exercise and in particular the comments of the Parliamentary Deregulation Committees:

  • instead of both the above proposals the Government intends to introduce a more focussed provision which would allow Ministers to use orders to amend, extend or supplement statutory provision so as to further enable or facilitate things which the provision in question does not prohibit but which could not otherwise be done;
  • the Government does not intend carrying forward the proposal to amend the scrutiny procedure for orders;
  • the Committee's suggestion that a power should be included to fast-track uncontroversial Law Commission proposals has also developed into a wider approach that will allow proposals from the Law Commission and others which are aimed at modernisation, clarification and simplification of the law to be progressed via the order-making power. This will to some extent subsume the proposal on clarification of the law.

The Government intends carrying forward the following proposals as described in the consultation document:

  • the proposal to allow deregulation orders to impose limited additional burdens in the interests of the greater good;
  • the proposal to allow the use of deregulation orders to clarify the law;
  • the proposal to allow the use of deregulation orders to remove or reduce burdens on government;
  • the proposal to allow the order-making power to apply to legislation passed after 1994.

Introduction

1.  The Delegated Powers and Deregulation Committee report on the Proposed Extension of the Deregulation and Contracting Out Act 1994 was published on 21 April 1999 (HL Paper 55). It was itself a response to the Government's consultation paper on this subject, published on 2 March 1999, which set out a number of proposed amendments to the Deregulation and Contracting Out Act 1994 (DCOA).

2.  The background to the proposed changes was set out in the consultation document as follows:

3.  The document outlined seven proposed changes to the order-making power which the Government felt would remove the constraints on wider application of the power. The proposed changes would apply to all Westminster primary legislation, other than in areas for which the devolved administrations have responsibility and other than regulations under the European Communities Act 1972. The Government is in contact with the devolved administrations about the precise implications of the changes for them. It should be noted that, in relation to the Welsh Assembly, the existing powers under parts I and II of the DCOA have not been extended to the Assembly, and that it is not the Government's intention to make the powers proposed for the reform of the DCOA available to them.

4.  A total of 45 public responses to this consultation were received, the majority of which were generally supportive of the Government's proposals. The Government will be publishing a separate public response to the consultation exercise, copies of which will be sent to the Deregulation Committees of both Houses and placed in the House Libraries.

5.  The proposed amendments to DCOA would require primary legislation. The Government will take account of all the responses that were received in formulating this legislation, which will be brought forward when Parliamentary time allows.

6.  The Lords Committee report dealt with each of the proposed amendments in turn and, so far as possible, this response mirrors that structure.

General comments on the proposals

7.  The Government welcomes the Committee's endorsement of a thorough evaluation of possible improvements to the deregulation order-making procedure; an endorsement hinted at in the Committee's Special Report of the 1996-97 session. It is conscious that the present rate with which proposed deregulation orders are being brought forward is disappointing. Following the Prime Minister's launch of a new drive to improve regulation, the Minister for the Cabinet Office has written to colleagues asking them to identify measures being taken to remove, simplify or re-direct regulations or burdens. This has set in train an ongoing process of monitoring of deregulatory action being taken across Government, which will assist the Cabinet Office in ensuring that deregulation orders are brought forward wherever possible. The Government will work to avoid a hiatus in orders being brought forward before the amending legislation is passed. As the Committee will appreciate, orders tend to have a long lead time, and there are currently a number of proposals undergoing consultation. Ministers and officials will concentrate efforts to ensure these and other proposals come before the Committees at the earliest opportunity. Beyond that, the Government is confident that the expansion of the powers will inspire a full programme of orders.

8.  The Government intends providing alongside the Bill comprehensive guidance for those considering bringing forward a proposed deregulation order, emphasising the scope of the new powers and their safeguards. The additional requirements for documentary evidence to be laid before Parliament, which will appear on the face of the Bill (the existing requirements being detailed in section 3(4) of the 1994 Act), will also be discussed in the guidance document. The new document would obviously involve a significant re-write of existing guidance. The Government will take steps to promulgate this guidance widely, to ensure that maximum appropriate use is made of the deregulation order-making procedure.

