Subordinate Legislation Committee, 18 Sep 2001

Meeting date: Tuesday, September 18, 2001

Official Report 147KB pdf

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Home Energy Efficiency Scheme Amendment (Scotland) Regulations 2001 (SSI 2001/267)

Item 1 is Executive responses.

We will take the Home Energy Efficiency Scheme Amendment (Scotland) Regulations 2001, (SSI 2001/267) first, because we are taking evidence from Scottish Executive officials and they have been waiting patiently outside. We will move that up to be the first item and then return to the normal running order.

I welcome Geoff Huggins and Murray Sinclair to the committee and thank them for their attendance. We asked for an explanation from the Executive on aspects of the regulations because there was a doubt about their vires, among other things. Would either of you start with a statement of the Executive's point of view on the matter?

I am happy to expand on the line of reasoning that was set out in our written response to the committee's question.

The committee is asking whether the regulations are within the devolved competence—that is, the competence of the Scottish ministers—as conferred by the Scotland Act 1998. In answering that question, one must have regard to the test that is set out in section 29(3) of the Scotland Act 1998. That test is applied principally to determine the legislative competence of the Parliament. However, in terms of section 54 of the Scotland Act 1998, it is applied to determine the devolved competence of Scottish ministers.

The test determines whether a provision that has been made in the exercise of devolved competence does or does not relate to reserved matters. It provides that

"whether a provision … relates to a reserved matter is to be determined … by reference to the purpose of the provision, having regard (among other things) to its effect in all the circumstances."

You will not be surprised to learn that the provision is deliberately worded. It was intended to effectively replicate a test that was employed in a similar context when power was devolved to the Parliaments in Australia and Canada. When the Scotland Act 1998 was being put together, it was acknowledged that sometimes a question arose of whether a provision related to a reserved matter was about a reserved matter and should therefore be viewed as not within the competence of the Parliament.

It might be difficult to draw narrow dividing lines in relation to that question, but that is the principal guide. We must see whether the provision that is being made by the regulations—on the application of the purpose test and having regard to its effect in all the circumstances—does or does not relate to any matter that is reserved by schedule 5 of the Scotland Act 1998.

The committee has suggested that there is a question whether, even on the application of the purpose test, the regulations relate to social security as that matter is reserved by schedule 5 of the Scotland Act 1998. As indicated in the Executive's response, our position is that, on a true application of the purpose test, we do not think that the subject matter of the regulations relates to that reservation.

The terms of the power that we are exercising are in section 15 of the Social Security Act 1990. Those terms make clear that the purpose for which the regulations are made is

"the improvement of energy efficiency in certain dwellings".

I am reading from the description of section 15 of the Social Security Act 1990. We would therefore say that our purpose in making the regulations has been to improve energy efficiency in certain dwellings. Therefore, on the application of the purpose test, the subject matter of the regulations is not about social security and does not relate to that reserved matter.

That is the principal position. I should say, however, that the committee might have been influenced by the fact that section 15 is contained in an act that is called the Social Security Act 1990. In response to that, I simply point out that the long title of the Social Security Act 1990 makes express reference to the fact that the act will

"make provision for the payment of grants for the improvement of energy efficiency in certain dwellings".

That is mentioned separately from the reference in the long title to the amendment of the law "relating to social security". That makes it clear that when the Westminster Parliament was enacting the Social Security Act 1990, regardless of the short title of that act, in specifically making provision for the payment of grants for the improvement of energy efficiency in certain dwellings, Westminster intended to make provision for a purpose other than a social security purpose.

Similarly, I refer the committee to section 23 of the Social Security Act 1990. That section underlines my point by providing that the 1990 act may be cited as the Social Security Act 1990. It also provides that the 1990 act, other than section 15, may be cited together as the Social Security Acts 1975 to 1990. Section 23 makes it clear that, for statutory purposes, the definition of the Social Security Acts 1975 to 1990 includes the 1990 act, but does not include section 15 of the 1990 act. That is the power that we are exercising to make the regulations. That underlines the point that, when it was enacting the 1990 act, Westminster did not think that section 15 was legislation for a social security purpose.

