Constitutional Convention

Lord Forsyth of Drumlean Excerpts

Thursday 13th December 2018 Lords Chamber

[Lord Foulkes of Cumnock (Lab)]

My Lords, I am particularly grateful to my noble friends in the Labour group in the House of Lords for agreeing to this topic and allowing me to speak to it. It is very important, as indicated by the number and distinguished nature of the speakers who have put their names down for the debate. I hope others will forgive me if I start by saying how pleased I am that my friend and former colleague, in the other place and in this House, the noble Lord, Lord Higgins, has agreed to make his valedictory speech in my debate. I am honoured by this; we look forward to it very much indeed. But we shall miss his wisdom when he is no longer with us.

It is encouraging that we are debating a constitutional issue that is not Brexit. Is that not a relief? This issue is a long-standing interest of mine—some might even say that it is an obsession. I was first motivated to become interested in it in the late 1960s and early 1970s by the late Professor John P Mackintosh, a Member of Parliament whom some noble Lords will remember. He was a very powerful and eloquent advocate of the need for devolution of power away from Whitehall and Westminster to the nations and regions of the United Kingdom. He was the author of the seminal book The Devolution of Power and a very good friend of mine. He and all of us who were concerned about devolution of power at that time saw a central metropolitan bureaucracy here in London that did not understand or take account of the different needs of the different parts of the country—not just Scotland, Wales and Northern Ireland but the regions of England.

We sought to remedy that for Scotland with the devolution of both legislative and administrative power to a Scottish assembly, as we called it at the time, and we campaigned for it. I am glad that my noble and good friend Lord McConnell of Glenscorrodale will speak today, because he and I fought shoulder to shoulder in that campaign, along with my noble friend Lord Maxton, who I am glad to see is also here, and many others. Sometimes it seemed like a lone fight but it gathered momentum—if noble Lords will excuse that word—as we went along.

We succeeded in persuading the Labour Government to agree to a referendum, which was held in 1978, but frustratingly, although we got a majority in that referendum, it failed to achieve the 40% turnout threshold that had been forced into the legislation by opponents, led by the late George Cunningham. Sadly, 1979—a date I will never forget, as it was when I was honoured to be elected to the House of Commons—saw the return of a Tory Government, which meant that nothing was done to pick up the idea and campaign for devolution. Some felt that the opportunity had been lost for ever.

[Lord Forsyth of Drumlean (Con)]

Would the noble Lord like to put it on the record that the Tories in Scotland will always be grateful to the SNP for bringing down the Labour Government on that issue and thus enabling Margaret Thatcher to become Prime Minister?

[Lord Foulkes of Cumnock]

For once, I am grateful to the noble Lord, Lord Forsyth, for intervening because he has reminded me of that, and we should keep reminding the people of Scotland that it was the SNP that helped to bring down Jim Callaghan’s Government and gave us Margaret Thatcher and a Tory Government for nearly 18 years.

HS2

Lord Forsyth of Drumlean Excerpts

Thursday 13th December 2018 Lords Chamber

[Lord Young of Cookham]

The noble Lord makes a powerful case for more resources for transport in addition to the money that we have already committed to HS2, in both phase 1 and phase 2. He wants additional resources to improve connectivity with Liverpool. A spending review is just starting in which I am sure the Department for Transport and those departments that have an interest in the northern powerhouse will make bids. I note his strong representations that improved connectivity for Liverpool should be a high priority.

[Lord Forsyth of Drumlean (Con)]

Has the Minister had the opportunity to read the reports from the Economic Affairs Committee of this House on HS2, and can he confirm how many billions could be saved by a marginal reduction in the speed of this train?

House of Lords: Membership

Lord Forsyth of Drumlean Excerpts

Monday 21st May 2018 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Lord not just for his helpful intervention but for the work which he and his committee have put in. I understand that he is continuing that work. Yes, I did read the comments made by the Lord Speaker, as reported in the press, and my right honourable friend the Prime Minister has shown restraint. Tony Blair appointed 374 new Peers—including the noble Lord, Lord Adonis—David Cameron appointed 245 and Gordon Brown appointed 34, so two years in the Prime Minister has indeed shown some restraint and I think that we are on track. The noble Lord set out targets for the individual parties to reach by 2022, and those are challenging targets. As I indicated a week ago, some groups and parties within the House are making progress but not all of them.

