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The European Union Act 2011
The European Union Bill (see our January 2011 Update) received Royal Assent on 19 July 2011, bringing the European Union Act 2011 ('the Act') into force. The Act promises a referendum whenever there is a potential European Union treaty change which transfers powers from the UK Government to the EU. At first glance, this may seem to indicate a major shift in relations between the UK and Europe. However, there are a number of factors which may mean that the Act has little actual impact.
Firstly, the assessment of whether power is transferred for the purposes of the Act rests with the relevant Government Minister. Although the Act offers some guidance on making this assessment (by stating when there may be a transfer of powers), the decision ultimately rests with the Minister. The Minister's decision may be challenged by judicial review in court. Although opponents of treaty change may view judicial review of any decision not to hold a referendum as an attractive tactic to delay UK ratification of treaty change, it may be difficult in practice to succeed in such a challenge. There may be even less scope for proponents of treaty change to overturn a ministerial decision that powers will be transferred to the EU.
Secondly, it is of note that no referendum is necessary when a new Member State joins the EU. Although this would not involve a transfer of powers, it could dilute the UK's position in the European Union, yet would not trigger a referendum. Finally, the Act does not address the fact that it is often the decisions of the EU courts, rather than treaty amendments, which have the perceived effect of enhancing the powers of the EU.
The Act also includes a somewhat controversial 'Sovereignty Clause', which declares that EU law is applicable in the UK only by virtue of Acts of Parliament, in particular the European Communities Act 1972. The purpose of the clause is to address euro-sceptic concerns about the principle of supremacy of EU law, which is perceived to conflict with the traditional UK doctrine of Parliamentary sovereignty. For the moment, the declaratory nature of the clause means that it will have little if any effect on the existing relationship between EU law and UK law. Under the European Communities Act 1972, the UK agreed to incorporate EU law (including EU legal principles) into UK domestic law. Absent a repeal of the 1972 Act, the principle of the supremacy of EU law will continue to take precedence over any conflicting UK law, including the sovereignty clause in the 2011 Act.
The significant limitation on the need to hold a referendum and the negligible effect of the Act's sovereignty clause have led to assertions that the Act is merely a publicity exercise rather than a serious attempt to rein in the EU's powers. Only time will tell whether these assertions prove to be true.
Click here to read the European Union Act 2011.
Removing the Royal Prerogative
The Fixed Term Parliament Act 2011 ("Act") received royal assent on 15 September 2011. Fixed term parliaments were part of the Conservative-Liberal Democrat coalition agreement drawn up after the 2010 general election. The Act introduced five year fixed term parliaments at Westminster. Prior to this Act, the dissolution of Parliament was a prerogative of the crown, which in practice meant the Prime Minister had de facto power to dissolve parliament, provided this was within five years from the last general election.
Elections are now to take place on the first Thursday in May of the fifth year after the previous election, starting with 7 May 2015. Parliament automatically dissolves 17 working days prior to the polling day. The Prime Minister, however, by way of Statutory Instrument has the power to provide that the polling day can be held up to two months after that date.
The Act provides two ways in which a general election can be held before the end of this five year period. Firstly, the House of Commons, by a two-thirds majority, may pass a motion that there should be a parliamentary election. Secondly, an election will take place where the House of Commons passes a vote of no confidence in the Government and a new Government cannot be formed within fourteen days.
The Act is not only an evolution of the UK's loosely constructed constitution but removes a tactical political advantage previously available to Prime Ministers. In practice, Prime Ministers would generally dissolve Parliament early at a time when it was likely that their government would be re-elected.
Click here to read the Fixed Term Parliament Act 2011.
Alcohol Etc (Scotland) Act 2010
Alcohol pricing continues to be a hot topic both north and south of the border. The Alcohol Etc (Scotland) Act 2010 ("the 2010 Act") came into force on 1 October 2011 amending the Licensing (Scotland) Act 2005 ("2005 Act"). The 2010 Act introduced minimum pricing in respect of packages containing two or more alcohol products. The price of such packages must be equal to or greater than the sum of prices at which each individual alcoholic product is available for sale. It also prohibits the supply of free alcohol or at a reduced price on the purchase of one or more drinks, such as multi-buy offers, three for the price of two and buy one get one free. Supermarkets have reacted to the change by offering to supply over the internet from their bases in England.
On the 1 November 2011, the Scottish Government re-introduced a bill on minimum alcohol pricing. A similar proposal was rejected by MSPs during the 2010 Act's passage through the Scottish Parliament. A unit price for the current proposals will not be announced until next year (the previous proposals set a minimum price of 45p per unit). Although opposition parties voted against the previous bill on the grounds of unfairness to responsible drinkers and potential incompatibility with competition rules, the SNP's majority makes the new bill much more likely to become law.
Similar proposals have been announced in England and Wales, with parallel aims to curb binge drinking. There is a stark contrast in approach to pricing between the Scottish Parliament and the Home Office, with the former adopting minimum pricing and the latter intending merely to ban below cost selling. The Home Office proposals include minimum pricing at 21p per unit of beer and 28p per unit of spirits, which research has suggested would not affect most current supermarket deals.
