Cabinet Manual: Revision (Constitution Committee Report)

Lord O'Donnell Excerpts

Friday 16th December 2022 Lords Chamber

[Lord O'Donnell (CB)]

I start by joining the noble Viscount, Lord Stansgate, in paying tribute to my noble friend Lord Hennessey of Nympsfield, who, I should stress, was a collaborator on the first edition of the Cabinet Manual. He was one of the academic experts whom we consulted about various constitutional matters, and he provided great advice to us. Indeed, he is associated very much with the “good chaps” theory, and I cannot think of anyone who is more the ultimate good chap than the noble Lord, Lord Hennessy.

It is interesting: the evolution of the Cabinet Manual is important. People have referred to John Major, and I was his press secretary when we went through the period of real concern. This led to the Nolan principles, which led to the publication of—people have probably forgotten this—QPM: Questions of Procedure for Ministers. These are things that go back a long way. People around the Chamber are nodding; it is good to see the experience that is here. So he started this process off of thinking about how we improve trust in politics by laying down some codes about ethical standards.

This is truly a cross-party venture, which is why, as a Cross-Bencher, I really welcome this. I was tasked by Gordon Brown—a Labour Prime Minister—to start this process. It came to fruition in 2011 with David Cameron as Prime Minister, who signed it off with the full support of the Deputy Prime Minister, Nick Clegg of the Liberal Democrats. It has always brought parties together in trying to come up with something which basically codifies where we are, in the absence of a written constitution, and can be a guide as to what constitutes good behaviour. I think people are trying to get it to do a little bit too much, and I will come back to that.

On the production of it, as the noble Baroness, Lady Drake, said, this was stolen with pride from New Zealand, which had done it before us. I say to the noble Baroness that this is an excellent report and I very strongly agree with its recommendations. The New Zealanders have an approach to updating their Cabinet Manual which is in line with what the report suggests. It suggests that you have an online edition and as legislation changes—for example, the repeal of the Fixed-term Parliaments Act—you amend that immediately so that there is always an up-to-date edition online and then, periodically, you get to have a major revision.

In the preface of my first edition, I wrote that

“it will need to be updated periodically”.

What terrible drafting—“periodically”—how vague can you be? I look back on that and I think that it could possibly be amended in 2024, which would be 13 years on. I remember being posted to the British embassy in Washington and waking up one morning surrounded by cicadas. These creatures burrow down and 13 years later they come up and they are refreshed; they run around, they have their lives, they mate and then they die. Their whole lives are six to eight weeks. If they can do it in six to eight weeks, I am sure the Minister can produce a new volume in good time.

The Cabinet Manual does need to be updated and there are key areas that people have talked about. There are obvious ones, such as Brexit and devolution. There are others that are not quite so obvious but are very important. During the coalition, we learned a lot about the way it operated. I had this brilliant idea of a coalition committee that would meet weekly—a complete waste of time. That was not the way it operated; we had bilaterals and a thing called the quad, which worked much more efficiently than the rather bureaucratic thing I had come up with, which was discarded and rightly so.

We need to think about the caretaker convention, which a lot of people have talked about. The devolution settlement has gone through some big changes. Big exogenous shocks—as we economists like to call them—such as Covid and the war in Ukraine have created all sorts of issues for the way in which government operates in crises. We need to learn from the experience of those.

On the point that a number of previous speakers have made, ethics more generally, of course, are absolutely crucial. It must be remembered that the Cabinet Manual brings together those codes and all those important things which are agreed. It is there as a work of reference. By creating a new one, you are given a stimulus to ask: are those existing codes right? Are the enforcement mechanisms correct? All those things are very important. The Cabinet Manual should be bringing all of those together.

Whose is it? That is very important. It is the Cabinet Manual, but it is also the Cabinet’s manual. It is owned by the Executive, but of course there should be extensive consultation with Parliament and Select Committees, as there was with the draft chapter on hung Parliaments, which we did before the 2010 election. That was really valuable.

There are trickier problems, which no one really wants to get into, but which I found very difficult when I did the first one. An example is conventions. When do precedents become conventions? When does someone breaking a convention mean that the convention no longer exists? We have had examples of all those things. I could not solve that, so good luck to all those trying to. It is tough, but there are important things that need to be highlighted there.

There has been great work from the Constitution Unit at University College London. I hope we can disseminate this. I am really disappointed by what the noble Viscount said about the school he visited. I went to Richard Challoner School in Merton, a good state Catholic school, where A-level politics students were learning about the Cabinet Manual. Taking a guess, maybe the school he went to was just taking parts of the curriculum.

We need to think about dissemination to a broader public. We have heard already that the word used was “dull”. It was indeed written very carefully and legalistically. I hope we can think about putting in some examples to make it come alive, and help a new generation understand it and feel encouraged about trust. The point is that we want to increase trust.

Again, I strongly recommend the report and thank the committee for it. A new version of the Cabinet Manual is essential. It is necessary, but not sufficient, for improving trust in our politics.

