European Council

Lord Strathclyde Excerpts

Monday 22nd October 2012 Lords Chamber

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, taking advantage of this spirit of good will and excellent relations across the Dispatch Box, perhaps now would be an appropriate time to repeat a Statement that was made earlier on this afternoon by my right honourable friend the Prime Minister. The Statement is as follows.

“With permission, I would like to make a statement on last week’s European Council. The European Union faces important choices in the coming months, to meet tough economic challenges and to deal with the problems in the eurozone. There were no landmark decisions at this Council, but there was some limited progress on both issues.

As I said, we are in a global economic race. All European economies need to become more competitive. That means taking steps like expanding the private sector, reforming welfare and improving education. In terms of action at the EU level, that means, in our view, lifting the burdens on businesses, completing the single market and taking forward trade deals with the biggest economies and the fastest growing countries and regions in the world.

I have consistently promoted these solutions and at the Council we made some good progress. On deregulation, I joined with others to secure a new agreement that specifically refers to withdrawing legislative proposals from Brussels that stifle our businesses. Now, of course, we need to see specific actions, but it is worth noting that the conclusions refer to the,

‘intention to withdraw a number of pending proposals and to identify possible areas where the regulatory burden could be lightened’.

On completion of the single market, as I reported in June, there is now a proper plan with dates and actions for completing the market in energy, services and digital. Once again it is important that these are followed through to secure jobs and growth.

On trade, the Council agreed an ambitious agenda to create 2 million jobs across Europe. This includes completing free trade deals with Canada and Singapore in the coming months, and starting negotiations with the US next year on a comprehensive transatlantic trade and investment agreement. And we made some progress on the launch of negotiations with Japan ‘in the coming months’. This deal alone could increase EU GDP by €42 billion.

Turning to the eurozone, Britain is not in the eurozone and we are not going to be joining the eurozone, but it is in our national interest that the uncertainty surrounding the eurozone comes to an end. I have argued for some time that a working eurozone needs a working banking union. It is one of the features that a successful single currency needs. Obviously, you do not need a banking union because you have a single market; you need it because you have a single currency. So Britain should not, and will not, be part of that banking union.

Britain’s banks will be supervised by the Bank of England, not the ECB, and British taxpayers will not be guaranteeing or rescuing eurozone banks. But we do need eurozone members to get on and form a banking union. At this Council I joined those arguing for progress to be made on the plan announced in June. Put simply, it is not enough to have a banking union that is stripped of the very elements, such as mutualised deposit guarantees, a common fiscal backstop and a framework for rescuing banks, that are needed to break the dangerous link in the eurozone between sovereign debt problems and the stability of eurozone banks.

However, because not all countries outside the eurozone, like Britain, will want to join such a banking union, it is also essential that the unity and integrity of the single market is fully respected. The organisation that currently ensures a level playing field for banking within the single market is the European Banking Authority. We need to make sure that it will continue to function properly, ensuring fair and effective decision-making. This is specifically recognised in the conclusions. More broadly, as eurozone countries take steps to deepen their economic and monetary union, as they will, I also secured an explicit commitment in the conclusions that the final report and road map in December will include,

‘concrete proposals to ensure that the integrity of the single market is respected’.

Finally, the next Council in November will discuss the financial framework for Europe between 2014 and 2020. We have not put in place tough settlements in Britain in order to go to Brussels and sign up to big increases in European spending. I do not believe that German voters want that any more than British voters, and that is why our Governments have led the argument in Europe for fiscal restraint. I therefore put down a marker that we need a rigorous settlement. As the letter signed in December 2010 by a number of European leaders said, given the tough spending settlements that all member states have had to pursue in their own countries,

‘payment appropriations should increase, at most, by no more than inflation over the next financial perspectives’.

On foreign affairs, the Council, led by Britain, once again discussed further restrictive measures on the Syrian regime, and made it clear to Iran that we will increase the pressure if there is not progress on the nuclear issue.

Our agenda is, therefore, making our economies competitive, dealing with uncertainty in the eurozone, keeping the EU budget under proper control, and making sure the EU speaks with a strong and united voice on the key international challenges”.

I commend this Statement to the House.

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[Lord Strathclyde]

My Lords, the noble Baroness the Leader of the Opposition started off well by associating herself with the conclusions on Syria and Iran. I am very grateful for that. However, I am afraid to say that it was downhill after that. Let me try to tackle some of the questions that she raised and give some answers and get some clarity on where we are on this. This is the first of a series of European Council meetings up until the end of the year that will increase in importance. This is an opportunity to set the scene, to clear the undergrowth and to sort out the most important issues that we need to resolve.

The noble Baroness asked why the Prime Minister did not go along with his plan for growth. When it came to the budget negotiations, he was the first to ask why, if we have to restrain spending in the United Kingdom, we should see profligacy in Europe. I would hope that the noble Baroness would agree with that and look at some aspects of where the United Kingdom is doing well in Europe. In the United Kingdom we see falling unemployment, rising employment, falling inflation, and low borrowing rates which preserve our triple-A rating. These are all things that the noble Baroness the Leader of the Opposition should support, and I hope that in future she will use them in her speeches.

The noble Baroness specifically asked about two aspects: energy and digital. She went on to say that these conclusions look remarkably like other conclusions that we have seen from the European Council. Remarkably, yes—I agree with her up to a point. However, she will know from her own experience in Europe that very often the same old problems come round again and again, and some of these are longstanding issues that have taken a long time to resolve. This year, we celebrate the 20th anniversary of the single market. How come it has taken so long to complete the single market when the noble Baroness’s Government were in charge for 13 years of those 20 years?

The Council did not discuss energy policy in detail but the conclusions refer to an agreement reached in March, which recalls the need to complete the internal market by 2014. It referred to new proposals for a connecting Europe facility. That is a continuation rather than the same point that was made in previous conclusions. Likewise, on digital, it is important to maintain the focus on areas that we have agreed. It would be a mistake to chase the new and neglect to hold others to account. Sometimes agreements are made but we need to make sure that they follow through, which is entirely sensible.

The noble Baroness asked an entirely sensible question—I am not saying that the rest of her questions were not sensible—about the banking union and our key demands in terms of voting rights and specific safeguards. The point was that we have not so far been clear as to what it is that we want. This is entirely deliberate. We have not been explicit yet over what we want to see in terms of a voting regime for X and Y. Several possible proposals are floating around, some of which are quite technical. We want to make sure, for instance, that the ECB does not get a de facto vote. Others are concerned that, should more countries join the euro, the UK does not end up with a veto. Overall, we want to see what I suspect in her heart the noble Baroness also wants to see—an acceptable solution that protects the single market through a change to the modalities of decision-making under the European Banking Authority regulation.

The noble Baroness had some fun with the quotation of the Finnish Minister. I think that he was in the boat and we were on dry land. Dry land might be quite a good place to be over the next couple of years. But she went on to say that we had been left isolated in the EU. We do not think so. We believe that we are an active participant in EU negotiations. We lead the EU on many issues—for instance, improving Europe’s competitiveness, the single market, trade and taking tough action in Syria—and eurozone members are often our closest allies, including the Finns. Member states with different interests do and need to work together in different ways. The EU is not and should not become a matter of everything or nothing.

That is the point of all this. From everything that has happened in the past two years, it is clear that there are stresses and strains within the European Union, which largely emanate from the financial crisis and the terrible problems that the eurozone countries have got themselves in. On banking, it is the responsibility of all of us to work together to try and solve that. In that respect, we are as good Europeans as anyone else.

[Baroness Falkner of Margravine]

My Lords, staying with the financial framework, perhaps I may congratulate the Prime Minister through my noble friend on aligning us to the German position. However, he will no doubt be aware that the German position is probably to have a compromise on the budget, which will be to cap EU spending at 1% of European GDP. That, of course, is backed by Austria, Finland, Sweden, Denmark, Netherlands and the Czech Republic. Therefore, will my noble friend reassure the House that when Mrs Merkel meets the Prime Minister in early November, he will not be wedded to the position of no increase whatever on the basis that we need further compromise at the December summit and that we may need to give a little bit here to meet the Germans in order that they might support us in December?

[Lord Strathclyde]

My Lords, I do not think that I can give my noble friend what she would really like, which is an agreement with Chancellor Merkel’s position. The Prime Minister has said that he is willing to do a deal on the budget in November, so long as it is the right deal for British taxpayers. Given the tough trading settlement that all EU member states have had to pursue at home, there simply is not the case for increases in European spending that are above the rate of inflation over the coming financial framework, which starts in 2014 and goes on until 2020.

Furthermore, Chancellor Merkel and three other leaders in 2010 joined the Prime Minister in writing a letter for a call for action to curb the progressive increase in EU spending and we remain committed to that objective. Last Monday, Chancellor Merkel and the Prime Minister discussed the budget and, I gather, reiterated their ambition to limit increases in the budget. Of course, they agreed that officials should work together on this before they meet early in November.

[Lord Williamson of Horton]

My Lords, I recognise that the so-called banking union involving monitoring and in some cases intervention in banks within the eurozone but not in the UK could be advantageous if it helped to stabilise the financial situation in the eurozone, although some related issues could give rise to problems. It was expected earlier that the European Council would decide to complete the banking union at this meeting but, of course, the conclusions obviously do not do so. Indeed, among the 3,164 words—that is my count—in the conclusions on economic policy, it states on completing EMU that “informal consultations will continue” and that the European Council looks forward to a road map,

“at its December 2012 meeting, so that it can move ahead on all essential building blocks”.