Concern has been raised that minimum unit prices may breach EU law, as they could potentially favour domestic products against competing imports. Placing a minimum price on alcohol from countries with a lower cost base may place them at a competitive disadvantage. However, discriminatory barriers to trade, if proportionate, can be justified under the public health derogation. The contrast between the proposals put forward in Scotland and England, where one sets a minimum price and the other bans below cost selling, may raise questions about the proportionality of the Scottish approach.
Click here to read the Alcohol Etc (Scotland) Act 2010.
Postal Exchange
The structure and function of the Royal Mail as we know it is set for some major changes. The Postal Services Act 2011 received Royal Assent on 13 June 2011 and introduces a radical shake up to the ownership and regulation of the Royal Mail. The main provisions of the Act relate to the privatisation and restructuring of the Royal Mail, the liability for Royal Mail's pension deficit and regulatory changes.
In terms of restructuring, the new Act allows for the privatisation of Royal Mail on the condition that at least 10% of Royal Mail shares are transferred to employees. Post Office Ltd, which manages the network of post offices is excluded from privatisation but may be transferred to a mutual organisation. The government is expected to take on the historic pensions deficit of the Royal Mail. The government have also agreed to take on the mantle of helping to improve the Royal Mail Group's financial balance sheet. Each of these government proposals, aimed at making the Royal Mail a more attractive prospect for potential buyers, are subject to prior clearance by the European Commission under European State Aid rules. It is likely that the application for State Aid will generate intense lobbying of the Commission by Royal Mail's competitors on the grounds that such support from the government will give the Royal Mail group an unfair advantage. It is expected that the State Aid application will receive positive clearance in due course.
The Act also transferred all regulatory arrangements in relation to postal services from Postcomm to Ofcom. This transfer took place on 1 October 2011. In carrying out its functions as regulator the key duty to which Ofcom is subject is to carry out their functions in relation to postal services in a way that the consider will secure the provision of a universal postal service. The must have regard to the need for a universal service to be financially sustainable and efficient.
Click here to read the Postal Services Act 2011.
Dramatic Changes to the NHS
The much debated Health and Social Care Bill was introduced into Parliament on 19 January 2011. Following completion of its passage through the House of Commons, and a "pause" for re-consideration over the summer is now going through the House of Lords (completing its fourteenth committee session on 19 December 2011). The aims of the Bill are to create increased patient choice and a reduce theNHS' administrative costs. The Bill has received a mixed response and has faced criticism from those involved in the provision of health and social care.
The Bill applies only to England. It seeks to change the arrangements for the commissioning of NHS services through the introduction of an NHS Commissioning Board which will commission certain services nationally and clinical commissioning groups (first referred to as GP consortia) responsible for commissioning locally. Concerns have been expressed over the accountability and transparency of such a system and suggestions that there should be wider clinical involvement in the decision making. Further, it has been suggested that such localised commissioning may lead to fragmentation and to variation in terms of access to and the level of services provided to patients, depending on where they live.
Monitor is to continue as economic regulator of foundation trusts but its role will be extended to all providers of health care serices to the NHS and it will have a responsibility to prevent anti-competitive behaviour in the NHS. The introduction of further of competition within the NHS has led to suggestions, in particular from health unions, that the delivery of integrated care for patients will be threatened. NHS healthcare providers will be licensed by Monitor which is in the process of consulting on the conditions to be applied through the licensing regime. Responses are due by 23 January 2012
The Bill also will remove the cap on how much NHS foundation trusts can earn from private patients resulting in a perceived risk that space in NHS hospitals will increasingly be filled by private patients.
The Bill has a long way to go before Royal Assent but one thing is certain: there will be plenty in the press about the Bill over the next few months.
Click here to follow the progress of the Health and Social Care Bill.
Private Members' Bills
The 2010-2011 Parliamentary Session is marked by a flurry of unusual Private Members' Bills. One bill focuses on questioning the UK's links with the European Convention on Human Rights (European Convention on Human Rights (Withdrawal) Bill), while no fewer than six question the UK's position within the European Union. Another unusual bill is the Taxation Freedom Day Bill which seeks an annual tax-free day to highlight the contribution individuals make from their income. No doubt in light of our increasingly snowy winters, the Snow Clearance Bill seeks to provide immunity from prosecution or civil action for persons who have removed or attempted to remove snow from public places.
Although such Bills may raise controversial or novel political questions, fewer than five Private Members' Bills have received Royal Assent each year for the past five years. The limited debating time afforded to Private Members' Bills provides some explanation as to why only a minority become law. While this may suggest that Private Members' Bills are a largely fruitless pursuit, their true potential lies in the public debate and publicity which they can create. This in turn may indirectly affect future legislation. Therefore, for instance, although a Private Members' Bill calling for the UK to leave the European Union will be unlikely to become law, its objective may find public support which, in turn could alter the Government's general policy on the European Union.
Click here to view a list of the Bills currently before Parliament.
Contact Us
For more information on our services, please contact:
Michael Dean
Partner
0141 271 5730
michael.dean@mms.co.uk
Catriona Munro
Partner
0141 271 7121
catriona.munro@mms.co.uk
This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.
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