Economy: The Growth Plan 2022

Baroness Stroud Excerpts

Monday 10th October 2022 Lords Chamber

[Baroness Stroud (Con)]

My Lords, I refer to the Register of Lords’ Interests and my role as chair of the Social Metrics Commission and CEO of the Legatum Institute.

It goes without saying that the UK is facing an uncertain economic future. That is why it is absolutely right that the Government’s focus is on growth, boosting productivity, delivering more jobs and attracting more businesses, investment and trade to the UK. But we need to go beyond this to ensure that growth benefits all people, families and communities right across the UK. Doing this will require an understanding of people’s living standards, and this in turn requires two things. First, the Government need to have an effective, official UK measure of poverty, which the Government currently refuse to implement. Secondly, it requires us to protect those with the lowest incomes by ensuring that benefits are not eroded in real terms—which we hear the Government are currently considering backing away from.

Over the last three years, we have seen the economic, social and personal impacts of the pandemic fall hardest on those who are least able to shoulder the burden. Now, with the rising cost of living, it is those very same people, families and communities who face a perilous winter.

But it could have been even worse. The Government’s action on energy bills and emergency cost of living support has protected more than 1.5 million people from poverty. If the Government had a measure of poverty, they could be demonstrating how their policies were protecting the most vulnerable. With such positive action taken so far, it is remarkable that we hear rumours of limiting the uprating of benefits next year. To do so would be to provide a significant real-terms reduction in incomes for families right across the UK who are struggling to make ends meet.

Our estimate at the Legatum Institute suggests that uprating benefits by earnings, rather than CPI inflation, would increase poverty in the UK by a further 450,000 people. If the Government had a measure of poverty, they would know this and take steps to avoid it. Uprating benefits only by earnings would increase poverty among working families by 350,000 people. It would increase poverty among families that include a disabled person by 250,000 people. These are the very people and families that society should be protecting from the impacts of the cost of living crisis, not consigning to a winter of precarity.

Perhaps this is the problem: that policy-making and political debate about poverty and the lives of those on low incomes are conducted in a vacuum of effective measures. This need not be the case.

For the past five years, I have been leading the Social Metrics Commission. Our goal has been to create a measure of poverty which both accurately reflects the lives and experiences of people on low incomes and has a broad consensus of cross-party support behind it. In 2018, we published our findings and in 2019, with the support of statistics experts, charities and the Office for National Statistics, the Conservative Government committed to developing experimental statistics based on our measure. This work has now been stopped without explanation or reason. As a result, policy decisions are being taken blind to the impact they could have on poverty.

What does all this mean? First, uprating benefits by inflation next year is the right thing to do. Even if the Government are successful in boosting trade, driving strong economic growth and increasing employment, failing to do so would increase poverty among working families and disabled people and fail to protect many of the most vulnerable in society.

Secondly, it means that the adoption of the Social Metrics Commission measure as an official statistic would allow the Government to show the positive impact they are having on people’s lives right now and take the necessary steps to protect vulnerable people at a moment of global crisis. Looking forward, it could be the foundation for the Government driving an economic and growth strategy which ensures that, for the first time in a generation, as a society we can see a meaningfully lower level of poverty.

United Kingdom Internal Market Bill

Baroness Stroud Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Baroness Stroud (Con)]

My Lords, I begin by adding my congratulations to the noble Baroness, Lady Hayman, and the noble Lord, Lord Sarfraz, on their maiden speeches. I look forward to hearing further contributions from them both over many years.

The Bill, as we have heard, makes provision for the continuation of the UK’s single market when the transition period ends on 31 December. This single, unified, internal market is a key block in the constitutional foundations of the United Kingdom. It is my understanding that the 1707 Articles of Union between England and Scotland, and those between Great Britain and Ireland in 1800, abolished all customs duties between the different parts of the United Kingdom. Accordingly, free and uninterrupted commerce across all parts of the newly united kingdom were seen as one of the most important advantages of the Act of Union, particularly in Scotland and Ireland, the citizens of which could freely trade into and out of the larger English market.

When Ireland was partitioned and the separate Parliament of Northern Ireland was established, the Westminster Parliament was careful to ensure Northern Ireland and Great Britain should continue to remain a single, integrated, internal market. The devolved legislatures in Scotland and Wales were created after the UK had joined the European community. Because the EU single market rules on state aid and free movement of goods and services apply to regional governments and legislatures as well as the central governments of member states, there was no need, during our EU membership, for specific UK-based rules maintaining the UK internal market against fragmentation. Now that we are approaching the end of the transition period, a vehicle is needed to maintain the free flow of trade across the nation in the post-Brexit world.

As we are all aware, though, there are two clauses in particular that will be subject to much debate and have already been subject to much debate during the passage of this Bill. These would allow the Government to restrict the so-called direct effect of two parts of the Northern Ireland protocol, which is part of the EU withdrawal agreement. These clauses have the goals of protecting the basic functioning of the United Kingdom’s internal market, as it operates between Great Britain and Northern Ireland in the event that it is not possible to reach an agreement with the EU on the UK’s future relationship with it; and allowing state aid in Great Britain to be dispensed under a framework of rules devised in this country, rather than being subject to European Commission control and European Court of Justice jurisdiction.

