Counter-Terrorism and Border Security Bill

Lord Davies of Stamford Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 31st October 2018 Lords Chamber

As is the case for many of the measures in the Bill, the offences that Clause 7 amends are subject to oversight by the Independent Reviewer of Terrorism Legislation. The Government give careful consideration to all conclusions and recommendations made by the independent reviewer. Given the specific explanation on the Section 58 offence, and the reassurances that I have tried to give on the sentencing provisions as a whole, I hope that I am not too forward in asking the noble Baroness to consider withdrawing her objection to this clause standing part of the Bill.

[Lord Davies of Stamford (Lab)]

I think that the noble Earl would carry the whole House in saying that terrorism has become a greater threat to our society in the last 10 years and that Parliament should do something about this serious matter. I, for one, would be open to persuasion—as, I suspect, would many others in this House—that what is required, among other things, is to strengthen the hands of the courts and to give them the ability to increase the sentences that they impose for terrorist or terrorist-related offences.

However, I have noticed that the Minister has not even begun to answer the quite significant questions asked by the noble Lord, Lord Marks, and my noble friend Lord Rosser, about the principle on which this increase in sentences has been decided—if you like, the multiple which is being applied to existing sentences. What is the origin of this? The Minister mentioned the review. Has the review set out exactly what the increased sentences should be, and if so, on what basis has it come to that conclusion? Did it decide on a universal multiple? From the figures of the noble Lord, Lord Marks, it sounded as though it was about 50%. Is that applied across the board, or was it decided that a different multiple should be applied to different types of sentence, and if so, on what principle? I do not sense that we have heard enough about the methodology that the Government have used to come up with the proposals that they have put before the House today.

[Earl Howe]

I am sorry that the noble Lord did not take one of the central points that I was trying to convey: that the review into this area, instigated by my right honourable friend the Prime Minister, concluded that the kinds of offences that we are considering preparatory to terrorism—which in 2000 and 2006, when the previous Terrorism Acts were passed, were not considered to be as heinous as terrorism offences themselves—were given sentencing structures that reflected that point of view; but that since that time, the intensity and scope of terrorist acts has so increased that it is necessary to treat those former, lesser offences as much more serious and harmful than before. In that context, it is to enable society as a whole, through legislation, to make a more emphatic statement, through sentencing guidelines, of the seriousness of those offences.

[Lord Davies of Stamford]

I did not ask the noble Earl to repeat what he has said to the House before. The question I asked is very specific: on what principle had these precise multiples been arrived at?

[Earl Howe]

There is always a judgment to be made. Once one has reached the conclusion that I have just articulated, there is indeed scope for argument about whether the increase should take place at all—we believe that it should—and, if so, to what extent. The Government have taken a view. We are putting it to Parliament and we believe it strikes the right balance in this context.

--- Later in debate ---

[Earl Howe]

My understanding is that the consultation that took place was a wide one, but I can clarify that point having taken advice on it. It is of course not for the Sentencing Council to comment on or recommend statutory maximums; it issues guidance on the application of currently existing maximums. That clarification is important.

[Lord Davies of Stamford]

The Minister has been very helpful to the Committee, but would it not solve an awful lot of problems if he were to publish the review on which these revised sentencing guidelines were based so that we could all see what arguments were adduced and how the conclusions were arrived at that are reflected in the draft Bill before us?

[Earl Howe]

I am happy to take that request away with me and investigate whether it is possible.

Defence Modernisation Programme

Lord Davies of Stamford Excerpts

Monday 29th January 2018 Lords Chamber

[Earl Howe]

I am grateful to my noble friend. That is a very constructive idea, which I shall relay to the appropriate quarter.

[Lord Davies of Stamford (Lab)]

I second the admirable suggestion by the noble Lord, Lord Cormack. If we are serious about value for money in defence, is it not important that we seize every viable opportunity that presents itself for collaboration with allies in defence procurement? The F35 programme is a good example of that, though of course the size of the US defence budget means that it is hardly an equal relationship. Does the Minister agree that OCCAR has done, and is doing, a splendid job in managing the collaborative defence procurement of a number of European countries in some very important programmes, including the A400M? I declare an interest because I renegotiated and relaunched that project in its present form. Can he give the House an assurance that if we leave the EU, which I think would be a disastrous idea from every point of view, including this one, we will nevertheless remain committed to OCCAR in the work that it is doing in this field?

