Sanctions and Anti-Money Laundering Bill [HL]

Lord Higgins Excerpts

Wednesday 17th January 2018 Lords Chamber

Between the Committee and Report stages there have been extensive discussions and debates about various parts of this grouping.

[Lord Higgins (Con)]

I am extremely grateful to my noble friend. It is quite clear that the grouping of these amendments is not a convenient way of proceeding. I understand that my noble friend has given careful thought to the wide range of issues covered by the amendments, and I understand that he is saying that he will make further changes to the Bill at a later stage. What I am not clear about is whether any of these will cover the points made by the noble and learned Lord, Lord Judge, in his opening remarks. Perhaps my noble friend will clarify that.

[Lord Ahmad of Wimbledon]

My noble friend is right to raise the point and I admire all noble Lords who have followed the thread. The reason I have gone into detail, as my noble friend has articulated, is that the range of amendments in this group is quite extensive. Also, as I have said before, it reflects the importance of the discussions we have had.

On the specific issue of Amendment 71A, on this occasion I regret that we are unable to meet the views of the noble and learned Lord. However, I hope that I have indicated at least in part that this is not a departure from the existing system. Indeed, it is something which has been applied previously and continues to be so. I hope, therefore, that I have convinced noble Lords that the Government’s proposed changes—aside from the differences set out by the noble Baronesses, Lady Kramer and Lady Bowles, which we have talked about and I appreciate and acknowledge—will ensure that proper safeguards are put in place in the Bill regarding offences, rather than removing the ability to create them and leaving a vacuum that we believe would weaken the UK’s anti-money laundering regime.

I hope also that I have convinced at least some noble Lords—I am looking behind me as well as ahead; it does not say that in my speaking notes. I have gone into detail but I believe that it was necessary to do so since, as I have always said, this is an important Bill. With those reassurances, I hope that noble Lords who have tabled amendments in this group will be minded to withdraw them.

European Union Referendum Bill

Lord Higgins Excerpts

Monday 23rd November 2015 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, I am somewhat surprised that many Members of your Lordships’ House seem to find the idea of understanding what leaving would mean somewhat strange. The question that will be put to the people of the United Kingdom is:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”.

The Electoral Commission, in its briefing to us for the second day of Report, points out that:

“It is important for voters to have access to information about the consequences of voting to remain a member of the European Union or leave the European Union, to help ensure they are able to make an informed decision on how to vote. However, any provision in legislation for this should ensure that voters can have confidence in the accuracy and impartiality of the information. There should also be sufficient balance given to the consequences of both a majority vote to remain a member of the European Union and a majority vote to leave the European Union”.

Amendments 24A and 24B went quite a long way in that regard but, if the Minister may not be able to envisage what the Government might say in terms of the relationship, can she at least tell us a little more about what “leave” might mean? The voters of the United Kingdom need to understand what “leave” means just as much as “remains”. We are almost there, but not quite.

[Lord Higgins (Con)]

My Lords, in Committee and this evening, a number of amendments have requested reports on a large range of subjects. I suggested in Committee that the extent to which these reports are likely to be read by the majority of people voting in the referendum is small. The reports might be of some use to parliamentarians and other people preoccupied with the issue, but they would be of very little use in determining the outcome of the result of the referendum. However, it suddenly seemed to me that there was some case for a particular report on a matter where there seems to be some confusion—namely, a report on what the process of withdrawal would be.

I was most interested in the point made by my noble and learned friend Lord Mackay that seemed to suggest that in the course of that process we would necessarily, and perhaps almost as a first step, repeal the 1972 Act. There was a large amount of other legislation, including that on devolution, that was based on that Act. I imagine that that would create an enormous problem in terms of the legislative programme that would follow any decision to leave. I do not know whether my noble friend on the Front Bench can shed any light on that, but the case for rather more attention as to how it would be done if there were to be a vote in favour of withdrawing may well have a rather strong argument in favour of it.

European Union Referendum Bill

Lord Higgins Excerpts

Tuesday 13th October 2015 Lords Chamber

[Lord Higgins (Con)]

My Lords, in waiting to speak this afternoon I have felt more comfortable than for many years because the Bench with a hole in it on which I habitually sit has finally been replaced. I mention this to reassure those who are still sitting on dilapidated Benches. It may be that the change here is a sign that austerity is finally coming to an end. I should add that one great advantage is that it is not as slippery, so that one does not find oneself sliding backwards and lying back and then being unjustly accused by the press of being asleep in a debate while listening to what people are saying. At all events, some things are improving.

