Hereditary Peers: By-elections

Lord Hannan of Kingsclere Excerpts

Wednesday 10th November 2021 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, is this not really about good faith? I have not been here very long but some of your Lordships were here when a deal was done, establishing the current system pending stage two reform. At the risk of making myself Billy-no-mates again, as I was in my old job, I favour eventual democratisation but, unless we are prepared to do that, does my noble friend not agree that it is perverse to be targeting what is, despite a limited franchise, the only elected element in this Chamber?

[Lord True (Con)]

My Lords, I will not be tempted too far down that road or some people might resuscitate some of the things that I said 10 years ago about your Lordships’ House and its composition. I now stand at the Dispatch Box as a Minister. My noble friend is absolutely right that we have a system that came out of particular circumstances. It was assented to and, as the noble and learned Lord, Lord Irvine of Lairg, said at the time, will bind and honour all who gave it their assent until we have reform of your Lordships’ House, which, as I hear, a lot of people would favour.

Ministerial Code

Lord Hannan of Kingsclere Excerpts

Tuesday 9th November 2021 Lords Chamber

[Lord True (Con)]

My Lords, I have explained the constitutional position. So far as the Prime Minister’s movements are concerned, I am thankfully not responsible for them, but he was on a prearranged official visit to the north-east. My right honourable friend the Chancellor of the Duchy of Lancaster, who heads up the Cabinet Office and is responsible for this, led in the parliamentary debate. The Speaker was informed that both my right honourable friend and the leader of the Scottish nationalists would be unable to attend.

[Lord Hannan of Kingsclere (Con)]

My Lords, until a generation or so ago there was almost no statutory regulation of Ministers, Members of the other place, or Members of this Chamber. Does my noble friend the Minister see a danger that the proliferation of codes, statutes and commissions skews incentives, encouraging politicians to tick the boxes, rather than asking themselves whether their behaviour is, in the broader sense, moral or edifying? Is there not a danger that we are replacing a culture of conscience with one of compliance?

[Lord True (Con)]

My Lords, my noble friend is absolutely right to say that the background, provisions and guidance have changed and evolved over time, and they will continue to evolve.

Health and Social Care Levy Bill

Lord Hannan of Kingsclere Excerpts

2nd reading & Order of Commitment discharged & 3rd reading
Monday 11th October 2021 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, that is one way of putting it. This Bill has been so hacked about from every Bench, so lacerated, that it seems an act of almost wanton cruelty to take out my own cleaver and join the mob. In the spirit of balance—at least, of karmic balance—let me therefore at least preface my remarks by saying that this is a good problem to have, in one sense, because we are talking about a problem caused by improvements in medical care and increased longevity, and we are looking at ways in which the wealth of an increasingly well-off society can spill over into the social care sector.

In the end, wrote Goethe, in what has always struck me as the single most depressing line in the whole corpus of European literature, we are all King Lear. Of course it was not quite true in his day and it is not true today, but we have a challenge, like every developed country, in ensuring that we are not stretched out upon the rack of this tough life any longer than necessary.

I wanted to agree with what I thought was a devastating takedown of the proposals by the noble Lord, Lord Eatwell, but I am going to disagree with one aspect of his remarks where he spoke about the reduced proportion of GDP going on health and social care. That strikes me as not a great measure. A more useful metric is what is the absolute amount. If you can grow an economy very quickly then a smaller proportion of that economy can be a much larger sum. It therefore seems to me that the question, if we are looking at how to fund this or indeed any other aspect of our welfare system, is where we strike the balance between getting instant revenue now by raising taxes and ensuring that that growth continues, thereby generating future surpluses. If, as in this case, we are looking at the prospect of increasing costs—because I think we can reasonably expect that longevity will continue to increase and that there will continue to be medical advances—how do we ensure that it is funded sustainably and that we do not, in removing money from the productive bit of the economy now, reduce the overall size of the economy and so damage future revenue?

However, I agreed very much with what the noble Lord said about the craziness, as we come out of the worst downturn that we have had—worse than anything we saw in either war or in the recession—of taxing jobs. Of all the ways that we could be raising revenue, this seems to me the most misconceived. On the contrary, we should be finding ways to reduce taxes on employment and investment so that, as furlough ends, we encourage people and firms to be investing and hiring more, thereby of course generating more economic activity and, in the medium term, more government revenue.

