Protocol on Ireland/Northern Ireland: EU Negotiations
Lord Hain Excerpts(3 years, 1 month ago)
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Lord Frost (Con)
My Lords, the noble Lord is obviously much more deeply expert in the Belfast/Good Friday agreement than I am, given his background. He is, of course, absolutely right in what he says about the article to which he referred. As regards the protocol, I point out that it was approved by this Parliament, but nevertheless it has created significant difficulties in its implementation. We seek to find a way forward from that and come to a better balance.
Lord Hain (Lab)
Is George Peretz QC’s opinion correct when he says that,
“it is not at all clear that the government has a solid legal basis for invoking Article 16, at least in relation to the large majority of concerns set out in the July Command Paper. Therefore, if the UK government chooses to implement measures that are otherwise in breach of the Protocol but which are justified solely on the basis of Article 16, it is at real risk of having those measures struck down in the domestic courts, especially if the measures exceed a limited duration or scope.”?
Lord Frost (Con)
My Lords, we will, of course, set out our justification for using Article 16 and the legal basis and so on, if we get to that point. As regards to the legal opinion quoted by the noble Lord, to be fair, there is quite a lot of debate among learned lawyers on this subject. I imagine that, if we were to use Article 16, that would be subject to a degree of legal testing. We will see where that gets to, if and when Article 16 is used.
Ireland/Northern Ireland: Solid Fuels
Lord Hain Excerpts(3 years, 1 month ago)
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Lord Frost (Con)
My Lords, the noble Baroness makes a very good point. The UK and the Republic of Ireland are obviously different countries divided by an international border, and most areas of national life—for example, legal systems, currency, taxation and many others—change when you cross that border. Some of those arrangements relate specifically to the movement of goods—VAT and excise, for example. These differences are nevertheless managed in market, without the need for physical infrastructure at the border, so I wait for the discussions with the Irish Government. I do not want to prejudge them, but obviously I do not see why we would have any difficulties if the Irish Government wished to manage one further regulatory difference between our two countries in a sensible and pragmatic way, as goods go on to the Irish market.
Lord Hain (Lab)
My Lords, both this Question and the Answer are misleading, as 100,000 tonnes of smoky coal goes from north to south on the island each year, and the stricter regulations being applied in Ireland come under EU directives for cleaner air that have been retained and so also apply across the UK today. In Northern Ireland, the Department of Agriculture, Environment and Rural Affairs under the DUP’s Edwin Poots said last year that there will soon be no smoky coal in Northern Ireland. Any future inspection on premises in the Republic of Ireland—not on some border that does not exist—to prevent the illegal sale of such dangerous solid fuel, especially from third countries, is nothing to do with Brexit, borders or customs. It is everything to do with the far more urgent and important challenge of tackling climate change and protecting public health.
Lord Frost (Con)
The noble Lord makes a very fair point about the objectives of this legislation. That is why we need to establish the detail of what the Irish Government intend to do and how they intend to go about it. What he says rather proves the point that we have always made: it is perfectly possible for two separate jurisdictions to pursue complementary policy ends that do not involve accepting exactly the same legislation in exactly the same way. That is the approach we have tried to take.
Budget Statement
Lord Hain Excerpts(3 years, 1 month ago)
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Lord Hain (Lab)
My Lords, I apologise to the Committee, as I already have to the Chair, because the group of amendments on which I have to speak in the House is one group away, so I may have to miss some of the wind-ups. I was here for all the opening speeches and remained for the debate.
The Chancellor delivered his Budget speech with his customary panache and began to bask in the warm glow of appreciation from his colleagues. How awful it was for him then to hear commentators instantly liken it to a Gordon Brown Budget—not the kind of talk likely to enhance his appeal among Tory traditionalists. Its one saving grace was that the Institute for Fiscal Studies’ Director Paul Johnson contrasted it to a George Osborne Budget, which was much more to the Chancellor’s liking.