[Lord Forsyth of Drumlean (Con)]

On the subject of fairness, raised by the Liberal Front Bench, if the political parties were represented according to the results at the last general election, will my noble friend indicate how many of the Liberals would have to leave this House?

[Lord Young of Cookham]

I do not have the mental capacity or the bandwidth to work that out. Fifty? Sixty? Any advance on sixty? [Laughter.] I notice some jostling for position on the Liberal Benches. I am sure that by the time the House rises someone will have worked out the exact proportion and how many Liberal Democrats ought to go.

House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL]

Lord Forsyth of Drumlean Excerpts

Friday 23rd March 2018 Lords Chamber

[Lord Trefgarne]

My Lords, I do not agree with that. I am in favour of House of Lords reform. Indeed, I would have supported the Bill introduced back in 2012, for a largely elected House, which of course did not even manage to get through the House of Commons.

However, the by-elections do serve a purpose, beyond helping the Government to get their Bill though Parliament in 1999. First, they are a strong link with the past—a golden thread that links us with the ancient Parliaments stretching back for generations. Secondly, they are a reminder that we have come from a House that was, only recently, entirely hereditary. Thirdly, and this is a point that I would like to expand upon, by-elections provide a different way into this House—a way which is not dependent upon prime ministerial patronage.

The noble Lord, Lord Grocott, has often said that his Bill is not personal, yet his mocking tone, and the use of the word “laughable” in his recent article in the House magazine, creates a very different impression. In his article, the noble Lord mocked the Liberal Democrats who recently voted in a by-election for the noble Viscount, Lord Thurso, to rejoin this House after a spell as an elected Member in the House of Commons. I was pleased to see the noble Viscount back in his place—he makes a valuable contribution to our debates. However, that is apparently not sufficient for the noble Lord, Lord Grocott. He described that by-election as “indefensible” and “laughable”.

[Lord Forsyth of Drumlean (Con)]

My Lords, far be it from me to come to the defence of the noble Lord, Lord Grocott, but I read the article. What he said was that having almost two and half times as many candidates as electors, and an electorate of only three, was laughable. He in no way impugned the authority or the contribution that the noble Viscount makes to this House.

[Lord Trefgarne]

I have already endorsed my admiration of the noble Viscount and continue to do so. I agree that there are some idiosyncrasies. That is why I have suggested that all hereditary Peer by-elections might be conducted as the one which we conduct for so-called officeholders, in which all noble Lords have a vote to select a new Member when a vacancy in that group occurs.

I do not have much more to say in favour of the propositions that I have made, but I hope that the noble Lord, Lord Grocott, will reflect again on the relevance of the by-elections in the context which I have described.

--- Later in debate ---

[Lord Forsyth of Drumlean]

My Lords, I shall make only a short contribution. If it looks like a duck and walks like a duck, it is a duck, and I know a filibuster when I see one. We have this ridiculous amendment to the Motion when, as my noble friend has pointed out, we have had a vote at Second Reading. We have all these other amendments tabled in the names of my noble friend and the noble Earl, Lord Caithness. What is going on here is an attempt to frustrate what is the majority view of this House. It is a majority view because we value the hereditaries and the important contribution they make to this place. I personally am opposed to an elected House and I thought the argument made by the noble Lord, Lord Tyler—that hereditary by-elections meant that the Prime Minister could not appoint people who would be compliant—was an insult to us all. None of us is compliant in this House, as my noble friend the Chief Whip will remember from yesterday. We act appropriately on our judgment, and that is the value of this place.

I saw in the Sunday papers that the Speaker in the other place had spent a bit of money on devising a new logo. When I looked at the new logo, I could not see the difference. Then I realised that it was not just about a few balls on a portcullis; rather, there was a huge difference. It has been proposed that the existing logo of the portcullis and the words “Houses of Parliament” should be replaced by one saying, “UK Parliament”, thus downgrading this House. Again and again, this House produces excellent reports—I declare an interest as chairman of the Economic Affairs Committee—which are largely ignored.

