Chapter 4: The Strathclyde Review
57.Before turning to the substance of the three options, we make a general comment about the approach of the Strathclyde Review. The Review was triggered by the House of Lords’ agreement to a motion to decline to consider the Tax Credits Regulations, leading to talk of a ‘constitutional crisis’.66 While the Review set out a number of the controversies surrounding that motion as background, it did not consider whether it might be sufficient, or indeed more effective, to take action to address some of those issues individually, rather than changing the basis on which all statutory instruments are scrutinised by Parliament. We consider two such issues briefly.
Financial privilege and delegated legislation
58.John Penrose MP and the Strathclyde Review both stressed the financial nature of the Tax Credits Regulations and argued that the Commons’ primacy over matters of tax and spending had been challenged. If Parliament accepts the Government’s concern in this regard—and that is clearly controversial in and of itself—there are various other means by which that concern could be addressed without changing the delegated legislation system in a way that affects all statutory instruments, including those that have no financial implications. For example, procedures for Commons-only scrutiny of statutory instruments already exist. A process of certification, akin to that already in place for bills, has been suggested as a solution.67 We note that the Strathclyde Review recommends that the Government should carry out a review, in consultation with the Commons Procedure Committee, of “when statutory instrument powers should be subject to Commons-only procedures, with a view to establishing principles that can be applied in future”68—but this is in addition to wholesale reform of the Lords’ role with respect to delegated legislation.
59.We believe the Government should consider the extent to which it is appropriate to be making legislative changes with significant budgetary implications through delegated legislation. The financial privilege of the Commons is already assured in relation to budget measures contained in finance bills.
The “ability of elected Governments to secure their business in Parliament”
60.This phrase in Mr Penrose’s statement seems to assume that the Government’s ability to secure its business has been, or is likely to be, impaired. Yet there seems to have been little consideration of whether existing mechanisms could be used to insist that the Lords reconsider. The Government could, for example, re-lay a defeated instrument in substantively the same form to insist on its passage following approval by the House of Commons, or lay a modified instrument by way of compromise.
61.We do not believe the House of Lords’ rejection of the Tax Credits Regulations constituted a constitutional crisis. A single Government defeat on a statutory instrument, even one with such unusually significant financial implications, does not seem a sound foundation upon which to base significant and lasting reform of parliamentary scrutiny of delegated legislation.
62.The Strathclyde Review put forward a single broad recommendation that would affect parliamentary scrutiny of all delegated legislation. We believe that consideration of a range of more precise measures might have addressed the Government’s concerns without recourse to such drastic measures as a statutory override power for the House of Commons.
The options in the Review
63.We now turn to consider the specific options set out in the Strathclyde Review. These are as follows:
Option 1: to remove the House of Lords from statutory instrument procedure altogether.
Option 2: for the House of Lords to pass a resolution or new Standing Orders setting out how it will use its powers in relation to statutory instruments and to “revert to a position where the veto is left unused”.
Option 3: to set out in statute a procedure whereby the Commons can insist on the passage of secondary legislation, in effect overriding the House of Lords.
The effects of weakening the Lords’ powers over delegated legislation
64.All three options have a common theme: they would weaken the Lords’ powers over delegated legislation to a greater or lesser degree. All three options would, in effect, remove the House’s power to veto delegated legislation (whether by removal of the Lords from the process altogether, by binding resolution or by statute allowing the House of Commons to override the Lords). We note the following effects which might occur should any of the three options be enacted (although in some cases to a greater extent were option 1 to be chosen, and to a lesser extent were option 3 preferred).
65.First, removing or weakening the Lords’ powers over delegated legislation might encourage the Government to draft delegated powers as broadly as possible, so that secondary legislation could be used to pass measures which might otherwise face greater opposition in the Lords as primary legislation. This would risk encouraging the use of secondary legislation which would, in turn, exacerbate the constitutional concerns mentioned above (see paragraphs 37-44).
66.Second, as the Strathclyde Review itself acknowledges, the House of Lords plays a valuable role in relation to the scrutiny of secondary legislation. There is a significant risk that if the Lords were to be deprived of any real power in respect of statutory instruments the impact of its scrutiny function would be diminished. As noted above (see paragraph 27), the Lords has only rarely exercised its power to annul or reject statutory instruments. However, the existence of the power and the possibility of its exercise form the context in which delegated legislation is drafted. Should that power be absent it may well affect the extent to which the views and concerns of the Lords were considered during the drafting process.
