Part 1: Constitutional Arrangements Chapter 3: Legislative competence Schedule 2: New Schedule 7B to the Government of Wales Act 2006
New section 108A(2)(d) (as inserted by section 3(1) of the Act) refers to Parts 1 and 2 of Schedule 7B in creating one of the tests of competence for Assembly legislation. Part 1 sets out the general restrictions on the Assembly's legislative competence and Part 2 sets out general exceptions to those restrictions. Section 3(2) provides that this Schedule, together with Schedule 7A, replaces Schedule 7 to GoWA.
	Schedule 7B is part of a separate legislative competence test from Schedule 7A. Schedule 7A lists the reserved matters and thus is part of the section 108A(2)(c) test by detailing the subjects that an Assembly Act provision can and cannot "relate to" (when applying the section 108A(6) purpose test). However, even where an Assembly Act provision satisfies that test in section 108A(2)(c) , by not relating to a reserved matter set out in Schedule 7A, it may nevertheless be outside competence because of the section 108A(2)(d) test, by breaching the restrictions in Part 1 of Schedule 7B, which are themselves qualified by the exceptions in Part 2 of Schedule 7B.
	Paragraph 1 of Schedule 7B prevents an Assembly Act provision from modifying the law on reserved matters. The law on reserved matters is defined in paragraph 1(2) essentially as any UK Parliament enactment or any rule of common law, the subject matter of which is a reserved matter. The reference to enactments is not limited to the enactments listed by name in Schedule 7A; it therefore includes all the law (enactments and common law) about a reserved matter.
	Whilst Schedule 7A is intended to set the parameters of future Assembly Acts in terms of reserved matters about which it cannot legislate, the restrictions in paragraphs 1 and 2 of Schedule 7B are intended to provide a separate form of protection for the existing legislation and common law which has a reserved matter as its subject matter.
	Whilst the purpose of an Assembly Act provision may not be reserved (meaning such provision does not fall foul of section 108A(2)(c) and Schedule 7A), it may nevertheless modify the law on reserved matters, for example to enforce or otherwise give effect to that provision.
	Paragraph 2 incorporates an exception to paragraph 1, which is in very similar terms to the exception in new section 108A(3). Paragraph 2(1) provides that an Assembly Act provision can modify the law on reserved matters where such modification:
is ancillary (as defined in new section 108A(7)) to a provision which does not relate to reserved matters, and
has no greater effect on reserved matters than is necessary to give effect to the purpose of that provision.
	In other words, the law on reserved matters can be modified in an ancillary way for a devolved purpose, provided such modification does not go further than it needs to, in order to achieve the devolved objective. The intention is to allow the Assembly sufficient latitude to modify the law on reserved matters for a purpose that does not relate to a reserved matter, provided the modification does not go beyond what is necessary to deliver the policy goal. The constraints created by the law on reserved matters provisions are intended to set out how far Parliament is content for the Assembly to go in modifying legislation that is the responsibility of the UK Parliament. Where modifications beyond the constraints of paragraphs 1 and 2 of Schedule 7B are required, and there is agreement between the administrations, an Order by the Secretary of State under section 150 of GoWA is the appropriate vehicle to achieve the required outcome.
	To give an example, a Planning (Wales) Bill could seek to modify the Communications Act 2003 in order to give effect to a devolved planning policy. Such a provision could satisfy the section 108A(2)(c) test by applying the purpose test and concluding that it does not relate to the reserved matter of telecommunications in Section C9 of Schedule 7A. However, it could nevertheless fall foul of section 108A(2)(d) if, for example, although the modifications to the Communications Act 2003 were ancillary (thereby satisfying paragraph 2(1)(a) of Schedule 7B), they nevertheless had a greater effect than necessary to give effect to the devolved policy (thereby failing to satisfy paragraph 2(1)(b) of Schedule 7B). In other words, the same planning policy objective could be achieved but with a lesser impact on the Communications Act 2003.
	Paragraph 2(2) clarifies that, in determining what is "necessary" for the purposes of paragraph 2(1)(b), it is not relevant that the UK Parliament could itself have enacted the provision.
	Paragraph 3 provides that provisions within Acts of the Assembly cannot modify the private law.
	The private law is defined as the law of contract, agency, bailment, tort, unjust enrichment and restitution, property (including the compulsory acquisition of property), trusts and succession. Intellectual property rights relating to plant varieties or seeds are not covered by the restriction.
	Paragraph 3(4) creates an exception to the restriction in paragraph 3(1), so that the Assembly can modify the private law for a purpose that does not relate to a reserved matter. However, the words "other than a modification of the private law" in paragraph 3(4) prevent the Assembly from modifying the private law for its own sake. In other words, the purpose of the provision cannot be to modify the private law; it must be for a non-reserved purpose.
