Tax Havens

Lord Forsyth of Drumlean Excerpts

Thursday 6th April 2017 Lords Chamber

[Lord Young of Cookham]

We already have country-by-country reporting in this country, and multinationals based in this country have to report to HMRC how much profit they make and how much tax they pay in each country. We are encouraging other countries to do this, so we have a multilateral approach, and the Chancellor raises this issue at the G20. In response to the first part of the noble Lord’s question, we have taken the lead on this as a result of our presidency of the G8, and more than 90 countries have agreed automatically to exchange taxpayer information under the common reporting standard. We are also taking initiatives on beneficial ownership and some of the other issues that we have already discussed.

[Lord Forsyth of Drumlean (Con)]

My Lords, given the widespread use of Luxembourg by large companies and multinationals to reduce their tax, will our exit from the European Union provide an opportunity to broaden our tax base?

[Lord Young of Cookham]

The initiatives we are taking on tax evasion are independent of our membership of the EU, although we are pursuing some EU directives. As I said, this country is in the lead. I do not know whether my noble friend has seen page 9 of today’s Times, which says that:

“Oligarchs must disclose identity as home owners”,


with a register. That is a world first: the people behind anonymous companies that own billions of pounds-worth of property must reveal their identities under new anti-corruption rules. This shows that the country takes the matter very seriously.

Building More Homes (Economic Affairs Committee Report)

Lord Forsyth of Drumlean Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Hollick, and I just take a few moments to pay tribute to the excellent way in which he chairs our committee. The noble Lord, Lord Tyler, in one of these BBC programmes, suggested that this is something of a daycare centre—it feels more like a workhouse under the leadership of the noble Lord: we have produced a report on electricity, we are working on a report on the labour market, we have finished off this housing report, and I believe we are doing something on student loans. We used to meet on Tuesdays; we now meet on Tuesdays and Wednesdays—and Thursdays, sometimes—and, in addition to that, the sub-committee now meets two days a week. So let us have no more talk about how this House is not properly employed.

I found this subject something of a challenge; housing is not an area where I claim any expertise. The last time I thought seriously about housing was when I was on Westminster City Council, which is nearly—gosh, it cannot be that many years ago; it is quite a long time, anyway. I was quite struck when, just after new year, I arrived by train in Glasgow. It was pouring down with what was almost sleet, on a horrible cold night. I went to get a taxi, and sitting in a sleeping bag in the wet was a young girl with a cup wanting money. Around London today we can see more and more examples of people in this desperate situation. Everyone in the taxi queue walked past, pretending not to notice her—if she had been a Labrador, everyone would have patted it, but she was a person and very few people put any money in the cup. It is not just with homelessness that we have a problem; we also have the problem of professional couples earning in good jobs who, in some parts of the country—most notably in London and south-east—cannot afford to get into the housing market. I was very proud to be a member of the Government in which my noble friend Lord Lawson led us with considerable success towards the idea of the home-owning democracy. The fact is, home ownership is falling and our ability to house those on the lowest incomes is non-existent.

If people do not have time to read the report, the only thing they have to look at in it is Figure 1. It shows the housebuilding that has occurred in the various sectors, and outside the private sector—as our chairman, the noble Lord, Lord Hollick, has pointed out—it is failing to meet demand. The demand has increased remarkably. I was quite struck by the numbers reported by the noble Lord, Lord Green. He said that we had to build a house every 15 minutes to meet the demand that was arising simply from immigration. However, it is not just immigration that is increasing demand: it is also rising incomes, the change in the nature of households and the availability of cheap mortgages because of quantitative easing.

Central to this problem, as the noble Lord, Lord Hollick, pointed out, is the supply of land. One of the recommendations in our report is that we should create some incentive. There is no incentive for a health authority or a transport body to make land available for housing if they do not get to keep the proceeds. That would make a difference, but, as we say in our report, there does not seem to be anyone in central government making sure that that land is used effectively.

We had a private session with the Housing Minister, Gavin Barwell, and I found him the most extraordinary Minister. He has been around the country and is absolutely on top of these issues. He understands them and that is very much reflected in the White Paper. That session was, therefore, very cheerful. We were very cross with him at one stage, however, because the Government took a very long time to respond to our report, and produced a response that was, to say the least, derisory. We were cheered, however, to find out that the probable reason for that was that many of our ideas were being incorporated into the White Paper, for which we were extremely grateful. Again, it shows that, in the Housing Minister, we have someone who is listening. I know he spends his time going around the country talking to local authorities. The key thing here is that this is not a singular problem. It varies from region to region: in some parts of the country, it is perfectly affordable for people to buy homes, but in other parts of the country it is not.

Now we come to the bit that I found ideologically challenging. The great thing about this House is that we operate—certainly our committees do—on the basis of the evidence put before us. The evidence was absolutely overwhelming: we cannot rely on the private sector to provide all the housing that we need and the different categories of housing that we need, but it was also reassuring to find that the old kind of statist ideas were also not going to deliver. We need a rented sector, but this term “affordable housing” is like something out of double-think. Affordable housing turns out to be something that you have to be very well-off indeed to be able to afford. There is little in the way of supply for those people who are on very low incomes and do not have very much money. The conclusion that we came to is that we must find a way of enabling local authorities to provide low-cost housing for people who need those facilities.

Where I was cheered, in recognising that there needed to be more reliance on public sector housing, was that this would also enable us to save a great deal of taxpayers’ money. The noble Lord, Lord Hollick, pointed out that we were spending £27 billion on housing benefit. If we had more housing at lower rents provided by local authorities or housing associations, or local authorities in partnership with the private sector, we would not have to provide the housing benefit on such a level. It does not seem a very effective use of taxpayers’ money to simply use housing benefit in a market where the rents are going up and up and neither the taxpayer’s situation nor the availability of housing is improved.

