Pre-emption of Parliament: Constitution Committee Report
(Limited Text - Ministerial Extracts only)
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The Commercial Secretary to the Treasury (Lord Deighton) (Con)
I thank all noble Lords for their contributions today and in particular the members of the Select Committee on the Constitution for their extremely thorough report and the airing that it has brought to these very important issues. I have found the discussion that we have just had extremely interesting. I learnt a lot. I am not a lawyer; I had never heard of the Ram doctrine or Sir Greville Ram before I was briefed for this opportunity to take the short straw and respond on behalf of the Government. I am a lot smarter now than I was 45 minutes ago.
For reasons of time, I may not be able to respond to all the individual issues that have been raised but I will try to cover the key aspects of the Government’s response, answer some of the broad concerns raised today and lay out the steps that the Government are taking to address them. I start by stressing that the pre-emption of parliamentary assent is an area that the Government take seriously, and Her Majesty’s Treasury polices it strongly. We were pleased to note, and I thank the noble Baroness, Lady Jay, for pointing this out, that the inquiry revealed no widespread use of pre-emption that went against constitutional principles. As the report says, the Treasury does not allow expenditure on new policies until after Second Reading in another place, and then only in very limited circumstances, including there being an urgent public interest to do so. The Treasury has strict criteria to determine whether an area of proposed expenditure is urgent and in the public interest. Although value for money is important, regularity, propriety and Parliament’s wishes are key and fully respected.
Many noble Lords will have seen the written government response. The noble Baroness, Lady Jay, is right that it is terse, but it is positive. I will be a little more expansive, but my experience of watching Ministers being too expansive gives me some warning. Several of the recommendations in the report that have been mentioned have already been taken on board, and I shall run through a few to illustrate this because it is important to look at the changes that we have made. For me, the most critical thing about what the committee’s findings bring to light is the importance of transparency and codification. Those two go together because the codification is part of what allows for the transparency, and of course it is the transparency—the noble Lord, Lord Maclennan, referred to the dialogue—that allows us all to determine whether the judgments being made are appropriate, given all the circumstances. So although our response is terse, it accepts the need for that codification and transparency, and everything else follows from that.
To list some of the things that we have done, we accept that Ministers should always make clear when pre-emption is intended—where possible, orally at Second Reading but, failing that, in a Written Ministerial Statement; Written Ministerial Statements are always made before a contingency fund advance is permitted, which, as noble Lords know, is how pre-emption is funded; and the Government will publish an annual summary at the end of the parliamentary Session of when pre-emption has taken place during the period. I can tell the Committee that in the current parliamentary Session there have been three instances where spend was permitted in advance of Royal Assent. Two of those were in advance of the Energy Act that received Royal Asset on 18 December 2013, and one advance relates to the Pension Bill, where Royal Assent is planned for April 2014.
The main guidance to departments on the pre-emption of Parliament—or “new services”, in the Treasury’s parlance—is a publication that has been referred to, called Managing Public Money. I can say from my own 14-month experience in the Treasury that there is no duty or activity that is taken more seriously than the control that the Treasury imposes on individual departments. That is a very strongly exercised function. That publication, as has been referred to, was updated in July 2013 in line with the recommendations in the report. We removed the references to the Second Reading conventions—we have stopped calling things conventions that, as noble Lords have pointed out, actually are not—and, to the relief of many noble Lords here, we have also taken out any reference to the Ram doctrine.
The Cabinet Manual also uses these terms but again, consistent with the report’s recommendations, the Cabinet Office will take those views on board when it next reviews the guidance. The Treasury is also going to issue an update to the detailed annexe on new services in the near future to be clearer about the very limited scope for pre-empting Parliament.
The only specific recommendation that the Government are not intending to act on is the proposal that there should be a Written Ministerial Statement at the end of each parliamentary Session listing all ministerial directions made across Government. That is because this information is already published in all departments’ annual accounts and further publication is not considered necessary. However, by way of information, there have been no ministerial directions during the life of the current Government. The Government appreciate that the accounting officer of a department could potentially seek a direction from the Minister if pushed to pre-empt Parliament. However, this is really a signal that further discussion is needed to find a practical and appropriate way through. As noble Lords will be aware, directions are always a last resort.
I shall dip a little further into the detail of some of the issues that noble Lords referred to. The noble Baronesses, Lady Jay and Lady Andrews, referred to the disquiet caused in the cases of both the Health and Social Care Act and the Public Bodies Act. I did my research on these because I understood that that was what had prompted the committee to have a look at this issue. The essence of the Government’s position was that they already had the powers to effect the changes that were put in place. That is why there was no need to call on the contingency fund. The Government were essentially relying on their existing powers to cause those reorganisations.
In the case of the Health and Social Care Act, the Secretary of State for Health has broad duties and wide powers under existing legislation, including the National Health Service Act 2006, which confers a duty to promote a comprehensive health service and allows public expenditure to do so. That enabled the Department of Health to put in place the transition programme, which included setting up clinical commissioning groups, closing down primary care trusts and so on. The savings that the programme is designed to deliver would have been wanted irrespective of the organisation of the NHS to meet the requirements of the spending review.
In the case of the Public Bodies Act, to which a number of noble Lords referred—clearly this was a controversial subject at the time, so I understand their reaction—each of the bodies involved had a bespoke set of duties and responsibilities appropriate to its functions. The powers that they already had left considerable discretion about exactly how the functions should be discharged, which allowed for some reorganisation ahead of Royal Assent. That was the basis on which those actions took place.
The noble Lord, Lord Norton, talked about commencement orders. This is not my particular area of expertise but, as I understand it, it is a timing question, because commencement orders cannot be put until Royal Assent has been given, so it does not help with anticipation.
For clarification, it may be worth my running through the criteria that the Treasury applies to determine whether an action is urgent and in the public interest. The reason why the test would be met is that otherwise there would be an increase in implementation costs, efficiency savings would be lost or it would be detrimental to the public. Ministerial or policy imperative is not a relevant criterion in securing a contingencies fund advance.
A lot of the discussion was around pre-emptive action rather than pre-emptive expenditure. I agree that this is a difficult issue, which is why transparency and scrutiny are so important. In the vast majority of cases, though, pre-emptive actions will require a financial element, which is why Managing Public Money and the Treasury’s watchdog approach are a substantial defence, although I agree that that cannot work in absolutely every case.
The noble Lord, Lord Hart, was far more eloquent about the Ram doctrine than I could possibly be. I can tell the Committee that we have removed reference to it. The Treasury and the Government absolutely accept that the actions of a Minister are constrained by public law, human rights law and so on, as the noble Lord pointed out. It is the balance that really counts.
To sum up, the Government take controlling the pre-emption of Parliament extremely seriously. We are grateful that noble Lords have shown such an interest in this area and shed such light on it. I think that the changes that will result will make us a better Government. We have looked again at our guidance and modified it, and we are satisfied that we are operating a robust system.