High Speed 2: Electronic Deposit of Documents

William Cash Excerpts

Tuesday 11th July 2017 Commons Chamber

[The Deputy Leader of the House of Commons (Michael Ellis)]

I beg to move,

That, in respect of any bill relating to High Speed 2 that is read the first time in Session 2017–19 and to which the standing orders relating to private business are found by the Examiners of Petitions for Private Bills to apply, it shall be sufficient compliance with:

(a) any requirement under those standing orders for a document to be deposited or delivered at, or sent to, an office of a government department, body or person if it is deposited or delivered at, sent to or otherwise made accessible at that office in electronic form;

(b) any requirement under those standing orders for a document to be deposited with an officer if it is deposited with or delivered, sent or otherwise made accessible to that officer in electronic form;

(c) any requirement under those standing orders for a document to be made available for inspection at a prescribed office, or to permit a document to be inspected, if it is made available for inspection at that office, or is permitted to be inspected, in electronic form;

(d) the requirement under Standing Order 27(4) or 36(3) relating to private business to permit a person to make copies of a document or extracts from it, if there is provided to that person, on request and within a reasonable time, copies of so much of it as the person may reasonably require and such copies may, if the person so agrees, be provided in electronic form;

(e) the requirement under Standing Order 27(4) relating to private business for a memorial to be made on every document deposited under that Standing Order, if the memorial is made on a separate document;

(f) any requirement under Standing Order 4A(1), 27A(6) or 224A(8) relating to private business to make a document available for sale at prescribed offices, if it is made available for sale at an office in London.

That this Order shall not affect any requirement under those standing orders to deposit any document at, or deliver any document to, the Private Bill Office or the Vote Office.

That any reference in those standing orders to a document which is deposited, lodged, delivered or sent under those standing orders includes a reference to a document which is so deposited, delivered or sent in electronic form.

That any reference to a document in this order includes a reference to any bill, plan, section, book of reference, ordnance map, environmental or other statement or estimate.

The Gracious Speech gave notice of the Government’s intention to introduce a hybrid Bill to Parliament later this year to take forward the next phase of HS2. As a hybrid Bill it will be governed by the Standing Orders for private business. Parliament’s review of those Standing Orders, following the passage of the High Speed Rail (London - West Midlands) Act 2017, has not yet concluded and is the first significant review since 1948. It is therefore necessary to move this motion to update parliamentary procedure to reflect developments in technology since 1948.

I will briefly explain the changes, which replicate those authorised by the House in 2013 ahead of the introduction of the previous hybrid Bill. The House will be aware that, along with the HS2 hybrid Bill later this year, we will provide Parliament with an environmental statement setting out the likely significant environmental effects of the scheme and making proposals for alleviating those effects.

A considerable level of detail is involved in a project of this magnitude. We expect the statement to be up to 12,000 pages long. It is, of course, important that local communities can easily find out what the impact will be on their local area. However, current Standing Orders require us to deposit a paper copy of the document in every local authority area along the line of route. In this day and age that is inconvenient for the communities involved, especially for parish councils, many of which do not have sufficient space, so they ask us to deliver the document elsewhere—often to a library in a nearby town. That is why the motion allows for the electronic deposit of documentation for the HS2 hybrid Bill.

[Sir William Cash (Stone) (Con)]

I seriously oppose the project, which runs straight through my constituency. Will the Minister be good enough to give an undertaking that written material of the kind he describes will be provided? I understand why it should be in electronic form.

[Michael Ellis]

It is a permissive power. It does not require documents to be deposited in electronic format only. If a deposit location wants all the documents in hard copy, HS2 Ltd will provide them in hard copy, but the motion allows for the electronic deposit of documentation for the HS2 hybrid Bill. Electronic documentation will, of course, make it easier for communities along the line of route to find the information most relevant to their area without having to work through an otherwise enormous document.

[Michael Ellis]

I do not accept my right hon. Friend’s characterisation. On previous occasions when there have been storage problems, nearby community libraries have been asked to store the hard copies, so I anticipate alternative mechanisms could be put in place.

It should be noted that this is a permissive power. It does not require documents to be deposited only in an electronic format, so if a location wants all the documents in hard copy, HS2 Ltd will provide them in hard copy. In all cases HS2 Ltd will make the key documents, such as the Bill itself and the non-technical summary of the environmental statement, available in hard copy.

Further, members of the public will be able to telephone HS2 Ltd to ask for free hard copies of the non-technical summary, the local community area report and the local maps. If a deposit location would like documents in electronic form but does not have the equipment to make them available to the community, HS2 Ltd will provide that equipment at its own expense.

This is a wholly sensible modernisation of Standing Order requirements that were originally conceived in the 19th century, and it is about making it easier for people to engage with the hybrid Bill process, thereby ensuring the most effective decision making by Parliament.

[Sir William Cash]

My hon. Friend has quietly referred to the maps, but of course there are also the specifications and the limits of deviation. He knows perfectly well how much all this involves. May I have an assurance that, if required, all those things will also be made available in hard copy?

[Michael Ellis]

Yes, that is a reasonable request.

This is a wholly sensible modernisation of Standing Order requirements, and it is about making it easier for people to engage with the hybrid Bill process. I commend this motion to the House.

--- Later in debate ---

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

The House will not be surprised that I rise to my feet to talk about this small motion, but colleagues sitting alongside me may be surprised to learn that I rise to welcome it. As a veteran of the hybrid Bill process, I can say that there is no doubt that it is arcane and has tremendous problems with its practices and procedures. My constituents, and many constituents of other hon. Members, certainly have been at the mercy of the hybrid Bill process, and I shudder when I hear a Front Bencher say that the environmental statement will be at least 12,000 pages long. I have experienced something just as large for phase 1 of the HS2 process, and I can say that these are indeed very opaque documents. Will the Deputy Leader of the House say whether these will be sufficiently navigable instruments, as this is being served up to people electronically? I found, as did many of my constituents, that the documents presented by HS2 Ltd were very difficult to navigate and hard to find. Therefore, I would like assurances that some improvements have been made to the way in which people can move around these very large documents.

The Deputy Leader of the House has already given assurances that nothing in tonight’s order will prevent communities from accessing paper copies. We must not forget that there is a digital divide. Many of the people affected by this project are elderly and do not access large documents easily on computers. It is very important that they have access, free of charge, to those sections of the documentation that relate to their properties or the area around that part of the route.

[Sir William Cash]

Does my right hon. Friend agree that when this material comes electronically and then has to be turned, at a person’s home or office, into the kind of material that makes sense and that they can read, the complexity of the documents—the design specifications and all the other things—and the monumental volume of paper becomes very daunting indeed? To refer back to our previous debate on consultation, does she also agree that HS2 Ltd, as I said to the project manager the other day, had better get its act together on consultation and do it properly?

[Mrs Gillan]

It is clear to me and many others who are involved with the project that HS2 Ltd needs to improve not only its consultation processes but its communications processes, which are still appalling in many instances.

--- Later in debate ---

[Sir William Cash (Stone) (Con)]

I have already made a couple of interventions, but I wish to say that I am extremely grateful to my very distinguished and right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) for all the work that she has done on phase 1, which has set a pattern for what is to be done on the second phase, which so directly and detrimentally affects my own constituency. Before the Minister replies, may I make one suggestion? Birmingham has been mentioned. If we take the line between Birmingham and Crewe, the most central place happens to be Stafford in Staffordshire. Will my hon. Friend be good enough to give serious consideration to using the county council facilities, which are extremely good, for copying and all that sort of thing? People from my constituency, at both ends of the line, would be able to visit that central point with a minimum amount of inconvenience. That is all that I need to say for the time being.

--- Later in debate ---

[Michael Ellis]

It is fair to say that all reasonable requests will be considered. It is clear and transparent that reasonable requests will be met. It is important that requests are not vexatious, and I know that my right hon. Friend does not want any doubt about that. Reasonable requests will be met, and further consideration can be given to that in due course. This is a sensible modernisation of 19th-century Standing Orders, which have not undergone radical reform since 1948.

[Sir William Cash]

I know that a lot of questions were put to the Minister, but would he respond to the question of whether Stafford and Staffordshire County Council buildings are a convenient place for people to go for documents?

[Michael Ellis]

My right hon. Friend the Leader of the House is alive to all the issues that have been raised, including the localities and local communities involved. My hon. Friend the Member for Stone (Sir William Cash) asked whether Staffordshire would be considered, and I can tell him that it will be.

Question put and agreed to.

Ordered,

That, in respect of any bill relating to High Speed 2 that is read the first time in Session 2017–19 and to which the standing orders relating to private business are found by the Examiners of Petitions for Private Bills to apply, it shall be sufficient compliance with:

(a) any requirement under those standing orders for a document to be deposited or delivered at, or sent to, an office of a government department, body or person if it is deposited or delivered at, sent to or otherwise made accessible at that office in electronic form;

(b) any requirement under those standing orders for a document to be deposited with an officer if it is deposited with or delivered, sent or otherwise made accessible to that officer in electronic form;

(c) any requirement under those standing orders for a document to be made available for inspection at a prescribed office, or to permit a document to be inspected, if it is made available for inspection at that office, or is permitted to be inspected, in electronic form;

(d) the requirement under Standing Order 27(4) or 36(3) relating to private business to permit a person to make copies of a document or extracts from it, if there is provided to that person, on request and within a reasonable time, copies of so much of it as the person may reasonably require and such copies may, if the person so agrees, be provided in electronic form;

(e) the requirement under Standing Order 27(4) relating to private business for a memorial to be made on every document deposited under that Standing Order, if the memorial is made on a separate document;

(f) any requirement under Standing Order 4A(1), 27A(6) or 224A(8) relating to private business to make a document available for sale at prescribed offices, if it is made available for sale at an office in London.

That this Order shall not affect any requirement under those standing orders to deposit any document at, or deliver any document to, the Private Bill Office or the Vote Office.

That any reference in those standing orders to a document which is deposited, lodged, delivered or sent under those standing orders includes a reference to a document which is so deposited, delivered or sent in electronic form.

That any reference to a document in this order includes a reference to any bill, plan, section, book of reference, ordnance map, environmental or other statement or estimate.

London Stock Exchange

William Cash Excerpts

Tuesday 21st February 2017 Westminster Hall

[Sir William Cash (Stone) (Con)]

I beg to move,

That this House has considered the future of the London Stock Exchange.

It is a pleasure to serve under you, Mr Hollobone. I have brought this matter for debate because the proposed merger between Deutsche Börse and the London Stock Exchange raises issues of national interest and, in my opinion, it is a slam dunk that the merger is not in the national interest.

The London Stock Exchange Group owns several key market components in the United Kingdom, including the London Stock Exchange itself, a recognised investment exchange regulated by the Financial Conduct Authority and the London Clearing House, which is supervised by the Bank of England. A number of subsidiaries of the group are also regulated by the Financial Conduct Authority. The proposed merger requires regulatory approval by the Bank of England and the Financial Conduct Authority. The most significant approvals are those required, first, from the Bank of England in connection with the London Clearing House, which I understand to be 57% owned by the London Stock Exchange, and which conducts euro clearing, and, secondly, from the Financial Conduct Authority with respect to the London Stock Exchange, which is fundamental to the City of London’s capital markets.

The London Clearing House is one of the two main clearing houses in the UK and clears all major currencies, including the euro. As I understand it, both the German and French Governments have indicated a wish to strip euro clearing out of the City. All of that has significant political involvement because it would facilitate in due course a substantial movement of UK market infrastructure to the continent and would permit Germany and France, in the context of Brexit negotiations, to achieve German and French objectives that will undermine the UK’s political leverage during those negotiations.

