Elections Bill

Baroness Noakes Excerpts

Lords Hansard - Part 2 & Committee stage
Thursday 17th March 2022 Lords Chamber

[Baroness Meacher (CB)]

My Lords, I am not going to take anything but a tiny bit of your Lordships’ time. The noble Baroness, Lady Hayman, has given us a very comprehensive and clear introduction to this group. I have been worried for a long time about local authority funding and the squeeze on it for the past 10 years or so and I have just one question for the Minister: has he consulted with a selected group of local authorities about whether they regard this as a good use of their resources and their money? If not, will he set in motion a consultation with local authorities about whether they really feel they can take on this added cost and use of their resources?

[Baroness Noakes (Con)]

My Lords, the noble Baroness made some interesting points about the issues that will face local government in implementing these proposals. She referred to the cost estimates, which are of course included in the impact statement, and seemed to say that these were extraordinarily large numbers. There are 45 million electors. At £180 million, the top end of the range, that is only about £3 per elector: we have to get this into perspective. We are talking about proposals that will improve the integrity of our electoral system. This is a very modest cost; can we just get it into perspective?

[Lord Woolley of Woodford (CB)]

My Lords, waiting five hours to speak, you can get a bit anxious. I am not quite sure how you do this on a regular basis. I would have preferred not to be here today; I would have preferred to be in Cambridge, at Homerton College with my students. We have a big event on, and I would have liked to be there with them, but I told them I need to be here discussing the Bill, because of its immense importance, not least to them and their generation. We are making laws that, if we are not careful, lock people out rather than encouraging people in.

I thank the noble Lord, Lord True—I reached out to him to have a conversation and he said, “By all means”. We had a good conversation, and it was a respectful one. I am not sure I persuaded him on some of the fundamental points that I am going to put now, but he said, “Lord Woolley, you need to persuade the House as well”, not least those on the Government side. He said to make sure I have my facts and to make sure I have evidence. We talked about a number of things, two of which I would say the noble Lord, Lord True, violently agreed with. One was the need for comprehensive citizenship in our schools. He said, “What’s not to like about that? We need to empower, to inform, to educate the next generation to understand what happens in this Chamber. Because, if they do not have that, they do not engage in politics.” It is the truth.

I was struck, as the Minister may have been, that a year or so ago hundreds of thousands of young people, black, brown and white, protested with Black Lives Matter up and down the country, demanding justice and race equality. However, many of those hundreds of thousands of people who took to the streets do not vote because they do not see the correlation between their protest and what happens in these Chambers. Having citizenship education, giving them that knowledge, would help their protests to translate into voting. We agreed on that.

We also agreed on the need for the Government and local authorities to ensure that people are encouraged to register to vote. We know that in my community, the black community, particularly among young Africans, 50% are not even registered. So these were the two issues that the Minister and I violently agreed on, yet—think about this for a second—in the Elections Bill there is nothing about citizenship, nothing about how we get people to the polling booths and nothing about ensuring that local authorities and communities engage in voter registration. You could not make it up. What we are presented with is not how we get people to the voting booth, enhance our democracy or inspire a generation to play their part, which this Bill should be campaigning for; instead we are spending hours upon hours ensuring that people do not fall off the register. Many of us today are not trying to ensure that people can get on but trying to save people from falling off. That is the truth. This is putting the cart before the horse.

The Minister said to me, “Make sure you get your facts”—and rightly so, because we are moved by evidence. I am here to tell the House that the last time I spoke here I inadvertently misled the House. When talking about voter fraud, I said in front of your Lordships that five individuals had been convicted of that offence. I was wrong: there was one, and one caution, out of 47 million people. So when we are looking at facts and justifications, are we telling these young people and our society that we are spending £180 million and are on the verge of losing—how many people might we lose through this legislation?—10, 20, 40, 100, 1,000 or potentially even millions of people because we are saying that there is a problem with voter fraud? How can I go to schools and colleges and tell young people to engage in politics when they see how we are doing politics, and when they see that we are spending millions of pounds but the effect is to take people off the register?

Evidence was asked for. The noble Baroness mentioned the local elections in 2019 and the pilot schemes. In its evaluation, the Electoral Commission noted that between 3% and 7% of those who engaged with those elections were turned away because they did not have the right voter ID, including non-photographic ID. We have to extrapolate what that might mean in a general election, because that is the evidence we are presented with. The Electoral Commission and others suggest that between 50,000 and 400,000 people could show up at a general election, be turned away and not come back—that is against one conviction of fraud. Is it me? Am I missing something here about how bonkers that sounds?

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[Lord Eatwell (Lab)]

As I was saying to the noble Lord, an accurate study to achieve a careful assessment of the impact of any measure would have to take into account all the circumstances of the time. Over time, there will be a change in circumstances, and therefore the gross figures may appear as if there has been no impediment. However, if you disaggregate the components of the motivations to vote, it is difficult to believe that the introduction of a new requirement or impediment has a zero effect.

[Baroness Noakes (Con)]

Does the noble Lord believe that this will be a permanent or a temporary effect? As my noble friend Lord Hayward said, voter ID has existed in Northern Ireland for a very long time, introduced by the Labour Government. There has been no evidence of a reduction in voter turnout and, importantly, there is a higher degree of satisfaction with the integrity of elections in Northern Ireland than in England and Wales. I think we ought to ground ourselves in facts—not pilots or the studies by the Rowntree Foundation, but facts.

[Lord Eatwell (Lab)]

I think the noble Baroness would agree that the electoral issues in Northern Ireland are rather different from those in the rest of the United Kingdom.

As I have just said, studying a phenomenon over time requires a careful disaggregation of the effects. Looking at the gross numbers does not tell you anything. Specific studies which carefully disaggregate the impact of particular measures are necessary. I find it difficult to see how one can sustain the argument that introducing a particular impediment to vote will have a zero effect.

As I was about to say, at Second Reading the noble Lord, Lord True, in what I call precautionary mode, referred to locking your door to prevent burglaries even though your house has not been burgled. However, it is striking that if you go to the Isle of Sark, where there are no burglaries, no one locks the door. It is the presence of burglars that encourages people to lock their door. If the incidence of fraud is one, as the noble Lord, Lord Woolley, told us, and the cost now is £180 million, or whatever the number is, to prevent one occurrence, is that value for money?

Elections Bill

Baroness Noakes Excerpts

Lords Hansard - Part 1 & Committee stage
Tuesday 15th March 2022 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, we have now come to the seventh group of amendments, where there are two amendments, Amendment 30C, in the name of my noble friend Lord Collins, and Amendment 31, in my name. Both amendments are probing amendments to Clause 21, which concerns the registration of parties and considers the declaration of assets and liabilities to be provided on application for registration.

One thing that the clause does is introduce the requirement that new political party registrations will have to be accompanied by a declaration that the new party does not have assets over £500 on registration. If it does have assets of over £500, it will be required to produce a record of those assets and liabilities. The amendment looks at the figure of £500 and suggests that it should be changed to £450. The purpose is simply to probe the reasoning behind the figure of £500 and to ask for some information about how that figure was arrived at, whether there was a precedent, and so on.

One thing that I am aware at in looking at the figure of £500 is that the Electoral Commission’s 2018 report, Digital Campaigning: Increasing Transparency for Voters, which I am sure we will debate later on when we get to the digital campaigning part of the Bill, recommended that all new parties should submit a declaration of assets and liabilities over £500 on registration. I wondered whether perhaps that was where the figure came from; it would be useful to understand. Obviously, those recommendations were intended to increase the transparency of digital campaigns and help prevent foreign funding of elections and referendum campaigns. So this is really to probe government thinking: did it come from this group and will be looked at and discussed when we get to the digital campaigning part of the Bill? It would be helpful at this stage to know that.

My Amendment 31 is, again, a probing amendment, looking at the proposals amending Section 28(8) of PPERA about the length of time that the copy of the record of assets and liabilities provided by the party should be kept available for public inspection. The Bill says that this should be for

“such period as the Commission think fit”.

