House of Lords Reform
Lord Strathclyde Excerpts(13 years, 11 months ago)
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Lord Strathclyde
That this House takes note of the case for reform of the House of Lords.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I for one am delighted to have been able to find this very early opportunity in the lifetime of this Parliament to discuss your Lordships’ House. I can say to noble Lords who have an interest—and many do—that this is the first of such opportunities that we will have to discuss the future of this House.
Lord Strathclyde
The noble Lord who asked a question a moment ago is now leaving the Chamber.
Lord Strathclyde
So I shall not bother telling him the good news about how often we hope to hear him speak in these quality debates over the next year.
Before the election, we knew that if Labour had won we would now be faced with a Bill based on Jack Straw’s committee paper, seeking to legislate on an elected senate in Labour’s historic fourth term—but that was not to be. Equally, we believed that, with a Conservative victory, reform would not be such an urgent priority and we could continue to seek a consensus for a long-term reform. Under the coalition Government, the three main parties all share similar objectives and the issue has now been given greater priority. Today’s debate is an opportunity for the Government to lay out the structure of their plan and an opportunity to listen to the views from your Lordships’ House.
There were more speakers who had put their names down on the speakers list but decided not to go ahead. Some have written to me with their views, but, as I said a moment ago, this, I think, will be the first of such opportunities to discuss the future of this House.
We seem to have been living with propositions for reform of your Lordships’ House for years, indeed decades. It is neither the most important question facing the country nor the least important; this is one House in a sovereign Parliament. It is a House that has often been proved right in recent years, but its voice needs to be better heard. Your Lordships’ House does an outstanding job, but it has not been able to avoid this country having a near disastrous experience from a surfeit of spending, legislation and regulation. We have done what we can well, but it has not always been enough to achieve all that we wanted, whether that was in the fields of ancient liberties, choice or plain old common sense. If the first job of your Lordships is to call the Executive to account and to challenge the other place to do its job, we have not lately excelled. It is at least legitimate to ask if one of the constraints on our ability to act lies in how we are constituted.
There have been years of debate since the 1999 Act changed this House for ever by ending the right to sit by virtue of hereditary peerage alone. We have seen umpteen schemes and watched them drift down umpteen backwaters, often with many here cheering loudly as they ran aground in the mud. We have seen umpteen propositions for change within the House, with my noble friend Lord Steel of Aikwood perhaps the most persistent in his bid to create the wholly appointed House that both Houses rejected in 1999. Many have hoped that it would all go away, but it has not. Indeed, all three major national parties promised a largely elected House in their manifestos only a few weeks ago, while the SNP pledged our abolition outright. A reformed House could play a great part in pulling together the voices of the devolved nations. No wonder those who would divide our kingdom see no place for any upper House, representative or not. That is a view that I totally reject. I have no doubt that this country needs a second Chamber with authority in all parts of the kingdom—one with confidence, powers and the willingness to use them in the public interest, even as the House that we now have acted to protect jury trial, defend habeas corpus and rejected the tyranny of electronic surveillance by compulsory ID cards. Can we create a Chamber better able to do all those things? That is the question before us. I believe that we can. Others believe that nothing under the sun could be better than this. As Leader of the House, I want to ensure that the voice of this House is heard from the outset in this debate, as sadly it was not always—indeed, some argue ever—heard in the past decade.
The coalition Government’s declared intention is to bring forward a draft Bill on reform of the House, which will provide a proper focus for debate and decision. It is something that I and many other noble Lords called for many times over recent years. My noble friend Lord McNally and I will set out the government agenda, but we are also, just as importantly, here to listen to your Lordships’ views. I can promise you this will not be the last opportunity. I know that many of your Lordships will have greeted this element of the coalition’s programme for government with a degree of apprehension, although the work of the cross-party group led by the former Lord Chancellor, Mr Straw, set it at the heart of the programme of the party opposite, too.
I hope that we will be able to reassure the House today that your Lordships, indeed both Houses, will have a full opportunity to take part before ever any legislation is introduced. In our programme for government, we said we would establish a committee to bring forward proposals for a wholly or mainly elected upper Chamber on the basis of proportional representation. We have done that. My right honourable friend the Deputy Prime Minister is chairing that committee, which is composed of members from all three major political parties as well as from both Houses. My noble friend Lord McNally, the noble Baroness, Lady Royall, and I all serve on it. The committee is charged with producing a draft Bill by the end of the year.
Lord Barnett
Whatever is in manifestos, the plain fact is that at the moment the Front Benches of this House are on this committee and, as the noble Lord and all sides of this House know very well, in advance of a debate the Back Benches do not agree with the Front Benches. Why is there not a single Back-Bencher on that committee?
Lord Strathclyde
Because, my Lords, this committee is charged to create a Bill in draft. There will be a full role for Back-Benchers in both Houses, on all sides and with different views, when we set up a Joint Committee of both Houses which will then give it the scrutiny it deserves before it is introduced to each House.
Lord Grocott
Could the Leader of the House, in the spirit of the coalition document, referring as it does to the importance of transparency, ensure that the agenda and minutes of this committee which is meeting at present are made available to the House and to the public?
Lord Strathclyde
I am very happy for the noble Lord, Lord Grocott, to discuss that with the Leader of the Opposition, who sits on the committee, but the Government will not be publishing either the agenda or any minutes because our objective is to come forward with a Bill in draft. That will be the result of the committee and we hope to do that before the end of the year. This will be the first time that legislation setting out how an elected second Chamber might be constituted will ever have been published by any Government.
Lord Hannay of Chiswick
Before we leave the matter of the composition of the committee, perhaps the noble Lord could explain why representatives of three of the main groups in this House are on that committee while the fourth group—the Cross-Benchers—is not represented? In order to save him from doing something which will irritate those around me quite a lot, will he please not say that it is because we have already made up our minds as to the shape of a future House?
Lord Strathclyde
My Lords, I have no desire to irritate the noble Lord or, indeed, his noble friends, but the point is that the three main political parties each had a manifesto at the last general election which was broadly in agreement. The Deputy Prime Minister took the view that it was important to bring those political parties together in drafting the Bill. When we get to the creation of the Joint Committee of both Houses, the noble Lord and others of his views—not just on the Cross Benches, but elsewhere—will quite rightly be fully consulted and represented on that committee.
Lord Hughes of Woodside
Does the noble Lord agree that the path that he has now undertaken means that the House will be presented with the choice of the three political parties? It is a bit like Henry Ford: “You can have any choice you like, so long as it’s mine”.
Lord Strathclyde
My Lords, in a way that is how it works in Parliament. Governments propose legislation and then Parliament disposes of it in whichever way it wants—and that will happen. I am sure that what the Government publish and what comes out of this committee at the end of the year is not where we will be at the end of the day. This is the start of the process. It will be up to the two Houses to set up the Joint Committee; it is not the job of government. My noble friend Lord McNally, the Deputy Leader, and I will make the case for the inclusion of all strands in this matter.
The Earl of Onslow
I am normally an enormous fan of my noble friend on the Front Bench, but surely his argument about not including Back-Benchers is slightly destroyed when it becomes a cartel of the three Front Benches. If it was solely my noble friends on the Liberal Front Bench and my noble friends on the Tory Front Bench, his argument would be absolutely solid. However, as it has included the Labour Front Bench, which as far as I have gathered is not part of the coalition—even though 1931 might come again—surely to exclude Back-Benchers is not a sensible idea.
Lord Strathclyde
My Lords, the point I was trying to make is that Back-Benchers will play their full part in the process when we get to the creation of the Joint Committee of both Houses. The committee that the Deputy Prime Minister chairs, with all his might and authority, is designed to create the Bill that your Lordships and others can then comment on. I suggest that we are not going to agree on this issue this afternoon, but I hope that we can move on.
Lord Campbell of Alloway
Is my noble friend the Leader of the House aware that there is another point of view? On 5 July, the question of due process concerning the setting up of this committee and its functions is due for consideration. There are two views. One is that of my noble friend the Leader of the House and the other is certainly my own.
Lord Strathclyde
My Lords, I am well aware that there is more than one view on this issue. Today we will hear from 68 speakers and we may well end up with more views than there are speakers. The point of the Deputy Prime Minister’s committee is to produce a Bill. Then a Joint Committee will examine it and that will have representatives from the Cross Benches and the Bishops’ Bench. I look forward to them playing their full part in it. We would not wish to exclude anybody from this process. That is likely to mean that it will be a substantial committee. It will have a substantial job to do, but that will be next year’s job, not this year’s.
Lord Richard
The noble Lord has been very good in giving way. Perhaps he could help me a little. I understand that this committee will produce a Bill. Will it produce a Bill in a legal form, properly drafted by parliamentary draftsmen? Will parliamentary draftsmen be attached to a committee of the three Front Benches to draft a Bill? Is that really the position, so that when the committee reports we get a Bill in draft—which can be introduced in the House—and carry on from there?
Lord Strathclyde
My Lords, yes. I would hope that the noble Lord would not be so incredulous. One thing that has been missing from this great debate is precisely that—a Bill in properly drafted form. It will not be introduced to Parliament as part of a legislative process, but as part of a pre-legislative process for proper discussion. I am not going to give way too often.
Baroness Farrington of Ribbleton
My Lords, I hope I can save the noble Lord the Leader of the House a little time. Will the draft Bill that is being produced by the committee deal with transition? I think it might shorten the number of speeches today if the noble Lord could be more forthcoming on that.
Lord Strathclyde
My Lords, yes, it will deal with transition, which is one of the most important issues. I do not suggest for one moment that the noble Baroness will agree with whatever we propose, although she might. I cannot tell her what it will be because we do not know either at this stage. It is still very early days. However, the Bill will cover that subject, as it must. Once the Joint Committee has completed its work, at the end of the process, it will be for the Government to decide whether to bring forward legislation. I hope that by the time we reach that point, this House will have had the opportunity for input—first into the work of the committee, and then that of the Joint Committee—before we get to a final decision.
Lord Rooker
I seek clarification on this point. Like other Members, I have read all three manifestos, which all talked about the House being mainly or wholly elected. Not one of them raised the issue of what this place is for. At what point will the House get the chance to debate what a Second Chamber is for, what it is to do and what its powers are? Surely, all we are talking about at the moment is its composition, which seems to be the wrong way round.
Lord Strathclyde
My Lords, the noble Lord, Lord Rooker, was a senior Minister in the former Government. They must have debated these issues many times in the build-up to the 2008 White Paper. Of course we have to decide what this House is for and what it will do. The view at the moment is that the House should continue to have the powers that it holds and do the work that it does. We are looking at its composition and how people get here, rather than what they do once they get here. I have hardly started in my speech. I will give way to the noble Lord, Lord Phillips, and then I will get on.
Lord Phillips of Sudbury
I am most grateful but, in the light of all the peculiar circumstances, it is important to know that, when the Bill is brought to the House, it will not be whipped so that there can be a genuinely free debate.
Lord Strathclyde
My Lords, I have consistently taken the view over a long period—I am not saying that I will retain that consistency—that whipping a Bill on reform of the House of Lords is a particularly fatuous exercise as I suspect that Peers will make up their own minds, almost whatever the Whips tell them. However, we are a long way from having legislation on which we need to take a view on whether it will need to be whipped.
The coalition agreement, which noble Lords will have seen, envisaged a wholly or mainly elected House with elections on the basis of proportional representation. As the noble Baroness pointed out a moment ago, it also anticipated the transitional arrangement that a “grandfathering” system would be put in place for current Members of the House. I know that noble Lords will be anxious to know what both these things mean. They mean that we as a Government have yet to take a view—
Lord Strathclyde
We have yet to take a view on whether a reformed House should be fully or partly elected. Those words mean that we recognise the case for an orderly process of transition if the composition of the House is to change, just as in 1999 both Houses saw the wisdom of retaining a transitional element from the old House.
