Oral evidence - Response to the Strathclyde Review

Members present

Lord Trefgarne (Chairman)

Baroness Andrews

Lord Bowness

Baroness Fookes

Lord Haskel

Lord Hodgson of Astley Abbotts

Baroness Humphreys

Lord Janvrin

Baroness O’Loan

Lord Woolmer of Leeds

________________________

Examination of Witness

Rt Hon the Lord Wallace of Tankerness QC

Q67 The Chairman: Good afternoon. Thank you very much for coming to talk to us. We are most grateful. You know what we are about.

Lord Wallace of Tankerness: Yes indeed.

The Chairman: Before we start asking the questions, I need to tell you that this is a formal evidence-taking session. It is on the record, and audio and video are being webcast together. A verbatim note is being taken that will be put on the public record in printed form and on the parliamentary website. We shall, of course, send you a copy of the transcript for the amendment of any errors that may emerge. Thank you.

I will kick off with the first question. What problem do you think the Strathclyde review is intended to resolve? We of course saw your speech from 13 January, which has informed our thinking on this matter.

Lord Wallace of Tankerness: Obviously one can see in the terms of reference of the review, which I think Mr John Penrose announced, the problem the Government perceived: they thought that they needed to look at the arrangements to secure the primacy of the House of Commons in financial matters. I use the word “perceived”, because whether in fact there is a problem may be one of the issues that has arisen from the events of 26 October, when the House voted for a delay—I know there is a dispute about whether it was fatal, probably de facto if not de jure.

We have welcomed the opportunity for the review to set out how we think secondary legislation should work, but it remains our view that the House of Lords—going back to the Motion from Lord Simon of Glaisdale in 1994—retained the right to say no and not to approve a statutory instrument. In our view, that right remains, although the Joint Committee on Conventions, under the chairmanship of Lord Cunningham, said it applied only in exceptional circumstances. Arguably, if you wish to be cynical—and some were, probably including a number of my colleagues—it was quite a good way for the Government, having experienced a defeat on a matter that was pretty politically charged, to start letting hares loose about a constitutional crisis. It helped to deflect attention from the subject matter of the actual defeat: the negative and damaging effect that their tax credit proposals would have had on the incomes of low-paid working families.

I do not believe that there was a constitutional crisis. Turning our minds back four months now, I do not think it merited talk of flooding the House of Lords with new Peers or about suspending the House of Lords—I am not sure how that could ever happen without primary legislation, which would require the House of Lords to pass it. I do not believe it was the kind of constitutional crisis described by some at the time.

Q68 Baroness Humphreys: The Strathclyde review has brought into sharp focus the debate about the quality of parliamentary scrutiny of secondary legislation. You have been a Member of both Houses. Where do you think the main weaknesses of the current system of scrutiny lie?

Lord Wallace of Tankerness: Part of the first problem, which is not necessarily a parliamentary problem, is that not enough people are aware of just how important secondary legislation can be—I know that this particular Committee is—or of just how much can be done by means of secondary legislation, which means that it does not always attract the detailed attention that it merits. We have seen a trend—it is not peculiar to this Government or to the coalition, but probably goes back to before that—of Governments increasingly using secondary legislation in areas where previously one might have expected primary legislation, and the growing use of skeleton Bills, which I think Lord Strathclyde even refers to in his review.

I have served in both Houses, and if there is a weakness it is that your Lordships’ House undoubtedly takes the scrutiny of secondary legislation more seriously—let us say it does it in more detail—than the House of Commons. That has changed even since I was in the House of Commons. I was there from 1983 to 2001. Back then—looking around, I think Baroness Fookes is the only other person present who was there at the time—from Monday to Wednesday, after the main business, there would often be a debate, starting at about 10.20 pm, after a Division, on an important piece of secondary legislation. These regular debates on secondary legislation tend not to happen now. I remember when, in about 1984, a debate on secondary legislation introducing milk quotas ran into the early hours of the morning. I do not think that the same level of attention is given in the House of Commons now, which makes our job in the House of Lords all the more important. Relatively little time is given to it, and Divisions on the Floor of the House are much less regular. By the same token, the level of scrutiny has declined.