My amendment suggests replacing that with 20 years, as we felt that that seemed like a reasonable amount of time and gave more clarity and detail as to how long a record would be kept available for public inspection. Again, I would be interested to hear from the Minister how that wording came to be decided on and what the criteria are that the Electoral Commission will use to determine a fit amount of time. I do not know whether there is a precedent anywhere else in legislation that has guidance for a fit amount of time. Will the Government be providing guidance on that issue? Are we out of the ball park with 20 years, or are we in the right place? Are there any other areas of electoral law—or similar law, if not specifically electoral law—that the commission would use as some kind of comparison when looking at decisions on that?

I read the Explanatory Notes to see whether there is anything further on this, but there did not seem to be any more information than what is already in the Bill. It would be helpful to get a better understanding of the Government’s thinking on these points, how they intend to take that forward, how they will work with the Electoral Commission and what kind of guidance there might be.

[Baroness Noakes (Con)]

My Lords, I have one further question to add to the questions that have been put to the Minister. New subsection (3C), which will be introduced by Clause 21, refers to calculation of assets and liabilities. Noble Lords will be aware that, as an accountant, I get interested in how assets and liabilities are measured. I understand the concept of net assets, which is assets minus liabilities, and the concepts of gross assets and gross liabilities. What I do not understand is the concept in new subsection (3C)(c) of assets plus liabilities. Under this, if a party had assets of £255 and liabilities of £250—that is, they had net assets of £5—adding the assets and liabilities together would give a figure of over £500, which would bring it within the scope of the new subsection, which, frankly, I do not understand.

[Lord Stunell (LD)]

My Lords, I will comment on Amendment 31, which is about record-keeping. I return to the point I made a few minutes ago: it is about not just keeping the records but access to the records that have been kept. There are plenty of “publicly available” records that are not actually publicly available in real life. Election expenses are a case in point: GDPR has added an extra layer of complexity because they often contain personal details, bank details, addresses et cetera that ought not to be transmitted to other persons. Clearly, these records might well come within the same purview. I do not seek a detailed reply from the noble Baroness as that would be quite unfair, but I hope that, as we proceed, the Government will be able to illustrate that they have considered carefully issues of record-keeping, and, indeed, how the transparency that goes with record-keeping will be maintained in the current and projected circumstances.

Elections Bill

Baroness Noakes Excerpts

Lords Hansard - Part 2 & Committee stage
Thursday 10th March 2022 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, on behalf of my noble friend Lady Hayman, I will speak to this amendment while she searches for her glasses.

These are classic Committee amendments in which we try to probe exactly what lies behind these clauses and in particular the clause that we do not agree with that we debated earlier. It is important to address the question that the noble Lord, Lord Butler, asked: what is the question to which this clause gives an answer? It is not clear, and I hope that we can address that with this amendment and the series in the following group to try to elicit some answers.

I was intrigued by the explanation of the noble Baroness, Lady Noakes, that the statement is about the political environment that the commission operates in. That can change rapidly, not least the closer we get to a general election. Now that we do not have fixed-term Parliaments—not that that really determined when a general election could be held—it is not clear what timetable would be involved in this requirement to produce a statement, which the commission “must” take cognisance of. Let us have some answers from the Minister.

I will repeat the question asked by the noble Lord, Lord Butler: what are we trying to solve here? What is the commission not doing that the Government think it should be doing at the moment? It is not clear. I have not heard a single criticism about the failure of the commission to carry out its statutory functions. I have heard political criticisms. The noble Baroness, Lady Fox, is fortunately not in her place so I will say what I want to say. I am prepared to accept that Parliament agreed to a referendum, and Parliament will abide by the result of that referendum and the Government do so, but I am not in favour of referendums. I am in favour of parliamentary democracy. I know who used referendums a lot: Hitler used referendums to store up his power, and so does Putin. It is important to understand what we are talking about here, which is a body that oversees statutory functions in the conduct of elections.

Therefore, with these probing amendments we are seeking to know—despite the detail of what the clause says—how frequently the Minister thinks these statements will be issued. When will the first be issued? Will it be six months before the next general election? Could it disrupt the way that people, political parties and civil society react to the general election? Let us hear it. How often does the Minister think this should be reviewed? The Bill says that this is something we should expect every five years and that it will fall into the cycle of elections, but our political environment is not as stable as that, so there may be other issues that prompt this. I would like some answers to those questions.

Also, what is the Minister’s expectation for how long it will take to produce the statement and the requirement for consultation? What does he expect between the start of the process and its end? What does he think the implications will be not only for the Electoral Commission but for the political process itself and the way political parties operate? It is really important that we get some answers to those questions.

I turn back to the point the noble Baroness, Lady Noakes, raised. I have been intimately involved with the Electoral Commission, certainly for the three-year period I was general secretary of the Labour Party. One of the innovations I thought was really good was that the Electoral Commission has the experience of people with quite detailed knowledge of the electoral process. It has members who are aware of the way political parties operate. It is not working in isolation; it has that experience.

One of my roles was to nominate somebody to the commission. It has a Member of this House, the noble Lord, Lord Gilbert, who is a friend of mine. Even though we are in opposite parties, we have collaborated in better understanding the rules and regulations that operate on political parties. Sadly, the noble Lord, Lord Gilbert, cannot be here this afternoon but I think all members of the Electoral Commission, even though they are nominated—some of them by political parties—take their responsibilities and independence very seriously. I think if he were here the noble Lord, Lord Gilbert, would explain that that was why he did not sign the letter from the Electoral Commission; he is a Member of this House, and it would perhaps have been inappropriate. But that does not stop him taking his responsibilities on the Electoral Commission seriously.

I do not get it; I really do not get what this is all about. What are the Government trying to correct or do? There are mechanisms now, as we heard in the previous debate, about accountability, the Speaker’s Conference and representations. Of course, just as importantly, political parties nominate to the commission—not just the Conservative Party or the Labour Party, but the Lib Dems and the Scottish nationalists have representation on that body. It is independent representation, but they take their statutory responsibilities seriously.

Let us get some answers if we can, not only to the question of the noble Lord, Lord Butler, but also to when the first statement will be produced. How long will it take? How close will it be to the next general election? What impact will such a statement have on the conduct of that general election? These are vital questions, irrespective of a future debate on whether the clause stands part. We need answers to these questions because they will determine our attitude to whole aspects of this Bill. I beg to move.

[Baroness Noakes (Con)]

My Lords, the noble Lord, Lord Collins of Highbury, has ranged rather more widely than the contents of the two amendments in this group, but I respect that Committee is an opportunity for probing detailed aspects. I want to speak only to the second amendment about the length of time you would normally expect a statement to exist.

We have to see these as strategic statements; they are about strategies and policies. Too short a timeframe simply would not work. The presumption in the Bill is five years, which is a reasonable medium-term timeframe for giving some stability, with the option for reviews earlier on various grounds listed in the Bill. I support the general concept of five years being a good starting point, recognising that there can be occasions when this has to be revised. But they should not be picked up and looked at every year or in the run-up to an election, because they should be dealing with issues that have a longer duration.

[Lord Collins of Highbury (Lab)]

Can I just ask the noble Baroness a question? If she looks back over the last 20 years, or even over the period of the Electoral Commission’s existence, what have the gaps between general elections been?

[Baroness Noakes (Con)]

I do not think that is a relevant question because I do not believe the statement is going to be used to try to fine-tune what is done in relation to any particular election. It will be about more strategic things like getting more participation from certain groups in the democratic process and those sorts of issues.

[Lord Collins of Highbury (Lab)]

I am sorry to interrupt but I think this is an important dialogue to have. We bandy around the words, “strategy” and “long-term strategy” but what we have not had from the Government—though the noble Baroness has attempted to give us an answer—is the answer to: what is behind this clause on this statement? Why do we need this statement?

I agree with the noble Baroness that one of the important things, and what this Bill should be about, is how we increase participation. The noble Lord, Lord Hodgson, is unfortunately not here, but this Bill should be about what we do to increase participation in our democratic process. How do we ensure that more people are able to participate and what do we do to take down the barriers that inhibit participation? If the noble Baroness is saying that this statement will be about that, why are those things not in the Bill?

[Baroness Noakes (Con)]

I am going to let my noble friend the Minister answer all this in detail because I am not a government spokesman on this. I was merely offering my opinion on the timeframe. When we get to the stand part debate, I am going to offer some other opinions about why these statements are useful in the context of regulators.

