UK Strategy Towards the Arctic (International Relations and Defence Committee Report)

Lord De Mauley Excerpts

Thursday 9th January 2025 Lords Chamber

[Lord De Mauley (Con)]

My Lords, I rise as the current chairman of the International Relations and Defence Committee. I very much thank my predecessor, the noble Lord, Lord Ashton of Hyde, and the committee’s members for their work on this important report. Although I did not join the committee until it had completed this report, I hope noble Lords will bear with me if I take this opportunity to focus on the pressing matter of the security of our critical national infrastructure in the face of emerging threats, particularly those being manifested in and coming from the Arctic.

The European Arctic has increasingly become an area of strategic importance. The rising tensions between NATO and Russia have created unprecedented security dynamics in the region. The Arctic and the Baltic regions are viewed as integral to Russia’s strategic interests. The Arctic’s difficult environment and related challenges for intelligence, surveillance and reconnaissance make that region particularly conducive to tactics which are difficult to detect. Russia has developed a range of capabilities to sabotage and disrupt critical infrastructure, including undersea data cables in the Arctic and further afield.

These specialist capabilities for deep-sea maritime sabotage are based on the Kola peninsula, which borders the European Arctic. Recent hybrid attacks, including deliberate disruption of undersea cables—one as recent as Christmas Day, as the noble Lord, Lord Ashton, said—and heightened surveillance activities highlight the vulnerability. Our critical national infrastructure, particularly subsea telecommunications cables, energy infrastructure and maritime communication networks, is facing a growing number of risks.

We are witnessing a troubling shift towards more aggressive tactics. NATO and western intelligence services have warned that Russia is behind a growing number of hostile activities across the Euro-Atlantic area. The interconnectedness of our modern world means that a single incident away from our shores can have far-reaching consequences. In January 2022, one of two subsea data cables connecting Norway’s Svalbard archipelago and the Norwegian mainland was damaged. Although it did not result in prolonged disruption, it clearly demonstrated the capabilities of a hostile actor and should serve as a wake-up call to the United Kingdom and our allies.

Russian naval intelligence, under the guise of oceanographic research, operates vessels such as the “Admiral Vladimirsky”, which is designed, among other things, for maritime sabotage. Moreover, civilian ships, including fishing trawlers, are being used to survey and potentially attack infrastructure in shallower waters, such as those in the North Sea. In spring 2023, four Nordic broadcasting companies mapped suspicious trajectories of Russian fishing trawlers, research vessels and merchant ships travelling in the region and detected 50 ships that appeared to be collecting data along the seabed and monitoring military and other sensitive activities. In November 2022, the “Admiral Vladimirsky” was spotted loitering near the RAF’s maritime patrol base at Lossiemouth in the United Kingdom. It also passed suspiciously close to several UK offshore windfarms.

Returning to the experience of our Arctic partners, Norway, now Europe’s primary gas supplier, has been the subject of increased Russian surveillance of its energy infrastructure. Any disruption to its energy production would pose a significant risk for Europe’s overall energy security. Since Sweden’s NATO accession, several Swedish organisations have fallen victim to cyberattacks carried out by groups of hackers suspected of having ties to Russia. In this context, international collaboration is essential. Also important is collaboration between Governments and industry, as private companies often possess extensive monitoring and surveillance capabilities. The Norwegian oil and gas sector alone, for example, has 600 remotely operated underwater surveillance vehicles. The committee heard during its inquiry that military-civilian partnerships could considerably enhance deterrence. When infrastructure is designated for both civilian and military use, adversaries could perceive that the risk of sabotage leading to escalation would increase.

State collaboration with major tech companies will also be crucial for ensuring cyber resilience. As we confront the growing challenges to our critical national infrastructure, the role of our Reserve Forces becomes vital. Noble Lords may recall my interest in reservist service, as set out in the register. Our reservists, drawn from all parts of society, possess unique skill sets, linguistic capabilities, technical expertise and adaptable professional backgrounds that are invaluable. They can significantly enhance our capabilities and societal resilience in a way that is cost effective. However, in order fully to realise the potential of our Reserve Forces, we must ensure they are adequately funded, equipped and supported. This involves investing in their training and resources and recognising the invaluable contributions they make to our national security. The dismantling of mechanisms for mobilisation and civil defence after the Cold War has left us vulnerable. There is an urgent need for a whole-of-government effort to build resilience and improve protection of the UK’s critical national infrastructure. New Reserve Forces are needed to provide this protection.