We have the Joint Committee on Statutory Instruments. As I understand it, the House of Commons tends not to have Committees such as this very Committee or the Committee that Baroness Fookes chairs, which I think are important. Having been a Minister in the coalition Government, I can assure you that—certainly in respect of any legislation I was involved in or had responsibility for—the reports from your respective Committees were treated with considerable seriousness, because we knew that a lot of thought had been applied to them. I do not detect that same level of engagement. That is not necessarily a criticism; the House of Commons and Members of Parliament have many other things to do, including a range of constituency responsibilities, that we as Members of the House of Lords do not. But I think the weakness is probably in the level of scrutiny in the House of Commons.

Q69 Baroness Andrews: I think you have answered this question, but I shall ask it anyway—in the best traditions of the House of Lords. Option 1 of the Strathclyde review proposed removing the Lords completely from scrutiny. There have been various unflattering descriptions of the implications, but do you think there is anything to be said for it?

Lord Wallace of Tankerness: No, I do not think there is. In fact, there is no “think” about it; there is nothing to be said for it. Even Lord Strathclyde’s review gives some cogent reasons why it is not necessarily a sensible procedure. I think, for the reasons I have just given about the lack of scrutiny in the Commons, it would mean secondary legislation receiving precious little scrutiny at all. It has been suggested that if we could change the procedures of the House of Commons in some way, it might be okay. I am sceptical; I am not sure that those procedures would change. At the end of the day, there is in the House of Commons for the vast majority of the time an Executive—I am not talking specifically about this Government—with a majority that will whip their business through in a way that cannot be assured in your Lordships’ House. The level of scrutiny would therefore decline. If we, in our House, wish to debate secondary legislation, Motions can be tabled and debates take place. From memory—I think this is still the case—it was very exceptional in the House of Commons for any Early Day Motion, particularly with regard to negative resolutions, to be debated. Effectively, it has to be in the name of the Leader of the Opposition to have any chance of debate. There is a greater guarantee of scrutiny in this House, and to take away that role is a non-runner—or ought to be a non-runner.

Baroness Andrews: So when Mr Grayling said that he thought there was an appetite in the House of Commons for option 1—he might have been threatening the House of Lords, of course—you did not agree. You do not think there would be an appetite, let alone the resources of time and procedure as you described them.

Lord Wallace of Tankerness: There might be an appetite within government for option 1, because I can see the advantage for government, but I do not think there would necessarily be an appetite if the quid pro quo was that Members of the House of Commons had to do some of the work of scrutiny that is done here or, for that matter, provide the resources. Again, I do not see that necessarily as a criticism of the other place; we complement each other in many respects by what happens at the moment.

Q70 Lord Janvrin: Lord Wallace, may I turn to your views on Lord Strathclyde’s option 2, where he recommends that the House should adopt a resolution to ensure that the “veto is left unused”. He says in his report that he was doubtful whether we could achieve this. Do you agree? Do you share those doubts?

Lord Wallace of Tankerness: I do. Left as it is, it would be very difficult to get agreement, because implicit in option 2 is that the veto would basically be written out and wither on the vine. As I indicated in my opening answer, that is not a position that I or my party take. When the Cunningham Joint Committee looked at this matters back in 2005-06, my namesake and colleague Lord Wallace of Saltaire gave evidence and made it clear that as a party we thought that the 1994 resolution still stood. To go down the route of option 2 would deviate from that. If you have a situation in which some still want to latch on and who should still, in the ultimate analysis or the exceptional circumstance, have the right not to approve, it would be very difficult to get agreement on any convention that effectively parked it for ever.

Also, as Lord Strathclyde points out, you would find that things that are agreed by standing order or whatever can subsequently be disagreed. You can bet your bottom dollar that if we were to go down that route, within 12 months something would come along—I just speculate on what it might be—and someone would say, “This is a complete abuse of powers. We”—and I mean collectively as a House, not specific parties—“must do something about this”. You might find that it did not have much longevity.

Lord Janvrin: May I ask one follow-up question? Could you envisage option 2 including or introducing some power of delay in some form of resolution, rather than simply doing away with the power of veto?