My concern is to see that these statements are strategic in nature and that means not short term in nature. They should be seen in that context. The timeframe of five years is fine for that, but I am going to leave my noble friend the Minister to respond in more detail to the broader questions that the noble Lord has asked.

[Lord Rennard (LD)]

My Lords, these amendments may lead to some mitigation of the effects of the Government taking control of the strategy and policy of the Electoral Commission if the Bill is passed in its present form. If Clauses 14 and 15 are not taken out of the Bill, as they should be, we can still limit some of the damage by preventing the party in power continually changing the statement in accordance with its own interests.

Amendment 3 would not allow a new statement 12 months after the Act is passed, while Amendment 13 tests how often the Government might seek to change such a statement. As the noble Lord, Lord Collins, pointed out, the amendments probe the Government’s intention in relation to the timings and processes of the proposed strategy and policy statement to which the Electoral Commission will be subject. The governing party appears to want to emasculate the role of the independent watchdog.

--- Later in debate ---

[Lord Scriven (LD)]

My Lords, it is interesting to follow the comments of the noble Baroness, Lady Noakes, who says that this is a strategic statement that is there for five years and not for revision. If we look at page 24 of the Bill, new Section 4E says that there is a power to revise the statement and that the Secretary of State may revise the statement at any time. It goes on further to say that:

“The power under subsection (1) may be exercised … on the Secretary of State’s own initiative”.


If this is a strategic statement, it then goes on to say about revision on page 25 under new Section 4E(4):

“The Secretary of State may determine in a particular case that section 4C(2) (consultation requirements) does not apply in relation to the revised statement.”


The view of the noble Baroness, Lady Noakes, is that this is a five-year strategy where the Secretary of State does not want to intervene because it is about the long-term view of the commission. But the Secretary of State can solely decide that not only are they going to revise but that no consultation is needed. May I ask the Minister under what circumstances and for what purpose would the Secretary of State wish to revise the strategy and policy statement? Under what circumstances would the Secretary of State deem it inappropriate to consult on the new statement, particularly if we follow the view of the noble Baroness, Lady Noakes, that this is a strategic view where the Secretary of State does not need to get involved on day-to-day issues because the strategic direction is set for five years? Why have the revision policy and, particularly, why can the Secretary of State determine alone to change the statement without consultation?

[Baroness Noakes (Con)]

My Lords, if I may respond to that, I was careful to say that it a broad presumption of five years and that the Bill allows for other opportunities, which I am sure my noble friend the Minister will explain. The noble Lord failed to deal with the fact that the revision can be considered at the request of the commission as well—it is not just a one-way street—and that is provided for in new Section 4E.

[Lord Scriven (LD)]

If noble Lords will allow me, the point I was raising was the basis on which the noble Baroness said that it was a strategic five-year statement and therefore the noble Lord, Lord Collins, had got the concept wrong. If it is a five-year statement that gives a long-term vision for the commission, the Secretary of State should not have sole power to revise without consultation. That is the point that I was making. It is in the Bill.

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[Lord Collins of Highbury (Lab)]

It is me again. Here, we are trying to better understand what the Minister means when he repeats reassuring paragraphs, not least, “This is not the Government imposing on the Electoral Commission; this statement will be subject to Parliament, and there will be consultation”—although, there will be circumstances where there will not be consultation, which is even more worrying.

We are trying to probe exactly how engagement and approval of both Houses of Parliament will work. This is important, because in the other place the majority rules, which means there is sometimes a lack of scrutiny and attention to detail. The Government have a majority and the Executive, if they take an opinion, try to force their view through the House of Commons, naturally, by the function of the majority party. So, scrutiny gets squeezed. This was one of the interesting things about the scrutiny the Commons did on this Bill in Committee. It was done in two and half hours. There were some really important clauses on funding that got no consideration at all, which is why the role of this unelected House—again, the noble Baroness, Lady Fox, is not in her place—is so vital. Our job is to scrutinise, to ensure that when legislation is passed by the majority in the other place, it is fit for purpose, does what it is intended to do and does not have other implications.

These probing amendments try to push the Government into giving clearer answers about how Parliament is going to engage in the process of this statement. We are also seeking a clear position on the role of this House in scrutinising and ensuring that the majority party of the Executive is not able to force things through, which can have huge implications. I was going to say it can have huge implications for the Opposition parties, but of course, it may also do so for the majority of the votes cast in our democratic process.

I come back to the fundamental point that many noble Lords have mentioned. Changes to our electoral system should be made by consent and in a way that all political parties can accept—these are the rules, and we are all going to follow them and abide by them. As soon as an Executive start pushing things through that favour their party and cause damage to the other parties, that is a very dangerous road to go down. We are trying to ensure through these amendments that changes in statements are not just written and approved by the Executive and forced through by the Whips of their party, but are subject to proper involvement, engagement, consultation and approval by Parliament, because we are a parliamentary democracy. I beg to move.

[Baroness Noakes (Con)]

My Lords, I am going to start by banking an agreement with the noble Lord, Lord Collins of Highbury. I completely agree, as I think the whole House does, that the quality of scrutiny in the other place underlines the importance of what happens in your Lordships’ House. Having banked that, I could not understand why these amendments have been tabled. Amendment 4 asks for the strategic and policy statement to be approved in draft by each House—but that is exactly what proposed new Section 4C calls for. It calls for the Secretary of State to lay a draft before Parliament that cannot be designated until it has been approved by each House of Parliament. These are standard procedures in each House, including, importantly, your Lordships’ House. I understand why the noble Lord might want to seek a way of saying that we want more than the normal procedures that apply to secondary legislation, but these amendments do not get any closer to that. They simply duplicate in a different place what is already in the Bill, both for the initial statement and for the revised statements.

[Lord Collins of Highbury (Lab)]

I accept the point the noble Baroness is making, but I think everyone in the House is always concerned about the way in which secondary legislation is implemented. Even though we have the opportunity to scrutinise it, it is extremely difficult ever to change it; and although we have certain powers in secondary legislation, it is not clear that they will apply to this statement. I am not very keen on using fatal motions, for example. Is that going to be an opportunity for this House? That is why we are asking these questions. These are probing amendments that do not simply say that this is the position we want to see. However, the principle of proper parliamentary engagement is one we want to ensure, and doing so might mitigate some of the aspects of this proposal.

[Baroness Noakes (Con)]

I completely understand that point, but the noble Lord is raising something much broader, which goes beyond the existing procedures we have for handling secondary legislation. I agree with the noble Lord that we should have a full and proper debate about whether there should be alternatives to the nuclear option. However, that is not a debate for this Bill.

--- Later in debate ---

[Baroness Noakes (Con)]

My Lords, I hesitate to rise to speak, given the entrenched views already expressed, both in this debate and in earlier debates this afternoon, but I think the reaction to Clause 14 has been disproportionate. Strategy and policy statements for regulators are not new. They are now an established part of the regulatory landscape, although it is still a relatively new concept and noble Lords may not have been following this development. As has been said, strategy and policy statements already exist for other regulators. There is absolutely no evidence that they have in any way impaired the independence of those regulators from government. If there had been a problem with them, it would be well known by now, as all regulators have multiple routes for making their views known. There is no significant difference between the functions of the Electoral Commission and the other regulators, as the noble Lord, Lord Kerslake, sought to say. There is no significant difference to make them exempt from what is a development in the regulatory practice in this country.

I was deputy chairman of Ofcom when the Government announced that they would legislate for a strategy and policy statement for Ofcom. That was eventually included in the Digital Economy Act 2017. Like all regulators, Ofcom was extremely protective, and somewhat precious, about its independence. It is fair to say that, within Ofcom, the reaction was of considerable suspicion of the Government’s motives. I had left the board before the final statement was eventually published in 2019, so I have no insights into the final process. However, having read that statement, it is difficult to see that there is anything in it that would cause any concern about the independence of Ofcom. I have not heard of anything to that effect. In fact, the statement itself looks rather anodyne to me, as do the statements in relation to the other regulators. I have not had an opportunity to look at the draft statement for the Electoral Commission, but even the noble Lord, Lord Butler of Brockwell, found nothing disobliging to say about it when he spoke earlier.