That is not exactly a rousing conclusion. Will the Leader of the House give us a reasonable estimate of the timetable now for the completion of the banking union?

[Lord Strathclyde]

My Lords, that is a very seductive question. But it is really not possible for me or the British Government to give a view as to when we think that those negotiations and discussions will be completed. Apart from being extremely good at counting the number of words, the noble Lord probably has also read many reports in the press over the past few days about the view of other countries on the banking union, and he will understand just how difficult and complicated that is. However, we will continue to play a lead role in the development of common rules for the single market and encourage our colleagues to come to an agreement as quickly as possible.

[Lord Grenfell]

My Lords, one of the less kindly remarks that Winston Churchill made about Stanley Baldwin was that he was a man who occasionally stumbled upon the truth and that he then got up, dusted himself off and hurried on as if nothing had happened. I think that that is a charge that one could probably level against this Prime Minister when it comes to Europe. Will the Leader of the House tell us whether he honestly has not understood the degree of irritation among our partners at the way in which the United Kingdom is behaving within the councils of the European Union?

The Prime Minister told us in one breath, for example, that he is prepared to do a deal with Chancellor Merkel over the budget but immediately went on to say that it would not be an increase, which is not a deal. That is not a deal in the minds of the rest of our European partners. Chancellor Merkel has offered a reasonable compromise. I notice that he says in his Statement:

“I don't believe that German voters want that”—

meaning an increase—

“any more than British voters”.

If you read about the rapturous reception that Chancellor Merkel got yesterday from, of all people, the Christian Social Union Partners in Bavaria when she went back to report on the results of what she had done at the summit, one would have the impression that probably she had a large section of the German population behind her.

Does the Leader of the House really believe that if the Prime Minister’s so-called deal, which is not a deal, produces no increase, he is prepared to veto the budget? Does the Prime Minister also understand Angela Merkel when she says that if he does that she will call off the budget summit anyway? I do not think that the Prime Minister has many of the attributes of Samson but surely he must understand that if he is going to pull the whole structure down around him because he insists on absolutely no increase, none of his European partners will have a good word to say for him.

[Lord Strathclyde]

My Lords, the noble Lord, with all his experience and knowledge, asks whether I understand how irritated other members of the EU are at the Prime Minister’s stance. I understand how irritated the British people would be to see budgets for austerity in this country and profligacy in the EU. That, of course, is what is uppermost in the Prime Minister’s mind.

The Prime Minister and Chancellor Merkel have agreed to meet early in November. There are, of course, huge budgetary pressures throughout Europe, including in this country. Let them meet. The Prime Minister said what he has said, echoing the words that Chancellor Merkel agreed and signed in 2010. Actually, I think that increasing the EU budget in real terms is a very fair deal for the people of Europe, particularly given that Britain is the second largest contributor to the EU budget.

[Lord Stoddart of Swindon]

Britain is not a member of the eurozone. We have decided to keep our own currency. There is no prospect of our joining the eurozone. So why on earth does our Prime Minister keep lecturing the eurozone as to how it should carry on, including whether it should have a banking union? Since we are not part of it, it is nothing to do with us, and we should keep out of it.

The second point I want to raise has already been raised—that is, the position in relation to Angela Merkel, the German Chancellor, who seems to be throwing her weight about increasingly these days. The Prime Minister does not have to satisfy Angela Merkel; he has to satisfy the people of this country, and the people of this country, we understand, will suffer austerity for the next 10 years, which means that they cannot afford to pay any more than the £10.3 billion that we already pay into EU coffers. I hope that the Prime Minister realises that he is not answerable to the EU for taxation and our contributions. He is responsible to the British people, who show increasingly that they are not very happy about remaining in the European Union, and who will be even unhappier if they are asked to pay even more towards it.

[Lord Strathclyde]

My Lords, that is the point that I was trying to make to the noble Lord, Lord Grenfell. I have every sympathy with the view given by the noble Lord, Lord Stoddart. It is entirely correct that, although we believe that the economy is heading for a state of recovery and long-term growth, many budgets are being cut in Britain, and we are not in the business of seeing them being increased in Europe, where British taxpayers will have to foot the bill. But that is a discussion that will take place, first between the Prime Minister and Mrs Merkel and then, later on, in the Council of Ministers.

As for the noble Lord’s question as to why we are interested in the banking union, self-evidently financial services and financial matters are incredibly important to the United Kingdom—it is one of our key interests—and to the City of London. It is entirely right that we should take note of what is happening in the zone where nearly 40% of our exports go. One of the many reasons why this economy has suffered in recent years is because of the uncertainty in the eurozone, which we believe needed to be resolved—and one way in which to do that is through the banking union.

[Lord Soley]

I notice with interest the deft footwork on the part of the Leader of the House on answering a question about the budget and the meeting. It should get him a place in the finals of “Strictly Come Dancing”. But in all seriousness, the story on the front page of the Financial Times says very clearly—and it is a very reliable newspaper on this—that Chancellor Merkel is considering cancelling the summit if the British threaten to use their veto and want no increased expenditure at all. Can he tell us—and I am sure the Financial Times, too, and the people of this country—whether that story is correct or incorrect?

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[Lord Strathclyde]

My Lords, I am not quite sure what I am supposed to confirm or deny. I can confirm that there was a story on the front of the Financial Times, but I cannot confirm that it was right that Mrs Merkel has issued a threat. She may have done—I have absolutely no idea. But it must be in everybody’s interest to seek an agreement on the EU budget, and the Prime Minister is quite rightly standing up for British interests and has explained what his position is—and I think that it is a very sensible position.

[Lord Hannay of Chiswick]

Will the Leader of the House accept a warm welcome for the recognition in the Statement that he has just repeated that it is better to be there at the negotiating table in the European Union than to wield vetoes that are not really vetoes and absent yourself from the subsequent negotiations? It is a distinct improvement on what happened in December last year that the Prime Minister is working at the table and will continue to do so to make sure that the interests that he is quite rightly seeking to protect of the single market, and the way in which the banking union will interact with the single market, are defended by being at the table.

Secondly, on the budget in the Statement and in what he has subsequently said, the Leader has reiterated again and again that the British position, which incidentally is supported by your Lordships’ European Union Committee, is that there should be no increase in real terms. But those words never manage to get past the lips of the Downing Street spokesmen; they just talk about no increase. The Leader knows quite enough about these matters to know that between 2013 and 2020 no increase in real terms will mean considerably higher figures in nominal terms—that is, by the amount of inflation. It is really not sensible to give the impression that we are trying to keep the budget steady at nominal terms, when that is not what we are trying to do. All that does is to distance ourselves from the other members of the European Union that take very similar views to our own.

My own view is that we are heading towards a very satisfactory outcome to the budget negotiations if we play our cards right. There is a solid body of support for a very low outcome, way below what the Commission proposed, and I just hope that we are not going to snatch defeat from the jaws of victory.

[Lord Strathclyde]

I have two points on that question from the noble Lord. First, we have every intention of continuing to work at the table and to be part of the negotiation. There are some very important and crucial issues that need to be resolved over the next few weeks, and I will be back at this Dispatch Box discussing and debating them, as I have done over the past two and a half years. But it is important to get some sense of the economic reality, which is very different to when the last EU budget was negotiated. For example, the level of public debt across the 27 EU member states in 2012 will be 50% more than it was in 2007. Across the EU on average, countries are expected to see expenditure as a percentage of GDP fall by about 8% between 2010 and 2014, and more than 16% of Commission officials earn more than €100,000. At a time when we are trying to boost growth, it is hard to justify a budget in which 45% is spent on the common agricultural policy.

Let me deal head-on with noble Lord’s concern that when we talk about a nil increase we mean a nil nominal increase. We do not. We mean that we do not see the case for increases in spending that are above the rate of inflation.

[Lord Brooke of Sutton Mandeville]

My Lords, in the Statement the Prime Minister specifically quoted, and thus emphasised, a passage in paragraph (g) of the European Council conclusions on the right regulatory framework for growth. The conclusions go on to state:

“The European Council looks forward to the Commission communication expected in December, which will take stock of progress and signal further action to be taken by the end of the current parliamentary cycle at the latest, including the follow up on the top 10 most burdensome pieces of legislation for SMEs”.

Will my noble friend remind your Lordships’ House of whether this is an actual or approximate date that constitutes the end of that parliamentary cycle so that our anticipation can be further whetted?

[Lord Strathclyde]

My Lords, I think that the parliamentary cycle comes to an end in 2014. However, we would like to see real progress on deregulation and dealing with regulation, particularly as it affects businesses and small businesses, as soon as possible. What was apparent at the end of last week was that that was a view shared not just by other member states but by the Commission itself. There are important prizes to be won here. If we can make the economies of Europe more efficient and effective, that will lead to growth, which is something that we all want to see.

[Lord Skidelsky]

My Lords, I agree with the Leader of the House that the British people will not support profligacy abroad while having to suffer austerity at home. Is not one way of trying to bridge that gap to have a bit more of what he would call profligacy at home, in which case at least the economy might start growing again, which it has notably failed to do over the past two years of coalition government?

