What’s Whitehall’s beef with the Agricultural Bill?

As the second Assembly Bill gets referred to the UK Supreme Court Manon George looks at the latest legal wrangle to stall a Welsh law

It seems ironic that on the same day the Silk Commission reported that 62% of the people of Wales would like to see more powers given to the National Assembly for Wales, the Attorney General for England and Wales blocked the latest piece of Assembly legislation.

On 17 July 2013 the Assembly passed its eighth Bill since the 2011 referendum on primary law-making powers, the Agricultural Sector (Wales) Bill. The Bill, introduced as an Emergency Bill in response to the recent abolition of the Agricultural Wages Board for England and Wales (AWB), makes ‘provision in relation to the agricultural sector in Wales; and for connected purposes.’ The Assembly opposed the abolition of the AWB, so passed its own Bill providing for Welsh Ministers to be able to make Orders setting the terms and conditions for persons employed in agriculture in Wales and for the establishment of an Agricultural Advisory Panel for Wales to carry out functions in relation to the sector.

However, the Attorney General for England and Wales, Dominic Grieve QC, has referred the Bill to the Supreme Court to decide whether the Bill is within the Assembly’s legislative competence. This is only the second reference of its kind; not once has the UK Government referred a Scottish Bill or Act to the Supreme Court. Indeed, the first time a devolved Bill was referred to the judges by the UK Government was in relation to the Assembly’s first Bill: the Local Government Byelaws (Wales) Bill 2012, which was eventually found to be within the Assembly’s legislative competence.

Last December the UK Government announced its intention to abolish the Agricultural Wages Board for England and Wales through the Enterprise and Regulatory Reform Bill. The Agricultural Wages Board was responsible for setting wage rates and a variety of employment terms and conditions for agricultural employees in England and Wales. It had the power to issue an annual Order to set out minimum wages and terms and conditions. The Welsh Government “strongly disagreed” with the proposal to abolish the Board and considered it to be within the Assembly’s legislative powers. It therefore tabled a Legislative Consent Motion (LCM) in the Assembly on the provisions in the Enterprise and Regulatory Reform Bill relating to its abolition. The Assembly subsequently refused to consent to the motion. The Memorandum of Understanding records that the UK Government will not seek to legislate on devolved matters without the Assembly’s consent. However, in this case, the UK Government did not consider the matter to relate to a devolved matter so it did not see it necessary to seek the Assembly’s consent. The Assembly’s opposition to the abolition of the Agricultural Wages Board was therefore ignored and the Enterprise and Regulatory Reform Bill soon received Royal Assent and became law in late April.

The Assembly’s Agricultural Sector (Wales) Bill therefore seeks to preserve the level of statutory protection for workers prescribed in those Orders by allowing the Welsh Ministers power to make future Agricultural Wages Orders and establishing the Agricultural Advisory Panel to replace the functions of the Agricultural Wages Board.  However, according to the Welsh Government, its policy aim “is not to replicate the existing Agricultural Wages Board for England and Wales but to create a modern and effective mechanism for facilitating the Welsh Government’s aspirations for the sector.” Nevertheless, the Attorney General for England and Wales, Dominic Grieve, is “not convinced that the Bill is within the National Assembly’s competence.”

Before the Bill was introduced, the Assembly’s Presiding Officer, Rosemary Butler, also raised concerns as to the legality of the Bill in a briefing note to all Assembly Members. The test of whether a Bill or a provision of a Bill is within the powers of the Assembly is whether it relates to one or more of the subjects listed in Schedule 7 to the Government of Wales Act 2006 (GOWA 2006). This question is determined ‘by reference to the purpose of the provision, having regard (among other things) to its effect in all the circumstances’ (s.108(7) of GOWA 2006). According to the Supreme Court Justices in Imperial Tobacco v Lord Advocate [2012] UKSC 61, the equivalent provision in the Scotland Act 1998 is intended to be a generous settlement of legislative authority.

So, the big question is, what is the purpose of the Agricultural Sector (Wales) Bill? Is it, as the Presiding Officer asked, “to ensure a successful agricultural sector or to safeguard the wages and conditions of agricultural workers?’’

The Welsh Government believes that the Bill relates to Agriculture, a devolved subject in Schedule 7 to GOWA 2006. The First Minister, Carwyn Jones, told the Assembly’s Constitutional and Legislative Affairs Committee that “it falls within the competence of the National Assembly because it is an agricultural matter, as it is in Scotland.” The UK Government, on the other hand, argues that it relates to the non-devolved area of employment law. There is no exception relevant to agricultural wages set out in Schedule 7, but neither is it a specifically devolved subject, so by implication it is assumed to be reserved to the UK Parliament. However, it is worth noting that the Agricultural Wages (Scotland) Act 1949 was specifically included in the legislative competence of the Scottish Parliament by means of an exception to the general reserved area of ‘employment.’ The subject of the Assembly’s Agricultural Sector Bill would therefore be within the Scottish Parliament’s competence.