I should, perhaps, declare an interest as chairman of Secure Trust Bank, because one aspect of the Government’s policy is clearly to encourage the building of more houses. They have set a target—I think it is a target—of a million houses, which, as the report points out, will be insufficient. The clear conclusion of our report, described by the noble Lord, Lord Hollick, is that the big housebuilders are something of an oligopoly. Actually, if you look at the business models of the big housebuilders, they are entirely rational in taking up the land, getting planning permission, creating a land bank, and then restricting the supply of housing that is coming on to the market to maintain the price, get best value and plan for the economic cycle. They are being entirely rational and you would not expect them to do anything else, but that is not consistent with what the Government need to do to meet their policy objectives.

Encouraging the small and medium-sized builders, which the Housing Minister says is a priority, means that they need availability of finance and labour. That has implications for our immigration policy when we finally get control of our own borders, but it also has implications for finance; so what on earth is going on when the Bank of England, in setting the capital requirements of the banks for lending, is actually making it cheaper for them to provide mortgages to people who have a low loan-to-value requirement and more expensive for the banks to provide money to developers to build housing? In the last few months, it has increased the capital weighting required for smaller banks, which are the main sources of revenue for small and medium-sized builders, from a 100% risk weighting to 150%. That means that it is 50% more expensive for the banks to provide loans, and it also means that there is less capital available and less ability for the banks to provide that.

On Friday, a report was published by the PRA with a statement from the Treasury Minister, saying that it wanted to increase competition and that it was going to address these issues. However, when you look at the detail, it is making the situation—certainly on my cursory glance—not better, but marginally worse.

I appreciate that we have lost a bit of time this morning, so I will bring my remarks to a close. On housing for rent, we need—as I have already indicated—rental properties available for people on lower incomes. We also have to recognise, however, that we need to have some means of securing rental tenures that are longer and more secure for people with families. We cannot go back to having a regulated housing market—we are certainly not recommending that—because we know where that will end: it will end with even less supply. We can, however, encourage the development and funding of building for rent in the private sector, where the terms of tenure are longer, to meet an obvious demand as we move forward.

Finally, I should like to say what a pleasure it has been to serve on this committee, and how much I appreciate that the White Paper has picked up on some of the ideas. The Housing Minister told us that everyone wanted a silver bullet. The White Paper is not a silver bullet; there is no silver bullet. We will solve this problem with a combination of policies on the capital and other rules that apply to the banks, on housing benefit, on welfare and on immigration. We need government as a whole to put their shoulder to the wheel on this. In our report, we said that there should be a senior Cabinet Minister who is in charge of driving this policy; my recommendation is to make Mr Barwell a senior Cabinet Minister.

House of Lords Reform Bill [HL]

Lord Forsyth of Drumlean Excerpts

Friday 3rd February 2017 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am aware that, when I introduced this Bill at its First Reading, it did not receive a rapturous reception on all sides of the House. Therefore, I state very clearly that it is not aimed at destroying or abolishing this House—on the contrary, it aims to preserve it in very much its present form while providing it with a new democratic legitimacy to protect it from destruction in the years to come. I therefore ask noble Lords to give it a fair hearing in keeping with the traditions of this House, which are a part of what I am seeking to conserve.

Some years ago it was said by the Government that,

“it is intended to substitute for the House of Lords as it at present exists a Second Chamber constituted on a popular instead of hereditary basis, but such substitution cannot be immediately brought into operation”.

That was in the introduction to the Parliament Act 1911. We had to wait a further 88 years for that promise to begin to be honoured in the 1999 House of Lords Act, by the abolition of the right of the majority of hereditary Peers to sit in the House of Lords. However, its fulfilment is still a matter of unfinished business.

Since then there have been three attempts to move matters forward; two by the then Labour Government and another by the 2010 to 2015 coalition Government. But all failed to achieve the support of either House. Nevertheless, the issue remains a live one, so much so that the manifestos of all the major parties at the 2015 general election included the intention to further reform the House of Lords—although the Conservative manifesto added that it would not, for them, be a priority. The 1999 Act was only a temporary stop on the road to full democratic reform. There can be little doubt that until further substantial reform takes place, it will remain firmly on the political agenda. Even if it does not happen under the present Government, the issue will not go away. It will be taken up by the next Government, of whatever complexion that may be. Whether that is in five, 10 or even 15 years, it will be a short time in comparison to the 106 years since the 1911 Act—and a short time indeed in the 800-year history of this House, since Magna Carta.

Since democratic reform is inevitable sooner or later, there are two ways in which this House can react to the prospect. One is for the House simply to turn its back on the idea of reform and wait, ostrich-like, until a future House of Commons imposes reform on it. The second course, which I argue is a much better option and which I seek to present in the Bill, is for the House to recognise the inevitability of eventual reform. We can take the initiative and design our own reform in a way that satisfies the legitimate demands of democracy, while preserving all that is best about our history, traditions and present arrangements. If we can do this, and pass our own reform Bill, it would be extremely difficult for those in the other place to then turn it down.

Let me explain how I believe this can be done. At the heart of the problem are two diametric viewpoints, and the fact that both are perfectly valid. From one, the House of Lords is seen as wholly undemocratic, based on privilege and patronage and entirely lacking in legitimacy. From this viewpoint, it should be abolished and replaced with a wholly elected Chamber. From the other viewpoint, the House of Lords is an institution that, either despite or because of the strange succession of historical accidents that have led to its present make-up, does a good and worthwhile job, contains an unrivalled wealth of experience and specialised knowledge, provides a platform from which people of outstanding achievement can deservedly contribute to the national debate, holds Governments and Ministers to account, and corrects the errors and omissions of the other place—and does all this with a traditional politeness and civility that is respected by the public in a way that the goings-on in the other place are not. From this viewpoint, for all these reasons, it should be left just as it is.

Not only are both these viewpoints valid, it is possible for one person to hold both simultaneously. It is little wonder, therefore, that the Blair Government failed to find an acceptable third way in an arithmetical splitting of the difference between the two views. For the abolitionists, a second Chamber would remain undemocratic unless it was wholly elected, while for the preservationists, no reform that involved expelling half or more of the present Members could possibly retain those features that they hold dear.