[Lord Strathclyde]

My Lords, as I said earlier to the Leader of the Opposition, it has been a difficult two and a half years in Britain. What have we seen? We have seen nearly a million private sector jobs being created in the past two and a half years. For the first time since 1976 we have seen net exports of motor cars made in the United Kingdom. We have seen the AAA rating and record low levels of borrowing. Employment is the highest that it has ever been and unemployment is falling. I hope that the noble Lord, Lord Skidelsky, agrees that these are very good signs for our long-term growth prospects.

[Lord Lea of Crondall]

Will the noble Lord confirm that he is about to ring the editor of the Financial Times to say that the Government’s policy is that when they talk about no increase it is in real terms, and that Chancellor Merkel takes some heart from that clarification?

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[Lord Strathclyde]

My Lords, I wrote down what I said and am very happy to repeat it. I said that we do not see the case for increases in spending that are above the rate of inflation.

[Lord Willoughby de Broke]

My Lords, one of the Council conclusions on which I hope the noble Lord can enlighten the House is headed, “Developing a tax policy for growth”. Is this a tax policy for having higher taxes or lower taxes? Secondly, the same paragraph of the conclusions refers to,

“enhanced cooperation to be launched on a Financial Transactions Tax”.

Was that supported by the British Government?

[Lord Strathclyde]

My Lords, on the first point, we are not in favour of any new taxes emanating from the EU. Secondly, we have not supported a financial transactions tax. We know that certain elements within EU countries have got together and decided to impose a financial transactions tax. I believe that in the long term that will prove to be against their interests.

Scotland

Lord Strathclyde Excerpts

Thursday 18th October 2012 Lords Chamber

[Lord McAvoy]

To ask Her Majesty’s Government what steps they are taking to promote the benefits of Scotland remaining within the United Kingdom.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, this Government firmly believe that Scotland is, and will always remain, better off within the United Kingdom. In June, the Secretary of State for Scotland announced a programme of cross-government work to inform and support the debate on Scotland’s future. This work will report from early 2013 and will produce detailed evidence and analysis to assess the benefits of Scotland remaining in the UK to both Scotland and the rest of the United Kingdom.

[Lord McAvoy]

My Lords, I thank the noble Lord and welcome the content of his Answer. Does he agree that the campaign for remaining within the union, which the Labour Party supports fully, needs to be a positive case put to the Scottish people, emphasising the social and economic benefits of remaining within the United Kingdom, and not a negative case as that would be counterproductive? Will he accept my assurance that the Labour Party will stand four-square with all unionist parties in Scotland in this referendum campaign?

[Lord Strathclyde]

My Lords, those are very welcome words from the noble Lord, speaking on behalf of the Labour Party. I think it is well understood in Scotland and elsewhere in the United Kingdom that while political parties may have many differences on many different issues, we are completely united in our belief that the United Kingdom is the best way to preserve peace and prosperity for all the people of these islands. The noble Lord is also entirely correct when he says that this campaign needs to be a positive one. It should be. There is a very positive case for keeping the United Kingdom together in terms of our position in the world, the protection of our citizens and the economic benefits to all the people of the UK.

[Lord Martin of Springburn]

My Lords, at the risk of repeating myself, I have a deep concern about whether the Electoral Commission, which will play a big part in this forthcoming referendum, will be up to the job. Will the noble Lord ensure that the appropriate Ministers meet the Electoral Commission to ensure that it is capable of dealing with the problems that this referendum will throw up?

--- Later in debate ---

[Lord Strathclyde]

My Lords, the noble Lord is right to voice his concern, but I am glad to say that the Electoral Commission has, over the past few years, learnt a lot from both running referendums and overseeing various elections. Both Governments—the UK Government here at Westminster and the Scottish Government—have agreed that the Electoral Commission should play its normal role, as for all other referendums. It is well understood by Ministers that this is a key referendum for the future of this country and it is important that we should get it right.

[Lord Stephen]

My Lords, is my noble friend the Leader of the House aware that, although there is very broad cross-party support for the campaign to maintain the United Kingdom—that very much includes the Liberal Democrats—there has been considerable concern about the role of the Electoral Commission and the question that will be put to the people of Scotland? For example, when the question that is currently supported by Alex Salmond and the SNP is tested by opinion poll, it generally gets a significant advantage—some are saying up to a 7% advantage—compared with a more neutral or balanced question. That is of concern to every one of us here. Will the UK Government make sure that the Electoral Commission plays a full and active role in ensuring that the referendum is not rigged or manipulated by the SNP and that the referendum question and all aspects of the running of the referendum are handled and set in a fair, open and transparent way that is published and understood not only by the people of Scotland but by those in the whole of the United Kingdom who have a deep interest in the outcome of this important vote?

[Lord Strathclyde]

I entirely agree with my noble friend. This is extremely well understood by politicians on both sides of the border. The Electoral Commission has an absolute mandate to do precisely as he suggested—to report and to lay that report in the Scottish Parliament, and of course it will be available here as well.

[Lord Gordon of Strathblane]

Does the noble Lord agree that independence is a moving feast, as reflected in the concern shown on all sides of the House about the question? I regard Scotland as an independent country at the moment but I am happy to renew my marriage vows with England. The key question is: does Scotland want to leave the UK? The matter must be closely focused on that single issue. Otherwise it will be lost in a mass of spin from Alex Salmond.

[Lord Strathclyde]

My Lords, we have up to two years of debate before we get to a referendum and I am sure that many people and organisations will make the point that the noble Lord has raised. Independence is not for Christmas; it is for life. Of course, the benefits of the United Kingdom need to be well understood before we get to a referendum.

[Lord Forsyth of Drumlean]

My Lords, can my noble friend deal with the anxiety about the question? It is now going to be decided by the Scottish Parliament, which means Alex Salmond in consultation with the Electoral Commission. Would a way of ensuring that the referendum is fairly conducted be to say that the Section 30 order, which transfers the power to the Scottish Parliament, will not be brought before either House of Parliament until Alex Salmond has published his draft Bill setting out the question and the rules for the conduct of the referendum and the franchise?

[Lord Strathclyde]

My Lords, the Section 30 order will be published next week, and both Houses of Parliament will debate and, it is hoped, pass it in due course. I cannot see that there is any great advantage in seeing Mr Salmond’s Bill before we pass the Section 30 order. After all, it can be amended in the Scottish Parliament. However, we understand that we will get the publication of the Scottish Government’s consultation, which will include their view of what the question should be, and that should be available in the next few weeks.

[Lord Hughes of Woodside]

I understand perfectly that this issue has to be handled sensitively without there appearing to be any attempts at bullying or cajoling the Scottish Parliament in deciding what to do. If the draft Section 30 order is published next week, it will be left entirely up to the Scottish Parliament to decide what to do. That is really going too far. Does the noble Lord agree that there ought to be a period of reflection before the Section 30 order is laid before us so that we have at least some idea of what the Scottish Parliament has in mind?

[Lord Strathclyde]

My Lords, there will be a period of reflection but it will not be very long because we want the Scottish Parliament to get on with it and to set the date and pass the necessary legislation so that we can clear the air in Scotland and get a decisive result at the referendum.

[Lord Cormack]

My Lords, the agreement says “intelligibility” when it comes to the question, and that begs a question in itself. Can we please make sure that the question is not merely intelligible but that it is not loaded and is entirely unbiased? I do not think that this House or any other should contemplate passing the order unless we are satisfied in that regard.

[Lord Strathclyde]

My Lords, that is precisely the role of the Electoral Commission—to look at the question, to test the various words in it and then to report to the Scottish Parliament as to its intelligibility.

Business of the House

Lord Strathclyde Excerpts

Thursday 18th October 2012 Lords Chamber

Tabled By

[Lord Strathclyde]

That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 23 October to allow the Infrastructure (Financial Assistance) Bill to be taken through its remaining stages that day.

[Lord Newby]

My Lords, I beg to move the first Motion standing in the name of my noble friend Lord Strathclyde on the Order Paper.

Business of the House

Lord Strathclyde Excerpts

Thursday 18th October 2012 Lords Chamber

Tabled By

[Lord Strathclyde]

That the debate on the Motion in the name of Baroness Perry of Southwark set down for today shall be limited to three hours and that in the name of Baroness Hooper to two hours.

[Lord Newby]

My Lords, I beg to move the second Motion standing in the name of my noble friend Lord Strathclyde on the Order Paper.

Business

Lord Strathclyde Excerpts

Tuesday 16th October 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I rise to intervene on two separate points rather than make two separate interventions. The first is on the conduct of Members of your Lordships’ House and the second is on the Local Government Finance Bill, which the House is about to consider this afternoon.

On the first issue, allegations have been made in the media about a number of former senior service personnel and their readiness to lobby current Ministers and officials in the Ministry of Defence about defence procurement—in other words, paid advocacy. Two of those named are Members of your Lordships’ House. When similar allegations were made in January 2009 by the same newspaper, the Sunday Times, about a number of other Peers, the House took action against those individuals and toughened up our Code of Conduct in relation to paid advocacy. I wrote to the Leader of the House on this matter yesterday, asking him to make a statement.

These are serious matters. They were when we suspended Members of this House previously and they are now. The reputation of this House and Members of this House, and the conduct of Members of this House, is again being called into question. Experience of these matters shows that the best way to consider and resolve these issues is through the improved mechanism that we now have available, including the Lords Commissioner for Standards. I believe that Members of your Lordships’ House should be kept informed about issues such as these, and that is why I am raising this matter now.

