How long does it take for Conservative ministers to go native? The Home Office civil servants judged about a year and three quarters. They pulled out of their drawer marked "wish list" a rewarming of the proposals for the new power to track people's internet activity which they put to earlier Labour ministers, and which the then Conservative and Liberal Democrat opposition and a concerned citizenry booted into touch.
It even came today, according to BBC reports, to Theresa May saying that "ordinary people would have nothing to fear". The argument that "if you aren't guilty you have nothing to fear" is the standard argument employed by all police states. Despite her wording, I imagine Mrs May is a little more sophisticated than this and she either expressed herself poorly or has been reported badly.
Already the government is in retreat, with earlier credible briefings by the Home Office now contradicted by Nick Clegg, in particular with respect to whether a court warrant would be required before looking through the private affairs of individuals.
Almost certainly George Osborne's mishandled granny tax (mishandled first by pretending at the time that it was just a "simplification", and secondly by making the change in the same budget which reduced the top rate of tax, when he could have just left it for a year) was also somewhere in the Treasury's wish list. This misjudgement cost him the kudos which he should have received for the commendable political decision to raise the income tax threshold closer to the long term target of £10,000.
Every government goes through periods of difficulty, but the ones over the last month are almost entirely self-inflicted. On the particular issue of internet privacy, the government is helped by the difficulties Labour will have in driving forward serious opposition given their earlier involvement in the issue when in government.
So far as concerns the current government and their performance over the past month, there is a difference between taking necessary but difficult decisions and shooting yourself in the foot: on this, backbenchers have a right to feel restless. Furthermore, is it any wonder that the population is so disillusioned with politicians, who on matters of principle appear to have little compunction in ignoring their election manifesto as well as their past opposition.
Tuesday, 3 April 2012
Friday, 10 February 2012
Bone v Bideford Town Council
Ouseley J gave judgement this morning in an application for judicial review by one Clive Bone in conjunction with the National Secular Society, in the case of R, on the application of the National Secular Society and Bone v Bideford Town Council [2012] EWHC 175. Bideford Town Council are in the habit of having a chaplain intone a few prayers for guidance and sound judgement at the beginning of each of their meetings. This, together with the appointment of honorific chaplains to the Mayor of some of the former large county borough councils, has been quite a common practice in earlier times although is now much diminished.
Mr Bone alleged that this practice offended both the provisions precluding religious discrimination in the Equality Act 2010 and articles 9 (freedom of thought, conscience and religion) and 14 (no discrimination in public rights on the grounds of religion or political or other opinion) of the European Convention on Human Rights as incorporated into UK law by the Human Rights Act 1998. He felt on the one hand that he could not in good conscience attend the meeting during the period within which a prayer was intoned, and on the other hand that he had a responsibility to attend all the business at the Council's meetings, which put him at a discriminatory disadvantage. As a make-weight he argued that holding prayers during the time that the Council was in formal meeting was outside the range of the Council's permissible activities under the Local Government Act 1972.
Mr Bone lost on his main point. Ouseley J held that holding prayers did not put Mr Bone at a disadvantage within the meaning of the 2010 or the ECHR, assuming that the action in question (a moment of formal prayer) was lawful under the 1972 Act. So in Ouseley's view it came down to a technical matter of statutory construction about whether the action in question was within the powers conferred on the Council by the 1972 Act.
I explained the principles behind the powers of incorporated bodies (whether incorporated by charter or, as in this case, by statute) in my article on the Royal Prerogative and the other natural powers of the Crown. In summary, statutory bodies can only do what they are explicitly or implicitly authorised to do by the statutory provisions in question. Section 111(1) of the Local Government Act 1992 gives the power to act for incidental purposes in these terms:
It is to be noted that Part 1 of the Localism Act 2011 will signficantly extend the powers of local authorities so that (like the Crown) they will have all the powers of a natural person, and a natural person certainly has power to intone prayers within his or her own hearing. The Cabinet can, for example, pronounce a prayer at the start of each of its meetings and perhaps Tony Blair might have been inclined to do so had he been able to persuade his Cabinet colleagues of its value. Section 1 of the 2011 Act provides:
However, this does illustrate the artificiality of this decision. It appears that county and district/borough councils will be able to utter prayers under this new power, but not parish or town councils unless and until made eligible parish councils. By the same token, this does not appear to be the victory for secularism that the NSS seem to think it is.
Update 1: Some commentators seem to think Chapter 1 of Part 1 of the Localism Act 2011 is already in force, so Ouseley J made a mistake. That is wrong. The Secretary of State said at the beginning of the year that he proposed to bring the 2011 Act into force around the beginning of April this year but the commencement order for this has not yet been made. A commencement order has been made enabling the Secretary of State to make an order prescribing the conditions to be met to be an "eligible parish council" (the Localism Act 2011 (Commencement No.1 and Transitional Provisions) Order 2011), but to the best of my knowledge the prescribing order itself has also not yet been made or indeed consulted on. Incidentally, the Christian Alliance (who assisted Bideford Town Council in the litigation) would do well to advise the Council not to appeal. It has been held by Ouseley J that prayers do not offend human rights or equality legislation so the Council won on that. Amusingly, Mr Bone and the NSS can't appeal that point as they succeeded on a technicality, a technicality which is due to end in April this year.
Update 2 (20 February 2012): The Secretary of State has now made an order bringing into force Chapter 1 of Part 1 of the Localism Act 2011 earlier than he originally intended, and has laid another order for approval, in response to the decision of the court in this case. First he has made the Localism Act 2011 (Commencement No. 3) Order 2012 which brought the general power of competence referred to above into force for principal councils (county, district and borough councils) on 18th February. They can now pray as much as they like. Secondly (and most relevant to Bideford Town Council), he has laid before both Houses of Parliament the Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012 which, subject to the conditions mentioned in that Order, will make the Town Council an "eligible parish council" once in force. It cannot come into force immediately as it requires approval by resolution of both Houses.