My Bill puts forward an entirely different approach. It would retain 100% of the present membership, except for the 92 hereditary Peers who were permitted to stay under the 1999 Act. It would allow for new life Peers to be created in the future with the right to sit in this House but, at the same time, would provide the reformed House with 100% democratic legitimacy. The key to achieving this apparently impossible reconciliation of opposites, and the compromise at the heart of my Bill, is that the life Peers and Lords spiritual would become full but non-voting Members of the reformed House. They would retain all their existing rights and privileges, except that of voting in Divisions of the House. It is a big concession, but it is absolutely necessary because nothing less will satisfy those who demand democratic legitimacy, including those who would rather abolish the House lock, stock and barrel. It is the price that must be paid by preservationists to preserve everything else, and to leave the abolitionists, once and for all, with no further case for reform.

There may be some who would argue against my Bill on the ground that it creates two classes of Member, voting and non-voting. However, the reality is that we already have two classes of Member: those who attend frequently, vote and partake in the business of the House—the so-called working Peers, many of whom are hereditary—and the remainder, who attend and vote less frequently or perhaps do not come at all. There is no exact definition, but between 200 and 300 Members of the current House would probably consider themselves to be working Peers—some more full-time than others. Under the proposals in my Bill, there would be 292 elected voting Members of a reformed Chamber, and current Peers would be eligible to stand for those positions without having to renounce their peerages. Elected Members would serve for an eight-year term and half would be elected every four years, so there would also be a four-year transitional period during which there would be 146 elected voting Members and 146 current Peers—perhaps those who had been most active over the previous years—who would retain their voting rights. It is not unreasonable to expect that most current working Peers who represent a party would be adopted by their party as candidates in those elections.

My Bill also provides that the group of Cross-Bench Members would be treated as a party for those elections, so present Cross-Benchers could also stand for election. It is quite possible that their group would be a popular option for many electors disillusioned with party politics. It is therefore likely that at least a significant proportion of the new elected Members would be current Peers, but with their voting rights endorsed by a democratic mandate. Those noble Lords who did not wish to stand for election as voting Members, or who did so unsuccessfully, would remain as Members of this House, with all their other rights and privileges intact.

The elections would take place using a regional list system, essentially the same as that used since 1999 for the election of UK Members of the European Parliament, but electing twice as many Members at a time. My reasons for choosing this system rather than any other are first, that it is a proportional system, and, secondly, that although it may not be the best or the most proportional of the many proportional representation systems available, it is the only such system that is already in use throughout the UK and, as such, is one with which voters, politicians and returning officers are already familiar.

I do not expect all Members of the House to agree with all the measures in my Bill. I believe, however, that the ideas contained in it have the potential to produce a reform of this House that would combine the preservation of the best features of the present Chamber with democratic legitimacy, which is essential if the House is to survive at all beyond the first quarter of this century. These ideas are certainly worthy of serious debate and consideration, not just at Second Reading but in Committee, so that the House can look at the various provisions in detail, amend them if it sees fit to do so and make a serious attempt to design its own reform, rather than waiting for a future House of Commons to impose a version that we perhaps do not like.

[Lord Forsyth of Drumlean (Con)]

Before the noble Baroness sits down—

[Baroness Jones of Moulsecoomb]

I have nearly finished. Perhaps the noble Lord would not mind if I conclude.

Some people have said that my Bill cannot succeed because it is like asking turkeys to vote for Christmas. If I may use the analogy without disrespect to my fellow Peers, the point is that reform, like Christmas, is coming whether the House votes for it or not. I am offering noble Lords a chance to vote for a vegetarian Christmas.

In conclusion, I have a confession to make. I did not write this Bill. It was written by Brig Oubridge, who, I think noble Lords will agree, has written a very fine Bill that is worthy of being passed into law. It has been through the Green Party conference and voted on as Green Party policy. I beg to move.

House of Lords Bill [HL]

Lord Forsyth of Drumlean Excerpts

2nd reading (Hansard): House of Lords
Friday 21st October 2016 Lords Chamber

[Lord Strathclyde (Con)]

My Lords, I am delighted to follow my noble friend in this debate on the Second Reading of his Bill. As he has ably demonstrated this morning, he knows a great deal about the House of Lords; he has studied it for a long time and has come forward with a workable proposal. I also thank him because he consulted widely on the Bill, right across the House, amended it from his original draft and has now presented it to the House. As he explained, the aim is to reduce the total number of Members of this House. My noble friend produced but one reason for it: the way Parliament is regarded as a whole from outside, by the public. I am not entirely convinced that the Bill would necessarily solve that. The reasons why Parliament is not held as well as it once was are many and varied; we do not need to go into those today.

There are a number of ways to achieve what my noble friend wants. The simplest—the noble Lord, Lord Steel, talked about it—is an automatic age limit of 80, and there are powerful statistics to demonstrate that, in an ever-ageing House, that would be a good way to reduce the numbers. However, for obvious reasons, that is deeply unpopular in this House and, apart from anything else, I am not entirely convinced that it would be legal, given the various equalities Acts that exist.

More Peers could be encouraged to take voluntary retirement from the House, which was impossible until two or three years ago. You could take a leave of absence but you could not exclude yourself permanently. We now can, and there are various ideas about how that could be made more practical. My view is that, given that this House is due to be relocated in a few years and we are to be removed from this building, we may well find then that more Peers are prepared to take voluntary retirement than is the case today.

The system that my noble friend has alighted on is well precedented, and the last time it was used, it worked. However, I have to say to noble Lords from all parts of the House that it is not an easy or pleasant system to go through—in fact, it is deeply unpleasant, and my noble friend and I have both been through it. It is precedented by the late Lord Weatherill’s amendment to the 1999 Act, which generally speaking has been a success. I wonder whether, if we were to use this for the whole House, my noble friend has considered some de minimis provisions for very small parties. We have only one Member from the Green Party, and it would be difficult to reduce her by 25%. I am not sure whether UKIP is a full designation in this House, but it may well be under the terms of the Bill or if it becomes an Act.

