UK Shared Prosperity Fund

Baroness Hayter of Kentish Town Excerpts

Monday 4th February 2019 Lords Chamber

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government what progress it has made on the design and implementation of the proposed UK Shared Prosperity Fund in the light of reports that the Prime Minister is considering providing additional funds to former steel and mining communities and industrial towns.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, we intend to launch the single prosperity fund consultation shortly, as confirmed by my right honourable friend the Prime Minister in the other place last month.

[Baroness Hayter of Kentish Town]

My Lords, first, is the money that the Prime Minister has been scattering around actually new money, or is it money that would otherwise come out of this shared prosperity fund? Secondly, we might need this fund in seven weeks’ time. How come, therefore, we have yet to have a consultation on it? We do not know whether it will be allocated on the basis of need or prosperity. Can the Minister assure us that, if it is needed in seven weeks’ time, it will be up and ready for the communities it is to serve?

[Lord Bourne of Aberystwyth]

My Lords, first, the noble Baroness will be aware that current EU programmes will run their course—in some cases, beyond 2020—so I do not quite recognise the urgency of which she speaks. At the same time as the Prime Minister announced that the consultation would be short, she talked about the importance of tackling inequalities between communities—something I am sure the noble Baroness welcomes, and it may well be something that the right honourable Member the leader of the Opposition chose to discuss with the Prime Minister. I am sure that she would hope so because, clearly, this is very important. We have been doing a lot of work with engagement events around the country. The consultation will start shortly and the decisions will be made in the spending review.

Tenant Fees Bill

Baroness Hayter of Kentish Town Excerpts

Report stage (Hansard): House of Lords
Tuesday 11th December 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, first, I thank the Minister for his sympathetic and speedy response to the issues that I, along with the noble Lord, Lord Palmer of Childs Hill, with the support of the noble Lord, Lord Best, who is in his place, and the noble Lord, Lord Deben, who is not in his place at the moment, raised in Committee about how the department was implementing these otherwise very welcome plans to introduce mandatory client money protection for letting agents. It was because the noble Lord, Lord Palmer, and I had worked very well with the Minister on that initiative that we were concerned that the whole thing was going a bit pear-shaped because of the introduction of unrealistic requirements on the main providers of CMP protection. But, thanks to the Minister—I have to thank him for that—the department moved very rapidly, as it is well able to, and responded to make the significant changes that the Minister has now introduced. We both thank and congratulate the people who drafted those changes. They will, of course, help ensure that both RICS and ARLA can continue to protect both landlords and tenants through their schemes.

There was just one area on which I sought clarification, which is indicated in the amendments to which the Minister has already responded. I know that these have been discussed with RICS, ARLA and officials. I am getting nods from the Box. The government amendments introduce a power, as has been said, for the Secretary of State to serve notice on scheme administrators, requiring them to amend their scheme rules in respect of the cover they may hold. We consider this a sensible addition because it ensures that appropriate cover will be in place and, importantly, it will prevent arbitrage between the different schemes. That is something that we had not thought of but we are very grateful that officials did so.

As has been noted, our concern is with the current wording, which we did not feel gave sufficient clarity on how such a scheme, where it proved necessary, could close in an orderly manner where the Secretary of State’s justified requirements proved unworkable. The amendments I tabled were therefore to clarify that schemes may alternatively close in an orderly manner in such a scenario, rather than leaving administrators open to a lot of uncertainty. I know that the Minister appreciates those points, as we have heard. It was a backstop—if I may say that—that we were looking for: something we hoped would never be needed but should be there in case. I think the Minister has given the reassurance needed about flexibility and the use of normal other legislation to ensure that such reasons are given, and in the right way. I am getting nods from other people on that point.

Although I tabled the amendments, they were clearly only a bit of final tidying up. We are very pleased and grateful that, as a result of what we raised in Committee, it has been possible to bring this forward in such a timely manner that we can go ahead on 1 April not just, unfortunately, to leave the European Union, but, perhaps a little more importantly, to have client money protection in place.

[Lord Flight (Con)]

My Lords, I refer to my interest as a modest landlord, as declared in the register. The new rules to protect rent paid by tenants to agents do not protect landlords fully. Letting agents will have to join the new government-approved client money protection insurance scheme, but changes proposed by the Government as to the level of insurance held by these schemes will not cover the full value of rental money held by agents. I cannot see the point of that. Is it not in the interests of all parties for the insurance effectively to cover all potential liabilities? The scheme will not pay out in some circumstances; it will be able to cap the amount it pays out. Surely it would be more sensible for the scheme to provide for full protection.

Tenant Fees Bill

Baroness Hayter of Kentish Town Excerpts

Monday 5th November 2018 Grand Committee

Debate on whether Clause 21 should stand part of the Bill.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Committee will recall that, as a result of pressure in this House and following the recommendations of a working group chaired by the noble Lord, Lord Palmer of Childs Hill, and me, the Government announced on 28 March last year that they would make it mandatory for all letting agents who handle client money to have client money protection in place.

Client money protection involves a separate, ring-fenced bank account, which, should a letting agent become insolvent, is not available to other creditors but belongs to the tenant, if it is rent paid in advance, or to the landlord, if it is rent due. Insurance is also part of client money protection. Making client money protection mandatory was widely welcomed—I remember congratulating the Minister at Question Time on the day he announced it. It safeguards both tenants and landlords, either from a business going bust or from an agent making off with the funds.

This was essential because, without this change in the law, only 60% of agents had such cover. Clients of the remaining 40%, perhaps unknown to them, were vulnerable to their money disappearing through poor business behaviour or fraud. Indeed, as the noble Lord, Lord Palmer, will recall, our working group heard heart-rending stories of tenants left without money and unable to move on to another property and of landlords losing serious money—sometimes their only source of income.

