HOUSE OF LORDS Delegated Powers and Regulatory Reform Committee 3rd Report of Session 2005–06 Review of the Regulatory Reform Act 2001 Commons Bill [HL] Consumer Credit Bill Regulation of Financial Services (Land Transactions) Bill Merchant Shipping (Pollution) Bill [HL] – Government response Children and Adoption Bill [HL] – Government response Harbours Bill [HL] Interception of Communications (Admissibility of Evidence) Bill [HL] Racial and Religious Hatred Bill Ordered to be printed 12 October and published 13 October 2005 London : The Stationery Office Limited £price HL Paper 45 The Select Committee on Delegated Powers and Regulatory Reform The Delegated Powers and Regulatory Reform Committee is appointed by the House of Lords in each session with the orders of reference “to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate level of parliamentary scrutiny; to report on documents and draft orders laid before Parliament under the Regulatory Reform Act 2001; and to perform, in respect of such documents and orders and subordinate provisions orders laid under that Act, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments”. Current Membership The Members of the Delegated Powers and Regulatory Reform Select Committee are: Lord Brooke of Sutton Mandeville Lord Dahrendorf (Chairman) Baroness Gardner of Parkes Lord Garden Lord Harrison Lord McIntosh of Haringey Baroness Scott of Needham Market Lord Shaw of Northstead Lord Temple-Morris Publications The Committee’s reports are published by The Stationery Office by Order of the House. All publications of the Committee are on the internet at http://www.parliament.uk/parliamentary_committees/dprr.cfm General Information General information about the House of Lords and its Committees, including guidance to witnesses, details of current inquiries and forthcoming meetings is on the internet at http://www.parliament.uk/about_lords/about_lords.cfm Contacts for the Delegated Powers and Regulatory Reform Committee If you have any queries regarding the Committee and its work, please contact the Clerk to the Delegated Powers and Regulatory Reform Committee, Delegated Legislation Office, House of Lords, London, SW1A 0PW. The telephone number is 020 7219 3103/3233. The fax number is 020 7219 2571. The Committee’s email address is [email protected] Historical Note In February 1992, the Select Committee on the Work of the House, under the chairmanship of Lord Jellicoe, noted that “in recent years there has been considerable disquiet over the problem of wide and sometimes ill-defined order-making powers which give Ministers unlimited discretion” (Session 1991–92, HL Paper 35–I, para 133). The Jellicoe Committee recommended the establishment of a delegated powers scrutiny committee in the House of Lords which would, it suggested, “be well suited to the revising function of the House”. As a result, the Select Committee on the Scrutiny of Delegated Powers was appointed in the following session, initially as an experiment for a limited period. It was established as a sessional committee from the beginning of Session 1994–95. Also in Session 1994–95, following the passage of the Deregulation and Contracting Out Act 1994, the Committee was given the additional role of scrutinising deregulation proposals under that Act. As a result, the name of the committee was changed to the Select Committee on Delegated Powers and Deregulation. In April 2001, the Regulatory Reform Act 2001 was passed which expanded the application of the deregulation order-making power under the 1994 Act, and the Committee took on the scrutiny of regulatory reform proposals under the Act. With the passage of the 2001 Act, the Committee’s name was further amended to its present form, the Select Committee on Delegated Powers and Regulatory Reform. Third Report REVIEW OF THE REGULATORY REFORM ACT 2001 1. This Committee, as well as reporting to the House on the delegated powers in bills, also scrutinises regulatory reform orders. With these twin responsibilities, the Committee has played a substantial role in the development of regulatory reform legislation. In particular, in relation to the Regulatory Reform Act 2001, we responded to the Government’s initial consultation in 1998–99, conducted pre-legislative scrutiny on the draft bill in 1999–2000 and reported on the bill itself in 2000–01. 2. On 20 July last, the day before the House rose for the summer recess, the Chancellor of the Duchy of Lancaster (Rt Hon. John Hutton MP) published the Government’s review of the Regulatory Reform Act 2001 together with a consultation paper on proposals for a new Regulatory Reform Bill, announced in The Queen’s Speech on the opening of this Parliament: “legislation will be introduced to streamline regulatory structures and make it simpler to remove outdated or unnecessary legislation”. The Chancellor invited this Committee to respond to the consultation but set a closing date of 12 October, a period entirely coinciding with the summer recess. There is much in the Government’s proposals which we find interesting and important but we find it impractical to respond properly within the timescale. We also understand that a late submission would be unlikely to help inform the Government’s policy for the bill. We are disappointed in this approach to consultation, particularly on a subject where the Committee and members of the House have such a close and legitimate interest. 