Second Reading Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, before the Minister moves that the Bill be considered, I remind noble Lords that the Motion before the Committee is that the Committee do consider the Bill. I should perhaps make it clear that the Motion to give the Bill a Second Reading will be moved in the Chamber in the usual way. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and it will resume after 10 minutes.
Consumer Insurance (Disclosure and Representations) Bill [HL]
(13 years, 6 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, this Bill implements the recommendations of the Law Commission and the Scottish Law Commission in their 2009 joint report on the law governing pre-contract disclosure and misrepresentation in consumer insurance contracts. This report highlighted an area where a complex and confusing array of rules and regulation has emerged to compensate for outdated legislation.
This is a limited and targeted Bill, which applies only to consumer insurance contracts; it does not apply to insurance contracts solely or mainly covering business, including micro-businesses. There has been extensive consultation, the results of which have been reflected in the Bill where possible and relevant. The recommendations enjoy a broad consensus of support from the industry, consumer groups and regulators. It has therefore been deemed suitable for this Bill to be considered by your Lordships under the procedure for Law Commission Bills.
On 2 October 2010, a letter with a range of signatories was sent to the Times in support of this Bill. It described the current law as designed to,
“govern face-to-face commercial insurance deals in the coffee houses of Georgian London”.
It should not come as a surprise that this existing law, passed in 1906 to govern marine insurance, is no longer an appropriate basis for the law on all consumer insurance contracts. The insurance industry itself has recognised that requiring consumers to provide all information that might,
“influence the judgement of a prudent insurer”,
is no longer a sensible approach.
It does not seem a reasonable expectation of consumers that they should understand the underwriting process to the extent necessary to know precisely which facts they should disclose. For example, under current law a consumer may find that his or her critical illness policy no longer provides cover because he or she has not mentioned a visit to the doctor for a cold. Even if he or she reasonably thought this irrelevant to the cover that he or she had purchased, was not asked specifically to give details of all visits to the doctor or had simply forgotten the visit, the insurer may use the non-disclosure to refuse to pay. When facing a critical illness and any consequent financial disruption, finding that you have lost the safety net that you thought you had might, understandably, be highly distressing and disruptive.
This Bill will address these problems by changing the law through two central provisions. First, there is the change at Clause 2 from a requirement that consumers volunteer information to one that the insurer ask clear and specific questions. Secondly, provision is made in Schedule 1 for a proportionate set of remedies for the insurer when a misrepresentation has been made.
Let me start with the change at Clause 2. By replacing the existing requirement on the consumer with a duty to take reasonable care to answer questions fully and honestly, this Bill brings the law up to date with industry best practice. It reflects current regulation by the Financial Services Authority and the approach taken by the Financial Ombudsman Service. It will no longer be possible, as it currently is, for an insurer to refuse to pay a claim and have this refusal upheld by the courts but be ruled against by the ombudsman and be fined by the FSA. The current law and layers of regulation are complex and confusing for both industry and consumers.
We anticipate that providing clarity to the requirements on each party will lead to a reduced number of complaints to insurers and the FOS. At present the FOS receives around 1,000 complaints a year about non-disclosure and misrepresentation. Around half of the insurers’ decisions are upheld. We would expect the uphold rate to be much higher if there were sufficient clarity around the rules, which indicates that insurers find it difficult to locate and interpret the rules.
In future, this law should be taken into account by the ombudsman when deciding cases, as required by FSA rules. Complaints about claims that were above the FOS’s limit for consideration, or otherwise not resolved by the ombudsman, could be addressed in the courts. However, the Bill will not lead to consumers being driven to the courts earlier than at present.
We believe that the Bill will shift the balance of the law in favour of the consumer. The Marine Insurance Act is, in some parts, heavily biased in favour of insurers. This Bill attempts to rectify that bias. It removes a sometimes unreasonable level of duty on the consumer so that responsibility for accurate disclosure lies somewhere between consumer and insurer. Our replacement has received support from a range of consumer groups, including Which?, the British Heart Foundation, Consumer Focus, Macmillan and Age UK.
Of course, there is also a balance to strike between the effort required of the consumer to provide relevant information and the role of the insurer in prompting this. I know from discussions with noble Lords that there are concerns around this. The Bill does not attempt to guide what questions insurers should ask beyond a requirement that they are clear and specific. However, this is covered in industry guidance elsewhere. Under principle 6 of the FSA Principles for Businesses, a firm,
“must pay due regard to the interests of its customers and treat them fairly”.
More specifically, firms have an obligation, under this principle and under the Insurance: Conduct of Business Sourcebook, to ensure that customers know what they must disclose. The FSA has also indicated that it does not think that the entire burden around disclosure should fall on the consumer.
Once information has been provided, Clause 4 sets out which circumstances then entitle the insurer to a remedy. The insurer must establish that, had it known the true facts, it would not have entered into the contract, or would have agreed different terms, before it can reject or reduce a claim. For example, a remedy would not be permitted if the insurer could not demonstrate that failure to disclose the visit to the doctor with a cold would have affected the motor insurance policy that it offered.
This takes me to Schedule 1, which looks at remedies available to the insurer when there has been a misrepresentation. The current penalties for failing to disclose information to insurers are harsh. A failure to disclose any information that a prudent insurer would consider when writing the policy means that it becomes void. This Bill will mean that an insurer can only apply a penalty proportionate to the nature of the misrepresentation. If the misrepresentation was honest and reasonable, the insurer must pay. If the misrepresentation was careless, the insurer has a remedy based on what it would have done had the consumer answered the question accurately. If the insurer would, for example, have excluded a certain illness, the insurer need not pay claims that would fall within the exclusion but must pay other claims. If the insurer would have charged a higher premium, it must pay a pro rata proportion of the claim. This means that only if the information carelessly misrepresented or not disclosed would have affected the terms of the policy would the insurer have a remedy. Finally, if the misrepresentation was deliberate or reckless, the insurer may treat the policy as if it never existed and may decline all claims. It is also entitled to retain the premiums paid.
I should also outline some of the further contents of the Bill. It establishes a statutory code to determine for whom an intermediary acts when arranging insurance. The ombudsman has often seen consumers allege that their broker was responsible for the provision of inaccurate or misleading information. Schedule 2 therefore lists factors that tend to show whether the agent acts for the insurer or consumer and therefore who should bear the consequences. This code is based largely on existing law, as supplemented by FOS practice and industry understanding.
Clause 7 also contains special provisions for group schemes where one party, typically an employer, arranges insurance to benefit members of the group. The Bill provides that, where one group member makes a misrepresentation, that has consequences only for that individual and not for others within the group. Again, this is in line with current accepted good practice.
The Bill that I have been detailing has a broad consensus of support. Discussions with interested parties have been extensive. The consultation carried out by the Law Commission ahead of its report received over 100 responses. HM Treasury has since carried out targeted consultation to ensure that support for the Bill remained. A summary of these responses has been placed in the Libraries of both Houses. The consensus obtained by the Law Commission has remained intact throughout the process. I have mentioned support from consumer groups, but the industry and regulators are also positive about a Bill that will ensure that the law reflects their existing approaches and best practice. We believe that this Bill will clarify the standing of consumers and reduce costs for the industry. I am pleased that it has been so widely supported and I commend it to the Committee.
Baroness Kramer
My Lords, I am delighted to have an opportunity to speak in what I assume is the Second Reading of this Bill and to congratulate the Government on a piece of legislation that has long been needed.
I became aware of the issues that this Bill attempts to redress when I was a Member in the other place. A constituent came to my office. She was a redoubtable lady—and thank goodness that she was. She and her husband had purchased a house, taken out a mortgage and purchased from the mortgage provider an insurance policy so that if the husband died—he was the breadwinner in the family—the insurance policy would pay the remaining payments due on the mortgage, to provide security for the widow and children.
Her husband very sadly died of a heart attack. Obviously, it was devastating for the family. She had to consider how she would go back to work and the children had to adjust to not having the presence of their father. It was a traumatic time, but the thought that comforted them was that they could remain in their house because the insurance would take care of the mortgage. However, it turned out on examination by the insurance company that in disclosing his medical history her husband had not said that, something like two years before the insurance was taken out, he had visited his doctor. He had been somewhat under stress and the doctor suggested that he was rather depressed and gave him a prescription. I believe that it was for Valium. The depression did not continue and never became a serious issue. There was no continuing medication. However, in the doctor’s notes on that one occasion, this discussion of his depression was duly and properly recorded.
On those grounds, the insurance company refused to pay out under the policy. This lady would have lost her home. She fought the issue for over two and a half years. I ended up in many a conversation with the ombudsman, there were letters to the FSA, the courts became involved and, eventually, she won her case, but it was a two-and-a-half-year struggle. In that time, she would have lost her house had her parents not been able to help her to make the ongoing mortgage payments. The loss of the house would have added to the trauma that the children and family were facing. Even if eventually the financial solution was appropriate, it would never have dealt with the emotional damage to that family.
It seems to me that this legislation will address a situation like that—I hope that the Minister can confirm that that is so. That is critical because, although in the past many people were eventually able to get redress either through the ombudsman, a long-term court battle or in other ways, the suffering because of the struggle and its consequences took an enormous toll on families. I use this example because sometimes such issues, particularly insurance, become much more real when seen in the context of what an individual experiences. I am delighted that, as I read it, the legislation seems to address all counts for such issues.
I have one further question, which perhaps the Minister can answer. He will know that relevance in insurance policies has always been significant. In a sense, relevance is somewhat captured by this legislation as it presents itself on paper. In the claim that I discussed just now, if the insurance company were to understand that the homeowner had failed to disclose this issue, it could have decided perhaps to exclude certain conditions in the policy or to charge a higher premium, but it would not have been able to use that factor to void any responsibility to pay. The sliding scale, in effect, becomes an interesting mechanism to make sure that irrelevant conditions do not intrude on the payment obligation of the insurer. That is a big step forward.
It is good to know that the Bill has been welcomed on all sides, including by the insurance industry, as it is in the industry’s interests to restore its reputation. We know that, on the street, there is very much an attitude that an insurance company will use any mechanism that it can find to avoid paying. In the long run, that does the industry no good, so its support for this legislation is a win-win all round and I am delighted to welcome it.
Baroness Noakes
My Lords, I shall try to be brief in my contribution to this Second Reading debate. Until late last week, I had not intended to take part in the debate so I did not attend the briefing meeting that I understand my noble friend the Minister arranged. I also apologise to him for not giving notice of the points that I will be making, which arose only late last week. Indeed, some of my briefing arrived only late this morning. I should say at the outset that I fully support the Bill and endorse what my noble friend the Minister and the noble Baroness, Lady Kramer, said about its importance.
While the Bill is about consumer insurance, its impact will not be confined to consumers or insurance companies. Insurance is often sold through people other than insurance companies, which is where the BBA’s members come on to the scene, because banks typically sell insurance products alongside other financial products. It is important, therefore, that the banks can implement the new requirements effectively. Implementation is the topic that I want to address.
Clause 12 deals with the timetable for implementation and provides in broad terms that the legislation will not come into effect until an order is laid, which cannot be for a year after Royal Assent. Implementation could be from some time after next summer. The Minister will be aware that when banks and, indeed, others sell financial products, they have to ensure that their documentation is compliant with legal and regulation rules. Importantly, they have to train their staff and support them with such things as standard scripts to ensure that the rules are complied with.
As the briefing provided by the Financial Ombudsman Service today makes plain, the emphasis of the sales process for insurance products will, as a result of the Bill, shift much more towards asking relevant questions and obtaining specific information. Banks will need to ensure that their staff ask the right questions and then probe the answers to those questions in the appropriate way. More importantly, they will have to assemble the right evidence in all this so that, if necessary, they can determine and prove whether a customer has taken care in providing relevant information.
Many banks sell face to face and do not have the ready evidence provided by telephone or internet sales, so the evidence aspect to this is important. In addition to addressing the sales process, banks obviously have to review and perhaps modify compliance systems. Inevitably, there will also be changes to and investment in information systems. I should stress that the BBA, in briefing me, has no problem with that at all. The issue is not any changes that might be necessary but timing.
As the Minister will be aware, the FSA is in the process of requiring implementation of its retail distribution review, with an implementation date of December 2012—some 18 months away. The changes that will come about through this Bill will involve to some degree the same systems, processes and people to be trained as the RDR; they will not be exactly the same, but they will be in the same area. In addition, the industry will look to the impact of the new simplified advice area, which could well have an impact on insurance sales. The industry is still awaiting FSA guidance on simplified advice and hence does not know what implications that will have for the sales process. If it does have implications, it will be in exactly the same area.
The banks and doubtless others affected by the RDR and simplified advice want to be in a position, if possible, to implement all the changes in one go. It does not make business sense to carry out one set of modifications to systems, processes, training and so on and then to follow it a matter of months later with another similar set in the same area. In theory, it can be done in sequential implementations, but that is not the most efficient way in which to proceed. It adds cost to the system and probably increases implementation risk. How do the Government see the implementation timetable of the Bill? Will it be harmonised with that for the RDR and simplified advice?
The BBA has also raised the issue of the interaction between the Bill and IMD 2—that is, the proposed revision to the insurance mediation directive. The Commission is currently conducting an impact assessment of the changes and expects to produce a revision to the existing directive by the end of the year. This could well also produce changes in the same sorts of areas, raising the same sorts of issues. Have the Government considered the impact of the Bill in relation to IMD2? I hope that my noble friend can reassure me that the Government will be mindful of the burdens on those who need to implement changes in the interface with consumers when they determine when to bring the Bill into effect.
Lord Higgins
My Lords, I begin by raising one or two questions of a procedural nature. I am not clear whether I am speaking in the gap. My understanding is that there is virtually no precedent for the procedure that we have adopted today other than for one previous Law Commission Bill. It is not the least bit clear whether this is a Second Reading. My understanding is that it is not. We are considering a Second Reading in Committee. If it is in Committee, any noble Lord is entitled to speak without being on a speakers list, but I understand that there is a speakers list. Perhaps at a later stage either the Lord Chairman or my noble friend, if he has advice from the Clerk, could make the position clear.
Further, in relation to the statement made by the Lord Chairman at the beginning, as I understand it a Second Reading will be moved in the Chamber in the normal way. I am not clear whether that will be debateable. Perhaps we can have some clarification on that. Presumably, there will then be Committee and Report stages later on. At the moment, there seems little precedent to clarify the position on any of this. However, on the assumption—it may be an heroic assumption—that I am speaking in the gap, perhaps I might raise one or two points.
I first congratulate my noble friend on the helpful way in which he has had private discussions ahead of this meeting. I also congratulate those who prepared the documentation for the Bill, particularly the Explanatory Notes, with the excellent and helpful diagram. There is confusion, as my noble friend Lady Noakes implied, between the situation with the Bill and European legislation. Of course, we do not have a single market in insurance in the European Community. Consequently, some parts seem to be dealt with by directives and some parts by national legislation. That takes me a little wide of the remarks that I want to make, but I congratulate my noble friend and, indeed, the Treasury on arranging to get this Bill into the programme. It certainly would not normally get in, given the pressure on parliamentary time.
The Bill is clearly very useful. It clarifies the position considerably, except in one respect. I discovered only this afternoon the massive tome that is the Law Commission and Scottish Law Commission report. At paragraph 10.29, it raises the question of whether courts should follow industry guidance and it says at paragraph 10.30 that there is confusion as to whether the courts follow industry guidance or not. Parliamentary counsel has drafted a provision saying:
“The insurer may not take advantage of any remedy provided for under this Schedule if, or to the extent that, it would be unreasonable to do so according to written guidance generally recognised by insurers providing the type of insurance in question”.
That seeks to reconcile the position between codes of practice and legislation, which in many ways this seeks to avoid. Anyway, when I look at Schedule 1, I cannot find that particular clause, which appears to have been drafted but not included. If it is not included, this point seems still to be left in some confusion.
I will be imposing on the tolerance of the Committee if I go on much longer. However, if this is going to be done in future—and there is a strong case for using this procedure on Bills of this kind—we need to be clear on what the procedure is.
Lord Eatwell
My Lords, I express my gratitude to the Minister and his team and to Mr David Hertzell of the Law Commission for their briefing on the Bill, which was very helpful indeed.
In debates on measures brought before Parliament, the claim is often made—and perhaps even sometimes believed—that the consequences will be wide-ranging. In the case of this Bill, it is likely that the claim will indeed be true—and perhaps not only in the United Kingdom. For the Bill proposes a fundamental change in the structure of the insurance contract from a requirement that the purchaser discloses everything that will be material to the insurer’s decision to insure to a requirement in Clause 2(2) that the purchaser,
“take reasonable care not to make a misrepresentation to the insurer”.
In effect, the purchaser must answer carefully the question posed by the insurer. That is a dramatic shift of responsibility. Even though it is claimed that the Bill essentially clarifies what is accepted practice under the FSA’s insurance regulation and the various provisions of the Financial Ombudsman’s scheme, it seems that the Bill goes further than mere clarification.
One of the fundamental principles of insurance is that which is referred to as “uberrimae fidei”, or “utmost good faith”. That principle is fundamental to insurance law throughout common-law jurisdictions. A quick internet search revealed exactly the same principle as cited in the UK also cited in India, Ireland, Australia and the United States. Yet the Bill makes it clear in Clause 2(5)(a) that,
“any rule of law to the effect that a consumer insurance contract is one of utmost good faith is modified to the extent required by the provisions of this Act”.
Given that this legislation makes such a fundamental change to the principle if not to the practice of consumer insurance, it would be helpful if the Minister would clarify a number of points. First, have I interpreted correctly the shift in the onus of good faith? Is it indeed the case that the Bill characterises the information on which an insurance contract is based as deriving from the responsibility of the insurer to ask the questions and from the requirement that the consumer answer the questions with “reasonable care”, as under Clause 3? Also, is it indeed the case that there is no onus on the consumer to provide information that is not asked for—that is, there is no requirement to answer questions that are not asked, however relevant the information may be to the insurer?
As a supplementary point, what is the position if the consumer thinks that unasked-for information might be relevant to the contract but, not being asked, either concludes that the insurer believes the information to be not relevant or believes that it is not his or her responsibility to supply the information? In other words, will Clause 3(1) result in the addition of catch-all questions to insurance contracts, such as, “Is there any other information that might be relevant?”, hence substantially negating the declared intention of this Bill? Would that question be “clear and specific”? Is such a question permissible?
As a further supplementary, what questions are not permissible? As the noble Lord will be aware, the European Union seems likely to rule questions associated with gender as being out of order in motor insurance. Is this likely to become a general rule? Are questions about race permissible when they are relevant, as in the health issues associated with, say, sickle cell anaemia?
Secondly, why is there no responsibility on the insurer not merely to be clear and specific in questioning but also to demonstrate the relevance of questions asked? If questions that are indeed relevant when embodied in the insurer’s statistical analysis do not appear relevant to the consumer and their relevance is not demonstrated, the consumer may be led into treating the exercise more casually than is appropriate. This may be particularly true in medical insurance, in which the relevance of important issues may be very obscure to the consumer.
As I understand it, Clause 4(1)(b) establishes appropriate materiality in legal terms, but to the lay man, and indeed to the consumer, that clause is completely obscure. I imagine that if I asked any non-lawyer in this Room to explain how that clause established materiality, they would be hard pressed to do so. Since this is consumer legislation, should not the wording be clear and specific and not as obscure as Clause 4(1)(b)? I believe that the clause needs to be rewritten.
Thirdly, given that the insurers are now no longer protected by the catch-all requirement that the consumer must provide everything that would be material to the insurer’s decision to insure, it might be expected that the questions asked in proposal forms would become far more wide-ranging and comprehensive than has previously been the case. The very complexity of questions required to cover every eventuality might well create problems in and of itself. Are there to be guidelines to insurance companies defining the character and range of questions to be asked? Will the ABI, for example, provide such guidelines?
Fourthly, it is a familiar problem in credit analysis that a consumer’s credit rating is inappropriate because information has been logged wrongly or analysis has been faulty, or for a number of other reasons. In these circumstances, consumers have access to their credit ratings and a right of appeal. Is a similar facility available to consumers of insurance products and, if it exists, will the availability of this facility and its importance be widely publicised subsequent to the passage of this Bill? Will the facility be available, or is it available on the internet? In this context, are consumers deemed to know to what they have access? I know that this is a common outcome of business law, but it would be entirely inappropriate in consumer law.
Fifthly, how are all these matters to be played out in the process of renewal of an insurance contract referred to in Clause 2(3)? What if the request “to confirm or amend”, based on the original questions asked, does not in fact cover relevant changed circumstances? Is the consumer required to volunteer such information and how, under the terms of the Bill, is he or she to determine what is relevant? Would the insurer be allowed to ask the catch-all question, “Provide all other information that might be relevant at this stage”? If so, once again the Bill is otiose. It is particularly unclear in Clause 2(3), which therefore requires redrafting. It says that an insurance contract renewal is in fact a new contract. Renewal is not a concept known to insurance law. Should not the clause be redrafted to make that clear? What estimate has the Treasury made of the increase in the cost of insurance consequent on this legislation?
Before ending, I shall turn to the questions raised by paragraph (a) of Clause l, which seeks to define “consumer”, and by Clause 6, which is on warranties and representations. It may be—I have been unable to find out—that the concept of the consumer is defined in other relevant legislation, but as drafted in this Bill the definition is unreasonably vague. For example, taking out insurance against debilitating illness is typically motivated by the economic well-being of the sufferer and could not be said to be unrelated to the individual’s trade, business or profession. That would be especially the case if the physical or mental capacity that is insured is a necessary component of the performance of the profession. For example, for a ballet dancer, the body is the tool of his or her profession; it is the instrument of his or her art. Would any general health insurance taken out by a ballet dancer be insurance contracted by a consumer or not? Another, less exotic, example of the ambiguity of this definition of a consumer comes to mind. If I insure my BlackBerry, am I a consumer or not? The expression “wholly or mainly” is far too vague for me to know and, by the way, is unknown to insurance law.
On a related point, why was the legislation not extended to cover small businesses or even the micro-businesses to which the noble Lord, Lord Sassoon, referred, which at present suffer the same disadvantage as consumers? Indeed, the boundary between a consumer and a small business is often very vague—take my BlackBerry example. The clause requires further attention. It is not satisfactory as it stands.
On the question of insurance warrants, Clause 6(2) makes a valuable amendment to the law on misrepresentation, but this does not eliminate the generally destructive power of a warrant related to a condition of insurance. Given the drafting of Clause 3, which refers to “reasonable care”, and the remedies outlined in Schedule 1, would it not be appropriate to eliminate the role of warrants entirely from consumer insurance?
This is an important Bill, which is designed to pursue a worthy purpose. It is entirely supported by this side. However, it is not clear that the present drafting is sufficient to bear the weight of the major philosophical and practical change that is embedded within it. We will have the opportunity to pursue these matters at a later stage. In the mean time, answers to the questions that I have posed will greatly facilitate preparation of any necessary amendments.
I nearly forgot: as far as the Committee stage is concerned, I understand that under the rules governing Law Commission Bills it is possible to take evidence in Committee. Given that and given the defects in the drafting of the Bill as presently tabled, are the Government intending to call expert witnesses in Committee?
Lord Sassoon
My Lords, I start my response to what has been a helpful discussion by thanking the noble Lords who have taken the trouble to contribute this afternoon. The points have been wide-ranging and constructive. I am grateful to the noble Lord, Lord Eatwell, for his faith that I can respond so quickly to the huge number of very detailed points that he raised in his constructive intervention. He may forgive me in advance if I do not manage to cover all the details. Of course, I will write to the noble Lord and copy that to others who have taken part in the debate this afternoon.
Lord Eatwell
My Lords, I entirely understand the noble Lord’s position and am quite happy to receive written answers to my questions.
Lord Sassoon
I am grateful for that, because some of this has been a touch technical and some rather fundamental. I will talk about the process in a moment, as my noble friend Lord Higgins asked about the procedure for Law Commission Bills. The fact that it is a Law Commission Bill and has, as my noble friend pointed out, been the subject of a big report subsequently consulted on by the commission means that we can be fairly confident that all the fundamentals of the law have been considered in great detail. Otherwise, this Bill would not be going through this procedure. This is the first Bill to go through the Law Commission procedure since the procedure was made permanent last year. I am pleased that, as my noble friend Lord Higgins recognised, this innovation has allowed for parliamentary time to be found for this legislation, which would clearly otherwise have been difficult.
On what happens next, the important thing is that this is not in any sense a fast-track procedure, because the Bill will follow the usual parliamentary process but for two exceptions. First, the substantive Second Reading debate is held in Committee—that is what we are doing this afternoon—rather than on the Floor of the House. Secondly, the Committee stage will be, as the noble Lord, Lord Eatwell, said, taken by a Special Public Bill Committee, which is indeed empowered to take evidence from witnesses as well as to conduct the usual clause-by-clause examination of the Bill. I have no present intention to suggest from the Government’s side that we should call witnesses, but that is allowed for in the procedures. For the benefit of my noble friend, I draw the Committee’s attention to paragraph 8.44 of the Companion to Standing Orders, which says:
“The House agreed in 2008, on a trial basis, that second reading debates on certain Law Commission bills should be held in the Moses Room … The Committee debates the bill, and reports to the House that it has considered the bill. The second reading motion is then normally taken without debate in the House, though it remains possible, in the event of opposition, for amendments to be tabled or a vote to take place on the motion. Law Commission bills are normally committed to a special public bill committee”.
I hope that that is as clear as it can be. I do not know whether that allows for speakers lists, gaps and things this afternoon, but I am grateful that my noble friend got to his feet and contributed to the discussions in his usual lively way.
As I said in opening, we believe that this Bill is necessary in order for the law to catch up with best practice. It will also ensure that the legal duty of consumers is reasonable and clear. In answer to the questions asked by the noble Lord, Lord Eatwell, in this area, I am not sure whether it is right to look on it in the context of shifting the onus of good faith. It is clear that it is up to the insurer to ask the questions and to the consumer to answer them, with the potential consequences of misrepresentation in the way that I outlined in opening. The effect of this is to shift the burden between the insurer and the consumer in the consumer’s favour as against the law as it stands in the 1906 Act. That is entirely appropriate.
It is worth reiterating in this context—I think that this is the point on which my noble friend Lady Kramer asked for confirmation—that any information that the consumer misrepresented or failed to disclose must be proven to have been relevant to the content and/or the price of a policy before the insurer is entitled to a remedy. There is a shift in the legal position, but it is a shift towards a position that is in line with industry best practice and the standards that are currently imposed by the Financial Ombudsman Service.
I am particularly grateful to my noble friend Lady Kramer for drawing attention to a shocking but classic case of the sort that this Bill is intended to obviate and to ensure does not happen in future. The case that she put forward was interesting because it was a question not of unreasonable loss to the consumer—as I understand it, after a two-and-a-half-year struggle, the FOS found in favour of the insurer—but, as was explained to us, of the very real distress and the time and effort that had to go into getting to the right answer. That should be eliminated in similar situations as a result of this legislation.
As I said in opening, the industry will benefit, as we anticipate a reduction in the costs of handing complaints internally and with the ombudsman. In that context, I can confirm to my noble friend Lady Noakes that we will be mindful of the burdens of implementation on the industry. She rightly and helpfully pointed out the various other initiatives that will bite on training, information and standards of scripts, whether in relation to the retail distribution review or simplified advice. Her points are well taken.
My noble friend Lord Higgins referred to paragraph 10.30 of the Law Commission’s report, which discusses the pros and cons of giving legal effect to industry guidance. My noble friend quoted from paragraph 10.30, but the report discusses the issue at some length in paragraphs 10.32 to 10.43. The Law Commission decided not to include such a provision for the reasons set out in paragraph 10.38, principally because the role of guidance is different from that of legislation. I think that the discussion is extensive in the Law Commission’s report.
Lord Higgins
I am most grateful to the noble Lord. The trouble on these occasions is that the Hansard reporters tend to remove the relevant documents. I am most grateful for his clarification.
Lord Sassoon
Good. I, too, am grateful that we have nailed that one.
On the other questions raised by the noble Lord, Lord Eatwell, there is first this difficult issue about permissible questions and specifically questions of gender and race. They are made particularly difficult by the recent judgment of the court in relation to motor insurance. This issue is dealt with elsewhere and not in the Bill, which is solely focused on the transmission of information in the context of underwriting risk. It is not part of the scope of the Bill to discuss questions of discrimination or equalities legislation—nor should it be.
On the definition of consumers and micro-businesses, we discussed informally last week what would happen with respect to the insurance of the foot of a ballet dancer or a footballer. Maybe we could call this the “David Beckham’s foot” question. The Explanatory Notes on Clause 1 define a consumer as,
“an ‘individual’ who is acting wholly or mainly for non-business purposes. Thus the consumer must be a natural person, rather than a legal person (such as a company or corporation). The definition expressly provides for mixed use contracts”—
for example, the insurance for a personal car that is sometimes used for business travel to be defined as a consumer insurance contract. It means that the Bill will not apply to individuals purchasing insurance that is mainly for purposes related to their trade, business or profession, which would clearly be the case in some of the examples that have been discussed.
Lastly, on the cost of insurance, HM Treasury has not made an estimate of the impact of the Bill on insurance premiums. However, we have estimated that the net impact will be savings for the industry—that is, when we take account of the initial training costs and the savings as a result of fewer FOS complaints among other factors. On the basis that the industry should have net savings from this Bill being enacted, there is absolutely no reason to believe that there should be any additional cost passed on to consumers. In relation to the overall cost of insurance, these are relatively small marginal costs but ones that would impact favourably—that is, downwards—on insurance costs.
Lord Eatwell
I should perhaps explain the point about cost. Given that the catch-all clause from the Marine Insurance Act 1906 is removed, necessarily the range of risks to which the insurance company is exposed will be greater. Given that, it is likely that the premium charge will be greater. That was the point that I was making.