Furthermore, in business terms, there was—and still is—the lack of a level playing field because the good agents, particularly those in the professional organisations such as RICS or ARLA, which require client money protection, are at a competitive disadvantage, given the cost of coverage, in relation to the fly-by-nighters, if I might call them that. These are the letting agents which risk other people’s money by lowering costs because they do not have client money protection. We were therefore delighted with the Government’s announcement that CMP would be made compulsory.

However, the Government are making a mess of it, I am afraid. They have somehow managed to devise a scheme whereby the two major providers of CMP—the world-renowned and respected Royal Institute of Chartered Surveyors, or RICS, and Propertymark, the rebranded Association of Residential Letting Agents, or ARLA—will soon no longer be able to offer CMP to residential letting agents under their schemes, and will therefore have to withdraw from the market because the Government are insisting that their current £5 million coverage is increased to £200 million, with no cap on liability. So instead of bringing the 40% of letting agents that do not have client money protection up to the standard of the 60% that do—as we planned and hoped for and as the House supported—they are driving the schemes of the 60% out of business. You could not make it up.

The Minister knows all about this as he kindly met RICS, ARLA and me last week, but his department has failed to amend the scheme requirements to prevent this catastrophe which is about to happen. I should add that the requirements that are leading to this catastrophe were added by his department only in the last few weeks. They are not the criteria on which the impact assessment was based, they were not discussed in advance with the major players in the field, and they were not included in anything which went through your Lordships’ House.

I will start with RICS—a standard-setter for 150 years, with a proud record of driving up standards and protecting clients, and with a charter which reflects its role in promoting the public interest. Because of the ludicrous demands for recognition of a CMP scheme, it will close to residential agents a scheme which has run problem-free for over three decades and which, together with Propertymark, covers all the big residential letting agents.

RICS’s independent UK and Ireland regulatory board, chaired by Antony Townsend—who used to run the Solicitors Regulation Authority; he knows a thing or two about this—discussed this on Thursday following the meeting with the Minister, and concluded that RICS could not accept a situation in which the public interest functions of the institution, which upholds standards of almost 130,000 professionals and 11,000 regulated firms, were put at risk because it was exposed to unlimited liability. It would be inconsistent with its charter obligations. By opening itself up to potentially unlimited liabilities, no matter how rare, RICS would put its public interest duty at risk—a risk it is, understandably, not willing to take and which, I suggest, the Government should not be asking it to take.

The current RICS CMP scheme limits are £50,000 per claim and £5.3 million annual aggregate. Over the past five years, RICS has paid out residential client money loss claims totalling £49,000—less than £50,000 over a five-year period. That includes some tenant deposits because occasionally these are included. It is £50,000 in total over five years and it is now being asked to insure for £200 million. In fact, the highest single claim was under £13,000.

This is evidence that RICS more than adequately safeguards the public while ensuring that businesses are not adversely burdened by unnecessary CMP insurance costs, which of course are always finally passed on to consumers. Its scheme works for landlords and tenants because all client money held by RICS firms must be held in a separate, ring-fenced client account. Furthermore, deposits are already protected under the Housing Act 2004. Rents are covered under client money protection and deposits are protected quite separately under the 2004 Act.

However, the department is currently demanding that these deposits should be double insured by requiring them, in addition to the Housing Act requirement, to be covered by the CMP scheme. That makes absolutely no sense and I do not know whether it is actually legitimate. Certainly concerns have been raised by insurers as regards whether any such money should be double insured. Insurers have also indicated that there is not the capacity in the market to provide suitable cover for the largest agents that include tenancy deposits.

The figures I have quoted do not come just from RICS. The other professional body for letting agents, ARLA, has its own scheme which has been running since January 2008. Over the past 10 years it has paid out just over £2 million to landlords and tenants, and that includes one year with 10 agents going bust where those claims involved pay-outs of just over £1.3 million. The other nine years saw pay-outs of under £1 million in total. Under that scheme, the average number of claims a year is four. The average loss from claims over the last 10 years was less than £70,000. The last large claim of over £100,000 was in 2013, some five years ago. No major corporate agency has ever claimed on the scheme, yet we were told when we had a meeting with the Minister that the new requirements were being added to protect the really big agents. Because of the big schemes, which have never claimed, all the schemes will have to increase their cover from £5 million to £200 million. That is completely disproportionate, it is not based on evidence, and it is unrealistic. Why should ARLA’s cover, if its anticipated annual scheme loss, based on nearly two decades of experience, is around a quarter of a million pounds, be almost 100 times that? Also, why is this very last-minute change being made in the department’s approach?

Until 16 October, ARLA had been given the impression that CMP schemes would not have to cover tenants’ deposits already protected in insurance-backed tenancy deposit protection schemes, which of course are themselves authorised by the Government under the Housing Act 2004. It quite accepts that unprotected deposits are to be covered by CMP, meaning that no tenant should be left at risk. That is what was agreed with officials on 14 August and it was the basis on which ARLA submitted its application for approval on 12 September, as had been discussed ever since this was agreed last year. On 16 October the department suddenly said that it now expected CMP schemes to cover deposits that are already protected. This represents double insurance of the deposits because they are covered by both TDP and CMP, something that has certainly been questioned by ARLA’s insurer, Gallagher. I am happy to share that letter with the Minister if that would help.