This was in fact a see-saw Budget, with a downside in March and September when the Chancellor announced record tax rises, and an upside a few days ago when he topped up his earlier public spending plans. Grasping the implications of the Budget for the economy means assessing both sides of his balance sheet, and they make for worrying reading.
In my view, this Budget bears closer comparison to George Osborne’s 2010 Budget than it has received, despite significant differences, because Chancellor Sunak is following in George Osborne’s footsteps in one key respect: he is withdrawing a major fiscal stimulus that has kept the economy alive. The way he is doing it is entirely novel for a Tory Chancellor; it is the reason why there are rumblings of discontent in Tory tea rooms and outside Parliament among what Harold Macmillan used to call “the party in the country”. George Osborne squeezed spending in the British economy by following the 80:20 rule: 80% public spending cuts and 20% tax increases. Chancellor Sunak’s strategy is very different: he is withdrawing fiscal stimulus through raising taxes by more than he is raising public spending.
The key distinction, which most commentators have overlooked, is that Rishi Sunak is a man in a hurry. He is withdrawing fiscal support for the economy twice as fast as George Osborne did. George Osborne took two years to withdraw 46% of the stimulus package with which Alistair Darling had tackled the 2008 global financial crisis. Rishi Sunak is taking two years to withdraw 85% of his own 2020 fiscal stimulus. In my view, that runs the same risk that George Osborne fell victim to: of causing the economy to lose momentum, real incomes to stagnate, and debt and deficit targets to be missed by a mile. Osborne’s strategy caused economic growth to halve in 2011 and come to almost a complete stop in 2012.
Many economists fear that Rishi Sunak may be running the same risk now. Martin Sandbu, European economics commentator with the Financial Times, has pointed to the pre-Budget IMF data showing that the UK had already pencilled in a much stronger fiscal contraction than its G7 or eurozone peers on average. Office for Budget Responsibility forecasts now show UK economic growth tailing off to 2% in two years and to only 1.3% in 2024, which could easily slip. The Labour decade before the 2008 global credit crunch saw UK growth average 3% per year, which is roughly double Chancellor Sunak’s plans. That Labour achievement is the least we should be aiming for now to begin to deliver a high-productivity, high-wage economy.
I support the pre-Budget open letter from 70 economists and nine think tanks calling for continued fiscal support for the economy, specifically a stimulus package of £70 billion to £90 billion in annual spending for three years, focused on green investment, social care and childcare. That would be closer to the example of vigorous action set in the US by President Biden and pressed by shadow Chancellor Rachel Reeves in an excellent speech during the Budget last week.
The American economy is recovering from the pandemic more quickly than the UK’s because the US Government have taken much stronger discretionary action to boost the US economy. US GDP has already returned to its pre-pandemic level. Premature withdrawal of fiscal support is why Britain took longer than America and Germany to recover from the 2008 global financial crisis. The signs are already there that we are doing so again. This time we faced two added blows, from the pandemic and Brexit, with Brexit hitting the economy between two and six times as hard as the pandemic, depending on which economist you talk to. The forecasts for real household incomes look dire, especially for those on low incomes, hence the critical importance of the noble Baroness’s amendment to the social security legislation yesterday, which I hope the Government accept.
The Tory traditionalists who I mentioned at the start of my speech profess to hate high government debt and budget deficits. They crave balanced budgets, which they somehow associate with Margaret Thatcher. David Davis MP, writing in the Mail on Sunday, wonders whether Rishi Sunak can “match” her “brilliance”. Someone should tell Mr Davis that in 11 years in Downing Street Margaret Thatcher delivered only two Budget surpluses. Who delivered three in 13 years in office? Gordon Brown. Be careful what you wish for.
Protocol on Ireland/Northern Ireland: Impact on Trade
Lord Hain Excerpts(3 years, 1 month ago)
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The Minister of State, Cabinet Office (Lord Frost) (Con)
My Lords, as noble Lords would expect, the Government continue to observe very closely the situation as regards trade on the island of Ireland and more broadly, for example, trade in goods from Great Britain to Northern Ireland. It is clear that trade in both directions between Ireland and Northern Ireland has increased significantly since the start of the year and that this constitutes trade diversion created by the pressures of the protocol.