3. We will consider the bill itself when it comes before us in the usual manner, for the scrutiny of its delegated powers. At this stage, we wish to note that we will pay close attention to issues such as • the test of what subjects are appropriate for legislation by regulatory reform order (RRO), including the test of “large and controversial” subject matter1; • the purposes for which the RRO procedure may be used, including simplification and the appropriate mechanism to implement Law Commission recommendations; • the nature of the tests to be employed, including the merit of concepts such as “burden”; • the relationship between RROs and very recent or impending primary legislation; • the rule that RROs may not create new secondary legislative powers. We shall also pay the closest attention to provision for changes to the parliamentary procedure for such orders, whether within the bill or by practice. 1 18th Report (2004-05), para 53. 2 DELEGATED POWERS AND REGULATORY REFORM COMMITTEE COMMONS BILL [HL] Introduction 4. This bill makes new provision for the registration etc. of common land and town and village greens. Among the statutes which it replaces is the Commons Registration Act 1965. The Delegated Powers 5. The delegated powers in the bill are explained in a memorandum to the Committee from the Department for Environment, Food and Rural Affairs (Defra), printed at Appendix 1 to this report. We wish to draw the attention of the House to the provisions of clauses 28, 32 and 41. We consider the other delegated powers to be appropriate and subject to appropriate levels of parliamentary scrutiny. Commons associations 6. Clause 25 enables the Secretary of State or the National Assembly for Wales (“NAW”) to establish commons associations for areas of common land or town or village greens subject to rights of common. Orders by the Secretary of State are subject to negative procedure. There are consultation and other requirements at clause 26, explained in the memorandum from Defra. In particular, the Secretary of State/NAW cannot make the order unless satisfied that there is substantial support for it. 7. The details of the constitution of the association are left largely to regulations (subject to negative procedure if made by the Secretary of State) under clause 28. But the establishment order can override the general regulations under clause 28. 8. The functions conferred on the association by the establishment order relate to the management of agricultural activities. The association can, in particular, be empowered to make rules (analogous to byelaws), breach of which may, under clause 32(2), be made a criminal offence punishable by a fine (the maximum being set out in clause 32(3)). 9. These provisions, taken together, are notable in that the bill gives little indication of who will participate in, or control, the association. A commons association will have considerable powers over the land in respect of which it is established (including the power in effect to create criminal offences) and we consider that the main features of the constitution of such associations should appear on the face of the bill. In particular, the Government were able to indicate at second reading that “the associations will function through majority voting”2. We recommend that the significant common principles of the constitution and administration of associations should appear on the face of the bill. 10. If the bill were to be amended to meet our concern in paragraph 9, we are content that regulations by the Secretary of State setting out the standard provisions of the constitution for the associations be subject, as proposed, to negative procedure. If, however, the bill remains as it is, we consider 2 HL Deb, 20 July 2005, col 1489. DELEGATED POWERS AND REGULATORY REFORM COMMITTEE 3 that regulations made by the Secretary of State under clause 28 should be subject to the affirmative procedure. 11. By virtue of clause 32, a rule made by a commons association may specify that a person who contravenes it is guilty of a criminal offence. Defra’s memorandum states: Under clause 33(2), an establishment order may specify the procedure to be followed by a commons association in exercising the power to make rules, and make require a commons association to obtain the consent of the appropriate national authority before making rules. It is intended that establishment orders will normally require the appropriate national authority to approve rules in draft, and this will certainly be required where rules include criminal offences.