In addition to the 3,000 member firms with less than £1 million in their client accounts, Propertymark has a little over 200 firms with more than that amount—the bigger ones that we were told we had to cover. Most have less than £1 million in their client accounts, so insuring for £200 million sounds a little unnecessary. The 200 firms that have more than £1 million have a combined total of £889 million in client funds, with £500 million of that coming from the top 16 businesses.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I am absolutely clear on that. The cap that we are talking about will not be appropriate in that regard. As I say, I have only just become aware of this. It is a significant issue. I am very happy to engage with the noble Baroness, who probably understands these things better than anyone else in your Lordships’ House, and to carry on the discussion with RICS. I hope on that basis she will withdraw her opposition to Clause 21 standing part.

[Baroness Hayter of Kentish Town]

I thank the Minister. I think he has said more than in our meeting. In our meeting, he said that he would look at the double insurance. Today he has gone a little further and stated that this CMP scheme will not have to cover already protected deposits. That is a large part of it, for which the organisations will be grateful. The other part—the level of coverage—is still important. I know that the Government are well aware of this. I know this is very different from the space industry but a similar discussion happened on the Space Industry Bill, recognising that unlimited issues simply cannot be insured, and the Government agreed to move on that.

For the moment, I will not divide the Committee on whether the clause should stand part of the Bill. However, a tiny word of warning: client money protection is mentioned in the Bill, which means that amendments will be in scope when it comes to Report. On that basis, I shall not oppose Clause 21 standing part of the Bill.

Clause 21 agreed.

Tenant Fees Bill

Baroness Hayter of Kentish Town Excerpts

2nd reading (Hansard): House of Lords
Wednesday 10th October 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Government have been on a very welcome journey with regard to the private rented sector. First, and following pressure in this House, they required all letting agents to belong to an alternative dispute or ombudsman scheme. Then, again following pressure in your Lordships’ House, they moved on client money protection. That was followed, as the Minister reported, by compulsory five-yearly electrical checks in rented accommodation, something that we started pushing for in the Consumer Rights Bill. Now, albeit after a delay—but, again, following pressure in this House—they have banned dual fee charging by letting agents; in other words, tenants cannot be charged by an agent which already represents the landlord. Furthermore, I have only just heard—maybe I missed it before—the very welcome announcement of what we are going to put on the broad shoulders of the noble Lord, Lord Best: the requirement on letting agents for training and codes. We now need only the right to a habitable property and we might actually have a really good private rented sector.

The Bill is good in itself. It will save tenants hundreds of pounds just when they are trying to put together the money for a deposit and to move, which alone can cost up to £1,000. Although the average letting agent charge to tenants—in addition to what they have charged the landlord—is £300, one in seven pays up to £500. It is good that the Bill puts an end to that but it is also important for the housing market because any such money extracted unfairly as fees is lost to both the tenant and the landlord, sucking some £240 million a year out of the housing sector. That money could be better used by landlords to improve homes rather than spent by letting agents, which generate no new properties.

I am sad to see ARLA, which represents letting agents, still arguing against the Bill, claiming that it will harm the private rented sector. In fact, it will do the opposite, partly, as I have said, by keeping funds within housing, rather than with agents, but also, vitally, by increasing tenant trust in the private rented sector. David Cox, the chief executive of ARLA, really ought to know that distrust in agents is not just apocryphal. It is based on hard evidence. He should also recognise, as I have long argued to him and his members, that the inherent conflict of interest within tenant fees is unethical and unprofessional. No service provider should have both parties to a transaction as clients. It cannot owe a duty of care to both. Charging both for the same service—letting a property—gives letting agents a dual responsibility which they simply cannot meet. Arguing on behalf of the landlord that rent should go up, or be paid on a certain day, can hardly be done by the same person arguing on behalf of the tenant that until a bathroom is fixed the rent is not due. Who is the client at that point? This is particularly important following the Consumer Rights Act. We have to be clear: who is the consumer in the transaction and therefore who gets the rights contained in that Act?

When we argued for a ban on the fees charged to tenants in your Lordships’ House, Ministers claimed that making agents’ fees transparent would be sufficient to drive down prices, as consumers could shop around. We sought at that point to explain that in fact tenants cannot shop around; only landlords can. If a tenant wants a particular property, they have to deal with the agent selected by the landlord and have no negotiating power at all over the fees charged, nor the quality of service provided. They cannot swap agents. So I greatly welcome the Bill and wish it a speedy path on to the statute book for the sake of millions of tenants, about whom we have just heard from the noble Baroness, Lady Grender.

Changes will obviously be needed as the Bill goes through in Committee. But following the very constructive way that Ministers have dealt with us over those earlier issues, we have every confidence that the Government will accept our amendments in Committee, particularly on default fees which, without protection, could be exploited, as the noble Baroness, Lady Grender, has again just noted. There is also the issue of the size of the cap on deposits, as mentioned by the noble Baroness and my noble friend Lord Kennedy.

We will also seek reassurance that proper enforcement will take place, with more meaningful penalties for those who flout the law. As my noble friend Lord Kennedy said, trading standards departments are highly stretched at the moment, with far too few assets, so we will look to the Government to ensure that the penalties due back into the enforcement system will be sufficient to enable action to be taken wherever tenants are being ripped off. Sufficient levels of fines are anyway essential to act as a deterrent to bad behaviour.

I will make one further point about how the Bill demonstrates the value of regulation. I am afraid that I had to watch the coalition Government abolish the National Consumer Council, which took away a source of thoughtful advice on when regulation is necessary to protect consumers. I have also had to witness, whether in relation to Brexit or more generally, the endless mantra from this Government and some of their supporters that red tape or regulation is bad for business. Not only is that not true; it ignores the interest and well-being of consumers who, without appropriate protection, are vulnerable to shoddy goods, rip-off merchants and poor service. I particularly welcome the Bill’s acknowledgement that this large group of consumers, who we have heard about, need legal protection to get a fair deal.

