Social Cohesion and Community during Periods of Change

Lord Leigh of Hurley Excerpts

Friday 6th December 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I congratulate the most reverend Primate the Archbishop of York on selecting this topic for debate, and thank him for bringing faith into the debate, which I will talk about more in a minute. I also congratulate my noble friend Lord Sharma on his excellent first contribution.

I care greatly about this issue. As my entry in the register of interests discloses, I serve on a number of organisations in the Jewish community and related outreach organisations. Social cohesion is under real threat. A survey published in October this year by the Institute for Jewish Policy Research, where I serve as president, demonstrates that more than one-third of British Jews have experienced anti-Semitic harassment, or worse, in the last year—a much higher proportion than the figures issued by the Home Office, which show only the incidents that are reported. Even this morning, at 4 am, the Adass Israel synagogue in Melbourne was firebombed while worshippers were inside. I am sure that your Lordships will join me in sending our best wishes to that community at this difficult time.

For decades, the Jewish community in this country has been the example par excellence of how to be part of a wider society and contribute to it while simultaneously maintaining its own sense of religious and Jewish identity. We can look at the contribution made to arts, law, business, philanthropy, science and, indeed, your Lordships’ House. But that is showing clear signs of change since 7 October. A study published by the Institute for Jewish Policy Research in October contains several indicators of Jews closing in on themselves, hiding their Jewish identity in public for fear of hostility, feeling uncertain or uncomfortable among non-Jewish friends, gravitating towards Jewish friends and retreating into the Jewish community spaces, where they feel safer, in search of solace and solidarity.

As president of a synagogue, I am always pleased to see more regular worshippers, but it saddens me that this increase is due to fear and concern for our presence. None of these is a good indication for social cohesion in Britain, and they all reflect a sense that it is becoming harder to feel comfortable or welcome as a religious or ethnic minority in this country. It has now reached the point where Jewish families are planning to leave the UK, as they no longer regard it as a safe place to live and bring up their families. I have spoken to many who have decided it is now time to leave.

Just a few weeks ago, the co-founder of the Outset Contemporary Art Fund, Mrs Candida Gertler, OBE, resigned from her role in the arts world because of vile, anti-Semitic sentiments, which she said seek “to marginalise and dehumanise” Jewish people. Worse, she pointed out that the institutions in the arts sector have failed to confront hate and

“allow prejudice to take root”.

These are not isolated incidents. The hate in the arts and literary worlds, which are now seeking to ban people who they call Zionists, sends a chilling effect down the spines of all Jewish subjects in the UK. We are sponsors of the Jewish film festival, which struggled to find cinemas to screen Jewish films. The cinemas provided all sorts of excuses as to why they could not do so. Even today, the Exeter International Dance Film Festival refused to screen a film about the Nova music festival in southern Israel.

Yesterday, Amnesty International, a somewhat flawed organisation, came up with a baseless report which has been described as a

“blood libel against the Jewish state”,

which will, of course, incite others to blame UK Jews for these grievances, as has been the case at Goldsmiths, where students forced the somewhat spineless college to remove the names of Jewish donors who had given in good faith to that college. We have seen anti-Semitism on campus, online, in workplaces and in the NHS. It has even been shown to Jewish pupils on the way to school, three of whom were glassed in Stamford Hill, with one girl receiving life-changing facial injuries.

CST found that, in the majority of anti-Semitic incidents in the first half of 2024, the ethnicity of the offender was provided and involved non-white offenders. A pattern is developing and there is a change in the demography of the offenders. It is clear that criticisms of the State of Israel’s actions, which are motivated by self-defence after 7 October, morph into hostility against UK Jews.

That includes actions by the UK Government, who, although having helpfully clarified that there is no genocide in Gaza, confirmed by the fact that there is no direct targeting of innocent civilians, then took the purely political action of banning arms sales and, unlike France, enforcing the ICC’s morally corrupt decision, which they must have known would lead to an increase in anti-Semitism and fuel such things as the marches in London, which simply terrify the Jewish community. Some 66% of British Jews avoid going to city centres when demonstrations happen, for fear of their safety. One such march, organised by the Palestine Solidarity Campaign, took place last month past my synagogue, Westminster Synagogue in central London. It stopped for seven minutes outside our synagogue, shouting the genocidal, inciting slogan, “From the river to the sea”.

What can be done? Outreach instances such as the brave visit to Preston mosque last month by Manchester’s Jewish leaders, for which all parties should be congratulated, was promptly condemned by 5Pillars. A protest at Birmingham University has called for “Zionists off our campus”. We know what they mean. So, will the Government tie their approach to extremism in with their approach to social cohesion? Extremism is not only violent behaviour, and the continuing crossing of red lines is a threat not just to the Jewish community but to national security.

The Minister can be of great assistance. I call on him, as I think the noble Baroness, Lady Helic, did, to convene the moderates—people who are like-minded and feel they can work together and do something together. I have worked with the marvellous Council of Christians and Jews. There is not a council of Jews and Muslims; I do not know if there is a council of Christians and Muslims. Such initiatives need a little help, and perhaps the Government might think further about how to be the catalyst for dialogue and constructive conversations.

We need to ask ourselves what kind of country we want to live in today. Do we want to live in one that loosely and brazenly condemns minorities as guilty simply by virtue of their religious or ethnic identity, or for their profound and legitimate feelings of attachment to a country elsewhere, as well as to Britain; one that allows a complex conflict in another part of the world to spill over on to the streets of this country in ways that make some of our citizens fear for their safety and withdraw into their siloed communities; one that tolerates speech and behaviour that is hurtful, offensive or downright racist, but is too scared to call it out for fear of a backlash?

This country has long been known for its decency, tolerance and openness. However, the experience of the Jewish community over the past year suggests that it is rapidly losing that reputation. It has often been observed that a rise in anti-Semitism is like the proverbial canary in the mine: a sign of increasing social tension or even collapse. We need the Government to have a plan and to enact it. Speeches are fine, but it is actions which are now needed. We are seeing a rise in anti-Semitism here in Britain today. The data is extremely clear, and the implications should be too.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Tuesday 7th May 2024 Lords Chamber

Debate on Amendment 20 resumed.

[Lord Leigh of Hurley (Con)]

My Lords, the noble Lords, Lord Warner and Lord Oates, and others want to remove reference to Israel. The question has been raised as to why one country should be singled out. The noble Lord, Lord Warner, drew attention to the remarks of the noble Lord, Lord Cameron of Chipping Norton. He did not mention the noble Lord’s other remarks—that part of his deal to recognise Palestine as a state would be that Hamas was expelled and, of course, the release of all hostages, which is an integral part of the jigsaw.

Others have commented that the Bill, which I support, does nothing about anti-Semitism. That is a minority view within the Jewish community. Jews for Justice for Palestinians, which was referenced, has an extremely small minority view. The vast majority of the Jewish population in the UK is represented by the Board of Deputies of British Jews and the Jewish Leadership Council, on which I serve as vice-president. They are both in favour of such a Bill. They would not be in favour of this Bill if they had any worries that it would lead to an increase in anti-Semitism.

Likewise, with reference to the impact on the West Bank, the noble Baroness, Lady Noakes, was asked whether she goes to the West Bank much. I have been to the West Bank. I chair a charity called the Jerusalem Foundation. One of the projects we are doing is building a very large sports centre in east Jerusalem. It includes a swimming pool, and it will be run by the locals for the benefit of the local community. It would be a great shame if this sports centre could not be built by a British contractor in whole or part because of fear of sanctions and thus its inability to win local council contracts.