[Earl Howe]

I join the noble Lord in commending the work of OCCAR. He is absolutely right that many of our defence programmes are not directly related to our membership of the EU but are bilateral or multilateral, and we certainly wish to see those continue. That is why we at the Ministry of Defence are keen to ensure that the Brexit talks result in as frictionless a trading environment as possible between ourselves and the remaining members of the EU. Interoperability is one consideration in our support for these joint projects; another is value for money and a third is cutting-edge capability, a lot of which this country is in the lead in providing.

Defence Review

Lord Davies of Stamford Excerpts

Thursday 18th January 2018 Grand Committee

[Lord Davies of Stamford (Lab)]

My Lords, we are deeply grateful to the noble Lord, Lord Sterling, for giving us the opportunity for this debate today, as well as for giving the House the opportunity to respond by showing the pent-up demand for a proper defence debate that lasts all day. I hope that the powers that be have taken note of that response. I am left with about one and half minutes to make three points.

The first point is that, like everybody else, and any responsible citizen of this country and Members on both sides of the House, I hope to heaven that the Government are not planning any more defence cuts after the terrible way in which our defence capability has been run down over the past seven or eight years. It would be utterly unjustifiable; the world has not in any sense become a less dangerous place, and there is no justification whatever for that.

My second point is that, on that positive assumption that the Government do not have those plans—it really would be horrific if they did—I hope that they will put an end to the uncertainty by making a clear statement that there will not be any further defence cuts. The moment that comes up in any conversation that anybody has with serving military personnel, officers or other ranks, there is a real worry on that subject. I am sure that many colleagues have had such conversations in the past few weeks and months. This is really affecting morale, and it must be affecting recruitment. This is a quite unnecessary cost to impose on our military, on top of everything else. I hope, therefore, that clarity can be established very quickly.

My third point is this: I gather one reason why the MoD has run into financial problems recently has been the devaluation of sterling, and the higher sterling price as a result of procurement from the United States and, to some extent, the European Union, of the A400M programme. I suppose that the F35 is the major issue here. I hope we can have a statement on this from the Minister to put our minds at rest, because one thing that is absolutely clear is that under no circumstances should the military be made to pay the price for that devaluation. In no sense whatever is it the military’s fault. This is a direct result of government policy to hold the referendum and, afterwards, to decide—quite gratuitously, in my view—to understand it as excluding us from the single market and the customs union. This is having a devastating effect on the economy, of course, but it is nothing to do with the military, and the military should not be made responsible for it or have to suffer for it. That would be utterly unjust and irrational.

Royal Navy: Staffing

Lord Davies of Stamford Excerpts

Tuesday 5th December 2017 Lords Chamber

[Earl Howe]

Yes, indeed. One of our objectives is to strengthen our bilateral relationships, not only with the French but with Germany and other countries in Europe. But, as the noble Lord will be aware, the UK and France have had a long history of working together on operations and exercises, and the Combined Joint Expeditionary Force is a realisation of the commitment made in the Lancaster House agreement for our forces to train and operate alongside each other.

[Lord Davies of Stamford (Lab)]

My Lords, following the Minister’s answer just a moment ago about foreign currency exposure and the procurement of military equipment, would it not be sensible—in the light of recent, rather uncomfortable experience—to extend the period of that hedging to cover the full delivery and payment period for the relevant project at the time when the contract is signed and the project is undertaken?

[Earl Howe]

Certainly, that idea is under consideration, but I am not qualified to make a judgment as to whether a particular form of hedging, or the timing of a hedging contract, is opportune. That is for more skilled minds than mine.

UK Defence Forces

Lord Davies of Stamford Excerpts

Thursday 23rd November 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I thank my noble friend Lord Soley for this pertinent and important debate and congratulate him on his excellent speech.

The record of this Government on discharging their responsibility for national defence is truly awful. In the 2010 Parliament, they cut a number of essential defence capabilities, including long-range maritime surveillance, as has already been mentioned. The worst thing they did was to cut the Army. As they knew perfectly well, that has a gearing effect; whereas for years we were able to successfully deploy 9,000 men and women in Afghanistan, now we can only deploy perhaps 3,000 on a permanent, long-term basis. That is a puny number for a country that considers itself a serious military player, important ally and permanent member of the UN Security Council.

On top of all that, we now face the prospect of getting rid of our amphibious capability—HMS “Albion” and “Bulwark”; not replacing HMS “Ocean”—and, quite extraordinarily and horrifyingly, 1,000 of our very brave and professional Royal Marines. I find that almost unbelievable; it is an absolutely crazy solution to the problems of the modern world. Our amphibious capability is essential to our ability to deploy in parts of the world where crises and threats arise in unexpected ways. We cannot predict them in advance; in most of the crises we have had to cope with, our interventions and operations were caused by events that were unpredictable only a few years, or even months, before.