I wish the Minister well with the Bill and all strength to his arm in persuading others back at the ranch—or up the food chain, which I think was the term just used—that he be given the freedom to respond positively to the amendments we will table. We will be happy to give him all the credit for the movement that he makes.

European Union (Withdrawal) Bill

Baroness Hayter of Kentish Town Excerpts

Committee: 11th sitting (Hansard): House of Lords
Wednesday 28th March 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it may not be possible to answer my question today, but it is an important one. I would have put down an amendment at the end of Amendment 354 to use two additional words: “in English”. Once we leave the European Union, there will not be an English-speaking country that chooses English as its language. The Maltese have accepted Maltese as the language, the Irish chose Gaelic. It is only the United Kingdom for which English is the language.

In future, for all sorts of reasons, it will be interesting to know whether the Government will ask or, I hope, negotiate that English remains for the production of EU documents. For myriad reasons, not least business, we will need to know that. If the Minister cannot answer my question about negotiations now, it would be useful if she could report at some point in the future.

[Baroness Goldie (Con)]

My Lords, may I first of all, in English, thank all who have contributed to the debate? I know that to some it may seem anorak territory, but knowing where to find law and being able to access law are matters of fundamental importance. Before coming to the specifics of Amendment 354 in the name of the noble Baroness, Lady Bowles, it may be useful to provide some context for the debate.

Part 1 of Schedule 5 serves an important purpose, which was picked up by, among others, the House of Lords Constitution Committee and the Bingham centre. Specifically, it is a recognition of that vitally important factor of the law being publicly available and accessible after exit day. Part 1 therefore provides for a combination of duties on and powers for the Queen’s printer to help to ensure that this happens.

I will be clear about what the provisions involve. There are differences between how part 1 of Schedule 5 is sometimes described and what it actually does. It is designed to ensure that retained EU law is sufficiently accessible but it does not, for the avoidance of doubt, impose a duty on the Queen’s printer to identify or publish retained EU law itself, or any subset of it. Instead, it imposes a duty on the Queen’s printer to make arrangements for the publication of the types of EU instrument that may become retained direct EU legislation, being regulations, decisions and tertiary legislation. It also requires the publication of several key EU treaties and confers a power on the Queen’s printer to publish other related documents.

I recognise the important issue the noble Baroness seeks to highlight by her amendment. Directives are an important part of EU law at the moment, and may be relevant to retained EU law in some cases, but they are not covered by the duty to publish which I have just outlined. That duty is focused, as I explained, on instruments that may become retained direct EU legislation, which of course in terms of the Bill directives cannot.

Housing: Letting Agents

Baroness Hayter of Kentish Town Excerpts

Tuesday 31st October 2017 Lords Chamber

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government whether they are planning to introduce legislation to require letting agents to join a registration scheme.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, my right honourable friend the Secretary of State recently announced a package of measures better to protect tenants, including that all letting agents will have to register with an appropriate organisation. This will give landlords and tenants confidence that their agent meets minimum standards. On 18 October we published a call for evidence, seeking views on the regulation of letting and managing agents. The Government will consider the feedback and work with the sector to shape the regulatory framework ahead of introducing legislation.

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for that Answer. As he knows, I have already welcomed the commitment that letting agents will in the future be required to register. However, I question the phrase “in the future”. As the Minister knows, the Government agreed in March to introduce client money protection for letting agents. It is now the last day in October. Perhaps he can give some reassurance to the House that both client money protection and this new measure will happen without any delay.

[Lord Bourne of Aberystwyth]

I thank the noble Baroness, whom I know has taken an interest in client money protection in particular. She has been very patient; I know that previously I have said “in due course”, “soon” and “very soon”. I can confirm to her that it will be this week. I hope that that pleases her.

Housing: Letting and Managing Agents

Baroness Hayter of Kentish Town Excerpts

Tuesday 28th March 2017 Lords Chamber

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government whether they will make membership of a client money protection scheme mandatory for letting and managing agents.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank the noble Baroness and the noble Lord, Lord Palmer of Childs Hill, for their time and commitment to the client money protection review. I am pleased to announce that the Government intend to make client money protection mandatory in line with the recommendation of the review chaired by the noble Baroness and the noble Lord, Lord Palmer of Childs Hill. This will ensure that every agent is offering the same level of protection, giving tenants and landlords the financial protection that they deserve. The Government will consult on how mandatory client money protection should be implemented and enforced.

[Baroness Hayter of Kentish Town (Lab)]

Well, that has taken the wind out of my sails. Will the Minister accept my thanks? The House will recall that we put into the Housing and Planning Act the reserve power to do this but at that point the Government were not quite convinced. However, as the Minister said, along with the noble Lord, Lord Palmer, we did the report, and the recommendation was published only yesterday. Today’s news is really good for tenants and landlords. It means that if any letting agent goes bust or makes off, the client’s money is safe. I hope the Minister will accept my thanks.

[Lord Bourne of Aberystwyth]

My Lords, I certainly will. That was a typically gracious response from the noble Baroness. It was a very well-reasoned report. Many people had been called to give evidence, so it was very strongly evidence-based. As I say, we will be consulting on implementation and enforcement. I am sure that we can talk about it in the meantime.