Lord Hain (Lab)
I thank the Minister for his reply. On the protocol, he told the Centre for Policy Studies at the Conservative Party conference on 5 October that he was “keeping the other side on the hop, cultivating uncertainty with regard to how we are going to react”. Why?
Lord Frost (Con)
My Lords, I did indeed say that, because it is my job to get the best outcome for this country in the negotiations that I am charged with conducting. That is what we did over the previous 18 months and that is what I intend to do now. I do not think it would be particularly good tactics to reveal to the other side exactly what we are going to do or how we are going to go about it.
Health and Social Care Levy Bill
Lord Hain ExcerptsMonday 11th October 2021
(3 years, 2 months ago)
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Lord Hain (Lab)
My Lords, I declare an interest that may be common to many, if not most, of us in your Lordships’ House. I have a relative living in a care home in England, so when the Prime Minister, with his trademark flourish, announced a new social care policy, I was naturally encouraged. However, as I examined it against the reality facing my relative and most of our citizens needing residential care or 24-hour home care, I became increasingly sceptical. Here is my take on what his policy means from the front line. If the Minister thinks I have got anything wrong, will he please say so when he replies? Specifically, will he write to me in response to what I have said?
The Government said that the reforms would address the problem of people having to sell their homes to pay for the cost of care. From October 2023, they plan to introduce a new £86,000 cap on the amount anyone in England will have to spend on their personal care over their lifetime. The cap will be applied irrespective of a person’s age or income—so far, so good.
However, Boris Johnson’s reforms do not live up to their marketing, and the cap will help relatively few who need care. It would be a surprise to most people to know that only care costs will be covered by the lifetime cap and that these do not include the so-called hotel costs, which may be very, very high. Under the Prime Minister’s framework, only money spent on meeting a person’s personal care needs counts towards the cap. The Government’s position is that a person would have to pay for living costs even if they did not need residential care but depended on care—maybe continuous care—at home. Spending on daily living costs, or what the Government refer to as hotel costs in a care home, does not count. There is therefore no help under the policy towards accommodation and food, as these are designated by Ministers as part of hotel costs.
The care costs would cover the nursing and care staff and possibly the costs of ancillary staff and medical supplies, but not the other costs of providing a residential care service. These include, for example, any mortgage on the residential home, insurance and legal fees, audit and professional fees, council tax, utility bills—such as rocketing heating costs—waste disposal, registration fees, transport costs, maintenance, marketing, office services and so on. These are categorised as counting towards the hotel costs and not covered by the lifetime cap.
I have looked at the current fees breakdown in a large care home in England with 50 beds running at 92% capacity. The current social service rate—the rate the local authority may contribute—does not even cover the care and nursing staffing costs; nor will the new plan. Yet the Prime Minister has given the impression that people entering residential care will benefit from the reforms to the social care charging framework with the introduction of the £86,000 lifetime cap on the amount anyone will spend on their care. In reality, only a small percentage, perhaps a measly 5%, will be protected from “catastrophic care costs”. Therefore, contrary to what the Prime Minister claimed, many, if not most, people will still have to sell their homes to pay for care.
Although the reforms are meant to solve the current catastrophic crisis in social care, it appears from paragraph 60 of the Government’s much-vaunted new policy, that there will be nothing for adult social care until April 2023. There is no funding in the levy to address the current problems facing social care and no plans to tackle the current gaps in the social care workforce, with over 100,000 vacancies. Although the Government’s plan discusses greater professional development and career support for social care workers, backed by a £500 million investment and a workforce White Paper, it contains no credible plans to tackle the current chronic shortage of social care staff.
Stakeholders in social care have highlighted challenges associated with transferring revenue raised by the new levy from the NHS to social care in future years, pointing out that there is absolutely no precedent for this, especially with many parts of the NHS on life-support, facing massive funding gaps, and serious shortages—running into tens of thousands—of doctors and nurses. The new funding will probably stay in the NHS and care home employers will be left with an additional burden: having to bear the payroll burden of the national insurance hike provided for in this Bill. That means that they will have to pass that on to their residents, many of them dementia patients and therefore oblivious, even if their families most certainly will not be.