I have always been totally opposed to referendums, and in particular to what one might call binding or mandatory referendums, which in effect represent the dictatorship of the majority and take no account of minority interests. They are the antithesis of representative democracy and leave Members of Parliament unable to wholly fulfil their jobs as representatives and not delegates. I was glad to see in a note prepared by the Library that this Bill,

“does not contain any requirement on the UK Government to implement the results of the referendum, nor set a time limit by which a vote to leave the EU should be implemented. Instead, this is a type of referendum known as pre-legislative or consultative”.

For the reasons I have just mentioned I welcome that, but I am not at all sure that that is what is understood by the public at large who are going to suffer perhaps two years of debate on this issue and then find that the way the vote has been cast does not automatically get implemented by Parliament. If I may say so, I think my noble friend the Minister said in her opening remarks that the people will have the final say. Strictly speaking, I suspect that that is not true as far as the way that the Bill is drafted.

The other thing, which was raised by my noble friend Lord Norton of Louth, is that the Bill does not include any provision either for what should be decided as a decisive majority on the one hand or what should be the threshold for voting on the other. We will need to consider that in the course of debates in Committee and at later stages. There is also some danger that because this is being carried out against the background of a renegotiation, the vote will reflect whether people think that the renegotiation has been successful or not rather than the underlying question of whether we ought to be in or out. That could distort the result, perhaps to a significant extent.

It has been very difficult to discern what the Government’s objectives are at the present time—many Members have referred to this—but it is clear that the Prime Minister and the Government are opposed to the concept of ever-closer union. But there is a real paradox here. The people who frustrate any move to ever-closer union are the bureaucrats in Brussels, because they are absolutely fixated on two things: the single currency and the free movement of people. Far from leading to closer union, both those dogmas have put them in a position which is more and more divisive. We were told that the single currency would lead to harmonisation and convergence, but that is far from the case. You only have to look at the recent disputes with Greece to realise that the effect of the single currency has been to tear countries apart rather than to bring them together. The situation is similar with regard to the free movement of people, particularly against the background of the extraordinary increase in immigration from outside the European Union, and the way in which this has caused great dissent between, let us say, Germany and Hungary. There is therefore a curious paradox that what the Prime Minister is against is effectively implemented by the bureaucracy in Brussels.

However, at all events, what is crucial is that because of these two issues, which we have opted out of, the Prime Minister has effectively opted out of participation in many of the most important issues, not least the ones I have just mentioned, which are going on at the present time. He has tended to opt out, which is very dangerous indeed. We need to get to a situation where much of the renegotiation should lead to us arguing for what is right not only for this country but for the European Union as a whole. At the moment, the issues I discussed earlier are greatly to the detriment of our country in terms of, for example, exports, problems with immigration and so on. So the Prime Minister has to ensure that he takes a far more active role in Europe than appears to have been the case, because we have not been participating in those particular major areas of policy which I have referred to.

I will make one final point. All these tendencies have been recently for disunity in Europe, which could not happen at a more dangerous time. We cannot conceive of a situation where we have disunity in the European Union on issue after issue and then are totally united on participation in NATO. Personally, I am more worried about that situation than I can remember being for probably my whole adult life. These are important issues, and I hope that the Prime Minister will take a lead in the way I have suggested.

Queen’s Speech

Lord Higgins Excerpts

Tuesday 10th June 2014 Lords Chamber

[Lord Higgins (Con)]

My Lords, this Queen’s Speech gives us an appropriate occasion to take stock, as we enter the finishing strait for the coalition agreement, ahead of the general election, before we become preoccupied with manifestos, and so on. The central piece of the Queen’s Speech is certainly on the economic side of things. Indeed, it begins,

“my Government’s legislative programme will continue to deliver on its long-term plan to build a stronger economy and a fairer society”,

and to,

“strengthen the economy and provide stability and security, my Ministers will continue to reduce the country’s deficit”.

It is now apparent that the policy that this Government have pursued on the economy was the right one, unlike a number of others advocated by the Opposition, and it is fortunate that we have a fixed-term Parliament so that we will have a period in which the fruits of the improvement in the economy can become more apparent. Nevertheless, it is important to recognise that progress in reducing the deficit has been slower than we hoped. Indeed, the target has been put back. In that context, it would be very important for the manifesto of the Conservative Party and, I would hope, of the other parties, to make it clear that we are determined to reduce the deficit entirely and to get around to reducing debt and reducing the burden on our children and grandchildren. There is still a long way to go in that regard. None the less, we have the fastest-growing economy. We have seen the IMF radically change its view of the British economy and the policy that we are pursuing; it is now very much in favour of what we have been doing and, indeed, have done.