It is obvious why Israel has to be protected by this Bill: precisely because it is the one country singled out for unparalleled abuse, criticism, misinformation and, sadly, hate. Which other country has people on the streets of the UK calling for its complete destruction? A country controlled by autocrats, or denying the rights of women, gays, minorities or religious groups? No. In fact, it is only one country—the one that achieves the reverse of all that.

This pattern has happened since Israel’s creation, facilitated in 1948 by a body—the United Nations—that has subsequently done all it can to demonise it. So why should special protection be given to Israel as Clause 3(7) suggests? I can answer that if noble Lords can explain to me why, since 2003, the UN has issued 232 resolutions in respect of Israel. Some 40% of all resolutions issued by the UN in that period have been on Israel, six times that of the second-placed country, Sudan. In 2023 alone, the UN General Assembly brought 15 resolutions against Israel and only seven on the multitude of conflicts around the world. Furthermore, the UN Human Rights Council has a dedicated, permanent line item—item 7—on Israel, specifically and alone. It has not done this with any other member state.

I argue that special prejudice and discrimination deserve special protection. The UN has had nine meetings of the Security Council to discuss the situation in Gaza, but not one about the hostages. If such a once-distinguished—now, sadly, widely regarded as discredited—organisation can show such bias against Israel, and only Israel, we need to take steps to ensure that this cancer of thought does not spread to UK institutions. Many agitators have run out of causes to address with their ire and prejudice, so their polemics are focused on a country they believe they can, by means fair or foul, destroy by a series of lies and hate- filled allegations.

I take the noble Lord, Lord Collins, at his word and believe him to be keen to find a way to avoid BDS. He is an honourable person and he says what he means. So I am disappointed that those on the Labour Front Bench support this amendment. I thought that they, and indeed all noble Lords, would understand that stopping BDS is right, fair and just, as are steps to protect the State of Israel from abuse by organisations themselves funded by the fair-minded British taxpayer.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to offer Green support for Amendment 20 while stressing our continued opposition to the entire Bill. The argument for Amendment 20—that Clause 3(7) not be in the Bill—has already been powerfully made, but I will make three brief points. The first is about international law. This point has been powerfully made by many noble Lords already, and you do not have to listen to me; you can listen to Alicia Kearns MP, chair of the Foreign Affairs Select Committee, who pointed out that, as the Bill is written, it constitutes a departure from British foreign policy that

“puts the UK in breach of our commitments under UN Security Council resolution 2334”.—[Official Report, Commons, 3/7/23; col. 604.]

My second point picks up a point raised by the noble Lord, Lord Oates. We have seen changes, over the months, in the British Government’s rhetoric at least, if not in their policy, when it comes to arms sales to the Israeli state, which will become only more legally, diplomatically and politically pressing. But we are not here talking about policy. We are talking about law: something on the statute book that remains until the law is changed. The convention, of course, is that no Parliament binds its successors, but we know how time-consuming and energy-consuming it is to change past errors as circumstances change.

The third point I want to make is one that no one else has made, but I am afraid that I have to, which is to refer to what is happening as we speak. Hundreds of thousands of people are in desperate fear with nowhere left to run, nowhere to seek safety. The Israeli state has seized the Rafah border crossing. A couple of figures haunt me. One of them is, of course, the death toll, which is approaching 35,000 in Gaza, but another figure I saw last week is that 5% of people in Gaza have been killed or injured. That is a deeply shocking figure.

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[Baroness Altmann (Con)]

May I, with all due respect, clarify a few points for the noble Baroness? First, I understand that the current Israeli Government are not in favour, and I have said myself that I am not in favour of the settlements. I am in favour of a two-state solution, and always have been. Past Israeli Governments have offered a two-state solution and offered an exchange of land for peace time and again. I am not sure why the noble Baroness is shaking her head. Israel withdrew from Gaza itself without even an offer of peace from the other side, and this is where we have ended up.

I have great respect for the noble Baroness, and one can always hear two sides to any argument, but there are a large number of Palestinians who welcome the employment they have in those territories. There are others who may have a different view, but in the end, the only solution, as far as I am concerned, must be a two-state solution. The noble Baroness is ignoring the fact that the other side, whether it is the Palestinian Authority or Hamas, is intent on wiping Israel off the map. It is not interested in a two-state solution. Israel would offer, and has offered, a two-state solution. As I say, I have spoken to people on both sides, and I hope the noble Baroness might be able to meet some of the others I have met, who have a different view, clearly, from the ones she has spoken to.

[Lord Leigh of Hurley (Con)]

Before the noble Baroness sits down, I am sure she will agree with me that violence by settlers or Palestinians has to be condemned without reservation, and the full force of the law used against such perpetrators.

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[Baroness Noakes (Con)]

My Lords, my noble friend Lord Willetts and others have queried whether there is any evidence of a problem. It may be true that there is not much evidence of actual BDS activities by universities to date, but it is certainly true that there is a problem of anti-Semitism on campuses. It may also be true, as the noble Lord, Lord Mann, said, that it is less acute than in the United States—most things are less acute here than in the United States—but I do not think that means we should ignore it. It is clear that the accelerating protests on campuses are having a deleterious effect on Jewish students on campuses. Indeed, the Union of Jewish Students said only last week:

“Jewish students are angry, they are tired, and they are hurt by the continuous torrent of antisemitic hatred on campus since October 7th”.


I am not sure that gives the Union of Jewish Students a veto on whether the Bill should go through, but it indicates that there is still a very real problem.

The current round of student protests—the encampments and related demands—do seem, as I have seen reported, to include BDS demands on the universities. As far as I am aware, none of the universities has yet succumbed and changed its policies on BDS, but at least one has given in to some other demands, such as renaming buildings and changing some other organisational arrangements, and we cannot be sure what universities will do in the longer run. The Bill would close the option of them ever implementing BDS policies and would therefore be one small step to closing that route off and helping to create an environment for Jewish students, who would be even more oppressed if the universities publicly announced BDS policies against them. I do not think it is a very big item, but I do not agree with the noble Lord, Lord Mann, that the Bill does nothing. I think it does something towards closing off an avenue that universities might be tempted to go down in order to see off the undoubted nuisance of all these student protests.

I would just like to briefly say something about the ONS as well. The ONS reviews all sets of bodies that are on the borderline between the public and private sectors at regular intervals, and it does it in a careful way in accordance with international definitions. These are all careful considerations. It is clear that universities are in a grey area: they are public authorities for the Human Rights Act, are included in the Freedom of Information Act and were included in the Procurement Act that we considered last year. They are already subject to a lot of the public sector laws, and nothing is going to change that. I agree with my noble friend Lord Willetts that this Bill will not be the straw that breaks the camel’s back, but it is always legitimate to ask on which side of the line these bodies that exist half in and half out fall.

Just being classified by the ONS does not of itself lead to other consequences. There may well be further considerations down the line, but we certainly cannot stop the ONS doing the job that it is set up to do, which is to consider classifications in accordance with international guidelines,

[Lord Leigh of Hurley (Con)]

My Lords, it seems to me to be fundamental to this Bill that universities and other relevant bodies are included. We are not talking about individual academics having their right to free speech being affected at all. We are talking about institutional behaviour. Yes, as the noble Lord, Lord Willetts, has pointed out, what happens in universities really matters. I also went on a trade trip to China with the vice-chancellors. I remember, because they were the ones sitting in business class. They are a very important part of the fabric of our society—

[Lord Willetts (Con)]

You were in first class—

[Lord Leigh of Hurley (Con)]

Possibly first class. No one can forget that academia is not immune to bigotry. Let us recall that Heidelberg University in Germany was no less prestigious than any UK university in its day. In the 1920s, it was the centre of liberal thinking. A decade later, a mob of Heidelberg students burned Jewish and other so-called “corrupt” books in the Universitätsplatz. Jewish students and Jewish academics were banned, its faculty developed pseudo-academic fields such as race theory, eugenics and forced euthanasia. Heidelberg was led by administrators who lacked moral leadership—and we all know how this ended.

