This (via) seems to be in the early stages of becoming a righteous ire-creating cause celebre amongst the civil libertarian and/or anti-Blair parts of the blogosphere: see here and here, for example. I think this might be based on a mistake. I am fairly sure that it may be an attempt to tidy up the use of statutory instruments, because of the restrictions which the content of section 4 makes:
(1) Provision under section 2(1) may not confer a function of legislating on a Minister of the Crown (alone or otherwise) unless the conditions in subsections (2) and (3) are satisfied.
(2) The condition in this subsection is that the function is exercisable by statutory instrument.
(3) The condition in this subsection is that such a statutory instrument—
(a) is subject to annulment in pursuance of a resolution of either House of Parliament; or
(b) is not to be made unless a draft of the statutory instrument has been laid before and approved by a resolution of each House of Parliament.
Section 2 (1) is the one which grants the power to make
[a]n order under section 1 may for either purpose specified in subsection (1) of that section make provision amending, repealing or replacing any legislation.
So that power presumably only applies to statutory instruments, which are bits of legislation granting the Crown discretionary powers. Since the discretionary powers granted through statutory instruments are already limited by the primary legislation they are a part of, which the bill would not grant the power to alter, this wouldn't, if I am right, grant huge powers it doesn't already possess to the Crown. Unfortunately, as satisfying as it would be for this to be a neat next escalating step in a trajectory of much-railed-against creeping totalitarianism, I don't think it is.
Update, 18/02/06: There's a Clifford Chance client brief on the Bill here, which does make it seem quite worrying. The gist seems to be that there has been pressure on Government to amend regulation without the lengthy process of new primary legislation for some time, and that the Bill is the latest in a series of attempts stretching back to the mid-nineties to do so. However, it goes further than any previous legislation by removing or attenuating the safeguards of limitations on the content of the legislation that could be passed in this manner, requirements for consultation and scrutiny by committee, and a prohibition on the use of the powers granted to create powers to make further delegated legislation. In particular, the brief claims, plausibly I think, that the last of these three restrictions is absent from the Bill. All this is very worrying, for although all orders under this legislation would have to be approved by Parliament by simple up-and-down votes, the lack of time for consideration available and the difficulty and in some cases impossibility of amending the orders would seriously impede Parliamentary oversight. I do find it somewhat ironic though that in an environment which creates substanial opportunity for the exploitation of supposedly existential threats, it is, if anyone does, plagues of well-meaning bureacrats brandishing forms that play the role of van der Lubbe.