Assisted Dying

Baroness Hayter of Kentish Town Excerpts

Monday 13th February 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, suicide—thankfully—is legal, but many people need help and support to ensure that it is both pain-free and risk-free and to have a trusted friend at one’s side at that hour of need. That means being able to get such support, safe in the knowledge that one’s chosen friend will neither be interrogated by the police nor face prosecution. For this reason, I would like to see the DPP’s approach given wider endorsement. I am concerned that the present law affects people unequally, given that going to Dignitas costs about £5,000 and is only available to the well-off and those fit enough to travel, and there is no safe way of having assisted death at home without risk of prosecution for loved ones, which is an unfair burden for the dying person to contemplate. I would favour a law to allow people to be helped to die if they meet safeguards and eligibility criteria, are terminally ill and mentally competent. Of course I want to see greater access to high-quality end-of-life care, but part of that comes from knowing that they will be free from suffering.

I finish with the words of the Reverend Dr John Cameron, who said that,

“the time has come … to look again at the law, because modern medicine is preventing nature from taking its merciful course”.

Fixed-term Parliaments Bill

Baroness Hayter of Kentish Town Excerpts

Tuesday 29th March 2011 Lords Chamber

[The Lord Speaker (Baroness Hayman)]

I have to inform the Committee that, if this amendment is agreed to, I cannot call Amendments 36 or 37 by reason of pre-emption.

[Baroness Hayter of Kentish Town]

My Lords, I want to group Amendment 37, which stands in my name, with Amendment 34. The officials have been advised. The Minister has also had a little notification of that.

Amendment 37 would replace 14 days with five days. The Constitution Committee accepted 14 days as reasonable. However, would the country accept it? A 14-day limbo seems excessive, not least to the bankers and to what we used to call the gnomes of Zurich—now the genomes of the internet or something. As everyone else discusses whether an election will take place, it could be a long wet fortnight. As David Laws acknowledges in his most helpful book on the five days, there has to be early reassurance of the market. In his wise words:

“neither the British media nor the financial markets nor the public would tolerate a prolonged period of uncertainty”,

as a,

“failure to form a stable government could have a real impact on the UK bond market and on the UK interest rates, as well as on confidence in the pound”.

He well describes how:

“The British press and the British people are used to seamless and swift transfers of power”.

He admits that, anyway, more time would not guarantee a better coalition agreement.

All this, of course, is without thinking about the implications of Ministers from a defeated Government going off to negotiate for Britain in key EU, G20 or IMF meetings over that period of 14 days. In her evidence to the Constitution Committee, Professor Oliver said that she thought that it was against the public interest for there to be no effective government of the country, and even the Minister for Political and Constitutional Reform, Mr Mark Harper, admitted that,

“it would become clear pretty quickly that the government could not put together an alternative government”.

Similarly, David Laws—I am sorry to quote him again, but he is very helpful—testified that David Cameron himself wanted negotiations to be over in days, not weeks, and preferably before the markets got jumpy. Nick Clegg believed at the time that the deal could be done in two to three days.

Therefore, I have to ask why the coalition, which was put together in just five days, thinks it needed longer for that task. Was it too pressed in May 2010 to take sensible decisions? Some of us would say, of course, that the evidence of the coalition agreement supports the idea that it is right in that assumption. Perhaps the chaos caused by the raft of unco-ordinated constitutional changes, of which I believe the present Bill is just one, is evidence of a rather over-hurried deal. Perhaps coalitions anyway should be about domestic and economic policy, not about the country’s constitution, which is far too precious for late-night bargaining.

Certainly, while the price for the Lib-Lab pact was electoral reform—the Lib-Conservative pact; I am sorry, I am too old, although they did not get quite so much out of us, I have to say—it is clear from David Laws that the issue of fixed-term Parliaments was not an end in itself as a real democratic need but was, to use his words,

“to avoid a second election”.

So is it uncertainty about their relationship that leads to this Bill and its 14 days? The coalition expressly does not want to rule out the possibility of a House changing its mind within 14 days. “Changing its mind”, of course, is a euphemism. I shall quote the noble Lord, Lord Howard of Rising, at Second Reading, as it is so good:

“As for introducing a 14-day cooling off period, the mind boggles ... imagine the cornucopia”—

a wonderful word—

“of inducements, together with the bullying, which a future Government might carry out during those 14 days. We might even get a few more Dukes in this House”.—[Official Report, 1/3/11; col. 1030.]

My noble friend Lady Taylor of Bolton, a former Chief Whip, said:

“Are we to have 14 days so that Government Ministers can offer jobs to rebels or inducements or threats”,

or is 14 days,

“simply designed as a mechanism for one partner in a coalition to try to persuade a different partner to enter a new coalition and form an entirely different kind of majority in the Commons without an election”.—[Official Report, 1/3/11; col. 1035.]

An academic rather than a practitioner of the dark arts, my noble friend Lord Plant contemplated,

“a series of coalitions arising during a fixed-term Parliament, without a straightforward appeal to the electorate, that would be club politics of the worst possible kind”.—[Official Report, 1/3/11; col. 1033.]

Is that what the coalition favours: a sequence of groupings, anything to keep in power? Is it knowing that five days will not suffice next time round? Only a coalition with parties bent on staying in office could have dreamt up the notion of two weeks of haggling to cling to power. The Conservative and Liberal Democrats commenced and consummated their relationship in just five days. They seem very happy, so are they repenting at leisure or do they feel that they needed more time for that coalition agreement? Perhaps they are beginning to worry about the commitment to early legislation to recall an MP, as Mr Clegg is somewhat unpopular in Sheffield. Is it because the commitment to the binding resolution in the other place that an election would be held in May 2015 has already fallen apart, and that has made them realise that they need more time? Is it perhaps the commitment to PR for the House of Lords, given that they have yet to even get a yes for AV in the Commons, and that they are now wondering whether they did that right? Or is it that they wanted time to include in the coalition agreement, “We will cause chaos in the health service and totally upset the BMA, patients and the public by unnecessary reorganisation”? Instead, of course, the agreement says that the Liberal Democrat and Conservative ideas are stronger when combined, such as on the NHS. The agreement states:

“Conservative thinking on markets, choice and competition and add to it the Liberal Democrat belief in advancing democracy at a much more local level, and you have a united vision for the NHS”.