I would be very happy to see national insurance scrapped. If we consider the case made against it by the noble Lord, Lord Lipsey, and my noble friend Lord Lansley, it is quite difficult to see why anyone—I agree with what the noble Lord, Lord Lipsey, said—would invent it today. I very much support my noble friend Lord Forsyth of Drumlean’s idea that we should be honest and merge it with income tax and stop the pretence that it is somehow a hypothecated tax paying for social care. Of course, Governments will never do that, because they will never admit the amount they are actually taking in income tax—so they pursue the strategy of having lots of little taxes to add up to one big one as a way of disguising the overall tax burden.

I also agree with the noble Lord on the absurdity of hypothecation. It is not that it is a bad idea, but that it is impractical. It did not work for Gordon Brown and has not worked for any other leader. It is impossible to devise a system where a Chancellor cannot simply substitute a different budget. It has defeated every attempt at doing so.

Finally, I agreed with the noble Lord, Lord Eatwell, when he spoke very truly and said that it is in the nature of taxes to go up. That has been true of almost every tax, going right back to the introduction of income tax as a temporary measure to pay for the Napoleonic Wars. Governments find that they do not have the revenue they need and have to widen and deepen the tax. So let us be clear what we are talking about; it is going to be a ratchet, where there is constant pressure for higher budgets, higher caps and so on.

Why are we doing this? Why have we picked this tax and this method? And why, as every other Bench has asked, are we doing it in such a hurry? I was very struck by how few people in the other place on the Conservative Benches voted against it. My right honourable friend the Minister, with commendable honesty, described it as a

“permanent … increase in the size of the … state”.—[Official Report, Commons, 14/9/21; col. 844.]

That is absolutely right. How many people on Conservative Benches in either House went into politics in order to pursue a permanent increase in the size of the British state? Yet there were only something like five Conservatives in another place who voted against it.

I suspect that that is because, when asked in isolation, this measure polled very well. It always does. If ever you phrase an opinion poll question as “Should we raise taxes to pay for”—insert desirable thing—you always get a very large yes, because people have been conditioned by our political discourse to hear the question as “Are you a nice person? Are you selfless or are you greedy?” They cannot tick a box in that opinion poll that says “Well, only if it is accompanied by efficiency gains”, or “Yes, I will happily fund more clinicians, but I don’t want to fund more NHS diversity officers”, or “What has happened to the £20 billion that has already been spent?”, or “Could it be done with the following priorities?” So they say yes because they do not want to look ungrateful.

My noble friend Lord Tebbit, when he was the Conservative chairman, once said that the only opinion poll on tax that matters, the only question that elicits a valid response, is “Do you feel that the amount of tax you personally are paying is too low, too high, or just about right?” I suspect that, when people see the implications, not least the second-order implications, of there being fewer jobs and therefore less overall revenue and slower growth, there will be a very different attitude.

Of course, your Lordships do not need to worry about opinion polls. The function of this House is precisely that it can take a longer view and bring perspective to these questions. It is clear, if you look at the long view and take a proper perspective, that the way to have growth and an economy that can then more easily accommodate increases in healthcare, social care and all the rest of it, is by pursuing the formula that has always and everywhere increased economic performance: freer trade, lighter regulation and lower, flatter and simpler taxes.

Brexit Opportunities

Lord Hannan of Kingsclere Excerpts

Thursday 16th September 2021 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, I very much welcome the Statement and the fact that my noble friend is here to give it. I very much welcome the report. I was astonished, when I was a new MEP 21 years ago, by how much big corporations lobbied for precisely these kinds of regulations, almost always because they saw an opportunity to disadvantage a rival by getting standards that they happened to follow anyway. Of course, they did not put it in that way— they would call it consumer rights or environmental protection—but that is almost always what it was, and it is wonderful that we are finally doing something about it.

Does my noble friend agree that the same principle should apply to our trade policy? Does he share my concern that the Trade Remedies Authority’s recommendation to remove some of the steel tariffs brought in by the European Union in retaliation against Trump was overturned? Does he see the same possibility of politics overriding economics, and does he believe that a global Britain should be an engaged, free-trading country where imports are cheap, costs are low and people have more money to spend on stimulating the entire economy?

[Lord Frost (Con)]

My Lords, I do believe those things. I have two points in response. On industry support for regulation, one reason that we intend to set up our standing commission is to make sure that we can listen not just to trade associations and big companies, important though they are, but to small and medium-sized enterprises, the people who gain from change and doing things differently, as well as those who gain from things being as they are. On free trade, of course I am a free trader. I believe that this country prospers by free trade; I think the whole Government believe that. On steel, obviously there is a particular situation in the global market in steel which has been discussed elsewhere, but, as a general proposition, we wish to reduce barriers, reduce tariffs, get in place free trade agreements and allow everyone to prosper.