    "The provision of a detailed list of possible uses of each of the extended powers will be essential when Parliament comes to consider any bill resulting from the Government's present proposals (paragraph 17)."

9.  The Government accepts that a list of examples of orders that could only be progressed under an amended DCOA will be necessary for full and proper consideration of the proposed powers. It will be providing such a list alongside the Bill.

    "Effective consultation is essential to maintain confidence in the deregulation system and to ensure that proposals have been tested by the opinion of those who would be affected by them. We attach considerable importance to Dr Cunningham's reassurance to us that the Government has "no plans to reduce the consultation procedure laid down in the Act (paragraph 18)."

10.  In widening the powers of the DCOA, the Government is sensitive to the need to protect the safeguards. It shares the Committee's views on the importance of consultation in the process.

Proposal to allow a small additional increase in burdens on some parties in the interests of the greater good

11.  The Government recognises that exploration of this and other proposed powers in the abstract form is challenging; it accepts the Committee's recommendation and intends providing alongside legislation, when Parliamentary time allows, a list of worked-through examples of situations where this power might be used.

12.  The Government also accepts the Committee's recommendation that the legislation should establish the circumstances under which such an order may be brought forward, and that any such order should strike a fair balance between the general interest of the community and the rights of the individual, should not be disproportionate and should not adversely affect any right or freedom which those concerned might reasonably expect to be able to continue to enjoy.

13.  The Government fully recognises the sensitivities surrounding what could be construed as a wide power. It places great emphasis on the safeguards which it feels are necessary in order to make the proposed power workable; as set out in the consultation document, any deregulation order that would impose a new burden would be subject to widescale consultation with all those affected, to a regulatory impact assessment and to the rigorous examination of the scrutiny Committees.

14.  Some of the other respondents to the consultation document suggested that proportionality should be defined in the legislation. The Government does not think that it would be helpful or practical to seek to define proportionality. It is already a well-established legal concept which is used in a similar way to the concept of "reasonableness". However, the Government agrees that it would be right to make clear what is intended by use of this concept. Overall, it envisages the following steps being taken in considering whether a new burden would be acceptable:

  • firstly, the overall effect of the order must be deregulatory, with reduced burdens overall. Hence the order-making power could not be used to lift an onerous licensing requirement on the few if it imposed a new onerous requirement on the many. This would act as an overriding test;
  • secondly, as stated in the consultation document, any new burden imposed by an order must not adversely affect a right or freedom which those concerned might reasonably expect to be able to continue to enjoy. This would rule out a number of potential orders which otherwise would be acceptable as being for the greater good. For example, it could be argued that an order removing constraints on aeroplanes landing and taking off at night would be deregulatory, would lift a burden on airlines and potential passengers and would be beneficial to the economy in allowing increased flows of tourists and businesspeople and more efficient use of resources (hence reducing the need for new airports). However there is a strong counter-argument that such an order would remove the freedom of those living near airports to enjoy peaceful nights, which is a freedom they could reasonably expect to be able to continue to enjoy. If this argument is accepted, the order would fail the test. Clearly, consideration of such orders would need to concentrate on what constituted "reasonable expectation";
  • thirdly, the new burden imposed must be proportionate to the mischief which it is intended will be overcome by the order; it must result in net benefit in terms of the [social] objectives of the provisions. For example, to revert to the example used in the consultation document, in rationalising a food shops licensing system it might not be considered proportionate to require those which did not previously have to have a licence to obtain one; it may be considered more proportionate (and therefore more appropriate) to set up a new system of negative licensing, class (rather than individual) licensing, or perhaps a registration system instead.

15.  It is worth noting that the Financial Services and Markets Bill sets out an express proportionality test at clause 2(3)(c): "the principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result form the imposition of that burden or benefit." This may prove a useful precedent.