The second issue is the Local Government Finance Bill. Based on a briefing given to Peers yesterday by the noble Baroness, Lady Hanham, we understand that the Government propose to make an announcement in this House this afternoon on transitional funding in connection with council tax support schemes. We do not yet know the detail, but it is clear that the changes to the Bill, at this late stage, will be material. I understand that there was a Written Statement yesterday, but today represents the first opportunity for Members of this House to debate these issues. Accordingly, yesterday we wrote to the Leader of the House asking for assurances that at Third Reading, which is due next week, all Members of your Lordships’ House, including the Opposition, will be able to table and, if necessary, vote on amendments—new and substantive amendments —driven by the Government’s announcement today. We received a reply from the Leader of the House rejecting such an easement of usual procedure, with the result that Members of this House will not be able to table such amendments following today’s announcement by the Government. We do not believe that this is correct. We do not believe that such an insistence is to the benefit either of Members of this House or of this House carrying out its role of properly scrutinising this Bill. Accordingly, we ask the Leader of the House to reconsider his response and provide Members of this House with the opportunity to carry out their constitutional role.

I apologise for having to intervene in this way, and on two separate points, but I believe that both are important matters which are of concern to this House.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I am surprised by the intervention of the Leader of the Opposition, particularly on the first question. These are enormously serious allegations that have been made against Members of this House. I happen to know that the noble Baroness asked the Lord Speaker for a PNQ on this matter and the request was turned down. I think that it is discourteous of the noble Baroness to have raised this issue because our rules do not provide for the second-guessing of a ruling on a PNQ by the Lord Speaker.

Since the noble Baroness was Leader of the House, this House has created a new code of practice and a new independent Commissioner for Standards. We should allow the new independent Commissioner for Standards to do his job, given his responsibilities, and to carry out any inquiries that he sees fit.

Secondly, on the Bill that we are dealing with today, it is completely standard practice for Governments to react to suggestions that have been made, to amendments that have been put down and debated in this House, in an attempt to be helpful to the House. That was the reply that I gave the noble Baroness. It is much better for the Report stage of this Bill to continue and for my noble friend the Minister to make whatever case she wishes to make as to why the Government have made this statement, and for the amendments to be taken in the order in which they were put down.

[Lord Laming]

My Lords, I am disappointed that the noble Baroness raised the first point, because she knows that the matter has been referred to the independent Commissioner for Standards. It is absolutely right, and in fairness to my colleagues involved in this, that the matter is handled in accordance with the procedures agreed by this House and away from the Floor of the House. I hope that all Members of the House will respect that.

--- Later in debate ---

[Lord Strathclyde]

My Lords, I think that what the noble Baroness is saying is that if the Government had not made a statement yesterday or this morning we would not have had this little debate at all, because we would have carried on with the amendments as they were. The Government are trying to be helpful. Surely the right time for this debate to continue is when we move into the Report stage. My noble friend can then make her position utterly clear and the House can take a view.

[Baroness Royall of Blaisdon]

My Lords, I rise to speak on both issues again. On the first point, these are of course deeply serious allegations, which is why I believe that the House should be informed. The process that we have now is absolutely correct; I am delighted that the procedure was changed; and I have the utmost confidence in the Commissioner for Standards. I just think that it is important that the House knows what is happening. I am glad that the noble Lord the Convenor of the Cross Benches was able to tell us what he has done; I am sure that the House is glad to know what has happened. We need to be open and transparent on these issues for the sake of the reputation of this House and its Members.

On the second point, I was merely being courteous in alerting the noble Lord to the fact that we would wish to table amendments at Third Reading and vote on them. I think that that is what the majority in the House would wish to do, which is why I wrote the letter yesterday.

Scotland: Referendum

Lord Strathclyde Excerpts

Monday 15th October 2012 Lords Chamber

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, with permission, I shall now repeat a Statement made by the Parliamentary Under-Secretary of State for Scotland in the House of Commons a few minutes ago. The Statement is as follows:

“You will appreciate that my right honourable friend the Secretary of State for Scotland is unable to deliver the Statement to the House today, as he has attended the meeting between the Prime Minister and the First Minister in Edinburgh to secure agreement on the independence referendum for Scotland.

In January of this year, my right honourable friend the Secretary of State for Scotland delivered a Statement to this House about the referendum. At that time, we acknowledged the Scottish National Party’s victory in the May 2011 Scottish parliamentary election and its manifesto pledge to hold an independence referendum. The Government also made clear their view that the Scottish Parliament did not have the legal power to legislate for an independence referendum. My right honourable friend the Secretary of State made an offer then that the UK Government would bring forward an order to give the Scottish Parliament that legal power. Since January, the UK and Scottish Governments have held consultations. There has been considerable public debate and numerous discussions between Ministers. Many of those discussions took place between me and Bruce Crawford MSP, Minister for Parliamentary Business and Government Strategy in the Scottish Government, and I would like to acknowledge his contribution.

Following 10 months of deliberation and four weeks of direct negotiations between the Scottish Government’s Deputy First Minister and my right honourable friend the Secretary of State, I am pleased to report to the House that, today in Edinburgh, the Prime Minister and the First Minister have made an agreement that will allow a legal, fair and decisive referendum to take place. This is a significant agreement. The two Governments have agreed that there should be a referendum. We have agreed that the referendum will consist of a single question. It will offer a choice between independence and remaining within the United Kingdom. We have agreed that it must be held before the end of 2014. The referendum will be based on the normal legal framework for UK referendums, with oversight from the Electoral Commission. This includes the key issues of how the referendum question will be determined and how the rules governing spending and campaigning will be established.

Following today’s agreement, the Government will bring forward an Order in Council under Section 30 of the Scotland Act. I have today placed a copy of the agreement and the draft order in the Library of the House. The agreement and draft order are also available to Members from the Printed Paper Office. This order will be laid before Parliament on 22 October and will be debated by both Houses of this Parliament and by the Scottish Parliament. All Members of this House will have the opportunity to consider and vote on the order. If both Parliaments approve the order, and after it is approved by Her Majesty in Council, the Scottish Parliament will have the legal competence to legislate for the referendum. We hope that the order will be passed by February 2013; once that has happened, the Scottish Government will introduce a referendum Bill setting out the wording of the question, the date of the referendum and the rules for the campaign for the Scottish Parliament to consider.

As part of today’s agreement, the two Governments have agreed that the rules for the referendum will be based on the rules set out in the Political Parties, Elections and Referendums Act 2000. Those rules were used successfully in the two referendums that took place last year. The two Governments have also confirmed that the Electoral Commission will review the proposed referendum question and that its report will be laid before the Scottish Parliament. This is the same process as applies to other UK referendums. Interested parties will be able to submit their views on the question to the Electoral Commission in the usual way. The Scottish Government will then respond to the Electoral Commission’s report.

Both Governments are agreed on the need for maximum transparency in this process and for a level playing field. Therefore, as part of today’s agreement, the Scottish Government will consult the two campaign organisations that have been established for their views before proposing spending limits for the referendum campaign to the Scottish Parliament. The Electoral Commission will also provide the Scottish Government with advice on the appropriate spending limits for the two campaigns in the referendum, as has happened in previous referendums, such as the 2011 referendum in Wales on further powers for the Welsh Assembly. In that referendum, the Electoral Commission recommended that the spending limit for designated campaign organisations should be set by reference to the expenditure limits applying to elections to the relevant legislature. In its response to both Governments’ consultation documents, the Electoral Commission provided its view that this model remains appropriate for the Scottish independence referendum.

Both Governments agree that all those who were entitled to vote in the Scottish Parliament elections in May 2011 should be able to vote in the referendum. As for all other referendums held in any part of the UK, it will be the legislation that establishes the referendum that will set the franchise. It will therefore be for the Scottish Parliament to define the franchise in the referendum Bill, as it would do for any other referendum or, indeed, election on matters within its devolved competence.

Although both Governments are agreed that the basis of that franchise will be the franchise for the Scottish Parliament elections, the Scottish Government have previously set out their proposals for extending the franchise to allow 16 and 17 year-olds to vote. It will now be for them to make the case for that change and to deal with the technical issues that may arise. There are, of course, a range of opinions in this House about changes to the voting age. However, having agreed the principle that the Scottish Parliament should have the legal power to legislate for the referendum—that it should be a referendum “made in Scotland”—the Government accept that it should be for the Scottish Parliament to determine the franchise. I fully expect that the Scottish Government’s proposals will be robustly debated in that Parliament. Any decisions taken by the Scottish Parliament for the referendum will not affect the voting age for parliamentary and local government elections anywhere in the United Kingdom.

Today’s agreement is important, as will be the consideration of the agreement and the order by this House, but I would also like us to reflect on what will come after. Now that the Governments have agreed the process for the referendum, it is vital that we get on with the real debate about the most important political decision that people in Scotland will ever take. The UK Government have already started to prepare the analysis and evidence that people in Scotland are calling for. Over the next year, this Government will publish thorough, evidence-based information that will set out the key issues in the independence debate. That analysis will be comprehensive, robust and open to external scrutiny. I fully expect it to show that Scotland is better off within the United Kingdom and that the rest of the United Kingdom is better with Scotland as part of it.

This Government believe passionately in the United Kingdom. We will work tirelessly over the next two years to show the Scottish people—and everyone else in this country—that together we are stronger, that together we can overcome the challenges confronting us and that together we can build a better future for Scotland as an integral part of the United Kingdom. The debates ahead will no doubt be long; they will no doubt be challenging and, at times, heated. But I fervently believe that, with the support of colleagues across this House, across Scotland and across the whole of the United Kingdom, in autumn 2014 fellow Scots will join me in choosing to stay part of the United Kingdom. We are indeed better together”.

