SPECIAL REPORT FOR 1999-2000 - THE COMMITTEE'S
PART 4: THE DRAFT REGULATORY REFORM BILL
99. This session, regrettably in our view, only one
draft bill has come before a House of Lords Committee for pre-legislative
scrutiny. This was the draft Regulatory Reform Bill which would,
if enacted, be one of the most far-reaching delegations of legislative
100. In 1994 the Committee reported twice on the
Deregulation and Contracting Out Bill, and described the power
conferred by Chapter I of Part I of that Bill as "unprecedented
in time of peace". That power pales into insignificance when
compared to the powers which the Government has proposed to take
in the draft Regulatory Reform Bill.
101. This bill is different to other bills. It does
not outline a detailed framework for future secondary legislation.
It is, as the Government acknowledges,
an enabling bill, creating a power to legislate by order which
would extend to the topics covered by the majority of bills introduced
in recent years. Depending on how this power was used by successive
Governments, it would be capable of bringing about a major change
in the long-standing arrangements for the parliamentary consideration
102. This draft bill would thus allow Ministers to
do almost anything by a new form of delegated legislation, rather
than by primary legislation. It includes an entirely new power
to impose an additional burden (rather than only to reduce or
remove a burden, as in the present Deregulation and Contracting
Out Act). Unlike the present Act it would also apply to post-1994
103. The differences between the proposed new order-making
and the power under the Deregulation and Contracting Out Act 1994
are set out in the following Table.
Table 2: A comparison of the 1994 Act
and the Draft Regulatory Reform Bill
|Deregulation Orders under the 1994 Act are capable of:
||Regulatory reform orders under the draft Bill would be capable of:
|[Not covered by 1994 Act.]
||"imposing additional burdens where necessary, provided they are proportionate and they strike a fair balance between the public interest and the interests of those affected by the new burden";
|[Not covered by 1994 Act.]
||"removing inconsistencies and anomalies in legislation";
|[Not covered by 1994 Act.]
||"dealing with burdensome situations caused by a lack of statutory provision to do something";
|The 1994 Act applies only to legislation passed before the Deregulation and Contracting Out Act 1994;
||"applying to legislation passed after the Bill if it is at least two years old when the order is made and has not been amended in substance during the last two years";
|The 1994 Act is in terms of removing or reducing burdens 'affecting any person in the carrying on of any trade, business or profession or otherwise'
||"relieving burdens from anyone except Ministers and government departments (where only they would benefit)";
|[Not covered by 1994 Act.]
||"allowing administrative and minor detail to be further amended by subordinate provisions orders, subject to negative resolution procedure".
104. We considered various versions of this draft Bill at our
meetings on 19 and 26 January, 2, 3 and 8 May, 4 and 25 July and
1 November. We reported on it twice this session, in our 15th
and 24th reports.
Most of our concerns about the bill, in its various drafts, relate
to the width of the powers rather than to the deregulation procedure
as such, about which we have very few concerns.
105. The latest draft of the bill is a great improvement
on previous versions. But the Committee remains concerned about
the Government's proposal for a dramatic widening of the power
to legislate by order. Whilst unable to greet the revised draft
with even modified rapture, we have said that we would not expect
to report in terms suggesting that the proposal was unacceptable
if a bill on similar lines were introduced.
106. When Parliament considered the Deregulation
and Contracting Out Bill, there was an accompanying document giving
carefully worked out synopses of examples of the way in which
the power would be used, many of which resulted in deregulation
proposals. This proved helpful in demonstrating to Parliament
how the powers would be used and enabled Ministers to show that
the advantages to be gained justified the risks of conferring
apparently wide powers. We have said on a number of occasions
that a similar document would be of even greater value in relation
to the parliamentary consideration of the Draft Regulatory Reform
Bill, because this bill would give Ministers even wider powers.
As yet, however, no such document has been produced.