Mr Bone alleged that this practice offended both the provisions precluding religious discrimination in the Equality Act 2010 and articles 9 (freedom of thought, conscience and religion) and 14 (no discrimination in public rights on the grounds of religion or political or other opinion) of the European Convention on Human Rights as incorporated into UK law by the Human Rights Act 1998. He felt on the one hand that he could not in good conscience attend the meeting during the period within which a prayer was intoned, and on the other hand that he had a responsibility to attend all the business at the Council's meetings, which put him at a discriminatory disadvantage. As a make-weight he argued that holding prayers during the time that the Council was in formal meeting was outside the range of the Council's permissible activities under the Local Government Act 1972.
Mr Bone lost on his main point. Ouseley J held that holding prayers did not put Mr Bone at a disadvantage within the meaning of the 2010 or the ECHR, assuming that the action in question (a moment of formal prayer) was lawful under the 1972 Act. So in Ouseley's view it came down to a technical matter of statutory construction about whether the action in question was within the powers conferred on the Council by the 1972 Act.
I explained the principles behind the powers of incorporated bodies (whether incorporated by charter or, as in this case, by statute) in my article on the Royal Prerogative and the other natural powers of the Crown. In summary, statutory bodies can only do what they are explicitly or implicitly authorised to do by the statutory provisions in question. Section 111(1) of the Local Government Act 1992 gives the power to act for incidental purposes in these terms:
"(1) Without prejudice to any powers exercisable apart from this section but subject to the provisions of this Act and any other enactment passed before or after this Act, a local authority shall have power to do any thing which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions."Ouseley J held in effect that such facilitation and conduciveness required more than seeking divine assistance to its deliberations in order to be lawful, whether or not a divine being existed capable and willing to provide it. I have always felt that Duncan Ouseley was a very sound fellow but I have to say this is just a little too legalistic for my taste. I think you either have to man up and say it contravenes the ECHR or just let it pass.
It is to be noted that Part 1 of the Localism Act 2011 will signficantly extend the powers of local authorities so that (like the Crown) they will have all the powers of a natural person, and a natural person certainly has power to intone prayers within his or her own hearing. The Cabinet can, for example, pronounce a prayer at the start of each of its meetings and perhaps Tony Blair might have been inclined to do so had he been able to persuade his Cabinet colleagues of its value. Section 1 of the 2011 Act provides:
"(1) A local authority has power to do anything that individuals generally may do.Section 2 provides that this does not confer a power to do anything authorised subject to conditions by an overlapping pre-commencement statutory power except on those prior conditions, but that would not apply here according to the reasoning adopted by Ouseley J. The problem for Bideford Town Council is that section 1 of the 2011 Act was not at the time of the prayers complained about in force (in fact, it was not then enacted); and that when it does come into force, the council is not covered by the provision unless it were to meet the conditions to be prescribed by the Secretary of State by an order enabling it to comprise "an eligible parish council" (town councils are in law just a species of parish council and not a district or borough council).
(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise —
(a) unlike anything the authority may do apart from subsection (1), or
(b) unlike anything that other public bodies may do.
...
(5)The generality of the power conferred by subsection (1) ("the general power") is not limited by the existence of any other power of the authority which (to any extent) overlaps the general power."
However, this does illustrate the artificiality of this decision. It appears that county and district/borough councils will be able to utter prayers under this new power, but not parish or town councils unless and until made eligible parish councils. By the same token, this does not appear to be the victory for secularism that the NSS seem to think it is.
Update 1: Some commentators seem to think Chapter 1 of Part 1 of the Localism Act 2011 is already in force, so Ouseley J made a mistake. That is wrong. The Secretary of State said at the beginning of the year that he proposed to bring the 2011 Act into force around the beginning of April this year but the commencement order for this has not yet been made. A commencement order has been made enabling the Secretary of State to make an order prescribing the conditions to be met to be an "eligible parish council" (the Localism Act 2011 (Commencement No.1 and Transitional Provisions) Order 2011), but to the best of my knowledge the prescribing order itself has also not yet been made or indeed consulted on. Incidentally, the Christian Alliance (who assisted Bideford Town Council in the litigation) would do well to advise the Council not to appeal. It has been held by Ouseley J that prayers do not offend human rights or equality legislation so the Council won on that. Amusingly, Mr Bone and the NSS can't appeal that point as they succeeded on a technicality, a technicality which is due to end in April this year.
Update 2 (20 February 2012): The Secretary of State has now made an order bringing into force Chapter 1 of Part 1 of the Localism Act 2011 earlier than he originally intended, and has laid another order for approval, in response to the decision of the court in this case. First he has made the Localism Act 2011 (Commencement No. 3) Order 2012 which brought the general power of competence referred to above into force for principal councils (county, district and borough councils) on 18th February. They can now pray as much as they like. Secondly (and most relevant to Bideford Town Council), he has laid before both Houses of Parliament the Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012 which, subject to the conditions mentioned in that Order, will make the Town Council an "eligible parish council" once in force. It cannot come into force immediately as it requires approval by resolution of both Houses.
Thursday, 9 February 2012
Tories renew Labour's Freedom of Information order
It is interesting that the Attorney General, Dominic Grieve, has decided to make a further order under section 53 of the Freedom of Information Act 2000 overriding a decision of the Information Commissioner under that Act that minutes of meetings of the Cabinet Ministerial Committee on Devolution to Scotland and Wales and the English Regions in 1997 should be released.