Lord Sassoon
My Lords, I do not believe that the range of risk will be any greater. Under this Bill, the range of risk to which the insurers are exposed will be brought in line with the current industry best practice and the standards to which insurers are held under FSA rules and by the FOS. There is no extension of the range of liabilities; there is merely—this is an important “merely”—an alignment, a clarification and an important legal codification of where the duties lie at the point at which the insurance contract is taken out. There is also clarification of the remedies—the remedies that are already applied by the FOS—should a misrepresentation occur. So, yes, the position under the law will change from that of the 1906 Act, but in substance the Bill will put insurers in a position that they are already in under current practice. Therefore, I would not accept that there is a greater range of liabilities and costs to which the insurer is liable; if anything, as I have said, there will be a modest saving because of the clarity that the new architecture will bring.
I have gone on at some length in response to the important questions that have been raised. I will sweep up anything else that I have not had the chance to cover and get back to noble Lords in good time ahead of the Special Public Bill Committee. I hope that I have, nevertheless, responded to as many points as I can this afternoon. I look forward to further discussion in the Special Public Bill Committee in due course.
House of Lords
Message from the Queen
The Lord Chamberlain (Earl Peel)
My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen, signed by her own hand. The message is as follows:
“I have received your address about His Royal Highness the Duke of Edinburgh on the occasion of his ninetieth birthday. It gives me great pleasure to convey to the Duke of Edinburgh the loyal and affectionate sentiments you express on behalf of My Lords”.
Royal Assent
Census
Baroness Kramer
To ask Her Majesty’s Government what proportion of postcodes in England and Wales will be covered by the 2011 Census Coverage Survey, and what are the anticipated benefits and costs of the Survey.
Lord Taylor of Holbeach
My Lords, the current Office for National Statistics census coverage survey is a validation exercise that will greatly enhance the statistical authority and value of the census. It will cover some 17,000 postcodes across England and Wales. This represents a sample of 1.3 per cent of all postcodes in England and Wales, and will cover some 330,000 addresses. The cost of the field operation of the survey is estimated to be £6.5 million, representing around 1.3 per cent of the total census costs. The cost for the processing of the information collected in the survey is included in the overall cost of the processing operation.
Baroness Kramer
My Lords, I thank the Minister for that very full Answer. However, he will be aware that this is a survey of people who have filled out the census form and about whom no questions have been raised as to accuracy. They are required to stand on a doorstep for 10 minutes, answering personal questions from a complete stranger. If someone refuses to answer, surveyors are instructed to return as many as 10 times to wear them down into answering this survey. As someone said to me, it is fascinating to watch an exercise that not only wastes public money but manages to alienate the public. Will the Minister give us a guarantee that future evaluations of the census will be proportionate, targeted and designed—please—with a dose of common sense?
Lord Taylor of Holbeach
I am sorry that my noble friend takes that view of this exercise, which is a valuable part of the census. I understand her concern about intrusiveness; these things are not taken in hand lightly. However, the survey is a vital element of the whole of the 2011 census operation. It is necessary in order to assess the extent of any undercount, and to provide information on those persons missed in the census to adjust the final estimates so as to enable all the resulting statistics to relate to the whole population.
Lord Desai
If one has to hold an objective survey, is it not necessary to get complete strangers to ask questions? If somebody I knew asked me questions I might not give the right answers, because he might misuse them. The noble Baroness asks why complete strangers ask the questions. Of course strangers have to ask the questions; if they did not, it would not be an objective survey.
Lord Taylor of Holbeach
A short interview on the doorstep is available and a form can be filled in if people prefer to do that. People may well wonder why they are doing this when they have already completed a census form, but we seek to ensure statistically that the figures which the census is delivering are an accurate representation of the household. This is a valid statistical exercise which complies with quality assurance as defined by the United Nations and is international practice. It is worth investing a little extra effort to ensure that the census really does achieve its objectives.
Baroness Gardner of Parkes
Will the Minister clarify this for me? I had thought that it was an either/or situation and that if you completed the form you did not have to be interviewed on the doorstep. However, from what he has just said, it sounds as if a certain number of people are still to be interviewed even if they have completed a form. Is that correct? How is it assessed which people who have completed a form should be interviewed?
Lord Taylor of Holbeach
This is done on the basis of postcodes. The measure is designed specifically to include those postcodes where information has been difficult to obtain and to ensure that the information returned is valid. I thank my noble friend for pointing this out: the actual households may or may not have completed a form in the first place. This measure is designed to ensure that the information that is available is correct.
Lord Dholakia
My Lords, the information in a census is required by law in this country. Does this survey have a penalty attached to it if one refuses to answer any questions?
Lord Taylor of Holbeach
No, it is entirely voluntary, but I would hope that people would realise why it is important to complete the survey.
Baroness McIntosh of Hudnall
My Lords, if it is the purpose of this survey to ensure that the information on the census forms is, broadly speaking, accurate, is it possible to ensure that Members of this House are included in that survey? I wonder whether the Minister is aware that the way that the census form was designed made it extremely difficult for people who are Members of this House to give accurate information about how they spend their working days.
Lord Taylor of Holbeach
I thank the noble Baroness for that question. I struggled a little to complete my own form and was rather embarrassed by that considering that I have occasionally to answer questions on the subject. So I understand exactly what she is saying. However, I can reassure her that were she part of the postcode lottery—that is, the postcode selected for this interview process—she might indeed find that somebody wanted to interview her about her census form. If so, it would be a very much abbreviated questionnaire compared with the one that she was asked to fill in in the first place.
Lord Brooke of Sutton Mandeville
My Lords, I declare an interest as a former canvasser in an inner London seat. Can my noble friend tell me what happens if the only method of communication with the person being interviewed is through an entry phone?
Lord Taylor of Holbeach
This is a familiar experience for most noble Lords. It relates in some ways to the difficulties experienced in some inner urban areas in this regard. Noble Lords may remember that I was asked a question on this some time ago and that Kensington and Chelsea had only a 64 per cent return of census forms in 2001. We are on track for a much better return this time, aiming at a 94 per cent return. The early indications are that it is on target, and that is very satisfying. As my noble friend has pointed out, communication is often difficult in these hard-to-reach areas. In the case of non face-to-face communication, it is possible, as I say, for a form to be filled in by the respondee.
Baroness Farrington of Ribbleton
My Lords, will the Government have regard to the assessment of population as a result of the census when considering parliamentary boundaries? It is my recollection that the Government closed that issue at the end of last year, and that therefore the new parliamentary boundaries could be drawn up on fallacious figures.
Lord Taylor of Holbeach
I think that we have discussed this previously, if I may say so, but I thank the noble Baroness for bringing it up. The truth of the matter is that registration for the electoral register is entirely voluntary in this country and not everyone is registered. On the other hand the census is mandatory and designed to make sure that government resources go to where they should. Therefore the two are not compatible; they are drawn up under separate legislation and conducted by totally separate organisations. The Office for National Statistics has nothing to do with local electoral registration.
Health: Transmissible Spongiform Encephalopathies
(13 years, 6 months ago)
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The Countess of Mar
To ask Her Majesty’s Government what are their proposals for continuing research into human and animal transmissible spongiform encephalopathies.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the Government continue to invest considerable funds in this research. I am pleased to note that the risk from BSE has declined significantly, and that cases of variant CJD peaked in 1999 and have declined ever since. The Government intend to continue to fund this research in order to ensure that policies are based on the best possible science and that there is evidence of efficacy, safety and cost-benefit for any measures implemented.
The Countess of Mar
My Lords, I am grateful to the noble Earl for that encouraging reply, because there have been rumours that the TSE research by the Health Protection Agency at Porton Down was to be “downsized”, as they say. Does the noble Earl agree that it is very important that we retain our knowledge acquired since the 1950s, when researchers were looking at scrapie, and that it is rather dangerous to put all our eggs in one basket? We ought to encourage lots of researchers to keep up to date, because these little prions seem to have naughty ways. What is happening to the archives for TSE conditions, which really ought to be called neurodegenerative diseases?
Earl Howe
My Lords, the Government are committed to continuing research in TSEs. Many fundamental questions remain unanswered and the research is, by its nature, long term. Considerable funding is provided by a number of bodies—not only the Department of Health, but the Medical Research Council, the Biotechnology and Biological Sciences Research Council, Defra and the Food Standards Agency. The total funding last year was in excess of £20 million, and I should add that the DoH funding is ring-fenced. That funding to key institutions ensures that expertise is maintained and continued in the UK.
As for the archive of research data, I agree with the noble Countess. The Government are committed to this research, as I have mentioned, and to surveillance, so our data and resources will remain accessible through peer-review publication systems for sharing material and through continuing liaison with the research community.
Baroness Finlay of Llandaff
In making decisions about funding, do the Government recognise that the research into prions and TSEs may be only the tip of the iceberg, and that prions may be implicated in a whole range of other protein-folding abnormalities, including Alzheimer’s and amyloid disease? In asking that question, I must declare an interest, because research in the field is carried out in my own university, Cardiff University.
Earl Howe
My Lords, I am aware of emerging findings in that sense. We welcome, of course, any significant findings from research, and my department has indeed part-funded some of the studies that the noble Baroness may have been referring to. Future funding applications for new studies will be considered, as they always are, on a case-by-case basis. These decisions are dependent on, among other things, existing research in progress and the availability of funding. However, this is an interesting area.
Lord Greaves
My Lords, does the Minister agree that this country is a world leader in research into spongiform encephalopathies and the role of prions generally? Nevertheless, what we know about this area remains a great deal less than what we do not know. In those circumstances, will he answer what I think was behind the noble Countess’s original Question? Is the amount of money devoted to funding this research continuing at the same level, or is it actually being reduced?
Earl Howe
My noble friend asks a very good question. Over 20-odd years, we in this country have invested almost £0.5 billion in research into TSEs. That is a significant amount of money. The total amount is declining, but that is because in the early days it was important to invest in research to ascertain the pathogenesis of this condition in cattle in particular. We are much further forward in understanding how this disease develops in cattle. Nevertheless, as I indicated to the noble Countess, important questions remain unanswered, and I think we will continue to see this research funded well into the future.
Baroness Masham of Ilton
My Lords, what is happening about the P-Capt filter for prions? Are we not lagging behind Ireland and China in this research?
Earl Howe
My Lords, the noble Baroness will know that the independent Advisory Committee on the Safety of Blood, Tissues and Organs—SaBTO—has advised that there is evidence that a particular filter can reduce potential infectivity in a unit of red blood cells. It has recommended the introduction of filtered blood to those born since 1 January 1996, subject to a satisfactory clinical trial to assess safety. We are undertaking an evaluation of the costs, benefits and impacts to inform a decision on whether to implement that recommendation, and we are awaiting the results of clinical trials, which are expected in early 2012.
Baroness Thornton
My Lords, following on from the noble Countess’s Question and linked to the need for continuing research, can the Minister assure the House that the scientific teams at the HPA and elsewhere will be kept together when the HPA has been broken up, and that during the period of establishing the independent health research agency the work will not be interrupted?
Earl Howe
My Lords, we are keen to see a smooth transition in the creation of Public Health England, which will include the current HPA. The expertise in prion research in this country is largely independent of the HPA. There is expertise particularly in Edinburgh and in the national prion unit in London, but her point is well made.
Banking: Government Shares
(13 years, 6 months ago)
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Baroness McDonagh
To ask Her Majesty’s Government when they intend to sell their shares in publicly owned banks; how the proceeds will be accounted for; and how the proceeds will be used.
Baroness McDonagh
I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as non-executive director of Standard Life.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, in line with its framework document and investment mandate, UK Financial Investments will advise the Government on the timing of the disposal of these assets, in light of market conditions at the time. The Office for National Statistics will decide how to account for the proceeds in the public finances of any share sale, taking into account the precise nature of the transaction. How any proceeds will be used will be determined as part of the normal annual Budget process.
Baroness McDonagh
I thank the Minister for that reply. The Government have been able to tell us little about their future banking policy. Perhaps we could be enlightened more about the here and now. I do appreciate that it is difficult for the Minister, given the abject failure of Project Merlin, but how have we got ourselves into a situation where under the Government’s own enterprise finance guarantee scheme we are lending to SMEs less and less each month to the degree where we are now lending half in the first quarter of this year of what we were lending in the first quarter of last year? The Government are threatening banks to lend more and more. When are they going to get banks to lend to small and medium-sized enterprises at rates they can afford?
Lord Sassoon
My Lords, I could be churlish or be fair to other noble Lords who might want to ask about the subject of this Question, which is the Government’s plans to sell shares in the publicly owned banks. We seem to be straying rather far from it. Project Merlin, agreed between the Government and the banks, means that the banks have put aside considerably more lending capacity this year for SMEs than last year. We have transparent reporting and a range of other initiatives to which the banks have committed to ensure that lending flows. We have also put money into a new equity fund for smaller businesses. These were things that the previous Government did not do but which have only peripheral relevance to the subject of this Question, which is about the sale of shares in the banks.
Baroness Anelay of St Johns
My Lords, it is a courtesy. The Question was posed from the Labour Benches. It might be helpful to hear from a different Bench, just for the moment.
Lord Newby
My Lords, given that all UK citizens have, to a greater or lesser extent, had to bear some of the costs of the Government bailing out the banks, can the Minister confirm that the Treasury is giving serious consideration to the distribution of the state-owned shares in RBS and Lloyds Banking Group to the UK population as a whole?
Lord Sassoon
My Lords, I can confirm to my noble friend that UK Financial Investments will be considering retail participation in the distribution of the shares. That does not, of course, necessarily mean quite what he said, which is some form of distribution but, yes, mass participation in some form is very much to be considered. Value for money is also one of the considerations that UKFI is required to take into account.
Lord Peston
My Lords, particularly as the Minister used the phrase value for money, is not the Government’s prime duty in determining when to sell making sure that the taxpayer gets the maximum proceeds from the sale of the shares? Is that not clear-cut? Is it not also clear-cut that the one group that should not be allowed to bid for the shares is the bankers who got us into this financial mess in the first place?
Lord Sassoon
My Lords, the obligation on UK Financial Investments is to provide advice to the Government on the time and form of sale. Value for money, as widely defined, is very much a consideration. The Government do not intend to be a permanent investor in the banks, but the timing of any disposals will take account of many considerations, including market conditions at the time.
Baroness Wheatcroft
My Lords, one of the answers to getting more lending to our small firms, who are clearly not yet being well served by Project Merlin, must be to encourage more competition. Can the Minister assure me that he sees no conflict between the desire to get the maximum price for the Government's investments in banks and ensuring more competition?
Lord Sassoon
My Lords, I am grateful to my noble friend as she enables me to point to the mandate which UK Financial Investments was given by the previous Government. It was that in creating and protecting value for the taxpayer it must have due regard to both financial stability and competition. At all stages, whether it is the involvement of the Independent Commission on Banking or the mandate of UKFI, competition is at the centre.
Lord Eatwell
My Lords, the noble Lord has mentioned Project Merlin on a number of occasions. Will he explain to the House why the lending targets set for the banks under Project Merlin and announced to this House have now been reduced by a good 10 per cent? Why are the Government fiddling the figures?
Lord Sassoon
Number one, this is a Question about the disposal of bank shares; number two, I would not believe everything that you read on the front page of the Financial Times every day.
Lord Lawson of Blaby
My Lords, in saying that financial stability should be one of the considerations in the disposal, which I warmly welcome, does my noble friend agree that an element of that financial stability must be ensuring the greatest possible separation between retail banking and investment banking?
Lord Sassoon
My Lords, I will wait with interest to see what the final report of the independent commission led by Sir John Vickers says on that point but, as indicated in its interim report, it is at the heart of its deliberations. The Government await with interest its final report.
Lord Touhig
Is the Government’s holding in the banks listed in the National Asset Register, and, if not, why not? If it is listed, can the Minister tell us where it is, because I cannot find it?
Lord Sassoon
My Lords, I shall have a look at the National Asset Register myself when I get back to the Treasury and, if it is not there, I shall write to the noble Lord to explain why.
Groceries Code Adjudicator Bill
The Lord Bishop of Wakefield
To ask Her Majesty’s Government whether they will outline the schedule for the future consideration of the Groceries Code Adjudicator Bill once pre-legislative scrutiny is complete
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government published the draft Groceries Code Adjudicator Bill on 24 May—that is, they have published draft legislation during the first Session, as they set out to do. The objective is to introduce a final Bill in the second Session, although it could be earlier if we have the opportunity. Of course, the timetable for introducing the final Bill will also be subject to the outcome of the pre-legislative scrutiny.
The Lord Bishop of Wakefield
My Lords, I am most grateful to the Minister for her encouraging reply. One of my main concerns is the speed of implementing this legislation because of further haemorrhaging in our dairy industry, in particular. However, I am also concerned that the adjudicator should have teeth. In relation to the implementation of the Groceries Supply Code of Practice, can the Minister explain why financial penalties will not be available to the adjudicator in the early stages of operation but will be made available only by order of the Secretary of State?
Baroness Wilcox
I know that the right reverend Prelate the Bishop of Wakefield is most anxious to see the groceries code adjudicator established, as the pastoral care of farmers in his diocese is important to him. The Government believe that the most effective way to handle this matter in a highly competitive market is to name and shame retailers who breach the code. However, if experience shows that negative publicity is insufficient, the Secretary of State will have reserve powers to allow the adjudicator to impose financial penalties. I know that the Commission recommended that we should have such financial penalties, but the Government believe that the most effective method of control is to go through the naming and shaming process and to see whether that works before resorting to fining.
Lord Avebury
My Lords, is my noble friend aware that many Members in another place who represent agricultural constituencies—primarily my honourable friend the Member for Ceredigion—have campaigned for some years for legislation along these lines to afford protection to agricultural producers against the abuse of monopoly power by large retailers? Would it not be wise therefore to take these interests into account and to press on with the Bill as rapidly as possible?
Baroness Wilcox
My Lords, we all agree that we wish to get this legislation through as quickly as we can. We have widespread cross-party support, and one retailer, Waitrose, already supports it, as do bodies representing suppliers, including farmers and third-world producers. However, as my noble friend knows, we have to go through the legislative process. If we can bring the Bill forward any earlier than we are aiming to do at the moment, then we certainly will, but there is a very full legislative programme and everyone thinks that what they have to do is extremely important. However, I fully agree with my noble friend and I, too, should like to see the legislation brought forward earlier.
Lord Kennedy of Southwark
My Lords, I think we would all support the groceries code and adjudicator who will ensure that British farmers and growers get a good price for their quality produce. However, can the noble Baroness tell us whether other producers will get a fair price for their produce? I am thinking, in particular, of the banana industry in the Caribbean.
Baroness Wilcox
I am delighted to answer this question because I know that third-world producers are very keen for the adjudicator to be in place. I agree that suppliers to the large supermarket groups come in all shapes and sizes. I was once one myself, so I know exactly how this process works and exactly where the worries lie on either side. However, it is worth remembering—I used to have to remind myself of this—that these are huge contracts and people go for them because they are a wonderful way of increasing employment and expanding one’s business. Therefore, a balance has to be found.
Baroness Byford
My Lords, does the Minister accept that there is extreme pressure from all sides of agriculture to have the adjudicator in place as soon as possible? The right reverend Prelate mentioned dairy, but the situation for pig farmers is extremely acute, and a lot of supermarket offers promote imported products rather than our own, which seems grossly unfair. Everybody is hoping for a fair deal for all those who have to deal with the few major players who control prices.
Baroness Wilcox
The whole reason for bringing in the adjudicator will be to arbitrate in disputes between the large retailers and their direct suppliers, and to investigate possible breaches of the grocery code, which has been in place for a year now. Of course, when there is a group of very big supermarkets together, that is a worry. That is the whole reason for putting this in place and I am sure that the noble Baroness would want this to go through as quickly as possible.
Lord Young of Norwood Green
My Lords, we welcome the Bill and the assurances received. The Minister said that only direct applications from suppliers can be made to the adjudicator. Why will the Government not consider trade associations? The Government have allowed anonymity in terms of representations, but allowing trade associations to make a direct representation on behalf of suppliers would be a valuable source of evidence for the adjudicator to consider.
Baroness Wilcox
I have no doubt that as the Bill goes through, the noble Lord will stand up and put these points to me. I am absolutely sure that everything will be considered. At the moment that is exactly what we are doing: looking at every possible way of getting this right for our country.
Baroness O'Cathain
My Lords, the noble Lord, Lord Kennedy, made a point about bananas. Almost all the major supermarkets now have Fairtrade bananas. Is there anything we could learn from the organisation of Fairtrade bananas in this country that we could copy for dairy, pork, sausages or anything else?
Baroness Wilcox
My noble friend makes a very good point. I am quite sure that other areas will be looking at the way in which Fairtrade and other such organisations have chosen to supply.
Export Control (Amendment) (No. 3) Order 2011
Baroness Wilcox
That the order laid before the House on 15 April be approved.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 June.
Taxation of Equitable Life (Payments) Order 2011
(13 years, 6 months ago)
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Lord Sassoon
That the draft order laid before the House on 21 March be approved.
Relevant document: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 June.
European Union Bill
(13 years, 6 months ago)
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17:56 - Division on Amendment 14 - Ayes: 213 / Noes: 209 - Amendment 14 agreed.
19:15 - Division on Amendment 22 - Ayes: 187 / Noes: 188 - Amendment 22 disagreed.
Lord Hannay of Chiswick
Lord Hannay of Chiswick
My Lords, I will speak to the long list of the amendments in this group. Because some amendments in the group have been changed since they were debated in Committee, I hope that I will be forgiven if I say a little about them. The broad case for this group of amendments remains that which was referred to by many noble Lords at Second Reading and in our debates in Committee: it is the belief that the long list of potential referendums is excessive and disproportionate, that it does real damage to the structure of representative parliamentary democracy and that it needs to be shortened. I do not know how on earth the Government arrived at a list as long as 56. Some earnest people have discovered even more in this legislation. Indeed, why stop one short of where Mr Heinz got to? The amount is quite excessive and would have a disproportionate effect on our constitutional practice. What it amounts to is massively increasing the number of potential referendums in one area of policy while not doing so in any other area of policy. It is completely unbalanced in its approach.
The amendments that I and other noble Lords have tabled today reduce the number of areas that would be subject to a referendum mandatorily if they were pursued separately, one by one. I will come back to the point about what happens if they are pursued collectively later on. In these amendments we have tried to take account of the debate in Committee. The noble Lord, Lord Howell, who was the Minister on that occasion, spoke about the big five and attached a lot of importance to their being the subject of a referendum. I and other noble Lords listened carefully to that speech and have taken considerable account of it in the way in which these amendments are cast. When we discussed it in Committee, we only suggested that there should be an explicit referendum requirement for a decision by Britain to join the euro and that other matters referred to in Clause 6 should not be so treated. However, we listened to what the noble Lord said in the debate, in particular the great importance that he attached both to the question of any move towards military co-operation and to the question of any move on border controls—that is the Schengen treaty, which, of course, does not apply to this country at the moment. Therefore, we have recast these amendments in such a way that, if they were passed, while there would be a considerable reduction in the number of referendums that potentially would need to be held, there would still be a referendum requirement if we were to decide not only to join the euro but to move decisively in the direction of military co-operation. Here the amendment is more precise than the extremely woolly wording of the Government’s own Bill, and makes it clear that what the Government and their supporters were talking about was the circumstances in which defence co-operation moved to an area that involved the setting-up of a European Union force or structure. That is the way in which it is now cast and it suggests that this would definitely require a referendum. The addition of the Schengen provisions requires less explanation; it is fairly straightforward. Britain has had an opt-out since, I believe, the Amsterdam treaty, and it is not suggested that that could be shifted other than after a referendum.
These changes show that those of us seeking to amend the Bill are listening carefully to the debate, in Committee and indeed on Report, and are taking full account of points that have been made from the government Bench on this matter. I hope that on their side they will reciprocate that spirit of compromise.
Baroness Nicholson of Winterbourne
My Lords, I shall comment briefly on the important set of amendments which the noble Lord, Lord Hannay of Chiswick, has put forward, and focus on two important points. The first concerns Amendment 15, in which the noble Lord, Lord Hannay, recommends that after “defence” we insert the words,
“that permits a single, integrated military force”.
As I understand the amendment, this would trigger a referendum. The second point concerns Amendment 16, in which the noble Lord recommends that decisions on common defence and security policy be referred back for an Act of Parliament.
It is immediately of interest that the supporters of this amendment, led by the noble Lord, Lord Hannay of Chiswick, have, in a sense, given a concession: they have agreed that if Amendment 15 is incorporated, there should be a referendum on a single, integrated military force. However, in their second amendment, Amendment 16, the noble Lord has ceded that although the issue of common defence and security policy is very important, it should be referred back to Parliament, in contrast to the purpose of the Bill, which is to seek the approval of the British people.
I should like to comment first on this welcome opening-up as regards the potential for a referendum on the single, integrated military force. My problem, however, is that I cannot really understand what that phrase means. I do not find “a single, integrated military force” a phrase that is commonly—or ever—used in treaties or Acts of this nature. In fact, I have not been able to recall it at any time during my decade or the decade previously in the other place. I cannot help but wonder precisely what it means. Does it mean, for example, the single, integrated military force that I saw and worked alongside in the south of Iraq in 2003 to 2007, when we had a number of military forces that co-ordinated themselves under UK command? We had the Poles, who were superb; we had the Italians—a little bit more questionably perhaps; we had the Romanians, who were very fierce fighters; the Bulgarians, over whom hung a little bit of a question mark; the Danes, who were superlative; and one or two others. On top of that, of course, we had Australia and the US.
What does a single, integrated military force mean? Does it mean a command under one structure, leader and nation state? Does it mean all 27 member states? Well, I think that that is unlikely. Mercifully, the ones that do not belong to NATO are now very few, but they are very unlikely to offer troops for a single, integrated military command. Does it mean, say, the Franco-British military command, which is getting stronger and whose strength I and others most warmly welcome? I may be correct in saying that at least until recently we had had at least 32 different actions going on with the French on the ground somewhere, some of which were training. We are strengthening that duality in military terms all the time.
Although the referendum proposed here for a single, integrated military force is a welcome admission that a referendum for the British people on common defence and security policy matters, at least in this perspective, is of high value—high enough for the proposers of the amendment to accept that a referendum would be required—none the less, the phraseology is with great respect too loose, too weak, too open and too imprecise to allow this amendment to be adopted.
In Amendment 16, on the other hand, the common defence and security policy is important enough to the proposers of the amendment to bring it back for an Act of Parliament. But how does that differ from now? Parliament has primacy in any event; if we wish to have an Act of Parliament on anything to do with EU legislation or policy, we can do that now. We have the primacy; it has been restated in Clause 18 and it has been there since 1972. The purpose of this Bill, which I support, is to put it to the people, which is why I cannot accept Amendment 16, which brings it solely back to an Act of Parliament. That is no different, in essence, from the situation that we have today.
Another amendment that the proposers have put forward, led by the noble Lord, Lord Hannay, and the last on which I will comment, contains the proposal that we should lose our potential veto for the multiannual budget. Is that truly sensible? I draw noble Lords’ attention to a highly possible situation, whereby in Brussels there could easily be today a time, not far distant, when the discussion on the multiannual budget was about the 40 per cent of the common agricultural policy expenditure. Noble Lords will know how difficult it is to get reform; it is almost possible—it has so far proved impossible to grasp the common agricultural policy by the tail and pull it into the reform network. It is rather like The Hunting of the Snark; it just has not been possible.
It is easy to imagine that reforming the common agricultural policy would be an expensive business. How might that be paid for? Suppose that it would be paid for by the British rebate. It would be very hard indeed to obtain a majority against that for the United Kingdom. We might not be in a minority of one: others who are net contributors and who also wish the reform of the common agricultural policy, such as the Netherlands and Poland, would perhaps be with us; I am not sure. But as sure as eggs is eggs we would lose France. In fact, we would have lost France before the argument began because France—great ally as it is, net contributor as it is—would have been arguing for just that. The loss of the British rebate as a payment for a partial reform of the common agricultural policy would be enormously attractive.
Lord Rowlands
My Lords, over the whole of my parliamentary lifetime I have always had a Eurosceptic disposition. Indeed, looking back at or listening to the deliberations in Committee, and now on Report, brings back floods of memories of the debates in 1972 and the various devices that were then thought up to try to make the system more accountable. I recall, for example, an amendment that there should be a general election before we entered the European Union, while there were of course numerous debates on referendums both in 1972 and particularly at Maastricht. I would therefore have had a natural sense of empathy for this Bill.
I have supported referendums and greater accountability on European decision-making right throughout my parliamentary lifetime. Having listened to much of the Committee and read as much as I can of our deliberations, I must say that this is now becoming a hugely overcomplicated process of accountability. Just look at Clause 6(5) and the list of issues that will, through its paragraphs (a) to (k), be subject to a referendum. It is not unreasonable for anyone reading this clause to believe that, as a result, there will be a potential plethora of referendums.
I support the objective, the principle, and the idea behind the Bill, but the Government have overcomplicated the issue. Reflecting on my own experience, I now rather regret that we did not in an earlier time invest greater interest and press the business of ensuring greater parliamentary accountability—a much tougher regime of accountability. That is why I find parts of the Bill, particularly Clause 6, if it were shorn of the referendum provisions as these amendments suggest, very important and attractive.
I was on the Constitution Committee in the previous Parliament when it brought forward an amendment during debate on the Lisbon treaty that all opt-ins should be the subject of particular parliamentary processes, approval and accountability, and the House subsequently devised the procedures to do just that. That is now the best route that we can take to make these European decisions more accountable. Some fundamental issues should be the subject of a referendum, and the three listed in the amendment clearly qualify. Indeed, our own Constitution Committee suggested in its report on referendums that they are best confined to the big, fundamental issues. Those should be subject to a referendum, but not the plethora of some of those listed in Clause 6. Given one’s own experience, and having listened to the debate, I certainly support these amendments, because they would reinforce the role of parliamentary accountability and do not go down the confusing route to the possibility of a plethora of referendums.