67.Third, if the Government could simply override the House of Lords at will in respect of delegated legislation, it would imply that secondary legislation warrants less scrutiny than primary legislation where the Lords’ significant power of delay means its wishes cannot simply be ignored. This would be particularly concerning with regard to Henry VIII powers which amend or repeal primary legislation enacted by both Houses. Given our concerns about the extent and use of delegated powers granted to ministers, this position is hard to justify. The mere fact that a given measure is legislated for by delegated legislation rather than in primary legislation does not necessarily mean that it is a matter of technical detail that requires less in terms of scrutiny. Should steps be taken to ensure that the powers granted to ministers by primary legislation were more detailed, with less latitude given to them, then this argument might be deprived of some of its force—as perhaps was intended by the statement in the Review that primary legislation should contain “appropriate detail”. However, in the light of the vagueness of the “appropriate detail” criterion, and the fact that any changes would have no effect on existing regulation-making powers, it does not appear to us that this argument yet carries sufficient weight to justify reducing the level of scrutiny of delegated legislation.
68.Fourth, if the Lords’ powers over delegated legislation were to be significantly diminished then it might become more assertive when considering the delegation of powers in primary legislation. An unintended consequence might therefore be to change the site of possible confrontation between the two Houses in relation to delegated legislation. For instance, if the House of Lords were to be denied any means by which to block or significantly delay statutory instruments in exceptional circumstances, the House might consider it appropriate to assert itself to a greater extent in respect of Bills that, if enacted, would confer particularly broad or potentially controversial delegated powers. This might increase the time taken in scrutinising primary legislation and, in particular, make the Lords more assertive on such matters at ‘Ping Pong’, should it feel the Commons were being unreasonable in dismissing its concerns.
69.Finally, as we note in paragraphs 35-36 above, these proposals must be considered in the context of the balance of power between Parliament and the Executive. We believe that a weakening of the House of Lords’ powers over delegated legislation, in particular when unaccompanied by a strengthening of the House of Commons’ role in respect of scrutinising statutory instruments, will result in a significant shift of power from Parliament to the Executive.
70.These concerns arise in respect of all the three options set out in the Strathclyde Review. We now make some further, more specific, comments about the three options in turn.
Option 1
71.We do not intend to comment on this option in detail—the Strathclyde Review itself deprecates option 1 by reference to the following compelling arguments against it:
“It would go way beyond establishing Commons primacy, because it would remove the basis for any involvement by the House of Lords, even in an advisory capacity, in the passage of legislation in the form of statutory instruments. It would also be detrimental to the quality of legislation generally if the foundation were removed for the very valuable role currently carried out by the House of Lords in the scrutiny of secondary legislation at a technical level. The presence of Lords on the Joint Committee on Statutory Instruments (JCSI) and the existence and work of the Secondary Legislation Scrutiny Committee (SLSC) are dependent on the role of the House of Lords in the affirmative and negative resolution procedures.”69
72.In addition to removing the Lords’ veto over delegated legislation, option 1 would prevent the House from even expressing an opinion on delegated legislation, or indeed from asking the House of Commons to think again. Option 1 is clearly unacceptable. It would significantly curtail the capacity and responsibility of Parliament to oversee the Executive.
Option 2
73.The Review concludes that limiting the Lords’ role by means of adopting a binding resolution or new Standing Orders would be inadequate because “it is difficult to envisage any agreement being reached or accepted widely enough to be an effective inhibition”.70 The Review reaches this conclusion because, it says, “a wide range of different views has been expressed about what the convention” currently is concerning the Lords’ role in relation to delegated legislation.71
74.The fact that there is presently disagreement about when the House’s veto can properly be deployed does not mean that an agreement could not be reached. We note that the Royal Commission on Reform of the House of Lords, the Joint Committee on Conventions and the Leader’s Group chaired by Lord Goodlad were all able to reach conclusions on what the ‘conventions’ were or should be. Moreover, if such agreement were reached, the fact that there is currently a diversity of views about the circumstances in which the veto can legitimately be used would cease to be relevant, and the new agreement would become the standard by which the House’s future behaviour would be governed.
