House of Lords: Allowances

Debate between Lord Alderdice and Lord Newby

Wednesday 6th May 2020 Lords Chamber

[Lord Alderdice (LD)]

My Lords, as a former Speaker of the Northern Ireland Assembly, and now as a Deputy to the Lord Speaker, I tend to approach these issues not just from a party point of view but from an institutional point of view, trying to understand the impact of any decisions that might be made on the institutions that we are privileged to be able to serve.

Listening to a number of noble Lords across the House, it is clear to me that there is an increasing loss of trust that the House is being treated properly. Yesterday’s Private Notice Question, asked by the noble Lord, Lord Forsyth of Drumlean, and the supplementary questions to it gave one example. However, the issue goes back much further than the Covid-19 outbreak—to, for example, suggestions that during restoration and renewal the House of Lords should be shuffled off to York, not in order to pay respect to the people in the north of England but to marginalise the influence of the House.

Recent briefings from 10 Downing Street about cutting out anyone over the age of 65 and moving to electing Peers are not thoughtful, creative comments but simply destructive threats whose purpose is to shut down debate in this place. Indeed, that seems to be the Government’s strategy. Having a very large majority in the House of Commons, it is only in your Lordships’ House that real, meaningful dissent is possible. Holding the Government to account is an essential role of Parliament, and that requires the possibility of not just asking questions of government but, from time to time, saying to government, “No, you’ve got it wrong.” In the case of this Government’s handling of the Covid-19 crisis, it is clear that there have been misjudgments and mistakes, some very serious.

I hear Ministers trying to gloss over such questions by saying that there will be time to address them later. That is true, but the time to learn from the mishandling is not just afterwards in the preparation for the next global pandemic, which we all hope will be as far away as the last one a century ago; no, we need to learn lessons as quickly as possible now to save lives. The Government need to hear the reality of what is going on in the health and care sector and in society as a whole.

In such national crises, the initial posture of society is of course to rally round the Government in the hope of finding clear leadership. However, when things do not go well and we find that the level of deaths in our country is one of the worst and that government promises are misleading or unfulfilled, trust, very properly, gives way to criticism. If that criticism is not heard and heeded—for example, in your Lordships’ House—accountability is not fulfilled. If it is heard and heeded, accountability is fulfilled, but, if not, the criticism gives way to hostility and a breakdown of trust and working relationships.

One thing that emerged when I tabled this amendment was that it was not possible for the Opposition effectively to oppose the Government’s position. We are not able to vote in our virtual sittings, although the suggestion that this is not technically possible is, frankly, misleading. As we in the Liberal Democrat group have found, it is perfectly possible to vote using the reaction feature in the Zoom program if one wants votes to take place.

It was also made clear to me that the House authorities did not want votes to take place in the Chamber, the Lobbies or the Royal Gallery, despite arrangements having been made some time ago, because of anxieties about the health of clerking staff. As a doctor and a psychiatrist, I am of course very alert to such issues, but the result is that it is not possible for this House to vote on any issue or to be clear whether the Government’s position has the support of the House. We are told that it will be at least four or five weeks before that capacity is technically available to us in the virtual sittings.

I am very sceptical. It seems that there is an attempt by the Government’s strategist and senior advisor to ensure that your Lordships’ House is muzzled and sidelined during this time of national crisis, and, as populist and authoritarian leaders around the world are doing, to use this crisis to make permanent changes in favour of an untrammelled Executive. That is why I propose that by the end of June the House of Lords Commission should be required to put forward any proposals that it has, whether to continue the arrangements currently being pushed through or to have a return to more reasonable arrangements for the work of the House.

The noble Baroness and her colleagues may feel that what is being proposed is reasonable and appropriate—although to suggest to people in the world at large that working online is not real work at all is hardly appropriate—but if that is the case, the rest of your Lordships’ House would expect that those who make the decision should change their practices and reduce their allowances voluntarily to reduce their substantial emoluments as an indication of some measure of solidarity. After all, we have had too many examples already of leading figures making rules that apply to other people, but not observing them themselves in respect of the Covid-19 crisis.