Lord Waddington
My Lords, the noble Lord, Lord Rowlands, was very eloquent, and I can well understand how he has reached the position that he has. Looking at just one of the amendments that we are considering, I must say that I find the wording of Amendment 15 really rather odd. It seems that, taken at its face value, all sorts of decisions could be made on a common European defence and no referendum would be required unless the intention was to permit a single, integrated military force. We could integrate our Navy with every other country’s navy and still be well short of creating a single, integrated military force, so there would not have to be a referendum. That seems very odd if you are going down the route of having referendums at all.
The noble Lord, Lord Hannay, was again rather beguiling. At one stage he said that he was putting forward these amendments in a spirit of compromise. It might look like an exercise in compromise to some people, but to others it might well look like part of a general strategy to whittle down the protection that the Bill is designed to afford. That is what I find so terribly depressing: that having gone all through Committee, and now on Report, not a word is spoken by the opponents of the Bill to suggest that they have a clue as to how disillusioned people feel and how necessary it is to give them some reassurance, or how necessary it is to show them that their views are not going to continue to be overridden and that we are not going to go on continually conceding powers so that eventually we finish up being no longer a sovereign, independent state. Never a word comes from opponents of the Bill to show that they have any realisation of the difficulties that we face at the present time.
In these debates we are constantly told that the right to a referendum can be safely whittled down here, there and everywhere. We are constantly told that referendums are an affront to parliamentary democracy, but I am bound to say that people are asking me what Parliament has done so far to guarantee our independence and to protect our fundamental freedoms. They point to what happened over the Lisbon and all the rest of it, and, as I say, they are thoroughly disillusioned. I think that they, like me, will not be at all impressed by the suggestion that somehow or other we can meet most of these problems by making sure that Parliament does its work properly.
I remind my noble friends and noble Lords of some of the history. The noble Baroness, Lady Quin, said in a speech the other day that it was made clear in the 1975 referendum that we were joining not just a common market but an EEC. Let us leave aside for a moment the fact that the question on the ballot paper was:
“Do you think the UK should stay in the European Community (Common Market)?”.
Let us leave aside for a moment the fact that there was no mention of the EEC at all. In fact, Harold Wilson, as he then was, made a great speech in which he recommended a yes vote because the threat of monetary union had gone away. I distinctly remember him saying that. That is all part of the dismal history. “Stop worrying, it is not going to happen”. Then it happens. “Well, it is not so important after all and it certainly will not happen again. This is the end of the road”.
I came back from Bermuda in 1997 having looked somewhat askance at some of the developments during the years when I was away. The first thing that happened to me was that I was invited to a rather grand dinner party at which every other guest was a Whitehall mandarin. There were three ambassadors and one or two permanent officials from the Foreign Office, and they said, “Oh, what are you banging on about, David? Stop worrying”. These are the exact words that were used to me that night: “The high-water mark of European integration has been reached”. That is what they told me. Well, the next day the tide continued to come in and it has been coming in ever since.
We are constantly told that it is safe to leave all these matters in the hands of our elected politicians. We might not have much to thank Mr Gordon Brown for, but let us give credit when credit is due; but for Brown, Tony Blair might well have used his vast majority to take us into the euro at the end of the 1990s, and a fine mess we would be in now. Remember, he dreamt up the idea of a referendum only to get him through the 2001 election. There was no question of the need for a referendum on the euro prior to that.
Lord Liddle
If I am correct, Mr Blair made his referendum commitment in 1996.
Lord Liddle
Mr Blair made a commitment to have a referendum on the euro well in advance of the 1997 general election, in 1996. Some of us thought that that was a mistake at the time, I hasten to add.
Lord Waddington
That had escaped my notice. By the end of the 1990s, he was certainly sending out messages that he thought the time might well be right to think about going into the euro. If Mr Blair were in office now—this would have been relevant on one of the amendments that was not moved—he would no doubt be advocating the need to have elections for a European president, which he would urge upon us as a not very significant matter that would only increase the powers of the people and was a thoroughly good idea, when we all know perfectly well that if a European president were elected that would be a dramatic step towards a United States of Europe. In fact, from the moment of such an election, the international community, whatever the constitutional niceties of the matter, would consider that Britain had turned itself into a United States of Europe.
Lord Radice
My noble friend is right. In fact, the Labour Party committed itself in 1994 to a referendum on the euro. That pushed the Conservative Party in that direction as well, and the Liberal Democrats were also in favour. Before the 1997 election, all three main parties were in favour of a referendum on the euro. I do not know where the noble Lord was at the time—was he out of the country? That is what actually happened.
Lord Waddington
Perhaps we could have a sweepstake and people could put in their bids; we have had 1996, 1994 and 2001, and we could have a few other dates thrown in. The fact remains that in 2000 and 2001 the papers were full of the possibility of a joint platform to take us into the euro. We were going to have the leader of the Liberal Party, Kenneth Clarke and Blair all on the same platform advocating our entry into the euro, so it is a bit rich to tell us now that there was no danger at that time of our going in. We know perfectly well that there was a very real danger of that, and, as I say, we were rather saved from it by Mr Brown. That at least can be said for him.
No one has answered the other point that I have made—I would have raised this on the third amendment if it had been moved—about the issue that has now arisen: what do we think Mr Blair would have done if he had been in office now and the possibility had been dangled before him of the direct election of the European president? He would have said, “Marvellous idea. It certainly doesn’t affect the rights of the British people. In fact, it extends their rights. It gives them the right to vote for the person they want”, without any regard whatever for the appalling constitutional consequences, which, from his press statements of the past few days, he clearly does not recognise. European matters safe in the hands of Parliament? History shows many things but certainly not that. This is not a very creditable performance.
It is no wonder that present-day people think that it is about time that there was more protection for them so that we can be sure that at some stage, if the European train goes tearing along towards the ultimate destination of a united Europe, we will get off before all British sovereignty is lost and we cease to be an independent nation. I am not attracted at all by this piecemeal approach of, “Don’t worry, this will all be done in a spirit of compromise. We can just take away the right to have a referendum here and another right there; it does not really matter”. That is just like the language that we have had for the past 25 years, and I do not find it attractive.
Lord Goodhart
My Lords, my noble friend Lord Waddington said early in his speech that some Members of your Lordships’ House are opponents of this Bill, and no doubt he includes me among the opponents. I am not an opponent of the Bill and nor are others of any significance in the House. What we want to do is make sure that matters which until now have not had to be decided by Parliament will be decided by Act of Parliament, and we are entirely in favour of giving the right to a referendum in matters of importance, which the noble Lord, Lord Hannay, has already described. We are looking for a different Bill, but we have no wish to destroy this one.
Referendums to be voted on by an entire country involve a lot of work on the part of those arranging them and cost a great deal of money. I understand that the referendum voted on a couple of months ago cost something in the order of £120 million. That is why referendums should be used only for matters of real national importance. Another reason, which is perhaps even more important, is that we must recognise that people will vote in a referendum only on issues of real interest to them. So far, the principle of the way referendums should be used has been recognised and observed. Only one referendum, of course, has been voted on across the whole of the United Kingdom; the 1975 referendum on our continued membership of the European Union. Since then, there have been referendums in Scotland, Wales and Northern Ireland on the important subject of devolution.
Those of us who support Amendments 14 to 21 accept that three of those issues, as the noble Lord, Lord Hannay, has said, are now covered by Clause 6. In all probability, they would justify a referendum. They are the creation of a single integrated military force in Amendment 15, making the euro the currency of the United Kingdom in Amendment 18, and bringing the United Kingdom into the Schengen protocol in Amendment 19. But extending referendums to other matters now covered by Clause 6 and its subsidiary, Schedule 1, wastes time and money and is completely unjustified.
In Committee, I spent some time demonstrating this, particularly in relation to matters affecting the legal system. I take, for example, the possibility that the United Kingdom Government might wish to participate in the European public prosecutor’s office. This is an organisation that does not now and may well never exist, and it is perhaps unlikely that the United Kingdom would participate in it if it did, although it is a possibility. But the point about this is that the EPPO, to shorten the name, is far from being a potentially serious change to the United Kingdom legal system. If your Lordships look at the terms of the TEU or the TFEU that deal with this issue, it becomes obvious that the EPPO would apply only to offences against the EU’s financial interests or to serious crime that has a cross-border dimension. Those would represent a tiny proportion of prosecutions in the United Kingdom and would affect hardly any of the ordinary citizens of this country. So if an EPPO is created and the British Government want to join it, what will happen? Most citizens will surely say, “This does not affect me so I am not going to waste my time by going out to vote on it”. Of course, the dinosaurs of UKIP will thunder down to the polling station to cast their votes. No doubt they would win in those circumstances, but that does not represent the real view of the people of this country.
There are also several cases in the Bill where the existing provisions of treaties require unanimity, but there is a possibility that member states might get together in the future to agree to QMV. Since the United Kingdom Parliament would have to give its consent to that change, it is likely that it would occur only if moving to QMV was of benefit to the United Kingdom, which it often is. It is more often than not to our benefit because it avoids the blocking of QMV, and therefore of legislation, by small member states that have a limited interest.
Matters made subject to QMV may be important or relatively trivial. It is totally inappropriate to insist on the referendum when we do not know how important or controversial the issue for that referendum will be. It is unlikely that ordinary citizens would take an interest unless it was clear to them that the referendum was a matter of importance, and one that would affect them personally.
We have never seen anything like this piece of draft legislation before. In cases where legislation has called for a referendum, that referendum comes first. It comes before any talk of an Act of Parliament. If the result is negative, there is no Act of Parliament to give effect to it. What we have here is an Act of Parliament first, followed by a referendum that might overrule it. If Parliament makes a decision, surely that decision should be binding. If Parliament wants to leave it to a referendum, so be it. What we have here is a ridiculous system that is contrary to the constitutional practice of this country.
Lord Flight
My Lords, the noble Lords proposing these amendments seem not to understand yet, notwithstanding the amount of time we spent in Committee, the whole point of the Bill. Put very simply, the point is that, whether by intent or by being beguiled, over the past 20 years British Governments have continued to give away sovereignty to the EU, notwithstanding that they have frequently pledged not to do so. Agreeing to the Lisbon treaty, clearly in opposition to the majority view of this country, was a huge example of just that.
This rather strange Bill and the arrangements for referenda are, I concede, a constitutional novelty. How it will work, assuming it becomes law, we shall have to see. However, it is clear that the referendum locks are there as a deterrent to prevent Governments repeating the behaviour of the past. It is fine to talk about letting the decision be made by Parliament, but we all know perfectly well that if one party has a substantial majority, Parliament is, alas, in practice an elected tyranny. There is absolutely no guarantee that even the wisest heads of this noble House will vote against the Government of the day if that Government have a substantial majority of Members in both Houses.
The issues that these amendments cover are among those that have been red line issues for Governments of both sides for some time. They are not issues that have been plucked out of the air. As was apparent from debates in Committee, there are several other issues that could have been picked up in both Schedule 1 and Clause 6, where there are clearly some aspects of transferring of power but where, for better or worse, the Government have decided not to make them subject to a referendum. It is not a case of issues being protected by the referendum lock—this is not something new that has been pulled out of the air—but about issues which have been seen as important red lines that should not be crossed by, I repeat, Governments of both persuasions.
Lord Davies of Stamford
My Lords, I rise to do two things. One is to address the contention made by the noble Lord, Lord Waddington, that I have heard before from him and other noble Lords during our debates on the Bill. His contention is wrong—that the British people have been systematically deceived about the nature or purposes of the European Union, or the European Community as it previously was, and that therefore they were unable to take informed decisions at election time or, indeed, at the time of the 1975 referendum.
It was always clear from the beginning that the European Union, or the European Community, was not a dead institution that was fixed once and for all. It was a dynamic institution, even a teleological institution which had a final purpose or end; all that was stated in the preamble of the treaty of Rome. The phrase about the ever closer union of peoples was always there. Right at the beginning, even when Macmillan first suggested that we might join the Common Market, or the European Community, I remember that speeches were made by members of my own party. I was a schoolboy at the time but I was already taking an interest in these matters. I remember Hugh Gaitskell’s famous speech. My noble friend Lord Radice, who has written books on this subject, will correct me if I have the date wrong. I think that it was in 1962 that Hugh Gaitskell made a famous speech saying that the effect of our joining the European Community ,or the Common Market, would be that we would become like Texas in the United States. If I am right and that speech was made in 1962, that means that literally for the past half century this discussion about the constitutional significance, and the significance for national sovereignty, of our being members of this institution have been clearly, expressly, openly, overtly and thoroughly transparently discussed in public.
Lord Flight
I thank the noble Lord for giving way. It may be that he was more involved at the time than I was, although we are roughly the same age. However, I remember being organised by the Conservative Party at the time to go out and preach on voting in the referendum for the Common Market—indeed, I voted for it—specifically on the grounds that it would be a good economic prospect for this country. We had lost an empire and we needed to belong to something where we could trade. I was not even aware of the idea that I was trying to market something about political unification—fool though I may have been at the time.
Lord Lea of Crondall
I am sorry—I do not know who is speaking and who is intervening here.
Lord Davies of Stamford
Perhaps I may resume my remarks and then of course I will give way to my noble friend Lord Lea. Given that the noble Lord, Lord Flight, brings up his personal reminiscences of the 1975 campaign, I can respond only by saying that I did indeed take part in it. I actually became chairman of the City in Europe committee—I had been working in the City only for a year or two at that time—that organised the campaign in the City, and I chaired a meeting attended by 600 or 700 people at which Edward Heath spoke effectively. I remember that very well. I say with great sincerity that then, as now, I was committed to the long-term agenda explicitly set out in the treaty of Rome, which I had taken the trouble to read—even in those days. I believe that I knew what I was doing and that those who campaigned with me knew what we were doing. We made it absolutely clear to the British public what was intended and what we had in mind. I am very proud of that campaign.
Those are my personal reminiscences, and I am delighted that at the time the noble Lord had the right views on the subject. Perhaps he will come around to the right views again one day. Both of us took part in an interesting campaign. I give way to my noble friend Lord Lea.
Lord Lea of Crondall
I am most grateful to my noble friend. Perhaps I may give an even more telling example that gives the lie to the other contention. I recommend to the noble Lord, Lord Flight, that he looks at the 1971 White Paper. Mr Heath was Prime Minister, although he was not necessarily the favourite Conservative Prime Minister of the noble Lord. The first page refers to going towards ever-closer union. That is not a phrase that I particularly like, but I invite the noble Lord, Lord Flight, to read that White Paper, which is in the Library, and see whether he wants to keep reiterating this falsehood—I am sorry, I withdraw that—or, rather, this error.
Lord Davies of Stamford
My Lords, the second point to which I wanted to draw attention is a theme that has come through in all these debates. All I shall say in a few sentences is to try to make explicit in Hansard what should be implicit for anyone who reads our proceedings with any degree of attention. A clear difference is emerging between those of us who are in favour of the Bill and those of us who are against it as regards the role of Parliament and our view of Parliament’s constitutional importance, functioning, efficacy and efficiency. It is clear that the coalition Government and those who support them in this Bill do not really believe in Parliament in the same way that those of us on the other side of the argument do. That is a sobering thought, because until now, for hundreds of years, there has been no distinction between the parties about Parliament and the fact that it is the best way of taking complex decisions on behalf of the country. That is why most of us came into politics and public life in the first place. It was because we wanted to be part of that process and to influence it in one way or another. All parties in this country and all of us who have stood for public elected office have always believed that Parliament was the best possible mechanism for achieving good governance and for making sure that complex arguments had been viewed from their different perspectives and debated, and that we came to a mature and considered conclusion on difficult issues. I am very proud of being here in the mother of Parliaments.
Now half our Members in this House this afternoon—perhaps more than half; I do not know, but we will see what happens in the vote—are sceptical about Parliament. They pay lip service to it and, no doubt, see some role for it, but they are clearly very sceptical indeed about Parliament. They do not think that Parliament is mature enough or sufficient for the purpose of deciding complex questions in the future. They want to go back to this Napoleonic concept of the plebiscite or referendum as a mechanism that is superior to that of parliamentary government. That is a sobering thought. I will not go further into the constitutional implications or the historical significance of that because it would take me well outside the amendment we are debating. However, it has been a theme which, unambiguously, has emerged from the debates we have been having on this Bill. It is something that we should all reflect on carefully because the long-term consequences of such a split in what has always been a constitutional consensus in this country are to my mind very sobering indeed.
Lord Kerr of Kinlochard
I support the final point made the noble Lord, Lord Davies, and the final point made by the noble Lord, Lord Goodhart. My point is a Burke point. I hope that the noble Lord, Lord Waddington, is listening: I am addressing it to the rising hope of the stern, unbending Tories. It seems to me really important that we should try not to undercut Parliament. As the noble Lord, Lord Goodhart, said at Second Reading, as he has said again today, what we are doing with these referenda, the ones talked about in this clause and in this Bill, is asking the simple question: do you wish to overrule Parliament; do you wish to disallow an Act of Parliament? In every case, the Act will be on the statute book and the question for the electorate will be: do you want overrule Parliament? What, I ask the noble Lord, Lord Waddington, would Burke have said?
Lord Waddington
As the noble Lord has been kind enough to bring me into this debate, is there not a difference between this situation and the situation which has normally appertained in the past? Is it not right to say that in the eyes of the public people are elected to Parliament to exercise the powers which are going to be bestowed upon them? The difference which has taken place over the past years is that people who have been elected to Parliament to exercise specific powers have thought that they are entitled to give away those powers in perpetuity to others. That is the great change which has come about and must be acknowledged when we are talking about Burke. Burke never envisaged that representatives in Parliament would give away the powers which they have been given—quite the contrary.
Lord Kerr of Kinlochard
I could repeat my Burke quotation with which I thought I had skewered the noble Lord, Lord Waddington, in an earlier debate but I will not. It is of the essence of Burke’s theory of parliamentary democracy, in which the Conservative Party used to believe strongly, that the people were consulted about who should sit in Parliament. The decisions of Parliament reflected the judgment of the people whom they had chosen. That seems to me to be quite a good rule and the point made by the noble Lord, Lord Goodhart, is a strong one. I support these amendments with the exception of the wording of the amendment on the euro, on which I have a separate amendment to which we will come later.
Lord Flight
I thank the noble Lord for giving way. I spent eight or nine years as a Member of the House of Commons when one particular side had a large majority. I felt that I was simply going through the motions and that there was no prospect of the Opposition members being able to stop that which the Government of the day wished to do. It was an elected tyranny by a large majority.
Lord Kerr of Kinlochard
I look forward to hearing the noble Lord express that view in the debate on the reform of the House of Lords.
Lord Faulks
My Lords, the amendment seeks to remove the referendum lock from all potential transfers of powers and competences, with the exception of the euro, Schengen and defence, in the sense that it is defined in the proposed amendment. Noble Lords might have thought, after the amendment proposed by the noble Lord, Lord Williamson, and its 40 per cent threshold, that the principle of a referendum lock had received acceptance, albeit without much enthusiasm except for those who are constitutionally opposed to referenda as a whole. This amendment goes much further. It takes outside the lock all potential transfers included in the big five, as they have been identified by my noble friend Lord Howell, with the exceptions that I have already described. I shall mention just one, referred to by my noble friend Lord Goodhart, the European Public Prosecutor's Office.
Lord Hannay of Chiswick
I am most grateful to the noble Lord for giving way, but he has managed in about three sentences to say three incorrect things. He said that in moving the amendment, we paid no attention to what he referred to as the big five. If he had listened to my introductory statement, he would have heard that, exactly to the contrary, we have amended the text that we had on the table in Committee by including Schengen and the international military force. If I may say so, it is clearly not sensible in our debate to pay no attention whatever to the person who introduces the amendment. I covered all that quite thoroughly.
Lord Faulks
I am grateful to the noble Lord for his intervention. I listened carefully to what he said and took on board the fact that the suggestion was that some other matters might also be the subject of a referendum if they were joined with those explicitly dealt with by the amendment. I also listened to what he said about the fact that there had been a change since Lisbon because now there was to be parliamentary approval, which was not the case before. I hope that the noble Lord accepts that I had listened to what he said, but, time being as it was, I was trying to truncate my remarks to make them digestible.
I return to the European public prosecutor, which is a matter which I suggest would not be in our national interest for the reasons I gave in Committee. It would involve us adopting the corpus juris, as it has been called; it might well involve us having national prosecutors representing the European public prosecutor; and it might involve an attempt at harmonisation of legal systems, so that we would have to take on board, for example, rules in relation to evidence; hearsay—
Lord Goodhart
My noble friend may be right on those particular points, but that would surely be a good reason for Parliament rejecting British participation in the EPPO, not for saying that that is an appropriate matter for members of the public to decide in a referendum.
Lord Faulks
I am grateful to the noble Lord and I accept his point. I am not quite sure what is the position of the party opposite in general terms on the European prosecutor. In Committee, the noble Lord, Lord Triesman, said, “Just say no”—as he said in respect of several proposals—from which I understood him to mean that Parliament would not put forward the possibility of a European public prosecutor and that there would therefore be no need for the referendum lock. However, from observations made by the noble Lord, Lord Liddle, I was not at all sure where he stood on the European public prosecutor.
I am, however, in no doubt about the view of the noble Lord, Lord Davies of Stamford, because he described the matter as being, to use his words, a no-brainer. Were somebody with his views to be the Minister for Europe in some Government to come, it would no doubt be said that the establishment of a European public prosecutor was generally to be the policy of the Government. The matter would then go through Parliament without the British people having been consulted and we would then have a European public prosecutor, with all the disadvantages which I have attempted to identify.
I am not in any way lacking in enthusiasm for the European project but, as a lawyer, I am aware that whereas sometimes I would like to conclude a negotiation without consulting my client—often I think I do much better without consulting my client—it is sometimes necessary to do so and to seek their instructions. It seems to be accepted on all sides of the House that enthusiasm for the European Union is, sadly, not as great as it might be. It is therefore, I suggest, incumbent on us as parliamentarians to consult and inform the people by means of a referendum, so that we can reconnect with those who are the source of our power.
Although I accept the qualifications made by the noble Lord, Lord Hannay, the amendment would take away that reassurance which has been identified by the coalition Government. I suggest that they have identified the zeitgeist. The Bill reflects what the country would like. To remove the referendum lock in the way proposed by the amendment would undermine that.
Lord Risby
My Lords, perhaps we could return to the Laeken declaration, which signified a very important moment in the history of the European Union. We all recognise the problem of disconnect. The Laeken declaration was intended to inform the individuals who were considering the whole future of the European Union what should be done about that problem. It is a fair summary to say that out of the Laeken declaration we saw the emergence of the constitutional treaty, which became the Lisbon treaty. Anyone, by any objective standards, would have to conclude that the spirit of Laeken, which was meant to inform the constitutional treaty, and later the Lisbon treaty, was not successful. Right across Europe we have seen an increase in Euroscepticism and in the disconnect between the peoples of Europe and the institutions of the European Union. The treaty, which was meant substantively to deal with that problem, has failed, not only in this country but right across the European Union. I suppose that one of the definingly difficult moments in the history of our relationship with the European Union was when Tony Blair substantially gave up the rebate in return for some structural reforms particularly linked to the common agricultural policy.
At the heart of this Bill must be the veto for the very firm purpose of restoring a sense of ownership of the processes of the European Union and our relationship with them. I think we all agree that the rebate is a most sensitive issue. Therefore, I just pose this question: would we wish to delete the requirement for a referendum if a future Government agreed to remove unanimity from the EU multiannual budget? This is a very contentious issue—it covers the whole envelope of European Union spending. The annual budget veto has already gone, and I suggest that nothing, particularly at a time of austerity, would be more damaging. It is precisely the threat of that happening that the Bill attempts to deal with.
I come back to the point that right across the European Union we have failed dismally to give people a sense of ownership or to secure the feeling that they have some sort of control. Therefore, comprehensive but clear processes, with a significant range of vetoes, are crucial in this country if we are to restore a sense of confidence and connection between the people and the European Union.
Lord Stoddart of Swindon
My Lords, I think that I have taken part in virtually all our Committee days. We are beginning to get to the end of our labours, although there are still a few amendments to go. This is a very important amendment and it has been discussed at great length. However, I want to get back to the reason why we have the Bill at all. It is because the people of this country have felt let down by the Government, and indeed by Parliament, for not involving them in very important decisions which affect their lives and the future of our country. I think that the Lisbon treaty brought that to a head and persuaded the Conservative Party that it had to do something about it. Together with its Liberal Democrat colleagues, it has now brought forward a Bill which, frankly, I believe has to stand virtually as it is or not at all. For that reason alone, if there is a vote, I shall vote against the amendment.
During our debates, we have heard a lot about parliamentary democracy, and so we should. Of course everyone agrees with real parliamentary democracy, if that is what we are talking about, but are we really talking about proper parliamentary democracy or do we have a “whipocracy”, in which great issues are not decided following proper debate in Parliament and relatively free votes on important constitutional matters but are voted on at the behest of government with strong whipping? Under those circumstances we cannot say that Parliament alone should be responsible for the great issues of who governs Britain—which is what it is all about.
Lord Richard
I have listened to the noble Lord for 20 years. He has been a passionate supporter of parliamentary democracy and British sovereignty, and has passionately opposed any kind of Eurofication or steps towards greater union with the countries of Europe. How on earth does he square the position that he has held for donkey’s years that Parliament is sovereign, and that it is what Parliament does that matters, with the idea that now Parliament has been doing things that he does not like it can no longer be trusted—even though Governments with majorities have been elected in general elections—so we have to move to a different form of public consultation? It is inconsistent with everything that he has said for 20 years.
Lord Stoddart of Swindon
Of course, I have listened to the noble Lord, Lord Richard, for longer than 20 years, and I know that he is an absolutely committed Europhile. He is right to say that I am very much in favour of parliamentary democracy, but I am trying to explain that in relation to the European Union we do not have a proper parliamentary democracy. All the amendments made to the European Communities Act 1972 were made by treaty. Under those circumstances, the Government agree to the treaty and sign it. One former Secretary of State for Foreign and Commonwealth Affairs said, “Now that I've signed the treaty, perhaps I'd better read it”. Therefore, we cannot be sure that even those who sign the treaties know what they are about. Nevertheless, the treaty then comes before Parliament and Ministers come to the Dispatch Box and say, “You must pass this treaty because we have agreed to it. If you do not, the country's standing in the world will be damaged and we will never be trusted again”. Governments put Parliament in an almost impossible position. If Parliament rejects the treaty out of hand, the Government will say, “My God, we have no further influence in the world because Parliament has declared that it does not agree with the treaty”.
Baroness Symons of Vernham Dean
I was the lead Minister on the Amsterdam and Nice treaties. I stood at the Dispatch Box and argued for them. I do not recall ever saying to the noble Lord, Lord Stoddart of Swindon, that we would not be trusted again. We argued on the merits of the treaty. It is important that we stick to the merits of the treaty in this argument today. I would not like the noble Lord's arguments about what was said from the Dispatch Box to stand on the record without being challenged by the person who stood at the Dispatch Box.
Lord Stoddart of Swindon
Of course the noble Baroness is entitled to challenge what I have said. I accept that she did not say that from the Dispatch Box, but various Prime Ministers did so. I am sorry if I offended her, but I did not accuse her of any such thing. However, we do have this problem; and there is a further problem that treaties cannot be amended. Parliament, which is here to scrutinise and amend, is told that it is not allowed to amend a treaty. Treaty amendments are simply not allowed, so Parliament has to accept everything in the treaty or nothing. That is Parliament’s situation in relation to the European Union. It is not democratic and it is not demonstrative of parliamentary democracy; when we talk about parliamentary democracy, let us realise that in respect of EU treaties. It has been the case with every single treaty that I have taken part in—and that is all of them. As the noble Lord, Lord Richard, pointed out, I was never in favour of joining the Common Market in the first place, and I believe that it would be in the best interests of this country to leave it at present. That is my view on this Bill. It is the best that we are going to get, quite frankly, at this stage.
Out in the country there is disquiet about our membership of the European Union—where it was, where it is now and where it is going in the future. My view, which I expressed in Committee, is that there should be a referendum as to whether we remain in the European Union or come out. I know that is difficult, but some way, some time, that is going to have to happen. I do not think the people of this country will be satisfied until it happens. I am sorry that I cannot support the amendments before us. As I have said, I think this Bill is about the best that we are going to get.
Lord Dobbs
My Lords, the noble Lord, Lord Davies, has tested our memories, and I ask noble Lords to test theirs. I did not intervene in Committee because to do so might have delayed the Whitsun Recess. Never have I received such a warm reception for a speech that I did not make.
I have been reluctant to intervene on this Bill because it has so much detail. I have been prompted to change my mind by two things. First of all, sitting here last week listening to proceedings for many hours, I heard language that I did not think did the argument justice. I heard Members of another place called “rather nerdy people” simply for being persistent and consistent. I do not know whether it is my job as one of the newest Members here to say that that sort of language in a debate helps neither the debate nor the reputation of this House.
I also thought that I should not intervene because, frankly, there are so many big beasts of the European jungle here—some very big beasts. Looking around this Chamber I can see that many of them are waiting to pounce, although where they were last week when the noble Lord, Lord Faulks, and I defended the honour of this place in the Commons versus Lords tug of war, I do not know. I wish they had been there. For those who do not know, we came a very close second.
Listening to this debate, I often feel as though I have dropped into the scene of that wonderful film, “Casablanca”, right at the very end when the wicked deed has been done, the fog is swirling, the body is lying on the ground and the police captain instructs his men:
“Round up the usual suspects”.
Having sat through this Bill for so many hours, I am beginning to recognise some of those usual suspects. If they will forgive me, I think it is not I who have missed the point but they. We have heard the blandishments of compromise that the noble Lord, Lord Hannay, has put forward so eloquently today, and we have heard the noble Lord, Lord Goodhart. Apparently we cannot afford a referendum on these issues. We have just had a referendum on AV, which no one seemed to want, so why can we not afford referendums on matters that people so clearly want?
