1.On 26 October 2015, the House of Lords was asked to approve the . This regulation would have made cuts in tax credits as part of the Chancellor’s plan, outlined in the , to reduce the welfare budget by £12bn. While rejected a fatal amendment tabled by Baroness Manzoor, by a margin of 99 votes to 310, Peers did endorse amendments tabled by Baronesses Meacher and Hollis (by margins of 307-277 votes and 289-272 votes respectively), which would have suspended consideration of the regulations until the Government either published a response to the Institute of Fiscal Studies’ (IFS) analysis of the regulations, or provided a scheme for a (renewable) three year transitional period.
2.In response to this vote, Peers had breached constitutional convention and had challenged the supremacy of the House of Commons on financial matters (MPs had previously voted to approve the regulations). On 4 November, the Government announced that the Rt Hon Lord Strathclyde, a former Leader of the House of Lords, would lead this review. In a Written the Minister for Constitutional Reform, John Penrose MP, stated that:
By long-standing convention the House of Lords does not seek to challenge the primacy of the elected House on spending and taxation. It also does not reject statutory instruments, save in exceptional circumstances. Until last month, only five statutory instruments had been rejected by the House of Lords since World War II, none of which related only to a matter of public spending and taxation. The purpose of the review is to examine how to protect the ability of elected Governments to secure their business in Parliament in light of the operation of these conventions.
The review will consider in particular how to secure the decisive role of the elected House of Commons in relation to its primacy on financial matters, and secondary legislation.
The review was tasked with reporting by the end of 2015, and was published in December that year. It outlined three potential options for reform:
i)To remove the House of Lords from statutory instruments procedures altogether;
ii)To retain the present role of the House of Lords in relation to statutory instruments, but for that House, in a resolution, to set out and recognise, in a more precise way, the restrictions on how its powers to deny approval or to annul should be exercised; and
iii)To create a new procedure, underpinned by statute, whereby House of Lords defeats of statutory instruments could be overruled by the House of Commons. Or, as Lord Strathclyde’s review put it, “to provide the Lords with a new means for asking the House of Commons to think again with regards to secondary legislation”.
Lord Strathclyde’s review recommended Option 3 be taken forward by the Government.
3.On 19 January 2016, PACAC held a one off evidence session on the Strathclyde Review, taking evidence from the Rt Hon Lord Strathclyde and Professor Meg Russell from the Constitution Unit at UCL. This session focused on the debate surrounding the constitutional propriety of the House of Lords votes on the Tax Credits Regulations, and whether these votes constituted a constitutional crisis. This session also examined the Strathclyde Review’s recommendations and on the potential implications of the options for reform. We thank Lord Strathclyde and Professor Russell for their evidence.
4.In this report, PACAC examines the Strathclyde Review’s proposals and whether such a review was a necessary and appropriate response to the House of Lords votes on 26 October 2015. This report begins with a brief explanation of statutory instruments (SIs) and of the role Parliament, and in particular the House of Lords, plays in scrutinising SIs. We then evaluate each of the Strathclyde Review’s proposals before making recommendations on the way forward.
1 MPs voted to approve the Tax Credits (Income Thresholds and Determination of Rates) () Regulations 2015 on 15 September 2015, by 325 to 290.(HC Deb 15 September 2015 ).
2 Sir Michael Pownall, a former Clerk of the Parliaments; Jacqy Sharp, a former senior Clerk in the House of Commons; and Sir Stephen Laws, a former First Parliamentary Counsel were also part of the Review.
3 Strathclyde Review: Written statement - , 4 November 2015.
4 Strathclyde Review: Written statement - , 4 November 2015.
5 HM Government,, Cm 9177, December 2015.
6 HM Government, Strathclyde Review : Secondary Legislation and the primacy of the House of Commons, December 2015, , p.17.
7 HM Government, Strathclyde Review : Secondary Legislation and the primacy of the House of Commons, December 2015, , p.18.
11 May 2016