With Parliament having voted in favour of adopting English Votes for English Laws on 22 October, the Housing and Planning Bill became the first piece of legislation to be considered under the new process. Steffan Evans writes that the Speaker’s interpretation of the new Standing Orders during the Bill’s second reading will have a significant impact on how devolution will be debated in the future.
Under the new process, and before a Bill’s second reading, the Speaker shall certify whether a Bill relates exclusively to England or England and Wales. A clause or schedule is said to relate exclusively to England if it would be within the legislative competence of the Scottish Parliament, the National Assembly for Wales or the Northern Irish Assembly to make a corresponding provision through separate Acts. In making his decision, the Speaker should treat any clause or schedule that would only have a minor or consequential effect outside the area in question, as relating exclusively to that area.
This test could present the Speaker with some difficulty. Under the Barnett Formula, the funding received by the Northern Irish, Scottish and Welsh administrations is based upon the money spent by the UK government in England. The implementation of any legislation in England that could have a significant impact on the money spent in a particular area does therefore affect the devolved administrations. The question for the Speaker is whether this impact should constitute more than a minor or consequential effect. The Speaker seems to have concluded that it should not.
The Housing and Planning Bill is the first Bill considered under the new system, and proposes to extend the Right to Buy to cover housing association properties in England. Under the current scheme, tenants of local authority council homes in England have the right to purchase their homes at a discount worth up to £77,900 outside London and £103,900 in London. In contrast, the majority of housing association tenants are only eligible for discounts of between £9,000 and £16,000 under the Right to Acquire.
Devolved administrations have developed very different policies in this area. In Scotland, the Scottish Parliament has voted to scrap both the right to buy and the right to acquire from August 2016. In Wales the maximum discount available to tenants under the right to buy is £8,000, whilst under the right to acquire, tenants are eligible for a discount worth up to £16,000. The Welsh Ministers also have the power to suspend the right to buy in specific local authorities, and have done so in Carmarthenshire. Northern Ireland has adopted a different scheme, with tenants of both the Northern Ireland Housing Executive and housing associations being eligible for a discount up to £24,000.
The proposal to extend the right to buy clearly fulfilled the criteria of the test on whether a Bill related exclusively to England, but it could have substantial funding implications for the budgets of the devolved administrations. At present it is difficult to measure the Bill’s impact in this regard given the limited detail contained within it. But based on a deal struck between the National Housing Federation and the UK government on the policy, it would appear that housing associations will be fully compensated for any property sold under the extended right to buy.
The National Housing Federation has estimated that if every household eligible for a discount and able to afford a mortgage took up the offer to buy their housing association home, the policy could cost the government £11.6 billion. According to the Bill, the government will attempt to fund the policy through the sale of the most valuable local authority council properties.
This raises two key questions for the devolved administrations. Firstly, if more households take up the offer than expected, and the cost of the policy is greater than the money recouped from the sale of local authority council housing, will this lead to an increase in the housing budget in England, and thus an increase in the devolved administrations’ budgets? Alternatively if take up is lower than expected, and the money that is earned through the sale of council housing is greater than the cost of the policy, will this lead to a cut in the housing budget in England, and thus in the budgets of the devolved administrations?
Without more detail of the financial implications of the Bill, it is extremely difficult to work out what effect the legislation would have across the devolved nations. It would appear, however, that whilst extending the right to buy to housing associations would only come into force in England, the impact of the legislation could stretch to all four corners of Great Britain and Northern Ireland. The Speaker’s decision seems to have dismissed these concerns. He concluded that the provisions within the Bill relating to right to buy were exclusively English.
Was his decision correct? Any cut or an increase in the housing budget would appear to be a consequence of the provisions, not the expressed purpose of them. As such, the wording of the Standing Orders would suggest that these concerns should not have been considered by the Speaker and that his decision was therefore the correct one. This is unlikely to make his decision less controversial, especially if this becomes the precedent for future decisions.
Welsh, Scottish and Northern Irish MPs are likely to feel aggrieved that they will not have the same ability to scrutinise a Bill that could have significant financial implications for their respective nations, as their English counterparts. Whilst not disputing the Speaker’s decision, the SNP’s spokesperson Alan Brown did note during the second reading that he had some concerns that complications could arise from the classifications made under English Votes for English Laws. He also argued that extending the right to buy could lead to an increase in the amount of money claimed through housing benefit. This is currently administered at UK level but Brown argued that it should now be devolved to Scotland, as he believed that both Governments should face the risks or benefits of their respective housing policies.
Recent developments seem to lend support to some of the concerns raised by Professor Richard Wyn Jones of Cardiff University during his evidence to the Public Administration and Constitutional Affairs Committee. He warned that there was a risk that English Votes for English Laws could shift the sense of unfairness with the constitutional settlement from England to the remainder of the UK.
In this light, the Speaker’s narrow interpretation of the test within the Standing Orders is extremely significant. If these budgetary concerns continue to be over-looked in the future, the impact of this interpretation on the debate surrounding the United Kingdom’s constitutional settlement could well be more than merely minor and consequential.
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Featured image credit: George Rex CC BY-SA 2.0