This debate has tried to bury the point in details rather than address the fundamental purpose. This amendment, like so many of the others that we shall deal with today, is yet another excellent example of that. The details are of course important, but the fundamental purpose of making the EU responsive to the people is far more so.
Europe is unpopular and is growing ever more so. No institution that claims to be democratic can sustain itself in the face of continued popular hostility. That is the huge challenge that this Bill aims to meet. We have heard it called a process of reconnection, but that language is insufficient. This Bill is much more than that; it is an attempt to save the European Union from itself.
It is my firm proposition, and, I believe, that of the Bill, that the people know best. To suggest, as so many of the amendments do, that there is nothing wrong with an institution that asks to be taken on trust yet embraces accounting practices that would have any company director thrown in jail is hopeless. Some might even argue that it is pretty shameful. Ministers have been accused constantly of not listening. Well, your Lordships will forgive me if I say that it is the usual suspects who have not been listening; they seem even afraid to listen. If they had listened more, perhaps we would not need this Bill. The Bill is a mark of their failure, a failure to recognise the need for change.
There is nothing inherently wrong or evil in the European dream. What so many ordinary men and women object to is the way in which that dream has been put into practice, imposed from the top down rather than built from the bottom up, so that it has now become so top-heavy it is in danger of toppling.
The face of Europe has changed over these past 40 years, whether the people accepted it or not. Often, little has changed perhaps from day to day; just a small change here, a little adjustment, a nip or a tuck there—a bit of bureaucratic Botox for which the EU is so well known. However, as with any ageing process, the face has ultimately changed beyond all recognition. It needs rejuvenation, and the only way to do that is by re-establishing the pre-eminence of the people in its deliberations. That will not harm the European dream; it will save it. The great irony of this amendment and all the amendments that we will discuss today is that, if they are pushed to a vote by their proposers, it is a vote that they will deny the people whom we were sent here to serve.
Lord Empey
My Lords, the noble Lord, Lord Davies of Stamford, referred to the argument about Parliament and said that the party positions had changed. However, I said at the beginning of my remarks on the Bill last week that we are nothing if not consistent in our consistencies. This House voted so that people such as me in Northern Ireland would have a referendum on our constitutional future and that we would decide. As recently as on a visit to Northern Ireland last week, the Prime Minister said that the decision about its future lay with the people there; he did not say that it lay with Parliament. If we want to take the argument to its logical conclusion, that Parliament decides everything, why did Parliament provide for referenda in the first place? If you are going to be consistent in saying that such matters are a decision for Parliament, you do not have referenda. However, we do have referenda. We had one in 1975, and we have had a number since. Therefore, the argument that Parliament always takes the decisions is simply not true.
Edmund Burke was quoted again. He is very popular in this debate, but we are talking about the 18th century and things have moved on. Life has changed. We have a totally different world in which people are, thank God, educated and able to participate in a meaningful way and no longer require people who can read and write to interpret things for them. As a new Member, it has struck me from the very beginning of our debates on the Bill that it is hard to construct an argument that we support the Bill in broad terms, inelegant though it might be, without automatically being deemed to be someone who does not want to have anything to do with Europe. I refute that. There are positive things about Europe, but, as the noble Lord, Lord Dobbs, said, in the view of the British people Europe has been systematically salami-sliced.
I think I understand why that is. There is a small group of people at the heart of Europe who, for perfectly legitimate reasons, believe ultimately in a large superstate to rival the United States. We saw an example of that last week when one former Prime Minister said that we now need a leader. I am not speculating on who he thought that person might be, but the implication is that the nation state is not held by some people to be the fundamental building block of the European Union. Indeed, the nation state is merely in transition towards something else.
Baroness Nicholson of Winterbourne
I apologise for interrupting the noble Lord, Lord Empey, but the facts are very firmly against him. I ask him to accept that the very architecture of the European Union is one of the most decentralised architectures of a large bloc of countries coming together that the world has witnessed in modern times. It is a highly decentralised, very diffuse organisational structure, and I beg him to recognise that point despite his excellent oratory.
Lord Empey
I thank the noble Baroness for her comments. I understand the argument for subsidiarity. I was part of a European institution that practised it in the days of bringing decisions ostensibly down to the lowest level at which they can be taken. However, the practice is somewhat different. It is all very well to push things down, but setting the envelope within which those bodies can take decisions and determining the size and shape of that envelope centrally, which is what happens, goes against the argument.
The point I am trying to develop is that I believe in the nation state and in nation states coming together in common cause where that is in their national interests. However, I do not believe in a push by some people to transform those nation states into a collective within a larger body that in effect has all the characteristics of a state: its own President, its own Foreign Secretary, its own system of justice, possibly even its own army. The people of this country are not ready for that argument. Those who for economic, political or security reasons push that argument are pushing against the tide and undermining the people of this country’s view of Europe. They are therefore undermining their own argument.
I hope as we go forward with this that we will recognise that confidence in the principle of a European Union in this country will be re-established only if people feel that they are in charge. Indeed, its standing, with pages filled with people claiming for Kit Kats and all sorts of things, has been undermined and has suffered colossal damage. It may take a generation to repair it, but in the mean time this Bill, with all its downsides, can at least begin the process of saying to people, “You are now in charge”. Yes, Ministers and Members of Parliament will play their role, but in a modern democracy with modern communications and an educated electorate, who says that it is incompatible to have parliamentary democracy on the one hand and on the other hand, for certain defined purposes, a referendum in which the people can be specific? When they vote for a Member of Parliament, they vote for myriad policies covering everything from defence to social services—the whole gamut of government. Constitutional matters are much more precise, and, with an educated electorate, why should the people on occasions not be able to tick the box that they feel is appropriate?
Lord Richard
My Lords, to follow the argument advanced by the noble Lord, Lord Empey, on referenda, the last few sentences of his speech seemed to indicate more than anything else a decision or a desire to support the amendment tabled by the noble Lord, Lord Hannay, and not to vote against it. Referenda are scattered throughout the clauses in the Bill on almost any given issue on which it is quite absurd that there should have to be a referendum.
Will the noble Lord consider again the provisions of Schedule 1 and apply them to Northern Ireland? Is he seriously suggesting that in Northern Ireland there should be a referendum on,
“provisions concerning passports, identity cards, residence permits … minimum rules on criminal procedure”,
or a
“decision identifying other areas of crime”,
or on the, “European Public Prosecutor’s Office”? Is he suggesting that there should be one on,
“police co-operation … cross-border operation by competent authorities … harmonisation of indirect taxes”,
in Northern Ireland, or on the,
“approximation of national laws affecting internal market”?
I could go on and on about this.
The point about the Bill is that if it was enacted you would have to have referenda on those issues. The noble Lord is saying that once we have crossed the bridge and accepted referenda in Northern Ireland, Scotland and Wales, why do we not accept them in this Bill? One does not accept them in this Bill because these are not proper and fit matters to be put to a referendum. They are matters for a Government to decide.
I cannot believe that the noble Lord would advocate having referenda on the issues set out on Schedule 1 if they were to apply only to Northern Ireland. It is absurd; it could not be done. It is exactly what Parliament is there to do. You do not to consult people on issues of that sort; you govern. The amendment in the name of the noble Lord, Lord Hannay, specifically confined the issue of referenda, which he accepts—and we accept—to certain major constitutional issues. I totally accept that. If the Bill confined it to those issues, no doubt there would be much less difficulty in getting it through. When it is as absurdly worrying as it is here, it does not make a great deal of sense.
Lord Empey
The noble Lord, Lord Richard, caught me as I was sitting down. I think he has misunderstood the point that I made at the beginning of my remarks about what the noble Lord, Lord Davies of Stamford, said—that the argument was that Parliament should effectively decide. I made the point to him that we had been required to have a referendum whereby the people in that referendum were taking a decision outwith Parliament. I was not suggesting for one moment that referenda would be held in Northern Ireland alone—in fact, the issues that the noble Lord, Lord Richard, listed are United Kingdom-wide. Tax harmonisation and the rest are very important matters but they are United Kingdom-wide not Northern Ireland-specific.
Lord Hamilton of Epsom
My Lords, I have been on a steepish learning curve for the duration of this Bill and one of the more amazing things I have learned this evening is that my noble friend Lord Goodhart is actually a supporter of the Bill. For some reason I got the impression that he did not really like this Bill at all. I am very encouraged to hear that he supports it, but I find it rather extraordinary that someone who is trying to support the Bill puts their name to an amendment which will mean that a whole lot of things that were going to be subjected to referenda will not be subjected to referenda any more.
As we know, the way in which the EU has operated for a very long time is that it never does anything in a great big bang: it is always “grandmother’s footsteps”, it is always one bit after another. It is very unlikely that at any stage the EU would introduce something saying that there should be a single, integrated military force. That would be much too large and dramatic a step. They would do it incrementally, bit by bit, until we ended up with a single, integrated military force.
Lord Radice
Is the noble Lord, Lord Hamilton, actually arguing that it is not legitimate to amend this Bill? He is coming very close to that. This amendment is trying to accept the principle of referendum but confine it to the major issues, as our own Constitution Committee suggested was the best way forward. It is trying to escape from the fact that this Bill has referenda for 56 separate issues, which brings the whole idea of referendum into disrepute.
Lord Hamilton of Epsom
I am very glad that the noble Lord, Lord Radice, has mentioned that point. This Bill covers a large number of issues concerning where there should be referenda. Of course, they are all wired back into the red lines laid down by a Labour Government. This is why they are in the Bill: they are not just dreamt up at random, they are related back to the red lines laid out by a Labour Government, and those are the issues that will now be subject to referenda.
The noble Lord’s accusation that I say people should not have the ability to amend this Bill is absurd—that is what we are here for—but some amendments have a much more wrecking impact on a Bill than others, and I would suggest that these amendments go a long way to removing most of the point of this Bill altogether. That is why I will not be supporting this amendment, but it will be up to the House to decide whether this amendment should go through.
My noble friend Lord Goodhart said that when these referenda come to be debated in the country the dinosaurs of UKIP will be the ones out there campaigning and winning the argument. I would suggest to him that if there is any rationale for UKIP, its primary purpose seems to be to have a referendum to decide whether we should stay in the EU. However, another reason people join UKIP is the feeling that not only are we in the EU but we are getting sucked further in. That is one reason there has been this pretty modest growth in the membership of UKIP, the feeling that not only are we in the EU but we are getting dragged further into a federal Europe, which people do not want to be part of. I think that UKIP is going to be very seriously damaged when this Bill becomes an Act of Parliament because it will be reassuring to people to know that we are not going to be taken any further into the EU and end up in a federal Europe for which nobody voted.
Lord Grenfell
Before the noble Lord sits down, he appeared to suggest that there were a large number of red lines which the Labour Government had introduced and that these were now under threat. The fact is that there were, I think, six red lines in the Lisbon treaty. Every one of them is now enshrined in the two treaties as amended by the Lisbon treaty, so one should not cry wolf where that is not appropriate.
Lord Hamilton of Epsom
I think that the noble Lord would accept that, enshrined or otherwise, the red lines have until now never been subjected to a referendum. If this Bill goes through, there will have to be referenda on all the red lines originally laid down by the Labour Government. That seems eminently sensible, so I will not be supporting these amendments.
Lord Lamont of Lerwick
My Lords, the noble Lord, Lord Dobbs, said in a very amusing and eloquent speech that the face of the European Union has changed out of all recognition. He added that all faces change unrecognisably as they get older, but he did not add “except to those who are behind the face”. Some of the enthusiasts for European integration should look in the mirror when they say that the European Union has not changed at all.
Earlier, we had an argument, which bordered on being disagreeable or a little ill tempered, about whether misleading things had been said about the future development of the European Union. I have to confess— I do not intend to pursue this point very long—that I am rather on the side of those who think that there was some misleading about its future development. I seem to remember that, in 1975, Harold Wilson told us that there was no question whatever of monetary union ever arising in the future. As for the phrase “ever closer union”, of course there will be ever closer co-operation in coming together, travelling and meeting across European boundaries—that is the nature of the modern world and of commerce and travel in Europe today. However, I never interpreted the phrase “ever closer union of the European peoples” as meaning the involvement of a supranational authority to such an extent, but perhaps I was wrong in my assumptions and failed to understand.
I remember standing in Trafalgar Square and sharing a platform with my noble friend Lord Deben. He and I have entirely different views on the European Union as it has evolved, but at that time we stood on the same platform advocating membership of the Common Market, as it was then. However, because, in a sense, the point is not of such great importance, I am quite prepared to concede that perhaps I failed to understand. Yet if I failed to understand, so did millions of other people in this country. Regardless of whether they should be criticised or told that they are fools for not understanding, the fact is that there is considerable disillusionment with the European Union, not just in this country but throughout Europe. I acknowledge that the noble Lords, Lord Hannay and Lord Kerr, have both admitted that extremely important fact during these debates.
As I have said before, it is not because of the Daily Express that the True Finns party has suddenly burst upon our consciousness. There are other reasons for it. First, there is a real problem with governance and democracy within the European Union which relates to the type of indirect democracy that we really operate. Deals are done between Governments; Ministers come back to the House of Commons and announce decisions; decisions can then hardly be modified because they are dependent on other decisions and concessions that have been made and on the horse-trading that has taken place. Secondly, as came out in the exchange with the noble Lord, Lord Stoddart, treaties cannot be amended. Treaties are treaties. So the role of Parliament and the great discussion which we have had about Burkean democracy is a bit irrelevant when you have the results of horse-trading in that indirect democracy and when you have the presentation of treaties. Those are two reasons why there is a real problem of governance in the EU. I am pleased to see the noble Lord, Lord Kerr, returning to his seat at this point.
The third and most important point is the irreversible nature of the decisions that are made in the EU—not just decisions about competence, but so many decisions about policy as well. They are very difficult to reverse simply because they are arrived at by a process of compromise, a process of agglomerating, of aggregating the decisions and interests of different countries together. If three, four or five years later one country has now got a different view of that issue, it is extremely difficult for the Parliament to reverse that decision because, unless public opinion has changed throughout the European Union, one Parliament alone cannot then change the decision that has been made, because one Government will require either a qualified majority or unanimity in order to reverse the decision.
Baroness Symons of Vernham Dean
My Lords, the noble Lord, Lord Lamont, has gone to the heart of the issue in many ways and I applaud him for what he has said. I do not agree with a lot of what he said, but at least he was dealing with the issues and not with the bland assertion that has come from some on the Benches opposite that this side, or those who are putting forward this amendment, the noble Lord, Lord Hannay, and his supporters, have somehow not got the point of the Bill, either out of deliberate perversity or just plain ignorance. The fact is that we simply disagree. We have to argue through that disagreement and Parliament is the right place to have the argument. In so far as that was the point that the noble Lord, Lord Lamont, was making, I agree with him wholeheartedly.
I say to the noble Lord, Lord Flight, that putting forward amendments in this way is not a tactic. It is part of a reasoned argument. Much of it has come not from the political side of these Benches, but from noble Lords on the Cross Benches, who have put forward well-reasoned amendments, although, of course, he may disagree with them. The noble Lord, Lord Flight, says that he sat through what he called “an elected tyranny” in the other House. Well, that “tyranny” was elected in 1997 and the British people, in whom he places so much faith over referendums, re-elected that “tyranny” in 2001 and again in 2005, so perhaps not so jolly tyrannical after all.
Lord Flight
Does the noble Baroness agree that there is a difference between how people vote at elections and what happens in the House of Commons? I was simply making the point that when any party has a large majority in the House of Commons, under the British system since it was changed by Walpole from the originally intended system in the Act of Rights, I am afraid that when there is a large majority it does function as an elected tyranny on either side.
Baroness Symons of Vernham Dean
The fact that there is a difference in Parliament from what happens at elections is precisely what we are discussing. The fact is that after the passing of the Amsterdam treaty the British people re-elected a Labour Government and after the passing of the Nice treaty the British people re-elected a Labour Government. They had the opportunity to get rid of the Government on those occasions and they chose not to do so.
The noble Lord, Lord Dobbs, made a very interesting argument. He said, with passionate conviction, that the British people know best. Do we therefore extend that argument to a referendum on the current health proposals that are dominating our headlines and are probably far closer to the hearts of the British people than a lot of what we are discussing here? Did it occur to the Benches opposite to have a referendum on the increases in university fees?
Lord Dobbs
Does the noble Baroness accept that I was trying to make the point that there should be moderation and a sense of balance in all this? That is what so many parts of this argument lack. It is not a matter to be taken to extremes; it is a matter of balance and common sense. Had we pursued that with the British people, they would be far more onside than they are.
Baroness Symons of Vernham Dean
My Lords, of course it is a question of balance and common sense. Where do we find arguments about balance and common sense but in another place and, especially, here? It is here where we have those arguments and can argue out what is in a Bill.
The noble Lord said that the British people know best—he did not qualify the sentence that he uttered—in making his argument about how important referendums could be. I merely suggest to him that the British people would perhaps have liked to have had a referendum on the increases in university fees.
Baroness Symons of Vernham Dean
I will give way in a moment. Perhaps it would be pertinent to suggest that there should be a referendum on the future of the nuclear deterrent.
Lord Stoddart of Swindon
I am most obliged to the noble Baroness for giving way. Would it not have been more pertinent if the Labour Government who introduced university tuition fees had had a referendum? That would have saved them from betraying everything that the Labour Party ever stood for.
Baroness Symons of Vernham Dean
No, my Lords, of course that is not the case. The point about what has happened in the very recent past is that not only did one of the parties in the referendum say in its manifesto that it would not raise fees but its members signed individual pledges to their electorates to say that they would not increase them, let alone put them up by three times. I do not take the noble Lord’s point on that; it was rather a weak one.
I return to the noble Lord, Lord Waddington. We understand that he has very robust views, as do many of his noble colleagues, but I hope that the Conservative Benches have listened to what I thought was the generous support from the noble Lord, Lord Goodhart. There can be no doubt where he stands on the European Union and yet he and the noble Lord, Lord Hannay, are willing to compromise on this issue. They are willing to acknowledge some of the points that have been raised on the Conservative Benches—and I make the point that it is very much the Conservative Benches, with one or two exceptions on the Liberal Democrat Benches. The noble Lords, Lord Goodhart and Lord Hannay, and others are willing to support referendums on the really important issues. That is the point. We are not saying no; we are saying, “Let’s listen to what our own Constitution Committee, with its representatives from the Conservative Benches, has said unanimously on this issue”, and it has said that referendums must be kept for the really important constitutional issues. If we do not concentrate on what is important, where we should be concentrating the British public’s attention, then indeed we do have a big argument about the role of Parliament and we do start to get into the fundamental constitutional issue of what Parliament is here to do.
It has been said that people will really want to have these referendums. I put it to your Lordships that we all know that is not true; of course they will not want them. They would want them on the euro; if we decided that we were going to leave the European Union; on Schengen issues, because immigration is such a major issue; and on whether or not there should be a European army. Those are the fundamental issues that have been at the centre of most of the arguments in this House in the whole time that I have been here, listening as we went through them over and over again. I suggest to your Lordships that going through the long list in front of us will do nothing to make the British public more confident in what we are doing here. Frankly, it will make them think that we have been dealing with trivia instead of with the important issues that face us.
Lord Maclennan of Rogart
My Lords, perhaps I may intervene briefly at the end of a fascinating debate. Those who are opposed to Amendment 14, which I strongly support, and the other amendments in the group have been at pains to suggest that what the British people really want is to stop the European Union taking decisions. My noble friend Lord Lamont made the point forcefully that one of the reasons for the unhappiness about the European Union is that it makes decisions in a cumbersome and not very transparent way. It does not actually always intervene to deal with the problems that occupy the British public most closely. It seems that the matters on which the Bill suggests that there should be referenda before decisions are finally taken would in fact make that doubt about the effectiveness of the European Union much stronger. It would make it more difficult for the Union to be able to answer the problems of banking, which are uppermost in many people’s minds at this time. It would make it more difficult for the Union to deal with problems of cross-border immigration and it would make it more difficult for the Union to take action on the environment, which many regard as the top priority today.
The noble Lord, Lord Lamont, talked about the indirect democracy of the European Union. Yes, I agree with him that that is a suitable characterisation. Of course all democracy is indirect in a sense, and the kind of cutting of agreements between interest groups within a Cabinet is comparable with what he described when decisions are taken at the European level. However, it is not altogether true that treaties are unamendable. We have had many treaties since we entered the Common Market which have endeavoured to make the decision- making process more democratic, open and expeditious, and I think that most of those treaties have gone through without any hostile reaction from the public. This Bill seems to have been designed to put a drag anchor on the process of improving decision making within the European Union. I do not accept the view expressed by the noble Lord, Lord Lamont, that decisions taken in the Union are irreversible. Even among those who are full members of Schengen, discussions are going on about the need to look at immigration in the light of the probable influx from Arabian countries. It is not impossible that steps will be taken to respond to that.
If we want the European Union to be more appreciated for what it does, we should not be putting rocks in the road that make it more difficult for its institutions, including the European Parliament, the Council and the Commission, to come up with legislative proposals to tackle the perceived difficulties that we all share within Europe. Most of our interests are common interests in the areas for which the European Union has responsibility. Certainly, ideologies will divide people in all countries, but because of the fact that so many of our interests are common, we do want to improve the democratic processes. Requiring referenda to be held on some of these matters by one out of 27 or 28 countries would be seen as a block on progress, democratisation and modernisation not only by other countries, but also by many people in this country who are conscious of the value of the work that the European Union has done over the 60 years of its existence.
Lord Liddle
My Lords, we have had a long debate on this set of amendments. We on the opposition Front Bench strongly support this group of amendments, spoken to by the noble Lord, Lord Hannay. I shall focus our debate on Report on the essence of these amendments, which is to reduce the 56 varieties of referendum lock that the Bill contains to referenda on new treaties and three major issues: joining the euro, joining Schengen and the setting up of a single European army or force, as my noble friend Lady Symons mentioned.
What people who accuse us of proposing a set of wrecking amendments have to take into account is that the Bill as amended would be a substantial step forward in public accountability as far as the European Union is concerned. There could be no major new treaties containing the kind of proposal that former Prime Minister Tony Blair floated last week—for an elected president of the European Union—without a referendum. We could not join the euro, which clearly might now mean significant steps towards a fiscal union, under the amendments in this group. We could not join Schengen, which would certainly mean abolishing our own border controls and replacing them with border controls at the EU frontier, a common set of asylum rules, burden sharing and so on. Under the amendments that we are proposing, that would be subject to a referendum, as would a major step towards common defence.
Therefore, these amendments do not wreck this Bill; they just make it more sensible and get rid of the huge number of referenda in it. That is wholly in line with the spirit of your Lordships’ Constitution Committee’s recommendation that referenda should be confined to matters of major constitutional significance. One of the curiosities of the many days of debate that we have had is that we have never heard why the Government think they can set aside in this way the recommendations of your Lordships’ committee on these specific matters when it comes to the European Union. On all these other matters—on which, if this amendment were passed, there would be no need for a referendum—there would still be a need for an Act of Parliament. That is an enormous change from the position that we are in now. We are not wrecking this Bill; we are trying to improve it. I hope that on that basis the Government might be prepared to show a flexibility that they have so far lacked in these debates.
One of the very wise contributions to this discussion was made by my noble friend Lord Rowlands. In a distinguished career in another place, he was a sceptic in the proper sense of the word and had to be convinced about the case for Britain’s membership of the European Union and the pooling of sovereignty that it involved. However, as he said, we are setting up a far too overcomplicated process of accountability with the plethora of referendums proposed. What I find difficult about this is why the presumed lack of legitimacy of the European Union is seen as being so peculiar and special compared with the huge problems that our democracy as a whole faces in today’s world.
I looked at the Eurobarometer opinion poll for October 2010—that poll asks people questions about trust on a regular basis—and found that a very depressing 64 per cent of the British people do not trust the European Union. That is why we accept that there is a legitimacy problem. However, it seems that 66 per cent do not trust the British Parliament, 67 per cent do not trust the UK Government and 82 per cent do not trust political parties in Britain, so what is so peculiar about the lack of legitimacy of the European Union compared with the rest of our democracy?
It is argued either that confidence in Europe has been destroyed by so-called competence creep or that we face lots of threats to our sovereignty in future. As my noble friend Lord Triesman has said many times, if you are in government and do not want to do something, you just say no. The noble Lord, Lord Lamont, made a very interesting speech in which he pointed out that there is a very distinctive issue about the irreversible nature of the surrenders of sovereignty that take place in the European Union and the problems of a Union that moves by a process of intergovernmental compromise. Many of us who are pro-Europeans have been worried about this issue for many years and have wanted to think of ways of closing that democratic deficit. Certainly, we should have a debate about the role of the European Parliament, which plays a much bigger role now than it did 15 years ago, largely because of the treaties that the noble Baroness, Lady Symons, when she was leading for the Government, put through this House. However, I presume that the noble Lord, Lord Lamont, would not regard those treaties or the strengthening of the European Parliament as being good things. I agree with him that we have to think of ways of addressing that democratic deficit, but I suspect that he is not prepared to accept these kinds of remedies.
There is a problem of legitimacy vis-à-vis Europe that is particular to Britain, because over decades we have failed to establish a cross-party consensus about our membership of the European Union and failed to argue the case for British membership with a united voice. Amendment 31—which we shall discuss later; the noble Lord, Lord Radice, moved it in Committee—will try to address that problem in part. However, there is another explanation of why the EU has run into problems. The explanation is, as I said at Second Reading, that there are two ways of looking at legitimacy. One is to think about it in terms of how decisions are approved, but the other is to think about whether the institution is effective at doing the job that it is supposed to do. One of the problems with Europe is that it is not as effective as it could be, and this causes public disillusion.
I looked at a poll carried out last November about attitudes to the European Union. If you ask a general question—do people think that we should co-operate more or do they want us to loosen the links with the European Union?—only 21 per cent want us to co-operate more, but 49 per cent would have us loosen the links. However, when you ask people questions about specific areas such as climate change, attacking terrorism and crime, regulating banks, minimum rights for workers, or minimum levels of tax on business, a strong majority in Britain want the European Union to do more. I therefore argue that it is not a question just of how decisions are taken, but of how we make Europe effective. That is what we ought to focus on in our debate.
Finally, in support of the amendment, perhaps I may say that we have had a good and long debate, but one of the depressing things about it is a tendency to be historical, to look back to the past, to take trips down memory lane, and to look at the debates in the 1950s, 1960s and 1970s. I am very prone to that tendency, and this is therefore a self-criticism. When we think about Europe, we really should remember that the world of which the European Union is part is transforming itself at enormous speed. Since the Maastricht treaty, communism has fallen and that aspect of the world has changed enormously, the Arab world is in revolution, China has risen enormously as a power, and the weight of the European Union in the world is decreasing at a rapid rate. Our weight in the world as the United Kingdom is decreasing at an even more rapid rate.
Yet, in response to these extraordinary developments of the past 20 years, this Government have come forward with a policy on Europe that is essentially, “Thus far and no further”. In other words, “We have no imagination about how the European Union might develop. We are saying there should be no change without a referendum”. This is a depressing attitude that destroys the flexibility that a British Government should have to respond to an unpredictable and unknowable future. I urge the House to support these amendments because they confine referendums to the really big issues on which the people ought to decide.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, we have had a rather amazing debate in which I found all kinds of echoes of agreement that did not seem to be there in the darker days of May when your Lordships first went into Committee to examine the details of the Bill. We have come a long way since then and there seems to be a greater appreciation—not necessarily combined with agreement—about some of the issues that the Bill seeks to address.
We have of course been down memory lane with the various comments by noble Lords who have been extremely experienced in European affairs over almost half a century. Edmund Burke featured again, although I must say that the more I think about that great man, the more I hear in my mind his remark, “Show me the man; show me the things”. In other words, he was interested in the situation as it actually was, rather than in the high theory of how it ought to be. I did not agree with the final remarks of the noble Lord, Lord Liddle. He should not be depressed because the possibilities for our leading in European reform are much greater than he accepts, although he is an expert in these matters. He is entirely right to say that the landscape has changed and that we are dealing with an entirely new situation.
Lord Goodhart
I accept that other countries in the European Union have been very reluctant, as have our Government, to join up to the EPPO and I think it is unlikely that there will ever be an EPPO, but that is mostly because of the inadequacies of the legal system in a number of those countries. For this country, under Article 86 of TFEU:
“The European Public Prosecutor's Office shall be responsible for investigating, prosecuting and bringing to judgment … the perpetrators of, and accomplices in, offences against the Union's financial interests, as determined by … regulation”.
That makes it perfectly clear that those who would suffer would not be ordinary citizens in this country. If the EPPO was brought into this country, those who would be subject to it would be international criminals and some major commercial companies. It would not affect the ordinary people in this country in the slightest.
Lord Howell of Guildford
I respect what my noble friend is saying, but one has only to pause for a moment and think about the phrase, the European Union's financial interests. Who will interpret that? How widely or narrowly will that be interpreted? Will offences be generated by the misuse of structural funds or other arrangements to do with the EU's finances? We do not know. We do not know who will define these things, but we can see clearly that they may well lead to a prosecution authority outside the UK, when we have our own prosecution authorities which are perfectly adequate in most—indeed, in all—cases to deal with those matters. We will have a prosecution authority from outside the United Kingdom for the first time charging and prosecuting British citizens. That is one reason why a huge uncertainty hangs over that.
Furthermore, once set up, although it is confined to EU financial interests now, the range can spread. Who is to say that it may not? We do not know. All those matters are reasons why many European countries—possibly the majority—are reluctant to see a development of that kind and why, if a Government in this country decided to change their mind, flatly against what the previous Labour Government wanted and flatly against what the present Government want, that should certainly be one item that should be put to a referendum.