So, that decision is quite extraordinary; it can have only three effects, as I see it. One is to greatly encourage our potential enemies, who want to take risks with world peace. If other countries follow our example, that will happen even more.

The second effect of that would be to discourage our allies—we already hear the sadness expressed by the Americans at prospective cuts. The third point, which has not really been made today, is that it will discourage recruits. We have always managed to recruit the best and the brightest into the British military—thank God we have; we have really depended on them and they never let us down—but the best and the brightest do not join organisations subject to constant cuts. How could you possibly want to start a career in any organisation where, every year or two, the Government will come back for more cuts? This is a very worrying situation. I do not think that the Government care about it at all. They say that they are under financial constraints. They are happy to spend money on hiring thousands of new civil servants. The other day, I saw that they were about to hire 2,500 new customs officers. That is nothing to do with the referendum, by the way—the referendum did not deal with whether we should stay in the EU customs zone; this is an entirely gratuitous obsession of the Government. They are perfectly happy to hire far more customs officers, yet they are ready to release and make redundant excellent marines. It is quite an extraordinary order of priorities and a frightening, perverse and bizarre set of values. It was enormously eloquent that defence was not mentioned even once in yesterday’s Budget presentation. What a sad situation we find ourselves in.

I want to ask two important questions. I hope that, this time, I get answers from the noble Earl, because I am not very successful at doing so when I ask him questions in debates. The answers will clarify a number of doubts that many people in this country have. First, is it correct that the Foreign and Commonwealth Office is to receive compensation from the Treasury for the impact on its expenditure of the devaluation of sterling, although the MoD will not? Secondly, a rumour is going around—by raising it, I think I am doing a good service to everybody because if it is not true it will be of great service to the individual concerned that it has been formally denied on the record— that, alone among Ministers with major spending responsibilities, the new Secretary of State for Defence did not ask the Chancellor for a private interview in the weeks leading up to the Budget yesterday? I hope that it is untrue, but it is important that we should dispose of this potentially damaging rumour by getting a clear answer to that question.

Type 31 Frigate

Lord Davies of Stamford Excerpts

Monday 3rd April 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

When can we expect a clear, authoritative and detailed statement on what is wrong with the Type 45 and what is being done about it?

[Earl Howe]

My Lords, a study was done in 2011 substantially to rectify the propulsion problems in the Type 45. Those problems have largely been addressed, although not completely. We will initiate Project Napier, which will deal with the propulsion problems once and for all. However, my advice is that the Type 45 destroyers are not now encountering the difficulties that they were.

Armed Forces Act (Continuation) Order 2017

Lord Davies of Stamford Excerpts

Tuesday 21st March 2017 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, it is a great pleasure, and not for the first time, to follow the noble Lord. He brings to this House a whole lifetime of experience both in business and in maritime affairs and defence. I very much agree with what he said.

I think the whole House is well aware that I was the Defence Procurement Minister in the last Labour Government, under Gordon Brown. In that role, I was often, and continue to be, accused of having overspent and having created, or culpably presided over, a procurement deficit of £30-odd billion—the actual figure varies from time to time. I have dealt with this matter in correspondence with the Minister and asked him to put that in the Library. I do not know whether he did so: I found that only members of the Government can place correspondence in the Library. Briefly, I could not possibly have overspent because the Treasury would not have allowed me to do so. What I never did, unlike the subsequent Government, was underspend. They did so on two occasions and a large amount of money was permanently lost to defence. I would have regarded such an action as a betrayal of the very important fiduciary responsibility which had been confided to me.

There is always a degree of uncertainty about the cost of a future programme, but the bulk of the procurement deficit was created, when the new Tory-led Government came to power, by the simple expedient of changing, from 1.5% in real terms to 0% in real terms, the rate of increase in defence expenditure, both currently and prospectively. Doing that, given compound interest and a defence budget of £35 billion, you can create a very large potential deficit and that is exactly what they did.

When he appointed me, Gordon Brown said that my first task was to make sure we got the right equipment out to Iraq and Afghanistan. We did that, and commissioned seven or eight new, bespoke armoured vehicle programmes. On one occasion, we actually got down to six months between specification and delivery to the theatre, which was an absolute record. Anybody familiar with defence procurement will realise what that means. It is a tremendous tribute to the ability, determination and morale of the people working in the DE&S—people who were subsequently, quite disgracefully, attacked publicly by the man who the incoming Tory-led Government put in charge of them. We also made some considerable breakthroughs in areas such as ground-penetrating radars, which were a vital part of the anti-IED programme.