Of course, there are still a number of dangers ahead, not least the rather precarious international political situation, and with regard to the eurozone. We are inclined to think that the eurozone crisis is over. The problem is that the eurozone structure and the extent over which it is operating geographically are fundamentally flawed. They may sort it out for the moment, but inevitably, as time goes on, it will continue to suffer very serious strains. That may jeopardise the future of the UK economy.

I say all this because I see no very clear alternative being put forward by the official Opposition. We have had a number of particular initiatives on fuel prices or whatever it may be, most of them abandoned very quickly after being put forward.

This is also an opportunity for us to take stock of a number of other matters. Perhaps inevitably, I shall mention one constitutional matter and some institutional matters. The constitutional one is, of course, the question of an elected House of Lords. As we approach the election, while the Liberal Democrats will no doubt include something on this subject in their manifesto, both the main political parties would be very foolish to do so. The reality is that the House of Commons has spoken; it now understands this issue, and it is not going to go ahead in agreeing to an elected House of Lords. Therefore, it would be very foolish for parties to endanger the programme that they wish to implement otherwise by including that in a manifesto. We ought to have learnt the lesson on that issue.

I am also slightly concerned about the position with regard to the House itself. I rather despair of hoping that some Members will stop referring to “the noble Minister”, when noble Ministers do not exist. There are noble Lords, but not noble Ministers. Indeed, even in this debate the same thing has turned up. But there are other important issues. We agreed some while ago to the use of iPads in the Chamber, but we have a very clear rule that speeches should not be read. Therefore, I was rather appalled to sit in on a debate recently where I regret to say that a Member of the Bishops’ Bench read his entire speech word for word from his iPad. I do not know whether he was in communication with any higher authority but, at all events, I thought that it was a rather unfortunate development.

It is tremendously important that we do something to adjust the balance in this House between legislation and general debate. My noble friend the government Chief Whip is very clear that the length of recesses recently has not been greater than normal. At all events, they have certainly seemed longer than normal, and there are a number of important issues that we could have spent time debating in that period—not least the crisis in Ukraine and the problems in Europe. I pay tribute to my noble friend Lord Tugendhat in this regard. It is quite extraordinary that we have not debated Ukraine in this House, and the problems arising with regard to Russia. My noble friend dealt with the issue very clearly. I managed to get a topical Question in the ballot, which came up a couple of weeks ago, but that is the only occasion when we have really tackled this problem. We have to face the fact that there is a change in our relationship with Russia. Whether it is true or not, it is widely reported that Mr Putin’s doctorate was on the use of economic power as a political weapon. We also ought to have a debate on NATO. We seem to have a defence organisation that is concerned with military matters, totally ignoring the fact that economic weapons are being used as well. As a result of that, we have been very ineffective in taking action on the position in international law and the treaty agreements with regard to Crimea. We have been pretty powerless, given the dependence of Germany and other countries on gas supplies, and so on.

Equally, we could have a very important debate on Europe, ahead of any proposed renegotiations. Again, we have not done that. So I would hope that we can have more time given to general debates.

The problem is in part a very fundamental one: we in the House of Lords have suffered from the way that the Labour Government, in a practice unfortunately followed by the Conservative Government, programmed their business. The result is that, as we well know—the noble Baroness, Lady Hollis, is not in her place, but she and I know this—Bills came here time and again with much of them not debated at all. There have certainly been a number of very big debates where that has been the case. The result is that we are spending all our time on legislation and virtually no time on general debates that might be of great use in holding the Government to account and informing them, given the level of expertise in this House.

Finally, I want to make a specific point with regard to a proposal in the gracious Speech for a Bill to,

“bolster investment in infrastructure … to improve economic competitiveness”.

I am very worried, as an economist, about the way in which we look at investment proposals. Traditionally, we have done it by raising capital, investing the capital and hoping to get a return on it, using discounted flow and all the other technical issues, with which I shall not burden the House now. Instead of that, we have seen increasingly with infrastructure projects, whether it is the renewal of railway equipment or wind farms, the use of the pricing mechanism to raise the money to make the investment. Those higher prices will very often be paid by people who will not live to see the benefit of that investment. Perhaps one can argue from an intergenerational point of view that this is only fair, given that we are in danger of landing our children and grandchildren with a lot of debt, but we will also give them a lot of infrastructure for which we have paid a far greater sum than is proportionate to the benefit we will derive from it. The Treasury uses the so-called yellow book as the basis for making these investment decisions. I do not think that they are being made correctly at present. I do not think that it is right to raise money by putting the cost on existing suppliers for the reason I have mentioned. This is a Bill that we will have to debate carefully and there are a number of others in the programme. However, I also think the case for having rather more general debates in the run-up to the general election is very strong indeed.