As I said at the outset, this House can be proud of so much that it does, but it lacks democratic authority. As a result, I believe that it does not carry the weight that the quality of its work merits. While we remain an overwhelmingly directly appointed House—something like 85 per cent appointed as against 50 per cent before 1999—our membership continues to grow. It is now fast approaching 800, with daily average attendance rising over 400. More new Members are due to be introduced over the coming weeks and months. I believe that it is time to examine what avenues could be created to make it possible for Members to leave the House permanently. To this end, I can announce that I will be setting up a Leaders’ Group, chaired by my noble friend Lord Hunt of Wirral, to investigate the options available. The group will include representation from all sides of the House and will be tasked with identifying the options that could be considered to allow Members to leave or to retire from the House.
Over the past 18 months, public confidence in politics, but more especially in Parliament, has been dramatically eroded. While many may reject the case for change, both Houses must surely consider it. Some in this House did not want change in Parliament in 1832, 1911, or, indeed, that much in 1999. Incredible though it may seem, the party opposite even voted against the creation of the life peerage in 1958. However, we came to accept all these great changes, just as in 1958 the then hereditary House accepted the case for change.
We cannot know precisely how this debate will unfold, but we know that it cannot be avoided. A great debate is beginning, or perhaps for some of us it is restarting. This House of all places cannot sit this one out. There is not a single Peer, whatever his or her views, who does not love this place, understand the need for a stronger Parliament and want the best for our House. This House, and its Members, must be at the heart of the debate ahead. I want to ensure this House a place in that process. That is the reason today’s debate was arranged. I look forward to all the contributions that will follow today and in the months ahead. I beg to move.
House of Lords Reform
Lord Strathclyde Excerpts(13 years, 11 months ago)
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Lord Steel of Aikwood
My Lords, I said at the beginning that I would listen to the debate. I have been encouraged by the strong support for my Motion. Therefore, I propose to move it without making another speech but I will simply clarify two things. Contrary to what the noble Lord, Lord Lucas, said, the Motion is not an alternative to the resolution of the noble Lord, Lord Strathclyde; it is a precursor to it. It is clear that the course on which the Government are embarked will take at least the five years of this Parliament. We need running repairs now. If the four separate resolutions are passed—I stress to my noble friend Lord Caithness that they are separate and might not all be passed—there is no reason why draft or full legislation could not be introduced in the autumn. Three of the points are already in legislative form from the previous Government. Therefore, the legislation could go through during this Session and we could achieve the running repairs which this House so badly needs. I beg to move.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I am surprised that this Motion has been moved. I was rather hoping that the debate we have had over the last few hours would have been enough for your Lordships, so I have not prepared many words. However, the Order Paper is a serious document, and if Motions are tabled and moved they need to be taken seriously, so I should formally respond to the noble Lord, Lord Steel of Aikwood.
This is an unusual Motion. I have never seen one quite like it before and we are taking it at an unusual time of night. It is unusual because it is unclear what its intended effect is. On the advice that I have received, it does not bind the Government to do anything. It simply asks the House—or gives it the opportunity, which it can take at any stage it wants—to give an opinion on various matters. It does not inexorably lead then to any legislation. From that point of view the Motion is rather pointless, though I am sure the noble Lord, Lord Steel, when he replies, will explain why it has a point and what that point is.
The Motion asks the Government to table Motions which could approve or disapprove certain requirements. In my speech this afternoon, some hours ago, I explained that I had had cause to set up a Leader’s Group that will look at the position of retirement of Members from this House permanently, and that the group would be chaired by my noble friend Lord Hunt of Wirral. I would hope that that would have dealt with that. There is certainly no scheme. The noble Lord, Lord Steel, does not have a scheme; I do not have a scheme. We are all rather hoping that my noble friend will be able to come up not necessarily with one scheme but many different schemes. There are several options. The whole point of my noble friend’s job is to try to find out what these options, and their pros and cons, are. Therefore, I do not see that there is any particular point on that because I think there is a substantial desire in this House to have a scheme for retirement. I was rather hoping that there would be a murmur of approval for that.
Lord Strathclyde
Since we are on a roll, how many noble Lords would like to take up that scheme for permanent retirement? I am very happy to take an interruption at this stage.
Lord Strathclyde
The noble Lord, Lord Richard, proves my point and I am immensely grateful to him. We are going to investigate whether there should be a scheme.
The noble Lord, Lord Steel, wants to have a vote on the abolition of by-elections for hereditary Peers. I can confirm to the House that when we publish a Bill at the end of this year, which is only a few months away, there will be not only a proposal for the abolition of by-elections for hereditary Peers but one for a very substantial cut in the number of life Peers under the Life Peerages Act 1958. That is the by-product of going down this road.
The noble Lord has put down only four suggestions. He could have had a fifth: whether or not there should be an elected or an unelected House—as if there were any doubt about that, incidentally. His next proposal concerns the removal of Members convicted of serious criminal offences. Frankly, I was surprised to see this because I cannot imagine that anybody would not be in favour of having a statutory scheme similar to that of the House of Commons. It is certainly our intention that this should be covered in the legislation when it comes forward, once we have had a suitable debate on that subject. The provision already applies in another place; there is no good reason why it should not apply here.
The creation of a statutory appointments commission is infinitely more complicated and is the most difficult and controversial aspect of the noble Lord’s proposals. It is difficult and controversial at least in part because the appointments system that we have already seems to work pretty well. Many of the Peers on the Cross Benches came out of the Appointments Commission and they show up that commission rather better than many of us had imagined would be the case. However, if we still had an appointed element in this House, there would have to be some kind of system, and it would be very surprising if that was not a statutorily-based system.
Lord Lea of Crondall
Is the noble Lord not aware that, in introducing his Motion, the noble Lord, Lord Steel, said that it applies to the period between now and the never-never land when the Bill will come into operation? To say that this will all be covered by the Bill and that the hereditary by-elections will automatically ipso facto go at that time does not address the point made by the noble Lord, Lord Steel.
Lord Strathclyde
But of course it does. The Government have pledged to produce a Bill by the end of the year. I could ring up the parliamentary draftsman tomorrow morning and say, “We have a cracking good idea. We have four marvellous suggestions that none of us has thought of before. Please draft a Bill”. These measures require legislation. They cannot just be willed. They cannot just happen.
Lord Strathclyde
But it is not a government Bill. It has been introduced several times and found to have enormous flaws. A responsible Government would have to ask a parliamentary draftsman to draft a measure. The noble Lord with his government experience knows this. We would need to do that at the earliest opportunity. We are going to fast track this. It could not be published before October or November. That is just a few weeks before we will publish our own Bill. I do not think that I could go to the committee of parliamentary business managers and say that the House of Lords wants an advantage of just a few weeks to discuss in government time the Bill of the noble Lord, Lord Steel. With the best will in the world, that is not going to happen.
All that I will say is that it has been a tremendous debate. I am glad that I have been able to answer the points made by the noble Lord, Lord Steel of Aikwood. He has been very patient for a number of years. Now we are asking him to be patient for a few more months and he will get everything that he wants and probably deserves.
Lord Steel of Aikwood
All that I would say to that is that I do not want to wait for another five years. We need these matters to be resolved now. I beg to move.
Financial Provision for Members
Lord Strathclyde Excerpts(13 years, 12 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I wish to make a Statement on future financial provision for Members of this House.
In my view, we need fundamental change. None of us wants to live through again what we lived through in the last Parliament. In a House in which the overwhelming majority of Peers have always acted on their honour, we found ourselves severely criticised. All too often, that criticism was fully justified. The parliamentary expenses regime was opened up to public view, and the public saw a system that was badly broken. Difficult questions were asked, abuses were uncovered, apologies have been made and prosecutions are pending. We could not let this continue, and I pay tribute again to the contribution made by the noble Baroness, Lady Royall. Once problems were uncovered, she acted decisively, and the House is indebted to her.
We received a report from the Senior Salaries Review Body. Building on that report, my noble friend Lord Wakeham was invited to lead an ad hoc group to consider, consult and advise on the implementation of a new system of financial support. The group has now submitted its proposals to the House Committee, and its report, entitled Financial Support for Members of the House of Lords, is now available in the Printed Paper Office.
The Wakeham group supported the SSRB’s idea of combining the current daily subsistence and office costs allowances into one daily allowance. I agree with that. But the group suggests an alternative option, a simplification of the SSRB’s approach to overnight allowances by combining that, too, into one single daily allowance, payable on attendance on each sitting day. If this were done, it would mean the abolition of the expenses regime as we know it, and in future, payment for staying overnight, taxis, meals, secretaries and research assistants would all come out of that single payment. How much Peers spend on each item would be entirely up to them. There would be no extras, no small print. The single payment would be the end of the matter.
Under the current scheme, the maximum some Members may claim per day they attend is £334. The SSRB suggested that this should be £340. If we create a single uniform daily allowance, it should be set at a figure less than these two totals. I recommend £300. This is 10 per cent less than the current maximum and 12 per cent less than the figure recommended by the SSRB. Furthermore, there will be a lower rate at which Members can claim. I suggest that this should be 50 per cent lower at £150.
This is not a salaried House. Attendance will remain the key basis for the allowance—that is what the public expect. But in order to contribute effectively to the work of the House, Peers are often involved in preparatory and other work outside the Chamber and cannot attend, for example, for long periods in Committee. However, I believe that many will consider a lower rate appropriate, for example for Peers who are able to attend the House for only part of a sitting on a particular day.
We are rightly all under scrutiny for our use of public money and the public expect Members of the House to set the same high standards for themselves as they do for others. Some may feel they do not wish to ask for any payment at all. Based on provisional statistics, last year 13 per cent of those who attended the House did not claim any allowances. I hope that they will continue not to. The Wakeham group proposals cover a number of other important issues, including travel arrangements for Members. Its proposals will continue to recognise the additional costs faced by Peers who travel from long distances.
Axing through the current complex structure of expenses would represent radical change, but I believe that that would be right. It also holds other advantages. It would be cheaper to run than any more complex arrangements, less bureaucratic and less expensive to comply with, simpler to police and far harder to abuse. The controversial rules on so-called “second homes” would quite simply be swept away. There will be no more accusations of addresses of convenience, and no more juggling of utility bills and claims forms. If you come to Westminster and work in Parliament, you will be able to claim the allowance. If you do not, you will not.
This will mean a reduction in the amount that some Peers have claimed in the past. But in the present economic climate we cannot protest against a reduction. Indeed, in my own view, with a new system, levels of payments should be frozen for the life of this Parliament. I accept that this is a scheme that will not be welcomed by all, but it will be broadly cost-neutral compared with the existing scheme. The existing expenses regime is discredited. It lacks credibility and the public have lost confidence in it. This new plan means the end of the second homes fiasco. It means the end of expenses in the House of Lords. It means a new system that is direct, transparent and accountable. It means that we are making a significant step towards winning the public’s confidence again.
So, what next? The House Committee will meet soon to discuss the details of this proposal. Before the Summer Recess, I will table resolutions for the House’s approval. This House has suffered greatly from the faults of the previous system and the misbehaviour of a small minority. Ultimately, it is a matter for the House if it wants to make this change. The Government’s view is that we need clarity, simplicity and reform—and that the time for reform is now. I hope that your Lordships will agree, and I commend this Statement to the House.
Lord Strathclyde
My Lords, I am grateful for the broad welcome given by the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness the Convenor of the Cross Benches. I understand why the Leader of the Opposition could not be in her place today, and I am glad that the noble Lord stood in for her in such an excellent manner.
I think the whole House should thank my noble friend Lord Wakeham and congratulate him on the work that he did. He took on an immensely difficult task after the debate that we had last December. It was not clear to me that anyone would be able to find their way around this particular maze, with so many different groups of people wanting different things and dissatisfied with what was being presented. It is a real credit. He did not manage to find his way through alone, though; he did so with the help of a group of individuals from all sides of the House who no doubt helped and encouraged him in his work.
The noble Lord, Lord Hunt, asked some specific questions, particularly about how long I anticipate this process will take and when the new regime will come into force. It is important that we move quickly to the new regime. The House Committee will therefore meet very soon and take a view on resolutions that will be proposed by me. If they are agreed they will be brought to the House. I hope that this will be done in the course of the next few weeks—certainly before the Summer Recess, because I envisage the new regime coming into force on 1 October. The current regime will continue until then.