My real purpose is to question the motivation, intention and necessity behind the proposal. I spent a bit of time reading some statistics from the very helpful people in the Library. Taking the basis of the Bill—that the House should not be bigger than 600—I decided to test how many people currently attend the House. We all know the overall figures: just over 800 Members are entitled to sit, and that is an increase since 1999-2000 of about 220. Since 2015-16, the figure has increased by about 100. Perhaps unsurprisingly, the daily attendance has increased by a similar number: currently, about 100 more Peers attend on a daily basis than did in 2009-10. What is interesting about these daily attendance figures—these are averages across the Session—is that none is anywhere near 600; in fact, none breaches 500. Therefore, they are well within the limit set by my noble friend. In the current year, the average daily attendance is 471 and in 2009-10 it was 388.

The next interesting statistics to look at are for Divisions over the past 10 years, which measure a good degree of participation in the House. In 2009-10, which was a short Session, the average number of Peers voting per Division was 206. The most recent figures available, for 2015-16, show that there were 114 Divisions with 362 Peers on average voting. It is interesting that, in the past 10 years, the highest average number of Members voting per Division was 394 in the 2013-14 Session. What I extrapolate from these figures is that the problem may not be quite as big as my noble friend thinks.

In discussing this with many Peers, I have realised that there seems to be more of a problem at Question Time, when the House is very full indeed. Again, there are many different reasons for that, and perhaps we should ask the Procedure Committee to consider moving Question Time to another time of the day to see whether that would lessen the problem. My question is: is the proposal necessary?

Comparing this House to the House of Commons is also not as helpful as one might initially suggest. We are a very different and varied House. We are not like Members of another place. We do not represent anybody and we do not have constituencies, but we are very regionally based. There are full-time Peers here, sitting on all the Front Benches, who devote their lives to this House. There are Peers who have retired from their formal employment who devote a great deal of time to this House, and there are those who are in part employment or full employment. In other words, people come when they can to try to play their part. I worry that the Bill would create the spectre of a full-time and, increasingly, fully paid House. My point for the Minister is to be very cautious in accepting this.

This will be an extremely useful and interesting debate.

[Lord Forsyth of Drumlean (Con)]

Does my noble friend not conclude from the statistics that he has drawn to the attention of the House that the issue is the relationship between attendance and participation?

[Lord Strathclyde]

My Lords, no, I do not. I produced the average daily figures for attendance and for voting in Divisions. It is entirely fair that some Peers come here and do not necessarily vote. There may be many reasons for that, including for the Cross-Benchers, who often do not vote in Divisions for their own political reasons.

The point I was about to make, which my noble friend might enjoy, concerns whether the House of Commons would welcome the Bill. We know what the House of Commons thinks. Only a few short years ago, the Deputy Prime Minister, Nick Clegg, produced a Bill in the House of Commons to have a largely elected House of Lords, which was passed overwhelmingly. I wonder whether enough time has gone by to ask the House of Commons to consider again a reduction Bill rather than an elected Bill.

Franchise: British Citizens Abroad

Lord Forsyth of Drumlean Excerpts

Thursday 20th October 2016 Lords Chamber

[Baroness Chisholm of Owlpen]

All those things are under consideration. I think that what the noble Baroness says is unlikely to be the case, but I will get back to her to make sure that that is correct.

[Lord Forsyth of Drumlean (Con)]

My Lords, what is the possible justification for allowing people who have no contact other than past contact with this country and who pay no taxes in this country to have votes? Will my noble friend tell me which other countries in the world have such a system?

[Baroness Chisholm of Owlpen]

I think that quite a lot of people who live abroad still have houses and relatives here, and come here quite a lot. They still have a lot of connection with this country. There is no reason why they should not be allowed to have a view on the elections.

Civil Service Fast Stream

Lord Forsyth of Drumlean Excerpts

Monday 11th July 2016 Lords Chamber

[Lord Bridges of Headley]

The noble Baroness makes a good point. As the head of the Civil Service has pointed out, we are determined to make sure that we get the brightest and best to negotiate and advise on an outcome that represents the views of our entire society. I am unable to go beyond that at this precise juncture.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend confirm that the Government’s policy is to maintain a United Kingdom Civil Service and ensure that civil servants from the devolved Administrations are exposed to Whitehall and vice versa?

[Lord Bridges of Headley]

Indeed, I can confirm that, and my noble friend makes a good point about ensuring that civil servants from Scotland are exposed to Whitehall.

Elections: Campaigning

Lord Forsyth of Drumlean Excerpts

Thursday 5th May 2016 Lords Chamber

[Lord Bridges of Headley]

The Government are always looking at these issues and their implementation. I again thank my noble friend Lord Hodgson for looking into the subject matter of this Question. He has produced a very balanced set of recommendations. As regards the perceived chilling effect, he said:

“It was … far from clear the extent to which it was the reality of the legislation’s provisions rather than the perception of what restrictions they imposed, which affected organisations’ behaviour … nevertheless … there was an atmosphere of increased nervousness and caution”.

I repeat that the Government are looking at these points and considering their position.

[Lord Forsyth of Drumlean (Con)]

My Lords, can the Minister indicate whether my noble friend’s report referred to campaigning in referendum campaigns, and can he take this opportunity to scotch the rumour that the Government are removing from government websites embarrassing quotes from senior Ministers in relation to the European Union?

[Lord Bridges of Headley]

I have no idea about that second point, but this was about elections, not referenda.

Trade Union Bill

Lord Forsyth of Drumlean Excerpts

Tuesday 3rd May 2016 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I believe that we have made significant progress today, despite the confusion over the timing of the Statement. The review will help to assess the rigour of the latest technology and address concerns about security, confidentiality and intimidation. It will allow us to consider again the case for e-balloting and ensure that we are making the right decision about whether to allow this method for conducting trade union ballots. I note what the noble Lord, Lord Collins, said about the value of increasing participation through e-balloting and the points made by the noble Lords, Lord Kerslake and Lord Pannick, about its value.

Let me first address the point raised by the noble Lord, Lord Stoneham, about pilot schemes. Pilots are always a good thing, and it is a pity they are not deployed more generally in public policy. How and when you use them in this area is not something that can be decided today. However, we have specifically mentioned them in the Bill and I appreciate from exchanges that we have had, including with the noble Lord, Lord Mendelsohn, that they are important.