This is the second time this has happened. Jack Straw made a similar order in 2009, about which I wrote in some detail here. I will not repeat the legal issues concerned - those interested can follow the link. However, one of the arguments used then, pointing to a fear of prejudice to the public interest arising from disclosure, was that some ministers which had taken part in the meetings in 1997 were still in office in 2009, notably Jack Straw himself. That argument of course no longer applies.
Presumably in order to make his decision, Dominic Grieve looked at the minutes in question: at least, I certainly hope he did, since it was incumbent on him in law to acquaint himself with all the facts when making his decision. Presumably also, he had some kind of permission to do so by the Shadow Attorney General, because there is a convention that governments do not get to see the cabinet meetings and briefing papers of previous governments of a different party.
Given that the "ministers in office" argument at least no longer applies (although other ones employed in 2009 still do), there must have been some interest amongst the Tories in letting the world see Labour's internal manoeuvrings in 1997. Presumably what has stayed their hand is the forthcoming referendum on independence in Scotland, and a notably increased concern amongst some people in England about their position as (in their eyes) the union's whipping boys.
This implies that there must be some quite powerful stuff in these cabinet committee minutes and it is interesting that there has so far been no leak: perhaps there will be a nicely timed one before the referendum. One can also guess that Sir Peter Housden, viewed by some in government as Alex Salmond's accessory, has been kept well away from the papers.
This is the second time this has happened. Jack Straw made a similar order in 2009, about which I wrote in some detail here. I will not repeat the legal issues concerned - those interested can follow the link. However, one of the arguments used then, pointing to a fear of prejudice to the public interest arising from disclosure, was that some ministers which had taken part in the meetings in 1997 were still in office in 2009, notably Jack Straw himself. That argument of course no longer applies.
Presumably in order to make his decision, Dominic Grieve looked at the minutes in question: at least, I certainly hope he did, since it was incumbent on him in law to acquaint himself with all the facts when making his decision. Presumably also, he had some kind of permission to do so by the Shadow Attorney General, because there is a convention that governments do not get to see the cabinet meetings and briefing papers of previous governments of a different party.
Given that the "ministers in office" argument at least no longer applies (although other ones employed in 2009 still do), there must have been some interest amongst the Tories in letting the world see Labour's internal manoeuvrings in 1997. Presumably what has stayed their hand is the forthcoming referendum on independence in Scotland, and a notably increased concern amongst some people in England about their position as (in their eyes) the union's whipping boys.
This implies that there must be some quite powerful stuff in these cabinet committee minutes and it is interesting that there has so far been no leak: perhaps there will be a nicely timed one before the referendum. One can also guess that Sir Peter Housden, viewed by some in government as Alex Salmond's accessory, has been kept well away from the papers.
Wednesday, 18 January 2012
The make-up of the Commission on the West Lothian Question
The government announced yesterday the composition and terms of reference of the Commission on the West Lothian Question.
When Mark Harper made his statement to the House on 8th September last year in attempting to kill off Harriett Baldwin's Legislation (Territorial Extent) Bill, he explained the Commission's remit in these terms: "The Government are clear that the commission's primary task should be to examine how this House and Parliament as a whole can deal most effectively with business that affects England wholly or primarily, when at the same time similar matters in some or all of Scotland, Wales and Northern Ireland are lawfully and democratically the responsibility of the separate Parliament or Assemblies."
The terms of reference for the Commission announced yesterday are slightly different, namely "To consider how the House of Commons might deal with legislation which affects only part of the United Kingdom, following the devolution of certain legislative powers to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales." The earlier proposed limitation to "effectiveness" would have made the the Commission's task pointless, because if efficiency were the only criterion, to the exclusion of other things like fairness and basic common sense, things could be left as they are.
The membership of the Commission is quite heartening. It includes both the current but shortly-to-retire First Parliamentary Counsel, Sir Stephen Laws, and his predecessor, Sir Geoffrey Bowman. First Parliamentary Counsel heads the Office of the Parliamentary Counsel, which is the office which drafts public Bills and is composed of clever and able individuals. I have long thought that those who are opposed to solving the West Lothian Question have over-egged the difficulties of establishing a drafting convention for the division of Bills into different Parts for their different territorial extents, and having two former heads of that Office in the Commission will I hope put that to rest at least. It was also good to see that Professor Victor Bogdanor is not a member of the Commission, as one of those prone to such over-egging.
As readers of this blog will also know, I think requiring a double majority at 3rd reading for any Part of a Bill with limited extent, one for all (UK-wide) members and one for those representing the actual extent, is a viable solution to the WLQ, and such a double majority requirement would meet the objection of those who argue that the whole of the UK has an interest in much England-only legislation via the Barnett formula (an argument which I think is anyway greatly overstated by its proponents, for reasons given in other articles in this blog). So far as concerns the argument that governments with slim majorities depending on Scottish members could not govern in England, it would be possible to borrow from practice with respect to the House of Lords, so that the absence of a territorial majority could, say, delay a Bill for a Parliamentary session (a year) but not defeat it: but better still, and as startling an idea as it might be, UK governments could actually try negotiation and compromise on those occasions when they lack a territorial majority.
One problem I foresee is the late reporting time of the Commission, which is to be "next session", that is 2013. Constitutional issues are moving so fast at present, that I would have liked to see it report by the end of this session.
The other problem is the limited nature of the Commission's remit. A double-majority solution of the kind I have outlined seems the most likely outcome, but it is one that will be overtaken by events should Scotland move to "devolution max" following a referendum in 2014. If and when Scotland becomes autonomous on all matters except defence and foreign affairs, and in particular once it can decide its own taxation, it would be unacceptable for Scottish members to decide taxes, such as income tax, in the remainder of the UK to which their constituents could not be subject; and the kind of voting finessing to which I have referred could not adequately deal with this. But I guess one can only deal with the position which pertains at any one time.
