HOUSE OF LORDS

Merits of Statutory Instruments Committee

32nd Report of Session 2010-12

Drawing special attention to:

Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011

Electronic Communications (Universal Service) (Amendment) Order 2011

Tobacco Advertising and Promotion (Display and Specialist Tobacconists) (England) (Amendment) Regulations 2011

Ordered to be printed 24 May and published 25 May 2011

London : The Stationery Office Limited £price

HL Paper 153 The Select Committee on the Merits of Statutory Instruments The Committee has the following terms of reference: (1) The Committee shall, subject to the exceptions in paragraph (2), consider— (a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an ; (b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament, with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (3). (2) The exceptions are— (a) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998; (b) draft orders under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006, and subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001; (c) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them. (3) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are— (a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House; (b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act; (c) that it may inappropriately implement European Union legislation; (d) that it may imperfectly achieve its policy objectives. (4) The Committee shall also consider such other general matters relating to the effective scrutiny of the merits of statutory instruments and arising from the performance of its functions under paragraphs (1) to (3) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments. Members The members of the Committee are: Rt Hon. Baroness Butler-Sloss GBE Lord Methuen Lord Eames OM Rt Hon. Baroness Morris of Yardley Rt Hon. Lord Goodlad (Chairman) Lord Norton of Louth Baroness Hamwee Lord Plant of Highfield Lord Hart of Chilton Rt Hon. Lord Scott of Foscote Lord Lucas Registered interests Members’ registered interests may be examined in the online Register of Lords’ Interests at www.publications.parliament.uk/pa/ld/ldreg.htm. The Register may also be inspected in the House of Lords Record Office and is available for purchase from the Stationery Office. Declared interests for this Report are in the Appendix. Publications The Committee’s Reports are published by the Stationery Office by Order of the House in hard copy and on the internet at www.parliament.uk/parliamentary_committees/merits.cfm Contacts If you have a query about the Committee or its work, please contact the Clerk of the Merits of Statutory Instruments Committee, Delegated Legislation Office, House of Lords, London SW1A 0PW; telephone 020-7219 8821; fax 020-7219 2571; email [email protected]. The Committee’s website, www.parliament.uk, has guidance for the public on how to contact the Committee if you have a concern or opinion about any new item of secondary legislation. Statutory instruments The National Archives publishes statutory instruments on the internet on behalf of the Government at www.legislation.gov.uk/uksi, together with an explanatory memorandum (a short, plain-English explanation of what the instrument does) for each instrument. Thirty-second Report

INSTRUMENTS DRAWN TO THE SPECIAL ATTENTION OF THE HOUSE The Committee has considered the following instruments and has determined that the special attention of the House should be drawn to them on the grounds specified. A. Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011 (SI 2011/1208) Electronic Communications (Universal Service) (Amendment) Order 2011 (SI 2011/1209) Date laid: 24 June 2011 Parliamentary Procedure: negative Summary: These Regulations implement the Citizens’ Rights Directive (Directive 2009/136/EC) which amends the “E-Privacy Directive” (Directive 2002/58/EC). These Regulations amend the Privacy and Electronic Communications Regulations 2003 which regulate privacy and data protection in the electronic communications sector in the UK. The Committee received several submissions which raised questions: in particular about the point at which a user is required to give consent for a “cookie” to be applied; and about the particular technology to be used in providing services for the deaf. DCMS has provided a clear explanation of their position. As the arguments are technical and quite lengthy the full correspondence is published on the Merits Committee website. These Regulations are drawn to the special attention of the House on the grounds that they give rise to issues of public policy likely to be of interest to the House. 1. The Department for Culture, Media and Sport (DCMS) has laid these instruments1 under the European Communities Act 1972 along with Explanatory Memoranda and a number of Impact Assessments. These Regulations implement the Citizens’ Rights Directive (Directive 2009/136/EC) which amends the “E-Privacy Directive” (Directive 2002/58/EC). These Regulations amend the Privacy and Electronic Communications Regulations 2003 which regulate privacy and data protection in the electronic communications sector in the UK. Gold plating in SI 2011/1208? 2. The amendments in this instrument strengthen current enforcement provisions and will require consumers to give their consent to allow the import of “cookies” to their machines. The Committee has received correspondence from the Internet Advertising Bureau and the Association of Online Publishers which questions whether the wording in revised regulation 3A, which is inserted by regulation 6 in the instrument, over-implements the Directive by changing the point and the method by which the reader must give consent to a cookie.