I note the point made by the noble Lord, Lord Collins, about involving interested parties in the review, and in particular trade unions and the Trades Union Congress. This will of course be an independent review, and it will be for the chair to determine how best to conduct it. However, to my mind, it would make sense to involve trade unions, and indeed other relevant experts, and I am sure that he or she will come to the same view. Union input is very important, and in deciding how to set up the review we obviously need to avoid conflicts of interest.

My noble friend Lord King rightly quoted my honourable friend Nick Boles, who has done so much to progress this legislation, and the Government’s intentions, as set out recently. I cannot really add to that, but a number of noble Lords have asked about timing. I am pleased to provide reassurance that the review will be acted upon in due course and without delay.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am most grateful to my noble friend the Minister. We did of course have extensive debates about the merits of this at an earlier stage of the Bill. Could she tell the House when and why the Government changed their mind on this matter?

[Baroness Neville-Rolfe]

My Lords, we discussed e-balloting in this House in Committee and at Report. There was a very widespread view that we should try to find a way forward on e-balloting. It is fair to say that we have been working since then to try to do just that. The Bill went back to the other place with amendments made by this House, most of which were accepted, and it was decided by the Government that we should bring forward a review of e-balloting in exactly the form that I have described today. I welcome that and welcome the progress that that has meant we are able to make on this Bill.

I shall not delay your Lordships long on this issue. I am very interested in all aspects of the advance of digitalisation—my friends know that—so I look forward to seeing the results of the review of e-balloting that we are agreeing today.

--- Later in debate ---

The other issue that the committee dealt with was that of political funding. During the short life of the Select Committee, I learned a great deal about the problems of party funding and along with many noble Lords hope that there will be progress on this front in line with the manifesto commitments. But that will have to wait for another day. As I have said, I am enormously grateful to the Minister, who has shown great patience on this issue, and am content with the outcome.

[Lord Forsyth of Drumlean]

In the noble Lord’s discussions with the Government about his amendment, at what stage was he told that the Government had changed their position? Was there a stage before that?

[Lord Burns]

Mr Nick Boles explained to the other place one day last week that he and I met last Monday evening and had a discussion. He put a proposal to me that I thought was rather unsatisfactory and fell somewhat short not only of the majority recommendation of the Select Committee but of the minority view. I explained that from my perspective it did not go far enough and that there would have to be further stages between the two Houses. Then I was subsequently told on Tuesday evening, the following day, that the revised proposal was being set down.

--- Later in debate ---

[Lord Pannick]

My Lords, we in this House often complain that the other place has ignored our views. It is unusual, and perhaps regrettable, that some noble Lords complained today that the other place listened attentively to the views of the committee of the noble Lord, Lord Burns, and to the vote in this House, which was supported all around the House, as the noble Lord, Lord Cormack, said, including on the government Benches. I do not know whether there was a deal, but whether or not there was, an act of political wisdom has occurred and we should welcome it.

[Lord Forsyth of Drumlean]

My Lords, I thank my noble friend not just for tabling this Motion, which I very much support, but for the way in which she has patiently conducted proceedings on the Bill and dealt with sometimes unhelpful contributions from people such as myself.

My concerns about the Bill were in relation to check-off and the proposals to change to an opting-in arrangement, which were coupled with an announcement by the Chancellor to cut Short money. It seemed to me that the Government were abusing their power in order to damage the funding of the Official Opposition. That is why I was opposed to these particular provisions of the Bill. I had a difficulty because there was a manifesto commitment in respect of the opt-in, opt-out proposals. However, as the noble Lord, Lord Tyler, and others have pointed out, that manifesto commitment was to look at the question of opting in and opting out in the context of overall party funding. I think it is wrong for a Government to use their power to dis their opponents or in a way which leaves open to question whether or not they are acting in the interests of the country as a whole or in the interests of a party. For years and years, I have made speeches attacking the Labour Party and suggesting that its dependence on trade union funds meant that policy could potentially be up for sale. Having listened patiently to the very persuasive arguments put forward by my noble friend to indicate why a change of policy should not be agreed, it was with some dismay that I heard suddenly—I believe I am not the only person who heard suddenly; I think some Front Bench people heard suddenly—that the Government’s position had changed completely.

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[Lord Robathan]

My noble friend was a distinguished Cabinet Minister back in the 1990s. Is he not being unduly cynical? Surely he cannot believe that the Government would come up with a shoddy deal such as this.

[Lord Forsyth of Drumlean]

I am tempted to be sanctimonious about this. What I found most risible about the Government’s explanation for their somersault was when Nick Boles, when asked why he had changed his mind, said:

“I urge my hon. Friend to look at the people who spoke in the debate and voted, or very assertively chose not to vote, in support of the Government’s position. They included not just Lord Cormack and Lord Balfe but Lord Forsyth, who supports the same campaign on the European Union that my hon. Friend has supported”.—[Official Report, Commons, 28/4/16; col. 1545.]

I really do resent being cited in support of a very shoddy deal. Later he said—contrary to what my noble friend has been saying—that he did not want to listen to the arguments at all. He said:

“I did not want to listen at all. I am afraid I simply acknowledged that, faced by an array of forces—it is not just led by the noble Lord Burns, but includes most of the Cross Benchers, all the Liberal Democrats, all the members of Labour party and very influential Conservative peers, such as Lord Forsyth, Lord Deben, Lord Balfe and Lord Cormack—neophytes in this game like me perhaps need to concede defeat”.—[Official Report, Commons, 28/4/16; col. 1549.]

This is something I shall quote on many future occasions.

[Lord Sherbourne of Didsbury (Con)]

My Lords, I think my noble friend Lord Forsyth has unravelled a puzzle. I, too, am disappointed by what has happened. I assumed that when the Conservative Party put in its manifesto the commitment to move from opt-out to opt-in, it thought it was the right thing to do. When it appeared in the Bill, I thought it was the right thing to do. I thought the party thought it was the right policy, and I think it was the right policy.