We will need resolutions, in part to allow the authorities of the House to take them into account when they are creating the new system. I do not believe that anything I have said about the new system will give the authorities in the House of Lords any concern at all about being able to administer the scheme effectively, efficiently and more cheaply than was envisaged under the scheme proposed by the SSRB.
Turning to the points made by the Convenor of the Cross Benches, I recognise that some will be concerned about a net reduction in the amount of money they receive. As the noble Lord, Lord Hunt of Kings Heath, said, this is not a perfect system—nor does it try to be. It tries simply to iron out the worst of the difficulties that we have seen in the current system and the proposed scheme, and it has taken all those things into account.
The noble Baroness was right about all the changes that have taken place during the past 12 months. We have a new code of conduct, a new independent Commissioner for Standards, and we are reviewing the attendance allowances. For the House of Lords, it is a positively revolutionary pace.
The noble Baroness mentioned taxation. That is not a matter for me; it is up to HMRC and the Treasury. However, if the previous scheme was without tax, there must be compelling arguments for this scheme also to be without tax, given that many of the expenses which Peers have are very similar.
The Clerk of the Parliaments has discretion to allow some additional expenses for disabled Members. Nothing in the Wakeham committee report seeks to change that, and there is no reason why it should not continue. The Clerk of the Parliaments has in the past demonstrated an ability and willingness to look favourably on people who need those additional expenses, and I am sure that he will want to continue to do so.
Lord Wakeham
Perhaps it might assist the House if I said a word as chairman of the ad hoc committee. In carrying out our work, we stuck firmly to our remit, which was to stay within the principles and architecture of the SSRB report. However, is my noble friend aware that we found it a complex task to come up with a final solution, which is why we floated the idea of an alternative that would be simpler and cheaper to administer and easier to explain to the outside world? Therefore, I very much support my noble friend’s Statement. As a member of the House Committee, I shall certainly support his proposal.
Lord Strathclyde
I have already said how grateful the House should be to my noble friend. He has come up with an immensely useful and helpful report. It is now in the Printed Paper Office and I hope that noble Lords will take the trouble to read it.
Lord Strathclyde
The noble Lord is right that it did not fit into the SSRB’s original report, but that is why my noble friend’s committee chose to offer it up as an alternative—as I understand it—in the light of its discussions. If the noble Lord reads the document, as I have done, he will see a remorseless logic that took the committee from where it started to its providing this idea as an alternative. It is an alternative taken in the round, looking at the bureaucratic costs, at each Peer being treated equally and at the end of the expenses regime, which I have found attractive.
Lord Dholakia
I welcome the Statement from the Leader of the House, for three separate reasons. The first is clearly spelt out—the system itself is simple to operate. It removes the complexity of the present system, which has resulted in adverse publicity in the media. Also, it has the least resource implications for administering the system. I have two questions. First, will the noble Lord explain whether there will be a built-in review procedure? The last thing that we should ever do is to determine the allowance applicable to us; we should allow an independent element to determine that. Secondly, will he establish some system of monitoring, given the concerns raised in the past about young people, women and people from ethnic minorities in the prime of their careers? Would the type of review that we are suggesting take those factors into account so that such people are not inhibited from becoming Members of this House?
Lord Strathclyde
My Lords, I thank my noble friend Lord Dholakia for his broad welcome. It was important to hear a senior member of the Liberal Democrat Benches on what is, after all, a House matter and I welcome his words. I have not at this stage recommended a built-in review procedure. It is my personal view that the level that we set should be the one set for the rest of this Parliament. Last week, we saw in the Budget proposals for freezing public sector pay and many other aspects, as well as cuts in the public sector more generally. I think that it is a sensible approach to freeze these amounts. As for a system of monitoring, I should emphasise that one reason why I have recommended this proposal is that it is for the interim period between now and when we potentially pass legislation for a future reformed House. That is another reason why it is attractive. Between now and then, I am sure that many people will monitor those who arrive in your Lordships’ House—new Peers. There are reasons why people from ethnic minorities and those raising a family may find the certainty of the new arrangements rather more attractive than the old expenses regime.
Lord Campbell of Alloway
My Lords, I do not want to challenge in any way the recommendations of my noble friend the Leader of the House but, for clarification, was the proposal of my noble friend Lord Wakeham accepted by the committee or was it not?
Lord Strathclyde
Oh yes, my Lords, the proposal was made by the committee in the report. The noble Lord, Lord Tomlinson, explained his position extremely well; he put in a reservation because he felt that the proposal did not fit the mandate of the committee when it was originally set out.
Lord Low of Dalston
My Lords, the Leader of the House made reference in outlining the scheme, which he supports, to an upper and lower level at which the flat rate might be paid. Could he give some indication of what criteria would be used to determine when the upper or lower rate was appropriate? If it is to be based on period of attendance—half day versus full day, as I have seen suggested—how would half a day and a full day be defined and how would attendance be validated?
Lord Strathclyde
My Lords, the noble Lord asks an extremely sensible question, one which is not entirely easy to deal with. There is a perception among those outside this House that a few minutes’ attendance reaps the benefits of large sums of money. In my experience, both as a former Chief Whip and as Leader of the House, I regard these abuses to have been exceedingly small; nevertheless, there is that perception. I am also aware that there are some Peers who, because of the nature of their outside work and for other reasons, do not spend a great deal of time in the House. It was felt in the discussions that I had that we should offer an alternative—a lower sum of £150.
Ultimately, it can only be up to the judgment of each individual Peer where and how they make that claim. A Peer may spend only half an hour in the House on a given day but, if they spent the morning reading and preparing for a complicated Committee stage on the next day, how are we to judge whether that time was well spent? In the end, all these claims will be made public. I hope that, with the co-operation of the House Committee and the House authorities, we will be able to make these claims known electronically on a rolling basis so that it will be easy to attach contributions to the amount of money claimed. That will create an internal accountability, which will be useful to Peers and public alike.
Lord Phillips of Sudbury
My Lords, I hope that I am correct in understanding my noble friend as having indicated that the new scheme will be wholly divorced from the actual expenses incurred by Members of this House in coming here and undertaking their duties. I think that that is right—the noble Lord is nodding. Therefore, his remarks vis-à-vis taxation assume a more important light. I go back to what he started by saying, which is that this House and, indeed, the other place came under a great deal of unwelcome public scrutiny over the expenses arrangements and that the trust in both Houses was severely dented. Some may think that those wounds are not entirely healed. Would it therefore be acceptable if the noble Lord and, indeed, the noble Lord, Lord Wakeham, and his group were to work on the basis that, whatever arrangements are come to vis-à-vis taxation, we have to accept that the allowance will now leave some Members of this place with substantial remuneration—that is to say, a return well in excess of anything incurred by way of expenses—and that it surely cannot be acceptable that this place, of all places, should expect a privilege in tax terms over any other citizen of this land? For us to say that it is much simpler to claim the entitlement and be done with it is fair enough, but that surely cannot satisfy the test that every other person has to live by, which is that, in terms of the tax charge, they can claim only those expenses actually incurred.
Lord Strathclyde
My Lords, my noble friend is entirely correct to point out that the reason why we are even discussing this is because trust has been dented, not just in this House but substantially in another place. Both Houses are, in their own way, trying to find their way through this to come out at the other end with a greater understanding between the public and Parliament, so that we can try to rebuild that trust. My noble friend is also entirely correct to say that this is a move away from the expenses regime. We are not asking Peers to demonstrate what they have spent. In fact, we are not hugely interested in what Peers spend their money on, in where they stay or, indeed, in whom they stay with. What we are interested in is: have they turned up? Have they made a contribution? What should the value of that be?
The SSRB suggested in its report that in due course the expenses regime that it proposed should be taxed. I take no particular view on that. I am not an accountant and it is not a decision for me. It may well be a decision for HMRC and the Treasury to take in due course. My further understanding is that, if tax were payable, that would require legislation and that, if tax were taken off, no doubt many Peers would make the case for some sort of rerating to make an allowance for taxation. These are all issues for another day.
There is another view, which I laid out a few minutes ago. We hope that there will be legislation on a reformed House. If there is a reformed, elected House, those Peers—or senators, or whatever they are—will be paid. There is then the prospect in that legislation for another independent body—perhaps IPSA itself—to look at what the recommendations should be.
Baroness McIntosh of Hudnall
My Lords, does the Leader accept that there are people around the House, including me, who may be significantly worse off under the new regime but who none the less welcome the proposal that has come from the noble Lord this afternoon? I agree substantially with the noble Lord, Lord Phillips of Sudbury. If we go ahead with this, we cannot expect to retain all the advantages of both the previous system and the new system and to suffer no change in how our tax status is viewed. The main benefit of the new proposal is that it ensures that the way in which your Lordships may be supported or remunerated—the noble Lord, Lord Phillips, suggested that it might amount to remuneration in future—bears some clear relationship to how people outside this House are paid for their services. As well as transparency and accountability, it feels at this moment as though we should be demonstrating not that we are so different from the rest of the world that we cannot be treated in the same way as other people, but that our work bears a distinct and reasonable relationship to what is done elsewhere and therefore we should be treated very similarly to people outside this House.
Lord Strathclyde
I thank the noble Baroness, particularly for her remark that she was likely to be one of those Peers who might end up with a little less money than under the old regime but still felt that this was the right way to go. That is a very sensible conclusion to come to. It also puts us on a different footing from the expenses regime. Some Members of this House will take some time to appreciate the difference in the change that has taken place. Expenses will no longer be claimed. There will be an allowance, depending on attendance. The noble Baroness is right: that brings the relationship to the general public closer. There was a time, perhaps many years ago, when the fact that Peers were unpaid and received an element of expenses was justifiable. As the years have gone by, that has become increasingly difficult to justify, which is why we need to make the change.
Lord Alton of Liverpool
My Lords, one of the most attractive things that the noble Lord, Lord Wakeham, has enabled the Leader to say today is that this will be cost-neutral, because the public, as they look at this, will ask, “Will there be an increase in what Members of the House of Lords receive in the future?”. However, is one of the other attractions not the simplicity of the system? It removes some of the ambiguities that many of us have felt uneasy about in the past. In responding, could the Leader return to the question that my noble friend Lady D’Souza asked about the separation of money that is claimed for travel? That is never received by any individual Peer and yet appears in the receipts of money that is claimed by Members of your Lordships’ House. There is surely a desire on all our parts to continue to encourage those of us who come from the far-flung parts of the United Kingdom to carry on coming here; we do not want to turn your Lordships’ House into a purely metropolitan establishment that draws only on Greater London. Is it not important that we show that separation? I also ask the Leader about the position of staff. Members of your Lordships’ House have research assistants or secretarial staff who are currently supported during recess with a specific payment. What will be their position in the future?
Lord Strathclyde
My Lords, the noble Lord, Lord Alton, made a straightforward case for the attractions of this in that it removes ambiguities with which many Peers have felt uncomfortable. Although they believe that they were on the right side of the line, they felt that they still had to explain themselves and to justify the position that they had taken. At a stroke, those ambiguities are removed. It is my assessment, with a little help from the House authorities, that this is cost-neutral. Potentially, there will be an added advantage of a reduction in the cost of the bureaucracy should we have had a more complex system of expenses.
Travel expenses will continue to be paid as before, although my noble friend Lord Wakeham and his committee make one or two suggestions on the SSRB’s report. There is already a different column for the declaration of travel expenses. I agree with the noble Lord that it is sometimes unfair that, because a Peer’s travel expenses are very high because they come from the far-flung parts of the United Kingdom, that puts them at the top of the list of those who have claimed expenses. Every year, we urge the media when they report on these things to take the travel expenses firmly into account. As the noble Lord has seen, they do not always listen to what I regard as wise advice.
Staff will be paid for by Members out of whatever resources they have, including the new £300 allowance. It will be up to Members to decide how best to do that over the year. There will be no extra or additional secretarial allowance paid during sitting days or recesses.
