European Union (Withdrawal) Bill

Lord Tyler Excerpts

Committee: 6th sitting (Hansard): House of Lords
Monday 12th March 2018 Lords Chamber

[Lord Lisvane (CB)]

My Lords, I support the amendments in the name of the noble Baroness, Lady Hayter of Kentish Town, and I shall speak to Amendment 126, which is in my name and those of my noble and learned friend Lord Judge, my noble friend Lord Pannick and the noble Lord, Lord Tyler. Amendment 126 would bring Clause 8 into line with Clauses 7 and 9.

Taxation matters can be dealt with by statutory instrument. For example, they can restrict relief from Customs and Excise duties or VAT under the Customs and Excise Duties (General Reliefs) Act 1979. But taxation, as it is normally and properly understood, is undoubtedly a matter for primary legislation. What is troubling here is the potential width of these powers and the lack of indication of how the Government intend to use them.

The Delegated Powers Committee’s 12th report says:

“At committee stage in the House of Commons, the Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker) indicated that the power to tax by statutory instrument in clause 8 was needed because the power was not available under clause 7”—


that is true enough. It continued by saying that,

“furthermore, taxation might be needed to ‘comply with international arrangements’”.

The committee then pointed out, and I entirely endorse what it said:

“The question which remains unanswered is why taxation by Ministers in statutory instruments is an acceptable alternative to taxation”,


approved by Parliament, with the normal rigour of the process, in primary legislation.

The Minister will need to give your Lordships some very hard examples of why a statutory instrument would be used and not primary legislation. If that is not known at this stage, the withdrawal and implementation Bill we are promised might well be the vehicle for making those changes in primary legislation, if the precise requirements are known at that stage. But this potentially wide power to tax by statutory instrument is, as I say, more than troubling. I am not suggesting that indications of how a power is expected to be used will in themselves suffice, although they should give your Lordships a clue to why the power is required, which is perhaps a more important question to address. What matters, of course, is what ends up in the Act. The use of the power then will not be trammelled by reassuring indications of how, at this stage, it is expected to be used.

Perhaps I may finish by enlarging on my noble friend Lord Turnbull’s masterly catalogue of fees and charges and their various characteristics, to add another category. In the financial procedure of the House of Commons, a fee that is levied and then applied for the good of the industry as a whole is not treated as a tax, so it does not require ways and means cover. As I say, that is merely a footnote to my noble friend’s excellent speech.

[Lord Tyler (LD)]

My Lords, I am a co-signatory to Amendment 126, as the noble Lord, Lord Lisvane, said. I want to underline a couple of the points he has made. This amendment derives, as he said, from the work of the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, which, I remind the House, is cross-party and non-party. It is entirely devoted to advising the House on important issues relating to the way we handle secondary legislation.

The noble Lord, Lord Lisvane, has been characteristically modest in not quoting the committee’s specific comment, which is very powerful. It said at paragraph 20(c):

“The Government should demonstrate a convincing case (if one exists) before the supremacy of the House of Commons in financial matters gives way to taxation by statutory instrument”.


This may be only a minor incident, but it is part of a much bigger pattern. I worry—I am getting old, I think—that Ministers and civil servants do not seem to have spent quite so much time with their history books as I used to when I took a degree in that subject. The power of Parliament to hold the Executive to account in matters of taxation goes back beyond even the 300 years to which the noble Lord, Lord Turnbull, referred. It could be said to go back to Magna Carta or Simon de Montfort’s Parliament, or indeed to the decision of our colonial cousins to declare independence: “No taxation without representation”.

This is very sensitive territory. We are surely entitled to demand a full explanation of why the regulations under Clause 8, unlike those under Clauses 7 and 9, may impose new taxation or increase taxation, allowing the supremacy of the House of Commons in financial matters to give way to taxation by secondary legislation.

The noble Lord, Lord Lisvane, referred to some discussions that took place in the other place on 13 December, when the Minister, Robin Walker, sought to explain why the provisions of Clause 7 could not apply and why Clause 8 was necessary. I shall quote him in detail because I think it is important:

“In addition, there are restrictions on the use of clause 7 relating to, for example, taxation that might, in some circumstances, prevent important changes to comply with international arrangements from being made. We need this power because we need to be prepared for all eventualities”.—[Official Report, Commons, 13/12/17; col. 557.]


There are three triggers there: “taxation”, “important changes”—this is not just trivial stuff—and “all eventualities”. Throughout discussion on the Bill, we have constantly been told that Ministers require a great deal of room for manoeuvre and flexibility; they need to be able to move fast. In this case, they have made the case themselves for proper discussion and consideration. Matters relating to taxation in these circumstances require the most composite and careful care. We should be seeking comprehensive scrutiny, not the usual approval of SIs.

If any noble Lords on the Conservative Benches think these are trivial issues, I invite them to consider how a future Government of a distinctly different colour might choose to use these unprecedented powers in relation to taxation. The very important role of Parliament is here before your Lordships’ House today. I know we will be told of the need for speed, flexibility, expediency et cetera, and that all the usual excuses for slipshod legislation will be trotted out, but this is an issue of considerable principle and of considerable responsibility for your Lordships’ House and the other place, and we must do what we can to assist it to fulfil that responsibility. Whether or not Brexit actually happens, these amendments to this clause are of huge long-term importance. We could be establishing a precedent for taxation being treated as a secondary issue, rather than as a matter that should always come in the form of primary legislation.

I was disappointed not to have been able to be here last Wednesday for the Committee, but I noted with admiration the range of expertise from all over the House and the eloquence with which it was deployed. This is not an area we can simply wave through as though it were just some small technical question. This goes to the very heart of the balance between government and Parliament. I think it was the noble Lord, Lord Cormack, who last week quoted the late Lord Hailsham warning of a slide towards “elective dictatorship”. We are back there again this afternoon, and I say amen to that.