EU: Future Relationship

Lord Garel-Jones Excerpts

Thursday 27th February 2020 Lords Chamber

[Lord True]

My Lords, I am not very good at doing triumphalism, and I do not believe that either this Statement or anything the Government have done has that tone. It is not triumphalism but the act of a historian to point out the result of the recent general election. It is not a mark against any party that took part, but a clear outcome of that election was that the British people renewed an instruction. As for the key question about business interests, the Government are continuing our dialogue with business over the coming months, in the usual way. We are fully aware of all the issues involved, but let us not leap forward and assume the worst at every opportunity. The Government will wish to be informed and to inform, but many supply chains successfully exist in areas where there is no customs union—in North America, for example. I do not accept the advice that we must be defeatist and that problems and issues cannot be satisfactorily addressed, at this early stage, when negotiators have not even met yet.

[Lord Garel-Jones (Con)]

My Lords, can my noble friend assure the House that, if these discussions with the European Union do not lead to a happy conclusion, the no-deal situation will be brought to Parliament for approval?

[Lord True]

My Lords, the Government do not anticipate that these discussions will fail.

Detainee Issues

Lord Garel-Jones Excerpts

Thursday 18th July 2019 Lords Chamber

[Lord Young of Cookham]

My Lords, I begin by saying that I understand the disappointment of both Front Bench spokespeople at the decision not to hold a further judge-led inquiry. Perhaps I can amplify the reasons that I gave in the Statement.

[Lord Garel-Jones (Con)]

I fully understand noble Lords’ disappointment. On amplifying those reasons, am I wrong in thinking that one factor is the cost of such a judicial review? If so, what precedents are there on that?

[Lord Young of Cookham]

Once the Front Bench exchanges have been completed, there will be 20 minutes for Back-Bench Members to interrogate the Minister. I will be happy to address the issue raised by my noble friend at the appropriate time.

I was trying to explain the thinking behind the decision not to have a further judge-led review. It is common ground that there were shortcomings in our response to detainee issues following the atrocities of 9/11. The Government have recognised that. Since then, there have been five independent inquiries—four by the ISC and one by Sir Peter Gibson—into exactly those shortcomings.

Last year, to ensure that we learn the lessons from not just those inquiries but the investigations carried out by the police and the internal reviews carried out by the security and intelligence agencies, we invited Sir Adrian Fulford to review and update the consolidated guidance issued in 2010. He completed his report last month; it was published today along with his covering letter. We have said that we will accept all his recommendations in full. Between now and when they are implemented at the beginning of next year, there will be appropriate training and guidance for all security personnel involved. That is all underpinned by a regime made up of the Justice and Security Act and the Investigatory Powers Act, supervised by an independent Investigatory Powers Commissioner who reviews compliance with that guidance annually. In an exchange in the other place, the ISC chairman welcomed the Government’s response to Sir Adrian’s recommendations.

To come to the point made by the noble Lord and the noble Baroness, against that background of very substantial progress, the Prime Minister decided that a lengthy and complicated inquiry, part of which would likely be held in private because of the security issues involved, would not yield proportionate benefits. That is the position as I see it.

I am grateful to the noble Lord, Lord Collins, for welcoming the publication of the report. He said that some of the civil society recommendations had not been adopted. The Government have been clear that Sir Adrian Fulford is independent. In his letter to the Prime Minister, he says:

“I have been keenly aware of the need to maintain my independence when seeking the views of … officials”.


In producing his report, he may not have incorporated all the recommendations from all those from whom he took evidence, but that is a matter for him. The Government are not minded to second-guess the recommendations of Sir Adrian in that respect.

The noble Baroness, Lady Ludford, mentioned the cases mentioned by the ISC and asked how many had been investigated by the police. These cases have been thoroughly reviewed by the Government, including in the context of the ISC’s 2018 detainee reports, which were extensive and detailed. Sir Peter Gibson had access to all relevant written records for his detainee inquiry and the entire Gibson archive was handed to the ISC for its review. On us being junior partners to the United States, the decisions taken by the UK Government are taken in the interests of the UK and nothing else. In response to the noble Baroness’s final questions, Ministers must of course abide by the law. She mentioned the MoD internal guidance. That is now being revised in light of the new principles published today.