The UK is far from immune to the hybrid threats experienced by Russia’s neighbours in the European Arctic. The protection of our critical national infrastructure is a pressing concern that requires our immediate attention. Reserve Forces, with their unique skills and expertise, are essential in addressing this challenge. I call on the Government, through the SDR, to prioritise the development and support of our Reserve Forces and recognise the vital role they play in defending our nation’s interests.

Her Majesty the Queen’s Platinum Jubilee

Lord De Mauley Excerpts

Thursday 26th May 2022 Lords Chamber

[Lord De Mauley (Con)]

My Lords, the breadth of wisdom, experience and accomplishments of Her Majesty the Queen, as well as the extent and depth of her service to our nation, are such that a single Member of your Lordships’ House can never do her justice. Most noble Lords have spoken of that service and of her great contribution. As Her Majesty’s Master of the Horse, I want to focus on the aspects of the Queen’s life which involve horses, an area where I like to think she gets her enjoyment, relaxation and excitement, but where she also makes a significant contribution to our public life.

Perhaps her best-known equestrian passion is for her racehorses. She has owned winners of all five English classics, except—tantalisingly—the Derby, in which her Aureole came second in 1953. Aureole, incidentally, itself sired a Derby winner. Among her best horses were Carrozza, which won the Oaks in 1957; Pall Mall, which won the 2,000 Guineas in 1958; Highclere, which won the 1,000 Guineas in 1974; Dunfermline, which won both the Oaks and the St Leger in 1977, an astonishing performance; and Estimate, which, despite not winning a classic, was one of her best horses, winning the Queen’s Vase in 2012 and the Gold Cup the following year. Each of these horses won other important races and Her Majesty has had, and continues to have, other very high-class and successful horses; these are just some of her bigger winners.

Despite the difficulty of competing at the top today, against the world’s massive racing establishments, which are equipped to breed a multitude of foals to produce one good one, compared to Her Majesty’s relatively modest number of brood mares, I think I am right in saying that the Queen had her highest ever number of winners last year and has had no fewer than five winners in the month of May this year alone—and, in addition, five seconds. She looks sure to have a fistful of runners at Royal Ascot.

The Queen’s approach to the breeding of racehorses is that of an intellectual. Which bloodline will nick with which? Is the aim a sprinter or a classic horse? What are the logistics of getting the mare to the stallion, many of the best of which are overseas? The breeding of racehorses is a long-term game. The classics are run by three year-olds and the planning of the breeding will not have been undertaken overnight. Luckily, patience is an asset of which the Queen is not in short supply. The naming of racehorses is, for the Queen, something akin to an advanced crossword. What would one call a foal by the stallion Night of Thunder, out of a mare called Free Verse, but Slipofthepen?

Other noble Lords have commented on the Queen’s sense of humour. We were discussing the other day a horse she was, unusually, rather disappointed with. At the age of 96, she told me, “I could run faster than it in gumboots”.

Her Majesty’s expertise is not restricted to racehorses. As my noble friend the Leader of the House said, at the Royal Windsor Horse Show two weeks ago she entered, among others, her homebred Highland mare, Balmoral Leia. Leia triumphed, not only in her class but as champion, and then as supreme champion in- hand mountain and moorland pony.

The Queen takes a considerable interest in breeding and has been a strong supporter of some our rarer breeds, just some examples of which are the fell pony and the Cleveland bay, the latter important to the world of carriage driving in general and the Royal Mews in particular. The Queen also pays considerable attention to the life after racing of her horses, a notable example of which is her retrained racehorse Barbershop, formerly trained by Nicky Henderson, which ran with distinction in the Queen’s colours, winning eight races and being placed in the 2009 King George VI Chase. He followed this up with a string of successes in the show ring.

The Queen is well known to be an excellent horse- woman and horse-master herself, most notably when riding in her birthday parade in 1981. As my noble friend the Leader mentioned, when a teenager let off a starting pistol next to her, her charger, Burmese, bounced, but Her Majesty patted its neck and carried on as if nothing had happened. She rode in nearly 40 birthday parades between 1947 and 1986, 16 of them on Burmese, a gift from the Royal Canadian Mounted Police, and has subsequently attended in a carriage.