It will be up to the Justices of the Supreme Court to decide whether the subject matter of the Agricultural Sector (Wales) Bill relates to a devolved area in Wales or not. Such a challenge of legislative subject matter competence is unprecedented in Wales. Though the Byelaws judgment helped clarify what is meant by ‘incidental to, consequential on’ it does little to help us in this latest case. In the Byelaws case it was decided that the main purpose of the Bill was to streamline and modernise the procedure for making byelaws and the prohibited removal of a UK Minister of the Crown function was simply ‘incidental to and consequential on’ the main purpose and therefore within the Assembly’s legislative competence. For my analysis of the case see here.

We can look to cases involving Scottish legislation for insight as to how the Supreme Court might interpret the Assembly’s legislative powers, bearing in mind that section 154 of GOWA 2006 also provides that ‘any provision of an Act of the Assembly, or a Bill for such an Act, which could be read in such a way as to be outside the Assembly’s legislative competence is to be read as narrowly as is required for it to be within competence or within the powers, if such a reading is possible, and is to have effect accordingly.’

In Martin and Miller v Lord Advocate [2010] UKSC 10 the Supreme Court had its first opportunity of considering the extent of powers of a devolved legislature, in a case brought, not by the UK Government, but by individuals. Here, the Justices of the Supreme Court considered whether an Act of the Scottish Parliament was within the devolved legislative powers of that Parliament or whether it related to a reserved matter; they were split by three to two as to whether it was or not. The majority, holding that the Act was valid, decided that a broad-brush approach should be applied, meaning that the court should look at the general purpose of the legislative provision. They considered that if the overall purpose of the provision related to a devolved matter, then it should be found to be within the devolved Parliament’s competence.

The same test was applied in the Supreme Court case Imperial Tobacco v Lord Advocate, in another private party challenged.  The Justices found the Tobacco and Primary Medical Services (Scotland) Act 2010 which prohibits the display of tobacco products by vendors and prohibits tobacco vending machines to be within the Scottish Parliament’s legislative powers. The Court held that the main purpose of the Bill related to the promotion of public health and not the reserved matters of ‘the sale and supply of goods to consumers’ and ‘product safety.’ In coming to their conclusion, the judges observed that the phrase ‘relates to’ “indicates something more than a loose or consequential connection.” In the case of the Agricultural Sector Bill, are ‘employment terms and conditions for agricultural workers’ sufficiently connected to a devolved matter to be within competence? Or are they more than just ‘loosely’ related to a reserved matter?

In considering whether the subject of the Agricultural Sector Bill relates to a reserved matter, bearing in mind that there is not actually a list of reserved matters in Wales, the Supreme Court may wish to consider what the judges in the Imperial Tobacco case considered to be the ‘common theme’ of reserved matters. According to Lord Hope “matters in which the UK as a whole has an interest should continue to be the responsibility of the UK Parliament at Westminster.” In the case of agricultural wages, it may be difficult to argue that this is something in which the UK as a whole should retain an interest; after all, Scotland and Northern Ireland have their own Agricultural Wages Board.  Also, whether it actually relates to a reserved matter is a difficult question to answer in the Assembly’s case because, as I mentioned, there is no list of reserved matters. The deciding question therefore is likely to be, if Wales were to adopt a reserved powers model, would the subject of agricultural wages be an exception to the reserved matter ‘employment’ as is the case in Scotland?

Ultimately, the judges must identify the subject matter of the challenged legislation and then decide whether it falls within or outside the subject matters over which the legislature has authority. However, under the current Welsh devolution model, there is still considerable room for debate as to whether something falls within competence or not. The powers of the National Assembly are defined very differently from those of the Scottish Parliament and the Northern Ireland Assembly. In Wales, the Assembly has no power to legislate except in relation to the specific conferred areas of competence – a ‘conferred powers model of devolution’. In Scotland and Northern Ireland, on the other hand, everything is devolved, unless it is specifically reserved to the UK – a ‘reserved powers model of devolution’.