I did not neglect in any sense the core programmes. When I arrived, I found that the two carriers were running into considerable cost overruns and delays. The Defence Board had decided that the programme should be extended by several years—at an enormous increase in cost, because you are doubling and trebling the fixed cost as each year goes by. It was obvious to me that, if that happened, we would ultimately end up cancelling the whole programme. I managed to persuade the Secretary of State—my noble friend Lord Hutton, who unfortunately is not in his place today—as well as others in the MoD and indeed in the Treasury, in due time, that we should go for a quite different option which had not been considered by the Defence Board. This was Option C, as the noble and gallant Lord, Lord Stirrup, may recall, which involved some delay and some additional cost, but of a relatively manageable kind. Fortunately, as a result, it was possible to save that vital programme.

On the Type 45, I thought they were wonderful ships and I still think so. I believe three were launched in my time; they were ordered long before I arrived. But I admit to the House that I never asked—it never occurred to me to ask—the brilliant naval engineers, admirals, shipbuilders and ships’ architects that I was meeting on that programme the key question: are you quite sure you specified enough power to run both the propulsion system and the radars at the same time? I have no idea how such experienced people would have reacted to a Minister asking a question of that type. However, I say with culpability that I should have asked it. It was a pertinent question. I still want to know what happened, and I think the public need to know what happened. There should be a public inquiry about it. I would look forward to taking a full part in such an inquiry to get to the truth.

The other great naval programme was Astute, which I shall come to.

On the RAF, I found when I arrived that the MoD was attempting to push forward as far as possible, in order to save money, the purchase of tranche 3 of the Typhoon. We managed to turn that one round, and I managed to negotiate with our partners for the tranche 3 programme to move forward. I am glad it has done so, because that aircraft now provides the cutting edge for our air capability in the period between the retirement of the Tornado and the arrival of the F35. It will continue—with the Meteor missile—to be the key power we have in the air-to-air area, prospectively into the 2030s.

I was also keen that we get into the unmanned aircraft business. I brought the French into that, because it was important to have partners to share the cost and, particularly, to secure longer production-runs than would have been possible if things were run purely on a UK basis. In addition, we had to renegotiate the A400M programme. I believe we did so successfully. I am a great believer in that aircraft—I think it will be the Hercules of the 21st century—though at times it too looked under threat.

With Nimrod, I inherited something that has now gone down in business schools as a classic example of how not to procure a military project. At the time I arrived, as I recall, the cost was around £2.3 billion for four aircraft. But I believed then, as I believe now, that economic decisions should be taken on the basis of marginal cost, not sunk cost. It was clear to me that almost all the capital cost had already been incurred—certainly, by the time of the election, all the capital cost had been incurred. Therefore, I looked open-mindedly at whether we should stay with that, or buy the P3, which was another possibility in those days. I became convinced that the right thing to do in those circumstances was to stay with the Nimrod programme. Had the Government done so—compared with what they are now doing in buying the P9—I believe they would have saved a lot of money. What is more, we would not have this irresponsible gap in our long-range maritime surveillance capability which we have been running now for many years, and which is quite frightening.

From these experiences, I am left with one or two conclusions, which I want to share with the House. One is that an awful lot of nonsense is talked about how defence procurement would be much more efficient if it were based on fixed-price contracts and if competition were involved. In most cases, you cannot do either of those things in defence procurement in our country because we have to operate at the frontiers of technology. We can send our brave young men and women to risk their lives only if we provide them with the very best equipment that money will buy. That means investing in new technologies, and you cannot speculate in advance what the costs or problems will be.

Every first of class is a prototype. If it costs £1 billion, like an Astute-class submarine, you cannot throw it away, saying, “It was a prototype; we’ll start again”, but it is still a prototype. You are going to spend an awful lot of money at the beginning of these programmes and you cannot tell what the costs will be. If you force the contractors to accept a fixed price, as happened with BAES over Astute and Nimrod, they will just blackmail you after a few years, saying, “We can go bankrupt if you want but we can’t come up with £5 billion”, or whatever it costs to change the programme, so you have to renegotiate, as we did on those occasions. However, that is the worst of all possible worlds.

The solution to that problem is the one that we devised in the case of Astute—that is, to have a target price with a reward for the contractor if it comes in under it and a penalty if it comes in over it. The whole thing was kept under very close and constant review, and that worked for the rest of the Astute programme. I think that that has a very wide application in defence.