The reputation of this House has fallen considerably because of the numbers, and frankly, as the noble Lord, Lord Grocott, pointed out in his excellent article in the House magazine and as the noble Lord, Lord Steel of Aikwood, has pointed out, this is about the reputation of this House. If we wish to maintain the hereditary presence—I was privileged enough to join the House while the hereditaries were still here and they make an excellent contribution—we have to get rid of a process that generates ridicule and damages us. It enhances the argument of those who would wish to get rid of the hereditaries and make this House an elected Chamber—one, as the noble Lord, Lord Tyler, has suggested, in which the Prime Minister’s patronage and the patronage of the Chief Whip and others would run well. That is not what this House is about and it is not its function. I hope that my noble friend will withdraw not only his amendment to the Motion but these ridiculous other amendments, which are designed to prevent this House taking a decision and sending it to the other place for it to take a view.

[Lord Balfe (Con)]

My Lords, perhaps I may make a couple of points as someone who gave both written and oral evidence to the Burns committee. The Burns committee did not deal with this subject. It decided specifically not to do so because it felt that it would be outside its terms of reference. We hear that the resolutions of Burns have not been implemented, but then, parliamentary reform is an ongoing process. From the 1832 Reform Act through to votes at 16, which will inevitably come, we have reformed the way we run the country and how parliamentary systems work. I believe that we are passing up an historic opportunity if we do not back the noble Lord, Lord Grocott.

Many years ago, I remember having a conversation over dinner with the late John Smith, a man I greatly admired. I asked him, “What is the most difficult thing you face?”, expecting him to come up with some problem in the House of Commons. He replied, “The queue of people outside my door who think that they should be in the House of Lords”. It is inevitable that at some point there will be a change of government. At that point, there will be a big difference between the number of Peers on each side of the House. In the city of Cambridge where I live, there is not only seething anger at what is seen as a party that is somewhat out of touch with aspirations of home ownership and the like; there are a lot of people who think. Let me tell noble Lords what I think will happen. If the Labour Party has any sense, which it does occasionally, it will include in its manifesto a line saying, “We will remove the right of hereditary Peers to legislate”. This would then be covered by the Salisbury convention, and the measure could be passed. When there is a change of government, there will be a great demand for radical measures—and this is an easy radical measure. The balance of the House would change very quickly because there are more hereditaries on this side of the Chamber than on that side. That would get the Labour Party out of a difficult corner and reduce the number of people.

I urge my colleagues to think carefully before they reject what I stress is a very modest proposal. I would like to see it passed, to see Burns implemented and to see us demonstrate to the country that we are capable of reforming ourselves. We should not have this charade of pretending that somehow, this or that has not been completed. This is a challenge for the whole House: to show that we are not, as was described to me by students at a recent meeting in Cambridge, the “pensioners’ party”, but that we are actually a part of the living government of this country. We play a vital role in the governance of this nation and the House of Lords has a definite place in the running of this country. We should get on with it, take the reforms on board and settle down to some sensible work. I hope that the Bill of the noble Lord, Lord Grocott, will be supported.

Finally, I appeal to the Government because it is the Government who can help. With great respect to the noble Lord, Lord Blunkett, I believe that, in the 1960s, we had the greatest Home Secretary of the past 100 years—Roy Jenkins. He dealt with a lot of radical measures by the simple means of saying, “I will give government time to these Back Bench initiatives”. I ask the Government to seriously consider taking this Bill under their wing and enabling it to pass, because if they wanted to, they could. If the Bill falls it will be in part because of this House, but also because our Government have not willed it to pass. I hope they will look carefully at making time available for this Bill to go down the Corridor, where I do not detect any great opposition to it.

--- Later in debate ---

[Viscount Trenchard (Con)]

My Lords, my noble friend Lord Caithness is right to propose this amendment because it clarifies the intent and effect of the Bill proposed by the noble Lord, Lord Grocott—

[Lord Forsyth of Drumlean]

My Lords, the proposer of the Bill has accepted the amendment. Why do we need to spend time on it?