It cannot be right that students at universities around the world feel unprotected and threatened. Most ironically, only a few years ago, children of Jewish friends of mine were telling their parents they did not feel comfortable going to a UK university, so they applied to go to one in the United States. The appalling lack of leadership in some US universities has quite rightly led to the removal of their leadership in some famous cases. We are all watching Columbia University, apparently led by the noble Baroness, Lady Shafik, most carefully to see whether it can exhibit proper leadership against the vile intimidation and abuse.

In the UK, we have seen many universities fail to take proper action. I will cite some alarming incidents indicative of this unsafe environment. For example, in Leeds there was the attack on a Jewish chaplain, a rabbi, the sit-in at the Parkinson building, the daubing of the Jewish student centre and the encampment outside of the student union. Apart from the absurdity of the protesters protesting against an occupation by occupying university buildings, the demonstrations themselves are misplaced—and, as at other universities, such as King’s College, Cambridge, are causing huge distress to Jewish students, as has been noted.

Despite very sterling work by the noble Lord, Lord Mann, it is endemic. In Birmingham, students called for “Zionists off our campus”. We know what they mean, “No Jews here”—as they did in Heidelberg. A while ago, in December 2021, City University students, among others, demanded a BDS ban. It was stopped only because the Charity Commission ruled that this was in breach of its charitable status. Interestingly, the leader of the call for BDS there, Shaima Dallali, was subsequently elected president of the National Union of Students before she was suspended for anti-Semitism. The connection between the call for BDS and anti-Semitism is staring us in the face

[Lord Davies of Brixton (Lab)]

Today, it has been reported that she has been compensated for unfair dismissal—so I do not think the point quite works as the noble Lord intends.

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[Lord Leigh of Hurley (Con)]

I thank the noble Lord for telling us that. I had not heard that and I will check it out. None the less, she was dismissed for anti-Semitic behaviour, so it is suggested. We know what lies behind much of BDS. With respect to the noble Lord, Lord Mann, and my noble friend Lord Johnson, the BDS movement, as he said, has taken credit and claimed it scored a victory in respect of divestments by Manchester and procurement by King’s College Cambridge and Southampton. It is true that the UJS’s previous president raised objections to the Bill, but that was before 7 October and before the heat turned up so dramatically. It certainly voted unanimously against BDS.

Most recently, we have seen student demands that Goldsmiths College rename a hall after a Palestinian, give scholarships to Palestinian students and participate in BDS. It looks like the college has agreed to all these demands without carefully considering the impact this might have—again showing absolute failure of leadership. Where does this lead? I am told today by people at Goldsmiths that there is now a movement to prohibit students entering the library unless they sign up to supporting BDS.

In my opinion, this Bill will help those in leadership positions in the above examples and at other universities. It will help them stand up to these outrageous demands by making it clear that intimidation is no longer allowed, and they have no choice but to refuse to enact BDS because the law now demands this. Universities cannot hide from their responsibilities. They should of course be focusing on their core public duty of providing quality higher education and undertaking excellent research while protecting those on campus who are currently threatened by the proponents of BDS with intimidatory anti-Semitic behaviour.

[Lord Shipley (LD)]

My Lords, the Minister will have listened very carefully and I hope concluded that she has heard several notable contributions on this group, to which the only conclusion, in my view, is that this amendment should be accepted by the Government. I listened very carefully to the noble Baroness, Lady Noakes, and the noble Lord, Lord Leigh of Hurley. In the case of the noble Baroness, I think her argument was that the problem of anti-Semitism on campus is too high, and one would agree. The problem I have with her conclusion is that this Bill would actually make it worse. It would make community cohesion more difficult. It would be worse.

The noble Lord, Lord Leigh of Hurley, talked about institutional behaviour and said that the institutional behaviour in universities would be improved by this Bill. He gave a number of examples, and one has to take those seriously and look at them. I will just say that it is a very dangerous policy to generalise from the particular and to say that across all our universities and higher education institutions, that pattern of behaviour is being followed, because I do not actually believe it is true.

I take very seriously what the noble Lord, Lord Mann, said. I think he made an extremely important contribution. He basically said that the Bill does nothing in the context of universities. There has been no successful BDS campaign, he said. The Union of Jewish Students does not want the Bill, I recall him saying.

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[Baroness Chapman of Darlington (Lab)]

My Lords, this has been a helpful discussion. I am very grateful to the noble Lord, Lord Willetts, for tabling his amendment, and I was very glad to be able to add my name on behalf of these Benches. There seem to be two parts to this case. One is that this simply will not work. The other is that universities are not public bodies and that this in some way is another penny on the scale towards making them public bodies, which is something I think that any us who are in any way involved in universities would seek to resist at every opportunity. I should declare my interest as chancellor of the University of Teesside.

When you have two Tory former Universities Ministers and the Government’s anti-Semitism adviser saying in the strongest terms that they fundamentally disagree with this legislation’s approach to this issue and support the amendment moved by the noble Lord, Lord Willetts, it is a wise Minister who reflects on that and perhaps takes it away and considers it a little bit further.

I can see why, when the Government conceived this Bill, they included universities because, as the noble Lord, Lord Leigh, quite rightly reminded us, there is a problem on some campuses for Jewish students and Jewish members of staff, and the atmosphere has deteriorated since October 7, in particular. There should be nobody in this Committee or anywhere else who dismisses that and thinks that there is no problem that we ought to set our minds to try to resolve because it is not right that in the name of free speech or anything else we allow that to continue. That must be tackled. My point to the noble Lord, Lord Leigh, is that the calls that he mentioned, such as about the naming of lecture theatres and the awarding of scholarships to Palestinian students, are made by those doing the protests, the sit-ins and all the other activities that he talked about. He mentioned Goldsmiths specifically. I have a copy of the agreement that was reached between the senior management team at Goldsmiths and the students’ organisation that I think is called Goldsmiths for Palestine. It is seven items long. Many things have been discussed, but only one section looks in any way at investment, divestment or boycotts. The rest are things that would never be within the scope of the Bill.

I am afraid that when the noble Lord, Lord Mann, says that the Bill will not do anything about these protests, he is probably right. I have not spent a lot of my life sitting on protests or going on marches, but I have done a bit, and the fact that what you are asking for, or demanding, is unlikely to happen—or is perhaps even legally impossible—at the point at which you are making the demand does nothing to stop you making it. That is the way protest works—we can like it or not; it is just a fact of life.

Many of the demands being made are nothing to do with BDS any more. BDS has been around for a very long time, as we all know, but taking away universities’ ability to succumb to these campaigns—not that any of them have—will do nothing to improve safety on campuses; it could make things worse. The noble Lord, Lord Leigh, is shaking his head. I hope that he will recognise that I am being genuine about this; I want to see this resolved as much as he does. However, I do not think that telling protesters that we are preventing universities taking the decision they wish them to take will mean that they stop making their demands, or that the temperature goes down. Protesters feel that they are right and are acting in the interests of humanity. We can agree or disagree on how they do that and the language and methods they use. We can have a discussion about that, and perhaps we should, but the Bill will not improve the situation. As the noble Lord, Lord Mann, and others have said, there is a risk that it could make it worse. I do not want us to take another step down a path that could end up making this worse when there is still an opportunity to work together and find an alternative means of making improvements that we all wish to see.

I do not think that the theory that the Government have put forward—that if you remove a university’s ability to adopt BDS, the protests somehow diminish, and that life becomes more tolerable and safer—is realistic. That is my main reason for wanting universities to be removed from the Bill.

