European and External Relations Committee, 26 Sep 2006

Meeting date: Tuesday, September 26, 2006

Official Report 250KB pdf

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Legislative and Regulatory Reform Bill

The next item of business is further consideration of the legislative consent memorandum for the Legislative and Regulatory Reform Bill. I welcome to the meeting George Lyon MSP, the Deputy Minister for Finance, Public Service Reform and Parliamentary Business, who will give evidence in a few moments. Mr Lyon is joined by Murray Sinclair, who is head of the constitution and parliamentary secretariat; Laurence Sullivan, who is from the office of the solicitor to the Scottish Executive; and Daniel Kleinberg, who is head of the Europe division of the European Union policy and organisations branch.

The committee—and I am sure the minister—will recall that we previously considered this item at our meeting on 14 March, when we expressed a number of concerns about the scope of the bill and the legislative consent memorandum. The minister agreed to respond to us on the Executive's views on those issues.

I gather that considerable progress has been made since March, minister, and I hope that you will be able to give us the reassurances that we are looking for. I invite you to make an opening statement.

I thank the committee for its patience and understanding on this matter. Since we last discussed the issue, a substantial amount of time has elapsed and there has been significant movement on the bill at Westminster. We always felt that, when we returned to the committee, we should be able to answer its questions fully, but to date the legislative process down south has been something of a moveable feast. With those remarks, I thank the committee for inviting me to give evidence this afternoon.

Yesterday, in light of discussions on the bill down south and our own discussions with the United Kingdom Government, an amendment was tabled to strengthen the preconditions applying to the making of regulatory reform orders to exclude provisions of constitutional significance.

I must apologise to the committee, but the tabling of that amendment has left us with insufficient time to prepare a detailed written briefing that would have addressed the committee's concern, which it expressed on 14 March, that the matter should be placed beyond all doubt. However, because of the timescales, the option of postponing consideration of the legislative consent memorandum is not open to us. I remain of the view that the measures that the Scottish Executive considers to be the subject of the legislative consent memorandum increase Scottish ministers' flexibility in implementing their EU obligations. Not having those powers would mean that the process of drawing up Scottish statutory instruments might take longer, which would in turn impact on transposition timescales. I therefore hope that the committee will bear in mind the following points in considering whether it believes that the Scottish Executive is right to pursue the LCM.

Members will be aware that the bill has already been extensively revised by both the House of Commons and the House of Lords at Westminster. I believe that the changes that have already been made to the bill, and the more recent amendment on constitutional matters, should satisfy the concerns that were expressed by this committee and the Subordinate Legislation Committee.

I will outline the general changes that have been made to the bill and then highlight the changes that meet the committee's specific concerns. First, I should emphasise that clauses 1 and 2 now set out powers to make orders in very specific circumstances: first, to remove or reduce burdens from legislation; and, secondly, to promote regulatory principles. Those tightly focused powers replace the more general formulation of the power to reform legislation that was in the bill as introduced and which attracted such widespread comment.

The committee will also note that the power to implement by order recommendations by any of the UK law commissions has been removed from part 1 of the bill to maintain the narrow scope within which the powers set out in clauses 1 and 2 might be exercised.

That fundamental recasting of the bill to emphasise that the main purpose of the powers is to provide for regulatory reform orders for tightly drawn purposes should reassure the committee that the bill itself does not give the UK Government the wide-ranging powers that have been described.

Clause 8 also contains a specific exclusion that directly meets the committee's concern that the bill could be amended using its powers in order to remove safeguards in devolved areas. It is now clear that the powers under the bill cannot be used to amend the bill itself.

The most recent amendment, which was tabled yesterday at Westminster, will require ministers who exercise the power to satisfy themselves that the order is "not of constitutional significance". The amendment is intended to protect the devolution settlement and is in response to questions that the committee and others raised. The test that must be met is added to other preconditions in clause 3. In our view, the amendment should protect the devolution settlement and the Scotland Act 1998 from being amended by these powers, particularly given the narrow focus of the powers that remain.

The committee was also concerned about three other detailed technical points: whether the tests in the bill give ministers wide subjective discretion; whether the provisions allowing ancillary changes to Scots law should be subject to an LCM; and whether the bill should contain a statutory requirement for Scottish ministers to be consulted if provisions are to be made in devolved areas. I am happy to answer those points today but, recognising their technical nature, I intend to write a full response that the committee will receive by tomorrow morning. We will try to answer the technical questions today, but it will clearly be to the committee's advantage to have a written submission as well.

