House of Lords - Delegated Powers and Deregulation

Select Committee on Delegated Powers and Deregulation Twenty-Fourth Report

TWENTY-FOURTH REPORT

24 June 1998

By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.

SCOTLAND BILL

Introduction

1. This is the second devolution Bill to come before the House this session. In our report on the Government of Wales Bill we expressed the view that under that Bill the Westminster Parliament would remain the supreme legislative body for Wales. By contrast, the Scotland Bill would create a Parliament with legislative power which included the right to create delegated powers.[1] New powers created by the Scottish Parliament would not be scrutinised by the Westminster Parliament. This is the new dimension added by the Bill to the devolution issues considered by the Committee in relation to the Government of Wales Bill. It is, however, not a wholly new feature in the legislative history of the United Kingdom as Acts of the Northern Ireland Parliament often created delegated legislative powers.

2. The Bill establishes a Scottish Parliament with power to make laws (Acts of the Scottish Parliament). This will not affect the power of the United Kingdom Parliament to make laws for Scotland (clause 27(7)). There will be a Scottish Executive comprising the First Minister (clauses 42 and 43), the Ministers appointed by him under clause 44, the Lord Advocate and the Solicitor General for Scotland. They are to be known as the Scottish Ministers.

3. There will be three categories of delegated powers for the Scottish Parliament to consider; those conferred on ministers to facilitate the devolution, existing powers transferred to Scottish Ministers and new powers created by that Parliament. As the Scottish Office memorandum states, "the Scotland Bill provides for a very significant change to the government of Scotland".[2] The memorandum, which is printed with this report, gives an excellent account of the delegated powers created by the Bill and a useful summary of these powers in the table (printed on p 14 below).

The power to create new delegated powers

4. One of the consequences of the Bill will be the creation of a new Parliament with power to create new delegated legislative powers without reference to Westminster. Presumably it is intended that the Scottish Parliament should exercise appropriate control over the passage of such delegated legislation, but the Bill is silent on the point. We accept that it will be for the Parliament to decide in the case of each new delegated legislative power what is the right measure of scrutiny and control. But the House may wish to consider whether Schedule 3 (Standing Orders) should be amended to make plain that Standing Orders will, in fact, address the issue.

Powers delegated to Scottish Ministers by the Bill

(i) Existing powers

5. Existing powers of United Kingdom Ministers to make delegated legislation are, in their application to Scotland, transferred to the Scottish Ministers (clause 49) unless they relate to reserved matters or are retained functions of the Lord Advocate. Clause 106 adapts the existing Parliamentary control over a transferred power so as to require the laying before the Scottish Parliament of such legislation and for the existing affirmative or negative controls to be exercised in future by that Parliament. The Committee considers this a necessary consequence of devolution.

(ii) New powers

6. The Bill creates more than 30 new delegated powers but only one of these is conferred on Scottish Ministers. This is the power in clause 17(5) to specify a sum (other than the £5,000 set out in the clause) for the caution which has to be given for the expenses of a court challenge to the qualifications of a person purporting to be a member of the Scottish Parliament. An order under this power is subject to negative procedure in the Scottish Parliament (clause 101(8)) and the memorandum states that it is intended to take account of inflation. The Committee considers that this is close to being a Henry VIII power but it is a minor provision, operative within a limited framework, and the Committee considers that the negative procedure is appropriate.

"Open powers"

7. An innovation in the Bill is the creation of powers to make subordinate legislation in clauses which do not indicate by whom the power is to be exercised. Clause 103 describes such a power as an "open power" and provides for it to be exercisable by Her Majesty by Order in Council or by a Minister of the Crown by order. Orders in Council are statutory instruments (section 1 of the Statutory Instruments Act 1946) and clause 101(1) specifically provides that an order made under the Bill by a Minister is to be a statutory instrument. Clause 102 specifies what Parliamentary procedure is to apply. The explanatory memorandum justifies the inclusion of these "open powers" on the grounds that they are "intended to provide the flexibility to deal in appropriate ways with the subordinate legislation which will be needed under the Bill. Different uses of these particular powers may be very different in terms of scale and importance." In the view of the Scottish Office, "these provisions are similar to those in the European Communities Act 1972, which permit Community rights and obligations to be incorporated into UK law by Order in Council or in regulations made by a designated Minister."[3]

