Select Committee on Delegated Powers and Deregulation Eleventh Report



ELEVENTH REPORT


29 MARCH 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.

ORDERED TO REPORT

POLITICAL PARTIES, ELECTIONS AND REFERENDUMS BILL

INTRODUCTION

1. This bill establishes an Electoral Commission; makes further provision for the registration of political parties; makes provision for the accounting and reporting of donations by registered political parties; restricts those from whom parties and others may accept donations; limits campaign expenditure by registered parties and third parties; limits expenditure during referendum campaigns and provides for shareholder consent for company donations for political purposes. The provisions about referendums would apply when other legislation provided for the holding of a referendum.

2. There are two kinds of delegated powers in the bill - those conferred on Ministers and the power to make regulations conferred on the Electoral Commission established by Part I of the bill.

3. Clause 146 specifies the Parliamentary control over the powers in the bill. (Regulations made by the Electoral Commission are not within clause 146 but are the subject of paragraphs 21 to 23 of Schedule 1). Orders and regulations made by the Secretary of State are subject to negative procedures except for those mentioned in subsections (3) (those not subject to Parliamentary control) and (4) (affirmative procedure). The Home Office memorandum states that the Government intends to bring forward Committee Stage amendments to extend affirmative procedure to the power under clause 65(1) (which is extended by paragraph 15 of Schedule 6). The memorandum states that the power under clause 104(6) is subject to negative procedure and argues that this is appropriate; in fact clause 146(4)(d) applies affirmative procedure.

4. The Committee thought it might be for the convenience of the House if it set out the following list of the powers in the bill, since they are not indexed in the memorandum:-

    Clauses 11(3), (6) and (9), 12(6), 15(6), 17(1) and (3), 18(1), 21(5), 23(8)(c), 25(2)(f), 28(5), 38(2)(a), 39(6), 62(1), 65(1), 75(6), 91(6), 97(4), 98(4), 99(2), 103(3), 104(6), 115(4), 124(1), 145(1) and 151(2) and Schedules 1 (paragraph 14(8)), 3 (paragraphs 1(2), 6 and 8(2)), 5 (paragraphs 2(1)(b) and 7), 6 (paragraphs 9(4)(c) and 10(3)(d) and (4)(d)), 7 (paragraph 7), 10 (paragraph 9(3)(b) and 10(2)(d) and (3)(d)), 12 (paragraph 7), 13 (paragraph 3), 14(paragraphs 9(3)(b) and 10(2)(d) and 3(d)), 15 (paragraphs 9(1)(d) and 10(2)(d) and (3)(d)) and 17 (paragraph 3 (5)).

5. This report does not comment on all these powers - those the Committee does not discuss it sees as appropriate delegation of procedural or supplementary detail - but rather draws attention to the most significant points.

AFFIRMATIVE POWERS

6. Clause 62 allows the Secretary of State to apply the requirements in Part IV of the bill about weekly donation reports in connection with general elections to one or more of the elections listed in subsection (2). The order may apply those provisions with modifications. He is required to consult the Electoral Commission.

7. Clause 97(4) allows the Secretary of State to apply the provisions in the bill about referendums to referendums proposed in future bills so that the preparations for holding the referendum can begin before the bill is passed.

8. Clause 105 provides for assistance from public funds for a designated organisation campaigning for a particular result in a referendum. Clause 103 provides for the Commission to designate organisations to whom this assistance may be given. When there are only two possible outcomes from the referendum the Commission may designate one organisation to campaign for each. Where there may be more than two outcomes, clause 103(3) allows the Secretary of State to specify those outcomes so allowing the Commission to designate more than two organisations to qualify for assistance.

9. Clause 104 deals with applications to the Commission from organisations which wish to be designated under clause 103. Subsections (2)(b) and (3) specify the time limits for applications and decisions by the Commission. Subsection (6) allows the Secretary of State to change those time limits by order in relation to a particular referendum.

