Further Education Institutions and 16 to 19 Academies (Specification and Disposal of Articles) Regulations 2012

Lord Strathclyde Excerpts

Thursday 5th July 2012 Lords Chamber

Moved by

[Lord Strathclyde]

That the draft regulations be referred to a Grand Committee.

Motion agreed.

Business of the House

Lord Strathclyde Excerpts

Thursday 5th July 2012 Lords Chamber

Moved by

[Lord Strathclyde]

That the debate on the Motion in the name of Lord Jenkin of Roding set down for today shall be limited to three and a half hours and that in the name of Lord Higgins to one and a half hours.

Motion agreed.

EU Council

Lord Strathclyde Excerpts

Monday 2nd July 2012 Lords Chamber

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

My Lords, this may be a convenient moment to repeat a Statement made by the Prime Minister about the European Council. The Statement is as follows.

“I am sure that the whole House will be deeply saddened by the death of three British servicemen in Afghanistan yesterday. These brave soldiers were demonstrating great courage to prevent Afghanistan once again becoming a haven for international terrorists and helping to keep us safe here in the United Kingdom. The suspected perpetrator is in custody and we will do everything in our power, with the Afghan national security forces, to ensure that justice is done. This tragic incident again demonstrates the very real risks that our soldiers face every day and we will learn all the lessons that arise from it. I know that everyone in this House will want to send their support to our brave troops and their families at this difficult time.

Turning to the European Council, Britain had three objectives at last week's European Council. The first was for eurozone members to take the urgent action needed to deal with the immediate crisis. The second was to secure a comprehensive growth package firmly focused on Britain's priorities and the third was to send a clear message to the rest of Europe about what Britain expects from the budget negotiations to come.

Under the previous Government, we could have been liable for financial support for these measures, as members of the EU bailout fund. But this Government have repatriated that power, so the British taxpayer is not involved.

On longer-term issues, eurozone members agreed important steps towards closer integration following a discussion of a report by the president of the European Council and others. It is vital for Britain—and for the strength and prosperity of the whole European Union—that they do this in the right way. I secured agreement that as this work goes ahead the “unity and integrity of the single market” will be fully respected. On the specific proposal of a banking union, I ensured that Britain will not be part of any common deposit guarantees or under the jurisdiction of any single European financial supervisor. I am very clear that British taxpayers will not be guaranteeing any eurozone banks and I am equally clear that, while we need proper supervision of our banks, British banks will be supervised by the Bank of England, not the ECB.

The original draft of the growth compact included a whole section on economic and monetary union which implied that a banking union might apply to all 27 countries. A number of countries worked to ensure that that whole section was removed.

We want a budget that is focused on growth not a focus on growth in the budget. EU members as a whole are €3.5 trillion more in debt now than when the last budget was negotiated and we have to face up to that tough reality. I made it clear that without the British rebate we would have the largest net contribution in the EU as a share of our national income. Without the rebate, it would be double that of France and almost one and a half times bigger than that of Germany. So the British rebate is not up for renegotiation. It is fully justified.

On foreign policy, the Council welcomed the EU oil embargo against Iran which came into force yesterday. On Syria, we called for united action by the UN Security Council to add more robust and effective pressure on Assad’s regime, including the adoption of comprehensive sanctions.

Europe is changing rapidly and fundamentally, and this presents real challenges for all countries. Those inside the eurozone have to face fundamental choices about whether to limit their national democracy and provide financial support to the weaker members, and like others outside the eurozone, in Britain we also face big choices too.

As Europe changes to meet the challenges of the eurozone, so our relationship with Europe will change too. There are those who argue for an in-out referendum now. I do not agree with that because I do not believe that leaving the EU would be best for Britain. But nor do I believe that voting to preserve the exact status quo would be right either. As I wrote yesterday, I do not believe that the status quo is acceptable. But just as I believe it would be wrong to have an immediate in-out referendum, so it would also be wrong to rule out any type of referendum for the future.

The right path for Britain is this. First, we must recognise that in the short term the priority for Europe is to deal with the instability and chaos. Secondly, over time we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. That should mean, as I argued yesterday, less Europe not more Europe: less cost, less bureaucracy, less meddling in issues that belong to nation states.

Thirdly, all party leaders will have to address this question. But it follows from my argument that far from ruling out a referendum for the future, as a fresh deal in Europe becomes clear, we should consider how best to get the fresh consent of the British people.

Finally, as I have said, as the eurozone moves to a banking union, we must ensure that Britain can take responsibility for sorting out its own banking sector. On the unfolding banking scandal here in the UK, we need to take action right across the board, introducing the toughest and most transparent rules on pay and bonuses of any major financial centre in the world, increasing the taxes banks must pay, ensuring tough civil and criminal penalties for those who break the law, and above all, clearing up the regulatory failure left by the previous Labour Government.

The British people want to see two things. They want to see that bankers who act improperly are punished and they want to know that we will learn the broader lessons of what happened in this particular scandal. On the first, the Serious Fraud Office is looking at whether there are any criminal prosecutions that can be brought, and it is using the full force of the law in dealing with this. On the second, I want to establish a full parliamentary committee of inquiry involving both Houses and chaired by the chairman of the Commons Treasury Select Committee. This inquiry will take evidence under oath, have full access to papers, officials and Ministers, including Ministers and special advisers from the previous Government, and it will be given, by the Government, all the resources it needs to do its job properly. The Chancellor will be making a full Statement, but this is the right approach because it will be able to start immediately, it will be accountable to this House, and it will get to the truth quickly, so we can make sure this never happens again.

I commend this Statement to the House”.

--- Later in debate ---

[Lord Strathclyde]

My Lords, perhaps I may clarify to my noble friend that there will be two Statements this afternoon, the second of which will be repeated by my noble friend Lord Sassoon, as is laid out on the screens, and will come immediately after Back-Bench time on this Statement.

As ever, I thank the Leader of the Opposition for her remarks. She asked plenty of questions and I shall try to deal with them fully. She expressed dissatisfaction at the Prime Minister having said that there should be an inquiry into banking and the LIBOR problem, because it was the wrong sort of inquiry. She said that her party would put down an amendment to a Bill before this House. She expressed disappointment with what the Government were doing, which is a pity, because I would have thought that one place where there is a good deal of expertise was in Parliament. To have a Joint Committee of both Houses looking at this matter, with Members of our Economics Affairs Committee sitting with their colleagues in the House of Commons, should surely be enormously welcome. It should also be able to respond quickly. We hope that it will get to work straightaway, call witnesses over the next few months and report by Christmas so that recommendations can be included in the Vickers Bill in the New Year. That seems to be an appropriate way forward.

The noble Baroness asked for our thoughts on Syria. She correctly recognised what a difficult situation it is. The situation remains grave, with hundreds of people dying every week. However, the Foreign Secretary was engaged this weekend in intensive talks in Geneva on a transition plan which included the Foreign Ministers of Russia, China, and other countries. The result is one step forward, which is worth having. We agreed with Russia and China that there should be a transitional unity Government in Syria, which should be made up of people from the present Government, the opposition, and other groups on the basis of mutual consent. It would of course exclude President Assad. We must now try very hard to bring this about. We are putting a great deal of energy into doing so, but nobody is under any illusions of just how complex all of this going to be, given the situation that exists in Syria.

The noble Baroness, the Leader of the House—

[Baroness Royall of Blaisdon]

If only!

[Lord Strathclyde]

Sorry, the noble Baroness the Leader of the Opposition, the former Leader of the House, also talked about the Europe of jobs and growth. She said that the Prime Minister could not deliver this in the United Kingdom, and asked why he therefore thought he could deliver it in Europe. That is to completely misunderstand what this Government have been doing, and, of course, to misunderstand quite deliberately. We want to rebalance the economy, with private sector growth taking the place of government deficits. We want prosperity shared across all parts of the UK. We want to become a world leader in advanced manufacturing and knowledge-based industries and services, and to remain the world’s leading centre for financial services. We have done this by cutting corporation tax, ensuring access to finance, dealing with the red-tape challenge, and many other brave and sensible pieces of action which will take the Government forward, from where we were under Labour’s misrule towards long-term growth and prosperity based on real jobs.

The noble Baroness asked about the European Patent Office. She said that it was not going to be based in London. This has been discussed and debated for over 23 years. It is an area in which Britain excels. The Council has decided that the patent office should be based in three parts of the European Union: in London, Paris and Munich. The most significant part of it as far as we are concerned—pharmaceutical and life science industries—will be based here in London. It will bring a turnover of over £100 million-worth in legal services into the United Kingdom.

Much of what the noble Baroness asked about concerned the referendum. I have believed for a long time that the real muddle on European policy lies in the party opposite, and not in our party at all. We said that an in/out referendum is not the answer right now, and we stick to that. A referendum on a choice between the status quo and coming out completely when Europe is changing would be the wrong choice. It would be a bad time to make a decision. Europe is changing a great deal, probably more so currently than it has done for very many years. Indeed, it is entirely right for my right honourable friend the Prime Minister to look at how we want to change our relationship with Europe, and as the end point becomes clear, to consult the British people either in a general election or a referendum. I regard that as a very strong position. If the Labour Party disagrees with consulting the British people, they should say so.

[Lord Dholakia]

My Lords, first, I welcome the sentiment expressed by the Leader of the House and the Leader of the Opposition about the death of the three British soldiers in Afghanistan. Our prayers and thoughts will remain with their families and friends.

I have two questions for the Minister. On the compact for growth and jobs, which will release €125 million for immediate investment, the noble Lord was broad enough to explain the area that may benefit Britain. Could he be more specific about what the real benefit to Britain will be from that money? Secondly, it is proposed that a group of eurozone members might pursue various measures, such as a financial transaction tax, through enhanced co-operation among themselves. If they do, will the Government ensure that Britain’s rights under the single market are maintained?

[Lord Strathclyde]

My Lords, my noble friend’s last point is crucial. There was real concern at the European Council and suggestions from other countries that a European banking supervisory system would be precisely that—for all the banks in Europe, including those in the United Kingdom. My right honourable friend the Prime Minister and others said that that should not and could not be the case, and we ensured that the final terms of the agreement ensured that British banks would not be a part of that but would continue to be regulated by the Bank of England. Within the eurozone area, it is of course entirely appropriate that they look at ways to improve banking supervision, ensuring deposits and working more closely together. That, too, should be welcomed.

As for growth, we are all pointing in the same direction. We want deregulation. We want a clearer completion of the single market, particularly in digital and energy. That will have an important impact on the European economy and, in particular, on the United Kingdom economy.

[Lord Hannay of Chiswick]

My Lords, does the Leader of the House accept my welcome that the lessons of last December seem to have been learnt on this occasion and that the Prime Minister has recognised that the right way to protect British interests is to stay at the negotiating table, not to reject any participation in negotiations? In my view, that is highly welcome.

As the Prime Minister begins to dance with wolves on referendum issues, does the noble Lord agree that it does not make much sense to parody the situation and the choice before us by talking about more Europe or less Europe? If we read the European Council conclusions, which I am glad the Prime Minister subscribed to, we see a great deal of more Europe in them in relation to the single market. There are references to patents, to the digital single market and to the single market in services, all of which require more Europe. It makes no sense at all to say that the British position is in favour of less Europe.

On Syria, does the Minister recognise that the Russian situation may not be one that we can work our way around? I am not criticising for one minute the attempt made in Geneva to achieve common ground, but it is doubtful whether that achievement is real or just apparent. If it is not real, it will surely be necessary to go to the Security Council to table a resolution imposing measures on the Syrian regime if it does not observe and honour the provisions of the Annan plan and put it to a vote, come what may. The only way you can find things out in the Security Council is by eventually putting it to a vote. If the Russians wish to veto it, they will do so, and that will be their responsibility.