--- Later in debate ---

[Viscount Trenchard]

As my noble friend is well aware, I take the Whip. I have also voted against the Government on a number of occasions. I think the first time I voted against an amendment was in connection with the War Crimes Bill. At the time the Law Lords were present in your Lordships’ House and, as has been noted today, I also agree that your Lordships’ House has suffered from their removal. I was persuaded by the arguments put forward by several noble Lords at that time that the War Crimes Bill was an inappropriate piece of legislation. That was the first occasion on which I defied the Whip.

[Lord Forsyth of Drumlean]

Does my noble friend not realise that he is insulting some of his colleagues, such as me, by suggesting that because we were appointed by the Prime Minister we do not behave in an independent manner and exercise our judgment? I suggest to him that he ought to declare an interest as someone who has benefited from the by-elections.

[Viscount Trenchard]

I do not for one minute dispute that. I do not mean to insult my noble friend in any way. I do not believe that he thinks for one minute that I was being insulting. My noble friend knows well that I have great regard for him for the contribution he makes. Indeed, this is one of the very few matters on which I do not share his opinion.

--- Later in debate ---

[Lord True]

My Lords, perhaps I could briefly intervene and declare an interest as not being a hereditary Peer. I doubt that I would ever catch the eye of the selectors, even if there were such a provision.

The noble Lord, Lord Blunkett, referred to the late Ivor Richard. Having been present at those times, I add my appreciation to the great service that Lord Richard did to his country, his party and this House. It was an honour to deal with him, albeit briefly. The misunderstanding in what the noble Lord, Lord Blunkett, said was that the late noble Lord did not support an all-appointed House, which this Bill would produce. I heard many times in those days and since that Lord Richard supported the principle of a two-thirds elected House—believing that the public should be entitled to elect their politicians to both Chambers of this Parliament—and a one-third appointed House. That was his provision, and he was summarily dismissed in 1998 and further and different arrangements were made. My view on the future of this House, to follow on from the noble Earl who spoke, is rather akin to that of the late Lord Richard. I do not see in the longer term why the public should not elect the politicians to both Chambers of this House.

Apart from the point of honour, which is a personal point, and which, having been involved, I do hold, I accept that that will not count for other Peers, and I respect that and do not expect to bind them to that—but that is something that moves me in this respect, as well as my feeling that it is an objective fact and truth, however much we may protest otherwise, that the longer-term effect of this Bill would be to create an all-appointed House by stealth, bit by bit and stage by stage. That is the inevitable result of your Lordships agreeing to this legislation and, if it went down there, the other place agreeing to it.

I personally believe that such a proposition of the creation of an all-appointed Chamber permanently as part of our legislature in the 21st century should be brought before Parliament in a serious and major Bill by a Government in future. Yes, if the Labour Party or the Liberal Democrats or even our party succeeds in winning an election, and it is our view that we wish to present a Bill for the abolition of the hereditary peerage and creation of an all-appointed Chamber, that is the proper way in which to proceed in a democracy: to secure a mandate from the public before the election for such a great proposition, and to go forward. In my submission, we should not, in a hole-in-the-wall piece of legislation, move bit by bit towards that end. I detect a certain eagerness, exemplified on the Benches on my side, to push this Bill forward. It has not escaped my notice that some of the most eager are those who wish to create an all-appointed House in the longer term.

I have sympathy with those hereditary Peers who have spoken. I do not believe that we should start challenging the right by which one sits here. As has been said, that would be a difficult and uncomfortable place for some of us to go to. While we are all here, we are all equal. We are all Peers and should be allowed to be heard. I would not follow my noble friend Lord Hamilton entirely, but having sat through many hours on the European Union (Withdrawal) Bill, the minority sometimes feels it has to hear a lot from the majority. I do not particularly care for majorities ganging up on minorities. I support Amendment 59, and if it is pressed I will vote for it.

I will make some other brief points. As my noble friend Lord Caithness said, the argument about gender within the peerage is strong and valid, but that matter needs to be addressed by wider legislation on the peerage. If the noble Baroness wishes to attempt that, she can bring legislation forward.

