House of Lords

Monday 9th May 2011 Lords Chamber

Monday, 9 May 2011.

14:30

Prayers—read by the Lord Bishop of Norwich.

Bosnia and Herzegovina

Monday 9th May 2011 Lords Chamber

Question

14:36

Asked By

[Lord Ashdown of Norton-sub-Hamdon]

To ask Her Majesty’s Government what assessment they have made of the current situation in Bosnia and Herzegovina.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the situation in Bosnia and Herzegovina is of serious concern. A new state-level Government have still not been formed following elections last October, preventing any progress on reforms. The process of government formation in the federation entity has proved divisive and problematic. Conclusions adopted by the Republika Srpska National Assembly on 13 April represent a serious challenge to the Dayton agreement and the rule of law. We have strongly condemned these conclusions and have made it clear that we will not tolerate such attempts to undermine Dayton or the rule of law in Bosnia and Herzegovina.

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, I thank the Minister for that extremely helpful reply. Is it not the case that the plan by the President of Republika Srpska, Milorad Dodik, to hold a referendum is clearly against the provisions of the Dayton agreement and confirms the country's depressing dynamic back towards dissolution? Given that the country would be unlikely to go through dissolution without returning to bloodshed, will the Government give us their assurance that they are prepared to use every means possible to protect and preserve the territorial integrity of Bosnia and Herzegovina and act against those who would seek to put it at jeopardy?

[Lord Howell of Guildford]

My Lords, I congratulate my noble friend Lord Ashdown on his constant concern, backed by his huge expertise and familiarity with this issue, which as we all recognise is a serious one and trending in the wrong direction. Will I give that assurance? Yes, I certainly will. We will, if necessary, argue for the European Union to deploy fully all incentives and deterrents at its disposal and we will use all the pressures available to us against what looks like a blatant and clear attempt to contravene the Dayton agreement by Republika Srpska and its leader. These are bad developments, which we are determined to see resisted. We do not want the territorial integrity and structure of the Bosnian state undermined, as it would be if these kinds of proposals are pursued.

[Lord Cormack]

My Lords, is my noble friend convinced that the Republic of Serbia is doing everything possible to exert pressure on Republika Srpska?

[Lord Howell of Guildford]

The Republic of Serbia is being helpful in some respects. I cannot say that everything one would like to see being done is being done. But the general support is there because that nation, too, has a clear interest in seeing that Bosnia-Herzegovina remains intact and does not fall back into its grim past, which we all remember and which was so stained with blood.

[Baroness Falkner of Margravine]

My Lords, will my noble friend agree that this dangerous situation, which may well lead to the dissolution of Bosnia-Herzegovina, has been aggravated by the failure to form a state-level Government as well? Does he agree that the EU and Washington need to move swiftly now to knock heads together and to use all legal powers at their disposal to prevent the referendum happening?

[Lord Howell of Guildford]

Yes, I think we do, and we have to address the fact that, on the Bosnian side, the formation of a Government has been very slow and stumbling, with the largest parties in effect excluded, so there is a very weak situation. That is quite aside from the Republika Srpska side, where, as we have recognised in the past few minutes, a policy is being pursued which, if pushed through to a referendum as proposed, would lead to a direct challenge to the whole Dayton structure. Do we need to move rapidly? Yes, we certainly do. Do we need to support the EU new strategy, including a new figurehead to work alongside the Office of the High Representative? Yes, we do. Will we do these things? Yes, we will.

[Baroness Royall of Blaisdon]

My Lords, would the Minister agree that in the longer term the only way to guarantee peace and stability in this region is to ensure that all countries are able to meet the Copenhagen criteria and that they are welcomed into the European Union?

[Lord Howell of Guildford]

That is certainly so. Obviously, the aspiration is there for the west Balkans to be part of the European Union in due course. Unfortunately, there are a number of very important conditions, and the noble Baroness is absolutely right to point to some of them. These immediate concerns that we are discussing need to be addressed; it is a question of consolidating the state of Bosnia and Herzegovina and preventing its breaking down into the old rivalries. Beyond that comes the prospect of the west Balkans joining the European Union, which we should certainly work for.

[Lord Teverson]

My Lords, is not the inclusion of Macedonia one of the fundamental ways in which the movement of the western Balkans into the European Union needs to start? That country’s candidature has been agreed but those discussions have been blocked so far by the disagreement between Greece and Macedonia over a name. Surely that is one of the most important areas in which the integration of the western Balkans should start, and others can then follow.

[Lord Howell of Guildford]

The whole issue of the western Balkans and the particular issue that my noble friend has raised require very close attention. They are full of very difficult problems, which we must gradually seek to overcome. We cannot say that any one starting point is the right one for this process; we have to work on all these fronts.

[Lord Hylton]

The Minister said something about consolidating Bosnia and Herzegovina. Would he agree that this means that work needs to be done at local level and city level to hold the thing together?

[Lord Howell of Guildford]

Most certainly it does. The work is going on and our own country, the United Kingdom, contributes directly—for instance, with work in judicial training, policing methods and community work of all sorts. This is a central part of the glue to try to bring these communities together again and enable one country to emerge.

Public Expenditure: Reserve

Monday 9th May 2011 Lords Chamber

Question

14:43

Asked By

[Lord Barnett]

To ask Her Majesty’s Government whether the public expenditure reserve is adequate to meet any potential requirement.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the contingency set aside in the Government’s public expenditure plans over the period 2011-12 to 2014-15 amounts to 0.6 per cent, 0.8 per cent, 0.9 per cent, and 1 per cent of each year’s total managed expenditure. The Government believe that this is a prudent level of contingency to hold against unforeseen costs during the 2010 spending review period, but it is not intended to cover all possible eventualities.

[Lord Barnett]

I thank the Minister for his Answer, but would not some flexibility be positively helpful? For example, if growth was not as good as we all hoped and unemployment continued to rise, could not additional funds for the contingency reserve be a sort of plan B? The Chancellor need not call it that but just do it, as it would be positively helpful. Indeed, that would help the deficit reduction by increasing growth and reducing unemployment.

[Lord Sassoon]

No, my Lords, that would not be the right approach at all. The words of a distinguished former Chief Secretary to the Treasury in another place on 17 March 1977 got it absolutely right:

“It is no good drawing up elaborate spending plans without the determination and means of ensuring that the planned total”,

expenditure,

“is not exceeded. We have that determination … The contingency reserve regime is strict. We do not allow additional expenditure to count against the contingency reserve until we are fully satisfied that offsetting savings are not to be had”.—[Official Report, Commons, 17/3/77; col. 641.]

That is what the noble Lord, Lord Barnett, said in 1977, and he got it absolutely right.

[Lord Newby]

My Lords, do not the comments of Standard & Poor in the US on the possible downgrading of American debt show the folly of building up too great a deficit, however tempting it might be to spend more money on things which we would all like to see?

[Lord Sassoon]

Yes, indeed. As ever, my noble friend Lord Newby gets it absolutely right. Fiscal discipline is absolutely the watchword of this Government. I should say that the Armed Forces will get all the expenditure that they need in relation to net additional costs of military operations in Libya and elsewhere, but that is the exception to the rule.

[Lord Eatwell]

My Lords, before answering my question, perhaps the noble Lord could tell the noble Lord, Lord Newby, what impact the threatened downgrading by Standard & Poor has had on the funding of US debt. I am sure that I could help the noble Lord by telling him that its impact was nil. Will the noble Lord tell us what criteria the Treasury uses to judge whether events merit using the reserve and, given those criteria, would an increase in unemployment of 100,000 or 250,000 fall within the rules?

[Lord Sassoon]

My Lords, first, in relation to this discussion about borrowing costs, I am pleased to say that as of last week the UK’s 10-year borrowing costs, the benchmark for our gilts, hit practically the lowest that they have ever done, while the margin we pay in relation to the German bund has hit its best position since the general election. We absolutely must do these things to make sure that our interest rates remain low. As to how the reserve operates, I am happy to copy to the noble Lord the published rules that the Treasury uses. However, they are for consideration only in exceptional circumstances and would not be linked to the sorts of factors that he sets out.

[Lord Higgins]

My Lords, did the European bailout of the Greek Government deplete this reserve and would any extension of that process deplete it?

[Lord Sassoon]

No, it did not and I will not talk about hypothetical situations.

[Lord Peston]

It is difficult not be cynical about any discussion of this subject. I spent the morning—I probably wasted it—looking at the history of what Governments say about their attitudes to contingencies. In all cases, they say exactly what the Minister has said, except for one thing. When the chips are down and they have what they call a crisis, which they are never short of, they spend all the money that they want to spend.

[Lord Sassoon]

My Lords, I have been back and looked at the record and it is certainly the case that the previous Government went and topped up the reserve on at least 10 occasions. They increased borrowings when it looked as if expenditure was going to exceed their totals. This Government, when they set a total for managed expenditure, intend that it will not be exceeded.

[Lord Naseby]

Has my noble friend seen the number of recent articles about the Office for National Statistics and the conflict between the figures that it has produced for the output of the construction industry and the figures that that industry believes are correct? The difference appears to be 0.3 per cent of national growth. This is a severe and difficult area and therefore should not the Office for National Statistics resolve that issue once and for all before the next lot of statistics come out?

[Lord Sassoon]

We are straying a bit from the subject of this Question but, as there do not seem to be many other noble Lords wanting to get in, I will say that I know how difficult it is for the ONS to produce these statistics. I am sure that it will continue to look at all ways of improving the way that it deals with the data. There was a one-off change to the way in which construction data were reported and the industry is questioning that. I am sure that the ONS is on the case.

[Lord Barnett]

My Lords, I am flattered that the Minister thought it necessary to research what I said 34 years ago when I was that much younger, but could he try to answer my supplementary Question this time?

[Lord Sassoon]

I am hearing that people seemed to think that I gave quite a sufficient answer the first time around. The noble Lord got it absolutely right when he was Chief Secretary and that is what my right honourable friend the present Chief Secretary will be doing.

Israel and Palestine

Monday 9th May 2011 Lords Chamber

Question

14:50

Asked By

[Lord Dubs]

To ask Her Majesty’s Government what plans they have to encourage a settlement between Israel and Palestine.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

As my right honourable friend the Foreign Secretary said in Cairo on 2 May, we renew our calls for both sides to commit to peace talks, leading to a Palestinian state that exists in peace and security alongside Israel. We want to see a resumption of negotiations based on clear parameters supported by the international community: 1967 borders with equivalent land swaps, appropriate security arrangements, Jerusalem as the capital of both states and a just solution for refugees.

[Lord Dubs]

My Lords, the Minister will be aware of the widespread support that there has been for the Prime Minister’s recent positive approach to the agreement between Fatah and Hamas. What is the Government’s view on the Israeli Government’s threat to withhold $105 million-worth of tax and customs revenues from the Palestinian Authority in case it should proceed with this agreement with Hamas?

[Lord Howell of Guildford]

We think that that is the wrong approach. On the contrary, Israel and the two parties that are now coming together in some reconciliation should now take the opportunities offered to carry the whole peace process forward. It should be recognised that, unfortunately, Hamas’s commitment to non-violence has not yet taken place—it has not yet committed to the quartet principles and we would like to see it be a more effective partner for peace—but on the whole we see these trends as the right ones and we think that the Israeli withholding of revenues is the wrong approach.

[Lord Clinton-Davis]

While I support a genuine rapprochement between Israel and the Palestinians—most of the Palestinians, not all of them—is it possible to broker a real deal as long as Hamas pledges to destroy Israel? Is it realistically negotiable?

[Lord Howell of Guildford]

The noble Lord is right that that is the obstacle. As I have just said in my answer to the noble Lord, Lord Dubs, we think that when Hamas is ready to be a genuine partner for peace and is committed to the quartet principles, we can go forward. Clearly, though, at the moment it is not and that is undoubtedly an obstacle, as the noble Lord acutely recognises.

[Lord Ashdown of Norton-sub-Hamdon]

My Lords, given that we all know that a settlement between Israel and Palestine can be based only on a two-state solution, and given that the present pattern of Israeli settlements makes the second state—that is, the Palestinian state—completely unviable, is it not the case that no such solution could ever realistically be achieved without a withdrawal of at least some, if not all, of the current pattern of Israeli settlements?

[Lord Howell of Guildford]

My noble friend is right that the settlements issue is also at the heart of this, and there are major difficulties ahead. In discussions on the two-state prospect, there have been some ideas of the settlements existing within Palestinian jurisdiction while, as my noble friend has said, other ideas include some withdrawal. These matters have all been examined in immense detail as part of the move forward, but first there has to be some movement in recognising that we now have opportunities for the peace process to develop in the right direction, rather than the attitude that we hear in some quarters at present that, “Nothing can be done for the moment because we don’t know where anyone stands, we don’t know where Egypt stands and we don’t know where the Fatah/Hamas agreement really stands”. That is a negative attitude. We must overcome that and move forward on all these fronts, including the settlements.

[Lord Hylton]

My Lords, was it not a great mistake to impose completely unacceptable preconditions on Hamas? Has the noble Lord noted that polls recently showed that 52 per cent of Israelis welcomed engagement with Hamas?

[Lord Howell of Guildford]

I hear what the noble Lord says, but our position remains that we are not prepared to talk to Hamas until it renounces violence, recognises Israel and adheres to the quartet principles. That is and will remain our view. If Hamas changes its attitude and moves forward, and if the partnership with al-Fatah comes to a positive conclusion, we will be prepared to review the situation, but at the moment that is our position.

[The Lord Bishop of Norwich]

My Lords, does the Minister agree that the recent withdrawal of residency permits from any Palestinians is a grave violation of basic human rights, and diminishes the capacity of many faith and community leaders to contribute to a peace settlement? In the case of Suheil Dawani, the Anglican Bishop in Jerusalem, it also further alienates the small Christian community in the Holy Land.

[Lord Howell of Guildford]

Yes, these are further concerns. I was about to say irritants but they are more than irritants; they are the sort of worries that we raise again and again with the authorities concerned and with the Israeli Government. We will do so in the future as well.

[Lord Clarke of Hampstead]

My Lords, many people will be pleased—if that is the right word—to hear that the Government are not prepared to deal with a terrorist organisation until it renounces its determination to drive Israel into the sea. Does the Minister agree with me that the first stage in getting the understanding that the Government are looking for is for the people who are lobbing missiles into Israel, almost on a daily basis, to be brought to book?

[Lord Howell of Guildford]

That is clearly one of the necessary cessations that must occur. However, one must take a balanced approach and recognise that it goes hand in hand with an acceleration of the easing of the supply of provisions into Gaza, where conditions have been horrific. These things all move together. If one concentrates on just one transgression on one side, progress is inevitably halted. However, the noble Lord is absolutely right that one of the essential conditions is for one of the key parties concerned—Hamas—to desist, or to persuade minorities that it may control to desist, from shooting rockets into Israeli towns, wounding and damaging completely innocent people.

[Lord Phillips of Sudbury]

My Lords, does the Minister accept that power is given to the extremist wing of Hamas by the relentless Israeli colonisation of the West Bank and east Jerusalem, and that without a cessation of that at least there is no chance that the moderate majority within Hamas will be able to bring about the conditions that he mentions? At the same time, will he urge the Israeli Government to observe the results of the forthcoming Palestinian elections and not scupper them, as they did in 2006 by kidnapping 26 Hamas MPs?

[Lord Howell of Guildford]

Balanced handling of settlements and the Jerusalem problem is at the centre of the whole situation. Urging the Israeli Government to proceed in a way that will not scupper—in my noble friend’s words—any progress is something that we do in our constant dialogue with the Israeli authorities. We will certainly continue along those lines.

Fraud: Staffing Levels

Monday 9th May 2011 Lords Chamber

Question

14:59

Asked By

[Lord Phillips of Sudbury]

To ask Her Majesty’s Government what assessment they have made of the staff levels at Government agencies dealing with financial, banking and tax fraud.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the Government are determined to step up the fight against fraud. This important work is done by both government and non-government bodies, including the Serious Fraud Office, Her Majesty’s Revenue and Customs, the Serious Organised Crime Agency and the Financial Services Authority. Ensuring that staff levels are adequate is a matter for each individual body, but I understand that the SFO expects to be able to adjust its numbers as necessary to meet its business needs, and that HMRC will be increasing the number of staff tackling fraud and tax avoidance.

[Lord Phillips of Sudbury]

I am grateful to the Minister for his reply, but he must be aware that HMRC will suffer massive cuts over the next three years, and that the current level of tax fraud and avoidance, on its own estimate, is £40 billion a year. Will he therefore look urgently at that state of affairs and have regard to the position of the Serious Fraud Office, which has lost roughly half its most senior personnel in the past few months to American law firms and banks, which makes its role in tackling complex fraud super difficult?

[Lord Sassoon]

My Lords, this is an extraordinarily difficult area. As my noble friend says, the level of tax fraud and uncollected tax receipts is extraordinarily large. That is precisely why, within a tight settlement for HMRC and every other department, HMRC has been allocated an additional £900 million over the spending review period. That will take up the number of full-time equivalent staff dealing with fraud and other tax avoidance matters from 20,000 at present to some 23,000 by 2014-15. That adjustment has already been planned for. As far as the SFO is concerned, we are clearly not talking about remotely the same order of magnitude of numbers of people, as that body has fewer than 400 people. The new management of the SFO has taken enormous strides since 2008, when the management changed. For example, the average time taken over its investigations has dropped from an average of five years on pre-2008 cases to some 15 months on newer cases, and the conviction rate has significantly increased, so the SFO is very much showing how it has become more effective with less resource.

[Lord O'Neill of Clackmannan]

Is the Minister satisfied by the resources that were made available for the investigation into the Phoenix four—the people involved in the so-called saving of Rover—which has resulted in no criminal charges being made, and literally a slap on the wrist being given to the directors who behaved so scandalously and betrayed the trust of so many people in Longbridge?

[Lord Sassoon]

My Lords, I will not be drawn into second-guessing decisions taken by the investigating authorities on any cases. However, I have heard absolutely no suggestion that the investigations in that case were in any way circumscribed by a lack of resource.

[Lord Newby]

My Lords, does the Minister accept that, while the additional £900 million that HMRC has to fight fraud is very welcome, the hollowing out of the HMRC regional structure means that many individuals and firms around the country now feel that there is no adequate, as it were, day-to-day supervision of their tax affairs, and that therefore they can get away with it? Will he take back to his colleagues at HMRC the fact that it is not just the people dealing with fraud who need to be reinforced, but that we need to have a continuing robust structure of local management of individuals’ and companies’ tax affairs if fraud is not to take place in the first place?

[Lord Sassoon]

I am grateful to my noble friend for bringing up that specific issue. Of course the question of local coverage is important. I will do as he suggests and take that back to my ministerial colleagues and to the management of HMRC.

[Lord Eatwell]

My Lords, the Minister will be aware that many of the organisations involved here, especially the FSA, have suffered serious and debilitating rates of staff turnover in the past few months—in part explained by the uncertainties associated with the reorganisation of financial regulation and management. A major source of that uncertainty has been that the Government’s Bill to change the status of the FSA and associated organisations is at least four months late. When will the Government bring this legislation forward? Why did they not get on with it and end the uncertainty?

[Lord Sassoon]

My Lords, I suppose it is my fault for raising the FSA in my Answer, even though it is not a government agency and therefore, more than the other bodies we have been talking about, manages its own affairs. I would not for one moment, though, agree with the noble Lord’s assertion about the state of staffing at the FSA, which continues to do an important and extremely difficult job—albeit within a flawed regulatory structure. We have been through rounds of consultation. If we brought the legislation forward too quickly, I would be criticised about the lack of pre-legislative consultation and scrutiny. It is coming forward with due speed because, as the noble Lord recognises, this is a big mess that we have to clean up, we have to get it right this time, and we will do so.

[Lord Brooke of Alverthorpe]

Will the noble Lord be prepared to place in the Library the response that he gets from his colleagues to the question asked by the noble Lord, Lord Newby? Secondly, in that reply, will he give details on the number of HMRC revenue offices that will be closing annually between now and 2014?

[Lord Sassoon]

My Lords, I will certainly take that away and see whether a useful information note on the regional question can be produced without disproportionate cost. I will certainly see whether an information note can be produced on HMRC’s regional coverage.

Pensions Appeal Tribunals Act 1943 (Time Limit for Appeals) (Amendment) Regulations 2011

Monday 9th May 2011 Lords Chamber

Pensions Appeal Tribunals Act 1943 (Armed Forces and Reserve Forces Compensation Scheme) (Rights of Appeal) Regulations 2011

Motions to Approve

15:07

Moved By

[Lord Astor of Hever]

That the draft Regulations laid before the House on 23 March be approved.

Relevant Documents: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 27 April.

Motions agreed.

Police Reform and Social Responsibility Bill

Monday 9th May 2011 Lords Chamber

Order of Consideration Motion

15:07

Moved By

[Lord Wallace of Saltaire]

That it be an instruction to the Committee of the Whole House to which the Police Reform and Social Responsibility Bill has been committed that they consider the bill in the following order:

Clause 1, Schedule 1, Clause 2, Schedule 2, Clause 3, Schedule 3, Clause 4, Schedule 4, Clauses 5 to 26, Schedule 5, Clauses 27 and 28, Schedule 6, Clauses 29 to 31, Schedule 7, Clauses 32 to 38, Schedule 8, Clauses 39 to 57, Schedule 9, Clauses 58 to 76, Schedule 10, Clauses 77 to 89, Schedule 11, Clause 90, Schedule 12, Clause 91, Schedule 13, Clauses 92 to 96, Schedule 14, Clauses 97 to 99, Schedule 15, Clause 100, Schedule 16, Clauses 101 to 152, Schedule 17, Clauses 153 to 159.

Motion agreed.

Public Bodies Bill [HL]

Monday 9th May 2011 Lords Chamber

Third Reading

15:07

Clause 10 : Consultation

Amendment 1

Moved by

[Lord Hunt of Kings Heath]

1: Clause 10, page 5, line 34, at end insert—
“( ) Where the Minister considers that the changes proposed do not warrant a full public consultation under subsection (1)(g), the Minister must publish a copy of the proposal on the website of the relevant Government department or make it otherwise publicly accessible.”

[Lord Hunt of Kings Heath]

My Lords, the Bill’s return after a period of some weeks is welcome. In this amendment I return to the issue of public consultation, a matter that we have debated on a number of occasions. Given the enormous powers that the Bill will give to Ministers—powers embracing the abolition, merger, finance and governance of a considerable number of public bodies—it seems only right that when changes are made to any of the orders listed in the Bill, the public should have a say.

The House did not agree to my amendment to ensure that whenever a Minister proposes to make an order under Clauses 1 to 6, the public should always be consulted. However, the noble Lord, Lord Taylor, was rather more sympathetic to a further amendment to which I spoke, which would have ensured that when a Minister considers that proposed changes do not warrant a full public consultation, the Minister must at least publish a copy of the proposal on the website of the relevant government department or make it otherwise available. The noble Lord kindly said that he understood the arguments that had been put forward and that where consultation does not take place, a proposal will at least be put on the website. He said that he would consider the issue between Report and Third Reading, and I should be grateful for, and am hopeful of, a positive response from him.

My next amendment, Amendment 6, relates to regional development agencies and the need for consultation on their proposed abolition. I will not reopen the whole question of whether or not it is wise to abolish regional development agencies, but I must say that the longer the economy flatlines, as it is, the more convinced I am that it is a very big mistake to remove a regional strategic body for economic development. I want to raise the issue of consultation, specifically the consultation that will need to follow the Government's proposals to abolish regional development agencies.

One problem with the Bill is that the Government have failed to engage in any pre-legislative consultation on these matters. One example of that is the remarkable decision to fire-sale the assets of RDAs. That has been the subject of a number of comments. I find it extraordinary that instead of the RDAs being allowed to pass on assets under deferred payment schemes to, for instance, local authorities, they are being forced down the route of selling off assets at the worst possible time. There is real concern here that if those assets are sold in the current economic climate, their values will not be at current market levels, to the detriment of the local economy and future work of both local authorities and local enterprise partnerships, which are to take the place of RDAs.

I come to the specific issue of consultation. The noble Lord will know that this matter was raised by the House Of Commons Public Administration Committee in its report. It refers to the evidence given by the Minister, who had been asked what consultation had taken place in advance of deciding to abolish bodies listed in the Bill. The report states that the Minister responded that,

“the level of consultation would have been ‘very varied [...] in some cases, will have been quite extensive; in other cases, will have been very little’”.

He also said:

“These are essentially decisions in principle; these are decisions made where departments will know, or should know and I'm sure do, in a great deal of detail what those bodies do, what their functions are and how they are carried out”.

The committee reports that it reached the view from these comments that the Minister had assumed that the nature of the decision was such that consultation was unnecessary. As the Commons Select Committee stated, that assessment is wrong. It concluded:

“The Government did not consult properly on these proposals. When undertaking such a fundamental review of the machinery of government it is desirable and sensible to do so. We welcome the fact the Government is now taking steps to rectify this, but question how useful consultation can be, given that decisions on the future of many bodies have already been taken. Having agreed to amend the Bill”—

as the Government did, and it has now been so amended—

“to allow for more consultation we expect these consultations to have real effect on the outcome of the review; even if this means reversing decisions that have already been made. We expect the Government to give us such an assurance in its response to this Report”.

In their response to the report published in March, Command Paper 8044, the Government state:

“The Government has always been committed to ensuring appropriate consultation and external input in relation to its proposals. There is a substantial role for consultation to play, and a strong impact to be made on the delivery of these decisions”.

I should therefore like the Minister to confirm that, so far as it affects the bodies listed in the Bill but specifically RDAs, there will indeed be proper consultation, the consultation will be duly considered and, in the light of that consultation, the Government will, if appropriate, reverse their decision. My amendment is intended to ensure, if the Government decide to bring forward any orders that would embrace RDAs, the explanatory document that has to be brought forward in conjunction with the order will make it clear that a proper consultation was undertaken, including a summary of the representations received in respect of the principle of abolition. That would ensure a proper and genuine consultation process. I hope that the noble Lord will be able to be positive on both amendments. I beg to move.

15:15

[Lord Pannick]

My Lords, I have added my name to Amendment 1. As the noble Lord, Lord Hunt of Kings Heath, said, at Report your Lordships rejected an amendment in the name of the noble Lord which would have required public consultation in all cases covered by Clause 10. Your Lordships rejected the amendment because the Minister argued that it cannot be appropriate and proportionate for a full public consultation to be undertaken on the implementation of all exercises of power under the Bill, however limited they may be. However, he also said:

“The Government support the principle behind this amendment, which is to ensure that the public are given an opportunity to make their views heard on the reform of public bodies.—[Official Report, 4/4/11; col. 1555.]

Amendment 1 would achieve that objective. It would ensure that the public were able to inform themselves of all proposals for change and were able to contribute to the debate if they wished. The amendment would therefore promote accountability, and it would do so at no cost or inconvenience to the Government.

The Minister may say that the amendment is unnecessary as this is so obviously sensible as a practice that the Government would do it in any event. However, a ministerial assurance given, I accept, in good faith cannot bind Ministers in this or any future Government. Even after the very welcome amendments that have been made to the legislation in this House, the Bill will still confer very extensive powers on Ministers over public bodies, and it is therefore important to make clear in the Bill the essential obligation contained in this amendment.

[Lord Taylor of Holbeach]

My Lords, I thank the noble Lords, Lord Hunt of Kings Heath and Lord Pannick, for bringing back these issues because it gives me the opportunity to clarify the Government’s position. As they say, Amendments 1 and 6 revisit the issue of consultation and so I shall respond to them together.

Amendment 1, to which the noble Lords, Lord Hunt of Kings Heath and Lord Pannick, have spoken, would require Ministers to publish the proposed reform on their department’s website or to otherwise make it publicly available in the event that a full public consultation was not to be undertaken. This is a helpful amendment and one that speaks to an important principle, so I thank noble Lords for bringing it back at Third Reading.

I said on Report that I thought that this was something that the Government could consider, and I can assure your Lordships’ House that we have done so. Supportive as we are of the objective behind this amendment, on balance, we do not believe that such a requirement is appropriate on the face of the Bill. We are debating ostensibly an issue of guidance and best practice, not imposing a legal requirement. For that reason I am able to support the purpose of the amendment but not its inclusion in the Bill. Given that I believe that this is an issue of guidance, I am happy to give a very specific assurance that the guidance for use by officials on making orders under the Public Bodies Bill, to be published by the Cabinet Office, will include a specific reference that departments ought to consider the most appropriate way of making a proposal publicly available.

The Government are committed to increasing transparency and accountability across the public sector. I do not believe that I can honestly stand here and say that I oppose the purpose of the amendment and still be true to that overall objective. I fear that our only point of divergence is on how to ensure that this purpose is reflected in the best way possible when Ministers are developing proposals and drafting orders. It is the Government’s clear judgment that a more practical and proportionate way of achieving the noble Lord’s objective is to capture this issue in the guidance which will be used by departments when bringing forward orders. On Report, the noble Lord, Lord Hunt, described my pledge to take this back to my colleagues in government as “handsome”. I hope that he will not now consider this an ugly conclusion by the Government. I can assure him that the principle of making proposals publicly available is one on which all sides of the House agree.

I should like to make one further observation on the noble Lord’s amendment. I agree that, in 2011, a website represents a very sensible vehicle for making proposals publicly available; indeed, I should expect departments seriously to consider whether website publication is not appropriate for publicising their proposals. However, my crystal ball will not tell me whether this will be the case for ever. Technology moves on. The statutory framework for consultation on this legislation is set out in Clause 10, and it is intended to be a stable and firm statutory requirement for reforms long into the future. It is guidance, not the statue book, that can be readily updated to reflect whatever is most appropriate at given times. That provides further weight to the argument that, however sensible this amendment might seem, it is not an appropriate addition to the Bill.

I am disappointed that I cannot be more supportive of the noble Lord’s amendment. I know that it is a sincere attempt to improve the Bill and to help the Government deliver a comprehensive and watertight piece of legislation. However, the vote on Report made it clear that consultation must not always be full public consultation and that a Minister must ultimately be responsible and indeed accountable to Parliament for deciding how to undertake proportionate and meaningful consultation. It is therefore not appropriate to seek to alter this legal framework through the noble Lord’s amendment.