When Mark Harper made his statement to the House on 8th September last year in attempting to kill off Harriett Baldwin's Legislation (Territorial Extent) Bill, he explained the Commission's remit in these terms: "The Government are clear that the commission's primary task should be to examine how this House and Parliament as a whole can deal most effectively with business that affects England wholly or primarily, when at the same time similar matters in some or all of Scotland, Wales and Northern Ireland are lawfully and democratically the responsibility of the separate Parliament or Assemblies."
The terms of reference for the Commission announced yesterday are slightly different, namely "To consider how the House of Commons might deal with legislation which affects only part of the United Kingdom, following the devolution of certain legislative powers to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales." The earlier proposed limitation to "effectiveness" would have made the the Commission's task pointless, because if efficiency were the only criterion, to the exclusion of other things like fairness and basic common sense, things could be left as they are.
The membership of the Commission is quite heartening. It includes both the current but shortly-to-retire First Parliamentary Counsel, Sir Stephen Laws, and his predecessor, Sir Geoffrey Bowman. First Parliamentary Counsel heads the Office of the Parliamentary Counsel, which is the office which drafts public Bills and is composed of clever and able individuals. I have long thought that those who are opposed to solving the West Lothian Question have over-egged the difficulties of establishing a drafting convention for the division of Bills into different Parts for their different territorial extents, and having two former heads of that Office in the Commission will I hope put that to rest at least. It was also good to see that Professor Victor Bogdanor is not a member of the Commission, as one of those prone to such over-egging.
As readers of this blog will also know, I think requiring a double majority at 3rd reading for any Part of a Bill with limited extent, one for all (UK-wide) members and one for those representing the actual extent, is a viable solution to the WLQ, and such a double majority requirement would meet the objection of those who argue that the whole of the UK has an interest in much England-only legislation via the Barnett formula (an argument which I think is anyway greatly overstated by its proponents, for reasons given in other articles in this blog). So far as concerns the argument that governments with slim majorities depending on Scottish members could not govern in England, it would be possible to borrow from practice with respect to the House of Lords, so that the absence of a territorial majority could, say, delay a Bill for a Parliamentary session (a year) but not defeat it: but better still, and as startling an idea as it might be, UK governments could actually try negotiation and compromise on those occasions when they lack a territorial majority.
One problem I foresee is the late reporting time of the Commission, which is to be "next session", that is 2013. Constitutional issues are moving so fast at present, that I would have liked to see it report by the end of this session.
The other problem is the limited nature of the Commission's remit. A double-majority solution of the kind I have outlined seems the most likely outcome, but it is one that will be overtaken by events should Scotland move to "devolution max" following a referendum in 2014. If and when Scotland becomes autonomous on all matters except defence and foreign affairs, and in particular once it can decide its own taxation, it would be unacceptable for Scottish members to decide taxes, such as income tax, in the remainder of the UK to which their constituents could not be subject; and the kind of voting finessing to which I have referred could not adequately deal with this. But I guess one can only deal with the position which pertains at any one time.
Wednesday, 11 January 2012
Binding referenda
On reviewing coverage of yesterday's announcement by Michael Moore about the the proposed referendum on Scottish independence, there seems to be a view propagating that a referendum carried out in accordance with his proposals, by means of an order under section 30 of the Scotland Act 1998, would be "binding" in a way that a referendum carried out by the Scottish government without such an order would not, so that the section 30 order approach is to be preferred.
In my view that is wrong. Neither approach would be "binding" in any legal sense; and each would be "binding" in the real world of politics.
It is possible to have legally binding referenda. To be legally binding, once the referendum result is known there has to be an answer to the question "What next?" which has ascertainable legal consequences which are capable (if need be) of enforcement in a court of law. Last year's referendum on whether the Welsh Assembly should obtain legislative powers under Part 4 of the Government of Wales Act 2006, similar to those of the Scottish parliament, was binding for example. By contrast the pre-legislative referendum on the Scottish parliament held in 1997 was not. The successful outcome in that referendum placed a political commitment on the incoming Labour government to consult on and prepare legislation for such a parliament, which it duly did in the form of the Scotland Act 1998. It conferred a political mandate, and imposed a political duty, to prepare something (a Bill) which would if and when enacted have a legal effect.
The same is true of the proposed referendum on independence. If successful it would impose a political but not legal commitment on the UK government to negotiate terms for independence with the Scottish government. The terms, once negotiated, would require a further enactment by the UK parliament dissolving the union in accordance with the agreed terms. The sanction, were the UK government to fail to enter into such negotiations, would be for the Scottish government to make a unilateral declaration of independence.
A section 30 order does not therefore make the referendum any more or less binding. What an order would do is remove any doubt about whether the Scottish parliament and government are within their powers to hold this (politically but not legally binding) referendum.
In my view that is wrong. Neither approach would be "binding" in any legal sense; and each would be "binding" in the real world of politics.
It is possible to have legally binding referenda. To be legally binding, once the referendum result is known there has to be an answer to the question "What next?" which has ascertainable legal consequences which are capable (if need be) of enforcement in a court of law. Last year's referendum on whether the Welsh Assembly should obtain legislative powers under Part 4 of the Government of Wales Act 2006, similar to those of the Scottish parliament, was binding for example. By contrast the pre-legislative referendum on the Scottish parliament held in 1997 was not. The successful outcome in that referendum placed a political commitment on the incoming Labour government to consult on and prepare legislation for such a parliament, which it duly did in the form of the Scotland Act 1998. It conferred a political mandate, and imposed a political duty, to prepare something (a Bill) which would if and when enacted have a legal effect.
The same is true of the proposed referendum on independence. If successful it would impose a political but not legal commitment on the UK government to negotiate terms for independence with the Scottish government. The terms, once negotiated, would require a further enactment by the UK parliament dissolving the union in accordance with the agreed terms. The sanction, were the UK government to fail to enter into such negotiations, would be for the Scottish government to make a unilateral declaration of independence.