1 See also the Electronic Communications and Wireless Telegraph Regulations 2011 (SI 2011/1210) 2 MERITS OF STATUTORY INSTRUMENTS COMMITTEE

3. DCMS has provided a full response and legal analysis of their transposition. They comment that proposals for prior consent were dropped during negotiation and the definition of consent used in the amending regulations is the definition set out in the Data Protection Directive, which was implemented in the UK through the Data Protection Act 1998. This definition is not time bound – it makes no judgement on when consent can occur. The correspondence is published in full on the Merits Committee website. Under-implementation in SI 2011/1209? 4. A submission from Sorenson Communications alleges under- implementation: it states that as the wording of the instrument currently stands, it does not provide for a functionally equivalent telecommunications service for British Sign Language (BSL) users, as mandated by the EU Framework. They wish to promote Video Relay Services as opposed to the Text Relay currently used. 5. DCMS have provided a response which explains that the Framework Directive requires Member States’ Governments to “enable relevant national authorities to specify, where appropriate, requirements to be met by undertakings providing publicly available electronic communication services to ... disabled end-users”. 6. In the UK Ofcom is the nominated regulator and is in the middle of a review of appropriate technology. Ofcom is currently undertaking a review of relay services, the objective of which is to assess whether current arrangements for the provision of relay services are adequate in delivering equivalence to voice telephony for hearing (including BSL users) and speech impaired end-users. Ofcom expect to publish a consultation document within the next few weeks and a research report, which has helped inform the review, was published on 4 February 2011.2 DCMS conclude that Sorenson’s complaint pre-empts the outcome of that review but comments that both Government and regulator share the view that equivalence is a broad concept and should not be tied to any particular service. The correspondence is published in full on the Merits Committee website. 7. In each case the submissions focus on technical issues about how the European legislation should be transposed and the Department has provided a strong defence of the position set out in the current regulations. The issues raised are technical and the full correspondence is published on the Committee’s website for the benefit of any Member who has an interest.

B. Tobacco Advertising and Promotion (Display and Specialist Tobacconists) (England) (Amendment) Regulations 2011 (SI 2011/1256) Date laid: 2 July 2011 Parliamentary Procedure: negative Summary: The Tobacco Advertising and Promotion (Display) (England) Regulations 2010 (SI 2010/445) provided exemptions to the general prohibition of the display of tobacco products set out in section 21 of the Health Act 2009 with the intention of allowing trading to continue but preventing tobacco products being used

2 http://stakeholders.ofcom.org.uk/market-data-research/telecoms-research/ofcom-relay-services/ MERITS OF STATUTORY INSTRUMENTS COMMITTEE 3

as promotional tools. This was based on evidence which demonstrated that eye- catching displays inspired young people to start smoking. Those regulations were due to come into force on 1 October 2011 for large shops and on 1 October 2013 for all other retailers of tobacco. The new Regulations defer the implementation of those provisions to 6 April 2012 for large shops and 6 April 2015 for all other retailers to reduce the costs on small business in line with the policy objectives of the Growth Review. The two policy aims of the Regulations are underpinned by a Written Statement on 9 March 2011 which states that the Department of Health expects to amend the display regulations to mitigate burdens on business “while maintaining the expected public health gains.” If the figures set out in the Impact Assessment to the Health Act 2009 are taken as the baseline it would appear that a deferment of a maximum of 18 months may result in up to 4,000 more young people taking up smoking with consequent long-term health effects. On the basis of the evidence given in the Impact Assessment to the Health Act 2009 (on the effect of deferring the prohibition of the display of tobacco products) and the minimal information provided in the Explanatory Memorandum, the House may wish to seek further explanation from the Health Minister on how these Regulations will achieve both policy objectives. These Regulations are drawn to the special attention of the House on the grounds that may imperfectly achieve their policy objectives. 8. The Department of Health (DH) has laid this instrument under the Tobacco Advertising and Promotion Act 2002 along with an Explanatory Memorandum (EM). Readers are referred back to the Impact Assessments (IAs) which accompanied the Health Act 2009 and the original Regulations laid in 20103 which included the implementation dates that the current regulations defer. 9. The Tobacco Advertising and Promotion (Display) (England) Regulations 2010 (SI 2010/445) provided exemptions to the general prohibition of the display of tobacco products set out in section 21 of the Health Act 2009. These were intended to allow trading to continue but to prevent tobacco products being used as promotional tools because evidence demonstrated that eye-catching displays inspired young people to start smoking. Those regulations were due to come into force on 1 October 2011 for large4 shops other than duty free stores and on 1 October 2013 for all other retailers of tobacco. The new Regulations defer the implementation of those provisions to 6 April 2012 for large shops and 6 April 2015 for all other purposes. These Regulations also defer the implementation date for specialised tobacconists from 1 October 2013 to 6 April 2015. 10. DH state that the deferment is in accordance with the Growth Review5 published by the Chancellor and the Secretary of State for Business, Innovation and Skills in November 2010 which stated the Government’s overriding priority is to return the UK economy to balanced, sustainable growth, in particular by reducing the regulatory burden on business. One of the first key initiatives under the Growth Review is the introduction of a three year moratorium on new domestic regulations for smaller, or micro, businesses and those just starting up.