I shall now turn to Amendment 6 in the name of the noble Baroness, Lady Royall, and the noble Lord, Lord Hunt of Kings Heath. This proposed amendment to Schedule 1 in practice concerns the issues of consultation and subsequent procedure, set out in Clauses 10 and 11, and how they might apply to the closure of the regional development agencies. I shall start by once again taking the opportunity to pay tribute to the work of the RDAs. I also acknowledge that the noble Lords have a strong regard for the work that the RDAs did and would prefer them to continue.

We have had very thorough debates in the House, in Committee and on Report, on the RDAs. The noble Lord, Lord Hunt, referred to these debates. I have explained that the Government's strong preference is to abolish the RDAs, and I have set out the reasons behind this, including why the current arrangements are no longer sustainable. The coalition agreement, the June 2010 Budget Statement and the local growth White Paper are equally clear about the Government's proposal to abolish the RDAs. The Government continue actively to engage with RDAs and interested parties on how closure is to be achieved. Individual RDAs have been in touch with their stakeholders, for example about their asset plans. The consultation and engagement are taking place irrespective of the requirements in the Bill.

I have listened to the arguments for the reform of public bodies to be an open process. Clauses 10 and 11 underline the Government’s desire for this to be the case. Clause 10 requires a Minister to consult on a proposal to which an order made using the Bill would give effect. The amendment proposes that in the case of RDAs, the explanatory document that accompanies an order should include, first, the question that was asked about the principle of abolishing RDAs and, secondly, a summary of the representations received on that question.

The requirements of Clause 10 on a Minister to consult when making an order covered by the Bill are clear. The requirements applied to the RDAs would oblige the Government to ask about the principle of abolition. Similarly, Clause 11(2)(d) requires that any explanatory document should include a summary of representations received in consultation. Therefore, I do not believe that the amendments in this group would provide any additional information for Parliament. Instead, they would unnecessarily complicate the drafting of the Bill. I hope that, in the light of the clarification that I have given with regard to the existing requirements—

[Lord Beecham]

My Lords, does the Minister recall that on Report, I asked about the consultation process for RDAs in the light of a letter that the Minister had written to my noble friend Lady Royall, in which he stated that consultation effectively would take place after the passage of the legislation? I asked on that occasion whether in those circumstances the consultation that took place with individual RDAs would be on the basis that each case would be considered on its merits, or whether in effect it was all or nothing in terms of abolition. Will there be an individual consultation in respect of each RDA, with the possibility of a different conclusion in respect of one RDA as opposed to another, or is it to be abolition tout court?

[Lord Taylor of Holbeach]

The consultation will be based on the statutory instruments that will be tabled in connection with each RDA. Therefore, there will indeed be consultation, and an opportunity for each regional development agency to have input on its future. The regions of the country, if they feel particularly motivated, will be able to discuss the reasons why they believe no change should be made to their status.

[Lord Beecham]

Will the Government be open to persuasion?

[Lord Taylor of Holbeach]

It is the nature of consultation that the Government are open to persuasion: that is the purpose of a consultative exercise. The policy decision has been made. It is the resolve of the Government to implement the policy. None the less, there will be a consultative process, at which there will be an opportunity to argue the opposite case.

I hope that, in the light of the clarification that I have given on the requirements of Clauses 10 and 11, the noble Baroness and the noble Lord will not press their amendments. I also hope that, given my assurances on guidance and the problems with adding Amendment 1 to the Bill, the noble Lord will withdraw his amendment.

15:30

[Lord Hunt of Kings Heath]

I am grateful to the Minister for his response. I shall take Amendment 6 first. My noble friend Lord Beecham surely put his finger on it, and it really takes us back to the comments made in the House of Commons Public Administration Committee, which made it clear that, having agreed through this Bill to have proper consultation, that consultation must be done properly. That must mean that the Government have to consider on their merits the responses received. Let me take the West Midlands as an example. There is almost uniform opposition and hostility to the abolition of Advantage West Midlands. There is also a dawning recognition that the local enterprise partnerships which are to be put in its place simply do not have the wherewithal or coverage of the region to do the job that the RDA is proposing. So the question arises of whether the Government, having considered the results of the consultation, will in all fairness give due consideration to those comments before coming to a decision. That is a very important matter.

I was disappointed with the Minister’s response to Amendment 1. All noble Lords know that the heart of the noble Lord, Lord Taylor, is in the right place when it comes to this amendment. It is disappointing that his department has not been able to respond in the same way. I fully accept that your Lordships' House did not agree to my amendment to make public consultation apply in all cases. However, this amendment modestly suggests that when, in appropriate cases, a Minister decides that public consultation is not necessary, there should be at the very least a reference to it on the department’s website. With the best will in the world, I have not heard any convincing argument as to why that cannot be in the Bill. I do not see why it should be left to guidance which can be changed at any point. Moreover, in referring to that guidance, the Minister carefully used the words “ought to”. He did not say that departments “must”.

This is a matter of principle. I accept that this House decided that there will be circumstances in which it will be appropriate for a Minister not to seek public consultation. In the interests of good governance, however, surely there should be a record, and a reference should be made to it at least on the department’s website. I think that this is a matter of principle and I wish to test the opinion of the House.

15:33

Division 1

Ayes: 179

---

Labour: 131
Crossbench: 39
Bishops: 2
Independent: 1
Plaid Cymru: 1

Noes: 185

---

Conservative: 118
Liberal Democrat: 53
Crossbench: 9
Ulster Unionist Party: 2

15:45

Amendment 2

Moved by

[Baroness Royall of Blaisdon]

2: After Clause 11, insert the following new Clause—
“Time limit on scheduled bodies
Any entry in Schedules 1 to 5 ceases to have effect at the end of the period of five years beginning with the day on which it came into force (without affecting any order already made by virtue of that entry).”

[Baroness Royall of Blaisdon]

My Lords, in moving Amendment 2, which will put a time limit on the bodies mentioned in Schedules 1 to 5, I will not rehearse the well honed arguments which have been put forward many times about the importance of sunsetting. Suffice it to say that the sunsetting of the schedules is one of the fundamental and welcome changes which have been made to this Bill. I am very grateful to the Minister for putting his name to this amendment, which appears for a second time because, I have to confess, I failed to move it on Report. I beg to move.

[Lord Taylor of Holbeach]

My Lords, I am delighted to have added my name to Amendment 2, which is also tabled in the names of the noble Baroness, the noble Lord, Lord Hunt of Kings Heath, and my noble friend Lord Norton of Louth. As the noble Baroness has said, perhaps she failed to move the amendment on Report, but then so did I. I think we were all caught up in the heat of the moment after a Division, so I am pleased that we have an opportunity to bring it back again. It is the outcome of a constructive engagement across the House and I thank noble Lords for their input into the process and for retabling the amendment to ensure that it becomes part of the Bill.

Grouped with Amendment 2 are three government amendments to clauses relating Welsh Ministers. They are essentially minor and technical in nature and have been requested by the Welsh Assembly Government. Amendment 3 clarifies that Clause 13(6) refers to internal drainage boards which have responsibility for geographic areas partially but not wholly within Wales. National boundaries do not necessarily follow catchment areas. Amendment 4 is a drafting amendment to ensure that the procedure for transfer schemes made by Welsh Ministers under Clause 23 applies to transfer schemes set up in connection with orders made under Clause 13. Amendment 10 alters the Long Title to reflect the fact that the Bill as amended on Report grants powers to Welsh Ministers in Clause 13 in relation to a number of other bodies and offices in addition to those powers that already exist in relation to environmental bodies specified in, and by virtue of, Clause 12. These amendments rightly clarify the Government’s intentions for the use of powers in the Bill and I trust that they will be welcomed by the House.

Amendment 2 agreed.

Clause 13 : Powers relating to other bodies

Amendment 3

Moved by

[Lord Taylor of Holbeach]

3: Clause 13, page 8, line 27, after “board” insert “for an area”

Amendment 3 agreed.

Clause 24 : Transfer schemes: procedure

Amendment 4

Moved by

[Lord Taylor of Holbeach]

4: Clause 24, page 14, line 35, after “12” insert “or 13”

Amendment 4 agreed.

Clause 25 : Transfer schemes: taxation

Amendment 5

Moved by

[Lord Whitty]

5: Clause 25, page 15, line 28, at end insert—
“( ) In relation to a transfer to another public body or to any other body of functions, duties or powers under section 1 or 5, or to a merger (where such transfers are involved), under section 2, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246) shall apply to a transfer which relates to rights or liabilities under a contract of employment whether or not the transfer would, apart from this subsection, be a relevant transfer for the purposes of those regulations.
( ) In the case of an employee of a body whose functions, duties or powers are transferred or merged under section 1, 2 or 5—
(a) a period of employment with the transferor is to be treated as a period of employment with the recipient organisation;(b) the transfer to the recipient organisation is not to be treated as a break in service.”

[Lord Whitty]

This amendment deals with the way in which the employees of the organisations covered by this Bill are dealt with. On one level, I apologise to the Minister for bringing the issue back because we debated it in Committee. Subsequently, I had a meeting with him and he sent me a useful letter. His goodwill in this respect is appreciated. However, I do not think that the situation is as clear as it should be, and I certainly do not apologise to the House or to the Government as a whole for bringing back an issue which is important to what are still several thousand public sector employees in those organisations which remain in the Bill.

One has to accept that some of the anxieties and suspicions relate not so much to the Bill as to the perceived general attitude of some members of the Government towards public service workers as a whole. Many employees of the organisations concerned have huge expertise and have been there for many years. They have done a very effective job on behalf of the population as a whole in those areas of public responsibility.

I appreciate that the Government have reached a conclusion that some of these bodies are no longer necessary. They have also reached a conclusion that some of their functions, powers and responsibilities are best carried out elsewhere, either in central government, the private sector, the third sector or in other public bodies. That has left huge uncertainty among employees. The Minister’s assurances have gone some way towards clarifying the position, but not entirely. The Minister’s position seems effectively to be that where there is a transfer, TUPE will apply, except where there is a public function exemption, in which case the Cabinet Office guidance—the COSoP, as it is termed—will apply, which will give rights and responsibilities equivalent to TUPE. If there are any doubts, what is now Clause 23(6)(f) will apply and Ministers will be able to clarify the situation when the regulations regarding individual organisations come into play.

On the face of it, that is a relatively watertight position and, generally speaking, the principles of TUPE will apply where there is a transfer. I do not apologise for reverting to the organisation of which I was chair until Christmas and which is still in the Bill. For reasons best known to the Government it is listed under Schedule 1, for abolition, whereas BIS’s policy as far as I understand it is to transfer the powers rather than to abolish them. They will be transferred in the main to Citizens Advice, which is a private sector body. If that is the case, it is not clear which powers, functions and responsibilities are being transferred or whether all of them will be, and whether they will all be transferred in the same direction—it is clear that they will not, because Citizens Advice Scotland and the Consumer Council for Northern Ireland will have some, other bodies will undertake others and others will lapse. That is not an unusual situation with the various bodies still stipulated in the Bill; indeed, we have just had a debate focusing largely on the RDAs, some of whose functions will in effect transfer to local partnerships, local government and elsewhere. Uncertainty is therefore quite widespread until the consultative process leading to the regulations makes the situation clearer.

In his letter to me, the Minister has said:

“In any transfer scheme relating to an order made under the Bill, a person will need to … determine a ‘relevant transfer’, as defined by TUPE, is taking place. This will sometimes not be the case, for example where the new organisation will be carrying out a function or activity which is different in nature from the old, or where the exception in TUPE”—

which relates to public functions—

“applies. In the first case, it would not be appropriate to apply TUPE. The reality is that a ‘transfer’ is not actually taking place—employees’ roles are not going to be continued. Accordingly, the situation should be dealt with by their current employer terminating their contracts by reason of redundancy and meeting his liabilities as regards compensation”.

That is quite logical, but, regrettably, it is not what the guidance on TUPE from BIS actually says at present. It effectively says that the responsibility for determining which measures will be regarded as transferred rests not with the existing employer but with the transferee employer—so not the transferor employer.

That has caused some confusion in the past, as it did when Consumer Focus was first set up because it did not seem to be the logical way of approaching things. It made the Minister’s words seem more logical in many respects. But they are at odds with what tribunals have been interpreting under the 2006 regulations and what, in slightly obtuse form, the rather lengthy guidance issued by BIS states very heavily: it places responsibility on the transfer organisation. That is one example of the lack of clarity and we need greater certainty on the record.

Relatively few bodies involved in this Bill are designated for merger, but when there is a merger, everything goes into the merged body, whether or not that merged body will have the responsibility for doing everything that the previous organisation was going to do. In which case, the exemption does not apply, but on the Minister's interpretation TUPE does not apply either.

I am well aware that there is a general view in Whitehall, following the Cabinet Office's guidance and so forth, that says to staff, trade unions and Back-Benchers like myself, “Don't worry about it, you lot. It will all become clear. The Government are committed to applying the TUPE principles”. It is also true that in certain situations, where the function is not continuing, it may be in the interests of individuals for TUPE not to apply. But we still need clarification as to what is a relevant transfer.

In the case of my old organisation, it is not clear what is being transferred. It is not clear to whom and it is not clear whether some functions will not be transferred and whether TUPE or COSoP will be applied. In that respect and in relation to many of the other bodies, we anticipate a consultative document fairly soon. However, I understand that the consultative document on consumer structures that was expected to be issued in March has been significantly delayed and the final outcome of that is again not clear, so the whole process has been put back. I would like the Minister today to clarify the situation. I accept his goodwill in this matter and I assure him that I will not press the issue to a vote, but I would like on the record at this last stage an indication of where the Government stand.

It is not all that easy to rely as a safety net on what is now Clause 23(6)(f), which states that a transfer scheme may,

“if the TUPE regulations do not apply in relation to the transfer, make provision which is the same or similar”.

The clause says “may” and it is sensible in the drafting to say “may” because there are a lot of other subsections to which “may” clearly applies, but it would be helpful if the Minister would say that as far as that subsection is concerned, the transfer scheme “would” make provision for the equivalence of TUPE to apply in those circumstances.

I am asking the Minister to say what he has already attempted to convince me of, although I do not think we are yet there: that in all situations where there is a transfer or merger, individuals will be subject to either TUPE or the public sector equivalent. The default position should be that TUPE or COSoP applies and that in that sense the Government accept their responsibility to all employees of the quangos that remain subject to the Bill and to the obligations that they have in terms of individual and collective procedures under TUPE regulations.

If the Minister can use words to that effect, I will not press him further today and he will go some way to reassure several thousand rather anxious public sector employees, many of whom the Government will continue to need to rely on, albeit possibly in a different guise. I beg to move.

16:00

[Baroness Turner of Camden]

My Lords, I rise to support my noble friend on this amendment and thank him very much for introducing it. As he rightly says, there is a great deal of uncertainty among public sector workers at the moment. Of course, there is a bit of a campaign about the public sector, as far as I can see, on the part of certain sections of the press, designed to give the impression that public sector workers are so much better off than people in the private sector. If you look at it very carefully, that really is not the case. On the other hand, it all adds to the sense of insecurity that many public sector workers feel. Therefore, it is essential that there should be something in this Bill that makes it clear that when people are transferred they have the protection afforded by the TUPE regulations.

Not to give that sort of protection would be to give the public sector workers, who provide the services that we all rely on, the sense that they are disposable. Our workers are not disposable and must be protected in the way suggested in the TUPE regulations. I therefore hope that the Government this time round feel that they have to support this amendment and that it eventually appears on the face of the Bill.

[Lord Taylor of Holbeach]

My Lords, I am grateful for the opportunity of coming back on the amendment proposed by the noble Lord, Lord Whitty. I am sorry if my prose failed to clarify the situation as well as it might, and I hope that my words and the speech prepared for me provide the clarification that the noble Lord seeks. He used the phrase, “words to that effect”. Let us hope that these words that I am about to deliver are to good effect.

The amendment gives me, as the Minister taking this Bill through the House, an opportunity to say that the Government recognise the valuable contribution made by their staff. We want to be, and feel that we are, a good employer, and staff in public bodies are important for good governance. We are keen to support all those affected by change and are committed to TUPE and COSoP as they currently apply. The noble Lord, Lord Whitty, agreed that extending TUPE is not necessarily the best option for all staff, which is what makes this particular matter more complex than it might otherwise be.

The amendment would require that TUPE regulations apply to any transfer of functions or activities that take place as a result of an order made under the Public Bodies Bill. As I did in Committee, I would like to inform the House why the Government believe that existing protection for staff is sufficient and why it would be inappropriate to accept the suggested amendment.

The purpose of TUPE and the European law that underpins it is to protect staff in circumstances where the business that they work for or services to which they are assigned are to be carried out by a different organisation. TUPE ensures that the staff retain their jobs and conditions with new employers stepping into the shoes of the old. When a change falls within the TUPE definition of “relevant transfer”, TUPE will apply and the staff will be protected. The definition is broad and many changes brought about by the Bill will be covered. However, there may be circumstances where it is uncertain whether TUPE applies or is excluded.

Clause 23 gives the Government the power to provide protection to staff in circumstances where TUPE is not engaged. This is underpinned by the Cabinet Office statement of practice on staff transfers—referred to as COSoP—which provides that, even where TUPE does not apply to public sector transfers, organisations will be expected to apply TUPE’s principles as a matter of policy. I assure the noble Lord that the Government remain committed to COSoP. In practice, such transfers are effected through legislation which closely follows the provisions in TUPE, including the continuity provisions.

Legislative transfer schemes which are used to effect transfers in non-TUPE situations do not always apply TUPE to the letter. For example, some schemes permit greater flexibility in relation to post-transfer contractual variations. This can assist the process of harmonising disparate reward packages, thus reducing the risk of unlawful discrimination, particularly on equal pay claims, and avoiding unnecessary barriers to reform. Where the change does not fall within the definition of “relevant transfer” because the new organisation will be carrying out a function or activity which differs in nature from the old, it would not be appropriate to grant TUPE protection; the reality there is that there is no transfer of employees’ functions—the staff are redundant and should be dismissed and paid the compensation to which they are entitled. I assure your Lordships that, if there is legal uncertainty on whether a function is to be continued, Clause 23 gives scope for TUPE protection to be provided.

It would be inappropriate to accept the amendment because, in the Government's view, the blanket application of TUPE to all those transfers which are effected pursuant to the Bill is not appropriate and could lead to inefficiencies and unintended consequences. The Bill provides a framework for a wide variety of reforms to public bodies. Given this, it is crucial that those involved in transfers taking place under the Bill retain the flexibility to respond to each situation according to the facts. It is necessary to form a judgment in each case about whether the particular facts fall within the TUPE definition of “relevant transfer” and, if not, whether a transfer scheme which follows TUPE principles is appropriate. Staff could otherwise be compelled to move and, perhaps, relocate—even where their work is not going to be continued—and all those involved in the transfer could find themselves subject to restrictions which are not helpful nor apposite to the situation.

I appreciate the contribution made by the noble Baroness, Lady Turner of Camden, and I thank the noble Lord, Lord Whitty, for again bringing this to the attention of the House. I assure them both that I am quite happy to write to them again and will keep them posted on developments under the legislation, if they wish. In respect of Cabinet Office advice in this area, I am perfectly happy to keep all noble Lords informed on this matter. However, in the light of the assurances that I have given, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I, too, thank my noble friend Lady Turner for her points underlining the issue of uncertainty that surrounds so many employees in these organisations and beyond at the moment. I am also grateful to the Minister for stating pretty clearly the Government’s commitment to the TUPE principles and to continuing to apply COSOP where that is the relevant coverage. I was slightly more dubious about the last two or three paragraphs. There is a slightly schizophrenic nature to the Minister's response. I do not know whether two people drafted his speech for him, as he carefully said at the beginning. On the one hand, there is that very clear commitment, which I appreciate. It is an important message for the Government to get out there. There were then references to flexibility in situations which hitherto may well have been regarded as transfers. I accept that some fine-tuning of TUPE is necessary and helpful, provided that that is done individually or collectively with the employees concerned.

The situation where neither TUPE nor COSOP applies probably requires one-off handling. However, if the principle is that the main principles of TUPE will be held to apply unless there is a good reason why they should not, I would rather have heard a speech from the Minister in those terms—that the default position is that TUPE should apply. However, clearly I am not going to get a lot more from the Government on this one; I think that I have done quite well over the previous stages of the Bill. I suspect that there will be some work for our learned friends in some of these areas, and I hope that the good will extended by the Minister at the beginning of his speech and the commitment to the TUPE principles that he reflected here will in practice be reflected in the proposals for the individual organisations and the approach that the individual departments take when we are drawing up the regulations to implement these parts of the Bill.

I thank the Minister. I am not entirely satisfied, and I suspect that some people outside will not be either, but I will not press this today. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Schedule 1 : Power to abolish: bodies and offices

Amendment 6

Moved by

[Lord Hunt of Kings Heath]

6: Schedule 1, page 19, line 36, at end insert—
“4 The explanatory document required under section 11(2) in respect of the regional development agencies must include—
(a) the wording of the question that was asked about the principle of abolishing regional development agencies;(b) a summary of representations received in respect of the principle of abolishing regional development agencies.”

[Lord Hunt of Kings Heath]

My Lords, we have already debated my Amendment 6, which would ensure that when the consultation takes place on the abolition of regional development agencies, there has to be a proper consultation. It is an important point of principle and I beg to move.

16:11

Division 2

Ayes: 172

---

Labour: 140
Crossbench: 23
Independent: 2
Bishops: 1
Plaid Cymru: 1

Noes: 215

---

Conservative: 130
Liberal Democrat: 54
Crossbench: 22
Ulster Unionist Party: 2
Independent: 1

16:23

Schedule 5 : Power to modify or transfer functions: bodies and offices

Amendment 7

Moved by

[Baroness Deech]

7: Schedule 5, page 22, line 11, at end insert—
“2 An order may not be made in respect of the Human Fertilisation and Embryology Authority or the Human Tissue Authority unless an independent assessment indicates that making such an order under section 5(1) would increase the cost-effectiveness of the functions exercised by that Authority.”

[Baroness Deech]

My Lords, in a nutshell what I and others are calling for is that the HFEA and the HTA should remain untouched until a new research regulatory body is in place with its own statute ready to receive those functions, and that in the mean time there should be a wholly independent external review of the HFEA.

The HFEA is like no other quango. Its work touches deeply on the intimate lives of the one in six couples who cannot conceive naturally, the health of babies, scientific research, cures for diseases now and in the future, the profits of scientific companies, and public morality. It is unique, has an international reputation and was a British first. I am seeking to preserve it from being shattered and to prevent lasting damage being caused to that area.

The HFEA and the Human Tissue Authority, to which similar considerations apply, are both listed in Schedule 5 as bodies that may have their functions transferred or modified under Clause 5. In Committee and at Report, amendments were tabled to remove the HFEA and the HCA from that schedule but, for various reasons, the proposal was not voted on but withdrawn to give the Government a further chance to reflect on the damage that it seems to us will be done, which we were convinced would persuade the Government to change their minds. This did not occur. Indeed, it seems that the Government are developing policy in this area as they go along. I sometimes suspect that behind closed doors there would be relief if the amendments being looked at by the House today were to succeed.

The first two amendments in the group are set down in my name and those of the noble Baroness, Lady Warwick, the noble Lord, Lord Walton, and the noble and right reverend Lord, Lord Harries, who cannot be in his place today because he has an unbreakable prior commitment but is giving his full support. The amendments seek to rectify an omission—the need for an independent review—and to prove a point that change in the organisations will be for the worse.

We have the support of the key organisations in this field—the Association of Clinical Embryologists, the British Fertility Society, the British Infertility Counselling Association, the BMA, the RCN, the RCOG and the Infertility Network UK. They do not consider that the HFEA should remain in the Bill because there has been no full and impartial public review of the risks and benefits of the new proposals, including the financial costs of all the options. However, as I have said, the removal of the two bodies from the schedule is not now a possibility. There is agreement that there are some elements of its remit that the HFEA could do better. Therefore, there should be an independent external review of the HFEA, with the aim of reducing bureaucracy, increasing accountability and saving money—albeit that the cost to the public purse is only £2 million and can be reduced. Even those who are most critical of the HFEA cannot oppose these two amendments, which call for just such a review.

The consultation proposed by the Government is not at all the same. No doubt the HFEA’s working practices could be streamlined with other regulators. Efficiencies could be found in the back offices and research regulation could be improved. However, there was no need to include the HTA and the HFEA in this Bill. No matter how irritating the HFEA may have been found to be by clinicians, they must surely welcome a review, for if they accept the Government’s way forward the irritations will no doubt increase and there will be no improvement of those functions.

I wish to say a few words about the third amendment, Amendment 9. Just shifting the HFEA into the Care Quality Commission will not achieve money savings or efficiency. The shift will not meet the objections of the professionals to some of the ways in which the HFEA works. I am saying: do not take it apart but make it better, with an impartial review by, for example, the King’s Fund, the Nuffield Foundation or the Wellcome Trust. Indeed, the proposed overarching regulatory body could work with the HFEA to achieve the aims desired by the Government. By splitting away the research functions of the HFEA as the Government propose, there is the risk of creating additional bureaucracy and increasing, rather than diminishing, the burden of regulation. The HFEA and HTA functions will be transferred to the Care Quality Commission, and research will go to a new body that has not yet been created. There is to be consultation about that reallocation of functions, even about the database—perhaps the most important feature to be concerned with in dismembering the HFEA—but in the mean time, the shadow of destruction hangs over the HFEA. That will affect staff morale and retention, and the confidence of scientists and clinicians, who rely on it for legitimacy and guidance, not to mention international respectability.

16:30

I submit that the CQC does not have the experience or expertise in the complex areas governed by the HFEA and the HTA, and there is the danger of losing the corporate knowledge developed over the past 20 years, along with the relationship built up between the HFEA and the clinics. There is no practical benefit in abolishing the HFEA and handing its responsibilities over to the Care Quality Commission. More members of staff will have to be recruited and trained to replace the existing ones. Rearrangement of all external relations will have to be accomplished. The efficiency and cost-effectiveness of that has not been tested. Nobody can understand why that is being done, when other countries such as Canada are trying to emulate what has been done so successfully here over the years to regulate infertility practice and embryology while staying ahead of the field in maintaining safety and patient confidence.

If ever there was a time to protect consumers in this field, it is now. Patients are used to having a single port of call for information and complaints. To disband the HFEA and the HTA sends the message that the Government do not trust the way that tissue, infertility and embryology is handled in this country. It is a message that will go right around the world.

I fear that there will be fragmentation in an illogical way. The latest government proposal is that the licensing of embryo research, the release of identifying treatment data to researchers where it is not practicable to obtain consent, and the provision of guidance to researchers will be hived off to a new research regulatory body. Those things are in fact inseparable from the maintenance of the database, which is of enormous significance in itself, and advice to patients, all of which is HFEA-based now. There is no definite timetable for the establishment of a new, overarching research regulatory body, on which the architecture depends. It depends on new primary legislation, likely to be after 2012. In the mean time, it is proposed that there be an interim special health authority in 2011-12 to bridge the gap until the hoped-for primary legislation in the second Session of this Parliament. It will need more funding from the Department of Health budget.

If noble Lords think that that is incomprehensible and confusing, they are right. The cost of a bridging research agency will no doubt far outweigh any savings—not that we have been told what they might be—that could be envisaged in the transfer of HFEA and HTA functions. That is why the third amendment has been tabled. Our preference, of course, is that your Lordships should vote for the first amendment, which calls for a review, but even so, if there is to be transfer, the Government's intentions have not yet been made plain in detail. Why is a bridging authority necessary? How much will it cost? How can an interim body deal effectively and authoritatively with ethical questions—those specific to the sensitive functions of the two existing bodies? That is why the third amendment is here, for it covers newly revealed policies not hitherto debated or explained in sufficient detail. Can the Minister guarantee that the HFEA and the HTA will remain untouched until legislation is in place and all is set to receive their functions into a new body? Of course we do not know what the other place will do in this area.

Some have said that IVF is routine and does not need special attention. That is not the Government's view, for they rightly propose to stick to the primary legislation. The Human Fertilisation and Embryology Acts will stay in place; they will not go. The demands that they place on laboratories and clinicians will stay, every word of them. Nor do the public think that IVF is routine. Their emotions and intelligence are engaged by every new development—for example, as recently reported, in treating mitochondrial disease, set out in some of the tabloids as having three mothers; in screening embryos; and in protecting the patents on stem cell work. All those who hope for cures for terrible diseases are involved in this debate. The uniting of eggs and sperm, and the resultant possibilities, can never be routine unless one is very hard-boiled. This is what commentators have said. The Guardian said:

“The abolition of the HFEA will leave a major policy vacuum in biotech ethics. Without intervention, it’ll be filled by the Daily Mail”.

The New Statesman said:

“The regulation of fertility and embryology … will now be hidden within the remit of the Care Quality Commission … There will be repercussions … Without a distinct, visible body to oversee reproductive ethics, scientists in the field stand to lose public trust”.

I should have said that I declare an interest, in that I was chairman of the HFEA years ago, and my heart is engaged in this topic for the sake of the patients and because of the whole enormously enriching field that was opened up to me and to many others. I urge your Lordships to do the right thing—to call for a review before committing this pointless transfer, which will save no money and damage British interests. I beg to move.

[Lord Walton of Detchant]

My Lords, I added my name to the first two of these amendments for a variety of reasons. Four or five years ago in a debate on the National Health Service in your Lordships’ House, I remarked that I had identified more than 40 organisations that had the right to inspect, assess and consider health service activities, and I defined those organisations as constituting an intolerable “quangocracy”. I believed that I was the first to create that neologism but since then others have claimed authorship. However, when I heard of the Government’s intention to embark upon a bonfire of the quangos, the two quangos that I would never have contemplated being the first to go on the bonfire were the Human Fertilisation and Embryology Authority and the Human Tissue Authority. In my opinion, each of them has fulfilled and continues to fulfil a vital function—vital for suffering humanity and vital for the pursuit of medical research—and I believe that the Government’s current proposals are likely to be damaging to both bodies and their functions.

Why do I say that? Perhaps I may go back. The Human Fertilisation and Embryology Authority was established by the Human Fertilisation and Embryology Bill based on a splendid report prepared under the chairmanship of my noble friend Lady Warnock. From the moment the authority was established, it required that any individuals wishing to work with human embryos up to 14 days after fertilisation would have to have a licence from the authority. In the first instance, that licence helped greatly to improve the treatment of infertility.