Secondly, it is very important to have partners in this business, not just to share the costs of R&D, which are enormous, but because the economies of scale in production runs are so important. We tend to buy both systems and programmes a few dozen or perhaps a few hundred at a time, depending on what we are dealing with. In the same area, the Americans will purchase by the thousands or tens of thousands, which makes the economics completely different. We can achieve something in that direction only if we have partners, not just to share the R&D but to make sure that we have much longer production runs. I did that successfully with the French on several occasions, and it is something that we need to do more and more.

Incidentally, I am delighted to see that OCCAR—an organisation that I strongly supported in every way that I could at the time—has been a great success. I think that it is now running about 30 joint European programmes, including the A400M. It is under the charge of one of my ablest civil servants, Tim Rowntree, and it has been a delight to see how successful that whole project has been.

Another thing that I want to share with the House is that there are a lot of illusions about exportability. I think that it was General O’Donoghue and I who first laid down that exportability must be considered at the specification stage and reported on at the “initial gate” stage. I am very much in favour of it and I commend the Government for trying to do what they can to achieve some exportability for the Type 26. However, again, because we need the best in this country, we will always tend to overspecify. Therefore, in practice the opportunities for export will be really quite small, and we have to face that uncomfortable fact. That may be the case with the Type 26. If it is not, and even if we export some variants of that frigate, we may well find that there are diseconomies of scale by virtue of the fact that we have split up that programme.

Finally, we must go over to modern accounting principles, particularly present value accounting, in defence procurement. I could have saved a large amount of money—perhaps £300 million or £400 million—by purchasing all the supplies and components that we needed for boats 3 to 7 of the Astute programme at one go in bulk, but that was impossible because the Treasury would not let me bring forward the purchases in relation to subsequent parts of the programme, even if I paid it back, as it were, with a substantial discount rate, which of course I was prepared to do, representing the costs of the capital involved. In the private sector, you would always make investment and purchasing appraisal decisions on a present value basis, but we cannot do that in the public sector.

Another good example was the MARS programme for naval tankers. I wanted to take advantage, opportunistically, of the collapse in the shipbuilding market after the Lehman Brothers disaster and so forth and buy in the market, for about $50 million each, tankers that were in the programme at £200 million. Even with the discount rate, the Treasury would not let me do it. By the time of the election, I persuaded not only my own finance director but the head of the National Audit Office, Sir Amyas Morse, to move in that direction, and I was in the process of persuading the Treasury to do so. I set out to my successor the importance of doing this and I thought that I had persuaded him as well. Sadly, I do not think that any progress on that has been made but I raise it this afternoon in the hope that that matter too will be looked at again.

Brexit: Armed Forces and Diplomatic Service

Lord Davies of Stamford Excerpts

Thursday 8th December 2016 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I had better start off by not so much declaring an interest as reminding the House of the parts of my past that may be thought to—indeed, must—inform or influence what I say on this subject. My first job was in the Diplomatic Service, until I resigned when I was 29. I was successively a third secretary in the FCO, a second secretary in Moscow, and a first secretary and section head in the FCO. Much later I was opposition defence spokesman in the House of Commons and then Defence Procurement Minister in the previous Labour Government until 2010.

I want to add my voice to those who have already paid tribute to the noble Lord, Lord Sterling, for the brilliant idea of having a debate on this subject because it enables us to look at this Brexit issue from a rather original perspective. Nevertheless, it is one which has the same effect: Brexit offers the country a very large number of risks and costs and absolutely no gains whatever. It has been noticeable that in this whole debate no one has argued that there are any gains in Brexit—except the noble Baroness, Lady Deech, with whom I profoundly disagree but I do not have much time to go into her arguments. The suggestion that a security relationship with New Zealand was a compensation for security relationships with our continental partners was a little bizarre.

It seems absolutely clear and obvious that we shall lose influence the day we leave the European Union. Of course, the object of the Diplomatic Service is to maximise the influence of this country abroad. It is difficult to see how one could more dramatically reduce the influence of this country abroad than by leaving the European Union. We shall no longer be sitting on the Council of Ministers or the Foreign Affairs Council. If the EU decides on some new initiative, such as it has done very productively in recent years—for example, the Quartet in the Middle East, the contribution to the Iranian deal and the Minsk negotiations with Russia—we shall not even know what is going on, except to the extent to which somebody tells us, and we will have no stake in either conceiving or carrying out these initiatives.