3 Tobacco Advertising and Promotion (Display) (England) Regulations 2010 (SI 2010/445) and Tobacco Advertising and Promotion (Specialist Tobacconists) (England) Regulations 2010 (SI 2010/446) 4 Definitions are taken from the Sunday Trading Act 2004: a large shop means one with a floor area greater than 280m2. A micro-business has less than 10 employees. 5 http://www.bis.gov.uk/assets/biscore/corporate/docs/p/10-1296-path-to-strong-sustainable-and-balanced-growth.pdf 4 MERITS OF STATUTORY INSTRUMENTS COMMITTEE

11. The current Government’s policy on the control of tobacco was announced in a Written Ministerial Statement on 9 March (HC Deb, col 67 WS), and included the intention to amend the tobacco display legislation in keeping with the Growth Review by: • giving retailers longer to prepare by delaying commencement until 6 April 2012 for large shops and 6 April 2015 for small shops; • increasing the size of temporary displays allowed when serving customers and re-stocking (from 0.75 square metres to 1.5 square metres); and • adding to the circumstances in which such displays can occur, for example, to carry out stock-taking and other activities necessary in running a business. 12. DH inform us that, as the existing legislation is due to come into effect for large shops from 1 October 2011, the Government’s first priority is to amend the commencement dates in order to provide confirmation for business as soon as possible. The more detailed substantive changes to the content of the regulations will be made separately; as these will need to be notified in draft to the European Commission under the Technical Standards Directive, and this will cause delay. An updated IA will be published alongside the second set of amendments to the tobacco display regulations in due course. 13. DH also inform us that the Government “fully recognises that this will defer the public health benefits and fully took this into account in reaching this decision”. However the current EM did not offer any figures to underpin this. The 2009 Act envisaged stock being held in discreet shelving without any prominent sponsor’s name. Estimates in the IA to the original regulations indicated that, although complete replacement of display shelves would cost over £1,000, solutions involving magnetic or other covers for brand names could be put in place for around £450 for a small store and £850 for a large one(IA to SI 2010/445, paragraph 40). 14. The same IA quotes estimates that accompanied the Health Act 2009, which calculated a net health benefit of £520m from removing tobacco displays (based on life years saved from a reduction in smoking prevalence and lifetime health benefits arising from fewer young people starting to smoke over a ten year period) (paragraph 19). Figures on the penultimate page of that IA stated the total benefits for a 10 year horizon were based on a reduction of between 579 and 2,786 fewer people smoking per year. 15. We find apparent inconsistencies in the proposals: • If the Growth Review aims to reduce the regulatory burden on small enterprises and micro businesses, why is the implementation date for large shops also being put back? • The Written Statement on Tobacco Control of 9 March 2011 said: “Take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence, and so it is crucial to reduce the number of young people taking up smoking in the first place. Nicotine is extremely addictive and young people can develop dependence on tobacco very rapidly. Each year in England an estimated 320,000 children under 16 first try smoking and the majority of adult smokers were smoking regularly MERITS OF STATUTORY INSTRUMENTS COMMITTEE 5

