So what are the natural powers of the Crown and what is the Royal Prerogative? In order to understand this, it is necessary to look first at how the law views legal personality, and secondly at what any given legal personality which the law chooses to recognise may do.
At common law, the principal form of legal personality is the natural person. In general, an individual can do anything which the common law, customary law or statutory provision does not expressly or impliedly preclude him or her from doing.
The Crown has however always claimed the sovereign power to create new legal personalities (itself an example of the exercise of the Prerogative), that is to say the right to form a new "artificial" legal personality by exercise of the sovereign will of the Crown. In practice this was done by the issue of a charter in which a body of individuals would be incorporated as a new body separate from the individuals which make it up, with the power to act as the "mind" of the body and to take decisions for it when gathered together in a meeting called in accordance with its constitution as set out in the charter. Such incorporation by charter is and was almost always for what might be considered public purposes: it became common for, for example, towns of significance to be incorporated so as to enable them to run themselves better. As another example, some of the early universities and colleges were formed by charter giving them the power to grant academic degrees and a constitution to run themselves. The BBC is today established and incorporated by charter, as are a number of bodies regulating the professions.
It was of course possible for individuals to join together on a common business enterprise, and to form associations or companies for the purpose without incorporation, but they would have done so as a collection of legal personalities rather than creating a new personality. One of the disadvantages of forming an enterprise as a collection of legal personalities was that each was individually liable for the things done within the terms of the enterprise - each was the agent of the other. In particular, if such an enterprise carried out a business and made a loss, each of the members would be liable without limit to the creditors.
Joint stock companies
This proved a disincentive to investment in collective business enterprise: people became unwilling to invest in the enterprise if there was the risk that, if it failed, they could be taken to the cleaners. It also became administratively difficult for unincorporated business associations comprising thousands of members to administer themselves. Initially for the purposes of stimulating colonial enterprise, the practice developed of forming joint stock companies by charter - one of the first joint stock companies being the Virginia Company, formed in 1600.
With the development of the Crown in Parliament when acting legislatively as something apart from the Crown wielding executive or judicial authority, this was superseded by the practice of incorporating companies by an Act of Parliament. At first this was done by private Act on a case by case basis, but with the development of commerce, the Joint Stock Companies Act 1844 permitted incorporation by administrative action by the Registrar of Companies rather than by an individual Act of incorporation, although the limitation of liability to the assets of the company itself (the equity of members in the company) was not achieved without specific individual enactment until the passing of the Limited Liability Act 1855. The 1844 and 1855 Acts, with the Joint Stock Companies Act 1856, were the progenitors of what is now the Companies Act 2006 and modern company law.
Corporations created by statute are much the same in practice as those created by charter with one difference. In theory, bodies incorporated by charter have all the powers of a natural person, whatever might be the purpose of the charter, because they are an emanation of the will of the sovereign. By contrast, bodies incorporated by statute (which include most local authorities and all modern commercial companies) are only lawfully able to do the things which they are explicitly or impliedly authorised to do by the statute concerned, or in the case of companies incorporated by the Companies Acts, by their memorandum and articles of association. This is sometimes called the ultra vires (literally, outside the powers) principle.
This distinction has become blurred in recent times. Although, unlike a body formed by statute, a body formed by charter does not act intrinsically unlawfully when acting in excess of its charter, the court may by injunction restrain deliberate breaches, on the grounds that acting in breach of charter deliberately would comprise an abuse of the charter (Jenkins v Pharmaceutical Society of Great Britain  1 Ch 392). Furthermore, although the London borough councils are (unlike their counterparts in England and Wales outside London) still formally incorporated by charter, in what has become known as the "loan swaps" case (Hazell v London Borough of Hammersmith and Fulham and Others  2 AC 1) they have been held to be so regulated by statute in the things that they do that any separate powers as a charter body have been extinguished.