I realise that the Government do not see things that way. They think empty chairs are an attractive prospect. They have tried to anticipate Brexit. The Prime Minister has cut a European Council in the brief time she has been in No. 10. The Foreign Secretary, Mr Johnson, cut the dinner before the last meeting of the Foreign Affairs Council. It is a very strange approach to British diplomacy. It is not in the tradition of this country at all. The House will recall that Castlereagh played a major part in the Congress of Vienna, that Salisbury and Disraeli played a decisive part in the successful Congress of Berlin, and that Ernie Bevin played a historic role in the foundation of NATO. They did not believe in leaving an empty chair in the councils of Europe and they were right. What they would have thought about Mr Johnson is another matter, which I will not speculate on. Every Member of the House can make up his or her mind on that.

Apart from the high-profile, high-level summit issues that I have just mentioned, with our membership of the European Union there is a constant dialogue on a weekly, sometimes daily, basis, involving embassies right across the European Union, about current issues that we face—economic, political, security or whatever—that come up in an EU context. It means that our embassies in these countries have to keep very close relations with the Governments to which they are accredited. They discuss a wide range of topics, bring together alliances, do deals, and gain a deep understanding of where those countries are coming from and where they are likely to go. That will all be gone. That daily, routine work of active diplomacy can have enormously important consequences.

I remember Garret FitzGerald—a wonderful man to whom I pay great tribute, a great historical figure: the Taoiseach who signed the Anglo-Irish agreement with Margaret Thatcher—saying to me in the course of a long lunch, which I will remember for the rest of my life, that Britain and Ireland could never have a really successful relationship until Ireland had joined the EU. Once that had happened, after centuries—800 years—in which the British has successively persecuted, exploited, neglected and patronised the Irish, we suddenly found ourselves equal partners in the same venture, with a daily agenda of business to be dealt with, and that changed everything. If you reverse that relationship, you will reverse that effect. Indeed, it is rather sad that the Diplomatic Service will have particular problems to deal with if we leave the European Union, both with Ireland if we try to suggest the setting up of an international frontier dividing the island of Ireland for the first time in history, and with Spain if we do the same thing between Gibraltar and the rest of Spain. It is a very depressing prospect.

Even more depressing are the immediate financial consequences of Brexit, for both the Diplomatic Service and the Armed Forces; that is, the devaluation of the pound and the prospective reduction in our growth rate, which I think all economic observers agree is almost certain to be the case. Two per cent of a lower GDP will be 2% of less for our Armed Forces. We heard from the noble Lord, Lord West, who spoke so eloquently, that we are already spending far less than we should be on that. I hope that the Minister will respond to the question asked by the noble Baroness, Lady Buscombe, which I endorse: have the Government made new estimates to allow for an increase in the sterling budget of the Diplomatic Service and the Armed Forces to take account of devaluation?

Queen’s Speech

Lord Davies of Stamford Excerpts

Monday 23rd May 2016 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I do not always agree with what the noble Lord says, but I very much agree with what he said about the role of this House in throwing pebbles into the water to see what sort of wave they create. We heard two wonderful speeches this afternoon: the valedictory from the noble Baroness, Lady Perry, and the maiden speech from my noble friend Lady Jowell. We shall remember both for a long time.

We are now half way through the Brexit campaign and, on the whole, it has been a rather unedifying spectacle. On the one side, a notable feature has been the publication of some pretty heavyweight studies by academic groups, two by the Treasury—I have not read the one that came out today—and by two of the three most distinguished international organisations in the area of economics, the OECD and the IMF. The third institution, the World Bank, is focused only on the developing world, so it has not been involved.

Those studies have not been responded to at all by the Brexit camp. There has been no attempt at any substantive refutation or rival alternative projections of the grave economic prospects that would face us if we left the European Union. There has been only a series of whining complaints that it was unfair that the Government were allowed to produce a study at all—we heard that from the noble Lord, Lord Forsyth, earlier—and, far worse, a systematic tendency simply to denigrate and impugn the honesty and integrity of people who dare to produce advice to the British people in favour of remaining in the EU.

Like the noble Lord, Lord Ashdown, I heard Dr Liam Fox on “Question Time” a week or two ago. He studiously avoided addressing any of the economic arguments put forward; on every occasion, he simply attacked the good faith of the people who had put forward those arguments or produced those studies. Christine Lagarde was merely a tool of the French Government—although she is the independent president of the IMF. The Governor of the Bank of England, which is an independent central bank, was merely the tool of the Chancellor. He actually said that the economists in the OECD and the IMF had been bought because the EU pays a subscription to those organisations. I have no idea whether it is true that the EU pays a subscription to them, but it is most unlikely that the scores of extremely distinguished economists in both those institutions, some of whom have an international reputation, would have the faintest idea what the subscription list was of the institution that employed them. The allegations were utterly ridiculous and absurd, but the fact that they were being made by a British politician was very discreditable and unfortunate—but there we are.