This House has changed enormously since I came here almost a quarter of a century ago. Those journalists who do not trouble to read our Hansard or come down the Corridor to familiarise themselves with the House as it now is will not be familiar with the fact that there is now a much wider range of age, gender, ethnic and religious diversity, and, particularly, income. The House authorities ought also to appreciate that those who come from well beyond London and the south-east have particular needs if they are to properly represent the concerns of those in Scotland, Wales, Northern Ireland and the regions of England.

I do not agree with the terms of the Motion brought forward by the Leader of the House, but I have no real way of voting against it. I know from my experience in Northern Ireland that when people find that they cannot express their concerns by voting for change, it leads to a breakdown in trust and relationships, without which no institution or society can work harmoniously. That is why I appeal to her to find a way to take on board my request, which does not take away from the content of the Motion but simply requires it to be reviewed when one could reasonably expect that voting would be possible in a virtual sitting. There are various ways she could do this, and I hope that she will find a way.

I believe that the amendment would have the overwhelming support of the House if it could vote and show it. It is the welfare of the future of the House, not just now but in the long term, that is at stake. I beg to move.

[Lord Newby (LD)]

My Lords, I think that everybody on the commission and a large majority of your Lordships’ House accepts that during these unprecedented times and with us moving temporarily to a virtual House, it was right that the current allowance system should be changed and that Members should receive a reduced amount. There was disagreement on the commission about how much that reduction might be. I argued for a somewhat larger amount; others argued for a much lower figure. The figure in today’s Motion reflects what might be thought of as the centre of gravity of opinion on the commission.

As I said, I wholly accept that some reduction was appropriate. I declare an interest in that I am a recipient of allowances. However, I should point out for clarity that this proposal will, given the constraints on people speaking and the reduction in Select Committee sittings, result in reduction in allowances received by individual Members of between three-quarters and seven-eighths of what people might reasonably otherwise have expected to receive. This is particularly hard on people from Scotland, Wales and the English regions who have unbreakable rental contracts on flats in London. It must, therefore, be seen very much as a temporary expedient.

Any discussion on allowances must be framed against the question: what is the point of your Lordships’ House? Unless we are clear about that we cannot have any clarity about what value to ascribe to it.

Like all institutions, we have a temptation to exaggerate our own importance, but if Parliament ever had a crucial role to play, then it is at this moment in our national history when we are facing a combination of an immediate crisis and, looking forward, a clear need to reassess the nature of our economy and how to better run society for the benefit of all its members. Parliament is the pre-eminent forum for undertaking that role, and your Lordships’ House is an integral part of Parliament.

Corporation Tax (Northern Ireland) Bill

Debate between Lord Alderdice and Lord Newby

Tuesday 17th March 2015 Lords Chamber

[Lord Newby (LD)]

My Lords, perhaps surprisingly, it was with a certain amount of affection that I looked at the possibility of speaking in this debate today because the first Question I answered from the Dispatch Box, nearly two and half years ago, was about the devolution of corporation tax to Northern Ireland. It was one of the most frightening experiences of my life. Despite that affection, I am not sure that I can share the worry, or sadness, of the noble Lord, Lord McKenzie, that we will miss the fun of Committee. There are many adjectives I could think of that would describe a Committee stage on this Bill, but I am afraid I am not sure that “fun” would be near the top of my list. Perhaps that shows a lack of imagination.

I am delighted to be able to congratulate the noble Lord, Lord Hay of Ballyore, on his excellent maiden speech. He brings with him a formidable reputation as someone who has been able to persuade people, in a quiet, effective way, to work together for the good of the community at large. It is clear that these qualities are still needed in Northern Ireland today, just as they ever were. Those qualities are going to be needed if we are going to see the kind of economic development that everybody who has spoken on the Bill wishes to see in Northern Ireland.