75.There is, however, a more fundamental point. The Strathclyde Review concludes that a resolution would be inadequate because it would be impossible to agree sufficiently precise wording. The implicit assumption is that only a rigid, cut-and-dried rule would be sufficient because leaving scope for flexibility or the exercise of judgement on the part of the House of Lords would be undesirable. In contrast, the Review proposes that in order to mitigate the risk of over-use of the statutory override proposed in option 3, its preferred approach, the Government would need to ensure that bills were drafted with “an appropriate level of detail” in the first place.72 This assumes that Government, in the drafting of bills, can be expected to exercise restraint by reference to a vague and open-ended notion such as ‘appropriate detail’ in a way that the House of Lords, according to the Review’s analysis of option 2, cannot. This assumption sits in tension with the fact that elements of the relationship between the two Houses have long been governed effectively by convention and established practice.
76.We are not persuaded by the Strathclyde Review’s reasons for rejecting a way forward based on convention or established practice, not least because elements of the relationship between the two Houses have been effectively governed in such ways for many years. Option 2 would not, however, address the wider concerns we have expressed earlier in this report. Those concerns cannot be addressed by any proposals that consider the powers of the House of Lords in isolation.
Option 3
77.The Strathclyde Review recommends option 3, a statutory procedure for the Commons to override the Lords, arguing that:
“The time has come to put in place new procedures to clarify the relationship between the two Houses on delegated legislation and to confirm that the role of the House of Lords in respect of delegated legislation is to ask the House of Commons to think again, similar to how it is in the case of primary legislation.”73
78.The Review goes on to argue that this should be done by means of legislation permitting the House of Commons to override the Lords should it veto a statutory instrument, suggesting that this would be equivalent to the current position with regard to primary legislation. In one respect, however, there is an important difference between the Lords’ present powers in respect of primary legislation under the Parliament Acts and the Lords’ proposed powers in respect of statutory instruments. Whereas the Parliament Acts enable the Lords to hold up primary legislation for one year, the Strathclyde Review proposes no fixed period of delay in relation to statutory instruments rejected by the Lords. An objection registered by the Lords to a statutory instrument would therefore be subject to the possibility of rapid override by the Commons.
79.The Review dismisses any suggestion that the Lords should be able to delay delegated legislation for a fixed (or indeed any) period:
“The difficulty here is that whatever period of delay is specified, it might in a particular case overrun the time specified in the draft or instrument for its commencement. In practice, that … would effectively deny the Commons the intended ability to override the House of Lords and would be fatal to the instrument or draft instrument in question. The Government’s only option would be to start again with a new instrument with a new commencement date. The Commons needs the ability to override the Lords rapidly in cases of urgency.”74
This raises two issues, one practical and one of principle.
80.As to the first, the assumption that a fixed period of delay could not be built into any new system for parliamentary scrutiny of delegated legislation is puzzling. Option 3 would require primary legislation to be adopted. If primary legislation were to be enacted, we see no insurmountable reason why a fixed period of delay could not be provided for whilst anticipating and avoiding the problems referred to in the Strathclyde Review in the passage set out above. Indeed, the Royal Commission on House of Lords Reform proposed that the Lords’ power to block SIs should be replaced with a three-month power of delay,75 while the Leader’s Group on Working Practices, chaired by Lord Goodlad, suggested a delay of at least one month.76
81.As to principle, it is unclear why the Strathclyde Review believes the Lords’ powers in respect of secondary legislation should be fundamentally misaligned with the Lords’ powers in respect of primary legislation. In particular, assuming that any technical obstacles to giving the Lords a power to impose a fixed period of delay were dealt with, it is unclear why the Lords should not be equipped to delay the adoption of secondary legislation for a fixed significant period, so that the Commons faces the choice of compromise or delay, as in the case of primary legislation. The Review states that “[t]he Commons needs the ability to override the Lords rapidly in cases of urgency”.77 It does not, however, explain why that need should arise in respect of delegated but not primary, legislation. Nor is there any evidence to suggest that the House of Lords has used its existing powers in relation to delegated legislation in a way that has caused difficulty in situations in which urgent legislative action is required.