Likewise, under EU jurisprudence, commercial companies in the UK can in a number of circumstances be liable under contracts decided on by the directors and entered into in good faith by third parties even if the company may have been acting in excess of its memorandum and articles of association, and there are other circumstances in which by estoppel, mistake or by action for money had and received, the full rigours of the ultra vires doctrine may be tempered for partially performed contracts.
What I have set out above may seem rather rambling and irrelevant to the natural powers of the Crown, but the purpose is to demonstrate that we have become so used, when an administrative decision is made, to looking for some statutory basis for it that it might be thought that all significant government action must be based on an enactment tucked away somewhere.
That is a mistake. The sovereign is a person and the government acting in right of the Crown may exercise all the powers of a natural person that you or I possess. Unlike creatures of statute such as local authorities, the government may do anything that it is not expressly or impliedly precluded by common law or statute from doing.
In addition, the Crown possesses at common law certain powers unique to itself, and it is these unique powers which are called the Royal Prerogative. Once, the Prerogative was at the seat of all government, and included the power to seize property, to deprive individuals of life or liberty (and through that to administer justice) and to make law. Nowadays the Prerogative is significantly reduced by the requirements of due process (as promulgated notably in the Magna Carta), together with the translation of most law-making functions to the Crown in Parliament and of the administration of justice to the Crown acting in the person of the judiciary.
The main Prerogative powers remaining to the executive branch of government are the power to act in defence of the realm and to wage war, and the power to enter into treaties and other arrangements with foreign governments. Other subsidiary matters still dealt with under the Prerogative include (as mentioned earlier) the grant of incorporation, the bestowing of honours, the prerogative of mercy (the power to pardon), the dissolution of Parliament (which is in consequence a matter which the Prime Minister can choose, provided the term of Parliament does not exceed five years and he maintains the confidence of Parliament) and the administration of the civil service.
The power to act in defence of the realm is often exercised by the making of Orders-in-Council (a form of legislative action outside Parliament), but does not have to be. No specific form of declaration of war is required other than a form recognised by public international law. This requires the conveying of a statement, oral or written, by one government to another that the two countries are forthwith in a state of war and that their respective citizens are enemies, prior to engaging in any acts of war affecting the other. However, as justice lies in the hands of the victor, whether a declaration of war properly precedes armed intervention is a matter mainly of academic interest. The realist would argue that a declaration of war only serves to give a warning to the enemy.
The natural powers of the Crown today
As I have previously mentioned in my blog, the British constitution is a practical thing. To the British constitution, theories concerning the powers of the sovereign are all very well and good, but Parliament holds the purse strings. Since the time of the civil war two principles of Parliamentary sovereignty have been established. First, no tax may be levied without the authority of Parliament. Secondly, no monies raised by taxation may be spent without the authority of the House of Commons. So far as concerns the second principle, in modern terms all money raised by taxation must be paid into the Consolidated Fund, and no money may be taken out of the Consolidated Fund without an appropriation of the House authorising it. (See this article for a further explanation of how this is done.)
So, although the Crown possesses these broad common law powers, it cannot actually do anything involving the expenditure of money (and what doesn't?) without Parliamentary authority for the expenditure. There is a further control in that the Crown has voluntarily agreed in an exchange of notes with the Committee of Public Accounts of the House of Commons in the 1950s that it would not launch new programmes involving expenditure continuing from year to year in reliance only on the ordinary appropriations without also obtaining legislative powers for the service concerned - but this is an administrative rather than a legal requirement.
In addition, there is also the point that a government can only hold office for so long as it maintains the confidence of the House of Commons. Where a government by its actions ceases by resolution of the House to hold that confidence, either a new Prime Minister likely to have its confidence must be appointed by the sovereign, or Parliament must be dissolved and an election held.
One other principle of law can impinge on the natural powers of the Crown. Where Parliament has enacted, by such specific service legislation, how and when something is to be or can be done, then as a matter of necessary implication that would be taken to have extinguished (or at least suspended) the Crown's natural powers in that subject matter (Attorney General v De Keyser's Royal Hotel  AC 508).