Finally, Foreign Office officials have been in contact with Hashem Abedi since his detention in May 2017 to provide consular assistance. They have been in contact on consular matters since then. As the noble Baroness knows, he landed in the UK on 17 July and has been charged. It is important to allow the judicial process to take place. We ask media colleagues and the wider public to respect this.

--- Later in debate ---

[Lord Young of Cookham]

It will be for Sir Adrian’s successor as the Investigatory Powers Commissioner to report annually to the Government, in particular on how the guidance on detainees is being implemented. I hope my noble friend will accept that, having set up the Investigatory Powers Commissioner with statutory powers, it would be right to leave it to him—or, indeed, her—to carry out the very important supervisory work that my noble friend refers to and to report as impartially and independently as he can on the progress being made in implementing the recommendations adopted today.

[Lord Garel-Jones]

I apologise to my noble friend for intervening during the time set aside for Front-Benchers. In addition to the reasons he has given, will he let the House know to what extent the cost of a judge-led review has influenced the Government’s decision? If it has, can he refer to any other similar judge-led reviews and their cost?

[Lord Young of Cookham]

I mean no disrespect to members of the judiciary, but having a judge-led review does not always lead to closure, which is the case that has been made in this example of a reason for having a judge-led review. In addition to the cost, which I will come to in a moment, there would be a serious diversion of energy and attention by those involved were we to carry out a judge-led review. As for the cost of inquiries, the Saville inquiry cost £192 million, the Chilcot inquiry cost £13 million, and the Gibson inquiry, which was incomplete, cost £2.3 million. My noble friend is right to put on the table the fact that these judge-led reviews have resource implications.

Elections: Online Interference

Lord Garel-Jones Excerpts

Wednesday 1st May 2019 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Baroness. I recently attended one such all-party meeting to discuss these issues and I have no hesitation in accepting her suggestion that there should be another. I have said before from this Dispatch Box that we have an analogue legislative framework seeking to operate in a digital age. We are determined to update that framework to make it fit for purpose and I welcome the suggestion of all-party talks.

[Lord Garel-Jones (Con)]

Can my noble friend advise the House on whether there has been any progress on the consultation aimed at extending to online electoral propaganda the same imprint that now applies to printed materials?

[Lord Young of Cookham]

My noble friend will know that last July we consulted on extending the requirement for an imprint, which already exists for printed material, to digital campaigning material. The Government have now concluded their considerations and an announcement will be made very soon.

Social Housing

Lord Garel-Jones Excerpts

Thursday 31st January 2019 Lords Chamber

[Lord Garel-Jones (Con)]

My Lords, I join other noble Lords in thanking the noble Lord, Lord Whitty, for introducing the Motion and above all congratulate him on the tone in which he introduced it. The challenge society faces in the social housing sector cannot be laid at the door of one political party but is the responsibility of the whole political class over the last 30 years. That point was eloquently made by the noble Baroness, Lady Grender, and my noble friend Lady Bloomfield. I also join other Members in congratulating the noble Baroness, Lady Osamor, on her maiden speech.

It seems that the Government are beginning to get their teeth into this challenge that society faces: first, by their commitment to commit £1.2 billion to homelessness reduction; secondly, by the undertaking to back local councils to build more social homes; and, above all, by removing the borrowing cap from them. They have also committed, I think, £2 billion to housing associations. I would be very interested, as I am sure that the whole House would be, if my noble friend the Minister, in summing up the debate, could give us some indication of whether these policies are moving in the right direction.