[Lord Strathclyde]

I shall take those points in order. The noble Lord welcomed the fact that the Prime Minister wants to work together with his European partners. Of course, that has always been the case, including last December, when my right honourable friend was ready to support treaty change for the 27 in return for specific and practical proposals, which we put forward to safeguard the integrity of the single market. These proposals were not an opt-out for the UK, as some have suggested; they would have applied to the EU as a whole. However, other countries blocked them, and without those protections it was entirely correct that my right honourable friend used his veto.

Of course, there are some vital parts of the EU that have a positive impact upon the United Kingdom, and we should seek to preserve these. Equally, it is right for the Government to conduct a national audit of what the EU does and what the implications are for this country. Extensive preparatory work is progressing, and when that is complete we shall make a further announcement to Parliament.

As for Syria, I see entirely the force of what the noble Lord has said about putting down a UN Security Council resolution. It is, of course, a delicate matter. I do not think that the issue has advanced as far as that, but the option must be open to the Security Council to put forward a resolution.

[Lord Lawson of Blaby]

My Lords, is it not clear that the present situation in the eurozone is unsustainable, that it remains unsustainable despite the changes agreed with the European Council, and that sooner or later—sooner better than later—countries that are part of the monetary union will have to decide whether they are going to enter into a full-blooded political union or whether they should dissolve the single currency altogether? If the former, which I do not think it will be, there is no way this country can remain part of the European Union. If the latter, as I hope, and the single currency is dissolved, we can remain in the Union and I hope they will have learnt their lesson.

On the LIBOR scandal, I welcome a proposal to set up a Joint Committee of both Houses under the chairmanship of my excellent former special adviser. I am particularly glad that it will be a Joint Committee that includes Members from this House.

[Lord Strathclyde]

My Lords, on the first question, I do not know whether the eurozone is unsustainable. I do know that there is a crisis that needs to be resolved, and the sooner it is resolved the better. Our view is that at the end of last week a bold step was taken in the direction of trying to solve the crisis. Certainly, the financial markets liked it. Whether it is going to be enough, quickly enough, it is too early to tell. As the Government have said, there is a remorseless logic to how the eurozone operates, which is why we decided not to join it.

I am glad that my noble friend welcomes the Joint Committee on LIBOR and the banks. I think he is a member of the Economic Affairs Committee of this House, so he may well find himself a member of that Joint Committee, which would see a reversal of the roles between its chairman and him.

[Lord Barnett]

My Lords, could I clarify the Prime Minister’s position on an in/out referendum? My noble friend the Leader of the Opposition asked the question and the Minister did not seem to be clear in his answer. Is the Prime Minister’s position that he is opposed to an in/out referendum, full stop?

Could I also, I think, congratulate the Government? The Minister seemed to confirm what was reported in the Times last week, but which I did not see anywhere else, that the Government and the Prime Minister have agreed to give €1.3 billion to the European Investment Bank to help growth in Europe. It seems an odd thing to do, given that I would have thought that the Prime Minister’s primary consideration was to promote growth here. However, I would welcome such a proposition. Could the Minister confirm this?

[Lord Strathclyde]

First, my Lords, I thought I had made it pretty clear that the Prime Minister and the Government are not in favour of having an in/out referendum now. It is not the answer right now, but who knows? I would not support one, and I do not think that the Government would, because it is not the right choice to make. The right choice to make is that since Europe is in flux we should see where it ends up and where the relationship changes, if it does. We already have provision, agreed by Parliament, that when power moves from the United Kingdom to Europe there should be a referendum, so referendums should not concern us very much. However, if that relationship changes, perhaps the right thing should be to consult the British people, either in a general election or in a referendum.

As for growth, we were very much part of the group that called for a credible EU growth agenda. The European Council endorsed our growth priorities on Friday. For instance, we secured agreement for the immediate implementation of actions to eliminate unjustified barriers on services. This alone could add 1.6% to EU GDP over the next few years.

[Lord Ryder of Wensum]

My Lords, is not the use of “growth” incredibly mistaken in the context not only of my noble friend’s Statement but of the European Council’s conclusions, which I have before me? Indeed, the first paragraph of the Council’s conclusions states:

“The European Union will continue to do everything necessary to put Europe back on the path of smart … and inclusive growth”.

Perhaps my noble friend can explain the difference between growth and “smart … and inclusive growth”. Furthermore, I would be very grateful to know precisely what the Prime Minister’s definition of growth is, because I have been confused in recent weeks by his understanding of it. Growth in the long term in the European Union can be sustainable only by continuing to liberalise every country within it and by introducing supply-side measures. If my noble friend agrees that the Prime Minister accepts this principle, can he please let us know what supply-side measures the Prime Minister has been trying to persuade his European colleagues to implement in recent weeks?

[Lord Strathclyde]

My Lords, I, too, read those words from the conclusions of the Council’s meeting, which say:

“on the path of smart, sustainable and inclusive growth”.

I suspect that in different countries within the EU, it means rather different things. The conclusions go on to say that it should provide,

“a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies”.

It then directs the reader to the annexe.

That leads me to my noble friend’s second question. I entirely agree with him that growth in Europe will come from sustaining, liberalising measures within the European economy. Again, we have been at the forefront of that by arguing for sound money, for spending European money better and more wisely, and wasting less of it, for decentralisation and for reducing bureaucracy. All these measures are the kind of things that have worked in the past and will work again.

[Lord Stoddart of Swindon]

My Lords, the Statement refers to the British rebate. If there are proposals for changes to Britain’s rebate, can the Leader of the House say whether they would they have to be agreed by veto or QMV? My second question concerns the growth arrangements that four countries agreed on before the summit. Will Britain be making a contribution to that and will it add to the £150 billion to which we are committed through the ECB and the European Investment Bank? Finally, does he agree with Dr Liam Fox that Britain should negotiate a new relationship with the European Union and, indeed, that,

“life outside the EU holds no terror”?

[Lord Strathclyde]

My Lords, on that last point, there is no proposal for the United Kingdom to leave the EU, so the whole question simply does not arise. No analysis has been made, nor is likely to be made, of what life would be outside, and my right honourable friend has no intention of proposing a referendum on whether we should be in or out of the EU. There are substantial benefits to our remaining a member.

Yes, we are committed to funding aspects of the European Investment Bank. Many of these have been debated and discussed in the past.

Finally, the British rebate is absolutely fundamental to our monetary relationship with the EU. We will not agree to giving it up. The noble Lord asked me whether, if it were to be changed, it would be under unanimity or under QMV. I think that I am right in saying that it would be under unanimity; if that is not the case, I shall write to him.

[Baroness Falkner of Margravine]

My Lords—

[Lord Deben]

Does my noble friend accept that we will be more likely to get the rest of Europe to help us, and do the things that we want in terms of growth, if occasionally we emphasise the advantages of our membership instead of constantly suggesting that all sorts of things have to be changed? Will he please ask for a bit more positivity in our discussions about Europe?

[Lord Strathclyde]

There are many of us on all sides of the House who no doubt would like to be positive about the EU, but there a number of aspects to change over the course of the past 15 years that we do not believe should be dealt with at a European level; we would like to repatriate some of these things back to the United Kingdom. I know that my noble friend Lord Deben may not be entirely in agreement with all of that, but dare I say that when we have seen this audit of competences, there may be more agreement around the House as to what should be done at a national rather than a European level than seems to be the case at the moment?

[Baroness Falkner of Margravine]

My Lords—

[Lord Grocott]

My Lords, I have listened very carefully to the Leader’s explanation of the Prime Minister’s position on a referendum. I think that I am an average member of the public and I still have not got the faintest idea what his position on a referendum is. Does he seek a fundamental renegotiation of the terms and conditions of our membership of the European Union, which he would then like to put to the people in a referendum? In which case, I ask the Leader what shred of evidence his leader has from his prime ministership of two years’ standing that any other member of the European Union is prepared to agree to a fundamental renegotiation of Britain’s position within the European Union. Should he fail to get a fundamental renegotiation, will he then put that failure to the British public in a referendum? Presumably, his recommendation then would be that we should say no, and come out.

[Lord Strathclyde]

My Lords, I do not think that the noble Lord was trying to be helpful there at all. He was making his own case and asking questions on his own terms. The plain fact of the matter is that there is currently a fundamental reorganisation within Europe, a reappraisal of different relationships, particularly within the eurozone, which is inevitable, given the crisis that has engulfed the eurozone countries. It may, therefore, lead to a renegotiation; whether or not that is fundamental, it is too early to say. All that my right honourable friend the Prime Minister was saying is something that I think is glaringly obvious: if, under those circumstances, we wanted to change our relationship with Europe, and if that end point became clear, why on earth would we not wish to consult the British people, either in a referendum or at a general election?

Arrangement of Business

Lord Strathclyde Excerpts

Monday 2nd July 2012 Lords Chamber

[Lord Stoddart of Swindon]

My Lords, the Motion is whether the House should adjourn.

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

My Lords, the point is that the debate that we are now on is about whether or not the House should adjourn during pleasure for 10 minutes. I suspect that it is probably my fault that we are in this position. I said that the first Statement should not start before 4 pm; it started pretty much on the dot of 4 pm, and perhaps if we had delayed it for another 10 minutes we would have been able to continue without a gap at all. I am in a bit of a quandary because I would have hoped that the Statement in the Commons from the Chancellor of the Exchequer would have already begun.

[Baroness Hayman]

Perhaps I could offer a potential solution to this. If, on the debate on whether the House should now adjourn during pleasure, the noble Baroness were allowed to make the point that she had not been able to put certain questions to the Leader of the House on the previous Statement and to explain to the House what those questions would have been, and perhaps the feminist dimension to them, and then the noble Lord the Leader were to answer that, we might even find ourselves in a happier position regarding the second Statement.

[Lord Strathclyde]

That is an astonishingly good idea. Although we are still on the Question of whether or not the House should rise during pleasure for 10 minutes, perhaps my noble friend Lady Falkner could reconsider what she was going to say.

[Baroness Falkner of Margravine]

My Lords, I am extremely grateful to the House and to the noble Baroness, Lady Hayman, for coming up with that ingenious solution. My question would have been to do with the banking union and the lack of clarity about the relationship between the enhanced powers of the ECB, as it will be the banking regulator and supervisor, and the Bank of England, because significant issues of UK banking priorities would be affected by banking union. I wonder if the noble Lord might have been able to tell the House, had he had the opportunity, whether Section II of the report on EMU, which says that,

“Member States will be closely associated … and regularly consulted”,

would also apply not to the 17 countries that are not in the eurozone or the eight that are applying to be in the eurozone, but to those that are neither applicants nor in the eurozone in terms of the relationship between the banking authorities.

[Lord Strathclyde]

My Lords, if that is the question that my noble friend would have asked, perhaps I can crave the indulgence of the House in giving her the answer that I would have given if she had been within the 20 minutes for Back-Bench time. I am not entirely sure whether it makes a difference that we have not had a female Member of the House asking a question; I think that it is a wonderful thing that my noble friend has asked a question, but I would hate to be in a position where we reserved a certain amount of questions for either male or female Members. For my part, I think that the female Members of this House play a most valuable role, and in some debates rather a bigger role than some of the male Members.