Substitution of statutory for common law powers
However, in my view the De Keyser principle should be applied with caution. It is clearly right, when dealing with the exercise of Prerogative powers affecting the rights of the citizen (such as, as in the De Keyser case, the taking of property for defence purposes), that any statutory code covering the same subject matter should prevail. However, it is another matter when the Crown is acting under its more general natural powers, such as when exercising the power to act pro bono publicae. Events are unpredictable, circumstances change and flexibility is needed. In real life, not everything can be governed by detailed statutory rules and it is not desirable that they should be. For example, for a number of years the Criminal Injuries Compensation Scheme was run on an a non-statutory basis under the natural powers of the Crown supported by appropriations of the expenditure concerned in the annual Appropriation Acts. Given that there were such appropriations, that should have been of concern to no-one other than the pedant.
The Court of Appeal recently got into an unnecessary tangle about this in R (Shrewsbury and Atcham Borough Council and Others) v Secretary of State for Communities and Local Government  EWCA Civ 148). This concerned proposals of the Secretary of State for Communities and Local Government to introduce unitary local government in parts of Shropshire in place of the then current two-tier (county council and district council) local government. The Secretary of State had had the temerity (in Carnwath LJ's view) to ask the local authorities concerned for views on this, and on any proposals they may have for unitary local government for their area. In a judgment of greater length (21 pages) than argument, Carnwath LJ managed to persuade himself that because the Local Government Act 1992 contains provisions under which unitary authorities can be created on recommendations of the Electoral Commission, it was wrong for the Secretary of State to solicit such proposals directly from the local authorities in advance of the enactment of new legislation (which became the Local Government and Public Involvement in Health Act 2007) which would have enabled her to implement them directly. In the end, though, he concluded that this did not really matter given that, by the time it had reached the Court of Appeal, the 2007 Act had been enacted and therefore impliedly ratified her actions.
What a bizarre set of conclusions, happily not accepted by the judge at first instance (Underhill J), who kept a firmer grip on reality and concluded the Secretary of State had acted lawfully, nor by Carnwath's fellow judge in the Court of Appeal, Richards LJ (also a former and well respected junior Treasury Counsel), who reached the more realistic conclusion (in only one page) that what had happened was just the kind of thing those in government might be expected to do where they feel it in the public interest, and that the Secretary of State had acted properly. Happily the Court of Appeal had also earlier reached a view inconsistent with Carnwath's in R v Secretary of State for Health, ex p C  1 FLR 627. In fact, it is surprising that leave to appeal was given at all, particularly given that council tax payers in Shropshire and other taxpayers in the UK were paying for it all.
Taking Carnwath's analysis to its conclusion, given the enactment of the Joint Stock Companies Act 1844 and its successors, it was wrong to form the BBC and similar bodies by Royal Charter, as they could undoubtedly have been formed as companies limited by guarantee. Get a grip.
The proposed Bill
From earlier consulation material, the Bill is not going to concern itself with these kinds of trivia. Instead it is intended to regulate the powers of the Prerogative properly so called, so as:
- to require treaties requiring ratification (not all do as some come into force immediately) to be laid before Parliament prior to ratification to enable Parliament to express a view
- to require approval of Parliament to war or planned (non-emergency) deployments of troops,
- to turn the administration of the civil service from a prerogative matter to a matter of statutory regulation,
- to surrender the prerogative of mercy, given that there are now statutory provisions allowing the Court of Appeal to review defunct cases which may involve a miscarriage of justice.
These might seem radical, but given the explanations above in truth they are not. In relation to war in particular, no waging of war will be successful unless Parliament votes the money to pay for it. Thus, no government in particular will ever declare war unless it is confident it can secure a majority in Parliament to go along with it.
On this basis, why not? But it is not earth shattering stuff.