Her Majesty’s Treasury has certain powers to direct or make recommendations to the Bank of England or the Financial Conduct Authority to take action or not. The Prime Minister is First Lord of the Treasury, and the Chancellor of the Exchequer of course has fundamental responsibilities. The Treasury has powers of direction over the Bank of England under section 4 of the Bank of England Act 1946. It may give directions to the Bank following consultation with the Governor

“as…they think necessary in the public interest.”

The Treasury may direct the Bank to exercise its powers not to approve the acquisition of what is described as a “qualifying holding” in the London Clearing House.

It is not known whether the Bank of England has already given its approval, although the Treasury could direct such a decision to be reversed on the grounds of public interest. The powers include determining that the proposed deal is not a normal commercial deal in the light of the Brexit negotiations and to take account of the involvement of the state of Hesse, which has shown a desire to boost Frankfurt as a hub at the expense of London, which is indicated in the report of Professor Dirk Schiereck, commissioned by Deutsche Börse in January 2017. In the past few days a Minister in Hesse indicated that the headquarters of the merged group should be in Germany:

“The reasons for the headquarters being in Frankfurt are crystal clear.”

The objective could not be clearer. It is inconceivable, in the UK national interest, that the London Stock Exchange should be regulated in and operated out of Germany as we leave, and having left, the European Union. There are also questions, as yet unresolved, surrounding the new chief executive officer, who is under investigation for potential insider dealing in connection with the London Stock Exchange deal, and the regulatory relationship between the United Kingdom and the EU which forms part of the Brexit negotiations. It would not be in the public interest for the combination of the two groups to be achieved immediately in advance of those negotiations, since that would give commercial parties operating at the behest of German political masters the ability to remove the rug from underneath the UK’s feet without regard to the negotiated outcome, or to threaten to do so during the negotiations unless the UK made certain concessions.

If the deal goes through, the combined group will be able to bulk up euro clearing and exchange and business clearing generally in Frankfurt at the expense of London. Given the declared political objective to promote Frankfurt, Paris and the eurozone, that is not an outcome in the UK’s national interest.

[George Kerevan (East Lothian) (SNP)]

The hon. Gentleman is, as ever, making a logical and compelling case, but is he suggesting to the House that the owners and management of the London Stock Exchange are willingly entering into a merger that will lead to the transfer of all of their business to another country?

[Sir William Cash]

There is severe detriment to our national interest in allowing a merger of that kind when the London Stock Exchange and its group are the jewel in the crown of the City of London. Any merger raises matters of national interest such as, first, financial stability and UK taxpayer liability. The merger would create a new financial market infrastructure group controlling, inter alia, about 90% of European-listed and over-the-counter derivatives transactions, but operated for the benefit of shareholders, not users, with an unprecedented complexity of risk profile and significant uncertainty as to whether the UK taxpayer would pick up the bill were part of the combined infrastructure to fail. The uncertainty created by the lack right now of a clear Brexit deal adds considerably to the stability and taxpayer risks.

Secondly, there is loss of control of a key UK asset post-Brexit. The London Stock Exchange is a major centre of global financial markets: more than 500 foreign companies are listed in London, which is 20% of global foreign listings; and it has the highest equity market capitalisation, 170%, in relation to the GDP of all the largest economies. Majority control of that vital business will pass to Deutsche Börse shareholders, who will own 54% of the new group post-merger. Passing control of the London Stock Exchange to Deutsche Börse in the context of Brexit is not in the national interest and might undermine our negotiations with the 27 member states as we leave the EU.

The issue is not where the headquarters of the new company is located technically. I am told that formally moving the HQ to Germany, as the state of Hesse has insisted, is not likely given the need for a significant shareholder vote, but that is beside the point. The real issue is who calls the shots and in whose interests critical decisions are made. It is no answer to say that the HQ will remain in the UK if the reality is that the people really in charge are flying in for the day from Germany. Decisions must be taken in the UK and in the interests of the UK.

My third point is about competition concerns. The only substantial remedy offered by the parties to the EU Commission to allay concerns about significantly impeding effective competition is the sale of the central counterparty, Clearnet SA, based in Paris, and part of the LSEG. No disposals have been offered by Deutsche Börse, which owns trading platforms, central counterparties and settlement systems that have been integrated into a single vertical silo in Frankfurt. That is not sufficient, and I am concerned that the outcome of the European Commission’s review of the proposed merger will be determined by the EU’s political priority to ensure that Germany has control over London’s capital market infrastructure, instead of by genuine market concentration and anti-trust concerns.

Fourthly, there has been a lack of public scrutiny and industry comment; there has been little proactive support for, or indeed criticism of, the merger from the main UK financial institutions. That is not surprising, since the parties have given 12 major investment banks a role in the deal and they are destined to share about £353 million in fees if the deal succeeds. There has also been little comment by the UK Government so far on a deal concerning a major UK asset, although they still have a public interest role to play under the Enterprise Act 2002. We need to know why it was, and who decided not to refer the merger when it first came before the Secretary of State. Vast profits and sums of money are involved, and some stand to gain financially on a grand scale. All of that can be ascertained, but the national interest must prevail.

Precious little has been put into the public domain to suggest that the deal is remotely in the public interest. On what possible basis can it be argued, in particular post-23 June and the passage through the House of Commons of the European Union (Notification of Withdrawal) Bill, that the merger is in the national interest? Furthermore, under section 1JA of the Financial Services and Markets Act 2000, the Treasury

“may at any time by notice in writing to the FCA make recommendations to the FCA about aspects of the economic policy of…Government”,

including how to ensure compatibility with the FCA’s “strategic objective”, to ensure that the London Stock Exchange functions well, and how to advance the FCA’s objective to ensure the soundness, stability and resilience of the UK’s financial system, which is defined as including the London Stock Exchange and the London Clearing House.

[James Duddridge (Rochford and Southend East) (Con)]

Has my hon. Friend thought about what would happen, were the merger to go ahead, if the eurozone collapsed, given some of its fundamental difficulties? Having extricated ourselves from involvement in the euro and, on Brexit, from the European Union, would the merger not lock in some of the potential downsides to the UK equity and capital markets without gaining us any of the upsides?

[Sir William Cash]

As I have said, the withdrawal Bill is quite clear. We will leave. That means that we will be insulated from the catastrophe that could occur if the eurozone collapsed. I could enlarge that point, but I will not for the time being.

There is another statutory requirement to ensure the principle of the desirability of sustainable growth in the UK’s economy in the medium or long term. Those are all statutory functions, and I strongly suggest that Her Majesty’s Treasury should decide—in fact, I urge it to—that it is not in the UK’s interests to allow a deal where there is a clear intention to take action that would cause systemic risks in the UK and be detrimental to UK tax revenues.

I move to the powers of the Bank of England, which is under a judicially reviewable statutory duty in respect of the test of approval for any acquisition of the London Clearing House. Under the European market infrastructure regulation, the test for approval in general terms for the purpose of ensuring the sound and prudent management of the London Clearing House raises questions of the suitability of the proposed acquirer and the soundness of the proposed acquisition, including the person who will direct the business of the London Clearing House. It also includes questions relating to whether the Bank of England would be able effectively to supervise, and several other factors. All those are in question in this instance.

I turn to the powers of the Financial Conduct Authority, which is required to approve the acquisition of the London Stock Exchange because it involves the acquisition of the “control” over the LSE by the new holding company. In those circumstances, the FCA has to consider the suitability of the new group holding company and the financial soundness of the acquisition to ensure sound and prudent management, and have regard to the key influence that the new group holding company will have on the London Stock Exchange. There are grave concerns about all those matters that pose a threat to the sound and prudent management of the London Stock Exchange, including questions relating to moving euro clearing out of London. The removal of euro clearing to Germany would undermine UK economic growth, because it may lead to the movement of other currency clearing out of the UK and undermine the City’s success. Moving the new holding company to Frankfurt would also be against the UK national interest.

[George Kerevan]

I grant that there is an issue about the removal of all or a substantial amount of euro clearing to the European Union jurisdiction, but that may come anyway as a result of Brexit; it is not dependent on whether this merger takes place. Indeed, one could argue that the merger might act as a barrier to such a move.

[Sir William Cash]

I was against the merger before Brexit, and I have become even more so since. I emphatically repeat my view that it is against the national interest, and I will not in any way resile from that point.

This deal would operate against the UK’s national interest in several ways. For example, the driver behind the merger is to consolidate as much market activity across the whole value chain into as few liquidity pools as possible. The reason given for that is to allow customers—primarily the world’s largest banks—to manage their capital and collateralisation requirements as efficiently as possible, particularly in the illiquid and untransparent world of OTC interest rate swaps. The most efficient way of achieving that is to have one dominant silo. This merger would bring together the two pre-eminent trading and post-trade silos in Europe, the London Stock Exchange and Clearing House and Eurex, which is owned by Deutsche Börse. One of those silos would inevitably prosper disproportionately, at the strategic and economic expense of the other. Given that a German chief executive officer would immediately be in place—whether that is the presently proposed CEO or not—and more than 54% of the shares would be owned by Deutsche Börse shareholders, and given the strength of Eurex’s existing listed derivatives clearing house, there is a very meaningful risk that the London Stock Exchange and the London Clearing House, and therefore the City as a whole, would be at the thin end of the wedge.

In the real world of markets, this works as follows. There will be no big announcements, no formal closures and no notice of intention to leave. Rather, liquidity will be shifted from one place to another through the creation of incentives and tipping points. Mirror contracts will be created that mimic what is on offer in London. Special arrangements for collateral and cross-margining in the favoured venue will be put in place. Without anyone particularly noticing, liquidity will shift away from London to the continent. Once that siphoning of liquidity begins, it will be unstoppable, and without liquidity there is no market.

Prior to Brexit, when this deal was first negotiated, that was a very attractive outcome for the LSE’s German partner. Post Brexit, control of the combined group and the shift of London’s business to Europe is an absolute necessity for Deutsche Börse and its national stakeholders. The importance of that is shown by the ever louder calls from German politicians and regulators for the combined group to be headquartered in Frankfurt. Controlling the LSE’s direction is key to Frankfurt successfully becoming the new financial centre of Europe—clearly at London’s expense. Even if the headquarters are maintained in the UK, there will be a German CEO, a majority of shares will be held by Deutsche Börse shareholders and there will be a massive political push from Frankfurt, which will lead to decisions being taken behind closed doors, against the UK’s interests.

The exchanges themselves have suggested that that loss of liquidity from London will not happen, and the solution is a so-called liquidity bridge. No market participant—apparently even the companies themselves—seems to understand what is meant by that or how it would be delivered. No reliance should be placed on it.

Finally, the acquisition of LCH.Clearnet SA by Euronext, which is largely French and Dutch-controlled and headquartered in Paris, is another political wildcard. That would enable France to exert much greater political force behind its push for euro clearing to relocate to Paris, again potentially creating systemic risk and dangerous uncertainty in the UK’s markets.

This transaction has the clear potential to strip a key activity out of the City of London. It should certainly not be nodded through in the midst of Brexit negotiations. Why weaken the City before we have even started the process of exiting the EU? I have mentioned the Enterprise Act 2002, which I understand can still be used in the public interest, including by reference to the criterion of UK financial stability.

In an important article published in the Financial Times on 13 February, Jonathan Ford makes it clear that the €29 billion merger was, as we know, conceived before the Brexit vote. The deal was supposed to take advantage of a converging EU rule book in the single market by drawing together Europe’s two most vibrant securities markets and their clearing activities, which are the financial plumbing of the system. The aim was to create

“a single…‘pool of liquidity’”

that captured scale economies, in competition with the Chicago Mercantile Exchange.