In summary, the bill has changed considerably since the committee last considered it, partly in response to the committee's comments. I think that the changes meet the concerns that the committee expressed previously. Clearly, our legislative consent motion does not affect the issue. We should support the LCM as the bill will lead to better implementation in Scotland of EU legislation.

On a separate issue, both the Executive and the committee were concerned that the bill had wider implications for other legislation, including the Scotland Act 1998. I am pleased that the UK Government has tabled an amendment on that issue. We are confident that the amendment gives us what we need and will protect the position in that act. Unless we get any convincing arguments to the contrary or have any doubt whatsoever, we will proceed with a legislative consent motion in the near future.

Having made those few remarks, my officials and I will be pleased to answer any detailed technical questions. As the committee will be aware, the bill has changed substantially over the months. That has been part of the problem for us in trying to get a definitive position that would enable us to return and speak to the committee directly.

From what the minister has told us, significant progress has been made, but it would have been helpful to have had a written submission. I recognise that the Executive is working to tight timescales and has had to wait for information from Westminster, but the committee is required to finalise its report on the memorandum today if we are to meet the deadline for next week's debate in the chamber. Therefore, if we receive the information even tomorrow morning, we will be placed in a very difficult position. However, the committee is very blessed—or perhaps cursed—to have a number of members who were lawyers and can look at the legal minutiae. I am sure that they will have a number of questions.

I should explain that the Executive saw the amendment only on Thursday night. We have had two working days to consider the amendment and to seek advice on it. I can only apologise, but we are at the mercy of the Westminster timetable. The concerns that the committee raised were also raised in the House of Commons and House of Lords. There has been significant movement down south in response to the general concerns that have been expressed.

Has the amendment that would limit the order-making power to provisions that are "not of constitutional significance" been agreed to?

The amendment has been tabled, but it is still subject to approval at report stage in the House of Lords, which is due to take place on 23 October. Although that means that there is a little bit of uncertainty about the matter, I felt that it was important to return to the committee because we also have a timetable to adhere to. It is up to the committee to take a view on the matter, but part 1 of the bill and the amendment are reserved matters. We cannot decide on such matters, but there are clearly concerns about the impact of that provision on the Scotland Act 1998.

I welcome the fact that clause 1 has been more tightly drawn to clarify what the purpose of an RRO is. I also welcome the provision that prohibits a minister from making an order under the bill to amend the bill itself. That is very helpful.

Our concern, to which the minister alluded, was that the bill could allow changes to be made to the Scotland Act 1998. I note that, when the minister referred to the amendment that will specify that a criterion for orders under the bill is that they are "not of constitutional significance", he said that he was confident that that will essentially safeguard the 1998 act.

Mr Canavan and I will recall that the committee stage of the Scotland Bill took place on the floor of the house, which means that the House of Commons considered that it was of sufficient constitutional significance to be debated in committee by the whole house. On what do ministers base their confidence that the amendment will safeguard the 1998 act? If one of my learned and noble colleagues on the Liberal Democrat peers bench puts the same question to a UK minister, will they be given the same answer?

Far be it from me to answer on behalf of a UK minister, but it is our view that the Scotland Act 1998 is a constitutional act and that any attempt to amend it would be of constitutional significance. For that reason, we believe that the amendment will protect the 1998 act.

I want to press you slightly further on that point. There is a canon of statutory interpretation that states that if one act is mentioned and another is not, the second act may not be covered. The bill mentions the Human Rights Act 1998, and clause 11 relates to the functions of the National Assembly for Wales. Given those references and the lack of a specific reference to the Scotland Act 1998, do you remain as confident as your earlier answer suggested you are—no doubt on the basis of advice that you have received—in relation to that act?

Yes. The Scottish Executive takes the view that the Scotland Act 1998 is a constitutional act and that any attempt to amend it would be of constitutional significance. For that reason, the amendment should protect the act from use of the powers for which the bill provides.

I may wish to return to the issue later. A number of points that the committee made have been addressed. However, on 14 March, it asked why the bill does not contain a qualification similar to that in paragraph 3 of schedule 4 to the Scotland Act 1998, to ensure that when an RRO is made it does not

"have a greater effect on reserved matters than is necessary to give effect to the purpose of the provision"?

Have ministers sought such a qualification, which does not seem to be asking much? Is it possible to obtain it, even at this stage?