16.  Turning to procedure, the consideration of whether a new burden would be proportionate would not, of course, fall solely on the Committees. In the first instance it would be for Ministers individually, then collectively, to decide. All interested parties would have an opportunity to comment on the proposal and the Committees of both Houses would be invited to reflect on the reasonableness of what is proposed. In so doing they would be able to refer to the documentary evidence submitted by departments to the Committees under section 3(4) of the existing Act, which under an amended Act would require an assessment of the proportionality of any new burden which an order would impose. This is the approach followed under existing provisions when considering whether "necessary protection" is maintained.

17.  The Commons Deregulation Committee was also concerned about the protection of individuals' rights and freedoms; the Government appreciates the sensitivity which is being shown to this important issue and welcomes that Committee's intention to formalise the requirement for members to have particular regard to this issue in its consideration of proposed orders. More generally speaking, the Commons Committee did not object to the proposal to allow orders to impose additional burdens in the interest of the greater good but commented that any such proposed order would come under particularly close examination. The Government agrees that such scrutiny would be right and proper. The Commons Committee would pay particular attention to consultation and an assessment of proportionality, and demand evidence that the department had taken proper account of these points.

    "The language of paragraph 13 of the [consultation] document suggests to us that new burdens are more likely to be imposed on small organisations or businesses to reduce the burdens on large ones (paragraph 22)."

18.  The Government does not intend that the power should be used in this way, and will frame the legislation accordingly. It believes that the requirement to maintain proportionality and necessary protection would provide robust safeguards against inappropriate use of this power. The Government has every confidence that the Committees would apply the same high degree of objectivity as they have displayed to date, challenging any proposed orders they considered inappropriate. The Government is sensitive to the needs of small business and the burdens that regulations can impose on them; these are issues that are also addressed in the recent consultation document on the new Small Business Service.

    "The imposition of a new burden almost inevitably requires the creation of a criminal sanction for failure to comply with the new requirement. Despite Dr Cunningham's attempts to reassure us that criminal sanctions would in practice be little used, we cannot envisage that compliance will be enforced if the imposition of a new burden will not usually require the creation of a criminal sanction (paragraph 21)."

19.  As discussed during the evidence session with the Minister for the Cabinet Office on 31 March 1999, it is clear that the imposition of a new burden may require creation of a criminal sanction for failure to comply. However, the concept of a criminal sanction for non-compliance with a regulation is not new and does not present a constitutional problem, provided the burden is imposed according to the proper procedures. The power to impose limited sanctions is of course already provided for under section 2 of the 1994 Act. Previous deregulation orders have only infrequently reworked any element of criminal sanctions under this provision. While the power to impose new burdens may increase the frequency with which this situation arises, the Committee will appreciate that criminal sanctions are not the only and certainly not always the most appropriate type of sanctions.

20.  The Committee may wish to consider the example of the Deregulation (Casinos) Order 1997, which reduced the 48-hour waiting period which must elapse before new members of casinos may take part in gaming to 24 hours. Non-compliance with this statutory provision (i.e. flouting the waiting period) would not result in criminal sanctions on the over-eager new member, but may have implications for the licensing of the casino. Another example of a new burden without an associated criminal sanction might be a new requirement to produce documentation in order to obtain something, for example a licence. If licence applicants fail to produce the requisite documentation they would not face a criminal sanction; the result would simply be that they could not obtain the licence they sought.

21.  A proportionate approach to penalising non-compliant organisations would always point to use of civil sanctions before criminal ones. Criminal sanctions would be used only as a last resort, and the maximum level would of course be capped in a similar way to the existing provision. In sum, the Government does not expect this proposal to result in net extension of the use of criminal sanctions.

22.  Subject to the approach outlined above, the Government is minded to carry forward this proposal.

Proposal to allow clarification of the law

23.  As stated in the consultation document, primary legislation is sometimes found to be ambiguous in that its effect in relation to a particular set of circumstances is uncertain. This is a significant burden on those affected by the legislation who are entitled to clear, certain law without going to the risk and expense of testing the provision in the courts. Article 7 of the European Convention on Human Rights has been interpreted such that a law imposing a criminal offence must be sufficiently clearly drafted or defined so that a person can reasonably be able to foresee that an act he undertakes would be an offence, and a person must not be prosecuted on the basis of a wholly ambiguous or uncertain provision. This proposal is clearly in line with the aim of that Article.