I turn now to some of the comments made by the noble Lord, Lord Hannay, which were very reasonably put. I know that he felt that he was in a consensual and concessionary mood and looked for some reciprocity from the Government. In that, I fear that he will be disappointed. The passerelles allowing for a move to QMV, which are listed in Clause 6(5), have been included simply because they are covered by Schedule 1. That is obvious to most of your Lordships. It would be wildly illogical to provide for a referendum on an amending treaty which abolished those vetoes without also providing for a referendum on any decision to use the passerelles attached to the specific articles listed in Clause 6(5), which would achieve exactly the same result. That would be tantamount to locking the front and back doors of the house—not closing them, locking them; and not throwing away the key either, but giving the key to the British people—but leaving the kitchen window open.
Lord Hannay of Chiswick
On one small point of fact, the noble Lord, Lord Howell, said that we have just given up the veto on the annual budget. The annual budget has been adopted by a majority vote by a provision of the Treaty of Rome which was negotiated before we joined, which we have applied. Therefore, it has been taken by a majority vote throughout the period of our membership. It really is not wise to adduce changes which have not taken place during the period of our membership.
Lord Howell of Guildford
I totally disagree; I think that it is pertinent and a healthy reminder of what happens. We can contribute all we wish to in all these vital areas. The surrender of the veto can lead to consequences which can be extremely dangerous.
Finally, I should like to say a word on common defence, because that has come up and it is important. Amendments 15 and 16 suggest that the only controversial element of a decision to move to common defence would be a decision to develop a single integrated military force—in other words, that it is only that particular interpretation of common defence which is of real concern.
Successive Governments and successive Ministers, including noble Lords sitting here now in the Chamber, have rightly said that we do not support the introduction of a common defence. A Minister said:
“We oppose the introduction of common defence either at 25”—
there were 25 members when this was said—
“or through enhanced co-operation. We think it is divisive and a duplication of NATO”.
We do not support,
“anything such as the creation of standing inner groups or an inner core on ESDP,
which,
“would undermine the inclusive, flexible model of ESDP that the EU and NATO”—[Official Report, 11/5/04; col. 242]—
have agreed. That comes from a Minister in a previous Government. It is extremely telling and sums up the case very well. However, there would be confusion about any decision that resulted in the establishment of a single integrated military force. For example, would the establishment of an integrated command structure or integrated units or the achievement of integrated budgets count? It is just that lack of clarity that allows for the sort of competence-creep which caused so much distrust and which we are trying to overcome in the Bill.
In addition, we have concerns about a move to a common defence that goes beyond the establishment of a common force. A decision to move to a common defence could lead to the loss by the British Parliament of final decisions over whether to send our troops into harm’s way. Like the previous Government, we think it is vital that the UK is able to maintain an independent defence policy. Indeed, it was one of the red lines during negotiation of the Lisbon treaty, and I cannot understand the Labour Opposition wanting to move away from that today. I accept that a common defence is ill defined but that problem would not be solved with this amendment, which could apply only to the UK. Instead, our promise is that any decision to move to a common defence should be subject to the full scrutiny of the British public.
I have gone on for a long time but this has been a huge debate. There are many vital issues to address and it would be wrong to ignore them. I am pleased that noble Lords recognise the utility of the referendum lock in its application to any proposal to abolish our border controls or adopt the euro. However, I ask your Lordships also to consider the sheer inconsistency of seeking to remove from Clause 6 other measures that would transfer further competence and power from the UK to the EU. They are directly related to the crucial six issues on which successive Governments have insisted they want to protect Britain while being forward and active in encouraging the European Union within their full competences. This is a good European policy and the Bill reinforces it. It should be supported and the amendment should be withdrawn.
Lord Hannay of Chiswick
My Lords, I am most grateful to all noble Lords who have contributed to this lengthy and interesting debate. I hope that I may be forgiven for saying that there were moments during the afternoon when I thought we were moving back to the future—namely, heading rapidly towards a Second Reading debate. A fair number of contributions bore little relation to the amendments on the Marshalled List but a great deal to the discussions that we had during Second Reading. However, I shall not follow that road now, when we need to focus on the amendments in a much more controlled way.
I thank the noble Lord, Lord Howell of Guildford, for his very thoughtful response and for being so frank about the fact that, although those in whose names the amendments stand were introducing an element of compromise, he did not intend to do so. That was made extremely clear and I hope that all those who listened to the debate will draw the appropriate conclusions from the lack of flexibility on the part of the Government.
There are not many detailed points that need to be referred to. A certain amount of a meal was made by those who spoke against the wording of the amendment relating to an integrated military force. What we are talking about is fairly obvious. We are talking about our old friend—much beloved of the Daily Mail—the European army. We are talking about, for example, our treaty commitment in NATO under which we are part of an integrated military force. I only say to the noble Lord, Lord Waddington, that he will know very well that the NATO obligations apply in exactly the same way to the Navy and the Air Force as they do to the Army. The use of the word “military” is not exclusive to the Army. Therefore, it is obvious what the amendment tries to do: it tries to ensure that, if we were ever to have a British Government who wanted to move in that direction, they would have to submit the matter to a referendum. That is a recognition by those in whose names the amendments stand that the Government are right to have identified that issue as one of fundamental constitutional significance. However, I am afraid that issues such as whom we fought alongside in Iraq are totally irrelevant. We did not fight in Iraq on the basis of any treaty whatever; we fought on the basis of a coalition of the willing without a legal base. Therefore, we should not get muddled up with that issue. There seems to be less trouble about the euro and Schengen. Then, ultimately we come back to the question of whether we should be trying to reduce the number of potential individual referendums. The arguments for that are very strong.
I have been a little saddened by the way in which so many of the protagonists of the Bill and the opponents of the amendments have denigrated the parliamentary process. They have, in fact, thrown up their hands and said that it is completely useless. They seem to have discovered the whipping system, which I think has been in effect since the 18th century or perhaps even earlier, as being at the root of all this evil. That is pretty sad. There are quite a lot of former Whips sitting here and I do not see them covering their heads in sackcloth and ashes and saying that they made terrible mistakes by doing so. It has been part of our constitutional practice for a very long time and we have managed to achieve greater constitutional stability than a lot of countries that do not have it. It is a bit sad that we should be heading off in the direction of plebiscitary democracy-a-go-go instead of thinking about how to make our parliamentary institutions work more effectively. That is why one of the most important points made by the proponents of the amendments is the fact that you need primary legislation for every single change in the Bill. That is really important. It is the way to make parliamentary scrutiny more effective and that is what is needed—not a dash towards plebiscites, which is a very revolutionary approach. I have to say that it comes from a rather unlikely band of revolutionaries from a party whose name suggests that they are counter-revolutionaries. Nevertheless, I think that it is a move in the wrong direction and I should therefore like to test the opinion of the House.
The Deputy Speaker (Lord Geddes)
Amendments 15 to 21 moved formally en bloc, Lord Hannay?
Baroness Anelay of St Johns
My Lords, it is my understanding that these amendments are not consequential on Amendment 14, on which the Government have just suffered a defeat. I understand that the Public Bill Office did not notify these amendments as being consequential. They were not put forward as being consequential by the noble Lord, Lord Hannay, in opening, and they were certainly not accepted by the Minister in winding as being consequential. I can understand that the noble Lord, Lord Hannay, might consider it desirable to insert Amendments 15 and 16 as a policy objective, but they are not consequential on the amendment that has just been decided.
Lord Hannay of Chiswick
My Lords, if I may, I will respond to some extremely mysterious words from the Government Chief Whip that I am afraid I do not altogether understand. I was perfectly clear when I introduced this set of amendments—which were grouped together by the Government Whips in a way with which I had no trouble at all—that I was introducing the whole body of the amendments, and nobody gainsaid that at all.
Baroness Anelay of St Johns
My Lords, the procedure when seeking any agreement on consequential amendments is, first of all, that they should be clearly consequential; these are not.
Secondly, grouping of course is for the convenience of the House. It does not indicate that all the amendments in a group are consequential. Indeed, if that were the case, there could be an invidious position whereby a noble Lord might have an amendment in a group led by a government amendment, and they would not be able to vote on later amendments in that group. Grouping is not of itself an indication of consequentiality. I remind the noble Lord, Lord Hannay, that the Minister did not accept the other amendments as being consequential. I am advised that the Public Bill Office did not give prior indication that these amendments were to be considered consequential.
Indeed, there are matters that are consequential in later groups. It is for the Government to consider whether they wish to bring different policy objectives to bear in another place as a result of Amendment 14. Amendments 15 and 16 may indeed be seen by the noble Lord, Lord Hannay, as desirable in policy terms, but those two amendments are not consequential on the Government’s defeat regarding Amendment 14. The noble Lord may wish to consider whether to take the matter further. There will, of course, be the opportunity to deal with the matter in another place and it may return here on another occasion.
Lord Triesman
My Lords, in almost all other circumstances I would not have dreamt of getting to my feet to argue this point, but I genuinely do not believe that a single Member of your Lordships’ House did not think that that was a debate on one set of matters that were plainly related. The speeches all dealt with issue after issue and the total consequence of them. The noble Lord, Lord Hannay, introduced the group by saying that attention had been given to questions described by the noble Lord, Lord Howell, as the big issues—I am not trying to argue that he said that what some of us described as smaller issues are not important. I cannot believe, in all conscience, that anybody in this House was under any misapprehension about the character of the last debate. It would be tragic if we got into a position where game-playing took over from the decencies of proper politics.
Baroness Anelay of St Johns
My Lords, in 13 years of opposition, we never thought to press an amendment that was not consequential when it had not formally been agreed to as being consequential by the Bill team and by the Minister, who always checked in advance. The noble Lord, Lord Triesman, talks about matters being related. Of course matters are related in debates on groups of amendments. That is why amendments are grouped. It is part of the constructive way in which this House works.
The Government cannot accept that Amendments 15 and 16 are consequential simply because they are not. They may be the policy objective that the noble Lord, Lord Hannay, feels is sensible and advisable, but it may not be what the Government accept as sensible and advisable. The Government may wish to take a different view. It is not a matter of the Government being recalcitrant. If something is not consequential and has not been accepted by the Government as being consequential, it is not. It is procedural, and it is something to be considered in the future if the Opposition wish to have amendments accepted as consequential when they are not. It is a matter of negotiation beforehand; not for announcement on the Floor of the House.
Baroness Williams of Crosby
My Lords, from these Benches I support the view that most of us believed that these amendments were taken together for the convenience of the House. We had a very long debate, which ranged over the whole group of amendments. I have to say to the Chief Whip, for whom I have great admiration—she is a person of great ability—that most of us took that vote to be about the whole group of amendments taken together. I find it difficult to see how we can explain to the world outside that this group of amendments has now somehow got lost when it seemed clear that, admittedly by a relatively small majority, the House chose to support these amendments.
Lord Hannay of Chiswick
My Lords, I wish to protest, frankly, at what I can only describe as an extremely underhand manoeuvre. I cannot believe that, if it were the intention of the Government to argue as they are now doing, it was not the right, proper and fair thing to do to warn the House before this debate started, on the basis of a grouping of amendments that the Government had made themselves and that were agreed to, that whatever we decided on Amendment 14 would not apply to the rest. We would then have had a completely different sort of debate. No warning was given of that sort at the time. No indication was given. If the noble Lord, Lord Howell of Guildford, seriously intended to do that, he could have said that, but he did not. He did not say one word of that. He in fact addressed all the amendments in this grouping in the debate, and when I asked to test the opinion of the House, there was no indication by any Member of the House that we were not testing the opinion on the whole group. I hope that, on calm reflection, the Government Chief Whip will consider that this is an unwise course to go down and one that is likely to lead to bad blood and accusations of something less than fair play. I will sit down now. We can have one more round at this, and afterwards I will speak.
Baroness Anelay of St Johns
My Lords, it may be helpful if I just point out at this stage that it is for each individual Peer to make their own view about how they present amendments. When a debate is held, it is not for the Government to warn the House as to whether any amendments may be consequential if the Government lose a Division. That is not how this House has been run. It has been a matter for those in charge of an amendment to be able to determine its fate and then to give advice to the House as to whether it considers other matters consequential. I have made it clear that the Government do not consider Amendments 15 and 16 to be consequential on Amendment 14. That is exactly the procedure that the noble Lord, Lord Bassam, would have carried out when he was the Government Chief Whip, because it is the way that this House works. It is not for the Government at the beginning of each debate to say that a number of amendments are grouped together and, if the House decides on the first of the amendments, we will not consider the rest consequential. It is for the person bringing the debate to make that statement.
However, I can feel the strength of feeling on some Benches that noble Lords wish, in a sense, to change the way in which this House works on the hoof, which is what the request is today. I am going to listen to that. The House has heard the argument. It is a matter that will need to be considered by the usual channels and perhaps the Procedure Committee. If the House is to change the way that it groups amendments and then deals with consequential amendments, it should be done after calm consideration; it cannot be done here and now.
The Government will not object to the noble Lord, Lord Hannay, moving his next two amendments, although I state again that I do not accept the policy that he proposes within them. That should not be taken as proof that the Government consider them consequential or in any way acceptable. On that basis, the House can proceed knowing the Government’s view that the remainder of the amendments in this group are not acceptable. We will not resist them, because the House has already been tested in its patience almost beyond endurance by the length of this debate on Report.
Lord Bassam of Brighton
My Lords, I have great respect for the noble Baroness, Lady Anelay, in these matters. While it is clear that she disagrees with the views being expressed around the House, she has acknowledged that, on this occasion, it would perhaps be wise to draw a line under where we are so that we can move on. It would also be wise for this matter to be one of those issues to which both the usual channels and the Procedure Committee should give further consideration. I can see that there is cause for question and dispute, although I take the view which has been expressed on this side of the House. However, I thank the Minister for clarifying issues for the House in the way in which she latterly has.
Lord Hannay of Chiswick
My Lords, I thank the Chief Whip for having come to a very statesmanlike conclusion on this matter. I shall certainly not say anything to exacerbate matters—quite the contrary. I have always found the Chief Whip to be a very good person who has helped the House in its deliberations. In this last decision that she has taken, she has once again done that. Since we are talking about the European Union, perhaps it might be the moment to bring out that most time-honoured of phrases used in all European Union agreements: this agreement creates no precedent.
Amendments 15 to 21
Lord Hannay of Chiswick
“( ) Where the European Council has recommended to the member States the adoption of a decision under Article 42(2) of TEU in relation to a common EU defence which is not covered by subsection (2), a Minister of the Crown may not notify the European Council that the decision is adopted by the United Kingdom unless the decision is approved by Act of Parliament.”
“( ) A Minister of the Crown may not vote in favour of or otherwise permit a decision under Article 140(3) of TFEU which would make the euro the currency of the United Kingdom unless—
(a) the draft decision is approved by Act of Parliament, and(b) the referendum condition is met.”
“(3A) A Minister of the Crown may not vote in favour of or otherwise permit a decision under Article 4 of the Schengen Protocol that removes any border control of the United Kingdom unless—
(a) the draft decision is approved by Act of Parliament, and(b) the referendum condition is met.(3B) In subsection (3A) “the Schengen Protocol” means the Protocol (No. 19) on the Schengen acquis integrated into the framework of the European Union, annexed to TEU and TFEU.”
Lord Kerr of Kinlochard
“Decision to join the euro
(1) No notification shall be given to the Council of the European Communities that the United Kingdom intends to move to the third stage of economic and monetary union (in accordance with the Protocol on certain provisions relating to the United Kingdom adopted at Maastricht on 7th February 1992) unless—
(a) the notification is approved by Act of Parliament, and(b) the referendum condition is met.(2) The referendum condition is that set out in section 3(2), with references to a decision being read for the purposes of subsection (1) as references to a notification.”
Lord Kerr of Kinlochard
This is a slightly different order of amendment from those that we have just considered. I fear that it is Osric or Malvolio, but it is not much ado. It does not address any of the great questions that we have been debating. I promise your Lordships that I shall not mention Burke versus Rousseau. I promise you that it has nothing to do with the underlying debate about flexibility versus dealing with the disconnect; it has nothing to do with whether there should be a referendum should the Government wish us to join the euro—that is agreed—it is merely about the timing of the referendum in relation to the process of our joining the euro.
The Bill ties the referendum to a decision under Article 140(3) of the TFEU, which irrevocably fixes the rate at which the euro shall be substituted for sterling and takes the other measures necessary for the introduction of the euro as the single currency of the United Kingdom. It explains that this will be a proposal from the Commission which will be the subject of consultation with the European Central Bank and then decided by a unanimous decision of the existing eurozone member states and, of course, the UK.
The Government say that the referendum on our joining the union should be taken on that draft decision about the modalities and the rate. My contention has been—I spoke on this matter at Second Reading and on our fifth day in Committee—that to wait until there is a negotiated draft decision on the modalities of joining the euro and the rate at which we join would be a mistake. I argue that the decision that is appropriate to a referendum is on whether the pound is to be replaced by the euro, not the decision, as in the EU text drafted by the Commission, on the detailed arrangements for the transition, the timetable or the rate. My contention is that the referendum should be earlier in the process and not the last stage.
I was grateful to the Minister for a letter which he sent me and copied to a number of other noble Lords this morning dealing with my arguments at Second Reading. His contention is—and I hope that I in no way misinterpret his letter—that it would be possible for the Government of the day to prepare a draft decision on the modalities before making the initial notification to the Council and Commission in Brussels and make that text available during the referendum campaign. He states in the letter that the “detail of the decisions” could be prepared,
“prior to the UK’s initial notification to the EU of its intention to adopt the euro. The question of the UK’s notification would then be subject to a referendum, by the time of which a draft decision … would be available for public discussion”,
and,
“form part of the public’s consideration”.
I do not want to exaggerate the difference between us; my point is rather small. I accept that the sequence that the Minister has set out might work; I am not saying that it is unworkable. What I am saying is that it is a little unwise.
The process in Brussels starts with a notification by the member state that wishes to suppress its currency and join the euro. When that is received, it is the task of the Commission to make the proposal, the ECB in Frankfurt to express a view on it and the Council to reach a decision. On the Minister’s scenario, we would draft it here. I confess that I can think of several precedents where it has been possible to get the Commission to put forward a text precisely in the language which the British Government wanted it to do—I happened to glance at the noble Lord, Lord Lamont of Lerwick, as I said that. I can think of no precedent for us publicising such a text in advance, passing it by Act of Parliament, as we would do, making it subject to a referendum and still hoping to persuade the Commission to present it as its own. Nor can I think of anything more likely to risk some discussion among the existing eurozone member states than our announcing the rate at which our currency was going to join theirs and giving it to them to buy—giving them the text, the decision, the modalities, the transition, the timetable. One would expect to go through some process of negotiation. It would be easier for everyone to save face if the text had not been published in advance from the start.
Lord Garel-Jones
As the noble Lord, Lord Kerr, has already said—he has more experience than me—there are three very distinguished ex-Chancellors sitting below me. Would not the rate at which we enter—such a delicate matter as far as markets are concerned—normally be decided after markets had closed, say on a Friday, and revealed before markets opened on Monday? The risk of doing it any other way would be substantial. Perhaps former Chancellors have something to say on the matter.
Lord Kerr of Kinlochard
I agree with the noble Lord, Lord Garel-Jones. I was Private Secretary to the noble and learned Lord, Lord Howe of Aberavon, when he used to chair EMS realignment conferences as Chancellor of the Exchequer when we were not a member of the EMS. The standard form is exactly as the noble Lord, Lord Garel-Jones, lays down. One tries to avoid a market rumour on a Friday—that would be quite difficult if we had held a referendum on the Thursday—ECOFIN would meet on the Saturday, and one would have a decision on the rate very early on Monday morning or late Sunday night as the Japanese markets open. In this case it would be highly desirable to move fast after our referendum because there would be a lot of movement in the market. However, if you have decided that the rate is to be a matter for an Act of Parliament and a referendum, you are stuck with several months of volatile movement.
Lord Lea of Crondall
I wonder if there is a special case in this. Some of us approach this question from the hypothetical case that in a few years we might join the euro when it has parity with the pound. It might be relevant to the referendum that people might think, “If you can’t beat them, join them. It’s been around a long time—you might as well join”. Frankly, that is the way referendum decisions are probably made—in the pub. We are talking about making something quite technical into a demotic sort of fact.
Might the discussion in the press get a debate going? Something like the new clause proposed by the noble Lord, Lord Kerr, might be relevant, maybe with some adjustment, to the idea that we need to have the proposition about parity with the euro as part of the question. Could somebody enlighten me as to how that scenario—it is probable rather than possible; it has some common sense about it—would fit with this Bill and with the amendment?
Lord Howe of Aberavon
Since my name stands on the Marshalled List below that of the noble Lord, Lord Kerr, it is right that I should intervene at this point. There is a certain diffidence about my approach, because I am in the presence of two propositions with which I have been closely familiar for a very long time indeed. I refer personally to the noble Lord. As he has already hinted, our relationship with each other is antique. I first came across him as a bright young man in my early days as Chancellor of the Exchequer; he did not necessarily appear to know a great deal about the Treasury or economics at that stage. I learnt that he was on secondment from the Foreign and Commonwealth Office. He was already serving me very well in the more sophisticated Treasury environment and therefore in due course became my principal private secretary in that department. He continued in that job to serve my noble friend Lord Lawson. I do not think that he lasted in that humble job for long enough to be with my noble friend Lord Lamont. Certainly, we came to establish a respect for each other and a familiarity.
The noble Lord is a young creature in my memory, who has already made a lucid and compact presentation to this debate, which is frankly not a hugely politically controversial one. It is a debate directed to the ostensible, practical way of approaching this particular proposition —our accession to what used to be called the European monetary system. That also is a symbol of my antiquity. My two noble friends Lord Lamont and Lord Lawson, who are alongside me, will not need much prompting to remember that our manifesto for the European 1979 election, preceding our own manifesto for the general election later on, had this quotation:
“We regret the Labour Government’s decision—alone amongst the Nine—not to become a full member of the new European Monetary System. We support the objectives of the new system, which are currency stability in Europe and closer co-ordination of national economic policies, and we shall look for ways in which Britain can take her rightful place within it”.
I am still looking, with an enthusiasm that has fluctuated over the years, as the stability of the currency has fluctuated as well.
In this context, I support the amendment. Although my relationship with the ERM, as it was then called, has been insecure, it was the cause of the less than friendly relationships between my noble friend Lord Lawson and myself and our noble friend Lady Thatcher before the Madrid summit, where our paths certainly divided. Remarkably, not many months after I had been subsequently moved on from the Foreign Office to become Leader of the House of Commons, a decision was taken for us to enter the European monetary system—
Lord Howe of Aberavon
Not at this point, in the middle of a sentence, although I have often given way to my noble friend in circumstances like this.
The news that we were joining the system reached me in rather a remarkable way. In my role as Leader of the Commons, on that day it was my job to go to Balmoral with a number of ministerial colleagues for a formal meeting for which I was Lord President of the Council. When I arrived in the presence of Her Majesty, before having a chance to talk to anybody else, her first question to me was, “What do you think of the news today, Sir Geoffrey?” I said, “What news, your Majesty?” She said, “Haven’t you heard?” I had not, indeed, but we had joined the European monetary system on that day. Although my private office in London had tried to get the message to me before I met Her Majesty, that had failed. So I found the whole thing embarrassing—but I was in a way a pioneer, because I first commended it to the other place as long ago as when I was Shadow Chancellor, on 29 November 1978. So I am quite impatient to see it fulfilled, as long as it is fulfilled on the right terms at the right time, but fortunately that is not for me to decide.
I see my noble friend is looking anxious. I have said all I need to say—
Lord Lawson of Blaby
I am sure that the whole House is fascinated by my noble friend’s trip down memory lane. I share a number of those memories with him, including sharing the noble Lord, Lord Kerr, as principal private secretary when I was Chancellor of the Exchequer. He was the first of a number of principal private secretaries whom I had as Chancellor, because I was there for quite a time. They were all good in different ways, but none of them was anything like as Machiavellian as the noble Lord, Lord Kerr. That makes one wonder what he is really up to with this amendment.
This trip down memory lane, fascinating as it was, is about the exchange rate mechanism of the European monetary system, which is a currency arrangement. This debate is about abandoning your own currency. There is absolutely no similarity whatever. So although I say with great respect and affection for my noble friend that what he said was of interest, it has absolutely no relevance to the amendment that we are discussing.
Lord Howe of Aberavon
With great respect to my noble friend, who always has a more ruthless and intellectual analysis of these questions than I do, it is broadly speaking the same thing. It was important, while that was the question, whether or not we joined the monetary exchange system; it is even more important whether we join the euro. Either way, we have reached the point where there has been a general acceptance of the need for a referendum on our accession to that currency. That arises not within the context of this Bill or this debate alone but has been on the agenda for a long time. The only question that we are actually debating now is the rather technical one of when precisely it should be required in the context.
I see my noble friend Lord Howell looking at me. When I reflect on his wisdom over many years, I am sure when he comes to wind up that he will recognise that is the flavour of the decision. Perhaps he is not winding up—he may be too nervous to handle this issue.
I am more than content to follow the wisdom and enlightenment of that splendid retired principal private secretary sitting over there. It was quite fun when we were together and I was presiding over the realignment of the European monetary system. It was quite nerve-wracking. We had one marvellously exciting day when it was agreed between the Germans and the French that there should be a 9 per cent realignment between those two currencies—2 per cent up and 7 down, or 3 per cent and 6 per cent down. That question, unhappily, for the first and only time, ran into a time when the currency markets were open on a Monday morning. That was our only failure. Apart from that, I am confident to give my backing to the noble Lord, Lord Kerr of—I can never remember the other half.
Baroness Williams of Crosby
My Lords, I am reluctant to intervene, even briefly, in this marvellous ballet of Chancellors, which has taught us all a very great deal. I apologise for having stepped in before the noble Lord, Lord Lamont, because I am sure he too will have a major contribution to make.
I want to raise one other issue before we move on to what one hopes will be the final remarkable occasion of this ballet, which we will all appreciate much. I want to talk for a moment, if I may, about being straightforward about the implications of this amendment. The noble Lord, Lord Kerr, talked with a degree of technicality I am incapable of following, and I am sure that he is probably right. It looks as if his former Chancellors, all of whom he managed to be a mentor to, will give him the full support that he needs on this amendment.
My point reflects more on our debate up to this point. We are showing an inclination to look more at the ways in which we can escape from some of the consequences of the growing interdependency of the world economy of which we are part. Quite simply, we all know that it is highly unlikely that there will be movement under this Government towards the eurozone or the euro. It will be important to take account in the future of the amendment of the noble Lord, Lord Kerr.
We will not be able to escape the presence and the problems of the euro by not joining it. I recognise that most people in this Parliament and probably most people in the country at the moment would not wish to join the euro. However, I also recognise that the euro’s future and its strength are of crucial importance to this country whether we join or not. We now do something like half our trade with the eurozone. The positions taken by the eurozone are of major influence in global financial meetings. Therefore, although we may not belong to it we do not escape all the consequences of it. We should make it quite clear as we continue to discuss this part of the Bill that time and again we will be caught in the gradually increasing interdependency of the economic world whether or not we happen to already belong to some of its institutions.
Why did we help to support the Irish in the desperate situation that they encountered last year? Quite simply because there were so many British interests—banking interests, shareholder interests—affected by what happened to the banks of the Republic of Ireland that we felt it irresponsible and unwise to stay out of the discussions about it. In just the same way, we will find it irresponsible and unwise to regard the possibility of a major crack in the eurozone between its richer and poorer nations as if it did not in any way affect us.
We know already how close this is. Already there is much closer investigation of the European stability pact, with the possibility of mounting greater surveillance on those who are within it as well as the possibility of moving towards some degree of control over the group of countries within the eurozone. I will not go into all that now because there is not time and it is not appropriate, except to say very directly that this is bound to have implications for Britain as well. We simply cannot stay wholly outside these things.
When my noble friend Lord Goodhart was talking earlier about the European prosecutor’s office, one of the things he might well have pointed out, though he was too nice to do so, was that already we in this country had been caught up in the OECD’s Financial Action Task Force very directly on the issue of when we moved and finally passed the bribery convention. We cannot escape from some of the massive international institutions—the G20, the OECD and many more—which are bound to affect our sovereign right to do as we will. To pretend that we do not live in such a world, that it is not becoming more and more that kind of world, is to live in a world of illusion which we cannot possibly afford to. I simply make the point on this discussion on the euro that we have to look all the way through at how the United Kingdom will survive, strengthen and prosper in a world which, like it or not, is becoming increasingly global, increasingly interdependent and increasingly without room for people taking pure sovereign attitudes because those are no longer possible, whether you live in China, the United States or anywhere else.
Lord Martin of Springburn
I thank the noble Baroness. I have listened to her not only here but in the other place and I have always had great respect for what she has to say.
I recall when we spoke here about the help that we would give Ireland, a country of which I am very fond, and everyone in this House, to their credit, supported that move. However, there is a big difference between helping out a friend and neighbour and taking on the same currency as that neighbour. The men and women, particularly in the west of Scotland, which I know well and which is so near Ireland, hear the stories of how difficult things became for Ireland when they entered the euro and gave up their punt. Those stories will have a big impact on any decision. I do not think that anyone, any Member of Parliament in the House of Commons, would want to join the euro at this particular stage.
Baroness Williams of Crosby
I agree with the noble Lord, Lord Martin, but I think he misunderstood my point. I was not advocating that we join the euro—indeed, I went so far as to say that I saw no possibility in the near future of our doing so or even wishing to do so. My point was that we cannot walk away from the plight of Ireland because we do not happen to belong to the euro. We have to address those issues whether or not we belong to the euro, and that is an issue on which I would have thought the noble Lord and I would find ourselves sharing a very strong sense of agreement.
Lord Lamont of Lerwick
My Lords, I hope the noble Baroness, Lady Williams, will forgive me if I do not entirely follow her down the road of her argument and her thoughts. Of course I agree that what happens to the euro has a profound impact on us and I certainly want to see the crisis resolved in as orderly a manner as possible.