However, as time went by, the Act was amended and we went on to develop the pre-implantation diagnosis of genetic disease, allowing individuals carrying harmful genes which would produce in their offspring very harmful diseases to be studied so as to prevent diseases such as cystic fibrosis and Duchenne muscular dystrophy. Later still, amendments to the Act led to many other crucial developments. Further regulations made it possible to use spare embryonic material in in vitro fertilisation programmes to generate stem cells for the treatment of human disease, and that is slowly but surely becoming a reality. As my noble friend Lady Deech said, only recently the HFEA established an expert committee to examine the results of some highly fundamental world-leading research, carried out in my former university of Newcastle upon Tyne, using the technique of pro-nuclear transfer for the prevention of mitochondrial disease. I as a neurologist have seen and tried to help and treat patients with devastating mitochondrial diseases. This is a massive development which is likely to be of enormous value to humanity.

I agree that it is possible to consider the transfer of these research functions to other organisations but let me make one or two important points relating to that proposal. The Care Quality Commission has recently merged the Healthcare Commission, the Mental Health Commission and the social care commission. It has taken on a massive regulatory task. I cannot conceive of any mechanism by which that organisation, constituted as it is, could possibly fulfil the functions of the HFEA without creating within itself expert committees with the right kind of background and expertise to be able to assess the importance of the functions that it will be absorbing from the HFEA. If that is the case, why abolish the HFEA or merge it into a body that is certainly not constituted to carry out those particular functions?

Let me turn for a moment to the Human Tissue Authority. The Alder Hey scandal was a failing on the part of members of my profession. Everyone in the profession knows that when a post-mortem is carried out inspections of the organs that one sees at that examination cannot, except in most unusual circumstances, give you the full diagnostic picture or the information necessary to prove the cause of death, or give evidence that is likely to help in future research. To obtain that information it is necessary to remove the organs and to fix them in formalin. After they have been fixed you then take sections that are examined under the microscope which give you diagnostic information. Regrettably many pathologists took the view that when permission for a post-mortem was given, that gave them authority to retain the organs and they did not regularly seek permission to retain them. Now, of course, the Human Tissue Act makes it absolutely clear that the retention of organs after a post-mortem for examination and diagnostic purposes absolutely requires the permission of the next of kin of the individual who is undergoing a post-mortem examination.

Quite apart from that the HTA has major responsibilities on issues such as the transplantation of human organs. There are many sensitive issues, such as whether someone donating an organ should be in any way compensated, whether it is appropriate that it should come from blood relations or whether well-meaning individuals not related to the individual should be allowed to give an organ for transplant. These and many other issues fall to the remit of the HTA. I recall very well when we considered the Human Tissue Act in your Lordships’ House and in Grand Committee—it took hours and hours of consultation. The Bill as it came to us from the Commons contained several major defects. Those major defects would have hamstrung diagnostic purposes and been immensely damaging to the future of medical research—not least the constraints on the use of archive material which had been removed from patients years before and which were vital for research purposes.

Happily we were able to introduce some major amendments in your Lordships’ House to improve the Human Tissue Act and to establish the Human Tissue Authority. I remember very well, as I am sure will the noble Lord, Lord Jenkin, that several people in the research community and in the royal colleges said, “Thank God for the House of Lords”. That Act was improved and the Human Tissue Authority was given the appropriate regulations to enable it to fulfil its function.

If the process that the Government intend goes ahead, and if these bodies are merged with the Care Quality Commission, who will be responsible for licensing? Will they carry out inspections and have the authority, under the Human Fertilisation and Embryology Act, to withdraw recognition from people who are not fulfilling the terms of their licence?

16:45

I have heard a suggestion that the research functions of these bodies might be transferred to a future health research agency. I am immensely supportive of the splendid report produced by a committee chaired by Sir Michael Rawlins for the Academy of Medical Sciences on the future regulation of research. The main purpose of the report is to clarify and make easier many of the constraints that have been imposed on multicentre research projects; it is to make medical research easier to regulate and conduct. To convey to that body, if it is eventually established, the responsibilities for research held by these two organisations, will not be its primary function, although of course the Government have not yet legislated—and may not for some time, until the next Session of Parliament—to establish the health research agency. In the mean time, it is crucial that the HFEA and the HTA—which are not perfect; they each have problems, which can readily be resolved without legislation—should be allowed to continue with their functions, because the proposals that the Government have put forward will be inestimably damaging to the future of embryo research and research in a variety of medical fields. I warmly support the first two amendments in the group.

[Baroness Bottomley of Nettlestone]

My Lords, I, too, support the amendments of the noble Baroness. My interest is that I appointed her as chairman of the Human Fertilisation and Embryology Authority all those years ago. One of the first Bills for which I had responsibility in Parliament when I was Minister for Health was the Human Fertilisation and Embryology Act, following the very distinguished report of the noble Baroness, Lady Warnock. I have also served on the Medical Research Council.

The noble and right reverend Lord, Lord Harries, said that umpteen days had been spent debating the Bill. I like that term, and it is absolutely accurate. I, too, when I was a Minister in another place said, “Thank God for the House of Lords”, because, whenever a particularly difficult and emotional issue arose, I knew that words of wisdom could be consulted in the House of Lords. They were a very good touchstone for me when I took on the task.

If ever there was emotion between scientists, clinicians, social scientists, theologians and patient groups, it was then. The fact that it has now become a relatively quiet issue does not mean that it does not have the potential to become once again extremely noisy. It speaks for the hugely effective way in which the HFEA has gone about its work, and the confidence that it has built not only in the United Kingdom among all parties but, as has rightly been said, around the world. If clinicians are irritated by the HFEA from time to time, that makes me even more convinced that there must be something good about it, because there is a distinction between the mind of the scientist and pioneering doctor, and the ethical balance of those calling for slightly more caution, control and constraint. When the area is that of the creation of life outside the body, it is a moral issue: we should never forget that.

The Minister, who is sympathetic, thoughtful and kind, and who listens endlessly to requests from Members of this House, has already been extremely accommodating. He has agreed to coherence and transparency; he has agreed that he will not rewrite the ethical standards; and he has agreed that most of the functions should be kept together. Nevertheless, the Care Quality Commission has a huge agenda of work, as was rightly said by the noble Lord, and most of its activities are of a different nature from those of the Human Fertilisation and Embryology Authority, so can the Minister give us further assurances and find a way to meet the objectives of the noble Baroness’s amendments?

Amendment 9, which is about the establishment of the health research regulatory agency, is even more important to me because it seems to be a prerequisite for the changes taking place. Of course we all believe in what we have now learnt to call a bonfire of the quangocracies. The easiest thing for any junior Minister to do is to make their name by setting up a quango; it is much harder to make your name by shutting down a few quangos, and we know it needs to happen. However, like other noble Lords, I urge the Minister to think very carefully before he puts the HFEA and the HTA at the top of his list.

[Baroness Warwick of Undercliffe]

My Lords, I shall speak to all three amendments in this group. I declare my interest as chair of the Human Tissue Authority, whose work is so much affected by this Bill. At the start of the passage of the Bill, there was much confusion over its purpose and the future direction of travel for many of those arm's-length bodies listed in it. Much progress has been made during the passage of the Bill. The Government have given due attention to concerns raised, thought through the potential outcomes and clarified many issues for all of us. I want to thank the Minister, the noble Earl, Lord Howe, for the attention he has paid to our specific areas of interest: the HFEA and the HTA. I particularly welcome his statement in the letter he sent to my noble friend Lady Thornton in which he recognised the need for our preferred option, which is to keep the functions of the HFEA and the HTA together, and gave a commitment to discuss directly with the HTA any potential movement of our research-related functions to another organisation.

I believe we are nearly there, but I feel that these amendments are necessary and will act as a safety framework for the Bill as it enters the other place and then goes onwards for external consultation. We are seeking a set of reassurances and safeguards from the Minister to ensure that the hard work everybody has done to shape this Bill will not be lost further down the road.

The noble Baroness, Lady Deech, and the noble Lord, Lord Walton of Detchant, have already set out the main arguments in favour of the amendments. I support them and shall not reiterate them. The amendments suggest measures by which the Government could assess the cost-effectiveness of the proposed moves, and I urge the Minister to consider utilising them. In his letter to my noble friend Lady Thornton, the Minister addresses the need for an impact assessment, but he proposes only a partial assessment. I believe that a full and thorough assessment is needed in order to give a true picture of cost-effectiveness. We are all looking for ways in which to reduce costs and bureaucracy and therefore see an increase in cost-effectiveness as the gold standard we should aim for in the public services we provide. If a saving is made in one area only to increase costs in another, that would be unacceptable. It is for this reason that I urge the Government to conduct a full impact assessment, not a partial one.

The HTA is already recognised as an efficient regulator with a clear focus on improving value for money. We are a lean organisation costing only £1 million in government grant in aid and we will reduce that by 14 per cent in cash terms this year. We have reduced our licence fees across all sectors this year, including a 30 per cent reduction in the research sector. I have already raised and evidenced my concerns that any proposals to transfer the HTA's research functions would not achieve either simplification or financial savings. Indeed, we estimate that it would impose additional regulatory and financial burdens on around 200 establishments across various sectors. So I suspect it will not surprise your Lordships to know that I am concerned to ensure that cost-effectiveness is real and not just perceived as an outcome of this assessment.

I now turn to the amendment that deals with setting up the new independent health research agency. As I mentioned, I seek reassurance from the Minister in a set of safeguards. The Government have set out a draft transfer timetable, and have made clear their intention to cause the least amount of disruption to all involved by enacting all transfers of the HTA and HFEA functions at the same time. None of this can happen until the health research agency has a legal basis in its own right and it has been decided whether any HTA functions should transfer to it. Will the Minister therefore outline a more specific timetable for its establishment, and reaffirm his commitment to hold off transfers until then?

In addition, the amendment would require that a separate ethics committee be established within the new agency to undertake the ethical considerations of any functions that are transferred. This would be paramount in ensuring that we do not lose public and professional confidence through this period of change and that we continue to ensure that tissues and organs are used safely and ethically and with proper consent. Finally, therefore, is the Minister minded to establish such a committee and so accept this amendment in full?

[The Lord Bishop of Guildford]

My Lords, I support both this amendment and the two related amendments that follow it. They would guarantee in one way or another that the enormously valuable work of precisely the present ethics committee of the two bodies is continued. I speak in general, so far as a Bishop can ever speak, for the Christian churches and for other faith communities for whom the human embryo and human tissue have moral significance. That is not to say that the present ethics committee is in the pocket, so to speak, of the Bishops or of any faith community leaders. It is not, and the range of views and commitments of its members is and should be wide. However, it would be a serious mistake not to have an ethics committee or expert body specifically to weigh the moral as well as the medico-scientific questions that are involved in this very proper research, not least into the tragedy of infertility.

Also of great significance for me is the serious support of the relevant professional bodies, so I urge the Government to consider these amendments very favourably.

[Lord Alderdice]

My Lords, I declare an interest because my wife is a pathologist who works in the National Health Service. She does no forensic work. Nevertheless, I declare that interest appropriately.

A number of noble Lords have mentioned the importance of the role of the House of Lords in considering such difficult and complex matters. We had plenty of evidence of that even before the Bill came to your Lordships' House, at least in debate on these two issues. Indeed, we had a very fruitful debate on 1 February this year in the Moses Room on the questions. There is a great deal to commend the amendments, although I have some difficulty with the fact that they link the two bodies. They are quite different in many ways and have a somewhat different track record and set of relationships.

I listened very carefully to what the noble Baroness, Lady Deech, said, and I do not disagree with any of it. She put forward her case clearly, but she focused in particular on the HFEA. A whole set of very important issues are involved there, and I hope that my noble friend the Minister may be able to give some kind of comfort to her and her colleagues, because I have a lot of sympathy for her case, as I do for much of what the noble Lord, Lord Walton, said. However, one of the difficulties has been that although there is clearly a need for legislation and for a body that undertakes these matters—the operation of the HTA in Scotland has been rather better than it has in England—it is important to draw to the attention of your Lordships' House that the impact of the way in which the legislation has been interpreted and conducted by the HTA has not inspired confidence, particularly among pathologists. I heard what my noble friend said about that proving what a good thing it is, but that does not show a very nuanced understanding of what is going on.

17:00

One of the problems, which the noble Lord, Lord Walton, and other medical noble Lords will know very well, concerns the final diagnostic tool, the post-mortem. We all have our thoughts about diagnosis from a clinical point of view but in the end you will get a definitive answer from the pathologist after a full post-mortem and all the investigations. When I was training, the Government’s ambition was that 10 per cent of all non-forensic cases would have post-mortems conducted. Why? It was in order that there would be a proper audit of clinical diagnosis. Is that the case? On the contrary, it has gone completely in the opposite direction. There are whole departments now where month after month scarcely a post-mortem takes place. We are now coming to the point where many members of the Royal College of Pathologists feel completely deskilled in the process of conducting post-mortems because there has been a feeling of a hostile environment in the conduct of post-mortems. We have to recognise this.

I shall quote from a letter written in February by the president of the Royal College of Pathologists to the right honourable Andy Burnham, the Minister. It is an eight-page letter from which noble Lords will be relieved to know I will quote only a short amount. The letter states:

“The Royal College of Pathologists does not contest the need for legislation on the uses of human tissues that led to the Human Tissue Act 2004—though we do continue to protest, with others, that aspects of that legislation are not working as intended and that the parallel Scottish legislation is much more sensible. Nor do we deny the need for a regulatory body such as the Human Tissue Authority. But it seems obvious that the HTA and the profession need to work together with mutual respect, and that at present neither group is displaying that respect. The recent actions of the HTA have considerably exacerbated an existing problem. Since the events”—

he refers to earlier events to which he has referred in the letter—

“pathologists will inevitably perceive the Human Tissue Authority as an aggressive regulator, all too ready to wield the force of the criminal law even when, it transpires, a crime has not been committed”—

thus wielding the law against medical practitioners. The letter continues:

“Changes in the attitudes of pathologists cannot be expected to occur without very visible and major changes in the Human Tissue Authority”.

The letter goes on to list a page of suggested changes.

That is not to say that there should not be some kind of authority or legislation. But it is important to put on record in your Lordships’ House that everything had not been going smoothly and suddenly the Government have come in to knock over something that was working perfectly well. As I say, I exclude the HFEA from that discussion. That is not the issue for me.

Having said all that, and giving that as a backdrop to my sense that it would be easier if the HTA and HFEA were not in the same amendments because they involve different issues, I have considerable sympathy with the intentions behind these amendments. They are thoughtful and are an attempt not to knock the whole applecart over. They try to ensure that the transitional arrangements, and where we come to at the end of the journey, are building and capitalising on all the very good things that have happened and that none of that is lost. In that regard, I hope my noble friend may have some comfort for those who have put their names to these amendments and that they will find some satisfaction.

[Lord Newton of Braintree]

My Lords, I wonder whether I might start by expressing my warm thanks to my noble friend Lady Bottomley for intervening in this debate. I had been dithering about whether to do so because for reasons I cannot understand my Front Bench regard me as a bit of a troublemaker on this Bill. Since no one could possibly accuse my noble friend Lady Bottomley of being a troublemaker, she has leant me a cloak of respectability, which I now put on. I agree very much with what she said. I should perhaps declare an historic interest as chair of a hospital trust that did transplants at the time that the Alder Hey events came to light and was, therefore, much interested in the introduction and passage, and the subsequent success, of the Human Tissue Act. So I have some longstanding interest in this.

But even without that, there is a concern that what we may be doing here is upsetting arrangements that appear to have worked pretty well without being at all clear about what we are going to put in their place. My noble friend also referred to her concern, as I have done on an earlier occasion, about whether the Care Quality Commission, which already has more on its plate than it can deal with, can take on any more until it has settled down to what it is seeking to do at the moment. Given the eloquence of the speeches made, particularly those of the noble Baronesses, Lady Deech and Lady Warwick, the noble Lord, Lord Walton, and others, I hope that my noble friend the Minister will give these amendments very careful consideration indeed.

I hope your Lordships will not think that I am indulging myself if I take this opportunity to express my gratitude for the kind words said at the last knockings of the Report stage about my absence at the time through ill health. My particular thanks go to the noble Lords, Lord Pannick and Lord Whitty, for picking up a couple of my amendments, even though they did not get what I would regard as perfect answers. I am also grateful for the very warm words of the shadow Leader of the House, the noble Baroness, Lady Royall, who I am sorry not to see in her place. She was kinder about me that I ever thought I would deserve, and as a result probably caused more upset on these Benches. It would be tempting as a counterpoint to say that my noble friend Lord Taylor of Holbeach saw me here last week and his first words were, “Should you really be here? Wouldn’t you be better off at home?”. But that would be very unfair because he has been genuine solicitous of my welfare and has actually offered to release me from slavery even when he thinks I would not cause trouble. I am very grateful to him.

I have already indicated to my noble friend Lord Howe that I have some sympathy with these amendments and that I shall listen carefully to what he says if he does not want to accept them. I want simply to tell him that what he says will have to be good.

[Lord Willis of Knaresborough]

I rise to speak specifically in support of Amendment 9, to which I have added my name. However, I want first to record my thanks to the noble Earl, Lord Howe, on the Front Bench for the very courteous way in which he has tried to respond to these issues throughout the passage of the Bill. The reality is that we should not be at this particular juncture now. If we had had proper consultation before these proposals came to light, we would have been able to argue the issues out sensibly and carefully. I recall the way the last Government treated the draft tissue and embryo Bill. They created a committee of both Houses that looked carefully at the issues and prepared a report. It was accepted by them and actually changed the legislation that was going through the House. With hindsight, we can always do things differently, as we learnt last Thursday.

I think that Amendment 9 is crucial. The Academy of Medical Sciences made a proposal to create a health research agency that was not just supported by the medical and research professions, but by all the political aspects of all the parties in both Houses of Parliament. It is rare for that to occur. I have argued with the Minister that the real crux of this Bill is not knowing what you are actually going to move to. I think that the concerns about the CQC are a little unfair. The reality of the situation is that the CQC already regulates and inspects a significant number of premises and establishments that deal with the use of embryos, embryo research and the clinical application of techniques using embryos. There is already significant duplication, so to argue that a new body would either increase or decrease duplication would depend on how you finally decide which functions will go to which organisation.

Health research is also crucial. The report of the noble Baroness, Lady Warnock, has rightly been mentioned often today. She established firmly back in the 1980s the fundamental issue of the special nature of the embryo, particularly when dealing with research. The noble Baroness, Lady Deech, is absolutely right that the founding of the HFEA has enabled research using the embryo, particularly when we started to look at stem cells and admixed hybrid embryos, to go through. That is because there has been a regulatory authority for which there has been public as well as clinical and academic support. We throw that away at our peril.

I put it to the Minister in Committee that we could not move to an interim authority for health regulatory research and believe that we could maintain continuity and credibility within the research communities both here and abroad. Unless we establish the health research agency, we will lose ground. It is too important an area for us simply to say, “Well, we'll wait and see’. In his incredibly helpful letter to the noble Baroness, Lady Thornton, the Minister referred to setting up an interim authority. However, in Committee, I proposed to my noble friend that a new clause be inserted in the Health and Social Care Bill to set up the paving legislation for the new regulatory research agency. My noble friend makes it clear in his letter to the noble Baroness that that Bill is now on hold for a while for a variety of reasons. Surely this is an excellent opportunity for the draftsmen to put into that Bill a clause which enables the agency to be set up. At one fell swoop, an early place in the legislative timetable—literally within the next six months could be given to an agency that all of us agree needs to be in place. Amendment 9 offers the Minister the opportunity to respond positively today and we could go ahead with those proposals.

The second part of Amendment 9 deals with the incredibly important business of an ethics committee. Many people who are not involved in the ethical consideration of these issues believe that this is somehow a sop or an add-on. It is not; it is fundamental to maintaining confidence in the research frameworks and the regulatory authorities. I hope that when my noble friend the Minister responds to the amendment he will give us clear direction on how the new agency will have an ethics organisation which meets the aspirations not only of this House but of the research and clinical communities.

[Lord Winston]

My Lords, I have not decided whether I shall vote for or against the amendment if it is pressed. I shall listen very carefully to the Minister’s response.

One of the greatest ethical issues involved in this treatment is its lack of accessibility. It is a highly privileged treatment, because it is mostly in the private sector. It is true that the NHS provides some, but many health authorities have based their fees to some extent on the private sector. Therefore, the hard-pressed PCTs have not been able to offer as many treatments as many people recommend.

When I left practice running a large IVF clinic some five or six years ago, we were charging very much less than is currently charged by clinics. We were still able to turn more than £1 million a year over to research and provide the Hammersmith Hospital with a great deal of surplus income, which was then used to treat other patients.

One of the key issues with which the HFEA has not dealt is the high cost of IVF treatment. In my view, it is a scandal. There are clinics that treat patients for around £3,400 a cycle. It is only when you look at their websites that you see that they are charging up to £1,100 to £3,200 for drugs that should be obtained on contracts at around £500 to £700 per cycle. Embryo freezing will be increasingly required if we are to limit the number of pregnancies that result in multiple births by transferring just one embryo each time. One clinic in London charges £915 for embryo freezing. That is for a mechanised treatment that is extremely easy to do in the laboratory. If that were not enough, the storage fees are £325 a year. Given that liquid nitrogen, which is what the embryos are stored in, costs a few pence a litre, that seems somewhat excessive, even allowing for the costs of regulation. I am afraid that the HFEA has shown itself to be completely unable to deal with this issue at all. This privileged treatment is a shocking issue.

Secondly, one thing that the HFEA claims to be doing is giving accurate information to patients. This morning, I trawled a few IVF clinic websites. A prominent clinic in London—which I can name but will not—argues on the front page of its website a 69 per cent IVF success rate. That figure is repeated twice on the website. It is only when you delve into the small print that you realise that it is nowhere near that. That is the cumulative success rate over several cycles of treatment. Another clinic argues that it has a 30 per cent success rate in women over 40 or 42. That is a biological impossibility given that the implantation rate alone of a patient under 40 is something around 18 per cent per embryo—at best 25 per cent. What the site does not say is that this is for pregnancy but not delivery of a live baby. It does not take into account the vast number of miscarriages that presumably these patients are going through. This kind of misinformation occurs again and again.

The Bridge fertility clinic offers a 71 per cent pregnancy rate per blastocyst treatment and 67 per cent success rate for pre-implantation genetic diagnosis. As someone who has been intimately involved with pregenetic screening of this kind, I find those figures, frankly, quite incredible. Perhaps they depend on very few patients being treated and a good deal of luck. But that is highly misleading. These treatments have not been validated by the HFEA. Presumably, that is why it has allowed advertising to continue.

Then we come to the ways of promoting treatments that are not acceptable in this country. There are several clinics in London alone that offer their services in, for example, Mauritius—that is one of the Harley Street clinics—the USA, India and Spain. There they can display all sorts of unvalidated success rates on their websites and in addition can offer treatments that are not acceptable in the United Kingdom, such as multiple embryo transfer. Why has the HFEA not withdrawn the licences of those clinics? Why has it not argued that this is dishonest and dangerous?

Then, of course, we have the question of the database, which has been referred to already. The database ought to be very valuable but, sadly, in practice it is useless because we cannot follow up patients in the long term. That is a very serious issue. As the Minister knows, epigenetic issues—early experiences in development from fertilisation onwards—may have a profound effect on our health when we become adults. IVF in this country is not followed up in this way, so we have no way of knowing whether some of the treatments or exposures of the human embryo may be more likely to cause damage at a later date.

Then we have the question of another issue, which the HFEA seems to have been totally powerless to deal with. That is the issue of treatments without any evidence base that they work. Let us take the example of immune therapy, which is charged at anything from £1,000 to £3,000 a time, in addition to the already high fees of IVF. Where is the evidence that immune therapy actually improves the success rate of pregnancies? I do not know of that evidence—and, indeed, the treatment may even be damaging or harmful to the patient’s residual immune system.

Then we have preimplantation genetic testing, which is testing of embryos genetically when IVF has previously failed. I accept that preimplantation genetic diagnosis works, as the noble Lord, Lord Walton, has said, and it is a valuable technique in a few patients. However, there is actually no evidence base showing that preimplantation genetic testing in people who do not have a genetic defect, as widely used by many clinics, provides a helpful and improved chance of a pregnancy afterwards. The control trials and the control evidence are not there, and this treatment—if it is done at all—should be done on a research basis. However, the HFEA has failed to license it on that basis. The same applies to the treatment of assisted hatching. These are not small treatments; preimplantation genetic testing is charged in one clinic at £2,690 in addition to the £3,000 or so charged for the IVF and the £800 to £1,000 for the drugs that the patient pays for. At this stage, patients who are desperate will do anything to ignore the avarice of the people who might be treating them. This is a massive issue, as it is with another treatment, widely offered, of assisted hatching, in which a little piece of damage is done to the zona pellucida around the embryo or egg in the hope that it might improve the pregnancy rate. Over many years it has not been shown to be really effective, but it is still widely sold without any proper regulation.

We have heard from a number of speakers in this debate that the HFEA is the envy of the world. If it is the envy of the world, why has no other jurisdiction accepted this method of regulation? It is not used in Singapore, the USA, France, Israel or Australia, the countries that are most successful at reproductive treatments. I am not suggesting for a moment that we should not have a proper culture of regulation or a proper ethical standard in how we deliver medicine, but the current workings of the Act of Parliament are now not suitable for the original purpose. We have outgrown it. With the burgeoning private practice that has occurred with this treatment as a result of the failure to fund it in the health service, we have an increasing problem, which is very far-reaching.

It is true that there are virtually no good academic units in the United Kingdom that really produce cutting-edge research in the field of reproductive biology where it applies to humans. That was not true 30 or 40 years ago, when we led the world, in places such as Cambridge, London, Edinburgh and many other centres in Scotland. Now we cannot find people to appoint to chairs in reproductive medicine. The chair at Hammersmith was left vacant for three years after my retirement, and eventually they decided not to seek anyone to fill it. They could not find somebody who was a suitable academic because people are being attracted to the highly lucrative business that IVF provides. In my view, this is a very serious problem.

One of the most respected academics in this field is Professor Alison Murdoch, in Newcastle, who has pointed out something really quite interesting. I take her view very seriously as I believe that hers is an example of a really well-run, ethical practice. She points out that regulation of in vitro fertilisation is now far greater than regulation of, for example, abortion. That does not seem to make sense. I listened very carefully to the right reverend prelate the Bishop of Guildford. However, does he really believe that the protection of the embryo is more important than the protection of the foetus or the protection of research on the newborn child, the patient who is pregnant or the elderly patient who may be about to die from various diseases? Surely the notion of centralising our research under one body makes good sense, because we can then have a rational basis for important ethical decisions. I shall listen with great intent to how the Minister responds to this debate. However, I am not convinced that, even if we vote for this amendment, it would be a good idea to vote for the preservation of the HFEA as it stands.

[Lord Patel]

My Lords, I shall be brief as we have been debating this for a long time. I spoke to this issue in Committee and, apart from the noble Lord, Lord Winston, and the noble and learned Lord, Lord Mackay of Clashfern, who is not in his seat, I was the only one to argue against preserving the HFEA’s current status and role, particularly on the clinical side.

I start by agreeing with the noble Lord, Lord Willis of Knaresborough, about the medical research authority. I totally agree with him that the Academy of Medical Sciences report has been widely accepted and backs the establishment of such an authority. It will also have an ethics committee because, according to the report, it will take over the national ethics service, which is currently run separately. It will therefore have an ethical body to assess the ethical issues related to all medical research. There cannot be any doubt about that. Last time, the noble and learned Lord, Lord Mackay of Clashfern, asked—and I have his permission to repeat the question—whether, in the interim, the Minister will find a way of establishing such an authority before the legislation is put in place.

I turn to the HFEA and its other role. Yes, it is true that we should all feel a glow when we mention the HFEA. When it was established, soon after the birth of Louise Brown, a voluntary licensing authority established by the Royal College of Obstetricians and Gynaecologists and the Medical Research Council had been operating for two years. Its creation gave both clinicians and the public the confidence that the newspaper headlines of the time—that monsters would be created in Petri dishes—would not be realised. It is true that in its formative years the HFEA did a fantastic and useful job in establishing and licensing premises for delivering good care to those requiring IVF treatment. Yet the world has moved on. More than 1 million children the world over have been born following IVF treatment.

There is no reason to think that the clinical care provided for patients requiring infertility treatment, including IVF, is any different, or should be any different, from the care provided for children with cardiac anomalies. Both treatments are properly regulated by the CQC and the professional organisations. We hear of units being shut down because of poor outcomes; so let us consider the recent performance of the HFEA. How should we measure it? We should measure it against the success rate for IVF. As the noble Lord, Lord Winston, mentioned, apart from spurious claims, there is no evidence that our outcome for patients requiring IVF treatment is any better than anywhere else in the world; in fact, it is poorer than in some other countries. Measured against promoting better outcomes for the patients, the HFEA has not delivered.

17:30

I agree with the noble Baroness, Lady Bottomley, that clinicians would complain if threatened, but these clinicians are not complaining because they are threatened—they are complaining because they think that they could do better if they were not so harshly regulated by an authority that looks at more and more ways of regulating. It has become a legend in its own mind. It makes the delivery of clinical care more difficult and, therefore, the outcome for patients poorer.

The noble Lord, Lord Winston, was right to mention the promotion of research. One of the objectives in setting up the authority was to promote research to improve the outcomes of patients with infertility. In fact, it blocked the use of valuable data. The noble Lord mentioned the example of using epigenetic factors—environmental, dietary and other factors—that would affect the health of the babies born. There has been an ideal opportunity to do so over the past 20 years, but we failed to.

Let us be quite clear: the glow that we feel about the HFEA may be slightly tarnished. We have to ask which of the functions we need to retain. I seek an assurance from the Minister that the medical research authority will be set up soon and that it will take over all the research functions of the HFEA. Let us have a debate about whether the HFEA delivers now when it comes to improving care and outcomes for the patients. That, I think, is when we will find that it is currently found wanting.

[Baroness Thornton]

My Lords, I thank the noble Baroness, Lady Deech, my noble friend Lady Warwick and other noble Lords for their determination to have the future work of the HFEA and the HTA clarified during the course of the Bill. I join others in thanking the Minister for his patience and accessibility in discussing the different aspects of the issue.