24.  It is clear from responses to the consultation document that, subject to appropriate conditions, there is a good deal of support for this proposal. The Commons Committee had no objection to this proposal provided there was appropriate consultation and a regulatory impact assessment in each case. The Magistrates' Association and the Justices' Clerks' Society were among those who embraced the proposal. In particular, it was felt that use of orders to amend the wording of the law where the legal effect, but not the wording, was clear and unambiguous, was a sensible proposal.

25.  The Commons Committee expressed concern that, where clarification of an uncertainty would lead to imposition of a new burden, this should be less than the burden being removed. There was also a strong feeling that any draft orders aimed at clarifying the law should demonstrate that there was a real burden of uncertainty to be removed. The Government is conscious of the importance of both these points, as highlighted by the consultation document. Amongst other respondents, there was concern that clarification should only be in a deregulatory direction, or where there was wide consensus that the direction of the clarification was the most appropriate. The Government considers the requirement that resolution of uncertainties should be limited to a deregulatory direction would be unnecessarily restrictive. Instead it is minded to include the requirement that a Minister putting forward a proposed order should hold the opinion that the overall result of resolving the uncertainty would be deregulatory.

26.  In addressing the burden of unclear law, the Government's discussions with the Law Commission about reform of DCOA are also relevant. The Minister for the Cabinet Office informed the Committee on 29 April 1999 of discussions with the Law Commission on the Committee's suggestion that a power should be included in the Bill to fast-track uncontroversial Law Commission proposals. This was a helpful suggestion that has led to very productive discussion and the development of new policy. As discussed in more depth at paragraph 53-54 below, the Government would prefer to take this idea forward by way of a wider power. This would allow draft orders based on proposals from the Law Commission and others which are aimed at modernisation, clarification and simplification of the law (and which meet the requirements for proposed orders on removing or reducing a burden and maintaining necessary protection, etc.) to be submitted for scrutiny.

27.  The issue here is that complex, outdated and unclear law does not constitute a burden as it is defined in the existing Act. The Government intends framing the legislation to overcome this problem. One of the reasons why so much law is complex is that there is often a variety of different statutory provisions applying to a particular topic, some of which will overlap. The Committee raised this issue in its recent report on the proposal for the draft Deregulation (Casinos) Order 1999, commenting that the way in which gambling law was being "salami sliced" by deregulation orders was unsatisfactory, and that a comprehensive overhaul of the relevant legislation would be preferable. This is another area which the Government would like to address in the Bill, by relaxing the requirement in the current Act for the burden to be the effect of a specific legislative provision. Experience of using the order-making power has shown that unnecessary restrictions tend to be imposed by the structure of regulatory schemes as a whole, or because there is no provision in law to allow people to do things they feel they ought to be able to do. We will return to this point about insufficiently facilitative or enabling law in paragraphs 38-42 below. The experience that burdens tend to be imposed by the interaction of more than one provision indicates that it would be beneficial for any revision to allow a more holistic approach to burdensome situations. This obviously ties in with the Government's proposals to allow orders to be used to modernise, simplify and clarify the law, as described above, and with the possible role of the Law Commission in the preparation of any such orders, as detailed in paragraphs 53-54 below.

28.  In the consultation paper the Government set out another set of circumstances where it might be considered beneficial to use orders to clarify the law: that is, where the meaning of the law is unclear and no-one knows what it means in relation to a particular situation. This is particularly relevant when the legislation deals with one set of facts but (precisely because it is precise) is uncertain in its effects on another set of facts. The Government is therefore seeking power to make fresh provision which deals with the case in point (which may or may not be what the original provision could have been held to mean in another case). The Government recognises that this is a complex issue, understanding of which will be much aided by the provision of worked examples which it is intended to provide alongside legislation when Parliamentary time allows.