Lord Wallace of Tankerness: Subject to what I have already said—that we should not do away with the power of veto—it is worth examining whether there is something sub-veto, but that maintained the veto, that could introduce a power of delay. It would almost slide into option 3. One of the weaknesses of option 3 is that any question of how long the Commons would have to reconsider is not properly addressed. Therefore, even under option 3, if you were to go down that route—obviously we will consider option 3 in a moment—there has to be some proper opportunity for the House of Commons to reconsider. I accept that there may well be matters of national security where there will be a sense of urgency, but it is not beyond the wit of Government, if that was the case and there was an agreement to a delay of at least one month, to withdraw regulations and bring in new ones almost straightaway, and if necessary taking into account some of the concerns that may have been expressed in our Lordships' House. Therefore, I do not think that this argument that somehow or another urgency defeats putting in any delay period. A delay period has merit, but I would not see it on its own as solving the position.

Lord Woolmer of Leeds: The Strathclyde report is contradictory, or ambiguous, on this question of the veto. The executive summary refers to reverting “to a position where the veto is left unused”, but in the actual discussion of option 2 that is not mentioned. It talks about the precise way in which “the restrictions on how its powers to withhold approval or to annul should be exercised”. The first question is: do you think that the Strathclyde report option 2 includes not having a veto in any agreement or understanding? The second question is: if it does not—that is, if the current position maintains—do you still endorse, as your party did as members of the Cunningham committee, that committee’s recommendations of on the conventions in relation to secondary legislation in this House?

Lord Wallace of Tankerness: Yes. Nowhere in option 2 does it say that the veto would go. It implies that in the executive summary but not in the actual text. As I think I put it in response to Lord Janvrin, perhaps the expectation is that it would wither on the vine and a new convention would emerge. That is why it would be a difficult path. There are other compelling reasons for trying to get some agreement on the kind of convention that it would be. The Cunningham Joint Committee on Conventions very much reflected the spirit of the evidence given by my then colleagues to that committee. Paragraph 227, and onwards, says: “On the basis of the evidence, we conclude that the House of Lords should not regularly reject Statutory Instruments, but that in exceptional circumstances it may be appropriate for it to do so”. It goes on to indicate why we disagreed with the then Government’s position that any defeat would be a breach of the convention and makes recommendations as to how these matters could be addressed. I am not sure that a vote ever took place, but it came before both Houses, and I know that my predecessor Lord McNally, as leader of the Liberal Democrats, who was on the committee was very insistent that the right to veto should not be given up.

Lord Woolmer of Leeds: That it would be used exceptionally.

Lord Wallace of Tankerness: But it would be used exceptionally, yes.

Baroness Fookes: A previous witness suggested that it would at least be worth while to try option 2, that if it did not work you would have to find something more fierce, shall we say, but that it would avoid the need for legislation, which has its own perils.

Lord Wallace of Tankerness: I certainly think it is important to avoid the need for legislation. Going down the legislative route could be difficult. It would not be a question of Lords v Commons; it would be more like the Executive v Parliament. Once you go down the route of primary legislation, the law of unintended consequences can sometimes kick in. As Governments have found in the past, you start with a Bill that you as the Government wish to see, but before you know where you are the genie is out of the bottle, amendments are being tabled and you have something that does not quite match what you originally intended.

I took the Fixed-term Parliaments Bill through your Lordships' House. In that Bill, there was the potential for certification by the Speaker, and very real concerns were expressed not only by Members of your Lordships' House but by the House authorities in both Houses about Article 9 of the claim of right. I am not sure that that is a road that Governments or Parliament would readily wish to go down. So there is much merit in avoiding the route of legislation.

What came through in our debate in January was that there is merit in having both Houses involved in this, and I suspect that we would need to convene a new Joint Committee of both Houses—a committee perhaps with a very narrow focus on the conventions in this area—to look at this again. Perhaps I can elaborate on this in future answers. We as a party, in my name, made a submission to Lord Strathclyde’s review in which we made some suggestions as to how we might proceed. It was a frustration that I sometimes felt when I was in the House of Commons that statutory instruments are “take it or leave it”. You might be very happy to accept 95% of them, but that leaves 5% that you are not happy to accept, and there is no opportunity, even with making a speech, to try to shape that.