We have had another excellent debate that has illustrated why it was necessary to bring the issue back to the Floor of the House for further discussion. The House needs to heed the voices raised across the Chamber—as well as the pleas contained in the letters that we have received from some of the parents of Alder Hey children, the letter in the Times this morning signed by a galaxy of medical experts and the briefing from the BMA on behalf of several organisations—as a sign of increasing concern.

Since Report, the Minister has kindly written to me explaining further the Government’s proposals for the HFEA and the HTA and the staged break-up that seems to be the Government’s preferred option at the moment. In brief, the break-up involves HFEA and HTA functions being transferred to the CQC except for research-related functions, which will be transferred to the health research regulatory agency, presumably covering what have been broadly referred to as the ethical issues. To facilitate this, as the noble Baroness, Lady Deech, explained, a special health authority will be created in 2011-12 and there will be primary legislation to establish the agency proper in the second Session of this Parliament. Presumably, the ethical issues will therefore be dealt with by the interim body in that process. Notwithstanding the proposals of the noble Lord, Lord Willis, regarding the Health and Social Care Bill when—indeed, if—it reaches us, it is clear that there will be primary legislation to establish the new research body.

I am further grateful to the Minister for his explanatory letter because it served to strengthen my view that these bodies should never have been in the Bill in the first place. It also illustrated for me the question that I want to put to him: why go through such disruption, risk, lack of stability, potential loss of expertise and expense for the next two years prior to the introduction of primary legislation to establish the new health research agency, which will address all of these issues? Why not agree the amendment that establishes an independent assessment of the work of both bodies? That could feed into the pre-legislative process and consultation, which will include all the questions that need to be asked, leading to primary legislation in about two years’ time. If the Government go down the route that the Minister is proposing, they intend to launch a consultation this summer, as outlined in the Minister’s letter to me, and then presumably will break up the agencies at some point towards the end of this year and the beginning of next. That means that at the beginning of 2012 the agencies would be broken up and then, by the end of 2012, we would start the pre-legislative programme to set up the new research agency.

That is why we on these Benches will be supporting all these amendments. It is not that either the HTA or the HFEA should be preserved for ever; indeed, it is clear that my noble friend Lord Winston and the noble Lord, Lord Patel, have grave problems with the HFEA. I make the point to the noble Lords, which I have also done outside the Chamber, that that is not the point of the Bill. Passing the amendments would actually be more likely to address their concerns than would leaving the situation as it is. In other words, there is no guarantee that their concerns about the HFEA, which I am sure are legitimate, would be addressed if we left the Bill as it is without the reassurances.

The one thing that we know is that there is going to be a health research agency. It is an idea of merit. It is also a proposal that is ideally suited to the expertise and inclination of this House; the Select Committee, the pre-legislative scrutiny, the draft Bill and, if I may say, the skills that the Minister brought to bear when he helped to create both these agencies make this the place where that process should start. I am certain that that would ensure a good outcome.

The amendments are different from the simple deletion amendments that we tabled in Committee and on Report, particularly the third amendment, because it accepts the principle that the Minister may transfer or modify the functions under Clause 5 in respect of these bodies but would require the Minister to have first established the Government’s new regulatory body with a separate ethics committee. It would ensure that there were no gaps between what is happening now with the current bodies and the Government’s intended independent regulatory body in future, a point that many noble Lords have made. However, it would not preclude an examination and independent assessment of the work of both these bodies. It would ensure that the critically important ethical functions performed by these bodies were recognised and catered for, which, in a way, is where we came in at the first stage of the Bill.

[Earl Howe]

My Lords, I thank noble Lords who have moved or spoken to these amendments. I recognise and understand the sentiments underlying them. I do not in the least wish to argue against or downplay the importance of cost-effectiveness in any legislative changes that we propose, or of ensuring that the right successor arrangements are in place for discharging the relevant functions of the HFEA and HTA. I therefore hope that what I am about to say will satisfy noble Lords that in most key respects I am in the same place as they are regarding the points at issue.

Since our debate on Report I have written to the noble Baroness, Lady Thornton, to set out my reflections on the points that she and others have made. There were common themes: a desire for greater clarity on where the Government intend to transfer the functions of the HFEA and HTA to; concern that the dispersal of functions across a range of bodies would risk fragmenting regulation; and concern over loss of expertise. I have considered these concerns carefully. As I have made clear, we intend to consult in the late summer on the options as to where certain functions would be most appropriately transferred. That remains our aim. However, having taken into account the strength of feeling about keeping functions together, we now intend to proceed on the basis that our preferred option is for all HFEA and HTA functions to be transferred to the Care Quality Commission, except for certain research-related functions that will transfer to the proposed health research regulatory agency. We shall therefore consult on this basis but, at the same time, remain open to receiving views on the way forward from all stakeholders through the consultation process. I hope noble Lords will agree that this preferred option will address concerns about the potential impact of fragmentation.

The noble Baroness, Lady Deech, expressed the fear that the Government’s proposals would lead to a vacuum as regards the ethical focus of these bodies—in the decision-making process for research and treatment involving embryos in particular. Let me explain what we intend. Ethical safeguards—for example, the type of embryo and gamete that can be used in treatment, the need to consider the welfare of the child, and the need for consent in respect of human tissue—are clearly enshrined in legislation in accordance with the wishes of Parliament. These safeguards will remain firmly in place.

In keeping an integrated approach to HFEA functions, the CQC would be the focal point for ethical considerations of treatment licensing that arise from the Human Fertilisation and Embryology Act. There is no reason whatever to suppose that it is not up to fulfilling that role. I say to my noble friend Lord Newton that my department’s officials have had discussions with the CQC senior managers about the proposed transfer of functions. The CQC is confident that these can be taken on effectively. The health research agency will provide a focal point for the ethical consideration of research using embryos. It will draw on expert advice, as the HFEA does now. The aim is to simplify and rationalise the ethical approvals process for all kinds of research. Far from the ethical focus for each type of activity being lost, it will be actively preserved.

My noble friend Lord Willis suggested that we might use the Health and Social Care Bill, now in another place, as the vehicle for the proposed changes, rather than this Bill. I recognise the force of his proposal. He will know why we have chosen not to go down that road. We do not want to add to what is already a substantial Bill. It is important, too, that the Government retain momentum for their planned changes across the ALB sector. The ALB review process has already garnered significant rationalisation across the health sector and we do not want that rolled back. By keeping the HTA and the HFEA within the Public Bodies Bill, we can deal discretely with complex issues and undertake detailed consultation and impact assessments in a timely and considered way. We also, as I have indicated on several earlier occasions, wish to avoid reopening the Human Tissue Act and the Human Fertilisation and Embryology Act, which command widespread agreement. Our desire to maintain momentum is why we plan to establish a special health authority to continue and strengthen the work of the National Research Ethics Service and to be a starting point for the simplification of research approval processes. That special health authority would be the platform on which we would build the fully fledged research regulator.

17:45

[Lord Willis of Knaresborough]

Does the Minister not understand the incredulity of many of us? This is a Bill that deals with getting rid of quangos, yet the Minister’s solution is to set up a quango to create time in order to set up a bona fide agency. Surely the Minister sees that by simply delaying the whole process until the agency is in place, everything can be transferred either to the CQC or to the new agency, all at once, without an interim body.

[Earl Howe]

I ask my noble friend to wait a few minutes; I hope I will tell him something that he will welcome.

I turn to the amendments. On Amendments 7 and 8 the issue is not so much the end point that they seek to achieve as the practical implications that they would carry if they were accepted. Let me set out what we plan to do. There will be a full public consultation on our proposals this summer. Alongside that, we will publish an impact assessment, which will include a view about the cost-effectiveness of options for transferring functions. I assure the House that the key comparison for the purposes of the assessment will be between our preferred option and the organisations’ own plans for rationalisation. I hope noble Lords will endorse the idea of a formal impact assessment as the vehicle for doing this. It is a process that, until now, has been accepted by Parliament for general legislative and policy changes. There does not seem to be any obvious reason why that should not be an appropriate way to proceed in this case.

In addition, as I have said previously, there will be a further consultation on the proposed regulations in due course before these are laid. Taken together, these three safeguards should be sufficient to meet the aspirations of noble Lords for achieving a robust evaluation. The approach that we propose on consultation and impact assessment will, I suggest, produce a result that is thorough, transparent, balanced and, therefore, fit for purpose. The amendments, taken literally, would have us go further by suggesting a formal process of independent assessment of cost-effectiveness. This would be neither necessary nor desirable. With the best will in the world, any such assessment would be costly to the public purse, highly subjective—as any assessment of cost-effectiveness is bound to be—and very difficult to measure definitively. Practically, it would get us no further forward than a standard impact assessment. In any issue of this kind, we need to take care that legislation does not set conditions that are impossible to meet. That is why I hope the assurances that I have given will be enough to persuade the noble Baroness not to press these amendments.

In turning to Amendment 9, I will address the question posed by my noble friend Lord Willis. The amendment seeks to ensure that no HFEA or HTA functions would be transferred using the powers in this Bill until the health research regulatory agency has been established. I fully appreciate the reasoning behind this. It very much accords with the Government’s wish to avoid a piecemeal approach to the transfer of functions. In my letter of 27 April to the noble Baroness, Lady Thornton, I said that,

“in principle our preference would be to consult on the draft secondary legislation during 2012 and to commence it after the primary legislation is place that will give the health research regulatory agency the necessary legal basis. In that way, transfer could take place as a single and clear exercise, and in a co-ordinated and least disruptive way”.

In the light of this amendment and the points made today in support of it, I am prepared to go further and give a firm commitment that, subject to the will and views of Parliament, the Government will proceed on the basis of transferring functions from the HFEA and HTA only once the research regulatory agency is established in legislation. I hope that this commitment will satisfy the House. There are problems with including the amendment in the Bill from a legal perspective. It is difficult to envisage how, within this Bill, we could describe with the necessary level of legal certainty the new research body that would need to be established. The detail of what a new regulator will look like and the functions it should hold is a matter for Parliament to debate and determine as and when the relevant legislation comes before it. To make provision for a future body in this Bill risks both describing it in a way that is not accurate, thus making the power to transfer functions redundant, and attempting to limit the discretion of Parliament in relation to future legislation.

The amendment also seeks to provide in this Bill that the research agency,

“must have a separate ethics committee to undertake … ethical consideration functions”

transferred to it from the HFEA and HTA. I fully appreciate the need for assurance that the research regulatory agency will have access to the relevant expertise to deal with the licensing of embryo research and any research-related functions that may transfer to it from the HTA. Therefore, I repeat the assurance that we have consistently given that expertise will follow function, and that we expect that the research agency will have access to expert peer reviewers and others in the relevant fields that are currently available to the HFEA and HTA. However, I suggest that the level of detail on matters such as expert committees is again more appropriate for consideration by Parliament in relation to any legislation that will seek to establish the research regulatory agency rather than attempting to include it prematurely in this Bill.

Although, for the reasons I have given, I cannot accept the amendment, as I indicated at the beginning of my remarks, I would like to believe that noble Lords who have spoken will not now be too far removed from the Government’s own position on these matters. In view of our developed approach to the transfer of functions and our clear intention to consult on our proposals in an open and transparent way, I hope that the noble Baroness will feel able to withdraw the amendment.

[Baroness Deech]

I thank the noble Lord the Minister and all noble Lords who have spoken. However, I particularly thank the noble Lord the Minister who has, as others have said, been very attentive throughout the passage of the Bill to the concerns of those involved in this field. I know that he has the best interests of the HFEA, the HTA, and all the people involved in them, at heart. When the noble Lord the Minister says that he gives a firm commitment, the whole House believes him and relies on his word.

The noble Lords, Lord Alderdice and Lord Winston, pointed to problems: in one case in the HTA; in the other in the HFEA. However, those points, and the points made by the noble Lord, Lord Patel, are irrelevant as, whatever problems there are with the HFEA and the HTA will not be solved by moving them lock, stock and barrel to another agency, because, as we all know, the human fertilisation and embryology Acts will remain. I say to the noble Lord, Lord Winston, that there is nothing that the agencies can do about costs. They are not able to fix costs. We all wish that the NHS would take on IVF; that would provide a solution to all our problems. However, no one can seriously imagine that if regulation were transferred to another government department, charges would somehow mysteriously come down, the patients would be charged less and nobody would make a profit. Indeed, the stories that the noble Lord, Lord Winston, shared with the House show precisely why regulation is necessary. If the doctors are all competing and jostling for pole position, this again confirms the need for regulation by a body other than a purely medical one.

It is also the case that the law is involved. I am sorry to say this about my fellow lawyers, but there are many things that the HFEA and the HTA cannot do, or cannot do more vigorously, because of the way in which the Human Rights Act came in on top of the existing human fertilisation law and shifted it much more towards the individual, the requirements of the Competition Commission and the requirements of the Data Protection Act, which make it very hard to carry out the research that we wish could be undertaken. If ever there was a case for calling for an external independent review, which is what at least one of these amendments calls for, the noble Lord, Lord Winston, has made the case because all those points can be looked at by an external impartial review, which is what we are calling for.

Although there is no time to go into this, other countries do have regulation such as is carried out here. Israel has a system for considering cases on a one-by-one basis. Canada is emulating us. Surely we do not want to be like the USA where recently a woman gave birth to octuplets. Noble Lords who have a spare moment can go online and look up Cryobank and see sperm for sale. Usually the students involved are called Randy and have a PhD from Berkeley or Stanford and sell their sperm online. We do not want to go down the unregulated route followed by the USA. I know from my involvement with the HFEA that we were bombarded all the time with concerns from the public. Many noble Lords will recall that when the HFE Act was revised in 2008, members of the public lined the streets across the road and waved banners that depicted their fear about hybrid embryos as they showed embryos that were half man and half horse because they did not understand the subject yet it meant an awful lot to them. Therefore, it is very important that regulation is put in place. I should not say that the issue was more important than abortion or neonatal care, but all these areas have their own special regulations and laws taking care of them, as this area should do. The points made by the noble Lords, Lord Alderdice, Lord Winston and Lord Patel, perfectly make the case for an independent review.

The noble Earl, Lord Howe, to whom I am extremely grateful, seems to have given a firm commitment that there will be only one transfer, if it ever happens, of the functions of the HTA and the HFEA—one jump straight into new bodies that will have been firmly established by legislation. That is very satisfactory and I am grateful to those who have listened to that case. I know it is difficult, but they have listened and we should be appreciative of that.

That leaves just one area of disagreement—the nature of the review. I do not wish to sound sceptical, but government reviews and consultations often start from a particular point of view and present rather limited options, and in the end the Government may well do what they wish anyway. I believe that given the range of problems that have been revealed, not just when I was addressing your Lordships’ House but by expert speakers on the Floor, there is a strong case for a wholesale review by an external learned body before the HFEA and the HTA take the irreversible move into the new bodies, when they are established.

Therefore, the points that lie behind certainly Amendments 7 and 8 have not been met and I wish to test the opinion of the House on Amendment 7.

18:00

Division 3

Ayes: 199

---

Labour: 153
Crossbench: 34
Independent: 3
Bishops: 2
Liberal Democrat: 1
Conservative: 1

Noes: 209

---

Conservative: 131
Liberal Democrat: 57
Crossbench: 12
Ulster Unionist Party: 1
Plaid Cymru: 1
Labour: 1

18:13

Amendments 8 and 9 not moved.

In the Title

Amendment 10

Moved by

[Lord Taylor of Holbeach]

10: In the Title, line 2, at end insert “and other”

Amendment 10 agreed.

A privilege amendment was made.

Motion

Moved by

[Lord Taylor of Holbeach]

That the Bill do now pass.

[Lord Taylor of Holbeach]

My Lords, I beg to move that this Bill do now pass. In doing so, I crave the indulgence of the House to say a few words. Today is 9 May, and we had Second Reading of this Bill on 9 November. For six calendar months, this House has been considering the Bill. The Bill has been much changed by this House; I think we all share the view that the Bill has been improved by this House. This House can be proud of its role of scrutiny, which it has demonstrated in scrutinising the Bill and improving it. It can serve as a textbook example of how this House serves that great and fundamental purpose.

I say a word of thanks to Members of this House for that role. In particular, I thank those on the opposition Front Bench for the constructive way in which we have been able to talk about the Bill from the beginning. They had firm ideas of what they wanted to happen to the Bill; we had ours; but the discussions were always friendly and open. I am very grateful to them. I am very grateful to all Peers who have attended our meetings: those from the Cross Benches, in particular, for their construction of ideas and resolution of some of the impasses which looked difficult to overcome; and to coalition Peers for their support and input. Right to the end, we have been discussing these matters, and the House has been divided on them, but there has been a real sense of partnership on the Bill. That has been particularly true of my Front Bench colleagues who have shared the passage of the Bill with me and have taken particular amendments. I have been reluctant to comment on individual involvement, but I feel that I should thank my noble friend Lady Rawlings, who is my Whip on the Bill and who has been with me more or less throughout its passage.

I conclude by thanking the Bill team, because they have had to work particularly hard not just within the Cabinet Office, which originated the Bill, but across all government departments, because every government department has been engaged in the Bill. I thank them for the way in which we have enjoyed working on the Bill together. They now go to see it through another place, and their job continues. I also mention the Bill team manager, as was, Louise Parry, who during the Easter Recess had a baby daughter. Cecilia is perhaps the most visible token of the Bill's passage through this House, and we are delighted for both of them. They are both very well and I thank Louise for her support to me and to her colleagues during the passage of the Bill.

[Lord Hunt of Kings Heath]

My Lords, I must say that when we completed the passage of the Marine and Coastal Access Bill, which also took about six months, I never thought that I would be facing the noble Lord, Lord Taylor, on another Bill which took so long. I echo his comments: I think that the Bill is much changed; it has benefited from scrutiny in your Lordships' House. I am sure that the whole House would wish to thank the noble Lord, Lord Taylor, for his stewardship of the Bill. He has shown great skill and sensitivity to the issues that have been raised. All of us are grateful for the manner in which he has met us to discuss the issues, but his responses in your Lordships’ Chamber have also been in a flavour of seeking a way through. We are very grateful to him.

There has been a cast of thousands on either side of the opposition and government Front Benches. I, too, very much thank my colleagues for their help. I echo the noble Lord’s words of thanks to the Bill team. We are very grateful to them for the help that they have given us over the months. I, too, congratulate the Bill team manager on the birth of her daughter during Easter.

The Bill goes to the other place much enhanced. Because of the sunset clause, although the Bill will deal with a number of public bodies, when that is done, there will be a mechanism for looking at public bodies in future in a way that noble Lords find a very satisfactory outcome.

[Lord Wigley]

My Lords, before the Bill passes, perhaps I may add a caveat to some of the comments that have been made. I immediately recognise that the noble Lord, Lord Taylor, and the government Front Bench have made concessions on a number of aspects of the Bill, and people in the Forest of Dean and elsewhere will no doubt be very happy with what has happened. However, the noble Lord will not be surprised that my reservation concerns the fact that the uncertainties about the future of the Welsh television channel S4C have still not been resolved. There had been a hope of amendments being tabled at Third Reading. I understand the reasons why that was not allowed, although I recall the noble Lord, Lord Roberts of Llandudno, saying on 28 March that if any of the eight assurances that he was given were not fully delivered, he would want to bring the matter back at Third Reading. The fact is that the S4C authorities have indicated that, of those eight assurances, six are without substance. Therefore, on that occasion the amendment was not pressed to a vote on the basis of assurances which had not been given.

I do not want to go over old ground and I certainly accept that the Government have moved on a couple of points but, if the consultation with the National Assembly had taken place, it would have been very much more satisfactory from the outset. However, with the announcement today of a new chair for S4C—Huw Jones, whom we wish well—we would have hoped to see a line being drawn under many of these matters so that S4C could move forward with confidence. When the Bill goes to another place, three aspects will need to be resolved. The first is the constitutional position of S4C, the second is the safeguarding of S4C’s funding and the third is its right to make managerial decisions without people from the BBC sitting in on them.

On Wednesday, a report on this matter will be published by a Select Committee of another place and it will contain remarkable cross-party agreement on the unsatisfactory nature of this Bill. Therefore, I very much hope that, when the Bill goes to another place, the aspects that have not been addressed in your Lordships’ House will be addressed and we will have the same satisfaction regarding S4C as noble Lords have indicated they have with regard to other aspects of the Bill.

[Lord Newton of Braintree]

My Lords, I hope that it will be in the spirit of the debate—

[Baroness Anelay of St Johns]

My Lords, before my noble friend makes what I know will be succinct and relevant remarks, as his remarks always are, perhaps I may remind the House of the guidance that Third Reading is not an opportunity for debate and that comments should be extremely brief.

[Lord Newton of Braintree]

I am tempted to sit down in view of that rebuke but I shall not do so. I only wanted to say, in a modest kind of way, that I know I have been a lot of trouble to my noble friends. I know that my noble friend Lord Taylor of Holbeach has been incredibly patient and understanding with me and I say to the Chief Whip that I really did not want to do anything more than be nice to him. Is that allowed? He has done a great job in helping us as a House to do our job, and he has produced the near-miracle—I speak in the presence of a number of ministerial colleagues—of bringing about a Bill that leaves the House shorter than it entered. Can anyone think of a government Bill that went anywhere and ended up shorter when it finished than when it began? That is a near-miracle. My noble friend has brought it limping into port with its superstructure destroyed and most of its cargo dumped, but at least he has got it there. He has contributed to the worst defeat of Henry VIII at the hands of the barons in 500 years, but unfortunately I do not think that it is yet the Waterloo. Henry is regrouping in Whitehall, hoping to find some mercenaries and commoners to come to his aid, and your Lordships may yet have more work to do. Meanwhile, my noble friend and many of his colleagues have done a fantastic job for us with patience, courtesy and understanding, as well as, I think, working behind the scenes to good effect, and I add my thanks to those of others.

Bill passed and sent to the Commons.

European Union Bill

Monday 9th May 2011 Lords Chamber

Committee (4th Day)

18:24

Clause 5 : Statement to be laid before Parliament

Amendments 24 to 29 not moved.

Clause 5 agreed.

Clause 6 : Decisions requiring approval by Act and by referendum

Amendment 29A

Moved by

[Lord Liddle]

29A: Clause 6, page 4, line 32, leave out “or otherwise support”

[Lord Liddle]

My Lords, I hope that this amendment will not take up too much of the Committee’s time. Its purpose is to amend Clause 6(1), which currently says:

“A Minister of the Crown may not vote in favour of or otherwise support a decision … unless … the draft decision is approved by Act of Parliament, and … the referendum condition is met”.

Amendment 29A would delete “or otherwise support” and Amendment 32A, which is in this group, would add at the end of subsection (1) that,

“the Minister may indicate support in principle for a decision if the Minister also gives notice that a vote in favour is subject to approval by an Act of Parliament and the referendum condition being met, if required”.

I understand why within the logic of the Bill—although it is a logic that we on this side of the Chamber do not accept—the Minister cannot sign up Britain for institutional changes without the conditions of an Act of Parliament or a referendum, if required, being met. However, surely it should be possible for the Minister to indicate support in principle for something that is proposed subject to the requirements of the Act. I do not understand why Clause 6(1) has the words “or otherwise support”.

I hope that what I have just said will find acceptance on the Front Bench opposite and, if that is the position, I shall not delay the Committee any longer. However, it seems that it does not, so perhaps I had better explain why I think that this is an important point.

If Ministers are not allowed on behalf of the Government to give any indication of the Government’s attitude towards any proposal, I do not see how they can be expected to represent this country in the councils of the European Union. Can they not discuss with their partners what they might and might not recommend? There is a danger, it seems to us, that the Government are trying to turn our Ministers in the Council of the European Union into perpetual “no” men and women who every time they are asked a question about what might happen can only say, “No, this isn’t permitted under this Act of Parliament”.

18:30

If that is the Government’s attitude, it is very revealing. I presume that the Government are saying that by definition any proposal for institutional change should be rejected. It is a kind of putting into law in a very rigid way the doctrine of thus far and no further. We have heard many times from the Front Bench opposite that this Government aim to be constructive in their relations with the European Union and that they see a positive role for it, but I cannot understand why a clause prevents a Minister engaging with our partners on a discussion about institutional change and whether this might in certain circumstances be acceptable. It seems to me that it will put the UK completely at odds with our partners, confirm the traditional view of Britain as an awkward partner in the European Union and, because the EU will ignore us and go ahead under enhanced co-operation, almost will the creation of a core Europe that advances with Britain in the outside lane.

I find it extraordinary, as do my colleagues, that the kind of thinking behind the Bill is that Britain should somehow be content with this creation of a core Europe of which we are not part, because as any time an institutional issue arises all that our Ministers can say is, “No”, and cannot otherwise indicate support for the proposal. Under the text of this clause we will end up with no ability on the part of Ministers to offer leadership in Europe and no ability to offer leadership at home when institutional issues are under discussion. I hope that my suspicions will be proved wrong and that in fact Ministers will be free to indicate support for measures subject to the requirements of the Bill. Otherwise, it is a denial of the leadership that we all want to see from this country. I beg to move.

[Lord Hannay of Chiswick]

My Lords, I speak in support of the probing nature of this amendment and wish to ask noble Lords on the government Front Bench to give some thought to an aspect that was not precisely raised by the noble Lord, Lord Liddle. It is what I call the chicken-and-egg problem. By definition, there cannot be a decision on these matters which are taken within Lisbon unless the Council takes a unanimous decision. There will not be a decision on which the Government can hold a referendum unless they have agreed to it, so you have a chicken-and-egg problem of a massive kind. What will the Minister do in the Council? Will he say, “My lips are sealed”? In that case, it will go through because it will be considered an abstention and he will have allowed it to go through. This is a bizarre situation and I cannot believe that that is what the Government intend to bring about.

Perhaps the Minister will confirm my understanding that the Government, in giving their agreement to a unanimous decision in the Council on matters that fall within the scope of Lisbon—not changing the treaty by the intergovernmental conference route—they intend that the British Minister will say that he is agreeing to this decision and that the agreement will be formalised only when in some cases our Parliament has approved it by primary legislation, or in others there has been a referendum. However, he will agree to it in the first place, otherwise there will not be a European Union decision that can be put to a referendum and you will find yourself in a fine old tangle. I hope that the Minister will be able to clarify this as I cannot believe that the Government seriously wish to put themselves in a position where they cannot even participate in the debate about a decision in Brussels because, perish the thought, what they say might be interpreted as support. Oh, terrible and fantastic—everyone will fall down at that stage.

I do not think that makes any sense, and nor do I think necessary the requirement for a referendum that the Government are trying to impose. In a later set of amendments, I will argue that that requirement is excessively imposed. It is not necessary because all those requirements can be retained without preventing the Minister in Brussels behaving in a normal, sensible way—that is, participating in the negotiations. If the British Government think that, basically, it is in our interests for that decision to go ahead, they can say that it can go ahead but that the following national processes then have to ensue. I hope that the noble Lord will be able to clarify the situation.

[Lord Davies of Stamford]

My Lords, for the purposes of this very narrow amendment, we accept that the Minister of the Crown cannot agree anything without a draft decision being approved by an Act of Parliament and the referendum condition being met. That means that in the case provided for in Clause 4 there is a referendum if necessary and the referendum result is positive. Most of us on this side of the House think that that is a monstrous situation to put the country in. Nevertheless, for the purposes of the amendment, we accept that and that the Government will not be able to agree to any of those decisions without a referendum or an Act of Parliament, and in many cases both.

The amendment is designed to question the words “or otherwise support”. That is why I am just as shocked as my noble friend Lord Liddle that the Government cannot accept it. What is the purpose of including “or otherwise support”? Surely, throughout the Bill the Government have been arguing to prevent this country acceding to or being party to any decision on constitutional change, such as the introduction of qualified majority voting, without going over these thresholds of Acts of Parliament and a referendum. The words “or otherwise support”, as in the text, imply that it is an additional restriction. What does that mean? We would like specific answers from the noble Lord, Lord Wallace, if he is summing up the debate on the behalf of the Government. Does it mean that a Minister would not be able to say, “I personally support this but I need the agreement of my colleagues before I can go along with it.”? Is the text designed to prevent that sort of conversation taking place? Is it designed to prevent the Minister saying, “The British Government support this, amazingly, but we’ll have to have a referendum because we have imposed this Act on ourselves”? Is that what “or otherwise support” means? Does the Minister want to intervene and perhaps answer my questions?

[Lord Wallace of Saltaire]

My Lords, perhaps it will help the House if I read the wording in Section 6 of the European Union (Amendment) Act 2008. It states:

“A Minister of the Crown may not vote in favour of or otherwise support a decision under any of the following unless Parliamentary approval has been given in accordance with this section”.

In addressing that clause and in resisting the amendment of the MP for Wells, Mr Jim Murphy said:

“If the European Council sought to come to a decision based on consensus, the provision in clause 6 would mean that we would have to vote to break that consensus by not abstaining. That is the important protection contained in clause 6(1)”.—[Official Report, Commons, 4/3/08; col. 1669.]

All that we are doing is repeating what the previous Government put in the Act that ratified the Lisbon treaty.

Perhaps it will help if I go on to explain that this does not in any way mean that a Minister or their officials cannot express support for a decision in principle, pending the completion of the process of approval provided in Clause 6.

[Lord Davies of Stamford]

I am grateful for that intervention, but I must say to the noble Lord—I think that he will agree in principle—that it is a very bad excuse for a Government, when bringing forward legislation, to say, “This may be bad legislation with bad wording, but we copied it from a previous Government”. That is not the way that legislation should be brought forward in this or any other House. All proposed legislation should be justified on its own merits and on its own text; the Government of the day should be prepared to defend the texts that they bring forward and should not say simply that they are reproducing what may well be the errors of the past.

I move to the text before us. It would be useful to have on the record a clear statement from the Government of what this is intended to mean to Ministers. If the Act is passed, Ministers will need to know what scope they have for taking part in discussions. If the noble Lord says that they will be allowed to say, in the example that I quoted, “I personally am in favour of this, but I do not have support yet from my colleagues so I will take it back to them”, that would be useful to know. If they will be allowed to say, “The British Government are in favour of this in principle, but we need an Act of Parliament and a referendum”, that would be a very reasonable thing to say if this Act was passed. However, it is extremely important that we get this clear.