I will ask my noble friend two questions. First, I think he was quite active in something called the rough sleeping initiative in the early 1990s. Rough sleeping is one of those ghastly things that brings home to us all the challenge we face in social housing. Has his experience in that area given him ideas and initiatives that will make it rather more hopeful this time round that we will begin to tackle this very serious problem?

Lastly, when we compare not just the city of London but major cities right across this country with major cities in other countries, one contrast that comes home is the fact that in the United Kingdom we have rows and rows of terraced houses, whereas most major cities abroad have blocks of apartments. My understanding is that the cost of housing in a block of apartments is better than in individual terraced housing. If we were able to divert some of our efforts into that area, it would also relieve some of the pressure that the green belt is facing. I would be very interested to hear my noble friend’s comments on that.

UK Democratic System: Interference by Russia

Lord Garel-Jones Excerpts

Monday 2nd July 2018 Lords Chamber

[Lord Young of Cookham]

The noble Baroness raises a series of important issues. On the general theme, perhaps I may remind noble Lords of what the Prime Minister said in her post-Salisbury Commons speech. She said that,

“led by the National Crime Agency, we will continue to bring all the capabilities of UK law enforcement to bear against serious criminals and corrupt elites. There is no place for these people or their money in our country”.—[Official Report, Commons, 14/3/18; col. 859.]

More specifically on Magnitsky, the noble Baroness will recall that the House recently debated the Sanctions and Anti-Money Laundering Act, which gives us powers to sanction individuals or entities to promote compliance with international human rights laws. That will allow us to take a range of actions against those suspected of gross human rights abuse such as that committed against Sergei Magnitsky. She will also know that we introduced unexplained wealth orders from the beginning of this year, some of which I understand have already been used where individuals have a standard of living which cannot on the face of it be explained by their declared income. This is an issue that we take seriously. We have introduced a number of other measures, including action taken under other legislation, to bring to justice those who have committed any offence.

[Lord Garel-Jones (Con)]

My Lords, given the open society in which we live, can my noble friend the Minister tell the House which areas of that society are particularly vulnerable to attacks of this kind and what, if anything, we can do to diminish that danger?

[Lord Young of Cookham]

The noble Baroness, Lady Kennedy, outlined a few moments ago the sorts of dangers that are run. Vulnerabilities could include the covert funding of political parties or movements in another country, the hacking or leaking of emails in order to discredit particular individuals or their parties, and the distribution of fake news. After the Salisbury incident the Kremlin put out 30 different stories about how it happened. Fortunately, the Government’s response, explaining that Russia had the means and the motivation, commanded international credibility, as we saw from the diplomatic response to that incident.

Elections: Electoral Commission Recommendations

Lord Garel-Jones Excerpts

Thursday 28th June 2018 Lords Chamber

[Lord Young of Cookham]

The noble Lord refers to the excellent report Securing the Ballot, produced by my then honourable friend Sir Eric Pickles—now, happily, my noble friend Lord Pickles. The noble Lord will have seen the Cabinet Office’s response dated December 2016 to all the recommendations made by my noble friend Lord Pickles, so he will be well aware of the answer to the question that is contained in this document.

[Lord Garel-Jones (Con)]

My Lords, do these recommendations contain any suggestions at all as to what can be done to be vigilant about Russian intervention in the British electoral process?

[Lord Young of Cookham]

My noble friend raises an interesting question. I think the honest answer is that all countries in the West have to wake up to a new form of conflict where military and non-military weapons are joined together in an integrated and dynamic way in order to achieve political aims. My noble friend is right: Russia is at the forefront of this so-called hybrid warfare, with a wide spectrum of capacity which has the potential to damage political and democratic institutions. That impacts on a wide range of government departments, and we have to make sure they are correctly aligned to see a proper response to this very real threat.

House of Lords: Size

Lord Garel-Jones Excerpts

Tuesday 22nd May 2018 Lords Chamber

[Lord Grocott (Lab)]

My Lords—

[Lord Garel-Jones (Con)]

My Lords—

[Lord Taylor of Holbeach (Con)]

My Lords, I think we will hear from the noble Lord, Lord Grocott, and then from the Conservative Benches.

