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Small Business, Enterprise and Employment Act 2015

Secondary legislation: duty to review

Section 28: Duty to review regulatory provisions in secondary legislation

219.This section creates a duty on Ministers making or amending certain secondary legislation either to include a review provision, or to publish a statement that a review is not appropriate. A review provision creates a legal obligation on the Ministers to carry out and publish a review of the legislation within a certain period of it coming into force and at intervals afterward. (The content of such a review is specified in section 30).

220.The duty applies where the legislation makes or amends a regulatory provision relating to a qualifying activity (both terms are defined in subsequent sections). However it does not apply to measures related to tax, procurement, and grants; to measures that will cease to have effect within five years; or to measures where the relevant legislation already contains a review provision.

Section 29: Section 28(1) (b): interpretation

221.This section defines “qualifying activity”. An activity is a qualifying activity if it is undertaken by a business or a voluntary or community body, for the purposes of that organisation. For example if a business was carried on by a sole trader, the buying and selling of goods or services under that business would fall within the definition of qualifying activity, but other activities undertaken by the business owner in their capacity as a private individual would not.

222.Subsection (3) excludes from the definition of qualifying activities those activities undertaken by businesses (or voluntary and community bodies) that are part of the public sector, or activities undertaken on behalf of a public authority (for example the provision of NHS services by many dentists or pharmacists).

223.A business or body is treated as part of the public sector if it is controlled by a public authority. It is intended that this will be determined in line with any determination by the Office for National Statistics (in accordance with relevant international standards) that an entity is classified to the public sector. Guidance will be published by the Secretary of State to establish this (subsection (4)).

Section 30: Section 28(2) (a): “provision for review”

224.This section sets out the requirements for review provisions made under the new duty. These follow the standard template for review provisions used in some secondary legislation at present.

225.The Minister is required to carry out a review, and publish a report setting out the conclusions within five years of the legislation coming into force, and on a five year cycle thereafter (starting from the date of the publication of the most recent report). The report must contain an assessment of the extent to which the original objectives of the regulation have been achieved, whether they remain appropriate, and (if so) whether they could be achieved in a less burdensome way. For legislation that implements international or EU obligations, the report should also consider how the obligation is implemented in other countries or member states.

Section 31: Section 28(2) (b): appropriateness of making provision for review

226.This section concerns the circumstances in which a Minister may publish a statement that a review would not be appropriate under subsection (2)(b) of section 28.

227.Subsection (2) provides two examples of such circumstances: where a review would be disproportionate (for example where the impacts associated with the measure are very small); or where there are specific policy reasons (for example an exceptionally high need for long term certainty). This is not an exhaustive list: there may be other grounds on which Ministers could decide that a review was not appropriate. Subsection (3) provides a power for the Secretary of State to publish guidance on the factors to be taken into account when determining that a review would not be appropriate. Subsection (4) requires Ministers to have regard to the guidance when making such a determination.

Section 32: Sections 28 to 31 etc: supplementary

228.This section defines the terms used in sections 28 to 31 and makes other supplementary provision.

229.The definition of “Minister” follows the definition in the Ministers of the Crown Act 1975. It does not include Ministers in the devolved administrations.

230.The definition of “regulatory provision” follows section 5 of the Legislative and Regulatory Reform Act 2006.

231.Subsection (7) provides that if there is a question as to whether a Minister has complied with the new duty, the relevant secondary legislation remains valid.

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