I will explain to the noble Lord why it is so important. There is an issue of good faith. We are parties to the treaty of Lisbon. The noble Lord probably voted for the treaty, and his noble friend Lord Howell probably did not. Nevertheless, we as a country are committed to the treaty of Lisbon, and we are therefore committed to the clauses of the treaty—including Article 31(3) of the TEU, which we will debate in a moment—which provide in certain circumstances for a decision by the Council to go to qualified majority voting to reach a decision. The treaty of Lisbon provides for these possibilities, but we are coming along with a proposed Act of Parliament—a Bill—that is designed to prevent Great Britain from ever being a party to mechanisms that we signed up to when we agreed to the treaty of Lisbon. If it appears that we are going to be censoring Ministers and saying, “You cannot take part in good faith in debates and discussion, you cannot have a normal exchange of views, you cannot make statements that you are in support of things and so forth”, this would constitute a determination to make sure that our contribution in the Council will be extremely negative and unproductive.

This is a matter of good faith and is about whether the Government—we had this discussion in another context during the debate on the Bill—want to bring about deliberately a degradation in the good relations between this country and our EU partners. I trust that they do not. The noble Lord, Lord Wallace, said on a number of occasions that they do not and that it was quite wrong for me to harbour that black suspicion. I hope that it is quite wrong of me, but it is therefore very important to see what kind of constraint will be imposed on Ministers. I am grateful for the noble Lord's intervention, which has gone some way to explaining the practical effect on a Minister of the Crown who takes part in the Council of Ministers. Anything further that he can add would be of great practical importance when Ministers find themselves in difficult situations in future discussions where they have to have regard to the Act, if it is an Act by that point.

[Lord Lamont of Lerwick]

My Lords, when the noble Lord, Lord Liddle, moved his amendment, he was careful and modest enough to say that it was a probing amendment, following which it was possibly unwise for the noble Lord, Lord Davies, to go in feet first when it was explained to him that the legislation was repeating what had been in previous legislation—apart from the referendum—and say, “That does not excuse it because it is bad legislation”. However, all the arguments that he applied about lack of flexibility surely would have applied before if his arguments were right.

18:44

[Lord Davies of Stamford]

I hope that the noble Lord, Lord Lamont, understood what I said. I stand by it, will repeat it and will ask him whether seriously he disagrees with it. This House and any serious legislature or democratic assembly anywhere in the world should look at the text of Bills proposed to it on their merits. It is no excuse simply to say, “We are just repeating mindlessly some formula that already exists”, without being prepared to justify it.

[Lord Lamont of Lerwick]

Yes, but the noble Lord's criticism might have been a little modified in the light of the explanation that the Minister gave, rather than being put forward in quite such an aggressive manner.

In an equally probing spirit—because I, too, would like to understand this—perhaps I might ask the Minister two questions. Is he saying, first, that there is a distinction between a draft decision and a full decision, and that a Minister could indicate an agreement in principle to a draft decision? That was what I understood happened when we debated the European financial stability mechanism—the first of the three bailout funds, if I may call them that, that were arranged—when my noble friend Lord Howell clarified a certain amount of confusion in the House. Some noble Lords thought that we were making a final decision; he made it clear that we were not, that Parliament would have to decide on the principle of the matter, and that there would be another debate later. If that is the correct example of how this operates, we can see that there would be plenty of time for flexibility and consideration.

Secondly, are the words “or otherwise support” meant to cover also a position where abstention on a decision occurs? Where there is a requirement for unanimity, abstention cannot stop a proposal going through. It may be that that, too, is covered by the words. I have seen the words of Mr Murphy that the Minister quoted, and I think that that was one of the points that he was making.

[Lord Blackwell]

My Lords, I oppose the amendment for the opposite reasons to those that the noble Lord, Lord Liddle, and others gave for promoting it. It is important that it is very clear that the UK Government are not enabled to support or enable moves to go forward in Europe that imply a treaty change or a substantive shift in competences, without it being very clear that the UK Government must have support in a referendum.

The issue for me is that if the words “or otherwise support” were removed from Clause 6(1), the only restriction would be on a Minister of the Crown voting in favour. As the noble Lord, Lord Lamont, said, there are many situations in which a vote may neither be required nor be part of the procedure. Simply by sitting still or abstaining, Ministers may enable something to happen that would have binding consequences for the UK. To remove the words “or otherwise support” would completely nullify the provision. The discussion has led me to wonder whether the wording goes far enough, or whether we need additional text stating “to otherwise support or allow by default” a decision to which the provision applies. I would like an assurance from the Minister that this will catch all those situations where abstention, sitting on the hands or complicity would enable decisions to move forward.

[Lord Richard]

My Lords, I found that contribution extraordinary. Is the noble Lord seriously suggesting that if you sit on your hands and do nothing you are positively supporting something? Is he seriously suggesting that if the procedures are such that an abstention may produce a particular result in a vote, by engaging in that abstention and not participating in the vote one is somehow allowing it to go through? We are one country among a group and, as such, we have the options of supporting something, not supporting it or abstaining. You can decide, “I support it”, “I do not support it” or “I am not going to say whether I am going to support it or not”. The first of those is clearly support. The second is clearly not support. The third is an intermediate position which is neither support nor rejection. In those circumstances, I cannot for the life of me see how the words in the Bill can cover that intermediate position.

[Lord Blackwell]

I am suggesting that because, as the noble Lord will know, in Councils in Europe if you abstain or are simply absent from the meeting you do not prevent binding decisions being taken that would have an impact on the UK. If there is a decision about something that implies a transfer of competence from the UK of the kind that this Bill deals with, I would not want a situation where the noble Lord or a Minister representing the UK could—by simply not turning up—avoid his obligation to say to the European Union that a decision cannot go through because it is subject to a binding referendum in the UK.

[Lord Richard]

I do not want to pursue this too much, but is the noble Lord again seriously suggesting that if you do not turn up to a meeting you are supporting something? That is an extraordinary proposition.

[Lord Blackwell]

If by not turning up you allow a decision to be taken that binds the UK, you are implicitly supporting it.

[Baroness Nicholson of Winterbourne]

Noble Lords on all sides of the House must now surely recognise that this amendment is a mistake. I feel absolutely sure that it is an honest mistake, but it is a mistake based on a misunderstanding of the rules in the European Union. In order to work well in the European Union, you have to recognise that members come from many different states—as they have always done. In order to draw the members together so that they come to the meetings and all the rest of it, the European Union has different sorts of rules that are designed to attract them, to make absolutely sure that they come to the meetings. There are some very tough rules indeed if you do not turn up, and that is why this amendment is such a mistake. We cannot pass it because it would so gravely handicap United Kingdom Ministers in the Council of Ministers.

This way of working is commonplace throughout the European Union. If you do not turn up when it is a unanimous vote—and many votes are unanimous in different European Union institutions—you will be deemed to have agreed. That is what forces people to come from so many different nations. It is an enormous effort and very expensive for the Union and so on, so there are a number of rules that act like a magnet. This is one of them. Therefore, with the greatest respect, I suggest to noble Lords opposite—to the noble Lord, Lord Davies of Stamford, for example, and others—that they should rapidly withdraw this amendment. It is a little embarrassing. If it were to go through, we would be the laughing-stock of the Council of Ministers.

[Lord Pearson of Rannoch]

I have a slightly more general question to put about a thread which is running through all our amendments and proceedings. It concerns the Government’s attitude to enhanced co-operation. We have heard much about the general position of Ministers who would find themselves isolated in the Council of Ministers because, although they might support a proposal, they would have to take it to a referendum that they might lose. That is why I ask: how serious is that, really? If nine or more countries wanted to go ahead with a proposal—it used to be eight, but I think it is now nine under the Lisbon treaty—what would be the Government’s attitude to it? How worrying is enhanced co-operation? I imagine that the Government may say that they do not particularly want a two-speed Europe. Of course, some of us would prefer a third speed or gear—a reverse gear. But it would be nice at some point during our proceedings to understand how the Government view enhanced co-operation generally.

[Lord Wallace of Saltaire]

My Lords, I shall respond to the spirit of the probing amendment that the noble Lord, Lord Liddle, rightly moved. It is useful to probe on this. I do not think that I can respond to all the points that the noble Lord, Lord Davies of Stamford, raised, because they seem to me to stem from a deep conspiratorial assumption about the implicit plot behind the Bill, and I suspect that reasoned argument cannot reach that deep.

I should point out that Articles 235(1) and 238(2) of the Treaty on the Functioning of the European Union make it clear that abstaining in a decision requiring unanimity is effectively counted as a supportive vote, and so an abstention could be classed as supporting a decision. Those of us who have been involved in any way in Brussels decisions will know that formal voting is not the most common form of decision-making in Brussels. A great many are taken by consensus and the chair taking the sense of the meeting. That is no doubt part of the reason why the previous Government, in their wisdom—I am not saying that they were always wrong, let alone that they pursued conspiracies of their own—put in this phrase “or otherwise support”. That does not mean that a Minister cannot indicate support in principle for a decision if the Minister also gives notice that a vote in favour is subject to approval by Act of Parliament and to the referendum condition being met, if that is required by the decision.

The noble Lord, Lord Pearson of Rannoch, was determined to get enhanced co-operation into the discussion even though we are not discussing that amendment. Enhanced co-operation is under way. The British Government are indeed involved in the process of enhanced co-operation on patent law. We do not believe that Britain will become more marginal because enhanced co-operation takes place among others. After all, if one looks at what is happening with European co-operation in defence, one will see that the United Kingdom and France are, in effect, leading in defining practical co-operation in that regard. The myth behind the Bill—that we will somehow be pushed to the margin, which the noble Lord thinks is a good thing but the noble Lord, Lord Davies, thinks is a wicked thing—is not the case. In an EU of 27, which is about to be an EU of 28, 29 or 30, it is likely that there will be a number of issues on which smaller groups—which will often including the United Kingdom, though sometimes not—will move ahead on their own through enhanced co-operation. In most cases that will not require treaty change. They will merely be moving ahead because it is not possible for all 27, 28, 29 or 30 to agree. Therefore, that will not be caught by the Bill.

[Lord Liddle]

If Britain agreed to enhanced co-operation but the member states participating in enhanced co-operation then decided under the provisions of the Lisbon treaty to change the decision-making process to qualified majority voting, would the Bill cover the situation?

[Lord Wallace of Saltaire]

As a hypothetical situation, at that point it would because it would be a change in power and competence. The enhanced co-operation itself would not. That is the distinction. Let me reiterate: a Minister can make very clear that the Government support a decision but that they must also seek the necessary approval of Parliament and the public first. Britain is not alone in this respect. This is the way in which national Governments very often have to proceed.

[Lord Hannay of Chiswick]

Now that Minister has dealt with enhanced co-operation, can he go back to the chicken and the egg? It would be quite nice to know how he thinks the Council will conduct itself in taking decisions in this matter. This is nothing whatever to do with absence from the Council, which is a complete red herring. This is about what you do in a matter that requires unanimity. Without unanimity, there is no decision in any of the matters that we are talking about. I think that that is common to the understanding of everyone in the House. How is that unanimity achieved so that the British Government can submit the matter to their Parliament or to the public through a referendum if they have not expressed a view, because then there is no unanimity? There is a serious chicken and egg problem here.

19:00

This is a probing matter. There are, for example, very well known procedures in Brussels, which I suspect the Government would take advantage of in circumstances such as this, whereby the Council would indicate that it could only reach political agreement on this occasion and that legal force could not be given to it through an A-point in the Council, or whatever, until the British Government had passed legislation, had a referendum, or whatever. If that is what the noble Lord is getting at, I have to say that the wording, including the wording that he quoted from Lisbon, is a long way adrift from that and will cause Ministers considerable difficulties if this becomes law. I hope very much that he will now be able to clarify whether we are talking about political agreement, which of course involves support—you cannot have political agreement without support—or legal agreement, because the British Government would be prevented from giving their legal agreement to the matter.

[Lord Wallace of Saltaire]

My Lords, this is not entirely new. We all understand that Her Majesty's Government have often said in Brussels that they can make only partial agreements, subject to a parliamentary scrutiny reserve. That is the normal way in which we proceed. The noble Lord is very experienced in this regard and will recall a number of instances in which decisions have had to be taken with parliamentary scrutiny reserves on board.

On the requirements of Clause 6, we are, after all, talking about the consequences of joining in with unanimity decisions that will involve the transfer of power and competences. That is the “added” part. Otherwise, the complex negotiating processes of Brussels, in which a number of noble Lords here are extremely expert, will continue with Her Majesty's Government and the Governments of a number of other member states saying that they can agree to something only subject to later parliamentary approval. That is the established practice of the Germans, the Danes, us, the Finns and others. The Bill might not be as elegant as the noble Lord, Lord Hannay, would like, but it merely restates the familiar circumstances from the Lisbon treaty ratification Act.

[Lord Tomlinson]

I am grateful to the Minister for giving way, but he leaves me rather confused. I try to think of the big picture all the time. Here we are trying to inspire the British people, to eliminate their scepticism about Europe, and to get them to love Europe and to feel connected to it. How on earth do some of the things that the Minister is talking about make a single contribution towards that process? He makes the British Parliament sound more bureaucratic than the worst European bureaucrat.

[Lord Wallace of Saltaire]

I simply do not accept what the noble Lord has said. I have been quoting from an Act from the last Government—his Government and that of the noble Lord, Lord Davies of Stamford, who was a Minister in it and who has now rubbished it. The Bill restates established practice, which in no way means that the British national media will—

[Lord Kerr of Kinlochard]

I suggest that the reference to a scrutiny reserve is not quite right. A scrutiny reserve prevents a decision being taken, so the decision is not taken until the scrutiny reserve is lifted or the Minister goes into the statistics of the noble Lord, Lord Pearson of Rannoch, and decides that he will override the reserve and does not apply it any more. There is no decision until the scrutiny reserve has been dealt with, so the chicken and egg point made by the noble Lord, Lord Hannay of Chiswick, is real. I hope that we do not need to pursue it much further tonight, but it does need to be thought about.

[Lord Wallace of Saltaire]

My Lords, I am very willing to reflect on this point and see whether we can return to the House with any words of comfort, but I fear that we are chasing headless chickens around the yard a little. I will leave it to others to decide whether the eggs are headless as well.

To conclude, we are not the only Government who—I will give way once more to the noble Lord, Lord Davies of Stamford.

[Lord Davies of Stamford]

I am very grateful to the noble Lord, Lord Wallace, but I hope that if he wants to criticise me in future, which he is very welcome to do, he will do so on the basis of what I actually said and not on what I have not said. I did not rubbish the Government of whom I was proud to be a member; I said that this was a general principle that applies to the Minister today and that applied to me when I was a Minister. If you bring forward a Bill in this House or the other House, you must be expected to defend the text on its own merits. It is no excuse to say simply that you are replicating text from the past. That was the point that I made. I made no normative statement about the text at all in that context; I simply made that general principle clear.

[Lord Wallace of Saltaire]

I thank the noble Lord for making that so wonderfully clear.

I hope I have managed to persuade your Lordships that there is no sinister intent behind these words. They are not part of a dreadful right-wing Conservative plot, so there is no need to add the qualification that Amendment 32A would require. May I also say, since the Daily Express has been running a range of quite absurd stories—the latest being that government buildings are being forced to fly the EU flag—that we must recognise that we are operating in a world in which, for many years, previous Governments have failed to stand up to some of the complete nonsense that has spread through the British press. Unfortunately, we now find more and more nonsense spreading, and part of what this coalition Government intend to do is to spell out the advantages to Britain of being in the European Union in order to get back at some of the nonsense put out by the Daily Express, which unfortunately, as noble Lords will know, is no longer part of the Press Complaints Commission process and so the commission has very few controls over what it puts out, but that is another matter.

We will take this matter away and look at it again. However, as I say, the words used in the Lisbon treaty amendment Act were there for a good reason, and the words used here are also here for a good reason. On that basis, I hope that the noble Lord will be willing to withdraw his amendment.

[Lord Pearson of Rannoch]

Before the Minister sits down, may I be allowed to put in a word on behalf of the Daily Express, about which he has not been wholly polite? Millions of people in this country actually welcome the campaign to leave the European Union which the Daily Express has started—it is the first national newspaper to have done so. Whatever noble and Europhile Lords might feel about the Daily Express, I would at least like to put in a word on behalf of the rest of us.

[Lord Tomlinson]

Before the noble Lord sits down, is he aware that these millions of people who follow the Daily Express campaign with such avidity brought such success to UKIP in the local elections?

[Lord Wallace of Saltaire]

I apologise for introducing this tangential issue into the debate on the amendment, and I really do think it is time for the noble Lord, Lord Liddle, to respond.

[Lord Stoddart of Swindon]

My Lords, we are in Committee and it is not necessary for noble Lords to interrupt or question the Minister on the basis that he has not yet sat down when in fact he has. It is in the power of noble Lords to intervene at any time unless there is closure or we have become fed up with discussing the issue. Now that I am doing so, I have just one final question.

The noble Lord, Lord Davies, appears to think that transferring a matter from one Bill, whether it is by a previous Government or a sitting Government, to another is out of order. Transferring that item from a Bill by the previous Government in relation to the very important Lisbon treaty is the sensible thing to do because it brings forward the protection that that Government made to this Government, who, by agreeing to it, confirm that it is good for Parliament and is proper to have in the Bill.

[Lord Radice]

I should like to raise a matter of pure curiosity. Did the previous Government’s Bill refer to a referendum, as does this clause?

[Lord Wallace of Saltaire]

I suspect that the noble Lord may know the answer to that. As I have made clear, when we are not discussing questions of the transfer of power and competence, these questions do not apply. As for the parliamentary scrutiny reserve, these questions occasionally do apply. As the noble Lord will be aware, the thrust of this Bill is partly to respond to those who fear that the European Union much prefers to talk about process, competences and institutions than about policy and outcomes. We want a European Union which focuses on policy and constructive outcomes and does not spend too much time focusing on institutions.

[Lord Liddle]

My Lords, of course this side of the House will not pursue this amendment and we will withdraw it. Before I withdraw it formally, I should say that I am very glad that we have put forward this amendment because it has raised some interesting points. The point made by the noble Lord, Lord Hannay, has not been adequately answered by the Government. In this discussion, we also have had a first: it is the first time since we started Committee stage that the Government have said that they might go away and look at something, which is quite remarkable. We have been passing rather like ships in the night.

The government Benches on the one hand and the Opposition and opinion generally throughout the House on the other hand have been talking, although not really engaging. This is the first time that the Government have said that they will consider the wording. I should have thought that if the need is to find a form of words to cover the agreement on a consensus without a vote one could find more specific words than “or otherwise support”. I see no objection to adding something on the lines of what is suggested in Amendment 32A in order to make clear that this is not intended to be a restraint on Ministers.

[Baroness Nicholson of Winterbourne]

Is it not proper for this Bill and, therefore, this Government to use the correct wording found in the Lisbon treaty? That is exactly where the wording comes from.

[Lord Liddle]

The noble Baroness may have a point—and she may not. I would prefer that in legislation before this House we use words which are clear as to their meaning. I have the greatest respect for Jim Murphy who is one of the most talented people in today’s Labour Party. The fact that the Minister has managed, with the help of his civil servants, to dig up one of his quotations does not put me off at all. I think that better wording could be found than that which is in this amendment.

The fact that the Government have said that they might go away and consider the wording perhaps shows that there is something about the spirit of Schuman Day; namely, that we are prepared on Schuman Day to be a little more positive in considering reasonable points about this Bill. In withdrawing the amendment, I hope we are clear that this is not a Bill which will turn our Ministers into people who have no alternative but to say no in European meetings. I beg leave to withdraw the amendment.

Amendment 29A withdrawn.

19:15

Amendment 30

Moved by

[Lord Kerr of Kinlochard]

30: Clause 6, page 4, line 33, leave out “to which this subsection applies” and insert “under Article 140(3) of TFEU which would make the euro the currency of the United Kingdom”

[Lord Kerr of Kinlochard]

My Lords, I should like to start by offering an apology to the noble Lord, Lord Pearson of Rannoch, for something I misheard on our second day in Committee. I was not here on the third day and this is my first opportunity to correct that which I misheard. After I had spoken, the noble Lord, Lord Pearson, said:

“Is it not true that none”,

of the judges of the Court of Justice,

“would pass muster as a judge in even the lowest and least distinguished of British courts?”.

I thought that that was an assertion and I did not reply because I did not think that it deserved a reply. But on looking in Hansard I see that it was a question. I apologise for mishearing the noble Lord, Lord Pearson of Rannoch, and for not answering his question. Clearly, the ears of the noble Lord, Lord Wallace of Saltaire, are better than mine and he spotted that it was a question. He began his subsequent remarks by saying that,

“the noble Lord, Lord Kerr, is not going to answer”.—[Official Report, 26/4/11; col. 90.]

As a result of what the noble Lord, Lord Pearson, said and that reply, I feel that it is necessary for me to say that my silence did not in any way imply assent. I feel that it is important to put into the record what I think about the judges of the court, of whom I have known about 12 or 14. In this House, there will be some who remember with respect and affection Lord Mackenzie-Stuart. There will be many of us who would wish that Sir David Edward was here with us. The present judge from the UK, Judge Schiemann, is an immensely distinguished jurist with, behind him, I think, nine years in the High Court, eight years in the Appeal Court and seven in the Court of Justice. And all of us will remember the contributions that Lord Slynn of Hadley used to make from these Benches to our debate. These four men have been British justices in the Court of Justice and to none of them, by any stretch of the imagination, could the criticisms made by the noble Lord, Lord Pearson of Rannoch, apply.

I greatly admire the imaginative and irrepressible verve that the noble Lord brings to our debates but it is really important that we should not make absurd allegations about a serious institution and serious people. I thought that it was important to set the record straight and to say what I would have said had I not misheard the noble Lord at the time. I hope that the Government Front Bench will confirm now, as I am sure that it would have done had I not misheard, that it agrees with me and not with the noble Lord, Lord Pearson of Rannoch, on the quality of the judges of the Court of Justice.

[Lord Pearson of Rannoch]

I do not know how many of the legal luminaries to which the noble Lord has just referred are present members of the Luxembourg court. I would merely say that those of us of a Eurosceptic bent do not really regard the Luxembourg court as a court of law at all. We regard it as the engine of the treaties, endlessly pursuing, in its judgment, the ever closer union of the peoples of Europe.

I do not think it was the Luxembourg court, but we owe it to the Daily Express, which recently ran a two-page spread complete with colour photographs, to see a summary of the members of the Strasbourg court. I do not think that they pass muster either. Of course, if there is a judge in the Luxembourg court who would pass the muster which I have suggested he may not, then I am happy to apologise to him, or indeed to several of them. But that does not alter my strictures and the strictures of the Eurosceptic movement in this country regarding the Luxembourg court and its proposals over the years. One thinks again of Article 308 as it then was, and other flexibility clauses in the treaty, which it has used and adapted relentlessly to pursue the project of European integration.

Those are my comments and I am grateful to the noble Lord, Lord Kerr, for his apology.

[Lord Kerr of Kinlochard]

I thank the noble Lord, Lord Pearson. Unless I misheard again, the noble Lord did not end his remarks with a question, so I am not going to respond except to say that the Strasbourg court is, of course, elected by parliamentarians. I do not think that the Strasbourg court has anything to do with this discussion, which is about the European Court of Justice, but I am grateful for the words of apology from the noble Lord.

I turn to Amendment 30. Here in Clause 6 we are in a different part of the forest. We have abandoned treaty land and treaty amendment by any form, and now we are into decisions of various kinds and the mandatory referendum requirements for those decisions. By definition we have therefore left coalition agreement territory because we are not talking about treaties any more. We are now dealing with the 56 categories of decision on which a mandatory referendum could overturn an Act of Parliament. As the noble Lord, Lord Goodhart, pointed out at the start of the Committee, that would be unprecedented. These referenda are entirely unnecessary because a Government, if they wished, could always choose to say no in the Council. The law requiring referenda is particularly unnecessary because, as the noble Baroness, Lady Brinton, pointed out during the third day of debate, not having a reference in the Bill to a particular requirement for a referendum does not mean that a Government could not, on the day, choose to say that they wanted to have one. All this does is tie the Government’s hands, which of course some would want to do.

Why have we got into this curious mess in these extraordinarily detailed thickets—and we have not yet looked at Schedule 1 where mandatory requirements are to be imposed? I can think of only two rationales. The first was the one that the noble Lord, Lord Lamont of Lerwick, talked about in a different context during the third Committee day. It might be called the Odysseus rationale. We would have a British Minister, let us say the noble Lord, Lord Howell of Guildford, sailing past Brussels and insisting that he be tied to the mast so that he cannot be lured by the siren voices with their seductive song. He wants to be able to say, “Look, guys, I have nothing against what you are saying, but I can’t possibly agree with you. If I did, we would have to have a referendum back home”. It is the wax in the ears and tied to the mast provision—the Odysseus provision. I think that it is very pusillanimous. I would have found it very hard to brief Mrs Thatcher, as Prime Minister, on this point. Mrs Thatcher thought that if you disagreed with something, you disagreed with it. You said no. You did not say, “I am terribly sorry. There is nothing much we can do about this because we would have to have a referendum and we do not want one”.

It is insulting to our negotiating partners to turn up tied to the mast. They expect to do serious business, but the Brits cannot do so because of this Act on the statute book. The Brits therefore cannot take part in negotiations. It will feed the temptation and tendency for people to do things in smaller groups without consulting us because we are such a bore.

[Lord Lamont of Lerwick]

I am most grateful to the noble Lord for giving way. According to his argument, Ministers will be put in a position where they have to say, “I cannot agree because we will have to have a referendum”. Why is he assuming that a referendum cannot be won? Why is it not possible for a Minister to say, “I agree to the draft decision. We will put it to the people and we hope and intend to win”?

[Lord Kerr of Kinlochard]

That is a fair question in relation to, say, the euro, which is the subject of Amendment 30. If we were to decide that we wished to join the euro, it would be totally reasonable for the Minister—I would like to see the noble Lord, Lord Lamont, in this role—to say to his ECOFIN colleagues, “We would now like to join the euro, but this is a big one and I am afraid that we will have to have a referendum on the issue”.

[Lord Gilbert]

Forgive me for being impertinent, but could the noble Lord define his pronouns? He said, “If we were to decide”. Who are the “we” he is referring to?

[Lord Kerr of Kinlochard]

The British Government of the day. My point, in answer to the noble Lord, Lord Lamont of Lerwick, is that when you look at the sort of decisions in Clause 6, they are the kind which the British public are not going to be remotely interested in. The public prosecutor and all that is not referendum stuff. It is therefore particularly difficult to play the Odysseus rationale because everyone knows that you are not going to have that referendum. You are going to block the decision in Brussels in order to postpone sine die the referendum. That will be the effect of what you say.

There is a second possible rationale, which is the one we hear from time to time from the Government Front Bench, usually in the context of the treaty. It is the one that particularly worries me. I think it worries the noble Lord, Lord Hannay, and everyone who knows about the way in which opinion in Brussels is moving now. It is the argument that the noble Lord, Lord Howell, comes up with when he says, for example:

“The picture of a dribble of referenda on small issues completely misunderstands the way in which the European process works now or will work in the future, whether this Bill is on our statute book or not. I have obviously explained that insufficiently because the message has not got over, but as we continue our debates I hope to be able to make clear that the pattern will not be dissimilar to the pattern of the big treaty packages in the past”.—[Official Report, 3/5/11; col. 369.]

There is a worrying misunderstanding here. In Brussels, everyone is determined that there should be a discontinuity. Everyone is determined to break with big treaty packages. That has been true for 10 years and it is why the convention invented the passarelle. Why do people want to avoid big treaty packages? If efficiency is your criterion, it is more efficient to make a change when the need arises. It is not very efficient to put the change in a hover and say, “We’ll wait for the next big package”. It is more transparent and democratic to give member states the right to agree or disagree with single specific decisions. It is good to get away from the awful IGC business of trade-offs, where people do a market haggle and things go into treaties which some would say should not be there in order to buy somebody else. The issues should be considered separately and on their merits, and they will be in future. That is why the convention produced the ideas that it did about accelerated methods of treaty reform—and passerelles in relation to decisions that do not require treaty reform.

19:31

The really sinister reading of the Minister’s repetition of this argument is that he is not describing—he knows that that is not the way it is in Brussels—but he is prescribing; he wants that to be the way it is going to be in Brussels. He may want to hold things up. He may want the EU to become inflexible and more brittle. He may want referenda always to be held on mixed bags of issues, making them even more arcane and unsuitable to a single yes/no answer. I cannot think of a third explanation. The rationale for Clause 6, which we are told is all about trust, is either distrust of ourselves—the Odysseus explanation—or distrust of reform, a feeling that all changes must be for the worse.

Amendment 30 is a simple amendment which accepts that, for the euro, there is a requirement for a national referendum. It also suggests that there should be no requirement, other than for treaty reform, for a referendum on anything else. If the amendment, which stands in my name among others, is carried, we will have accepted that there should be referenda for treaty reform, and now for the euro, but not for the thickets or plethora of decisions which we are about to go into. I beg to move.

[Lord Hamilton of Epsom]

My Lords, it is quite difficult in this debate not to get drawn into some sort of Second Reading speech when we have amendments, such as those of the noble Lord, Lord Kerr, which basically fillet the whole Bill and seem designed to ensure that it does not have the effect that was originally intended.

I am always amazed when I listen to people supporting these sorts of amendments that they do not seem to realise how totally disillusioned the British people are with our progress as we creep, by grandmother’s footsteps, further and further into an integrated Europe which nobody really wants. I rather liked the analogy of Odysseus being strapped to the mast with wax in his ears, because we should remember that the reason why that happened was so that he would not hear the sirens’ songs and be dashed on the rocks. I hope that our Ministers will be strapped to the mast with wax in their ears because we will otherwise be merely drawn further and further into Europe and into an integration that people in this country do not want. I sincerely hope that we will oppose these amendments, which seem to be designed precisely to remove what the Bill is trying to do, which is to reassure the British people that we will not be drawn any further into Europe by this rather surreptitious process that has been going on under successive Governments for many years now and has led to a great sense of disillusion among the British people.

[Lord Hannay of Chiswick]

I shall speak to a number of the amendments in the group which are in my name and support the amendment moved by the noble Lord, Lord Kerr. I am glad that the noble Lord, Lord Hamilton, got in ahead of me, because he has enabled me to realise that he has neither understood what the amendments are trying to do nor understood what they are not trying to do. So I shall try, since that is the spirit of Committee stage, to say a little bit about them.