29.  The Government accepts that the Law Commission has a potentially very useful role in the preparation of orders aimed at clarifying the law. As detailed in paragraphs 50-52 below, the Commission has agreed to fulfil this role where appropriate.

30.  The Government accepts the legitimacy of the concerns of the Committee and others in relation to this proposed amendment to the Act. It will take these into account as it frames the legislation on this proposal in the terms described above.

Proposal to allow removal of burdens on government

31.  The Government welcomes the Committee's recognition of the benefits of a power to lift burdens from local government and statutory bodies. It is clear that the overall ability of such organisations to provide an efficient and effective service is often unnecessarily fettered by requirements which do not serve the public need. Inefficient and over-bureaucratic public administration is neither in the interest of those who use public services, nor in the interest of the Exchequer.

    "We have, however, considerable reservations about the extension of the power to include central government, since it would mean that government could, by means of delegated legislation, propose the removal of statutory burdens on itself. We are also concerned that those powers might be used, as the consultation paper itself points out, in conjunction with others "such as being able to impose a small additional burden in order to remove a burden from others". This aspect of the Government's proposals would merit particularly careful scrutiny in any draft bill (paragraph 34)."

32.  In its response to the consultation document, the Local Government Association, the Institute of Trading Standards Administration, OFSTED and the Union of Independent Companies among others gave strong support to this proposal. Other respondents echoed the Committee's natural concerns about allowing Ministers to use the order-making power to lift burdens on themselves or their departments. The Government recognises that maintaining necessary protection would be paramount in any case of this kind, as it will with any orders involving the imposition of new burdens in the interest of the greater good. As the Committee pointed out, it will be for Parliament to decide whether the order-making procedure offers sufficient safeguards to prevent abuse of this power. Undoubtedly, Parliament would wish to consider this very carefully. The Government believes that the respect earned by the process in the past will serve it well here, as the Committees have always displayed a highly objective attitude in their consideration of proposed orders.

33.  The Commons Deregulation Committee concluded that they and their counterparts in the Lords would be able to decide whether any such proposed order was an appropriate use of the power. In so doing, they will be able to draw on the documentary evidence (including the regulatory impact assessment) that departments provide to the Committees under section 3(4) of the existing Act. The Government recognises the importance of giving guidance to departments on the circumstances in which such an order would be appropriate; it would clearly be inappropriate for orders to be brought forward simply in the interests of administrative convenience or which covered issues of minor consequence.

34.  The Government believes that there is much to be gained in terms of improved efficiency and effectiveness of both central and local government from this proposed change. In lifting burdens on regulators and service providers in central and local government (subject to the safeguards of the order-making procedure), there is a further (and potentially much larger) indirect benefit for those who are regulated and who use the services. This is a key proposal in the Government's programme of reform of the DCOA, closely linked with the Modernising Government White Paper and its agenda. On this basis the Government intends carrying this proposal forward.

Proposal to extend the power to regulations under the European Communities Act 1972

35.  The Committee's comment that there is already a general power to amend or revoke regulations by further regulations made under the same power (which is, of course, entirely right) suggests that the Government failed to communicate effectively the true intention of the proposed power. The following paragraph seeks to outline the type of reform that the Government had in mind in proposing this power.

36.  The original proposal as described in the consultation document was essentially about extending EU regulatory regimes where it would be beneficial to do so. The Government recognises that this is a particularly sensitive proposal about which the Committee expressed reservations in its 19th report of this session, commenting that "we see it as a point of principle that section 2(2) should not be used for matters which are not the subject of a European obligation". On this basis, the Government has recast this proposal slightly in order to bring it into line with the alternative provision suggested by the Committee, which was recently the subject of a new clause added to the Employment Relations Bill to allow for extension of TUPE (Transfer of Undertakings (Protection of Employment) Regulations). The result is the proposal that, where regulations under section 2(2) of the ECA make provision for the purpose of implementing, or for a purpose concerning, a Community obligation of the UK, this power would allow Ministers to propose deregulation orders to make the same or similar provision in circumstances other than those to which the Community obligation applies. This would not, as it might at first appear, be out of kilter with the deregulatory direction of the wider initiative. On the contrary, it would be enabling in that it would remove the burden on business imposed by an inability to take wider advantage of Community developments.