Baroness Jay of Paddington
My Lords, perhaps I may reinforce the comment made by the noble Lord, Lord Alton, about good employment practice with members of personal staff, particularly secretaries, who cannot be laid off in terms of good employment practice for three months in the summer and then reappointed. There may be something to be looked at further than that. On a broader point, has the noble Lord considered that, in pursuing the question of House of Lords reform and the endless question of how to deal with those Members of the House who are already here, if we abandon, as he is proposing, an expenses regime, one of the issues in principle about getting people to retire or asking them to leave will be overcome because there will be no reason why, in principle, some sort of pension should not be paid to them?
Lord Strathclyde
My Lords, it is typical of the noble Baroness to raise such a deeply controversial subject in the manner that she has. Tomorrow, we will spend many hours discussing all these issues. No doubt, the question of transition will come up. The noble Baroness, with all her experience, has spotted that in terms of transition there is a real difficulty about how we move from one House to the other. I can assure her that these issues are uppermost in our minds.
Lord Marlesford
My Lords, in relation to the point on tax, which was raised by my noble friend Lord Phillips of Sudbury, the noble Lord may not be aware—although obviously the Leader of the House will be aware—that in the detailed documents attached to the Budget Statement, it is said that HMRC will have to amend the rules to enshrine the long-established practice that expenses received by Members of another place are not taxable. In other words, it is proposed to retain the system whereby Members of another place are not taxed on their expenses because, as the note says, with the arrival of IPSA the determination of expenses for the House of Commons is no longer quite the same. That is being dealt with in another place.
On the more general point, it is welcome that transparency and simplicity are important and overriding considerations. There is another consideration as to whether the taxpayer will regard £300 a day as good value for money. Is it a little bit relevant that for many professions such as doctors, accountants, lawyers and others, £300 buys about one hour of their time?
Lord Strathclyde
My Lords, what my noble friend said about taxation, HMRC and Members of another place shows how complicated this issue is. There is already a whole variety of rules for Parliament and, as the noble Lord, Lord Alton, said, if you give money to research assistants, it is almost going through individuals’ hands, and HMRC may indeed wish to take all of that into account. That is the start of a wider debate that I do not wish to continue this afternoon.
I have also wondered about the figure of £300. I am sure that some members of the public would regard that as being extremely good value, when they look at the quality of the work that they are getting from individual Peers, and others may not. It is important for us all to demonstrate that when we claim this money we are working for it and playing a full part in the legislature of which we are all members.
The Lord Bishop of Exeter
My Lords, we on these Benches have not taken a particular view on these matters beyond believing that any system should be fair, transparent and clearly good value for the public purse; but sitting on these Benches involves becoming very aware of, and developing a great appreciation for, the tremendous hard work on the part of all working Peers on all Benches. One is also aware of how much of that work continues beyond the House going into recess. Is there not a stronger case for looking again at the resourcing of working Peers out of the House’s sitting time to ensure that they are properly resourced to undertake their important public role and that no one is left unnecessarily out of pocket?
Lord Strathclyde
My Lords, the right reverend Prelate’s point about pay outside sitting days has been raised many times. This scheme will pay £300 per sitting day only, and the judgment that I and others who have looked at this matter have taken is that that amount should keep Peers going when we are not sitting. It is entirely fair enough to say that the totals do not add up to as much as full-time Peers can currently claim, but, as I said in my Statement, in today’s economic climate it is right for us who gain the most to say that we are happy to take a reduction.
Baroness Symons of Vernham Dean
My Lords, does the Leader of the House agree that a number of the questions that are being raised are dealt with in the report by the noble Lord, Lord Wakeham. We have spent a great deal of time discussing taxation. The question of additional office costs is also dealt with in the report, as are the important questions raised by the noble Baroness, Lady D’Souza, about long periods of illness. The noble Baroness’s point was not about the powers of the Clerk of the Parliaments to give additional help to noble Lords who have, for example, mobility difficulties, it was more about what happens during extended periods of illness and some of the representations that have been made in relation to them. We are starting to move into a more detailed debate.
I support, as the noble Lord, Lord Wakeham, does, the thrust of the additional element brought into this report—the alternative suggestion. Of course my noble friend Lord Tomlinson is right to say that this was not included in the principles and architecture of the SSRB report. That is why the noble Lord, Lord Wakeham, explicitly states in his report that he is moving outside the architecture and principles described in paragraphs 5.56 and 5.57. That notwithstanding, it is possible to move outside it because circumstances have changed. Clarity, transparency and simplicity are what we should aim for.
Lord Strathclyde
My Lords, the noble Baroness has been extremely helpful. As a leading member of my noble friend Lord Wakeham’s group, she has also demonstrated that there is an enormous amount of detail in my noble friend’s report. I hope that, when read in conjunction with my Statement today and with the report of the SSRB, it will make everything considerably clearer.
I accept what the noble Baroness said: perhaps I did not answer the Convenor of the Cross Benches sufficiently well when she asked about periods of illness, particularly for Members of the House who are severely disabled. I have never opposed any attempt to find a regime for a very few special cases. We are one of the few legislative assemblies to have allowed severely disabled people to play their part. I am sure that if the noble Baroness were to invite the House Committee to re-examine these issues, she would receive a positive response.
Lord McIntosh of Haringey
My Lords, my question is about the word “attendance”, which sounds very simple. I spent the past week at the parliamentary assembly of the Council of Europe in Strasbourg, where they have changed the rules. You get your hotel paid, and a smaller amount than used to be the case for subsistence. I was in Macedonia earlier this month, where the subsistence amount was the munificent sum of €28—in addition to the hotel, which they chose. Those who serve the House away from the House, such as members of the Council of Europe and the Western European Union—are they not attending the House for the purpose of this exercise?
Lord Strathclyde
My Lords, it is not envisaged that the attendance rules will be changed for Peers who are working outside the House. The current rules are clear about what can be claimed when Members are outside the House, and it is not intended that that should change.
G8 and G20 Summits
Lord Strathclyde Excerpts(13 years, 12 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, it may be a convenient moment to turn to the second Statement, which was made a few minutes ago by the Prime Minister in another place.
“With permission, Mr Speaker, I should like to make a statement on the G8 and G20 summits which took place in Canada. First, I am sure the whole House will join me in paying tribute to the seven British servicemen who have lost their lives in the past week. From 40 Commando Royal Marines: Sergeant Steven Darbyshire. From 1st Battalion the Mercian Regiment: Colour Sergeant Martyn Horton, Private Douglas Halliday, Private Alex Isaac. From the Yorkshire Regiment: Lance Corporal David Ramsden. From the 4th Regiment Royal Artillery: Bombardier Stephen Gilbert, who died from injuries received in an explosion earlier this month; and the soldier from 101 Regiment Royal Engineers who died yesterday. As the country marked Armed Forces Day this weekend, people did so with tremendous pride but also great sadness. We will never forget what these men and so many of their colleagues have given for us.
As I have said, I am determined that our forces will not stay in Afghanistan a day longer than necessary. I led a discussion at the G8, where we made it clear that we ‘fully support the transition strategy adopted’ by international partners. We are not after a perfect Afghanistan—just a stable Afghanistan, able to maintain its own security and prevent al-Qaeda from returning. So the G8 sent a collective signal that we want the Afghan Security Forces to ‘assume increasing responsibility for security within five years’. The presence of large-scale international forces cannot be an indefinite commitment. We need to get the job done and bring our troops home.
Let me report to the House on the main conclusions of the G8 and G20. I have placed copies of the communiqués in the Library so that people can see the details of what was agreed. The G8 is a good forum for the leading democratic economies to give proper strategic consideration to the big foreign policy and security issues. It also plays a vital role in helping the richer nations to improve the future of the poorest. In my view, these two vital functions of this forum should continue. Let me take each in turn.
On the big security issues, we discussed the Middle East peace process and agreed the importance of putting pressure on both sides to engage in the proximity talks with the aim of creating the conditions for direct talks. President Obama specifically said that he would make this his priority in the coming months.
While the changes that Israel had proposed are welcome, they do not go far enough, and the communiqué says that the current arrangements in Gaza,
‘are not sustainable and must be changed’.
On Iran, UN Security Council Resolution 1929 was welcomed. The communiqué states that all countries should “implement it fully”. Since the G8 includes Russia, Britain believes this was significant.
The UK also made the case for all members of the G8 to have positive engagement with Turkey, which could have a key role to play in resolving both the Iran issue and encouraging progress on Middle East peace. We also discussed North Korea, deploring and condemning the sinking of the “Cheonan”, nuclear disarmament and non-proliferation.
On development, while the G8 has played an important role in increasing aid spending by the richest countries in the world, some of those countries have not met the commitments they set out. I stressed the importance of transparency and accountability, and the accountability report sets out what countries have done in meeting their commitments. While not perfect, it is really good progress in making sure that countries cannot make promises without being held to account for them.
Even at a time when our countries face difficult budget decisions, it is important we maintain our commitment to helping the poorest in the world. The UK is maintaining its commitment to increase spending on aid to 0.7 per cent of gross national income. This gives us the opportunity to exercise leadership. At the same time, in order to take the public with us, we also need to make sure that every penny will reach those who need it most—that means transparency and accountability. It also means that the projects we support must be deliverable, practical and measurable, addressing the causes of poverty and not just its symptoms.
The Muskoka Initiative is a case in point. Today in the UK, the chances of dying in pregnancy and childbirth are one in 8,200. In parts of Africa, it is as low as one in seven. This is something we can change—and we must change. The resources agreed, including a big contribution from the UK, could lead to an additional 1.3 million lives being saved. As the White Ribbon Alliance points out, if you save the mother, you save the family; and if you save the family, you build a stronger society and a better economy.
Turning to the G20, this is now the right forum for all the leading economies of the world to discuss the vital economic issues. The key goal of the G20 is to continue the recovery of the world economy and secure sustainable growth. The argument, proposed by some, that deficit reduction and growth are mutually exclusive is completely wrong. The whole approach underlined by the IMF for this G20 and the subsequent meeting in Seoul is all about how the world should maximise growth through the right combination of three things: deficit reduction, tackling imbalances, particularly through actions by emerging economies, and structural reform in the advanced economies. There was broad agreement on all three and this is reflected clearly in the communiqué.
On deficit reduction, the G20 agreed:
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation”,
and that there was,
“a risk that failure to implement consolidation … would undermine confidence and hamper growth”.
The advanced G20 economies committed to at least halve current deficits by 2013 and stabilise government debt to GDP ratios by 2016. While we agreed that the speed and timing of deficit reduction will vary with national circumstances, the verdict of the G20 was unequivocal.
For countries with large deficits, the time to act is now. Britain has one of the largest deficits in the G20, and the summit specifically welcomed the plans set out in our Budget last week. In terms of addressing the fundamental imbalances, China’s recent decision to move towards greater exchange rate flexibility is welcome. As, in the end, growth comes only from rising productivity, we also agreed on the need to pursue structural reform across the whole G20 to increase and sustain our growth prospects.
On financial reform, the G20 agreed ‘a set of principles’ on bank levies to ensure that the financial sector makes a,
‘fair and substantial contribution towards paying for any burdens associated with government interventions to repair the financial system’.
That is very much in line with the plans for a bank levy, which we announced in the Budget. On making sure that the banks in all countries can withstand future crises, we also agreed that,
‘the amount of capital will be significantly higher and the quality of capital significantly improved’.
We agreed that new standards on the quality, quantity and transparency of capital and liquidity should be finalised by the Seoul summit in November.
Basle took 10 years and this looks like it will be completed in one. Although the drawing up of clear, robust new rules is absolutely essential, it is important that they are not implemented too quickly. We do not want a further monetary squeeze or a reduction in bank lending at this stage of the recovery. The biggest stimulus we could give to the world economy today is the expansion of trade. Although the G20 agreement to extend its pledge that no additional trade barriers should be put in place is welcome, continued failure to make progress on Doha is deeply disappointing. This has now been eight years in negotiation and there can be little confidence that, as things stand, the round will be completed rapidly.