Jonathan Ford argues that to make their own common pool a reality, Deutsche Börse and the London Stock Exchange would have to be very ambitious. He doubts whether that is feasible. He indicates that there is a serious problem, namely, that

“clearing operations have a wider impact on the functioning of capital markets; not just the management of systemic risk but on the very competitiveness of financial centres.”

He states:

“Given the importance of finance to the post-Brexit economy,”

the United Kingdom has a “strong interest” in ensuring that the deal is not damaging to London as a financial centre. He argues that the Bank of England and the FCA still have vetoes, and the Government can

“determine the outcome in the wider public interest.”

He suggests that the Government would be wise to intervene to prevent the loss of future business, and indicates that it would be better to take account of the Brexit negotiations as they proceed.

The UK has long been in favour of foreign direct investment, which increases productive capacity through capital investment, transfers of technology, skills and better management. Deutsche Börse’s acquisition of LSE is not FDI. It is not cross-border investment in the UK by residents and businesses from another country with the aim of establishing a lasting investment in the UK. FDI does not cover the asset stripping and systemic risks associated with the proposed merger. Foreign investment in UK infrastructure, including in the LSE, is welcome—the LSE of course already has many foreign shareholders—but this merger must not be allowed to clamp down on competition, gut the UK’s financial infrastructure and cause significant and lasting damage to the UK. It is understood that the European Commission has already commenced proceedings and the London Stock Exchange and Deutsche Börse have received a limited statement of objections to the proposed deal.

In conclusion, I urge the Government, the Bank of England and the Financial Conduct Authority, and other regulatory authorities, including those in Germany and Brussels, to recognise that whatever the reasons may have been for the merger before 23 June 2016, the reasons since then for determining and resisting it are extremely strong and should be employed.

[Several hon. Members rose—]

--- Later in debate ---

[George Kerevan (East Lothian) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. This is an important debate, and we have discovered that an hour is not enough. I hope we can take it into the main Chamber at some point because a lot of issues need to be cleared up.

The hon. Member for Stone (Sir William Cash) is correct: this is a national issue and we have to take the national interest into consideration. The track record of takeovers and mergers in recent years has actually proven that, more often than not, the national interest has not been well served. There are a number of instances, particularly in financial services at this crucial moment in time, where dangers have to be brought into the light. The takeover by MasterCard of VocaLink, our main payments system in the UK, is systemically dangerous. It is also a technology raid, because we have the best payments technology in the world—that is another issue.

We have to judge mergers on a case-by-case basis. I say with due respect to everyone—I am not trying to make a silly debating point—that, if there has been a move to politicise this particular merger, I am afraid it has come from those who supported Brexit. They are in danger of finding problems where there are none to be found. Why would the owners of the London Stock Exchange Group walk into a merger like this if it was so disastrous for their business, and if it was so patently obvious that they were going to be out-regulated and that their business will be shifted away to another part of the world? If we look at it from that perspective, it ensures a bit of common sense in the debate.

[Sir William Cash]

Will the hon. Gentleman give way?

[George Kerevan]

I would dearly love to give way, but given the little amount of time I have, I will not. As things move on, I hope we will have the chance for further discussion.

Hon. Members might be interested to know who actually owns the two parties in the proposed merger. In fact, the bulk of the London Stock Exchange Group’s ownership is not British. It is the Qatar Investment Authority, it is BlackRock, which is a major American private equity group, and it is Invesco, which is headquartered in Bermuda—we can all ask why that is. It is not actually the jewel in the crown of the UK, as was mentioned. It is already an internationalised organisation.

If we were to ask who owns Deutsche Börse, the answer is that the majority is owned by City of London institutions. That underlines the fact that, while there are hundreds of small exchanges all over the world, particularly in Asia and Africa, the big exchanges are owned by global institutions, and they are about mobilising global amounts of capital. In particular, they are no longer simply about narrow trading in equity. They are fundamentally about finding the capital for exchanges in derivatives and interest rate swaps, which makes the whole global capital market work. For that, the capital needs to be pooled. That is why for the past 15 to 20 years, right across the globe, there has been a constant move to merge and in some way consolidate the large exchanges. As we know, it has not been easy for political and national interest reasons, but that is the way the market is going. I put it to Members that it is either this merger or another merger—a stand-alone London Stock Exchange Group is no longer tenable.

That brings me to the final point worth making. Aspects of the structure of the merger have to be discussed, particularly post-Brexit. For instance, it seems strange that it is 54% to Deutsche Börse and 46% to the London Stock Exchange, rather than 50:50. That should be discussed, but in the end, this or some other merger will go ahead. Let us look at the specific technical issues, but let us not politicise this issue, because it is the nature of the way these global markets are working.

--- Later in debate ---

[Sir William Cash]

I am glad that the Government will consider the matter carefully, and that it is clear from this debate that everyone accepts the need to examine the issue rigorously, as so many have urged on me since I introduced the proposals. We look forward to that further examination, which may well be on the Floor of the House.

I do not have time to go into all the details of the essential questions now; I set them out in my speech. On the question of who calls the shots and the location of the headquarters, as I said, formally moving the headquarters to Germany would not be likely given the need for a significant shareholder vote, but that is beside the point. The real issue is who calls the shots and in whose interests critical decisions are made. It is no answer to say that the HQ will remain in the UK if the people who are really in charge just fly in from Germany for the day. Decisions must be taken in the UK, in the interests of the UK. I hope that the Government will take a proactive position on all of this.

I do not agree with the Minister’s assessment of the impact of the articles of association. I have been a lawyer for a long time, and I know that such things have an extraordinary capacity to disappear into the wind. I am not impressed by the 75% argument, whether it involves directors or the combined group. The key question is who calls the shots. The idea of 50% of the directors coming from each side is interesting, but basically it all comes down to the national interest.

With regard to the powers of the Treasury under section 4 of the 1946 Act, the European market infrastructure regulation is a European regulation. I inform the Minister, just in case he had not noticed, that we are leaving the European Union, which means that the European Court of Justice will no longer have a role in relation to the regulation. I do not say this cynically, but I strongly suggest that he goes back to his lawyers and assesses that point. The European Court of Justice will not have any jurisdiction over EMIR once the matter has been dealt with by our exiting the European Union, the repeal Bill and other measures. I thank you, Mr Hollobone, for your chairmanship of this debate.

Question put and agreed to.

Resolved,

That this House has considered the future of the London Stock Exchange.

Leaving the EU: Financial Services

William Cash Excerpts

Thursday 3rd November 2016 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

I should say at the outset that I am chairman of the all-party group on wholesale financial markets and services, and that I worked in the industry for a few years before I entered the House.

I congratulate the hon. Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) on securing this incredibly important debate. We are concentrating on an industry in which we have the greatest comparative advantage. It is important for the economy not just because it means that we can help public services, but because, as the hon. Lady pointed out, it is the lifeblood of many other industries. She has set out the facts about how many people it employs. It is the largest taxpaying sector and the largest exporting sector.

The sector is also the one with the largest trade surplus with the European Union. It is absolutely clear that one reason for that is that we have had access to and membership of the single market. London was always a financial centre, but membership of the single market has allowed it to become the undoubted capital for financial services not just in Europe, but arguably in the world. We have had a common set of regulations, we have broken down barriers, we have attracted huge investments, and global operations have moved to Britain. Leaving the single market or losing access to it would be calamitous for the financial services sector.

Some colleagues have argued that immigration was a key reason why we voted to leave the EU on 23 June, and that freedom of movement must therefore be at the forefront of our thoughts. I have heard colleagues argue that we should say to the EU 27, “Trade on these terms or we will leave on WTO terms.” Such an outcome would make access to the single market impossible. That would be hopeless for financial services, because we are already seeing, in both analysis and actuality, the impact of what has happened. The hon. Member for Streatham (Mr Umunna), who is no longer in the Chamber, mentioned euro clearing. We have already seen euro clearing for currency dealing leaving London, and euro clearing for securities would leave as well. As the hon. Member for Leicester West pointed out, many institutions are drawing up contingency plans for that.

Last night, I attended a meeting of the National Institute of Economic and Social Research. Its most recent analysis shows that if we leave the EU on just WTO terms, which exclude most financial services, London would lose 60% of financial services business with the EU. I do not think that anyone, whatever their view, would regard that as anything other than a calamitous result.

The hon. Lady was right to concentrate on passporting. Passporting is necessary. It is not just a case of putting up a brass plaque on a door somewhere else in Europe; since the change in financial regulations, there is much more to it than that. It would be much more difficult to establish trade functions across Europe if we gave up passporting. The Chancellor told the Treasury Committee two weeks ago that he accepted the importance of passporting, and I hope the Economic Secretary will assure us that the Government recognise that.

Passporting is not only important for the banking industry. The Association of British Insurers put out a brief this week—I also met its representatives this week—about the ability of businesses throughout the UK to carry out insurance business across the world, and how they will be unable to do that if we lose passporting.

[Sir William Cash (Stone) (Con)]

I am sure my hon. Friend is aware that there is not a single market in insurance, and that 87% of all insurers operate through subsidiaries in the EU, rather than in branches dependent on passporting?

[Stephen Hammond]

My hon. Friend would be right to claim that about asset management, but I think he is confusing the two industries. The London Market Group said this week that although the number is not as high as that for banking, the amount of business done in the EU is substantially higher than the number my hon. Friend cites. I am happy to ask the LMG to come and discuss that with him.

If the Government are prepared to be rational, a solution can be negotiated, and that is what many people will want to get out of this debate. We might be able to have cross-industry work visas that would involve some limit on access—that would fulfil the requirement of those who want to control freedom of movement—but would also allow us some access to the single market.

As the hon. Member for Leicester West pointed out, an equivalence regime would need to be established, but such regimes are fraught with difficulty. The issue is whether we could establish a bilateral equivalence regime similar to what we have with America. A regime dominated by the European Court of Justice would not be satisfactory for the financial services industry and would wind back our prospects substantially. I would have liked to have said more about that, but I will heed the strictures of the Chair.

It is absolutely clear that the Government must give some guidance on transitional arrangements. The industry cannot wait for the end of the article 50 process. This is a bridge: the Government might not be able to set out exactly where we are going, but they must show that they understand the importance of financial services to this country and our position globally by giving the sector some certainty that after the article 50 period—it is unlikely we will be able to do a deal within two years—they will have transitional arrangements in place. That would mean that wherever we end up, the financial services sector can start its journey over the bridge.

I have no doubt that the Prime Minister and the Economic Secretary understand the importance of this industry to our country. I also have no doubt that we can negotiate a hybrid deal through which we can retain jobs and maintain London as Europe’s financial centre.

--- Later in debate ---

[Sir William Cash (Stone) (Con)]

There seems to me to be a great deal of overstatement and exaggeration in this arena. The media have tended to overstate difficulties in this area to a very significant extent.

This is about confidence. For nearly 400 years, up to our entry to the EU under the European Communities Act 1972, the United Kingdom was able to run one of the most effective—if not the most effective—financial services centres, the City of London. The idea that somehow or other, because of the intervention of the European Union, things will get better is completely outweighed by the disaster area and dysfunctionality that the EU now represents.

Only a few days ago, in Bratislava, I heard the chairman of the European Parliament’s Committee on Budgets saying that the EU needed an “electric shock”, that there was far too much regulation, that it was far too intrusive, and so on. The chairman of ECOFIN said that the EU was facing the biggest economic and political crisis in modern political history. All that is true. The idea that we would not have to leave the European Union—thank heavens the British people made their own judgment about that—and the construal of our leaving the European Union as a disaster in itself simply belie the facts.