So far as binding the Parliament’s successor is concerned, the original deal had two parts. The first was that, until the end of that Parliament, hereditary Peers who departed—the proper English word is died—would be replaced by ones on the list of those who had been put forward at the election. It was not conceived at the time that this arrangement would continue, but provision was made by Parliament for it to continue in successive Parliaments. That is the process we have now, which came into effect after the 2001 election. So provision was made specifically for this to last until such time as your Lordships’ House is finally reformed.

The noble Lord, Lord Steel, who is no longer in his place, referred to his Bill. A serious mistake was made in that Bill—which I did not support—requiring that a hereditary Peer who retires should be replaced. Under the original arrangements, when there was no retirement system, a hereditary Peer who took leave of absence would not be replaced. In the Bill introduced by the noble Lord, Lord Steel, it was your Lordships, in your wisdom, who made the deliberate decision to extend to retired Peers the privilege of being replaced.

[Lord Forsyth of Drumlean]

The noble Lord, Lord Steel, included that provision in order to avoid the kind of exercise we are seeing from some hereditaries today.

[Lord True]

I do not know about that but, having heard what other hereditary Members of the House have said today, I doubt that would have been the case. At the time, I thought it was a very odd decision, but there it is. That is why retirement is there, and if an amendment comes forward to remove it I will support it, irrespective of the wider provisions.

The proportion of hereditary Peers is now lower now than it was in 1999, when there were 666 of us. I do not believe that that is a conclusive argument either way: I simply note the fact. I found unattractive the appeal to self-interest of my noble friend Lord Cormack, who said: “You will not be affected, so do not worry, you can come along with us”. That exemplified the eagerness to beguile noble Lords into accepting a long-term result. No one in this House, including my noble friend, should feel they have to act upon self-interest, even if that were the case.

--- Later in debate ---

[Lord Forsyth of Drumlean]

We all value enormously the contribution which my noble friend makes to this House, and I very much support his view about improving the diversity of this House and having more disabled people in it. But surely by limiting the cohort in the way that by-elections do, he is arguing against himself.

[Lord Shinkwin]

I do not accept that point, because if one looks at the appointments to this House, one can argue that if we were all to agree today that in future by-elections we would prioritise the election of disabled hereditaries, we could make quite significant progress on improving the composition.

I will close with the following point, on which I hope we can all agree. We recently marked the centenary of women aged 30 and above being given the vote. Would it not be wonderful if, to complement our commitment to reform from within through by-elections, we also gave our support to this country’s second woman Prime Minister should the majority of people whom she recommends that Her Majesty send to your Lordships’ House be women, with a significant proportion of them from BAME backgrounds? Both measures, taken together, would do more to strengthen the legitimacy of your Lordships’ House than any reduction in our numbers, important though that is. The retention of by-elections is therefore a crucial part of the organic process of reform from within. For that reason I support Amendment 25.

Meetings with Ministers

Lord Forsyth of Drumlean Excerpts

Wednesday 14th March 2018 Lords Chamber

[Lord Young of Cookham]

The Government are genuinely open to discussions about how we improve accountability and transparency in our political process. I am very happy to look at those proposals. In the past it has not been possible to achieve the sort of consensus one would like on these sensitive matters of political issue.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend not think that where money is obtained by political parties from proven criminal sources perhaps the funds should be returned, as in the case of the very substantial donations made by Mr Michael Brown to the Liberal party, which held on to the money?

[Lord Young of Cookham]

My Lords, behind this, there is a serious issue. Democracy in this country depends on political parties. If there is to be a choice at a general election, we need a range of financially viable, credible political parties which train and nurture the people who lead this country and which provide an opportunity for engagement and debate at a national and local level. Given the limited taxpayer appetite to fund those activities and that political parties need to be resourced, we should be cautious about denigrating those who support political parties. We should encourage more people to join and financially support the political party that most closely reflects their values.

House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL]

Lord Forsyth of Drumlean Excerpts

2nd reading (Hansard): House of Lords
Friday 8th September 2017 Lords Chamber

[Baroness Hayter of Kentish Town]

Well, we are all here by that way.

This is an appointed House: it just depends on the century in which the Prime Minister made the appointment.

It is absolutely clear that those of us who are here should bring to the House our own attributes and experience rather than those of our ancestors, proud though I am of my grandfather who was a miner and my other grandfather who was a baker. Their own geographical spread and attributes contributed to this country. But I should be here not because of them—and I do not believe that it is—but because of what I hope I have done by myself.