I will ask Murray Sinclair to address that legal point.

We take the view that the bill, like many other Westminster statutes, reflects the bit of Sewel policy that makes clear that the Sewel procedure will not be required for a provision that is incidental or consequential to a reserved provision. In our opinion, the current provisions in the bill on ancillary matters provide perfect protection and nothing further on the lines of paragraph 3 of schedule 4 to the Scotland Act 1998 is required. They are consistent with the Sewel guidance and with what we have done in other bills. We do not think that the inclusion of a provision of the type suggested would be of practical value.

Mr Wallace made a point about the National Assembly for Wales. Why does the bill mention the National Assembly for Wales but not the Scottish Parliament?

Special provision is made for the National Assembly for Wales because of the Assembly's nature. I pause to sound the caveat that because the bill deals with reserved provisions, we are not close to the policy. However, the bill reflects the fact that the Assembly exercises subordinate legislation-making functions under the Government of Wales Act 1998. The devolution settlement for Scotland is completely different. It provides for a legislative Parliament, as well as for ministerial functions. That is why it is important that the amendment is worded to exclude provisions of constitutional significance. That is helpful, because it requires consideration to be given to the substance of what is being done. As the minister said, we take the clear view that anything that would amend the Scotland Act 1998 would be of constitutional significance and would therefore be ultra vires.

That is helpful.

We have a list of six amendments to the bill that were tabled in the House of Lords by Lord Bassam. In all my years at Westminster, I never came across Lord Bassam. Can we assume that he is a United Kingdom Government minister?

I do not think that I can answer that question easily, but I believe that he is a UK Government minister.

In the Home Office?

Yes.

Am I right in thinking that the key amendment tabled by Lord Bassam is number 3?

That is correct.

The amendment does not specifically mention the Scotland Act 1998. My reading of the amendment is that the minister would not be able to make provisions under clauses 1(1) or 2(1) if those provisions were of "constitutional significance". Are you satisfied that the wording is tight enough to prevent a minister or future minister from interfering with the provisions of the 1998 act?

Our view is that the amendment protects the 1998 act. We believe that the 1998 act is a constitutional act and therefore that any attempt to use regulatory reform orders to amend it would be ultra vires.

Because of the constitutional significance of the Scotland Act 1998—in effect, it sets up a written constitution for devolved Scotland—any amendment to it would be of constitutional significance within the meaning of the new amendment.

We will see about that in the fullness of time. The Scotland Act 1998 itself mentions constitutional matters that are reserved to the Westminster Parliament under the act. Are you saying that the whole of the act is now a constitutional matter?

Yes. The provisions of the act are constitutional, so a minister could not use a regulatory reform order to amend any of them, including the provisions on reserved matters in schedule 5. Any such amendment would obviously be of constitutional significance because it would affect the devolution settlement. It would therefore be beyond the powers in the bill.

I do not dispute for one moment that the minister and the Scottish Executive officials have an accurate understanding of the situation. However, I am concerned that it will not be Scottish Executive ministers and officials who will determine the meaning of the word "significance", either now or in the future. I am concerned that there is potential for the word to be interpreted in different ways.

If we want to bolt down the amendment so that we all have the degree of confidence that the minister and his officials expressed, it should specifically state that any provision made under the bill does not relate to the powers of the Scottish Parliament or anything in the Scotland Act 1998. I accept the views of the minister and his officials, but it seems to me that there is wriggle room for a future minister at Westminster who might want to interpret the word "significance" differently. For example, they could amend the Scotland Act 1998 in a small, detailed way that did not significantly amend the act. I am trying to tease out what the amendment means.

Can you give us an example?

Recently, the Scottish Parliament took powers over the railways in Scotland. That did not require a change to the Scotland Act 1998. The change was made through the Railways Act 2005. Would it be possible for a future Westminster Government to pull those powers back to Westminster? I might be wrong, but it is not just the 1998 act that we need to bear in mind. I am trying to get some specifics.

On the specific example that you mention, the provision on railways was slightly unusual in that it involved the conferral on the Scottish ministers of functions that still relate to a reserved matter. That was done via a Sewel motion on a Westminster bill, so it did not involve any amendment to the 1998 act. That takes me back to the point that I was making a minute ago, which is that, in some ways, there can be an advantage in a protection that is not expressed by reference to a specific act; instead, we can consider the constitutional significance of what is being done. So, to get us back into context, if an order under the bill gave the ScotRail franchise functions to Scottish ministers, that would obviously be of constitutional significance because it would greatly extend the powers of the Scottish ministers, whether or not it amended the Scotland Act 1998.