37.  This proposal would allow use of the order-making power to give effect to the extension of TUPE as described above, had it not been dealt with by the Employment Relations Bill. This is clearly a situation in which, it has been argued, it would be beneficial to clone an EU regulatory regime in an area of national competence. The Government is pressing for better regulation in Europe, and this power would be extremely useful in circumstances where the EU took deregulatory measures, as it would enable the UK to take that deregulation a step further by applying it to related issues, thereby increasing the deregulatory effect. Use of the order-making power to give effect to such "cloning" will, as always, reduce the pressure for time on the floor of the House.

38.  Whilst the Government does intend carrying forward this proposal, the Committee should be aware of the broader context in which this power will link in with a new approach. This new approach (detailed below in the following paragraphs) also reworks the proposal to allow orders to amend common law. The Government is seeking a provision to allow Ministers to bring forward orders to amend, extend or supplement statutory provision so as to further enable or facilitate things which the provision in question does not prohibit but which cannot otherwise lawfully be done.

Proposal to permit changes to restrictions imposed by common law

39.  Both here and with the proposal to allow the order-making power to apply to EU regulation, the Government expressed its proposals in terms of the forms of law it would wish to address, rather than in terms of the goal it sought to achieve. The proposal to create what appeared a very open-ended power to amend common law aroused a significant degree of questioning and comment amongst respondents, some unfavourable (although there was general agreement to the EU proposal). In the light of these responses, the Government accepts that it would be better to present its proposals in terms of its intended objectives. The Government now proposes seeking a power to allow Ministers to propose orders to amend, extend or supplement statutory provision so as to further enable or facilitate things which the provision in question does not prohibit but which could not otherwise be done.

40.  While the above power might be interpreted widely, it would effectively be limited in function to an enabling provision, in that it would remove the burden on business imposed by an inability to take wider advantage of developments elsewhere. The Government considers this to be the most important of the proposed amendments in terms of genuine deregulation. It would deal with cases where there is an existing statutory provision which could readily be extended, but where one cannot say there is a restriction since, in the absence of the provision in question it would not legally be possible to do the thing anyway.

41.  This clearly covers the open ended investment companies (OEICs) case, whereby regulations under the European Communities Act make provision for the establishment of UCITS (Undertakings for Collective Investments in Transferable Securities) OEICs. Under this proposed new power the regulations could be extended to allow non-UCITS OEICs to be set up, but one cannot say there is a restriction because, in the absence of the regulations, it would not legally be possible to set up an OEIC at all. (This case is, of course, being dealt with by the Financial Services and Markets Bill, but the Government feels it is nevertheless worth quoting as a straightforward and familiar example.)

42.  The power would also cover cases such as the Charity Commission proposals to create a legislative vehicle for the incorporation of charities. For a number of reasons, incorporation is increasingly being seen as the most effective way for many charities to structure themselves. Many charities have incorporated under the Companies Act 1985 and its statutory predecessors, others under industrial and provident society legislation. However these incorporation regimes were not structured with charities in mind, as their jurisprudence is more appropriate to commercial organisations or mutual traders. This can create operational and regulatory difficulties for charities.

43.  Use of the proposed power under the deregulation order-making procedure would provide a solution to this problem. Essentially it would allow the Charities Act(s) and/or the Companies Act(s) to be built on in order to allow a charity to become a body corporate, which could then be registered with and regulated by the Charity Commission. This would remove the operational and regulatory difficulties.

44.  As the Committee will appreciate, it is not necessary to pursue the wider power to amend common law in order to achieve the objective set out in paragraph 38 above, although that would have provided a tidy and effective vehicle for doing so. Under this new approach, there is a requirement for deregulation orders to be anchored in a statutory provision. Orders covering common law in the abstract would therefore not be possible.