I hope that I shall not be totally out of order if I express some regret that so many of these amendments have been bundled together when they are completely contradictory. There are amendments in the group which add more to the list of 56 referendums with which we are threatened and there are amendments, such as those which I support, which subtract. They are not two branches of the same subject; they are two completely contrary views of how to pursue Britain’s national interest in Brussels. However, having said that, I am happy to address all the amendments, particularly those in my name.

The reasons that we have to take seriously the need to reduce the number of subjects on which there might be referendums are numerous. The proponents of the legislation have simply ignored the views of the Constitution Committee of this House. I have not heard a single word from the government Benches answering the committee’s report in which it said that referendums should be used in the EU context only when matters of major constitutional importance are at stake. I shall not go through the whole list in Clause 6 to show which matters are and are not—most are not—covered by that; the euro clearly is, which is why there is no question of trying to suggest there should not be a referendum on that matter. However, that is one reason for shortening the list.

The other is that if you have 56 items—or, as some speakers on later amendments in this group will no doubt urge, more than 56 items—which could trigger referendums, you are chopping at the base of representative parliamentary democracy and the sovereignty of Parliament, because you are handing over huge chunks of it to a different process which does not involve Parliament. That is another reason for cutting down. A further reason for taking this matter seriously, as I hope the Government will, is that given by the noble Lord, Lord Kerr. So far, the Government’s response to these criticisms of this great cascade of potential referendums has been totally inadequate. Their response has been what is now described in the argot as “Calm down, dear”. They say, “Don’t worry, it won’t happen. None of these things will happen”. The noble Lord, Lord Howell, said the other day that there will not be all these decisions in Brussels that require referendums; they will all be bundled together into a big package. As the noble Lord, Lord Kerr, pointed out, that is fundamentally against Britain’s interests. I do not wish to accelerate construction of a large institutional package of measures of the sort that was passed in the form of the Single European Act or Maastricht or Lisbon. It is not in our interests to do that, but that is precisely what we will end up doing. Alternatively, and it is really quite serious, we will end up having serial blocking in Brussels, which is what I think some noble Lords opposite would like; that is, when each decision comes forward, the British Minister will block it because they will not want to have a referendum on it, either for opportunistic reasons or for perfectly substantial principled reasons. Together, they will all add up to a situation in which Britain’s good faith will be queried. Our partners will then be propelled either into the large package, which is not in our interest, or into enhanced co-operation. By definition, since we are talking about matters that require unanimity, they will have been brought around the Council table to a point at which 27 of them—or more if there are more members of the Union than now—have said that they are prepared to go ahead and one, Britain, has blocked it. That is the absolute perfect building block for enhanced co-operation—for marginalising ourselves and being completely ineffective. Therefore, I am arguing that we truncate the list of matters on which there should be a referendum.

I now turn to the point raised by the noble Lord, Lord Hamilton. This is certainly not removing the whole meaning of this legislation. No one from these Benches is contesting the completely new innovation; namely, that the Government will submit to a referendum any measure that is negotiated in an intergovernmental conference and results in a new treaty or a treaty amendment reached through intergovernmental conference. That is the meaning of Clause 2. No one is contesting that. No one is contesting the referendum on the euro. Those of us who are moving amendments in this block need to be clear about what we are not doing as well as what we are doing.

Thirdly, we are not challenging the coalition agreement in any way, which merely stated that there would be a referendum on treaty change. No one here is contesting that. It is probably not formally covered by the Salisbury convention, but the Government have a majority in the other place and have the right to have their legislation. However, the Government have added a huge amount to that coalition agreement in this case and these amendments address that. That is why we should take them seriously.

Finally, these amendments do not take us back to the position that this Parliament agreed when it ratified Lisbon. At that time, it subjected these matters—the Article 48(6) matters and the passerelles and so forth—to resolutions in the two Houses but not to primary legislation. In the Bill, the Government are introducing a requirement for primary legislation in all these matters and some others too which are not required for referendum. None of these amendments contests that shift, which is a shift to increased power for the Westminster Parliament in ratifying things agreed in Brussels. That is not being contested.

Those three things that are not being contested are important to understand as well as those things that are being contested, which I argue are also important. I hope that these amendments can be treated seriously and not considered to be wrecking amendments. They are not wrecking amendments. If the Bill is passed with these amendments it would still be a major constitutional innovation in this country. It would still institutionalise the holding of a referendum whenever an intergovernmental treaty were agreed in Brussels.

No one should try to tell those of us who tabled these amendments that we are not accepting the spirit in which the coalition was founded and the spirit in which Parliament conducts its business. The amendments are perfectly legitimate. They would put Britain in a much stronger position in Brussels because Ministers will still have to say, “I can give only political agreement to this unanimity requirement. I cannot give legal agreement to it. Before I can give legal agreement to it I must go back to London and seek an Act of Parliament to enable me to give legal agreement to it”. That is how these amendments will leave the situation.

That is a strong position for a British Minister. But it does not involve a whole cascade of referendums. I believe, along with others, that it is frankly a sick joke to suggest that this will improve Britain's relations with its partners in the European Union. Alas would it were so, but it will not. It will organise a whole series of difficult moments which may well lead to our marginalisation. We all know from last week that that is what referendums are in this country. They are confrontations between two schools of thought. They are bitter and lead to hard feelings.

Anyone who tells me that organising a series of referendums in this country will improve the way that people think of the European Union cannot be stating that with any seriousness of purpose. It cannot be so. We have all known in the history of Britain's membership of the European Union that when we get into a confrontation over European issues, support for Europe drops sharply. When we have a period of relative calm and tranquillity and of reaching agreement in Brussels in a sensible way, sometimes striking compromises, support rises. Please do not tell us that this Bill will improve support for the European Union in this country. It will have the exact opposite effect.

19:46

[Baroness Nicholson of Winterbourne]

My Lords, I oppose the amendment put forward by the noble Lord. My reasons are not in spirit different from those of the noble Lord, Lord Hannay of Chiswick. I wish this Bill to succeed and I wish to reconnect the British public with the European Union movement of legislation and with what happens with our Members of the European Parliament and Ministers. But I profoundly agree with the view of the noble Lord, Lord Hamilton at Epsom, that these amendments would hollow out the Bill completely. The noble Lord and I might differ on other things to do with the Bill, but I agree that these amendments would have a completely negative effect. We would be left with a hollowed-out Bill that simply would not be worth putting before Parliament again.

Indeed, if I can tweak the noses of some of the noble Lords opposite, if we agreed these amendments we would be left with merely a referendum on the euro, which I understand is what the previous legislation from the Opposition put forward, whereas other points in that legislation were not acceptable.

The amendments in this particular group go right against the philosophy of the Bill itself. As a former Member of the European Parliament, it is galling indeed for MEPs to receive something between 30 per cent and 35 per cent of the vote. It is shameful and shows how weak successive Governments have been in putting European Union thinking, philosophy and practices—good or bad, positive or less than positive—in front of the British people, who are the ultimate deciders. We have failed as Members of this House and of the other House, and other member states have not had that failure. I put that point forward previously.

The common purpose of this Bill, for those of us who support it, is to regain not just the trust but the knowledge base that the British people used to have so many years ago with the first referendum in the early 1970s. A huge amount of work was put forward by those who opposed membership and those who supported it. The result was that on the table was a mass of information about what grew to be the European Union. Indeed, looking back at those speeches reminds one of the profundity of the knowledge base put forward by different Members of both Houses of our Parliament.

The curious thing about these amendments—

[Lord Tomlinson]

I am grateful to the noble Baroness, but when she romanticises about the 1975 referendum, would she perhaps reflect that it was a rather shoddy device from the Labour Party, to which I belonged at that time, and the House of Commons? That party did not have a decisive policy in relation to Europe, and this was the shoddy compromise to make sure that we got away with it.

[Baroness Nicholson of Winterbourne]

I am perhaps just a few days younger than the noble Lord. What I recall as a campaigner with my father, my uncles and my cousins, was that we wanted to put forward the maximum amount of knowledge to the voters. All I am suggesting—and I think, correctly, that it is evidence based—is that the information flow is now so weak that nobody in the United Kingdom knows very much about the European Union at all. Indeed, the level of ignorance is shameful and it has to be put down to us in Parliament and to successive Governments. We have the knowledge and we should be putting it forward. The core purpose of this Bill is to reconnect—to use that wording again—with the British public, to bring the knowledge base forward. I suggest that these amendments would destroy that purpose, and that is not a proper thing to do. The public have a right to know, and if we do not tell them they cannot know.

The curious thing about the amendments is their self-contradictory terms and the disparity in what they seek to achieve. Some amendments propose to extend referendum provision to common fisheries policies, rights of citizens and the ECHR, which is outside the parameters of this Bill. The Bill does not transfer those powers or competences from the UK to the EU, so it is a very curious set of amendments.

The amendment that troubles me most of all is the one that would remove our capability to stop qualified majority voting with the veto for areas in common foreign and security policy. I hardly need to remind the noble Lord, Lord Hannay, that Article 42(2) of the treaty of Lisbon states:

“The common security and defence policy shall include the progressive framing of a common Union defence policy. This will lead to a common defence, when the European Council, acting unanimously, so decides”.

Here I refer to Amendment 28A, which would remove our capacity to stop that happening sometimes. Article 42(2) goes on to say:

“It shall in that case recommend to the Member States the adoption of such a decision in accordance with … constitutional requirements”.

In other words, I am talking about irreversible decisions to transfer power and/or competences from the UK to the EU on issues such as a common EU defence policy—for example, with a European army, whereby the UK might lose its freedom to decide if and when we send our troops. There would have been no Libya; we would have had to wait for the Italians to agree, for example. Do those who propose the amendments recognise that that is what could very easily happen? A move to qualified majority voting from the veto on any important policy area in part 3 of the TFEU is set out in Schedule 1 on the common foreign security policy, enlargement and direct taxation. These are traditional red lines for us and these amendments would destroy our position.

[Lord Hannay of Chiswick]

I am a bit puzzled by the noble Baroness’s line of questioning over whether those of us who tabled amendments, including myself, understood that point. Of course we understand that it would require, as she read out, a unanimous decision, including the British Government’s decision, to do that. Nobody doubts that; it means to say that there are no circumstances in which we could be forced to take that decision against our will, and nobody is suggesting that we should. I do not really see what the issue at stake is in that matter. It requires unanimity, like everything else in this part of the Bill. The assumption appears to be—and perhaps it is shared by the noble Baroness—that we are legislating for some weak-kneed, limp-wristed British Government of the future, who will simply give everything away and collapse in a heap. I can see noble Lords’ heads nodding—and there you are. You have proved beyond peradventure that you are trying to break one of the rules of the British constitution that one Parliament does not legislate for another.

[Baroness Nicholson of Winterbourne]

The point of my remarks is very simple. I believe most profoundly, along with a number of others who support the Bill, that that is exactly the sort of transfer of sovereignty—absolutely au fond the transfer of real sovereignty of the kind that matters most of all to us, which is our defence—which should surely be put in front of the British people. I refer to the making of a common defence and security policy. Let us take Amendment 28A; let us recall that the Council of Ministers and the European Council and the institutions of the European Union in their wisdom can make unanimous decisions without many people being present—not only without ourselves being present but without others who would agree with us and are also members of NATO, for example. So we can have a unanimous decision without core members of NATO being present. Those are common defence and security policy issues. I believe most powerfully that that is the fundamental transfer of real sovereignty, which puts many other things in the pale. It really matters.

I would be aghast if that happened through the mechanism that the Government have put forward in this Bill, which is a good Bill and not a great constitutional Bill as the noble Lord, Lord Hannay, suggested. I do not think it is that at all; it is a very good, solid, small and middle-of-the-road Bill, which opens the door for us to speak directly to the British public. I cannot help but feel that if we close the door again, as the noble Lord, Lord Hannay, and his colleagues would recommend, and put down a referendum merely on the euro, which it is extremely unlikely that we will ever join—look at Greece, for a start—and we do not have referenda, it will all be done by Twitter anyway. It will all be done on the web. This mass of knowledge base that the public have will be expressed in another way, and our Parliament will become ever more excluded from what in effect will be the national debate.

My only point is a simple one. The integrity of the Bill is demonstrated by the linkage with the people. The only way in which we as parliamentarians can offer the people a true linkage is by referendum power. I was interested and pleased to see—result or no result—that 42 per cent of the electorate turned out on the referendum last Thursday. People want to express their views. They want to be asked; if they are given the knowledge, they will respond. They are very used to it these days—are not we all, with iPhones and so on? It is most foolish and self-defeating to say, as the noble Lord, Lord Hannay, did, that these amendments, which are in many ways contradictory, as I have already pointed out—some going too far and some not going far enough; in that sense they are really wide of the mark in some respects—do not remove the context in which the Bill is based and would not be foolish in terms of Britain’s future.

[Lord Goodhart]

My Lords, I am entirely in disagreement with what my noble friend has been saying. This Bill is full of absurdities, and the most absurd of those is that referendums will have to be held for changes in 56 sets of EU rules, even if they are minor changes that are of no particular interest to members of the public.

There is a large number of these possible proceedings, listed especially in Clause 6 and Schedule 1. Of these, only one—the decision to make the euro the currency of the United Kingdom—would clearly justify a referendum. In practice, it is inconceivable that there will be any decision to seek to make our currency the euro. It is arguable that a decision under the Schengen protocol to remove UK border controls would also justify a referendum, but none of the other matters in the Bill does so.

20:00

Let me give an example. There are references in Clause 6 and Schedule 1 to a body called the “European Public Prosecutor’s Office”. That is the subject of my Amendments 36 and 42, which are in this group. The EPPO does not yet exist and may never exist, but under Article 86 of TFEU it could be created. The EPPO would then be responsible for,

“investigating, prosecuting and bring to judgment … offences against the Union’s financial interests … in the … courts of the Member States”.

The powers of the EPPO could be extended to include,

“serious crime having a cross-border dimension”.

I do not at present wish to support the extension of an EPPO to the United Kingdom but it may be accepted by other member states, provided that at least nine states join in.

It is possible that the EPPO might prove to be a useful and effective organisation and a future Government might wish to join it. The powers of an EPPO are not unimportant and an Act of Parliament would be justified, but why go on to a referendum? How many citizens of the United Kingdom would be affected, as individuals, by the EPPO? How many might be charged with,

“offences against the Union’s financial interests”?

Hardly any; if anyone is prosecuted by the EPPO, it will probably be bankers or fraudsters. How many might be prosecuted for,

“serious crime having a cross-border dimension”?

Again, it would be only a few corporate bodies or fraudsters. A referendum on the EPPO would be of far less interest to the public than any on a Bill to, let us say, reconstruct the National Health Service, which is not going to be the subject of a referendum.

Referendums are also expensive. The cost of the AV referendum will be large but a referendum under this Bill will cost even more because it will be harder to couple it with parliamentary or local government elections, unless it is decided that it must be delayed for up to a year until we have the next electoral event. Not just one on the EPPO but any referendum under this Bill, except for those on joining the euro or opening the borders, would frankly attract very few votes. It would be a waste of time and money and attract a minimum of people. Almost all the other provisions in Clause 6 do no more than refer to the possibility of qualified majority voting or the substituting of the ordinary legislative procedure for a special legislative procedure—that is, that the special procedure will be replaced by the ordinary procedure. These matters are suitable for decision by Parliament but are patently inappropriate for referendums.

I finish with a statement contained in a government hymn-sheet which was circulated among my Liberal Democrat colleagues a few days ago. Referring to the group which we are now debating, it says:

“This goes against the whole purpose and philosophy of the Bill. It only—cynically—leaves the referendum provisions for the euro, and so returns to the dreadful political status quo”.

There is nothing whatever that is cynical in those of us who object to referendums when they would be inappropriate, or who believe that it is not the status quo but the proposals in the Bill which would be dreadful.

[Lord Tomlinson]

My Lords, I take great pleasure in following the noble Lord, Lord Goodhart. He dealt with that specific example of the European public prosecutor's office and quite rightly pointed out, rather rhetorically, how many would be affected. My question is: how many would care? In addition to his views that it would be a waste of time and money, I have one much more serious complaint about it. It would be the greatest democratic turn-off that we could have and would encourage a process of non-participation in public decision-making. Our democracy is in sufficient difficulty without us placing additional obstacles between the success of our democratic systems and the use of so-called democracy through referenda on many of these trivial issues.

The noble Lord, Lord Hamilton, spoke earlier about disillusioned citizens. My view is that Clause 6 drives a coach and horses through any sensible concept of parliamentary democracy. I can conceive of little that would more enrage our people than to see Parliament surrender its powers on anything other than the most serious constitutional issues in which the people ought to be engaged. We proudly go out and talk to all sorts of people about being the mother of Parliaments. I feel that with Clause 6 as it is, a lot of people might be tempted to question the paternity.

The noble Baroness, Lady Nicholson, reminded us that she has been a Member of the European Parliament. I remind your Lordships that I, too, spent 15 years in the European Parliament. To the best of my knowledge and belief, nobody at any time during those 15 years raised any of the subjects in Schedule 1, demanding to have a say in resolving such decisions.

[Baroness Nicholson of Winterbourne]

I cannot raise the question of age discrimination, because that is now illegal, but might it be a little before my time that the noble Lord was in the European Parliament, and that, for example, the section which I have just quoted from the treaty of Lisbon is entirely new? The noble Lord might realise that things have changed.

[Lord Tomlinson]

I am glad that the noble Baroness felt it necessary to point that out. However, since I left the European Parliament, I have had the privilege of representing your Lordships’ House in the Convention on the Future of Europe, which kept me a little abreast of some of the things that were going on. There is an idea that any one of the subjects listed in Schedule 1 is appropriate for public engagement through a referendum, in the hope that that will then provide the missing link to inspire the people of Britain in relation to Europe, but not one of them has that inspirational quality. If we are going to inspire people about Europe, as I said at Second Reading but will not repeat now, we have to address the issues of great concern: the environment, what we are doing on world poverty, the role of Europe in the world, and the things which we do together and which have created success, rather than engage them with every bit of trivia that we can imagine. In terms of referenda subjects, that is what Schedule 1 is.

As regards how we are going to behave, we have 56 areas of decision-making where referenda could overturn the wish of what we have always thought of as a sovereign Parliament. What are we really going to be saying to our negotiating partners? Will it be, “We’re really in favour of this measure but we can’t vote for it because we’re not allowed”, or, “If we give you a nod and a wink about being in favour of it, we have to put down a formal disclaimer? We certainly can’t abstain because that will be interpreted as support”. That will really be inspirational and reconnect the British people with decisions on Europe.

What will we in fact find ourselves doing? Rather than abstaining and giving reasoned objections, as regards many of the 56 areas of decision it will be easier and less absurd for a Government to vote against and to deny progress. In consequence, we will be marginalised in Europe, with other countries making each of the decisions that they need to in their national interest. We will be the defenders of their national self-interest by having created conditions that we cannot possibly fulfil.

We should be sensible about the Bill. I am not one who wants to make modest amendments to it; I think that it is a shoddy and shabby Bill that serves no useful purpose to the body politic and has no benefit of engagement, apart from to half a dozen anoraks in the odd referendum that there might be. If we really want to serve the British people, we will get rid of the Bill, and if we cannot do that, we should produce at least half a dozen sensible amendments that take the guts out of it, particularly Clause 6.

[Lord Lamont of Lerwick]

My Lords, I agree with the noble Lord, Lord Hannay, that it is a pity that so many of these amendments have been lumped together; it would have better if they had been somewhat disaggregated. We are talking more about Clause 6 than about Schedule 1, and whatever the objections in general to the Bill and the things listed in Schedule 1, I find it difficult to understand why people do not regard Clause 6 as eminently reasonable. That clause is about a substantial increase in competence and transfers of power.

All the areas listed are where Britain has special arrangements or opt-outs. It is true that they do not require treaty change but they are none the less significant and affect us in different ways, so, given the Bill, it is logical that they should be subject to the referendum provisions. Those issues include the euro, the European army that was referred to, border controls and the European public prosecutor. I listened to the noble Lord, Lord Goodhart, with great respect, as I always do, but I think that the establishment of the European public prosecutor is actually a very big issue, one that would be suitable to have a referendum on. I shall say a bit about that in a minute.

An argument was put forward from the Benches opposite that in having Clause 6, which deals with the passerelles, we were going against the Lisbon treaty after it had been ratified. That is not really the case; although those passerelles exist and were in the treaty, they say that we “may” do this, not that we “will” do this. These are significant changes.

I may add that I am told that the Germans have altered their treatment of passerelles to give more say in any ratification of parliaments in future, so this does not go against the Lisbon treaty. In any case, the argument that the passerelles represent the will of Lisbon may sometimes be true, but sometimes passerelles were put in the treaty simply because countries could not agree; one group of countries wanted to go ahead faster while another group did not, so they decided to compromise and have a passerelle to leave the issue for a later date. I remember it being reported that one of the Finnish participants in the Lisbon treaty said, “The passerelles were where we failed, where we couldn’t agree”.

[Lord Dykes]

When my noble friend referred to the Germans, he would accept, wouldn’t he, that, like us and other member states, they are very keen to enhance the involvement of the national parliament in European decision-making at various different levels, including therefore making that process easier for the parliament to be involved in, but at the same time with the expectation in Germany, which is natural there, that the parliamentarians will be voting enthusiastically for any changes if they come to a vote? In the mean time, the basic law repeats the important clause on continued European integration.

20:15

[Lord Lamont of Lerwick]

I think that it is common ground that we are all in favour of increased national involvement in treaty changes and changes in the competences and the power of the European Union. That is a point that the noble Lord, Lord Hannay, has gone out of his way to emphasise. That is common ground; the argument is about where there should be referenda. My argument is that, whatever the general arguments about the Bill, these provisions, particularly the European defence policy, the euro, our borders and the European public prosecutor are suitable projects on which to have a referendum.

I said that I had listened carefully to the noble Lord, Lord Goodhart, and that I always do. I was with him on a committee that considered the European arrest warrant, and I was in a small minority in expressing strong reservations about it. Some of the arguments that were put forward then were, “Well, it’s going to apply only to a few criminals”, “It won’t apply to very many people”, and, “Why should people be worried about appearing in a court?”. Many of us would argue now, though, that it was a hugely significant transfer of powers that has now worked out in the way that it was intended to. There have been many examples of injustice, certainly several that are known to me personally, and it is something that I very much regret. I hope that we might return to that subject and amend the arrangements that exist.

Article 86 of the TFEU, which refers to the possibility of the public prosecutor, talks about,

“offences against the Union’s financial interests”.

Fair enough if we are talking about offences against the Union, as the noble Lord, Lord Goodhart, has often emphasised, but one wonders in what ways those words might be stretched. One notices that subsection (4) says:

“The European Council may, at the same time or subsequently, adopt a decision amending paragraph 1 in order to extend the powers of the European Public Prosecutor’s Office to include serious crime having a cross-border dimension”.

I know that the noble Lord said that he was not in favour of that extension, but this is a big area and one that is suitable to give great consideration to. Peter Hain, Britain’s representative at the convention leading up to the constitution that never was, strongly opposed participation in the EPP. He said:

“Criminal prosecution should be essentially a national responsibility. Our national prosecutors must be accountable to national courts and ultimately to our national parliaments. The European Public Prosecutor would be accountable to neither”.

It is true that these are not treaty changes but they are big increases in competence, brought about through the passerelle, which we do not have to endorse. In ratifying Lisbon, we were not endorsing that we would automatically let these things go through. For that reason I am strongly against the amendment.

[Lord Goodhart]

The noble Lord is right to say that the European arrest warrant has not worked out as properly as it should have done or as we expected it to at the time. However, this matter wholly involves people who are concerned with international crime. How does the noble Lord see that it could operate to the damage of ordinary citizens of this country, who make up the vast majority of those who find themselves in court?

[Lord Lamont of Lerwick]

I am very sorry that the noble and learned Lord, Lord Goldsmith, is not here; he was here earlier. I read what he said the other day. If I have in any way misrepresented his views, I am sure he will correct me. I read that he was very firmly one of those in the previous Government who took the view that the best way of dealing with international crime was not by the creation of new international authorities but through co-operation between national authorities. That was his very firm view. I thank the noble Lord, Lord Goodhart, for what he said about the European arrest warrant. I know he felt it should have been combined with a system of European bail, which would have made it very different.

[Lord Davies of Stamford]

I want first to address some of the general points that have been made in this debate and then focus on Amendment 42, with which I thoroughly agree. I very much support the arguments of the noble Lord, Lord Goodhart, on that. Several general points have been made. Some of this debate has been a bit of a Second Reading debate, which is a very good thing. These issues are extremely important and I accept that many of these amendments cut across the thrust of the Bill itself. They force the Government to explain exactly what their purposes are. That is a most important aspect of this evening’s proceedings. We are making some progress. I am grateful to the noble Lord, Lord Lamont, for recognising that we on this side of the House are very much in favour of enhanced parliamentary scrutiny of European Union decisions. If the argument was about that, there would not be an argument. We would be pretty much in agreement and would have put the Bill to bed long ago. The issue is entirely about referenda, and whether it is sensible, practical and ever seriously intended to have referenda. It is important that, as a result of the proceedings of this Committee, we elucidate that point.

The noble Lord, Lord Hannay, said that he thought it was a sick joke—strong words, but justified—to suppose that the Bill would in any way enhance our relationship with our partners in the EU or enhance the British public’s support for our membership of the EU. I do not cast aspersions on the sincerity of any Member of this House. I am sure the people who say that they believe that the Bill will somehow enhance the British public’s understanding of and support for the European Union have genuinely persuaded themselves that that is the case. However, it is quite difficult to follow that argument, which is so obviously contrary to the historical facts. We all know what those are: Mr Cameron offered this Bill to his Eurosceptics as a sop. It was put to them as being a victory for the Conservative Party in the negotiations that led to the coalition agreement. Indeed, Mr Cameron and his Whips have been going around the Back Benches of the Tory party, as I know, saying, “You must be pleased with us now. We have at least brought forward this Bill, which stops any further growth in powers for the European Union and preserves parliamentary sovereignty”. That is an aspect we will come to later in the Bill. That is historical fact. That is how it has been presented and the way it happened. There is no question at all of anybody saying, “Let’s see what we can do to enhance the British public’s understanding of and support for membership of the Union”, and then coming up with this Bill. That is not how it occurred.

[Lord Ahmad of Wimbledon]

My noble friend Lord Hamilton referred earlier to the importance of connecting again with the British people. Is the noble Lord, Lord Davies, suggesting that military independence, the loss of our decision-making around defence and judicial independence are less important than financial independence?

[Lord Davies of Stamford]

I have not raised the issue of defence at all in my remarks, so I do not know where that question comes from. From the Whips, I am told. I do not dispute that interpretation.

[Lord Ahmad of Wimbledon]

My right honourable friend the Prime Minister put forward the Bill, which is all about connecting with the British people, not with the Whips. The important thing is what the British people care about. They care about our defence, our military independence and our financial independence. That is what this Bill is all about.

[Lord Davies of Stamford]

The British people clearly care very much about the defence of the country; that is another, wider subject. I have no doubt at all that they are very unhappy with what the Government are doing in that regard. As the noble Lord may know, I have always supported a greater degree of cohesion in European defence matters. However, the amendments that we are discussing are not concerned with that issue. I want to get back to the Bill and the amendments that we are discussing.

Amendment 42, which deals with the European public prosecutor’s office, exposes the Bill’s lack of sincerity. Of course it is possible to make an argument for having a referendum about our joining the euro, or possibly about our joining Schengen, but is it really credible in this regard? Does anybody really think for a second that any Government would seriously have a referendum about the public prosecutor’s office? I do not think that anybody could possibly believe that is a realistic possibility.

Article 86 provides for a public prosecutor’s office. It says:

“In order to combat crimes affecting the financial interests of the Union, the Council, by means of regulations adopted in accordance with a special legislative procedure, may establish a European Public Prosecutor's Office from Eurojust”.

The words which state,

“In order to combat crimes affecting the financial interests of the Union”,

provide the answer to the point made by the noble Lord, Lord Lamont, about having national jurisdiction. This country clearly does not have jurisdiction in financial crimes committed in Brussels or elsewhere in the Union against the financial interests of the Union. We are a member of the Union and suffer as a result of those crimes, but our courts may very well not have jurisdiction in such circumstances. Indeed, they are most unlikely to have it.

Who is going to oppose that? If you are going to have a referendum, have one on something that is controversial. If you go to the British public and ask, “Are you in favour of crimes against the European Union? Are you in favour of prosecuting them? Are you in favour of having a public prosecutor who would have jurisdiction in such cases?”, who is going to say no, they are not? It does not really make sense. Article 86(2) continues:

“The European Public Prosecutor's Office shall be responsible for investigating, prosecuting and bringing to judgment, where appropriate in liaison with Europol, the perpetrators of, and accomplices in, offences against the Union's financial interests, as determined by the regulation provided for in paragraph 1. It shall exercise the functions of prosecutor in the competent courts of the Member States in relation to such offences”.

What is controversial about that? Where is the substance there for a genuine referendum campaign? Can anybody consider suggesting to the British public that we spend £1 million of their money on having a referendum on such a subject, let alone tens of millions of pounds? The noble Lord, Lord Goodhart, pointed out that almost certainly a referendum on that subject could not be linked to some local or national election, and so the costs would be disproportionately high. It just does not ring true. I said that on Second Reading and I say it again now. The Government will have to do very much better to try to persuade the British public of their sincerity in that matter than they are doing.

The noble Lord, Lord Lamont, says that the treaty may extend the remit of the European public prosecutor’s office to enable it to deal with cross-border crimes within the European Union. That is perfectly true. He quoted paragraph 4, but it is clear that that decision would have to be taken by unanimity, so we have an effective complete lock on that for the rest of time. There is no threat of that happening without our having to take a decision on it if we wanted to. Of course we should take a decision only with parliamentary support. In fact, we should take a decision to join the European prosecutor’s office in the first place only with parliamentary support—whether through a resolution or a Bill, I do not particularly care; I am all in favour of that.

If the British public do not think that we in Parliament are capable of taking a decision on a matter which is a no-brainer—is it not?—to pursue financial fraud more effectively, then what is the purpose of having a Parliament? It does not even begin to make any sense.