I also support the arguments made by the noble Lords, Lord Willetts and Lord Johnson, about the independence of universities; they are very important. Our universities are feeling somewhat beleaguered and got at by this Government. There does not seem to be a lot of understanding or support, and they would argue that many of the challenges they are now facing have been made worse by the actions of this Government and the attitude that they seem to take towards universities—wanting to plant them front and centre of a culture war. Our universities are wonderful institutions. They bring huge investment into our country. I am sure that we are all immensely proud of them. They employ a great number of people. They bring jobs and prosperity to parts of the country that desperately need them. They are inspiring and educating the next generation of engineers, pharmacists and doctors, and we thank them for all that they do.

I say to the Minister that to go further down this path, without pause, would be a mistake. A far better approach to tackling this problem, which we all accept needs to be addressed, is to work alongside universities —my party would be part of this if that would be helpful—to work out the most effective way of dealing with this. The Bill will not work, and there is a risk that it could make the situation worse for Jewish students.

[Lord Leigh of Hurley (Con)]

I heard what the noble Baroness said very clearly, but does she agree that Goldsmiths has now agreed to take on a policy of BDS, and that if the Bill had passed, it would not have been able to succumb to intimidatory pressure so to do?

[Baroness Chapman of Darlington (Lab)]

I have the agreement that Goldsmiths made in front of me, and the noble Lord, Lord Leigh, is right. One of the six issues concerns BDS, but I suggest that he read the wording very carefully. It says that the senior management team will raise concerns with the college’s ethical investment fund manager; it is not saying that it will enact any divestment at this stage. I read the agreement very carefully, not least because I thought that it may have made a decision that undermined my case this evening. I would be very happy to meet with the noble Lord and discuss this further, because it leaves the door open, perhaps, to Goldsmiths taking the decisions that he fears it might. It does not look as if it has done so far, but even if it does not and were prevented from even discussing that, there would still be the other six elements that were driving the campaigns, the sit-ins and the activities on campus which were so problematic.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

[Lord Hain (Lab)]

Since this has been raised—and I am not sure who I am intervening on—that was a long time ago. I do not withdraw the fact that there are many features of the State of Israel of which I am critical, not least in its dual citizenship law, where certain citizens are regarded as full citizens and others are not. That is a racist thing to be practising—but the noble Baroness suggested that I was questioning the right of Israel to exist. I have not done that, and I do not believe that, and she should not suggest it.

[Lord Leigh of Hurley (Con)]

My Lords, to bring us back to Amendment 19, I thought it was a probing amendment—but it seems that perhaps it is a serious one, given the endorsements of the noble Baroness, Lady Jones, and others, so let us think about it. I am querying it only because, if it comes back, it might allow the noble Lord, Lord Collins, to refine and consider it further.

I would add to the questions from the noble Lord, Lord Wolfson. For example, let us assume that there is an egregious gay rights violation in some country, and a local council gets very agitated about it, responds to pressure and announces that it will no longer do business with, or procure works or services from, this country, because it abuses gay rights. Under this amendment, it would then have to apply that to every country that does not fully respect gay rights, so if it wanted to buy product from the Middle East then the only place it could go to would be Israel.

[Lord Shipley (LD)]

My Lords, this has been an extremely helpful debate. As the noble Lord, Lord Mann, identified, there is a conundrum in the Bill. The Minister may wish to reflect on the discussion that has taken place. She said after the first group that she valued the expertise of this House and would go away and think about how the Government would respond. I took that to mean that they may make changes on Report, which is theoretically likely to come in about three weeks’ time, but may take longer.

I have concluded, having listened to so many opinions—I am not a signatory to Amendments 19 or 48, though I have huge sympathy with them—from my noble friend Lord Purvis of Tweed, the noble Lord, Lord Collins, the noble Baroness, Lady Jones, and others, that it would be useful if the Minister would consider trying to bring all those opinions together into one place to talk further. That is the only way in which progress on this Bill will be made.

I think that I heard the noble Baroness, Lady Noakes, say that you cannot have local authorities setting foreign policy. I do not think local authorities want to do so, are doing so or have any ambition to do so. However, they are concerned about human rights and doing the right thing in their procurement and investment policies. Nevertheless, the issue must be discussed.

I took Amendment 19 to mean simply that a statement of policy relating to human rights would need to be considered by those seeking procurement or making investments, and that the statement may not single out individual nations and would therefore have to be applied consistently, as has been confirmed. However, it would have to be in accordance with guidance published by the Secretary of State. I find the concerns we have been hearing against Amendment 19 unfounded. The only solution I can see to this is that the offer made at the outset by the noble Lord, Lord Collins, should be taken up by the Minister. It would be really helpful if that could happen, because otherwise the passage of the Bill on Report will get more and more difficult.

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[Lord Collins of Highbury (Lab)]

No, the noble Lord is not right. That is not what I said. We have guidance about specific investment in the Occupied Territories. That is what the Government issue now. Why is that so confusing?

[Lord Leigh of Hurley (Con)]

What, then, is the effect of proposed new subsection 4B(b) if not a blanket ban?

[Lord Collins of Highbury (Lab)]

Do you mean “must have regard to”?

[Lord Leigh of Hurley (Con)]

Proposed new subsection 4B(b).

[Lord Collins of Highbury (Lab)]

We currently have guidance on human rights and investment decisions. On other groups of amendments we will discuss the whole question of environmental, social and governance issues. When a public body is taking into account investment decisions, as a private company would, it takes into account those sorts of policies. We will come on to pension schemes in a later group. The problem we have at the moment is that this debate is on BDS but we are actually talking about ethical investment policies. No one is concerned about those issues when we have general debates about procurement and ethical policy. This comes down to specific targeting campaigns that are not to do with human rights.

I strongly defend the right of Israel to exist. I strongly defend the right of Israel to defend itself. Those two things go together. If a campaign of BDS is saying that Israel occupied territories in 1948—many of these campaigns talk not about 1973 but about 1948—I do not agree with that. Israel exists and has a mandate to exist. We must respect that, and I strongly believe in it. But when we come to human rights and investment policy decisions, the Government are more than capable of giving guidance on that, because they do so at the moment through the UN guiding principles, the Modern Slavery Act and all the other things that we have done. The Procurement Act even has paragraphs in it as well. So it is not impossible to have the sort of guidance that we are advocating in this amendment.

[Lord Leigh of Hurley (Con)]

I simply say that the noble Lord has criticised the wording and language of the Bill quite specifically. If this amendment is to be presented at a later stage, proposed new subsection 4B(b) does not work because it is a blanket ban.

[Lord Collins of Highbury (Lab)]

I am more than happy to discuss the wording of this amendment and this proposal. We are not advocating blanket bans. There must be a reason for a ban. The FCDO issues a list of countries that have human rights issues—some, such as North Korea, have very clear issues—but they are not all countries where you would ban engagement or investment, or say, “That’s the end of the road”. An ethical investment policy needs to look at a range of issues—basically, the ESG issues that we will come on to in later groups. I do not want to go through them now.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Committee stage
Wednesday 20th March 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords—

[Lord Verdirame (Non-Afl)]

My Lords, Amendments 3 to 5 are in my name. All the amendments in this group have the same objective, which is to find some ways of mitigating the rather unusual and perhaps slightly sinister language of

“political or moral disapproval of foreign state conduct”—

the language that gives the provision its title. Amendments 1 and 2 seek to achieve that objective by retaining that concept but raising the bar for its application. I agree that this approach may be sensible, and it is one that I encourage the Government to consider very seriously.