The reality is that EU legislation is deeply embedded in the financial services sector. Just to state the obvious, not only are we obliged under sections 2 and 3 of the 1972 Act to absorb all the legislation—I warned in a letter to the Financial Times in 2008 that that would lead to the kind of difficulties we are now experiencing with regard to financial services—but because of the Court of Justice we have to obey all the regulations. The massive regulatory overkill of the whole of the financial services sector as a result of that arrangement is an undoubted disadvantage. There are huge benefits to be gained by being outside the European Union, which I will come to in a moment.

[George Kerevan (East Lothian) (SNP)]

Surely the hon. Gentleman is aware that most EU bank regulation—especially since 2008—has been at the behest of the G20, so we will be subject to it whether we are in the EU or not.

[Sir William Cash]

The problem that the hon. Gentleman has perhaps not quite taken on board is that because of the European Communities Act there is a legislative requirement for us to accept those rules. Outside, we will, I hope, be able to benefit not only the United Kingdom but the EU, as I will come on to in a moment.

We only have to look at places such as Singapore and Hong Kong to understand that one does not have to be in the European Union to have a successful financial services sector and compete in the global marketplace. The same applies to New York. The objective must be to keep the financial markets open throughout the European Union as a matter of mutual concern throughout the UK and the other 27 member states. Breaking up the London system would involve much greater costs for everyone. Europe would end up far worse off, in my judgment—and that of many others, too—if the financial sector migrated to New York, Singapore or Hong Kong.

The passport is not specific to any one aspect of the financial services field. It works best in relation to banking accounting for about a fifth of annual banking sector revenue. It works less well in relation to asset management, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned. It is vital to understand that there are subsidiaries set up all over Europe carrying on the business of other countries irrespective of a passport. A significant amount of EU assets are already in Dublin and Luxembourg and their management—this is the key issue—is run from the UK. Indeed, on a recent assessment I have read, only 7% of assets managed in the UK are thought to be threatened by the loss of the passport.

There is not a single market in insurance at all. I appreciate that my hon. Friend might wish to come back to me on that, and I am very happy to talk to the people he mentioned in reply to me, but I simply make the point that we are not always dependent on the passport. There is a special problem regarding Lloyd’s of London, but I am informed that the pool of underwriters across the EU amounts to only 11% of the market’s gross written premium, and only 3% is directly reliant on the passport.

We have three main alternatives: equivalence, bespoke agreements and local arrangements. Equivalence is granted by the European Commission. The Commission is guardian of the treaties and has the legal clout that we will get away from when we vote to leave, so equivalence would not apply to us if we left the EU. But we have the same regulations as the EU, and under the repeal Bill, which I put together just before the referendum and am glad the Government are so interested in, we would be able to run parallel operations where it was in our mutual interests to have regulatory arrangements in the UK equivalent to those elsewhere in the EU—and, indeed, internationally, as well.

As regards bespoke agreements, we have the potential to secure an agreement similar to that with Switzerland, for example. If no cross-border access arrangement is made, firms will still be able to set up subsidiaries. That would, I have to admit, cost money, but it would not be disproportionate. I do not want to go into the details of a private conversation so I will simply say that I got that straight from some very senior bankers the other day. It boils down to this: we can arrive at an arrangement similar to Switzerland’s or at a free trade agreement. Of the two, I must admit I prefer the latter.

--- Later in debate ---

[Joanna Cherry]

Yes, I am concerned about that. Edinburgh’s reliance on financial services is 23.8%, compared with 18.9% in London, 17.3% in Brussels and 17% in Amsterdam. By comparison, Glasgow’s financial services sector is worth about 12.4% to its economy.

This is not fearmongering. Paris and Frankfurt are already angling for some of the jobs that may leave London and Edinburgh if we leave the single market. I attended a briefing last week at which the Irish ambassador spoke. He pointed out that while Britain leaving the European Union poses some problems for the Republic of Ireland, it will also provide some fantastic opportunities for Dublin to attract jobs that we really need in our financial sectors across the UK. In Edinburgh, we really want to hang on to those jobs.

I am happy to say that a lot of people in my constituency are employed in legal and accounting services, which is what I used to do before I came to this place. More than 3,000 of my constituents are employed in the legal services sector. Across Edinburgh, that figure for the legal and accounting sector is closer to 10,000. The Law Society of Scotland has its headquarters in my constituency, and the Faculty of Advocates, of which I am non-practising member, has its headquarters in the neighbouring constituency of Edinburgh East. A lot of lawyers and other people who work in law firms live in my constituency and are worried about the impact of Brexit on legal services. There are many aspects of EU law that have particular relevance to the legal system and professions, including the directive on the mutual recognition of diplomas, the lawyers establishment directive and the lawyers cross-border provision of services directive.

[Sir William Cash]

Does the hon. and learned Lady recognise—I imagine she might—that there is a certain circularity in her argument? It is not surprising that the legal profession inside the European Union, which is concerned about European law, would want to protect that particular part of their activities. She could perhaps be a little more generous in understanding that those who want to leave might actually end up with laws that are made in this place.

[Joanna Cherry]

That is not what I am actually talking about. I am talking about the way in which European Union law has enabled Scots lawyers, English lawyers and lawyers across these islands to practise across Europe not for their benefit but for the benefit of their clients. That is the point. It is also to the benefit, as earlier speakers pointed out, of the financial services sector and to the British economy in general. This is not naked self-interest on the part of the lawyers. Lawyers depend on their clients to make a living. If lawyers are not able to practise across Europe easily, they will not be able to provide such a good service to their clients. That does not just apply in the financial sector. It covers all sorts of areas, including, very importantly, child and family law.

In Scotland, the Law Society of Scotland will be urging the UK Government and the Scottish Government to argue in negotiations that the current arrangements for lawyers to be able to practise in the European Union should be retained. It would be very disappointing if the only route for lawyers to be able to practise in Europe in future would be to requalify in other EU jurisdictions and go through the cumbersome processes that we have done away with as one of the many benefits of being in the EU.

Clearly, the best way to protect the legal and financial services in my constituency and in the city of Edinburgh is to remain part of the single market. That would be the easiest way to give comfort to those sectors. Of course, we are not able to give any comfort to those sectors, because the Government “do not want to give a running commentary”. However, it appears, as the result of a legal decision today, that the Government may in due course be forced to come to this democratically elected Chamber and tell us a little bit more about what their plans are. It is worthy of comment that that is not as a result of European judges sitting in Brussels, Luxembourg or Strasbourg. It is the result of English judges sitting in London. As a Scots lawyer, I wish to pay tribute to those English judges for the decision they have reached.

--- Later in debate ---

[Chris Evans (Islwyn) (Lab/Co-op)]

I begin by congratulating my hon. Friends the Members for Nottingham East (Chris Leslie) and for Leicester West (Liz Kendall) on bringing forth this timely debate. They are both known as having been huge talents, and their absence from the Front Bench is unfortunate.

I come to this debate with a sense of frustration. Like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I worked in financial services for a number of years before I came to this place. I get frustrated when I hear politicians characterising bankers as greedy, yacht-going men who live in high-rise apartments, looking for ways to rip off the British public to make themselves even richer. That is not my experience of the banking system, and it is not the experience of the people I meet in my constituency, such as those who work on the high street in Blackwood or people such as Jonathan Brenchley from Barclays, a community relations manager who works hard to improve community relations. I recently had a meeting with NatWest, which is trying to improve IT and promote small IT businesses so that they can grow in Wales.

It is true that financial services are the largest exporters in the world. Some 11.8% of our GDP is in the financial and related sectors. The financial industry employs over 2 million people, and not all of them are based in the City of London. It employs one in 14 people in the UK on average, and two thirds of them are based outside Greater London. In Wales, for example, 54,300 people are employed by the financial and professional services industry. These are people who really believe in their companies; they have a buy-in, and they want to provide the best possible customer service. That is why I am concerned.

Before the referendum of April 2016, PricewaterhouseCoopers conducted an analysis of what effect leaving the European Union would have on the financial services sector. The outcome was grim, forecasting that leaving would result in the loss of 70,000 to 100,000 jobs by 2020, with a slight recovery over time, but remaining with a loss of 10,000 to 30,000 jobs by 2030.

As we have heard, work in the financial services industry involves helping businesses to grow and individual people to reach their potential. Suffice it to say, it is the base industry for everything in this country. The prospect of the UK leaving the EU is a real threat to the financial services industry. Our financial services industry does not operate in a vacuum; rather, it relies on international trade and the flow of capital around the world and particularly the EU.

At the moment, the sector makes extensive use of passporting, as we heard from my hon. Friend the Member for Leicester West. The Treasury Committee’s publication of figures from the Financial Conduct Authority shows that 5,476 companies registered here in the UK depend on these passport rights to do business with the EU.

[Sir William Cash]

In the light of the hon. Gentleman’s condemnation of the vote to leave, will he remind us how his constituents voted in the referendum?

[Chris Evans]

The hon. Gentleman has spent 30 to 40 years in this House going on about the European Union. All his birthdays must have come at once on 23 June—that is all I can say! [Interruption.] He knows the answer very well. I think he is trying to create a bit of mischief for me.

Essentially, we need to ask whether this will mean the loss of passport rights. What structures will be put in place to allow people to continue doing business and paying their taxes? Banks and the financial service industry simply need to know that.

I am short of time, but let me say that my second key concern that generates uncertainty is the extent of EU-originated law that now governs financial services. The law itself, of course, is not the issue, but what replaces it and the process by which it will happen is still a mystery. It is hard to find reliable information to quantify the extent to which EU law governs the UK financial services sector. However, since the EU implements many international regulations and agreements relating to the financial services sector and the UK relies on that body of law, leaving the EU can raise questions.

Ultimately—I am running short of time—it is no good for the Prime Minister to come here and, when she is challenged, to say every week, “Brexit means Brexit.” It is no good her saying that she is not going to give a running commentary on the negotiations either. The financial services industry needs certainty. It needs to move on, and it is time that the Government came up with some answers to the questions I have raised today.

--- Later in debate ---

[Sir William Cash]

Will the hon. Gentleman give way?

[Chris Leslie]

I do not have time to give way to the hon. Gentleman. Well, I may do so if I am tempted. The clock stopped after he spoke, and it felt like the 19th century.

Let me read out to the hon. Gentleman a list of the products that will be banned after April 2019, the time at which we would be out of the European Union. It will no longer be possible to trade in these services with the other 27 countries unless we secure a transitional arrangement or some solution from the Government.

There will be no deposit taking, regulated commercial lending services, trade finance, finance leasing, regulated receivables financing such as factoring, derivatives, hedging services, credit card services, payment services, consumer credit, mortgage lending, equity and debt capital markets, fixed income secondary market trading, regulated foreign exchange spot and forward trading, securitisation, regulated commodities trading, or clearing and executing brokerage. It will be illegal for British-based firms to trade into those 27 countries after April 2019 unless the Government manage to secure a decent deal.

The challenge to the Minister, who has already heard it from many Members on both sides of the House, is yes, to focus on the right solutions—automatic access rights to the single market must be our goal—but before we reach that stage, in January or February, he must start to ensure that we have some evidence on the transitional arrangement talks. A transitional arrangement must begin before we trigger article 50, in the reporting season, so that banks and other financial institutions can plan ahead. If the Government do not give a clear commitment to seeking a transitional arrangement, we will find that those financial institutions have a “stick or twist” option. Do they stay and risk it, hoping that something will crop up after 2019, or do they twist, leave the UK and try to locate elsewhere? That is too much of a gamble. It should not be so binary. I hope that Ministers will think very seriously about doing the right thing for the sector and those who are employed in it.

