On parliamentary sovereignty

111 Members of Parliament vote to take matters out of their own hands.

Yesterday, 111 Members of Parliament voted against parliamentary sovereignty. In speech after speech, and in the voting lobby afterwards, these MPs -- including 80 so-called Conservatives -- sent the clear signal that they thought Parliament was not competent to legislate on an important matter and so it should be left to others, by means of a referendum.

The foregoing paragraph is not altogether facetious. There is a great deal of muddled thinking about "parliamentary sovereignty" and part of this comes from it usually not being clear what this phrase actually means.

To begin with, the concept of sovereignty does not cover all the activities of Parliament. Resolutions of either House have no "sovereign" effect outside of the Palace of Westminster. Statutory Instruments passed by both Houses can be and sometimes are quashed by the Courts. Parliamentary debates and select committee reports are also not, in any meaningful way, "sovereign".

In fact the "sovereignty" goes to one specific activity of Parliament: the passing of primary legislation as "Acts of Parliament". But in strict constitutionalist terms, the Acts have this effect not because Parliament has passed a Bill but because they have been signed on behalf of the Crown (though not personally by the Queen).

And even then, these Acts are not always "sovereign". The Courts -- though rarely -- can disapply primary legislation when it conflicts with other legislation, perhaps most notably the Merchant Shipping Act 1988 which conflicted with the European Communities Act 1972. Some Scottish lawyers (including judges) have plausibly contended that the terms of the Act of Union 1707 mean that the doctrine of parliamentary sovereignty is not part of Scottish law. Moreover, one English Court of Appeal judge, Sir John Laws, has opined that there are fundamental common law rights which cannot be infringed even by primary legislation; 400 years ago another judge, Sir Edward Coke, said the same thing.

The correct position is subtle. As the recently retired Court of Appeal judge Sir Stephen Sedley points out in his excellent collection of essays (reviewed here), sovereignty actually lies in the combination of the "Crown in Parliament" and the "Crown in the Courts". Primary legislation only has the effect of "sovereignty" to the extent to which that is allowed by the Courts. Some lawyers would go so far to say that, in technical terms, "sovereignty of parliament" is merely a rule of statutory interpretation.

One does not have to go this far to see that "sovereignty of parliament" is a little more complicated than certain MPs seem to realise. Of course, one does not expect a certain type of MP to understand this: after all, those who call for the Human Rights Act 1998 to be repealed clearly do not grasp that this would simply mean an enlarged role for the European Court of Human Rights in Strasbourg.

If MPs genuinely do not want the United Kingdom to subject to European Union law, then it is open to them to repeal the European Communities Act 1972 and related legislation. The solution to their apparent problem is entirely in their own hands. Without the 1972 Act, the Courts will have no legal basis to implement EU law. But the MPs won't do that, of course. It would mean taking parliamentary sovereignty seriously.

David Allen Green is legal correspondent of the New Statesman. He also writes the Jack of Kent blog and for The Lawyer.

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/