My amendments go a little further. I tried to think of ways in which the main provision of the Bill—Clause 1 —could operate without the novel concept of a prohibition on

“being influenced by political or moral disapproval of foreign state conduct”.

I note that this is not an attempt to frustrate the Bill. As the Minister will recall, I spoke in support of the Bill at Second Reading and I support the Government’s intentions. I am suggesting this different way forward because I am not really persuaded that the policy objectives require us to introduce this concept in our legislation. I urge the Government to test more proportionate and more focused ways to achieve those objectives.

As I understand those objectives, the core purpose is to ensure that public bodies, when taking procurement or investment decisions, do not impose a de facto sanctions regime or a de facto ban or boycott on a foreign state on the basis of their own judgments about a territorial dispute, the status of a foreign territory or the presence of a foreign Government in a particular territory. It seems to me that that objective can be achieved equally effectively by focusing the duty in Clause 1 on not having regard to territorial considerations, rather than in the current formulation of a duty not to be influenced by political or moral disapproval of foreign state conduct. Subject to the exceptions, it would still be the case that if a public authority were to have regard to a territorial consideration, it would probably do so because of disapproval of a moral or political kind of the foreign state’s conduct in the territory. But it would be better if we can get to the result that the Government are pursuing without that language of political or moral disapproval of foreign state conduct.

I accept that a criticism of the proposals may be that if we remove that expression “moral or political disapproval” from Clause 1, as my amendments would do, and focus instead on territorial considerations, the main provision of the Bill would not substantially improve on Section 17 of the Local Government Act 1988.

The Bill would supersede the Local Government Act in the part where it prohibits local authorities from considering non-commercial matters in relation to decisions about public supply or works contracts, including

“the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors”.

This part of Section 17 of the Local Government Act would be omitted by the effect of a separate clause in the Bill. But Clause 1, even with the amendment I propose, would still go further than Section 17. In particular, the duty not to have regard to foreign state conduct in relation to territorial considerations, such as the existence of a territorial dispute, would still be able to capture indirect bans or boycotts, which I understand is the Government’s main concern.

I look forward to what the Government have to say. Again, I stress that my main concern is to encourage them to think of ways of tightening the language in Clause 1, and mitigating or perhaps altogether removing this notion of

“political or moral disapproval of foreign state conduct”.

[Lord Leigh of Hurley (Con)]

My Lords, I apologise for my not being able to speak at Second Reading, although if I had, I would have agreed with my noble friend Lord Wolfson on much of what he had to say. I also apologise for slightly jumping the gun on the noble Lord, Lord Verdirame, particularly as what he said was so interesting and informative.

I just wanted to question Amendment 1. If one is seeking clarity and certainty, introducing the idea of having a

“primary or sole factor in the decision”

seems extremely difficult to prove, whereas showing that the decision was “influenced” is much easier and, as I understand it, a recognised legal term.

[Baroness Noakes (Con)]

My Lords, I have problems with all the amendments in this group. Amendment 1 in the name of the noble Lord, Lord Wallace of Saltaire, would elevate “political or moral disapproval” to be the sole or main factor, and the noble Lord, Lord Palmer of Childs Hill, wants to introduce the concept of materiality into influence. Both these would just create huge loopholes, which would allow public bodies to conceal their boycott activities within other factors. Clever lawyers would find ways of writing papers which support decision-making in, say, local authorities or other bodies affected by the Bill, by reference to a whole load of other factors, to support the claim that they were not “materially” influenced by their disapproval of a foreign state, or that it was not the sole or main factor. I genuinely have a problem with the watering-down implied by Amendments 1 and 2.

I listened very carefully to what the noble Lord, Lord Verdirame, said about his amendments. I understand that he is trying to find a way through by removing the reference to “political or moral disapproval”, but I am not convinced that his amendments work either. In particular, I am not sure what the restriction to “that territory” in his Amendment 4 will do. Let us suppose that the territorial consideration is Ukraine, because it has to relate to a particular foreign territory by virtue of subsection (3). Does that mean that the decision-maker must have no regard to what is happening in Ukraine itself? It seems to me that “that territory” can be related only to the territorial consideration referenced in subsection (2). In that case, it would be Ukraine. If, say, Russia is the foreign state you have a problem with, it seems that you can take account of its activities only in Ukraine. You could not take account of activities that were not in Ukraine—for example, attacks from other places, such as the Black Sea, or whether it takes children from Ukraine back to Russia. If you thought that Russia was the territory—still restricting it to one territory—you have the problem the other way around; you could take activities only in Russia, but not in Ukraine, which is the fundamental problem. That creates an interpretive problem.

While these distinctions might not matter if we are talking about Russia and Ukraine, if you try and then relate it to a council or other public body trying to boycott Israel, and relate that to the complexities of the different parts of the territory around the State of Israel, you may end up finding some odd conclusions on how the reformulation might work in practice. I am aware that the noble Lord, Lord Verdirame, is a very clever lawyer and I am not, and I may well have completely misunderstood how his amendment is intended to work.

--- Later in debate ---

[Baroness Deech (CB)]

My Lords, I did not come prepared with examples about universities—my memory is not that good. However, there have been very many occasions where violence used by anti-Israel students has forced the university to cancel speakers or to charge Israeli and Jewish societies for their own security when an Israeli or a pro-Israeli speaker comes. There are manifold examples of this, and I have dealt with it over the years. If noble Lords do not know about this, they really should.

The comments that have been made by the noble Lords, Lord Mann and Lord Wallace, and the noble Baroness, Lady Fox, take us to the heart of the Bill and why the drafting is so difficult. What the Bill really means to do is clamp down on anti-Semitism in local authorities and universities, but it cannot say so in direct terms; therefore, it goes much more broadly than it needs to, because it is academically dancing around the subject. If I could rip it up and start again, I would have a couple of clauses saying that anti-Israel activity—anti-Zionist activity, if you want to call it that, or anti-Semitic activity—is prohibited in universities and public authorities, because there are no examples of universities and public authorities acting against Australia, to give a fanciful example. Is anyone banning Australian wine because of what happened to the Aborigines? Is anyone banning New Zealand lamb because of the way the Māoris were treated? Is anyone, anywhere, ceasing to use Chinese products? I need hardly go on.

[Lord Leigh of Hurley (Con)]

My Lords, I will add to this element of the debate, if I may, because I think it is relevant. The noble Lord, Lord Willetts, mentioned at Second Reading that he was on the council of Southampton University. I too am an alumnus of Southampton University.

In March 2015, the university procured the services of a speaker to host a debate questioning the right of Israel to exist. I do not know whether that would be caught by the Bill. I would hope that it is, but I suspect that it is not. I wrote to the vice-chancellor at the time—I had been a very modest donor to the university—and asked, going to the point made by the noble Baroness, Lady Deech, whether there had been any conference at Southampton University questioning the right to exist of any other country. He wrote back and said there had not. Eventually, the conference was cancelled—it received reprobation from the Communities Secretary at the time, now my noble friend Lord Pickles —only because the university claimed it could not go ahead on health and safety grounds. But that was a very thin excuse, and for a university to host a conference dedicated to questioning the right of the State of Israel to exist, and to procure the services of people to run it, is, I hope noble Lords would agree, what we should be addressing.

[Lord Johnson of Marylebone (Con)]

My Lords, my noble friend the Minister was asking whether I was reassured. I appreciate that that was largely a rhetorical question, but I have to say I am not yet totally reassured. But I would be if she were able to furnish us with examples of higher education institutions succumbing to pressure from student unions to undertake BDS-style actions in relation to their investment and procurement decisions. That is really important for us as we make progress with the Bill.