The Government have said they will ensure that local authorities have access to sustainable funding for core budgets at the spending review, but local authority leaders across the party divide do not believe this. They have suffered budget cuts of around 30% these past 11 years, and it is not honest to dump the problem back on local councils. That means that people needing care will have to sell their homes whatever the Prime Minister claims. People on very modest incomes or pensions living in modest homes will lose them to finance costs of around £5,000 monthly for residential and nursing care. The new levy is simply totally inadequate to fund plans necessary to reform adult social care if Britain is to claim to be a civilised society.
It is troubling that the Government’s solution to addressing social care’s core pressures appears to be the use of council tax, a social care precept and long-term efficiencies. To describe this as totally unrealistic is overly polite. The Prime Minister might better recognise it as sheer balderdash.
His reforms will instead create confusion and frustration among the public. On the one hand, people are told that the levy will fund adult social care and, on the other, that “hotel costs” are not covered. Hotel costs is a handy label for Ministers, because it implies to the public some super-duper state of luxury when actually it is a massive slice of providing care.
The £86,000 cap will benefit very few people, leaving most to continue paying high care home fees. Rather than create a simpler system of funding, the plan also paves the way for entrenching the complexity of funding that has beset social care for so long. This has left many families in a state of misery as they grapple with care costs of £1,300 per week in residential care homes, with staff on poverty wages and businesses struggling to survive. Sadly, this is no care plan; it is a care con.
Brexit Opportunities Unit
Lord Hain Excerpts(3 years, 4 months ago)
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Lord Frost (Con)
My Lords, I am very happy to do so. For example, we have already brought in a new points-based immigration system. We have also brought in new arrangements to support our farmers, replacing the common agricultural policy. We are beginning to agree free trade agreements with a range of countries around the world. We have brought in a new global human rights sanctions regime, which has been used extensively. In the Queen’s Speech, we set out future opportunities, including the Subsidy Control Bill, a procurement Bill, the free ports programmes, the Professional Qualifications Bill and a planning Bill. The Chancellor has also set out our road map for future financial services; I could go on. There is a long list of opportunities that we will be able to take advantage of.
Lord Hain (Lab) [V]
My Lords, the DUP leader Sir Jeffrey Donaldson claimed this morning on “Good Morning Ulster” that the Northern Ireland Assembly not having any role whatsoever in the operation of the protocol undermined the very standing of devolved institutions in Northern Ireland. What plans do the Government have to give Northern Ireland elected representatives meaningful engagement in and scrutiny of decision-making about the evolution and implementation of the protocol and the trade and co-operation agreement as they impinge on areas of devolved competence?
Lord Frost (Con)
My Lords, the day-to-day arrangements in the protocol for the democratic scrutiny of laws in Northern Ireland are democratically anomalous. We have said that before and it is why we had to negotiate the consent arrangements in the Northern Ireland protocol to ensure democratic support, or not, for these proposals. We will be setting out our approach to the Northern Ireland protocol more generally later this week.
Ireland/Northern Ireland Protocol
Lord Hain Excerpts(3 years, 5 months ago)
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Lord Hain (Lab) [V]
My Lords, will the Minister clarify the highly charged phrase that he and a director in the Cabinet Office used before the Lords protocol sub-committee yesterday—namely, that the European Union “dropped” 800 new measures on Northern Ireland last week without notice? Are those measures technical amendments to the existing legislative instruments that apply mainly through Annexe 2 to the protocol, or are they new legislative instruments that the EU thinks should apply to Northern Ireland? In either case, can he explain how the Northern Ireland Assembly, as the legislature responsible for implementing them, is being kept informed of such developments?