I am not sure that the good noble Baroness, Lady Williams of Crosby, has read that.

Those are just some comments on the present coalition agreement. My worry is the essence of the 14 days, because democracy is about more than just numbers; it is about being able to vote out a Government. This measure seeks to entrench one. For that reason, it should be avoided.

I have two questions for the Minister. Why, when this coalition was put together in five days, does he now think that it would take 14 days to repeat the exercise? How does he think that markets and our allies, or indeed our foes, would respond to 14 days of dithering, bargaining and negotiation?

[Lord Cormack]

The noble Baroness, Lady Hayter, has made an interesting speech and has raised a number of fascinating questions. But there is a danger that we will have a bit of confusion because Clause 2 is concerned wholly and specifically with holding an “early parliamentary general election” during a fixed-term Parliament in the event of the Government of the day coming unstuck for some reason or other. Although the remarks about the time taken to form the present coalition are intensely interesting, this clause does not affect what happens after a general election when there could be—perish the thought—unlimited time.

I believe that this clause is wholly misplaced. It needs to be deleted and replaced with something far simpler, more specific and more precise. At a later stage in the Committee’s deliberations, I shall seek to move an amendment to that effect.

Fixed-term Parliaments Bill

Baroness Hayter of Kentish Town Excerpts

Monday 21st March 2011 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, I am tempted to talk about the word “consensus”. I said on day one of the Committee that New Zealand had a three-year term of Parliament. When the cut in the number of UK seats was devised as a consensus between the two parts of the coalition, I think that one lot wanted to get rid of 60 seats and the other wanted 100 seats, so they went for a compromise of 50. On the basis of that, I say to the noble and learned Lord, Lord Lloyd of Berwick, that perhaps there could be a compromise here but it could be three years rather than four or five.

I turn more seriously to the question of four years. As the noble and learned Lord has reminded us, the Minister acknowledged at Second Reading that this was a judgment and there was no absolutely right or wrong answer. I feel that the Government have made the wrong judgment in going for five years rather than four.

There is a lot to quote from earlier debates. I have chosen the quote from Herbert Asquith that is in the report, partly because it was exactly 100 years and one month ago today when he said that we should be desirous of a House of Commons that is,

“always either fresh from the polls which gave it authority, or—and this is an equally effective check upon acting in defiance of the popular will—it is looking forward to the polls at which it will have to render an account of its stewardship”.—[Official Report, Commons, 21/2/1911; col. 1749.]

More recently, the noble and learned Lord, Lord Wallace of Tankerness, said on 1 March:

“as the election comes up accountability is a very, very strong thing indeed”.—[Official Report, 1/3/11; col. 1045.]

For any MP, he went on to say, an election is very effective for accountability.

The Deputy Prime Minister, who has already been quoted, claimed that the Government’s ambitious programme would transfer power away from Parliament and empower people. So we have to ask why the Government want to diminish accountability by extending the life of the other place from four years to five. It cannot be about increasing accountability. As the noble and gallant Lord, Lord Stirrup, has suggested, to think about two periods of five years—that is, 10 years —is what makes me think that the figure of five is wrong. Ten years seems to be too long. Someone just short of their 18th birthday might have to wait until they were 23 to vote, and they would be 28 before they could vote again. The period from 18 to 28 is the whole of the setting down of one’s life, but the Government are suggesting having only one vote during that time.

Similarly, imagine a Government with a small majority or indeed no overall control. It would be extremely hard to run the country like that, as I know, but the Government would be denied the right to go for a working majority, somewhat dreading every death or resignation and the resultant by-election—or maybe hoping for them so that they could then engineer a defeat on a confidence vote. Leaving it that way to call an election could mean that it would happen at the very worst of times: in the middle of a freezing winter, during school holidays, in a financial crisis or even at a time of national mourning, to say nothing of major international events or indeed the convenience of Her Majesty. Some of those questions are about the principle of a fixed-term Parliament, but they are far more likely to arise and be more acute with an over-lengthy five-year Parliament.

The question is particularly pertinent for a coalition. A coalition is new to the electorate and therefore needs a vote sooner on its performance than five years. Also, because its manifesto was never put to the electorate or endorsed at a general election, it seems right that it should not be run for a full five years. Although in general four years is right, it is even more acute either for a Government with a small majority or indeed for a new coalition that four years down the line rather than five is the right time to involve the electorate in whether they wish that Government to continue.

[Lord Martin of Springburn]

I agree with the noble and gallant Lord, Lord Stirrup, about the length of the period between elections in normal times. If it is agreed that five years will be written into legislation, over a period of 20 years the electorate will be denied an opportunity to go to the polls to decide what form the Government will take and which Government will be returned. We had an opportunity last week to hear the Minister on this matter. The noble and learned Lord, Lord Wallace, was good enough to talk about it. He said that the present system gave awesome power to the Prime Minister of the day. However, what seems to have happened in the room that was talked about in the story from the autobiography of Mr Laws is that awesome power was given to the people around that table. It strikes me that many of the people around that table, who may be very good at economics and other matters, were not experienced parliamentarians. If they had been experienced parliamentarians, they would have said what I am saying today: four years is far better than five.

