Select Committee on Delegated Powers and Deregulation Fifth Report


FIFTH REPORT


9 FEBRUARY 2000

By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.

Electronic Communications Bill

INTRODUCTION

1.  This bill was the subject of pre-legislative scrutiny by the Trade and Industry Committee of the House of Commons.[1] That Committee was concerned that Parliament should be able to review any decision to bring into force Part I of the bill. That Part is unusual because it has been presented to Parliament on the basis that it will be needed only if self-regulation in the industry is seen to fail. Hence the unusual commencement provision in clause 15 which repeals Part I at the end of five years from Royal Assent unless an order has been made bringing Part I into force (though the order could specify a commencement date after the end of the five year period).

2.  What concerned the Trade and Industry Committee was that the Government's decision that self-regulation had failed could not be effectively challenged in Parliament. Once a commencement order had been made, the process was irreversible - Part I took effect and regulations under it would be needed and the bill provides only negative procedure for those. Their report commented that they would await with interest this Committee's report on these provisions.[2] The Government was challenged on this at Committee Stage in the Commons but did not give way.

3.  The department's memorandum explains the background to the bill and discusses the delegated powers. In addition this Committee invited oral evidence from officials of the Department of Trade and Industry. The transcript of this evidence is printed with the report.

Part I

4.  Clause 4 protects certain information obtained under Part I, sets out the purposes for which it may be disclosed and makes improper disclosure a criminal offence. Clause 4(2)(c) allows regulations to permit the disclosure of information for the purpose of facilitating the carrying out of prescribed functions of any prescribed person. As the explanatory notes make clear, "there is no restriction on who may make the disclosure or to whom it may be made, provided that the purpose is proper."[3] The Department's explanatory memorandum explains that "there will be circumstances where information, which should otherwise remain confidential, needs to be disclosed - for example, to other regulators. It seems likely that companies from different sectors ... and trade associations may apply for approval and it may be necessary to ensure that information is available from and to statutory regulators of those other sectors."[4]

5.  Clause 4(2)(c) is potentially a very wide-ranging power in an area where information is otherwise confidential. In oral evidence officials from the Department of Trade and Industry said that they had concerns about limiting the power to statutory regulators because of the need to comply with European legislation and the need to communicate with voluntary regulators. Nevertheless, the Committee believes that the power, as currently drafted, is unacceptably wide. The House may wish to consider amending the bill to restrict the power in a way which clearly limits it to information needed for regulatory and other public functions.

6.  Clause 5 contains a power to make regulations subject to negative procedure which prescribe the matters to be "prescribed" under other clauses (see clauses 2(3)(a) and (b), (4) and (8) and 4(2)(a) and (c)). The Committee sees these as similar to those commonly left to delegated legislation subject to negative procedure. However, in the light of the sensitive area in which the powers in Part I will operate the House may wish to consider amending the bill so that on the first occasion that regulations are made under this power they are subject to affirmative procedure.

7.  There is an "affirmative" power in clause 3(5) but the Committee considers that it is justified in the memorandum and does not call for further comment.

COMMENCEMENT PROVISIONS FOR PART I

8.  Normally commencement provisions are not subject to parliamentary control. But the provision in this bill is highly unusual, because the bill sees self-regulation as the best course. So an order to bring Part I of the bill into force would be a particularly important decision, going against the preference of Parliament.

9.  The Committee considered carefully the concerns expressed in the Commons. The original draft bill apparently simply provided for statutory regulation of cryptography service providers and it was the House of Commons Trade and Industry Committee which persuaded the Government to accept that the statutory regulation should be used only if self-regulation failed. The Committee consider that Parliament must have some control over the decision as to whether self-regulation has failed. Having discussed this in oral evidence with officials from the Department of Trade and Industry we recommend that the House may wish to consider amending the bill to provide that Part I is to take effect only if brought into force by an order which has been approved in draft by both Houses.

Part II

10.  There is a very wide power in clause 8 to "modify legislation" for the purpose of "authorising or facilitating the use of electronic communications or electronic storage". The scope of the power is made clearer in the detail of the clause which is extended by clause 9(5) and (6). An order under clause 8 may be made by affirmative or negative procedure (clause 9(3) and (4)) and the memorandum explains that it is intended to make the first order by affirmative procedure.

11.  Clause 8 can operate across a potentially wide range of legislation, as the explanatory memorandum admits. It "relates to enactments passed after the enactment of the Bill, as well as those passed before, and the Government is not able to identify the statutes which currently require the actions specified in subsection (2) and which could or should be amended." Moreover, the power could also be used to amend enactments and instruments which already make provision for electronic communications or storage.[5]

12.  The power in clause 8 may bite on enactments which have hardly been dreamt of, let alone reaching the light of the long parliamentary day. Were the use of this power not circumscribed on the face of the bill the Committee would have had to conclude that this was an inappropriate delegation of power. Fortunately the power is limited, in the following ways:

  • an order cannot require use of the electronic means: it can only provide for an electronic means alongside the conventional one,
  • it is only enactments and instruments which call for the doing of something listed in subsection (2) which can be amended,
  • the purpose of the order must be to authorise or facilitate the use of electronic communications or storage instead of the conventional alternative,
  • the appropriate Minister must consider that records of things done using electronic communications or storage are no less satisfactory than are required if conventional alternatives are used.

13.  In oral evidence officials from the Department of Trade and Industry explained that the Government intends to table an amendment to clause 8 to make sure that the clause works in the same way when an order facilitates electronic communication or data storage as when the order authorises such communication or storage.

14.   While there must be concern about the wide-ranging situations to which this power could be applied, the Committee is satisfied that the purpose for which the secondary legislation can be used is circumscribed on the face of the bill. Furthermore, the memorandum gives an explanation of the need for proceeding in this way which the Committee finds convincing.

Part III

15.  The Committee noted that clause 13 prohibits ministers using their powers under the bill "to impose a requirement on any person to deposit a key for electronic data with another person". This clause removes concerns which had been expressed and so makes more acceptable the delegated powers in the bill.

Recommendations

16.  The Committee has made the following recommendations:

  • Clause 4(2)(c) is potentially a very wide-ranging power in an area where information is otherwise confidential. The House may wish to consider amending the bill to restrict the power in a way which clearly limits it to information needed for regulatory and other public functions.
  • In the light of the sensitive area in which the powers in Part I will operate the House may wish to consider amending the bill so that on the first occasion that regulations are made under the power in Clause 5 they are subject to affirmative procedure.
  • Parliament must have some control over the decision as to whether self-regulation has failed. The House may wish to consider amending the bill to provide that Part I is to take effect only if brought into force by an order which has been approved in draft by both Houses.

17.  There is nothing else in the bill which the Committee wishes to draw to the attention of the House.[6]


1   14th Report, session 1998-99, Draft Electronic Communications Bill (HC 862). Back

2   Paragraph 50 of the Trade and Industry Committee's Report. Back

3   Paragraph 36 of the explanatory notes. Back

4   Paragraph 12 of the explanatory memorandum. Back

5   Paragraph 18 of the explanatory memorandum. Back

6   This report is also published on the Internet at the House of Lords Select Committee Home Page (http://www.parliament.uk), where further information about the work of the Committee is also available. Back


 
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