Gaza: Humanitarian Situation

Lord Leigh of Hurley Excerpts

Thursday 8th February 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, the current situation in Gaza is of course horrific, but it could be resolved within hours, if Hamas wanted to, by releasing the hostages. Hamas does not want that and should be held liable for the terrible deaths, destruction and injury, as Israel has no choice but to try to protect and rescue its citizens. Gaza was a tragedy before 7 October, when Israel totally withdrew; it could have flourished, like Tel Aviv, but was prevented from so doing by Hamas and Hamas alone.

His Majesty’s Government have called for an independent state of Palestine. Can my noble friend confirm now or in writing: is it to be a democracy or an autocracy? Will a Palestinian state be required to ban Hamas and other terrorists? Will it have a military army, and will this mean the end of the discredited and corrupt UNRWA? Will it allow regular inspections to ensure there are no more tunnels? These difficult questions highlight why now may not be the right time to seek a two-state solution. The objective now must be to focus on peace and security for both Palestinians and Israelis.

House of Lords (Peerage Nominations) Bill [HL]

Lord Leigh of Hurley Excerpts

2nd reading
Friday 18th November 2022 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I congratulate my noble friend Lord Norton of Louth on introducing his Private Member’s Bill. I am afraid that I cannot support it as drafted and would be disappointed to see it pass in its current form. However, let me confirm that I support reform and wholly agree that it is totally unacceptable that people are introduced to this House and then frankly fail to serve it in a way that anyone would regard as reasonable, in terms of time or other contributions.

There is a problem at the moment, but it is not necessarily related to the size of the House. I discovered with the assistance of the Library, to which I am very grateful, that some 75 eligible Members have not spoken since December 2019 and 33 have not voted, with a core of 20 who have neither spoken nor voted in more than two years. This excludes those who are on leave of absence or disqualified, and of course the Lord Speaker. Figures I have obtained from the Library show that average participation in Divisions is only 42% of Members, with some consistency between participation and those taking a party Whip. It is as high as 65% for the Lib Dems, with the Conservatives at 56%. It goes down to 44% for Labour, with the Cross-Benchers achieving only 17% participation in Divisions in total. In arguing for more Cross-Benchers, one needs to understand the percentage of people attending on sitting days, which varies.

Perhaps the Bill goes to the heart of the misunderstanding of this House by so many, particularly those surveyed in polls. We are not meant to be full-time participants, nor were we ever intended to be. Unlike Commons Members, Peers are not full-time, salaried legislators. Only a portion of Peers attend on a full-time basis. One should perhaps focus on the number of Peers who attend and not just those eligible to sit. Restricting the number to the size of the Commons—now confirmed as 650, not 600—is to impose totally arbitrary limits on two very different Chambers with very different roles and duties. Yes, there are too many Peers who are effectively retired or too old to contribute properly, but the Bill does not address those points.

The Bill restricts the Prime Minister’s ability to appoint Peers with an effective size restriction, but it does not impose the same restraint on the commission, which could nominate unlimited numbers to the House, effectively restricting the Prime Minister’s capacity. Strangely, the Bill then excludes anyone from being nominated by the commission who has supported a party in the past two years. Why is that? Why is membership of a party an immediate block for someone whom the commission believes would otherwise be an excellent Member here?

Although I wholeheartedly approve of a mechanism to ensure that your Lordships’ House contains people who are committed to the House, I do not believe the Bill achieves that. All it requires is that nominees must show a “willingness and capacity” to contribute—as if anyone proposed would say, “I don’t have the willingness or capacity”. I would hope that Members do have other interests: we benefit from Members who are active elsewhere. That is not of itself an impediment. I am an employee of a financial services company, I chair a public company, I chair four charities, I am on the board of another five and I have served for 22 years as a senior treasurer of the party—so, under the Bill, I am sure I would be told that I do not have capacity, yet I have an 82% voting record. I did not get an LOL on my text.

I am also unhappy with the effective veto the commission would have over the PM’s choice—and, of course, nominees frequently come from opposition party leaders. There is one case which had been cited in the press which I happen to know more about than most and where, in my opinion, HOLAC was possibly ill-informed and possibly then gave an ill-judged view. I would feel very uncomfortable that a commission of unelected people, however eminent, could overrule the democratically elected Prime Minister of this country. Who are they to decide what is “conspicuous merit”? In principle, it is fine, but what does conspicuous merit mean? Then the Bill allows the commission itself to propose additional criteria without any approval from Parliament or government. This is a very dangerous open invitation to allow a private, secret, unelected group to determine who it thinks are the appropriate Members of this House, when clearly that should remain with our Prime Minister—and, of course, other political leaders.

As the noble Lord, Lord Kakkar, eloquently said, we should bear in mind that this route opens the door to judicial reviews, dragging the courts into a decision. I welcome reform, but I do not believe the Bill addresses the real issues we face in this House.

House of Lords Reform

Lord Leigh of Hurley Excerpts

Wednesday 30th June 2021 Lords Chamber

[Lord True (Con)]

My Lords, it is perfectly reasonable, given the House’s membership—not least the fact that its average age is 70—for it to be refreshed from time to time. I repeat an answer I gave before: neither the previous Prime Minister nor this one has accepted that the House of Lords should be able to impose a cap on its own size.

[Lord Leigh of Hurley (Con)]

First, does my noble friend the Minister agree with me that, now that the other place has agreed that it will stay at 650 Members, we can review our aspiration of 600 to 650? Secondly, we should recognise that unlike in the other place we are not salary men. We represent a wide pool of expertise and experience that needs to be deepened and strengthened. By admitting more Members to this House, we will counter the correct allegations of underrepresentation of minorities, women and businesspeople.

[Noble Lords]

Oh!

Finance Bill

Lord Leigh of Hurley Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 8th June 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I join the congratulations to my noble friend Lord Bridges—under the excellent mentoring of my noble friend Lord Forsyth—and his committee on the report, which is most welcome. Of course, I first refer your Lordships to my register of interests.

This is an important debate, as the Finance Bill and the powers of HMRC affect us all. I am therefore somewhat surprised to see how few Peers have put their name down for this debate. While I am delighted to see so many here physically—I think all but one are speaking in the Chamber—I am perplexed by why so few are speaking on this matter today. Of course, we do not have the power to amend the Bill, but this sort of Second Reading is exactly the place where we can interrogate government and, I hope, come up with some ideas which would be of assistance based on our expertise and experience. It also does not help those who argue for a smaller House if we cannot attract a strong number for such an important debate, and it means that people with knowledge and awareness of finance, tax and business should be recruited into the House. The Government do listen to these debates and to Peers’ comments on taxation, as I will elaborate later.

I start my comments on the Bill by congratulating my noble friend the Minister and his colleagues on the 132 clauses originally tabled, as physically displayed by my noble friend Lord Forsyth. They address so much that affects our daily life, from the rates of tax payable to capital incentives—which I believe will encourage greater investment in industrial plants and machinery—some nudging behaviour away from plastic packaging, and even encouraging cycling to work, with cycle equipment being written off. There really is much in here to be commended. I thought I would focus most of my remarks on what is not in the Bill, sometimes with good reason, and some matters which might be considered for future Budgets.

The first, which is not in the Bill, is an increase in the capital gains tax rate. Before the Budget there was a somewhat rogue report from the aforementioned Office of Tax Simplification. It is normally a sensible office producing sensible ideas, but on this occasion it proposed that it would be simpler to equalise income tax and capital gains tax—a somewhat unsophisticated thought, as it does not allow for the essential difference between income or salary and capital gain, which is a return on risk taken. Fortunately, after somewhat of a campaign—in which I confess I played a part—the Chancellor agreed that CGT rates should stay as they are. This Finance Bill does not change them, which is an eminently sensible and pragmatic decision.