As I mentioned above, under the Welsh ‘conferred powers model’ there is no composite list of matters reserved to Westminster, just a list of matters on which the Assembly can legislate, and a list of exceptions to those matters. As a consequence, there are a number of subjects which are not mentioned at all, resulting in ambiguity and uncertainty as to whether something is devolved or not. For this reason, it is often difficult to judge whether something falls within or outside the subject matters over which the Assembly has legislative powers. This is precisely the case with agricultural wages: it is not an exception to the Assembly’s conferred legislative authority, but neither is there anything which states that it is a reserved matter (or an exception to a reserved matter as is the case in Scotland). Under the ‘reserved powers model’, on the other hand (as Emyr Lewis explains here) ‘there can be no subjects in limbo under this model, because the default position is that all subjects are included, unless expressly excluded.’ Also, as I mentioned earlier, the UK Government has never challenged a devolved piece of legislation under this model of devolution.

The Attorney General hopes “that this reference will give us clarity in respect of important questions about the breadth of the National Assembly’s competence.” However, it is doubtful whether we can ever achieve clarity on the Assembly’s powers without a move to a reserved powers model of devolution. It was clear from the public gallery of the Supreme Court last Autumn that even the best legal minds in the UK are yet to grasp the Welsh devolution arrangements. As Counsel General for Wales, Theodore Huckle QC, observed in the Byelaws case ‘it took five Supreme Court Justices, the Law Officers of England, Wales and Northern Ireland, several of the UK’s leading constitutional lawyers and a great many officials across three Governments to decide it was lawful to make minor changes to the way Welsh local councils deal with things like dog-fouling and loitering in public lavatories.’ We can now only wait and see what the Supreme Court will make of the latest ‘devolution issue’ case involving Wales and who they believe has the power decide the employment terms and conditions of Welsh farmers.

This is an amended version of the article and was updated on Friday 30th August

Manon George is a PhD candidate at the Wales Governance Centre and lecturer at Cardiff Law School

8 thoughts on “What’s Whitehall’s beef with the Agricultural Bill?

  1. Excellent survey of both the details and key themes Manon. Very helpful indeed. Thank you.

    As you say, a fascinating legal conundrum revolving around the question of when an agricultural matter is not an agricultural matter, when there is no statute or provision saying that a given agricultural matter is to be considered something else (the absence in the GOWA of exceptions and reservations). Looking at it the other way around, it is easy to say that ’employment law’ is not devolved but it is a lot harder to prove it in the context of the Welsh settlement. What is ’employment law’ and when does a statutory provision become employment law? And even if you can define particular parts of it, can you say that ‘all’ employment law is not devolved? ‘All’? If the answer is no, your absolute is lost and you’re into the realms of speculative intention of the original legislation.

    Where does it say in the Welsh constitution that the National Assembly can’t legislate on Agricultural workers wages and ts&cs… nowhere. The Welsh constitution only says the NA can legislate on Agricultural matters. Define ‘Agricultural matters’…

    Once again though, the UK Government is asking jurisprudence to do the job of politicians (at unbelievable cost I imagine). This is an avalanche they can’t possibly hope to hold back beyond Silk…

  2. This simply will not suffice as a legislative process. It is not sustainable for the legal officer in Westminster to operate a constitutional veto every time there is either confusion over the powers involved or the Assembly decides on a different policy path with which he disagrees. The solution to this, as has been suggested above, is to adopt the ‘reserved powers’ model rather than the ‘conferred powers’ model.

  3. While it may seem perverse to say so, in some respects this is a welcome development.

    In the first place, unlike the Byelaws case, it concerns an issue where there is a genuine difference of policy between Cardiff and London. This challenge therefore has less of the appearance of turf warfare than did the former.

    Secondly, it forces a proper forensic discussion on a central issue about what is and is not within the legislative competence of the Assembly, which has tended to be fudged by a rather dismissive “well that’s not a devolved matter”.

    As Manon points out in her excellent article, the architecture of the Assembly’s law making powers is such that there is an excluded middle – those things which are in limbo, neither expressly within nor expressly outside the Assembly’s law-making powers.

    The natural interpretation of the relevant parts of the Government of Wales Act 2006 is that an Act of the Assembly can cover those things, provided it relates to matters which are expressly within the Assembly’s powers. So in this case, employment of agricultural workers relates to agricluture. The fact that it relates to employment as well is irrelevant, since employment is not excluded.

    For the Attorney General to succeed, he would have to show that this interpretation is incorrect, or at least inadequate, because when you look at the purpose of the relevant parts of the Bill, it isn’t really about Agriculture, but about something else, employment. In other words, it doesn’t “relate to” Agriculture at all, or not enough. It will be interesting to see how the case is put.

    If the Attorney General succeeds, the consequences for the Assembly could be quite stark. Without being alarmist, it could call into question the validity of provisions in other Acts passed by the Assembly to date, where they stray into the excluded middle, but are not saved by being incidental to some other provision. (We should not forget that it is open to anyone to challenge the validity of Acts of the Assembly in legal proceedings, on the basis that they are outside the Assembly’s law-making powers). Of equal concern is the likelihood that this would increase the current uncertainty of Welsh Government and civil society as to how to legislate in order to achieve policy goals.