Ukraine

Lord Higgins Excerpts

Tuesday 13th May 2014 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords—

[Lord Higgins (Con)]

My Lords—

[Lord Bates]

My Lords, I think we have had four questions from the Labour Benches and only two from this side.

[Lord Higgins]

Does my noble friend agree, first, that the combination of coalition government and fixed-term Parliaments seems to be resulting in longer and longer recesses and that there is a strong case for us having time to debate this issue in this House on a full-time basis? Secondly, is it not extraordinary that we have such elaborate arrangements on the military defence side of things yet very little thought seems to have been given to economic defence, with the result that we do not have the ability to reach agreement on short notice in the light of the present crisis on economic sanctions? What body is setting up the immediate procedure for dealing with the economic problems and the need to take economic measures in response to this crisis? Should we not have a permanent arrangement covering that?

[Baroness Warsi]

First, in relation to the point on recess, my understanding is that apparently the number of recess days does not exceed what has happened in previous years. As a Minister who is part of this coalition Government, I cannot remember the last time I had recess.

On the economic consequences, it is already clear, for example from the recent downgrade of growth for Russia’s economy from 2.3% to 0.2% this year, the $63 billion capital flight and the downgrading of Russian bonds, that this is having a real impact on Russia’s economy. The format for making sure that these sanctions are having an impact has been, among other things, the EU Foreign Affairs Committee. It is because there is constant planning happening that when there is an escalation in the situation there is an escalation in sanctions, and those sanctions are biting.

European Union (Referendum) Bill

Lord Higgins Excerpts

Friday 24th January 2014 Lords Chamber

[Lord Lea of Crondall]

My Lords, I hope that the noble Lord replies to that because the noble Lord, Lord Inglewood, has given the game away. As the noble Lord, Lord Armstrong of Ilminster, said earlier, there is no point to having this date if noble Lords want to have this flexibility. I therefore add a question to the noble Lord, Lord Dobbs. In one minute it is seen as a bilateral negotiation by Britain and in the next minute it is clear, as has been said by many speakers, that it is a multilateral negotiation. It cannot be both at the same time. The first would be narrow, and I do not think it would get very far. If it is the latter, a multilateral poker game, it certainly cannot be time constrained in advance. When he replies, I ask the noble Lord, Lord Dobbs: which is it?

[Lord Higgins (Con)]

My Lords, I make a rather simple point. When we began our proceedings today, there was a widespread view that if any amendment were carried, it might endanger the future of the Bill. There was therefore a great inhibition against voting for any amendment. I do not believe that was wholly true because, as was pointed out in earlier debates, it would be possible for the other place to allow enough time for the Bill to proceed and for the amendments to be considered.

At all events, we are now in a situation where an amendment has been carried; it makes little difference whether one amendment has been carried or a number. It is therefore extremely important, if the Bill is to have a future, as I believe it should, that we make it as good as we can by carrying out our duty of amending it in a sensible way. I find it quite difficult to think of any amendment which has been proposed more sensibly that that of the noble Lord, Lord Kerr, this afternoon.

It seems to me that if we are really in favour of a genuine referendum on the substance of the issue, following a serious negotiation—which I believe is what the Prime Minister intends—then there really is a very strong case for the amendment. Therefore, whatever my noble friend on the Front Bench’s brief may originally have said, I hope that she will consider the point which I have just made and, more particularly, that my noble friend Lord Dobbs would also consider it. It seems quite clear that the Bill would be better it we accepted the amendment.

--- Later in debate ---

[Lord Wigley]

My Lords, I am under the impression that, following Amendment 31, the group of amendments starting with Amendment 33 will be the next group to be dealt with, before we deal with Amendment 40. Am I mistaken in that and is it not down to the noble Lord, Lord Anderson, to move Amendment 33 at this point?

[Lord Higgins]

My Lords, I think that is correct. I think that the noble Lord, Lord Anderson, should now move Amendment 33.

[Lord Foulkes of Cumnock]

My Lords, there is a problem here. I am ready to move Amendment 40, but no explanation has been given to my noble friends Lord Anderson and Lord Wigley on why their amendments have been pre-empted. With respect, either the Chairman, the Clerk, the Government or the mover of the Motion—there is an option; all four of them—should let the noble Lords, Lord Anderson and Lord Wigley, know why their amendments have been pre-empted. If they have, I am ready to move Amendment 40. If they have not, the noble Lord, Lord Anderson, is ready to move Amendment 33.

--- Later in debate ---

[Lord Wigley]

My Lords, I support the noble Lord, Lord Anderson, in what he was saying. When he spoke to the earlier bank of amendments, Amendment 28 had not been passed. He therefore had every expectation to be coming to the bank of amendments standing in his name and mine. He said specifically that he would be speaking to them in more detail. It is totally unreasonable that they should be taken out. Can we have an assurance that we can return to all these matters on Report?