What is more, the Brexit camp will not tell us at all what alternative scenario we face if we leave the EU. We are invited to drive into a complete void. We have had Mr Johnson say that he thinks that we should have a Canada-type arrangement with the EU. Perhaps he regrets that now that he has discovered that the Canada arrangement scarcely includes services, when 80% of our GDP is in services. We have had Mr Gove saying that we should have no relationship whatever with the single market. We have had other people talking about Albania and so forth—Mr Gove talked at another moment about Albania; he seems to change his mind rather. So we are quite unclear.

It is serious because it is an open secret in Westminster—is it not?—that the people running the Brexit campaign expect that if they win, the Prime Minister will have to resign. I dare say that they may be right in that assumption. They then intend to try to take over the Tory party in fairly short order, which means taking over the Government of the day. There will not be a general election for four years, so the only chance that the British public have of deciding that matter is the vote they cast on 23 June. It is a bit much not to tell them at all what the plans are after leaving the EU, if that is indeed what happens.

It is obvious that those running the Brexit campaign want to get as far away as possible from the economy, and these are all methods of trying to change the subject or deflect people’s attention from the serious economic issues at stake. That is why they have focused on the whole business of immigration, which is emotively very powerful. We have had two examples of that just recently. One of them was the Turkey issue. I must say to Ms Mordaunt that the kindest thing that can be said about her remarks to the effect that enlargement was not a matter for unanimity under the EU treaty was that she was extraordinarily ignorant. But I have to tell her that there is no excuse for being ignorant in the MoD. In the MoD, you are surrounded by the most able officials, uniformed and non-uniformed. They will give you a briefing on anything as soon as you ask for it, more or less—within a few hours. All that was necessary for Ms Mordaunt to do if she actually wanted to discover the truth was to ask one of her civil servants to arrange a briefing and tell her what was in the treaty. So the whole episode is very worrying and concerning.

The truth is that in relation to immigration from outside the Union, we have complete sovereign control today and we have no problem about it. If we left the Union, the difference would be that we would no longer have the co-operation of our partners in the EU as we would no longer be a part of the Union. The first casualty of that would be the Sangatte and Dunkirk camps. It is an extraordinary anomaly that the French have permitted the frontier of another country to exist on their territory, but that is what they have done. Anybody who knows any elected representatives, députés or élus locaux—mayors and so forth—from the Nord-Pas-de-Calais region knows that it is a very sensitive issue. The presence of those camps is regarded as a nightmare by the local electorate, and many of those constituencies are marginal between the Front National and the Socialists. They are all straining at the leash to find an excuse to get rid of those camps and to tell the British to take their frontier back. That is a real prospect that has not been identified very much in the discussions so far.

I want to say one thing finally, which is very important, about the other aspect of immigration, which is freedom of movement. It is said that we have control now over immigration from outside the EU but that if we leave the EU we will have control over immigration from the EU as well. We cannot, for two reasons. One is the reason that has often been quoted and has been cited in this House several times this afternoon, which is that, almost certainly, if we want to have some relationship with the single market, which we inevitably and naturally would have to achieve, we would almost certainly have to accept freedom of movement—which every other European country that has access to the single market, including Switzerland and Norway, has accepted. That is a high probability, but it is not a certainty.

However, there is one absolute certainty: we cannot physically leave the freedom of movement regime so long as the Republic of Ireland remains part of the Union and accepts freedom of movement. My noble friend Lord Dubs anticipated me here in putting his finger on this very important point. It is a critical point. The Irish have no intention of leaving the EU or of being bullied by the British to leave the EU or of giving up freedom of movement. Indeed, they have done very well out of freedom of movement. They had a large import of labour from eastern Europe during the Irish boom; then, when the economy fell away after the banking crisis, most of them went home; and now they are coming back again. So they have benefited from that. If you have freedom of movement into Ireland, anybody from Romania, Poland or anywhere else in the EU can go into the Republic of Ireland and, once they are there, they can take a bus or a train or walk across the frontier into the United Kingdom as easily as I can walk into St James’s Park after the debate if I feel like it.

