House of Lords - Delegated Powers and Deregulation - Twenty-Fourth Report

Select Committee on Delegated Powers and Deregulation Twenty-Fourth Report

SCOTLAND BILL

Memorandum by the Scottish Office

Clause 29 : Power to modify Schedule 5 (Reserved Matters)

General

Clause 29 introduces the list of reserved matters in Schedule 5 and provides for modifications of the Schedule to be made by Order in Council. It also defines a "devolved matter".

Clause 98 provides a related power for the agreed redistribution of transferred functions. This may be used when a change is made to Schedule 5 under clause 29.

Power

Clause 29(2) provides that Her Majesty may by Order in Council modify Schedule 5 in ways which She considers necessary or expedient. This will permit matters to be transferred to and from the reserved list.

Clause 101(5)(a) provides that the Order under clause 29 can modify any enactment, prerogative instrument or other document and any provision made by or under the Scotland Act. This might be necessary, for example, to replace statutory references to a UK Minister with references to the Scottish Ministers or vice versa.

Clause 101(5)(b) provides that the Order may also provide for the continued effect of any Act of the Scottish Parliament or subordinate legislation made, confirmed or approved by a member of the Scottish Executive where a matter becomes a reserved matter by virtue of the Order.

Under clause 101(8), this Order may make provision having retrospective effect. This will permit, for example, provision being made after a court case or otherwise to restore the position to what it was always thought to be so as to minimise the disruption which would otherwise be caused.

Procedure

Under the provisions of clause 102(3) and (5), an Order in Council under this power is subject to affirmative resolution procedure in the Scottish Parliament. Under the provisions of clause 102(1) and (5), it is also subject to affirmative resolution procedure in the Westminster Parliament.

Clause 33 : Power to prohibit the submission of a Bill for Royal Assent in certain circumstances

This clause provides for the Secretary of State to be able to make an order prohibiting the Presiding Officer from submitting a Bill of the Scottish Parliament for Royal Assent if the Bill contains provisions:

(a) which the Secretary of State has reasonable grounds to believe would be incompatible with any international obligations; or

(b) which either modify Scots private law as it relates to reserved matters or makes incidental or consequential modifications to an enactment as it applies to reserved matters and which the Secretary of State has reasonable grounds to believe would have an adverse effect on the operation of an enactment as it applies to reserved matters.

The order-making power is constrained by subsections (2) to (5) which

- require the order to identify the Bill and the provisions concerned, and state the reasons why it is being made;

- give the Secretary of State 4 weeks in which to make an order after the Scottish Parliament has passed the Bill or approved it following reconsideration;

- prevent the Secretary of State from making an order if he has previously notified the Presiding Officer that he does not intend to do so, unless the Parliament has meanwhile approved it following reconsideration; and

- provide that an order ceases to have effect if the Scottish Parliament approves the Bill following reconsideration. Under subsection (3) the Secretary of State then has a 4week period in which to make a further order if he is still not content.

This order will be made by statutory instrument and, under the provisions of clause 102(6), is subject to negative resolution procedure in the Westminster Parliament. The order is not subject to any procedure in the Scottish Parliament.

It is not thought appropriate that the orders under clause 33 should be subject to affirmative procedure because they would need to be made quickly, within the four week period after the passing of the Scottish Bill. This would also be necessary to avoid uncertainty about the provision concerned, and possible damaging effects from that. It would be very difficult for an affirmative instrument to be drafted, laid, debated by both Houses of Parliament and made, all within the 4 weeks allowed, even assuming that Parliament is sitting. Drafts of an affirmative instrument can be laid only where Parliament is sitting and this could give rise to difficulty if a Scottish Bill was enacted by the Scottish Parliament at the time of a Parliamentary recess at Westminster and the Secretary of State wanted to make an order under clause 33.

Clause 36 : Power to make provision as to the form etc. of Letters Patent and royal proclamations

Clause 36 makes further provision in relation to Letters Patent signifying Royal Assent to Bills of the Scottish Parliament and in relation to royal proclamations dissolving the Parliament and providing for elections to be held. Such instruments are to pass under the Scottish Seal. It also makes provision for a Wafer Scottish Seal and for it to be used instead of the Scottish Seal itself.