45.  The Government intends carrying forward the amended proposal, and hopes that it will be more acceptable to the Committee than the earlier proposal to allow orders to remove burdens in common law. As elsewhere, Ministers collectively will have to satisfy themselves (and the Committees) that the change they seek to effect is an appropriate candidate for the order-making power. Documentary evidence that the department had conducted a comprehensive consultation with all parties affected will be especially important. And where appropriate, the Law Commission would advise on proposals in draft. Once again, a list of worked-through examples of potential orders will aid consideration of this proposal, and the Government will be providing such a list in due course.

Proposal to allow orders to amend legislation passed after 1994

46.  The increasing use of draft Bills, early consultation and the open manner in which the Government approaches production of new legislation shows that it is committed to legislating right first time. Nonetheless, the fast-moving nature of the modern world means that circumstances change, and what once was a reasonable requirement can quickly become a burden. The proposed legislation on E-commerce and Government policies on areas such as electronic delivery of government services are good examples of situations where this might be the case. The Government would not wish artificially to fetter the ability to propose deregulation orders whenever the need arises; the concern is to secure the removal of unnecessary or inappropriate burdens wherever and whenever they make their effect felt. This view was shared by the Commons Committee and the majority of other respondents to the consultation document.

47.  The Government appreciates the Committee's concern but is not convinced that deregulation orders would prove sufficiently attractive as a "quick-fix option" to encourage poor drafting, especially given the time it takes for an order to undergo the necessary process of consultation and scrutiny. The revised guidance to those considering new legislation will emphasise that the order-making process is not an easy solution. In view of the above, the Government is minded to carry this proposal as it stands.

    "As an alternative to taking this sweeping power we would much prefer the use of an annual redundant legislation bill as a vehicle to tidy up the statute book (paragraph 41)."

48.  The Government recognises that retention of genuinely redundant legislation on the statute book is to be avoided. It is worth bearing in mind the valuable contribution of the Law Commission and the Scottish Law Commission in this area, with respect to the periodic Statute Law (Repeals) Acts. The possibility of an annual redundant legislation Bill will be considered in the context of the Government's aim to improve the quality of legislation, but such a Bill might not always be a priority for its legislative programme. The Government does not believe that such a Bill could become a satisfactory alternative to extending the order-making power to post-1994 legislation, as deregulation orders do not deal with redundant legislation, but with legislation that imposes unnecessary burdens.

Proposal to permit orders to be progressed if the Committees report before the end of the 60 day scrutiny period

49.  The Government is mindful of the need to avoid doing anything that would damage the effectiveness of the scrutiny procedure. This is especially important in the context of the proposed amendments to extend the scope of the order-making power. Given this consideration, and the practical problems highlighted by the Committee of ensuring that all representations from interested parties had been received before the 60-day period of scrutiny on any given order was guillotined, the Government is minded to retain the scrutiny process as it currently operates.

Committee's additional proposal for Law Commission proposals

50.  As detailed in paragraph 25 above, this suggestion was very welcome and has become the springboard for new policy. From the original starting point of the concept of a fast track power, discussion broadened into a package of ways in which the Commission could be involved with the order-making procedure.

51.  Firstly, there is the suggested role for the Law Commission in "vetting" proposed deregulation orders aimed at clarifying uncertainties in the law. The Commission is content to be consulted on orders of this type in appropriate circumstances, and to give an opinion on whether or not a genuine ambiguity does in fact exist. Where the subject of the deregulation order falls into the Commission's current or recent work programme, it may well have significant comments to make. However, the Commission has made the point that where the proposed order was not connected with any of its current projects, ad hoc requests on such points would often relate to very specialised fields which may be well outside the Commission's expertise.

52.  For this reason, the Commission would not support imposing a statutory duty on departments obliging them to consult the Commission, as it fears this would create a misleading impression or expectation that it would normally respond. Not only does the Commission have insufficient resources to take on a formal responsibility for vetting proposed orders in this way (although this is not an insignificant point, as the Commission's resources are allocated according to their programme of work, as agreed with the Lord Chancellor). But it is also not designed in a way that allows it to offer this type of consultancy service, which is not within its normal terms of reference.