[Lord Higgins]

My Lords, the point, in answer to the noble Lord, Lord Anderson, is this: he is seeking to amend a part of the Bill which no longer exists. With great respect, I do not think he can do that.

[Lord Foulkes of Cumnock]

All I said earlier, with respect, was that I was ready to move Amendment 40, but if the Whip wants to move the adjournment, I shall give way to him. I see that he is indicating dissent, so we have 35 minutes left.

Amendments 40, 41 and 47, and Amendment 49, which is in the name of my noble friend Lady Quin, are all grouped. Again to be as helpful as possible to the House, I shall deal with all of them together. Amendment 40 states:

“If the turnout for the referendum is less than 25 per cent”—

all these amendments deal with the legitimacy of the referendum—

“the referendum shall be considered invalid”.

Where one sets the percentage is open for discussion, but I should have thought that there is no doubt whatever that if the turnout is less than 25% the referendum should be invalid.

Amendment 41 is somewhat different, in that it sets a higher threshold in two ways. It states that the Secretary of State shall,

“lay before Parliament the draft of an order for the repeal of this Act”,

if two conditions are not met—if less than half the votes have been yes, or if the turnout is less than 40% of those registered to vote. A similar provision was included in the first Scottish referendum through an amendment proposed by the then Member of Parliament, George Cunningham, known as the Cunningham amendment. So there are two thresholds in order for the referendum to be successful. First, it has to get half plus one of those who vote—that is obvious—and the other is that 40% of those eligible to vote, those people on the register, would have to have voted. If the referendum does not pass both thresholds, it should not pass.

The third amendment in my name and those of the noble Lords, Lord Anderson and Lord Wigley, deals with each part of the United Kingdom, and states:

“The referendum may not result”—

in other words, it will not be legitimate or take effect—

“unless there is … a simple majority and”,

again,

“40 per cent of those registered to vote in every component part of the United Kingdom in which the count is taken separately”.

I have a later amendment that states that the count should be held separately in each of England, Wales, Scotland and Northern Ireland.

Let me put the reasoning behind those requirements in turn. The result of any referendum on Britain’s membership of the EU must, in order to maintain legitimacy, have the backing of all four nations of the United Kingdom, not just the United Kingdom as a whole. Given the momentous nature of such a referendum, I fear that national discrepancies in outlook may cast doubt on the final outcome. I therefore believe that an issue of such importance deserves the legitimacy bestowed upon it by the requirement of national electoral consensus.

--- Later in debate ---

[Lord Dobbs]

My Lords, you wait for one amendment tabled by the noble Lord, Lord Foulkes, to come along and then three or four arrive at the same time. I am grateful to him. This is clearly a serious issue and the points that have been made are well taken. Personally, I cannot conceive of circumstances in which, for instance, Amendment 40, which requires a 25% turnout, would ever arise. This is far too important a decision, which I am sure the British people would acknowledge and do justice to. The noble Lord, Lord Wigley, correctly pointed out the difficulties around setting a threshold. We would all like a very clear decision in a referendum, and there are dangers in being too prescriptive about the form that that decision should take: turnouts, majorities and so forth.

There is what I think is an important safety valve in the Bill. We are not talking about a binding referendum. It is not like, for instance, the AV referendum we had recently; it is a consultative referendum. Parliament would have to deal with the consequences of an out vote. How they would deal with the difficulties and uncertainties that might then arise would depend entirely upon the circumstances of the time.

[Lord Higgins]

I am very heartened by what my noble friend has just said about this being a consultative referendum, but I am having difficulty in finding where it states that in the Bill.

[Lord Dobbs]

My Lords, I believe that the convention is that if it is not a consultative referendum, it is an obligatory referendum, as was the AV referendum. It is not necessary to put in the fact that it is consultative because it is consultative unless we say otherwise. That, I believe, is the convention.

--- Later in debate ---

[Lord Foulkes of Cumnock]

Indeed. Perhaps the noble Lord was out having his tea earlier when I said precisely that in a previous speech.

The noble Lord, Lord Dobbs, has said that trust in politics and politicians is very low. Therefore, we must not allow the fact that it is a consultative referendum to remain unclear; otherwise, what he said earlier will apply a fortiori—we will be deceiving the people. The people deserve not only a say, which is their democratic right—I hope that the people’s choice organisation is listening to me—but full disclosure. I hope that we will therefore clarify the situation and put in the word “consultative”.