82.The Review goes on to state that:
“The absence of any specified period of delay seems very unlikely, in practice, to reduce in any way the chances that a proper consideration of the Lords’ decision, and a serious reconsideration of the instrument, will be undertaken by a government, which will still need to explain and justify to the House of Commons the motion to override the Lords. They may need to do it rapidly but they will still need to do it seriously and well.”
83.The decision on whether a delaying power would be appropriate depends on what the underlying role of the Lords is considered to be. If the aim, as the Review argues, is to make the Commons debate (and the Government consider) a statutory instrument once again in the light of the Lords’ concerns, then that might be achieved by requiring the Government to make time for a substantive debate in the Commons—although a delay would be needed for the Commons properly to consider the substance of debate in the Lords and to allow time for the various reactions of the public and civil society to be heard. If, however, the aim is to give the Lords leverage, such that the Government would be more likely to re-lay the statutory instrument in a form that met at least some of the Lords’ concerns, then a power to delay for a fixed period would be necessary.
84.As a final point, we note that the Review takes it for granted that the absence of a delaying power would not reduce the likelihood of “proper consideration [by the Commons] of the Lords’ decision, and a serious reconsideration of the instrument”.78 The position adopted in the Review boils down to trusting that the Government and the House of Commons would take seriously the Lords’ objection and give due reconsideration to the instrument in question in the light of the Lords’ concerns. If this is what is intended, then there is no reason why the arrangements for reconsideration by the Commons should not be formalised, for example by requiring that any reconsideration of an instrument following an objection by the Lords should take place by way of a full debate on the floor of the House of Commons. By not proposing this, the Strathclyde Review implicitly assumes that the Government and the House of Commons should be trusted to exercise good judgement and appropriate restraint in relation to matters of this nature. It is striking, however, that the Review, by rejecting option 2 out of hand, is not prepared to rely upon the exercise of such judgement and restraint by the House of Lords.
85.If the Lords’ powers over delegated legislation were sought to be constrained by statute without proper consideration of the wider context, then we would expect the following matters to be addressed in detail by both Parliament and the Government:
- What steps would be taken to ensure that delegated powers proposed in primary legislation are set out in appropriate detail, sufficiently narrow in scope, and restricted to matters of detail rather than of principle;
- Whether the exercise of Henry VIII powers, which permit the amendment or repeal of primary legislation, should still be subject to a Lords veto or to a modified procedure;
- Whether the Lords’ powers would be intended to require the Government to reconsider its stance following Lords’ opposition to an instrument, or simply to prompt reconsideration by the House of Commons;
- What the advantages and disadvantages would be of
incorporating a fixed period of delay prior to Commons reconsideration should the Lords reject a statutory instrument; - Whether and how Commons procedure would be altered to ensure that a statutory instrument rejected by the House of Lords would be given an appropriate degree of scrutiny on reconsideration;
- Whether any new procedures would apply only to powers delegated in the future, or whether they would apply to powers already delegated under an assumption that they would be subject to bicameral approval;
- Whether and how Commons financial privilege would be specifically extended to cover statutory instruments.
66 ‘Lords v Commons: Tax credit battle gets constitutional’, BBC News, (27 October 2015): http://www.bbc.co.uk/news/uk-politics-34614716 [accessed 10 March 2016]
68 Strathclyde Review, p 23
69 Strathclyde Review, p 16
70 Strathclyde Review, p 17
71 Strathclyde Review, p 17
72 Strathclyde Review, p 25
73 Strathclyde Review, p 15
74 Strathclyde Review, p 20
75 Cabinet Office, A House for the Future: Reform of the House of Lords, Cm 4534, January 2000, para 7.36: https://www.gov.uk/government/publications/a-house-for-the-future-royal-commission-on-the-reform-of-the-house-of-lords [accessed 15 March 2016]
76 Leader’s Group on Working Practices, Report (Report of Session 2010–11, HL Paper 136) para 153; the Group recommended that the House should ask the Government to ‘think again’ when instruments were rejected by the House of Lords, which would then resolve not to reject the instrument again if laid after a specific time interval (of at least one month).
77 Strathclyde Review, p 20
78 Strathclyde Review, p 20