Lord Frost (Con)
My Lords, I do not think that was highly charged language; I think it was an accurate description of the situation when we received a communication containing 600 to 800 pieces of legislation and pages. That is a significant event. New legislation not within scope of the protocol is obviously covered in a different way; this is obviously legislation that is within scope. Technical amendments can of course be quite significant, and the task of assessing that and ensuring that we understand the statute book in Northern Ireland is significant. That is why we should like more warning, more process and more discussion of this matter.
Protocol on Ireland/Northern Ireland
Lord Hain Excerpts(3 years, 5 months ago)
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Lord Frost (Con)
My Lords, we continue to discuss the grace period for chilled meats with the European Commission. It is not yet resolved and there are still a number of issues to sort out. We will continue to consider all our options on this or any other matter if we cannot resolve them by consensus.
Lord Hain (Lab) [V]
My Lords, why on earth should Brussels, Dublin or Belfast trust him?
Lord Frost (Con)
The question of trust is important in these negotiations. Trust is required on all sides. The protocol is, in our view, not being operated in the pragmatic and proportionate way we hoped for when we agreed it. If we are to establish trust between us again, we need to operate it in that fashion.
Northern Ireland and Great Britain: Trade
Lord Hain Excerpts(3 years, 8 months ago)
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The Minister of State, Cabinet Office (Lord Frost) (Con)
My Lords, we are committed to and have legislated to ensure unfettered access for Northern Ireland goods moving to the rest of the UK market as a unilateral UK matter. As to goods’ movement between Great Britain and Northern Ireland, we continue to be committed to working through the joint committee to provide pragmatic and sustainable arrangements for east-west trade, and we are supporting all our businesses in doing so.
Lord Hain (Lab)
Does the Minister now acknowledge that his fiendishly complex barriers to trade between Great Britain and Northern Ireland are throttling local businesses and undermining political stability? Surely the joint and specialised committees that he co-chairs with the EU are fully capable of resolving these problems—or are they simply the direct and inevitable consequence of the Prime Minister’s dogmatic obsession with a hard Brexit? Surely the Minister accepts that unilateral suspensions of, and inflammatory calls to renege upon, the Irish protocol—negotiated by him and agreed by his Government—are also eroding trust with future trading partners, as President Biden has ominously signalled.
Lord Frost (Con)
My Lords, the best way of dealing with the issues that are arising on trade between Great Britain and Northern Ireland is for the Northern Ireland protocol to be implemented in a pragmatic and proportionate manner that is consistent with all its aims. That is what we intend to do and we are working with the European Union to that effect.
Budget Statement
Lord Hain Excerpts(3 years, 9 months ago)
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Lord Hain (Lab) [V]
My Lords, I welcome all our new noble Lords joining us for their maiden speeches today.
The Chancellor responded to an unprecedented threat in 2020 by giving the economy an unparalleled fiscal boost—twice as big as the package with which Alistair Darling successfully tackled the 2008 global financial crisis. Rishi Sunak now insists that
“it would be irresponsible to withdraw support too soon”.—[Official Report, Commons, 3/3/21; col. 255.]
But the Office for Budget Responsibility’s central forecast shows that that is exactly the risk he is planning to run by withdrawing half the 2020 fiscal support this year and nearly 90% of it by 2022. He is pulling the plug on the economy prematurely and cutting fiscal support for recovery twice as fast as George Osborne did so draconically in 2010, launching 10 years of disastrous Tory austerity and low to nil growth.
The furlough scheme, the self-employment grants, the 5% VAT rate for hospitality and tourism and the universal credit uplift all end in September. The Chancellor even plans to start withdrawing the furlough scheme and the business rates holiday for hospitality businesses on 1 July, only nine days after Covid restrictions are due to end no earlier than 21 June. He cannot possibly be confident that recovery will be firmly established so soon. His Budget cheats the challenge and fakes the change, most notably by including more than £16 billion of public spending cuts relative to his March 2020 pre-Covid spending plans.
The Chancellor is trying to find an early exit from his fiscal dilemma. By rushing his fences he risks removing support for the economy and derailing recovery just when the vaccine offers a way out of the virus, piling even more pressure on massively underfunded health and care services.