I shall be extremely brief. I am not intervening in this debate simply because two other Chancellors have spoken, although I did feel under a certain obligation, like both of them, to speak when the noble Lord, Lord Kerr, had tabled this amendment—not only tabled this amendment but talked to me, dare I say it, incessantly in the bars about it and written me a letter about it. I have the greatest respect for the noble Lord, Lord Kerr. In fact, he, I and, above all, the Prime Minister, John Major, all worked hard over the piece of paper that we are debating now: Protocol 15 of the Maastricht treaty. Although I spent a large part of my life poring over this, I have spent what seems an eternity this afternoon poring over it again trying to work out what on earth it means and trying to work out how some parts that seem to contradict it actually come together. Of course I owe it to the noble Lord to consider very seriously what he said, because he gave me great support when I was Chancellor, although when I knew that the noble Lord was putting forward this amendment, the story of Talleyrand came to mind—having been told that someone had died, he asked whatever had he done that for.
I confess that even having thought about this a little, I am not entirely convinced that there is a massive difference between the way that the noble Lord, Lord Kerr, wants to tackle it and the way that my noble and learned friend Lord Howe wants to tackle it. My noble and learned friend said that he was quite sure that I and my noble friend Lord Lawson needed no reminding that joining the ERM was in our manifesto in 1979. I confess that it was only when I became Chancellor that I expressed exasperation about the whole thing and the Permanent Secretary at the Treasury reminded me that it had been in our manifesto. It did not come quite so easily to my memory as to that of my noble and learned friend Lord Howe.
I turn to the subject of the debate. An extremely important point is that the referendum should not be about the exchange rate. Anxiety has been caused by whether Article 143 would give rise to a situation in which the actual exchange rate at which we joined the euro—perish the thought that we ever did—would be on the ballot. It is my understanding, and I hope that the noble Lord will be able to confirm this, that it does not follow that it will have to be on the ballot paper. It is an option but not essential. As I understand it, the Government are proposing a package approach. They are intending that the negotiation of the draft content of the Article 143 decision should take place before the Government formally notify the Council that it intends to adopt the euro; that is, that the negotiations should take place first. I do not see that as a great problem and I think it can be done that way. This is something which, as I understand it, has happened before.
Lord Liddle
My Lords, from the Opposition’s point of view, exotic as it may seem that we should at this moment be debating the circumstances in which we might join the euro, this Bill is intended to bind future Parliaments for a long time. Indeed, that is one of our major difficulties with it, which is why we will be moving the sunset amendments on Wednesday. However, given that it is a Bill that is intended to bind Parliaments for the future, it is important to get this right. We have listened to our colleague the noble Lord, Lord Kerr, at great length on this subject and are persuaded that he is right. The Opposition will therefore be supporting his amendment.
Lord Wallace of Saltaire
My Lords, no Parliament can bind its successors. That is one of the principles of parliamentary sovereignty. I am grateful to the noble Lord, Lord Kerr of Kinlochard, for following up the previous Committee discussion with his letter of 19 May, in which he outlined his concerns in more detail: namely, that Clause 6(5)(e) of the Bill might be legally defective. We have therefore taken careful legal advice. The Government have now been able to reply to that letter and a copy has been sent to those of your Lordships who participated in the Committee debates. A copy of the letter has also been deposited in the Library of the House. On the basis of that legal advice, I hope to reassure your Lordships that we do not judge there to be a risk of more than one referendum on the euro being required and that the provision does what we and noble Lords on all sides of your Lordships’ House intend it to do.
Unlike other member states, the UK is not under an obligation to adopt the euro. Protocol 15 of the consolidated treaty begins with the clear statement that the United Kingdom,
“shall not be obliged or committed to adopt the euro without a separate decision to do so by its government and Parliament”.
That protocol, which needs to be read alongside Article 140 in the British case, sets out in detail the steps that must be satisfied before the UK could adopt the euro. Paragraph 9 of the protocol states that after the UK has notified,
“the Council … of its intention to adopt the euro”,
as its currency,
“decisions in accordance with the procedure laid down in Article 140(1) and (2)”,
of the TFEU must first be taken, to which protocol 13 is also relevant.
The process starts in practice by examining convergence criteria as set out in Article 140(2). That is bound to happen before the UK formally notifies, even if it is not part of the formal procedure. It might be helpful to consider what needs to be done following notification of our intention to join the euro. It is not a matter of negotiating terms of entry but of economic criteria being satisfied in terms of the treaty. The final step of the process is to take a decision in accordance with the procedure laid down in Article 140(3) of the TFEU. Paragraph 9(c) of Protocol 15 commits the Council,
“in accordance with the procedure laid down in Article 140(3)”,
to “take all other necessary” measures to enable the UK “to adopt the euro”.
Clause 6(5)(e) is designed to catch this final step in the process, thus ensuring that as much of the complex detail as possible is available to Parliament and the public in deciding whether to join, while giving the Government of the day the flexibility to set the timetable for when to seek approval from Parliament and the British people. If I may say so, the noble Lord, Lord Kerr, might almost be old enough to remember the first applications for Britain to join what was then the European Economic Community. Before formal application was made, a number of informal negotiations established the terms for potential negotiation. We envisage something of that in this situation. It will allow the Government to seek a referendum when sufficient detail is known about the circumstances and conditions of entry, but will allow the UK to seek approval from the people before the exact point at which the exchange rate between the euro and the pound would be set. We all recognise that the exact exchange rate will have to be set at the end of the process to avoid market turmoil and speculation against the rates declared.
In contrast, the amendment proposed by the noble Lord would require the referendum to be held and approval given before the UK could notify the EU that it intended to adopt the euro. The Bill nevertheless allows for matters to be arranged in this way if the Government so wished, again providing the degree of flexibility which noble Lords, including the noble Lord, Lord Kerr, have so often called for on this Bill. It would be open to the Government of the day to undertake negotiations with the EU in line with paragraph 9 of the protocol before the UK issued its notification. This would allow draft decisions under Article 140(3) on the rate at which the euro would be substituted for sterling and other measures necessary for its introduction to be prepared—with perhaps a range of rates being negotiated—before notifying our final intention to join the euro.
On that basis, I do not consider that the Bill would lead to what we all view as an unwelcome situation in which two referendums would have to be held on the euro: the first on the UK notifying that it wished to join; the second in a rushed weekend on determining the specific question of the exact rate at which the euro is to be exchanged for the pound. Instead, it is possible under the Bill for the Government to submit the question of adopting the euro to a single referendum.
Lord Lawson of Blaby
My noble friend mentioned the lawyers early on and I am quite sure that the lawyers worked this out. To me, this is too redolent of lawyers. The practicalities might in fact tell the other way. The noble Lord, Lord Kerr, for whom I have a high regard as I indicated earlier, has raised a point that at least merits further thought and discussion. Quite apart from the problems that might or might not occur on the currency markets, it would be very confusing to the British people if there were no referendum on the principle of joining the euro at the first stage, when the Government of the day had decided that.
My noble friend the Minister said that this can be played either way, early or late, but we cannot know what a future Government might do. They might decide to play it late, which would not be desirable. It would be most undesirable for, and, as I say, very confusing to, the people, who would not quite understand why it was happening in that way. It might therefore be sensible if the noble Lord, Lord Kerr, could be persuaded to withdraw his amendment on an undertaking by the Government that they will give this matter further thought. That would be the right way forward.
Lord Wallace of Saltaire
I am very happy to give an assurance that the Government will look at this further, but we have consulted—we are dealing with legislation, so it is entirely appropriate to consult—lawyers on the implications of that legislation. The process is long by which what necessarily begins with informal exploration becomes formal notification, then, under the terms of Article 140(2), as the noble Lord, Lord Kerr, will know, entails a degree of negotiation on how far the UK meets the convergence criteria and then moves towards the final negotiation in Article 43. What we provide for under the existing arrangement is a degree of flexibility over at what stage in that process the Government put the—
Lord Hamilton of Epsom
Is not the other side of my noble friend Lord Lawson’s argument that if we take the decision in principle, we are put in a much weaker position in all subsequent negotiations because, in practice, the country has already voted in principle to go into the single currency and therefore we have to give way on many of the negotiations that follow?
Lord Wallace of Saltaire
That, of course, is partly why, in all three British applications to join the European Economic Community there were informal conversations before Britain made a formal application—we needed to know what potential terms were available before we formally declared our hand. For the reasons I have outlined, we conclude that Clause 6(5)(c) is not legally deficient and that there is no risk of the Bill requiring more than one referendum on the issue, the second referendum being on the rate at which the UK would join the single currency. I therefore urge the noble Lords to withdraw their amendment.
Lord Kerr of Kinlochard
I always listen very carefully to what my former bosses say and I take very seriously the advice of the noble Lord, Lord Lawson, but I did not hear from the Minister any suggestion of thinking further or looking again. I agree with the noble Lord, Lord Lamont, that there is not a great deal between the Minister and me. My language, which is the language of the existing Act plus the referendum requirement, would permit the Government to do everything that the noble Lord, Lord Wallace, has said they would wish to do. It is perfectly permissive; they could do that because the notification could be done informally and the formalisation of the notification could be saved up till the end. They could do absolutely as the noble Lord, Lord Wallace, says.
Lord Wallace of Saltaire
I was using the language of the consolidated treaty. The noble Lord was using the language of the Maastricht treaty, and I suggest that the current consolidated treaty might provide the more appropriate language.
Lord Kerr of Kinlochard
I was using the language of our Act, the Act in force in this country now. I am talking the 1993 Act language, which is replicated precisely in my amendment. I am very glad to hear the Minister agree that we must avoid a second referendum and that we must avoid the crisis weekend drama, but in a plain reading the Bill says that what should be put to Parliament and the people is the draft of the decision under Article 140(3), which sets out the rate. That is the decision that we are going to take over a weekend, and it is going to be a busy weekend if ECOFIN starts on Friday, Parliament sits on Saturday and the referendum is on Sunday. It is not going to be fun.
I agree that under my language the Government could do exactly as they want. Under their language, I believe that the country would think it very odd if they did not see the draft decision including the rate, because that is what Article 140(3) of the consolidated treaty says. It uses the rate; the rate is there in the treaty. So although I regret that I have taxed your Lordships’ patience long enough, I think that I really have to test the views of the House.
The Deputy Speaker (Baroness Fookes)
My Lords, I have to announce a correction in the voting figures in Division No. 1. The correct figures are: Contents, 214, not 213 as announced; Not-Contents 209.
Contracting Out (Local Authorities Social Services Functions) (England) Order 2011
(13 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the purpose of the order is to allow local authorities taking part in two pilot programmes to contract to outside organisations certain adult social services functions conferred on them by a variety of legal provisions. The pilots are, first, adult social work practices pilots and, secondly, right to control pilots. In short, the SWP pilots will test various models of social worker-led organisations undertaking adult social care functions for which local authorities are currently statutorily responsible. The right to control pilots will test the exercise of disabled people’s right to manage the state support they receive to live their daily lives. I will explain each pilot programme in greater detail as I go along.
The Government’s vision for adult social care set out a new agenda for adult social care based on a shift of power away from the state to the citizen by putting people, personalised services and outcomes centre stage. We are committed to the devolution of decision-making close to those who are responsible for the service delivered and, wherever possible, into the hands of those who are the service beneficiaries. This is an integral component of our wider personalisation agenda. We also want to ensure that individuals, carers, families and communities work together with local services, balancing family and community action with state support. Again, this is an integral component of our big society vision.
Since 2008, the Department for Education has funded SWP pilots to deliver services for children and young people in care. The pilots have seen the creation of independent, social worker-led organisations, including social workers moving out of public sector employment to form their own employee-owned social enterprises. The pilots also co-ordinate and monitor services provided to the children and young people in the SWP. They are independent of the local authority, but work closely with it and in partnership with other providers. The local authority pays the SWPs for the services provided.
Last November, my right honourable friend the Secretary of State announced that the Government wanted to test this concept in the adult social care sector, with pilots running for two years starting this summer. The emerging evidence from the Department for Education pilots strongly suggests that both clients and staff will benefit from service delivery by SWPs. That is why we are giving local authorities this opportunity to test the potential benefits of the SWP model and adopt a completely innovative approach to delivering services for adults and their carers.
We want not only to improve the experiences and outcomes for people in vulnerable circumstances, but also to empower social workers to do their jobs effectively, and we want to reduce the unnecessary bureaucracy that so often gets in the way. The programme will bring people who need health and care support closer to those who provide the services they need by reducing bureaucracy and encouraging innovation and personalised services. It will also give social workers the freedom to run their own organisations in the way they want within the constraints of their contract with the local authority. Evidence shows that staff working in employee-owned organisations have greater job satisfaction, leading to lower staff turnover and capacity for greater innovation.
SWPs will discharge the functions of the local authority in providing adult social care services and be responsible for providing the support to people receiving services from the SWP to achieve better experiences and better outcomes. They will also be responsible for undertaking delegated social work functions, managing day-to-day support, co-ordinating and monitoring service provision, and of course this will differ between the pilot sites. The local authority will keep its strategic and corporate responsibilities and will manage the contract and partnership with the SWP. I will speak a little later about concerns that noble Lords may have about possible risks associated with the delegation of these functions.
The SWP pilots will give local authorities a unique opportunity to test the potential benefits of various models and to adopt innovative approaches to delivering services for adults and their carers. The Department of Health is providing funding in the region of £1 million to help the pilots get up and running and to provide initial support. The pilots are an opportunity to test different models to see what works well and what does not, and they will be evaluated fully both during and at the end of the two-year period.
Primary legislation specifically allowed councils taking part in the Department for Education pilot programme to delegate their statutory functions in relation to looked-after children to SWPs. There is no equivalent legislation to allow the delegation of adult social care functions. However, the Deregulation and Contracting Out Act 1994 allows the making of orders allowing such delegation, and that is why we are seeking to introduce the order under discussion today.
The right to control, introduced by the previous Government in the Welfare Reform Act 2009, gives disabled adults greater choice and control over certain state support they receive to go about their daily lives. The right is based on the principle that disabled people are the experts in their own lives and they can decide what support they need and how it should be delivered. It is essentially a variant relating solely to disabled people within the general concept of personalisation.
The right is being tested in eight local authorities in England. These trailblazers, funded by the Office for Disability Issues, will evaluate the best ways to implement the right and will be used to inform decisions about whether and how to roll out the right more widely. Disabled people accessing the right to control will have a right to be told how much money they are eligible to receive for their support. They will be able to choose, in consultation with the public authority delivering the funding stream, how that money is used to meet agreed outcomes. They will be able to choose different degrees of control over their support.
One local authority has asked us whether it could test the delegation of its statutory duty to review social care assessments to third parties such as user-led organisations. As part of their vision for adult social care, the Government have stated their expectation that by April 2013 councils will provide personal budgets for everyone eligible for ongoing social care, preferably as a direct payment. Evidence shows that people who have their circumstances reviewed by fellow service users under appropriate supervision are far more likely to have their care and support needs met to their satisfaction and to request direct payment of their personal budgets to enable them to make their own support arrangements. We were therefore happy to agree to the request and the order allows delegation of the assessment functions under Section 47 of the NHS and Community Care Act 1990, which is also available to the councils piloting SWPs.
I said earlier that I would address concerns that noble Lords might have about the powers provided by the order. I fully understand how the delegation of council functions to outside bodies might raise concerns about potential risks to service users. It is always a balancing act when people are given the freedom to try new ways of doing things with the aim of improving other people’s quality of life. On the one hand, might service users be exposed to unnecessary risks, while on the other, might they not benefit from being able to make more decisions for themselves? Functions in social work practices have to be carried out by or under the supervision of a registered social worker or, in the case of right to control, by a person with requisite competencies or qualifications. I should like to assure noble Lords that accountability for the care delivered to vulnerable people will not change. Each local authority will retain overall responsibility for the services delivered by the SWP it contracts to, just as it does in relation to other local services. In this respect, the contract between the local authority and the SWP will be critical. We expect councils to monitor closely the outcomes of the practices, identifying issues early and providing support, while allowing them the scope to innovate and make decisions about the best packages of support and services for their population. Any potential risks will, of course, be reflected in any recommendations coming out of the separate evaluations.
In conclusion, we see this order as an important marker of progress in the developing world of personalisation. On the back of persistent requests from within the sector for greater freedom of choice and control for both staff and service users, this order has the support of councils and their representatives, as well as service users and their carers. It will enable the release of new partnerships and new ways of working to the benefit of individuals and their communities as a whole. I commend the order to the House.
Baroness Thornton
My Lords, I thank the Minister for introducing the order and explaining its purpose so well. It is one of those orders the name of which belies its importance and its comprehensibility. As the Minister explained, the order is similar to one concerning children’s services from some years ago. Its purpose is designed to pilot flexibility at local authority level and test innovative approaches to delivering services to adults and their carers. As it is designed to foster new ways of delivering care on the ground with the caring and cared-for—in other words, user-led services—we would all agree that it is a good thing.
The meat of the order is in Article 3(2). Most of my questions centre on the practical details of delivery and how to ensure the safety of the adults concerned. The Minister has addressed some of those already. The noble Earl said that one local authority in the pilot involved the right to control. I wonder which authority that is, which seven authorities have been chosen and how they were chosen.
I am interested in the right to control. I should be grateful if the Minister could explain in more detail what the interface between the trailblazers funded by the ODI is. What benefits could there be to using those powers with the right to control, which is being explained in this order? I am not quite clear on how those would work. How will continued support and resources for co-production with disabled service users—an essential component of successful delivery of right to control—be maintained if there is a marriage between the two regimes?
How will the local authority authorise the third party to undertake social services functions? What criteria will they use, given that no guidance is to be made available with this order? Perhaps the Minister could paint us a picture or give us an example of that.
I should be grateful if the Minister could untangle the approved provider and independent mental capacity advocate by explaining who will be doing what under this proposed regime. Given that social work is regulated, as the Minister explained, can he confirm that that same framework will apply under this order? Can he confirm who—I assume it will be the local authority—will approve the individuals, businesses, charities and social enterprises that participate to ensure that their practice is of the highest standard when they deal with this most vulnerable sector of the community? If things are not working out properly for the person in receipt of care under this order, who would they go to and how would they do that?
Finally, if the person who is undertaking the functions under this order is not a registered social worker, what check will there be on their qualifications to carry out the functions required? I should be grateful if the Minister could explain who is undertaking the monitoring and reporting, and how long it will take. What does the Minister envisage the next steps would then be?
Lord Beecham
My Lords, in 51 years in active politics, I have never before spoken in support of the SWP. This, however, is a different SWP, and I am happy to support the initiative, which, as the Minister has rightly said, follows an equivalent process in children’s services. However, there are one or two questions that I should like to ask.
First, I assume that it will be open to council health and adult services scrutiny committees, if they wish, to look into the operation of the scheme in their individual authorities. That would be a helpful addition to the process. Secondly, it would also be helpful to be assured that the terms and conditions of those to whom this work will be contracted in adult care services will be comparable to those in current adult services departments. One does not want to see—as has sometimes happened, for example, in my own authority—the contracting out of domiciliary care services even to voluntary sector organisations that pay barely above the minimum wage. That is compared to somewhat above it, although not vastly above it, at the moment.
Thirdly, in respect of the possible formation of new bodies by local authority employees, a matter on which the Minister touched, there might be problems with the European Union procurement and competition laws. We have touched on this from time to time, and will no doubt revert to it in the event that a Bill dealing with the National Health Service comes to this House in due course. I assume that, for the purposes of these experiments, it is perhaps unnecessary to worry too much about that, but is it a factor that might have to be taken into account later?
In relation to the right to control, again, this is a sensible way to proceed. This is a matter not only for the individual and the organisation that helps him but also, I suspect, for the local authority in helping people navigate the various providers and alternative courses of action. For that matter, they must also ensure that sufficient information is available to provide value for money for the applicant. Would it be intended to extend this experiment to provision by the health service for disabled people, either from GP practices or trusts? Presumably at the moment some functions are provided by such statutory organisations as well as by the local authority. If it is not intended to bring that in at this stage, is it something that could be looked at, maybe within the trailblazers working with their local health partners, to see whether this right to control might be extended?
I am reassured to hear that monitoring will take place for individual projects but the document says:
“The Trailblazers … will evaluate the best ways to implement the Right”.
I am not sure whether that means a collective view will be taken by the trailblazers or individual trailblazers will report. In either event, who will decide, and with whom, how matters are taken forward? For example, is it the department’s intention to consult patient groups or groups representing the people affected? I assume that that is probably the case but it would be as well to have it spelt out.
Finally, we should bear in mind what currently worries so many people about Southern Cross and reflect on the difficulties that arose as a result of local authorities effectively being driven out of the provision of residential care for the elderly in the 1980s and 1990s when they became heavily dependent on largely private sector providers. I emphasise the need, whatever happens, in a mixed economy of care, which most of us support, for a local authority role to remain in provision. It is worrying that there is now little direct provision of residential care by local authorities. That leaves not just the system but, of more concern, the individuals who are in care and being looked after vulnerable to the pressures of the market. I am sure that the Minister would not wish to see problems of that kind arising so it would be helpful to be given encouragement that local authorities, in conjunction with other providers, will be able to remain on the field, as it were. As I understand it, at the moment it is not possible for people to use direct payments to procure services from their local authority. Perhaps that could be looked at in the context of these experiments as matters go forward.
Lord Lee of Trafford
My Lords, these Benches are happy to support this pilot. However, I wish to ask my noble friend one or two questions. First, will the resources currently spent by local authorities in assessing social care needs and arranging care be passed on in their entirety to the organisations to which this duty is being contracted out? If so, for how long will this contractual arrangement last? Who is conducting the independent review of the pilots and will the findings be made available to the House?
Baroness Wall of New Barnet
My Lords, I wish to pursue a matter that has already been discussed and emphasise a couple of concerns that have been raised, which I share. My noble friend referred to the treatment offered by a private consortium being threatened by the financial situation, as has just occurred. If we allow the contracting out to occur—I do not disagree with that—how can we ensure that that does not happen and that the treatment is safeguarded? A couple of noble Lords have asked how the assessment and monitoring will take place. As my noble friend Lord Beecham said, it seems that the trailblazers will also monitor the provision. That might be a bit dubious as their judgment will obviously be biased by their experiences. My noble friend Lady Thornton asked who these trailblazing local authorities are. I should be interested to know that, too.
Earl Howe
My Lords, I am very grateful to noble Lords who have spoken, particularly to the noble Baroness, Lady Thornton, for her broad welcome of the order. A great number of questions have been asked. I shall probably not be able to answer them all but I shall be happy to write to noble Lords with the detailed answers. However, I will attempt to cover as much ground as I can.
The right to control trailblazer that has requested this facility is Essex County Council. The social work practice sites are Birmingham City Council, the London Borough of Lambeth, Stoke-on-Trent City Council, North East Lincolnshire Care Trust, Shropshire County Council, Suffolk County Council and Surrey County Council.
I was asked how the SWP pilots would be put in place. The local authority will support the set-up of the SWP and the transition of people to the SWP. Once in place, the SWP will use its income under the contract with the local authority to provide services and improve the experience and outcomes of people in the SWP. As I said, the local authority will then manage the contract, monitor performance and manage the relationship as a whole. The local authority will review the contract with the SWP periodically to set new outcome targets and adjust payments. The Department of Health would expect these reviews to occur annually. In answer to my noble friend Lord Lee as to who will conduct the eventual evaluation, the workforce unit at King’s College, London, will do that. The final report will be an independent evaluation and will be published after the two-year period.
Although the local authority will remain liable for the performance of functions undertaken by the SWP, the authority will be able to sue for any breach of contract. It will work closely with the local authority and each local authority should decide what decisions it wishes the SWP to refer to it for agreement, so everything hinges on the contract. How will the outcomes of the SWP be managed? The local authority needs to maintain a close relationship with the SWP, as I have said, but it also needs to allow the SWP scope to innovate and make decisions about the best packages of support and services for the people involved—the service users—and how to provide these, so there is a delicate balance to be struck here. The department would expect the local authority to monitor outcomes, identify issues early and provide support, while allowing the SWP sufficient autonomy to decide how best to meet the needs of the people with whom it works.
The transfer process will be managed between each local authority and SWP. Where transfers take place, it is for the local authority and SWP to agree as part of their contract clear and transparent criteria for deciding who should transfer. It would be for local authorities to decide where social workers could be most effectively deployed. Ideally, SWPs will provide out-of-hours support directly to ensure continuity of services, but if the SWP is small, and particularly while it is getting started, it could choose to purchase out-of-hours support from the local authority.
The noble Baroness, Lady Thornton, asked how these contracts will operate if there is no guidance. I hope that what I have already said about the importance of the contract has answered that. The contract that each local authority has with an SWP will specify the scope and feasibility of operation of each SWP.
My noble friend Lord Lee asked whether the terms and conditions being contracted out are comparable to current conditions. That would depend on the individual SWP and the individual local authority. There will be flexibility here. We are encouraging diversity so that we can find out from different models what works best.
The noble Baroness, Lady Thornton, asked how the SWP would link with the approved provider for independent mental capacity advocates. The SWP would have access to whatever independent mental capacity advocate services exist locally. I think that there will be no bar to that. She also referred to the very important issue of safeguarding and how that would be ensured. Any body that is carrying out regulated activities in adult social care must be registered with the CQC. We are working with the seven councils to establish which sites are carrying out regulated activities. It is likely that most will need to be registered with the CQC, but the pilots vary greatly. They may therefore be subject to different registration requirements. Ultimately, it is the responsibility of councils to ensure that SWPs, if applicable, are registered individually with the CQC. Organisations registered with the CQC are required by regulations to carry out CRB checks on staff who have contact with patients or service users. Keeping patients and service users safe involves providing training, regular supervision and development and feedback from patients, service users and relatives. It will be for the councils and the SWPs to ensure that CRB checks are carried out as appropriate. The noble Lord, Lord Beecham, asked whether the overview and scrutiny committees would have a role here. I see every reason why they should take an interest in what is happening. No doubt the message will go out that they should be encouraged to pay particular attention to these pilots.
The noble Baroness, Lady Wall, asked how we can ensure that SWPs do not go down the same path as providers such as Southern Cross. We do not, of course, yet know the final models of the SWP pilots and whether there is likely to be much, if any, private sector involvement. Local authorities can decide what they put in their contracts with the SWP pilots to ensure that those risks are mitigated.
Disabled people taking part in the right to control trailblazers will have a legal right to be told how much support they are eligible to receive, and to decide and agree with the public body the outcomes they want to achieve, based on the objectives of the funding streams they access. They will have a right to choice and control over the support they receive, and be able to choose how they receive the support.
Some aspects of the right to control process, such as the extent to which administrative processes are aligned, will be subject to some flexibility and may be different in each trailblazer. However, the broad framework of how the right to control will be tested is already agreed. Disabled people accessing the right to control will be told how much money they are eligible to receive for their support. They will be able to choose, in consultation with the public authority delivering the funding stream, how that money is used to meet agreed outcomes. I should say for the information of noble Lords that the seven trailblazing local authorities are Barnsley Metropolitan Borough Council, Sheffield City Council, Essex County Council, Greater Manchester, Leicester City Council, the London Borough of Barnet, the London Borough of Newham and Surrey County Council.
I was asked whether the trailblazers will be consulting with service users. The answer is yes—the evaluation will include consultation with service users.
A number of other issues were raised in the debate and I shall cover just one before I conclude. The noble Lord, Lord Beecham, asked whether direct payments were prohibited from buying council services in this context. There are no plans to change current arrangements and, indeed, the Law Commission, in its recent report on social care, did not recommend a change in this respect.
Once again, I am grateful to noble Lords for their pertinent questions and comments. As I mentioned at the beginning, I shall endeavour to respond to those questions that I have not covered in my reply.
Motion agreed.
European Union Bill
(13 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Davies of Stamford
Lord Davies of Stamford
My Lords, it would be possible to make a well founded and persuasive argument to get rid of all the provisions of Schedule 1. At this point, however, I will focus on one provision where there is an absolutely demonstrable, concrete, national, economic and industrial issue at stake. I hope I shall persuade the House, and indeed the Government, that there is more than good reason to think again about this element of Schedule 1. The House will be well aware that military equipment is one of the rare exceptions and exemptions from the single market. That is achieved by Article 346(1)(b) of the treaty, which states:
“any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes”.
That is an explicitly protectionist measure that allows individual member states to protect their own markets, as in generations gone by before the single market, or Common Market, were ever conceived of. It is an anomaly in what is otherwise a free market, and it is very difficult for some member states to give this up because they are protecting industries with considerable lobbying potential in their own countries.
I have no financial interest to declare in the British defence industry. When I became Defence Procurement Minister, I made sure that I had no shares in defence industries and that has remained the case. I have not developed any relationships with the defence industry since I left government. Indeed, it would have been impossible under the rules for me to have done so in the last year. I acknowledge an admiration for the British defence industry, which I was able in the course of my job to get to know extremely well. The technologies that it has developed over the years, many of which you cannot even talk about the existence of let alone describe the nature of, are extraordinary. We really are at the front line in this area of technology. It is not surprising, and a demonstrable fact, that the British defence industry is by far and away the largest in turnover in the European Union. In other words, we are the losers through this protectionism.
The EU market for defence procurement is roughly €70 billion, say £55 billion, or something of that order. Our own element in that is about £15 billion—say €18 billion—so we are talking about a potential market of some €50 billion to €55 billion. The French, who are very protectionist and make considerable use of Article 346, have about the same spend. The Germans and the Italians have rather less and are also very protectionist. Everyone else in the EU adds up to that sum. There is at stake a market for something like €55 billion, or £45 billion to £50 billion. Of its own nature and operating against the largest most productive sector in the EU, this protectionism deprives us of the opportunities for sales and therefore for employment and for investment, not least for sharing the considerable overheads of R&D with the Ministry of Defence, which is very much in the interests of this country—the interests of defence, the taxpayer and industry.