I had a stark personal experience of the Queen’s horse-mastership when accompanying her round the stables at the Royal Mews before Christmas in 2019—so, comparatively recently. We came to one rather excitable young horse whose stable door had been flung open, between the sovereign and which there was only fresh air—and not very much of it. As its forefeet left the ground, I was calculating how it would be possible for me to insert myself between the Queen and the horse, bearing in mind that I had to navigate around or over either the Crown equerry or the head coachman, to neither of whom it appeared to have occurred that a disaster of global importance was about to occur. While I was still working on it, and indeed while said horse’s feet were still airborne, the monarch lifted a forefinger and firmly said, “No”—at which the horse in question sprang to attention, and disaster was averted.

I know that the entire horse world, like the United Kingdom and the Commonwealth, would want to record its huge congratulations to the Queen on yet another extraordinary achievement in her Platinum Jubilee.

His Royal Highness The Prince Philip, Duke of Edinburgh

Lord De Mauley Excerpts

Monday 12th April 2021 Lords Chamber

[Lord De Mauley (Con)]

My Lords, others have spoken and will speak about the huge range of interests and skills that the Duke of Edinburgh possessed. As Master of the Horse, I will focus on his contribution to equestrianism and equestrian sports. His Royal Highness was, from an early age, a keen sportsman, playing cricket and hockey with great dexterity and, in the late 1940s, he began an active polo career. He quickly became a remarkable player, twice leading his team to victory in the gold cup for the British open and founding the Guards Polo Club at Windsor. Prince Philip reached a handicap of five, taking the sport much more seriously than most amateur players.

By the time that he retired from active polo in 1971, he had developed a love for carriage driving, taking it up competitively in the 1970s. After his second competition, the European championships, held at Windsor, he recalled:

“I came in not quite last, but very nearly.”


Ultimately, he represented Great Britain in six world and three European championships, in a career that spanned more than 10 years, becoming a world-class carriage driver and winning team gold in the 1980 world championship.

Prince Philip became president of the International Federation for Equestrian Sports—known by its French abbreviation, the FEI—in 1964, and served until 1986. A true leader, he recognised that more could be done to bring order to elite competition. Deeply involved, thanks to his true love for horses, His Royal Highness channelled his passion into driving standards up across a broad range of equestrian sports, writing the rules for international carriage-driving competitions and introducing new disciplines.

While, in the equestrian world, his name is most closely associated with carriage driving and polo, he instigated the FEI Jumping Nations Cup series—now a major part of the elite athletes calendar—during his tenure as president of the FEI, and he actively encouraged the launch of the FEI Jumping World Cup. He was also instrumental in the creation of the FEI World Equestrian Games.

His Royal Highness became president of the Royal Windsor Horse Show in 1991 and took a close and personal interest. He had a watchful eye and your Lordships will not be surprised that he often made suggestions to the committee of ways to improve the show and its competition. He created the Prince Philip pony club games, and the nation’s competition at Windsor was a highlight that demonstrated his interest in youth development.

St Matthew, at chapter 5, verse 15, says:

“Neither do men light a candle, and put it under a bushel”.


His Royal Highness used all his considerable assets to shine a light on equestrian sports, in the United Kingdom, around the Commonwealth and internationally. His passion for all things equestrian was of course shared by the Queen and passed on to their children, particularly the Prince of Wales, who was also a successful polo player, and the Princess Royal, the first member of the British Royal Family to compete at an Olympic Games, who succeeded him as president of the FEI.

The Duke of Edinburgh was an honorary member of the Jockey Club from 1947, and enthusiastically supported the Queen in her great passion for racing. The Duke of Edinburgh handicap was named for him at Royal Ascot. A high point was his presenting the Queen with the Queen’s Vase after Estimate won that race in 2012. Not to be outdone, he had owned the winner of the 1968 English Greyhound Derby.