So, in other words, there are advantages in leaving the protection just that little bit looser.

The test is the substance of the order. It is also useful to remember that any future Government could use a parliamentary vote to do whatever it wanted to the Scotland Act 1998, including abolishing the Scottish Parliament. We can never rule out any change coming through the use of Parliament down south. We are talking about the scope of the use of orders, which has been narrowed down dramatically by the amendments. There will now be a legal requirement on ministers to satisfy themselves that orders are not of constitutional significance. It is not down to the judgment of the minister. I take it that that can be tested.

Yes.

I take the minister's point that Westminster could simply abolish the Scotland Act 1998, but we do not like the idea that it could do that with a statutory instrument. If it was going to do it, we would like there to be a wee bit of trouble over it—we dinnae want it done on a wet Friday afternoon. That was our main point.

I understand that.

I am now quite comfortable with the bill, not just because of the amendment on constitutional significance; in some ways, the other changes are more important because they have limited the purpose of the bill. Would it be asking too much of the minister to ask him to ask the Home Office minister who is dealing with the bill to answer the question that Jim Wallace's colleague in the House of Lords was going to ask? There would be nothing to stop our minister asking the Home Office minister to state in the House of Lords, when it deals with the bill, that there were concerns about the possible effect of the bill on the Scotland Act 1998 and that the United Kingdom Government is clear that the bill does not apply to that act. As I understand it, when courts are deciding on issues, they can look at Hansard and, if there is a grey area, use what the minister said at the time as an interpretation tool, because it shows the intended purpose of the legislation. So it would be a little comfort to us—not that I need much comfort on the bill any more—if our minister would ask the Home Office minister to say that. Of course, that is assuming that he will say it; it would not be of much comfort if you ask him and he does not do it.

I would be pleased to ask UK ministers to make a Pepper v Hart statement when they are addressing this matter in the House of Lords, if that would assist the committee.

It would be very helpful and committee members would be content with that.

I have another point on which I seek clarification. However, first of all, I thank Murray Sinclair for his useful response to my question about the Railways Act 2005, which helped me to clarify my thoughts, although I am not sure that I can come to a view at this stage on whether to accept the wording of the amendment.

I would be pleased to take up any individual points from committee members as quickly as possible and get the committee's response before close of play tonight, if that is possible. I know how difficult it is for a committee to be asked to approve something when the amendment was lodged only yesterday. We will do everything we can to address any substantive points that the committee might have, if that would help with your deliberations. Members can contact my office; I will leave details with the clerks.

I appreciate the offer. I just wish that Westminster would behave similarly and recognise more effectively the business pressures affecting us here.

I have no control over that.

My specific point is in regard to some of the substantial changes that have taken place. Clause 1(2) says:

"That purpose is removing or reducing any burden, or the overall burdens, resulting directly or indirectly for any person from any legislation"

if it has a financial cost or an administrative burden. I can understand the intent behind that, but almost all UK and Scottish legislation will involve some financial cost or administrative burden for someone. I seek absolute assurance that there is no wriggle room in the wording that would allow an act of the Scottish Parliament to be drawn into that definition.

Specifically, clause 1(3)(d) refers to a "sanction, criminal or otherwise". My understanding is that most criminal law is devolved to the Scottish Parliament. There may be more to it than that, but perhaps the amendments that have been lodged to adjust the position should be more specific. Could the minister reassure me on that specific point?

It is useful to remember that the purpose of the bill is to simplify regulation and reduce administrative burden. I am sure that we would all support that. I will ask Murray Sinclair to address your specific point and try to give you some comfort.

Protection is provided by what is now clause 9 of the Westminster bill, which makes it clear that, except for purposes ancillary to the reserved provisions of the bill, an order under part 1 of the bill cannot do anything that would be

"within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament."

Would that also bear on the example of the Railways Act 2005?

No, because railways remain reserved. Under the Scotland Act 1998, the provision and regulation of railway services are reserved. It is Westminster and not this Parliament that has the power to change that by primary legislation. The Railways Act 2005 did not change the powers to make primary legislation in respect of the railways; it transferred to the Scottish ministers most if not all the ministerial powers in relation to the franchise. It did not change the legislative competence of the Parliament; it changed the ministerial competence of ministers.