10. Clause 124 allows the Secretary of State to make orders regulating the conduct of referendums. He is required to consult the Commission by subsection (4). An order may create offences (and, by implication, provide for the mode of trial and the penalties).

11. Schedule 7 contains detailed provisions about what counts as qualifying expenses for the purposes of the controls on campaign expenditure imposed by the bill. Paragraph 7 is a Henry VIII power allowing the amendment of Parts I and II of the Schedule either to give effect to a recommendation of the Commission or after the Secretary of State has consulted the Commission.

12. Schedule 12 makes provisions about qualifying expenses in relation to referendums in terms very similar to those of Schedule 7. Paragraph 7 of Schedule 12 is identical to paragraph 7 of Schedule 7.

13. Schedule 13 places limits on referendum expenses by permitted participants. The financial limits set out in paragraph 2 apply when the referendum is conducted throughout the U.K. When a referendum is held in a particular part of the U.K., the Secretary of State is given power by paragraph 3 to specify by order the relevant limits. Sub-paragraph (4) requires him to consult the Commission and if he decides to make an order which is not in accordance with the views of the Commission, he is required to lay before Parliament when he lays his draft order a statement of his reasons for disagreeing with the Commission.

ELECTORAL COMMISSION'S REGULATIONS

14. The Commission is established by clause 1 and Schedule 1. The Commission has power to make regulations under various provisions in the bill and paragraphs 21 to 23 of Schedule 1 set out the procedure for this.

15. The regulations are not statutory instruments but must be printed and made available to the public. The Commission may charge a reasonable fee for a copy of regulations. It is a defence to an alleged breach of a regulation to show that at that time the regulations had not been made available to the public.

16. The powers to make regulations are in clauses 38(2)(a), (3) and (4), 39(6) and (7), 75(6), 91(6) and 115(4) and in Schedules 3 (paragraph 6), 5 (paragraph 7), 6 (paragraphs 9(4)(c)) and 10(3)(d) and (4)(d)), 10 (paragraphs 9(3) and 10(2)(d) and (3)(d), 14 (paragraphs 9(3)(b) and 10(2)(d) and (3)(d)), 15 (paragraphs 9(1)(d) and 10(2)(d) and (3)(d)) and 17 (the new section 81(6) of the Representation of the People Act 1983 inserted by paragraph 3(5)). Of these a number of powers are limited to prescribing a form of return (clauses 75(6), 91(6) and 115(4) and paragraph 3(5) of Schedule 17). Others allow the Commission to require information additional to that required by the bill to be provided in returns - Schedules 3 (paragraph 6), 5 (paragraph 7), 6 paragraphs 9(4)(c) and 10(3)(d) and (4)(d)), 10 (paragraphs 9(3)(b), 10(2)(d) and (3)(d)), 14 (paragraphs 9(3)(b) and 10(2)(d) and (3)(d) and 15 (paragraphs 9(1)(d) and 10(2)(d) and (3)(d)). The remaining powers are those in clauses 38 and 39.

17. Clause 38 requires the treasurer of a registered party to prepare an annual statement of accounts. Regulations will prescribe "requirements as to its form and contents". Clause 39 requires accounts to be audited when income or expenditure exceeds £250,000. Subsection (6) allows regulations to make provision about the appointment etc. of auditors and their duties.

18. When the Committee undertook pre-legislative scrutiny of the delegated powers in the draft Financial Services and Markets Bill it considered anxiously the propriety of conferring legislative powers on the FSA, as the exercise of those powers would not be subject to Parliamentary control. The case for delegation to the Commission has to be justified by its public nature and its functions and the Committee sees nothing inappropriate in the delegation proposed.

CODES OF PRACTICE

19. Paragraph 6 of Schedule 12 provides for the Commission to prepare a code of practice giving guidance about expenses which do, or do not, fall within Part I or II of that Schedule (direct expenses and overheads qualifying as campaign expenditure). The Secretary of State may approve the Commission's draft code (with or without modification) and has then to lay a copy before both Houses. If there are modifications, he has also to lay a statement justifying them. If after 40 days neither House has resolved not to approve the draft, he then issues the code which comes into force on the date appointed by order made by the Secretary of State. That order is subject to negative procedure.