Clause 36(3) provides that Her Majesty may by Order in Council make provision as to the form and manner of preparation and the publication of such Letters Patent and proclamations.

The power is intended to enable the making of provision of the type which can be made in relation to Letters Patent and proclamations passing under the Great Seal of the United Kingdom under powers conferred by sections 3 and 5(3) of the Crown Office Act 1877.

Under the provisions of clause 102(8), an Order in Council under this power is subject to negative resolution procedure in the Scottish Parliament. The Order is not subject to any procedure in the Westminster Parliament.

Clause 54(1) : Power to prohibit action incompatible with international obligations

Clause 54(2) : Power to require action to give effect to international obligations

Clause 54(4) : Power to revoke subordinate legislation in certain circumstances

Clause 54(1) and (2) enable the Secretary of State by order to direct

(a) that any action proposed to be taken by a member of the Scottish Executive should not be taken if he has reasonable grounds to believe that it would be incompatible with the international obligations of the United Kingdom; or

(b) that any action capable of being taken by a member of the Scottish Executive should be taken where he has reasonable grounds to believe that this action is required for the purpose of giving effect to any such obligations.

Clause 54(3) makes it clear that the action which can be prevented includes the making, confirming or approving subordinate legislation and the action which can be directed can include not only that but also the introduction of a Bill into the Scottish Parliament.

Clause 54(4) also enables the Secretary of State by order to revoke subordinate legislation made or which could be revoked by a member of the Scottish Executive where it contains provisions which he has reasonable grounds to believe would be incompatible with the international obligations of the United Kingdom; or a provision which modifies Scots private law as it applies to reserved matters or incidentally or consequentially modifies a reserved enactment and which he has reasonable grounds to believe would have an adverse effect on the operation of an enactment as it applies to reserved matters.

Under clause 101(8), orders under clause 54(4) may make provision having retrospective effect. This will permit the Secretary of State to make provision to rectify retrospectively any provisions in breach of our international obligations or which have an adverse effect as mentioned above.

An order under clause 54 will be made by statutory instrument and, under the provisions of clause 102(6), is subject to negative resolution procedure in the Westminster Parliament. The order is not subject to any procedure in the Scottish Parliament.

Under the provisions of clause 102(9), if the order merely revokes another order made under clause 54(1) it is not subject to any Parliamentary procedure.

It is not thought appropriate that the orders under clause 54(1), (2) or (4) should be subject to affirmative procedure because they might need to be made quickly, to prevent action being taken, to require action to be taken or to revoke subordinate legislation. It could be very difficult for an affirmative instrument to be drafted, laid, debated by both Houses of Parliament in time, even assuming that Parliament is sitting.

Drafts of an affirmative instrument can be laid only where Parliament is sitting and this could give rise to difficulty if a Scottish Bill was enacted by the Scottish Parliament at the time of a Parliamentary recess at Westminster and the Secretary of State wanted to make an order under clause 54.

Clause 56 : Power to transfer property etc. to the Scottish Ministers

Clause 58 : Power to transfer property etc. to the Lord Advocate

Clause 56 enables subordinate legislation to provide for the transfer to the Scottish Ministers of any property or liabilities of a Minister of the Crown which are or have been held or used or incurred for or in connection with devolved functions, or to provide them with rights or interests in such property. By virtue of clause 112 property includes rights and interests of any description and so will enable the transfer of, for example, rights under contracts.

Clause 58 provides a similar power to provide for the transfer of property and liabilities from a Minister of the Crown to the Lord Advocate in connection with the exercise of his retained functions.

Clause 104 makes supplementary provision in connection with these clauses.

These are open powers. They may be exercised by Her Majesty by Order in Council or by a Minister of the Crown by order.

Subordinate legislation under these powers will be made by statutory instrument and, under the provisions of clause 102(6), is subject to negative resolution procedure in the Westminster Parliament. Under clause 103(3), a statutory instrument containing such subordinate legislation is not subject to annulment if it has been laid in draft before and approved by both Houses. It is not subject to any procedure in the Scottish Parliament.

