1.This Bill, which was introduced in the House of Lords on 4 December and which is expected to go through all its stages on 12 December, delivers on the commitment in the Government’s Autumn statement to cut the rate of National Insurance contributions. It includes one provision which confers delegated powers and in respect of which the Treasury have provided a delegated powers memorandum (“the Memorandum”).
2.The Schedule to the Bill contains consequential and transitional provision. It includes at paragraph 5 a regulation making power for the Treasury to make such provision as they consider appropriate in consequence of the Bill, and a power to make such transitional and saving provision as they consider appropriate in connection with the commencement of the Bill’s provisions.
3.Paragraph 5(2) of the Schedule makes it clear that regulations under paragraph 5 may amend, repeal or revoke any enactment, including primary legislation. It is therefore a Henry VIII power. Paragraph 5(2) also allows the regulations to make provision having retrospective effect from no earlier than 6 April 2023.
4.Regulations under paragraph 5 of the Schedule are subject to the negative resolution procedure in respect of all exercises of the powers. This is different from what usually happens; although many Acts include a regulation making power for making consequential etc. provision, they are usually framed so that the affirmative resolution procedure applies where the power is used to amend primary legislation.
5.We have previously expressed the view, both in our Democracy Denied? report and in our guidance for departments, that there is a presumption that Henry VIII powers will be subject to the affirmative resolution procedure, and accordingly that, where a lower level of scrutiny applies, a full explanation should be given in the memorandum.1 It seems to us that this presumption applies with even greater force where the usual practice is for the affirmative resolution procedure to apply.
6.There is only a very brief explanation in the Memorandum as to why the negative resolution procedure applies to all exercises of the powers, and there is no acknowledgment of the fact that it is exceptional to provide for a Henry VIII power to be subject to such a level of scrutiny. The Memorandum states:
“Paragraph [5(4)] provides that a statutory instrument containing regulations under this [paragraph] is subject to annulment in pursuance of a resolution of the House of Commons or the House of Lords. This is considered appropriate as the provisions made by the Bill are relieving, the consequential provisions will not increase any liability.”2
7.We do not consider this explanation to be adequate, particularly in the light of what we have said in the past about the need to give a full explanation where exceptionally a bill provides for Henry VIII powers to be subject to the negative resolution procedure. As is usual with a power to make consequential provision, it is framed so as to enable the Treasury to make such provision “as they consider appropriate”. This confers a broad discretion on the Treasury to decide on the type of provision it is appropriate to make in consequence of the Bill’s provisions. It does not follow, in our view, that the provisions will necessarily be constrained in the way suggested by the Treasury.
8.Accordingly, we consider that the Treasury have failed to provide an adequate explanation as to why the power is subject only to the negative resolution procedure given that it is capable of being used to amend primary legislation. The House may wish to ask the Minister to provide a full explanation for the chosen level of scrutiny. We also take the view that, in the absence of a convincing explanation, the powers should be subject to the affirmative resolution procedure where they are used to amend primary legislation.
1 See DPRRC, Democracy Denied? The urgent need to rebalance power between Parliament and the Executive, (12th Report, Session 2021–22, HL Paper 106), paras 75–85 and DPRRC, Guidance for Departments (November 2021), paras 7 and 11: https://committees.parliament.uk/publications/8225/documents/84262/default/.
2 HM Treasury, ‘Memorandum to the Delegated Powers and Regulatory Reform Committee on National Insurance Contributions (Reduction in Rates) Bill’ (November 2023), para 10: https://publications.parliament.uk/pa/bills/cbill/58-04/0012/231123DelegatedPowersmemo.pdf [accessed 7 December 2023]. Square brackets are used in the quoted passage because the original contains mistakes—ie it refers to paragraph 6(4) instead of 5(4), and to regulations under this section instead of regulations under this paragraph.