A section 30 order does not therefore make the referendum any more or less binding. What an order would do is remove any doubt about whether the Scottish parliament and government are within their powers to hold this (politically but not legally binding) referendum.
Tuesday, 10 January 2012
Michael Moore's statement
Michael Moore made his statement to the House of Commons today. He stated that the coalition government thinks that the holding of a consultative referendum on independence is outside the powers of the Scottish government and parliament. The UK government proposes to make it within those powers by means of an order under section 30 of the Scotland Act 1998, but on its (the coalition government's) own terms. These terms relate both to the question to be put (and it would be a single Yes or No question not encompassing "devolution max" and avoiding ambiguous wording on the Quebec model), and also timing ("sooner rather than later").
It appears that the phony war is now over, but I do not intend in this article to deal other than in passing with the wisdom or otherwise of the course the UK government has adopted. On the plus side, with radio silence from the Labour party who hold the key to all this, something is being done at last by those who don't, namely the Tories. Ed Milliband has let the country down, with an absence of any leadership, and indeed of any signs of life at all. It was disappointing also that Margaret Curran, Shadow Secretary of State for Scotland, used the statement in the House as an opportunity for points scoring, but that probably reflects Ed Milliband's lack of any discernible control of events. On the minus side is the extent to which this will feed those north of the border who gravitate to feelings of grievance. However, Cameron has now committed to playing out his hand for better or for worse and it may well turn out for the better. Does this mark Salmond's Stalingrad, or a bright new dawn? Voters in Scotland will in due course pronounce.
I covered the legal issue in Independence, the Scottish Parliament and the Scottish Government. The UK government's statement comes down to the question of whether legislation by the Scottish parliament concerning a consultative referendum can be said to "relate to reserved matters". My view is that the words "relate to" are to be looked at in terms of legal agency. Since a consultative referendum has no legal effect - it merely obtains the views of the people in Scotland - in my view it does not. The UK government's legal advisers think otherwise.
In my view the UK government's view leads to absurdities. The powers of the Scottish parliament are congruent with those of the Scottish government. Everything that a Scottish or UK government does has to be permitted by law. It so happens that a very large proportion of the things either government does is not based on statutory powers but on the powers of the Crown as a natural person or under its prerogative, which as I explained in my article are transferred to Scottish Ministers in relation to devolved matters. If we take the view that consultative referenda on independence by the Scottish government are unlawful, then so must be consultative exercises on devolution itself, which is equally a reserved matter in the sense that the Scottish parliament has no power to pass an enactment transferring new powers, as presently reserved, from the UK parliament to itself. In theory at least, using Scottish civil servants' time to respond to the proposals of the Calman Commission (rather than using the Scottish parliament's constituent parties' own resources) was also unlawful. It would, in theory at least, be improper for the Scottish parliament to debate devolution and Scotland's position within the UK at all. Legal propositions of the government's kind are best tested against the light cast by these stress cases.
It is however equally absurd for the Scottish government to claim as they do that they have a "mandate" from the electorate in Scotland which the UK government cannot oppose, unless the government of an independent Scotland intends to operate above the law (that is, in a way otherwise known as tyranny). Either the SNP believes in constitutional government or it believes in revolutionary imperatives which put it outside bourgeouis considerations such as legal process. The proper course now is for the Scottish government to explain why the UK government have got the law wrong. They could apply to court for a declaratory judgement, but it seems highly unlikely they will do so.
It appears that the phony war is now over, but I do not intend in this article to deal other than in passing with the wisdom or otherwise of the course the UK government has adopted. On the plus side, with radio silence from the Labour party who hold the key to all this, something is being done at last by those who don't, namely the Tories. Ed Milliband has let the country down, with an absence of any leadership, and indeed of any signs of life at all. It was disappointing also that Margaret Curran, Shadow Secretary of State for Scotland, used the statement in the House as an opportunity for points scoring, but that probably reflects Ed Milliband's lack of any discernible control of events. On the minus side is the extent to which this will feed those north of the border who gravitate to feelings of grievance. However, Cameron has now committed to playing out his hand for better or for worse and it may well turn out for the better. Does this mark Salmond's Stalingrad, or a bright new dawn? Voters in Scotland will in due course pronounce.
I covered the legal issue in Independence, the Scottish Parliament and the Scottish Government. The UK government's statement comes down to the question of whether legislation by the Scottish parliament concerning a consultative referendum can be said to "relate to reserved matters". My view is that the words "relate to" are to be looked at in terms of legal agency. Since a consultative referendum has no legal effect - it merely obtains the views of the people in Scotland - in my view it does not. The UK government's legal advisers think otherwise.
In my view the UK government's view leads to absurdities. The powers of the Scottish parliament are congruent with those of the Scottish government. Everything that a Scottish or UK government does has to be permitted by law. It so happens that a very large proportion of the things either government does is not based on statutory powers but on the powers of the Crown as a natural person or under its prerogative, which as I explained in my article are transferred to Scottish Ministers in relation to devolved matters. If we take the view that consultative referenda on independence by the Scottish government are unlawful, then so must be consultative exercises on devolution itself, which is equally a reserved matter in the sense that the Scottish parliament has no power to pass an enactment transferring new powers, as presently reserved, from the UK parliament to itself. In theory at least, using Scottish civil servants' time to respond to the proposals of the Calman Commission (rather than using the Scottish parliament's constituent parties' own resources) was also unlawful. It would, in theory at least, be improper for the Scottish parliament to debate devolution and Scotland's position within the UK at all. Legal propositions of the government's kind are best tested against the light cast by these stress cases.