8. These "open powers" are to be found in clauses 56, 58, 60, 92, 95, 96 and 97 and in paragraph 2 of Schedule 2. Clause 97 attracts affirmative procedure and the other powers are subject to negative procedure if they are not made by way of affirmative procedure. This is the effect of clause 102(6) which provides that an instrument under any of these powers shall "unless it is an affirmative instrument in relation to both Houses of Parliament, be subject to annulment in pursuance of a resolution of either House of Parliament." This formula differs from that in the European Communities Act 1972 (the precedent cited in the Scottish Office memorandum) which provides that an instrument made under that Act "if made without a draft having been approved by a resolution of each House of Parliament, shall be subject to annulment in pursuance of a resolution of either House" (paragraph 2(2) of Schedule 2). That formula clearly allows an option but the formula in clause 102(6) is apparently intended to deal only with the possibility of combining in one instrument provisions made under a power which is subject to affirmative procedure and provisions made under a power to which clause 102(6) applies and which would otherwise attract negative procedure. Subject to our comments below on Henry VIII powers, there is nothing here which the Committee wishes to draw to the attention of the House.

Retrospective powers

9. Parliament always considers with the greatest caution any bill which would operate to change the law retrospectively or would create a delegated power which could produce that result. This is because it is generally accepted that it is unfair to affect adversely the basis on which individuals or corporations have taken decisions in the past. Indeed, the European Convention on Human Rights provides that no-one shall be held guilty of an offence on account of an act which was not an offence at the time it was committed and also provides that a heavier penalty must not be imposed than the maximum applicable when the offence was committed. In certain, limited, circumstances, however, retrospective legislation may be justified provided that the power concerned will not have a detrimental effect on people. We have examined the retrospective powers conferred by the Bill and are satisfied in each case that there are no objections of principle to them. We discuss the powers briefly in the following paragraphs.

10. Clause 101(8) enables subordinate legislation under clauses 29, 54(4), 92 or 95 to have retrospective effect. In each case, the Committee considers that retrospection is likely to be necessary.

11. Clause 29 is the power to modify Schedule 5 (reserved matters). The memorandum states that the need for retrospection arises when an assumption about the scope of existing powers of the Scottish Parliament is proved wrong in a court case, for example, and it is thought right to "restore the position to what it was always thought to be so as to minimise the disruption which would otherwise be caused." The power is subject to affirmative procedure in both Parliaments.

12. Clause 54(4) allows the Secretary of State to revoke subordinate legislation otherwise within the jurisdiction of the Scottish Parliament which he believes to be incompatible with international obligations or dealing with reserved matters. Here the Committee considers that it is clearly necessary to have power to make the revocation take effect from the coming into force of the instrument which is to be revoked. The power is subject to negative procedure unless the power is exercised in conjunction with an affirmative power - see paragraph 8 above.

13. Clause 92 permits the exercise of subordinate legislative power to remedy ultra vires acts. Here it is clearly necessary to allow retrospection back to the act in question. Again negative procedure applies unless the power is exercised in conjunction with an affirmative power.

14. Clause 95 is the power to make provision consequential on any provision made by or under any Act of the Scottish Parliament. In the Committee's view retrospection may well be necessary to ensure that the consequential provision takes effect from the same date as the provision on which it is consequential. Again negative procedure applies unless the power is exercised in conjunction with an affirmative power.

Henry VIII clauses

15. The Committee considers that the term "modification" as used in this Bill is the equivalent of textual amendment. It is not the same idea as is expressed in a power to apply legislation with such modifications as the minister thinks appropriate - in that case the statute book remains unamended but is applied in particular circumstances as if it had been amended. On this basis the Committee sees Henry VIII powers in clauses 29(2), 64(3) (a power to make a textual amendment), 75(1) (also textual), 96, 101(6) (which converts to Henry VIII clauses the powers in clauses 59, 84, 92, 94(3), 95, 97, 98 and 99 and paragraph 7 of Schedule 2) and 101(7) (which extends clause 104(2)(c)).

16. Clause 29 is a power to modify legislation conferred in wide terms. It is extended by clause 100(5) to include the modifications of any enactment. The memorandum states that the power "will permit matters to be transferred to and from the reserved list" and will enable the replacement of references to a United Kingdom minister with references to Scottish ministers, and vice versa. Affirmative procedure in both Parliaments is applied.

17. Clause 64(3) allows the amendment of clause 64(2) to substitute a different limit on borrowing under Clause 63. Clause 102(2) provides for affirmative procedure in the Commons.

18. Clause 75(1) allows the Treasury to modify enactments in consequence of the creation of a Scottish Parliament with tax-raising powers or the exercise of those powers. Again the power is subject to affirmative procedure in the Commons.