[Lord Young of Cookham]

There are, however, many others who might fill the gap. The noble Lord, Lord Grocott, was the first to admit that his Bill would have but a marginal impact on the size of the House, which is the subject of this debate, dependent as it is on the mortality of the hereditary Peers—none of us would wish to see that accelerated. So far as his Bill is concerned, as I said when he asked a question last week, unusually we have offered additional time to him. There will be another Friday when he can take the Bill forward and I have made it absolutely clear that the Government will not obstruct it. It is up to him and the House to make progress with the additional time that we will make available.

[Lord Garel-Jones]

My Lords, if memory serves me right, I believe that Jeremy Corbyn gave an undertaking that, if elected leader of the Labour Party, he would not nominate any new Peers. If that is the case, can my noble friend the Minister speculate on what might have led him to change his mind?

European Union Subsidiarity Assessment: Electoral Law of the EU (EUC Report)

Lord Garel-Jones Excerpts

Thursday 4th February 2016 Lords Chamber

[Baroness Kennedy of The Shaws (Lab)]

My Lords, I shall speak to both the Motions in my name on the Order Paper. Before I begin, may I place on the record my thanks, and that of my committee, for the work of the incredible staff who serve the committee—particularly Tim Mitchell, a truly talented lawyer, who drafted this report?

In 2009 the treaty of Lisbon introduced new procedures that gave national parliaments the responsibility of policing the application to European Union legislative proposals of the EU’s principle of subsidiarity. It is a responsibility that I, and my colleagues on the EU Select Committee and its six sub-committees, take very seriously. The draft report that forms the basis of this debate was produced by the European Union Justice Sub-Committee, which I chair, and subsequently approved by the European Union Select Committee.

The report recommends that the House should submit to the European Union institutions, under Protocol 2 of the EU treaties, a reasoned opinion stating that it considers that the European Parliament’s proposal for reforming the EU’s electoral law does not comply with the principle of subsidiarity. This is a rather timely matter, coming just after the recent debate.

This is the eighth time since 2009 that the European Union Select Committee has recommended this course of action to the House. Unusually, though, this is the first time that the committee has recommended that a subsidiarity reasoned opinion be issued against a legislative proposal brought forward by the European Parliament. That has never been done before.

As the report explains,

“The principle of subsidiarity provides that, in policy areas which do not fall within the exclusive competence of the European Union, but where competence is shared with Member States, the Union can act”—

the following words are a quotation from Article 5 of the Treaty on European Union—

“‘only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States’”.

That, of course, is the principle of subsidiarity. In this way, in order to comply with the principle of subsidiarity, European Union action must be both necessary and add value, as compared to action at the member state level.

The European Parliament agreed this particular significant legislative proposal on electoral reform on 11 November, and sent it to the UK Parliament on 11 December. The intention behind the proposal is to reform the European Parliament’s electoral procedures before the 2019 elections. To this end, the European Parliament has proposed a number of new rules and a range of amendments to the existing EU legislation governing elections to the European Parliament. Somewhat surprisingly, given the power in the treaty under which the proposal has been brought forward, it also includes provisions seeking to clarify the Parliament’s role in appointing the President of the European Commission.

The proposed legislation has been brought forward by the European Parliament under a specific legal basis in the EU treaties calling on it to do so. In late November, as required by the treaties, the European Parliament sent its proposal to the Council. The member states must now agree to the proposal unanimously. Therefore, national vetoes will apply. Key aspects of the proposal are summarised briefly in paragraphs five and six of the report.