As a number of noble Lords have said, if we are to earn the respect of the public for our work, having just 16 people electing someone who is perhaps 12th in line to their title to sit in this House, is not the PR that we would like for the work that we do.

[Lord Forsyth of Drumlean (Con)]

Can the noble Baroness deal with the point made by my noble friend Lord True? Should this Bill go through, will the Opposition recognise the effect that that would have on the political balance and therefore be prepared to see those hereditaries appointed as Conservatives in order to maintain that balance? If she gave that undertaking, it would make it much easier for some of us.

[Baroness Hayter of Kentish Town]

I have answered that. I said a few moments ago that it has already been done because of the number of new Peers that David Cameron appointed. As Prime Minister he appointed more new Peers than the previous five Prime Ministers did in total. Virtually all of them were appointed to that side of the House, and we have had one. So, in a sense, I have already answered the point—because it has already happened.

Of the 32 by-elections that have taken place, which the noble Lord, Lord Pannick, mentioned, the total number of votes cast was just under 6,000. That is under 200 votes per seat. All 32 Members elected were white men, as noted by the noble Lord, Lord Pannick, and the noble Baroness, Lady Berridge. The most significant contribution today was the challenge to the Government that, because of their broader remit, it is part of their responsibility to do something about this. That is a challenge that we wholeheartedly endorse.

We wish the Bill well. Last year, the Government used the slightly weasel words that they were sympathetic to any reform but that it should only be part of a broader review. But as the noble Lord, Lord Tyler, said, because of Brexit we will have very little time to do very much more, and the result of the election removes any such possibility. So we should accept this modest, incremental and reasonable Bill.

I am grateful for the last intervention because of the acknowledgement that it is the Conservatives who are most worried about this because they will lose some of their seats, which I do not think we have heard before. But change will be very gradual. I look round the Chamber and see some of the hereditary Peers who I am sure will have many more years with us, and we look forward to their contributions. But the Minister must rise to the challenge of his noble friend Lady Berridge. This matter is not simply for this House but for the Government to see whether they want to continue a system where white men have a privileged way of finding their way into the Parliament of this country.

Electoral Spending Limits: Wales

Lord Forsyth of Drumlean Excerpts

Wednesday 6th September 2017 Lords Chamber

[Lord Young of Cookham]

My Lords, I am grateful to the noble Lord for his question, not least because it was in English rather than in Welsh. The proposals would exempt the costs of translation from a candidate’s limits and I see no reason at all why the approach taken by the Welsh Assembly, if it goes down that road, and the approach taken by the UK Parliament, if it does so as well, should not be aligned so that there is no confusion among the candidates over what the rules are.

[Lord Forsyth of Drumlean (Con)]

My Lords, given the enormous costs of the Electoral Commission, would my noble friend encourage it to review its own spending limits and levels? The last time I looked, the cost of the Electoral Commission was as much as half that of the entire cost of the Royal Family.

[Noble Lords]

Oh!

Boundary Reviews 2018

Lord Forsyth of Drumlean Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Young of Cookham]

The legislation, which was approved by both Houses of Parliament, reduced the numbers of Members of Parliament from 650 to 600. The review that I referred to in my earlier response postulates boundaries for 600 constituencies.

[Lord Forsyth of Drumlean (Con)]

My Lords, I speak as someone who, when Secretary of State, had to sign a Boundary Commission report which made my own constituency unwinnable. Would my noble friend confirm that it is the duty of this House and the other place to approve the independent Boundary Commissions’ proposals? If it becomes a party-political matter, that way lies great danger to our democracy.

[Lord Young of Cookham]

I heartily agree with my noble friend. His constituency was made unwinnable by the Boundary Commission; mine was actually abolished; I am not quite sure which of us came out of it best. So far as his question is concerned, it would be an affront to democracy if the proposals of the independent Boundary Commissions were obstructed.