Centenary of the Battle of the Somme

William Cash Excerpts

Wednesday 29th June 2016 Commons Chamber

[Sir William Cash (Stone) (Con)]

I wish to make a few comments because the Staffordshire Regiment played a magnificent part in the first world war. I also want to commemorate those we remember on Remembrance Sunday. Their names are read out in St. Mary’s church in Cheadle and in Stone church. We listen to the roll call and think of the brothers, sisters and all the others who were affected by this enormous tragedy.

I simply want to say this: war is dreadful. My father was killed in the second world war, but people were killed on a massive scale in the first world war, and we do not want that ever to happen again. I am not going to speak about current matters—I just want to remember these people.

I also want to remember those from southern Ireland who took part in the war, just like those from Northern Ireland and from across our territories. There were many such people, including people like Victor Cullen from the Royal Irish Rifles. I would like to mention the names of the regiments: the Royal Dublin Fusiliers, the Royal Munster Fusiliers, the Connaught Rangers, Princess Victoria’s Regiment, the Royal Irish Fusiliers and the Royal Irish Rifles. It is impossible for us to imagine that the people in these regiments, who became part of southern Ireland for the most part, actually fought with our people. As a result of the troubles, they were vilified afterwards, but now they are entrenched in our memories.

I want to read out, in final tribute, just one part of a poem by Wilfred Owen:

“What passing-bells for these who die as cattle?

Only the monstrous anger of the guns.

Only the stuttering rifles’ rapid rattle

Can patter out their hasty orisons.

No mockeries now for them; no prayers nor bells,

Nor any voice of mourning save the choirs,

The shrill, demented choirs of wailing shells;

And bugles calling for them from sad shires.”

Finance (No. 2) Bill

William Cash Excerpts

Monday 11th April 2016 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

I beg to move, That the Bill be now read a Second time.

I do hope that this will be worth waiting for, Mr Speaker. As my right hon. Friend the Chancellor set out in the recent Budget, the Government’s long-term economic plan is securing the country’s economic recovery. The British economy is set to grow faster than that of any country in the G7. Our labour market is delivering the highest employment in our history. This year, the deficit is forecast to be cut by almost two thirds from its peak, and is set to fall each year after that, so that we will deliver a surplus in 2019-20. However, being one of most open economies in the world means that we are not immune to global slowdowns and shocks, which makes it all the more imperative that we continue the hard work we have carried out over the past six years to help our economy face up to those challenges.

This Finance Bill demonstrates this Government’s commitment to putting stability first.

[Sir William Cash (Stone) (Con)]

rose—

[Mr Gauke]

I will very happily take interventions, but let me first set out to right hon. and hon. Members the order in which I intend to discuss the measures in the Bill. I will outline, first, how this Bill provides opportunities for households, then how it supports British business, and finally how it ensures that the businesses pay the tax that they owe.

[Sir William Cash]

In the context of the European side of the global question to which the Minister has referred, is he aware of the substantial deficit in the last quarter figures that the Office for National Statistics has just published in respect of our relations with Europe, which is causing a lot of difficulty for the United Kingdom economy? Last year, we had a deficit on current account transactions—imports, exports, goods and services—of £58 billion, whereas we had a surplus with the rest of the world in the same services of about £30 billion. By contrast, Germany had a surplus of £67 billion in its dealings with the other 27 member states, which shows a significant reason why we should leave the European Union: this single market just does not work for us.

[Mr Gauke]

My hon. Friend takes me away from the Bill, but let me say in response that I do not accept his analysis. First, on trade, both voluntary parties to any transaction benefit from trade. Secondly, we have to remember that trade deficits or surpluses are the result of a series of transactions decided by individuals and businesses on the basis of what they perceive is of value. I would argue that it is always desirable to seek to remove trade barriers to facilitate fair and free trade. The removal of trade barriers within the single market is, I think, one of the advantages of membership of the European Union, so I am not persuaded by his argument.

Let me start by looking at the measures in the Bill that provide opportunities for families who work hard and save. The Government have long been committed to the principle that those who work should be able to keep more of the money they earn. As a result of action taken in the last Parliament, almost 28 million individuals received a tax cut, with a typical tax bill reduced by £825. We go even further in this Bill by increasing the tax-free personal allowance to £11,500 in 2017-18—a £500 increase from 2016-17. The higher rate threshold will also increase by £2,000 from £43,000 in 2016-17 to £45,000 in 2017-18. As a result of those changes, we will be cutting tax for more than 31 million people by 2017-18. Compared with 2010, a typical basic rate taxpayer will be paying more than £1,000 less in tax in April 2017. That is a proud record.

Section 5 of the European Communities (Amendment) Act 1993

William Cash Excerpts

Wednesday 23rd March 2016 Commons Chamber

[Sir William Cash (Stone) (Con)]

I know my hon. Friend listened to what I said in my point of order, so I would like to address the point to him personally. Section 5 states:

“Her Majesty’s Government shall report to Parliament for its approval”—

on the basis that it is accurate—

“an assessment of the medium-term economic and budgetary position”.

It is absolutely clear, unless he can tell me that this document was prepared since the controversy of the past few days, that this cannot be accurate and nor can it be a proper assessment. To report to Parliament something that is not accurate is quite an important and rather difficult problem for the Minister, is it not? What measures will he take to correct the position, so that Parliament can approve it on the basis of an accurate assessment?

[Mr Gauke]

I will return to that point later, but let me address it in short now. The information provided to the Commission under this process is and has always been based on information already published. It is not a new exercise. We do not ask the OBR to go through the process once again. It is required to produce its documentation and make its assessments at the times of Budgets and autumn statements, and we do not think that our requirement under European legislation is such that we should require the OBR to go through that process again.

The essential position of the public finances remains the same. Notwithstanding the announcement on personal independence payments, it remains the case that from next year debt will be falling every year, that the deficit will be falling each and every year of this Parliament and that we will be in surplus in 2019-20. I suspect that my hon. Friend the Member for Stone (Sir William Cash) would not be keen for us, as a consequence of this requirement—I suspect he is no enthusiast for our going through this process in the first place, but the fact is we have to go through it—

[Mr Gauke]

Because that is what the law requires us to do.

It would not seem proportionate, in these circumstances, to do anything other than submit documentation previously prepared by the OBR.

[Sir William Cash]

I just want to put this to bed. I have made the point that the documentation cannot be accurate—unless my hon. Friend is going to tell me the Government have changed the figures since publication—but there is a second point. It appears from the figures, which can be a bit confusing for some people, that there is a black hole. Some people allege it is as much as £4 billion and others say it is only £1.3 billion—it relates specifically to PIP—but he will appreciate that it is not possible for the documentation to be accurate. This has nothing to do with the OBR as such—it is not the OBR report being submitted—but concerns the Government’s own assessment. Will he be kind enough to get that right? It is important that we are accurate.

[Mr Gauke]

Our principled approach over several years has been that the documentation provided to the Commission is based on the most recent publications. I do not think it would be sensible or proportionate to rerun elements of a Budget process purely for an EU audience. That would not be the right thing to do.

--- Later in debate ---

[Rob Marris (Wolverhampton South West) (Lab)]

I have to say that I have some sympathy with the hon. Member for Stone (Sir William Cash) and the right hon. Member for Wokingham (John Redwood). I draw the House’s attention to the wording of the motion, which states:

“That this House approves…the Government’s assessment as set out in the Budget Report and Autumn Statement”.

Even the Chancellor of the Exchequer does not accept the assessments made in the autumn statement, yet we are now going off to Brussels and—if the motion is passed; I hope it is not—saying that we accept them.

I hope you will give me a little latitude, Mr Speaker, because I would like to start by setting the scene of where we are with our economy and looking at some of the history behind it. We must look at credibility. In the 2015 general election, Labour lacked economic credibility and people voted accordingly. It is true that most of the economic meltdown in the UK in 2008 was due to world factors such as the Lehman Brothers collapse and so forth. Let me try, however, to dispose of the myth to which some in Labour still cling—namely, that there were no real problems with the UK economy when the world economic meltdown occurred in 2008 and that all Labour’s economic problems thereafter were due solely to world factors.

That analysis is just plain wrong, and most people know it. Most voters know that the Labour Government did great things to improve our society and our economy, but voters also know that Mr Gordon Brown made some fundamental economic mistakes—for example, the nonsense of his slogan “an end to boom and bust”, his light-touch regulation of the financial services sector, the disaster of the private finance initiative, and large deficits in the good times. Just before the world meltdown, the UK annual deficit was 3.1% of GDP.

As I have said in the House before, Mr Brown arrogantly ignored the warnings that some of us gave him well before the crash. I am angry and sorry that he made those mistakes, because they meant that the UK economy was not as well placed as it should have been before the world crash. Even without them, the UK’s defences would have been overtopped when the financial tsunami came across the Atlantic, but not by so much. Today, our economy faces what the current Chancellor has described as world headwinds, and because of the current Chancellor’s own mistakes the UK is far worse placed to withstand those headwinds than it was in 2008, when the world tsunami hit. The national debt expressed as a percentage of GDP, for example, is far higher than it was in 2008, and it is now rising.

[Sir William Cash]

In the light of the strictures that the hon. Gentleman has imposed on his former Prime Minister, may I just mention that the national debt, which is currently regarded as being about £1.5 trillion, rises to between £3 trillion and £4 trillion if, for instance, Network Rail and the pension liabilities are taken into account? Does the hon. Gentleman accept that that is the real position?

[Rob Marris]

Network Rail should be included; future pension liabilities should not.

The Chancellor is fond of saying that the current Government and the last coalition Government have fixed the roof while the sun was shining, and that Labour failed to do so. Well, only 20% of infrastructure projects have been started over the last six years. Under Labour Governments we had many more hospitals and schools, and we also had the £12 billion decent home programmes for doing up social housing. As a result, there was a great deal more social housing, including housing association and council properties, than there has been under the current Conservative Government and the coalition.

I welcome the creation of 2 million more jobs since 2010—that is the jewel in the Chancellor’s crown—but it has been bought with a sea of debt, a point to which I shall return. The proportion of part-time workers in the work force has remained broadly the same for the last 10 years, but there is concern about the growth of zero-hours contracts, although I must say that that concern is sometimes overblown. There is also concern about regional imbalances between London and the rest of the country, although I am pleased to say, as a west midlands Member, that they have lessened somewhat in the last two years. However, according to the Office for National Statistics, median gross weekly earnings in the United Kingdom fell by about 4.5% in real terms under the coalition Government.

A theme of the Chancellor’s Budget statement was

“We choose to put the next generation first.”—[Official Report, 16 March 2016; Vol. 607, c. 951.]

What happened about student fees and loans in England? What happened about the abolition of the education maintenance allowance in England? What happened about the spiralling cost of housing in the last six years because the Government singularly failed to address that issue, thereby increasing intergenerational imbalance? What happened about this Government’s selling of a record amount of state assets this year? Those assets could have gone to the next generation. What happened about this Government’s carrying on with the disastrous policy of PFI? And what happened about the deficit and the national debt?

We were told that the deficit was not going to be eliminated by 2015. Well, these things happen. Is it going to be eliminated by 2020? Barely any commentators besides the Chancellor of the Exchequer himself believe that. The Financial Secretary to the Treasury says this evening that we are doing better than other member states. I have to tell him that that is not true. In the G7, for example, our deficit compared with those of the other seven states is the sixth worst; only that of Japan is worse. In 2014, the deficit in Greece—poor old meltdown Greece—was less as a proportion of GDP than the deficit in the United Kingdom. In 2015, according to the International Monetary Fund, they will be the same. That is not a great example to set.

