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Deregulation Bill
Report Stage, House of Lords
5 February 2015
Briefing supporting Amendment 44 to remove the regulatory powers of
the Equality and Human Rights Commission from the scope of the
growth duty (Clauses 88 to 91 of the Bill).
For more information, please contact:
Parliamentary lead: Finola Kelly, Head of Parliamentary and Public
Affairs
finola.kelly@equalityhumanrights.com
DD: 0207 832 7826
Mob: 07932 799 120
Legal lead: Wendy Hewitt, Legal Director
DD: 0161 829 8427
wendy.hewitt@equalityhumanrights.com
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Introduction
This briefing supports an amendment put forward by Lords McNally and
Rooker and Baroness Thornton to Clause 89 of the Deregulation Bill.
The amendment would ensure that the growth duty cannot be applied to
the Equality and Human Rights Commission’s regulatory functions, in
order to:
i)
ii)
protect our ability to operate independently, so safeguarding our
‘A status’ as a United Nations (UN) accredited National Human
Rights Institution (NHRI) and the UK’s compliance with
European Union (EU) law, and;
ensure that we can exercise our functions and powers in
accordance with clear and foreseeable legal limits.
Clause 89 - Commission’s recommendation
Support Amendment 44:
LORD McNALLY
LORD ROOKER
BARONESS THORNTON
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Page 71, line 2, at end insert—
“(d) a regulatory function of the Commission for
Equality and Human Rights.”
Explanation
Clause 88 places a legal duty on regulators to have regard to the
desirability of promoting economic growth when exercising regulatory
functions, and ensuring regulatory action is only taken when necessary
and in a form that is proportionate.
The precise regulatory functions covered by the growth duty will be set
out, in a Statutory Instrument requiring Parliamentary approval, following
consultation with those whose regulatory functions are affected. The
Government published a list of regulators to whom it intends the growth
duty will apply [DN please add footnote link to this]; this included the
Equality and Human Rights Commission.
Regulatory functions are defined in broad terms in Clause 91 as a
function under or by virtue of an Act or subordinate legislation imposing,
(or relating to securing compliance with or enforcing, “requirements,
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restrictions or conditions, or setting standards or giving guidance, in
relation to an activity.”
Clause 89(3) states that the growth duty cannot apply to regulatory
functions that are exercised in relation to matters reserved to Scotland,
devolved to Wales, or transferred to Northern Ireland.
Clause 90 empowers the Secretary of State to issue guidance on the
performance of the growth duty. To help improve understanding of how
to comply with the growth duty, the Government has published draft
'principles-based' guidance, developed through collaboration with
businesses and regulators. Among other things, this guidance states the
growth duty is not subsidiary to, nor more important than regulatory
duties.
Our analysis
The Commission supports the principle and intention behind the growth
duty. We do, and will continue to, exercise our regulatory functions fairly
and proportionately, taking all relevant considerations into account including the impact on businesses and economic growth. However,
applying the growth duty to the Commission risks our status as an NHRI
and a National Equality Body and introduces legal uncertainty into the
exercise of our functions. We therefore consider that the Commission
should be excluded from the scope of the growth duty, as proposed by
Amendment 44.
Independence
The Commission has the highest possible UN accreditation ('A status')
as an NHRI rated against the UN 'Paris Principles', which clearly and
unequivocally require NHRIs to be independent of government. In
addition, as a National Equality Body under EU equality directives1, we
must be able to provide independent assistance to victims of
discrimination. This need to operate independently is also reflected in
domestic legislation.2
In our analysis, subjecting the Commission to the growth duty presents a
real risk of our UN NHRI ‘A status’ being downgraded for noncompliance with the ‘Paris Principles’, because the growth duty does, or
1
See EU Gender and Race Equality Directives (Article 20 of Council Directive 2006/54 and Article 13
of Directive 2000/43)
2 Paragraph 42 of Schedule 1 to the Equality Act 2006 requires the government to have regard to the
desirability of ensuring the Commission is under as few constraints as reasonably possible in
determining is activities, timetables and priorities.
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could be perceived to, constrain the independent exercise of our core
functions. The growth duty also has the potential to compromise our
ability to fulfil the requirement under EU law to provide independent
assistance to victims of discrimination, because the Bill applies the duty
to decisions to instigate civil proceedings.
Having an ‘A status’ NHRI is of great importance to the UK’s
international standing and reputation, enabling the UK to influence the
protection of fundamental rights globally and giving it a voice at the UN
Human Rights Council. Any downgrading of the Commission’s status
could have a significant negative impact on the UK’s global influence.
Our concerns are shared by the UN International Co-ordinating
Committee (ICC), which is responsible for the accreditation of NHRIs.
The ICC wrote to the Minister of Equalities3: “Independence from
Government is an essential element for a NHRI. In considering whether
a NHRI is independent the ICC looks at all of the ways in which the
NHRI is subject to control or direction…The Bill might not intend to affect
independence but attaching an additional duty which could be seen as
competing with or limiting the existing duties and core function of EHRC
would have a direct effect on its decision making processes. Being
subject to Ministerial direction and the possibility of legal challenge to its
work ….could have a detrimental effect on its ability to make decisions in
relation to upholding human rights. These clauses combined with the
existing connections and accountabilities to the UK Government would
raise questions about the compliance of EHRC with the Paris
Principles.”