It is however equally absurd for the Scottish government to claim as they do that they have a "mandate" from the electorate in Scotland which the UK government cannot oppose, unless the government of an independent Scotland intends to operate above the law (that is, in a way otherwise known as tyranny). Either the SNP believes in constitutional government or it believes in revolutionary imperatives which put it outside bourgeouis considerations such as legal process. The proper course now is for the Scottish government to explain why the UK government have got the law wrong. They could apply to court for a declaratory judgement, but it seems highly unlikely they will do so.
Wednesday, 9 November 2011
Incitefulness
I rotate my newspaper reading where I can, and I was surprised to see that the Telegraph has one of the most inciteful explanations of how we have got to where we are on devolution.
I have long thought that Scottish Labour is largely responsible for our current mess, with their facile alignment of any difficulties in Scotland with the Tories and implicitly the English. Unable to get off this track, their disastrous campaign this summer in the elections for the Scottish Parliament was largely based around how only Labour and not the SNP could properly protect Scotland against "London". This was particularly ludicrous, as well as being implicitly anti-English, because the Scottish Parliament is responsible for devolved matters and not for the reserved matters for which the UK government (and so, using Scottish Labour's and the SNP's lexicon, "London") is responsible. Scottish Labour have been trying to out-nationalist the nationalists, which is bound to fail.
The headline to the Telegraph article somewhat misrepresents the article itself. The article suggests that Scotland having a semi-detached relationship with the UK under "devolution max" may be the end point - although perhaps Mr Brogan thinks that that cannot reasonably be described as a union. For my own part, as explained in this article, I cannot see how devo max would work without a complete rewriting of the UK constitution. It would make Nick Clegg's current playground hobby of rejigging the House of Lords largely redundant, since presumably the House of Lords would become some kind of federal or confederal chamber.
I doubt the resolve of both the Labour and Conservative parties to see such an arrangement through, and indeed both parties seem incapable of even talking about it. We are likely instead to end up with some half-baked arrangement leading to independence in a generation. So the headline may end up being right.
Which raises the question: When is the Labour party's navel gazing on this going to end, and they start saying something useful? At the end of the day, the future of the union (or otherwise) is in their hands.
I have long thought that Scottish Labour is largely responsible for our current mess, with their facile alignment of any difficulties in Scotland with the Tories and implicitly the English. Unable to get off this track, their disastrous campaign this summer in the elections for the Scottish Parliament was largely based around how only Labour and not the SNP could properly protect Scotland against "London". This was particularly ludicrous, as well as being implicitly anti-English, because the Scottish Parliament is responsible for devolved matters and not for the reserved matters for which the UK government (and so, using Scottish Labour's and the SNP's lexicon, "London") is responsible. Scottish Labour have been trying to out-nationalist the nationalists, which is bound to fail.
The headline to the Telegraph article somewhat misrepresents the article itself. The article suggests that Scotland having a semi-detached relationship with the UK under "devolution max" may be the end point - although perhaps Mr Brogan thinks that that cannot reasonably be described as a union. For my own part, as explained in this article, I cannot see how devo max would work without a complete rewriting of the UK constitution. It would make Nick Clegg's current playground hobby of rejigging the House of Lords largely redundant, since presumably the House of Lords would become some kind of federal or confederal chamber.
I doubt the resolve of both the Labour and Conservative parties to see such an arrangement through, and indeed both parties seem incapable of even talking about it. We are likely instead to end up with some half-baked arrangement leading to independence in a generation. So the headline may end up being right.
Which raises the question: When is the Labour party's navel gazing on this going to end, and they start saying something useful? At the end of the day, the future of the union (or otherwise) is in their hands.
Monday, 31 October 2011
A referendum
More on Greece and the Eurozone in this article I am afraid, but it is the issue which is going to shape events in the next year or two to a far greater extent than a referendum on Scottish independence, which is relatively neutral to those in the remainder of the UK, or some of the other legal issues I cover on this blog.
It appears that I was adrift on the 60% haircut for private creditors of Greek debt. Under the package agreed by the Eurozone last week it is "only" to be 50%, for the moment. But the Greek government has now out of the blue decided to hold a referendum on that package, apparently to take place around January.
This is an odd development. With Greek acceptance of the deal now in issue, it puts in doubt whether the EFSF can send more funds to Greece next week as proposed: I doubt anyone really thinks Greece can pay off any of these new "loans", but a minimum of pretence needs to be maintained nonetheless. We were earlier told by the Greek government that they will run out of cash in the middle of November. How will Greece fund itself in the meantime?
It is difficult to read the intentions of the Greek government with this surprising announcement. Is it to give the Greek people a taste of semi-default in the November to January period, as without the EFSF money it will not be able to pay public sector wages or pensions in full during the period?
Or is the referendum an attempt to get a better deal out of the EU in the hope that the EFSF money will still be credited to them next week and that they can hold a gun to the German government's metaphorical head between then and January?
In either case the dangers are immense, and are four fold. First, if the current package is rejected in the referendum, unless the EU agrees to fund Greece with real money transfers it can only result in sovereign debt default, which would leave the ECB with deficits which will require further funds from Eurozone members to finance on the public side. This is because the current 50% "haircut" agreed in the current package only applies to the banks. It does not apply to public authority creditors, and in particular to the ECB which has been buying Greek bonds on the market to make cheaper finance available to Greece. To have Greece potentially defaulting on its ECB support is startling and must be causing apoplexy in Berlin.
Secondly, in the event of such default, the "haircut" for private creditors will not be 50% but probably near 100%. When taken with the call-in of hedging insurance on the debt, it will leave a significant number of banks and other financial institutions insolvent, requiring further taxpayer support, which may exceed the ability of some Eurozone countries to finance when the support also required for the ECB's losses is taken into account.