That is all I have to say by way of opening remarks.

When I heard the proper long title of the 1990 act, I began to believe a bit more in the purpose argument advanced by the Executive. However, that is a personal opinion.

Is there even the smallest doubt that the regulations do not meet the true application of the purpose test?

I would be lying if I did not say that there is scope for some doubt. The simple reason is that in almost all such questions there is always scope for an argument. That is in the nature of the sort of questions that we often have to face.

Is there no reasonable doubt?

I cannot say that no doubt exists. There is often scope for doubt. I understand how the argument can be made, but the question is whether the Executive considers that that argument is correct. On balance, we do not think that it is correct. On a proper application of the purpose test, the matter does not relate to social security. We can see the argument, but we do not think that it is correct.

Is there any reasonable doubt in your mind or that of the Executive?

There is none.

My question is about the Scotland Act 1998, which mentions housing grants in connection with reserved social security matters. How do you interpret the phrase "housing grants"? Does it include housing benefit, which is a social security measure, rather than housing grants that are aimed at improving the fabric of a house?

I understand that housing benefit is the form of benefit that the words from the social security reservation to which you refer were meant to cover and that payments such as that which we are discussing were not meant to be covered. As section 15 of the Social Security Act 1990 says, such payments are intended to improve energy efficiency in some houses. That is a different matter.

Bristow Muldoon has opened up a can of legislative worms. The committee might agree that it accepts your explanation this time, but you have said that housing legislation can be used to confer a benefit.

The point that I intended to make was that a fairly strong argument could be made about the provision of housing benefit and legislation to provide housing benefit in terms of the relevant reservation. The situation depends on the legislation that purports to make such a provision. A stronger argument could be made that such a housing provision was for a social security purpose, but not all forms of housing regulation could fall foul of the social security reservation. As I said, the situation depends on the legislation that is under consideration.

I read the social security reservation as referring to income support measures, such as housing benefit. It is clear that housing is a devolved matter.

My concern about the purpose argument is that, taken to its logical conclusion, it would mean that we could legislate on any reserved matter, provided that we said that the primary purpose of our legislation concerned a devolved matter. We could legislate on defence if we said that the primary purpose of the legislation related to road safety. At what point can that argument be curtailed? It seems to cut across the intention of the Scotland Act 1998 with regard to reserved and devolved powers.

I think that I understand why you ask that question. The answer is that we determine whether any provision falls within the Parliament's legislative competence or the ministers' devolved competence by considering section 29 of the 1998 act and the purpose of the provision under consideration. We could not legislate on a matter that was clearly beyond our competence, such as asylum, on the pretext that our purpose was not to deal with asylum, unless we could persuade a court that, viewed objectively, the purpose of the provision, having regard to its effect in all the circumstances, was not to deal with the status of asylum seekers, but to deal with a matter that was not reserved.

If the regulations were challenged, a court would consider the question. In much case law from Canada and Australia, the courts applied that difficult test, which was used to ascertain whether, viewed objectively, a provision that prevented the trade of milk between southern Ireland and Northern Ireland concerned trade, which was a reserved matter, or public health and the quality of milk, which was a devolved matter. The Judicial Committee of the Privy Council held that the subject of the relevant provision was devolved. Even though the provision could be argued to be a barrier to trade, its true purpose related to health. We must consider such a question. The test is not without limits; rather, it provides the limits within which it must be decided whether the provision goes too far.

Your argument suggests that you interpret the Parliament's legislative competence as being wider than the public commonly perceives it to be, because public perception is based on the list of reserved matters.

I do not want to speculate on what public perception might be. When the Scotland Act 1998 was discussed in Parliament, it was made clear that the test of whether a provision related to a reserved matter was not literal. Just because a provision uses a word that is used in one of the reservations, it does not mean that that provision deals with a reserved matter. That is why the purpose test in section 29 of the 1998 act was included. The test whether a provision relates to a reserved matter, for the purposes of the 1998 act and devolution, is not literal. The test is determined by

"the purpose of the provision, having regard … to its effect in all the circumstances."