My Lords, that concludes the Statement.

--- Later in debate ---

[Lord Strathclyde]

My Lords, I very much welcome what the noble Lord said in his closing remarks. He is right to say that all of us, across the political divide, should work together to get a result whereby Scotland feels part of the United Kingdom and wants to continue in what has been one of the most successful, if not the most successful, partnership that the world has ever seen.

The noble Lord asked a variety of detailed questions and I shall try to answer them. He started by saying that this was an historic day. It is; it is the most extraordinarily historic day and one that I never wished to see. I, for one, never thought that the Scottish nationalists would be able to achieve the majority that they did under the electoral system used for the Scottish Parliament, but in May 2011 the SNP won an outright majority; it won 69 of the 129 seats and part of its commitment was that there should be a referendum, even though it knew that it did not have the legislative ability to achieve that.

The noble Lord asked about the franchise. I expect that we will come back to that in the course of this debate. The first and most important thing to say is that the franchise is up to the Scottish Parliament to decide; it is not up to this House to decide.

[Lord Cormack]

No!

[Lord Forsyth of Drumlean]

No!

[Lord Strathclyde]

My Lords, I hear some “noes” around the place, but that happens to be the position. Noble Lords may not agree with it, but that is the purpose of the Section 30 order: to allow the Scottish Parliament to decide the franchise. The Scottish Government have said that they intend to try to include 16 and 17 year-olds, or certain 16 and 17 year-olds, in the franchise. We believe that there are some difficulties in doing so. I cannot speak for any other political parties, but Conservatives in the Scottish Parliament will campaign and vote against that provision. I, for one, as a parent of teenagers, would rather that my children were learning a bit more maths and physics in school than working on whether they should be voting in the referendum.

Of course, advice from the Electoral Commission is not statutorily binding on the Scottish Government or the Scottish Parliament, but when it comes to the question I think that there would be a political price to pay not to take the advice of the Electoral Commission, which has been specifically set up to offer such advice. It has given advice to the Scottish Government in the consultation process on the franchise and will no doubt do so on the question. The same goes for the financing of the referendum and the referendum campaigns.

As for Scots living in the rest of United Kingdom, I see no reason why they should not be part of the debate on policy and funding, but that will ultimately be a matter for the Scottish Parliament.

The noble Lord’s penultimate remark was about scrutiny of the First Minister. That will depend on the quality of the scrutiny carried out in the Scottish Parliament. I hope that a great deal of scrutiny of these measures is given in the Scottish Parliament.

[Lord Forsyth of Drumlean]

My Lords, has my noble friend had the opportunity to look at the Scottish Government’s website this afternoon? It states quite clearly that after the Section 30 order has been agreed, the Scottish Government will bring forward legislation that will set out the date, the franchise, the wording of the question, the rules on campaign finance and other rules governing the conduct of the campaign. It states:

“A final decision on these aspects will be taken by the Scottish Parliament, taking full account of the responses to the Scottish Government’s referendum consultation”.

If a final decision has not been taken, and will be taken by the Scottish Parliament, what exactly have my right honourable friends the Secretary of State for Scotland and the Prime Minister been negotiating about? If we are being asked to buy a pig in a poke and to pass a Section 30 order before we know the contents of the Bill, is that not marginalising the House of Commons? Would it not be better, at the very least, given that we cannot amend a Section 30 order, that we do not pass that order until we have seen the draft Bill that is to be put before the Scottish Parliament?

[Lord Strathclyde]

My Lords, I always like it when my noble friend agrees with me and when I am in agreement with him. Sadly, that is not the case on this occasion. The key question is: what does this agreement today mean for the people of Scotland? It means, first of all, that there will be a single question on the ballot paper—no more than that. We understand that many in the Scottish Government wanted a two-question referendum. Secondly, there is a time limit. We now have certainty that the referendum must take place before the end of 2014. That is a tremendous advantage to clear the air, to remove the poison at the heart of Scottish politics and to give real certainty to politics throughout the United Kingdom.

I cannot disagree with the list that my noble friend read out. These will be matters for the Scottish Parliament. We are today announcing a Section 30 order that will devolve to the Scottish Parliament the ability to run the referendum and, naturally, it will have to answer those questions.

[Lord O'Neill of Clackmannan]

Will the Leader of the House confirm that a Section 30 order is required to be passed by both Houses of this Parliament? That may be a tall order to achieve. From what he said today, and the manner in which he answered the points made by the noble Lord, Lord Forsyth, one gets the impression that the Scottish Tory Party has learnt nothing and forgotten nothing.

[Lord Strathclyde]

My Lords, on the first question, it will be up to both Houses of the Parliament to agree the Section 30 order. I did not understand the second question at all. To coin a phrase, we are all in this together. Across this Dispatch Box—I do not know where the noble Lord stands on these great matters; I thought that he was rather in favour of the United Kingdom—we will be working together to ensure the desired result in the referendum.

[Lord Steel of Aikwood]

My Lords, we have already had a year and a half of debate about Scottish independence and I must admit that the thought that we are to have another two years of debate fills me with gloom. We have the consolation of knowing that, through that period, public opinion has moved in favour of retaining our position in the United Kingdom and we must hope that that continues.

I was encouraged by what the noble Lord said a moment ago about the Electoral Commission, because the Statement itself was weak on that question. If the Electoral Commission takes the view that any question beginning with the words, “Do you agree that”, is a leading question, surely it will not be possible for the Scottish Parliament to ignore that. Would it not be better than having a yes/no question simply to have two conflicting statements against which the electorate put a cross: either, “I am in favour of Scottish independence”, or, “I am in favour of retaining the United Kingdom”?

[Lord Strathclyde]

My Lords, under this legislation, the referendum must take place by the end of 2014—I think that essentially it is understood that it should be in the autumn of 2014—so there is plenty of time to go. Some people will find that hard to put up with; some people will find it reasonable that we should have plenty of time to discuss these important issues. As for the question, the Electoral Commission is not binding on the Scottish Parliament. The Scottish Parliament must ultimately approve the question. The point that I was trying to make is that if there was a leading question with which the Electoral Commission disagreed—its report will be made available to the Scottish Parliament—I suspect that there would be a political price to pay for that.

[Lord McConnell of Glenscorrodale]

I welcomed the intervention of the Prime Minister earlier this year because I felt that many outstanding questions had to be addressed. One was the proposed date of the referendum. On that, to secure this agreement, the Government have capitulated. The two years that is now proposed for debate on this referendum could do untold damage, and not only to the Scottish economy—it could affect the British recovery as well. That has been a mistake. On the other side, it is positive that we have now secured agreement that there will be a legally binding referendum. The Scottish Government did not want a legally binding referendum; they wanted a softer option of an advisory referendum and we have stopped that. That is to be welcomed.

On the rules of that referendum, there are serious questions to be answered. Frankly, I am astonished that we have in front of us today the Section 30 order that could be passed by this House and the other House but not the draft referendum Bill that that Section 30 order will enable. In the months since the Prime Minister’s statement in January, I always expected that there would be the Section 30 order at the end of this process and that at the same time the draft referendum Bill on which that Section 30 order was based and on which the agreement had been reached would be published. I am disappointed that that is not in front of us today and I urge the Government to think seriously about pressing the Scottish Government to publish that referendum Bill in advance of the deliberations of this House rather than afterwards.

[Lord Strathclyde]

My Lords, the referendum process is now legally watertight. The draft Section 30 order will provide the Scottish Parliament with the confidence to legislate for an independence referendum if it is passed by both Houses of Parliament.

As to the question of the Bill, there is no Bill before us. We have not seen a draft Bill. We wait to see what the Scottish Government publish. They have not yet published the answers to their consultation process. We would hope to see that soon. The noble Lord started by saying that two years is a long time to wait. We cannot force the Scottish Parliament to publish their draft Bill. We have had this negotiation, we have a time limit and I think that the months will pass by very quickly.

[Lord Martin of Springburn]

My Lords, I put on the record that I welcome the fact that there is one question and one question alone. That is right and fitting and it saves confusion. However, in the Statement a lot has been made of faith being put in the Electoral Commission. It should be borne in mind that only five years ago, in 2007, at the parliamentary elections the Electoral Commission had to step aside and the taxpayers of this country had to invite a Canadian expert, Mr Ron Gould, to investigate why 85,000 electors had their ballot paper rejected. That is the equivalent of one and a half constituencies in the Scottish Parliament. Because the Electoral Commission had played a part in preparing the electronic machines and making up the ballot paper, it could not get involved. That was a big mistake. I ask the Minister to pay close attention to the internal workings of the Electoral Commission to make sure that no one in this election has their ballot paper rejected.

[Lord Strathclyde]

My Lords, I join with the noble Lord in saying that we have come to the right conclusion that there should be only one question. The most important thing in this debate is that we have absolute clarity of result and the only way of doing that is by having a single question with a yes/no answer.

I very much welcome what the noble Lord has said about the Electoral Commission. It is true, as he knows very well, that there was a problem in 2007 and I am sure that the Electoral Commission has learnt many lessons as a result of it. However, his main point was that Ministers should pay close attention to the workings of the Electoral Commission to make sure that this does not happen in this all-important referendum, and on that I completely agree with him.

