European Union (Withdrawal) Bill: Consideration of House of Lords amendments 110, 10 and 4 concerning scrutiny of delegated powers and Statutory Instruments
As the EU (Withdrawal) Bill arrives back in the House of Commons for consideration of House of Lords amendments, this briefing paper for MPs sets out our concerns about three amendments - 110, 10 and 4 - concerning scrutiny of delegated powers and Statutory Instruments.
the EU (Withdrawal) Bill should be amended to circumscribe the powers it delegates more tightly;
the House of Commons should establish a new ‘sift and scrutiny’ system for all delegated legislation;
a new strengthened scrutiny procedure should be introduced for the exercise of the widest delegated powers in the EU (Withdrawal) Bill.
Following scrutiny in both Houses a number of changes were made to the Bill in the House of Lords in line with our concerns. For example:
provisions that would have enabled ministers to create new public bodies by Statutory Instruments were removed (government amendment);
further restrictions were placed on the use of delegated powers to impose fees or charges (government amendment);
one clause was amended to remove the power which would have permitted ministers to modify the EU (Withdrawal) Act itself by statutory instrument (proposed by Lord Lisvane and supported by the government);
a provision was introduced in Schedule 7 requiring ministers to explain the need for ‘urgency’ if they wish to use the made affirmative urgent procedure (proposed by Hansard Society chairman Lord Sharkey and supported by the government).
There are three further scrutiny-related amendments which we wish to draw to the attention of Members:
Lords amendment 110 – regarding the sifting committee to upgrade the scrutiny procedure for Statutory Instruments;
Lords amendment 10 – regarding the use of the term ‘necessary’ rather than ‘appropriate’;
Lords amendment 4 – regarding drafting concerns in relation to the proposed enhanced scrutiny procedure.
When considering the relevant sections of the Bill we also urge MPs to look at the draft Standing Orders for the proposed new scrutiny committee (see the appendix to this note) and seek a commitment from government to ensure that time is set aside for these to be properly considered.
Lords amendment 110 – sifting committee to upgrade the scrutiny procedure for Statutory Instruments
A number of changes were made in the House of Lords to strengthen the proposals for a sifting committee to consider upgrading negative Statutory Instruments (SIs) to the affirmative procedure (as originally and successfully proposed during consideration of the Bill in the House of Commons by the Chair of the Procedure Committee, Charles Walker MP).
A cross-party amendment to the Walker proposals was made in the House of Lords by the former Clerk of the House of Commons, Lord Lisvane, and supported by the Hansard Society’s chairman, Lord Sharkey.
The government intends to oppose this amendment.
However, the Walker amendments were deliberately framed to refer only to the House of Commons rather than Parliament, to avoid trespassing on the Upper House’s procedures. This Lords amendment 110 therefore provides for an equivalent sifting process in the House of Lords (which will be undertaken by the Secondary Legislation Scrutiny Committee as the counterpart to the proposed European Statutory Instruments Committee in the House of Commons). This is necessary as most SIs have to be considered by both Houses of Parliament. Government ministers have acknowledged the need for this change.
If the amendment is rejected by the House of Commons, at some point during ping pong it will still be necessary for the House of Lords to be written into the sifting procedure (essentially the Walker amendment will have to be amended to replace references to the House of Commons with references to Parliament). Indeed the government had intended to make the change itself in the House of Lords but Peers preferred amendment 110.
This is because the Lisvane amendment does three valuable things in addition to writing-in the House of Lords:
(i). It makes the recommendation of the sifting committee binding
As originally passed as the Walker amendment, a new European Statutory Instruments Committee was to consider all negative SIs laid by the government under then clauses 7, 8 and 9 of the Bill and recommend, within 10 days, an upgrade for those SIs where it deemed the affirmative procedure to be more appropriate. However, the committee’s power was advisory: it could only recommend that a negative SI be upgraded to the affirmative procedure. The decision to upgrade ultimately rested with the government, and there would be nothing – other than the risk of a political row – to stop a minister ignoring the committee’s recommendation.
The Lords amendment gives the sifting committees some teeth by ensuring that its recommendations will have to be accepted by ministers. This is in keeping with previous legislation with similarly wide delegated powers (e.g. the Legislative and Regulatory Reform Act 2006, Public Bodies Act 2011 and Localism Act 2011), where a strengthened scrutiny procedure was inserted which obliges the government to accept the recommendation of a designated committee in each House to upgrade the scrutiny of an SI.
Given the similarly broad delegated powers in the EU (Withdrawal) Bill, unless this requirement to accept the recommendation of the designated sifting committee is replicated, it will make for a step backwards in the legislature’s control of executive power. In line with existing strengthened scrutiny procedures, the Bill as now drafted provides that the power to upgrade a negative instrument will rest with Parliament, although a decision by the designated committee to upgrade an instrument could be overturned by a motion of the House.
(ii). It extends the sifting and upgrade process to SIs created under Clause 22 (previously numbered Clause 17)
This Clause confers a Henry VIII power on ministers to, by regulations, ‘make such provision as the minister considers appropriate in consequence of this Act’. The Lords amendment brings the potentially broad nature of this power’s application – which is subject to the lowest form of parliamentary control, the negative procedure – within the remit of the sifting and upgrade process.