I ask the Minister to consider four years for the sake of the House and how it operates. I know what he said last week, when we had a warm-up and were able to hear some of his thinking. That is good; we could then think about what he had to say and come back, as we have today. I think the Minister said that his case was that in the fifth year Members of Parliament decide that they want to be in their constituencies. That is not because they are lazy—far from it. They want to work on the hustings; they know an election is coming up and want to be in their constituency. The Minister’s case was that they would do that in the fourth year. However, they would not do that because the Government would not run out of legislation in the fourth year. Therefore, if Members of Parliament missed three-line Whips, it would be duly noted in their constituency. Constituents would say, “Why was he or she here on a Tuesday, missing a three-line Whip?”. That is an incentive to keep Members of Parliament here in the fourth year, rather than in the fifth.

I bolster the case about Governments running out of legislation in the fifth year. The House of Commons Library tells me that in 2009-10 Session, there was not one vote taken on the Floor of the House of Commons on a Thursday. They had topical debates on a Thursday. Some were on very important matters but they were debates. On Thursdays we turned the House of Commons into a debating society, which meant there was no record of whether anyone turned up to represent their constituents. I reiterate what I said the other week. Tam Dalyell, an excellent parliamentarian, told me as a young MP, “Michael, if they want you, tell them you will be available on a Saturday or a Friday night. Don’t take the sleeper up to Glasgow and then get back down for the vote. Tell them that your job is to be in the House of Commons”. However, the Executive of the House of Commons at that time were pleased to have topical debates with no votes so that everyone who wanted to could get away, which meant that more power was put into the hands of the Executive. That is contrary to what the Liberals have said on the Floor of the House of Commons and, indeed, here. They have said, “We don’t want the Executive to get more power”.

Last week the Minister said what fantastic power we were giving to the Prime Minister by enabling him or her to call an election on a date of their choosing, when the polls looked good. The coalition comprises two parties that fought like cats and dogs in the House of Commons—I had to hold their jackets at times—because their policies were so different. However, the leaders of those parties said: “We are getting together to sort out the financial problems of this nation; that’s why we are together, but here’s the wee deal—that we get a five-year Parliament”. There are people with more knowledge of political history than I but I put it to the Committee that Ted Heath might have had the power to go to the country that the Minister talks about, but it did not work for him. Ted Heath said: “It’s me or the miners”, but the country did not re-elect him. He did not serve his full term. Therefore, the great power that he had did not work in his favour; nor did it work in Harold Wilson’s favour in 1970. I remember hearing as a young canvasser that Labour would win again, and the polls all said that. Harold Wilson was perceived as the winner, but during the 1970 election word came through that he would lose, and he did. The same happened with Jim Callaghan. Had Jim Callaghan gone to the country before the great winter of discontent, perhaps he would have won—who knows? The Prime Minister may have awesome power but it has been shown that that power does not always work in his favour.

The noble and gallant Lord spoke about disgruntled Ministers. I suggest that there will be a stack of disgruntled former Ministers. I can hear them now saying, when they were appointed, “Tony said I am the only one who can do this job”. Then they go on to Sky TV—the lovely thing about Sky TV is that if you cannot sleep in the middle of the night, you go on to Sky TV—and the same Minister says, “What a wonderful Prime Minister we have”. I do not know whether it was reported that one Minister said: “I would jump under a bus for the Prime Minister”. I would not jump under a bus for anybody. I do not know whether it was a moving bus or a stationary bus but it shows how much that Minister loved the Prime Minister. Then there is a reshuffle because the Prime Minister has a difficulty; he has to get fresh blood in because the Back-Benchers are saying, “They’ve had their turn at being Ministers; we want to be Ministers now”.

I do not want to mention names but it has been reported that the gentleman who wrote the book might get back into government. I say good luck and three cheers to him. However, there are too many Ministers on the Front Bench so somebody must fall off the end. The logic of that gentleman getting back into government is that someone else will lose their job and become a disgruntled former Minister. The lovely thing about that is that the same people, when they lose their jobs, do not say any more that the Prime Minister is a great person. They sidle up to you in the tea room and say, “He’s a rotter. He’s a bounder”. That gave me an opportunity to say, “But you were not saying that about him two years ago”. The media then make mischief because they have a pool of individuals who are willing to criticise the Government.

That then leads me to consider the people who matter—the electorate. They turn on their televisions, as do the politicians, and they say, “What is going on here? They are all fighting like cats and dogs”. They then think of the old saying in the Bible that a house divided against itself will surely fall, and they say to themselves, “We elected these people to be unified. They promised us unity and now they are fighting with one another”. That will happen in the fifth year. For the sake of running the House properly, four years is far better than this fixed five years.

--- Later in debate ---

Moved by

[Baroness Hayter of Kentish Town]

14A: Clause 1, page 1, line 8, at end insert “unless this date coincides with an election to a reformed House of Lords”

--- Later in debate ---

[Baroness Hayter of Kentish Town]

My Lords, this amendment would mean that an election to the other place could not take place on the same day as an election to this House. The Political and Constitutional Reform Committee in the other place suggested that the Fixed-term Parliaments Bill should be discussed with the draft Bill on reforming the House of Lords so that the two fundamental constitutional issues could be considered alongside each other. Indeed, that somewhat wise committee noted:

“Elections to a reformed House of Lords may well prove a further complicating element”.