	For instance, in respect of the compulsory acquisition of property, the Assembly could modify the law in this area (apart from the compensation regime which is reserved under section M3 of Schedule 7A) for a non-reserved purpose, such as housing. An example of this would be legislating to confer a power to acquire land in Wales for a non-reserved purpose. The Assembly is, however, prevented from modifying the law of compulsory purchase for its own sake or to achieve reserved ends. This would, for instance, prevent the Assembly from modifying the general rules on compulsory purchase in legislation such as the Acquisition of Land Act 1981 and the Compulsory Purchase Act 1965 in respect of all compulsory acquisitions in Wales.
	Paragraph 4 prohibits the Assembly from legislating to modify or create an offence in the following listed categories of offences:
treason and related offences;
homicide offences (including offences relating to suicide) and other offences against the person (including offences involving violence or threats of violence) that are triable only on indictment. Indictable only offences against the person include, for example, kidnapping, false imprisonment, wounding with intent to do grievous bodily harm contrary to section 18 of the Offences Against the Person Act 1861, and robbery. There is an element of overlap here as some indictable only offences are not only outside the Assembly's legislative competence under this paragraph, but are also outside competence by being reserved matters. For example, the possession of a firearm with intent to injure is an indictable only offence against the person under s.16 of the Firearms Act 1968 and is also a reserved matter under Section B13 of Schedule 7A;
sexual offences (including offences relating to indecent or pornographic images);
offences of a kind dealt with by the Perjury Act 1911.
	Paragraph 4(3) prohibits the Assembly from modifying the law about:
criminal responsibility and capacity,
the meaning of intention, recklessness, dishonesty and other mental elements of offences,
inchoate and secondary criminal liability, (by way of example, inchoate liability covers the subject-matter of Part 2 of the Serious Crime Act 2007 (encouraging or assisting crime), attempt or conspiracy), or
sentences and other orders and disposals in respect of defendants in criminal proceedings, or otherwise in respect of criminal conduct, and their effect and operation.
	This means that whilst the Assembly can legislate for offences in relation to non-reserved matters, the Assembly is not able to modify offences falling within the listed categories of offences (including defences), nor create new offences that would fall within these categories. By way of example, the Assembly may specify the mental element which is to be an ingredient of an offence in a devolved area but paragraph 4(3)(b) would prevent the Assembly from giving a different meaning to mental element concepts such as "intention", "recklessness" or "dishonesty" than that which applies generally. Similarly, the Assembly can create new attempt offences in a non-reserved area but paragraph 4(3)(c) would preclude the Assembly from modifying the meaning of "attempt".
	The aspects of the criminal law listed in paragraph 4(3) ensure that these fundamental elements of the criminal law that apply in England and Wales cannot be altered by the Assembly. However, the Assembly is able to apply these existing frameworks to offences it creates.
	The reference to sentences in paragraph 4(3)(d) protects the suite of sentences, disposals and other orders available to the court, from an absolute discharge, to a hospital order under the Mental Health Act 1983, to ancillary orders such as a compensation order. The effect and operation of sentences covers when such sentences are available (for example, an Extended Determinate Sentence is only available for offences included in Schedule 15 to the Criminal Justice Act 2003), and the requirements available as part of the community order; the release arrangements for a custodial sentence, which may include release by the Parole Board; the ability to suspend custodial sentences; how consecutive and concurrent sentences operate; recall and re-release; and repatriation of offenders. The reference to "disposals…otherwise in respect of criminal conduct" also covers outs of court disposals (such as cautions, warnings, and penalty notices).
	Paragraph 4(5) confirms that protecting the specific categories of offence in paragraph 4 does not affect the reservation by virtue of Schedule 7A of the creation or modification of criminal offences in relation to reserved matters.
	Paragraphs 5 and 6 provide that an Assembly Act provision cannot modify certain provisions of certain enactments ("protected enactments").
	Paragraph 5 includes a table of protected enactments. These are enactments that an Assembly Act provision cannot modify, textually or non-textually, under any circumstances. Protected enactments have a different status from the enactments that are listed in Schedule 7A. Reserved matters may include the "subject matter of" an enactment which, subject to the section 108A(6) purpose test, reserves generally what that enactment is about, rather than its precise terms. Paragraphs 1 and 2 of Schedule 7B, for example, allow the law on reserved matters to be modified in minor ways. Protected enactments, on the other hand do have their precise content entirely protected from modifications by paragraph 5. There are no exceptions to this prohibition.
	Paragraph 6 provides that an Assembly Act provision cannot modify an Act of Parliament (other than GoWA) if it requires sums required for the repayment of amounts borrowed by the Welsh Ministers to be charged on the Welsh Consolidated Fund.
	Paragraph 7 sets out which are the protected provisions of GoWA. Although paragraph 7(1) creates a general prohibition on an Assembly Act provision modifying GoWA, paragraph 7(2)-(8) qualifies that prohibition so that the Assembly is able to modify certain provisions of GoWA.
	Paragraph 8 creates a general rule that an Assembly Act provision cannot, without the consent of the appropriate Minister, (a) confer functions on reserved authorities, (b) modify the constitution of reserved authorities, or (c) confer, modify or remove functions specifically exercisable in relation to reserved authorities. The same rule applies to Assembly Acts conferring delegated powers to achieve these results. An example of a provision that would be caught by (c) is creating a power to appoint persons to a reserved authority. In other words, creating a function that relates to that authority; rather than creating a function of that authority.