My noble friend’s question was to do with the common regulatory regime for EU banks; in other words, what the relationship will be between the ECB in its new role in relation to regulators, supervisors and banks in non-eurozone countries. The euro countries have agreed to establish a single supervisory regime involving the ECB. Throughout this whole process, we have been entirely clear that the UK will not participate in that. The details need to be worked out over the coming months but we are very clear that any supervisor must not undermine the single market or UK financial services. The European Council has agreed that any proposals must include,

“concrete proposals on preserving the unity and integrity of the Single Market in financial services”.

I see that the Chief Whip has arrived on the Front Bench. We have an unusual convention that we repeat Statements and do not pre-empt them. I was rather hoping that the Prime Minister would have finished his Statement by now and that the Chancellor of the Exchequer would be on his feet. I wonder if it would be appropriate, even though we are still discussing this Motion as to whether or not we should adjourn for pleasure for 10 minutes—

[Lord Foulkes of Cumnock]

I will try, as usual, to be helpful by saying a few words on this Motion about adjourning for pleasure. I do not think that we should. At least the Leader of the House was candid enough to confess that this timetabling was his mistake, but it is not the first mistake he has made in relation to the business of the House. In fact, in this instance, he is a serial offender. He ought to be very grateful to the noble Lords, Lord Hamilton and Lord Myners, to myself and others for insisting—and putting it to a Division, which was won, with the support of the Opposition—that the Committee stage of the Financial Services Bill be held on the Floor of the House. Given the events of the last few days, it would have been outrageous if it had been taking place in the Moses Room, hidden from public attention. Now, we can be sure that all of it, including the amendments, will be taken here on the Floor of the House.

When we have that debate, I hope that we will have, for once, the presence of the Minister of State at the Department of Trade and Industry, the noble Lord, Lord Green, who is never here, never answers Questions, never participates in debates and leaves it all to the poor noble Lord, Lord Sassoon, who does a wonderful job under the circumstances. It would be particularly helpful to have the noble Lord, Lord Green, here, because on 28 November 2005, it was announced that he was to become group executive chairman of HSBC. He has more knowledge from the time when all of this took place. He was chairman of one of the biggest banks and so can give us some inside information, if he is allowed to. I hope the Leader of the House will confirm—

[Baroness Royall of Blaisdon]

My Lords, I wish to apologise. I am grateful to my noble friend Lord Foulkes for bringing these issues to the attention of the House. We have had a very worthwhile discussion but I wish to place on record my thanks to the government Chief Whip. As I understand it, it was at the Opposition’s request that the Statement was promptly at 4 pm, for the convenience of some Members of my Benches and of the whole House. I do not wish to cast aspersions on the Leader of the House when, in fact, I should be the one taking the blame.

[Lord Strathclyde]

I am very grateful for that. I have very broad shoulders on these things, but it demonstrates that I made yet another mistake in giving way to the noble Lord, Lord Foulkes.

As for the noble Lord, Lord Myners, let everybody just remember what his role was in all this as a very senior Minister in the Treasury in the previous Government.

[Lord De Mauley]

My Lords, in view of the fact that the Chancellor of the Exchequer has now started, I beg leave to withdraw my Motion.

Business of the House

Lord Strathclyde Excerpts

Thursday 28th June 2012 Lords Chamber

Moved By

[Lord Strathclyde]

That leave be given to advance the Motion to approve the Draft Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012 from Wednesday 4 July to Monday 2 July.

Motion agreed.

Small and Medium-sized Enterprises: Foreign Languages

Lord Strathclyde Excerpts

Thursday 28th June 2012 Lords Chamber

[Lord Broers]

My Lords—

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

I think that we should hear from my noble friend Lord Cotter.

House of Lords Reform Bill

Lord Strathclyde Excerpts

Wednesday 27th June 2012 Lords Chamber

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

My Lords, the Government have today published our response to the report from the Joint Committee on the draft House of Lords Reform Bill of last Session. We have reflected, and we are now in a position to introduce a Bill. The House of Commons has today given a First Reading to a House of Lords Reform Bill introduced by the Government and copies are available in the Printed Paper Office. The Government, after a White Paper, joint pre-legislative scrutiny and many debates, have taken the next step in the legislative process and put the proposals before Parliament. The Government will ask another place to give the Bill a Second Reading before the Summer Recess.

The development of the Government’s Bill has benefited from the detailed scrutiny of the Joint Committee on the draft House of Lords Reform Bill so valuably chaired by the noble Lord, Lord Richard. The Government are grateful to the Joint Committee for its report. We have considered its report and we have accepted many of its conclusions and recommendations.

I hope it might be helpful for me to set out the key respects in which the Bill introduced today differs from the original draft Bill, and to identify the central elements of the Bill that have not changed. The Joint Committee and the Government are in agreement on key features of our proposals. We are agreed that 80% of members of the reformed second Chamber should be elected on the basis of proportional representation; that the reformed House should be smaller than the current House of Lords; that Members should serve for a single 15-year, non-renewable term; and that there should be no change to the powers and functions of the two Houses.

We have none the less made a number of significant changes to the Bill we have introduced today. The draft Bill recommended reducing the size of the House to 300 Members. The Joint Committee recommended 450 Members, and we have accepted its recommendation. The Joint Committee also recommended that the 90 appointed Members should not necessarily be expected to attend the reformed House every sitting day. The committee argued that allowing individuals to maintain relevant professional expertise would strengthen the reformed House, as it does the present House. The Government have accepted this recommendation, and consider that the same logic should apply to elected Members. To reflect this, the Bill provides that IPSA must pay Members according to their level of participation in the work of the House.

On the recommendation of the Joint Committee, we have also significantly altered Clause 2 of the Bill. It is no longer a declaratory statement that nothing in the Bill affects the primacy of the House of Commons, the powers of each House and the conventions. Instead, it now clarifies the continuing application of the Parliament Acts in the context of a reformed second Chamber.

A further substantial change intended to provide a clear differentiation between the role of MPs and that of elected Members of the reformed House is that the areas from which elected Members will be returned are now larger regions rather than the smaller electoral districts proposed in the White Paper. Using these regions means that there will be a larger number of seats in each district, which in turn would have led to significant practical issues if an STV system had been used. The Government share the Joint Committee’s view that the complexity of the electoral system is an important consideration, and that voters should have the option of simply voting for a party. The Government therefore consider that the most appropriate electoral system for the reformed House in Great Britain is a regional, semi-open list, and that is what is now proposed.

In many other respects the draft Bill and the Bill introduced today are the same. Elections to the second Chamber will happen in thirds to coincide with general elections. There will be a transitional period with existing Members leaving in thirds, as each set of elected Members arrives. Membership of the reformed second Chamber will no longer be linked to the peerage. There will be a continuing role for Church of England bishops, but in reduced number. A statutory Appointments Commission will make nominations for the 20% of appointed Members who would be expected to be non-party political. The Bill includes provision for Members of the House to be able to resign, it provides for disqualification from membership of the House, and it gives the House a power to suspend or expel Members.

Finally, the fundamental principle behind the Bill has not changed. The Government believe that those who make the laws of the land should be elected by those to whom the laws apply, and that a democratic mandate—obtained through direct elections—would afford the House greater legitimacy and thereby enhance the House’s ability to perform its core functions of revising legislation and holding the Executive to account.

I am conscious that Members around the House have taken a close interest in the cost of the Government’s proposals for reform. As promised, the Government have today published their full cost estimates alongside the impact assessment for the Bill. These, too, have been placed in the Printed Paper Office.

I hope that this overview has served to highlight the main respects in which the Government’s proposals have evolved since the publication of the draft Bill and the publication of the Joint Committee’s report on that Bill. I reiterate the Government’s thanks to the noble Lord, Lord Richard, and the other noble Lords who served on the Joint Committee, whose report has had a significant influence on our final proposals.

I said before that there is only one way to test whether a consensus on the second phase of reform of this House exists or can emerge, and that is to introduce a Bill and allow Parliament to take a view. Today, that process is under way.

--- Later in debate ---

[Lord Strathclyde]

My Lords, having read what Mr Miliband said in support of the prospect of reform, I was surprised by much of what the noble Baroness said this afternoon. I was very impressed with what Mr Miliband said yesterday. He pledged the Labour Party’s support for the Second Reading of the Bill, even before he had had an opportunity to see it. Perhaps when he has read it, he will decide to support a programme Motion to rush it through the House of Commons and into this House as quickly as possible.

The noble Baroness asked whether this should be a priority. It has been hanging around for so long that we have to get around to it at some stage. It started in 1998-99 as a great priority of the previous Government. They published their last White Paper in 2008. I dare say that if the Labour Party had won the election it would have brought forward a Bill. This coalition has decided that it is time to bring this debate to an end and to ask Parliament what its view is, and it is right that we should do so.

There is also the bizarre suggestion that when important things are happening, Parliament cannot decide on other important issues. It is worth reflecting that on 6 and 7 June 1944, the House of Lords was debating the all-important Butler Education Act on Second Reading. Of course, getting growth into the economy is important, but that is not going to be done just in Parliament; it is going to be done by businesses and entrepreneurs up and down the country.

The noble Baroness reiterated the Labour Party’s view that what is most important in reform is that the House should be 100% elected. Respectfully, we disagree, as did the Joint Committee. Although she did not say that the powers between the Houses should be codified, I think that is what she meant. Again, respectfully, we disagree. She said that there should be a referendum. We see no case whatever for a referendum on the issue. Parliament should decide. It would cost £80 million to have a referendum on this issue, which was included as part of all three main parties’ political manifestos. I urge the Opposition to have more confidence in their manifesto, which is only two years old. I hate to point out to noble Lords opposite that there were no referendums in 1958 or 1999, when the composition of the House was changed, and we see no case for one now.

On the question of primacy, it is true that the Joint Committee had a substantial debate on Clause 2, helped by the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Pannick, and the Government reflected on that. That is why we have changed the Bill in this way. This is in part because this Bill is about the composition of a reformed House of Lords and the transition arrangements for getting there. It is not about the functions, powers and role of the two Houses, which we would like to see remain unaffected by that change. The Bill clearly states that the Parliament Acts of 1911 and 1949 will continue to apply after the introduction of elected Members.

The Parliament Acts underpin the primacy of the House of Commons in statute. They limit the legislative power of the Lords and ensure that any Administration with a majority in the Commons can ultimately pass legislation without agreement of the House of Lords. We are not aware of any further constitutional implications of repealing the preamble to the 1911 Act.

On the questions of cost raised by the noble Baroness, Lady Royall, she rightly pointed out that the cost of election was excluded from the cost of the House; it stands at £85.7 million every five years. We believe that at the end of the transition period the projected additional annual cost of the House of Lords will be £13.6 million. Of course there will be other associated costs during the course of transition. As for pay, there is something inherently useful about the current arrangements whereby Peers have a daily allowance, and we wish to replicate that through a per diem salary that would be paid monthly in arrears but would be assessed on daily attendance in this House.

In the course of the next few months, there will be many opportunities to discuss some of these issues, but it is also right for the House of Commons now to take its view. I have no idea when the House of Commons is going to discuss these issues, and whether it will be early or late in the autumn. We also have work to do and we should get on with that before dealing with the Bill when it gets to us some time in the winter.

[Baroness Royall of Blaisdon]

My Lords, for the avoidance of doubt can I say explicitly that if my Government had been in power now and had faced the economic situation which the country faces now, this would not have been at the top of our priorities and we would not be discussing this Bill in the House of Commons today?

[Lord Laming]

My Lords, I will be brief. I, too, thank the Leader of the House for repeating this Statement on a Bill that will clearly repay careful study, and for agreeing to this extended time of questioning.