[Lord Cormack]

My Lords, unless and until any constituent country in the United Kingdom becomes independent, it should surely be bound by the rules of the franchise which apply in the United Kingdom. Does my noble friend not accept that it is wrong to alter the franchise by the back door? That will be the consequence of our kow-towing—that is what it is—to the demands of the First Minister of Scotland. Can we please have the opportunity at the very least to see this draft Bill before we approve the order? If we do not, some of us may not feel inclined to approve it.

[Lord Strathclyde]

My Lords, I cannot give my noble friend the comfort that he wants. There is nothing that we can do to oblige the Scottish Parliament to publish a draft Bill, and this very much depends on the process of the passage of that Bill in the Scottish Parliament.

On the second point on the franchise, such voting already takes place in Scotland. The Scottish Parliament decided that 16 and 17 year-olds who turned 18 during the lifetime of the register would be able to vote in the health board elections. It may be a small example but it is an example of where devolution on the franchise has already taken place. I reiterate that I am not in favour of a change in the franchise but it will be a matter for the Scottish Parliament to decide.

[Lord Reid of Cardowan]

My Lords, everyone in this House accepts that in these discussions compromise is necessary. But that compromise has to be informed by the need and the criteria for clarity, fairness and legitimacy. Let us accept that having one question certainly meets those criteria. However, there are two areas which fail to meet those criteria.

First, the idea of having the Scottish Parliament and the SNP effectively decide the question is not liable to assist in either legitimacy in the long run or fairness in the short term. There may be inadequacies, as has been pointed out, about the Electoral Commission, but I am sure that if anyone in Scotland was asked who was likely to be more objective in choosing a question between the SNP and the Electoral Commission, I would not bet against the Electoral Commission winning that judgment.

Secondly, as my noble friend Lord McConnell pointed out, to ask people to vote for a Section 30 before they know what they are voting for is similar to asking people to vote on devo-max before they know what they are voting on. Since we argued successfully against that—that people should not be asked to vote for a “pig in a poke”—if that applies in the Scottish referendum surely it applies in this House and the other Chamber.

[Lord Strathclyde]

My Lords, the noble Lord said that compromise was necessary and I think that all those who have followed this process would agree with him. He also mentioned clarity and we do have clarity in the single question. I am one of those who have never entirely understood what is meant by devo-max, and if you ask three people what they think it is you always get four different answers. Therefore, it is entirely right that we remove the opportunity for that question to be asked.

The question on the paper will be a question on independence. The precise wording will be for the Scottish Parliament to determine and will be set out in the referendum Bill to be introduced by the Scottish Government. However, the Scottish Government have agreed to refer the proposed referendum question and any preceding statement to the Electoral Commission for review of its intelligibility. It is important that interested parties will be able to submit their views on the proposed wording to the Electoral Commission as part of the commission’s review process in the normal way.

We have had experience of this already, although admittedly perhaps not on something this important or involving the Scottish Parliament. The Scottish Government will respond to the report, indicating their response to any recommendations that the Electoral Commission may make. The point is that this will be a very public process. Equally, constitutionally it is right that it must be up to a parliament to decide what question should be on the paper. That is what this Parliament would demand and I can understand why we have concluded that it is right for the Scottish Parliament to do the same thing.

[Baroness Liddell of Coatdyke]

My Lords, I am grateful for the opportunity to add to this debate. There has been a startling degree of naiveté on the part of the Government in the negotiations that have taken place so far. I noted that the noble Lord the Leader of the House talked about the need for transparency and a level playing field, and he discussed the fact that a body of work is to be undertaken to ensure that the facts are properly put before the people of Scotland. I say to him that that is not enough. We have already had a degree of sophistry and confusion over whether Scotland would automatically be a member of the European Union and would have to adopt the euro. I have no doubt that, as a Scotsman, the noble Lord the Leader of the House has used the old toast, “Here’s tae us. Wha’s like us? Damn few, and they’re a’ deid”. That means that anyone who suggests that after independence Scotland will not be a land of milk and honey will be rubbished. It is not enough to say that a body of work will be undertaken. There will be a requirement for rebuttal and I ask the Minister to look hard at establishing a panel of neutral experts who will be available for that process of rebuttal.

[Lord Strathclyde]

My Lords, I slightly object to the accusation of naiveté. Many of us warned the Labour Party many years ago that this is exactly what would happen, and it was senior members of the Labour Party who continually told us that this was the thing that would stop the nationalists in their tracks. However, the years go by and now here we are, all working together to try to stop this process. I do not think there is any naiveté anywhere in this Government about the role that the First Minister of Scotland takes or the verbal gymnastics and occasional distortions that take place. The Government are utterly committed to providing evidence-based information to the people of Scotland so that they can very clearly see what the impact of breaking up the United Kingdom would be and what the separatist cause would lead us to.

[Lord Selkirk of Douglas]

My Lords, will the Leader of the House accept that, while some tactical advantages may have been gained by the Scottish Administration during the formation of this agreement, these are outweighed by the fact that there will be one single question? Will he also accept that the large increase of powers for the Scottish Parliament in the Scotland Act have been consistently underestimated and that further issues relating to devolution should be set aside until the result of the referendum is made entirely clear?

[Lord Strathclyde]

Yes, my Lords, I agree with my noble friend that there is no need to discuss any further devolution settlement until the referendum has taken place and that there is also a pipeline of provisions in the Scotland Act. I am not sure that the nationalists have received a tactical advantage, but it is now right that the decision should be brought to the Scottish people.

--- Later in debate ---

[Lord Foulkes of Cumnock]

My Lords, there is a paragraph in the agreement which says that,

“the referendum should meet the highest standards of fairness, transparency and propriety”.

I have one simple little question. If, after we pass the Section 30 order, the UK Government think that the proposals do not meet the highest standards of fairness, transparency and propriety, what recourse do they have?

[Lord Strathclyde]

My Lords, I have tried to explain that the Scottish people—who, as the noble Lord knows well, are a fair-minded and educated people—will see through anything that is not fair-minded and responsible. The time has come to trust the people of Scotland. As my noble friend Lord Steel pointed out a few minutes ago, it is true that as this debate has raged in the past couple of years the opinion polls have swung in favour of maintaining the United Kingdom.

House of Lords: Reform

Lord Strathclyde Excerpts

Monday 8th October 2012 Lords Chamber

[Lord Wakeham]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, the Government have decided not to proceed with the House of Lords Reform Bill, and it has been withdrawn.

[Lord Wakeham]

I thank my noble friend the Leader of the House for his reply. Might I assume from his Answer that the Government have no plans for further reform of your Lordships’ House in this present Parliament?

[Lord Strathclyde]

My Lords, the hard work of many Members of this House and the other place to shape this Bill has of course inched us forward in this great debate, but Lords reform is now a matter for future Parliaments. I can confirm that the coalition will not be able to deliver Lords reform during this Parliament, which in a way seems extraordinary, given that more than 70% of the House of Commons voted in favour of the Bill at Second Reading.

[Baroness Royall of Blaisdon]

My Lords, I am grateful to noble Lord, Lord Wakeham, for tabling this PNQ but regret the fact that the Leader of the House did not make a full and proper Statement. For the Government to tell this House formally by means of a reply to a Private Notice Question that they have abandoned their legislation on further House of Lords reform is woefully inadequate. If the Lords had been sitting on 3 September, at the same time as the Commons, the Leader would have repeated the Statement.

I welcome the fact that the coalition has finally come to its senses and abandoned what was a bad Bill. I must say that for the Leader, in his piece in today’s House Magazine, to lambast Labour for the Bill’s failure is a bit rich. My party wants reform, but the right reform. Would the Leader agree that it is regrettable that the Deputy Prime Minister appears, in a fit of pique, to have ruled out any reforms to your Lordships’ House before the next election, including the Steel Bill?

Now that the Bill has gone the Government have time on their hands, so what are we going to do? Will the Leader therefore agree to an urgent meeting of the usual channels to examine the Government’s legislative programme strategically, and come up with proposals on planning and handling that will find favour with the whole House and ensure that we could respect the firm convention that this House will normally rise on legislating days by about 10 pm?

--- Later in debate ---

[Lord Strathclyde]

My Lords, I think that is a question for which the word “opportunistic” was originally coined. Lords reform was, of course, based almost entirely on Jack Straw’s White Paper from 2008, when the noble Baroness stood at this Dispatch Box. No doubt historians will wish to examine exactly why the Bill fell in another place. My own view is that while the House of Commons was keen on the idea of an elected House, when Members found out what it might mean for them they became less keen. Furthermore, it required a consensus right across the parties in another place and in this House. The Labour Party was not willing to form part of that consensus in a programme Motion, demanding a referendum, the removal of the Cross Benches and the entrenchment of powers. I therefore make no apology for saying that the Labour Party was at least in part to blame for there being no further action on Lords reform.

As to the further legislative programme, Bills will be introduced. However, while there is time currently available in the House for Commons for more legislation, of course we were not expecting the House of Lords Reform Bill until the new year. We expected to be in Committee at least, and perhaps for the Session to continue well into the summer. We will now be able to finish the Session in a normal time. However, I very much welcome any discussions that the noble Baroness would like to have.