[Lord Beith (LD)]

I am sure that the noble Baroness believes firmly that the Government she so strongly supports would not issue a statement that would challenge the independence of the commission. However, there is absolutely nothing about the illustrative statement—or, indeed, in comparison with statements made for other regulators—that in any way circumscribes the ability of this Government or future Governments to go much further than that, unless they are restrained by things that we put into the legislation.

[Baroness Noakes (Con)]

At the end of the day, there is a requirement for Parliament to agree. That is an important part of the framework. It is not something the Executive can do alone. It would need to become a parliamentary approved statement and, as we discussed earlier, it must be approved by both Houses of Parliament.

My second point is that we should be absolutely clear that strategy and policy statements are not directions. No power of direction exists for the Electoral Commission, and Clause 14 does not create one. Noble Lords would be rightly concerned if Clause 14 created a power of direction in relation to the Electoral Commission. I think that the Electoral Commission was just plain wrong, in its written briefing, to claim that it would be subject to government direction as a result of Clause 14.

I regret to say that the noble Lord, Lord Butler of Brockwell, for whom I have the highest regard, was also wrong, when he spoke on the first group of amendments, to assert that this statement amounts to a direction. It does not. Directions are very clear in what they can force public bodies to do. This does not force anything. The only requirement, as we have heard, is in new Section 4B for the Government to “have regard to” the statement. We discussed that in the first group of amendments, and the noble and learned Lord, Lord Judge, has made some comments on the ineffectiveness of that, because it does not refer to other things which it could “have regard to”. It does not trump the commission’s statutory objectives; it does not compel the commission to do anything at all, or to take account of anything else.

We must keep all this in proportion. It is an additional thing for the Electoral Commission to take into account; it does not replace all the existing law relating to the commission. This is the formulation used for all existing regulators, and I believe it is the right approach to protect regulatory independence. As I said, no concerns have been expressed to date about the independence of any of the regulators subject to statements.

The important thing is that the commission has to report on what it has done in consequence of the statement. In practice, as we will see from the way in which the statements tend to align with what the independent regulators are doing, statements generally reinforce what those bodies are doing, and relatively new information beyond what would be included in the annual report comes as a result of those statements.

However, it is important that the independent regulator explain any divergence from the Government’s priorities as approved by Parliament. For example, if the Government said that their priority was to improve democratic participation, not just generally but for particular groups, we would want to know what the commission had done about that and whether it had had any impact. That really does not threaten independence.

I believe that transparency and accountability are what the strategic and policy statements are really all about, and why they are useful. One element is for the Government to be transparent about their policies and priorities, because they have to set them down, get them consulted on and then have them approved by both Houses of Parliament. The regulators then have to be transparent in reporting on what they have done in respect of those priorities—or whether they have done nothing at all. That allows them to be held to account by Parliament—in the case of the Electoral Commission, through the Speaker’s Committee. I hope noble Lords will see that this legislation is not the monster they have created in their own minds. In fact, it can be seen as a very positive development for improving transparency and accountability. I hope we will allow these clauses to stand part of the Bill.

[Lord Eatwell (Lab)]

My Lords, I regret that, like the noble Baroness, Lady Noakes, I was unable to attend the Second Reading debate. At the time I was on an aeroplane returning from work in the United States. However, I have read the full proceedings in Hansard with great care and I feel appropriately informed.

Moreover, some time spent in the United States has also given an added perspective on some of the measures in the Bill, for there is about it a definite odour of the Donald J Trump playbook. There is the whiff of voter suppression in the extra requirements being added for access to the franchise. There is a distinct stench of the politically partisan in the measures that undermine the independence of the Electoral Commission. But perhaps the strongest stink arises from changes in the franchise being imposed by the current majority party, without pre-legislative scrutiny or a Speaker’s Conference. This strikes at the foundations of our constitution, written and unwritten.

I predict that in due course, much as the late Enoch Powell predicted, Mr Johnson will be defeated in an election—and then there will be a, perhaps minor but none the less significant, online campaign claiming that the election was stolen or rigged. While it would be unfair to claim that the noble Lord, Lord True, had planted the seeds of such a threat to our democracy, he will have added a little natural fertiliser. In his speech introducing the Bill at Second Reading, he made much of the precautionary principle, and of taking steps to protect the integrity of elections from potential, if as yet hypothetical, threats. He did not, however, extend his precautionary principle to the measures in Clauses 14 and 15 that, as the Public Administration and Constitutional Affairs Committee stated, risk undermining public confidence in electoral outcomes by diminishing the independence of the Electoral Commission, both in perception and in reality.

As the late Lord Hailsham famously observed, this country is governed by an elected dictatorship. A Government with a substantial majority in the other place can do virtually what they please. That is why this House, with its, let us say, peculiar composition, has a particular responsibility to protect the constitution, written and unwritten, against partisan proposals by the governing party. Here, the discussion by the noble Baroness, Lady Noakes, of statements for regulators gives us a valuable insight, because, in this case, the statement is made by the regulated entity. It is as if one of the broadcasters could have a statement telling Ofcom to what it should have regard. The Secretary of State is a political figure. In the electoral arena, he is a regulated entity. He should not be in a position to provide advice of any sort to the regulator.

As the noble and learned Lord, Lord Judge, said at Second Reading,

“there is a constitutional necessity, in a system of democracy based on universal suffrage, that any electoral commission should be wholly and totally independent”.—[Official Report, 23/2/22; col. 239.]

By rejecting these clauses and affirming the independence of the Electoral Commission, this House will make a vital commitment to free and fair elections.

Elections Bill

Baroness Noakes Excerpts

Lords Hansard - Part 1 & Committee stage
Thursday 10th March 2022 Lords Chamber

[Lord Lipsey (Lab)]

My Lords, when the noble Baroness, Lady Meacher, came into the Chamber, I do not think that she was expecting to have to move any amendments, and when I came into the Chamber, I certainly was not expecting to speak on any of them. But in a few sentences I would like to inject a broader perspective.

At the moment, we see a conflict between democracy and totalitarianism in Ukraine such as we have not experienced since the end of the Cold War. Democracy must win. But at this very perilous moment, the Government are introducing measures to shackle the independent Electoral Commission and put in its place the will of government Ministers. The Minister may say that they have no intention of doing anything naughty, but I would not trust him on that and, even if I did, I certainly would not trust every subsequent Government to go the same way. This is a disgraceful proposal. It undermines the democratic case that we are making to the world, and I hope that the Committee will have none of it.

[Baroness Noakes (Con)]

My Lords, this is the most extraordinary debate that I have ever taken part in, with the noble Baroness, Lady Meacher, first disowning the amendment in her name on the supplementary list of amendments and then moving it formally but not explaining what we are debating. I hope that the noble Baroness remains to withdraw her amendment at the end. Otherwise, we may be in a little trouble.

I was unable to take part at Second Reading on this Bill because I was not in the country, but I have of course read Hansard on that debate and I hope to take part in the remaining stages. I will not range as widely as the noble Lord, Lord Stunell, because I hope to say more about Clause 14 generally when we get to the stand part debate, where I think it would be most appropriate. But I will say a couple of things about the two amendments in the name of the noble Baroness, Lady Meacher, because neither of them is necessary.

Amendment 4A states that the Electoral Commission only needs to comply with the strategic and policy statement if it conforms with its own objectives. The amendment is unnecessary because the only requirement in new Section 4B in Clause 14 is for the commission to “have regard to” the statement. Nothing compels the commission to do anything specific as a result of the statement being published, and nothing in Clause 14 changes the requirement for the Electoral Commission not to do anything which conflicts with its statutory duties. In short, its regulatory independence is already protected by Clause 14.

I was somewhat mystified by Amendment A1 which removes the role and responsibilities from the strategic and policy statement. These strategic and policy statements merely set out what the Government’s priorities are and what the Government see as the role and responsibilities in relation to those priorities. It does not override the commission’s independence but gives guidance as to the Government’s priorities and of course those priorities will be approved by Parliament. Public bodies do not exist in a vacuum; they exist in a political context. The strategic and policy statements just give that context—nothing more, nothing less. Clause 14 does not impact on the independence of the Electoral Commission.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, this is an astonishing Bill. I understand why there was confusion at the start; I do not blame the noble Baroness, Lady Meacher, in any way and I hope no one else will, given what we are facing today.