European Union (Notification of Withdrawal) Bill

Lord O'Donnell Excerpts

Monday 20th February 2017 Lords Chamber

[Lord O'Donnell (CB)]

My Lords, I should like to refer, first, to my interests in the register, particularly as president of the council of the Institute for Fiscal Studies and as chairman of Frontier Economics. In such a lengthy debate, I want to concentrate on those issues where I believe that I can add something—namely, the economic case and the implications for the Civil Service.

The eminent economic historian Professor Nick Crafts concluded a review of all the evidence on our membership of the EU, saying that the positive effects on competition and trade significantly exceeded the negative effects of the membership fee, the CAP and, indeed, badly designed EU regulation. I stress that this is an analysis of the past, not a forecast. Overall, being in the EU has boosted UK economic growth.

The economic impact of leaving has been less than expected so far, but it is now clear that when we leave we will not have full access to the single market and will have fewer migrants. Therefore, the longer-term effects, once we have left, will be negative—that is, it is likely that the economy will grow more slowly than it would have done had we stayed as a member. Some believe that this will be offset by free-trade deals with non-EU countries. As my former boss the noble Lord, Lord Lawson, will know, I am an unashamed free trader and believe that it will be fairly easy to do deals with countries such as Canada. However, when you look at the facts, it is hard to see how such deals could offset the costs of losing full access to the single market in terms of both zero tariffs and non-tariff barriers, and I worry that future regulations, set only by the EU 27, will worsen our competitive position.

Let us remember that the EU will remain our largest trading partner by some distance and we will not be round the table when those regulations are determined. It is ironic that Brexit is said to have boosted the prospects not of free trade but of President Trump and Madame Le Pen, who both favour protectionism.

It is against that background that Ministers and civil servants will have to negotiate our exit. As far as the Civil Service is concerned, I have every confidence that it will do its utmost to achieve the best possible deal for the UK. However, as my successor has said, it is under huge pressure. The negotiations are extremely complex and I have yet to hear of the Government closing down work to allow civil servants to transfer across to the new tasks. Indeed, that wonderful oxymoron, the great repeal Bill, will keep them and us busy in an effort that will probably leave things exactly as they are. However, negotiating with the EU has been a core competency of civil servants in both the home and the foreign services, and they are very good at it.

I am more concerned about implementation problems. We do not know yet what kinds of customs and immigration changes will emerge but we can be certain that they will involve more complex arrangements than exist at present vis-à-vis the EU. As the noble Lord, Lord Hague, mentioned, we have to wait for elections in the EU and then we have to think about the time that will be needed for ratification by EU Parliaments. The time left in which to carry out the negotiations will not be long enough to sort out many of the details, so, believe me, there will be a very long transition period. Therefore, it is important that this House concentrates on some key points that we need to put forward to the Government in amendments, which I hope will not add to the complexity of the negotiations. As someone who for years worked for various Prime Ministers of different parties on the Northern Ireland peace process, and as a proud O’Donnell, I sincerely hope that the final deal will not reintroduce borders between the Republic and Northern Ireland.

Over the years, I have done more than my fair share of negotiations with the EU and I believe that I understand the frustrations of those who want to leave. Too little has been done to ensure that the winners compensate the losers. I also believe that the creation of the euro was an enormous mistake—a triumph of politics over economics that in time may well be reversed. However, I believe that the EU without the UK and without people like the noble Lord, Lord Hill, around the table will be less of a force for good in the world and will be less economically successful, which will damage us directly. I accept that we are on course to leave but we need to strike the best possible bargain for the UK and, as the noble Lord, Lord Hill, emphasised, maintain the best possible relations with the EU 27.

We should, at the minimum, grandfather the rights of those EU citizens working here at the time of the referendum as a matter of principle. I would also favour Parliament having a genuine vote once a preliminary deal is reached and before it goes for ratification to the EU’s 27 parliaments and a number of sub-parliaments, which is quite likely because the deal will inevitably cover some national competences. The UK Parliament should have a serious role in what the deal should cover. That is what we in this House should aim for with judicious amendments that help us to achieve a better deal for all in this country. The “concession” of a vote which has, as the alternative, departure on WTO rules is no choice at all, and I differ from the noble Lord, Lord Lawson, about the impact of that. To be honest, I am very surprised that anyone would think that it was any concession.

This Parliament should get a say before the Walloon parliament, and here I disagree with the noble Lord, Lord Hill. When Monsieur Barnier negotiates, we have no guarantee that the individual EU 27 countries will accept whatever deal he has agreed, because it will be going for ratification to their national and sub-national parliaments. So we would not be putting our negotiators at a disadvantage; we would simply be levelling the playing field.

This negotiation will be much harder than anything I had to deal with—believe me, coalitions and so on are completely straightforward compared with this—so I end by wishing the Minister and his civil servants well in what will be lengthy and complex negotiations. I hope that in this House we can put forward some amendments that will strengthen their hand and get a better deal for all of us.