A completed trade round could add $170 billion to the world economy. The UK led the working session on this issue at the G20. One potential way of making progress is to try to add to the benefits of the round so that all parties can see reasons for going that final mile. That was supported by President Obama. The director-general of the World Trade Organisation, Pascal Lamy, suggested that all trade negotiators should return to the table and consider both what it is they really need from the round and what it is they are prepared to offer to get it moving again. That will lead to a report at the Seoul meeting in November.
Too many people still see this as a zero sum game, where one country's success in exports is another country's failure. That is nonsense. Everyone can benefit from an increase in trade flows. We will play our part in breaking the logjam. I want this country to lead the charge in making the case for growing trade flows around the world.
On climate change, while the G8 communiqué was strongly positive on limiting the rise in global temperatures to less than two degrees and on seeking an ambitious and binding post-2012 agreement, at the G20, the communiqué was more limited. This is partly because some countries do not see the G20 as the forum for discussing this issue. In discussions, it was also clear that there was widespread disappointment at the way that Copenhagen failed to deliver a legally binding global deal. We must not give up on this. We will be playing our full part in pushing for a successful outcome at Cancun.
This long weekend of summitry was a good opportunity to build Britain's bilateral relationships. Among others, I had useful meetings with President Obama, President Hu of China, Prime Minister Singh of India and Prime Minister Erdogan of Turkey. In building a very strong friendship with our leading European partners, I also suffered the exquisite agony of watching England lose 4-1 to Germany in the company of my good friend Chancellor Merkel and the German summit team. Although I cannot recommend the experience of watching football in the margins of a G20 summit, I commend this Statement to the House”.
Lord Strathclyde
My Lords, I was going to say how grateful I was that the noble Lord, Lord Eatwell, was standing in for the leader of the Opposition. Having heard his speech, I am not sure that that is the case. He asked a series of extremely pertinent questions that, if this were a full debate of several hours, would take me tens of minutes to reply to. I hope that he will forgive me if on some of his specific questions I answer him by way of a letter. As I know that others in the House will take what the noble Lord said seriously and with great interest, I will make sure that a copy of the letter is put in the Library.
The noble Lord, Lord Eatwell, started off with an important question about the statement by my right honourable friend the Prime Minister on Afghanistan, the so-called five-year limit and whether any discussions took place with our allies. We are in a state of continual consultation with our allies in Afghanistan. None of that statement was a surprise to them. They understood exactly the point that we were making. There is no desire in any country for its forces to remain in Afghanistan for any longer than they absolutely have to. Over the past few weeks, we have laid out a set of priorities that we believe will enable British forces to have largely removed from Afghanistan, as part of getting civil society in Afghanistan working again.
We have set ourselves new priorities on the aim of development aid. It is right that we and the G8 should do so. It is important continually to review our processes and priorities for our development goals, and the new priorities on the health of mothers, children and families speak for themselves. However, a unity of purpose does not mean a unity of means. Although it is true that Britain has maintained its commitment on funding overseas aid, other countries have found it more difficult. However, in the medium term, there is no reason why we should not get back to the original position. We do not anticipate new money coming in to deal with those priorities. It will be a change of priorities within the existing budget but, as we have explained, over time we hope to meet our target of 0.7 per cent of GDP.
On bank levies and the financial situation, as the noble Lord knows only too well, the IMF forecasts that the UK will in 2010-11 have the largest budget deficit in the G7. When he talked about the record of the former Chancellor of the Exchequer, I was not quite sure whether he took pride in the legacy that the Labour Party left this country. We must never lose sight of the lesson of the past three years: taxpayers pick up the bill not only when one of our banks fails but when Governments spend too much money. The bank levy, the concentration of risks and higher capital requirements will all be debated and discussed as quickly as possible over the next few months. There is no question of the new bank rules being imposed. They will need to be agreed by all, and we believe that there is every possibility of those new rules being agreed by everybody.
The noble Lord poked fun at my coalition colleagues, which was entirely unnecessary. I can confirm to him that we are getting along extremely well. Sometimes people say that we have a lot to learn from our European colleagues. I hope that when it comes to working with coalition colleagues, they will find that they have a lot to learn from us.
Lord Laming
My Lords, I am sure that the whole House will support the warm tributes that the Leader of the House and others have paid to our brave military personnel. Does he accept that many of us welcome the Prime Minister’s decision to get our troops out of Afghanistan at the earliest practicable time? Does he also accept that, if that requires involving the Taliban in negotiations, that is a nettle that will need to be grasped?
Lord Strathclyde
I thank the noble Lord, Lord Laming, for what he has just said. He reiterates the position extremely well and with a clear understanding of what the issues are. There is increasingly an appreciation and understanding that a violent and military-directed war in Afghanistan is not a winnable proposition for anybody, least of all for the people of Afghanistan themselves. All peace processes around the world have dealt with it by, slowly but surely, bringing all sides together. That will need to be the case in Afghanistan and is increasingly the thrust of our policy.
Lord Dholakia
My Lords, may we from this side join the noble Lord in the tributes that he paid to the seven soldiers who lost their lives last week?
One matter of concern is the non-action on development aid, particularly the lack of action on the targets for alleviating poverty. How do the Government plan to ensure that the decisions taken by the G8 and the G20 will be actively implemented? Furthermore, why was climate change discussed only in the G8? If there is to be a global agreement on the way forward on climate change, surely the non-G8 members of the G20 will have to play a crucial role. Finally, do the Government agree that the G8 has now become an anachronism and that it would be better if its role was assumed completely by the G20?
Lord Strathclyde
My noble friend is right to draw attention to development aid, a matter which very much dominated the discussions of the G8. That delivered for the first time a comprehensive accountability report which assessed transparently the G8 progress against its development-related commitments. In the communiqué the G8 leaders reaffirmed their commitments on overseas development aid, on aid effectiveness and on HIV/AIDS. Furthermore, however cynical one is—and I am not suggesting for a moment that my noble friend is cynical when it comes to these matters—about a very serious attempt to give a new priority to these initiatives, the House will recognise that there was an agreement in the Muskoka initiative which means that funding for maternal, newborn and child health will be the new priority.
On the question of climate change, I can understand why my noble friend should feel aggrieved that this could be debated and discussed with one group but less successfully with another. However, there are those at the G20 who felt that it was not appropriate for it to be discussed at that level and that it should remain with the G8. However, there is the climate change conference in Cancun later this year. An enormous amount of work is taking place between now and then to give effect to a global agreement.
Lord Howarth of Newport
My Lords, on global imbalances, the Statement referred only to the modest, although welcome, adjustment that the Chinese authorities have allowed to the exchange rate of the renminbi, but surely the Government do not think that that will be enough to solve adequately the problem that is being generated by the continuing propensity of certain major economies, notably China and Germany, to invest and export very powerfully, and the propensity of other major economies, notably that of the United States of America and our own, to borrow and consume excessively. Is it not inevitable that if we continue with these imbalances, the trade surpluses of the exporting countries will be recycled to create excessive liquidity in the economies of countries such as our own that tend to consume too much, leading to another manic and unsustainable boom followed by a miserable bust? What were the Prime Minister’s suggestions at the G20 for averting this outcome, and what response did he receive?
Lord Strathclyde
I could not possibly comment on the noble Lord’s direct question at the end, but the whole issue of global imbalances concentrated the minds of the G8, and indeed of the G20. The new flexibility in the Chinese arrangements is an important step in the right direction. It is the kind of flexibility that we have been looking for for some time, it will make an appreciable difference—so we all hope—and it is recognition by the Chinese authorities of China’s importance to the world economy as a trading nation and as an increasingly important currency. The noble Lord might say that this is a very small step, but it is at least a small step in the right direction.
Lord Hannay of Chiswick
My Lords, does the Minister accept that the case for maintaining the G8 while the G20 is functioning is rather less strong than the Statement that he read out suggests? Here, I join the noble Lord, Lord Dholakia. Only by stretching the word “democratic” a very long way indeed can it be applied to the G8, which has Russia among its members. It is also surely worth remembering that there are rather better qualified democracies in the G20, such as India, Brazil and South Africa, the membership of at least some of which we support as permanent members of the Security Council. I therefore hope that the Government will reflect a little on the need for these two forums to continue to run side by side and confusing the issues that they discuss quite a lot—a confusion that I suspect will increase when they meet in different places, as presumably they will have to when the G20 goes to Mexico in 2012, as is said in the communiqué. I therefore hope that the Government will reflect on the possibility of a sunset clause for the G8.
Will the Minister also be so kind as to comment on what the Government are doing to ensure that these endlessly repeated commitments to complete the Doha round are brought to a decision in the not too distant future? The wording of the communiqué is extremely weak. I thought that the wording of the Statement was first class, if I may say so. It reflects the view of those on all sides in this House and in this country that this is a really major objective. However, there is no sign whatever that the United States Administration are putting their back into completing Doha. What strategy do the Government have for moving that ahead at Seoul and thereafter?
Lord Strathclyde
My Lords, my right honourable friend found the meetings at the G8 and the G20 useful. They were particularly useful because they were different, and because, as a new Prime Minister, he was able to meet different political leaders at different stages. It is impossible for me to say whether these structures will be maintained in the long term. As the noble Lord recognised, they will not be meeting together in the future.
On the Doha round, the noble Lord, Lord Hannay, said that he finds the Statement convincing but the communiqué rather less so. Frankly, we were rather disappointed by the wording in the communiqué. It is a key strategic plank of this Government to move issues forward on the whole question of the Doha trade round and we will be developing a strategy so that we turn that leadership into action by convincing different countries that it is in their material interest to see an increase in global trade. I am sure the whole House agrees with that but it will need our combined collective will, good judgment and the kind of experience that the noble Lord, Lord Hannay, possesses in order to convince other countries of that necessity.
Baroness Symons of Vernham Dean
My Lords, first, can the noble Lord shed a little more light on the Prime Minister’s thinking on withdrawing our troops from Afghanistan by 2015? It was always the view in the past, as I understood it, that giving a date for withdrawal would be like signalling to the Taliban and al-Qaeda how long they would have to hold out before they would not have any opposition on the ground. My concern is that many people will think that this gives the Taliban and al-Qaeda an opportunity to scale down what they are doing, gather their resources and armaments, bring in fresh recruits and simply re-emerge when the foreign troops have departed. I wonder if the noble Lord can help me on that.
Secondly, the Statement says that the biggest stimulus that we can give the world economy today is the expansion of trade. Can the noble Lord tell us when the Government are planning to appoint a Minister dedicated to trade promotion? I know that, among his many other duties, Mr Mark Prisk has been appointed pro tem to look at trade—but the fact is that he has many other duties. Previously, the noble Lord, Lord Digby Jones, my noble friend Lord Mervyn Davies, and indeed I myself were dedicated to trade promotion and expansion. When will the Government be able to match what they are encouraging the world to do by doing a little better at home?
Lord Strathclyde
My Lords, on the point about Afghanistan, I agree that the view was taken in the past that making too rigid a timetable and setting the end date too soon simply gives a target for everyone to aim at. That is not true in this case because we are in a very different situation. We have been in Afghanistan for about nine years now and we can see that this current year is extremely important in creating the right grounds for long-term peace and rebuilding civil society. In this case, I do not think that we will run into the danger of giving the Taliban a target, and after all, five years is a long time to have to hang around waiting for British troops to leave. Moreover, that would not achieve the right conditions on the ground for rebuilding civil society in Afghanistan, which is important. So while I accept the point made by the noble Baroness, it is my wish, as I know it is hers, that those conditions will not apply.
On the question of the Minister for Trade, I could not agree more with the noble Baroness that such a Minister is important and that—by her own example and that of others in this House who have held the role—it is a key role for the Government and for focusing our overseas export effort. I am delighted to say that in the past 24 hours Mr Mark Prisk has been made the Minister of Trade. I know that, aided and helped in every way by my noble friend Lord Howell of Guildford, they will make a valuable team. Moreover, my noble friend will be answering for him in this House.