I am very grateful to the noble Lord, Lord Goodhart, for bringing forward this amendment, as it shows up the complete hollowness of the Bill. It is insincere and simply does not make any sense. It is not for real. It is like dealing with a dishonest salesman: you know perfectly well that what he is saying is not the truth; you try to get at the truth and his real intentions, but it is clear that the real intentions are not the ones being overtly expressed. That is my problem with the Bill. It is a very serious problem. I am very grateful to the noble Lord, Lord Goodhart, and to his fellow signatories to the amendment for bringing it forward. I hope that we get an answer from the Government. What is the reason for this obsession with the public prosecutor’s office? A respectable answer may be this: “We are stopping everything. Of course, it would be absurd to have a referendum on the public prosecutor’s office but we want to stop everything. A cat should not be allowed to cross a street so far as competences in the European Union are concerned without having a referendum. We want to be absolutely certain that we are totally pedantic about that”. That may be a respectable answer. It is an intellectually coherent answer but it means that the Government have adopted a policy of complete, rigid, ideological dogmatism in this matter. That is a very revealing point. If that is the explanation, it is very important that the public should know about it.

20:30

[Baroness Falkner of Margravine]

I thank the noble Lord for giving way, particularly after he spoke so eloquently about political dogmatism. He will of course know all about political dogmatism. He has not helped his arguments by his tone of incredulity that perfectly sensible noble Lords across this Chamber might disagree with each other on the importance of giving away power or competence to the European public prosecutor’s office. He should be able to disagree with that without descending to the level of incredulity.

I will tell the noble Lord why his argument does not work. If he thinks back, the article on the European public prosecutor’s office to which he referred, and which I have looked up, talks about the financial interests of the Union. It does not define, word by word, what those interests might be, or what acts those who go against the financial interests of the Union might have to perpetrate to do so. I remind him of the NatWest four and the extradition treaty with the United States. Many Members across this House and, I am sure, in the other place, are extremely uncomfortable about what happened there. Widely defined clauses can contain any number of provisions and can have all sorts of side effects. I just wish that the noble Lord would accept that the article is widely defined.

[Lord Davies of Stamford]

The noble Baroness has made one of the longest interventions that I have ever taken in my time in either House. I shall not reply at such length, but I will say, first, that I have never made ad hominem or ad feminam arguments in this place; I have tried to address the issues and I hope that she will try to do the same. Secondly, by drawing an analogy with the people who were extradited to the United States for commercial crimes, she has completely misunderstood not only the point I was making but particular articles in the treaty. All the crimes foreseen in Article 86 as matters for the public prosecutor are defined as those that are,

“affecting the financial interests of the Union”.

It is a narrow category of crimes, and there is no way in which that category could be expanded without unanimity.

As I said, it is extraordinary for the Government to decide specifically to provide for a referendum on a matter that can scarcely be of great public controversy. It is very difficult for me or the public to see what national damage could be done. The most respectable explanation that I can think of is that the Government are acting in an utterly narrow-minded and dogmatic fashion. They are displaying the mentality of, if you like, the Spanish Inquisition. There is no flexibility or pragmatism. That would be a very frightening way to conduct our national interests abroad.

[Lord Risby]

My Lords—

[Lord Dykes]

As I hope my noble friend will agree, I have put my name to the amendments and wish briefly to address the House on them, following the remarks of the noble Lord, Lord Hannay. Although the noble Lord is no longer in the Chamber, he should receive the thanks of the House for revealing the shocking irony that Clause 6 is in many ways more obnoxious than Clauses 2, 3 and 4 in terms of what it does to weaken Parliament and, ironically, government and ministerial decision-making in European meetings which would take place as a result of the clauses.

Amendments 32, 33, 34, 35 and so on, including my noble friend’s amendments on the EPPO, try again to appeal to the Government to respond reasonably. There has already been a hint, to which the Labour spokesman referred, that the Government were beginning to listen to deep and genuine arguments from all parts of the House against the details of the Bill.

Amendment 32 and subsequent amendments remove the referendum condition from the beginning of Clause 6, to deal with items not covered in Clauses 2, 3 and 4. These are specified decisions postulated in the TEU or the TFEU that do not need a new treaty or Article 48(6) treatment, because the two categories listed mirror the list set out in earlier clauses; and the second category relates to the so-called one-way decisions that are by definition irreversible. Similarly to the previous clauses, especially Clauses 3 and 4, it would greatly improve the efficacy and good faith of the Bill if those subsections were either eliminated altogether or substantially amended to soften the harsh impact of the provisions.

The subsequent amendments in this cluster, under the names of the same promoters, would remove the referendum condition in other areas of decision-making. I will not go into great detail, but Amendment 33 omits the whole of Clause 6(2) to (6) and cancels the need for referenda on QMV, EPPO, social policy items, the environment and so on. Those are all worthy of consideration by the Government once again to reinforce and return power to the British Parliament, which has been seriously undermined by the constant nagging by the anti-Europeans that Parliament has somehow let down the British people about Europe. That is not the case in any evidential way, and we now need to restore the balance to the British Parliament—both Houses—in future. Incidentally, it is interesting to muse that according to page 9 of the Constitution Committee's report, if change in the House of Lords were covered by the definition covering abolition of either House of Parliament, then change in a fully elected House of Lords also should be the subject of a referendum. I bet that it will not be, bearing in mind what happened last Thursday.

Under the clause, no ministerial judgment is exercised on the transfer of power argument, because the primary legislation and referendum are automatic. There are no exemptions. Hence, on Europe Day, I am wearing the Europe tie in honour of the Schuman day. There is one European flag in Parliament Square—that is because it is Europe Day—and the member state flags as well, but Britain is the only leading member state where the European flag does not routinely fly on any government building. Perhaps my noble friend Lord Wallace would try to do something about that in future for the coalition Government.

[Lord Wallace of Saltaire]

I intervene to say that the Daily Express said that the British Government were being forced to fly the European flag on government buildings. The noble Lord has just demonstrated that that is a slight exaggeration.

[Lord Dykes]

I entirely accept that. Indeed, no member state is forced to fly the flag. It is interesting that in Germany, France, Italy and other countries, routinely, all or most government buildings fly the European flag as well as the national flag. We know that President Sarkozy, when he has a television interview, always has, alongside the tricolour, the European flag.

[Lord Pearson of Rannoch]

Will the noble Lord admit that the absence of the European flag on most of our public buildings reflects the wishes of the British people, if not the wishes of our Europhile political class?

[Lord Dykes]

The British people have not been consulted on that in any way. If they were, they would probably be very much in favour of it. I think that the younger generation, in particular, would like to see the European flag flying alongside the national flag. You can be a patriotic Britisher and a keen European as well, and there are plenty of them.

[Lord Pearson of Rannoch]

My Lords—

[Lord Dykes]

If the noble Lord will forgive me, I will not give way again at this stage.

The feeling about Clause 6 is mounting that it will have a worse effect than the previous clauses. Yet again, I do not believe that the Government have thought out the dangerous subsections. Any British Government of whatever colour or, in the case of a coalition, whatever combination of parties, could find to their dismay that the communitarian habit of working together by positive and constructive consensus for the greater European benefit and that of the national member states would be stymied by a sudden, brutal UK stop-all on routine matters of state business in the Council of Ministers. We would therefore paralyse ourselves for no good reason other than the propagandistic appeasement of the Daily Mail, the Sun, my noble friend Lord Hamilton and a few other headbangers in the Commons on the Conservative side. I did not mean to say that my noble friend Lord Hamilton was a headbanger; far from it, he is a very respected Peer who succeeded me as chairman of the European Atlantic group, so he must be a very good bloke indeed. We would also bring the whole European Council process to a stop. We recall that in the first section of the coalition agreement on Europe the Government wanted to play a leading role and to be a positive participant in the EU, but this amazingly stupid clause is a funny way of dealing with our aspirations. If it were passed, the Government would henceforth face regular clashes with their partners for no good reason other than to have a clash, and this would come from the member state that insisted on no artificial hurdles and, quite rightly, full QMV for the single market—indeed, full integration in all aspects of the single market.

Lisbon went wider on the machinery of collective decision-making than previous treaties. It included similar techniques to the ones first introduced by the Single European Act, when huge new powers were agreed for the Union without the UK authorities and indeed Mrs Thatcher, in particular, running away, as was alluded to earlier. Why were we so surprised to see other member Governments appreciating our zeal for the Single European Act and wishing to apply its mechanisms to other areas as respectable normative integration between friendly, like-minded and patriotic member countries? Why are we so insecure that we have to agree with Bill Cash and John Redwood on these issues? If the Government were sensibly to accept all or some of the original main amendments in this rather unwieldy and elaborate cluster, they would be doing themselves and Parliament a big favour in sparing us from the agonies that will surely arise under this dotty clause.

[Lord Stoddart of Swindon]

My Lords, first, I agree with the noble Lord, Lord Lamont, in his criticism of the way that these amendments are being handled. Altogether, 19 amendments have been put into one group, but I believe that a better debate would have been had if we had been able to discuss amendments on individual clauses. I also agree with the noble Lord, Lord Hamilton, that it would have been far better if we could have had our Ministers tied to the mast with their ears waxed up, as they would not have hit the rocks. We have hit so many rocks during the past 40 or more years that we have been a member of the European Union. Of course, when we joined it, it was not a European Union but a common market, and no one ever thought that it was going to be the sort of European Union that we have now. It was sold as a common market.

Throughout this debate and in previous debates we have heard a great deal about parliamentary democracy. I believe very much in parliamentary democracy and I have been around it for quite a long time. However, we gave away our real parliamentary democracy when Parliament passed the European Communities Act 1972.

[Lord Dykes]

I am most grateful to the noble Lord for giving way. Should he not address himself specifically to this clause and the amendments thereon, rather than make yet another Second Reading speech? He makes exactly the same speech on every single occasion.

[Lord Stoddart of Swindon]

I explained why it would have been far better if many of the amendments had been grouped differently. Perhaps we could then have spoken to each and every one of them according to what they were proposing. It is difficult to speak to this conglomerate of 19 amendments, and that is why I want to take up the matter of parliamentary democracy at this stage, particularly as we have heard so much about it. I repeat that we gave away parliamentary democracy when the House of Commons and this House passed the European Communities Act 1972, which of course gave European law superiority over British law.

20:45

[Lord Pearson of Rannoch]

My Lords, I wonder whether the noble Lord really means to say that we gave away our parliamentary sovereignty. Surely we have been paying Brussels billions a year to take it from us. We did not give it; we are paying them to take it.

[Lord Stoddart of Swindon]

I am afraid that that was by parliamentary decision. That is precisely what I am trying to say. We gave decision-making in relation to Europe to the European Union which has the last word. We talk about parliamentary democracy but when it comes to the push and we discuss the various amendments that have been made through treaty making, we are told that Parliament cannot make amendments to the treaty. All we can do as a Parliament is accept or not accept the treaty. We are not allowed to alter the treaties because they are made by Governments. The treaty they make is the treaty that matters and Parliament has no power at all to amend any provision of the treaties that have been passed since the European Communities Act 1972. That cannot be denied.

In relation to the transfer of power in each and every treaty, particularly in the Single European Act, the Maastricht treaty and eventually the Lisbon treaty, we have given powers to Europe without Parliament being able to say yea or nay. That is why we are in this position. It is because Parliament has not been able to make decisions about individual matters and the powers that have been transferred. That is why we have reached this decision. Ultimately, because a referendum was promised on the Lisbon treaty and it was not granted, the people are so outraged that they have demanded that something should be done. Let us make no mistake about it. This issue of sovereignty, this issue of who governs Britain, is not a party political matter. It transcends party politics. It is about who governs Britain. Unless that is realised and the people are considered and given the opportunity of speaking, the European Union will sink further into public disapproval than it already has.

I just want to add that we are told all the time that if we do this or that which does not suit the European elite we will be marginalised. Why on earth should a country of 60 million and the fourth—

[Baroness Garden of Frognal]

My Lords, I apologise for interrupting the noble Lord but it would be helpful to your Lordships’ House if he could indicate to which amendment he is speaking.

[Lord Stoddart of Swindon]

They are grouped so I am speaking to all of them. I am actually speaking in favour of the Government and I was just coming to that. I was going to say that this issue transcends party politics and that the Government have been forced by public pressure, and indeed party pressure though not only from the Conservative Party, to bring forward this Bill to reassure the people of this country that they will have a voice and that we will no longer hand over powers—great powers at that—to the European Union until Parliament has had a proper say, and indeed the people have had a proper say in matters of great note—not on little matters but matters of great note.

[Baroness Nicholson of Winterbourne]

Perhaps the noble Lord will explain, given his right and proper loyalty to the sovereignty of the United Kingdom, why he supports amendments that make the euro, which after all is a financial mechanism, of greater value in sovereignty terms than defence, which was the issue that I raised.

[Lord Stoddart of Swindon]

Every issue that transfers powers from this country to the European Union is very important. The Bill is about ensuring that when great powers are transferred, the people of this country as well as Parliament will have a say.

It is a pity that we have got to this stage. Nevertheless, because there has not been proper parliamentary scrutiny over the 40 years that we have been a member of the European Union, we have now got to a stage where the Government have had to bow to the demand that the people should be consulted and proper parliamentary scrutiny should happen.

[Lord Risby]

My Lords, we have heard a great deal in this debate about marginalisation. We should recall the words of the noble Lord, Lord Mandelson, who talked about the pragmatic nature of this Government. As we reflect on what the coalition Government have done, we should recognise that none of the grandstanding and grand old Duke of York activity that we have seen from successive Governments has been characteristic of this Government. It is worth reminding ourselves of the pragmatic relationship that has been established by the Government with the institutions of the European Union.

The amendments deal with the removal of all treaty provisions requiring a referendum, except euro membership. I accept the sincerity of what has been said by a number of noble Lords. Nevertheless, I suspect that many who have spoken in this debate do not like referendums at all. I find it curious that they accept the idea of a referendum on the euro when in principle many would not like a referendum at all, and that they thereby elevate the euro to a level of importance that is unique and special, to the exclusion of other considerations in the Bill.

There is a settled view on this in the nation, which should be accepted. However, there are wide areas of EU activity that alienate the public and enhance the view that there is a democratic deficit. Judicial independence, military independence, the ability to control our own borders, social policy including the rights of workers and employment terms and conditions, could not be blocked. Given our history, particularly in the latter area, this is a crucial issue. They are absolutely not crucial.

[Lord Goodhart]

Perhaps my noble friend will explain why judicial independence is damaged by our relationship with the EU.

[Lord Risby]

I will be delighted to. I will come in a moment to a discussion of various elements such as passerelle clauses, which I hope will cover this point.

Clause 6 sets out which passerelles would automatically trigger a referendum if powers or competences were moved from the UK to the EU. We touched, for example, on the matter of defence. This reflects the reality for us that EU member states have different relationships with third countries and different foreign policy priorities. For example, the UK has particularly strong relationships with interests in the Commonwealth. It would be wrong to give the EU the ability to prevent us developing these relationships. I am sure that that is perfectly logical, and it is covered in Article 31(3).

I turn to measures on working conditions and social security. Noble Lords will know that QMV already applies to many decisions concerning the health and safety of workers, working conditions, informing and consulting workers, combating social exclusion, modernising social protection systems, as well as to decisions in areas such as the European social fund. However, there are important things left for unanimity; for example, social security and the social protection of workers, the protection of workers when their employment contract is terminated, et cetera. These things can have a huge impact on the life of an individual nation and the businesses that add to the prosperity of that nation. Any move to QMV could jeopardise independent national decisions on that score. If we look at environmental matters, for example, they are mostly covered by QMV, but there are others that are still subject to unanimity. We would, of course, like to retain national control of what is left on the environment where there is a fiscal element attached to them: town and country planning; the management of water resources or the availability of those resources or land use; and, of course, the choice of energy resources and the general structure of the energy supply. These are very important for people at an individual level, a community level and a national level.

So, as we look at this debate and hear the discussion, I find it rather perplexing that our currency alone seems to have a critical aspect for our relationship with the EU. I think it is misplaced. There are all these other areas of vital concern to our national interest which concern people in terms of our relationship with the European Union. Coming back to my original point, it is precisely because we want to defuse the difficulties that have arisen in terms of public opinion and the public’s attitude to the European Union with a totally pragmatic Government—that has been obvious in the past year—that this Bill is in place. If we have red lines, they have to be very clear and very red. The amendments would make the Bill incoherent and make the public very suspicious and alienated. That is exactly what this Bill seeks to avoid.

[Lord Flight]

My Lords, I rise to address the amendments tabled in my name. As I understand it, Clause 6 addresses areas that are suitable for the requirement of a referendum in two of the ways in which a veto could be given up which are not covered by Clauses 2 to 4. They are, through the other part of the simplified revision procedure using Article 48(7) of TEU, effectively a third type of treaty change, and the six specific cases are dealt with by the passerelle.

The amendments are grouped somewhat strangely in that my Amendments 35A, 35B, 48A and 48B are on one side of the argument and all the others, with the exception of Amendment 40A, are in one way or other seeking to reduce situations where a referendum and Act of Parliament are required. Self-evidently, I do not agree with those amendments.

[Lord Hannay of Chiswick]

It is astonishing how little listening and how much assertion there is in this debate. I spent quite a lot of time trying to say that the amendments in this group that I and others have tabled do not seek to remove the requirement for primary legislation by Parliament when any of these changes are made. I speak very slowly because it is a point that the noble Lord has just contradicted. Indeed, they are designed to remove the referendum requirement, but not the requirement for primary legislation, which is an addition to the existing requirement under the Lisbon ratification.

21:00

[Lord Flight]

I thank the noble Lord for his interruption. He enlightens Members of this House as he has done previously. I am well aware that he accepts the Act of Parliament and that it is the referendum to which he is opposed. He obviously lacks faith in the trust of ordinary people and for some reason does not seem to realise that the tool of the referendum is essentially there as a deterrent in order to discourage the EU gathering more power unto itself and the sort of behaviour that we had from the Government who were in power in this country until the most recent general election.

I will, if I may, continue. The amendments in my name cover examples of areas that come to light, on looking at the various territories to which Clause 6 might relate, in which there is indeed scope for power to transfer from the EU without the check of a referendum, and sometimes even without the check of an Act of Parliament. I am quite sure that there are many other areas in which there remains scope for powers to transfer. The point of my two amendments is, above all, that within the range of areas that it might be deemed appropriate to require a referendum, there is balance in the Bill—a whole range of territories that transfer powers but in which referenda are not required.

My amendments relate to two cases. First, as your Lordships will be aware, Article 25 of the Treaty on the Functioning of the European Union allows the Council to adopt any provisions to strengthen or to add to the rights listed in Article 20(2) of the TFEU. Article 25, which deals with the basic rights of EU citizens, appears to allow a fundamental extension of the scope of EU law. This in effect would alter the list of rights in Article 20(2). Article 25 provisions could well amount to treaty change. Extended rights for EU citizens would transfer power from the UK over whether it accorded such rights to nationals of other EU member states. There is clearly a debate here. Is it appropriate that measures that considerably extend the political rights of non-nationals, because they are members of other EU states, could occur without the agreement of the people living in those states?

The second territory is slightly more complex. Currently the EU is not a party to the European Convention on Human Rights. Lisbon introduced Article 6(2) of the TEU, which provides that the EU will accede to the ECHR, and as your Lordships will be aware this is currently being negotiated. The issue here is that any EU law that is modified in response to a finding of non-compatibility with ECHR rights would subsequently be binding on member states, so if the EU accedes to all ECHR rights—and, yes, I am well aware that there has to be unanimity for it so to do and that it has to go through the appropriate procedures in each country—EU legislation could be altered as a result. Therefore, EU accession to the ECHR could result in a transfer of power from the UK to the EU over whether the UK is bound by the jurisdiction of the European Court of Human Rights in areas that fall within the wide scope of EU law. So here, again, we have the question as to whether such a transfer is appropriate for a referendum.

[Lord Hannay of Chiswick]

I am sorry to interrupt the noble Lord again, but I think it would be helpful if he recognised that the provision in Lisbon that enables the EU to accede to the European Convention on Human Rights is in fact a transfer of powers away from the European Union, not towards it from this country, and it is a transfer to an organisation and a set of judicial procedures to which we are already a party. I therefore find it extraordinarily hard to see how the noble Lord manages to weave this into the tapestry of the Government’s excessive—in my view, in any case—desire to subject matters to referendums.

[Lord Flight]

While there is obviously a differentiation between the European Court of Human Rights and the EU, the point I was making was that if there is accession the result could be an important overriding of UK law by the ECHR and decisions taken by the ECHR in due course becoming binding in the law of this land. This is effectively a change and a giving away of power by the UK to the ECHR rather than the EU in terms of its law making.

To conclude, these two amendments are essentially illustrative. As I commented earlier, looking across the total territory, there are many areas where the arrangements surrounding the EU and bodies such as the ECHR continue to cater for powers being taken without the requirement of an Act of Parliament and certainly without the requirement of citizens having a say in it. The argument that this Bill is right over the top in terms of the areas where it requires a referendum is nonsense. Let me assure your Lordships that there are scores of other areas where a transfer of power could occur where no referendum is being provided for.

Contrary to the arguments put by noble Lords from the other side of the House, a reasonable balance has been adopted by this Bill. Those of us who are perhaps on the other side of the argument would make the point that there are many areas which this Bill does not address where we can still see scope for power being transferred.

[Lord Faulks]

My Lords, I rise to comment on the European public prosecutor, the subject of an amendment by my noble friend Lord Goodhart who is not in his place. The potential establishment of the European public prosecutor finds its origins in concerns about budgetary fraud and the improper diversion of grants and aids. The purpose is to improve co-operation and to co-ordinate legal action among member states. It would potentially involve the establishment of a uniform code of criminal offences of fraud against the EC budget applicable in all member states and a uniform set of procedural rules applicable in investigations. Together that would constitute a so-called corpus juris, which would be enforced by the European public prosecutor’s office. I regard this as a significant potential change as a lawyer, but also not as a lawyer.

It seems that the rationale behind the potential establishment of the EPPO ought on the face of it to attract the support of the United Kingdom. Nevertheless, it would amount to a substantial change in criminal jurisdiction. The idea of national prosecutors on secondment from the EPPO in the UK is a significant alteration to our system, which provides that it is for the Crown to prosecute criminal offences. Once established, there would inevitably be steps taken to introduce rules which might not sit easily with our common law systems.

Article 86 provides that an EPP,

“shall exercise the functions of prosecutor in the competent courts of the Member States”.

This means that we would give up control of a fundamental part of our judicial system; namely, the decision on who can be prosecuted for what and, equally important, the decision not to prosecute in some circumstances. It is now the province of the CPS. The EPP will initially be concerned with only crimes affecting the financial interests of the union, although that definition is likely to prove particularly elusive. However, by a passerelle in the treaty, the powers of the EPP can be extended to cover any serious crime with a cross-border dimension, which gives it a potentially very wide remit. One has to think only of the problems with the European arrest warrant, to which my noble friend Lord Lamont referred, and the definition of serious crimes.

The creation of an EPP has not met with much enthusiasm from our friends on the other side of the House. When the matter was discussed at length in 2002 and 2003, Justice said it thought that a European court of criminal justice would have to be established. The Law Society of England and Wales and the Law Society of Scotland did not think a case had been made out for it. The European Union Committee of your Lordships’ House concluded that a European public prosecutor was not a realistic and practical way forward, stating:

“The benefits of creating another body and in particular an EPP, whose existence and processes could cut across national criminal laws and procedure and which might not be accountable to democratically elected representatives, have yet to be clearly and convincingly demonstrated”.

While even the most ardent Eurosceptic would support all reasonable steps to improve the detection and punishment of fraud in relation to grants and aids, surely this can be better achieved by co-operation between member states in the sharing of information and evidence, and access to information, rather than by the creation of a supranational prosecuting body.

It is suggested that there should be harmonisation of criminal procedures if there is to be an EPP office. The problems with harmonising procedures have been confronted by the courts in this country in the context of the ECHR. For example, Articles 5 and 6 of the convention have had to be interpreted by the courts as to whether they respect or are in total harmony with the right to a fair trial and the right to protect suspects. The courts have had considerable difficulty in the attempt to try to harmonise systems with different origins. It is not impossible that there could be a real conflict between the CPS and its view of what is within its province and the national prosecutor for the European public prosecutor trying to do the same thing.

If a future Government want us to join in with the establishment of a new EPP office, I suggest that the case should be made to Parliament and to the British people. It may not be their everyday obsession, but they should and can be educated, and not just by the Daily Express, about the question of a European public prosecutor. It is an important matter that goes to the fundamentals of justice. This amendment seeks to take away the safeguards that are fundamental to the Bill and to the philosophy underlying it.

[Lord Triesman]

My Lords, we on this Bench have a great deal of sympathy with the noble Lords, Lord Kerr and Lord Hannay, and much of what I say will probably reflect some of the arguments they have made. Like many other noble Lords, I have found this grouping about as unhelpful as it could possibly be. It mixes together propositions that would reduce the scope for referenda, propositions that would increase the scope for referenda, and does not deal with any of the principles that might guide a move in either direction. So, as briefly as I can, let me summarise what I think the amendments we are discussing actually are. In the midst of all the Second Reading speeches we have heard, we probably ought to try to focus on the amendments.

The first amendments, from Amendment 30 onwards, which the mover of the amendment did address, discuss the situations under which a referendum and Act are required and seek to limit the issue of whether the UK should adopt the euro as its currency. That is to some extent elaborated in further amendments. From Amendment 32 onwards we see amendments that would remove the requirement for a referendum and an Act on the list of Clause 6 decisions and change them so that they would simply require an Act of Parliament. That is a proposition where this Front Bench also has an amendment, and with which I strongly agree.

Indeed, in some of the discussions, including the one just introduced by the noble Lord, Lord Faulks, I have found it hard to understand the rationale for the proposition that has been made at all. In almost every area that has been described, the Government would plainly have the capacity to say no and to insist on unanimity. If we wished to reject a proposal to change our judicial system, and I can see perfectly well why we should argue that that might be the case, we should—to paraphrase the wife of a recent American president—just say no. It is not hard; it is not a complicated piece of electoral practice. Just say no. There are a number of areas where it is perfectly possible to do so.

21:15

[Lord Waddington]

Does not the noble Lord appreciate that there is a very strong feeling in the country that, very often, the Government have not said no and have allowed the transference of power when there was no interest whatever to the people of the country? The most obvious example was the previous Government giving up half the rebate. What conceivable benefit did the people of this country get from that surrender, when it was given on the promise of a reform of the CAP which never took place?

[Lord Triesman]

I appreciate the point that the noble Lord, Lord Waddington, makes, but that was not a surrender of any power or competence. It might be regarded as the wrong judgment to have made about national assets, but it was nothing to do with a power or a competence. It may be felt that past Governments have acceded too willingly to arrangements that they did not like—that point was made very early in the debate this evening—but in almost every one of these areas it is perfectly possible, should this Government wish, simply to say no. They can achieve, without large rafts of legislation, the same result with a word of no more than two letters.

Amendment 40 and subsequent amendments would delete various decisions which would require both an Act and a referendum before a Minister could vote in favour of them. As a result of them, there would be no decisions which required both mechanisms. Our Amendment 40 would delete a number of the paragraphs from Clause 6(5) along with those that others have identified.

We completely agree with the proposition that a referendum would be required in the case of the euro, but we have also previously mentioned other major constitutional reforms as a second possible decision area requiring a referendum. I shall not speak to the amendments in the next group, Amendments 39A and 39B, other than to mention that in them we identify the way in which those issues might be selected as issues for a referendum. It is not a hollow premise; we are testing out ways in which, apart from the euro, other major constitutional changes might also be considered.

We agree entirely with the case for holding a referendum over the euro and we also believe that there are significant constitutional issues—although we know as a result of an earlier debate that they will not include accession of other countries—which might attract a referendum. Indeed, your Lordships’ committee was also clear that this could be appropriate in a number of circumstances. I immediately recognise that somebody will say, “Well, how is it we determine what should count as significant? What will that word mean when the decision is taken?” Looking at the Bill, the mechanism which is currently envisaged seems to me to be wholly inadequate. It has fault lines built into it to the extent that I believe that it will not work. I know that the noble Lord, Lord Howell, and I have not agreed about this; I fear, with the greatest of respect to him, that we will not agree about it this evening. Even as alumni of the same college, we will not find that we achieve agreement this evening, because the decisions which would so limit the role of Parliament extend so widely through this clause that it is very easy to see, in the contemporary political circumstances, how they would give rise to a continuous pattern of dissent which I do not think would make the British people feel any more comfortable that their view was being taken seriously or even sought, as has been suggested.

I make this point because it was clear in the intervention, for example, of the noble Lord, Lord Blackwell, who is not in his place. It was made equally clear by the noble Lord, Lord Pearson, and other noble Lords on our previous day in Committee. Their objections to the development of the European Union have been so profound and so marked that almost any opportunity would give rise to triggering the whole sequence that is contained in the Bill—judicial review at the very least.

In this Bill we have the potential to make sure that widespread and protracted campaigning will take place on every issue, not because a practical issue is always involved but because that is the way in which it is possible to organise resistance to the change. It may be that the change merits resistance. I am not arguing that that will never be the case, but it is simply an armoury of tactical approaches that become available for anybody who wants to slow down or block any kind of change at all. If I were of the same mind as some of those noble Lords, I would say “fair enough”. Give me those tactical options and I would probably choose to use them, and of course they will be used in that way.

The practical route seems to be where a degree of independence is possible in determining what is a significant issue so that those issues can be put through the whole process, including a referendum. In Amendments 39A and 39B, we canvassed those possibilities—either a Joint Committee of both Houses or an independent review commission. We would then begin to reach some kind of reality about what it is sensible to do or not to do outside the remit of Parliament itself.

I have listened intently to all that has been said about the role of Parliament as contrasted with the role that might be taken in the conduct of referendums and I find myself in agreement essentially with the proposition of the noble Lord, Lord Dykes, about the diminution of the role of Parliament. I will come back to the point about reconnection with the electorate because it is important. However, as the noble Lord, Lord Kerr, said in his opening speech, we will see changes taking place or being suggested in small amounts and pretty much continuously as adjustments of this variable architecture become possible. I acknowledge that that is what many people have objected to.

Parliament, apparently, would gain the confidence of the electorate if it ceased to do the job that it had been elected to do. How that will achieve greater confidence in Parliament completely bemuses me. I have to acknowledge that. There may be many criticisms of Parliament and parliamentarians, but the one criticism that I doubt we will hear anywhere is that people believe that we should give up doing the job that we are expected to do and franchise it to somebody else.