In the paper that I submitted, which we have made available to the clerk, we suggested one possibility, which is to park the secondary legislation and have a Motion that incorporates the terms of the statutory instrument into the substantive Motion, which would then allow for amendment. You are not amending the statutory instrument, so you do not fall foul of that problem. This means that the Government have a better, more detailed idea about what our House has found objectionable or difficult. You could then give the Government an opportunity to withdraw the original measure and re-table. That allows more detailed consideration. If we established a Joint Committee looking not just at the conventions but at different ways in which we can deal with statutory instruments to allow amendments to be expressed, that would be very helpful. As I said, I sometimes felt frustration in the House of Commons when secondary legislation that you generally wanted to support had something in it that you did not have the option to amend. Trying to do it that way—by getting a better understanding between the two Houses and reforming some of our procedures—is far preferable to going down the legislative route.

Baroness Fookes: Would it help when Bills are going through if draft regulations were made available to the House before they are set in stone and before you have to vote on them, giving a much better idea of what the Government of the day have in mind?

Lord Wallace of Tankerness: That is undoubtedly the case. Baroness Fookes, your Committee has highlighted a number of cases in this current Session where there have been gaps. In fact, we dealt with some of them last night: in Clause 68 of the Scotland Bill, which gives vast powers to government. To be fair, the Government amended it after a debate in Committee—it came back last night. It was going to give powers to amend, in a typical Henry VIII way, primary legislation—of this Parliament, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly—that had not yet been passed; future legislation, which is pretty wide ranging. The Delegated Powers and Regulatory Reform Committee said that it thought that, in part 3 of the Bill, the Government had made a case. In fact, when I moved my amendment, I did not seek to change Part 3 in that regard. However, they took the opportunity to take on all the other elements, as well, yet no justification or argument had been put forward for doing that. That is a bit sloppy, a bit easy. You need to avoid sloppiness in drafting and be much more focused. Also, if you are going to bring forward regulations, bring forward draft regulations so that both Houses, preferably, have an opportunity to see them, but so that the second House, at least, has a proper opportunity to do so.

Q71 Lord Hodgson of Astley Abbotts: On option 3, which replaces the Lords power of veto with a power of delay by statute, in the light of your experience, how can we make certain that the House of Commons has a genuine opportunity to think again, and how would it be told what had caused the House of Lords concern?

Lord Wallace of Tankerness: That is one of the weaknesses of option 3, because I am not convinced that there would be a proper opportunity. There are some fine words, but in practice I am not sure quite what would happen. Arguably, we do not exchange messages about secondary legislation. The Government table a statutory instrument before each House. It does not pass through one House and is then transferred to the other; it is presented to each House. I am sure that that could be worked around, but it is important to remember that we are looking at a statutory instrument on our own, and the Commons is looking at it separately.

I have been on one of these so-called Reasons drafting committees, when we disagree with the Commons in the said amendment, and all that. It is pro forma; it does not really have much substance. There is no detail such as, “The reasons why your Lordships were not happy with this were A, B, C and D”. The process is far more truncated than that. We would need some way properly to express the concerns, and of ensuring they were then properly considered. There are so many ifs and buts. Even in Lord Strathclyde’s own report, you can see the seeds of its destruction. He say that he does not think the Lords would do it that often, but he then says that if it did, the Commons would get a bit fed up and might want to go back to option 1, but would probably just go ahead anyway. The temptation for any Government—again, I am not making a partisan point—in these circumstances must be just to go ahead if they have a majority.

Lord Hodgson of Astley Abbotts: I think you are on record as saying that there should be fixed period of delay to guard against that.

Lord Wallace of Tankerness: Yes. As I said earlier in my evidence, I would prefer a period for consideration.

Lord Hodgson of Astley Abbotts: Have you said how long it should be?

Lord Wallace of Tankerness: No. I think Wakeham mentioned three months, although I suspect that may be on the long side. It would probably be sitting days rather than actual months, because if you had to consider such an instrument in the last week of July, you might want to make sure that the Commons had a chance to consider it in October and that the time had not expired. There is no judgment of Solomon in these things. Perhaps it would be 20 to 30 sitting days, but that is not hard and fast.

Q72 Baroness O'Loan: The Strathclyde review was prompted by a vote on an instrument that it was said had significant financial effects, not least on the recipients of tax credits. Is there an argument, therefore, for saying that any proposed limitation on the power of the Lords in respect of secondary legislation should be confined to financial instruments, and if so, how should “financial instrument” be defined?