This is an outrageous Bill in almost every way: a 171-page compendium of political bias. In the case of the Electoral Commission, I can understand why the Government are embarrassed. As I understand it, the commission pointed out the kind of money that the Conservative Party was getting and where it was getting it from. Given that we are now in the middle of a war in which the Russian state—Mr Putin and his cronies—are invading Ukraine, the fact that some of the money was coming from Russian sources must be an acute embarrassment to the noble Lord and his cronies. That is why they do not like the Electoral Commission.

We just have to look at what is in the news today about the Charity Commission. The story is that the Government are about to put in a Tory placeperson—a placeman, as it happens—as the chair of the Charity Commission, as they have done before. This is what they do, and it is happening throughout our public system. A Member of this House, who used to be a Labour MP, has been appointed to post after post because they supported the Government in the last election and supported the Vote Leave campaign. It is cronyism squared—cubed, probably.

The Liberal Democrats mentioned the Westminster Foundation for Democracy in a speech earlier. I used to be a board member of that foundation and am now on the executive of the Commonwealth Parliamentary Association. We are about to have a seminar, with representatives from all around the Commonwealth, at which we will be talking about good governance. How on earth can we try to put forward the idea that this so-called mother of Parliaments is an example of good governance if this Bill becomes an Act? We must do everything we can, not just to amend it but to scupper it.

Look at today’s amendments: after the two from the noble Baroness, Lady Meacher, we have over 100 government amendments. What on earth is going on with this legislation? We will soon be moving towards Prorogation and the Queen’s Speech. This Bill should be totally abandoned. In many ways we are wasting our time going through amendment after amendment; I do not think there is any prospect of the Bill moving forward.

I am a member of the Parliamentary Assembly of the Council of Europe and the Organization for Security and Co-operation in Europe Parliamentary Assembly. We go around monitoring elections in other countries and we see what happens. If there is no effective independent electoral commission in a country then we criticise that and say it is not a proper democracy. How can we properly participate and show face in these countries if this Bill becomes an Act? It is just outrageous.

I know the Minister has an impossible task. Those of us who have been in the House of Commons know the kind of debates that take place there. Regrettably, the House of Commons these days is not taking the time—it does not have the time—to examine 171 pages and all these amendments in detail, let alone their implications for our democracy. We are dealing here just with the Electoral Commission but there is a whole range of other issues, such as identification, which will make the opportunity for ordinary people to vote much more difficult.

As I say, the House of Commons has not given this legislation the kind of scrutiny that its Members ought to have done. They understand elections more than we do; they take part in them year by year, so they understand the implications of the Bill. We have a responsibility to go through the Bill line by line, but there is no way we can do that in the next couple of months. I hope that at some point—even if not now, it is inevitable that this is going to happen—the Minister will throw in the towel and say, “This is just not going to proceed”. If not, I warn him that we on this side of the House—and I think the Liberal Democrats are filled with the same kind of enthusiasm and determination, as are the Greens and, I suspect, a huge number of Cross-Benchers—will do everything we can to undermine and thwart the Bill and make sure that this abortion—no, that is not the right word.

Dissolution and Calling of Parliament Bill

Baroness Noakes Excerpts

Report stage
Wednesday 9th February 2022 Lords Chamber

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I too attempted to darn this Bill in Committee and, indeed, spoke at Second Reading, and I too am opposed to this group of amendments. My core concern here is to safeguard my successors on the Bench and to avoid the risk of constitutional crisis, which would arise were there to be some future attempted legal challenge not as frivolous as that just indicated by the noble Lord, Lord Pannick, but something dressed up as an altogether more coherent attack on a Dissolution, such as the noble Lord, Lord Pannick, himself would be adept at managing.

Unlike the noble Lord, Lord Howard, but in common with the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord Beith, I do not think for an instant that the courts would ever actually reach the point of upholding such a challenge, even though, as the noble Lord, Lord Pannick, also says, things have undoubtedly moved on since the CCSU case. That, as it happens, was my very last case at the Bar, decades ago. Although it is very unlikely that such a challenge would succeed, it is very important to put in the Bill a provision that would provide the greatest possible discouragement to any mischievous person, instructing whosoever it may be, contemplating a challenge.

Clause 3 seems to me to be admirable for that purpose; it enables the courts to say, as Mr Justice Macpherson—a very old friend of mine, with whom I shared a room in chambers for decades—said in that case, “Chuck it out without more ado.” That is really the point made by the noble Lord, Lord Trevethin and Oaksey. That is the practical effect of Clause 3. It is not there, I would suggest, as revenge for Miller 2; nor does it—and this is the point made by the noble Lord, Lord Faulks—create a risk that this will be a template or precedent for the future. Its relevance here is purely in the context and to underline the fact that Dissolution is essentially a prerogative act, preserved even since CCSU. We should leave it there, discourage prospective litigants and reinforce the courts in a robust rejection of any attempt that would delay and disrupt, to some degree, a Dissolution process. Leave it there.

[Baroness Noakes (Con)]

My Lords, the noble Lord, Lord Butler of Brockwell, was kind enough to quote me from when I spoke in Committee on this. I want to underline that what I said was:

“I cannot conceive of any circumstances in which the involvement of the courts could ever be justified”.—[Official Report, 25/1/22; col. 227.]


That is the important point. What Clause 3 is trying to do is to put this question beyond doubt.

Without Clause 3, we potentially do not rule out the courts trying to get themselves involved in challenging the use of the royal prerogative, doubtless with the help of very clever lawyers such as the noble Lord, Lord Pannick. Indeed, in the noble Lord’s remarks just now, he rather wanted to keep the door open for noble Lords such as himself to encourage the courts to get involved in cases such as the use of the royal prerogative.

Our understanding before the introduction of the Fixed-term Parliaments Act was that the courts would not get involved in the use of the royal prerogative. Since then, there have been some surprising judgments—perhaps not surprising to the noble Lord, Lord Pannick—such as Miller 2, which have made many people doubtful about whether or not the settled understanding of where the courts would go was indeed that settled. That is what the noble Lord, Lord Pannick, has underlined for us today.

Dissolution and Calling of Parliament Bill

Baroness Noakes Excerpts

Committee stage
Tuesday 25th January 2022 Lords Chamber

The noble Baroness, Lady Taylor of Bolton, asked what would happen if there were a tied vote. I immediately agree that conventions and precedents are not as tight a constraint as statutory provision, but I am in no doubt that, if there were a tied vote, the Speaker of the day’s attention would be brought to the decision of Speaker Denison in 1867, when he said that major matters of public policy should be decided by a majority of the House, not “merely”—he used that word—on the casting vote of its presiding officer.

[Baroness Noakes (Con)]

My Lords, I do not often agree with the noble Lord, Lord Wallace of Saltaire, as he knows, but I did agree with his closing remarks on Second Reading:

“We should never take democracy for granted: it needs to be defended.”—[Official Report, 30/11/21; col. 1332.]


I absolutely agree, which is why it is important that the amendments in this group are not passed.

Sometimes, when people talk about democracy, they talk in terms of the role of Parliament or the separation of powers. But we must always remember that democracy is about the people—demos—who have power at the apex of our constitution and whom we have to defend. The most important players in our democracy are not Members of Parliament at Westminster but the voters up and down the land. The possibility of Parliament standing in the way of asking the people for their views on the way forward is fundamentally undemocratic, in my view.

These amendments are capable of depriving the people of their say in the future of the country. Furthermore, they could do harm at the very time that the views of the people, as expressed at the ballot box, are most needed and could have the greatest impact. Of course, if the Government of the day have a whopping majority, whether or not they have to pass a resolution in the other place will make very little difference to the outcome. It might perhaps add a few days of delay to the timing of a general election, but it would otherwise simply be a tiresome detail. But the amendment will make life difficult for minority Governments or Governments with small majorities, if they feel that they need to call an election.

