Select Committee on Delegated Powers and Regulatory Reform Third Report


Financial Services and Markets Act 2000, section 426(1), (2) and (3)

426  Consequential and supplementary provision

(1)  A Minister of the Crown may by order make such incidental, consequential, transitional or supplemental provision as he considers necessary or expedient for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.

(2)  An order under subsection (1) may, in particular, make provision—…

(b)  for applying (with or without modifications) or amending, repealing or revoking any provision of or made under an Act passed before this act or in the same Session.

(3)  No other provision of this Act restricts the powers conferred by this section.

Parliamentary procedure: negative (section 429(8)).

Departmental explanation:

"This is not an uncommon bill provision. It is similar, for example, to section 75 of the Competition Act 1998.

The provision is necessary to ensure that detailed provisions of the Bill can be brought into effect smoothly, without the need for further primary legislation and to deal with any transitional provisions and consequential amendments that are not covered directly in the bill. The circumstances in which the power can be used and the purposes for which it may be used are, in fact, quite focussed. It can only be used for the general or any particular purposes of the bill, in consequence of its provisions or for giving full effect to it. In broad terms, the power is needed to deal with tidying up that is not dealt with directly by the Bill itself.

Although it is the Treasury's intention to make all practicable efforts to deal in the bill with the maximum number of matters that can be dealt with under this power, it is inevitable with an exercise of this size and complexity that certain things will fall through the net. For example, the Government intends to introduce amendments to the Bill that will make consequential amendments to other legislation. For example, tax and companies legislation contain provisions that rely on definitions in the Banking Act 1986 and the Insurance Companies Act 1982. Those provisions will need to be updated when those other enactments are repealed. However, some consequential changes may not be easy to identify and the Treasury needs to have the powers to bring about relevant any changes in the event there are some that have been overlooked.

It is also possible to imagine circumstances in which it is necessary to make provision which cannot strictly be characterised as transitional or consequential but which is to ensure proper articulation between provisions in the bill, once it is enacted, and other measures on the statute book. The Treasury are not currently aware of the need to make such provision but with the range of matters covered by the bill the need to make such provision seems a possibility that could not be called remote. By way of example, the Bill and the Companies Acts make provision requiring auditors to disclose certain matters in particular circumstances. The purpose of the requirements will be similar - but as they are not directly equivalent provisions it is not inconceivable that some inconsistency or conflict may be identified at a later stage. An order under this clause would, therefore, be able to resolve such difficulties.

The order is subject to the negative resolution procedure. This is appropriate because the powers would only be used for limited purposes to give effect to the policy that Parliament has endorsed when passing the legislation."

Committee Report (7th of 1999-00): no comment on this provision

Note: the provision which became section 426(1) was in a slightly different form at introduction, being the subject of some minor amendments at Third Reading in the House of Lords to enable the Ministers in charge of Government departments other than the Treasury to exercise the powers. The Committee had no comment to make on these amendments (16th Report for 1999-00)

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