The noble Lord, Lord Bew, I think, stressed the key issue and the key difference that has characterised the debate today, which is one of expectation. Some in Northern Ireland have very high expectations for the Bill, while others, in your Lordships’ House, have very low expectations. There is very clearly, in this Chamber at least, no agreement on that. At one end of the spectrum we have the noble Lord, Lord Forsyth, and at the other, the noble Lord, Lord Browne of Belmont, but it is quite telling that the greatest enthusiasts for this legislation are those in Northern Ireland who, on a daily basis, are grappling with how to make the economy stronger. The political parties and the business community are extremely keen on this. To respond to the noble Lord, Lord Davies of Oldham, on whether we should do this or business rates, the business community have said that this is what they want. It is in response to a combination of the strength of feeling in the business community and of that in the political parties that the Government have entertained this measure.

Whatever view you take about the desirability of doing this, there is clearly a huge amount of uncertainty about what the outcome will be: there are many variables that we cannot possibly bottom out at this point, several years before it comes into force. However, for the rest of my time, I will deal with some of the concerns noble Lords have raised and clarify some of the issues which are clearly uppermost in people’s minds.

The noble Lord, Lord McAvoy, began by expressing the hope that there would not be brass-plating—companies just having a brass plate in Northern Ireland and doing business elsewhere. The rules in the Bill contain many features to protect against avoidance. In addition to the exclusion of investment income, the main one is the adoption of rules for large companies which are based on existing international principles. Pure brass-plating simply will not be possible because the rules require a physical presence in Northern Ireland and, more fundamentally, a calculation of Northern Ireland’s trading profits, as if the company were a stand-alone entity, so that concern should not be too great.

A number of noble Lords, starting with the noble Lord, Lord McAvoy, asked about the modelling of the impact of the different rates. The example that the Government have set is on the basis of a 12.5% rate of corporation tax in Northern Ireland, assuming a 20% UK rate. This is expected to be £325 million in 2019-20, which will be the first steady state year if implementation takes place in April 2017 and if the rate in Northern Ireland from April 2017 is 12.5%. Obviously, the Executive will have the power to consider the impact of setting the rate. The UK Government will continue to work with them on the detail of the block grant deduction.

The noble Lord’s question on modelling led into his second question about the impact on overall income for the Executive and what that could mean in terms of levels of public expenditure. This is a key question that the Executive will have to decide, but one way in which they might decide to progress—I am not saying that they will do this—rather than going through a very big change in one year, is to reduce the rate over a number of years, as we have done in the UK, so that you set a direction of travel, with a rate of 12.5% as the end-point. It would not be necessary to implement it all from year one. The reason why we have spread it over a number of years here is that it spreads the cost, while at the same time giving companies that are investing the UK a sense of where they are going to be in a few years’ time.

The other point in terms of how the Executive will be able to manage a potentially big reduction in their income is that the impact does not all come in in one go. Even if you were to reduce the rate to 12.5% from day one, the impact on the Executive’s budget would rise from £120 million in 2017-18 to £280 million in 2018-19, and then get to the steady state level of £325 million in 2019-20. So, in any view, you will have a phasing in.

My noble friend Lord Trimble pointed out that the Varney report suggested that there was a raft of other things just as important as this tax change for the viability and strength of the Northern Ireland economy, including the labour market, telecommunications and transport; obviously, that is true. We have, as a Government, been helping the development of high-speed broadband and the transport infrastructure in Northern Ireland. But if anybody thinks that we are going to get the full benefit of a reduction of corporation tax while standing still on all these other very important issues, they are clearly incorrect.

I believe that my noble friend Lord Trimble was the first to raise the issue of how the rest of the UK would see this change—a point very eloquently developed by my noble friend Lord Forsyth. As far as Scotland and Wales are concerned, the Smith commission did not recommend devolution of corporation tax, nor did the Silk commission in Wales. The suggestion that there will inevitably be the same kind of pressure from Scotland and Wales as there has been from Northern Ireland is not really borne out by the experience of the views of the political parties in those parts of the United Kingdom.