I have heard the word “compromise” used today. The noble Lord, Lord Whitty, used it several times. I understand that we are at the end of the Session. I understand the need for compromise, concession and deals. But this is none of these things. This is the abandonment of a Conservative manifesto pledge, and we should say that. I notice that my honourable friend in the other place, Mr Nick Boles, turned what was a manifesto commitment into what he called a suggestion in the manifesto. It was not a suggestion; it was a promise. When we debated this last time, my noble friend the Minister said it was right for Governments to honour their commitments.

Of course I accept the decision of the other place. My noble friend Lord Forsyth has given his explanation of why this manifesto commitment was abandoned. I say only that junior Ministers in this Government, who are extremely able and good, often have a very hard task.

[Lord Leigh of Hurley (Con)]

My Lords, I will not speak for long because we have discussed this at length. I think we have all reached agreement as to why, as my noble friend Lord Sherbourne said, we are going from opt-out to opt-in. We have been through some people’s perception that there has been legislation in the past that has affected political disclosure, if not donations, and have discussed PPERA. But we have now reached a point where we have something before us. This time, unlike on previous occasions, I find myself agreeing with the noble Lord, Lord Cormack, on where we are.

I am grateful to the noble Lord, Lord Forsyth, for crystallising my mind: clearly I am not an influential Conservative Peer because my suggestions have not been adopted.

[Lord Forsyth of Drumlean]

My noble friend is extremely influential. It was Mr Boles who did not think to include him.

[Lord Leigh of Hurley]

I am grateful for that clarification. The noble Lord, Lord Robathan, has explained how Ministers approach these problems. Sadly, again, I have never had the honour of being a Minister. That is most unlikely. I come from more of a business background and in business when one wants to get things done invariably there has to be an element of compromise. Like the rest of the House, I congratulate the noble Lord, Lord Burns, on achieving a compromise. How and why it was achieved we will perhaps never know but it has been achieved. We will end up with an opt-in. It will take longer than other people thought appropriate but it will happen. The suggestion of the noble Lord, Lord Burns, of the publication of the opt-in levels achieved is excellent and to be welcomed. On all those grounds, I welcome these amendments.

Trade Union Bill

Lord Forsyth of Drumlean Excerpts

Wednesday 16th March 2016 Lords Chamber

[Lord Balfe (Con)]

My Lords, there seems to be a great reluctance among your Lordships to speak. I will not repeat what the noble Lord, Lord Kerslake, has said, but obviously I agree with everything that he did say. The amendment that we have down—let me remind noble Lords—asks for an independent review. It says neither that we are putting electronic balloting in the Bill, nor that we are endorsing it. We are simply asking for an independent review. The noble Lord, Lord Kerslake, outlined a number of organisations that use electronic balloting. There are a number of venture capital trusts of which I have knowledge that use electronic balloting—as, incidentally, does the Co-operative Wholesale Society for the elections of its board of directors. There was a lot of controversy around the last election, but none of it was about the fairness of the ballot.

We seem to have somehow sanctified the idea of a postal ballot. As noble Lords will know, particularly those on the Opposition Benches, I have a very dubious background. One of the people whom I can claim as my friend—now long dead—was involved in rigging the ETU ballot in 1959. There are also people who have rigged local authority postal ballots. Indeed, there are regular allegations of people going around collecting postal ballots. I am not justifying this, but I am saying: do not sanctify the postal ballot as being beyond reproach and dismiss the electronic ballot as something that we cannot consider. We are, after all, in 2016; technology has moved enormously fast.

I was impressed with my noble friend’s evidence about the Transport and General Workers’ Union. I had not realised that he was a notable fan of its history. But I seem to remember that it was a postal ballot, not an electronic ballot, where things went wrong. So I go back to the words of the noble Lord, Lord Kerslake: we have no evidence that it would go wrong, but—and I underline this key point—all we are asking for is a review. The review could conclude that everything that the Government say is right, and that this is not the opportune time. But this is certainly, in my view, an opportune time to have a review.

There is a lot in the Bill, as the Minister knows, that I support. I agreed with a lot of what the noble Lord, Lord Pannick, said. If we are to make the Bill work, we must not make it appear to be making things as hard as possible. I am afraid that that is the conclusion that is coming through if we turn down this very reasonable amendment that says no more than, “have a review”. So I hope that noble Lords will reflect and find themselves able to support this amendment and that when, as the amendment says, the report comes forward, we will be able to decide whether it is an opportune moment to introduce e-balloting.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am not certain that I understand why no one is getting up on the other side on this matter. I will just intervene briefly to ask the Minister, when she comes to reply to this amendment, if she could explain the Government’s thinking on the use of the internet and technology. I ask because the Finance Bill is providing for the use of digital returns for people’s entire financial affairs. At no stage did I hear the Government suggesting that the internet was prone to hacking and that, therefore, it would be quite impossible to move to a system where we have people presenting their tax returns electronically. It is also the Government’s intention that returns should be filled in electronically by other people detailing income or savings or investment income.

Either the Government believe in embracing the future and the importance of the use of digital technology or they do not. It seems to be both. In respect of people’s financial information, they believe that it is a proper and sensible way to get more efficient application of government services. Increasingly, people’s personal health and other information will be transmitted and shared over the internet. I suspect that that is because the Government fully understand that, with good hygiene, it is possible to have secure digital systems in place. So I very much hope that my noble friend will explain why that does not apply to ballots organised by trade unions, which are independent organisations and which will have an interest in ensuring that the ballots are properly conducted. Perhaps she could also explain how on earth she could possibly be against the amendment, because all that it suggests is that the arguments put up by the Government should be looked at within six months by an independent body, and there is provision for this to be brought into effect.

This is important because I remember, when I was first elected to the House of Commons, making speeches in support of our trade union reforms. The argument that I used at the time was that we wanted to give trade unions back to their members; we wanted their members to be more in control. That is why we opposed the closed shop; that is why we brought in ballots. This sensible legislation is intended to ensure that people do not go out on strike without the support of our members. If that is our intention, why on earth would we want to resist something that will allow increased participation?