Lord Lawson of Blaby
My Lords, is not the answer to the question posed by the noble Lord, Lord Dholakia—who, having asked his question, appears no longer to be in his place—that the G20 was unwilling to tackle the question of climate change because the major developing nations such as China, India and, to a certain extent, South Africa and Brazil quite rightly attach much greater importance to economic development and the relief of poverty, to which moves on climate change would be entirely antipathetic? Nevertheless, does my noble friend agree that there is reason to welcome the response by that distinguished economist, the noble Lord, Lord Eatwell, speaking on behalf of the Official Opposition? Although he devoted his comments largely to the minutiae of banking reform—which are important but not urgent matters; indeed, it is more important to get this right than to do it quickly—he accepted, tacitly at any rate, the urgent need for the fiscal consolidation which this Government have shown they have the courage to enter into despite some of the rumblings from the neo-Keynesian dinosaurs who appear to be around.
Lord Strathclyde
My Lords, I am sure that the noble Lord, Lord Eatwell, enjoyed that in the spirit in which it was intended. I agree with my noble friend that fiscal consolidation is important. Not only have we struck the right balance but, increasingly around the world, it is seen that we have struck the right balance. On the question of the G20 and the G8, my noble friend is again correct. Different countries have taken different views of these issues, particularly the developing countries. That is not news today but has been true for some time. That is why the climate change conference in Cancun will be extremely important.
Lord Patel
My Lords, I commend the Government on their commitment to increasing overseas aid to 0.7 per cent of GDP, as I do their renewed commitment to reducing the terrible tragedy of maternal mortality. Does the Leader of the House agree that in any new strategy which the Government might develop for reducing maternal mortality, our professional organisations will be well placed to assist in the health service reforms required? Secondly, while a reduction in maternal mortality is important, we must also not forget that we need to reduce the terrible burden of other reproductive health issues, such as the greater number of deaths—even more than through maternal mortality—that occur through cervical cancer in low-resource countries, which is a totally preventable disease; the problem of fistulas; and the number of children dying in childbirth or immediately after, which is now some 3 million.
Lord Strathclyde
My Lords, the noble Lord, Lord Patel, rightly draws us back to the issue of overseas aid. The reasons for changing the priorities of the G8 were not taken lightly. Obviously, in putting this new strategy into effect, there will be wide consultation with involved parties—most importantly with the health authorities of the countries most directly involved—so that the resources spent can be used as effectively and efficiently as possible. The noble Lord is also correct to refer to the range of preventable diseases that exist and which at the moment are not dealt with sufficiently well. This issue is part of an overall programme. I do not suppose we will see all the answers come out quickly, but the direction of travel is important.
Lord Bates
My Lords, I welcome my noble friend repeating the Statement, particularly the strong section relating to development aid. Can he confirm reports that there was a shortfall of some $10 billion in the commitment of $50 billion made at the Gleneagles G8 summit five years ago? Can he further confirm that the two countries primarily responsible for that are Japan and Italy? What conversations did my right honourable friend the Prime Minister have with them on that issue? Given that they have cited their fiscal position as the reason for not fulfilling their commitment, will my noble friend encourage the Prime Minister to give them a lesson on how to rigorously tackle the fiscal deficit while still being fair and caring about the world’s poorest?
Lord Strathclyde
My Lords, there are many people who will be disappointed that some of the Gleneagles aims have not been met. My noble friend referred to two of those countries. In the communiqué that was delivered this weekend, there was genuine recognition that there needs to be more transparency and accountability on the part of those countries that have promised to help but have not yet delivered.
I know that the Prime Minister draws the attention of many people, not only from overseas, to the problems that we face in this country and how we are tackling them. They may well be a beacon of light to help other countries meet the commitments that they have already made and come up with the money.
Business of the House
Lord Strathclyde Excerpts(13 years, 12 months ago)
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Lord Strathclyde
To move that the debate on the Motion in the name of Viscount Montgomery of Alamein set down for today shall be limited to three hours and that in the name of Lord Mawson to two hours.
House of Lords: Financial Assistance to Opposition Parties
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Lord Strathclyde
That, in the opinion of this House, the resolution of the House of 30 July 2002 (Financial Assistance to Opposition Parties) should have effect, in relation to the giving of financial assistance, with effect from 12 May 2010, as if—
(a) in paragraphs (1) and (2)(a) the references to the second largest opposition party were omitted, and
(b) paragraph (8)(b) were omitted.
Baroness Boothroyd
My Lords, this is an important resolution. It is cloaked in technical terms and it affects the way in which opposition parties are funded in this House to help them perform their parliamentary duties. Sadly, no one would know that without recourse to Hansard and to the resolution of 2002 that the Government seek to amend. I regret that. Where public funds and parliamentary accountability are involved, the Government need to be more transparent.
I believe that the Motion before us is more than a tidying-up operation. Rightly, it recognises the changed fortunes of the Liberal Democrats; wrongly—unless I am corrected—it implies a severe cut in the distribution of Cranborne money to the opposition parties in this House by no less than 30 per cent. At the same time, it does less than justice to Cross-Benchers, whose independence will always disbar them from office and who operate on a shoestring.
The Cross-Benchers came late to the party when Cranborne money was distributed for the first time in 1997. They had to wait two years. By that time, the cake had been cut and they were handed the smallest slice—a meagre slice, some would say. Cross-Benchers received £10,000 out of a total allocation of £291,000. Our relative position has improved slightly, but it remains at a subsistence level. I am really quite shocked at the disproportionate way in which Cranborne money has been divided during the past 13 years. To some, the Cross-Bench share was almost a joke.
Eight years ago, when Lord Williams of Mostyn increased the Cross-Bench allocation to £35,000, he laughingly remarked:
“I stand amazed at our generosity”.—[Official Report, 30/7/02; col. 820.]
My colleagues were grateful all the same.
Last year, the Cross-Bench Convenor, the noble Baroness, Lady D’Souza, received the princely sum of £61,003—a substantial percentage increase, you might say, but that was only because the starting point was so low. Cross-Benchers had trailed so far behind they were almost out of sight.
The £60,000 a year allows our Convenor to employ one full-time and one part-time assistant to administer her office and respond to the needs of the 187 Cross-Bench Peers. She also represents us in consultations with the Government and other parties. She sits on some nine House committees. I pay tribute to her fortitude, but it is wrong that she should have to bear so heavy a burden without adequate support.
In contrast, the Conservatives and the Liberal Democrats last year shared the rest of the Cranborne money on a 2:1 ratio. In 12 months, they received £770,000. If that is not lop-sided, I do not know what is. Sinn Fein received more than the Cross-Benchers for its non-performance in the Commons. Despite the refusal of five Sinn Fein Members to take the oath of allegiance, Sinn Fein netted £96,000 to finance what the previous Government described as “representative business”, a term capable of many interpretations. I take these figures from an excellent research paper on the public funding of opposition parties produced by the Commons Library. The section on the way in which the Cranborne money operates makes eye-popping reading.
Sadly, unless the Leader of the House enlightens us otherwise, this Motion makes matters worse. In the absence of further information, the Government appear intent on returning to the Treasury the funds previously allocated to the Liberal Democrats. If that is right, the total amount of Cranborne money available to the Opposition will be reduced by nearly a third, all without reference or explanation to this House.
A clever lawyer might argue that the Cross-Benchers are entitled to all the Cranborne money that went to the Liberal Democrats—not that I would think such thoughts, of course. But the pecking order set out in the resolution of 2002 is clear. Then, the Cross-Benchers were in third place; now, they are in second place. It is a position that the Government choose to ignore to save money and—who knows?—perhaps to reassure their junior partner that its entitlement to Cranborne money is secure if the coalition fails. I do not challenge Labour’s entitlement to the £475,000 which the Conservatives received as the Official Opposition last year—that is, of course, on top of the salaries paid to their Leader and their Chief Whip. Nor do I begrudge Ministers the command of resources needed to formulate their policies, run their departments and present their case as persuasively as possible. I do, however, believe in fair play and hope that the Government do too.
As the House knows, we on these Benches belong to no party. We have no common platform or agreed policies, and no leader. We speak and vote according to judgment and conscience, without the discipline of Whips to guide us through the Lobbies, and we may be swept away if this House is replaced by an elected Chamber. However, while we are here Cross-Benchers will, I know, do their duty to Parliament and to the country. They need adequate resources to do so. We are not partisans but share the same principles and, I believe, perform a useful role.
These Benches do not need the hundreds of thousands of pounds that routinely go to opposition parties. Your Lordships may be surprised to know that during Labour’s period of office, the Conservatives received over £4 million in Cranborne money, the Liberal Democrats £2 million and the Cross-Benchers £400,000. I was a Whip in Harold Wilson’s Government when the first public funds were allocated to opposition parties in the Commons. The aim was to improve the parliamentary effectiveness of parties and groups not in government. I hope that the noble Lord the Leader of the House will agree that the need to do so has not changed. He is long experienced in the travails of opposition, and I hope that he will review the allocation of Cranborne money in the light of my unashamed appeal for a better deal for these Benches. I do not seek generosity; I seek fairness. Fairness will do for me.
Lord Dholakia
My Lords, I ask for clarity in this resolution. Will the Leader of the House confirm that this resolution applies for the duration of this coalition Government? Now that there is the arrangement with the fixed-term Parliament, would he not consider it necessary to have a sunset clause for the termination of the arrangement?
Lord Strathclyde
My Lords, I am very grateful to all noble Lords who have spoken, especially to the noble Baroness, Lady Boothroyd. I am certainly one who would never want to cut across what she says. I am glad that what she said was said with her customary elegance and force. There was also an element of logic behind it. I shall try to deal with all the points that the noble Baroness raised—no mean feat.
I do not share the view of one of my predecessors, Lord Williams of Mostyn, that it was an act of great generosity. I have always taken the view that parties that are in opposition or on the Cross Benches should receive support from the taxpayer so as to fulfil their functions. The noble Baroness said that it was a disproportionate way in which to do things. Her main point, I think, was that there was an unfairness between how the main party in opposition and the Cross Benches were dealt with.
This lies at the heart of how I think the House views the different roles of the Opposition and the Cross Benches. I was in opposition for a long time, so I know perhaps more than anyone else that the Opposition have a difficult task to do. In an unpaid, part-time House, they need to provide a substantial number of Peers to act as shadow Ministers and they do not have the benefit of the Civil Service to provide them with the papers and amendments that are required for the Opposition to function. As I have said many times, it is important that there should be a strong Opposition. That is why a substantial amount of support is provided to the party of opposition in this House, which is now the Labour Party. I do not think that anyone would believe that the nearly £500,000 given by the taxpayer to the Labour Party is overgenerous. It is probably about right and it allows the Opposition to do the work that they are asked to do.
Those conditions do not apply to the Cross Benches. The Cross-Benchers—I say this with the greatest respect—do not have a Front Bench or a central office. They are not involved in the formulation of policy. They do not need to negotiate with their colleagues in another place, because they do not have any colleagues in another place. As the noble Baroness pointed out—and I cannot disagree—the Cross-Benchers come together as a loose alliance for administrative purposes, but they are all individuals, with individual views of how things should be done. It may be that there is not quite enough money to help the Convenor to do her job. I do not wish to be in the least bit flippant about this and I pay the greatest tribute to the work that the Convenor of the Cross Benches does on behalf of her whole flock—indeed, I pay tribute to her predecessors, too. It is faintly shocking that, 10 years ago, the Cross Benches received nothing at all. The amount was reviewed only two years ago and was increased by 48 per cent—a substantial increase—to £61,000. The current amount is, I think, £63,000. I know that that was from a relatively low base, but I am always happy to receive representations from the Cross Benches and from the Convenor about whether that figure should be increased.