During the passage of this Bill, it is my intention to focus on and scrutinise, first, the degree to which, under the UK’s constitutional law, international treaties in general do not form part of the law. It is my understanding that, when an international treaty has made it necessary to make changes to the UK’s internal law in order to comply with it, the general practice has been for Parliament to pass legislation to make any necessary changes to the law. Secondly, I want to focus on the degree to which the jurisdiction clauses represent a gross departure from normal international treaty practice, under which sovereign states simply do not accept binding rulings by the courts of the other treaty party and agree only to subject themselves to mutual international courts or tribunals. Thirdly, I shall look at the degree to which, as a matter of UK constitutional law, the UK Parliament is entitled to legislate to remove direct effect from part of, or, if it so chose, the whole of, an international treaty.

I look forward to engaging in the debate on this Bill and hope that, in doing so, we can find a way through that addresses the challenge this Bill seeks to address and remember that having UK law subordinated to EU law and ECJ rulings was one of the main drivers leading to the British people’s decision to leave the EU.

[Lord Trevethin and Oaksey (CB) [V]]

My Lords, while listening to the many powerful speeches condemning part 5 of this Bill, I have wondered how the arguments in favour of these controversial provisions might be best presented. First, the phrase “breach of international law” is a loose expression, and the Minister in the Commons might well wish now that he had not used it. What is being contemplated here is better defined as a breach of an obligation arising under an international treaty, which is a better way in which to define the matter. This is a familiar contractual problem of quite a familiar sort: one party to the agreement wants to tear up certain provisions that it does not like.

Secondly, it is probably accurate to say that the contemplated breach is potential, not actual. The Constitution Committee concluded in paragraph 152 of its report that this is an open question. The actual breach may occur only if the power to disapply parts of the Northern Ireland protocol is exercised. Therefore, it can be argued that there is no current breach of a treaty obligation, only something rather less objectionable: the equivalent of a solicitor’s letter saying: “We intend to continue negotiating in good faith, but you need to know that we reserve all rights and, in particular, the right—if we have it—to tear up parts of the present agreement that we do not like, if it seems to us necessary to do so”. This is close to being what English lawyers call a “repudiatory and anticipatory breach of contract”, but it is probably on just the right side of the line.

Thirdly, Article 184 of the agreement requires both parties to use their best endeavours, acting in good faith, to negotiate the agreements referred to in the political declaration. That obligation should be read as being informed by the recitals to the Irish protocol. These repay careful reading. In particular, the parties affirm that the Good Friday agreement

“should be protected in all its parts”.

There is ample scope for argument on what may follow from that. It may be argued, as the Government have already argued, albeit faintly and without particulars, that the EU has in various ways itself been in breach of this good faith obligation. Reserving the right to disapply certain provisions of the agreement at some future point is not properly characterised as an outrageous and unlawful threat to renege. It is something different— namely, making it clear that, if the EU persists in conduct which the UK regards as a breach of Article 184, the UK reserves its right to treat the agreement, or part of it, as terminated or suspended. That, it may be argued, is a right that exists under Article 60 of the Vienna convention, which provides that a material breach of a bilateral treaty entitles the innocent party to terminate the treaty or treat it as suspended, in whole or in part.

Fourthly, to move away from the law of contract, it might be said that dealings between the EU and the UK over the last four years have shown very clearly, that in zero-sum adversarial contractual negotiations, it is sometimes necessary to play with a hard ball. The speech made by the noble Lord, Lord Skidelsky, displayed hard-headed pragmatism which Mr Keynes surely would have admired. The noble Lord correctly observed that the most complex treaties involve constructive ambiguity and, often, a degree of what might be called “covert bad faith”.

Those are the arguments. I do not suppose that I have persuaded the noble and learned Lords, Lord Judge and Lord Brown of Eaton-under-Heywood, with whose speeches I agree, and I have not come close even to persuading myself that Part 5 of the Bill is defensible. Clause 47 is an astonishing provision. In that respect, I listened with dismay to the Lord Chancellor’s recent answers to questions put to him by the noble Lord, Lord Pannick. The Government seem to be largely ignoring the details of exhaustive dispute resolution provisions in the agreement—in particular, in Article 168 —which makes it mandatory to use them. Theyhave not done much more than faintly to sketch a case that the EU has acted in bad faith; if they want to rely on that, they should set it out in detail. This is a very wobbly position from which to launch a case that the counterparty is acting in bad faith. In the absence of such a case, there is no legal justification for threatening to tear up part of the agreement. Accordingly, I regret Part 5 of the Bill, and add that, while this House must act in accordance with its perception of what the rule of law requires, it should also bear in mind the admonition of the noble Lord, Lord Skidelsky, that we risk weakening the hand of our negotiators.