(iii). It extends the sifting and upgrade process to negative SIs created under a power in any other Act of Parliament which have the same purpose as an SI derived from a power in the EU (Withdrawal) Bill to deal with deficiencies arising from withdrawal or to implement the EU Withdrawal Agreement.
In debate on day two of the House of Commons committee stage on the Bill, the Solicitor General Robert Buckland MP made clear that, where possible, the government may use powers in existing non-Brexit- related primary legislation to deliver changes to retained EU law (see House of Commons, Hansard, 15 November 2017, col. 418). There is concern that inclusion of a strengthened scrutiny model in the EU (Withdrawal) Bill may create a perverse incentive for ministers to find and use existing powers to amend retained EU law in order to circumvent the sifting committee process in the future EU (Withdrawal) Act. The Lords amendment closes down this possibility.
Lords amendment 10 – ‘necessary’ rather than ‘appropriate’
In the House of Lords several clauses (now numbered 9 and 22) were amended so that ministerial powers to make regulations to correct deficiencies in retained EU law and consequential regulations can be used only when ‘necessary’ rather than when ministers consider it ‘appropriate’ (another amendment proposed by Lord Lisvane). The government intends to oppose these changes.
The test for the use of any delegated power should not be the subjective judgement of ministers. Reassuring statements from ministers about their intentions with respect to delegated powers have no legislative force. The best way to constrain ill-defined powers is to tighten the scope of their application on the face of the Bill.
A new clause was added in the House of Lords to require that retained EU law in specified areas (employment rights, equality, consumer standards, health and safety standards, environmental standards) be amended, repealed or revoked only by primary legislation.
However, amendment 4 also provides that where ‘technical’ changes are proposed to retained EU law in these policy areas then they can be made by statutory instrument subject to an ‘enhanced scrutiny procedure’. This procedure is to be defined by the Secretary of State in regulations and subject to the affirmative procedure. The enhanced procedure proposed provides that ministers must consult, must produce an explanatory statement (as already required under Schedule 7 for regulations (under Clause 9) to correct deficiencies in retained EU law), and certify that the regulation makes only technical changes.
We make no comment on the policy issues inherent in this clause. However, we are concerned about the drafting of the section regarding the scrutiny provisions.
It may prove unhelpful to have a category of statutory instruments whose scrutiny will be separate to the core enhanced scrutiny procedure set out in Schedule 7 of the Bill.
We are also concerned by the suggestion that any scrutiny procedure should be ‘established by regulations made by the Secretary of State’. Scrutiny procedures are not a matter for regulation, nor the Secretary of State; they should be a matter for Parliament. To provide otherwise would be to cut across the principle – enshrined in the amendments made to the Schedule 7 scrutiny procedures – that Parliament not ministers should decide on the scrutiny mechanisms required for secondary legislation.
Standing Orders for the new European Statutory Instruments Committee: parliamentary time is needed for debate and consideration
In order to give effect to the new sifting and upgrade scrutiny process for future EU Withdrawal Orders the House will need to move quickly to establish the new European Statutory Instruments Committee (ESIC). The government has published draft Standing Orders for the Committee (see appendix below) and the Procedure Committee is currently holding an inquiry on how the Committee should operate. The Leader of the House of Commons has indicated that, subject to Royal Assent, the government hopes to lay the first EU (Withdrawal) Orders before the end of June. Time is therefore of the essence.
We urge Members to seek a clear commitment from the government that time will be made available to properly debate and consider the Standing Orders prior to their introduction.
As currently drafted we have a number of concerns about the Standing Orders and the ability of this sifting committee to meet Members’ scrutiny expectations in the prescribed 10-day sifting period. (A more detailed analysis of our concerns is set out in our evidence to the Procedure Committee; it should be noted that this was produced prior to relevant amendments to the EU (Withdrawal) Bill made in the House of Lords.)
For example, draft Standing Order A(4) acknowledges that it might not be ‘reasonably practicable’ for the government to respond to the Committee’s questions – orally or in writing – within the period provided. In most cases, only a rapid assessment of an SI’s merits against pre-agreed criteria for upgrading to the affirmative procedure will be possible.
If no scrutiny by the ESIC of any SI is envisaged beyond the 10-day period, then the effect of this new procedure will simply be to ensure that an upgraded SI is made subject to consideration by Members in a Delegated Legislation Committee (DLC) – with all the inherent flaws of these bodies - followed by a vote there on a consideration motion, and a subsequent vote on an approval motion by the whole House.
The 10-day sift and upgrade period is short, and will be particularly tight if ministers adopt a ‘peak and trough’ approach to the production of SIs. Ministers have indicated that the Brexit SI programme is being overseen by the Parliamentary Business and Legislation Cabinet Committee and that a minister and senior civil servant have been given responsibility for it in each department. It is essential that an advance management plan is produced for Parliament so that the relevant scrutiny committees, including the new ESIC, can plan their work and allocate their resources appropriately. The provision of such a plan should be an express requirement, not a recommendation. The forward-look management plan should be published, so that relevant external stakeholders can be informed about what to expect in the coming weeks. This is especially necessary given the limited opportunity for consultation and engagement that exist in the system.