My first question to my noble friend is, given all this wasted noise, effort and focus against raising CGT and that the Chancellor has clearly researched the subject and reached a conclusion, can we avoid all this palaver at every future Budget of this Government by announcing that the rate will stay fixed, as has been done for other taxes in the Conservative Party manifesto? This will provide much greater certainty to entrepreneurs, investors and businesspeople for the next few years. The cynic might argue that the Chancellor likes the uncertainty as it encourages people to realise assets when they would not otherwise do so, and thus send money to the Exchequer ahead of the anticipated date. However, we all know on this side of the House that the Chancellor is not that type of politician and is instead focused on making life easier and more predictable for taxpayers. By the way, the retention of the current rates proves my earlier point that the Government listen to people in this House and elsewhere and consider their arguments carefully.

In the debate on the Motion to Take Note of the Budget Statement in this Chamber, I asked my noble friend the following:

“I would be grateful if the Minister could tell us to what extent this Budget complies with pillar 1, and in particular pillar 2. What steps will HM Treasury be taking to ensure that we fully comply with pillar 2?”—[Official Report, 12/3/21; col. 1919.]


There were many speakers on that occasion, so I assumed that I did not get an answer because of other priorities. It turns out that the reason I did not get an answer was because the Government were busy hatching a plan with world leaders to do just that. This is another matter not in the Finance Bill, but I hope the Minister will allow me to comment on the historic announcement as it will fundamentally affect corporate taxation and is thus very germane to this Bill.

The Red Book estimates that only £40 billion will come from corporation tax this year but that the new rates proposed in the Bill will increase that by £2.3 billion in 2022-23, £11.9 billion the following year and £16 billion the year after that—those are just the increases—so a lot is riding on corporation tax yield increasing as the rates move up. Accordingly, it is very important that corporations pay their fair share. I have tracked the OECD proposals on base erosion and profit shifting for some time. Indeed, it was the subject of my maiden speech in 2013. I hope the Minister will allow this as an acceptable forum to raise this related issue, not least as no other forum other than today’s PNQ has been offered to Peers to discuss the OECD announcements —although, of course, he may want to answer some of my questions in writing at a later date. The UK really needs a deal on pillar 1, as much as we are seeing progress on pillar 2. At the moment, the details are somewhat vague. It is all very well for profits which are diverted into tax havens to be transferred into the HQ country, but the minimum rate of tax—be it 15% or 21%—does not of itself affect the amount of tax the FAANG or others will pay in the UK.

DST—digital services tax, which I will come on to again in a minute—was put in place to ensure that profits generated from UK customers were taxed here. Clearly, future tax should be based on user bases rather than sales made—not just customers, but user bases. As we know, sales to UK customers are currently often based in places such as Ireland, but the goods are delivered here. DST seeks to achieve proper taxation on this, but we need to know how pillar 1 will do so likewise, as the expectation is that DST will be dropped at some point. Perhaps the Minister can assure us on that point.

Meanwhile, the pillar 2 proposals are encouraging, but I urge some caution. The IPPR issued a report estimating that with a global minimum rate of 21%, our take could be £14.7 billion. That would be nice, but at a global rate of 15% now being suggested, our share would be much lower. Let us not forget that we already have controlled foreign corporation legislation in place—I think it may have been introduced by my noble and learned friend Lord Clarke, but it may have been before his time—and that this legislation seeks to equalise UK-headquartered corporations’ tax take. I am indebted to Glyn Fullelove, formerly president of the Chartered Institute of Taxation, for sharing with me his calculations, which suggest that a figure nearer to £2 billion or £3 billion could be the amount raised by the pillar 1 and 2 proposals. Perhaps HM Treasury could share its estimates with us at some point.

We introduced the digital services tax so that companies such as Amazon would pay their fair share. Unfortunately, it is not working as well as it should. First, Amazon, which clearly has monopoly-type power, has simply told its suppliers to pay. Secondly, it applies only to marketplace fees, not to direct sales. This is a very important difference. It is another area I was disappointed not to see mentioned in the Finance Bill, as we now have the situation where DST has made it harder for SME retailers to compete with Amazon.

The current DST legislation is defective in not taxing the user-created value arising from sales made by marketplace providers on their own account. Additionally, the application of DST to marketplace fees and commissions charged to third parties, without a corresponding charge arising on the value created when the provider uses the platform to make sales on its own account, is a distortion to competition. I and a number of others have proposed that the scope of DST be extended, so that when a marketplace provider uses the marketplace for its own sales—or uses a similar platform alongside the marketplace—an amount of digital services revenue, which can be taxed, arises.

As the Minister might be aware, I have discussed these ideas with the Financial Secretary, who is resistant to changing DST at this point. As a result, there is nothing in the Bill on this issue. I hope, however, that the Government will reconsider this matter, as we are quite a way from a final deal on a pillar 1 and 2 agreement and, in the interim, we are losing a very large amount of revenue.

Finally, on the enterprise initiative scheme, or EIS, Brexit gives us a chance to look again at restrictions placed on HM Treasury to avoid accusations of state aid. EU laws restrict the ability of the SEIS and EIS to provide entrepreneurs’ start-up capital quite dramatically. Will my noble friend the Minister agree to revisit this area?

Financial Services Bill

Lord Leigh of Hurley Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[Lord Leigh of Hurley (Con) [V]]

My Lords, I congratulate my noble friend the Minister on Amendment 14, as I raised that issue at Second Reading and it was very good to see it today. It shows that the Government are listening, which is very welcome. I thank him for his kind opening remarks on a number of Peers’ appearances: it was very perceptive of him. I will not repeat the sorry tale that he heard last time around, which is the reason for this amendment. He will recall that it was in response to an attempt to commit a fraud by sending me a credit card I had not requested, and that I was unable to progress matters with FOS because I was not a customer of the credit card company concerned. I had a letter from FOS, which says the following:

“The Financial Ombudsman Service must follow the rules stipulated by the Financial Conduct Authority handbook. The relevant section concerns dispute resolution—DISP—and DISP states that there are limitations to when FOS may investigate a complaint.”


This is the rule that stipulates that FOS may look at complaints only from “an eligible complainant”, and DISP 2.7.3 states:

“An eligible complainant must be a person that is … a consumer”.


The regulations go on to say that FOS may investigate a complaint from a consumer or “a potential consumer”, and that this consumer or potential consumer must have a relationship with the regulated busines. There is a full explanation set out in DISP 2.7.3 and 2.7.6 of the FCA handbook. As I did not genuinely attempt to make a credit application, I did not fit the description of consumer or potential consumer in the handbook. In his reply to me at Second Reading, the Minister said that

“it is already the case that potential customers of a firm can seek redress through the FOS scheme under the FCA’s existing rules, notably the FCA dispute resolution handbook rule. The relevant rule states that, to be an eligible complainant, a consumer must be, or have previously been, a potential customer, payment service user or electronic money holder of the firm that they are raising a complaint against”.—[Official Report, 8/3/21; col. GC 552.]

This is completely contrary to the email sent by FOS, and there is clearly misunderstanding and confusion.

My noble friend the Minister was kind enough to suggest that I could report this matter to Action Fraud, and reports received by Action Fraud are then considered by the National Fraud Intelligence Bureau. Frankly, none of that need have been necessary or would be necessary in future if my Amendment 26, the only amendment I will speak to, were adopted. I seek for it to be adopted so that, from here on in, FOS can take action against credit card companies which do not seek to verify recipients of credit cards before they are sent out. At the moment, there is no redress for anyone who receives a credit card and no one for them to complain to. I do not think they can complain to Action Fraud because the fraud was never consummated, as it were. I very much look forward to listening to his remarks at the Dispatch Box later this afternoon, given that the Government are in listening and action mode.