It was entirely understandable that the new coalition Government introduced a full and challenging legislative programme that required an extended first Session. Inevitably some of that legislation was controversial. Does the Leader agree that every one of those Bills was carefully scrutinised in this House? Does he agree that, thanks to the hard work of colleagues from all around the House, each one of those Bills was greatly improved, so much so that during the period of scrutiny the Government had time to reflect on points that had been made and brought forward very many changes to their own legislation? As a starting point, does the Leader agree that this House has demonstrated time and again its ability to fulfil its responsibilities in the scrutiny and improvement of legislation?

Secondly, does the Leader agree that the House has changed greatly in recent years, and that time and again it has shown its willingness to change? Indeed, across the House there is agreement that further incremental change is still there for the taking.

Thirdly, will the Leader accept that my colleagues and I welcome that the Bill will endorse that 20% of the membership of the House will be appointed, but will he assure the House that the appointed Members will be genuinely independent and without any party political allegiance?

[Lord Strathclyde]

My Lords, I am grateful for the Convenor’s questions. Of course I agree with him: the House of Lords, not just since the general election but broadly since 1999, has done a good job of scrutiny and worked well on Bills. I have put on record many times that this is not about the current effectiveness of the House of Lords, which is recognised as having done its job extremely well and having improved legislation. The Government’s view is to improve the legitimacy of the House—indeed, to strengthen its ability to hold the Government to account and to challenge the decisions of the House of Commons.

On the noble Lord’s second question, yes, the House has changed substantially throughout the 20th century, most recently in 1999, and has always accepted such changes. Many of my colleagues in the coalition regard the transitional period as being extremely long. There was no transitional period, or not a very big one, in 1998-99, but there will be a substantial one for the new House to get used to the new arrangements over three electoral cycles.

I confirm that the 20% appointed Members will be appointed by a statutory Appointments Commission, as laid out in the Bill, and will be non-party political Members of this House.

[The Lord Bishop of Leicester]

My Lords, I am grateful to the Leader for his clarification of the Government’s proposals. We on these Benches recognise the need for some reform of this House, and welcome the opportunity that the Bill will give for a thorough debate about the future of Parliament. In particular, we are pleased to see that the Government endorse the Joint Committee’s recommendation on the continuing contribution of the Lords spiritual to a reformed House, albeit that the decision to raise the proposed size of the House to 450 from the original proposal of 300 suggests that the proportion of Bishops, at the number of 12, may be too low if the total number is revised upwards.

We have always said that we will assess the proposals on the basis of what makes for the good governance of Britain. I therefore raise two questions. First, as a member of the Joint Committee, I remained puzzled throughout the course of its work about how the Government’s expressed desire for a more assertive House could be squared with the confident assertion that a reformed House could be relied upon to exercise the necessary self-restraint required to guarantee the primacy and effectiveness of the House of Commons. Will the Leader help us to be as certain as he appears to be that the Parliament Act will prevent the serious risk of dysfunction in the relationship between the two Houses?

Secondly, as your Lordships will be aware, the Church of England has always argued for diverse religious representation in this House so that it properly reflects the diversity of civil society as a whole. The Government appear not to have accepted the Joint Committee’s recommendation that it is necessary for the Bill to make explicit reference to the inclusion of major faiths in a reformed House. How is it proposed that the Appointments Commission can ensure that a reformed House will reflect the religious heritage and cultural diversity of Britain today?

[Lord Strathclyde]

My Lords, I reiterate a view that I have long held and which the Government also hold: the Lords spiritual play a valuable and important role in the House and make an important contribution. The right reverend Prelate wonders about the numbers. I think it was the Joint Committee that suggested a reduction to 12 Bishops. The proposal in the Bill is that there should be five named Bishops and Archbishops, and then seven others chosen by the Church of England.

On two key questions of self-restraint and how this can be achieved, of course nothing can be guaranteed. It depends on the House evolving, and its new relationship with the second Chamber, which either will or will not change. It will be up to the new House, and the House of Commons, to decide how best to govern itself.

On the second question the right reverend Prelate raises, he is right to point out that we have not accepted that there should be an explicit condition on the statutory Appointments Commission to put in Peers of other faiths and make sure they are represented. There is no such view on the current Appointments Commission, yet it works extremely well. Other faiths have been introduced into the House, and I hope that that will continue.

[Lord Tyler]

My Lords—

[Lord Tyler]

My Lords, my noble friend Lord Dholakia is not able to be here, and I have been asked to respond. I am very sorry if I am holding up the noble Lord, Lord Richard, because I am looking forward very much to his response. He and other members of the committee will agree that the Government have in the main responded to our report.

Has my noble friend the Leader noted very intriguing variations in consistency on this issue? He will have noted, I think, that David Cameron and George Osborne voted for the 80/20 hybrid House as long ago as February 2003, as indeed I did. However, a great many others seem to have changed their minds since. I particularly welcome—and I think that other members of the Joint Committee will join me in this—the fact that the Government have taken such trouble with a very robust and comprehensive analysis of the cost projections to lay to rest the otherwise very speculative scaremongering expenditure estimates that were given to us previously. That is very helpful. That also responds to the report recommendations.

May I ask my noble friend the Leader to expand in due course, not necessarily now, on the true comparison between the Government’s proposals in this very useful document on the projection of cost and what would otherwise happen if the Government’s proposals did not go through? If the size of the House continued to expand, the cost of this House would of course also increase dramatically.

[Lord Strathclyde]

Yes, my Lords, we most certainly can. My noble friend is entirely correct. There has been a very robust analysis of the cost, including an examination of what the cost might have been if no reform had taken place—it would increase substantially. I said in reply to the Leader of the Opposition that the net cost in the first year after transition would be an extra £13.6 million per year, and I stand by that amount. I am very happy to write to my noble friend about how the costs have been robustly examined. I think the House will find that when it looks at the Explanatory Memorandum and the reply to the Joint Committee of both Houses, it will see very clearly how those costs have been reached and how they are substantially different from the ones proposed by the noble Lord, Lord Lipsey.

[Lord Richard]

My Lords, it was indeed a privilege and a pleasure, although perhaps not a treasure beyond measure, to have been asked to chair the Joint Committee. It was a fascinating experience, and I greatly enjoyed it. We exposed a very large number of issues in the course of it, some of which I am happy to say the Government have taken on board. It is now proposed that the size of the House should be 450 rather than 300. That is thoroughly sensible. However, the main issue that the Joint Committee spent a great deal of time on was raised by the noble and right reverend Prelate the Bishop of Leicester: namely, the primacy of the House of Commons and the relationship between the two Houses.

The Government are quite right to put in the provision clarifying totally the issue of the Parliament Acts. There was a lacuna there, and it was clearly pointed out to the Joint Committee by the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Goldsmith. The Government have put that right, and that is to be welcomed, but I am not sure whether merely dealing with primacy in that way, and only in that way, in the Bill will be sufficient. I ask the Leader of the House whether he will look at this issue of primacy again, and at whether there are ways in which one could perhaps not exactly buttress the primacy of the House of Commons but at least harden it.

There was one Joint Committee recommendation which the Government did not accept, and I would be grateful if the Leader of the House could tell me why. It came originally from the Cunningham report, and was that you could not codify the conventions dealing with the relationship between the two Houses and that you should not put them in statute. That I entirely agreed with. On the other hand, as we suggested, each House could almost simultaneously pass resolutions in identical terms spelling out what that relationship is and what the conventions underlying that relationship were. In other words, you would have a concordat spelt out in two documents between the two Houses that would set out the basic relationship between the two. I am not suggesting that that is immutable and can inevitably last in perpetuity, but I do say that although you cannot guarantee the primacy of the House of Commons in perpetuity—it cannot be done—you can produce a set of proposals that make it far more likely that that primacy will last than if you do not have those proposals in the Bill.

The Government should therefore perhaps look again at whether you cannot harden that part of the relationship between the two Houses, and I ask the noble Lord to look at it.

[Lord Strathclyde]

My Lords, the noble Lord is of course entirely correct that a large part of his report and the evidence that he received was on precisely this point about powers and primacy. There is a difference of opinion. My view, and the Government’s view, is that we should not worry too much about this at this stage. There is no need to do so. What could be a potential outcome of this? We could end up with an elected House having less power than the current House. That would be completely absurd. In the Bill, the Government have protected the current rights and privileges of the House of Commons and the House of Lords and have asserted that the Bill is about composition and not about powers at all.

The noble Lord, Lord Richard, has made an entirely sensible observation: that one way around this is to look again at the conventions that exist between the two Houses, and to ask each House to pass some sort of resolution. Well, maybe that is exactly what will happen, but there is no need for it to happen now or before Royal Assent of this Bill, or indeed before 2015, which is the anticipated date of the first elections. However, it is certainly a suggestion that a successor House may well wish to look at sensibly.

[Lord Harries of Pentregarth]

My Lords, I appreciate the way that the Government have taken on board the main principles of the Joint Committee. I note that the Bill now overlaps in most significant respects with the recommendations of the royal commission chaired a few years ago by the noble Lord, Lord Wakeham, but with one significant difference. The Wakeham commission allowed for the possibility of at least a few experienced politicians being appointed to the new second Chamber. How does the Leader of the House envisage providing, under the Bill, for people who have perhaps stood for election to the House of Commons two or three times and who would not necessarily be tempted to stand again for election to this House but who have a huge amount to offer in the way of political experience and wisdom? If there was no such provision in a new Chamber, would he not say that this was a significant loss?

[Lord Strathclyde]

My Lords, the noble and right reverend Lord, Lord Harries, makes two valuable points. First, he is entirely correct that there is a firm line of thought between the conclusions of the royal commission chaired by my noble friend Lord Wakeham, the White Papers produced by the Labour Party when it was in government, the draft Bill and, indeed, the Bill that we have published today. That is why I have said that very little is new in all this; the noble and right reverend Lord is entirely correct. The second point that he raises is more difficult and more intriguing. It is right that unless former distinguished Members of the House of Commons were prepared to stand for election under their party label, we would lose some of that expertise. Having said that, I do not think that it would be beyond the terms of reference of the statutory Appointments Commission to select a small number of most eminent politicians—a very select few—who might be interested in serving the nation and this House without a party political label.

[Lord Howe of Aberavon]

My Lords, my noble friend will surely remember that it is only a few years ago that the Public Administration Select Committee of the House of Commons concluded that the principal cause of today’s widespread public disillusionment with our political system is the virtually untrammelled control by the Executive of the elected House of Commons. The committee reached important conclusions. First, that there is a need to ensure that the domination of Parliament by the Executive, including the political party machines, is reduced and not increased and, secondly, that,

“the second chamber has to be neither rival nor replica … but genuinely complementary”,

to the Commons, and therefore, “as different as possible”. On that very sound basis, coming from the other place, would my noble friend take note of the fact that the principle underlying this Bill is one which will have to be examined critically and seriously, because it is fundamental to the good working of this constitution as we have enjoyed it for so many years?

--- Later in debate ---

[Lord Strathclyde]

My Lords, I agree with my noble and learned friend that this Bill should be fully examined and I know that it will be. I agree with the examples that he uses: the control of the Executive in another place, the domination of Parliament by the Executive and the need for differences between this House and the House of Commons. However, I come, and the Government have come, to a different conclusion. I see these reforms as strengthening this House by giving it the authority of the electorate to be more assertive and occasionally to be more beastly to the House of Commons, to hold it to account and to challenge the decisions that it takes. This House will be able to do that far better having been elected than simply having been appointed.