At Second Reading, I spoke about the events of 2019 being one of my key reasons for supporting the Bill. It was plain that Parliament was dysfunctional. The Government could not get their chosen policies through the House due to a combination of the actions of the opposition parties and of some of our own Back-Benchers. A majority in the other place and indeed in your Lordships’ House—although that is not relevant to this amendment—was set upon frustrating the Government’s Brexit policies, but the Government could not call an election to settle that issue because they could not meet the two-thirds threshold of the Fixed-term Parliaments Act.

Of course, the Government eventually got their Early Parliamentary General Election Act through and, by then, the Labour Party had decided to support it. But we will never know whether it would have been possible for the Government to have reached the simple majorities required in these amendments at an earlier stage—but it is entirely possible that they would not have done so. A number of my party’s MPs had lost the Conservative Whip during those unhappy days and would not, therefore, have been able to stand as Conservative candidates if an election had been called. Would the turkeys really have voted for Christmas? I think not.

Many noble Lords in this House might choose to forget the result of the 2019 election because it was not to their taste, but I remind them that it was a resounding thumbs up for the Government’s Brexit policies, which Parliament was seeking to harass and destroy at the time. These amendments could well have prevented that decisive view of the country from being expressed at the time, and we would have been the poorer for it.

Minority Governments with small majorities but fractious Back-Benchers capable of frustrating a vote on a general election are not figments of my imagination; they are a real part of our political system. I say this especially to the Benches opposite because, if they have any hopes of again forming a Government, they need to reflect on whether a zombie Parliament could affect them as well. They might also reflect on whether the minority Wilson Government in 1974, which the noble Lord, Lord Beith, referred to in the debate on the earlier group of amendments, would also have resulted in an election. Is it absolutely clear that the Wilson minority Government could have called the second election in that year if he had had to cope with what this amendment would have landed him with? These amendments could be a very dangerous part of our constitutional arrangements and should be rejected.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I feel part of an endangered species: a Cross-Bencher who fully supports this government Bill. I would also like to go back to where we were before the ill-starred and ill-judged Fixed-term Parliaments Act.

I am against giving the Commons a veto, as proposed in Amendment 3 by my noble and learned friend Lord Judge, who is normally so sagacious but who is wrong on this occasion. This could lead to the same chaos, stasis and problem of September 2019, which the noble Baroness, Lady Noakes, has just outlined, when we subjected our Prime Minister—whatever you thought of him then or think of him now—to the humiliation of having to go cap in hand to Brussels to plead for an extension of time to achieve a policy flatly contrary to the one that he wished to put to the country. He could not get a two-thirds majority, and one seriously doubts whether he would have got a simple majority.

The Joint Committee that examined this legislation and reported in March 2021 made plain that, although a minority supported the view outlined by my noble and learned friend Lord Judge and the noble Lords, Lord Lansley and Lord Beith, the majority recognised the danger, which we should avoid at all costs, I respectfully contend.

As to the prerogative power, one can hardly overstress the difference between Prorogation and Dissolution. Prorogation—let one remind oneself—affects the cessation of Parliament and is anti-democratic in the sense that it thwarts the power of Parliament. Our governing, imperative, fundamental constitutional principle is the sovereignty of Parliament; Prorogation thwarts it and leaves the Executive for the duration in uncontrolled power. Dissolution—at the opposite end of the spectrum—is explicitly designed to give the electorate the opportunity to decide who should control our Executive. My noble and learned friend Lord Judge speaks of Dissolution eradicating the decision of the electorate last time around, ditching the democratic vote. Well, of course, in one sense you are getting rid of an existing Parliament, but you are inviting more up-to-date views on what the public—who, as the noble Baroness, Lady Noakes, said, really should be controlling all our processes—want and whether they approve the particular policies in the particular circumstances in which Dissolution is sought.

Of course, if you put the Commons in control, although you run into the sort of difficulties that the noble Baroness, Lady Noakes, rightly identified, you get rid of the problems that others seem to suggest arise under Clause 3 here. There is no question then, obviously, of the courts’ supervisory jurisdiction. But—and we will come to this point of debate later—I suggest you really do not need to introduce the chaos of a Commons vote in support of Dissolution in order to avoid the risk of introducing the courts into the whole business.

--- Later in debate ---

[Baroness Noakes (Con)]

My Lords, I will speak only on Clause 3 stand part and not on the more detailed amendments, because I am sure that my noble friend the Minister will reply in his careful way about how the wording was arrived at and what it is intended to do, as he did very carefully at Second Reading.

One does not have to be an expert on the constitution, which I am not, to know that judges should not interfere in politics, and decisions on calling elections are about as political as decisions ever get. I believe the Government are right to try to draft this Bill in such a way that the courts cannot interfere in that very political decision, and that is why I support Clause 3 standing part of the Bill.

The fact that the Government feel it necessary to include Clause 3 and draft it in such a complex way speaks volumes about how the judiciary has found many ways of getting involved in areas that would have seemed unthinkable only a few years ago, ones of which we would have assumed the courts would steer clear. The clause is necessary only because of the direction of travel taken by the courts in the way they have interpreted the areas they get involved in. I, for one, believe that we need no more surprises like the Miller judgments.

Clause 3 is confined to the specific and narrow issue of whether the prerogative power to dissolve Parliament is justiciable. I cannot conceive of any circumstances in which the involvement of the courts could ever be justified, and those who oppose Clause 3 have said that they cannot think of any either. Even the noble Lord, Lord Butler of Brockwell, who demonstrated the fertility of his imagination in the debate on an earlier group of amendments, could not come up with an example. We are legislating against shadows, against figments of the imagination.

The issue is about only the steps taken to allow a general election to be called. It is a very political decision. We cannot conceive of the courts ever getting involved in delaying an election, halting an election or even, as my noble friend Lord Faulks suggested, nullifying the result of a general election. It just seems too ludicrous a concept even to contemplate. However, we need it to be clear beyond peradventure in the law, and without this clause it may not be.

We need to get this into perspective. Clause 3 does not diminish the role of the courts in the constitution; it is about this one narrow area that before, when we simply rested on the prerogative, no one thought the courts could ever get involved in, but because of other developments in the law we now feel it necessary to be quite explicit about it.

[Lord Butler of Brockwell (CB)]

The noble Baroness and I agree that the circumstances in which this situation arises are unthinkable, so why should we have the dangerous precedent of this ouster clause in the Bill?

[Baroness Noakes (Con)]

We have it because it is just possible that the courts could find a way in. We have seen them getting involved in areas that we never thought they would get involved in before. That is a fact of the way the judiciary has moved in recent years, and it is why the clause is there.

I do not accept that the clause sets a dangerous precedent. It is about this one very narrow issue. It is not about an ouster clause that would be put in every statute that came before Parliament. Of course, Parliament must decide at the end of the day how it wants to frame its laws. It has the right to do that, and the courts can then interpret those laws, but I do not believe that this will be seen as a precedent for a more general use of ouster clauses. If it is, I am fairly sure that Parliament would not accept them. We should see this clause in the narrow concept in which it is drafted and not try to extend it beyond that.

[Lord Wallace of Saltaire (LD)]

My Lords, if we are talking about our tried and tested constitution, we should remember that in the 17th century it was Chief Justice Coke and his defence of the rule of law against the extent of the royal prerogative which led to the development of some of the ideas of constitutional democracy at least as much as Parliament. The rule of law is an essential part of the way we work.

I say to the noble Baroness, Lady Noakes, that we all know that this clause is in the Bill because of the judgment on Prorogation in 2019. I was interested to hear that the Minister’s definition of Prorogation did not in any sense suggest that that use of the power came within an accepted definition. Perhaps he will change his definition next time he comes.