There are many examples of similar powers to transfer property in connection with a transfer of functions which have also been subject to negative resolution procedure, e.g. section 15 of the Local Government etc. (Scotland) Act 1994, section 36D of the New Towns (Scotland) Act 1968 and section 16 of the Further and Higher Education (Scotland) Act 1992.

Clause 59 : Power to transfer functions to the Scottish Ministers

Clause 59 enables Her Majesty by Order in Council to provide for Ministerial functions exercisable in or as regards Scotland to be exercisable by the Scottish Ministers instead of by or concurrently with UK Ministers. It also enables provision to be made for the adaptation of such Ministerial functions so as to require the UK Minister to consult with or obtain the agreement of the Scottish Ministers before he exercises a function. Orders in Council under this clause will provide for the transfer to the Scottish Ministers of functions in relation to reserved matters, a process which is referred to as 'executive devolution'. These could include statutory functions such as powers to make subordinate legislation, but only insofar as they are exercisable in or as regards Scotland. The UK Minister of the Crown will continue to exercise a function in or as regards the other parts of the UK. He could continue to exercise functions in or as regards Scotland if the Order in Council provides for their concurrent exercise with rather than transfer to the Scottish Ministers.

Rather than list on the face of the Bill all the functions to be executively devolved and in order to provide scope for future transfer of functions, clause 59 provides for a general power to make provision for functions to be transferred to the Scottish Ministers.

Under clause 101(6), an Order in Council under this power may modify any enactment (except Schedule 5), prerogative instrument or document.

Under the provisions of clause 102(3) and (5), an Order in Council under this power is subject to affirmative resolution procedure in the Scottish Parliament. Under the provisions of clause 102(1) and (5), it is also subject to affirmative resolution procedure in the Westminster Parliament.

Clause 60 : Power to transfer property etc. in connection with functions transferred under clause 59.

Clause 60 enables subordinate legislation to provide for the transfer of property and liabilities from a Minister of the Crown to the Scottish Ministers in connection with the exercise of any functions transferred to or conferred on them by subordinate legislation under clause 59.

Clause 104 makes supplementary provision in connection with this clause.

This is an open power. It may be exercised by Her Majesty by Order in Council or by a Minister of the Crown by order. The power is needed to make appropriate provision in connection with the transfer of functions under clause 59.

Subordinate legislation under this power will be made by statutory instrument and, under the provisions of clause 102(6), is subject to negative resolution procedure in the Westminster Parliament. Under clause 103(3), a statutory instrument containing such subordinate legislation is not subject to annulment if it has been laid in draft before and approved by each House. It is not subject to any procedure in the Scottish Parliament.

There are many examples of similar powers to transfer property in connection with a transfer of functions which have also been subject to negative resolution procedure, e.g. section 15 of the Local Government etc. (Scotland) Act 1994, section 36D of the New Towns (Scotland) Act 1968 and section 16 of the Further and Higher Education (Scotland) Act 1992.

Clause 61(5) : Power to designate receipts payable into the Scottish Consolidated Fund

Clause 61 establishes a Scottish Consolidated Fund and provides for:

a) sums to be paid into the Fund by the Secretary of State from time to time, out of monies provided by Parliament (i.e. the Parliamentary grant);

b) sums received by officeholders in the Scottish Administration to be paid into the Fund subject to any provision made by, or under, an Act of the Scottish Parliament for the disposal of, or accounting for, such sums;

c) sums to be paid to the Secretary of State, by the Scottish Ministers in respect of certain receipts designated by the Treasury by order, and for these sums to be charged on the Fund; and

d) the Fund to be held with the Paymaster General.

Clause 61(5) provides that the Treasury may, after consulting with the Scottish Ministers, by order designate receipts of any description specified in the order which are payable into the Fund (or would be but for any provision made by or under an Act of the Scottish Parliament). Clause 61(6) requires the Scottish Ministers to pay over to the Secretary of State sums equal to the amount outstanding of any receipts so designated.

The purpose of these provisions is to ensure that certain receipts (such as interest payments, fines, return on public dividend capital) which are currently paid into the UK Consolidated Fund continue to be paid into that fund after devolution by the Scottish Ministers, through the Secretary of State.