We have already had two amendments agreed. This would clarify things. It is a very simple thing, putting in just one word. I say to the noble Lord, Lord Dobbs, that he should not feel inhibited by the procession of Tory Whips I have seen whispering in his ear. He should have the courage to say, for once, “That is a good amendment even though it is proposed by the noble Lord, Lord Foulkes, so I will accept it”. I hope he will.

[Lord Higgins]

My Lords, I am rather heartened by the exchanges we have had in the past few minutes. I sat through the whole of the Second Reading debate. I did not take part because it seemed that everyone would say everything that needed to be said—a great many times over. Strangely enough, as far as I can recall, and I was here for almost the entire proceedings, no one raised this issue, which is the most important amendment on the Marshalled List.

Throughout my 33 years in the other place, I always told my constituents very strongly that I supported the view of Edmund Burke that Members of Parliament were representatives not delegates. I explained that, often at great length. Whether this explains why my majority over the period fell from 32,500 to less than 18,000, I am not sure. But I believe they accepted that even if I had had a machine that would tell me exactly the opinion in my constituency, I would not feel it right or necessary to take that as decisive. I strongly believed that one would take the views of one’s constituents into account every Friday evening and by correspondence and so on, but at the end of the day a Member of Parliament has to take into account all the other representations he has received, all the research he has done and so on, and make up his mind on the basis of that.

I have always been totally opposed to the idea of a referendum that was mandatory. I used to be totally opposed to referendums in all shapes or forms. I have come round slightly from that view, but I certainly maintain the view that I have just expressed. It would be appalling for us to agree with a referendum which would then impose on the House of Commons a particular decision where it had not been able to take the action that I believe is a fundamental feature of our democratic system in this country.

I very much welcome the noble Lord’s amendment. It is important that it is made clear. I equally welcome my noble friend the proposer of the Bill’s view that it is anyway covered by convention. But I entirely agree with those who have said that it needs to be in the Bill. Therefore, I hope very much that my noble friend whose Bill it is, in responding to this debate, will make it absolutely clear that he accepts this amendment, and then we will know where we stand; otherwise, there is a grave danger that there will be uncertainty about this, which will cause great confusion in the future.

--- Later in debate ---

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord, but I am sure that what my noble friend meant when he said that it was consultative was that we were consulting the people to get their opinion. When I read the Bill, it seemed quite clear to me that if there was a referendum and people decided to leave or to remain in the European Union, that would be that. If the Bill is amended to say that the referendum is consultative, that is another matter. I am sure that my noble friend Lord Dobbs would also point to the fact that at the end of the day, this will require legislation in Parliament and Parliament will have the last say—of course it will—but I find it difficult to imagine that any Parliament faced with a referendum—

[Lord Higgins]

Will the noble Lord give way?

[Lord Forsyth of Drumlean]

In a second, although actually, the noble Lord did not give way to me. I find it difficult to imagine that any Parliament faced with a referendum made on the basis that it was not consultative would not respect the will of the people. I give way to my noble friend.

[Lord Higgins]

I will give way to my noble friend at Question Time next time.

The fact is that we cannot have the matter left in the dark. My noble friend the proposer of the Bill is clear that it is intended to be a consultative referendum. That being so, I think it is right that we should state that in the Bill. It is not a good idea to leave anyone in any doubt of that. As for subsequent legislation, of course, whichever way the referendum goes, it is likely that the House of Commons and this House will have to legislate, but it is important that they do not find themselves in a position where they have no option but to go along with the decision of the referendum.

[Lord Forsyth of Drumlean]

I hesitate to disagree with my noble friend; I will sit down having done so. If I may say so, his position is ridiculous. We have spent the whole day arguing that it is necessary to have the Bill so that the people have the assurance that the promise will be carried forward. If you amend the Bill to say that it is consultative, and we will decide what to do then, you have blown up the whole thing—which may be my noble friend’s intention, I do not know. I certainly think that the Bill ought to be, as it states, an opportunity before 2017 for the British people to have a say, for their say to be implemented and for us to be freed of this wretched debate.

EU: Recent Developments

Lord Higgins Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Higgins]

My Lords, the noble Lord, Lord Kakkar, has raised—entirely appropriately, given the breadth of the Motion before us—a number of extremely important issues. One must hope that in reply the Minister can give him answers to the very specific three points that he has rightly made.

I wish to concentrate on the crisis in the eurozone. It is very unfortunate that our debate on this subject in the Moses Room was diluted by the fact that the Labour Party insisted on bringing in other, related economic issues. It is sad that we have still not had a debate on this specific issue. It reflects the serious problem that we now have in the relationship between the two Houses. Regrettably, the present Government have followed the practice of the previous one in dramatically guillotining debates in the other place, with the result that legislation arrives here in such a condition that it crowds out opportunities for debate on serious issues such as this one or, as has been mentioned, the Arab spring. To a large extent we are carrying the legislative burden, with the number of Committee days far in excess of what is normally accepted. This is not a criticism of the procedure of the other place; it is a criticism of the way in which the Government are dealing with these matters there. I hope that we will tackle the issue as soon as possible, because the balance between the Houses has been distorted.