It might be thought—indeed, I hope it would be—that any rational Government, and I am sure that the coalition Government are in no sense irrational, would want to seize any opportunity that could be identified to deal with that anomaly in the single market. We have been pioneers in, first, opening the single market initiative under Margaret Thatcher and Lord Cockfield and, subsequently, in pushing through the opening of financial services, intellectual property and many other areas in which there was hesitation on the part of our partners in moving forward to implement the principles of the single market.
One would assume that it would be common ground between all the major political parties, in addressing the electorate in our own ways and in addressing the economic interests of the nation, to want to get rid of the protectionist barriers that face that particularly important industry. I think it would also be common ground to agree that the defence industry, perhaps after pharmaceuticals and biochemistry, is the area of manufacturing in which we have the greatest competitive technological advantages in the world market. It is very important, and we ought to be able to come, more or less, to a consensus on what should be done about it.
How do you generate an opportunity to get rid of a form of protectionism when certain member states find themselves subject to considerable pressures and lobbies and find it difficult to move? It is difficult for some of them to vote openly, clearly and decisively for the abolition of Article 346. As I said in Committee, and as all of us with experience of negotiations in any context will know, often the best way to solve a substantive problem or make progress on a substantive issue, especially in a complex negotiation where people have strong and differing interests at the outset, is by a procedural route. I gave the example of setting up a committee to solve the problem rather than taking a decision around the board table, the Council of Ministers, or whatever. The qualified majority voting system is undoubtedly a very useful weapon that has proved its worth over the past generation in achieving substantive progress through procedural routes.
I can see one or two noble Lords looking for the text of the provision in Schedule 1, so let me say that it is on page 14, the penultimate element in Schedule 1, and states:
“Article 346(2) (changes to list of military products exempt from internal market provisions)”.
The provision does exactly the opposite of what I suggest is the obvious thing to be done in the national interest. It makes it impossible for us to agree to, let alone to propose, QMV to decide the future of that derogation from the single market without a referendum. We are putting a ball around our own necks, we are shooting ourselves in the foot, with that provision. It makes no sense at all. Where we have an interest in liberalising trade—I think I would carry a number of people on the opposite side with me in saying that we surely do—and where that means might be the only way to make progress in the area, as has proved to be the case in other similarly difficult areas in the past, we are preventing ourselves from doing so.
We all know that if a British Minister is not allowed to agree and says, “Well, we've got to have a referendum beforehand”, that in effect denies us the chance to seize the opportunity rapidly. It might need to be seized there and then, because if it is not you have lost it. You have your interlocutors in a favourable frame of mind in a particular situation when they agree to resolve the question through QMV. That element in Schedule 1 is entirely perverse. It goes in exactly the opposite direction from that in which any responsible Government would want to go. It is contrary to rationality and good sense; it is directly contrary to the national interest.
The Government have been very statesmanlike in saying in the course of our debates that they will listen to new arguments, that their minds are not closed. Both noble Lords, Lord Wallace and Lord Howell, have said that in answer to me and to other noble Lords. I am sure that that is true, because they are both sophisticated men of the world who know that one always needs to look carefully at these things. When you have a schedule of 56 items, it is almost certain that something somewhere will have crept through when it should not really be there, and it needs to be looked at again.
I claim no monopoly of wisdom in this matter, but I raise it because, as I said, I have a background in this subject and I was struck very forcibly on reading the text of the Bill. I hope that on the basis of the considerations that I have just set out there will be scope to reconsider this important matter. It is important for a major British industry which I think we all wish to support in every way we can. I beg to move.
Baroness Nicholson of Winterbourne
In moving his amendment, the noble Lord has not explained to my satisfaction, or perhaps to the satisfaction of others, why the removal of these two lines from the text of the Bill, which would result in QMV rather than a veto on the protectionism of military products, would assist the development of the free market, as he and I wish to see. From my experience in Brussels, sometimes sitting in the chair on common security and defence policy debates, it was very clear that some member states—particularly some of the smaller and newer ones—wished to pursue protectionism to an extent that would have been extraordinarily unhelpful both to the defence of the European Union and to the wider defence policies of countries such as the United Kingdom. In other words, we need the veto and I cannot understand why the noble Lord wishes to remove it.
Lord Davies of Stamford
Perhaps I may try to help the noble Baroness. Of course I did not suggest that adopting QMV in this case would guarantee that we would solve the problem. I said that the problem had not been solved until now but an opportunity might arise to solve it via QMV. Many problems that were solved by QMV did not prove to be solvable when each individual member state was put on the spot with a requirement that it make an explicit and public declaration and hold a public vote in favour of a change, particularly when the change was to remove protectionist support for a domestic industry. I am saying simply that it would be quite perverse to deny ourselves the opportunity of using QMV as an instrument. Of course, there is no guarantee that it would work, but that is no reason for not trying it or keeping it open as an instrument that we might need.
Baroness Nicholson of Winterbourne
My point was purely that from my experience and that of others in Brussels, a number of member states wish to keep protectionism. As the noble Lord has already clearly indicated, it is in Britain’s interests to have an open system, and in the case of the defence of the European Union and beyond it is in all our interests to have an open system. I cannot see how QMV will assist an open system when Britain may need a veto.
Since the noble Lord was involved in the defence industry at an earlier stage in his political career, the European Union has widened immensely. Some of the newest member states have had a significant interest in keeping protectionism moving in the defence industry, with some of them having very large interests in it. The contracts are massive; the potential for dealings that are less than transparent is huge, as some of the biggest contracts on the globe are before individual member states; and one of the great strengths of the potential of the EU common security and defence policy is an open system of military equipment, which would stop the protectionism to which the noble Lord rightly refers. I have failed to be convinced so far by what the noble Lord has said about the loss of the veto and the introduction of QMV.
Lord Hannay of Chiswick
I think that the noble Baroness has the wrong end of the stick. I do not see how on earth Britain keeping a veto on a matter where there is no liberalisation will help us to achieve liberalisation. What are we going to veto—protectionist moves by other member states? This is absurd; it is another world. To do what the noble Lord, Lord Davies, suggests does not involve a decision to move to QMV. The noble Baroness implies that if we took the two lines out of the Bill, we would automatically and at that moment accept QMV. We are not doing that; we are simply making it possible, at a putative future moment and if we felt that it was to our advantage, to do so by means of simple legislation in Parliament without a referendum.
Baroness Nicholson of Winterbourne
I accept that the noble Lord, Lord Hannay, wishes to exemplify the argument that the noble Lord, Lord Davies of Stamford, has already put forward—in which case it must be rather weak. I cannot see why bringing in QMV is a better option than the veto, which I prefer. I cannot see how the proposal will strengthen the hand of the United Kingdom. Although I have a long and personal friendship—and indeed a good neighbourliness—with the noble Lord, Lord Davies of Stamford, and a high regard for his massive intellect and his knowledge of the defence industry, none the less he has failed to convince me.
Lord Hamilton of Epsom
Does my noble friend not feel that if the argument of the noble Lord, Lord Davies of Stamford, is so compelling, he would probably win it in a referendum?
Baroness Nicholson of Winterbourne
I must admit that this is a very compelling argument from this side of the House. I am sure that the noble Lords, Lord Davies and Lord Hannay, will attempt to knock it down, but I suspect that they will not succeed.
Lord Triesman
My Lords, it may dismay the House, but I will pick up from the point where this argument has arrived. Like the noble Lord, Lord Hannay, when I looked at the proposal put forward by my noble friend Lord Davies of Stamford, it did not seem to me that the consequence of it was that there would be an immediate move without any further ado to qualified majority voting. Instead, there would be a very substantial process before anybody got there, even if they had the desire to get there. It seemed that whatever difficulties and barriers were raised by those who thought it best to have a closed-market system rather than an open-market system in the defence industry, it would be harder in the middle and long term for them to sustain the restriction on free markets were they to be deprived of the veto as the automatic response. In short, over a period of time—I am sure that it would be over a period of time if it happened at all—it might be possible through a different mechanism to change from this restriction to a free-market solution.
It may be thought curious that from this opposition Bench I argue trenchantly for free markets in Europe. However, it does not seem odd to me; I have held this view consistently for a very long time. Like my noble friend Lord Davies, it appears to me that when we take a serious and hard view of the areas in our manufacturing industry where we might be very successful, among them are the products of our defence industries. They are very fine industries; they are hallmarked by exceptional research and development; they are among the industries that co-operate most successfully and most frequently with the best of our university departments that are working in the same areas of research and development; they manage to do it on a large scale; and they manage to create extremely valuable intellectual properties of a kind that we cannot always achieve in many other parts of our manufacturing life.
As a former Minister responsible for intellectual property, I frequently came at this from a different ministerial portfolio from that of my noble friend Lord Davies, but none the less I was frequently full of admiration for the high quality of patents that were created in that industry and very well aware of the value that they could inject into free-market circumstances. It is very easy to see why, even when there is a concrete commercial rationale for this country, there will be others who will seek protectionism because they are fearful that their industries cannot compete in industries of this kind, particularly where those industries are so driven by outstanding research and development and by their links with the university research world. It is a tough environment to compete in—that is for sure—but that does not seem to me to be a reason to protect those kinds of industries in other countries any more than somebody could argue that we should simply protect them in our country from any difficult winds and buffeting of international competition in a fully commercial sense.
I can also understand the argument that some of those countries will be looking at industries—as we have in defence in the past—as being of considerable strategic importance and we have been cautious about whether that strategic importance should be so lightly set aside. Westland helicopters and so on have been examples of it. However, broadly speaking, we have been at our best as a country when we have been prepared in free markets to compete where we can and to achieve results on the basis of the excellence of what some of our manufacturing industries can do with freedom to operate properly in markets.
In summary, I return to the point that the noble Lord, Lord Davies, has made, that the noble Lord, Lord Hannay, was making and that I made at the beginning of my remarks. Nothing in this proposal moves us with any suddenness onto a different trajectory. I am loath to believe that the House and the general sentiment in this House would be against the possibility of the full operation of free markets and the benefit to United Kingdom industry of competition in a free market, especially where we believe that we can succeed way beyond many of our competitors in that market. It is a very strong argument and I hope that it will appeal to any free marketer looking at the benefits of the European Union in free market terms, which, many noble Lords have urged, were among the founding reasons that they could see for the rationale of the EU in the first place. I support this amendment and I believe that, on free market arguments alone, it should succeed.
Lord Howell of Guildford
My Lords, this amendment seeks to remove Article 346(2) of the Treaty on the Functioning of the European Union from Schedule 1 to the Bill. The article has appeared verbatim in every European treaty since 1957, so it is not new on the scene. At present, unanimity is required for changes made to the list of military products for which single market provisions do not apply. Under the Bill, a proposal to move to QMV would require approval by Act and by referendum. The noble Lord, Lord Hannay, and others are correct that it does not immediately mean that the veto is removed. It merely means that the move would require approval by Act and by referendum. The amendment of the noble Lord, Lord Davies, would remove that requirement.
The noble Lord, Lord Davies, spoke at length on this issue during day six in Committee, and he has spoken again now. Of course, he has considerable experience as Minister for Defence Equipment and Support, and in my view he has made the case extremely well that there could be some benefits to the UK from a move to QMV in this area. Having conceded that point, I hope that he and other noble Lords will excuse me if I now at least set out the other side of the argument, particularly as the noble Lord, Lord Davies, has just said that there is no guarantee that his proposal would work. Why is that so? It is because a move to QMV would also come at considerable cost to the UK, which a responsible Government have to consider. We must remember that this article is sensitive, as it applies to national security and defence. It is one of the wires that feeds directly into the red lines that all parties in the United Kingdom and other member states have always maintained during treaty change negotiations. Obviously that applies to previous Governments as well as this one.
The noble Lord, Lord Davies, said with some passion that Article 346 of the TFEU is a protectionist measure and he portrayed the Government as,
“using a referendum to block the removal of a derogation from the single market legislation”.—[Official Report, 17/5/11; col. 1364.]
The noble Lord, Lord Triesman, has spoken in the same vein just now. I have to point out that the UK’s veto could be used also to block any proposals to extend the protectionist measures with which the noble Lord understandably takes issue. A qualified majority could push through decisions which would favour greater national discretion and protection. The list, which has been unchanged—
Lord Kerr of Kinlochard
I thank the Minister for letting me intervene. The point that he is making is absolutely right—it could work either way—but the trouble is that the list is very long now. The UK interest is to have the list reduced. The list is very long because particular countries have particular little defence industries which they are keen to protect. The chances of it being possible to reduce the list are therefore low but would be enhanced if there were qualified majority voting on the composition of the list. We are starting from a bad place. It is unlikely to get worse; it is difficult to get it better; but you cannot get it better without qualified majority voting.
Lord Howell of Guildford
It is unlikely to be shortened, but I do not think that any of us can be sure. Protectionist pressures operate all the time, particularly in the defence industries. as the noble Lord, Lord Davies, knows better than all of us, and will continue to do so. The noble Lord said that the position is unlikely to get worse, but I think that we have to guard against that. A qualified majority could push through decisions which favoured greater national discretion and those pressures exist. The list has been unchanged since 1958 and can be expanded as well as contracted. I have before me the list as it is at present; it is a long list. It could certainly be expanded, so keeping the veto is as much, if not more than, a guard against protectionism as a barrier to liberalism, much as one believes, as I believe very strongly, in liberal free markets. The noble Lord’s zest for liberalism, which is certainly equalled by mine, could end up the opposite way round.
Lord Kerr of Kinlochard
The Minister is now making a general argument against the Single European Act and against having qualified majority voting on any area of the single market because it might go the wrong way and in a protectionist direction. All history suggests that the Single European Act was a good bargain. On the whole, it got us a more open market. It was a good, Conservative, market-driven measure which worked pretty well. The exception of defence goods is there because it was there before we joined the European Union. We have to my knowledge always argued against applying single market disciplines, which we believe in, to all sectors of the economy. That is the argument for the amendment.
Lord Howell of Guildford
I am not a Latin scholar, but I have a feeling that there is a Latin phrase to describe what the noble Lord is doing, which is projecting from a particular area which has its particular features and qualities, with which we are all quite familiar, on to the general case for free markets and expansion of trade, which we all seek, as we have done throughout the history of our membership of the European Union and will continue to do. I suppose that the noble Lord’s proposition is that the interweaving of political pressures and the defence and security industries operates just the same as everything else. I do not believe that it does; I just have to disagree with him. In this case, we are dealing with different pressures which are evident to those who examine these patterns. There are dangers as well as gains.
Retaining unanimity does not prevent product list changes, but it ensures that we can oppose any decisions that seek to install greater, inappropriate levels of protectionism for products—weapons, equipment, trucks, APVs and all the rest—that we feel should not be exempt from single market provisions. This allows us to take decisions on the basis of what would be best for the effectiveness of the single market and our own defence industry. Unanimity enables us to oppose removal of any products in the list where that would have unwelcome consequences for the UK and might prevent us from acting quickly to secure the right equipment for our troops in times of urgent need. I reassure noble Lords that, despite the doubts that have been expressed, the Government fully support the goal of better value for money through collective arrangements for identifying gaps and procuring equipment, pooling our multinational capabilities and forces wherever we can.
Lord Davies of Stamford
My Lords, I am deeply grateful for the consideration which the House has given to my amendment and for the warm and supportive words of the noble Lords, Lord Hannay and Lord Triesman, and the noble Lord, Lord Kerr, who seized on an argument that I was about to deploy myself in response to the noble Lord, Lord Howell. I will address the points of the noble Lord, Lord Howell, in a moment and bring my remarks to a conclusion by addressing the Government’s response. I am grateful too for the contribution of the noble Baroness, Lady Nicholson. Frankly, I did not understand her argument that somehow possession of veto was going to help us in any circumstance in advancing the cause of reform of Article 346. I shall correct her on a practical point: she says that since I was involved with defence there have been a lot of changes in the world, including the end of the Cold War. I think she is going back to the time when I was a defence spokesman in the Conservative Party. My experience of defence in government ended 13 months ago, in May last year.
I always enjoy the contribution of the noble Lord, Lord Hamilton, to these debates. He deployed an argument today which I have heard him deploy in other contexts. It is, “If it is such a good idea, why not have a referendum and you will win it? The public will support you”. I am not sitting close enough to see whether he has a twinkle in his eye when he says it but I think he has. He knows as well as I do that there is no prospect of having a referendum on a subject as esoteric as Article 346. If we have a serious opportunity to change it, it is no use saying to our partners, “For once we have got the chemistry right—there is an opportunity to go for QMV on this, and then maybe there will be a consensus and we’ll get some reform. But sorry, chaps, you’ve got to wait for two, three, four, five or six years, when it is particularly convenient for us to have a referendum with a whole package of measures”. Even then, as I have said before in these debates, it would be quite unsatisfactory for the British electorate to do their homework on a whole series of rather technical matters. It is just not practical politics. The noble Lord, Lord Hamilton, knows more about politics than I do; he has been involved in politics longer than I have, and I am quite certain that he had his tongue in his cheek when he said those things.
I move to the points made by the noble Lord, Lord Howell, on behalf of the Government. He started off by saying that Article 346 had been in the treaties in one form or another—of course, it had different numbers—since 1957. What is new is the idea of having a referendum on a change. That is brand new. It has not come in yet—it is in the Bill before us. That is what I want to change. It is not an argument against changing this new measure that the instrument that we might want to use to reform Article 346 is now under threat from a new provision in this Bill, so it would be sensible for us to remove that threat. I do not think that there is a logical argument there against my proposal.
Like the noble Lord, Lord Kerr, I really wondered how serious the noble Lord, Lord Howell, was when he said that it may be in our interests to prevent protectionism to have a veto, because then we could stop our partners from being even worse protectionists than they were before. As the noble Lord, Lord Kerr, pointed out, in that case the noble Lord, Lord Howell, would have logically opposed the whole single market programme. It would not have made any sense at all. So the noble Baroness, Lady Thatcher, and Lord Cockfield were actually doing something very dangerous in threatening greater protectionism by agreeing to have qualified majority voting in the Single European Act.
The noble Lord, Lord Howell, tried to justify that approach with the distinctly implausible suggestion that different rules applied to defence. I do not think that different rules applied to defence; I think that the argument is rather different from that. That is why, for two reasons, I think there might be an opportunity to achieve QMV, if only the British Government have not deprived us of that opportunity in advance, ab initio. First, there is a positive incentive on Governments to reduce the costs of their defence procurement—and protectionism, as we know, is extremely expensive. If they opened their markets they would be able to purchase more cheaply, given a measure of defence capability. When I was the Defence Procurement Minister—and I was very proud of this, because I did it for the first time—I introduced a unilateral open market in the EU. I said, “Sorry, we’re going to buy the cheapest and the best, wherever it is. We’re not going to be protectionist”. It is only when there is inequality of quality and price between the British supplier and non-British supplier that I will favour the British supplier. I made that absolutely public, and it was what I operated on. For example, I bought the 42-millimetre cannon for the Scout vehicle and potentially for the Warrior upgrade from France. Why? Because it was the best. The French were obviously delighted. There was no quid pro quo. I said to my French colleague, Laurent Collet-Billon, “You know, you and I must do something”. He said, “Of course, mon cher collègue, we will see what we can do”. But of course nothing has come through. Unless we do something about this protectionism, it will probably not.
Lord Hamilton of Epsom
As the noble Lord was responsible for the posting of the aircraft carrier orders, why were they not submitted to bids from all round Europe? Why were the bids all placed with British shipyards in this country?
Lord Davies of Stamford
As a matter of fact, I would be very proud to take credit for those particular contracts, but that contract was let before I came into my job in the MoD. However, I did manage to save that project when it was under very severe threat, in similar circumstances as last year. But unfortunately the new Government decided to throw in the project and deny us carrier strike capabilities for at least the next 10 years—disastrously so. Let me answer the question hypothetically, therefore, and say what I would have done had I been there at the time. Undoubtedly, I would have been delighted to have had those carriers procured on the best bid from within the European Union basis, as long as it was reciprocal and we had some chance of getting an order for a French frigate from a British shipyard. It has to be reciprocal. That was a particularly big order, and the protectionism the French afford to their shipyard, the Chantiers de l’Atlantique, is particularly great, so there would have been a situation in which competition would have been completely false.
I would have been delighted to have had the opportunity to procure on a common EU basis because that would have enabled us to bring the costs down further and it would have meant that our yards, over time, would have done very well. If you just look at two—the Type 45 destroyer and our submarine-building capability in Barrow—I am convinced that they are the best in the world, including the United States, when it comes to building very sophisticated warships. We would have done very well with that solution.
As I said, there are two reasons why there is a chance of Article 346 being reformed. It is particularly unfortunate, therefore, that we should be about to make it much more difficult for that to be achieved through QMV, if that seems the most likely way forward, which I think it is. The second argument is that, unlike us, our continental partners always have a sense of guilt in acting in a non-communautaire fashion. They are signed up to the principle of the single market. They find it very difficult and embarrassing to argue for derogations, though of course they do so when they are under great political pressure. Therefore, it is the sort of situation when agreeing to the intermediate stage of going to a QMV decision-making process has some hope—I do not put it more strongly than that—of achieving the substantive change that we all want.
I put to the Government, in my last comment on the subject, that when you have some realistic hope of something—it does not matter whether it is 20 per cent or 50 per cent or 70 per cent or even 10 per cent—but there is no downside, logically you do it. In this case there is a real hope of moving forward. There is no possibility whatsoever of extending the list under Article 346. The list is already far too great, as somebody has already said in the debate. Nothing that could conceivably be argued to be military materiel is not currently included, and this clause has been used to cover things like trucks, notably in the case of the Italians—I do not mind embarrassing them by mentioning this now—who claimed that because they were military trucks they were military materiel. There is no chance; I am quite convinced that the European Court of Justice would rule out any further use of Article 346 because such a use would no longer be consistent with the description in the article itself.
There is no downside. I ask the Government to look at that point again. There is a potential upside through using QMV, and the stake is important. This is a major national industrial interest for one of the major British industries in which we have a worldwide capability. There is a direct benefit to us—the taxpayer—as well, because if we can expand the sales which carry the overheads, including R&D, of the British defence industry, it will mean that we can achieve given levels of military capability from that industry when we procure from them at lower cost. It will be a win-win situation if we can break through here and we would be very foolish to deny ourselves any opportunity or instrument which made it even slightly more likely that we would achieve that.
On the basis of that, you would expect me to put my amendment to a vote. However, I am conscious that we are after dinner and that the Whip has been withdrawn, so there may be an uncharacteristic result from any particular vote, and I am also anxious not to take up too much time. We have already had a very good debate. I think I have said enough and colleagues have said enough. I trust to persuade the Government to look at this again. The noble Lord, Lord Howell—I am very grateful for this—was kind in his remarks about my intervention and he said that there were strong arguments on my side, though he said there were strong arguments on the other side as well. I understand that. That indicates to me that despite what is in the Bill the Government are a little bit more open-minded, perhaps, than one might have thought at the beginning of this debate. On that basis, I beg leave to withdraw my amendment.
Lord Willoughby de Broke
“Repeat referendums
Where a referendum has been held in pursuance of any of section 2, 3 or 6, a further referendum on the same treaty or decision, or treaties or decisions, cannot be held until a period of three years has expired.”
Lord Willoughby de Broke
My Lords, I brought a similar amendment to this in Committee which did not find favour with the Government. That was in the name of the noble Lord, Lord Stoddart of Swindon, and my noble friend Lord Pearson of Rannoch. I listened to the arguments then that the five-year gap that we proposed was perhaps too long, so this amendment proposes simply a mandatory three-year gap between referendums. When he replied to that similar amendment on 23 May, the noble Lord, Lord Wallace, went off on a rather bizarre tangent about the European Gendarmerie Force, which I had not even mentioned in my speech. I do not know quite what that was all about. However, in reply to my amendment he went on to say:
“If the Government were defeated in a referendum, it would be tantamount to a defeat of the Government”,
and they would have to reconsider the matter. He went on to say:
“It would be unusual for the Government then to consider asking the public the same question in short order, having failed to convince them”—[Official Report, 23/5/11; col. 1623-24—]
at the time to change their minds the second time around.
The point of my amendment is that this is what has happened in the EU in the past. It is exactly what happened on the Maastricht treaty and in Ireland with the Nice treaty. It happened on the constitutional treaty. When the French and the Dutch voted that down, it was brought back under the cloak of the Lisbon treaty with a rather unsavoury démarche which allowed the then Government to pretend that it was not the same thing at all as the constitutional treaty. Yet a stinkweed by any other name still smells as foul. This constant backsliding, weaving, dodging and bobbing and ducking are what have given the European Union a bad name. Several speakers made the same point on the amendments that we discussed this afternoon: that there is a very prevalent distrust of the EU in this country, and not only in this country but throughout the European Union now.
In many of his remarks during both Committee and Report, the noble Lord, Lord Howell, has repeatedly underlined that the purpose of this Bill is to reduce the distrust of the British people in the institutions of the EU and in the way that the Government deal with EU matters and directives which have, so far, gone through without any influence by the people of this country. The amendment really should be there to reassure those people that if they vote in a referendum under this Bill, it will not be interfered with again by a Government, who may be more manipulative than this one, for at least three years. That is helpful to the Government and I hope that they will take it in that spirit. I beg to move.
Lord Deben
My Lords, I find this a fascinating amendment because those of us who are opposed to referenda in any case are now presented with somebody who is in favour of a referendum but does not want to have it when it is inconvenient. This is a most peculiar amendment. I think that referenda are always wrong in a parliamentary democracy and I have always stood by that. I have never changed my view from that and I am not changing it now, but if we are to have a referendum, the concept that we must not have one except in three years’ time, irrespective of what the public think, seems a most peculiar argument. To complain about the fact that in a second referendum people made a different choice seems an odd thing. After all, that was the choice the people made. I think that this is proof of why referenda are not an acceptable way forward, because the truth is that a referendum analyses what people think at a particular moment.
I became opposed to referenda at my father’s knee. I remember just after the war he was explaining to his infant son about politics. He said that he remembered the peace pledge. Eleven million people signed the peace pledge and two years later one could not find any of them. Once we got near to the war, they all disappeared. That is the problem with a referendum, because it is an irresponsible act—one is not responsible for the vote that one makes because it is secret and private. Surprisingly enough, I found a number of my constituents who voted one way in the referendum we had about remaining in the European Union and who within two or three years decided they had really voted the other way. I gave them the benefit of the doubt and felt that they had mistaken themselves, but if one is going to have a referendum, one has to have it without strings.
The noble Lord is presenting something that gives the lie to the whole referendum argument. People who want referenda want referenda because they want a particular response. That is why they want them. They want it because they think it will produce a particular answer of which they approve. When they find that there is a possibility that it might not produce that, they want rules to make sure that the public cannot have another go. I beg your Lordships’ House to accept that if we are going to have referenda, we had better have them on a fair deal and not on the basis that we restrict them in case the public possibly take a different view the second time.
Baroness Brinton
My Lords, I cannot really follow the points of the noble Lord, Lord Deben, on referenda. I disagree with his initial argument, but I support the principle about the people having their say, whether one agrees with it or not. I find it understandable that the noble Lord, Lord Willoughby de Broke, proposed the amendment, given the frustrations that he and his colleagues clearly feel about both the Irish and Danish referendums on treaties in the past, but it seems to me that there are two reasons to oppose the amendment.
In Committee, the Minister made the valid point that it would be very unlikely that two successive referendums would be called, not least for the important political reason that it would be likely to cost the Government of the day dear—assuming that it were the same Government—with a cynical public punishing them for so doing. Secondly, the Bill is not a crystal ball attempting to predict the future, no matter how much the noble Lord would wish it so. The Bill must allow for flexibility for a future Government and this amendment would tie their hands.
There are checks and balances within the Bill: a second referendum would require a second Act of Parliament with the detailed and appropriate scrutiny that comes with that—and that is before the Government of the day would have to start convincing the public of the need for that second referendum. There might be rare circumstances in which a second referendum were relevant—the checks and balances that I have outlined will force politicians and the public to think carefully about returning down the road of another referendum. To ban it completely for three years, or even five, as we looked at in Committee, removes that option for those circumstances which, though rare, are not impossible. There might be changes to the treaty that significantly benefited our country and other member states, which it might therefore be appropriate to consider. Or there might be a financial crisis in the eurozone—as there has been recently—in which the circumstances have so substantially changed that it might be appropriate to go back for a second referendum.
To conclude, the amendment seeks to remove the flexibility and the voice of Parliament and the people should there be a rare but necessary need to consider a second referendum.
Lord Hamilton of Epsom
My Lords, I very much sympathise with my noble friend Lady Brinton because it is unlikely that any Government would be brave enough to hold another referendum on the same subject when the country had made it quite clear that it did not want the measure put forward originally. However, to turn to the distaste of referenda generally expressed by my noble friend Lord Deben, presumably that distaste is slightly tempered by the referendum confirming our membership of the European Union. Let us face it, this referendum was put forward by Harold Wilson to solve a problem that he had within his own Labour party and settle the issue for good. Many people—I am one of them—voted in favour of our remaining in the European Union and it seemed to settle the issue for some time after that.
Lord Deben
I was opposed to that referendum, as I have always been opposed to referenda. I am absolutely consistent on that matter, whether they were favourable or unfavourable.
Lord Hamilton of Epsom
My noble friend prides himself on his consistency, but that decision put the issue to bed at the time. That would seem to have certain advantages that he does not acknowledge in any way.
Lord Stoddart of Swindon
My Lords, I supported this amendment in Committee and we had quite a good debate about it. I am not going to repeat everything that I said at that stage but I want to say a couple of things. First, I regret that the noble Lord, Lord Willoughby de Broke, has reduced the amount of time from five years to three.