The Minister has said that the importance of the Bill is to restore the status quo, but this ouster clause is not the restoration of the status quo. I agree with the noble and learned Lord, Lord Hope, that it opens a window to its use on other occasions, which would be highly undesirable. It is much more radical than Clause 2 in changing our customs and practices. If we want to maintain the status quo while changing it a little—

Dissolution and Calling of Parliament Bill

Baroness Noakes Excerpts

2nd reading
Tuesday 30th November 2021 Lords Chamber

[Baroness Noakes (Con)]

My Lords, in my time in your Lordships’ House, two periods stand out as painful memories, and both are addressed by the Bill. The first is of the period of coalition government between 2010 and 2015. While these Benches rejoiced at the end of the period of Labour rule, many of us found it hard to support the coalition wholeheartedly. In particular, the coalition agenda had a disproportionate focus on constitutional reform, which inevitably sapped energy away from more important things. I was very sorry to hear my noble friend Lord Young of Cookham, who is leaving his place at the moment, claiming some credit for that. Of course, there was Nick Clegg’s futile attempt to reform the House of Lords, which fortunately ran into the sand and never got past a Second Reading in the other place. The time of both Parliament and the country as a whole was wasted on a referendum on the alternative vote system. The wheels came off that when the British public had their say.

At the time, the Fixed-term Parliaments Act did not seem to be the worst of the constitutional measures that sailed under the convenience flag of the coalition, but its weaknesses emerged over time. As we have heard, it has produced only one five-year fixed-term Parliament, and that was in order to hard-wire the coalition in. Whether or not that was, on balance, a good thing for the country is a moot point at best. After 2015, we had two elections in less than five years—so the Act failed in its initial purpose.

The 2017 election was an act of self-harm by my own party—I freely admit that—but the second, in 2019, is the source of my second painful memory. Its final result, when it was finally called, was a triumph for democracy and the good sense of the British people, whose message was clear, and that included getting Brexit done. But the journey to that election was truly painful and laid bare the flaws of the Fixed-term Parliaments Act.

The requirement for a supermajority and the narrow path laid out for a no confidence Motion in the other place before an election could be called led to chaos in Parliament in 2019. The Government could not get their business through, could not call a general election and were harried at every turn by both Houses of Parliament, set on defying the outcome of the 2016 referendum. I still bear the scars of what happened in your Lordships’ House, as I am sure my noble friend the Minister does, and I certainly hope never to experience its like again in my remaining time here. For these reasons, the Bill has my wholehearted support. We must never again risk the mayhem of late 2019. That is why I fully support Clause 1, which removes the Fixed-term Parliaments Act from the statute book—it can be written out of our history.

The logical next step is to reinstate the status quo ante. As we have heard, Clause 2 does this through the revival of the royal prerogative. I believe that anything that diverts from that straightforward aim, including fettering the royal prerogative with parliamentary processes, runs the risk of unintended consequences. It is conceivable that a Government might not have a majority, could not get a vote through the other place and could be held to ransom, as they were in 2019, by a Parliament set on thwarting their will. That year showed us that the unthinkable can indeed happen. The previous system worked well for Governments of all parties, and I am confident that it will work well again. We should simply revive the royal prerogative and not invent something else around it.

I also support Clause 3 of the Bill, which expressly provides for non-justiciability. I do not believe that it should be seen as an ouster clause, because it is generally accepted that the likelihood of the courts challenging the monarch’s personal prerogative is very small. There should be nothing to oust. But a small likelihood is not a zero possibility, and recent judgments should make us wary of where the courts might want to go in future—we clearly cannot rule out future judicial activism. I believe that we should put that question beyond any doubt by enacting Clause 3.

The other place has already expressed its clear view on this short and simple Bill. When it debated it, it did so in the light of all the relevant issues that were surfaced by the excellent Joint Committee on the Fixed-term Parliaments Act, its report and the Government’s response. It also did so in the light of the points raised by the Public Administration and Constitutional Affairs Committee in the other place, and I do not believe that any new issues have been raised by your Lordships’ Constitution Committee in its recent report, although I look forward to hearing the noble Baroness, Lady Taylor of Bolton, in due course.

Your Lordships’ House is always entitled to ask the other place to think again, but I suggest very gently to noble Lords that doing so when the result is not likely to change is not a good use of your Lordships’ time. I hope that this House will not impede the Bill’s journey to Royal Assent.

Budget Statement

Baroness Noakes Excerpts

Wednesday 3rd November 2021 Grand Committee

[Baroness Noakes (Con)]

My Lords, I agree with my noble friend Lord Lamont and the noble Lord, Lord Fox, that this debate should have been held in the Chamber. Indeed, 10 years ago, when the noble Lord, Lord Davies of Oldham, and I were on our respective Front Benches, it never happened and never would have, not least because we would never have accepted a time-limited debate on something as important as the Budget.

I have a problem with this Budget: it does not feel at all Conservative. Low taxes, pro-enterprise measures and small government have all gone AWOL. I therefore struggle to be upbeat about it. The Budget is of course shaped by the choices that the Government made in responding to the Covid pandemic. The Government never published a proper cost-benefit analysis of their response to the pandemic, so there was no public debate about the right balance of measures that could have been taken.

One bright bit of news emerged last week in the shape of a leaked Cabinet Office document on the current Covid plan B, which fortunately has not been implemented. It shows that the Treasury is on the case in analysing the economic benefit, and it calculates that the cost would be up to £18 billion with very weak health benefits. It is a pity that the more careful analysis for which the Treasury is renowned was not more prominent in the last year and a half.

The economic impact of the Government’s Covid choices are now very visible. The lockdown tanked the economy and required extraordinary levels of support for individuals and businesses. That has left us with debt estimates of nearly 90% of GDP, albeit lower than previously forecast but still at levels that none of us expected to see in our lifetimes, especially under a Conservative Government. The OBR has estimated the long-term effects of scarring from Covid as a permanent loss of 2% of GDP.

The non-Covid outcomes also have to be paid for, with serious backlogs in health and education. The Government are pouring astonishing amounts into the NHS. The Department of Health and Social Care’s budget starts at around £140 billion and rises to nearly £190 billion. There is not a single word in the Red Book about efficiency or value for money in the NHS; the commentary is almost all about spending, which is how the NHS likes to frame the conversation. That cannot be the right approach to public expenditure, and I hope the Minister will assure me that the Treasury will not wait until the next spending review to tackle the black hole of NHS spending.

To pay for all this, we need serious growth in the economy. I am particularly concerned about the prospects of growth beyond the current bounce-back from Covid. As we have heard, the OBR forecasts that growth in the years beyond 2022 will fall below 2%, ending at 1.4% in 2026. Doubtless part of that is a result of the estimates of scarring, to which I have already referred, and one ray of hope is that there is still massive uncertainty about those estimates so it may not have such a dramatic effect. However, if the forecasts are right then we are creating an environment in which businesses will not prosper, the tax yield will decline and enterprise and investment will find no incentives in the UK, which will in turn lead to lower employment. We could be entering a downward spiral.

However, I simply do not believe the forecasts; if I believed them, I would be preparing to leave the country. The only thing that keeps me sane is a belief that the picture painted by the OBR is simply wrong—and not just in the scarring effects, whether from Covid or from Brexit. We know the OBR is resistant to dynamic forecasting, and that may account for some of it; the contribution of trade to GDP is “negligible”, and that feels wrong; and the OBR’s growth forecasts are at the bottom end of those by independent forecasters. So, I shall not be packing my bags just yet.

There were two good bits in the Budget speech. The first was the reduction in duty on champagne. As noble Lords may know, champagne is the dieter’s drink of choice for its low calorific content, so this is clearly consistent with the Government’s obesity strategy.

The second good bit has already been referred to by my noble friend Lord Lamont and read out in full by the noble Lord, Lord Eatwell, so I do not have to take up the Committee’s time by repeating it, but I remind noble Lords that it concludes that there are limits to government involvement in the economy. It was good to hear the Chancellor saying that. It was the most Conservative thing he said in his 34-page speech. I hope he means it, and that we can return to Budgets which reduce taxes, curtail the size of the state, reduce burdens on business and support the enterprise sector to grow and prosper.

Critical Benchmarks (References and Administrators’ Liability) Bill [HL]

Baroness Noakes Excerpts

3rd reading
Tuesday 2nd November 2021 Lords Chamber

[The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)]

My Lords, I would like to make a few short remarks. The Bill builds on the Financial Services Act 2021, which gave the FCA powers to oversee the orderly wind-down of a critical benchmark, such as Libor. In particular, it allows the FCA to ensure the continued publication of a benchmark, using a synthetic methodology. The Bill plays a vital role in supporting a smooth and orderly wind-down of the Libor benchmark, by providing legal certainty for contracts that rely on Libor beyond the end of this year, and a narrow immunity for the administrator of Libor, where it is publishing synthetic Libor as required by the FCA.