Many of us in the past pointed out very clearly the dangers of the single currency. These were exacerbated as the eurozone grew ever larger. It is probably true that even my noble friend Lord Tebbit did not realise the extent of the approaching disaster or the problems that we now face. Of course, the failure to deal with them was to a large extent due to the rigorous approach of those who wished to see an ever closer economic and political union. A little while ago, Mrs Merkel said that if the eurozone broke up it would lead to the end of the European Union. This is simply not the case. What should stop is the headlong pressure toward closer political union.

The search for a solution to the present problems is hampered by confusion between the debt problem and the exchange rate problem. The two are of course related. The extent of the indebtedness of European countries is to a large extent due to the fact that they found themselves in an environment created by the single currency. However, the solution to the problem cannot be found in dealing with the debt problem alone. We need to deal with that, but it will not solve the underlying problem. We could go through bailouts ad nauseam until either German generosity runs out or the streets of Athens become even more dangerous, but we will not solve the problem through bailouts.

The only answer to the Greek situation is for Greece to leave the euro and adjust its exchange rate. However, as was pointed out in an earlier speech, it is not just a question of Greece; there are further problems because countries in the single currency have given up the main means of adjusting for differential movements in costs and prices. Therefore, it is likely that over time other countries such as Portugal, Spain and Italy will find themselves in the same situation. The reality is that the eurozone is too diverse in its present composition to accommodate a single currency. This was not the case when it was just Germany, France, Benelux and so on; but it is now too large an area for these variations in costs and prices over time to remain unadjusted. We may find that eventually a solution is found by an adjustment of the exchange rate. Certainly it would benefit Greece, as well as the eurozone as a whole, if it were to leave.

We were told that the creation of the single currency would lead to convergence. In fact, that has not been the case. European countries have diverged. We were told that it would contribute to peaceful circumstances in Europe, whereas we now find bigger tensions between certain European countries than have existed probably at any time since World War II. There are difficulties here. The other problem, to which my noble friend Lord Lamont referred, is that we are simply seeing a rerun of the stability and growth pact, but with no mention of any growth. This involves a very significant loss of national sovereignty, which one has seen particularly in the Greek situation. Control over tax and spending has always been the hallmark of national sovereignty. Giving up that control—this is currently very apparent with some countries in the eurozone—inevitably leads to that country being undermined. Having said that, obviously a degree of fiscal co-ordination is necessary.

I have a couple of further points. One problem with the debt has been to get a degree of agreement with private creditors. It is constantly being said that there will be a deal and that the creditors will take a so-called haircut. It is understandable that they have been reluctant to do so because they do not know whether, if they write down the debt, there will be a subsequent devaluation that will further reduce the value of that debt. Until they know where they are—there is a high degree of uncertainty about exchange rates—they will be unlikely to be very enthusiastic about agreeing to a debt reduction.

My final point is that if a country—it is likely to be Greece—leaves the eurozone, it will not be a simple matter. My noble friend Lord Wolfson offered a prize of £250,000 for a paper explaining how it could be carried out. Some newspaper commentators think that it is just a question of printing more notes and coins. One certainly hopes that if the thing happens there will not be chaos for a very long time while they get around to printing the notes and coins. It would not be a good idea to go back to the drachma; it would be more appropriate to think up a new name for a euro-replacement currency.

It would be very dangerous if contingency plans were not made well in advance to deal with the problem. This is a matter for the British Government as much as for anyone else, because we will not be able to avoid the consequences, particularly for the banking system, which could be very serious. Therefore, I hope that Her Majesty's Government will be very active in making contingency plans to deal with these matters. It is not just a question of having a new currency established. There will be great dangers of flight from the existing currency in certain countries; there will be a great need for exchange controls, at any rate on a temporary basis; and one must have some doubts about the ability of the Governments concerned to direct a suitable system of exchange controls. These are all very serious matters and one must hope that the Government will take a very proactive line in providing a contingency plan to deal with them. However, this will only be done by dealing with exchange rates and not with the debt alone.

European Union Bill

Lord Higgins Excerpts

Tuesday 22nd March 2011 Lords Chamber

[Lord Howell of Guildford]

Yes, I will be able to help the noble Lord on the meaning of “in principle”. He is quite right to spot that those words indicate that there are exceptions. I will explain exactly what those exceptions are. Briefly, they cover treaty changes that might not pass the significance test, which I shall explain later and help him on, and treaty changes that do not affect this country at all. I shall come to those in great detail and will be able to help him in a way that will satisfy him completely.