He was an extraordinarily fearless horseman, and his impact on equestrian sport is remarkable. He was famously direct and much enjoyed the company of the family of carriage drivers, who regarded him truly as one of them, and of his grooms, who were devoted to him, not least for his interest in them. You knew when he was not entirely approving of something, be it the design of a horse-box, the way someone was driving a pair or a team, or something being in the wrong place in the picnic box. He expressed himself very clearly when that happened, but he was excellent company and had a fund of amusing and often apocryphal stories from his own life. He was a man of incredible energy and a great sense of humour. The equestrian community joins the rest of the nation, the Commonwealth and indeed the world in mourning the loss of a remarkable man, and in sending our condolences to Her Majesty and the Royal Family.

European Union (Notification of Withdrawal) Bill

Lord De Mauley Excerpts

2nd reading (Hansard): House of Lords
Tuesday 21st February 2017 Lords Chamber

[Lord De Mauley (Con)]

My Lords, although I voted in the referendum, I did not campaign in the run-up to it because despite believing, on balance, that we would be better off out, there were genuine and strong arguments on both sides. However, we are where we are, and we now need to get on with it. Before I go further, I must declare an interest as a beneficiary of payments under the common agricultural policy.

I listened carefully to the debate yesterday and this morning. Much of it has been fighting last year’s battle. I hope your Lordships will forgive me if I take the rather novel course of making a speech on the Second Reading of the Bill before us. Many issues have been raised and amendments have already been tabled that deal with all manner of matters, and I have no doubt that there will be more to come. I intend to address only three key areas that have been raised in another place and are covered by amendments that have already been tabled here.

The first is EU nationals living here and their right to continue to do so. That is something that many of us—if not all of us—would wish to see. The Government have said that they are prepared to give them that right and that it must be reciprocal, with our citizens living in EU countries being given the same right. There is pressure unilaterally to give EU citizens the right to continue to live here, but it is in the nature of negotiations that related and reciprocal matters are dealt with together. If one point is conceded, this risks losing the reciprocal point, so by definition, to do this would run the risk of British citizens currently living in another EU country losing the right to continue to reside in that country. That would be grossly unfair on them, and that is why I would resist any attempt to insist upon the unilateral approach.

The second issue I want to address is that of scrutiny by Parliament between the triggering of Article 50 and the completion of the process two years later. In this context, scrutiny means two principal things: the provision of information and allowing time to debate it. I have no problem with allowing plenty of time for debate. As regards the provision of information, the Government have said that they would provide Parliament with the same information that the EU Parliament receives. That seems fair and right, but as far as the provision of additional information is concerned, I look to my career as a negotiator. I negotiated a significant number of corporate acquisitions and disposals in Europe and the Far East during that career. One of the golden rules of negotiating is that information about your counter party’s position and the detail of what is important to them, is gold-dust. You learn everything you can about their backstop positions, what they will negotiate on and what they cannot, the intricate details of their financial position and things that might not seem important but might later prove to be. It is a forensic science, and it makes all the difference to the outcome. Any information about our position that comes into the possession of the large number of people and institutions that make up our counter party—the Commission, the Council, the Parliament and their various members—will be used against us. That is why I would resist the provision of additional information.

My third issue, impact assessments, is closely related. I have explained my reasons for strongly resisting the provision of information to this Parliament beyond that provided to the European Parliament. An impact assessment on Brexit, if it were to be of any value, would reveal information about our options and negotiating position which would be hugely valuable to our counterparty, the negotiating representatives of the EU. That information would, without a shadow of doubt, be used against us by them. I am afraid that confidentiality arrangements that allow limited access to documents have a habit of failing to prevent leaks, so I do not find that suggestion of any comfort. As such, I resist any proposal for impact assessments.

Those are my views on three key areas. Many other issues have been and will be raised, and I look forward to hearing the views of noble Lords still to speak, to the Minister’s response and to debates at subsequent stages.

Arrangement of Business

Lord De Mauley Excerpts

Monday 2nd July 2012 Lords Chamber

Moved by

[Lord De Mauley]

That the House do now adjourn for 10 minutes.

[Lord De Mauley]

My Lords, in view of the fact that the second Statement has not yet started in the other place, I am afraid that I am going to have to beg to move that the House do now adjourn during pleasure, I suggest for 10 minutes.

[Baroness Falkner of Margravine]

My Lords, in the 20 minutes that we have had for this European Council Statement, not a single female Member of this House apart from the noble Baroness, Lady Royall, was able to subject the Government to scrutiny. I therefore wonder whether the House will consent to hear me put a question to the noble Lord the Leader on the European Council. My question is to do with the banking union.

