Pre-emption of Parliament: Constitution Committee Report

Baroness Jay of Paddington Excerpts

Thursday 6th February 2014 Grand Committee

Asked by

[Baroness Jay of Paddington]

To ask Her Majesty’s Government what is their response to the report of the Constitution Committee on the pre-emption of Parliament (13th Report, Session 2012-13, HL Paper 165).

[Baroness Jay of Paddington (Lab)]

My Lords, I am pleased to have this opportunity to debate the Constitution Committee’s report on the pre-emption of Parliament. As your Lordships are aware, I had the privilege of chairing the committee, and the report follows a short inquiry which we undertook last year. As always, I am grateful to the witnesses who appeared, to our expert advisers, to our officials and to the members of the committee for their invaluable help in producing the report.

At first sight, it may appear somewhat arcane as a subject even for the Constitution Committee but in fact parliamentary pre-emption concerns the central constitutional principle that, in the United Kingdom, Parliament makes the laws and Governments implement them. To put it simply, Ministers may propose changes to matters of policy which involve changes to organisations or institutions—or, indeed, to have full-scale reform and introduce new structures—but they can do so only once Parliament has passed the necessary legislation. That principle is obviously especially important when the proposed policy requires the expenditure of large amounts of public money.

As your Lordships will be aware, however, Governments sometimes jump the gun—changes are begun and money is spent before the relevant Bill has passed through all the stages of Parliament. The argument for doing that is usually that it improves public administration and cost effectiveness, but we have called that practice the pre-emption of Parliament.

I am particularly glad that my noble friend Lord Beecham is speaking for the Opposition today, as he has been one of several Members of the House to draw the Constitution Committee’s attention to this matter. He was particularly concerned about the passage of the Public Bodies Act 2011. At that time, many organisations—notably, the Youth Justice Board—were initially told that they would be abolished. After the passage of the Bill, and particularly amendments made in this House, they were reprieved—but not, of course, before there had been considerable disruption and anxiety within the organisation. A similar issue—sadly, with a different result—arose during the House of Lords proceedings on the Health and Social Care Act 2012. The noble Lord, Lord Owen, who regrets that he is unable to be here today, sought to challenge the Government for beginning widespread reorganisation of the NHS, which affected many services, before the Bill had passed, but in that instance was told that it was too late to stop the changes.

The Constitution Committee decided that there were sufficient recent examples to provide the basis for a focused inquiry to enable us to take evidence on the origins of and authority for pre-emption and how it is understood in government. It was a surprisingly fascinating exercise. We uncovered historical precedents and significant conventions which had been hidden in layers of obscurity. We discovered government action often depending on agreements drawn up more than 80 years ago, or on historical advice from individual lawyers which had become enshrined as Whitehall “doctrine”.

I must emphasise that we did not find evidence of deliberate constitutional malpractice or a widespread determination to bypass parliamentary process. Rather, we concluded that the rules governing pre-emption are both complex and unclear and that certain so-called conventions and understandings are anachronistic and unfit for the political realities of the 21st century.

There are two separate strands to our report, the first covering the governance controls on pre-emptive activity and expenditure, and I shall address those in my remarks. The second is the very important legal basis for pre-emption, which my noble friend Lord Hart, who is a fellow committee member, will speak to.

A central aspect to our inquiry was the role played by the Treasury in authorising government expenditure before legislation receives Royal Assent. The foundation of this authority is concordat drawn up as long ago as 1932 between the Treasury and the House of Commons Public Accounts Committee, which states that the authority for government expenditure should normally derive from a specific Act of Parliament rather than from any general authority of the annual Appropriation Act. In other words, in the interests of constitutional propriety Parliament must specifically approve expenditure, indicating that it should not normally be incurred before Parliament has approved the expenditure through an Act.

The problems that can arise are well illustrated by the matter that I have already mentioned—the passage of the Health and Social Care Act, when the noble Lord, Lord Owen, among others, raised the question of pre-emptive expenditure and was told that the scale of the expenditure undertaken on NHS reorganisation before the Bill had passed made it practically impossible for the Bill to be abandoned. This effectively meant that Parliament was being told that it could not refuse to pass the legislation. The practical consequences for the NHS, we were told, would have been overwhelming, so the constitutional principle was apparently abandoned.

The Treasury publishes guidance for the Ministers and their departments on pre-emptive public expenditure; this is called Managing Public Money. The guidance states that to incur such expenditure there must be a genuine, urgent need for it and it must be in the public interests. The relevant Bill must have passed Second Reading in the House of Commons and the planned legislation must be certain to become law in the near future. In evidence to us, Mrs Paula Diggle, Treasury officer of accounts and a very senior official, said that the requirements were interpreted by the Treasury as encapsulating parliamentary control over pre-emptive expenditure. She said that the Treasury was the “guardian of Parliament” and ensured that departments did not spend money before appropriate approval had been given. In its written evidence, the Treasury described this as an “ancient convention”. However, the committee concluded that, while the Treasury’s role is important within government, Parliament’s interests over pre-emptive expenditure should primarily be guarded by Parliament itself. Given this, we did not think that it was appropriate to describe the Treasury’s role as a convention in the constitutional sense.

We felt that the same was true for the general understandings about public expenditure being legitimate after a Commons Second Reading had been passed. We found no evidence that Parliament has ever endorsed this practice and, therefore, we felt that it should not be called a constitutional convention.

More significantly, we concluded that there is really no basis for assuming that pre-emptive spending can be justified after Second Reading in the Commons. Of course, a successful Second Reading in another place is usually an indicator that a Bill will become law. However, as your Lordships will be aware, particularly from some recent experiences, a Bill may well still be defeated or significantly amended at a later stage. The Second Reading practice is obviously complicated when a Bill starts in the Lords. We therefore decided that the Second Reading really carries no independent constitutional force.

In our final section, on the political oversight and authority for pre-emption, we concluded that Parliament should be much better informed than it is at present about the details of pre-emptive activity in advance. At the moment, there is no standard procedure and we recommend that a consistent method of explanation and information should be developed, perhaps by way of an Oral Statement during a Bill’s passage or through statements in documents accompanying a Bill. We further recommend that the Government should at the end of each Session produce a Written Statement summarising the pre-emptive activity undertaken across all departments and including the amount spent and the powers under which the Ministers acted. I am grateful that the Government have accepted those recommendations in their written response to us.

Overall, we felt that it would be useful and constitutionally important that the principles and practices covering pre-emption should be consolidated into one authoritative statement, to be included in the next edition of the Cabinet Manual. In their response the Government agreed to revise the relevant guidance in the Treasury document Managing Public Money and to refer to it in the Cabinet Manual.

I emphasise that the committee’s central concern was that at present the rules and understandings used by Ministers are opaque and, in places, inappropriately ancient. This militates against both good public administration and good constitutional practice, even when that constitution is unwritten.

I am grateful to the Government for their written reply to our report and for accepting some of our recommendations. Although their response is positive in tone, I think it is fair to describe some of the replies to our points as somewhat terse. Perhaps the Minister could be slightly more expansive today.

I return to the fundamental point in our report: where pre-emptive activity or expenditure is such that it threatens effective parliamentary scrutiny, it should not be undertaken. It is for Parliament, not the Executive, to decide whether and when to change the law. I look forward to the debate and to the Minister’s reply.