107. The explanatory notes state that the proposed
power is "no wider than necessary" to achieve regulatory
reform. In oral evidence to us Lord Falconer of Thoroton readily
acknowledged that there is no precise line drawn in the draft
bill between matters in respect of which it is appropriate to
legislate by way of order and other matters in respect of which
it would not be so appropriate, nor is it the Government's intention
to try to draw one. It will, he said, be for Ministers to decide
whether or not the use of the new power would be "appropriate"
(Q 13), likening the task of so deciding to the difficulty of
defining an elephant. "You cannot describe it but you know
it when you see it" (Q 13). When asked whether he would "be
content to rely totally on a successor administration's definition
or interpretation of what was appropriate and what an elephant
was" Lord Falconer replied "Yes, I would" (Q 16).
He also relied on the safeguard that both Committees would be
expected to comment if they considered a proposal inappropriate.
It would therefore be open to a future Government, of a presently
unknown political complexion, to propose changes of potentially
great significance by means of an order.
108. The Government regards the two Parliamentary
Deregulation Committees as valuable protections against the abuse
of this unprecedently wide power. In particular, it contemplates
the two Committees deciding whether the use of the power is appropriate
(Q 53). Clearly the Committees would provide some protection.
But from our own standpoint we do not consider - however flattering
it might be to do so - that the fact that we carry out this work
to the best of our ability within the existing framework is lasting
protection against the misuse of the extremely wide powers now
proposed. Although to date the Government has always acted on
our recommendations regarding draft deregulation orders, it is
not obliged to do so, but only to take account of our reports.
The legislation allows the Minister to continue regardless of
the views of either Committee (though those views will, of course,
inform the subsequent debates on the resolutions to approve the
109. Paragraph 7 of the Explanatory Notes to the
draft bill states that "on no occasion has a Minister ignored
an adverse report from either Committee; the proposed order has
always been re-cast or withdrawn accordingly. The Government intends
to continue this practice in its use of regulatory reform orders."
Clearly this is important and welcome.
110. We also noted that the few examples which the
Government has given of ways in which the new power would be used
involve significant pieces of legislation, each equivalent to
The proposal to reform the fire safety regime in particular, which
is currently spread across about 120 pieces of primary legislation
and a similar number of statutory instruments,
would involve the Committee in a major scrutiny task, and it is
likely that the Committee would receive a substantial amount of
evidence on the detailed policy elements of such proposals. The
Committee's work has already expanded in recent years and it is
inevitable that we would need additional resources to make such
111. Our conclusion on the draft bill was as follows:
"During a protracted
consultation process the Government has listened to our concerns
and dropped many of its original proposals whilst strengthening
the safeguards in the bill. The main issue which the present draft
bill raises - the considerable widening of the power to legislate
by order - is one for the House as a whole to decide.
The preservation of the supremacy of Parliament is
a matter of crucial constitutional importance. The Government
has so far been unable to circumscribe the legislation so as to
limit it to those objectives which they say they wish to achieve,
and the power has been left open-ended. For this reason the Government
attaches great significance to the substantial safeguards including
the two Parliamentary Deregulation Committees, to which they look
for guidance as to whether each use of the power will be appropriate.
Only Parliament itself can decide whether this guidance from the
Committees and the unfettered and important power of either House
to refuse to approve the final draft order makes this unprecedentedly
wide power acceptable."
112. The draft Regulatory Reform Bill raises matters
of fundamental constitutional importance for the House as a whole
to consider. We have no doubt that the House will wish to debate
as a matter of great importance any Regulatory Reform Bill which
may be introduced in a future session.
86 See paragraph 92 of the explanatory notes: "As
an enabling Act, it [the Bill] will itself have no financial effect." Back
Proposed in Cm 4713, Publication of the draft Regulatory Reform
Bill (April 2000). Details of the background to the proposals
in the Bill are on the Cabinet Office website at http://www.cabinet-office.gov.uk/regulation/index/bill.htm.
The Command paper is available on the Internet at http://www.official-documents.co.uk/document/cm47/4713/4713.htm.
Column 2 of the Table is taken from paragraph 10 of the explanatory
notes to the draft bill. Back
HL Paper 61. Back
HL Paper 86. Back
On 27 November 2000 the Government announced by means of a written
answer in House of Commons (but not House of Lords) Hansard
a list of some 22 "proposals under preparation that could
be implemented under the Regulatory Reform Bill": see House
of Commons Hansard, col. 369W. Back
See paragraph 29 of the Explanatory Notes to the draft Bill. Back