Thirdly, a referendum decision against the deal seems likely to result in Greece leaving the eurozone, if only so that it can print money to provide temporary relief on its deficits, at the expense of high inflation, and also devalue its currency.
Fourthly, this will lead to immense pressure on Italy, Spain, Portugal and Ireland. I cannot predict what that will lead to, but it feels most unpleasant. A clearing of the decks with respect to Eurozone debt, accompanied by a period of recession in Europe (including the UK), may sound attractive as a resolution until it comes time to live through it.
A referendum is no doubt good for democracy. But in terms of the Greece and Europe, this is either clever brinkmanship by the Greek government, or lunacy.
It appears that I was adrift on the 60% haircut for private creditors of Greek debt. Under the package agreed by the Eurozone last week it is "only" to be 50%, for the moment. But the Greek government has now out of the blue decided to hold a referendum on that package, apparently to take place around January.
This is an odd development. With Greek acceptance of the deal now in issue, it puts in doubt whether the EFSF can send more funds to Greece next week as proposed: I doubt anyone really thinks Greece can pay off any of these new "loans", but a minimum of pretence needs to be maintained nonetheless. We were earlier told by the Greek government that they will run out of cash in the middle of November. How will Greece fund itself in the meantime?
It is difficult to read the intentions of the Greek government with this surprising announcement. Is it to give the Greek people a taste of semi-default in the November to January period, as without the EFSF money it will not be able to pay public sector wages or pensions in full during the period?
Or is the referendum an attempt to get a better deal out of the EU in the hope that the EFSF money will still be credited to them next week and that they can hold a gun to the German government's metaphorical head between then and January?
In either case the dangers are immense, and are four fold. First, if the current package is rejected in the referendum, unless the EU agrees to fund Greece with real money transfers it can only result in sovereign debt default, which would leave the ECB with deficits which will require further funds from Eurozone members to finance on the public side. This is because the current 50% "haircut" agreed in the current package only applies to the banks. It does not apply to public authority creditors, and in particular to the ECB which has been buying Greek bonds on the market to make cheaper finance available to Greece. To have Greece potentially defaulting on its ECB support is startling and must be causing apoplexy in Berlin.
Secondly, in the event of such default, the "haircut" for private creditors will not be 50% but probably near 100%. When taken with the call-in of hedging insurance on the debt, it will leave a significant number of banks and other financial institutions insolvent, requiring further taxpayer support, which may exceed the ability of some Eurozone countries to finance when the support also required for the ECB's losses is taken into account.
Thirdly, a referendum decision against the deal seems likely to result in Greece leaving the eurozone, if only so that it can print money to provide temporary relief on its deficits, at the expense of high inflation, and also devalue its currency.
Fourthly, this will lead to immense pressure on Italy, Spain, Portugal and Ireland. I cannot predict what that will lead to, but it feels most unpleasant. A clearing of the decks with respect to Eurozone debt, accompanied by a period of recession in Europe (including the UK), may sound attractive as a resolution until it comes time to live through it.
A referendum is no doubt good for democracy. But in terms of the Greece and Europe, this is either clever brinkmanship by the Greek government, or lunacy.
Tuesday, 11 October 2011
Very dangerous times, Part 2
Things have move on a little since my article of 3rd October.
Word on the street is that the apparent indecision in the EU masks a decision that has been made: it has apparently been concluded that the Greek government is incapable of reducing its budget deficit unless it no longer has the money available to it to spend, so the next tranche of "loan" of €8bn will not be made. Instead Greece will be allowed to default by renouncing its sovereign debt to 40% of face value, which coincidentally is the price at which their debt is trading on the open market, and any further financial assistance given to Greece will be in the form of emergency transitional relief. Things are about to get a great deal worse for people in Greece.
The delays are apparently now to allow all reasonable effort to be put into ensuring that the banking system does not collapse once the formal announcement of the default is made (the default will force the banks to crystalise the losses on their balance sheets), by recapitalising the banks and by restructuring one of the most vulnerable, Dexia. Whether Greek domestic banks are capable of being saved (and any EFSF effort or money is to be put into this) is not clear, but it is banks in other parts of the Eurozone, and in particular French banks, which are now the main targets of this recapitalisation. The remaining battles within the Eurozone are about whether the recapitalisation of French banks is to be a French taxpayer responsibility, or an EFSF responsibility to which other Eurozone countries, and in particular Germany, will contribute.
The EU/ECB appear to have gone on the path of short term pain for (possible) long term gain, but the question is whether Greek default can be managed without causing contagion to Portugal, Italy and Spain. In any event, little attention seems to have been paid to David Cameron's preaching to the Eurozone, quite reasonably given that the UK is not a member.
Meanwhile the UK government and Bank of England have gone on the opposite path of short term gain for (possible) long term pain, by starting a new round of quantitative easing. Quantitative easing comprises in effect a compulsory taking of a proportion of all UK denominated liquidated assets, such as banks accounts, cash ISAs and bonds, for the relief of debt in the UK by inflation. It puts more money in the economy but punishes the prudent, which is not sustainable as a long term model. It is particularly bad for people's savings in pension funds and for annuity rates because of the reduction in bond yields. The point that may be in danger of being overlooked is that the economy needs savings, investment and trust as well as short-term liquidity in order to prosper in the long term.
So two very different approaches to how to deal with sovereign and private debt. Time will tell which is the more correct. I would not necessary bet on this being the UK government rather than the German government.
Word on the street is that the apparent indecision in the EU masks a decision that has been made: it has apparently been concluded that the Greek government is incapable of reducing its budget deficit unless it no longer has the money available to it to spend, so the next tranche of "loan" of €8bn will not be made. Instead Greece will be allowed to default by renouncing its sovereign debt to 40% of face value, which coincidentally is the price at which their debt is trading on the open market, and any further financial assistance given to Greece will be in the form of emergency transitional relief. Things are about to get a great deal worse for people in Greece.