[Lord Lipsey]

My Lords, I have no wish to extend discourtesy in public life, as the Deputy Prime Minister, Nick Clegg, did when he described my costings of the Richard report as complete nonsense. I will not apply those words to the Government’s costings. However, would the noble Lord the Leader of the House accept that their costings of £220 million omit a large number of costs that will certainly arise under the Bill—for example, the costs of election—and therefore do not stand a moment’s close scrutiny? If he will not, will he agree to refer those costings to an independent referee, such as the Institute for Fiscal Studies, which can examine their costings of their proposals and my costings of the Richard report, and give the public the correct assessment of the costs that they will have to pay through their pocket as VAT, income tax and so on?

[Lord Strathclyde]

My Lords, the underlying assumptions and cost projections are in the public domain today. I fully expect that they will be given robust scrutiny by the IFS, the TaxPayers’ Alliance, the Labour Party and anyone else who wishes to examine them. Of course, the Government will reply to any questions raised on costs, which I believe have been reached in a robust manner.

[Lord Deben]

My Lords, does the Minister accept that the decision to have a list system will mean that this House would be in effect appointed by the political parties in many cases? The people they would appoint would be those who would not in other circumstances be chosen for this House. Many of those who work in this House would not wish to fight an election in those circumstances. This proposal makes for the worst conceivable kind of appointment to this House. That is why, above all, we should look at this Bill extremely carefully and, I hope, recognise that that which is, although illogical, is better than that which would just be fatal.

[Lord Strathclyde]

My Lords, apart from powers, one of the key areas will be the electoral system, which is different from the one originally proposed in the draft Bill. It is different from what was suggested by the Joint Committee, although the committee suggested some improvements to the original system on which this is based. Under this system, it is difficult for independents to be elected, which is why we have reserved 20% of the House to independents who will be put here through the statutory Appointments Commission. It is beyond doubt that it is a proportional system. Therefore, there will be no natural majority for any Government, which will preserve one of the strengths of this House.

[Lord Reid of Cardowan]

Will the Leader of the House at least consider that, after the White Paper and all the deliberations, consultations, and discussions he has made a bad Bill worse? First, as has just been pointed out, the new senators will be less independent than originally proposed because not only will the list system make them more loyal to parties but they will have to be determined on the list by the party leaders. Secondly, they will be more likely to intervene in the legislative process and the work of the House of Commons because they will have no constituency work to do and can spend all their time dealing with matters of politics and legislation.

Thirdly, I am sceptical about the cost. I do not know what the Leader of the House would think of any new company which starts up with 450 employees and bases its overheads and costs assessment on the hope that they would not turn up to work, which seems to be what he is doing. Above all, will the Leader of the House explain—if he knows it but Members of the other House do not—that you cannot ring-fence by regulations or by law the natural dynamic of politics? If you choose 300 senators with constituencies 10 times as big but with no constituency work for a term three times as long, whatever the regulations that will become through the dynamic the primary House. If there is scepticism from the Members of the House of Commons about this cast-iron guarantee that they have been given, will he refer them to the cast-iron guarantees that were given by Mr Straw that the Freedom of Information Act would be ring-fenced so that it did not apply to MPs allowances?

[Lord Strathclyde]

My Lords, the noble Lord says that Peers elected under this new system will be even less independent. We are not calling them senators at the moment: we are not calling them anything. I think that the Bill calls them Members of the House of Lords, but they will not necessarily be Lords.

The noble Lord’s charge is that they will be less independent than they are today. I am not sure that that holds water at all. At the moment, Peers get appointed by their party leaders and presumably act accordingly. Under this arrangement they will be elected by the electorate, but once they are here they will not need to be reselected to stand again because it will for one term only. Do I agree with the noble Lord that they will intervene in improving scrutiny of legislation? I think they will. This Bill is now in the House of Commons. It is up to Members of the House of Commons to decide whether the noble Lord is right and whether that will aid the scrutiny of legislation or improve it. I believe that it will improve it and that elected Members of this House will be more assertive than the current House.

[Lord Woolf]

My Lords, I hope that the Leader of the House will agree that there has been a long tradition that when Law Lords retired they made a significant contribution to the deliberations of this House and that it is an important tradition to maintain. Will he tell me whether the special position of the Law Lords has been given consideration in the present Bill? It seems to me that it will be very difficult—if not impossible—for former Law Lords to become Members of this House through the appointment system.

Law Lords do not retire at a particularly youthful age. If the application for appointment to this House is to be made subsequent to their retirement, as one would expect, the prospects of obtaining Law Lords in this House is going to be remote. I understand that at present the appointment of independent Cross-Bench and other Members is at the rate of four a year. That will be reduced to two a year, which is hardly consistent with dealing with a category of that sort.

[Lord Strathclyde]

My Lords, I have every sympathy with what the noble and learned Lord says because I am one of many who voted against the constitutional vandalism of tearing out the Law Lords from this House five or six years ago. However, it is a bit like toothpaste; you cannot put it back into the tube. I think we miss the Law Lords and I think they probably miss us, which is why the noble and learned Lord is suggesting that we should find a way back. I have to tell the noble and learned Lord that there is no guarantee that they would be appointed by the Appointments Commission. However, I do not believe that because they are old they are of no further use to Parliament and to the nation, and after 2015 it may be that particularly eminent Law Lords will still be appointed.

[Lord Cormack]

My Lords, my noble friend has repeatedly told the House that at the last general election all parties had some form of commitment to election of this House in their manifestos—they were markedly different, I would remind him. That being the case, no elector in this country had the opportunity of expressing concern on this issue. How, therefore, in all logic can someone who prides himself on his democratic credentials—namely, Mr Clegg—possibly argue against the validity and fairness of a referendum on this very important constitutional subject?

[Lord Strathclyde]

My Lords, my right honourable friend the Deputy Prime Minister is really not at all convinced that there is a strong case for a referendum on this matter. Earlier, I said that the cost of a referendum would be around £80 million. At a time of economic austerity, this seems—

[Noble Lords]

Oh!

[Lord Strathclyde]

It is all very well noble Lords laughing at this. The public will see that they are laughing at a huge amount of public money being spent on a referendum when all three parties and the coalition manifesto said that there should be reform of this House.

[Baroness Symons of Vernham Dean]

On the contrary, I think that noble Lords were probably laughing at the transparent inadequacy of the answer. We now see on page 36 of the Bill the enormous constituencies that are proposed for electing Members of this House. There are eight of these huge constituencies and it will take the votes of millions of people to send Members to your Lordships’ House in the future. Does the noble Lord the Leader of the House really think that people sent here for 15 years with the backing of millions of votes are going to defer to Members of the House of Commons, who will be sent to represent constituencies with electorates of no more than 80,000 on a minute proportion of the votes for only five years? Self-evidently, Members of this House will be much more powerful than colleagues at the other end of the Corridor. I hope that the noble Lord will answer that in terms of how it will automatically affect primacy. I do not think that Members of this House will go on deferring to the Members of that House in the way that we do while we are unelected and they are elected.

[Lord Strathclyde]

My Lords, I agree with some of what the noble Baroness says: I think that elected Members will probably defer less than is the case with the current House. That of course is something that the House of Commons will need to take into account when it comes to its conclusions on this, and it is right that it should do so. There would be no point in doing this if this House were less assertive than it currently is. The fact that Peers will have been elected will give us an authority and legitimacy that we do not have at the moment. However, I think it will be argued by Members of the other place that the House of Commons has ultimate legislative supremacy because of the provisions of the Parliament Acts, because the Government of the day is formed from the party or parties that can command a majority in the House of Commons and because the House of Commons has control of financial matters. These are the protections for another place.

[Lord Forsyth of Drumlean]

My Lords, I strongly endorse what the noble Baroness, Lady Symons, has just said. Certainly, if I am elected to this House, I shall be very assertive. However, looking at the way that the list system operates, I am not sure that the Prime Minister will put me on the list, thereby completely destroying the independence of this House, upon which our constitution depends. I say to my noble friend that it is very important that this debate is conducted in accurate terms. I therefore ask him and his colleagues to desist from saying things which are simply not true; for example, the assertion, as contained in the Statement, that those who make the laws should be elected. This House does not make the laws; the other place makes the laws. Nothing gets passed into law without the agreement of the other place. If this is the principle upon which the Government are founding their ridiculous Bill—that those who are elected must make the laws—then does the reverse apply? If it does, how on earth can the primacy of the House of Commons be maintained?

[Lord Strathclyde]

My Lords, I have made the point about the primacy of the House of Commons and I stand by it. Of course it is an essential principle of democracy that those who make the law should be elected and of course it is true that this House makes the law, as we are going to be doing later this afternoon. My noble friend is right. No law becomes law without the agreement of the House of Commons. This afternoon, this law cannot become law without the agreement of the House of Lords.

[Lord Williamson of Horton]

My Lords, I am aged 78 and I expect personal decomposition before we ever agree on the composition of this House. I welcome what is in the Bill about the independent Members and the statutory commission but I raise one single question. How can the noble Lord the Leader of the House justify the phrase in the Bill that,

“present party political activity or affiliation does not necessarily preclude selection”,

as an independent Member? I do not think that that is right.

[Lord Strathclyde]

My Lords, I think the whole House would agree that the noble Lord looks to be in robust health and I wish him continuation of that for very many long years. The line he takes is the point made by the noble and right reverend Lord, Lord Harries. It is our view that non-party political Members will be appointed. There may be a case for saying that former eminent politicians who have no interest in continuing a party political role could be selected by the Statutory Appointments Commission, but it is a statutory commission and not one which is guided by party politicians.

[Lord Pearson of Rannoch]

My Lords, why did the Government ask Her Majesty the Queen to appoint a record number of new life Peers, all of whom are of course personally very welcome, so that we now have a record number of some 660 life Peers? Why did they do that when they were already planning to reduce us so drastically, perhaps to some 300? What has the Government’s logic been in this process?

[Lord Strathclyde]

I do not think that there is any difference. We decided there should be a transition arrangement over three parliamentary terms. That will give the existing House, including any new Peers appointed since 2010, the opportunity to remain here until 2025 if they survive that long and if they survive the process of transition.

[Lord Howarth of Newport]

My Lords, will the Leader of the House reconsider the reply that he gave just now to the noble Lord, Lord Forsyth? Will he accept that there are few, if any, who dispute the principle that those who make the laws of the land should be elected by those to whom the laws apply? But in the interests of ensuring that the Deputy Prime Minister does not mislead the House of Commons or the country, will he undertake to find an opportunity to explain to the Deputy Prime Minister that Members of the present House of Lords do not make the laws of the land but confine themselves to advising those who do—the elected Members of the House of Commons? Therefore, the whole project of this Bill is based on a fallacy, and a dangerous fallacy at that, because it would confuse and diminish the present clear-cut accountability of the Government to the people through their elected representatives in the House of Commons.

[Lord Strathclyde]

My Lords, all I can say is, you could have fooled me. I have seen the noble Lord robustly defend or indeed attack a piece of legislation in this House. But I meet with the Deputy Prime Minister very regularly and I shall draw the noble Lord’s remarks to his attention.

[Lord Elystan-Morgan]

My Lords—

--- Later in debate ---

[Lady Saltoun of Abernethy]

My Lords, what makes the Government think that, if this House is to continue to do what it is doing at present, 300 Members will be sufficient to service the committees and the offices that have to be serviced? I have worked out that 300 would not be nearly enough and that it would take 450 Members to do the job. Would the noble Lord care to comment?

[Lord Strathclyde]

I am delighted to end on a high note. The noble Lady is entirely correct in her assumption. That was also seen by the noble Lord, Lord Richard. The Government took that advice and there will now be not 300 Members but 450.