In addition to the committee’s two substantive subsidiarity concerns, to which I will turn in a moment, a number of important procedural requirements have not been followed by the European Parliament. These include a requirement to communicate legislative proposals to all national parliaments. This, in turn, sets the timetable for the issuing of reasoned opinions by national parliaments. But it appears that the Dutch Tweede Kammer, the House of Representatives in the bicameral Dutch Parliament, has only very recently received notification of this proposal—indeed, in the last few weeks. Therefore, the application of the usual eight-week window within which national parliaments can issue reasoned opinions is unclear. Does it date from then or back to the date when we, the UK Parliament, received it? Nevertheless, in the interests of issuing a reasoned opinion in the time, we are proceeding on the basis that the deadline expires tomorrow—5 February.

In addition, the European Parliament has failed to accompany its proposed legislation with a,

“detailed statement making it possible to appraise compliance with the principles of subsidiarity and proportionality”.

That detailed statement is a requirement by the subsidiarity protocol to the treaties. To our mind, that is a significant omission and makes it very difficult for individual national parliaments to undertake their treaty-imposed obligation to assess the compliance of EU legislative proposals with subsidiarity. I say that as someone who is supportive of the European Union, but it really does fail to live by the standards it has set itself. The absence of a detailed statement should be a matter of real concern to this House.

The assumption underpinning the principle of subsidiarity is that decisions to legislate should be taken as closely as possible to the European Union citizen. The report notes:

“Any departure from this presumption should, therefore, be justified with sufficient detail and clarity so that EU citizens, and their representatives in national parliaments, can understand the”,

reasons for EU action. The Parliament’s failure in this instance makes any assessment virtually impossible. That was the view taken by my committee and endorsed by the full EU Select Committee of this House.

The report argues in paragraphs 12 to 15 that,

“this omission constitutes a clear failure to comply with the essential procedural requirements in the Subsidiarity Protocol”.

The report notes that such a procedural failure is also,

“a ground for judicial review under EU law”.

The report addresses, further to these procedural matters, two aspects of the proposal that my sub-committee believes are difficult to justify in subsidiarity terms—a difficulty exacerbated by the Parliament’s procedural failures. The proposed rules governing the selection of candidates for election to the European Parliament, in particular the imposition of a gender balance requirement, have caused us some reflection. I should make it clear that most of us are wholly supportive of gender balance and want to see that come into being, but this is not the power in the treaty with which to do it. In our view, it really should not be done at the European Union level but by member states in a way that is appropriate for the different nations.

The other matter of concern is the proposed expansion of the existing right to vote in European elections for all EU citizens resident in the EU, to encompass all EU citizens regardless of where they live—in or outside the EU. This seems to be creating an unlimited right to vote in the European Union for citizens, wherever they live in the world, for ever. As we know, European Union citizens who are nationals of a member state are usually confined to a 15-year limit when living abroad to exercise the right to vote. We feel that that incredible extension should be taken at the national level.

The report argues that the European Parliament’s failure to produce the requisite detailed subsidiarity statement, taken in conjunction with the two provisions I have just mentioned, justifies this House’s conclusion that the proposal does not comply with the principle of subsidiarity. Once the preliminary issue of subsidiarity has been concluded, my sub-committee will soon begin its formal scrutiny of this proposal.

[Lord Garel-Jones (Con)]

What is the opinion of the noble Baroness—I am not sure of this myself, which is why I am asking the question—on the process of renegotiation the Prime Minister is currently involved in, whereby what is now called the yellow card would be substituted by a red card? Would it mean that national parliaments could block this proposal if they deemed it the right thing to do?

[Baroness Kennedy of The Shaws]

The situation is difficult to imagine. What should be happening here is very clear: a statement should normally be made explaining the justification, but subsidiarity is the primary principle that should be applied. Our concern was that not only was there a failure in terms of the normal proprieties, but that some of the proposals did not fit with subsidiarity at all in any event. We have not moved on to the second stage, but for the moment, I would rather leave the question of whether introducing a red card would somehow mean that one would be able to prevent it automatically. I am sure that my advisers would have an answer to that. We feel that this is precisely the kind of failure that gives the European Union a bad name. We are calling them on it, because if anything upsets citizens in the member states, it is the failure of the Union itself—here, it is the Parliament—to live by its own rules. Really, it is about conforming to the rulebook and that is the reason for this Motion today.