[Lord Cormack]

My Lords, would my noble friend accept that there are many people in this House who are delighted that the Government came to their senses on this issue? Would he assure the House that he has not ruled out the housekeeping measures which are in the Steel Bill? Will he consult with the noble Lord, Lord Steel, the noble Baroness, Lady Hayman, and others on what sensible, modest housekeeping measures can be brought forward to make this House even more effective than it is at the moment? Will he also use his very considerable influence within his own party to ensure that, at the next general election, the Conservative Party does not fight on a manifesto that has any reference at all to an elected second Chamber?

[Lord Strathclyde]

My Lords, that may or may not be asking too much. Of course I am aware that this House will be very pleased with the news. Ever since the election, in every debate that we have had there has been an overwhelming majority against the proposals in the Bill. As far as the Steel Bill is concerned, this House has passed a Private Member’s Bill in the name of my noble friend Lord Steel. It now languishes in the House of Commons at the back of the Private Member’s Bill queue. It remains to be seen whether a Member of the House of Commons regards it as a priority and decides to pick it up. However, I will just point out that more than over 70% of the House of Commons voted in favour of an elected House. It may be a little difficult to believe that the House of Commons will now move to entrenching an appointed House so soon.

[Baroness Hayman]

My Lords—

--- Later in debate ---

[Baroness Hayman]

My Lords, I am grateful to the House, and I am sure that the whole House will be grateful to the noble Lord, Lord Wakeham, for ensuring that we at least have 10 minutes to discuss this issue. Will the noble Lord the Leader of the House accept that reform and election are not synonymous? Will he also accept that two areas of consensus did emerge from the debate on the Government’s Bill? First, the Bill for elections to this House was not deliverable. Secondly, there was an urgent need to make changes in the House. I must say to the noble Lord, Lord Cormack, that I have never seen myself as a modest housekeeper and am more interested in some substantive reforms that are urgent for this House. Despite the pique felt over the withdrawal of the Bill, those remain urgent priorities on which there is widespread agreement. Will the noble Lord accept that and help make some progress on it?

[Lord Strathclyde]

My Lords, there may well be widespread agreement in this House, but I have seen no indication that there is widespread agreement in another place. That agreement is absolutely necessary before a Bill can be passed. I urge the noble Baroness, with all her influence, and those who agree with her to discuss things further with Members of the House of Commons.

[Lord Rennard]

My Lords, does my noble friend the Leader of the House agree that whatever may or may not happen in the near future in relation to reform of your Lordships’ House, there is now absolutely no case whatever for continuing the farcical practice of holding by-elections to replace hereditary Peers when one of their number passes away?

[Lord Strathclyde]

My Lords, the by-elections were never supposed to occur because the Labour Party in 2001 promised that it would come forward with proper, elected reform that did not in the event take place. The existence of the by-elections may still be a spur for further reform.

[Lord Campbell-Savours]

With two-thirds of the House of Commons voting in favour of an elected House, why will the Government not table a Motion for a referendum to be held at the time of the next general election, in the knowledge that when that comes to a vote in the House of Commons the Labour Benches would be required to support it because it is in our election manifesto; and Liberal Democrat MPs, along with Conservative supporters of an elected House, would also feel obliged to? The country would then decide and would lock in Parliament to a yes or no decision.

[Lord Strathclyde]

The Deputy Prime Minister looked at many options, including having discussions with the leader of the Labour Party. However, it was decided that moving forward would not be fruitful.

[Lord Elton]

My Lords, will my noble friend exercise his good offices with the Prime Minister and the commission and ask them to exercise great restraint in the appointment of new Peers until some method is devised to make room for them?

--- Later in debate ---

[Lord Strathclyde]

My Lords, there is a Question on tomorrow’s Order Paper that will deal with that.

[Lord Elystan-Morgan]

Does the Minister accept that it will be the verdict of history that the proposed reform failed because it was fundamentally and fatally flawed? It created a situation whereby mutual strangulation would have been the order of the day between the two Houses. Will he give an undertaking to the House that any future consideration, which of course must encompass the primacy of the House of Commons, should be on the basis of a written constitution?

[Lord Strathclyde]

My Lords, it will certainly be for historians to take a view on what happened, not only during the past two and a half years but over the past 15 years over which the debate has raged. However, as I said, more than two-thirds of the House of Commons voted in favour of an elected second Chamber. I do not think that the Bill was fatally flawed, but I do think that there will be no further progress until the House of Commons understands the full implications of an elected House being more independent, stronger and able to hold it and the Government to account.

Procedure of the House

Lord Strathclyde Excerpts

Tuesday 24th July 2012 Lords Chamber

[Baroness Royall of Blaisdon]

I apologise for intervening on this issue, but I wish to say something. I address my remarks to the noble Lord the Leader of the House rather than to the Lord Chairman. In view of the fact that the noble Lord, Lord Green, is going to be on television this evening and that he has written a letter to Mr Chris Leslie in the House of Commons, I thought it pertinent to raise this matter on the Floor of the House.

As a matter of procedure, the noble Lord the Leader of the House yesterday told your Lordships’ House in relation to the noble Lord, Lord Green of Hurstpierpoint:

“No Minister needs to be accountable to Parliament for their previous career”.—[Official Report, 23/7/2012; col. 482.]

However, in a letter to my honourable friend the shadow Financial Secretary to the Treasury, the noble Lord, Lord Green, does precisely that in giving, as a government Minister in an official letter from a government department, his views on HSBC and what he described as the “failures” of the bank, about which he says, “I share that regret”. If the noble Lord, Lord Green, can make that kind of point in a government letter—let alone what he might say in an interview on Sky television at 7 pm this evening—he should come to this House and make those points here. I therefore invite the Leader of the House, in the light of the actions today of the noble Lord, Lord Green, to make arrangements for the noble Lord, as a Minister and a Member of this House, to take the opportunity to come to this House tomorrow to dispel the questions that are being posed about his ministerial role.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I think that it is worth replying to this. The noble Baroness the Leader of the Opposition was kind enough to give me notice that she would raise this issue. There are two accusations against my noble friend Lord Green. The first is that he has written to Mr Chris Leslie, who is a Member of the House of Commons. The only reason why my noble friend Lord Green has written to Mr Leslie is because Mr Leslie wrote to him and he has simply replied. That strikes me as being entirely the right and correct thing to do.

The second accusation is that my noble friend has not come to this House to answer questions. The reason why my noble friend has not come to this House to answer questions is because none has been put to him on this subject.

The noble Lord, Lord Foulkes, made much of the table of attendance and referred to my noble friend Lady Anelay. However, she happens to be the government Chief Whip, and if she was not here practically every day, I would want to know why. Incidentally, I also want to know why the Minister for Trade should spend all his time in here when his job is to do his best, banging the drum for British business—as the noble Lord, Lord Jones, used to remind us—rather than coming here. How many questions has the noble Lord, Lord Foulkes, put down in the past 12 months to my noble friend Lord Green on matters of trade? I shall check the record later.

[Lord Foulkes of Cumnock]

If the noble Lord the Leader of the House would care to check, he will find that the noble Lord, Lord Jones, attended here regularly. He answered question after question. Not only did he do so, but so did the Secretary of State, the noble Lord, Lord Mandelson, who also attended regularly. The noble Lord, Lord Green, is the senior Minister from the Department for Business, Innovation and Skills in this House, but who has to stand in? The noble Baroness, Lady Wilcox, who comes very high in the table, gallantly stands in regularly to answer these questions; and if she is not able to do it, the noble Lord, Lord De Mauley, stands in. However, we never see the noble Lord, Lord Green. I do not think that the noble Lord the Leader of the House understands that he is the Leader of the House, not of the Conservative Party. He is responsible for the whole House. It is a grave discourtesy for a Minister never to appear to turn up. He is not just responsible for trade and investment; he is the main Minister in that department, and he should be here answering questions.

[Lord Strathclyde]

I will not continue this for very much longer. All I can say is that if the noble Lord wants to put down questions on trade and investment, my noble friend Lord Green will be here to answer them.

[Lord Barnett]

My Lords, while the noble Lord is here and answering questions, I hope he does not mind my saying this, but I understand that the noble Lord, Lord Green, should have made from BIS the Statement on loan guarantees. For some reason, he was not here, although I gather he was in the House. Could the noble Lord inquire into why that happened? I would rather that the noble Lord, Lord Green, had answered, given that he was the Minister concerned.

[Lord King of Bridgwater]

Can we get a better understanding of this issue? My own memory goes back to two excellent Ministers of Trade: Cecil Parkinson, who is now a Member of this House, and Richard Needham—both of whom will be familiar to many Members of this House. I was rude to them if I ever saw them, because their job was not to be here. At a time when we needed trade and exports, they needed to be out and about promoting British business. The other House respected the fact that they had to lead delegations and had greater impact outside. The more they did, the better they did it. They were very effective Ministers of Trade at a rather successful time for the British economy. If ever we needed a Minister of Trade to be active overseas, it is now. I thought this House would appreciate that.

[Lord Strathclyde]

My Lords, my noble friend puts it extremely well. In answer to the noble Lord, Lord Barnett, a Written Ministerial Statement on the loan guarantee scheme was made by my noble friend Lord Sassoon because it was a Treasury matter. The noble Lord was able to ask him a Question a few minutes ago.