G20 Summit

Lord Strathclyde Excerpts

Monday 25th June 2012 Lords Chamber

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

My Lords, it may now be a convenient moment for me to repeat a Statement that has just been made by the Prime Minister in another place on the G20 conference that took place last week. The Statement is as follows:

“The G20 needed to address the five big threats to the global economy. First, the problems in the eurozone; secondly, the mountain of debt and persistence of imbalances in the world economy; thirdly, the lack of growth; fourthly, the rise of protectionism; and, fifthly, the failure to regulate our banks properly. Let me take each in turn. First, the eurozone. Britain is not in the eurozone and we are not going to join, but when 40% of our trade is with the eurozone, its future affects our future. It is in our national interest for the eurozone to resolve its difficulties. As a full member of the European Union and a significant net contributor to its budget, it is not only vital, but also quite right that we speak plainly about what needs to happen.

In the short term, we need rapid action by the core of the eurozone, including the European Central Bank, to restore financial stability and confidence to the countries on the periphery of the eurozone as they undergo their vital structural reforms. This needs to be reinforced in the medium term by improvements to the governance of the eurozone that recognise the remorseless logic of being in a currency union.

This clearly was not a eurozone summit: it was a G20 summit. None the less, at this summit, the eurozone countries made some steps towards both. First, they agreed to take all necessary policy measures to safeguard the integrity and stability of the eurozone, including breaking the link between sovereign debt problems and bank instability.

Secondly, they committed to take further steps towards fiscal and economic integration, including through a banking union. Britain does not want to stand in the way of these measures towards closer integration of the eurozone but we will not be part of them. We did not join the eurozone precisely because we did not want to give up the kind of sovereignty over our national economy that is essential to making a currency union work. We have been clear that whatever long-term decisions are made about the governance of the eurozone, the rules that govern the single market must always protect the interests of all its 27 members. This is a red line for Britain: it is vital to our national interests. The eurozone now needs to get on with implementing the agreements reached at the G20. I will be working at the European Council this week to make sure that the eurozone takes these steps in a way which protects the UK’s interests.

To deal with the wider risks of contagion to the global economy, the G20 also welcomed the commitments to increase the resources available to the IMF by more than $450 billion. It is a basic principle of the IMF that the help it offers is for countries not for currencies. Indeed, almost all the IMF’s 50 programmes are for countries outside the eurozone. No country has ever lost money lending to the IMF. Britain’s contribution is a loan on which interest is payable and it will be used only if troubled economies meet strict conditions to get their economies back on track.

Thirdly, on debt and imbalances, as at the G8, there was absolute agreement that deficit reduction and growth are not alternatives. You need the first in order to get the second. The G20 also reaffirmed its commitment to reduce global imbalances with deficit countries strengthening their public finances and surplus countries taking further actions to increase demand and move towards greater exchange rate flexibility.

We welcomed in particular China’s commitment to allow market forces to play a larger role in determining movements in its exchange rate, and to continue reform and increase transparency in its exchange rate policy. This is an important advance for the G20 in dealing with global imbalances—one of the underlying causes of the crisis in 2008.

In a debt-driven crisis where many countries lack the fiscal space to stimulate their economies, the most powerful tools for growth that we have are monetary activism and structural reform. The G20 agreed that monetary policy should continue to support the economic recovery and every G20 country has put on the table specific structural reform commitments to strengthen global demand, foster job creation and increase growth potential.

The Los Cabos growth and jobs action plan includes mechanisms to hold G20 members accountable for delivering on the reform commitments made. Vitally for Britain, this includes completing the European single market. The G20 did not just focus on growth in the largest economies; it also reaffirmed its vital commitment to supporting private-sector-led growth in the poorest countries as the best way of helping people to lift themselves out of poverty. Britain led a significant breakthrough on two of the biggest barriers to a successful private sector in developing countries.

We drove forwards the G20’s anti-corruption plan, including securing agreement on important new principles which will deny entry to all G20 countries by corrupt officials or those who corrupt them. On the inability of farmers to access the technology that makes their farming viable, Britain made a substantial contribution to the Ag Results initiative which will harness the creativity of the private sector to help put new technology in the hands of the world’s poorest farmers. We will be building on this further at our special event on hunger at the Olympics in London in August.

Fourthly, on trade, we expressed our deep concern about rising instances of protectionism around the world. The President of Argentina had a number of arguments during this summit—not just with me—and it was made very clear to her that recent behaviour by Argentina on both investment and trade protectionism was not acceptable. At this G20, free trade again won the day. We extended our commitment to avoid any new protectionist measures until the end of 2014 and agreed to roll back new protectionist measures that have arisen, including new export restrictions. Most significant of all, the US and the EU reached a ground-breaking political agreement to move forward with a deep but credible trade agreement with a clear and agreed timetable. The EU-US High Level Working Group will now produce recommendations for taking this forward by the end of this year. The EU and the US make up half of the world’s GDP, so completing a deal here could provide an enormous boost to growth across the world—meaning jobs and growth for Britain.

Fifthly, on financial regulation, this G20 maintained the political impetus behind the reform of regulation across the global economy. We endorsed the strengthening of the Financial Stability Board in holding all G20 countries to account for delivering on their commitments: something specifically recommended by the UK report on global governance at the Cannes Summit last year. We also agreed to push forward with completing the implementation of Basel III.

Finally, in the margins of this summit, I had useful discussions on some of our key foreign policy priorities. On Syria, where the regime continues to pound civilian areas with mortars, attack helicopters and snipers, the EU is today, as a result of UK efforts, extending sanctions to ban any EU companies from insuring ships taking arms to Syria. We will continue work with our international partners, including through the United Nations, to stop the appalling slaughter and to help forge a political transition to a democratic future, which protects the rights of all its communities.

On the Falkland Islands, I took the opportunity to emphasise the importance of the planned referendum to President Kirchner. The islanders have to put up with endless attempts at endless summits to put a question mark over their future. They want to determine that future themselves. No one should be in any doubt that, as far as the British Government are concerned, it is the Falkland Islanders who will determine the sovereignty of the islands and their view will be respected by this House, by this country and by the world”.

I commend this Statement to the House.

[Baroness Royall of Blaisdon]

My Lords, I thank the noble Lord, the Leader of the House, for repeating a Statement given in the other place by the Prime Minister on the recent G20 meeting. Unusually, I did not see a copy of the Statement in advance. I am not complaining, but it does make life rather difficult.

I will start with the foreign policy issues. On the Falklands, there is support from this side of the House for the absolute need to protect the principle of self-determination of the islanders. On Syria, there is deep concern on all sides of the House about the continued failure of the Annan plan to deliver a cessation of violence, and there is cross-party consensus on the appalling nature of the Assad regime and the need for the toughest sanctions against Syria. We welcome today’s extension of EU sanctions but given the urgent need for an immediate end to the dreadful and escalating hostilities, does the noble Lord the Leader of the House agree that it is now vital that the wider international community unites around the need for the toughest sanctions against Syria?

The Prime Minister said in his press conference that:

“President Putin has been explicit that he is not locked into Assad remaining in charge in Syria”.

If correct, this clearly represents an important step forward. However, Foreign Minister Lavrov said afterwards in a statement that these comments did not “correspond with reality”. Can the Leader of the House clarify the position?

I now turn to the main business of the summit—the economy. With our country in double-dip recession, with world growth slowing and with the eurozone crisis, if ever there was a time for the international community to come together and act, this was it. All we got from this summit was more of the same: drift and inaction in the face of a global crisis. The Prime Minister claimed afterwards that the summit had made “important progress” on a number of issues,

“on the Eurozone, on the lack of global growth and on the rise of protectionism”.

This sounded familiar. Then we realised why—because the Prime Minister said exactly the same after the last summit, in Cannes last November.

The Prime Minister now says:

“In terms of the slide towards protectionism, I think that has been halted”.

Can the Leader of the House confirm that the Prime Minister told us precisely the same thing in November? That summit was a success because action had been taken to,

“stop the slide to protectionism”.

That was a great triumph—the slide that had been stopped last November has been halted again.

On global growth, the Cannes summit communiqué said that,

“should global economic conditions materially worsen”,

countries should,

“agree to take discretionary measures to support domestic demand”.

Well, global conditions have worsened and therefore, being true to that communiqué, this G20 should have been a coming together of world leaders to work for a co-ordinated plan for jobs and growth. And what did we get? The communiqué just repeated the same words:

“Should economic conditions deteriorate significantly further, those countries with sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand”.

No change, no action.

On the eurozone, I note that the Statement says:

“As full members of the European Union, and a significant net contributor to its budget it is vital that we speak plainly about what needs to happen”.

I think that our partners would have listened to us more if the Prime Minister had not decided to use the veto that never was in December. Actions for short-term political gain have long-term consequences.

The Prime Minister said that while this was not a European Council meeting, progress was made with,

“significant agreements. Now the eurozone countries need to get on and implement them”.

But is not the reality that there is no agreement on the main issues of substance, such as how to recapitalise Spanish banks; how the European Central Bank can stand behind member countries; how to prevent the escalation of problems in bond markets; or how to boost the size of the firewall fund to make it work? Instead, we had more of the same.

For people here at home, the economic reality is that things are getting worse, not better, and there is nothing in this summit’s conclusions to make any difference to that. And there is a simple reason why there was nothing for Britain at this summit: because we have a Prime Minister, and a Government, who simply argue for more of the same. What a contrast with France, where the president is passionate about growth, understanding that it is a prerequisite for dealing with deficits. Austerity is not working; with Britain in a double-dip recession, one of only two G20 countries in that position, can the Leader of the House tell us whether at the G20 the Government were actually arguing for anything different from what they were arguing for last November? From today’s Statement, it does not look as though they were.

Can the Leader of the House confirm that at the time of the Cannes summit, UK growth for 2012 was forecast to be 1.2% and that now the average of independent forecasts is just 0.3%? On the world economy, what this summit needed was a co-ordinated plan to generate greater growth, but the international community is divided between those who want a move towards greater growth and jobs and those whose answer to the failure of the last two years is simply more of the same. I fear that, on this issue, this Government and this Prime Minister are on the wrong side of that argument.

There is one important lesson for the Government from the last week. A global summit in the face of an economic hurricane needs action, not words. The reality is that the Government and the Prime Minister have come back from this summit with nothing for Britain—nothing to cope with double-dip recession, nothing to help Britain’s families and nothing to ensure growth in the world economy. I trust that when the Prime Minister returns from the European summit next week he has growth at the top of his Statement and agenda. Britain deserves more than was achieved at the G20 summit, and we deserve a change of direction; a change of economic strategy; a change that puts action first, not words; and a change that puts jobs and growth first.

[Lord Strathclyde]

My Lords, the noble Baroness the Leader of the Opposition is on good form today. Typically, she sees a socialist president being elected in France, looks over the water and believes that everything over there is going swimmingly. However, she has not read what the good president has said. He said that,

“national debt is the enemy of the left and the enemy of France”.

We agree with that. Mr Hollande would balance France’s budget faster than the coalition plans for the United Kingdom. When asked how he would stimulate growth, the French President said, “The means cannot be extra public spending since we want to rein it in”. We can agree with that; the noble Baroness and her party cannot.

We very much welcome the noble Baroness’s support on the Falklands and Syria. The situation in Syria is immensely dangerous, difficult and complicated. We are still discussing with key partners what more we can do, including in the United Nations, to support the Annan plan. There remain differences over sequencing and the exact shape of how a potential transition can take place but we have put in place a strong EU arms embargo, are closely tracking other shipments to Syria and want to work with countries and companies around the world to stop them. We have had useful conversations with Russia but the key thing is to get together, to work together and to try to implement the Annan plan, if at all possible.