[The Lord Bishop of St Albans [V]]

My Lords, I shall speak to Amendment 16 and then address my own Amendment 27. The introduction of a regulatory body to oversee the rules governing the behaviour of bailiffs would greatly strengthen complaints handling for the victims of practices that fall outside the national guidelines. The FCA reported in its Financial Lives 2020 Survey that 3.8 million people in the UK are currently experiencing “financial difficulty”. It is a terrible situation that takes a significant toll on people’s health and relationships. This amendment seeks to address an important concern: the fair treatment of people by enforcement agents who collect debts, often from vulnerable people who are in grave financial distress.

The absence of an independent regulator means that, when breaches of national standards occur, any complaints will be dealt with through the company or a trade association, before possibly being passed on to an ombudsman. This is an arduous process that prevents complaints from being adequately actioned. Furthermore, these national standards are not legally binding, which obscures the extent to which an individual can seek redress. No industry is exempt from poor practice. While most enforcement agents will probably abide by national standards, nevertheless we need to make sure that they are properly regulated.

Breaches do occur, and I will quote one example provided by the charity Christians Against Poverty of a single mother of two children. This woman was living under police protection and was a regular at a food bank, and her abusive former partner had taken out £20,000-worth of debt in her name. All of this was compounded by the fact that she was caring for her critically ill mother. When visited by a bailiff on account of a parking fine that had escalated, she attempted to contact CAP so that it could explain the situation to the bailiff. At this point the bailiff became intimidating, aggressive and threatening. That is a breach of rule 21 of the national guidelines, which states:

“Enforcement agents must not act in a threatening manner when visiting the debtor”.


We need to get a balance of powers that allows enforcement officers to undertake their tasks while also protecting debtors and ensuring they have significant mechanisms to air complaints impartially and without fear.

Debt charities are already reporting rising numbers of people in financial crisis and behind on household bills such as rent and council tax because of the Covid pandemic. Given the possible upturn in the number of individuals being referred to bailiffs in the near future, now is a suitable time to explore how we can introduce a regulatory body. I hope the Government will look closely at the content of this amendment and work to correct the current imbalance.

I now turn to Amendment 27 in my name. I am grateful to the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle, who have also signed it. I tabled this amendment because I believe in the positive difference that gambling blockers can make in reducing gambling harms and empowering individuals to control their own addictions. The amendment would mandate the providers of debit and credit accounts to offer opt-in gambling blockers to block gambling transactions.

As things stand, gambling blockers have widened coverage over the past three years, currently reaching around 90% of current accounts and 40% of credit card accounts. This is an achievement in its own right and should be welcomed as a positive technological aid to reduce problem gambling. While there is a still a need to close that 10% in debit card coverage, the majority of which will come from smaller banks and building societies, it is of secondary concern to the far larger gap that exists in the credit account market, where 60% of accounts are not covered by blocking options.

In April 2020, the Gambling Commission banned the use of credit cards for gambling purposes, but this is only enforceable on licensed operators. The lack of gambling blockers on credit accounts is particularly problematic as it can provide a back door for individuals suffering from gambling-related harms to use credit cards on unlicensed sites. This undermines the Gambling Commission’s own rules and unfairly benefits unlicensed operators. Even more worryingly, this blind spot provides a direct avenue for the expansion of harmful and addictive behaviour, and the accumulation of gambling debt that would not ordinarily be allowed.

With the Government’s gambling review ongoing, the emphasis should be on preventing harm, and provisions for gambling blockers would be a welcome aid in achieving this goal. Admittedly, they are not perfect; they rely on accurate merchant categorisation codes to identify gambling transactions. But this should not discount the positive part they can play. Furthermore, through greater co-operation between account providers and payment processors, a robust and data-driven system of reporting could be developed to identify unlicensed operators hiding behind incorrect merchant categorisation codes to block future transactions. With no legal requirement to provide blockers and no obligation on payment processors to diligently review the merchant categorisation codes of unlicensed operators, gambling blockers will suffer from pitfalls that could be effectively remedied through either a legislative or regulatory approach.

There are also issues this amendment does not directly deal with but deserve highlighting. Due to the entirely optional provision of blockers, there are currently no minimum standards for functionality. This is an issue when it comes to the so-called “cooling-off” or “friction” period—the time between deactivating the blocker and once again being allowed to transact for gambling purposes. As a tool that assists those suffering from gambling addiction, the ability to activate and deactivate at will renders a blocker redundant.

Of the gambling blockers currently on offer, friction periods range from instant reactivation to 48 hours. The results offered by Monzo highlight the success of stricter cooling-off periods. Its blocker, with a 48-hour cooling-off period, block around 585,000 gambling transactions per month and is active on nearly 300,000 accounts. According to its data, once it is activated, fewer than 10% of customers deactivate it. Monzo, driven by its own success, has called upon the Government to mandate that banks provide blockers and would no doubt support this amendment. However, as I have shown, it is not merely their provision that renders them successful but their architecture. A minimum cooling-off period of 24 hours would make them far more effective tools to deal with addictions.

Finally, I will add that, in a data-driven world fuelled by digital payment systems rather than the cash we used in the past, individuals should have more autonomy over how they spend their money. Aside from their benefits in combating addiction and containing the unlicensed market, gambling blockers are an example of giving customers control over their own transactions. Actions and decisions are increasingly dictated by data that is controlled, analysed and dissected by global corporations and increasingly removed from the individual. Optional transaction blockers such as those related to gambling re-empower individuals and give them a stake in this new data-driven environment.

I thank the Government for their helpful work in encouraging the major banks to introduce gambling blockers—an endeavour that has been very successful in relation to debit cards. I know from discussions I have had with the Government that they see the benefits of blockers and continue to support a voluntary rollout. This is very encouraging and I hope that as they move forward with these efforts they will take on board some of the comments made here and find ways to promote greater data sharing between payment service providers and processors to tackle the unlicensed market. However, I remain of the opinion that for products as potentially harmful as gambling there should be not only a statutory obligation to provide opt-in blockers, as stated in this amendment, but minimum design requirements so that the positive results provided by Monzo can be emulated by other account providers.

Budget Statement

Lord Leigh of Hurley Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I congratulate my noble friend Lord Cruddas on his excellent maiden speech and welcome him to your Lordships’ House. He is a role model to many. Like me, he started his business in 1989 and it has grown to be a global leader, employing 700 people and with a market value in excess of £1 billion. Mine is something of a work in progress by comparison. He has contributed enormously to many charities—some of which I know but many of which I do not—and of course to British public life. We look forward to his many future contributions to this House, which will draw on his great experience, and most importantly his business experience, which is badly needed in this House. I welcome all noble Lords making maiden speeches, in particular the noble Lord, Lord Khan of Burnley, and those from whom we look forward to hearing later on, my noble friends Lord Benyon and Lord Bellingham.

As it happens, my maiden speech was on taxation—specifically, the OECD taxation of multinationals on base cost erosion and profit shifting. Since then, the OECD has produced pillars 1 and 2. I would be grateful if the Minister could tell us to what extent this Budget complies with pillar 1, and in particular pillar 2. What steps will HM Treasury be taking to ensure that we fully comply with pillar 2?

Finally, I congratulate the Minister and in particular the Chancellor on an excellent Budget and on listening to the pleas of 2,500 entrepreneurs who co-signed a letter, written by me and Shalini Khemka of E2E, strongly advising against any rise in capital gains tax for entrepreneurs. Entrepreneurs are vital to the UK economy and we want to see many more of them. We want them to aspire to the success of our new noble friend, my noble friend Lord Cruddas.