Protocol on Ireland/Northern Ireland (EUC Report)

Lord Hannan of Kingsclere Excerpts

Monday 13th September 2021 Grand Committee

[Lord Hannan of Kingsclere (Con)]

My Lords, the Northern Ireland protocol stands on a palpable absurdity, namely the idea that checks on goods between Northern Ireland and the Republic of Ireland will upset the political equilibrium, possibly even threaten the peace, but that such checks on goods between Northern Ireland and Great Britain are just fine and dandy. It is because we have all been dancing around that anomaly that we are meeting here in this Committee. All the ripples have been caused by trying to come to terms with something that is simply absurd.

I add my voice to all those who have complimented our chairman. Our committee indeed has, to use his phrase, “strong and divergent” views. There speaks nearly 40 years of diplomatic experience. That is one way of putting it. None the less, we have come up with some serious proposals with consensus. I think that we were able to do so for one reason, which is worth bringing out: of all the witnesses we heard from, there was not one that was actively pro-protocol. There was certainly a variety of views. I was very impressed. It was the first time that I had been on a Select Committee and everything that people said about the balance, fairness and thoroughness was absolutely right. We heard from every different quarter of opinion. There were those who thought it was a price worth paying, those who did not, those who put the blame on Brexit and those who put the blame on the protocol, but there was not one voice arguing that the protocol was an improvement on the status quo ante—not one.

I can broadly group under two headings the complaints that I heard from the various witnesses who appeared before us. One lot are what we might call the practical objections. They were uniform, I think, across Northern Ireland. You could not tell which tradition someone was from when they voiced them. They were concerns to do with sausages, pet passports and all the other pragmatic difficulties of overzealous implementation. I think there would, in theory, be quite easy solutions to them if there were a modicum of good will. The second lot, I think it is fair to say, were objections voiced largely from unionist and loyalist sources and had to do with what we might loosely call the democratic deficit—the idea that Northern Ireland will have laws, even taxes, imposed on it by people that it cannot vote for. Those are much harder to deal with, at least within the protocol. We can safely disregard the various ideas that they can be resolved by somehow allowing Northern Ireland to be politically further annexed by the EU. They are a very difficult set of problems to resolve.

If I were an EU negotiator, I would be super-flexible about the first lot, thereby maximising the difficulties of any UK Government wanting to deal with the second lot. It would not really be any skin off my nose. We heard my noble friend Lord Empey quote the figures of the miniscule amount of the EU economy accounted for by Great Britain/Northern Ireland trade—0.008%. However, it seems that the Brussels negotiators do not have the same diplomatic skill that I see arrayed on the Bench opposite, albeit with a little gap now with the noble Lord, Lord Kerr, having absented himself. Instead of showing flexibility on the practical side and digging in on sovereignty—which is what we might expect them to do—they have been difficult and obstreperous about every issue, even requiring rabies shots for pets moving from Great Britain. It is very difficult to avoid the conclusion that they relishes our discomfort and are seeking to use the protocol as a pressure point, a way of exerting pressure on the UK to secure our long-term adherence to EU standards. We heard some of the figures: 20% of EU external checks are applied to 0.5% of its trade, if you count Great Britain-Northern Ireland trade as external trade. Why are they doing this?

It is extraordinary, listening to the debate in this Chamber, another Chamber, more widely in the media and, I have to say, from three speakers so far how often the only answer we get is, “Well, you signed it”. Seriously, is that all you have? How does that take us forward? It is true that it was signed, as what we might call an unequal treaty. History is littered with examples of treaties that ceased to be valid and were then abrogated or annulled. An apt example, given both the subject matter and this being its centenary year, is the Anglo-Irish treaty of 1921. It was repudiated in stages by successive Irish Governments, first breaking their residual constitutional links with the UK, then declaring a republic and leaving the Commonwealth. I note en passant, as we old Brussels hands say, that when that the final break was made in 1949 the UK Government were remarkably affable about it. In fact, King George sent the following message to the Irish President:

“I hold in most grateful memory the services and sacrifices of the men and women of your country who rendered gallant assistance to our cause in the recent war … I pray that every blessing may be with you today and in the future.”


I wonder whether the European Union will be similarly accommodating if a similar repudiation happens. Somehow, I doubt it. Maybe that is something we can all agree on around this Room.

When a treaty is not working, when a treaty is a product, as this one was, of the Benn Act and of a Parliament that was not working to get the best possible terms, it will obviously have to go in one way or another. It seems to me that there are three options. In declining order of drama, there is outright repudiation, the triggering of Article 16 or asking for some changes within the existing structures. The first is the cleanest, and there is precedent, but so far I see little appetite for it.