	Paragraph 8(3) defines "reserved authorities" for these purposes as:
	- a Minister of the Crown or a UK government department;
	- any public authority (other than a Minister of the Crown or a UK government department) that is not a devolved Welsh authority.
	For the meaning of "devolved Welsh authority" in this context, see the note on section 4.
	Paragraph 8(4) defines "public authority" for the purposes of paragraph 8(3), as a body, office or holder of an office that has functions of a public nature.
	Paragraph 8(5) provides that the appropriate Minister for the purposes of paragraph 8(1) is the Secretary of State (in practice this is likely to be the Secretary of State for Wales), unless the relevant functions relate to HMRC in which case it will be the Treasury.
	Paragraph 9 creates exceptions to the general rule stated in paragraph 8. It disapplies the Ministerial consent condition in the case of conferring functions on specified reserved authorities. An example of the type of situation addressed by paragraph 9(5) is where Welsh Ministers are given the power to issue guidance to the Electoral Commission and the Commission is required to have regard to the guidance. In such a case the Assembly is not required to seek the consent of the appropriate Minister. Paragraph 9(6) and 9(7) completely disapplies the Ministerial consent condition provided for in paragraph 8 in the case of certain reserved authorities having functions related to water and in relation to the funding of police and crime commissioners through council tax precepts.
	Paragraph 10 imposes a further condition of UK Ministerial consent for Assembly legislation. Unlike paragraph 8(1)(a) which relates to Assembly Act provisions conferring functions on reserved authorities, paragraph 10 relates to Assembly Act provisions that remove or modify functions of reserved authorities. The authorities to which this paragraph applies are essentially the same as those to which paragraph 8 applies, however Ministers of the Crown are excepted. This is because paragraph 11 makes specific provision about the removal or modification of Minister of the Crown functions. Paragraph 10 is subject to similar exceptions as exist under paragraph 8.
	Paragraph 11 imposes a requirement to obtain the consent of the appropriate Minister before the Assembly may remove or modify specific functions of a Minister of the Crown. These functions are those classified as "qualified devolved functions" and those relating to the Welsh language, water in its broadest definition, certain marine management functions, financial assistance for railways and that Treasury’s consent will need to be sought before the Assembly changes the rules about the Treasury appointing anyone other than the Assembly Clerk as its accounting officer. A qualified devolved function is a function that is:
	- conferred or imposed on, or transferred to, the Welsh Ministers, the First Minister or the Counsel General by or under any Act; and
	- to any extent exercisable concurrently or jointly with a Minister of the Crown or only with the consent or agreement of, or after consultation with, a Minister of the Crown (these functions are listed in Schedule 4 to the Act).
	Paragraph 11(2) requires Welsh Ministers to consult a Minister of the Crown before an Assembly Act provision can modify any existing devolved function of a Minister of the Crown (other than those that require consent under paragraph 11(1)). Many functions conferred by Parliamentary legislation on Ministers of the Crown before the devolution settlement took effect have already been transferred to Welsh Ministers by transfer of functions orders made using the powers in section 58 of GoWA and other powers. Part 2 of Schedule 7 to GoWA required the Secretary of State’s consent before a Minister of the Crown function could be modified. This provision will be repealed by this Act when Schedule 7 is replaced by Schedule 7A and 7B. Remaining devolved Minister of the Crown functions will be transferred by a transfer of functions order after this Act is enacted using the expanded powers of section 58, as amended. In case any such powers have not been identified and transferred in the transfer of functions orders, paragraph 11(2) will require the Welsh Government to consult the UK Government before an Assembly Act provision can modify such a function.
	Paragraph 12(1) provides that references to the legislative competence of the Assembly that appear throughout the statute book should be read without applying the Minister of the Crown consent mechanisms in paragraphs 8,10 or11 of Schedule 7B. This is because such consent mechanisms are only relevant to the legislative competence of Assembly Acts. They are therefore not relevant when considering the Assembly’s legislative competence in the context of UK Parliament legislation because Minister of the Crown consent would never be required for such legislation.
	Similarly, paragraph 12(2) provides that the requirement on Welsh Ministers to consult the appropriate Minister when removing or modifying Minister of the Crown functions that do not fall within paragraph 11(1) of Schedule 7B, is to be disregarded when considering a provision in an enactment other than GoWA is within the Assembly's legislative competence.
	Part 2 of Schedule 7B sets out the general exceptions from Part 1 of that Schedule.
	Paragraph 13 provides that the restrictions in Part 1 of Schedule 7B do not prevent an Assembly Act provision restating the existing law or repealing or revoking spent enactments. Paragraph 13(2) clarifies that the law on reserved matters restriction in paragraph 1 of Schedule 7B includes any restatement of the law on reserved matters if the subject matter of the restatement is a reserved matter. This ensures that Parliament is able to consolidate or codify the law.
	Paragraph 14 ensures that the restrictions in Part 1 do not unduly limit the Assembly’s competence to legislate about its own subordinate legislation procedure.