Lord Strathclyde’s report into the House of Lords and secondary legislation, commissioned following the row over tax credits, was published yesterday. Meg Russell discusses his proposals and argues that they may present an opportunity for a deal to be struck between the Lords and government – restraint in the use of Lords’ powers in return for restraint in appointments.

The report from Lord Strathclyde into the powers of the House of Lords was published on Thursday. This was precipitated by October’s row between the government and the Lords over tax credits, where the second chamber voted against a piece of ‘secondary legislation’ (which is frequently used to implement the detail of policy, under powers delegated in primary legislation – i.e. bills). Strathclyde was asked to investigate whether the Lords’ powers over such legislation should be reformed. His report, prepared with the support of a civil service secretariat and input from three former senior officials with specialist knowledge of the legislative process, presents three options for limiting the chamber’s powers. These received a very sceptical response from the opposition, and the legislation proposed by Strathclyde to implement his preferred option could prove very difficult to agree. So how reasonable are these proposals, and how much of a threat do they pose to the Lords? Could the government’s desire to make progress on the powers of the chamber instead be turned into an opportunity, to resolve wider issues of Lords reform?

The report and its context

The Strathclyde report offers a lucid summary of the complex issues surrounding secondary legislation and the House of Lords’ powers. Those confused by the topic could do well to read it as an introductory text. Its analysis is balanced, though it does explicitly support the government’s position that the chamber’s behaviour on tax credits breached convention – not just in relation to secondary legislation, but also financial matters – which is disputed by many in the Lords. As the report acknowledges, the 2006 Joint Committee on Conventions concluded that the Lords might vote against secondary legislation in ‘exceptional circumstances’. It notes (page 11), that such circumstances included ‘when the provisions of an SI [statutory instrument] were of the sort more normally found in primary legislation’, which is precisely what many argued was the case with respect to tax credits. What it omits to say is that such circumstances also included where the House of Lords Secondary Legislation Scrutiny Committee had explicitly expressed its concerns – which also applied in this case. The report proposes that secondary legislation with financial implications might in future be subjected to different (and more lenient) treatment by the Lords. What it doesn’t do is clearly establish that this was an expectation in the past.

Overall, the report takes a considerably more nuanced position than ministers have recently done. Notably, it states clearly (page 6) that ‘it would be appropriate for the Government to take steps to ensure that Bills contain an appropriate level of detail and that too much is not left for implementation by statutory instrument’, which some could interpret as a hint that the government overstepped the mark on tax credits. The awkward fact that ministers have since climbed down over the tax credit changes, which could be seen as vindicating the Lords’ intervention, is left unsaid.

The proposals

The report sets out three options, all of which would potentially constrain the Lords more tightly on secondary legislation (i.e. statutory instruments). Two of these would require primary legislation to enact. Option 1 is by far the toughest, to ‘remove the House of Lords from the formal parts of statutory instrument procedure altogether’ (page 16). Secondary legislation would under this option need the approval of the Commons alone. Given that it is widely acknowledged (and emphasised most recently by the Hansard Society’s work) that such legislation receives inadequate scrutiny in the Commons, this option is extreme and would provoke strong resistance. Indeed, the main purpose of its inclusion in the report may simply be to make the other options appear more moderate.

The third option, which is officially the preferred one in the report, is presented as a compromise. This would allow the Lords to continue debating and voting on secondary legislation, but provide that any resistance by the Lords could be overridden by a subsequent vote in the Commons. In a sense, this would bring the Lords powers over secondary legislation (where it currently enjoys an absolute veto) into line with those for primary legislation (where in most cases the Commons can ultimately prevail) – but with extremely important differences. First, the option of a fixed delay is rejected in the report, so the Lords’ veto could potentially be overridden immediately. Second, there is no guarantee that the Commons would even debate the proposals. Much secondary legislation is agreed by MPs in ’deferred divisions’, which do not even require passing through a division lobby, just voting on proposals en masse on a ballot paper. If a Lords defeat did not trigger a debate, and a full-blown vote, peers could find themselves overridden by MPs who had no clue what they were voting on.

The second option, unlike the other two, would not require legislation to introduce. It would depend instead on a restatement of existing conventions, set out in a resolution. For reasons indicated below, this could prove to be the most attractive option for all concerned. The report notes that ‘there are discussions taking place in the House of Lords about a new convention’, but claims to be ‘doubtful whether a solution can be devised by which the House can qualify its powers by convention alone’ (page 18). Nonetheless Lord Strathclyde, in his personal foreword to the report, implies that a shift to a statutory system would be regrettable, commenting that ‘Conventions exist because they provide a basis for orderly government… when they go, Parliament and the people we serve will, I believe, come to miss their value’ (page 4).

Finally the report proposes a review of whether parliament should make greater use of statutory instruments which require Commons consent alone (even under option 2 or 3) where the changes that they contain have clear financial implications.