There is already ample justification for the second. Article 16, just to remind members of this Committee and other noble Lords, contains the following clause:

“If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures.”


Leaving aside “environmental”, it seems to me that we have already passed that threshold on the others. In terms of economic disruption, Northern Ireland sells more to Great Britain than to the Republic of Ireland, the rest of the EU and the rest of the world put together. We heard from one of our witnesses that Northern Ireland-Great Britain trade is now subject to £10 billion of extra costs, and three-quarters of Northern Ireland businesses said they had been negatively impacted. As for societal difficulties, when, according to the opinion polls, half of Northern Ireland is against it—it is now almost exactly half and half—that is normally taken in the Northern Ireland context as a pretty good argument to desist from your course of action and try something more consensual.

As for trade diversion, that is not in doubt. We heard that north-south trade increased by 50% as businesses in the Province shifted their sourcing and trade, but to portray this as a good thing, to portray the cause of extra cost and bureaucracy forcing trade diversion as somehow an economic step forward, is rather like arguing that it was a great thing that the blockade in the Second World War led to people growing more potatoes in their gardens. The most basic principle of trade is that we should trust businesses to do what is rational and profitable. If they cannot do so because of needless paperwork—applied, to repeat, not in any proportionate spirit but for the sake of making trouble—it seems to me that must be reckoned a net cost.

So one way or another, the current deal is going. The only question is whether it goes in agreement with our European partners or through unilateral action. I have to say—I know this goes against the spirit of the meeting—that my noble friend the Minister has shown heroic restraint so far in asking nicely for changes, rather than making them unilaterally. When we think that the European Union triggered Article 16, albeit briefly, on no grounds beyond pique that the UK vaccine programme was ahead of its own, we have ample cause in terms of the economic and societal impacts that we have already seen.

I hope we can do this consensually. I hope that Northern Ireland becomes a bridge between the UK and the European Union, but there is no veto here: one way or another, the protocol has to go.

House of Lords Appointments Commission

Lord Hannan of Kingsclere Excerpts

Monday 6th September 2021 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, everyone likes the idea of a neutral expert. One of the most depressing things in politics is how easy it is when you are on “Question Time” or “Any Questions?” to get a round of applause by saying about virtually any subject: “This is too important to be a political football. Why can’t all those elected politicians back off and leave it to the professionals?” Yet I have to tell noble Lords that there is no such person as a disinterested patriot who can raise his eyes above the partisan scrum and describe the true national interest. No such person exists; we all have our assumptions and prejudices. The only distinction is that some of us have to test those in elections and others do not.

I very much agree with what the noble Lord, Lord Desai, just said. We have, at the moment, a system where the power of appointment is with one elected person, directly elected in a constituency and then indirectly elected in another place. You might make an argument, as he did, that we should go further and have an appointments body made up of the electorate as a whole. That is a good, consistent, coherent argument. But moving in the other direction and placing the oligarchic power of appointment in the hands of an unelected group that, by definition, will like to appoint people who share its own assumptions and opinions is a step away from accountable government and would be a retrograde step.

UK Government Union Capability

Lord Hannan of Kingsclere Excerpts

Thursday 1st July 2021 Lords Chamber

[Lord Hannan of Kingsclere (Con)]

My Lords, why are we discussing the separation of this kingdom? We are not riven by some massive ethnic difference in the way that Kosovo or South Sudan or somewhere was. In all parts, we speak the same language, we watch the same TV, we follow the same sports, we shop at the same chains and we abuse alcohol in the same way, and this common affinity predates our formal union. When James VI of Scotland made his first speech in this building in 1604, he made precisely this point:

“Hath not God first united these two kingdoms, both in language, religion, and similitude of manners? Yea, hath He not made us all in one island, compassed with one sea”.


For a long time after that, people had a sense of shared nationality, of shared characteristics. We were stubborn, we were stiff-necked, we bridled at injustice, we were slow to anger, we could be morose and difficult, but we had a clear sense of union, bolstered by our habit of intermingling and intermarrying.

So what has changed? What has changed, it seems to me, is the trashing of the British brand. If the United Kingdom as a concept is systematically derided and traduced by our intellectual elites, if our history is presented to young people as a hateful chronicle of racism and exploitation, is it any wonder that people in the constituent kingdoms will start groping back towards older patriotisms? Yet I ask the question: where else in the world down the centuries would you rather have been poor, or female or from a religious minority? Which country has done more to spread liberty and law? We do not have to make up a fable, some platonic noble lie. We have a tremendous story to tell as a united people: we defeated attempts to unite the world under fascist and communist tyranny; we ended slavery; we spread commerce and law across the continents and the archipelagos. It is a great song to sing, and we have not finished singing it yet.