The 10-day period for sifting and upgrading SIs will afford external bodies little or no opportunity to feed their views into the process. If, for example, the ESIC were to meet weekly on a Wednesday morning, it would not, at that meeting, realistically be able to consider many of the SIs laid on the Monday just forty-eight hours earlier. Consideration would likely slip to the subsequent meeting, on day eight of the prescribed 10-day scrutiny upgrade period. In the intervening days, at the direction of the chair, engagement with ministers might have taken place, but on these timescales it would be difficult to locate and engage external experts on the subject matter of the SI, let alone persuade them to make a written submission or attend the committee meeting to give oral evidence. Only the largest stakeholder bodies are likely to have the capacity and resources to respond on these kinds of timescales.
There is limited opportunity for stakeholder engagement at the ‘praying against’ and DLC stages for negative and affirmative SIs respectively. If there is little scope for such engagement at the ESIC stage, arguably the only real opportunity for it to take place will be during any consultation stage, upstream in Whitehall before the content of the SI is finalised.
Appendix: Draft Standing Orders for the new European Statutory Instruments Committee
Future Business Paper 3. STANDING ORDERS: EUROPEAN UNION (WITHDRAWAL) BILL Andrea Leadsom That the following changes to Standing Orders be made:
A: EUROPEAN STATUTORY INSTRUMENTS COMMITTEE (Temporary Standing Order)
(1) There shall be a select committee, called the European Statutory Instruments Committee, to examine and report on— (i) any of the following documents laid before the House of Commons in accordance with paragraph 2A(3)(b) or 10A(3)(b) of Schedule 7 to the European Union (Withdrawal) Act — (a) a draft of an instrument; and (b) a memorandum setting out both a statement made by a Minister of the Crown to the effect that in the Minister’s opinion the instrument should be subject to annulment in pursuance of a resolution of either House of Parliament (the negative procedure) and the reasons for that opinion, and (ii) any matter arising from its consideration of such documents.
(2) In its consideration of a document referred to in paragraph 1(i) the committee shall include, in addition to such other matters as it deems appropriate, whether the draft instrument— (i) contains any provision of the type specified in paragraph 1(2), 5(2) or 6(2) of Schedule 7 to the European Union (Withdrawal) Act  in relation to which the Act requires that a draft of the instrument must be laid before, and approved by a resolution of, each House of Parliament (the affirmative procedure); (ii) otherwise appears to make an inappropriate use of the negative procedure; and shall report to the House its recommendation of the procedure which should apply.
(3) The committee shall have regard to— (i) reasons offered by the Minister in support of the Minister’s opinion that the instrument should be subject to the negative procedure; (ii) any relevant report of the Joint Committee on Statutory Instruments.
(4) Before reporting on any document, the committee shall provide to the government department concerned an opportunity to provide orally or in writing to it or any sub-committee appointed by it such further explanations as the committee may require except to the extent that the committee considers that it is not reasonably practicable to do so within the period provided by the Act.
(5) It shall be an instruction to the committee that it shall report any recommendation that the affirmative procedure should apply within the period specified by the Act.
(6) The committee shall consist of sixteen Members.
(7) The committee and any sub-committees appointed by it shall have the assistance of the Counsel to the Speaker.
(8) The committee shall have power to appoint specialist advisers either to supply information which is not readily available or to elucidate matters of complexity within the committee’s order of reference.
(9) The committee shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place, and to report from time to time.
(10) The committee shall have power to appoint sub-committees and to refer to such sub-committees any of the matters referred to the committee.
(11) Each such sub-committee shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place, and to report to the committee from time to time.
(12) The committee shall have power to report from time to time the evidence taken before such sub-committees, and the formal minutes of sub-committees.
(13) The quorum of each such sub-committee shall be two.
(14) The committee shall have power to seek from any committee specified in paragraph (15) of this order its opinion on any document within its remit, and to require a reply to such a request within such time as it may specify.
(15) The committees specified for the purposes of this order are those appointed under Standing Order No. 152 (Select committees related to government departments) including any sub-committees of such committees, the Regulatory Reform Committee, the European Scrutiny Committee, the Public Administration and Constitutional Affairs Committee, the Procedure Committee, the Committee of Public Accounts, the Environmental Audit Committee and the Committee on Exiting the European Union.
(16) The committee may also request an opinion from the Joint Committee on Statutory Instruments and the Joint Committee on Human Rights.
(17) Unless the House otherwise orders each Member nominated to the committee shall continue to be a member of it for the remainder of the Parliament, or until this Standing Order lapses, whichever occurs sooner.
(18) This Standing Order, to the extent that it relates to a regulation making power provided to the Government under section 7, 8 or 9 of the European Union (Withdrawal) Act  shall lapse upon the expiry of the power to make new regulations under that section and shall lapse entirely upon expiry of the last such remaining power.