Lord Wallace of Tankerness: It is worth bearing in mind that the powers of the House of Lords in relation to finance are very clear and very limited as defined by the Parliament Acts of 1911 and 1949. Section 1(2) of the former specifies in detail what might be certified by the Speaker as a money Bill. Interestingly enough, the order that triggered this review was a social security measure. Arguably, if the Government had chosen to put it into the Finance Bill, which was there at the same time, this House would never have had an opportunity to go near it. They did not, and one might speculate why. Was it because they did not want to give the House of Commons an opportunity to table amendments, given that there was clearly some unrest on their own Back Benches? The ultimate irony is that when your Lordships House asked them to think again, they did think again and changed the policy. So there was an opportunity, in this case, for the measure to be put into a Finance Bill.

I therefore think that if you were to go down the road of trying to invent some new rule, it would probably have to be done by primary legislation. You would have to be very careful, because the temptation for Governments to try to slip things into secondary legislation that had the look of a money resolution might be considerable. We should remember that there is a category of statutory instruments that at present require the consent of the House of Commons only: financial statutory instruments. We should not lose sight of that. As a House, we scrutinise considerable pieces of legislation that have expenditure implications. To extend the range of statutory instruments considered by the Commons only would raise the same kind of issues that we addressed in discussing option 1.

At the moment, there is a very clear definition. We are not disputing the primacy of the House of Commons in financial matters. After all, it was a Government of my own party who brought in the 1911 Act, and who, in the preamble, promised it as the forerunner to a fully elected House, but that has never quite happened.

As I said, I would be very wary of going beyond what we have at the moment. Then again, if we had a procedure whereby we could flag up problems, it would be open to the Government to explain why they did not accept a given statutory instrument. They could say that A, B, C and D had financial implications, and when it came back to us, we could table a Motion to look at the substantive instrument, as we do at the moment, and that would be taken into account.

Q73 Lord Haskel: You have referred to the skeleton Bills and their weaknesses and to the lack of scrutiny in the Commons, and you have spoken about the Joint Committee and other ways of dealing with this. Do you think that the boundary between primary and secondary legislation should be decreased or done away with? Is that one way of dealing with it?

Lord Wallace of Tankerness: I do not think that you can do away with it. Secondary legislation is there because we would be absolutely snowed under if everything was put into primary legislation. As with so many of these things, it is about getting the balance right. That is why we have Committees such as the one Baroness Fookes chairs, this Committee and the Joint Committee on Statutory Instruments—to try and get the balance right—but you sometimes have an unenviable task.

I think there has been a slide. In the early days of the coalition Government, we were given hell to pay in this House over the Public Bodies Bill—in retrospect, I think, possibly with some justification. It is not satisfactory. I have to be careful what I say, although I do not think I am giving away state secrets. I sat on the Parliamentary Business and Legislation Committee—it used to be called the L Committee. In the final meeting before the election, I was commended for being the only person who had been there throughout the whole Parliament. There were times, however, when you were not exactly comfortable that everything had been thought through, but there was an imperative to get the Bill published by a certain date, and you would think, “It’s okay. We’ll fill in some of the details a bit later.” Probably more often than not, it worked, but it leads to situations where it does not work, and both Houses of Parliament are left looking at pieces of legislation that are in some sense incomplete; either they should be in a primary Bill or, as Baroness Fookes suggested, the draft regulations should be made available.

Lord Haskel: So how are we going to get the balance right?

Lord Wallace of Tankerness: Lord Strathclyde nods in the right direction in the latter parts of his report, but there is no detail there about how we do it. It will be done partly by Committees such as this one continuing to make their reports. As I said, I certainly know, having been on the receiving end of some criticism, that they are taken seriously. But it is like all these things: you cannot legislate for it; it is culture. Parliamentarians of all parties and none probably just have to keep banging on about this.

I suspect that we have heard more about this issue in the last 18 months than we have done for a while, but I will not pretend I have an easy solution. Governments will try to take the short-cut route if they think they can get away with it. Maybe Parliament firing a shot across their bows every now and then makes them sit up and think. I read somewhere, maybe in evidence to you or in other articles discussing this, that if Ministers think they will get a rough time by doing something, their officials and the drafts men and women will soon catch on. As I said, it need not necessarily be the exceptional circumstances of a veto, but it might well be something pretty close to it—a shot across the bows.