[The Chairman of Committees (Lord Sewel)]

My Lords, it seems so long ago, but if I remember correctly the noble Lord, Lord Foulkes, began by commending the report. I thank him for those very few words on the report. He raised issues that have been dealt with by the Leader of the House. The only thing I should say is that if anyone wishes to take these matters further in light of the Procedure Committee, they can always write. I do not think that any points, let alone points of substance, have been raised on the content of the report, which makes a number of important advances in how we enable people with disabilities to contribute fully to the business of this House. I commend the report to the House.

HSBC: Lord Green of Hurstpierpoint

Lord Strathclyde Excerpts

Monday 23rd July 2012 Lords Chamber

[Baroness Royall of Blaisdon]

My Lords, I beg leave to ask a Question of which I have given private notice.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, Her Majesty’s Government have every confidence in my noble friend Lord Green ability to fulfil his ministerial duties. His experience, expertise and enthusiasm provide great benefit to the UK’s international profile and to the support that UK Trade and Investment provides to British businesses.

[Baroness Royall of Blaisdon]

My Lords, I am grateful to the Leader of the House for that Answer. However, as the noble Lord will be aware, questions have been asked about the present ministerial role of the noble Lord, Lord Green, following the US Senate committee’s findings.

Paragraph 1.2 of the Ministerial Code, which sets out the responsibility of Ministers to Parliament, says that:

“Ministers should be as open as possible with Parliament and the public, refusing to provide information only when disclosure would not be in the public interest”.

Given that obligation, will the Leader of the House ask the noble Lord, Lord Green of Hurstpierpoint, to come to your Lordships’ House to place on record what he knew and when about the matters investigated by the US Senate committee, including what steps he took to deal with them? Would such a move not give the noble Lord, Lord Green, the opportunity to dispel once and for all the questions being asked about his present ministerial role?

[Lord Strathclyde]

My Lords, I congratulate the Leader of the Opposition. I know that she has been trying to find a PNQ to put to the House and she has managed to do so. I am very glad to be able to respond on behalf of Her Majesty’s Government.

There is no urgency in this matter. The investigation started more than two years ago. The report in question was published two weeks ago. There was no evidence of personal wrongdoing of my noble friend; indeed, there was no personal criticism whatever of my noble friend. The investigation is ongoing. As for ministerial accountability, my noble friend Lord Green is accountable to this House—to Parliament—for the work he does as a Minister. However, many Ministers have had previous careers. No Minister needs to be accountable to Parliament for their previous career, only for what they are doing as a Minister.

[Lord Butler of Brockwell]

My Lords, I declare an interest as a non-executive director of HSBC during the time when the noble Lord, Lord Green, was chief executive officer and chairman. Is the Leader aware that when I was advising the Prime Minister on calls for ministerial resignations, I drew a distinction—which I think is widely accepted—between accountability and responsibility? While it may be the case that the chairman and chief executive officer of a major international company is accountable for everything that happens in that company, there is no possible way in which they can be responsible for everything that happens in a worldwide group of the size of HSBC.

[Lord Strathclyde]

My Lords, with all his experience and knowledge—not just as head of the Civil Service and Cabinet Secretary but having had a more commercial career since he left—the noble Lord, Lord Butler of Brockwell, has brought a lot of wisdom and good sense to this debate, on which we should all reflect.

[Lord Kinnock]

My Lords, since the Leader of the House has told us that the work of the noble Lord, Lord Green, is of benefit to the United Kingdom’s profile—the words he just used—does he think that the accountability of an individual in a very senior position in government or business ceases when that individual changes post? Does he not think that it would benefit the UK’s profile to ensure that a Minister rigorously adheres to the wording of the Ministerial Code, as just spelt out by my noble friend? Further, does he not think that the ethics of business require that a Minister who has the opportunity and the right to come to this House to explain themselves should do so?

[Lord Strathclyde]

My Lords, I do not disagree at all with what the noble Lord says about the ethics of the industry in which my noble friend was involved. In fact, only last week, this House set up a special Joint Select Committee to look at ethics and many other practices in the banking industry. Surely that is the point. If a Select Committee of this House or another place wishes to ask my noble friend questions, it should do so. My purpose is to reflect on my noble friend’s role in government and to answer on behalf of Her Majesty’s Government.

[Lord Cormack]

My Lords, does my noble friend agree that anyone who knows the noble Lord, Lord Green, could not doubt his total integrity for a moment?

[Lord Strathclyde]

My Lords, I agree with that but I wholly accept that questions need to be asked—and are habitually asked—of a Minister to make sure that he is accountable to Parliament. As I said in my reply to the noble Lord, Lord Kinnock, if a committee of Parliament wishes to put questions to my noble friend, it is entirely free to do so.

[Lord Grocott]

My Lords, perhaps I can remind the Leader of the House of a report with which he will be, no doubt, almost word perfect: the report of the Leader’s Group on Working Practices, which made a number of recommendations. Of course, the group was established by the Leader for the Leader. Recommendation 3 of that report—which, I remind him again, was published more than a year ago in April last year—said:

“We … recommend that there should be a monthly question time dedicated to questions on House of Lords matters addressed to the Leader of the House”.

Perhaps I may helpfully suggest that both today’s Question and indeed the very important one raised last week by my noble friend Lord Barnett could be handled were the Leader to accept that simple, unanimous recommendation by a committee that was set up at his instigation. I urge him to act on that recommendation as soon as possible.

[Lord Strathclyde]

My Lords, from memory, I do not think that there has been a single Question put to me in my capacity as Leader of the House in the past 12 months. That rather leads me to believe that there is no great demand for a monthly Question Time session for the Leader. There are perfectly good methods for asking me questions and noble Lords should use them if they wish to.

[Lord Hughes of Woodside]

My Lords, from a rather different view, perhaps, I query what was said by the noble Lord, Lord Butler. Surely accountability and responsibility cannot simply be divided one from the other—it is not as sharp as that. Accountability and responsibility go hand in hand and no one should doubt it.

[Lord Strathclyde]

My Lords, my noble friend Lord Cormack said that no one should challenge the integrity of my noble friend Lord Green, and I agree with him. But if it comes to a choice between the noble Lord’s view of what is responsibility and accountability and that of the noble Lord, Lord Butler of Brockwell, I will go with the noble Lord, Lord Butler of Brockwell.

[Baroness McIntosh of Hudnall]

My Lords, I personally—along with most of the House, I feel—am in no position and would not wish to challenge the integrity of the noble Lord, Lord Green. However, does the Leader of the House agree that perhaps there would be less question about his conduct over the issue of HSBC were the House to see him more often answering questions that relate to his ministerial responsibilities? It may have something to do with his relative unfamiliarity to Members of the House that they are perhaps more sceptical than they should be.

[Lord Strathclyde]

My Lords, as a Minister for trade, my noble friend of course spends a great deal of time overseas. Since he was appointed, he has travelled to 42 countries and visited 73 cities. In his role as Minister of State for Trade and Investment, he has answered a total of 72 Parliamentary Questions, including two Oral Questions out of three that he could have answered. The response to the point raised by the noble Baroness is that if more Questions on trade and investment were put down, I am sure that my noble friend would be very happy to come and answer them.

[Baroness Royall of Blaisdon]

My Lords, I thank the noble Lord for his answers, but perhaps I may say that I found his initial response to my Question slightly patronising, albeit not in terms of the substance. I table PNQs when I believe that there is a matter of accountability which is of interest to this Parliament as a whole—we are the only House of Parliament sitting at the moment—and when I believe that it is of importance to this nation. I do not do so for personal gratification.

[Lord Strathclyde]

My Lords, if the noble Baroness felt that I was in any way seeking to patronise her, I apologise fully.

Business

Lord Strathclyde Excerpts

Thursday 19th July 2012 Lords Chamber

[Lord Barnett]

While the Leader of the House is here, I feel that I should bring to the attention of the House a very serious matter that has arisen. At Question Time yesterday, I asked a question of the Treasury. The noble Lord, Lord De Mauley, who is normally very honourable, told me that he could not reply to my question and would do so in writing. We did not know at the time that a Written Ministerial Statement was being made by the noble Lord, Lord Sassoon. The Leader of the Opposition asked a few days ago that, while this House is sitting as part of this Parliament, any major Statement—this was a serious Statement on infrastructure and loan guarantee schemes—be taken here. It was taken as a Written Ministerial Statement while I was asking an oral question. It really is quite outrageous and I hope that the Leader of the House will be able to assure us that it will not happen again.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, the noble Lord, Lord Barnett, has been a Member of this House for a very long time indeed. The noble Lord knows that it does not have points of order and that if he needs to raise a question, it has to be on a relevant Motion. It is a gross discourtesy to the Lord Speaker for the noble Lord not to have put down a PNQ if he felt it was appropriate. It is also a discourtesy to the House for him to break the rules in this way. If the noble Lord does not know what the rules are, then I urge him to take advice from the Clerk of the Parliaments, who no doubt will provide an induction course for him.

[Noble Lords]

Oh!

[Lord Barnett]

My Lords, I have indeed been a Member of this House for nearly 30 years and have never, I hope, done anything discourteous in any way. I was putting an oral question on the specific issue and at the same time a Minister was putting down a Written Ministerial Statement. This was on something rather important, to say the least, because the Prime Minister—and even his deputy was with him—was making this major statement about loan guarantees. The Leader of the Opposition asked specifically that those kinds of statements should be made here; she never said written ones. What is wrong with my asking now that it should not happen again?

[Lord Strathclyde]

My Lords, what is wrong is that the noble Lord is breaking the rules of the House by not raising it at a relevant time on a Motion that is on the Order Paper.