We cannot possibly create a permanent controlled frontier across the island of Ireland, hermetically sealing off the six counties from the 26 counties. That would be regarded as a horrific affront by nationalists in Ireland north and south of the present border. Indeed, it would be regarded by some nationalists as a declaration of war by the British. We did not create such a border even in the days of the Troubles. How could we possibly create it now? It is out of the question. Equally out of the question is to create a border across the United Kingdom itself, dividing Northern Ireland from the rest of the United Kingdom. That is simply not a possibility. It follows that so long as Ireland remains in the EU—I will give way in just one second—it is simply not a practical possibility for us to leave it without very serious consequences for the island of Ireland and serious risks to the Belfast peace process and to the progress that has been made over the last few years in that part of the Kingdom.

[Baroness Flather]

My Lords, I find it quite annoying that the noble Lord has spoken for nine minutes when the advisory speaking time was five minutes. I cut short a lot of things I had to say, yet we sit here and listen to one noble Lord for nine minutes.

[Lord Davies of Stamford]

How long did the noble Lord, Lord Forsyth, speak for?

Strategic Defence and Security Review

Lord Davies of Stamford Excerpts

Thursday 3rd December 2015 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I add my own congratulations on the four maiden speeches we have heard this afternoon. All four maiden speakers not only are well known to me but have been colleagues and indeed friends of mine for decades. I commend them to the House as the ideal candidates for coming to this place, because they are men of great integrity, they are all people of very considerable experience and knowledge of the world, and they have always been committed, as I am sure they will remain committed here. We will therefore have very valuable contributions from them for, I hope, a very long time.

I do not want to say much about the SDSR itself. I thoroughly agreed with the brilliant analysis delivered by my noble friend Lord West and the noble and gallant Lord, Lord Stirrup, on that subject, but just add one thought, which I might repeat from time to time to make sure the Government do not forget it. Although of course I am delighted at the purchase of the P-8s, the Government would have saved an awful lot of public money and avoided an awful lot of risk if they had kept the Nimrod MRA4. It was a great mistake to cut those aircraft up in the vandalistic fashion that they did when they came to power in 2010.

I have a good announcement for the House, which is that I think we have solved the long-standing problem of the black hole—the alleged deficit in the MoD’s programme, which it is said the Labour Government left in 2010 to their coalition successors. I have been conducting correspondence with the noble Earl about this for some weeks. Buried in his latest letter to me is a single sentence telling us that the Government went through our programme, which was based on resources being increased at 1.5% in real terms per annum, to see what would happen if resources had no real-terms increase at all but were flat in real terms for the 20 years of the programme. Of course, they came up with a deficit, and my maths showed that that deficit was even greater than the £19 billion or so in the equipment programme which is mentioned in the noble Earl’s letter to me. I wanted to put all our correspondence in the Library of the House but, when I tried to do so, I discovered that Back-Benchers could not put correspondence in the Library. Ministers of course can, and I invite the noble Earl, if he would be so kind, to put our correspondence in the Library so that colleagues can follow this matter in detail. I hope we will not need to speak about it any more because this particular myth will be put thoroughly to rest.

I want to just say a little about Russia, which the last two speakers both touched on. Mr Putin must be congratulating himself on having carried off a brilliant coup. He has succeeded in getting away with changing frontiers by force, with annexing the Crimea and, in his own estimation, with ensuring that Ukraine can never join either NATO or the EU—partially because we have always said, since the Cyprus problem, that we would not have another state in either organisation which was split, and partially because it is quite difficult to extend an Article 5 guarantee to a country when a part of it is already occupied. He has guaranteed that the future of Ukraine will be very difficult and unstable. No one will have any incentive to invest there, and therefore the great poverty and very high unemployment in that country will continue indefinitely. I am sure that Putin thinks and calculates that that can in itself only lead to one of two things. One is that eventually the poor Ukrainian population will give up, throw in the sponge and vote in a pro-Russian Government, who will join the Eurasian Economic Union and do whatever else Putin tells them to do. The other is that the West will give up, and do a shameful thing and tear up its commitments to Ukraine on both NATO and the EU. The West will say that Ukraine cannot come into either organisation and will do some deal involving other parts of the world.

I am all for doing deals with the Russians, I must say, but not at the expense of good faith and the guarantees that we have given to Ukraine. Of course, the result of that would be more or less the same for Ukraine, but it would be a devastating blow to the morale of NATO, the EU and, particularly, the east European countries. It would be a terrible betrayal: something that we would regret for decades and perhaps centuries.

My final thought is therefore that we need to think carefully about how we can avoid that scenario. I think that the only way that we can is by thinking how we can extend an Article 5 guarantee to that part of a territory which is not occupied. That is a matter on which we should focus and which we should discuss with our allies over the coming months, despite the other very important issues which we also have to determine during that period.