Sterling
Debate between Earl of Courtown and Lord Soley
The Earl of Courtown
As noble Lords are aware, the whole point of the industrial strategy is to boost productivity and the earning power of people throughout the UK, as well as encouraging investment in the technologies of the future. The centrepiece of our approach is increased public investment in infrastructure and R&D through the national productivity investment fund. We have increased its total size to £37 billion, but the noble Lord makes a good point.
Lord Soley (Lab)
Can the Minister confirm that he understands that the current Brexit crisis is having, and will continue to have, a profound effect on investment in this country? This will not end quickly, deal or no deal, because the problem continues. That is what we need to address if we are to take investment seriously in the future.
The Earl of Courtown
My Lords, the noble Lord makes an important point as we move towards 31 October. We recognise that there has been some exchange rate volatility. This is not unusual as we move to our new relationship with the EU. It is important to remember that the UK’s macroeconomic framework is based on an inflation target, not an exchange rate target. It is for the independent Monetary Policy Committee to set monetary policy to meet that target.
Referendums
Debate between Earl of Courtown and Lord Soley(5 years, 4 months ago)
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Lord Soley
To ask Her Majesty’s Government what assessment they have made of the impact of the increased use of referendums on the functioning of representative democracy in the United Kingdom.
The Earl of Courtown (Con)
My Lords, before the start of the short debate, I remind noble Lords that Back-Bench speeches are limited to three minutes, so when three minutes is shown on the Clock you have gone on too long.
Lord Soley (Lab)
My Lords, I seek to put this Question before the House on the use of referendums in the British constitution because it is a very important issue. I know that we are time-limited, as we have just been reminded. I will try to keep my remarks very tight.
I have been increasingly concerned over the use of referendums in the United Kingdom. I do not like referendums. I think we do much better under Edmund Burke’s representative democracy, where MPs and Governments can be thrown out if the electorate do not like them. Perhaps it is easy for me to say that because I was never thrown out, although the Minister did try on one or two occasions in my neighbouring area to organise that, just as I tried to organise his. It was a joint project.
By and large, referendums do more harm than good. There are, of course, exceptions. If you have a position where maybe you want to reinforce a constitutional change that has been widely discussed and then largely agreed it can make sense, but it is always worth reminding people, as many have, that dictators often use referendums to reinforce their position. Fortunately, we have not been in that position and I do not think we will be.
We know that the other problem with referendums, which really lies underneath my debate, is that they can be incredibly divisive. The mess we are in on Brexit is because a referendum was called on an issue that, frankly, had not been one of the top political issues in the United Kingdom until it was called. There was no alternative policy to put if the referendum was lost, which it was. Although I thought that we would vote remain and I did myself, I was not surprised that it was lost, because the Brexiteers’ strapline of “Take back control” is very powerful. I do not take the view that people who voted leave did so because they had not thought it through, because the arguments were weak or dishonest or because of immigration. It was much more basic: that strapline went to the heart of what many British people felt about being able to make their own laws and to sack their own Governments.
One can argue the toss about that, but one thing we cannot argue about is the fact that the Brexit referendum, three years ago now, has done enormous damage to this country, both in the United Kingdom and overseas. It has damaged us politically and economically. I noticed that the retiring Foreign Office official in Singapore made that point today about the damage it has done to us. The problem is that, even if it was discussed well—people will argue the toss about that—it is a very complex issue to decide in a referendum. Although you can argue that it was a simple question, it was on a very complex argument that had many different strands to it, which made it very difficult for people to decide. My view is, as I have said already, that if MPs are able to debate widely and come to a conclusion, the public make their views known if they do not like the outcome that MPs have come to, just as they have made their views very well known about the House of Commons and its behaviour over the last three years.
The other point that is very important in the context of the Brexit debate is that the two main referendums on this issue, in 1974 under the Harold Wilson Government about membership of the European Community and the more recent one on the European Union, were called not because there was a great demand for it in the country—there was a demand, but not a great one—but because the political parties in government were divided and could not deliver an outcome themselves. What the second one did, which the first did not, was aggravate the division, so the divisions in the country now run not just between political parties, organisations and companies but within families. You get arguments in families, particularly younger people tending to argue that we should stay in and the older generation tending to argue that we should come out. There are many variations of that and I am not claiming that it is a hard and fast rule, but it is an important point.
One of the things this indicates is that there is no sure-fire answer to the question, “Will we hold another one?” I have tended to the view that we should not, but I am driven to the position that, because of the mess we are in, we might have to hold one to get us out of it. But I would add this caution: I am by no means convinced that the answer you will get if you hold another referendum in the reasonably near future will be very different. It might come to the same conclusion, or conclude that we should stay in, or go back in, perhaps by an equally small margin. If that happens, the split in the United Kingdom stays.
Moving that argument forward to one that has concerned me deeply from the beginning of this, what happens in Scotland? The Scottish referendum was really well debated and there was a great deal of information. Everybody agreed that the debate was really good and the case for an independent Scotland was lost with a big majority. Did that mean that the argument went away? No, it did not. It has come right back and the same argument will happen again. With referendums such as this, in the way they have been called, the danger is that we go on having referendums without having a solution to the problems that led to them.
Again, I argue very strongly that we should not use referendums when we can use the representative democracy system, which is better. Without going into it, I would simply say that in the case of the United Kingdom, if you think that coming out of the European Union has been a problem, think of how much more difficult it will be if Scotland chooses to come out of the United Kingdom, to which about 80% of its exports go. Imagine if that was somehow decided on a narrow majority either way. It would be a disastrous situation for Scotland and the rest of the United Kingdom, so we should not think of going there. I will not go into it now, but there is a much stronger case for the United Kingdom to develop a more federal structure. In a way, we had that with the Acts of Union, but it was limited to courts, religion and one or two other issues. We could develop a modern federal system which might solve the problem rather better than referendums, which deliver an outcome which might be on a knife edge either way.
I commend the very good Library paper on this debate to Members. It pinpoints a number of the arguments raised by the Select Committees of both Houses and the independent review of referendums carried out in July last year. Those arguments are very strong. I do not wish to lay them out; they are in the excellent Library paper and I would rather draw people’s attention to that, so that people can look at it and decide what to do. The Political Parties, Elections and Referendums Act 2000 lays down a number of conditions in which a referendum could take place, for example, on constitutional issues. One of the points made on a number of occasions was that it ought to be a clear issue where the argument would be very clear either way. That was one of the conclusions of the independent review of referendums.
What troubles me is that there has not been a significant discussion in all of this about whether there should always, or in most cases, have to be a certain percentage of the vote cast in order to make it a legitimate referendum. Think what happens if you have a referendum on an issue such as Scottish independence or Brexit and the numbers turning out are only 20% or 30% of the electorate. Think also what happens—this troubles me greatly—if there is not a clear majority. If there had been a clear majority with the EU referendum in 2016—by that, I mean a majority of 3 million or more, with 55% or 60% of the electorate voting either way—we would have far fewer problems than we have now. I hope the Constitution Committee will want to look at this again. If they do, I hope they will look at those questions of a minimum turnout and whether there should be a maximum.
This debate is very important. I am sorry about the time limits; I have attempted to be as brief as I can. We cannot leave this matter for long. We will have to return to it, so I make a plea for the British system to be used, with representative democracy and MPs and others being thrown out if they get it wrong. That seems to be a tried-and-tested procedure.