Agricultural Sector (Wales) Bill (Attorney General for England and Wales, Ref) [2014] UKSC 43

The UK Attorney General referred the Agricultural Sector (Wales) Bill to the Supreme Court, questioning whether the Welsh Assembly could legislate on agricultural wages. The Court unanimously held the Bill related to agriculture, a devolved subject, and was within competence.

Facts

Following the UK Parliament’s abolition of the Agricultural Wages Board for England and Wales by section 72 of the Enterprise and Regulatory Reform Act 2013, the Welsh Assembly Government wished to retain a regulatory regime for agricultural wages in Wales. It passed the Agricultural Sector (Wales) Bill 2013, which established an Agricultural Advisory Panel for Wales with powers to prepare agricultural wages orders regulating minimum rates of remuneration, terms and conditions of employment, and holiday entitlement for agricultural workers.

The Attorney General for England and Wales referred the Bill to the Supreme Court under section 112(1) of the Government of Wales Act 2006 (GWA 2006), questioning whether it fell within the Assembly’s legislative competence under section 108 and Schedule 7.

Issues

The sole question was whether the Bill related to a subject listed in Part 1 of Schedule 7 to the GWA 2006. This gave rise to four sub-issues:

• The meaning of “Agriculture” in Schedule 7;
• Whether the purpose and effect of the Bill related to agriculture;
• Whether the Bill also related to non-devolved subjects (employment and industrial relations);
• Whether a Bill that relates to a devolved subject falls outside competence if it might also be characterised as relating to a non-devolved (but unexcepted) subject.

Arguments

Attorney General for England and Wales

The GWA 2006 had to be interpreted against the legislative background of the regulation of agricultural wages and the development of devolution. In reality, the Bill did not relate to agriculture but to employment and industrial relations, which were not devolved. The usual approach across the UK was to set minimum employment standards providing a level playing field for employers. The court should determine the “real” purpose and objective effect of the Bill.

Counsel General for Wales

The Bill related to agriculture, which was sufficient under section 108 and Schedule 7 to bring it within the Assembly’s legislative competence.

Judgment

Lord Reed and Lord Thomas (with whom Lord Neuberger, Lady Hale and Lord Kerr agreed) held that the Bill was within the Assembly’s competence.

Approach to interpretation

The Court applied the principles set out in Local Government Byelaws (Wales) Bill 2012, Martin v Most, and Imperial Tobacco v Lord Advocate: competence is determined by the particular rules in section 108 and Schedule 7; the statute must be interpreted like any other; and its purpose as a constitutional settlement may guide interpretation where necessary.

Meaning of “agriculture”

The Court rejected reliance on dictionary definitions in isolation. In context, “agriculture” designated the industry or economic activity of agriculture in all its aspects, including its business and constituent elements, since that was the subject-matter of legislative activity.

Purpose and effect

Under section 108(7), the question whether a provision “relates to” a listed subject is determined by reference to its purpose, having regard to its effect. The consultation document and the terms of the Bill demonstrated that its purpose was to regulate agricultural wages so as to support and protect the agricultural industry in Wales. The Bill therefore related to agriculture.

Relation to non-devolved subjects

The Court accepted that the Bill could also be characterised as relating to employment and industrial relations, neither of which is listed as devolved. However, neither was specified as an exception in Schedule 7. Certain specific aspects of employment (such as occupational pensions) were expressly excepted, which tended to suggest no general limitation on competence in respect of employment.

Overlap analysis

The Court rejected the Attorney General’s submission that the “real” characterisation should determine competence. Under the conferred powers model, competence depends on whether the Bill fairly and realistically satisfies section 108(4) and (7) and does not fall within a specified exception. It does not matter that the Bill might also be capable of classification as relating to a non-devolved subject. Accepting the Attorney General’s approach would in effect require the Court to add to the exceptions in Schedule 7 and would create an uncertain, unstable and unworkable scheme.

Ancillary matters

The Court declined to place weight on ministerial statements describing the GWA 2006 as “deepening” rather than “broadening” devolution, considering the phrase too general and ambiguous. It refused to admit pre-legislative correspondence between the Wales Office, the Welsh Government and Parliamentary Counsel, holding it inconsistent with transparent democratic process to rely on private inter-executive exchanges. The distribution of powers under the first and second phases of devolution did not restrict interpretation of the third phase.

Implications

The decision clarifies the interpretive approach to the conferred powers model under the GWA 2006. Where a Bill fairly and realistically relates to a subject listed in Schedule 7 and does not fall within an express exception, it is within the Assembly’s legislative competence, even if it might also be capable of characterisation as relating to a non-devolved subject.

The Court declined to imply broader exceptions than those Parliament expressly enacted. Specific exceptions (such as occupational pensions under “Economic development”) indicate that wider fields (such as employment generally) were not intended to be excluded.

The judgment is significant for the Welsh devolution settlement: it affirms that the Assembly’s competence within listed subjects is real and not to be narrowed by judicial characterisation, and it endorses a coherent, stable and workable approach to section 108. It also confirms interpretive limits: ambiguous ministerial statements and private pre-legislative correspondence between executives are not admissible aids.

The decision is important to legislators, practitioners advising on devolved competence, and those in industries (such as agriculture) affected by differing regulatory regimes across the UK. Its reasoning informs how overlaps between devolved and non-devolved subjects should be resolved under the conferred powers model, at least until the model is reformed.

Verdict: The Supreme Court unanimously held that the Agricultural Sector (Wales) Bill 2013 relates to agriculture within the meaning of section 108 and Schedule 7 to the Government of Wales Act 2006, and is therefore within the legislative competence of the National Assembly for Wales.

Source: Agricultural Sector (Wales) Bill (Attorney General for England and Wales, Ref) [2014] UKSC 43