My noble friend Lord Alderdice raised an entirely different question, which was about the funding of political parties when they are in government. I am not enormously attracted to that idea. The purpose of Cranborne money, which is the subject of the Motion, was to support the parties of opposition. There is now only one party of opposition. Naturally, consideration was given as to whether the one party of opposition should receive all the Cranborne money, but wise counsel prevailed on both sides of the House. We took the view that, as the Liberal Democrats had joined us in coalition government, both we and they should give up that money. There is a good reason for that. We now have the resources of the Civil Service at our disposal to create policy and to do all the administrative work. We recognise that the civil servants do an excellent job.
Other Parliaments and Assemblies have created different traditions, particularly those that have almost inbuilt coalitions. I have no idea how long this coalition will last, although I hope that it will last for a long time. That leads me to the question raised by my noble friend Lord Dholakia. He rightly said that, if a second party of opposition should re-emerge, the whole situation should be reconsidered and the position reviewed. I cannot conceive of circumstances in which such a review would not be done in a most positive light, with Cranborne money reapplying to a second party of opposition.
Although the Motion on the Order Paper is slightly opaque, I think that it has now been clearly explained, not least by the noble Baroness, and I hope that we can now agree it.
Viscount Tenby
My Lords, the remark of the much lamented late Lord Williams of Mostyn has twice been referred to today. For the record, he made that remark in response to a rather carping comment from me; I was speaking for the Convenor on that day. It was ironic, and there was a twinkle in his eye when he said it.
UK: International Competitiveness
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Lord Strathclyde
My Lords, there is time for both noble Lords. Perhaps we should have the noble Lord, Lord Cotter, first, and then the noble Lord, Lord Jones.
Lord Cotter
My Lords, the Government are rightly committed to reducing bureaucracy to help competitiveness. Will the Minister look at the hurdles faced by small businesses when they try to borrow? They include new charges and fees along the line, audits, facility fees, reviews, management fees and so it goes on. These are clearly blocks in the way of the ability to borrow. Will the Minister also consider the high rate at which businesses frequently have to borrow through the banks?
Business of the House
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Lord Strathclyde
That leave be given to advance the Motion in the name of Baroness Verma from Monday 28 June to Tuesday 22 June.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, in moving the Motion, it may be helpful if I say a few words about the scheduling of business in the next few weeks. The Motion on the Order Paper today seeks leave to bring forward from next week to tomorrow the debate in the name of my noble friend Lady Verma on progress towards meeting the millennium development goal on universal primary education. This proposed change has come about as a result of discussions on the Academies Bill, which the House will begin considering in Committee today.
Last Wednesday, the Chief Whip published Forthcoming Business, which set out three consecutive days for Committee stage on the Academies Bill. I must confess that there was a misunderstanding as to how this came about, which led to some feeling that this was not the optimum way to proceed. As a result, there were further and very constructive discussions between the usual channels, which led to the republication of Forthcoming Business. This revised edition sets out three days for Committee stage on the Academies Bill—today, Wednesday 23 June and Monday 28 June. I am sure that these revised dates will be welcomed by all sides of the House. Furthermore, the usual channels have agreed to take Report stage on Wednesday 7 July.
The usual channels are a vital part of self-regulation in this House and we remain committed to ensuring that they work effectively on behalf of the whole House. I beg to move.
Baroness Royall of Blaisdon
My Lords, I warmly welcome the statement and the clarification from the Leader of the House. The usual channels provide a very important function for and within this House, although sometimes some noble Lords think that perhaps the system is too opaque. However, I believe that it works very well. For the smooth running of business and the well-being of the House as a whole, it is crucial that the whole House has confidence in the system. The noble Lord’s statement demonstrates that we agree on the importance of a fair system which respects the role of the Government and the Opposition. I thank the noble Lord.
European Council
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
This may be a useful point at which to hear a Statement made by the Prime Minister a few minutes ago in another place. The Statement was as follows:
“I am sure that the whole House will join with me in paying tribute to Trooper Ashley Smith from the Royal Dragoon Guards, who was killed in Afghanistan last week. He died serving our country and our thoughts are with his family and friends. We have also heard this morning news that a member of 40 Commando Royal Marines has died from his injuries. He is the 300th member of the British Armed Forces to lose his life as a result of the conflict in Afghanistan.
When such a tragic milestone is reached, we should re-emphasise our support for our Armed Forces, and for all that they do. Inevitably some will question our mission and purpose there, and we are paying a high price. Let me be clear that we are in Afghanistan because the Afghans are not yet capable of securing their own country from terrorists. It is for our own national security that we help them. When they can do it alone, we will leave. In the mean time, we will give our Armed Forces everything they need to get the job done.
With permission, Mr Speaker, I would like to make a Statement on last Thursday's European Council. It was rightly focused on securing the economic recovery, and it was unanimous that this required early action on budget deficits. The Council also dealt with Europe's growth strategy, the need to sort out the problems in the eurozone, and our approach to the G20. It also delivered important progress on Iran.
Let me take each in turn. On deficits, the conclusions could not be clearer. Delaying action would entail ‘major risk’, and the Council called on member states to meet budgetary targets ‘without delay’. Since the last European Council, the problems in Greece and the scale of the sovereign debt crisis have become apparent to almost everyone. That is why there is such unanimity across the EU on early action, and it is why President Barroso paid tribute to the efforts that the UK coalition Government are taking and said:
‘Consolidation is necessary for confidence and without confidence there will be no growth’.
On growth, the Council agreed a new strategy called Europe 2020. This follows on from the Lisbon agenda, whose aim was to make Europe the most competitive market in the world. The document has some worthwhile objectives, including raising the level of research and development, and improving education. This should not interfere with national competencies. So I secured explicit agreement that the new strategy must be,
‘fully in line with the relevant treaty provisions and EU rules and shall not alter member states’ competences’.
We should be clear that all the strategies in the world should not conceal the fact that EU countries all need to get to grips with the real problems that harm our competitiveness, not by endlessly setting targets but by taking action. This includes action on the extent of our debts, the affordability of our pensions, and on the scale of our welfare dependency.
Europe has never lacked strategies, but European countries have frequently failed to deliver them. We will continue to press for the real stimulus that European economies need—more trade, more international investment and breaking down barriers to business. This means pushing for agreement on Doha, reforming and completing the single market and making the process of trade easier. Even without Doha, there is a huge amount that countries across the world can do to facilitate trade. I want Britain to be one of the driving forces in helping to bring this about.
Next, the eurozone: Britain is not in the euro and—let me be clear—we are not going to join the euro. However, a strong and successful eurozone is vital for the British national interest. Already about half our exports go to the EU, fourth-fifths of this to the eurozone. However, as this House is aware, with the situation in Greece and the need for a support package from other eurozone members, there is no doubt that the eurozone as a whole faces real challenges. I was generally supportive of the Council’s efforts to strengthen the eurozone governance arrangements, but I was equally determined to ensure that our national interests are protected.
On budget surveillance, let me be clear: the UK Budget will be shown to this House first and not to the Commission. Of course, we will share projections and forecasts, just as we do with the IMF and other international bodies. Co-ordination and consultation, yes; clearance, no—never. On sanctions for those who breach their economic obligations, the Council agreed that:
‘Member States’ respective obligations under the Treaties will be fully respected’.
Because of this and because of the special opt-out negotiated by the last Conservative Government, under the current framework sanctions cannot be applied to the UK.
Sorting out the eurozone and adding to its governance arrangements are clearly vital for Europe. There may well be significant changes coming down the track. Whether they require treaty changes or not, our position will be the same. We will back measures that help to sort out the eurozone. We will not back measures that pass power from the UK to Brussels and, as we are not a member of the euro, we will not back measures that draw Britain further into financial support for the euro area.
On the G20, the Council discussed our priorities for the upcoming meeting. As well as taking action on the deficit, the Council also agreed about the importance of reforming the financial system. It is vital that the meeting in Canada backs the right action on reserves and capital.
On the issue of a banking levy, the Council conclusions were helpful. We wanted the European Council to endorse the idea of countries introducing a levy on financial institutions to ensure that they make a contribution to rebuilding public finances. We did not want the Council to mandate a particular form of levy or how the money raised should be used. I am pleased to say that the Council conclusions reflect that approach.
On Iran, we have argued that it is time for actions, not just words. Following the UN Security Council’s recent adoption of Resolution 1929, the Council agreed to step up the pressure, issuing an unequivocal leaders’ declaration. This refers to measures including restrictions on trade, banking, transport and the oil and gas industry. Final agreement will be reached at the Foreign Ministers’ meeting.
The Council also reached important conclusions on Iceland’s application to join the EU. This country should be a good friend to Iceland and a strong supporter of EU enlargement, but Iceland owes the UK £2.3 billion in respect of compensation paid by the Government to UK investors following the collapse of its banking sector. We will use the application process to make sure that Iceland meets its obligations, because we want that money back.
Finally, it is important that, even in difficult times, we should be supporting people in the poorest countries suffering from severe poverty. The Council reaffirmed its commitment to achieve development aid targets by 2015 and, supported by the UK, to review this annually.
This was a Council that delivered good outcomes for Britain. Our citizens do not want new structures to talk about things; they want a new resolve to actually do things, such as getting to grips with our massive budget deficits, developing the single market and building the conditions for strong, sustainable and balanced growth. That is what this Council was all about”.
I commend this Statement to the House.
Lord Strathclyde
My Lords, I thank the noble Baroness for welcoming the Statement, at least in part as I accept that she became slightly less welcoming as she continued her speech. However, she started extremely well by congratulating the Government and the Council on our position on Iran. She was right to do that because our position on Iran is unequivocal. It underlines the clear view in Europe that Iran’s pursuit of a nuclear weapon is unacceptable. Europe has asked Iran to return to the negotiating table and has made clear that the alternative is further isolation. I am unable to give the noble Baroness the timetable that she sought, but my understanding is that we await the next Foreign Ministers’ Council, where final agreement will be reached. I am hopeful that there will then be quick action to put in place the various sanctions that have been recommended.
The noble Baroness asked me rather a good question about the BBC Farsi programme. If I had an answer to that, I would give it to her, but perhaps I can write to her on that point. The Government have rightly been congratulated on continuing with the millennium development goal commitments, as the noble Baroness recognised. In our view it is very important that these commitments talk about European countries meeting and achieving their targets by 2015. There has certainly been no slippage on that on our part. Even in difficult times when we are having to make tough decisions in our own economies, it is important that we should support people in the poorest areas of the world suffering severe poverty. It is important that we maintain that commitment. The European Council reaffirmed its commitment to spend 0.7 per cent of GDP on development aid by 2015, and agreed to monitor progress towards this target annually. I cannot at this stage give a commitment on the legislative proposals that we will make as regards the 0.7 per cent target, but it is our intention so to do.
The new European 2020 strategy is focused on promoting conditions for growth and improving the single market. A stronger European economy is overwhelmingly in Britain’s interests, given that around half of the UK’s exports go to the EU. However, noble Lords will no doubt agree that action in Europe clearly needs to recognise the different circumstances faced by different member states and strike the right balance between European and national action. The conclusions that we came to at the Council thus make clear that the strategy will not affect member states’ competencies on, for example, education. However, it will help Europe recover from the crisis and come out stronger internally and at the international level by boosting competitiveness, productivity, growth potential, social cohesion and economic convergence. It was kind and thoughtful of the noble Baroness to show her concern about the EPP. I assure her that we are happy with the current arrangements.
Lord Higgins
My Lords, I welcome the forthright attitude taken by the Prime Minister regarding the eurozone, but clearly the situation there presents considerable risks to the United Kingdom, even though we are not a member of the euro. Are we to understand that there was no detailed discussion at the Council on the widespread discussions taking place outside on the possibility that some members of the eurozone might find themselves in a position whereby they have to withdraw? Indeed, it has recently been suggested that it might be disruptive in that context if Germany were to withdraw, rather than the countries in the weakest position. At all events, the scheme was designed to prevent people withdrawing and it is important that we should not hide our heads in the sand regarding that possibility and we should make contingency plans. In particular, there is a major practical problem. Is there not perhaps some case for setting up a contingency fund of what we might call euro-exit notes and coins, which would be used if a particular country had to withdraw? Surely it is better that we should plan for that possibility, whatever our position might be on whether it is likely to happen, rather than suddenly finding that we are in a situation where nothing can be done because of the practical point that I mentioned.