I rather admire the fact that the noble Baroness’s research led her to spot that some of the words in this communiqué were the same as those used at the Cannes summit. She read that as signifying that nothing had changed. However, it may also prove some admirable consistency emanating out of G20 summits in that there are still common problems with which to deal, and they are going to be dealt with.

The noble Baroness took a pot shot at what my right honourable friend the Prime Minister did at the EU summit at the end of December, which was not to sign up to the communiqué. As I said at the time, the reason my right honourable friend did not sign that communiqué was because he believed in protecting British interests, which is what he did. The noble Baroness and her party would have signed it and, we believe, would have sold vital British interests down the river.

The G20 was a success in the sense that many of these gatherings are a success as an opportunity for the leaders of different countries to discuss some of the key issues facing the world and to try to come to an agreement. There was no shying away from the fact that one of the most difficult issues facing the world at the moment is the problems in the eurozone. We have come up with what we believe to be helpful and constructive words to try to encourage the eurozone to find a solution in preparation for the European Council later this week. However, in the end, the countries in the eurozone have to make those decisions themselves.

[Earl Attlee]

My Lords, I remind the House of the benefit of asking short questions in order that my noble friend the Leader of the House can answer as many questions as possible.

[Lord Kinnock]

After £325 billion worth of quantitative easing and consecutive quarters of zero growth, is it not evident that the monetary activism of which the Prime Minister spoke earlier cannot get any traction without substantial fiscal stimulus? Therefore, why do the Government continue to resist the proposition that they should establish a national investment bank that through the use of public funds will attract private investment in order to stimulate growth, employment and development in this undergrowing economy? Secondly, when it is clear, as the Prime Minister said, that deficit reduction is not an alternative to growth but is contingent on growth, why do the Government continue to advocate expansionist growth policies in the eurozone but firmly resist exactly the same approach in the United Kingdom, which sorely needs those policies? Is it not clear that the Government’s maxim of securing growth through austerity is oxymoron economics?

[Lord Strathclyde]

My Lords, I do not agree with what the noble Lord, Lord Kinnock, has said. Neither do I accept his characterisation of what we are doing in the United Kingdom and what we are exhorting our colleagues in the eurozone to do. I take his point about a national investment bank in order to try to encourage growth, but our solution has always been to try to encourage the private sector—and private sector banks—to have the confidence to invest in British business.

The UK economy is recovering from the deepest recession in living memory. It was even deeper than was previously thought: over 7% was wiped off the economy. Inevitably, recovery will be choppy, and by historical standards subdued, because household business and government debt rose unsustainably. Naturally, the eurozone crisis is making the recovery even more difficult.

The main point is that we have managed to maintain the lowest interest rates that this country has seen in modern times; a one percentage point rise in our interest rates today would add £10 billion to family mortgage bills alone. You only have to look at the interest rates in Spain, Italy and of course in Greece, to see just how much better off we are today than those nations. Despite having a deficit similar in size to that of Greece, the UK has interest rates at historic lows, similar to those in Germany; France’s interest rates are more than 50% higher, and Italy’s interest rates more than three and a half times higher. We can have a philosophical debate—even an economic debate—as to whether or not austerity and growth go together, but our firm view is that they can.

[Lord Hannay of Chiswick]

My Lords, will the Minister accept my thanks for that Statement? I must say that I found it a trifle Panglossian, but I do not wish to take issue with what was in it.

Are the Government not concerned that these G20 meetings are becoming of rather waning relevance, and that as each meeting succeeds each other the hopes that the world placed in the G20 when it was set up at the height of the crisis are not really being realised? Are they not, increasingly, simply photo opportunities and things of threads and patches that make no overall effort to get to terms with the challenges that confront us? If the Government are concerned about that, do they have any thoughts about how the G20 machinery could be made to work a little bit better?

Perhaps as an illustration of that, the distinctly disappointing outcome of the Rio meeting on the environment, which was held only shortly after the G20 meeting, was perhaps highlighted by the fact that the G20—the economies that are responsible for between 80% and 90% of the world’s emissions, because they are responsible for 80% or 90% of the world’s economic activity—did not even find time to talk about this subject. No effort was made to prepare a position that might have provided the 193 countries that went to Rio—which could not possibly have produced, in one or two weeks, a very meaningful outcome—with some guidance and momentum. That, too, seems to be lacking from the G20’s present agenda.

[Lord Strathclyde]

My Lords, the noble Lord makes an interesting point, particularly with his background and experience, on the role of the G20 and, indeed, of the G8. The role of these organisations has changed, particularly over the course of the last five or six years, given the economic situation. However, there is a very important role in their meeting—both G8 and G20—to work through an agenda and come forward with conclusions. The important thing in those conclusions is that they make sure that there is a vibrant system that can check back to see who committed to doing what and to make them accountable. I am sure that the noble Lord, Lord Hannay, has views on how to streamline the secretariat, or indeed to make it more strategic, and I would encourage him to put those down on paper.

Do we believe that the G20 has made no difference at all on climate change? No; all G20 countries were committed to implementing the outcomes of the COP 17 in Durban, and we made it clear that we wanted a successful outcome to the COP 18 in Qatar later on this year. As far as Rio is concerned, the deal delivers much of what the UK wanted and worked hard to achieve, and it puts the sustainable development agenda very firmly back on the map.

[Baroness Goudie]

My Lords, I thank the Leader of the House for repeating the Statement. I declare an interest as a member of the La Pietra Coalition, which is a group of international NGOs and global corporations that came together three years ago to try to influence the G20. Among the items on which we have been trying to influence the G20 is access to finance for women and youth around the world. I am very grateful to officials in Treasury and DfID who have worked very closely with us over the past three years, and I am pleased that at long last there is the following phrase in the communiqué:

“We recognise the need for women and youth to gain access to financial services and financial education”.

It is stated that the OECD and one or two other international organisations will be responsible for this. Given that this Government have played such a part in this matter over the past three years, we should officially take this policy on board, keep an eye on it, and ensure that that access to financial services and financial education does happen, because we know that the GDPs of countries change enormously when women have access to finance and can educate their children.

[Lord Strathclyde]

My Lords, the noble Baroness is quite right and I very much welcome her welcome for the initiative. The Government are very pleased to receive these independent reports from NGOs, particularly regarding the extremely important areas of access for women and financial education. We certainly should keep an eye on it and I shall make sure that officials in the departments are aware of what the noble Baroness said.

[The Lord Bishop of Ripon and Leeds]

My Lords—

--- Later in debate ---

[The Lord Bishop of Ripon and Leeds]

My Lords, I am grateful for the particular stress that the Leader of the House put on support for the poorest countries of the world. As I understand it, there were three strands to that support and to the UK’s part in creating it. The first was an anti-corruption plan. Can he be more specific on how corruption can be tackled within the poorest countries of the world and how the UK can contribute to that? The second strand relates to the inability of the poorest countries to access modern technology. What sort of help can be provided by the UK and does that have implications for our aid budget and aid policy? Thirdly, welcome though the hunger event at the Olympics, to which reference was made, would be, how is that intended to support the poorest countries of the world?

[Lord Strathclyde]

My Lords, I thank the right reverend Prelate for his general welcome. I cannot add anything more on the anti-corruption plan because G20 officials have been asked to come forward with details over the next few months. We will have to wait and see what will happen on that. As to food security and technology, the UK met its L’Aquila financial commitments in full and will continue to provide broadly equivalent resources to help food security. We made welcome progress at the G20 on implementation of commitments made last year at Cannes, including rolling out the Agricultural Market Information System to improve transparency, endorsing the Scaling Up Nutrition movement, and pledging to continue our work in other areas, such as the platform for agricultural risk management. This is an area to which a substantial amount of importance is given, as is the hunger event at the Olympics in London during August. I think that the idea is to hold a conference to concentrate people’s minds on the issue of hunger around the world, but if I can add more I shall let the right reverend Prelate know.

[Lord Lester of Herne Hill]

My Lords, is my noble friend the Leader of the House aware that when a great democratic socialist—namely, Roy Jenkins—served as Chancellor of the Exchequer, he was of the view, and remained of the view when he became Home Secretary in the second Wilson Government, that the national debt should not occupy more than about 40% of GDP? That view was expressed by Mr David Laws in an interesting article in the Sunday Telegraph this weekend. Is my noble friend aware that it is possible to have that view and yet be a democratic socialist?

[Lord Strathclyde]

My Lords, I think my noble friend is trying to be helpful. Indeed, he is being very helpful. Our net debt to GDP is considerably higher than 40%. My noble friend is right: as President Hollande has shown, the answer does not lie in increasing debt.

[Baroness Hooper]

My Lords, I am delighted that the Prime Minister was able to make it quite clear to the President of Argentina that the British people and the British Government stand beside, and behind, the people of the Falkland Islands in deciding their own future.

Can my noble friend the Leader of the House let us know whether, in the margins of the G20 meetings, the Prime Minister was able to talk with political leaders in Mexico, given the importance and vitality of the Mexican economy, and in view of the forthcoming elections there?

[Lord Strathclyde]

Yes, my Lords. Certainly, on the first question, my right honourable friend the Prime Minister made a point on the future of the Falklands which he has made continually, which I know the whole House will agree with. We do not see that this question should be put into any doubt whatever. We have made the proposal that there should be a referendum. We believe wholeheartedly in self-determination. That is the right way forward and we encourage the people of Argentina and its Government to agree with us on this vital matter.

I can also confirm that my right honourable friend had a further meeting with Mexico, and an inward investment meeting of British businesspeople in Mexico. It was extremely successful and useful, and showed again this Government’s firm desire to demonstrate our need to grow our economy through exports.

[Lord Hollick]

The Leader of the House will recall that the verdict of the Office of Budget Responsibility on all of the growth measures announced by the Government is that they will have no impact. Now that the Prime Minister has signed up to the growth plan for the G20, when will the Government bring forward measures to give that some substance?

[Lord Strathclyde]

My Lords, the Government are continually bringing forward all sorts of plans and prospects—not least the speech my right honourable friend the Chancellor of the Exchequer made at the Bank of England only 10 days ago, where he made a specific commitment to try to improve liquidity of the banks, so as to increase lending, which will also lead to growth.

[Lord Hughes of Woodside]

My Lords, in the Statement, there was a repetition of the conviction that only the Annan plan will lead to peace in Syria. Is the Leader of the House aware that since it was first announced, the situation has not got better? It has got worse and worse. There is a dreadful parallel here with what happened in Libya. Will he assure us that we are not interested primarily in regime change, and that there have to be intense discussions at a very high level to bring this slaughter to an end?

[Lord Strathclyde]

My Lords, I have a lot of sympathy for what the noble Lord said about Syria. I said earlier that the situation was extremely difficult and complicated, and continues to be appalling. Syria is descending rapidly into a bloody and tragic civil war, with potentially irreparable consequences for its people and for the future.

We are continuing to discuss with key partners, including in the UN, exactly what the best way forward will be. We still believe that the essential framework of the Annan plan is the best way forward, and that is what we will continue to discuss. We have put forward a strong EU arms embargo, which we are currently tracking, and we will maintain that. The EU has announced further sanctions against the Syrian regime today. The UK is at the forefront of imposing the 16 rounds of EU sanctions against 129 individuals and 49 entities.

I cannot be sure that those things in themselves will work. As the noble Lord said, the international community at the highest level is aware of what is going on. There is a lot of activity and pressure is being applied to the Syrian regime. We have to hope and believe that in due course we will reach the end of this appalling conflict.