The changes, positive as they may be, with some anaemic growth and considerable growth in employment, have been bought on a sea of debt. Government spending is out of control. Let us look at the national debt. I am grateful to the economist Richard Murphy for providing me with these historical figures. In 2014 prices, the average borrowing by Labour Governments for each year in office since the war was £26.8 billion. The figure for Conservative Governments was £33.5 billion. The average borrowing, in 2014 prices, for each year in office excluding the period since the world crash in 2008—it could be argued to be unfair to the last Labour Government and the Conservative-led Governments to include that period—was £17.8 billion for Labour Governments and £20.6 billion for Conservative Governments.

Let us look at the percentage of years in which debt was repaid by Governments since the war. Part of the national debt was repaid in a quarter of post-war Labour Government years; the same happened in 10% of Tory Government years since the war. Let us now look at the total repayments of the national debt made by respective Governments, in 2014 prices. Conservative Governments have managed to pay off £19.9 billion of the national debt. Labour Governments, who have far more economic credibility, have paid off £108.8 billion. This Government’s spending is out of control. The national debt is up two thirds in six years, and this year it is forecast to increase slightly as a percentage of GDP.

It is a good thing that Mr Brown kept the United Kingdom out of the euro. Had he not done so, we would be in special measures big time under the terms of the growth and stability pact. The treaty defines excessive budget deficits as those that are greater than 3% of GDP. The current Chancellor has failed that test six years running, and on current forecasts—they could of course change next week—he is set to scrape in under the wire at 2.9% this year. The other element of the definition of excessive budget deficits under the growth and stability pact is that public debt is considered excessive if it is greater than 60% of GDP. It should also be falling by 5% per year on average over a three-year rolling period. The current Chancellor is on track to fail that test 10 years running.

The Chancellor is borrowing on the credit card to pay the day-to-day bills. He is also borrowing on a mortgage to buy bricks and mortar. That is fine for infrastructure— that is what Labour would do and it is what many families do. We borrow on a mortgage to pay for the bricks and mortar, but we should not borrow on the credit card to pay the day-to-day bills.

This Chancellor has been in office for six years and it is time that he took some responsibility. Frankly, it is wearisome, juvenile and harmful to our economy to keep blaming the previous Labour Government. I urge all Members of the House to vote against the motion tonight.

--- Later in debate ---

[Sir William Cash (Stone) (Con)]

I have already made my point about the inaccuracy embedded in the report and need not repeat any of that; I am sure that the Minister heard what I said. In a way, it is an impossible situation for him, but that does not remedy the inaccuracy, and I need to hear what the Government propose to do. It may be inconvenient or fortuitous, but the reality is that it is there. The approval by Parliament of these documents for the purposes of onward submission to the European Commission simply cannot be conducted on the basis of the documents under consideration. I will now park the issue, but I am inclined to vote against the Government this evening on account of the inaccuracy, because it just does not make sense. I will be glad if the Minister tries to put things right in some manner, even if only orally, but he may be unable to do so. It is perhaps just as well if I leave things as I have just stated.

What I really want to refer to is the question of national debt, which I mentioned in an intervention. The problem is that the stability and growth pact, the convergence criteria and the 3% are important because they are the basis upon which countries decide whether to run their economies in line with European law or to be cavalier, and there are massive problems in the European Union relating to all that. My right hon. Friend the Member for Wokingham (John Redwood) mentioned that we are just about on the cusp of 3% at the moment, but that is simply not the case in other countries, which raises an important question. For example, the Italians are in dire trouble and are in an enormous battle to try to get some wiggle room into the stability and growth pact, which has led to extremely bad relations with Germany.

In 2003-04, however, nobody blinked an eye when it suited Germany to play around with the pact and not comply with its provisions. Italy is in difficulties and Greece remains in monumental difficulties, infringing the rule of law in Europe as expressed in the stability and growth pact and the convergence criteria, but Germany insists that everybody else obeys the rules until it does not suit it to do so. I find that difficult to accept. In fact, I do not accept it; I reject it. Either there is a rule of law or there is not. The bottom line is that there is a great deal of talk in the European Union about the rule of law, but unfortunately Germany does pretty much what it wants

[John Redwood]

I remind my hon. Friend that, even today, when Germany would say that she is very virtuous in having no budget deficit, she still has a much bigger proportion of debt to GDP than the 60% criterion and no obvious means of getting back down there.

[Sir William Cash]

My right hon. Friend is, of course, right about that, as he really understands all these things. There are massive problems with the whole of this European project, not only because of the inconsistencies but because of the laying down of requirements and obligations that are, in effect, disregarded when it suits certain countries but not when it suits others. The performance required under section 5 relates not only to the accuracy of the figures, to which I have already referred, but to social, economic and environmental goals, as set out in article 2 of the treaty, and a range of submissions in respect of article 103, which deals with economic growth, industrial investment, employment and the balance of trade.

I am happy to agree that the Conservative Government have managed to retrieve the appalling situation that faced us before 2010, but that does not alter the fact that we are talking about a debt level of £1.5 trillion when it is actually very much more than that. I have suggested that if we include the pension liabilities, it could be as much as £3 trillion to £4 trillion. One really has to take that on board, because if someone running a company conveniently parked an element of required debt, the auditors would never give them a clean bill of health. I do not see how pension liabilities can legitimately be off balance sheet, given the scale of this debt and the fact that all those public pensions have to be paid.

I want to move away from that issue, and I would be interested if the Minister would be good enough to refer to one these points in his reply, if he has time. I want to refer now to another aspect of this paper being presented to Parliament for its approval. Page 19 is headed: “Economic opportunities and risks linked to the UK’s membership of the European Union”. What follows on the whole of the page is a litany of reasons why we should stay in the EU. All the arguments of those who say, as I do, that we should leave are dismissed, and I find it tendentious. I have already criticised the three White Papers on the grounds that they lack accuracy and impartiality, which I was promised by the Minister for Europe when I put the point to him during a ping-pong between the Lords and the Commons on the duty to provide information under sections 6 and 7 of the European Referendum Act 2015. Yet, here we are, confronted with exactly the same problem. It is not just that there is inaccuracy embedded in this document, which I am bound to say I do not think the Government can get out of, but there is inaccuracy that conflicts with the provisions of those sections. There is a real list of problems here.

I should also mention the reference on page 19 to the virtues of the single market. I voted for the Single European Act in 1986 but I did table an amendment to say, in effect, that nothing in the Act shall derogate from the sovereignty of the United Kingdom Parliament. Things have moved on enormously since those difficult days, because if I table an amendment now to preserve the sovereignty of the UK Parliament, you, Mr Speaker, will allow it to be debated, and the Clerks of the House of Commons will not raise the difficulties that I was faced with then. In a nutshell, I was told by the then Speaker, and indeed by the Clerk of Public Bills, that I was not allowed to move such an amendment—it was as bad as that. Mr Enoch Powell came up to me in the Lobby and said, “I see that you have put down this amendment, and I agree with you.” As in so many other matters relating to economics, he was not exactly wrong.

The reference to the single market has to be weighed against whether it has achieved its objectives. Page 19 says that the single market is full of virtue and is entirely necessary for the United Kingdom.

Section 5 of the European Communities (Amendment) Act 1993

William Cash Excerpts

Wednesday 23rd March 2016 Commons Chamber

Question again proposed.

[Sir William Cash]

I wish to put on the record again the position with regard to the single market, and I would really like the Minister, for whom I have a lot respect, to answer my question, which I have put over and over again. It is based on figures from the Office for National Statistics and the House of Commons Library.

There is no disputing the fact that we run a trade deficit on current account transactions—imports and exports and good and services—of £58 billion a year, which is a lot of money. That £58 billion deficit is with the other 27 states of the European Union. We run a loss of £58 billion a year, and I do not regard that as small change. However, Germany runs a surplus of £67 billion with the same 27 member states. If someone can tell me that that is a single market that we need, I would like to hear them repeat it from the Dispatch Box, because it cannot be in our interests.

Furthermore, if we take that same criterion of current account transactions, we run a surplus of well over £36 billion with respect to the rest of the world, and that is selling the same goods and services. Clearly, therefore, there is nothing wrong with our goods and services, but such trade does not work for us in the way that it could and should when we are dealing with the European Union and the single market.

[John Redwood]

Does my hon. Friend agree that £12 billion of the £58 billion deficit with the European Union is the money that we have to send to it and that we do not get back? It is payment in order to buy its imports. One does not normally have to make a contribution to a country in order to import things from it.

[Sir William Cash]

It has been said in the past that the House of Commons is the only lunatic asylum that is run by the inmates, but I think we pale into insignificance compared with the European Union. This just does not work. I ask the Minister to make a note on the piece of paper in front of him to remember to answer my question relating to that deficit and surplus issue, because every time I raise it I get no answer. Although I agree that we will continue to trade and to co-operate with Europe—we want to do so and they want to do it with us—when it comes to this question of the need to stay in the single market, it simply does not stack up. This document is put forward for approval by Parliament, so we are entitled to an answer to that question.

[George Kerevan (East Lothian) (SNP)]

In case the Minister does not answer, let me say that a sizeable proportion of the imports that Britain takes from the EU are in fact intermediate products, such as automotive parts, that go into goods that we then re-export. We are talking about supply chain interconnection, not free-standing goods.

[Sir William Cash]

I can only refer to the fact that these are ONS figures. They are endorsed and verified by the House of Commons Library, and I will leave my point at that.

The argument on page 19 moves forward to a suggestion that any

“new relationship which gives the UK…access to the single market that it needs”—

that assertion continues to be made—

“would involve contributing financially to the EU”,

which we are certainly doing to the very substantial extent of about £10 billion a year, and

“accepting the free movement of people”.

The European Scrutiny Committee has been trying to have a debate on that for the best part of 18 months, but without success. I had a meeting with the Minister about it only today. That goes right to the heart of the viability of free movement and the immigration that flows from it. The argument continues:

“and adopting EU rules without having any say over them.”

I repeat: without any say over them.

Today, the European Scrutiny Committee embarked on an investigation into the influence it is claimed we have and the manner in which decisions are taken in the European Union. This document implies that, somehow or other, we have massive input. The European ombudsman is looking into the question of trilogues, but within the decision-making process of the Council of Ministers it is horrendous to observe the extent to which votes are not taken. The so-called consensus on all matters, including those dealt with on page 19, is arrived at without a proper degree of accountability—in fact, I would say no real accountability of any kind. Decisions are taken in what I would describe as a Dan Brown’s “Da Vinci Code” situation, in which the Illuminati—otherwise known as COREPER—make deals behind the closed doors of unsmoke-filled rooms. We do not know and cannot find out how the decisions are arrived at. There is no agenda; nobody knows who decided what and on what basis. It is an affront to the democracy of this country that the decisions that affect the daily lives of everyone in it in respect of the whole gamut of European rule making are made almost entirely without majority voting taking place, in COREPER. It is deeply offensive. It is a black hole and the European Scrutiny Committee is looking into it.

Finally, page 19 talks about productivity. All I would say on that is that, as I understand it, the OBR, whose report is contained in this document, says that the biggest problem this country has is lack of productivity.

The whole of our economic performance is being presented to the European Commission for approval under the 1993 Act and to Parliament for approval today. I will not vote in favour of the motion and I certainly will not approve this load of rubbish. I will vote against the Government because I do not believe that page 19 is true or accurate. I do not agree that the basis of the statistics relating to PIP is such that the document is sufficiently valid to be presented to Parliament. It is a serious matter. We have become far too accustomed to saying, “Oh well, it’s just a blip—just a slight mistake. Someone got something wrong. Let’s not take too much notice of it.” Well, I am going to take notice of it and I shall vote against the Government this evening on that account.