before they turned 18 years of age ... We believe that eye-catching displays encourage young people to try smoking. They also undermine quit attempts by adults by tempting them to make impulse buys of tobacco.” However, if the figures set out in the Impact Assessment to the Health Act 2009 are taken as the baseline it would appear that a deferment of 18 months may result in up to 4,000 more young people taking up smoking with consequent long-term health effects. 16. The two policy aims of the Regulations are underpinned by the Written Statement of 9 March 2011, which states that DH expects to amend the display regulations to mitigate burdens on business “while maintaining the expected public health gains.” However, DH has provided no information about how this will be achieved. On the basis of the evidence given in the IA to the Health Act 2009 (on the effect of deferring the prohibition of the display of tobacco products) and the minimal information provided in the EM, the House may wish to seek further explanation from the Health Minister on how these Regulations will achieve both policy objectives.

OTHER INSTRUMENTS OF INTEREST Draft Charities Act 2006 changes in Exempt Charities Order 2011 Draft Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations 2011 17. Following a substantial review, the Charities Act 2006 aimed to clarify and standardise the administration of charities, including the regulation of exempt charities which are outside the jurisdiction of the Charity Commission but which they are required to comply with the general requirements of charity law. The 2006 Act also changed the status of some charities but, despite provisions that came into force on 31 January 2009 which removed exempt status from foundation, voluntary and foundation special schools, their position has been equivocal for some time. This instrument re-confers exempt status on such schools, relieving them of the need to register with the Commission and from the accounting and reporting requirements that flow from registration. Separate legislation, the Apprenticeships, Skills, Children and Learning Act 2009, removed exempt status form sixth form college corporations – this effect appears to have been unintentional and this instrument similarly re-confers exempt status on them. A second instrument also appoints the appropriate Education Minister as the principal regulator: amongst their other duties that person will have oversight of the schools’ compliance with charity law, thus minimising the regulatory burden for these charities; for example, by not requiring them to prepare accounts in differing formats for two different regulators. A full policy statement on this subject was made in a Written Statement on 30 March 2011.6

6 Lords Hansard, 30 Mar 2011 : Cols WS 95-6: http://www.publications.parliament.uk/pa/ld201011/ldhansrd/text/110330-wms0001.htm#11033060000228 6 MERITS OF STATUTORY INSTRUMENTS COMMITTEE

Draft Distribution of Dormant Account Money (Apportionment) Order 2011 18. The 2008 Act stipulates that the dormant accounts money which is available for public spending (that portion which is transferred from the Reclaim Fund to the Big Lottery Fund, the designated distributor) is to be apportioned between England, Wales, Scotland and according to a ‘prescribed percentage’. That percentage is set out in the current Order and is in line with the Barnett Formula, which is the standard mechanism for devolved spending: 83.9% for meeting expenditure in relation to England, 4.9% for meeting expenditure in relation to Wales, 8.4% for meeting expenditure in relation to Scotland, 2.8% for meeting expenditure in relation to Northern Ireland. In its 19th Report of this Session (HL Paper 91) the Committee drew attention to the Transfer of Functions (Dormant Accounts) Order 2010 (S.I. 2010/2976) which transferred responsibility for the funds from dormant bank accounts to the Cabinet Office; so that, in England, it could be used for the Big Society Bank, which will be a social investment wholesaler.

Draft Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No 2) Regulations 2011 and three related instruments7 19. These instruments make consequential changes to primary and secondary legislation as a result of provisions in the Pensions Acts 2007 and 2008. Those Acts provide for the abolition of contracting-out for occupational, personal and stakeholder pension schemes which contract out of the state additional pension on a defined contributions (or money purchase) basis, and the abolition of the rules governing contracted-out rights in such schemes known as “protected rights”. Together with the primary legislation, they remove the rules and references that relate to contracting-out on a defined contributions basis and protected rights and make some transitional provisions. Most rules and references will be removed from 6 April 2012. Some provisions will remain in place for a transitional period until 5 April 2015.