The Joint Committee on Human Rights also expressed its concern in its
legislative scrutiny report on the Deregulation Bill4:
“Applying the economic growth duty to the EHRC poses a significant risk
to the EHRC's independence, for the reasons set out in the letter from
the ICC to the Minister for Equalities, and therefore to its compliance
with the Paris Principles and the Equal Treatment Directives as
implemented by the Equality Act 2010. The Government is therefore
risking the possibility of the EHRC's accredited "A" status being
downgraded and of putting the UK in breach of its obligations under EU
equality law. This could be easily avoided if the proposed new duty did
not apply to the EHRC. However, it would appear that the Government
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4
By letter dated 17 January 2014
Published 11 June 2014
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still intends to apply the economic growth duty to the EHRC and to
attempt to deal with concerns about independence in another way.”
The Commission’s Chair, Baroness O'Neill of Bengarve, told the JCHR:
“We have tended to agree with this Committee that, prima facie, it would
indeed threaten the A-status. Therefore, it would be proposed that we
come under the duty with respect to very specific functions. The debate
between us and government at this stage is over how specific it would
have to be and whether it is worth the candle when you get to that
degree of specificity.”
The JCHR made the following recommendation:
“We endorse Baroness O'Neill's view. We are also conscious of the
importance of the Commission's category A status for the Foreign and
Commonwealth Office in terms, as Baroness O'Neill said, of British soft
power. Unless the continuing discussions between the Government and
the Commission satisfy the Commission that the growth duty will not in
any way impact upon its independence, we recommend that this duty
not be applied to the EHRC.”
Legal uncertainty
The growth duty would have competing status5 with the Commission’s
other statutory duties, generating considerable uncertainty as to how, in
practice, those duties can be discharged together. Lack of legal clarity
opens up the risk of legal challenge and litigation in relation to our
regulatory decisions and actions.
Considerable uncertainty also arises about how the growth duty would
apply in respect of the regulatory functions the Commission exercises
across Great Britain in relation to matters which are devolved to
Scotland or Wales, such as education and health.
Conclusion
As noted by the JCHR, the Commission has been in discussions with
government about whether the Commission should be excluded from the
growth duty, and whether all or only some of the Commission’s
regulatory functions should be covered, and if so, which ones.
“The duty does not set out how economic growth ranks against existing duties as this is a judgement
only a regulator can and should make”. “The growth duty does not automatically take precedence
over or supplant existing duties held by regulators” (see pages 4 and 5 of the government’s draft
‘principles-based’ guidance: BIS, Better Regulation Delivery Office - Draft Guidance: Non-economic
Regulators: Duty to Have Regard to Growth January 2014).
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During January 2015 the Better Regulation Delivery Office (BRDO)
conducted a voluntary review of the Commission’s compliance with the
Regulators’ Code.
The BDRO final report was sent to the Commission and to the Minister
for Government Policy in the Cabinet Office, The Rt Hon Oliver Letwin
MP, on 30 January 2015.
The report found that the Commission does take steps to avoid placing
unnecessary burdens on those we regulate. In a number of cases,
businesses and organisations commended the Commission for allowing
sufficient and realistic time for consideration and implementation of
improvements, and for not applying a disproportionate level of pressure
on a business to comply. There is no evidence that criticisms levelled at
other regulators (that their decisions are inconsistent, lacking
transparency and accountability, without offering informal less costly
resolution, generating additional burdens detrimental to business
growth) apply to the Commission. In our analysis, this indicates that
there is no need to apply the growth duty to the Commission as our
practice is already to take into account business needs and act
proportionately.
Many of the equality and human rights functions of the Commission are
overlapping in their operation. In our view there is no viable method of
applying the growth duty to a proportion of the functions of the
Commission in a way which would be compatible with the ‘Paris
Principles’ requirement of independence from the executive and which
would avoid creating additional legal uncertainty.
In our analysis, the most straightforward and effective step that can be
taken to address all the problems is to remove the Commission from the
scope of the growth duty altogether. Therefore, we welcome and support
Amendment 44 to Clause 89, which has this purpose and effect.
While arguably the same effect could be achieved by the government
committing not to include any of the Commission’s functions in the order
it may make under Clause 89(1) of the Bill, this would leave it open to a
future administration to apply the growth duty to regulatory functions of
the Commission through secondary legislation. In our view, the risks to
the Commission’s independence, and the consequences of impinging on
it, are of such importance that this matter should be put beyond doubt in
primary legislation.
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The Minister argued at Committee stage that “listing inclusions and
exemptions in a Bill is not generally regarded as appropriate because
primary legislation would then need to be amended each time a
regulatory function were changed or created.” – [Official Report,
20/11/14; col. GC 232] However, were the Commission’s statutory
functions to be changed in future, it would be possible and appropriate to
deal with the application of the growth duty to any new functions in the
primary legislation which would be needed to amend our functions.
About the Equality and Human Rights Commission
The Equality and Human Rights Commission is a statutory body
established under the Equality Act 2006. It is an independent body
responsible for promoting and enforcing the laws that protect fairness,
dignity and respect. It contributes to making and keeping Britain a fair
society in which everyone, regardless of background, has an equal
opportunity to fulfil their potential. The Commission enforces equality
legislation on age, disability, gender reassignment, marriage and civil
partnership, pregnancy and maternity, race, religion or belief, sex and
sexual orientation. It encourages compliance with the Human Rights Act
1998 and is accredited by the UN as an ‘A status’ National Human
Rights Institution.
Find out more about the Commission’s work at:
www.equalityhumanrights.com
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