In the early 21st century the combined executive, legislative and judicial functions of the historical office of Lord Chancellor began to be viewed as untenable, as it infringed on the idea of the separation of powers as put forward by Montesquieu (where no one should reside in any more than one of the three branches of government; the Lord Chancellor stood in all three). It was also considered as possibly inconsistent with the European Convention on Human Rights. At the same time, proposals by the Blair Government simply to abolish the office met with opposition from those who felt that such an official is necessary to speak on the judiciary's behalf in the Cabinet, as well as from those who opposed the sudden abolition of such an ancient office. In 2003, Tony Blair chose his close friend and former flatmate Lord Falconer of Thoroton to be Lord Chancellor and Secretary of State for Constitutional Affairs. At the same time, he announced his intention to abolish the office of Lord Chancellor and to make many other constitutional reforms. After much surprise and confusion, it became clear that the ancient office of Lord Chancellor could not be abolished without an Act of Parliament. Lord Falconer of Thoroton duly appeared in the House of Lords to preside from the Woolsack on the next day. The Lord Chancellor's Department, however, was renamed the Department for Constitutional Affairs.
In January 2004, the Department of Constitutional Affairs published a concordat, outlining the division of authority between Lord Chancellor and Lord Chief Justice and which was intended as the basis of reform. The Government introduced the Constitutional Reform Bill in the House of Lords in February 2004. The Bill sought to abolish the office of Lord Chancellor, and to transfer his functions to other officials: legislative functions to a Speaker of the House of Lords, executive functions to the Secretary of State for Constitutional Affairs and judicial functions to the Lord Chief Justice. The Bill also made other constitutional reforms, such as transferring the judicial duties of the House of Lords to a Supreme Court.
In March 2004, however, the Lords upset the Government's plans by sending the bill to a Select Committee. Although initially seen as a move to kill the bill, the Government and Opposition agreed to permit the Bill to proceed through the parliamentary process, subject to any amendments made by the Committee. On 13 July 2004, the House amended the Constitutional Reform Bill such that the title of Lord Chancellor would be retained, although the Government's other proposed reforms were left intact. Then, in November 2004, the Government introduced an amendment in the Lords which wholly removed references to the Secretary of State for Constitutional Affairs, changing them to ones about the Lord Chancellor, with the positions of Secretary of State and Lord Chancellor envisaged as being held by the same person. The final Constitutional Reform Act received royal assent on 24 March 2005 and the major transfers of the historical functions of the Lord Chancellor to others (such as the Lord Chief Justice and Lord Speaker) were complete by mid-2006. However the Lord Chancellor and Secretary of State for Constitutional Affairs retained his place as a member of the Cabinet and certain special statutory functions.
Unlike the responsibilities of other Secretaries of State, which can be transferred from one department to another by an order-in-council, several functions of the Lord Chancellor are linked to the office of Lord Chancellor as a matter of statute law, even after the adoption of the Constitutional Reform Act. Those "protected functions" of the Lord Chancellor can only be transferred to other ministers by Act of Parliament.
In May 2007, the Department of Constitutional Affairs ceased to exist, and its functions were transferred to a newly created Ministry of Justice, which also took charge of certain responsibilities that were transferred to it from the Home Office. Lord Falconer, the Lord Chancellor, while retaining that title and office, was appointed the first Secretary of State for Justice.
In the past, if a person who was not a peer was to be appointed to the office of Lord Chancellor, he would be raised to the peerage upon receiving the appointment, though provision was made in 1539 for non-peers who hold the Great Offices of State to sit in between the benches in the House. With enactment of the Constitutional Reform Act, 2005 and the subsequent separation of the roles of Lord Chancellor and Speaker of the House of Lords, it is no longer necessary for the Lord Chancellor to be a peer. In June 2007, Jack Straw, an MP, was appointed as Secretary of State for Justice and Lord Chancellor, thus becoming the first Lord Chancellor to be a member of the House of Commons, rather than the House of Lords or its predecessor, the Curia Regis, since Sir Christopher Hatton in 1578.
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