Does everything fall within a definition?

The question is whether, considering the subject matter of a provision, the purpose of that provision is the same as the purpose covered in the reservations.

I will put the matter into plain English: the courts will eventually decide the purpose.

We are discussing legal questions that would be decided by the courts if the legislation were challenged, as such questions have been decided in similar contexts elsewhere.

I will return to what Margo MacDonald said. I became more convinced by Murray Sinclair's argument when he mentioned the long title to the Social Security Act 1990 and the exclusion of section 15 of that act from the combined reference to the Social Security Acts 1975 to 1990. That is a strong argument.

I would like you to ease the committee's conscience. Do you believe that the Executive would win any legal challenge to the regulations because of the arguments that you have made? Are you confident that, if we allow the regulations to be made, you will have a strong argument that the courts would be likely to uphold?

Yes.

If your heart is pure, it will be okay.

Do any other members want to add anything on the vires of the regulations?

I want to ask just one question.

Just a wee one.

Would legal advisers in the Scotland Office be likely to share Murray Sinclair's view?

I am not in a position to comment on that. That would be speculation. I hope that they would share my view. I have no reason to doubt that, but I cannot say that I know their view.

That question was most interesting.

It certainly opens up an interesting area of investigation.

We planned to ask further questions of the Executive. We may not want to go into the nitty-gritty of them all, but do members have other questions?

We asked the Executive why regulation 1 of the principal regulations was included only in part 1 of the instrument. The Executive has acknowledged that that is a drafting error. It is unclear whether applications are to be made under both parts of the regulations or under part 1 exclusively. That makes for a lack of clarity—are we talking about part 1, part 2 or both parts?

Our response acknowledged that there is scope for clarification. We will take steps in due course to do that, probably by introducing a consolidated set of regulations. That would be helpful and it would allow us to incorporate clarificatory provision.

Thank you.

That sounds okay.

A general point, which applies to many of the regulations that come before the committee, is the place of electronic communication in making applications under regulations.

We will examine that point. It was thought that electronic applications would not be feasible in this case, as the regulations require applications to be signed. At the present time, it is difficult to make an electronic application and to have it signed. We will examine that, as the situation could change.

We also asked you to re-examine the question of applications from sub-tenants. The Executive seems not to intend to allow sub-tenants to apply for a grant, but the committee believes that the regulations do not make that position clear.

As there are no further questions for the witnesses, I will sum up.

At the beginning of the discussion, there was talk of unreasonable and reasonable doubt. Murray Sinclair conceded that he could see why doubt might exist. Although committee members had doubts about the question of vires, are we agreed that we are now minded to proceed?

Members indicated agreement.

I thank the witnesses for their attendance.

We will all need to bone up on section 29 of the Scotland Act 1998. Before we move on, I ask members to clarify our position on the regulations, as differing shades of doubt—let me put it that way—were expressed. Are we agreed that, because the regulations appeared to relate to social security provisions, there was doubt about the question of vires? However, we are now minded—

That overstates my position, as it would appear to suggest that we are on the side of doubt. I accept that doubt was raised. I also accept the argument that the primary purpose test would show that the regulations fall within the powers of the Scotland Act 1998. Shades of doubt may exist, but, as far as I am concerned, the recommended action, as drafted, overstates the committee's position.

I have thought about the question and I tend to agree with Bristow Muldoon. I asked whether reasonable doubt existed and that was answered. We may have doubts about a lot of the subordinate legislation that comes before us but, unless reasonable doubt exists, we do not draw our doubts to the attention of the lead committee.

Having heard Mr Sinclair's explanation, I do not have a reasonable doubt that the regulations are ultra vires. I accept his argument about the purpose test. Given the fact that the long title of the Social Security Act 1990 includes the phrase

"to make provision for the payment of grants for the improvement of energy efficiency in certain dwellings",

I have no reasonable doubt that the regulations do not relate to social security. That means that they are quite properly within the vires of the Scottish Parliament.

