Ministers have been accused of seeking to use controversial “Henry VIII powers” to enable them to impose taxation without the consent of Parliament once Britain has left the EU.
A House of Lords committee said measures in the Government’s flagship EU (Withdrawal) Bill breached fundamental constitutional principles dating back to the Glorious Revolution of 1688.
In a hard-hitting report, the committee said it “should not be possible” for ministers to impose taxes or “tax-like charges” through regulation.
It comes after the Bill – which transfers thousands of EU laws and regulations onto the UK Statute Book – cleared its first hurdle in the upper chamber when it was given an unopposed second reading on Wednesday.
It sets the stage for the real parliamentary battle in the weeks ahead when peers – who are overwhelmingly opposed to Brexit – are expected to use the committee stage to make a series of major amendments.
In its report, the Delegated Powers and Regulatory Reform Committee said the legislation as it stood gave “excessively wide law-making powers” to ministers.
It said the so-called Henry VIII powers in the Bill – which allow ministers to amend EU rules as they are transferred into EU law – were “wider than we have ever seen”.
Once the Bill became law ministers would then be able to amend it – or even repeal it altogether – by regulation, something the committee described as “wholly unacceptable”.
In particular the peers highlighted Schedule 4 of the Bill enabling ministers at Westminster and in the devolved administrations to authorise public bodies to impose “fees and other charges” in order to cover their costs through the use of regulation without any parliamentary scrutiny.
The accompanying delegated powers memorandum refers to the creation of “tax-like charges”.
The report said: “A ‘tax-like charge’ means a tax. Not only can ministers tax, ministers can confer powers on public authorities to tax. Indeed, they can do so in tertiary legislation that has no parliamentary scrutiny whatsoever.
“Taxation, including ‘tax-like charges’, should not be possible in fees and charges regulations made under Schedule 4. Taxation should be a matter for Parliament, a principle enshrined in Article 4 of the Bill of Rights 1688.”
As an example, the committee suggested ministers could authorise a UK successor body to the European Medicines Agency to levy charges on pharmaceutical companies – or even the general public – in relation to the costs of establishing a new regulatory regime for medicines.
The committee chairman Lord Blencathra – a former Conservative chief whip in the Commons – said: “The committee had serious concerns about the proposal that new tax-like charges could be introduced by ministers, or even public authorities, without any parliamentary scrutiny at all.
“Tax-like charges are taxes and it is a fundamental principle of our constitution going back to 1688 that taxation is a matter for Parliament.”