Lord Strathclyde
My Lords, my noble friend raises an important and interesting issue. The eurozone is of course extremely important to the British economy. We want a strong and competitive eurozone area, but it is clear to anyone who has been following this subject in recent months that there are substantial problems with the euro and, most notably, with Greece. However, I am not in a position to speculate in any way on what may or may not happen in any other eurozone country or, indeed, on what contingency plans are envisaged over the next few months. The G20 has recognised that countries with serious fiscal challenges need to accelerate the pace of consolidation. In that regard, we welcome the recent announcements of further consolidation plans by the Governments of Spain and Portugal. It is important that to rebuild confidence all Governments implement in a rigorous manner the measures that they have announced. It is that confidence which will provide strength again to the eurozone. That in the long term will be to all our benefits.
Lord Dykes
My Lords, I thank the Leader of the House for repeating the Prime Minister’s Statement in the other place. He highlighted the fact that, on a number of occasions, the Prime Minister repeated that we were going to play an active and engaged role in working with our colleagues to solve the international financial and economic crisis that affects all countries. Even if, under the coalition agreement, we are not for the moment committed to joining the euro—and a lot depends of course on what happens to the euro—does the noble Lord agree that the logic of the single market means that a single currency is really necessary later on? Conservative Ministers frequently enunciated before 1997 that you could not have a genuine single market without a single currency. That reality prevails.
Does the noble Lord not agree that we in this country should be careful not to be too complacent or gleeful about the apparent crisis in the eurozone, given that we have the only currency that was driven out of the preliminary arrangements before the euro was created? A notable and spectacular devaluation ensued; in fact, we have had seven devaluations since the war. That was always the easy way out, rather than solving problems with a disciplined currency system. Does he agree that this is as much a crisis of the banking statistics and asset bases of the commercial and investment banks as it is of sovereign debt, and that we need to deal with both on an active basis? Will he therefore emphasise that the UK Government are supporting the suggestion of the Spanish Government that stress-test figures should be published in the second half of July showing the different states of various banks in the member states, within and without the eurozone, including, I think, five or six banks from the United Kingdom? Furthermore, as the Prime Minister was, quite rightly, warmly received in Brussels, does the noble Lord agree that that adds to the arguments for his party rejoining the EPP, as the shadow Leader of the House suggested?
Lord Strathclyde
My Lords, I can give my noble friend no encouragement whatever that we are about to join the euro any time soon—an answer that he may find rather disappointing. However, all the evidence over the past few years indicates that we were entirely right not to join the euro, as the former Prime Minister, when he was Chancellor, ensured would be the case. That was the right decision then, it is clearly the right decision now, and we shall continue with that. However, that does not mean that we should not play an active and engaged role, as my noble friend Lord Dykes said, and we will continue in the way that we started. Indeed, my right honourable friend the Prime Minister was very much welcomed in Brussels for his positive attitude and constructive approach to a whole range of extremely difficult issues that face Europe. I say to my noble friend, as I did to the noble Baroness the Leader of the Opposition, that the EPP issue is not one that we shall reopen.
Lord Hannay of Chiswick
My Lords, will the Minister accept my thanks for allowing a question from Benches other than the government Benches after six minutes?
I congratulate the Government on the confirmation of the millennium development goals, which I think is a very positive step. However, do they not recognise that some members of the European Union—not the United Kingdom—are not fulfilling their obligations to move to 0.7 per cent of GDP? To give an example, Italy is cutting back on its aid. Does that not demonstrate the necessity for proper co-ordination at the European level when these commitments are entered into and the need to ensure that they are followed? Simply saying all the time that we are not going to do this or that in co-ordination has its disadvantages when we are in the lead and other people do not follow.
The noble Lord mentioned education. Does he not recognise that our higher education sector is the leader in Europe, that we have four of the world’s top 10 higher education establishments and that we are extremely well placed to give the lead in this essential part of making Europe more competitive? I hope that the Government will take that to heart and will see how, without transgressing any transfer of powers, we can make more of a reality of co-operation in the higher education sector and make it a more competitive part of the European economy.
Lord Strathclyde
My Lords, with regard to the millennium development goals, the Council reaffirmed its commitment to spend 0.7 per cent of GDP by 2015. The important point that I think will encourage the noble Lord is that the Council also agreed to monitor progress towards this target annually. Therefore, if a country lags behind, no doubt this will be brought to the Council’s attention at the time and appropriate action will take place in that member country.
I agree with the noble Lord about the excellence of Britain’s university education system and that we have a lot to contribute to this debate, at least by example. That is why we believe that this matter should remain firmly as part of the national competencies and not be raised to a higher level through command and control and instruction by the European Commission and others. That is precisely why we got the conclusion in the final report with which we were happy—namely, that education would remain part of those national competencies.
Lord Pearson of Rannoch
I share with sorrow the sentiments expressed from the Front Benches about the two latest deaths in Afghanistan.
Turning to the Statement, does the noble Lord agree that it really is beyond belief that the EU should presume to examine our Budgets before Parliament debates them when its own internal auditors have been unable to sign off its own accounts for the past 15 years? Can he comment on that? Will he also comment on Mr Van Rompuy saying last week that the Government’s refusal to submit our Budget to Brussels is unfinished business? How will the Government react if they are outvoted on this in the autumn? Finally, and more widely, the Government’s protestations of their innocence do not exactly chime with the wording of the Council’s conclusions. I shall read three extremely briefly. First,
“we fully agree on the urgent need to reinforce the coordination of our economic policies”.
Secondly,
“All Member States are ready … to take additional measures to accelerate fiscal consolidation”.
Thirdly,
“The crisis has revealed clear weaknesses in our economic governance, in particular as regards budgetary and broader macroecononmic surveillance. Reinforcing economic policy coordination therefore constitutes a crucial and urgent priority”.
Which one is right—the Government’s Statement or the Council’s conclusions?
Lord Strathclyde
My Lords, the noble Lord, Lord Pearson of Rannoch, is right when he says it is beyond belief that the EU should wish to inspect our Budget before it is presented to Parliament. He is entirely right. In that there is not a cigarette paper of difference between him and the Prime Minister, or I suspect even the Opposition. We would all agree that the EU has no role and no place to look at our budgetary arrangements and, indeed, our parliamentary procedures. That position has been made entirely implicit in the Statement that I repeated a few minutes ago. It is not unfinished business; it is firmly finished business and we will be leaving it entirely the way that it is currently.
The noble Lord, Lord Pearson of Rannoch, made great play of looking at the conclusions and the Statement that we made. This is an old game to play and the noble Lord does it with great skill. I assure him that again there is no difference between the conclusions and the Statement that we made. They can live together entirely side by side and there is no difficulty for the Government.
Lord Grocott
The Leader of the House has reported, quite rightly, that there were extensive discussions about the ongoing problem of Iran. Were there any discussions on the wider issue of the region and the ongoing problem of the blockade of Gaza? How can the suffering of the people of Gaza be relieved? How and when will there be discussions at some stage, as surely there must inevitably be, between representatives of the European Union and representatives of the current Administration in Gaza?
Lord Strathclyde
My Lords, there was a discussion on Gaza. Generally speaking, the conclusion was positive about the steps that have been taken and we very much hope that the measures taken by the Israeli Government will be part of reducing tension in the area.
Lord Hylton
Are the Government aware of the very delicate situation now existing in Kosovo? This is already sub judice at the European Court of Justice. In addition, it so happens that the new Patriarch of all the Orthodox Serbs will be enthroned in the historic monastery of Pecs in October. This event could be seen by the Albanian majority as provocation or an act of cultural assertion. Do the Government agree that this makes it urgent to normalise relations between all the Serb monasteries and their Albanian neighbours? These have been tense since 2000—10 years ago. Will the Government ask the European Union to commission and pay for an independent third-party attempt at conciliation, which has already, I am glad to say, been invited by both parties in the conflict? I conclude by declaring a non-financial interest in the NGO in question.
Lord Strathclyde
My Lords, I cannot confirm that there was a discussion at the European Council but clearly the situation in Kosovo is immensely tense and the noble Lord has great expertise on it. The words that he has spoken today will of course be taken fully into account by my colleagues in the Foreign and Commonwealth Office.
Lord Trimble
Further to the point made earlier by my noble friend Lord Higgins, I draw the attention of the Leader of the House to what happened under the Bretton Woods system of fixed exchange rates whereby on occasions Germany revalued the deutschmark upwards, thus taking account of the changes between it and other countries on competitiveness. Surely what we need in the eurozone is some mechanism of that nature whereby one can adjust for changes in competitiveness rather than force countries, as is proposed to be done, through incredibly tough measures which they probably are incapable of sustaining.
Lord Strathclyde
My noble friend raises a point that we could debate and discuss for a very long time. He is right to mention the Bretton Woods arrangements. As to whether there should be an automatic mechanism to adjust for competitiveness, that is a matter not for the Government but the European Bank. It must take into account all the needs of all the economies within the eurozone and it is one of the reasons—only one—why we supported the view of the then Government that we should not join the euro in 1999.
Lord Stoddart of Swindon
I want to make two points. First, with regard to the reference to budget surveillance on page 4 of the Statement, this does not go far enough. It says that,
“the UK Budget will be shown to this House first—and not to the Commission”.
It is not a question of showing the Budget to the House; it is a question of the House of Commons agreeing the Budget before the Commission has its way. Surely that is right.
Secondly, why on earth do the Government continue to harp on about 40 per cent of our trade being with the European Union? The world is a much bigger place than that these days, so would it not be better if we expanded our trade with China, South America, India and indeed the Commonwealth, instead of concentrating on the backyard of Europe?
Lord Strathclyde
My Lords, on the question of the Budget, the noble Lord is in danger of tilting at windmills. We are not playing any verbal gymnastics that somehow when we say that it will be presented to Parliament first it means that round at the back door we are busily presenting it to the Commission. We are not. Tomorrow there will be a British Budget which will be presented to the British Parliament first. After it has been presented it will be a matter of public record and knowledge. I dare say that the Commission may be interested; it may indeed be very interested in looking at it before it is finally agreed by Parliament. Therefore, I do not think that there is a fundamental difference between the two of us on this issue. Neither, incidentally, is there about what the noble Lord Stoddart of Swindon, said about trade with the rest of the world. It is an important plank of British foreign policy to expand our trade beyond Europe. That is vital to our long-term prosperity and the creation of jobs in this country. We are using all the natural advantages that this country has built up over many decades—centuries even—with countries whose economies are growing extremely quickly. To ignore them would be an enormous mistake. So I hope that I can put a smile on the face of the noble Lord, Lord Stoddart, by saying that I very much agree with what he said.
Lord Martin of Springburn
My Lords, the Statement mentioned the banking sector. We all agree that, less than two years ago, young couples with children, first-time buyers, were sometimes offered a mortgage of more than 100 per cent. It is understandable that the banks have to tighten their belts—or, perhaps, to behave themselves—but young couples are now being required to find 25 per cent of their new mortgages. For young couples with children to find £25,000 to £30,000 is very difficult. Can the Prime Minister speak to the banking sector to make the point that if young couples can buy homes, that will help the building industry and relieve tension on community-based housing associations and local authorities?
Lord Strathclyde
My Lords, that may not have been quite a matter for the European Council, but the noble Lord, Lord Martin, raises an important point for young people and people starting families who are trying to purchase a house. The background against which we operate is now extremely different from what it was only two or three years ago vis-à-vis the whole question of mortgages and deposits. I assure the noble Lord that the President of the Board of Trade, the Chancellor of the Exchequer and the Prime Minister himself are very involved in trying to ensure that lending is allowed and encouraged to people who can pay it back, not just in the commercial and business sector but in the domestic sector.
Business of the House
Lord Strathclyde Excerpts(14 years ago)
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Lord Strathclyde
That the debates on the motions in the names of Lord Sugar and Lord Corbett of Castle Vale set down for today shall each be limited to two and a half hours.