Tax Havens

Lord Forsyth of Drumlean Excerpts

Thursday 6th April 2017 Lords Chamber

[Lord Young of Cookham]

We already have country-by-country reporting in this country, and multinationals based in this country have to report to HMRC how much profit they make and how much tax they pay in each country. We are encouraging other countries to do this, so we have a multilateral approach, and the Chancellor raises this issue at the G20. In response to the first part of the noble Lord’s question, we have taken the lead on this as a result of our presidency of the G8, and more than 90 countries have agreed automatically to exchange taxpayer information under the common reporting standard. We are also taking initiatives on beneficial ownership and some of the other issues that we have already discussed.

[Lord Forsyth of Drumlean (Con)]

My Lords, given the widespread use of Luxembourg by large companies and multinationals to reduce their tax, will our exit from the European Union provide an opportunity to broaden our tax base?

[Lord Young of Cookham]

The initiatives we are taking on tax evasion are independent of our membership of the EU, although we are pursuing some EU directives. As I said, this country is in the lead. I do not know whether my noble friend has seen page 9 of today’s Times, which says that:

“Oligarchs must disclose identity as home owners”,


with a register. That is a world first: the people behind anonymous companies that own billions of pounds-worth of property must reveal their identities under new anti-corruption rules. This shows that the country takes the matter very seriously.

Building More Homes (Economic Affairs Committee Report)

Lord Forsyth of Drumlean Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Hollick, and I just take a few moments to pay tribute to the excellent way in which he chairs our committee. The noble Lord, Lord Tyler, in one of these BBC programmes, suggested that this is something of a daycare centre—it feels more like a workhouse under the leadership of the noble Lord: we have produced a report on electricity, we are working on a report on the labour market, we have finished off this housing report, and I believe we are doing something on student loans. We used to meet on Tuesdays; we now meet on Tuesdays and Wednesdays—and Thursdays, sometimes—and, in addition to that, the sub-committee now meets two days a week. So let us have no more talk about how this House is not properly employed.

I found this subject something of a challenge; housing is not an area where I claim any expertise. The last time I thought seriously about housing was when I was on Westminster City Council, which is nearly—gosh, it cannot be that many years ago; it is quite a long time, anyway. I was quite struck when, just after new year, I arrived by train in Glasgow. It was pouring down with what was almost sleet, on a horrible cold night. I went to get a taxi, and sitting in a sleeping bag in the wet was a young girl with a cup wanting money. Around London today we can see more and more examples of people in this desperate situation. Everyone in the taxi queue walked past, pretending not to notice her—if she had been a Labrador, everyone would have patted it, but she was a person and very few people put any money in the cup. It is not just with homelessness that we have a problem; we also have the problem of professional couples earning in good jobs who, in some parts of the country—most notably in London and south-east—cannot afford to get into the housing market. I was very proud to be a member of the Government in which my noble friend Lord Lawson led us with considerable success towards the idea of the home-owning democracy. The fact is, home ownership is falling and our ability to house those on the lowest incomes is non-existent.

If people do not have time to read the report, the only thing they have to look at in it is Figure 1. It shows the housebuilding that has occurred in the various sectors, and outside the private sector—as our chairman, the noble Lord, Lord Hollick, has pointed out—it is failing to meet demand. The demand has increased remarkably. I was quite struck by the numbers reported by the noble Lord, Lord Green. He said that we had to build a house every 15 minutes to meet the demand that was arising simply from immigration. However, it is not just immigration that is increasing demand: it is also rising incomes, the change in the nature of households and the availability of cheap mortgages because of quantitative easing.

Central to this problem, as the noble Lord, Lord Hollick, pointed out, is the supply of land. One of the recommendations in our report is that we should create some incentive. There is no incentive for a health authority or a transport body to make land available for housing if they do not get to keep the proceeds. That would make a difference, but, as we say in our report, there does not seem to be anyone in central government making sure that that land is used effectively.

We had a private session with the Housing Minister, Gavin Barwell, and I found him the most extraordinary Minister. He has been around the country and is absolutely on top of these issues. He understands them and that is very much reflected in the White Paper. That session was, therefore, very cheerful. We were very cross with him at one stage, however, because the Government took a very long time to respond to our report, and produced a response that was, to say the least, derisory. We were cheered, however, to find out that the probable reason for that was that many of our ideas were being incorporated into the White Paper, for which we were extremely grateful. Again, it shows that, in the Housing Minister, we have someone who is listening. I know he spends his time going around the country talking to local authorities. The key thing here is that this is not a singular problem. It varies from region to region: in some parts of the country, it is perfectly affordable for people to buy homes, but in other parts of the country it is not.