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[Lord Strathclyde]

I am very grateful for that. I have very broad shoulders on these things, but it demonstrates that I made yet another mistake in giving way to the noble Lord, Lord Foulkes.

As for the noble Lord, Lord Myners, let everybody just remember what his role was in all this as a very senior Minister in the Treasury in the previous Government.

[Lord De Mauley]

My Lords, in view of the fact that the Chancellor of the Exchequer has now started, I beg leave to withdraw my Motion.

Motion withdrawn.

News Corporation: Conduct of Secretary of State for Culture, Media and Sport

Lord De Mauley Excerpts

Monday 30th April 2012 Lords Chamber

[Lord Strathclyde]

My Lords, the Prime Minister was invited to make a Statement by the leader of the Opposition, who was clearly trying to play politics. I do not want to offend the noble Lord, who is a distinguished Cross Bencher, but those of us better versed in the means of politics can see what is going on utterly clearly; it is as clear as daylight. I am under the impression that everything the Secretary of State was required to do during the bid process, he did. He accepted an offer of undertakings by BSkyB, but he referred them as well; and of course when the undertakings were themselves withdrawn, the full referral then took place. As for the role of the Permanent Secretary, I think that I have said everything I can possibly say about that.

[Lord De Mauley]

My Lords, the time has come for us to move back into the other debate.

Phone Hacking

Lord De Mauley Excerpts

Wednesday 13th July 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords—

[Lord De Mauley]

My Lords, we have 10 more minutes. Can the noble Lords decide which of them is to go first?

[Lord Campbell-Savours]

My Lords, the Prime Minister referred in his Statement to consulting with the Cabinet Secretary on an amendment to the Ministerial Code for the recording of all meetings “regardless of the nature of the meeting”. Does this include formal and informal meetings and official and unofficial meetings, if they exist? How is he describing them?

Police Reform and Social Responsibility Bill

Lord De Mauley Excerpts

Wednesday 11th May 2011 Lords Chamber

[Lord Carlile of Berriew]

My Lords, there are a number of problems with Amendment 31. The first is that we have not debated it yet. We have not agreed it. Logically, if we are to have a structured debate, it should start with Amendment 31. The problem is that we would be debating Amendment 1 all over again.

[Lord De Mauley]

Following the advice of the noble Lord opposite, I beg to move that the Committee do now adjourn during pleasure until 9.10 pm.

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[Lord De Mauley]

I am going to have to crave your Lordships’ indulgence and ask if we can have a further adjournment during pleasure until 9.20 pm.

Sitting suspended.

Agriculture: CAP Direct Payments

Lord De Mauley Excerpts

Tuesday 27th July 2010 Lords Chamber

[Lord Livsey of Talgarth]

To ask Her Majesty’s Government whether they have reached conclusions on the findings of the Department for Environment, Food and Rural Affairs-funded Dutch Agricultural Economics Research Institute (LEI) study of the likely impact on United Kingdom farmers if common agricultural policy direct payments were removed by 2013.

[Lord De Mauley]

My Lords, I declare an interest as a recipient of the single farm payment. The Dutch Agricultural Economics Research Institute’s report, commissioned by the previous Government, is an academic exercise to look at a hypothetical scenario. It should be noted that the data are from 2004 to 2006—a time when exchange rates were unfavourable to the United Kingdom—and fail to account for the 70 per cent increase in UK farm incomes that has since occurred. Finally, there is no chance of direct payments being withdrawn by 2013.

[Lord Livsey of Talgarth]

My Lords, I thank my noble friend for that reply, but does he not agree that the LEI report indicates that 35 per cent of farms in the UK would become financially unviable if Pillar 1 payments were withdrawn, while 83 per cent of all EU farms would remain viable? Will he seek to reverse the previous Defra policy of abolishing single farm payments, as that would save many UK livestock farms that depend on those payments for their financial viability? The alternative is land abandonment. This subject is very important.

[Lord De Mauley]

My Lords, I acknowledge the first half of my noble friend’s contention, but in my initial Answer I explained that the report data are somewhat out of date and that there have been fairly substantial changes in the economic position for farmers since then. My noble friend is right that the financial perspective for 2014 to 2020 will be negotiated in a scenario of much more limited financial resources being available than before. The Government’s view is that Pillar 2 represents a more effective use of those limited resources. However, I am really not expecting direct payments to disappear immediately under the next financial perspective.