Trade Bill

Baroness Stroud Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

Yes. I now call the next speaker, the noble Baroness, Lady Stroud. My noble friend Lady Smith of Newnham will not be participating, so she will be followed by the noble Lord, Lord Judd. I call the noble Baroness, Lady Stroud.

[Baroness Stroud (Con) [V]]

I will speak in support of Amendment 33 and thank the noble Lord, Lord Alton, for his commitment to the question of who we will become as a nation when we Brexit, and not just what we can get. This is an important moment for us, and the choices we make now will define the character of Britain for generations to come. We look back at our history with moments of extraordinary pride, and the stories we tell ourselves and our children are often rooted in the choices made by many in this House to build a nation on the principles that drive prosperity, not only economic prosperity but the prosperity that comes from an ethical vitality driven by people of character.

However, when we look back, there are also moments in our history when we might have wished to have chosen to do things differently had there been a moment to pause and check the path we were choosing. This amendment ensures that such a moment is created. We are being asked to consider what checks and balances will improve the wisdom of our choices, ensure our blind spots are challenged, and that we have a moment to consider the character of the nation we are, the one we are seeking to business with, their motivation for a deal and whether we have considered its impact on us and on their people.

The purpose of this amendment is to require the Government to bring trade deals to Parliament for ratification where they involve critical infrastructure and are being made with countries that are undemocratic. As someone who believes in free trade, why am I speaking to this amendment? Without adequate scrutiny, our sovereignty, safety and security are at risk. When a nation is undemocratic, its priorities are not the same as ours, which are the creation of prosperity through freedom of speech, respect for property rights—including intellectual property rights—the rule of law, equitable market access and a strong social contract between the public, government and business. If our trading partner’s objective is not the above but rather the strength of their state—and if their stated long-term ambition is the expansion and influence of their regime—our very sovereignty and the principles and values that define us as a nation could be undermined.

There are also issues of safety to be considered. The critical infrastructure named in this amendment—for communications, health, transport, food and water among others—is essential to the British people, and even more so in moments of crisis as we have just seen. Should provision in those sectors be withheld or slowed down, real harm would be created. As we move into an increasingly interconnected, networked world, our systems have become more productive but also more exposed.

There are also security challenges that we need to face up to and consider. Chinks in our security armour do not necessarily lead to hot war escalation, but we have seen recently in the Intelligence and Security Committee’s report on Russia the subtlety and insidiousness of foreign interference. It is not just our security that we need to be wary of but that of our Five Eyes partners as well.

Britain is a global leader, so we should not underestimate our international influence. We demonstrate a standard not just for our neighbours but for emergent nations around the world. We do not want to set the standard that profit trumps national responsibility. At a time when soft power is bought and traded across Africa and the developing world, we need to demonstrate that true prosperity comes from upholding the principles and values of a democratic nation.

The amendment does not set out to block, cancel or modify existing trade agreements or to threaten or coerce our allies, neighbours and trading partners. It merely recognises that we need an effective mechanism whereby the wisdom of choices can be evaluated. The amendment is entirely reasonable. It does not argue that a trade agreement should not be reached, just that the Government should bring trade deals to Parliament for ratification where they involve critical infrastructure and are being made with countries which are undemocratic.

[Lord Judd (Lab) [V]]

My Lords, I have great sympathy with what the noble Baroness, Lady Stroud, has just said. It resonated with me as I am sure it did with others, and we must take her arguments seriously.

We in this Committee are spending a great deal of time dealing with what in the end are second-order questions, because the first-order question is: what is the driving and determining force behind the proposed legislation? I am convinced that the omissions with which we are concerned are not oversights; they are part of a deliberate policy in driving towards an unregulated and, as some would see it, free society untrammelled by the responsibilities which we have grown to take so seriously over the decades.

That is why—the noble Baroness, Lady Northover, was right about this—it is essential to have these important amendments in the Bill, so that the muscle of Parliament is backed up by what is said in the legislation. I believe that most of us right across the party divides understand that the rule of law is not just a matter of law which we must in a disciplined way follow; it is a matter of rational conclusion about how we can order our affairs, best protecting and enhancing the well-being of our people.

The conventions to which the amendments refer are vital, including the conventions covering collective bargaining. Most important are the conventions governing the rights of children, who are very vulnerable and at risk in the world as it is at the moment. The amendments talk of parliamentary sovereignty, and that is right too, but that does not mean sovereignty for Number 10 or for the backroom boys there with their ideological commitments: it means real, effective parliamentary scrutiny, which is the essential essence of sovereignty. I know that many of those on the government Benches would not dissent from the analysis that I have given, but the trouble is that we are faced with driving forces that rely on populism and that are determined at all costs to fundamentally change the nature of our society.

The problem is not just the Bill that we are considering now: noble Lords should think of what is going on at the BBC at the moment. What are we about? We are at a real moment of destiny in our country; we really have to take the gravity of the situation extremely seriously. I therefore commend the amendments in this group; the sooner we have them in the Bill, the better.