Once the preliminary issue of subsidiarity has been concluded, we will scrutinise the proposals in the normal way. But we are really concerned about the EU’s failure to live up to the standards it has set itself. That is the sort of thing that discredits the Union and causes alarm to many people within the United Kingdom just now—and I say that as someone who is a great supporter of the European Union.

I commend this report to the House and I beg to move.

Bank of England and Financial Services Bill [HL]

Lord Garel-Jones Excerpts

Wednesday 11th November 2015 Lords Chamber

[The Lord Bishop of Southwark]

My Lords, I shall speak against Amendment 21. I confess that my expertise does not rival that of the most reverend Primate the Archbishop of Canterbury, who justly won plaudits for the seriousness and skill with which he served on the Parliamentary Commission on Banking Standards. Regrettably, he cannot be in his place today, but I am at one with him in supporting the Government’s intentions on the reverse burden of proof.

One of the important functions of the parliamentary commission was to consider the change of culture of banks and the standards of conduct of those working in them, particularly its senior managers. Anger, disbelief and misery was felt by so many following the crisis that engulfed the British economy in 2007-08, much of it directed at the banking industry. That anger and disbelief were compounded when those best remunerated within the banks seemed to demonstrate little or no accountability for their actions. Rather, the burden was borne by society as a whole and it was the poorest who suffered most and, arguably, continue to do so. The ability of well-funded senior managers in the banking sector to evade responsibility was considerable. My assessment is that the commission saw sufficient evidence that there was a balance to be redressed. Small wonder that the commission sought to protect the public, including the taxpayer, with a robust regulatory regime and suitable civil and criminal penalties. This included several provisions with a reverse burden of proof.

A reverse burden of proof would mean that senior managers would have individual responsibility for proving that they had fulfilled their regulatory obligations, rather than regulators having to prove that they had not. This goes against the ancient common-law principle of “innocent until proven guilty”. The proposed reverse burden of proof seems to require senior managers in the sector to do something required in no other sphere of work, and that, from a philosophical perspective, causes concern. It is absolutely right that the individual is obligated to ensure that they take reasonable steps to prevent regulatory breaches in their financial institution but, as with other parts of society, it is right that the burden of proof should sit with the regulator to prove such breaches beyond reasonable doubt.

Secondly, I want to express my anxiety at the creation of a two-tier system of regulation in which deposit-taking institutions, including credit unions and building societies, are obligated to operate under the reverse burden of proof but other financial institutions are not. The need to ensure financial stability in the sector is vital, particularly among the largest institutions, but there seems to be a certain arbitrariness regarding who would be covered by the reverse burden of proof. I fear that a two-tier system would risk confusion or a loss of focus both within the banks and other financial institutions, and on the part of the regulators.

Well-funded individuals and corporations are capable of all manner of misdemeanours across our society, in all sectors of the economy. To introduce a reverse burden of proof only for senior managers in the financial services sector would set a grave precedent. What of those accused of pollution, negligence or failure to care? Where would it be extended next, further eroding the fundamental rights upon which our society is properly based? For the sake of all, not least those without the backing of considerable funds, we should continue to insist that the burden of proof must fall on regulators, prosecutors and those in authority who affirm that wrong is done. Better, as in the published Bill, to have a provision that contains a presumption to act reasonably and for regulators to prove that an individual has done otherwise. In view of these concerns, I humbly urge your Lordships’ House to reject the amendment.

[Lord Garel-Jones (Con)]

My Lords, I draw the House’s attention to my declaration of interests. Before coming to the reasons why I believe that the removal of the reverse burden of proof is a wise move in both practical and administrative terms, I want to say that its removal restores the principle of natural fairness—a fundamental principle of British law to which the right reverend Prelate has just referred, and, if I may be so bold, one to which even bankers are entitled. Also, as again the right reverend Prelate has said, the creation of a two-tier system would not be a very helpful situation to move towards.