The delays are apparently now to allow all reasonable effort to be put into ensuring that the banking system does not collapse once the formal announcement of the default is made (the default will force the banks to crystalise the losses on their balance sheets), by recapitalising the banks and by restructuring one of the most vulnerable, Dexia. Whether Greek domestic banks are capable of being saved (and any EFSF effort or money is to be put into this) is not clear, but it is banks in other parts of the Eurozone, and in particular French banks, which are now the main targets of this recapitalisation. The remaining battles within the Eurozone are about whether the recapitalisation of French banks is to be a French taxpayer responsibility, or an EFSF responsibility to which other Eurozone countries, and in particular Germany, will contribute.
The EU/ECB appear to have gone on the path of short term pain for (possible) long term gain, but the question is whether Greek default can be managed without causing contagion to Portugal, Italy and Spain. In any event, little attention seems to have been paid to David Cameron's preaching to the Eurozone, quite reasonably given that the UK is not a member.
Meanwhile the UK government and Bank of England have gone on the opposite path of short term gain for (possible) long term pain, by starting a new round of quantitative easing. Quantitative easing comprises in effect a compulsory taking of a proportion of all UK denominated liquidated assets, such as banks accounts, cash ISAs and bonds, for the relief of debt in the UK by inflation. It puts more money in the economy but punishes the prudent, which is not sustainable as a long term model. It is particularly bad for people's savings in pension funds and for annuity rates because of the reduction in bond yields. The point that may be in danger of being overlooked is that the economy needs savings, investment and trust as well as short-term liquidity in order to prosper in the long term.
So two very different approaches to how to deal with sovereign and private debt. Time will tell which is the more correct. I would not necessary bet on this being the UK government rather than the German government.
Monday, 3 October 2011
Very dangerous times
So Greece has admitted what everyone thought, namely that they have not met the formal conditions for the release of a further unrepayable "loan" of €8bn, and they are in talks with the IMF, ECB and EU/EFSF.
We really are at crunch time here. It is conventional to blame Germany for being unwilling to take the steps necessary to underwrite Greek debts, either by way of eurobonds or by agreeing to borrowing being undertaken by the ECB secured against the EFSF at lower rates than Greece could ever manage, in order to enable further "loans" to Greece which can never be paid off but which would stave off default towards the private (banking) sector. The argument, probably correctly, is that German citizens will be far worse off if they allow Greece to default, with a domino effect on Italy and Spain; and since they have the economy to more or less stand it, why not have Germany underwrite Greek debt? However German citizens seem to want a bit of Bundesbank style rectitude established, and who can blame them. Whilst Germany holds the key to the puzzle, let it not be forgotten that Greek governments are at root to blame for the crisis. They deliberately, profligately and, in terms of the eurozone treaty, illegally incurred excessive indebtedness and cooked their books in order to hide it.
We have something of a smaller scale going on in the UK. The Tory party were only for a short time, during the Thatcher years, the party of the middle classes. They have gone back to 1950/60s-style "Toff Toryism", which is a brand of Eton Toryism which is generally content if they can keep their own money at the same time as more or less managing the country effectively. Their strategy for dealing with national and private debt in the UK is clearly to inflate it away: that means transferring funds from those in the middle classes responsible enough to save for their future (including their retirement) to irresponsible people who instead of saving have rung up very large debts, including the UK government itself. So in contrast to the stance of the German government, there is no moral high ground from the UK government here.
The Tories will do as little towards the middle classes as they can get away with without losing too many of their votes - their calculations are tactical rather than moral. From that point of view Ed Milliband's wooing of the aspiring middle classes at the Labour Party conference is an interesting and probably wise development. Probably he means it only slightly more than does, say, David Cameron, but at least it would be done with a warmer smile (or at least, would be should Ed Balls cease to be the shadow Chancellor.)
We really are at crunch time here. It is conventional to blame Germany for being unwilling to take the steps necessary to underwrite Greek debts, either by way of eurobonds or by agreeing to borrowing being undertaken by the ECB secured against the EFSF at lower rates than Greece could ever manage, in order to enable further "loans" to Greece which can never be paid off but which would stave off default towards the private (banking) sector. The argument, probably correctly, is that German citizens will be far worse off if they allow Greece to default, with a domino effect on Italy and Spain; and since they have the economy to more or less stand it, why not have Germany underwrite Greek debt? However German citizens seem to want a bit of Bundesbank style rectitude established, and who can blame them. Whilst Germany holds the key to the puzzle, let it not be forgotten that Greek governments are at root to blame for the crisis. They deliberately, profligately and, in terms of the eurozone treaty, illegally incurred excessive indebtedness and cooked their books in order to hide it.
We have something of a smaller scale going on in the UK. The Tory party were only for a short time, during the Thatcher years, the party of the middle classes. They have gone back to 1950/60s-style "Toff Toryism", which is a brand of Eton Toryism which is generally content if they can keep their own money at the same time as more or less managing the country effectively. Their strategy for dealing with national and private debt in the UK is clearly to inflate it away: that means transferring funds from those in the middle classes responsible enough to save for their future (including their retirement) to irresponsible people who instead of saving have rung up very large debts, including the UK government itself. So in contrast to the stance of the German government, there is no moral high ground from the UK government here.
The Tories will do as little towards the middle classes as they can get away with without losing too many of their votes - their calculations are tactical rather than moral. From that point of view Ed Milliband's wooing of the aspiring middle classes at the Labour Party conference is an interesting and probably wise development. Probably he means it only slightly more than does, say, David Cameron, but at least it would be done with a warmer smile (or at least, would be should Ed Balls cease to be the shadow Chancellor.)
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