    On the other hand, if the Supreme Court upholds the Bill (or those parts challenged by the Attorney General) it creates the mirror-image problem. It opens a Pandora’s box of legislative possibilities which might allow the Assembly to make laws touching on the armed forces or immigration (neither of which are expressly excluded), provided they relate to something within the Assembly’s legislative competence.

    One answer to the point made previous paragraph is: “But that would be absurd. Parliament cannot possibly have intended that”. It will be interesting to see whether the Supreme Court grasps this particular nettle by setting some kind of constitutional bedrock beyond what is in the 2006 Act. After all, from a UK perspective, it seems intuitively correct that an Act of the Assembly should not be able to undermine certain matters considered to be fundamental.

    One of the issues which the Attorney General will need to face is that raised by a provision of the Government of Wales Act 2006 which makes express reference to the limbo areas.

    Section 114(1)(a) gives the Secretary of State the power to intervene to block any Assembly Bill (without going to the Supreme Court) if he has reasonable grounds to believe that it “would have an adverse effect on any matter which is not listed under any of the headings in Part 1 of Schedule 7 (or falls within any of the exceptions specified in that Part of that Schedule)”. He can do this at any time within four weeks of passing the Bill, or within four weeks of the Supreme Court deciding whether the Bill is within the legislative competence of the Assembly.

    This section poses the following question: If limbo areas such as employment are automatically outside the Assembly’s legislative competence, why does this provision exist? It envisages a situation where a Bill passed by the Assembly, and which is within its legislative competence (because the Supreme Court has so determined), can nevertheless be blocked by executive fiat because it has an adverse impact on a limbo area. If limbo areas are in fact excluded from the Assembly’s legislative competence, the Supreme Court would presumably have struck down those parts of any Bill which deal with them. This provision seems designed specifically to deal with the question of the excluded middle.

    It may be that the answer to this argument is that this section is only meant to apply where the reference to limbo areas in an Assembly Act is “incidental” to another provision which is within competence. But if this is the case, then there is no distinction, in terms of legal effect, between excluded and limbo areas. So why does the 2006 Act make a distinction?

    Whatever the outcome, it is to be hoped that having these issues discussed at the highest judicial level in the UK will help make some progress in resolving some of the problems raised by the architecture of the 2006 Act, and in helping the move towards a more settled, reserved powers model for Wales.

  4. Emyr 3.46

    Thanks for your detailed post. Extremely interesting.

    I am no lawyer, but even to me this seems to be a far more important ruling than the last one. At it’s heart is the distinction between the letter of the 2006 GOWA and the spirit. The ‘letter’ allows for any number of things to be legislated on by the NAW that perhaps the ‘spirit’ did not intend. But does the ‘spirit’ have a legal personality? Perhaps by deduction, or even heaven forbid by induction, it does. But does it have a moral personality? And is not the moral personality of law by necessity a political question? A democratic question?

    Whatever the court decides, I suspect they will do it knowing that they have been asked to make a fundamentally political decision. That decision will be endorsed or amended in short course by the political process and statute I am quite sure. Courts do not ultimately decide political questions, and neither should they be asked to.

    Your point about the SoS’s ‘veto’ is an interesting one. Surely the honourable thing to do for the UK Government (since they are surely aware of the intractable flaws in the settlement and that ultimately the Court can only settle this on technical grounds and not moral ones) would be to veto this law in the short term and settle the outcome through the political process (Silk or otherwise)?

    In the absence of the veto I understand that referral would be the only option open to them if they seek to avoid short-term ‘disruption’ whilst getting their statutory house in order. But they have another option don’t they? A more honest one?

  5. Phil

    You may not be a lawyer, but you understand very well how the law dissolves into politics on occasion.

    You raise an interesting point as to why the UK Government didn’t simply use the power of veto.

    One reason might be because, in order to do so they would need to show reasonable grounds for believing that the Bill would have “an adverse effect on” employment law. It’s difficult to see what the adverse effect might be, let alone the reasonable grounds for believing that it existed. If they proceeded without reasonable grounds, then they would be open to challenge by way of judcial review from the Welsh Government or, for instance, a Trade Union.

    Also, it may be that they considered it politically wiser to ask the Supreme Court to make a ruling than to use an executive power of veto.

  6. Dewi:

    It’s too early to tell, but if we take the Byelaws case (referred on 31st July last year) as a yardstick, there should be a decision before Christmas.

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