Pilgrim Fathers (400th Anniversary)

William Cash Excerpts

Wednesday 9th March 2016 Commons Chamber

[Mr Evennett]

My hon. Friend makes a powerful case. I know that he has been a champion of his constituency and of the celebration of the 400th anniversary of the Mayflower. It is good to see my hon. Friend the Member for Stone (Sir William Cash) and also my hon. Friend the Member for Newark (Robert Jenrick), who tells me that there is a civil war centre funded by the Heritage Lottery Fund and an exhibition in his constituency, so we are getting to grips with this important historical occasion.

We want to encourage as many Americans as possible to learn at first hand about the journey of their forefathers, which underpins our special relationship. In doing so, we want them to discover more of our beautiful country, and to visit, look up their roots and enjoy our heritage.

The Mayflower with the Pilgrim Fathers on it left Plymouth on 6 September 1620 with just 102 passengers and crew on board. It arrived 56 days later on 11 November in Cape Cod on the US east coast. The Mayflower sailing is celebrated by many in the US as the beginning of their national legacy, and in the UK as the beginning of one of the most enduring alliances the world has ever known. The Mayflower sailed from Plymouth, but, as the hon. Member for Bassetlaw pointed out, three of the four signatories to the Mayflower compact came from Bassetlaw and south Yorkshire. They must be remembered too for their contribution.

[Sir William Cash (Stone) (Con)]

We should remember that four of the children who were on that journey came from Shropshire and were directly related to a distinguished former Member of this House, Sir Jasper More.

[Mr Evennett]

I am grateful to my hon. Friend for enlightening us on that matter.

It is only right that all parts of the United Kingdom that were involved in that momentous occasion can profit from the renewed interest that the citizens of the USA will have in visiting the UK as part of the 400th anniversary commemorations in 2020. This matters not just for the constituencies involved, but for tourism and the economic benefits brought by those tourists from America and other parts of the world, because we have a great story to tell. American tourists spent nearly £3 billion in this country in 2014.

The Plymouth area has received financial support from the Government, with £35,000 announced to upgrade facilities at the Mayflower museum. However, I would like to allay any fears that the people of Bassetlaw might have that all Mayflower-related financial support is going to Plymouth and will not be distributed across the country: £500,000 worth of support was announced in the autumn statement 2015 by my right hon. Friend the Chancellor, as we heard, for Mayflower-related celebrations across the country. VisitEngland is in the process of allocating that sum and will involve in its work a number of areas across the nation, not just the city of Plymouth.

EU Referendum: Timing

William Cash Excerpts

Tuesday 9th February 2016 Commons Chamber

[John Penrose]

This is where I would respectfully part company with the hon. Gentleman. While it would be stretching a point to argue that holding two polls in the same place a minimum of six weeks apart would be somehow disrespectful or that it would prejudice the result of either poll—

[Sir William Cash (Stone) (Con)]

Will my hon. Friend give way?

[John Penrose]

May I just finish this point, then I will give way?

While that would be stretching a point, I believe that it is important to provide enough time for the issues and arguments to be debated fully. A six-week minimum—which is, after all, the length of an entire general election campaign—would provide plenty of time for an extremely full and detailed democratic debate to take place.

[Sir William Cash]

rose—

[Mr Speaker]

Order. I think the Chairman of the European Scrutiny Committee, the hon. Member for Stone (Sir William Cash), is seeking to fox the Chamber. I will not say that he has perambulated around the Chamber, but he has entered, most uncharacteristically, from a different door and he is seated in a different place. There is nothing disorderly about this, but it is mildly confusing and I hope that he might perambulate towards his normal position in due course, because that would make us all feel so much more comfortable.

--- Later in debate ---

[Sir William Cash]

Thank you very much indeed, Mr Speaker. I love that! The final possible date for the referendum is 31 December 2017. Would the Minister be kind enough to confirm that it is a slam dunk that we would not hold the referendum during the French presidential elections in April and May 2017 or during the German federal elections on 22 September of that year?

[John Penrose]

May I first congratulate my hon. Friend on sitting in a different place in order to demonstrate flexibility of mind and his ability to take a different approach once in a while, just to keep us all on our toes? On the specifics of his question, I have to confess that those elements have not been factored into any of my discussions on potential dates so far. Perhaps they should be, however, and I will take that information away if I possibly can.

The motion also notes the recommendations of the Electoral Commission on best practice for referendums. The commission has produced reports on previous referendums and we have taken on board many, if not all, of its recommendations in the European Union Referendum Act, including those on pre-poll reporting of donations and loans. We have also taken on board its views in other areas. For example, we followed its recommendation to change the wording of the referendum question. We also consulted it on the draft conduct regulations, which set out the detailed framework for the administration of the referendum poll. Those are just a few examples of how we have listened to the commission’s thoughts.

European Union Referendum Bill

William Cash Excerpts

Tuesday 8th December 2015 Commons Chamber

[Sir William Cash (Stone) (Con)]

I beg to move amendment (a) to Lords amendment 5.

[Mr Speaker]

With this it will be convenient to discuss the following:

Lords amendment 6, and amendment (a) thereto.

Lords amendments 2 to 4 and 7 to 12.

Lords amendment 13, and amendment (a) thereto.

Lords amendments 14 to 46.

[Sir William Cash]

I tabled amendment (a) to Lords amendment 5 because amendments were moved in the House of Lords, not the House of Commons, and accepted by the Government in respect of, in Lords amendment 5, a duty to publish information on the outcome of negotiations between member states and, in Lords amendment 6, a duty to publish information about membership of the European Union. That might sound all very well and good, but the problem is that they contain a whole raft of question marks that I want to raise today.

I will just give a brief outline of Lords amendment 5. On the outcome of negotiations, the Secretary of State will be under an obligation to publish a report,

“alone or with other material”—

we do not know what “other material” would involve—containing:

“a statement setting out what has been agreed by member States following negotiations”.

We have just seen the letter from Mr Tusk on the current state of the EU’s assessment of the negotiations and I do not think it makes for very pretty reading for the Government. In fact, I would go further than that. I find this quite astonishing, but the apparent point of the letter was to satisfy, and provide a solution for, the Prime Minister. I thought the real objective here was to satisfy the United Kingdom, in particular its voters. That, after all, is what the referendum is all about. It is not about what the Government think. Parliament is handing over the entire exercise to the voter, which is only proper and for which I have campaigned for 25 years.

--- Later in debate ---

[Mrs Main]

How does my hon. Friend envisage the reports being scrutinised, and who does he think will sign them off before they are published?

[Sir William Cash]

I am confident that the European Scrutiny Committee will be looking at this carefully. During our examination of the renegotiations, we have been exercised by the desire to ensure that the Government do not just come forward with a final offer. The Minister knows what I mean. We do not want to be bounced by a final offer; we want to assess the negotiations as they progress. That is what we are doing, and what we will continue to do, because that is what our Standing Orders require us to do on behalf of the House of Commons. I am grateful to my hon. Friend for her intervention because it is important that the House not be bounced.

I spoke to, and received a note from, the Electoral Commission today. It regards the provision of the impartiality we would expect as beyond its own functions, which is extremely regrettable because it should have an opportunity to comment. My Committee will consider this matter carefully—the Minister knows what that means—and it is my clear assessment that any such report, if he could not guarantee it met the highest standards of impartiality and accuracy, would effectively mislead the British people. That is the test. If he tells me something along those lines, I will be prepared—

[Damian Green (Ashford) (Con)]

rose—

[Sir William Cash]

I am happy to give way to my right hon. Friend, as soon as I have finished my point.

It is important, if the voter is to make a balanced choice, that due accuracy and impartiality be implicit in any such report.

[Damian Green]

I am slightly puzzled. My hon. Friend is rightly demanding accuracy in the Government’s analysis, but he is also demanding impartiality. Does he mean, and is it the purport of his amendments, that the Government should not express an opinion on the most important issue facing the country for perhaps the next 40 years? I assume not, as that would clearly be absurd. Is he saying, therefore, that if the Government produce an accurate report and then reach a conclusion with which he disagrees, it could not, in itself, be impartial? There is a difference between accuracy and impartiality.

[Sir William Cash]

I will leave aside my own opinions on this point. As my right hon. Friend knows, I have strong views, which I will develop during the campaign, about why we should leave, but we already know from speeches made by the Prime Minister and other Ministers that there is a presupposition that a reformed Union is the way to go. The test to be applied is whether the reforms amount to much, which I do not think they will, and meet the test of changing our relationship with the EU, which is also relevant. On these questions there will be much debate, but anybody with a fraction of judgment, in respect of this huge landscape and the trust to be placed in the voter to make the right decision, will have to consider whether there is any significant bias in the reports. We have already been through the whole of the purdah debate, which was about using the civil service machinery. If I may say so, I think we won that one. There should not be a back door to achieving the same objectives relating to a report of this kind.

On that note, I give notice that I propose to withdraw my amendment. I want to know from the Minister whether or not he is prepared to accept my point about impartiality and accuracy. He knows perfectly well what I mean, and he is more than capable of giving us a decent answer.

[Mr McFadden]

I shall speak briefly, particularly now that the hon. Member for Stone (Sir William Cash) has indicated that he will withdraw his amendment.

Lords amendments 5 and 6 quite closely reflect amendments that Opposition Members tabled in Committee and on Report. Amendment 5 calls for information and a report on the Government’s renegotiation process, while amendment 6 calls for a report on the rights and obligations entailed in membership of the European Union and invites the Government to outline the rights and obligations of certain countries that have relationships with the EU, perhaps through the EEA agreement, but are not members of it.

I refer Members to the recent Policy Network pamphlet on these issues, entitled “What does ‘out’ look like?”, which I think would make a great Christmas present for the Minister and for anyone considering these issues. I have some copies available if the Minister would like to see them. This is not the same as the purdah issue. We are talking about something that is 10 weeks out and we are not in the absolute heat of the campaign. We are not talking about a leaflet that is to be distributed to every household in the country or anything like that. What we are calling for is for the Government to publish information on both aspects—the renegotiation and what “out” might look like. That should give the public the best information possible on a very important decision.

The Government and the Prime Minister have placed great emphasis on the renegotiation itself, and we have seen the exchange of letters between the Prime Minister and the President of the European Council, who published his initial reply yesterday. We know there will be some discussion of these issues at the European Council next week, but probably not a conclusion until the European Council in February next year.

It remains to be seen what the outcome of these renegotiations is going to be. We had some indication in the letter from the President of the European Council yesterday. Many Opposition Members do not place the same weight on this renegotiation as the Prime Minister does, because we think there is a broader case for membership beyond the four points that the Prime Minister outlined in his letter of last month to the President of the European Council. It is obviously also the case that many Government Back Benchers place no weight at all on the renegotiation, because there is nothing in it that could get them to change their minds about the outcome of the referendum. I believe it was the hon. Member for Harwich and North Essex (Mr Jenkin) who asked during questions on a statement after he had seen the contents of the Prime Minister’s letter, “Is that it?”

--- Later in debate ---

[John Redwood]

I put my name to the amendments tabled by my hon. Friend the Member for Stone (Sir William Cash) because I thought that Lords amendments 5 and 6 were ill considered and unwise, and that we needed to debate them for that reason.