The big danger for the Government is that those who are perhaps not their friends may be able to argue that what they are really doing is trying to undermine the rights and responsibilities of trade unions to look after the interests of their membership, and making it more difficult for them to take industrial action, even where that enjoys the support of the membership. That would be a foolish error to make. So I very much hope that, having listened to the debate, my noble friend will feel able to accept the amendment moved by the noble Lord, Lord Kerslake—who, after all, has very considerable experience of dealing with the public sector unions and is very well aware of the issues that arise.

[Lord Deben (Con)]

My Lords, there are moments in this House when I begin to wonder whether I have quite got the right end of the stick. On this occasion, I find myself in considerable agreement with my noble friend Lord Forsyth on an issue on which it might have been suggested that we would differ. I also have to tell the Minister that I just do not understand her reasons. Here we have a request that we consider a mechanism which all of us use every day in our business life. We do not say, “Gosh, I’ve got to write a letter because somebody might steal my email”. We do not say, “I wonder whether I can bring back the old-fashioned secretary who can take shorthand and write it out, because I am concerned about the security of my business”. I would be unable to run a business if I did that.

We recently had a hotly contested debate on whether we should be allowed to use modern technology in this House. I had a sharp disagreement with my noble friend Lord Cormack on the issue. But the House said that really we had to move into the 21st century, and that it was not sensible not to avail ourselves of the mechanism—and I must say that, since I have been able to use it, I have been able to pick up some falsehoods, quoted sometimes I fear by the Opposition, on a number of issues, because now I can look things up pretty quickly. In the debate on Brexit, I find that almost every speech made by those who wish us to leave the European Union is filled with such falsehoods—and I can look it up at once.

[Lord Forsyth of Drumlean]

And that is just the Government.

[Lord Deben]

On that, I deeply disagree with my noble friend Lord Forsyth.

To be serious, the argument goes like this: it may be that an electronic ballot may be less safe than a postal ballot, but we are not prepared to allow anyone to look into that proposal. I do not think that I would like to argue that from the Front Bench. Therefore, I ask my noble friend very carefully to lead me step by step along the argument so that I can be convinced—for I am very willing to be convinced, but I need a very careful explanation. Up to now, I have found it impossible to understand any basis whatever for arguing that it is not reasonable to look at such a matter at such a time, in such a way, with such an opportunity to say no if you do not like the result. That does not seem to me to be a challenge to the Government, and I very much hope that my noble friend will be able to help me yet again on this very difficult matter.

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[Baroness Neville-Rolfe]

This is an important debate, and I thank noble Lords who have taken time to contribute. I think that the sense of the House is clear, and I would say that electronic communications are the future—as I have said on many occasions, on other matters. Society is changing, as the noble Lord, Lord Kerslake, explained so eloquently, which is why the Government are promoting the programme of digitalisation, supporting the British-based creative economy, with apps such as Lyft share—and, indeed, as the noble Lord, Lord Forsyth, said, there is the use of the internet across government services. So there is a lot of support for the introduction of electronic balloting for decisions by trade unions. I have to say that I have a great deal of sympathy with these sentiments, and I am not going to argue with the substance of much of what has been said.

I am afraid that I cannot agree to the amendment proposed by the noble Lord, Lord Kerslake. It seeks to require that an independent review is commissioned within six months of this Bill becoming an Act and that the Secretary of State publishes a strategy for the rollout of electronic balloting after consulting relevant organisations. We do not think that that is the right approach. The fundamental problem that we have with it is that if the review found problems, the Secretary of State would nevertheless be committed to pressing ahead with e-balloting regardless.

The common ground we have is that we agree in principle with the concept of electronic balloting. As my noble friend Lord Callanan said, we already have the ability to bring it into effect for statutory trade union decisions, including industrial action ballots. The power is contained in Section 54 of the Employment Relations Act 2004. Where we differ, I think, is on the issues of timing and security, and I will outline the issues that are currently holding us back from exercising that power right now.

To respond to my noble friends Lord Forsyth, Lord Deben and Lord Cormack, there are risks. They cannot just be ignored. The consequences are serious, particularly for strike ballots, because strikes have such far-reaching consequences for union members, who may lose pay for the days they are on strike; for employers, whose businesses are adversely affected; and, of course, for the public, whose daily lives are disrupted.

Perhaps I should at this point thank the noble and learned Lord, Lord Brown, for repeating his question regarding the bizarre example. I should of course have come back to him in Committee. It is an extreme example when exactly 50% of workers turn out for a ballot for industrial action in an important public service. It is right that we ask for 40% of eligible members to support strike action before it can take place in important public services on which millions of people rely, as I have said. Recent events show that the threshold can be achieved when union members feel strongly about live issues.

To return to the issue of electronic voting, we must ensure that there is the utmost confidence in ballot processes. The Speaker’s Commission on Digital Democracy quoted the Open Rights Group summing up concerns over the security of online voting:

“Voting is a uniquely difficult question for computer science: the system must verify your eligibility to vote; know whether you have already voted; and allow for audits and recounts. Yet it must always preserve your anonymity and privacy. Currently there are no practical solutions to this highly complex problem and existing systems are unacceptably flawed”.

The key challenge is how to be sufficiently confident about both the security and the confidentiality of the votes—so let me try, step by step, to explain the problem. First, there is the need to confirm identity. Computer expert Dr Kevin Curran reported to WebRoots Democracy, for its recent report on secure voting, on the difficulty with ensuring a system that is secure enough to ensure voter verification. Professor Robert Krimmer says in his contribution to the WebRoots report that ensuring that the system is sufficiently secure “is really tough”. He was particularly concerned about the practicality of testing a system that incorporates individual voter verification.

Secondly, there is the need for confidentiality. This is an active field of research. Electoral Reform Services acknowledges the challenges of the secrecy of the vote, which is critical if we are to ensure a truly secret ballot. It is important that no one—neither the union nor the employer—can see how a member has voted. Noble Lords may argue that electronic voting is as secure as postal voting, but I am not convinced. It is potentially easier to gain access to huge quantities of electronic votes, which it would be physically impossible, or certainly much harder, to do with postal votes. Mi-Voice, an organisation that develops secure transactional applications, has stated that while,

“it is possible to de-couple the identity of the voter with the vote cast … this … represents one of the biggest challenges to e-voting providers”.