I think that Mr Sinclair said that he could see why doubt should have been raised, but that in the opinion of the Executive that was incorrect.

I took a note of what Mr Sinclair said, which was that there is no reasonable doubt that the regulations meet the true application of the purpose test. In my opinion, for what it is worth, if there is no reasonable doubt, no compulsion exists. We should not refer the regulations to the lead committee and the Parliament. We should do that only if reasonable doubt exists.

I was not suggesting that we refer the regulations to the lead committee. That is what we do with legislation that needs to be re-examined. The recommendation was for us to indicate to the lead committee that doubt was expressed. We are neither quantifying the degree of doubt, nor are we suggesting that the lead committee needs to act. However, if the ultimate test is for the matter to be decided by the courts, we should record our doubts, where they exist.

My concern about the recommended course of action, as drafted, is that the word doubt is shown in relation to the phrase social security, which suggests that we have formed a view that the regulations relate to social security. That is not my position—the regulations are an energy efficiency measure.

We must report on the issue, however, and it would be more acceptable to report that the committee sought explanation from the Executive about the question of vires. Subsequent to hearing the evidence, the committee noted the Executive's position, which is that the regulations satisfy the purpose test of section 29(3) of the Scotland Act 1998. The recommended course of action, as drafted, says only that the Executive's position is noted.

I might be in a minority of one in saying that, in our note to the lead committee we should record that initial doubts were expressed about the question of vires, but that the committee was prepared to note the Executive's explanation. However, David Mundell does not agree.

I do not disagree with the convener's suggestion but, as was conceded by the Executive, we have entered new territory. This is the first time that Executive lawyers have put that interpretation of the Scotland Act 1998 on the record. If I were the convener or Mr Campbell, I would be delighted to have heard that interpretation, as it is the widest interpretation of the Scotland Act 1998 that I have heard.

Although the interpretation is reasonable and credible, it calls into doubt all those who have criticised the number of so-called reserved matters that have been debated by the Scottish Parliament. On the basis of Mr Sinclair's argument, nothing is reserved, provided that the purpose of the discussion falls within devolved competence.

Mr Campbell and I will look up the traffic regulations for the Helensburgh area. [Laughter.]

I wish to distance myself from the comments that David Mundell made. That is not my interpretation of Mr Sinclair's evidence. David Mundell and I can agree to differ on that.

I did not necessarily want Mr Sinclair to interpret the Scotland Act 1998 as he did, but I think that we will hear much more about that interpretation of the rules.

The debate might be the first of many pleasures to come. As we may return to the matter, I will allow members some leeway to put their thoughts in the Official Report.

For the Official Report, I clarify that I do not share David Mundell's interpretation of what Mr Sinclair said. To put it kindly, I think that David Mundell's interpretation overstates what was said. As befits someone in his station, Mr Sinclair was very cautious, careful and clear. All of us should follow his good example.

As I said, his heart is pure.

Mr Sinclair is a civil servant. In Mr Sinclair's absence, Bill Butler is trying to defend what Mr Sinclair said. I will not say whether the regulations are a coach and horses through the Scotland Act 1998. The committee should look after its best interests. If the issue is going to end up in court, the committee should record that there was some doubt about the regulations, but that that doubt was removed by the professional advice that the committee received.

There are shades of difference in the committee and we must find a form of words on which we agree. Initially, the committee wondered whether there was a doubt about the vires of the regulations as they were introduced under social security legislation. The committee asked for clarification and reassurance on various points and heard the Executive's response from Murray Sinclair and Geoff Huggins. Do members agree that we should note that the Executive is confident in its interpretation?

Should we record that the committee was substantially reassured—I think that the convener used those apposite words—and then noted the Executive's position?

In case that was not what the convener wanted to say, I point out that I think I used those words.

Credit where credit is due.

Is that agreed?

Members indicated agreement.

That will be recorded in the Committee's report. Just wait until we discuss traffic regulations in Helensburgh.