The importance of the City of London to the British economy will be a given among your Lordships. If that position is to be retained, bearing in mind some of the abuses we have seen in recent years, it needs to be underpinned by a strict and proper regulatory framework. Under these proposals for senior management conduct, which are supported by the PRA, senior managers remain responsible for taking reasonable steps to oversee the areas for which they are responsible.

The revised disciplinary provisions in the Bill provide that regulators will be able to take action against senior managers on three grounds: first, a breach by the senior manager of the conduct rules; secondly, the senior manager being knowingly concerned in a breach by the firm of its regulatory obligations; thirdly, where there is a breach by the firm of its regulatory obligations in relation to the area for which the senior manager is responsible, a failure by that senior manager to take such steps as a person in his or her position could reasonably be expected to take to avoid a breach occurring or continuing.

The first of those two grounds would also be grounds for action against any other employee or director of the firm, while the third ground in effect replaces the reverse burden of proof. In all three cases the burden of proof now rests with the regulators. Importantly, the FCA’s reaction to these changes makes it clear that the regulators,

“remain committed to holding individuals to account where they fail to meet our standards”.

I therefore believe that the Government are right in claiming that senior managers will remain subject to the same tough underlying conditions. The statutory duty, together with the statement of responsibility, means that senior managers will no longer be able to plead ignorance in these matters.

I make one final point, which to many noble Lords may seem a mere footnote to the bigger issues we are discussing. One of the great attractions of London is that it is truly the most international city in the world. Not surprisingly, therefore, many of the most senior positions in the City are held by non-British citizens. If you are running a global business, in many instances you can just as easily manage that with your team from New York or some other financial centre. I am advised that, had the reverse burden of proof remained on the statute book, many senior managers may well have declined to be posted to London, and that some now here would have moved as soon as a suitable opportunity arose. I believe that we have here a rigorous regulatory framework of the type we need, which no longer carries within it what might well have proved to be a strong disincentive to senior non-British bankers to base themselves in London.

[Lord McFall of Alcluith (Lab)]

My Lords, I support the amendment of the noble Lord, Lord Sharkey. I bring to the attention of the Committee my position as deputy chairman of the Banking Standards Board, but I speak here in a personal capacity.

This measure abandons a key element of the recommendation of the Parliamentary Commission on Banking Standards—a decision that was unanimous among its members, including the most reverend Primate the Archbishop of Canterbury. We all signed up to the recommendation to hold senior bankers to account. The essence of the recommendation is that, if misconduct or prudential failings take place, in order to avoid sanction senior managers have to demonstrate that they did all they could to prevent them happening.

I remind the Committee why we came to that decision. We sat for two years and asked 10,000 questions. We questioned senior executives of banks, whose response when anything went wrong was, “No see, no tell. Nothing to do with me”. In fact, senior executives were content to come across as incompetent rather than culpable, no doubt advised to do so by their lawyers. We covered examples such as PPI, which went on for 20 years. I questioned the former chief executive of Lloyds. I asked him, “What about PPI? It’s cost you about £12 billion”. He replied, “Oh, we were on the side of the angels as far as PPI was concerned”. This is a group of people divorced from the reality of the situation in society, and that is why the parliamentary commission unanimously made this recommendation.

I shall give your Lordships another example. We had four UBS executives lined up before us. We were told informally that their salary was probably £100 million a year. One of their star traders had lost more than $2 billion in Hong Kong, so naturally we asked, “Did you know?”, to which the answer was “No”. We said, “You didn’t know what your star trader was doing? Fine. So when did you find out?”. The answer was, “Oh, we found out on the Bloomberg wires”. In other words, it took someone outwith the company to tell the most senior managers that one of their star traders had lost $2 billion.