53.  Instead departments could seek advice on legal uncertainties in the normal way from Departmental lawyers and, if necessary, Treasury Counsel, who may be in a better position than the Law Commission to offer analysis of the issue concerned. While it may not always be sensible to publish the advice in its raw form, the consultation document and the material laid before the Committees will need to deal expressly with the legal considerations. The Government is persuaded that a statutory requirement for departments to consult the Law Commission on draft orders is not the best - or the only - way to produce the result that the Committee envisages. Non-statutory arrangements appear to offer a more flexible and focussed solution.

54.  The second area where the Law Commission's experience would be apposite with regard to deregulation proposals will be in development of measures aimed specifically at modernisation, simplification and clarification of the law. This could not of course be the primary aim of the order; the first and most important hurdle is that Ministers must have identified a burden or burdensome situation which could be removed or reduced by means of an order. Where this is a burdensome situation caused by the interaction of various pieces of legislation, the experience of the Law Commission will be especially valuable. In acting to relieve the burden or burdensome situation by exercising the order-making power, Ministers should have regard to the aims of modernising, simplifying or clarifying the law wherever possible. Where modernisation, clarification or simplification is a significant characteristic of an order, the experience of the Law Commission should be brought to bear. The Government believes the best way to achieve this is to make a link between legislation to amend the DCOA and the remit of the Law Commission as set out in section 3(1) of the Law Commissions Act 1965.

55.  The aims of modernisation, simplification and clarification will take care of some of the issues discussed above: clarification will to some extent subsume the proposal from the consultation document on clarifying uncertainties; simplification will deal with cases where the law is complicated by overlapping provisions. The Law Commission is clearly very well-placed to advise on any wholesale investigations into complex areas of law. The Government hopes to be able to tie in what might be major pieces of work with the rest of the Commission's programme of work. The Government is also keen that a link is made where possible between the Commission's programme of work and the Cabinet Office's Forward Look at regulation and deregulation in the pipeline, in order to ensure a consistent, targeted and co-ordinated approach.

56.  As mentioned above, the Law Commission is resourced by the Lord Chancellor's Department according to its work programme. At present, the costs of references to the Law Commission are chargeable to departments; the Government expects this arrangement would also apply to advice and assistance on deregulation orders. There may be limitations on the speed with which the Commission can act in resourcing work of this type, as close attention would need to be paid to balancing it against the established work programme. These points would be made clear in guidance to departments.

57.  In making the above provisions, the Government is mindful of the need to accommodate the original proposal of using the order-making procedure to fast-track uncontroversial Law Commission proposals where appropriate. In discussions the Commission has emphasised that this power should not be seen as a substitute for other initiatives (such as proposals for a "main committee" of the House of Commons), and that primary legislation would remain the appropriate route for the great majority of Law Commission proposals. Nevertheless, the Government is confident that the new proposals in this area will be of mutual benefit to departments and the Law Commission.

Conclusion

58.  In addressing each of the points above, the Government has endeavoured to respond as fully as possible to the points made by the Committee as well as highlighting other issues for consideration which have arisen. The Government takes seriously the concerns of the Committees of both Houses, and is keen to accommodate their views wherever possible. Clearly the support of those who will be charged with implementing the new procedure is crucial in developing a framework of scrutiny which commands the confidence of both Houses and the wider public.

59.  The Government intends giving both Committees the opportunity to comment on draft legislation if at all possible, although this will be dependent on Parliamentary timetabling. Before introduction of the Bill the Government will also be working on developing a full list of examples of areas where the new powers might be used, and preparing new guidance for departments on the order-making procedure (although clearly this could not be finalised until after enactment). The Government will also be giving careful consideration to what additional documentary material departments will need to produce in support of proposed orders.

Cabinet Office

July 1999


 
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