[Lord Tomlinson]

As the noble Lord is a member of a Government who are more and more committed to the role of market forces but is not committing himself imminently to change, what plans do he and the Government have for introducing market forces to agriculture, thus contributing to the savings that they are looking for in every other area of public expenditure?

[Lord De Mauley]

My Lords, no one thinks that this is going to be easy. In my experience, however, there are very few farms that can claim that they have exhausted all potential for making more efficiencies, so I take the noble Lord’s point. Many would benefit from training to improve skills, especially in business management, cost reduction and better marketing strategies, such as through producer organisations. As a whole, the EU has been falling badly behind its global competitors in productivity growth over the past 30 years and the Government are working hard on how this can be reversed.

[Lord Redesdale]

My Lords, will the Minister consider—

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[Lord Willoughby de Broke]

I am most grateful. Will the Minister reassure the noble Lord, Lord Livsey, and indeed the noble Lord, Lord Tomlinson, that successive French Governments have stated repeatedly that there will be no change whatsoever to single farm payments after 2013? Will he also therefore reassure the British taxpayer that they will continue to pay for French farming for the foreseeable future?

[Lord De Mauley]

My Lords, the noble Lord is a noted cynic on this subject. I assure him that the British Government will be negotiating hard at EU level for a reform to the CAP.

[Lord Redesdale]

My Lords, I apologise. I was slightly confused by the noble Lord, Lord Willoughby de Broke, because he said, “This side”, and the Front Bench opposite agreed with him. Will there be any move to deal with the power of the supermarkets in setting prices, which is having a detrimental effect, especially on hill farmers in livestock areas? Indeed, it is one of the major causes of depressed incomes for livestock farmers.

[Lord De Mauley]

My Lords, I very much take my noble friend’s point. He should be aware that the coalition programme for government, which was published on 18 May, made a commitment to introduce an ombudsman in the OFT to enforce the groceries and supply code of practice and to curb abuses of power that act against the long-term interest of both consumers and farmers.

[Baroness Quin]

My Lords, what strategy are the Government putting in place to build up support among other member states for CAP reform and for promoting our interests? Given that the Lisbon treaty now gives the European Parliament a bigger say in agricultural policy, how are Conservative Ministers and MEPs planning to get support there beyond the small and very motley group of allies that they have at present?

[Lord De Mauley]

The noble Baroness is right that negotiation needs to go on at EU level; indeed, I can confirm that comprehensive negotiations are continuing. She is also right that it is now a matter of codecision, so those negotiations will need to go on with MEPs.

[The Lord Bishop of Blackburn]

My Lords, the Minister has already heard that land abandonment is likely to be one of the greatest challenges for a future CAP. The potential loss of upland farms could have a large impact in my diocese and, I know, in many other areas. What consideration is being given to preventing this from happening in future?

[Lord De Mauley]

I am grateful to the right reverend Prelate for that question. We recognise that the future of the uplands is a matter of considerable concern to a great many people and organisations. We have a wide range of policies and schemes in hand—the uplands entry level scheme and others—to address individual issues raised by the Commission for Rural Communities. We recognise the potential of the uplands for generating greater public goods and we are working on unlocking that.

[Lord Grantchester]

I declare an interest as a farmer receiving payments. Does the Minister agree that, to capture improved returns, agriculture needs to move beyond primary processing and up the value-added chain? What is Defra doing to help in this regard?

[Lord De Mauley]

I agree with that. I have explained a bit about what we think is the right way to go in terms of competitiveness. I will leave it at that for today.

Barnett Formula

Lord De Mauley Excerpts

Monday 7th June 2010 Lords Chamber

[Lord Barnett]

To ask Her Majesty’s Government what action they propose to change the Barnett formula.

[Lord De Mauley]

My Lords, the Government recognise the concerns expressed by your Lordships’ Select Committee report on the Barnett formula, the Holtham commission on Welsh funding and other commentators on the system for devolution funding. However, as set out in the coalition programme for government, at this time the priority must be to reduce the deficit, and therefore any change to the system must await the stabilisation of the public finances.