[Lord Alderdice]

I shall press my noble friend a little. There is a huge focus on what happens if this is introduced and all the modelling and so on. I emphasise to him that part of the purpose of this is so that those people who want to take Northern Ireland out of the United Kingdom and who want to harmonise the arrangements with the rest of the island are, by the device of this Bill, made to face the real political and economic consequences of any such process. The likelihood is that, whether because things would change or not, they will look at the situation, add up the sums and discover that going down this road is not what they want to undertake. This is a completely different thing from the situation in Scotland or Wales where there is not another country that people want to be part of that is a comparator or competitor. If Northern Ireland has this power and decides not to use it, that is a very strong pilot exercise to say to people in Scotland and Wales that there is no point in going down this road because it is not actually a serious economic goer. I want to emphasise that there is a political dimension to this in terms of Northern Ireland that is quite separate from any of the economic debate which has formed a large part of this debate.

[Lord Newby]

That is accepted. My noble friend makes a very strong point.

Northern Ireland: Illegal Petrol and Diesel

Debate between Lord Alderdice and Lord Newby

Tuesday 15th July 2014 Lords Chamber

[Lord Newby]

My Lords, I can absolutely do that. First, perhaps I may correct the noble Lord. A quarter of all diesel consumption is not illegal; 12% to 13% is illegal; the balance is made up of diesel that is bought in the Republic and brought across. I also assure the House that it is not true that there have been no convictions in this area. There were nine convictions last year, nine convictions the previous year and four convictions the year before. It is true that, unlike in the rest of the UK—or, rather, in England and Wales—there have not been custodial sentences in Northern Ireland, but legislative change last December was undertaken specifically to deal with that problem.

[Lord Alderdice (LD)]

My Lords, when the Independent Monitoring Commission was established by the British and Irish Governments, we sought to investigate this problem and were shocked to discover that, despite the fact that the Northern Ireland Office had been there for a very long time and was very well resourced, almost no resource was being put in by HMRC to address it. It just did not seem a priority. We worked very hard, without trying to create a problem or embarrassment for the Government. It is true that, by the time that we were finishing up, HMRC had appointed a substantial number of people to address the problem, but there is now no Independent Monitoring Commission and the Northern Ireland Office is a shadow of its former self. How can the House be assured that there will be proper monitoring and accountability to ensure that HMRC continues to do what it needs to, because that certainly was not the case in the past?

Northern Ireland: Corporation Tax

Debate between Lord Alderdice and Lord Newby

Monday 15th October 2012 Lords Chamber

[Lord Newby]

My Lords, that is exactly what this whole process is about. The complication, as I said earlier, is that if you devolve Northern Ireland corporation tax rate-setting to the Northern Ireland Assembly, you face a significant financial cost to the Northern Ireland budget, which, when last estimated by the Treasury, was thought to be in the region of £300 million.

[Lord Alderdice]

My Lords, as I listen to the somewhat siren voices on all Benches, I seek reassurance from my noble friend that the interests of the people and of the economy of Northern Ireland will not be set aside because of excessive rigidities in Her Majesty’s Treasury on the one hand, and inappropriate comparisons with other parts of the United Kingdom that do not have, and I trust will continue not to have, an international frontier, on the other.

[Lord Newby]

Absolutely, my Lords. The key question, as I was just explaining, is financial and is about the consequences for the Northern Ireland Executive’s budget if the tax is devolved. I think that is recognised within Northern Ireland. A recent poll by the Belfast Telegraph showed that, although 30% of those questioned were in favour of this move, a higher number—some 34%—were against it, and an even higher number did not have a view. That just demonstrates that this is a very complicated issue. On the second half of my noble friend’s question, Northern Ireland is clearly in a different position from that of the other nations and regions of the UK, simply because it does not have a land frontier with them but has a land frontier with the Republic of Ireland.