Let us pause for a moment to see what considerations and complications might arise. There are two assumptions. The first is that the elections to the other place and to your Lordships’ reformed House would take place on the same day. If that is the correct assumption, I assume that the elections to this House would also be for the same five-year fixed term—if that, rather than a term of four years, is accepted. One has to assume that the term would be shortened should an election be triggered in the other House. In the mean time, what should happen? Will Members of this House be able to resign, for example, to fight a seat in the Commons? Maybe they will be able to resign from this House, having been elected here, for any other reasons via—presumably—the equivalent of the Chiltern Hundreds. If so, what if the following by-elections to this House changed the composition of this House so that the Government in the Commons could no longer get their programme through this House but were unable to call an election in the other place because that is not allowed for in this Bill?

The second assumption is that elections to the two Houses would take place on different days. It is interesting then to ask the question: for how long would Members elected to this House sit and would that be for a fixed term, regardless of what elections were to take place in the other place? What will be the gap between the general elections in which people are elected to the two Houses? On the assumption that they are held on different days, halfway through a Commons parliamentary term your Lordships’ House could change hands so that there was stalemate, but with the upper House perhaps claiming the legitimacy of a fresh mandate and—if elected by proportional representation—a more representative mandate. If this House claimed a fresh mandate in light of current affairs, where would that leave the Commons—unable to challenge it or to refresh itself by virtue of a new election and mandate? Could the equivalent of a no-confidence vote in this House then trigger a response in the other House, to enable it to call an election?

It is worth recalling that our Select Committee on the Constitution noted that, in regard to the triggering of an early general election for the Commons, the Bill should contain a form of safety valve in case the Government lost,

“the confidence of the Commons or where a political or economic crisis … affected the country”.

However, either of those, should they happen, might be felt most quickly in your Lordships’ House—should an election here come swiftly after, or even during, such a crisis—and change its composition so that this House felt it more truly reflected the current views of voters. The new elected House might then almost make things ungovernable if it felt that it had to restrain the Commons from action that the electorate had demonstrated would displease it.

These are exactly the sort of questions that will in due course be debated with regard to the plans for this Chamber. However, it seems odd that we will entrench the date for the elections to one part of Parliament without any reference to elections to the other part. Perhaps, therefore, at the very least, the Minister will simply clarify whether the first tranche of the elections to this place is also envisaged for 7 May 2015, and the next tranche for May 2020. If not, what are the ideas about the harmony of the two Chambers, given the provisions of the Bill? I beg to move.

[Lord Cormack]

My Lords, the noble Baroness has done us a real favour in introducing her amendment. It is a mischievous one, as she knows, but she has brought before us a subject that may come again. Personally, I hope it does not. As one who believes strongly in the virtue and value of a non-elected second Chamber, I hope that this Chamber will not be abolished and replaced by another. The noble Baroness has indicated the sort of things that could happen if there were two elected Chambers. There is the challenge over which is the more legitimate, and the challenge as to whether you can possibly—even though you may wish to—retain the supremacy of the other place if a second Chamber here is elected. Many of us believe that you cannot. Many of us believe that it is far simpler, better and less ambiguous to have one mandate held by one House, rather than a mandate divided between two.

It will be interesting to see whether my noble and learned friend the Minister can give us some of the answers that the noble Baroness sought. He ought to reflect, as should others in government, on the wise words of Ernest Bevin, one of the greatest Foreign Secretaries that our country has had in the past century. Talking of some political problem, he said:

“If you open that Pandora’s box, you never know what Trojan horses will jump out”.

I urge the wisdom of those words on my noble and learned friend before he replies.

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, I am in no way trying to dismiss the suggestion that my noble friend makes. I am not in a position to indicate how that committee will be established. No doubt there will be nomination procedures from both Houses. I suspect that it would be rather odd if a contrary view or two was not expressed on it, but I am not in a position to indicate that ahead of the Bill being published. I assure the Committee that the timings of elections to the reformed second Chamber has been considered carefully by the Government and the proposals will be in the draft Bill.

I certainly take my noble friend’s point that, having spent most of the time on the Parliamentary Voting System and Constituencies Bill listening to the Opposition saying that the Bill should be split, it is somewhat intriguing then to be told that not only should it be split but that two other Bills should be added on to it. I do not think that the experience of the CRAG Bill in the previous Parliament, where numerous constitutional principles were put together under the one heading of a constitutional reform Bill, was necessarily the most satisfactory experience.

The noble Baroness mentioned entrenching the election date for one House while the other was pending. At least it will be known when this Bill has got on to the statute book what Parliament has agreed with regard to a fixed-term election. If this Bill had not come forward and we did not have fixed-term Parliaments, an election to the other place could have happened at any time. The potential for some of the confusion and concerns to which the noble Baroness referred would have been multiplied many times over if it was proposed that this House should have a fixed term while the other place could have elections as and when the Prime Minister of the day thought best to call them. Therefore, when the Joint Committee of both Houses considers the draft Bill, it will do so in the knowledge of what Parliament has passed in the context of fixed-term Parliaments. This Bill deals with dates of the general election to the other place. These should be set before we consider the dates of elections to the reformed second Chamber. There will be ample opportunity to discuss elections to this Chamber when the Bill is published in draft form and, I suspect, plenty of further opportunities to discuss it when the reality of the Bill comes before the other place and your Lordships' House. I invite the noble Baroness to withdraw the amendment.

[Baroness Hayter of Kentish Town]

I thank the Minister and the other speakers for their contributions. The Minister said that it was an interesting amendment, rather like the Chinese proverb, “May you live in interesting times”. I am not sure about the noble Lord, Lord Cormack, calling it mischievous. It was seriously meant because it is about a package of reforms, as my noble and learned friend said. I do not think that means putting them in one Bill but rather having a real idea of where we are taking our constitution before we tackle any one bit of it, so that we see it in the round. Nevertheless, given the comments that have been made, I beg leave to withdraw the amendment.

Amendment 14A withdrawn.