Lord Haskel: Which is very much the system as we have it.

Lord Wallace of Tankerness: Yes, the system much as we have it.

Baroness Andrews: What you said about culture is significant, but it is sometimes difficult to disentangle a culture, is it not? You used the word “sloppiness”. There is a culture of political expediency, too, and a culture of necessity—when you have to push a Bill through very quickly—and we understand political realities, but there are other things at work here. It seems to me that you might be able to create a better discipline inside government. This is one symptom of the sort of thing that comes before both Lady Fookes’ Committee and this Committee, in the form of inaccurate memorandums, inadequate and misleading impact statements, very faultily drafted Explanatory Memorandums and short consultation periods. It is a sort of slipping away of the standards of legislation that I think everybody has the right to expect. There are many things that the Government could do, through the L Committee, the Cabinet Office’s own disciplinary procedures, or whatever.

Lord Wallace of Tankerness: Or the guidance books they give.

Baroness Andrews: Yes. Do you think it is completely unrealistic to think that this can be reversed in some way just by pulling on the levers that we know exist?

Lord Wallace of Tankerness: I would be very disappointed if I came to the conclusion that it cannot be reversed, because if it cannot, it is liable to accelerate, and we might be in a more difficult position, so it is important that we try to pull levers. This and other committees, and parliamentarians, should take advantage of the fact that this issue is on the agenda more than it has been, and should take the opportunity to continue to raise it. I think it unlikely that any of the options proposed by Lord Strathclyde would reverse it, but you may need to have someone like the Cabinet Secretary in front of you—you may have done already, I am not sure.

Baroness Andrews: But the Cabinet Secretary, who of course came before us, deplores what has happened to the Civil Service, in the sense that there has been a sort of hollowing out. There has been a loss of memory and of continuity, which you see in the nature of the Bill teams, which are quite new and inexperienced these days. We are looking at quite a substantial problem with the quality of governance, as well as scrutiny. Do you agree?

Lord Wallace of Tankerness: I would hesitate to agree generally to that, but, yes, as I said earlier, I did see things happen such as Bills that were not quite ready that still had to go ahead. There are two ways you can address this. At the Civil Service level, if the Cabinet Secretary says there is a problem, he, amongst others, must give leadership to try to resolve it. But there is also the political leadership that is required and the political pressures that can be brought to bear.

None of us who have been Ministers—indeed, anyone, not just politicians—like criticism all that much. That is true probably even more so in the Commons than in the Lords, because the electoral consequences can be worse. But if your department is constantly being held up as an example of things that should not be happening, the message should start to get through to Ministers. Ministers do not like this. Lord Chairman, you have been at the Dispatch Box, and it is uncomfortable when you are there being attacked for something that you know full well is probably not good enough and could have been done better.

So there is a political pressure, but some leadership is probably also required from within the Civil Service. I do not want to give the wrong impression: the overwhelming majority of the civil servants I engaged with during five years as a Minister, dealing with quite a number of pieces of legislation in your Lordships’ House, were very good, hard-working and diligent, and showed initiative. But there is a tendency when a culture develops for people to slip into shorthand ways.

Q74 Lord Bowness: Lord Wallace, I have a simple question, really: what would you like to see happen next following the Strathclyde review, if anything?

Lord Wallace of Tankerness: The ball having been kicked around the park, it is an opportunity to see whether there are ways in which we can improve our consideration of statutory instruments, and I have given examples of how we might do that. It would be useful to look at that. As I said in answer to Baroness Andrews, there are the issues associated with what is a much more long-term project. It may well be that a Joint Committee of both Houses should take an overall look at statutory instruments. It is very much a matter for Parliament to deal with, as Parliament: both Houses talking to each other, rather than it being dealt with by the Executive against Parliament, through primary legislation. The review should be a contribution to a much wider discussion of how we deal with statutory instruments, to be addressed by both Houses of Parliament. What I do not want to see happen is primary legislation.

The Chairman: Thank you very much indeed, Lord Wallace. We are enormously grateful to you.

Lord Wallace of Tankerness: Thank you very much. Thank you for the opportunity.