[Lord Waddington]

Does not the noble Lord agree that Members of Parliament are elected to exercise the powers that they have inherited, not to give away those powers in perpetuity?

[Lord Triesman]

My Lords, I broadly do agree, but that does not alter the general proposition that MPs are expected to take a dynamic and full political role in determining the outcomes of debates in these areas. Whether the determination goes in the direction of giving away no more powers or giving away more powers, that is the job of a sovereign Parliament and people working in a sovereign Parliament.

[Lord Radice]

Does my noble friend think it is because they do not really trust themselves to be parliamentarians? They want to bind themselves—it is the Odysseus complex, or whatever it is—because they do not really trust themselves. Does he think that that could be what it is all about?

[Lord Triesman]

My Lords, that may be one explanation. The other may well be that they do not have the courage to do it on all occasions and they are afraid of the kicking that they will get from much of the media if they actually fight the case out. That is very much more likely to happen, I am afraid.

[Lord Flight]

I think it was one of the noble Lord’s colleagues who made the point that it was the Wilson Government who first used the vehicle of the referendum because they were unable to take the decision themselves. I just make the point that as a young person who participated in it at that time I thought that it was absolutely correct. The fact that it may have been born of weak political circumstances was irrelevant. I grew up thinking that it was a crucial constitutional matter and the sort of issue that ordinary people should have a chance to have a direct say in.

[Lord Triesman]

I could not agree more with the noble Lord, Lord Flight. I took part in that referendum as a young activist in the Labour Party who believed strongly that we should retain our relationship with Europe. Many of my colleagues were not only in disagreement with me but in pretty hostile disagreement with me. The thing that I remember most about that, apart from the dissent that it opened up—our problem, our party—was that it was a fundamental and critical constitutional issue for the United Kingdom and exactly the sort of thing that I would have believed would be defined as significant in the sense that I have tried to present to your Lordships' House this evening.

[Lord Tomlinson]

There is an important further point to be made. This big, important constitutional issue was devised by those who opposed our membership of the European Union in order to be able to vent all their feelings. It was going to resolve the question. Was it not the fact that the same people who lost in the referendum came back within a few years trying to get a different result?

[Lord Triesman]

My Lords, it is of course entirely true. That is the other conclusion that one should draw from some referenda—that whatever the decision of the British people taken in a sovereign way, it does not stop anybody from coming back on future occasions.

[Lord Flight]

My Lords—

[Lord Triesman]

I should really try to make some progress, if I may.

[Lord Stoddart of Swindon]

My Lords—

[Lord Triesman]

As it is you, David, how could I refuse?

[Lord Stoddart of Swindon]

I was one of those who was never in favour of joining the common market and opposed it during the referendum. In relation to the intervention from the noble Lord, Lord Tomlinson, the reason why there has been continuous opposition is that the story has changed. As the European Union has become more powerful, the greater the resistance has been from those who originally opposed it and, indeed, a hell of a lot more who now oppose it.

[Lord Triesman]

I suspect that the noble Lord has a slightly different experience of political life to mine, if that is the conclusion that he draws. My conclusion is that you can fight either side in a referendum and find that within a short period you did not like the result, whether things have changed or not, and the opportunity to fight it again will occur. It may very well be, for example, that some of those people who thought that the proposal to change the electoral system should not have been defeated as heavily as it fortunately was last Thursday will come back and conclude that they should have another go on another occasion. I shall not be wholly surprised if they decide that that is what they are going to do, even at the cost of having the experience repeated.

The point about reconnecting with the electorate is very critical. The electorate is dismayed with Parliament and parliamentarians on occasions, for a raft of reasons, and I shall not bore your Lordships by going through all those reasons in the recent past. As I said earlier, I do not think that a feeling of greater warmth towards parliamentarians will be achieved by parliamentarians giving up work in some of the areas that would be regarded as being the nitty gritty, not the big constitutional issues at all. I have looked through the list in Clause 6(5)—paragraphs (c), (d), (f), (g) and (h). I mention those because I am an inveterate campaigner on behalf of all sorts of causes, including those of the party I have the privilege to represent. I have thought hard about having any one of those paragraphs, let alone any combination of them, about how the campaign on them would be fought and what the doorstep would be like as you went around trying to do that kind of political work. It is not because of the ignorance or foolishness of the electorate; that is not the reason at all. Yet there is an expectation that many of those issues will have so much fine-grained detail within them that the electorate expects someone to have done a lot of this work, especially if they have elected those people to come here and do it. In our case, we are not elected but they nonetheless have a healthy respect for the work that this House can do because of the knowledge and expertise that we know is in it.

I suspect that, on most of those issues, you would get far greater traction on the doorstep by discussing the Eurovision Song Contest than you would ever get by a serious attempt to discuss some of these issues in detail. As most noble Lords who have campaigned in politics will know, I know that the kinds of discussions you have on the doorstep are real ones: about wider economic issues and a wide variety of issues. However, it is not typically the case that people want to get into a large number of sub-clauses under the arrangements of Article 312(2) of the European constitution. In fact, to my dismay, I have never had that raised with me anywhere. I look forward to the occasion when it might be.

[Lord Pearson of Rannoch]

My Lords—

[Lord Tomlinson]

If you went to Rannoch Moor, they talk of nothing else.

[Lord Pearson of Rannoch]

Is the noble Lord not making the mistake commonly made by the political class in this country, which contains many distinguished Members of your Lordships’ House—

[Lord Tomlinson]

Including yourself.

[Lord Pearson of Rannoch]

Including myself? That is very generous. The mistake is in taking the line, “Really, the people won’t be interested in this. They shouldn’t be troubled with this as they won’t understand it”. Yet if you take almost any referendum on anything to do with the European public prosecutor's office, that will be of considerable interest to the British people. They do not like it and do not want it in any form whatever. The turnout on the most supremely boring of any imaginable subject—the recent AV referendum—was 43 per cent, which really surprised people. I have to put it to the noble Lord that the British people may not only be fed up with their political class but be beginning to have doubt in our system of representative parliamentary democracy. They may want a much greater say on matters in future, like the Swiss have, for example. What is wrong with that system to reconnect the people? That is the system to reconnect them and not, I am afraid, the approach of the noble Lord.

[Lord Triesman]

It is terribly tempting to go into experiences of Swiss referenda in the cantons. Sadly for the House, I have some experience of them. That is what tells me that I should not retell it here because it is not exactly what the noble Lord, Lord Pearson, thinks it might be. I hope that the House is not misunderstanding my point, which is not that people are unable to grasp complex ideas or are uninterested in them. It is that, in general, I believe they have a sentiment which suggests that the really critical things should be put before them but that there is also a responsibility on parliamentarians to do a high level of detailed work and to get some of that work done.

[Lord Lamont of Lerwick]

The noble Lord says that he has never been asked on the doorstep about Article 312(2). Of course not, but if he called it the European budget people would understand exactly what he was talking about. Is it not the case that subsection (5) refers to all these different provisions in the TFEU by their complicated numbers but they actually come down to about five or six simple areas that are perfectly comprehensible, like a European army, a public prosecutor and our borders? If the noble Lord thinks that it is appropriate to have a referendum on a complicated issue like the single currency, why can we not have one on the European army?

[Lord Triesman]

That may well be one of the substantive issues that people might concede was necessary, but it is also true—and I was grateful to the noble Lord, Lord Ahmad, when he made the point about the interest that we rightly take in the defence of this country—that we already undertake a great deal of what we do in the defence of this country inside alliances about which the British people are not asked at all other than in general elections. They are certainly asked in the context of whether we are willing to sustain an independent nuclear deterrent—another issue that had ramifications inside the Labour Party, I readily acknowledge—

[Baroness Nicholson of Winterbourne]

I—

[Lord Triesman]

Let me try to finish my sentence. Generally speaking, we have undertaken our defence, either in NATO or in NATO plus one or two others, often under the command of Americans or of others, quite frequently these days with people drawn from the Nordic countries in military command. We have developed alliances, I should add, often in circumstances that are stressful and rapidly moving, when UN decisions have required it and when there have been potential massive attacks on civilians. In those sorts of circumstances and against the economic background in which we are all living at the moment, I did not take huge umbrage when the Prime Minister, Mr Cameron, suggested that the United Kingdom and France might co-operate on the use of aircraft carriers. I did not think that that was a terrible threat to the UK’s security.

[Baroness Nicholson of Winterbourne]

Does the noble Lord agree, when he makes a comparison between the United Kingdom exercising a great deal of authority inside other alliances, that there is a bit of a difference between, say, NATO or the UN and the European Union? None of the other alliances of which we are an important member has the acquis communautaire, and none therefore binds us so tightly into legal provisions that we accept and implement. It is therefore a different story with the EU, and that is what the Bill addresses.

[Lord Kerr of Kinlochard]

I—

[Lord Stoddart of Swindon]

Order. You cannot intervene on an intervention.

[Lord Triesman]

I have a feeling that I am going to give way instantly.

[Lord Kerr of Kinlochard]

I cannot let the noble Baroness get away with that. The North Atlantic treaty says that when we go to war, our forces will be under foreign command. The supreme commander is an American general. That is fact. The Western European Union treaty, the revised Brussels treaty, says that when any of the parties to the treaty is attacked, we are all at war. These are huge transfers of sovereignty that were done, of course, without a referendum—quite rightly.

The noble Lord, Lord Lamont, talks about a European army but that is not what the treaty says. It might in the end be what someone comes up with, but the treaty talks about a European defence force; the noble Baroness, Lady Nicholson, correctly read out the treaty passage. It seems almost inconceivable to me, though I would like it very much if it were true, that non-aligned and neutral countries—the Irish, the Austrians, the Swedes, the Finns—would wish to get into any kind of binding defence arrangement remotely like the ones that we are already a member of, the Western European Union and NATO. We are dealing with a very remote contingency here. It would be a momentous national decision for us.

[Lord Triesman]

My Lords, that makes the point that I wished to make about the character of the alliances, even in an area that is as sensitive for us as defence. I suspect that most people would conclude that our membership of those alliances has been absolutely fundamental to the security of our country and would not wish to see them shaken. Were there to be some absolutely massive change in the architecture of defence, it might be so substantive as to require a mechanism that is contained in an amendment and has been in past undertakings that we have made. However, it would be a fairly extraordinary event that looked as though it were even more significant than the arrangements that we have under the provisions of the NATO treaty.

[Lord Pearson of Rannoch]

Surely the noble Lord must agree that, as the noble Baroness, Lady Nicholson, said, these other organisations do not make our law. We can leave them tomorrow if we want, with far greater ease than we can leave the European Union. The EU makes our law, which is a difference. We would be in a very different position with an EU army from the one we are in with NATO.

[Lord Triesman]

My Lords, the noble Lord, Lord Kerr, made the point that the arrangements made under the NATO treaty, about its command structure and the obligations on members, have the effect, whether described as law or not, of determining how we behave in the defence of this country. It is impossible to argue that that is not substantively the case.

As I said earlier, this clause provides, more than anything else, the opportunity for continuous internal division and splits—not harmonisation or bringing people back to political activism and political understanding but rather the alternative. If the argument flows in the other direction—that we will never use it, or that the process of being bound to the mast is not really there and we will sail by without anybody noticing that it is happening—the Government should, out of courtesy to the House, simply make a statement that this is a form of dressing up a political proposal for people who feel disenfranchised in any respect by what has happened in the development of the European Union. They should say that that is what it is for; it is not at all for anything practical. That is really the status of this clause.

[Lord Howell of Guildford]

My Lords, this has been a very wide-ranging debate, covering all these amendments. Some very wise and profound observations have been made. It would be quite wrong not to say that many of the points raised feed into the arguments, the presentation of the Bill and how Ministers should think about it. There are matters on which to reflect, which we will no doubt come back to again and again. Indeed, on the track record so far, we are likely to come round this course several times.

There are still some serious misunderstandings about the nature and purposes of the Bill. It ranges over several extremely complex issues. The whole EU structure and its legislative underpinnings are enormously complex and have grown over decades from a series of legislation, treaty-making and so on. I do not disguise that for a moment. If noble Lords would find it useful, I am willing to put on record that I am very open, as are my colleagues, to any degree of informal discussions to elucidate what is intended by the Bill, since some noble Lords are perhaps, in their own words, still confused about aspects of it. These amendments are wide-ranging but they nearly all have the same broad objective. They are designed to remove requirements for a referendum or Acts of Parliament from the list of decisions in Clause 6. As the noble Lord, Lord Hannay, rightly said, their intention is to shorten the list. I want to explain why we should not shorten the list and to deal particularly with the passerelles.

21:45

[Lord Hannay of Chiswick]

I know that it is late but will the noble Lord please not say that these amendments are designed to remove the requirement for an Act of Parliament? Not a single amendment being moved tonight requires the removal of the need for an Act of Parliament. The people who are moving these amendments, including myself, accept that the Lisbon treaty procedures of merely requiring resolutions from the two Houses are inadequate and that there needs to be an Act of Parliament when these powers are shifted—if they ever were, and they could be so only with the agreement of the British Government of the day. Therefore, can we please not have the misunderstanding that this is about more than removing a referendum requirement? That is all that these amendments set out to do.

[Lord Howell of Guildford]

I accept that. I note that I had already crossed out the words “Act of Parliament” in my notes in anticipating that comment. Unfortunately, in the excitement, I put those words in, so I take them out again. However, when we come to the minutiae, there may be some qualification even to what I am saying.

I want to try to explain why shortening the list is not the right thing to do, and to deal particularly with the passerelle provisions, on which the noble Lord, Lord Kerr, commented with his enormous expertise and hinterland of understanding of these things, having been in at the creation of not all the passerelles—some have existed for many years but never been used—but of those that we dealt with in the Lisbon treaty, which we had first seen given birth to in the constitution, which unfortunately came to a sticky end.

I say as a preliminary that all this discussion about referendum requirements against treaty changes and for certain decisions where no treaty change is required, and for giving up vetoes—in other words, allowing the right to be outvoted on certain issues—takes place against a background of huge areas of existing power and competence in the European Union. When one thinks of the enormous range of areas where the European Union can legislate, and where we can develop all kinds of positive ideas and initiatives to enable it to deal with entirely new global conditions of the 21st century, I am always left a little bewildered that we should come back again and again to the probably, I suspect, fairly marginal areas—these may be very small areas indeed—where there is supposed to be a tremendous yen for new treaties and extending the competences and powers of the European Union. These are areas in the margin of the real world of the European Union, where many of us have been involved over many years, and where enormous tasks have yet to be carried out which do not require yet a further extension of the powers and competences of the European Union. I say that just as background; I want to come back to that point in more detail a little later on.

I turn more specifically to the amendments. Of course I am very pleased that the signatories to the amendment have accepted the principle that a decision on whether to join the euro is of such fundamental importance that the people should decide. I have argued before—Ministers have argued, the Government have argued and the Bill argues—that the referendum requirement is a vital part of rebuilding trust with the British people. We perfectly accept the point made by the Constitution Committee of your Lordships’ House that referenda should not be used, as it put it, as a “tactical device”, and that referenda should, as we argue, be used for more critical issues of fundamental importance. We therefore come down to a central question running through all this debate—what are the critical issues? What are the fundamental problems and matters on which it would be right for people to be consulted before powers are pushed away or—whether through treaties, various procedures, the passerelle device or simply a decision of this Government—they decide to give away a certain power or move in a certain direction?

We begin with a puzzlement as to why the other one-way irreversible decisions in Clause 6 that we are talking about and I shall come to in detail are considered any less important in the minds of noble Lords than the euro. I find it difficult, as do a number of noble Lords who have spoken with great precision and accuracy, to conceive that the monetary independence of the UK should be considered essential to our national identity and economic interest—an argument apparently accepted by the supporters of the amendments—but not the UK’s military independence and commitments to NATO, if it were decided to establish a common EU defence that might well conflict with those commitments. We have held many debates in this House in the past four or five years about the dangers of that.

Why consider just the euro but not the impact that joining the European public prosecutor’s office could have on the UK’s judicial independence, as my noble friend Lord Faulks clearly emphasised. I want to refer to that in much more detail. I note that the previous Government opposed that. The present Government are against it. Many of the Nordic countries think that it is an extremely bad idea. There is very little support at all for the proposition. Yet the suggestion that there should be a safeguard against what would be a major incursion into the criminal justice system in this country is not seen as important. I cannot give all the details, because I know that there are different views on this. What about the UK’s ability to police its own borders? This is a red-hot issue, yet for some reason it is not included in the list.

Allow me to elaborate on some of my remarks. A decision on whether to join a common EU defence is fundamental, as it could result in a common EU army—the noble Lord, Lord Kerr, said that that may not happen immediately; but it could happen—and in giving the EU the power and legal right to decide on the deployment of UK civilian and military assets in a way that is not the case with NATO. It is of course perfectly true that operational command is under an American supreme commander, and that on the battlefield decisions and powers may be taken that can subordinate British forces to others. However, the suggestion that we should move in a new direction and be aligned with some of the European Union’s ideas is a new departure. These would be huge decisions on which the British people should decide that are discussed on the doorstep.

It is reasonable to suggest that Parliament and the people are entitled to ask what extra benefit would be bought by moves of that kind. The UK has long valued its NATO membership and key bilateral defence relationships within Europe, of which the treaty with France announced last summer is one. The UK also values existing mechanisms for security and defence co-operation within the EU. Bilateral and multilateral co-operation is an essential part of our approach in the UK and to wider international defence—as has recently been shown in Libya and earlier off the coast of Somalia, through Operation Atalanta. All that is going on; all that is thoroughly sensible; all that is within the operational activities of the European Union and I find it hard to see why an advance into a completely new area of power delegation and power transfer should be brushed aside. It would be a major development.

I turn to the issue of the public prosecutor, because a good many comments were made on that. It is coalition policy that we will not participate in the establishment of any European public prosecutor. We know that it is a sensitive issue, as was recorded by the House of Lords Select Committee on the European Union in its 16th report seven years ago. It is perfectly true—the noble Lord, Lord Goodhart, spoke with great expertise on this—that Article 86(2) provides only for the European public prosecutor to combat crimes affecting the financial interests of the Union. Although that is so, the participation of the UK in a European public prosecutor would mean giving up control of a fundamental part of our judicial system: the decision on who can be brought for prosecution in this country. That is not a small matter. That is a vital principle. As Article 86(2) states, a European public prosecutor,

“shall exercise the functions of prosecutor in the competence courts of the member states”.

In other words, a European public prosecutor would have power to prosecute in those member states within the prosecutor’s jurisdiction.

In England and Wales, it is the responsibility of the Crown Prosecution Service to decide whether to prosecute and whether to take over any private prosecution, so powers granted to a European public prosecutor would cut across that well-established principle. As the noble Lord, Lord West of Spithead, when a Minister in the previous Government, informed this House:

“The Government have consistently opposed the creation of an EPP”.—[Official Report, 1/3/10; col. WA325.]

[Lord Kerr of Kinlochard]

I agree with everything that the noble Lord, Faulks, said on the European public prosecutor. It seems to me highly unlikely ever to be suitable to a common-law country such as us or the Irish. I am delighted to hear the Minister say that it is coalition policy is to play no part in that. It was precisely because of such considerations that the article in the treaty specifically provides for a group of nine or more to go off to do their own thing, so we are in a rather unlikely scenario here when we come to the point on which a referendum requirement is imposed. That is the question of whether the European public prosecutor’s office, set up to look after the financial interests of the Union and prosecute fraud against the Community budget—and unsuitable in this country as a vehicle for doing that—should extend its role to cross-border crime—human trafficking or whatever. That is a really unlikely contingency, because we will not be in the thing anyway. Surely, if we had an issue for a referendum, it should be: should we have common procedures for prosecuting people who traffick children? That issue is referendable. The issue of whether the European public prosecutor's office, in which we will be playing no part, should have its role extended into that area is a very rum one to choose to block. That is why the noble Lord, Lord Goodhart, was absolutely right to say that this provision in Clause 6 is completely inappropriate, although I agree with the noble Lord, Faulks, on the substance of the EPPO.

[Lord Howell of Guildford]

All these issues are interconnected. In Clause 6 there are two concerns about the surrender of our veto, and therefore the opportunity for others to outvote us on those matters and the agreement to go along with the public prosecutor proposal, which is, of course, already in the treaty. One is joining up with and adopting the European public prosecutor proposal; the other is the extension of the public prosecutor's competencies and the regime which might follow.

Therefore, those are both areas where, because successive Governments have set themselves against them, one hopes that the matter will not arise. However, it is one of the issues involving big decisions—and they are big decisions; there are five such issues and I shall come to them in due course—where there would not be a treaty change but where, as Clause 6 suggests, the British Government should put the matter to the people in a referendum, and the public prosecution proposal is certainly one of them. Perhaps I may mention the big five issues. I do not want to take an unlimited amount of time over them, difficult as it is to cover all the issues.

22:00

[Lord Radice]

The noble Lord may be right in what he has said—in fact, I think that he is—but there is a very simple answer. Cannot the Government just say no if they do not want any of these things to happen? That is surely the point.

[Lord Howell of Guildford]

It is not the point because, as your Lordships have been reminded in the debate in the past half hour, the proposition has been fundamentally questioned that the Government and even our parliamentary institution are always going to be the safeguard, ensuring that unconstitutional changes are not ceded and that powers and competence do not slip away, or creep away as some have said. Today, a majority in this country, so it seems—although we cannot be sure about the opinion polls—wish to have a greater say in these matters. It is not just a question of leaving it to the Government to say no.

I shall finish on the public prosecutor issue by saying that I continue to find it extremely difficult to understand why noble Lords opposite would wish to deny the British people the right to be consulted before any future Government decided to take such a sensitive and important decision on creating or extending—that is my point to the noble Lord, Lord Kerr—the powers of the European public prosecutor’s office.

I was about to elaborate on what I call the big five issues—I shall come to some of the other veto issues in Clause 6—on all of which I think it would be perfectly reasonable to have a referendum. They are: UK agreement for the EU to move to a common EU defence; UK participation in the European public prosecutor, as we are currently discussing, and extending the powers of the public prosecutor, which we shall talk more about; the UK joining the euro, which does not appear in the amendment because noble Lords feel that that one is okay; and abolishing UK border controls under Schengen. These are vital, red-hot issues, all bound up with talk of red lines, which have been mentioned in the debate, and it is almost incomprehensible that noble Lords should suggest that they are not important, critical or fundamental. Of course they are.

Because of the time and the fact that we have been debating this matter for some hours, I shall not elaborate on why the Schengen issues would also be very important and justify a referendum. However, we think that they would, and we believe that it is part of a need to restore trust that that should be on the statute book. If decisions are taken in this area by the British Government, there should be a referendum on them.

[Baroness Williams of Crosby]

I apologise for interrupting the Minister and shall be very brief. Given that a large part of his argument rested on the case that these were very important—in fact, he used the word “red-hot”—issues, can he say how we would sustain the argument that the referendum exercise would be inappropriate for important and red-hot domestic issues, such as council tax or taxation, because it would be for Parliament to make those decisions and not for a referendum of the people?

[Lord Howell of Guildford]

I can make the oversimple point that referenda have been used rather frequently, including by the previous Government and from the days of Harold Wilson onwards, as we heard. They have been used in this country and increasingly in other countries far more frequently than here. There is a more general point behind my noble friend’s intervention which is that we now live in the internet age. We live in an era in which people still admire, despite its many faults, and still support the principle of parliamentary government, as I most certainly do. There is a constant pressure for wider consultation and empowerment. Sixty-three per cent of people in this country are on the web every morning. People want a say. There is greater pressure coming for referenda. We heard from my noble friend Lord Deben that he does not like referenda. I think that several of my noble friends do not and I suspect that many throughout your Lordships’ House are not very happy about referenda. It is a question of balance and the balance has shifted. The shift is in the direction of a greater demand that fundamentally important issues, five of which I have just outlined—not one, but five—should be put to referenda.

I want to come in particular to the other items in Clause 6. There are six very important areas where noble Lords ask why they are there as they are issues that if decisions gave rise to treaty changes, they would be caught under Clauses 2 and 3. They are in Clause 6 because under the passerelle provisions, on which the noble Lord, Lord Kerr, is undoubtedly the leading expert, vetoes could be given up in those areas as well. The Government believe that the surrender of those vetoes would be transfers of power and that again there needs to be fundamental reassurance under this Bill and the beginnings of some kind of reconnection and support that there will be no further extensive and sometimes rather furtive concessions of powers and competences. We believe that these two should not be barred. The passerelle system should not be barred in any way, but if we look on it as a possible window for quicker procedures—I would question the quickness, incidentally, as I have some figures showing that it is very far from being quick—nevertheless one should put a lock on that window. That is all we are saying. We are not saying that the passerelle system should not be used but that there should be a lock to ensure that it does not provide the opportunity for power and competences to seep away. I add the point about the length of time taken. Passerelles are not the quick fix that some people suggest. In all the cases that one looks at about the future—of course, there is very little to look at in the past as most of these passerelles have never been used, which is for good reason—the evidence is that they would take six months or a year. They would have to clog up national Parliaments and would not be the easy way of getting round the issue of giving up vetoes.

In that sort of scenario I very much doubt that the British people would understand why they would be asked for their views on whether or not to give up the British veto on, for instance, common foreign and security policy by virtue of a treaty change but be not asked for their say before the British Government could do exactly the same thing through the passerelle procedure. That is why there is concern and why these matters are in Clause 6. I mentioned common foreign and security policy but there is a whole social policy area where there are very serious issues and the surrender of a veto would be a major surrender of power. The environment passerelle has been there since 1987. It has never been used, for the very good reason that countries do not want to use it because it takes time, is complicated and blocks up national parliamentary procedures throughout the European Union. The European Union's multiannual financial frameworks, introduced by the Lisbon treaty, are neither unimportant nor casual. They are highly important and giving up the veto over them would be a considerable departure and concession of power. The remaining vetoes concern not enhanced co-operation itself—which does not affect competence at all because it is not allowed to—but situations where, once we were in an enhanced co-operation operation, there might be pressure for it to go to QMV. All these areas are vital, not trivial. They are critical areas, in the language of the noble Lord, Lord Triesman, and there must be reassurance that they will not be, by a tick of a box, by launching into a long and complicated treaty procedure, or even by an Act of Parliament, simply turned into major concessions of power and competence.

I have not begun to answer every question and I will be happy to write to noble Lords about some of the very interesting amendments they tabled. I have in mind in particular the observations of my noble friend Lord Flight. As he said, they did not quite fit into the main thrust of many amendments from noble Lords opposite, but they were very interesting and raised important issues.

We have debated these matters very thoroughly and I will end by saying this. If one believes that the EU has enough competences and powers to proceed and to succeed, and that this is the context in which the UK can take the lead; that, far from being marginalised, we can continue to shape and be decisive in the European Union; and if one recognises that other countries are just as opposed to QMV and the moot case of passerelles—I mentioned Sweden, Spain, Ireland and Estonia, and there could be many others—one will see the case for the Bill. If noble Lords believe that all members of the EU are itching to bring forward new treaties, take new powers and extend competences, despite the fact that that would be a very slow and unpopular process in many countries and would clog up 27 national Parliaments, they will obviously disagree and there is nothing that I can do to persuade them otherwise.

If that is the way they see the future of Europe, and the future development of a successful and popular European Union that attracts and merits the public consensus in a way that it is not doing today, clearly they will also see the prospect of an endless treaty trickle that in my view would be a major contribution not to encouraging trust and support for a successful European Union but to undermining it. To noble Lords who insist on that view, there is nothing more than I can say, except that, in the view of the Government, such a procedure in future—a pattern that would come up against the proposals in the Bill if there were endless treaty changes appearing at all times—would be guaranteed to alienate people even more than they have been already, and would be profoundly hostile and not helpful to sound EU development.

Some noble Lords believe the opposite. The noble Lord, Lord Tomlinson, believes the opposite with great force and vigour. I always admire his energies, but I believe that his proposition that the Bill would somehow simultaneously weaken popular support for the European Union and respect for Parliament is 180 degrees wrong. The Bill points the way to much greater public confidence in Parliament and public commitment to the benefits of the European Union, and our role in it, in a completely changed world and international landscape. That is why I strongly urge noble Lords not to press their amendments, which do not add to the aims and goals of the Bill, or the aims and goals of a better and stronger European Union.

22:15

[Lord Kerr of Kinlochard]

I thank the Minister for his disarming response to the debate. It was an interesting debate. I am a little sorry that the Front Bench has not associated itself with the defence of the ECJ that I rather inadequately attempted.

[Lord Howell of Guildford]

Much of what the noble Lord said on that matter is correct. There is no question of challenging the integrity of the very senior legal figures who have served their country and Europe very well, and I associate myself with some of the noble Lord’s remarks, although some decisions coming out of the ECJ and the European Court of Human Rights are a different matter, and I would question them very strongly. However, I would not question that the personnel involved are men and women of integrity, uprightness and skill.

[Lord Kerr of Kinlochard]

I am grateful to the Minister. The most endearing feature of the debate was that it was the first of our debates in Committee where we all agreed on something. We all agreed that the grouping was insane. The Opposition Front Bench said that the grouping was insane, and the Minister said that the grouping was unfortunate. One wonders where the grouping comes from. Clearly nobody in the Chamber was in any way responsible for it. It came down from above. Perhaps it came out of Brussels or some dreadful place like that.

It was a difficult debate because of the amendments seeking to subtract, the amendments seeking to add and the amendments of very different weights. At the end of the previous short debate, there was, as the noble Lord, Lord Tomlinson, pointed out, a very significant move by the noble Lord, Lord Wallace of Saltaire, who indicated that he might be prepared to go away and think about something said in the debate. I urge the coalition to share this insight.

It would be extremely good if the Minister too would consider at the end of these debates whether there might not be something that he would be prepared to think about further. He has very kindly said that he would be happy to explain, meet informally and discuss, but that had slightly the ring of the schoolmaster: “If you guys only do your homework, you will in the end understand the wisdom of the Government’s Bill”. I am not sure that that is quite going to do the trick. I think it will be necessary to come back at a later stage to the scope of Clause 6, but for the moment, I withdraw the amendment.

Amendment 30 withdrawn.

Amendment 31 had been withdrawn from the Marshalled List.

Amendments 32 to 39 not moved.

House resumed.

House adjourned at 10.19 pm.