[Lord Stoddart of Swindon]

My Lords, like other noble Lords, I believe that the Statement is rather bland. I also agree with the noble Lord, Lord Hannay, that the influence of the G20 appears to be declining. My only question concerns the speech that Mr Barroso made to the G20 in which he blamed the United States for the economic and financial problems that we have today. Was he speaking for all the nation states of the European Union, including our own? Such a statement is hardly likely to improve relations between the United States and the EU.

[Lord Strathclyde]

My Lords, I speak on areas for which I am responsible and Mr Barroso speaks on areas for which he is responsible within the European Union. I do wonder whether what he said will influence relations not just with the United States but with the UK, and whether there is enough of a fundamental understanding of the problems that have occurred over the past five years, and therefore of the solutions that will need to be taken into account.

House of Lords: Behaviour in the Chamber

Lord Strathclyde Excerpts

Thursday 21st June 2012 Lords Chamber

[Lord Addington]

To ask the Leader of the House what is his assessment of current standards of behaviour in the Chamber of the House and whether he will make time available for a debate on this subject.

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

My Lords, standards of behaviour vary, which is why in a self-regulating House it is incumbent on us all to take responsibility for ensuring that the rules set out in the Companion are adhered to in spirit as well as in letter. I would welcome a debate on the subject should my noble friend secure time for it through the normal routes.

[Lord Addington]

I thank my noble friend for that Answer. Does he not agree that certain habits that are coming into this House, such as trying to intervene on people excessively and compulsively, are becoming much more of a pattern and that the noble Lord who is speaking does not have to accept an intervention? Is it not the case that in a debate where we have a speakers list and a noble Lord intervenes and the intervention is accepted, that noble Lord should be here at the end of the debate to hear the summing up?

[Lord Strathclyde]

My Lords, I have every sympathy with what my noble friend says. The Companion allows Members to interrupt each other with,

“a brief question for clarification”.

But it also makes it clear that Members are entitled to,

“refuse to give way … in time-limited proceedings when time is short. Lengthy or frequent interventions should not be made, even with the consent of the member speaking”.

That is good practice for the House of Lords and we should not emulate aspects of behaviour in another place that do not suit the flavour of this Chamber.

[Lord Richard]

My Lords, it is certainly true that the House is now a bit more assertive than it was. I am bound to say I think this is a good thing rather than a bad thing. It is also true that people get intervened on in the course of their speeches. It seems to me that that is part of normal debate. I hope the Leader of the House agrees that this is meant to be a House of debate, not one in which people just get up and read set speeches from a script. In that sense it is much healthier than it used to be. Will the noble Lord consider another issue, which is Question Time? Behaviour at Question Time seems to be getting increasingly disorderly. I hope the noble Lord will agree that one of the main reasons for the disorder is that there is confusion as to whether the other side of the House is entitled to two slots or to one. On this side of the House we are perfectly clear that the coalition is entitled to one slot in the normal ladder and not to two. I ask the Leader of the House to confirm that again.

[Lord Strathclyde]

My Lords, I very much welcome the assertiveness of the House. However, there have been instances in the past of Peers intervening in an opening speech and then leaving the Chamber, not intending to speak themselves. This is something which I think we should all deprecate and is not part of the normal traditions of this House. I wish to make two comments about Question Time. I think that the behaviour in the House over recent months has been very good and I have had to intervene on very few occasions. I comprehensively disagree with what the noble Lord, Lord Richard, says: we have a very good system of understanding which side should speak next. The statistics demonstrate that at Question Time Labour Peers probably speak more than is their fair share.

[Lord Geddes]

Will my noble friend confirm to the House yet again that there is no such person as a noble Minister?

[Lord Strathclyde]

Yes, my Lords.

[Baroness Hayman]

Does the noble Lord the Leader of the House agree that an underlying pressure on behaviour in the Chamber is the size of the House and the number of Members who want to participate? On an earlier Question, he spoke about the increased costs of a reformed House. Will he confirm that an elected House and a reformed House do not have to be the same thing, and that a smaller reformed House would in fact be cheaper than the current House?

[Lord Strathclyde]

My Lords, I understand the point that the noble Baroness makes. In 1999, the average attendance at the House of Lords was 350; in 2005, it was 400; in the previous Session it was 475; so we can see the increase there. However, as far as behaviour is concerned, more than half of the Peers appointed since the general election have not attended any of the induction seminars offered by the Clerk of the Parliaments. I have written to them, encouraging them to do so. I am glad to say that the Clerk of the Parliaments will be resuming a further series of seminars in the autumn and I would very much encourage them to go along.

[Baroness Royall of Blaisdon]

Like the noble Lord the Leader, I welcome the fact that this House is more assertive in terms of interventions, but it is not so different from how it was in the past. I well recall that my noble and learned friend Lady Scotland was intervened on 20 times in one speech. I would like to put that on the record. Does the noble Lord agree that if more recommendations from the Goodlad report on working practices were agreed to and implemented perhaps that would assist with behaviour in the House?

[Lord Strathclyde]

My Lords, many of the recommendations in the Goodlad report on working practices have been agreed, but quite a lot of them have been rejected by the House. The Procedure Committee will no doubt wish to take that into account.

[Lord Dykes]

Does my noble friend share my dismay about the behaviour of some Members of the House of Commons? Has he seen that the president of my party in the other place, Tim Farron, described Peers as unelected political appointees coming in for a few minutes to get £300 a day? The deputy leader, Simon Hughes, said that the tax-free £300 a day was the only reason that Peers come in to the House and that we are lobbyists anyway. As a full-time working Peer, I bitterly resent such an accusation. What is my noble friend’s reaction?

[Lord Strathclyde]

I hope my noble friend will take it up with the president of his party.

[The Countess of Mar]

My Lords, does the noble Lord agree that it is not our place to criticise Members of another House?

[Lord Strathclyde]

Yes, my Lords, and I think that the feeling should be reciprocated in both Houses.

[Lord Crickhowell]

My Lords, will the Front Bench perhaps give a lead on one matter and stop the growing practice of the Whips trying to intervene and stop important speeches during Second Reading debates—a practice that is in breach of the rules and conventions of this House?

[Lord Strathclyde]

No, my Lords, I completely disagree with my noble friend, but I am very glad he raised that point. The Whips on all sides of the House have a responsibility to draw attention to when a rule, as laid down in the Companion, is being broken and to offer guidance to the House. That is what they do, and they should continue to do it.

House of Lords: Reform

Lord Strathclyde Excerpts

Thursday 21st June 2012 Lords Chamber

[Lord Lee of Trafford]

To ask Her Majesty’s Government what is their latest estimate of the cost of their plans to reform the House of Lords.

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

My Lords, on behalf of the whole House, I wish my noble friend a very happy 70th birthday. As to his Question, cost estimates depend on the content of the Bill. Therefore, the Government will publish full cost estimates when we introduce a Bill.

[Lord Lee of Trafford]

I thank my noble friend for his good wishes. My finest birthday present would have been for him to announce that the Government’s proposals were to be withdrawn because they are nearly friendless and wholly unnecessary.

Is my noble friend aware that the noble Lord, Lord Lipsey, a distinguished and recognised economist, has costed the Joint Committee proposals? The details have been sent to the Library and are freely available. He projects that the total cost of the recommendations will be nearly £500 million by 2020, broadly split between running costs of £300 million and election and referendum costs totalling £200 million—in other words, half a billion pounds in total. That is equivalent to the cost of 15,000 nurses’ salaries in one year. This £500 million compares with the total cost of running this House for the past five years of £91 million; it is five times as much. When the public wake up to this gross waste of money, will they not kick the proposed Bill firmly into touch?

[Lord Strathclyde]

My Lords, we will publish a Bill before the Summer Recess. When we do, we will have a full estimate of what a reformed House would cost. However, noble Lords would be wrong to assume that this will necessarily be an enormously expensive enterprise. After all, part of the purpose of reform is to reduce significantly the size of the House. However, we will make a full cost estimate when we publish the Bill.

[Baroness Boothroyd]

My Lords, the Prime Minister recently said that he had not ruled out a referendum on Lords reform. Bearing in mind that this House was told last May, after the country had rejected the AV system, that the cost of that referendum was around £120 million and still counting, what estimate have the Government arrived at for a referendum on Lords reform in these hard-up days?

[Lord Strathclyde]

My Lords, the Government are not convinced of the case for a referendum, even though it was a recommendation of the Joint Committee of both Houses, which reported earlier this year. The noble Baroness will have to be patient until we publish the Bill, which we will do relatively soon.

[Lord Soley]

My Lords, are the Government satisfied that detailed scrutiny of legislation will continue to be done in this House, regardless of whether it is elected in whole or in part?

[Lord Strathclyde]

My Lords, if we had an elected Chamber, I do not see why elected Members should not be able to give legislation exactly the same expert scrutiny as this House currently does. The noble Lord himself was formerly elected and I am sure that many of the skills that he uses now were skills that he learnt in another place.

[Lord Elton]

My Lords, it is simplistic to argue that to be democratic a House of Parliament must be elected. The importance of the House rests in its function, not in its appearance. Did not the experience of the Terrorism Bill 2006, when your Lordships prevented the House of Commons enacting a Bill that allowed one Secretary of State, having talked to one policeman, to lock up any private citizen for three months without any access to law whatever, show that the unelected House is actually the defender of democracy and should be retained as such?

--- Later in debate ---

[Lord Strathclyde]

My Lords, I hate to say it but my noble friend is rather straying from the original Question on the Order Paper. He makes a very valuable defence of the second Chamber, and the House of Lords in particular, over the past 10 years. However, given that if this House were to be elected it would be on a different basis from the House of Commons—with different constituencies and a different electoral system—there is no reason to believe that a second Chamber, so constituted, would not be able to do some of the very valuable things that this House has done in the past.

[Lord Kakkar]

My Lords, how can Her Majesty’s Government reassure the people of our country that in destabilising the relationship between your Lordships’ House and the other place their proposals for House of Lords abolition will not undermine the constitutional monarchy?

[Lord Strathclyde]

My Lords, I have every confidence that the robust nature of the British constitution would be able to bear well an elected second Chamber and it would have no impact whatever on the constitutional monarchy.

[Lord Tyler]

My Lords—

--- Later in debate ---

[Lord Tyler]

My Lords, returning to the original Question, can my noble friend assure the House that when an estimate is prepared in the light of the Government’s Bill in a few weeks’ time, we will have a true comparison of the future likely costs of not reforming the House along the lines of the Government’s Bill?

[Lord Strathclyde]

My Lords, I do not think that I can go quite as far as my noble friend wants. Yes, I believe that there will be a comprehensive breakdown of the costs of a reformed Chamber. As for the costs of the future of this House, that is more difficult to see, but the House needs to be aware that the total costs of this House are currently around £90 million a year, forecast to rise to £103 million in 2012-13.

[Baroness Hayman]

My Lords—

--- Later in debate ---

[Lord Brooke of Alverthorpe]

My Lords, is the Leader of the House aware that some Members of this Chamber believe that the present composition is unsustainable and needs reform? Is he also aware that it is my birthday today too?

[Lord Strathclyde]

My Lords, I am very glad that it is the noble Lord’s birthday. I am surprised that we have had no questions on age limits being introduced in this House. I join him in being one who thinks that the House should be reformed.

--- Later in debate ---

[Lord Cormack]

My Lords, I am grateful for that support. Does my noble friend accept that the present House is cost-effective, and does he deplore the indiscriminate attacks on the bishops? We appreciate their presence, believe that they perform valuable duties, and we do not expect them to sleep on the embankment.

[Lord Strathclyde]

My Lords, I entirely agree with my noble friend. Bishops are eligible for the daily allowance and all the travel allowances, like any other Peer. I think that the House regards the bishops as providing very good value.