20. Clause 74(5)(a) provides that it is a defence to a charge under that clause (of incurring expenses in excess of the limit imposed by Schedule 8) to show that there has been compliance with the code of practice.

21. Paragraph 6 of Schedule 12 makes similar provision for a code of practice giving guidance as to expenses which do or do not fall within Part I or II of that Schedule (direct expenses and overheads qualifying as referendum expenses).

22. Clause 113(3)(a) provides that it is a defence to a charge under that clause (of incurring expenses in excess of the limit imposed by Schedule 12) to show that there has been compliance with the code of practice.

RULES OF COURT

23. Clause 53 allows the Commission to apply to a court for the forfeiture of a donation made to a registered party by an impermissible or unidentifiable donor. Clause 54 confers a right of appeals against a forfeiture order. Clause 55(1) allows rules of court to make procedural provisions for proceedings under clauses 53 and 54.

24. This extension of existing powers to make rules of court is not discussed in the Home Office memorandum, but it is a common way of legislating and the Committee considered that it raised no issues which it should draw to the attention of the House.

VARIATION OF SUMS SPECIFIED IN THE BILL

25. Clause 145 is a general power to vary any sum specified in the bill (other than the limit on policy development grants under clause 11 which can be varied under subsection (9) of that clause and the limit on expenditure by the Commission under clause 32 on assisting existing registered parties). If the Secretary of State makes an order under clause 145 in consequence of changes in the value of money, no Parliamentary procedure applies. He can make an order in other circumstances only to give effect to a recommendation of the Commission; in which case negative procedure applies. While this is a Henry VIII power, the Committee considers that negative procedure is appropriate even though the power extends to varying the fines specified in Schedule 19.

OTHER HENRY VIII POWER SUBJECT TO NEGATIVE PROCEDURE

26. The Committee has already referred to the power in clause 11(9) to vary the limit on policy development grants. That Henry VIII power is subject to negative procedure, which the Committee considers appropriate.

POWER NOT SUBJECT TO PARLIAMENTARY CONTROL

27. In addition to the commencement power in clause 151 and the power to vary sums specified in the bill in consequence of changes in the value of money (clause 145(2)(a)) there are two powers not subject to Parliamentary control. Clause 15(6) provides that a Boundary Commission shall cease to exist when the Secretary of State, being satisfied that the Commission has no further functions to perform, by order so directs. Paragraph 14(7) of Schedule 1 allows the Secretary of State by order to transfer to the Electoral Commission such property, rights and liabilities as he considers appropriate in connection with the establishment of the Commission.

28. The Committee considers it appropriate for these powers not to be subject to Parliamentary control.

COMMISSION TO BE CONSULTED ABOUT CHANGES TO ELECTORAL LAW

29. Clause 6 does not confer new powers but requires the Commission to be consulted before regulations, orders or rules are made under certain existing powers. Similarly clause 7 lists functions which are to be exercised only on, and in accordance with, a recommendation of the Commission. Subsection (3) of the clause applies this restriction to three powers to make orders and a power to make regulations. The Committee noted that among the powers to which these clauses apply are section 17A(3) of the Greater London Authority Act 1999 (free delivery of election addresses) and section 76(2A) of the Representation of the people Act 1983 (limitation of expenses in elections to the Greater London Authority).

30. The Committee welcomes the extent to which the Commission is required to be consulted before these and other regulations are made. This consideration has affected our overall judgment that the powers to be granted under the bill are reasonable and also that the level of parliamentary control to be provided is adequate.

RECOMMENDATION

31. The Committee considers that no amendment is necessary either to the delegated powers in the bill or to the parliamentary control provided for these powers.

RACE RELATIONS (RELIGIOUS DISCRIMINATION) BILL [HL]

32. This bill contains no delegated legislative powers.[1]


1  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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