Sometimes our criminal sanctions are in UK statute. For road traffic and drugs offences, the system is Scottish, but the sanctions might be UK sanctions.

Murray Sinclair referred to clause 9, which points out that Westminster cannot do anything that would normally be within the competence of the Scottish Parliament,

"except by virtue of section 1(8) or 2(7)".

If the UK Parliament is doing things that are consequential and supplementary and so on, it may go into things that would otherwise be Scottish. Do you have any examples of when that might happen? Can you think of any regulatory change that the UK Parliament would make that would make those sections kick in?

Criminal sanctions are probably not a bad example, but if a provision is being made that reduces a burden and in respect of which there is at present some criminal sanction, and the consequence of removing the burden is also to do away with the criminal sanction, it might be argued that that is straying into devolved Scots law because Scots criminal law is devolved. The clause would, for that limited purpose, ensure that that could be done.

If a criminal sanction were imposed for a road traffic or drugs offence, for example, Scots law would not be involved and the matter would not be devolved anyway. I am trying to think when the arrangement would kick in and when a regulatory reform order would be made to reduce a burden or whatever, under the tight principles that exist. Under clauses 1(8) and 2(7), ministers will be allowed to stray into Scotland if an amendment is consequential to what they are doing. Just for my own interest, does the Executive have examples of when that might happen? I see that somebody has one.

The issue was discussed in the House of Commons by Jim Murphy, who was the minister who was responsible for the bill. An example that he gave of when the ability to make such provision would be helpful was when an order restated a piece of Westminster legislation to simplify it and in doing so renumbered some provisions. If an act of the Scottish Parliament referred to the renumbered provisions, the ASP could be amended simply to change the references, so that the act would refer to the correct provisions. Jim Murphy said that the Scottish Executive would be consulted before such an order to make consequential and incidental amendments were made, even though the order would be for a reserved purpose.

The order would be truly incidental and consequential.

Yes.

I now understand when the provision would kick in.

My point is much lighter than the others—I give way to the legal expert on my right on legal issues, but certainly not on politics.

The minister said that the bill would improve regulation in Scotland and would speed up the transposition of European directives. I will put my question in political terms. Does being faster always mean being better? Is it not better sometimes to give much more thought to and take a lot more time over issues?

The bill will make transposing EU regulations simpler. That refers mostly to how we do that in the parliamentary process with affirmative and negative orders, which the bill will allow us to bulk up. However, it will not cut our time for considering orders.

Oh well—I am assured by that, but we will wait and see.

Mr Gallie is forever the sceptic.

We have received much clarification this afternoon. The committee must sign off its report by tomorrow lunch time and we will discuss the direction that our report will take immediately after the public session today, so we ask you to send written comments to us as soon as possible. Could you leave a contact number with the clerks, so that if any queries arise in our discussion this afternoon, we can clarify them with you? We are working to a tight drafting timescale.

I fully understand and can only apologise. I will try to get the paper to you by close of play. If it would help, I will leave contact numbers at which you can speak to me or to officials about specifics for the rest of the afternoon or even first thing tomorrow. I can only apologise again for the timetable, which was not of my making—it was driven by Westminster.

We understand that.

I know that we could do what I will ask for ourselves, but it is work.

I know how keen you are on that.

You have the bill as amended plus the amendments that have still to be tabled. Is it easy for you to give us a copy of the bill as introduced and as amended? My impression is that dramatic changes have already been made and it would be useful to see that. Would that be easy to provide?

It is fairly easy to obtain both versions of the bill and to compare them—I did that this morning. However, we do not have to hand a version that shows where changes have been made, although we could find out whether we can obtain that.

Sometimes, a version of a bill with lines printed down the side of the page is produced.

I think that a Keeling schedule may be produced.

Such a version makes it easier—for me at least—to follow the changes that have been made.

Shall we pass that information to the committee clerks?

Yes, please. I am sure that the clerks could send the information to members.

If you send the information to the committee clerks, we can circulate it to all committee members. I think that that would be helpful.

If it is not too big a task.

No, it is important that we satisfy your concerns.

We will do the best we can, but I am not sure that such a document exists at the moment.

I thank the minister for coming along. We all look forward to debating the issue in the chamber next week.

We will take a short, two-minute break to allow us to change witnesses.

Meeting suspended.

On resuming—