The director of corporate affairs, Tracey McDermott, came before one of the sub-committees in relation to this issue. She is a very competent and professional person. We asked her, “What happened with the UBS situation?”. She said, “We examined it but the trail went cold. In other words, we couldn’t pinpoint anyone in the organisation who was culpable because there wasn’t a sufficient organisational chart”. Her evidence indicated that at that time—this was mentioned by the noble Lord, Lord Sharkey—the FCA was unable to impose sanctions on senior executives, first and foremost due to the evidential standard required to prove their liability. She added:

“The test for taking enforcement action is that we have to be able to establish personal culpability on the part of the individual, which means falling below the standard of reasonableness for someone in their position”.

That entails showing that senior executives failed to reach a reasonable conclusion and, as the Bill stands, that will remain the evidential standard for proving culpability. So we are back to the future here—a future that has failed time and again. That is why the Parliamentary Commission on Banking Standards was very frustrated at the situation and said that something had to be done in civil law. However, the new standard in the Bill will not effect the change that it is supposed to bring about because the evidential standards remains the same and, as a result, we are going back to an old regime.

I remind the Committee of the long list of recent failures, not least IPOs, LIBOR and forex. Those are what are called the three lodestars of the market, and they were all rigged. It was a corrupt market, and the Parliamentary Commission on Banking Standards was very clear, from the evidence it received, that it was a corrupt market. We had evidence from HBOS, UBS and RBS. PPI mis-selling went on for 20 years and cost £40 billion. What does £40 billion mean? It is about 2% of the country’s GDP, so, paradoxically, the PPI fines helped economic growth. I do not want to live in a country with standards like that.

Electoral Registration and Administration Act 2013 (Transitional Provisions) Order 2015

Lord Garel-Jones Excerpts

Tuesday 27th October 2015 Lords Chamber

The second excuse is even more ludicrous. Ministers claim that some or many or most of those 1.9 million entries on the electoral register may be false and potentially fraudulent—what? This is the register on which the general election was fought. Are Ministers really now saying that the whole election could have been based on a wildly inaccurate, potentially fraudulent register? What is the evidence for that? Why have the commission or the Government not demanded an inquiry? Are Ministers now challenging the outcome of the election on those grounds? Anyone can see that claiming now that the electoral register used this year is somehow so defunct as to be an instrument of fraud is a pretty thin veil over the real reasons for this blatant gerrymander.

[Lord Garel-Jones (Con)]

Is it not the case, for example, that the Council of Europe has made it very clear that household registration is an open door to corruption?

[Lord Tyler]

That is precisely why we are moving towards IER, which my party and I personally have warmly supported and, during the coalition Government, sought to make sure was being effectively implemented at the local level.

I turn to the propriety of this Motion. There was much talk yesterday of what this House can and cannot do and what it should and should not do. This Motion is our one chance to do our duty to the voters. There is no middle way of delay or prevarication.

In any case, this Motion is quite distinctly different from any of those we debated yesterday. First, both Houses agreed primary legislation in 2013 which insisted that any order made to end the transitional period early might be, must be or could be annulled by either House of Parliament. This specific protection was built into the legislation precisely to withhold from the Executive an unfettered right to tamper with the electoral register. Secondly, of course, there is a precedent for the Lords voting down secondary legislation on matters of election law. Indeed, Conservative and Liberal Democrat Peers voted together to defeat such an order in 2000 when the then Government attempted to deny candidates for the Greater London Authority the chance to mail electors. Thirdly, in opposition Conservative Peers moved several other Motions to kill off similar secondary legislation. As is also apparent, the Conservatives made absolutely no mention of this change in their manifesto.

Parliament has a special responsibility to listen to the Electoral Commission—by law. It reminds us that we have not just a right but a duty to oppose this order. Ministers should be ashamed of this unilateral attempt to undermine the IER transition process, to skew the boundary review and, in so doing, to challenge the authority and integrity of the statutory independent commission set up precisely to advise us all on these issues. They hoped they would get away with it unnoticed. But they have been found out and now we in this House must, on behalf of voters, do our duty. I beg to move.

Amendment to the Motion