[Lord Barnett]

My Lords, the noble Lord must know that he has not answered my Question. The Select Committee to which he referred unanimously pointed out that approximately £1,600 per head more is spent in public expenditure in Scotland than in England, which has serious implications for the coming cuts. The Select Committee, which included a former Conservative Chancellor and two former Conservative Secretaries of State for Scotland, unanimously recommended that the system should be changed and based on need. What is he going to do? Is he going to do nothing at all?

[Lord De Mauley]

My Lords, I pay tribute to the noble Lord, Lord Barnett, not only for producing his eponymous formula at the end of the 1970s, when he was a much respected Chief Secretary to the Treasury, but also for his powerful arguments in recent years for change. He of course knows more than I will ever know about the Barnett formula, and he makes a valid point; and the coalition understands his concerns very clearly. However, I am sure that he will be among the first to acknowledge that, in the light of the grave financial situation that the country faces, it would be wrong for a new Government to rush to a decision on this complicated matter.

[Lord Lawson of Blaby]

My Lords, perhaps I may assist my noble friend. I entirely agree that the number one objective—the Government are right—must be to reduce the appalling size of the deficit. If he re-reads the unanimous report of the Select Committee to which he referred, he will discover that its recommendations would assist that task, not fly in the face of it. I hope he will embrace it.

--- Later in debate ---

[Lord De Mauley]

My Lords, I thank my noble friend for his intervention. We recognise the force of the arguments and are carefully considering the various reports. There is as yet no consensus on exactly what a needs-based assessment would take account of. In the mean time, the coalition’s priority, as I have said, is to reduce the deficit.

[Baroness Hollis of Heigham]

My Lords, given that the Barnett formula funds on the basis of population and not need, does the Minister agree that it is profoundly unfair to overfund Scotland by the extent of some £4 billion to £5 billion a year, while requiring underfunded local authorities in the rest of the country to make further savage cuts as their contribution to reducing the deficit?

[Lord De Mauley]

My Lords, in circumstances where the public sector debt is approaching £900 billion and the PBR forecast for 2009-10 is for net additional borrowings of £156 million, or about 11 per cent of GDP, I am surprised to hear that the noble Baroness thinks that the Barnett formula is a more urgent matter.

[Lord Oakeshott of Seagrove Bay]

My Lords—

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[Lord Elystan-Morgan]

My Lords, is it not the case that the whole economic and financial landscape has changed so fundamentally over the past 30 years that a rough and ready yardstick of calculation, as it was then, now becomes something utterly inequitable; and that if there is no radical change, parts of the United Kingdom, such as the land and nation of Wales, will suffer the perpetuation of this inequity? Is it therefore a matter not of waiting for events to happen but of radically tackling a massive injustice?

[Lord De Mauley]

My Lords, the Government hear what the noble Lord and other noble Lords say. However, while we recognise the concerns expressed by, for example, the Holtham commission, as I said, the priority must at the moment be to tackle the deficit.

[Lord Oakeshott of Seagrove Bay]

My Lords—

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[Lord Oakeshott of Seagrove Bay]

Thank you, my Lords. The Labour Benches have already had two questions.

Does the Minister agree that, unlike its author, the Barnett formula is now well past its sell-by date? Does he recognise particularly the concerns expressed so thoroughly by the Holtham commission on the whole system of public sector or devolution funding? While obviously accepting that the deficit is the immediate problem, does he not also accept that moving towards fairness between all four nations of the United Kingdom is an important part of getting the deficit sorted?

[Lord De Mauley]

My Lords, I have just said that we recognise the concerns expressed by the Holtham commission, and the Government are listening to what noble Lords are saying.

[Lord Peston]

My Lords, I was under the impression that the Liberal Democrats were part of the Government. I know that we need to sort out the protocol, but they really have to get used to what they have sold their souls for. They really do.

May I ask the noble Lord, with all lack of respect to my noble friend Lord Barnett, whether it is not about time that the Barnett formula was simply allowed to die? Should we not let it rest happily in its grave until we can come back to invent a new formula?

[Lord De Mauley]

My Lords, the dulcet words of the noble Lord, Lord Davies, when he was a Minister answering almost an identical question, were along the lines that the Barnett formula is simple, robust, and it works. The coalition, on the other hand, and as the noble Lord, Lord Peston, implies, recognises that there are concerns over the allocation of funding. But, as I said, there are other priorities.