UK Policy Implementation for Wales and Scotland

Lord Hannan of Kingsclere Excerpts

Wednesday 19th May 2021 Lords Chamber

[Lord True (Con)]

My Lords, I am grateful for the noble Lord’s welcome of the Prime Minister’s initiative. On intergovernmental relations, I laid a Statement before the House—I think on 21 March—on the significant progress made in those discussions. I am confident that further progress will be made on those co-operative instruments.

[Lord Hannan of Kingsclere (Con)]

My Lords, our world-beating vaccination programme was a UK achievement. Our independence allowed us to move quickly and our size allowed us to buy big. Can my noble friend the Minister confirm that, while it is perfectly legitimate for politicians to argue for a reset—as the noble Lord, Lord Wigley, did—or democratic partition of this country, the focus must be on recovering from the worst economic trauma any of us has ever experienced?

[Lord True (Con)]

I absolutely agree with my noble friend. That is the commitment of the Prime Minister, and I have every hope that it will be the commitment of the other First Ministers and leading Ministers involved. Our nation gained enormously from the resources of the United Kingdom, including financial, Armed Forces, co-operative, technical and scientific ones. That lesson has not gone unnoticed by people in every corner of these isles.

Ireland/Northern Ireland Protocol

Lord Hannan of Kingsclere Excerpts

Thursday 29th April 2021 Lords Chamber

[Lord Frost (Con)]

My Lords, the noble Baroness raises an important issue. In all my interactions with Vice-President Šefčovič, I drive home the seriousness of the current situation in Northern Ireland and the overriding importance for all parties of supporting the peace process and protecting the Belfast/Good Friday agreement. I encourage the vice-president to meet business and civic groups in Northern Ireland to hear their unfiltered views; I know that he intends to do that. The solution to this problem is one in which we can work with the Commission to operate the protocol in a pragmatic and proportionate fashion.

[Lord Hannan of Kingsclere (Con)]

My Lords, the United Kingdom has concluded free trade agreements with 67 states, not counting the TCA belatedly ratified by the European Parliament this week. Can my noble friend assure this House that Northern Ireland will benefit in full from the provisions of those agreements?

[Lord Frost (Con)]

My Lords, I am happy to assure my noble friend that this Government’s intention is that Northern Ireland will benefit fully from the great trade deals we have agreed and those coming in future, which we are currently negotiating; that intention is clear in the protocol. Unfortunately, because of legislation passed by the EU, Northern Ireland does not benefit from certain TRQs in the same way as the rest of the UK. This is one of the issues that we are discussing with the Commission at the moment. We are making progress on that and I am hopeful of a satisfactory resolution.

Global Minimum Corporate Tax Rate

Lord Hannan of Kingsclere Excerpts

Wednesday 14th April 2021 Lords Chamber

[Lord Agnew of Oulton (Con)]

The overriding position is that we welcome the American Government’s re-engagement in this process. As realists, we accept it will not happen without full American support. We agree with the noble Baroness that these things hang together, and it will be a cohesive result that will work.

[Lord Hannan of Kingsclere (Con)]

My Lords, international tax competition is an important constraint on big government. You can raise the rate only to a certain point before the revenue and jobs begin to flee to friendlier jurisdictions. For that reason, it has always chafed with people who want a very large state. Will the Minister accept that the logic of the Laffer curve is not an academic theory but an empirically observable reality—that every cut in corporation tax, down to our current rate in this country, led to an increase in revenue? Will he further accept that having a competitive rate of corporation tax is an important growth strategy for a developing country? The formula that worked for Singapore, Hong Kong and eastern European countries would be cut off if we created a global high-tax cartel.

[Lord Agnew of Oulton (Con)]

My Lords, we did not plan to increase corporation tax in the way we have had to do in the last few months. It is only as a result of the appalling crisis we have suffered through Covid and having to address the financial impact of that. I agree with my noble friend that lower corporation tax rates are broadly a good thing. Personally, I do not like to see tax on productive activity, employment or any of the things that make a country prosperous. Therefore, I support his comments that we should always aspire to lower tax rates, particularly on corporation tax. We will try to set it still at a competitive rate, so the US, Canada, Korea, Japan and Germany will all have higher rates than the one to which we are moving.