This order will be made by statutory instrument and, under the provisions of clause 102(7), is subject to negative resolution procedure in the House of Commons. It is not subject to any procedure in the Scottish Parliament or in the House of Lords.

Clause 64(3) : Power to increase maximum sum which may be lent to Scottish Ministers

Clause 64 enables the Treasury to issue to the Secretary of State, out of the National Loans Fund, such sums as are required by him for making loans to the Scottish Ministers under clause 63 (i.e. short term loans to meet shortfalls or to provide a working balance in the Scottish Consolidated Fund). The clause also sets an overall limit on such short term borrowing of £500 million, but provides that the Secretary of State may, with the consent of Treasury, increase this amount by order. Repayments received by the Secretary of State under clause 63 are to be paid into the National Loans Fund.

Clause 64(3) provides that the Secretary of State may by order made with the consent of Treasury substitute for the amount specified in subsection (2) (i.e. £500m) such increased amount as may be specified in the order. This will enable the Secretary of State to increase the amount from time to time, for example, to keep pace with inflation or to meet unforeseen circumstances.

This order will be made by statutory instrument and, under the provisions of clause 102(2) and (4), is subject to affirmative resolution procedure in the House of Commons. It is not subject to any procedure in the Scottish Parliament or in the House of Lords.

Clause 75(1) : Power to make provision in consequence of tax-varying power

Clause 75(2) : Power to provide for exclusion of tax-varying power in respect of particular enactments

Clause 75(3) : Power to provide for effect of tax-varying resolution on the operation of PAYE

This clause is entirely supplementary to the provisions of clauses 69 and 70. It permits the Treasury by order to modify enactments to take account of the Scottish Parliament's tax-varying power. In particular, such an order may exclude the effect of any tax-varying resolution in relation to certain enactments, or postpone the effect of such a resolution in relation to the operation of the PAYE system. Clause 102 sets out the procedures applicable to orders under this clause.

Subsection (1) provides that the Treasury may make an order modifying any enactment as they consider necessary or expedient in consequence of the fact that the Scottish Parliament has, is to have, or has exercised, its tax-varying power.

Subsection (2) provides that a Treasury order may exclude the effect of the tax-varying power in relation to any enactment, and may make consequential modifications of any enactment.

Subsection (3) provides power by order to postpone temporarily the effect of a resolution in relation to the operation of PAYE.

Subsection (4) provides that an order under this section may, to the extent that Treasury consider it to be appropriate, take effect retrospectively from the beginning of the year of assessment in which it is made.

Orders under this clause will be made by statutory instrument. Under the provisions of clause 102(2) and (4), orders under clause 75(1) and (2) are subject to affirmative resolution procedure in the House of Commons. Under the provisions of clause 102(2) and (7), orders which make provision only under clause 75(3) are subject to negative resolution procedure in the House of Commons. None are subject to any procedure in the Scottish Parliament or in the House of Lords.

Clause 83 : Power to specify an authority as a cross-border public authority

- makes provision for public authorities which, in addition to other functions have functions exercisable in or as regards Scotland which do not relate to reserved matters to be designated by Order in Council as "cross-border public authorities";

- disapplies the provisions in certain other clauses in relation to such authorities;

- requires a Minister of the Crown to consult the Scottish Ministers before he exercises certain functions in relation to such an authority; and

- requires any report in relation to such an authority which must be laid before the Westminster Parliament also to be laid before the Scottish Parliament.

Most of these cross-border public authorities operate both in Scotland and the rest of the UK. Some will operate only in Scotland but will fall to be dealt with as crossborder public authorities because they have devolved and reserved functions.

Subsection (5) in effect defines a "cross-border public authority" for the purposes of the Bill as any body, government department, office or office-holder which is specified in an Order made under this clause. A body can only be so specified if (at the time when the Order is made) it has, in addition to other functions, functions exercisable in or as regards Scotland which do not relate to reserved matters.

Under the provisions of clause 102(6), an Order in Council under this power is subject to negative resolution procedure in the Westminster Parliament. It is not subject to any procedure in the Scottish Parliament.

© Parliamentary copyright 1998