The risks for the Lords

Any of these changes would obviously place greater restrictions on the House of Lords. The first option would remove its power entirely, and as the report states would likely result in the dismantling of the two most important committees dealing with delegated legislation – the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee – both of which are based in the Lords. This would decimate parliament’s ability to scrutinise powers delegated to government, and place additional unwanted pressure on the Commons. Few outside government itself could seriously support such a change; though (as discussed below) it would ironically hold significant risks for government as well. The third option, with appropriate safeguards, could allow the Lords to continue to act as a ‘safety net’, drawing the Commons’ attention to particularly inappropriate delegation of power. But, as already indicated, this could quickly become meaningless unless adequate scrutiny in the Commons was guaranteed. In the case of tax credits, the Lords’ resistance was fuelled by knowledge that there was disquiet among backbench Conservative MPs. A Commons vote on the matter following the Lords defeat could thus have been difficult for government. But for the minister not to face questioning in the chamber over the policy, and for MPs not to have a voice, could have made the Lords’ position easier to ignore.

Either of the options requiring legislation ultimately hold a threat for the Lords, though they also give it substantial power (discussed below) in the short term. The government could if it wished force legislative change through without the Lords’ consent using the Parliament Acts. These provisions require that the Lords reject a proposal in two successive parliamentary sessions, after which it can be sent for Royal assent regardless, so long as a year has passed from its initial Commons second reading. Use of the Acts has in practice been rare.

The risks for the government

But as already indicated, the risks in this situation are not one-sided. Any legislative solution holds significant risks for the government as well. A bill must pass the Commons, where there is already indication that backbenchers will resist any apparent government ‘power grab’. And of course, the bill would face passage through the Lords. In both chambers amendments would be possible, to introduce safeguards, water down the proposals, or perhaps even introduce wider topics of Lords reform. And while peers cannot ultimately prevent the use of the Parliament Acts, they could make significant trouble in the meantime. At the extreme, government policy-making could be thrown into chaos if peers chose to enjoy a last hurrah by repeatedly blocking secondary legislation (in the 2014-15 session alone there were 1148 statutory instruments which parliament could potentially have voted on – 340 ‘affirmative’ and 808 ‘negative’). Misbehaviour could easily also spill over onto government bills.

But the difficulties do not end there. In thinking through the consequences of change, it is necessary to remind ourselves who delegates power (i.e. the power to make secondary legislation) in the first place. This is done through primary legislation, which requires the assent of the Lords. If the chamber is forced into a settlement that it considers inappropriate, and if there are fears that oversight of secondary legislation has consequently become inadequate, parliament (and particularly the Lords) could become far more cautious in future about what it delegates. The Lords Delegated Powers and Regulatory Reform Committee, which is well-respected and non-partisan, scrutinises bills for the appropriateness of their delegated powers. If the Lords’ veto is watered down this committee might well toughen its stance, and peers begin to demand that more detail is put on the face of bills. This would make matters significantly more difficult for the government in years to come. The Strathclyde report recognises this risk (page 17) with respect to option 1; but it could also apply to an inadequately beefed up option 3.

The prospects for a deal to be struck

Hence it would be quite wrong to see this is a situation where the government holds all the cards. The Lords has significant negotiating power as well. If the government tried to impose a solution on the Lords it could face grave dangers. In particular the stance of the Labour opposition in the Lords (which can readily win votes with the support of the more gung-ho Liberal Democrats) is crucial to the future of any proposed reform. Hence while the downside of option 2 (renewed conventions) is that it requires different parties to get around the table and negotiate, smooth implementation of any legislative option in effect requires this as well. Indeed, the benefit of option 2 is that this is all it requires. If agreement can be reached between the key players (primarily Conservative and Labour frontbenchers, but also key Crossbenchers) new conventions could be put in place without the need for a bill, for lengthy stages through both chambers, amendments and all the rest.

But it is hard to see why peers (and the opposition in particular) would agree to change without getting something back. And here the wider context of Lords reform becomes important. If you ask most people in the Lords, or indeed outside, what is the biggest problem with the chamber they would point not to its powers, but to its growing size (and cost). Before the tax credits row, the hot topic was how to get a grip on this (particularly following David Cameron’s August 2015 appointments). In a debate in September it was confirmed that there are two official groups looking at the question of Lords size – one convened by the chamber’s Leader and the other by the Lord Speaker. Both are yet to report. While much attention has focused on options for peers to retire, the key change needed is restrictions on appointments. The chamber has not grown on its own, but thanks to excessive appointments by prime ministers (and particularly by David Cameron). Until that changes, any retirements could simply be cancelled out by creation of new peers. The government is resistant to curbing appointment powers, as shown by the response from the Lords Leader in September’s debate. But the government now wants something from the Lords, and needs to consider what it can give in return.

The Strathclyde review therefore provides an opportunity for a deal to be struck between the government and the Lords (and specifically between Labour and the Conservatives) on a balanced package – restraint in the use of Lords’ powers in return for restraint in appointments. This deal could be struck through conventions (allowing either side to react appropriately if the other reneges), or more firmly through legislation. In the New Year, therefore, we might finally hope to see some progress on a sustainable and balanced package of Lords reform.

About the author

Professor Meg Russell is the Director of The Constitution Unit and author of The Contemporary House of Lords: Westminster Bicameralism Revived (Oxford University Press, 2013).