It has been a privilege to have engaged in these discussions. I thank noble Lords for their rigorous examination of this highly technical Bill, both in formal debate and in the various technical briefing sessions that I have held. I am confident that the Bill has been thoroughly examined by the House. All those involved have brought significant experience and insight to this process.

I am particularly grateful to my noble friends Lady Noakes and Lord Blackwell for raising this important issue during the passage of the Financial Services Act earlier this year. Once again I put on record my thanks for their work on this matter.

In our discussions, we have covered the issue of the FCA’s methodology for the synthetic rate. We have considered the importance of legal certainty, which the Bill delivers, and we have highlighted the work that the FCA is doing on the wider Libor transition. This includes its work to ensure that synthetic methodology is fair and aligned with the global consensus.

We have talked about the work that the FCA has been doing alongside the Bank of England and the industry-led risk-free rate working group. This will support and encourage a voluntary transition away from Libor prior to the end of this year wherever possible—an effort which has been successful in significantly reducing the number of contracts that will need to rely on the synthetic rate both here in the UK and globally. Throughout, your Lordships have had a particular interest in protecting consumers and maintaining the integrity of UK financial markets.

As we have discussed, the UK has one of the most open, innovative and dynamic financial services sectors in the world. As the home of Libor, we have a unique and crucial role to play in minimising global financial stability risks and disruption to financial systems from the wind-down of Libor. The Bill forms part of a significant programme of work by the Government and the regulators to support the global market-led transition away from Libor. It supports the integrity of financial markets and consumer protection. In doing so, it underlines our reputation as a custodian of a global financial centre.

I conclude these brief remarks by thanking the Economic Secretary to the Treasury, his officials, and the clerks in the Public Bill Office, who have worked so diligently to support the passage of this Bill. I also thank FCA officials for the technical briefings that they have provided. I beg to move.

[Baroness Noakes (Con)]

My Lords, as I was so kindly namechecked by my noble friend, I will just say that I thank the Government very much for responding to the real concerns expressed by the financial services industry in respect of tough legacy Libor contracts. The Bill does not deliver everything that the industry wanted but it delivers a great deal, and I am very grateful to the Government.

Bill passed and sent to the Commons.

Critical Benchmarks (References and Administrators’ Liability) Bill [HL]

Baroness Noakes Excerpts

2nd reading
Wednesday 13th October 2021 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I declare my interests as recorded in the register and, in particular, my holdings in financial services companies, which could be affected by the Bill.

I welcome the Bill and thank the Government for responding to the very real issues that are raised by tough legacy contracts. I also thank the Minister and my honourable friend the Economic Secretary for arranging two very helpful briefing meetings for Peers. Before getting into my speech, I must say how much I am looking forward to the maiden speech of my noble friend Lord Altrincham, and I welcome him to the select group of noble Lords who speak on financial services matters.

When we considered the Financial Services Act 2021 earlier this year, I argued that we needed provisions beyond those contained in that Act to deal with tough legacy contracts. I tabled some amendments in Committee and on Report, none of which found favour with the Government. It was plain to me that legislation was needed to avoid disruption in financial markets, and I warned about the clock ticking down towards 31 December this year, when Libor ceases. I therefore rejoice that the Government have now seen the light, and I hope that this Bill can be speedily dealt with both here and in the other place.

In the previous Bill, I argued for two measures to deal with the tough legacy problem: a contract continuity provision and a safe harbour provision, as referred to by the noble Lord, Lord Sharkey. This is what the financial services industry said that it needed and what the responses to the Treasury’s consultation showed. The Bill provides for contract continuity but not safe harbour. If nothing else, that is regrettable for being out of line with the approach already taken under New York law, where a safe harbour has been provided.

As I understand it, the Government believe that they have drafted the continuity provisions in such a way that a safe harbour is not needed. The theory is that the continuity provided by the Bill should be watertight against any actions that arise from transition to synthetic Libor. There are concerns about this. Experience shows that legal challenges can and do emerge to legal drafting, even if that drafting is initially believed to be bombproof—whether in contract or statute law. No self-respecting lawyer would claim otherwise.

There is clearly a risk of litigation by parties who think that they have suffered from the transition to synthetic Libor or who could gain from being released from a contract. The risk of successful litigation may not be high, but there is a risk. This could be disruptive and costly. I hope that my noble friend agrees that it is important to avoid this.

The scale of the risk may well be difficult to quantify and will, of course, depend on the number and type of contracts that actually transition to synthetic Libor at the end of this year. There will, however, be clear winners and losers. As the noble Lord, Lord Sharkey, said, the new, synthetic rate will probably be higher than Libor—possibly by about 10 basis points. I spent some of our recent Recess acquiring new knowledge about the overnight interest swap rate and the ISDA five-year historic median credit adjustment spread. If nothing else, this shows that your Lordships’ House is a wonderful place for lifelong learning. Ten basis points may not be much on a retail mortgage but, on a large nominal in a commercial transaction, it could be a pretty big deal.

Last week, the Financial Conduct Authority provided us with a very helpful note on synthetic Libor. I fully accept that the FCA has consulted extensively and that there is general market acceptance that the methodology is the best that could be achieved for Libor-like rates. Nevertheless, there has not been a debate about the quantum of the difference between Libor and synthetic Libor and its impact on litigation risk. A question about quantum was tabled last week at a webinar arranged for the financial services industry together with the Treasury and the FCA, but that question was not selected for answer. This will be in the public domain at some stage and I believe it could increase the likelihood of litigation.

An important risk mitigant will be the clarity of the government messaging in relation to the impact of this Bill. I hope that my noble friend the Minister can be crystal clear on three points. First, the Government need to intend for the drafting of Clause 1 to have the same substantive effect as the New York legislation. In other words, the Government’s clear intention should be that the continuity drafting must be watertight in relation to litigation targeting the transition to the use of synthetic Libor.

Secondly, the Government need to be very clear that the ISDA credit adjustment spread—the main source of the difference between Libor and synthetic Libor—is set by the FCA, that it may well result in higher rates, and that it is out of the control of the parties to the contract.

Thirdly, with the strong encouragement of the Treasury, the FCA and the PRA, the industry has been actively transitioning contracts by agreement, generally using SONIA—with or without a credit adjustment spread or base rate. The FCA briefing note to which I referred said that they regarded these formulations as fair. Do the Government agree that these rates are fair, given that they may not be the same as the synthetic rates to be used for tough legacy contracts? It is just as important to avoid litigation on contracts transitioned by agreement as it is on those designated tough legacy contracts, especially as the draft scope from the FCA will potentially put a very large number of outstanding contracts into synthetic Libor for 2022 at least.

I will touch briefly on the fallback provisions in new Article 23FB. It is certainly welcome that contractually agreed fallbacks can continue, particularly where they have been negotiated in the clear knowledge that Libor would be ceasing. However, many contracts and other documents have fallback language which would be problematic if they were saved by Article 23FB. The risk-free rate working group, which has done splendid work on Libor during the last couple of years, highlighted formulations which used “cost of funds” as being problematic. The term sounds more straightforward than it is. There is no agreed method of computation for standard market practice. It is thus a rich source of potential disagreement between parties and, hence, of lengthy and costly litigation, which I am sure the Government will want to avoid. Can my noble friend say whether any contracts with cost of funds fallbacks are likely to stand, or is it expected that they will all be transitioned to synthetic Libor? The latter is clearly preferable, given the difficulty of applying that particular fallback.

Lastly, I want to raise the 10-year time limit on the use of synthetic Libor under the 2021 Act. The New York legislation does not have a time limit. I understand that it is widely believed that there will be a rump of contracts which will go beyond this period. Do the Government accept that some contracts will need a solution beyond 2031? If so, when do they expect to deal with these? I hope that we can avoid the brinkmanship that has characterised the timing of this Bill and some of the FCA decisions in the run-up to the deadline at the end of this year.

In conclusion, despite the concerns I have outlined, I am a big supporter of this Bill. I hope that it will become law as soon as possible and give the market the certainty it needs.