Thirdly, there is the issue of security. Dr Curran also exposes the significant risk that exists of cyberattack, explaining that approaches which had worked just a few years ago are now useless and that we can expect many more attacks. The Electoral Reform Services report, while recognising that it is right and proper to give consideration to the use of e-balloting, recognises a number of difficulties. For example, how can people securely vote if their computer is infected with viruses? Although antivirus software exists, it has to be kept up to date in order to be properly effective. I know from my own unhappy domestic experience just how important this is. So the system relies on people following best practice advice, and it can only protect against known issues. The WebRoots report also indicates that the Du-Vote system, which is being developed at the University of Birmingham, could resolve the issue, but not until about 2020 or 2025.

Finally, there is integrity. The risk is of voter coercion. I will not test your Lordships’ patience by suggesting that this is a problem that is unique to an electronic method of voting but obviously it is an issue that affects it, and is serious. This issue does not solely affect the UK—

[Lord Forsyth of Drumlean]

I am listening to this series of difficulties which the Government do not know the answer to. Is that not the most powerful argument we have heard this afternoon for having an independent commission to look at them and report?

[Baroness Neville-Rolfe]

My Lords, I have explained that we already have the power, and we also have the will to move in this direction. However, for the reasons I have stated, we should not agree to the review set out in the amendment. As I was saying, other countries have struggled to implement online voting successfully and sustainably. The Speaker’s commission identified 14 countries that have tried internet voting for binding elections, which included five countries—the UK, Finland, the USA, the Netherlands and Spain—which either piloted or fully adopted electronic voting and then decided to discontinue its use.

There is a problem here. The only country that has succeeded with a sustainable system is Estonia, and that is because its ID card system makes it unique. I met with the President recently and we had an interesting discussion about this. Of course, it is possible there because their system is different.

On the amendment in the name of the noble Lord, Lord Kerslake, of course, the concept of a review is not new and, as I said, a lot has already been done to review the case for electronic balloting. I have spoken of the Speaker’s Commission on Digital Democracy, which published a report on 26 January last year. Obviously, the Electoral Reform Services looked at the case for e-voting for trade unions in the UK and published its findings—indeed, they were published online—and WebRoots Democracy published a report on 26 January on secure voting with contributions from global experts and academics in the electronic voting field. Therefore, we are not short of reviews.

Against that background and despite the excellent points made by noble Lords, I cannot agree with the amendment because it irrevocably commits the Secretary of State to press ahead with a strategy for the rollout of electronic balloting, irrespective of any problems the review finds. I have tried to explain that another review could find problems—it is not absolutely dead easy. As I have said, we have the power to permit e-balloting, and we will use it when we are convinced that all the concerns have been addressed. This is why the current legislation is framed as it is, and for good reason.

I am conscious that this all sounds rather negative but, rightly, noble Lords want to know what problems prevent us agreeing to electronic balloting and I hope I have given a flavour of them. There has been a good deal of positive progress in the way technology can help to address these issues, and that is reflected in the reports I have cited.

I hope that I have been clear. I have listened to the case for the amendment and the case made at other stages of the Bill but, for the reasons I have given, the Government do not support the amendment and I encourage the noble Lord to withdraw it.

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[Viscount Hailsham]

Notwithstanding my considerable respect for the noble Lord, Lord Burns, and my noble friend Lord Cormack, now my near neighbour, and indeed the noble Lord, Lord Tyler, I am not with them on the amendment.

The amendment is in paragraph 142 of the Select Committee report. I am an advocate of the alternative view: a generous transitional period for existing members. I should like to think that the Minister will offer a more generous transitional period than she is presently contemplating. I cannot help feeling that, if she did, she would attract considerable support.

My reasons are very simple and can be briefly expressed. First, as a matter of principle, existing members should be covered by the opt-in provisions. The noble Baroness, Lady Drake, referred to the amendment as fair and even-handed. It is nothing of the kind. It actually deprives existing members of the greater ability to opt out, if they want to. There is nothing fair or even-handed about the amendment; it has a contrary effect.

However, I agree with another point made by the noble Lord, Lord Burns, and, incidentally, my noble friend Lord Cormack: that it would unbalance party funding. That is not in the general interests of the country or, therefore, within the general consent of this House. I therefore think that the alternative approach formulated in paragraph 142(b) of the Select Committee report is the way forward. A more generous transitional period for existing members seems to me to catch the sense of the House.

[Lord Forsyth of Drumlean]

What does my noble friend mean by a generous period, because, clearly, if it were 10 years or five years, that would be a completely different argument?

[Viscount Hailsham]

That, truth to tell, is a matter of negotiation. My noble friend Lord Forsyth and I have often negotiated in the past. When one seeks a compromise, one negotiates: one sees what will meet the general will. I cannot go further than that. One problem with the amendment moved by the noble Lord, Lord Burns, is that it does not contemplate an active moment when existing members will be covered by the new provisions. That matter also needs to be addressed and is wholly uncovered by the terms of his amendment.

[Lord Forsyth of Drumlean]

I am very grateful to my noble friend, but he cannot stand up and say, “We ought to have a more generous period”, and then not say what he thinks will be workable.

[Viscount Hailsham]

Of course I can—I am not the Minister, nor am I in the business of negotiating. When we were on the Front Bench together, we often had to negotiate about policy, one with the other. If I was in the business of negotiating, I would have a proposition to put forward. All I am saying to the Minister is that, if she were to be generous in her approach, I suspect that would get a lot of support in this House.

Government Contracts: Steel Industry

Lord Forsyth of Drumlean Excerpts

Thursday 25th February 2016 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend confirm that far more steel is imported from other EU countries than from China, and that if the Government were to do what the noble Lord, Lord Hoyle, wishes them to do, we would have to leave the European Union?

[Lord Bridges of Headley]

Blow me down with a feather: my noble friend is wanting to leave the European Union. That is a surprise at quarter past 11. I am sure that he is right about his facts. The challenge at the moment is obviously Chinese steel. Chinese excess steel capacity is estimated to be roughly double the EU’s annual steel demand and 25 times the UK’s steel production. That is the real challenge we face.