Syria (Asset-Freezing) Regulations 2011 (SI 2011/1244) 20. These Regulations make provisions relating to the enforcement of Council Regulation (EU) No. 442/2011 of 9 May 2011 concerning restrictive measures in view of the situation in Syria (“the Council Regulation”). The measures include the freezing of funds and economic resources of designated persons and ensuring that funds and economic resources are not made available to them or for their benefit. These Regulations provide for penalties for breach of those asset freezing measures. The Regulations have been laid

7 Draft (Abolition of Protected Rights) (Consequential Amendments) (No 2) Order 2011, Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) Regulations 2011(SI2011 1245) and The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) Order 2011 (SI 2011/1246) MERITS OF STATUTORY INSTRUMENTS COMMITTEE 7

before Parliament less than 21 days before they come into force. The Explanatory Memorandum (EM) says that the Council Regulation came into force on 10 May 2011, but given the seriousness of the risks it addresses, it is important that appropriate penalties are in place for breaches of its provisions (paragraph 3.1). The Treasury provides guidance on the asset freezing measures in relation to Syria on its website, and operates a free subscription email service alerting subscribers to changes to the asset freezing regime (EM paragraph 9).

General Medical Council (Applications for General Practice and Specialist Registration) (Amendment) Regulations Order of Council 2011 (SI 2011/1248) 21. Following a complaint made to the European Commission concerning the evidence requirements set out in the main regulations SI 2010/475, these Regulations amend the provisions concerning evidence required from applicants for inclusion on the General Medical Council’s General Practitioner and Specialist registers. Regulation 5(2) and (3) of the principal Regulations sets out the evidence that doctors of certain categories must provide in support of an application. This covers evidence of qualifications, training and experience. The omission of this provision removes the detailed prescriptive requirements for evidence, which the General Medical Council will now set out in non-statutory guidance. This is designed to make the requirements less prescriptive, not less stringent. Further information on what doctors are required to do to register and obtain permission to practice in the UK, which includes professional qualifications, evidence of good character and proficiency in English are set out on the GMC website.8

INSTRUMENTS NOT DRAWN TO THE SPECIAL ATTENTION OF THE HOUSE The Committee has considered the instruments set out below and has determined that the special attention of the House need not be drawn to them.

Draft Instruments subject to affirmative approval Draft Charities Act 2006 (Changes in Exempt Charities) Order 2011 Draft Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations 2011 Draft Contracting Out (Local Authorities Social Services Functions) (England) Order 2011 Draft Corporate Manslaughter and Corporate Homicide Act 2007 (Amendment) Order 2011 Draft Corporate Manslaughter and Corporate Homicide Act 2007 (Commencement No. 3) Order 2011

8 Registration requirements: http://www.gmc-uk.org/doctors/applications.asp English proficiency: http://www.gmc-uk.org/doctors/registration_applications/language_proficiency.asp 8 MERITS OF STATUTORY INSTRUMENTS COMMITTEE

Draft Distribution of Dormant Account Money (Apportionment) Order 2011 Draft Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 Draft Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No. 2) Regulations 2011 Draft Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2011 Draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2011

Instruments subject to annulment SI 2011/1210 Electronic Communications and Wireless Telegraphy Regulations 2011 SI 2011/1245 Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) Regulations 2011 SI 2011/1246 Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) Order 2011 SI 2011/1230 Crime and Disorder (Formulation and Implementation of Strategy) (Amendment) Regulations 2011 SI 2011/1242 Constitutional Reform Act 2005 (Consequential Amendments) Order 2011 SI 2011/1244 Syria (Asset-Freezing) Regulations 2011 SI 2011/1247 Immigration (European Economic Area) (Amendment) Regulations 2011 SI 2011/1248 General Medical Council (Applications for General Practice and Specialist Registration) (Amendment) Regulations Order of Council 2011 SI 2011/1268 Whole of Government Accounts (Designation of Bodies) Order 2011 SI 2011/1271 Courts Act 2003 (Continuing Provision of Court-houses) (Amendment) Regulations 2011 SI 2011/1275 Financial Transparency (EC Directive) (Amendment) Regulations 2011

MERITS OF STATUTORY INSTRUMENTS COMMITTEE 9

APPENDIX: INTERESTS AND ATTENDANCE Committee Members’ registered interests may be examined in the online Register of Lords’ Interests at www.publications.parliament.uk/pa/ld/ldreg.htm. The Register may also be inspected in the House of Lords Record Office and is available for purchase from The Stationery Office. For the meeting on 24 May 2011 Members declared no interests.

Attendance: The meeting was attended by L. Eames, L. Goodlad, L. Hart of Chilton, L. Lucas, L. Methuen, B. Morris of Yardley and L. Scott of Foscote.