Now we come to the bit that I found ideologically challenging. The great thing about this House is that we operate—certainly our committees do—on the basis of the evidence put before us. The evidence was absolutely overwhelming: we cannot rely on the private sector to provide all the housing that we need and the different categories of housing that we need, but it was also reassuring to find that the old kind of statist ideas were also not going to deliver. We need a rented sector, but this term “affordable housing” is like something out of double-think. Affordable housing turns out to be something that you have to be very well-off indeed to be able to afford. There is little in the way of supply for those people who are on very low incomes and do not have very much money. The conclusion that we came to is that we must find a way of enabling local authorities to provide low-cost housing for people who need those facilities.

Where I was cheered, in recognising that there needed to be more reliance on public sector housing, was that this would also enable us to save a great deal of taxpayers’ money. The noble Lord, Lord Hollick, pointed out that we were spending £27 billion on housing benefit. If we had more housing at lower rents provided by local authorities or housing associations, or local authorities in partnership with the private sector, we would not have to provide the housing benefit on such a level. It does not seem a very effective use of taxpayers’ money to simply use housing benefit in a market where the rents are going up and up and neither the taxpayer’s situation nor the availability of housing is improved.

I should, perhaps, declare an interest as chairman of Secure Trust Bank, because one aspect of the Government’s policy is clearly to encourage the building of more houses. They have set a target—I think it is a target—of a million houses, which, as the report points out, will be insufficient. The clear conclusion of our report, described by the noble Lord, Lord Hollick, is that the big housebuilders are something of an oligopoly. Actually, if you look at the business models of the big housebuilders, they are entirely rational in taking up the land, getting planning permission, creating a land bank, and then restricting the supply of housing that is coming on to the market to maintain the price, get best value and plan for the economic cycle. They are being entirely rational and you would not expect them to do anything else, but that is not consistent with what the Government need to do to meet their policy objectives.

Encouraging the small and medium-sized builders, which the Housing Minister says is a priority, means that they need availability of finance and labour. That has implications for our immigration policy when we finally get control of our own borders, but it also has implications for finance; so what on earth is going on when the Bank of England, in setting the capital requirements of the banks for lending, is actually making it cheaper for them to provide mortgages to people who have a low loan-to-value requirement and more expensive for the banks to provide money to developers to build housing? In the last few months, it has increased the capital weighting required for smaller banks, which are the main sources of revenue for small and medium-sized builders, from a 100% risk weighting to 150%. That means that it is 50% more expensive for the banks to provide loans, and it also means that there is less capital available and less ability for the banks to provide that.

On Friday, a report was published by the PRA with a statement from the Treasury Minister, saying that it wanted to increase competition and that it was going to address these issues. However, when you look at the detail, it is making the situation—certainly on my cursory glance—not better, but marginally worse.

I appreciate that we have lost a bit of time this morning, so I will bring my remarks to a close. On housing for rent, we need—as I have already indicated—rental properties available for people on lower incomes. We also have to recognise, however, that we need to have some means of securing rental tenures that are longer and more secure for people with families. We cannot go back to having a regulated housing market—we are certainly not recommending that—because we know where that will end: it will end with even less supply. We can, however, encourage the development and funding of building for rent in the private sector, where the terms of tenure are longer, to meet an obvious demand as we move forward.

Finally, I should like to say what a pleasure it has been to serve on this committee, and how much I appreciate that the White Paper has picked up on some of the ideas. The Housing Minister told us that everyone wanted a silver bullet. The White Paper is not a silver bullet; there is no silver bullet. We will solve this problem with a combination of policies on the capital and other rules that apply to the banks, on housing benefit, on welfare and on immigration. We need government as a whole to put their shoulder to the wheel on this. In our report, we said that there should be a senior Cabinet Minister who is in charge of driving this policy; my recommendation is to make Mr Barwell a senior Cabinet Minister.