Secondly, second referendums have been quite common in Europe. When Governments do not like an outcome, they are quite prepared to hold a second referendum in order to get it changed. Second referendums per se are perfectly logical and legitimate in the European Union. Surely we should not arrive at the decision that once a referendum has been held on anything there should be no second referendum. That would be quite absurd. It would bring Governments in particular into disrepute, because it is usually they who call for second referendums, if they said to the electorate, “You have voted but I’m afraid we don’t like what you have told us. We must therefore ask you to vote again, and indeed again, until you provide the right answer for the Government”.
Lord Liddle
My Lords, the Opposition cannot support the amendment. The reasons why many have spoken against it are very true. I agree with what the noble Baroness, Lady Brinton, had to say. I agree with the noble Lord, Lord Hamilton, that in our political culture a precise repeat referendum would be extremely unlikely. However, we should not tie our hands. As the noble Lord, Lord Deben, said, you vote under a particular set of circumstances but circumstances can change at remarkable speed. We do not need these kinds of constraints on our politics.
Lord Wallace of Saltaire
My Lords, this is the second time that we have examined an amendment of this nature. It did not find much sympathy around the Chamber in Committee and it has not found much more now. The amendment stipulates a lesser period of three years rather than the original five but the principle remains the same.
In Committee I set out some of the Government’s objections to an amendment of this nature and I will recapitulate some of those now. First, were the British electorate to vote no in a referendum, it is clear that the Government would have to consider their future action carefully. It would be difficult to view the result as anything other than a firm rejection of a proposal for treaty change. If the Government wanted to hold another referendum for whatever reason, under the terms of this legislation, as my noble friend Lady Brinton said, they would first need to secure parliamentary approval to do so by Act. Primary legislation would be necessary to enable the referendum, so Parliament would have to consider that request very carefully and itself be persuaded to agree, which is not necessarily a given.
Secondly, the amendment reduces flexibility, a quality that has attracted a lot of support from all Benches. We do not know what will happen in the future, and as the noble Lord, Lord Liddle, has suggested, sometimes we do know what will happen in the short term future. As noble Lords have argued on a number of occasions, and in this case following the rejection of a proposal by the British people in a referendum, circumstances could change. There are “events, dear boy” and unexpected crises whether they be security crises, financial collapse, economic recession or even crises of energy supply or surges in immigration. All might conceivably transform the situation. So there could be previously unanticipated grounds for the Government and Parliament to believe that the treaty change on the table was in the national interest of this country. As a consequence, if both the Government and Parliament were to decide that there were good reasons for putting a question to the British people in a further referendum, Parliament should be able to do so without having to disapply an inflexible provision.
I have to say to the noble Lord that I would be surprised if any Government in the future would wish to hold a referendum in the hope that the people would be somehow persuaded to change their minds merely by the Government cajoling them rather than in response to a substantial change in circumstances. I agree with what the noble Lord, Lord Triesman, said in Committee. He pointed out that the people of Denmark, Ireland, France and the Netherlands,
“were perfectly capable of settling the first propositions put in front of them and they were perfectly capable of assessing the changes”.—[Official Report, 23/5/11; col. 1621.]
Those changes were any changes that had taken place or had been made to the treaty before them between the holding of the first and second referendums. People are clear in their own mind and will not easily be browbeaten into giving a different answer just because the Government—any Government—would like one. As the Minister for Europe made clear in the other place, it is a recipe not only for the public to say no again, just as firmly if not even more so, but also an invitation to be voted out of government at the next election for treating the public with contempt. But I reiterate that there might be circumstances where a repeat referendum may be in order before the three years suggested by the noble Lord had elapsed.
We were running through a most wonderful boom at the end of 2007. The recession hit us rapidly and sharply thereafter, with the financial collapse of a number of banks. We face a potential crisis in energy supply. At the moment there is a range of possibilities where crises might erupt that would affect us and our European partners. Therefore I see no reason for reducing flexibility, as this amendment would, and I urge the noble Lord to withdraw it.
Lord Willoughby de Broke
My Lords, I am grateful to all noble Lords who have spoken in the debate. The noble Lord, Lord Deben, made his position on referendums perfectly clear, so I do not think there is any point in pursuing that. I am grateful to the noble Lord, Lord Stoddart, for his support. The noble Baroness, Lady Brinton, said that a new treaty might possibly have some advantages for Britain and therefore the Government should not have their hands tied on another referendum. But the whole reason for the Bill—I hope that the noble Lord, Lord Howell, will concede this—is that, so far, all the new treaties have given power away from Parliament and the British people to the European Union. That is the nature of treaties and it is what has happened. That is also why we have the Bill in front of us right now. It is to stop this constant, undemocratic transfer of power from Parliament and the British people to the European Union. It has been one-way traffic all the way, and while this Bill is not perfect, at least it is a step in the right direction.
I am sorry that the Government do not feel that the amendment is helpful. I think it would be helpful because it would persuade the British people that in spite of the protestations of Ministers—no one believes any longer what they have to say—they will not be double dealt yet again. But, having heard the opinion of all those who have spoken and from the Government, I beg leave to withdraw the amendment.
Lord Triesman
“Promotion of United Kingdom’s membership of EU
In participating in a campaign for any referendum held in pursuance of section 2, 3 or 6, or in taking other steps required by this Act, Ministers of the Crown must have regard to the desirability of promoting the United Kingdom’s membership of the EU.”
Lord Triesman
My Lords, this is very close to an amendment that my noble friend Lord Radice moved in Committee. For that reason—aside from that of plagiarism, having reproduced the amendment so closely—I shall be very brief.
It appears that the circumstances in which the referendum on whatever subject—an omnibus referendum on a treaty or a more limited one—would be held would be those in which the Government had concluded that it was right to take matters to both Houses. They would have secured a majority in both Houses, including —critically, because of the confidence issues—the House of Commons. Legislation would have been approved by Parliament and would therefore have become the position that Parliament had adopted. That is the decision that would then be put to a referendum—put before the people of the country to overturn it, should they choose to do so. Throughout that process there can be little doubt that it would be incumbent on the Government, and anybody who supported them, to pursue as vigorously as they could the case for the change that they advocated. It would be pointless—indeed, frivolous—if a Government did not, by the time they had reached that point, argue fiercely for the substantive issue.
It is particularly true that that would be the case because, so often when we were dealing with matters to do with Europe, the previous Government did not argue effectively or convincingly. The case was never put with the level of conviction that, on reflection, I should have liked to see. In those days, the Opposition—now the Government—never pursued an argument for Europe with any great vigour that I could detect. There was in general no great desire to do so. However, it will become very important that it should be done—that the argument should be pursued, and that there should be some proper presentation that will enable people to understand why any kind of decision is being put in front of them at all.
I say that in the briefest terms for this reason. I have no doubt that if and when any referendum takes place, whatever the substantive issue being put before the people of the United Kingdom, there will be those who regard the occasion as an ideal opportunity to argue against membership of the European Union per se. It will come up and it will begin to look like the opportunity—for which some people outside this Chamber and some within it have urged—for another decision to be taken on Europe. We shall find that that is how the argument will be displayed in much of our media. It will not necessarily be about the issues; it will be about whether people really want to be in Europe. The media will campaign vigorously around that. Of course, the decision will be on the substantive issue in the referendum, but I have little doubt that the campaign will be disfigured by the argument over whether we should be in Europe at all. That is why there is a great deal of merit in asking the Government to have regard—not a very high hurdle to climb over—to,
“the desirability of promoting the United Kingdom’s membership of the European Union”.
My noble friend Lord Radice put that point in very convincing terms in Committee. There are extremely good reasons for it, not least that we have all failed so abjectly to argue the case for Europe with great effect in the past. I beg to move.
Lord Risby
My Lords, I very much agree with some of the underlying sentiments of the noble Lord, Lord Triesman. There are powerful reasons for us to be part of the European Union and to have a positive view of it. Of course that is the case. Sometimes that is completely lost in the wash, which is regrettable and unfortunate. However, on promoting the desirability of our membership, I just point out that we have to take great care over what we do in this respect. One of the most extraordinary episodes under the previous Government was their attempt to explain the euro. We had the exceptional sight of the then Europe Minister, Mr Keith Vaz, going round in a white van to various market towns, handing out literature explaining why the euro was a very desirable thing. The net effect of this risible campaign was to cause support for the euro to diminish, so we have to undertake these things with great care.
The amendment implicitly reflects concern about the lack of popularity—
Lord Dykes
I am most grateful to my noble friend for giving way, but has he not left out the vital fact that a lot of support for Europe grew out of Mr Keith Vaz having learnt the trick of taking Mr Eddie Izzard round with him on the campaign?
Lord Risby
I discussed this episode with Mr Keith Vaz and I am not sure that he felt it was one of the high points of his political career, but we can leave it at that.
The amendment implicitly reflects our concern about the EU’s lack of popularity, but I fail to see the point of it. It is completely unnecessary. To have a referendum the Government need to have agreed the relevant treaty in Brussels in the first place, and Parliament will have enacted an Act of Parliament, having debated and scrutinised it. I entirely agree that a referendum campaign should educate the public in the fullest sense of the word. Presumably, having decided on a referendum, the Government would like to win it. The notion that they would somehow be against the EU, implicitly or explicitly, makes a nonsense of the whole situation. Why waste money on such an exercise? The case for membership is explicit in the whole referendum process. The way to change the view of the desirability—
Lord Lea of Crondall
I am most grateful to the noble Lord for giving way, but I am rather intrigued by his clear statement that the Government will want to win a referendum. Is he absolutely sure that they will not do a Pontius Pilate in some cases in a referendum?
Lord Risby
If a Government have got that far and want to test public opinion, it is very unlikely that they would behave as the noble Lord suggests. It is not likely that a Government would embark on a referendum if they thought that they were going to lose it. That is not the natural course of political events, but perhaps the noble Lord—
Lord Hamilton of Epsom
Surely it goes somewhat further than that; if the Government put forward a referendum that they are trying to win and they lose it, that damages their credibility.
Lord Risby
That would certainly be the case; I entirely agree with my noble friend. The way to change people’s view of the desirability of EU membership is simply to prevent them believing that we have been on a conveyor belt to greater integration without their assent. That is the real point; it is better than any publicity campaign. The real reason for negative attitudes is because over the years when there have been European Council meetings or discussions over treaties such as at Nice, Amsterdam or Lisbon, we have had the whole “Grand Old Duke of York” activity on the part of successive Governments. Statements have been issued by Downing Street, particularly more latterly, that indicated that great victories had been won for Britain, which no other European nation would recognise as being the truth at all. The good thing about the coalition Government is that all the spinning and posturing that characterised our relationship with the European Union has stopped. Where has anyone seen it in the past year? That is an admirable change for us all. The Bill will give us a better chance of restarting our relationship with the EU by addressing public attitudes than any publicity campaign could possibly do.
Lord Radice
My Lords, I support the amendment in the names of the noble Lords, Lord Triesman and Lord Liddle. I could hardly do otherwise as it is an exact replica of the amendment that I moved in Committee. I thought it was a good thing then and I that it is a good thing now. In Committee, I made a general case for Ministers—the amendment refers to the general case—making a positive case for the European Union.
Baroness Falkner of Margravine
My Lords, I have considerable sympathy with this amendment. In the course of the last three months we have heard from all sides of the House the collective failure of politicians to articulate a vision of why Britain needs to co-operate with members in her region to advance her interests. Putting an obligation on Ministers to spell out positively a vision for the EU seems eminently sensible, given the context of the Bill. This is, as the noble Lord, Lord Risby, said, that once the Government have passed an Act, they would presumably like to win an amendment. It seems odd to resist an amendment such as this when we are clear that the Government would have passed an Act proposing the policy solutions that there would be and, as the noble Lord, Lord Hamilton, said, would wish to maintain their credibility by seeking actively to campaign in a referendum. I cannot see why there is such resistance to this amendment.
I remind noble Lords of some of the things that have been said about the media. Even if the Government of the day were determined to win a referendum, it is entirely conceivable that a sceptical media would choose to ask questions about why the Government were spending money. We have known from the several months of debate over referendums in this House in relation to other matters that large amounts of money have been set at the door of the practicalities of holding a referendum. It would be entirely possible for our media, which did not wish us to promote that measure that was meant to be discussed in the referendum, to say that this was a huge waste of money. The fact that a requirement for promoting that measure would be enshrined in the Bill would allow the Government to say that they were carrying out what statute and legislation required them to. We have had arguments for months on the lack education and the lack of information about the European Union. This would be an opportunity for the Government of the day to move beyond those technical measures to use that process to educate the public about their vision.
I turn to the final point in the amendment that I do not think the noble Lord, Lord Triesman, in moving it, quite brought out to the extent that I would wish to do. It states,
“in participating in a campaign for any referendum held in pursuance of Sections 2, 3 or 6 or in taking other steps required by this Act.”
The discussion we have had so far pertains only to the holding of referendums. There are other measures in this Bill that do not call for the holding of referendums. Sometimes they call simply for an Act of Parliament, or for a Statement to be made to Parliament. In doing these things, an obligation would be put on the Ministers of the day to have regard for the desirability of promoting the United Kingdom’s membership of the EU. This amendment says to us as politicians that we have to step up to the mark and that if we believe that the legislation that we are passing is good legislation, we have to go out and explain why we think that it is good legislation. While I would love to say that I wholeheartedly support the amendment, I will only go so far as to say that I can see a lot of merit in it and I look forward to hearing from the Minister why he does not think that it is extremely useful and long overdue.
Viscount Trenchard
My Lords, I am afraid that, although I listened with great interest to my noble friend Lady Falkner, I cannot agree with her that the amendment makes much sense. I listened carefully to the noble Lords, Lord Triesman and Lord Radice, in putting forward the amendment. It is an odd amendment. What does it actually mean? Any referendum that might be held under the Act is not going to be a referendum as to whether our membership of the EU is or is not a good thing. By definition, if the Government want to put a referendum event to the people, it follows that they must already have decided that it is a good thing, so to get the result they want in the referendum, they will obviously explain the benefits as energetically and positively as they can.
There is something strange about the language of the amendment, because the desirability of promoting the United Kingdom's membership of the EU sounds rather as though we are not a member but perhaps should be. We are a member, so obviously Ministers must explain what being a member of the EU means and must honour the obligations of being a member. I fear that that is rather subjective.
Furthermore, under the Bill, a referendum other than one which the Government wanted to win might be triggered. There are many ways in which a referendum can be triggered under the Bill, as noble Lords have said. Ministers of the Crown might be obliged to put a certain point to the country but they might not necessarily want the result to be yes. The noble Lord, Lord Radice, said that Ministers have not positively made the case in public for membership of the EU on a continuing basis. I suggest that that is because many Ministers of the Crown have felt that our membership of the EU is no longer so clearly wholly beneficial as they had thought it was, or as people thought it would be 10 years ago, or longer ago than that.
The amendment does not add anything to the Bill. It is somewhat subjective and I cannot support it.
Lord Dykes
My Lords, I agree very much with the earlier utterances and express regret that I cannot agree with what the noble Viscount, Lord Trenchard, said. I do not think that there is any evidence that Ministers have become less enthusiastic about our membership of the European Union. That is irrespective of the colour of the Government. That applies to both parties in power in recent times and, as far as I can detect, definitely applies to the coalition—very positively so in respect of the first part of the coalition statement about their aspirations on Europe.
I am sure that it is because of what the noble Lord, Lord Radice, mentioned and what the noble Lord, Lord Triesman, hinted at less directly: because of what the British press say. It is mainly the tabloids—the comics that masquerade as newspapers in Britain. They are more and more like magazines rather than newspapers. That is affecting the broadsheets as well, particularly those with owners living in tax havens overseas, not normally living in the UK and not paying UK direct taxes themselves, mainly the Murdoch press, but all of them anti-European and attacking our membership of the European Union in a most extraordinary and vicious way, which has not been seen in any other member state that I can think of.
I have to declare an interest as I also live regularly in France at weekends whenever possible. The French press are not at all like that. My colleagues in politics in Paris express astonishment that we allow the overseas-based owners of the press here who do not pay UK direct taxes themselves to attack our fundamental membership of the European Union in such a way. That has been the reason.
The most astonishing contrast that I noticed was just at the moment of the IMAX launch by the new Prime Minister Blair, with his new Government, still very, very popular, not quite walking on water but pretty close to it in those early days and causing a lot of inspiration and enthusiasm among the British public for the new Labour Government. That launch was the beginning of the decline in the new Labour Government's support for Europe in atmospheric and psychological terms. That was tragic. Britain in Europe was destroyed by it. So was the European Movement—although it still exists, it is struggling along as a very truncated body doing noble work but very much at the fringes of British life.
It is a tragedy for this country that we have had this nonsense for so long: politicians refusing to stand up bravely and correctly for the benefits of our membership of the European Union. Therefore, I very much welcome the proposed new clause. It was debated in Committee and therefore we need not go into all the arguments now. We particularly thank the noble Lord, Lord Howell, for repeating that the purpose of the Bill is to oblige Ministers to promote the cause of our membership of Europe in what he would describe as a more correctly balanced sense because the public would have much greater participation through the referendum mechanism. Like the noble Lord, Lord Deben, I do not agree with that because I am against referendumitis and the populism that comes from it, but I can see his arguments. The proposed new clause would be a good thing, as we would return to promoting our membership—not in a propagandistic sense but in the practical sense of reassuring the public, explaining in detail many of the complicated matters and getting away from the dreadful xenophobia that is being allowed to develop because of the insouciance, nervousness, recalcitrance and hesitation of British politicians. There is a danger that that will start to affect the coalition if it continues, and I hope very much that it does not.
I do not want to take up too much of the House’s time but I conclude with an issue that may seem small, although it is very important. I refer to the display of flags—one of my favourite subjects. There is only one European flag within the vicinity of Westminster. It is on the Slovenian embassy building and we thank the Slovenians for their courage in daring to show it. It is the only one, apart from the one displayed on Europe Day in Parliament Square each year. All other major countries, together with some of the new ones, routinely proudly display the European flag alongside their patriotic national flag. Our national flag should be alongside the European flag on government buildings, as is routinely the case in France. When President Sarkozy makes a television broadcast, he always has the European flag alongside the tricolor. Why have all parties in this country been so hesitant and pathetic about this in the past? It is now time for the matter to be corrected. I have been encouraged by the words of the noble Lord, Lord Howell, on previous occasions in these debates and believe that the Government should accept this imaginative new clause.
Lord Hamilton of Epsom
My Lords, I have heard my noble friend Lord Dykes say on previous occasions that the only cause of Euroscepticism in this country is the Murdoch press, but I find that very difficult to go along with. I always reckon that to some degree the press has to reflect the national mood and, if it does not, it does not sell any newspapers. I also have a slight problem with the fact that Euroscepticism is growing at a pace in Germany, where I am not aware of the Murdoch press owning any newspapers. Therefore, I think that it is a little too simple to blame the whole thing on the Murdoch press.
However, let us get to the basis of the amendment and, for the sake of argument, start at the beginning, which seems to be a useful place to start. The Government will bring forward a measure to be put to a referendum of the people of this country only if they think they will win it. I do not accept the view of my noble friend Lord Trenchard that the Government might put something forward to be addressed by the country in a referendum if they want to lose, as I think that they can only possibly want to win it. If they do want to win it and if, as I think the noble Lord, Lord Triesman, said, this is an opportunity for UKIP to say, “Ah, we don’t want anything to do with the European Union at all. We must pull out”, then of course the Government will be compelled to argue the virtues of remaining in the European Union, and all his problems will be answered by the referendum. For that reason, the amendment is completely otiose and I shall not support it.
Lord Willoughby de Broke
My Lords, I think that this is rather a sad amendment. It demonstrates the Europhiles’ lack of confidence in their case in trying to put into the Bill a requirement for Ministers, frankly, to propagandise. I know that the noble Lord, Lord Radice, says that it is not propaganda but let us look at the words of the amendment. It says,
“must have regard to the desirability of promoting the United Kingdom’s membership of the EU”.
That sounds exactly like a recipe for propaganda to me. There is no balance there whatever—it requires Ministers to promote our membership of the EU. Like the noble Lord, Lord Hamilton, I find it extraordinary that the noble Lord, Lord Dykes, should keep saying that the only reason for Euroscepticism is the Murdoch press or the Barclay press or whatever. They have absolutely nothing to do with the rise of the new Finn party, for example, or of Euroscepticism in France, Germany or Hungary. I am afraid that there is a growing realisation that Europe is going the wrong way and that the desire for more and more integration is not what people in member states want. To put this amendment in the Bill would be absolutely contrary to what people in this country think is right.
The noble Lord, Lord Dykes, said that the noble Lord, Lord Howell, had encouraged him in some of the things that he had said. I have listened to many speeches by the noble Lord, Lord Howell. He is extremely balanced in his view of the EU. He takes a critical but on the whole positive approach, which is right; Ministers in the Government will always do that. There is absolutely no need to put this sort of demand for propaganda in the Bill, and I hope that the Government will reject the amendment.
Baroness Williams of Crosby
The noble Lord, Lord Willoughby de Broke, has perhaps underestimated some of the forces out there that make it difficult to explain what the European Union is doing. I shall speak briefly. Despite the fact that we have been, as my noble friend Lord Trenchard said, citizens of the European Union for 50 years, we have never spoken about it or taught it in our schools in any adequate way. We are almost unique in Europe in the fact that our syllabuses carry very little information about the common market and very little understanding of this additional citizenship, which is part of the law of the land.
This is an issue now with a new Education Bill that is considering what should be in the syllabus for English children. Ministers should encourage the idea that if we are part of the European Union—and we still are—there should be at least a limited level of education about Europe in our schools so that our children know what we are talking about and are capable of making critical judgments about statements made in the press and deciding whether or not they agree with them.
I will give a second example. There was a good deal of discussion in the House today and on previous occasions about the level of distrust in the European Union. The noble Lord, Lord Liddle, made powerful points about the level of distrust in Parliament and in the whole democratic process. The distrust is part of the atmosphere of the present time; it is not specific to the European Union but much wider and in many ways more disturbing.
My final point is that we have some of the responsibility in this Parliament for the level of distrust. I will give just one example; I will not go into the expenditure crisis and so on. We heard much earlier in the debate about the number of occasions on which the scrutiny reserve imposed by Members of this House in the European Scrutiny Committee on the mandate given to Ministers in the European institutions has simply been brushed aside and disregarded. That has not been the act of the Commission or even of the Council of Ministers; it has been the act of our own Government in our own Parliament, despite the efforts of Parliament to persuade them to show caution or not to go ahead with a particular measure in Brussels.
We have to accept that our own Governments—I am not pointing at any particular one—have been part of the level of distrust created by a consistent disregard of Parliament expressing doubts and concerns about pieces of European policy pursued by those Governments. We have many times disregarded Parliament's doubts. That is not a way to build trust or to build a sense that Parliament has real power over what happens in Brussels, because often we have let that power disappear by failing to recognise what Parliament has urged us to take very seriously.
This is an important amendment. I do not terribly like some of its drafting; it should be much wider and, rather than referring simply to a referendum campaign, should concern the whole attitude of British citizens toward Europe. However, I commend the noble Lord for moving it.
Lord Radice
I would prefer the amendment to be much wider, but it would then be out of order.
Baroness Williams of Crosby
I will always take instructions from my former colleague, the noble Lord on the other Benches. I commend him on the pressure that he has brought to bear on the issue, which is of immense importance.
Lord Howell of Guildford
My Lords, when my noble friend Lady Williams speaks about the need for strengthening the teaching in schools and in citizenship classes of Britain's role in, and relationship with, Europe—and dare I say in the Commonwealth generally and in the new landscape that is building around us—it strikes a chord with me. She is absolutely right that the quality of teaching needs a considerable uplift in this area.
I will begin with a tiny bit of propaganda for the Foreign and Commonwealth Office. We have supported the Hansard Society in producing a new booklet to help citizenship teachers teach secondary school pupils about the European Union and our role—our very effective role, despite some minor criticism in the European Union and in Europe generally. We are taking action to improve the resources available, as citizenship teachers asked us to do. That is the kind of way forward that we should all work towards instead of spending a lot of time sitting around talking down our nation and its extraordinary talents and abilities to adjust to the new world situation.
I wish I could say such enthusiastic things about this amendment. It strikes me as a bit curious because it seeks to place a statutory requirement on the new Bill that, during a referendum held under the provisions of the Clauses 2, 3 and 6, or in implementing any of the other provisions of this legislation, the Government of the day should have regard to the benefits of the UK’s continued membership of the European Union. This sounds as though there is a desire to switch on a light at this particular moment rather than concentrate on the broader issues reflected in the observations of the noble Baroness, Lady Williams, and of the noble Lord, Lord Radice, that these matters cannot just be switched on and off but require sustained and effective narrative—not propaganda but an effective story to show how we fit into, how we contribute to and how we are able to draw strength from associations in the European Union and elsewhere.
As the noble Lord, Lord Triesman, candidly admitted, the past record has not been too brilliant, to put it mildly. If one just looks at those who have been in government over the last decade—which happens to be one party—one can see that they have not achieved a dazzling success in uplifting public support for, or even public awareness of, the role that this country has played, is playing and is capable of playing in the future in the European Union. When we discussed this amendment in Committee, the noble Lord, Lord Radice, said that the EU Bill was,
“based on the wrong premise about our membership",
and that instead,
“we should recognise that the sharing of responsibilities with our partners has been good for Britain and good for Europe”.
We have no difficulty with that. As I tried to make clear in Committee, we fully recognise the benefits of EU membership and the flow both ways of advantage of our being a key member of the European Union. This Bill does nothing whatever to alter our current commitments within the European Union, nor our current active engagement within the existing powers and competences of the EU, which are very extensive, nor indeed our positioning to reform and equip the EU for the 21st-century challenges that lie ahead, because, just as we are trying to adjust the position of this country to the new landscape, so everyone recognises that the European Union as a whole needs to do the same.
The noble Lord, Lord Radice, also said,
“according to public opinion polls, the British remain reluctant Europeans and fairly ill informed about the EU”.—[Official Report, 23/6/11; cols. 1626-27.]
That just about sums up the key concern that this Bill has been crafted to focus on. It is that reluctance that the Bill seeks to address by making clear to the public that they will have their say over any future transfers of power and competence and that a future Government will have to make the case as to why such changes are in the national interest. That is the aspiration of this Government for the future. It is nonsense to say that it binds future Parliaments, which we cannot do, but that is our aspiration. This is a construction, an architecture that will be sustained and built to help the EU in the future.
Let me remind noble Lords that for a referendum to be held under the terms of this Bill, both the Government and Parliament have to be in favour of the proposed treaty, as many of my noble friends and indeed almost every speaker have recognised. That is the starting point for any referendum activity. Otherwise, if the Government did not like the measure, they could block it at the European Council, or Parliament could simply legislate against it. Parliament would be fully in control. Therefore, the change in question would have to be considered by the Government to be in the national interest before it could be put to Parliament. That would be the necessity, the sine qua non. While the referenda provisions will help address the reluctance that exists in Britain and that must be faced, no one is claiming that they are sufficient to address the general lack of information on, understanding of and enthusiasm for the European Union. Clearly, that cannot be done just when action under the Bill is needed. The oddity of the amendment is that it so inadvertently implies that action is switched on only when there is activity under the Bill, not least because the EU Bill focuses on future changes to the treaties and does not call into question our membership of the European Union.
Lord Triesman
My Lords, I thank all noble Lords who have taken part in the debate, particularly the noble Baronesses, Lady Williams and Lady Falkner, the noble Lord, Lord Dykes, and my noble friend Lord Radice. My noble friend was quite right to point out that it would have been ideal to have a much more widely constructed objective, but I doubt that we could have got it into the Long Title, although it would have been well worth it for all the reasons that have been argued. Perhaps I may express a word of appreciation to the noble Baroness, Lady Falkner, for pointing out the phrase in the middle of the proposed new clause that was intended to broaden the scope of what is intended beyond a referendum. I had not made that point, so I greatly appreciate that it was.
I am quite sure that the noble Lord, Lord Radice, did not intend last time around, as I did not this evening, to advocate some system of propaganda of a narrow and fruitless kind or publicity stunts. I can promise the noble Lord, Lord Risby, that if anyone approaches me in a white van, they will see me heading rapidly in another direction. I have no intention of engaging in a serious matter with anyone in a white van. I have nothing against white vans in general, but if there is anything emblazoned on the side that tells me that they are part of a propaganda campaign, I shall head off—on a bicycle, of course—in another direction.
I accept the point made by the noble Lord, Lord Hamilton, that it is not only the media who criticise the EU, but they do play a dynamic role in these things, as they do in Germany and elsewhere.
I was reflecting on the difficulty of dealing with the media. Not all that long ago, I remember reading a detailed account—albeit in relatively short paragraphs and sentences—in one of the newspapers of the European Union’s desire to insist that in future we should have only straight sausages in the United Kingdom. Such was the level of debate. I would have taken that seriously but for the fact that I turned over a couple more pages and found that it also reported that Elvis was alive and well and driving a bus in Stalybridge.
My point is that you do not always get a fair crack in the media. I do not attribute all the difficulties that I have described to the media but the balance in the media has not been the balance which we have sometimes achieved in debates in your Lordships’ House. The point is to try to seek further rebalancing. The noble Lord, Lord Howell, was fair enough in mentioning one decade and pointing to the fact that we were the Government. However, he might have been a bit more generous and gone back a couple of decades to the impromptu words that the Prime Minister of the day was caught saying on television about some of his colleagues and their attitude to Europe.
In the recent past, we have not had a glorious history of a balanced debate. Indeed, on occasions we have not had any debate. In seeking to withdraw the amendment, as I now do, I hope that it if has done nothing else, the initiative of the noble Lord, Lord Radice, which we followed up this evening, will make us reflect on the fact that we are unlikely, whether in the context of anything in this legislation including referenda, to have an intelligent discussion about Europe if we continue to pillory it without any serious attempt to tell the other side of the story.