Another of the committee’s conclusions, consistent with its earlier inquiry, is that referendums in the United Kingdom should be reserved for matters of significant constitutional importance and that some of the matters subject to a referendum under the Bill could lead to numerous and costly referendums on small issues. I am not sure that I agree with that. First, the coalition Government have made a clear commitment that we will not agree to any treaty changes that transfer power or competence from the UK to the EU for the duration of this Parliament. Secondly, and more importantly, any treaty change is very unlikely to focus on single or individual transfers of power, for the simple reason that it must take into account the arduousness of ratifying treaty changes across all member states, of which we have vivid experience. The Lisbon treaty took 23 months to ratify in all 27 states and we expect a similarly lengthy process with the current treaty change on the eurozone’s stability mechanism and with future accession treaties. We do not believe that there is an appetite in the EU or in the member states for a further round of treaty changes that would transfer further powers, particularly on individual issues. That is our view on the matter.

Clauses 2 to 5 make provision for the process to be undertaken in the event of future treaty changes. I want to explain this and many other aspects in some detail and I hope that your Lordships will be patient with me. Clauses 2 and 3 are broadly similar but concern treaty changes agreed under the ordinary revision procedure and the simplified revision procedure respectively. Both clauses provide that all future treaty changes require parliamentary approval by Act of Parliament. At present, changes under the simplified procedure require only a positive resolution of both Houses of Parliament. Therefore, the first change that the Bill introduces straightaway is an enhancement of control in the case of so-called Article 48(6) decisions. Both clauses also provide that, where a treaty change of either type would also transfer power or competence from the United Kingdom to the EU, such a change should also be approved by the British people in a referendum. There is one exception to this—the so-called “significance condition” in Clause 3, which, as I indicated, I shall come to in detail in a moment.

Clause 4 sets out the detailed criteria that the Government of the day would have to apply to determine whether a transfer of competence or power would occur under a future treaty change. The Government make no apology for the complexity of the provisions. We want to make it clear for Parliament, the British people and, indeed, our EU partners and the EU as a whole where a referendum would be required under the Bill. We feel that a short, vague statement would leave any future decisions more open to challenge in Parliament and the courts. It would do little to increase the transparency of decision-making in the EU, which forms a fundamental part of the disconnection of the British people to these decisions—a matter about which the whole House is rightly concerned.

Whereas the principle of competence is fairly well defined in the EU treaties, the principle of power is not. Therefore, for the purposes of this legislation, I shall set out what we mean by a transfer of power. First, it means the giving up of a UK veto in a significant area of policy, because that would mean that the UK would lose the ability to block a future measure under that treaty article. Some of the vetoes in the treaties are in areas that all sides of the House consider important and sensitive—for example, foreign policy, tax, justice and home affairs. It is, and must be, right that any treaty change that would transfer from unanimity to qualified majority voting the way in which decisions were taken in those key areas of policy should require the consent of the British people before the Government could agree to such a change. These are set out in Schedule 1 to the Bill. We do not propose to hold a referendum over more minor or technical vetoes, such as any future agreement to change the number of representatives in the Committee of the Regions. The Government have therefore taken a balanced approach in deciding which vetoes should be subject to a referendum.

The second way in which power, which we are now talking about, would be transferred would be by granting an EU institution or body, through treaty change, a new ability to impose further obligations or sanctions on the UK or on individuals and organisations within the UK. It is this particular point on which, in the case of the simplified revision procedure, a Minister can determine that a future treaty may not be significant enough to require a referendum and instead rely on the requirement for parliamentary approval by Act. This is what is known in Clause 3 as the significance condition. We have provided for this test as we obviously recognise the need to be able to distinguish between important and minor changes. Therefore, we are providing a workable, sustainable solution to prevent referendums from being held on matters that we could not justify to the British public as having such significance as to merit a referendum—for instance, on giving an EU institution the power to require special statistics from a UK body or something of that nature.

[Lord Higgins]

I am sorry to interrupt my noble friend. We have recently had a great many debates on referendums and, for the first time ever, we have created a precedent whereby a referendum—that in relation to the AV Bill—will be mandatory. All previous referendums have been advisory, rather than mandatory. We also had a long debate on what the turnout needed to be, and so on. Could my noble friend tell us, in regard to this Bill, whether it is proposed that the referendum should be mandatory or advisory?

[Lord Howell of Guildford]

These referendums are mandatory. The Bill requires that these transfers of competence away from this nation to the European Union in these very important and fundamental areas cannot take place without the approval of a referendum. I hope that that clarifies the matter.