Lords amendment 5 is easy to deal with and I have no particular problem with it, because it states the obvious—namely that, when the negotiations have been completed, the British Government should share their view of the outcome of those negotiations with Parliament and the people. Well, of course they will: it will happen naturally. There will be a statement, and I dare say there will be a written text as well. I therefore think that the amendment is an unnecessary addition to what was a simpler Bill before their lordships got hold of it.

Lords amendment 6 is far more worrying, because it is so sloppily drafted and because it leads to all sorts of arguments that are properly arguments for a referendum campaign rather than for good legislation to set up the referendum. The first part of the amendment says that the Government must publish information about the

“rights, and obligations, that arise under European Union law”

from our current membership. As has already been remarked, if that were done properly it would result in a very long book, given that we are now subject to so many legal restrictions and obligations as a result of an extremely voluminous consolidated treaty and thousands of directives. I think that to fulfil that remit properly, the Government would have to set out all the directives, and explain to the British people why there are now very large areas of law and public practice that we in the House of Commons are not free to determine as we see fit and as the people wish. While that might be a useful thing to do, I fear that the Government might fall short because they might not wish to give a comprehensive list of our obligations, and it is not good law to invite people to do things that they do not really intend to do.

I look forward to hearing the Minister clarify whether he will be publishing a full list of the thousands of legal restraints that now operate on this Parliament in preventing us from carrying out the wish of the British people, and also on the British people, who must obey these laws as they are translated into British law, or else obey the directly acting laws. Of course, all these laws, and our own laws, can be construed by European justice through the European Court of Justice, which, rather than this court of Parliament, is now the true sovereign in our country because we have submitted ourselves to the ultimate judgment of the European Court.

[Sir William Cash]

Does my right hon. Friend attach the importance that I attach—and the Electoral Commission itself has attached—to the fact that the reports proposed by Lords amendments 5 and 6 should be produced on the basis of both impartiality and accuracy? We remember the review of competences: it was a whitewash. If these reports were anything like that, we would be significantly misleading the public, would we not?

[John Redwood]

Indeed. That is why I share my hon. Friend’s concern about Lords amendment 6, and fear that the Government might fall short of the full remit. Will they spell it out to people that we cannot control our own borders, our own welfare system, our own energy system and energy pricing, our own market regulations, our own corporation tax or our own value added tax, because all those matters have been transferred to the superior power of the European Union? That should be the very substance of the referendum debate about whether we wish to restore the full sovereignty of Parliament for the British people, or whether we wish to continue on the wild ride to political union that the EU has in mind, which will mean that even more powers are taken away.

The second part of Lords amendment 6 states that the Government must set out

“examples of countries that do not have membership of the European Union but do have other arrangements with the European Union (describing, in the case of each country given as an example, those arrangements).”

I have not read or heard anything so woolly for a long time. The amendment refers to all the countries that are not in the European Union but have some kind of arrangement with the European Union without even specifying a trade arrangement, although the Opposition seem to think that it relates to trade.

The Opposition try to perpetuate the myth that our businesses and people would be able to trade with the rest of the European Union only if we resubmitted ourselves to some of the powers of that Union through some kind of arrangement like those entered into by Norway and Switzerland. Have they not heard that America is a mighty trading partner of the European Union that does not have one of these special trading arrangements, and certainly does not pay a contribution to the European Union in order to sell goods and services to it—nor does China, nor does India, nor does Canada, and nor does Australia—and have they not heard that some individual countries have free trade agreements with the European Union which are arguably better than the arrangement that we have as members of the EU, because they do not have to pay anything like the very large levies and contributions that we must pay for the privilege of trading from within the internal market?

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[Peter Grant]

It is perfectly in order for the UK Government to take an impartial, neutral stance once we get closer to the referendum. We do not know what stance they will take. There is a question as to whether it was appropriate for somebody else’s Government to interfere in our referendum, but I know that that is not an argument we will win just now. However, that degree of interference probably contributed to the fact that on most days these Benches are significantly more crowded than they were before. If the Government do not produce information, as opposed to campaigning opinion, about how the EU works now, who will produce it? If we are happy for the two opposing camps to produce the information, then they can go ahead and do it, but we know before we start that all that will happen is that people will be drawn to believing statements of fact because of their opinion of the politician or TV personality who has associated their name with them, rather than being presented with a factual, well-researched document that sets out how things are just now.

[Sir William Cash]

rose—

[Peter Grant]

I will give way to the Chair of the European Scrutiny Committee with pleasure.

[Sir William Cash]

I rise to intervene on a member of my Committee simply to say that we know that the broadcasts and the information that will be delivered and published by the designated organisations on either side will provide that information. We saw it in Ireland, and there are many other examples in other referendums in the EU. But the idea that the Government are not going to try and organise the view that they want, which is to stay in a so-called reformed union, is, I think, for the birds.

[Peter Grant]

I wish I could share the hon. Gentleman’s absolute faith in the impartiality of broadcasters during important referendums, but that might be one of the very small number of issues on which we disagree.

The point about broadcasters is that if they are found to be in breach of the requirement of impartiality, a sanction is available and there are ways in which they can be held to account—and certainly the BBC feels as if it is being very severely held to account by any number of Committees in this place just now.

[Sir William Cash]

I was not referring to the impartiality of broadcasters in this context; I was referring to the fact that under the designated arrangements each side will have the right to issue broadcasts and provide information by way of literature. That is what I was concentrating on.

[Peter Grant]

I apologise for misunderstanding the hon. Gentleman’s comments.

My essential point is that I do not think it is enough to leave it to campaign groups to provide information. The purpose of campaign groups is to persuade people to vote for the cause that they are promoting. They will provide information that supports their cause. They will choose not to provide or emphasise information that does not support it. That is what we all did in order to get elected, and as long as it does not involve deliberately making untrue statements or trying to mislead people, that is part of the democratic process; it is part of politics. It is up to the electorate to judge whose arguments they believe, but if the electorate are starting from a position of significant ignorance, or in some cases significant misperception and misunderstanding of what the EU is all about, there is a danger that they will not be in a position to exercise that judgment at a critical time.

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to be at all unreasonable. In fact, it would be rather odd if the Government did not publish such information. The advantage of having this obligation in the Bill is that the Government will have to publish it 10 weeks before the date of the referendum. That will mean that it will be properly scrutinised, rather than bounced on to the electorate at the last minute. I would say in response to my right hon. Friend the Member for Ashford (Damian Green) that it is perfectly reasonable for the Government to express their own opinion in such a document on the outcome of their own negotiations, as they would in any White Paper. It would be a good thing to have this provision in the Bill.

[Sir William Cash]

My hon. Friend should bear in mind that the White Paper that led to the European Communities Act 1972, which went through by only six votes in this House, contained a very precise promise that the use of the veto in our national interest would never be abandoned, because to abandon it would be to endanger the very fabric of the European Community itself. Is that not an example of how unreliable White Papers and other Government reports can be?

[Mr Jenkin]

Indeed, but it is unavoidable that the Government are going to produce information of this kind.

The second duty, in Lords amendment 6, is not something that I expected to see. The Lords amendment asks the Government to produce judgments and opinions on a vast topic, using examples that, by their very nature, will be subjective. I am not at all surprised that the Electoral Commission has decided that it would be far beyond its competence to make a judgment about what such a document might be. The Government have accepted this amendment, but if they are to justify retaining it—as I expect them to do—they will have to answer some questions about it.

What do the Government mean by the word “publish” in the amendment? It would be one thing to place a learned, detailed and technical paper in the Library of the House of Commons in order to present the depth of analysis that the hon. Member for Glenrothes believes would be justified, but would the Government produce such a subjective document in a form that could be circulated to every household? How would we feel about that, 10 weeks before a referendum? It is reasonable for the Government to explain the outcome of their negotiations, but it would not be reasonable for them to use public money to present their entire world view on European Union membership as part of a campaign to remain in the EU.

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[Mr Jenkin]

I am waiting to hear what the Minister has to say on that point. The proposed amendment changes the wording. It now says that it should be allowed to make that decision only if

“no permitted participant makes an application to be designated under section 109 as representing those campaigning for that outcome except for a permitted participant whose application the Commission states is, in its opinion, vexatious or frivolous.”

That would mean that, provided there are two legitimate applications for designation, the obligation would be clear in the Bill that the commission has to designate two campaigns. That is not clear in the Bill at the moment. If one such campaign was “vexatious or frivolous” and was clearly just there to spoil in some respects, the Electoral Commission would have to justify its action. I hope the Minister will tell us that he can accept our amendment. If he cannot do so, I hope that he will make it clear that the substance of the amendment should be understood, and that it would be unconscionable to have only one campaign designated in this referendum. If an application is made in such a way as to be construed as vexatious or frivolous, such an application would have to be considered. We should be in no doubt that there will be an application in respect of both sides of this campaign.

[Sir William Cash]

I endorse what my hon. Friend has just said. Let me repeat for the sake of clarity that these amendments are the result of ping-pong between the Commons and the Lords, which is not the best way for them to be considered. We have not had enough time to have a really good look at this matter, and I hope that the Minister will take that into account when he gives us the very full explanation on amendments 5, 6 and 13.

[Mr Jenkin]

In closing, let me add that in all three amendments we have been discussing the potential role of the Electoral Commission. In respect of amendments 5 and 6, the Electoral Commission has shrunk from the possibility of being given an obligation for which it is not fit. It is worth reminding ourselves that we have already developed one new role for the commission during the passage of this Bill, which is that it will give its advice about possible new regulations on the restriction of section 125 of the Political Parties, Elections and Referendums Act 2000 in respect of purdah. It did not want that obligation, but we gave it to it. Electoral commissions in countries such as Ireland or Denmark have a very much more active policing role in respect of fair referendums, and that is a role that we, in this country, have not set up the Electoral Commission to undertake.

[Sir William Cash]

With both amendments 5 and 6, we need to bear in mind that a duty would be imposed. That duty would imply and carry with it the potential for judicial review. If there were any failure in carrying out that duty in the manner that was expected under all the precepts of administrative law, the Minister should accept that there is more than a high probability of a challenge in the courts. That challenge could arise not only because of the manner in which a report arose, but if any of the information were misleading in any way.

[Mr Jenkin]

I agree with my hon. Friend, and will add that, where the Electoral Commission clearly has a duty, its decision can be judiciously reviewed. In respect of the designation of only one campaign, I have absolutely no doubt that there would instantly be a judicial review, and I speak with knowledge aforethought.

In the absence of the duties on the Electoral Commission —for example, to provide for impartial and objective information from the Government—it is a moral imperative on Ministers to ensure that they undertake their obligations in the spirit of a fair referendum, and not to abuse the trust that this legislation places on them with regard to the publication of that information.

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[Mr Mak]

I thank my hon. Friend for his characteristically cogent intervention. He is right that, beyond the walls of this place, men and women, families and businesses and community organisations play their day-to-day role, focus on other priorities and are not necessarily concentrating on the EU referendum or those issues on which this House concentrates.

[Sir William Cash]

I refer vicariously to the most recent opinion poll, which showed that 52% of the United Kingdom electorate thought that they should leave and only 48% thought that they should stay in; 60% of those in the south-west said that they wanted to leave.

[Mr Mak]

I thank my hon. Friend for his intervention. I was just finishing my response to my hon. Friend the Member for North Dorset (Simon Hoare). I hope that through debates in this House we shall be able to take a lead on the issues. I welcome emails from people on all sides of the argument.

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[Mr Mak]

My hon. Friend makes an outstanding point. To give the Electoral Commission a role beyond its current role would be to tread on the feet of hon. Members and encroach on the democratic freedoms and roles of this Parliament. My hon. Friend is right that the Electoral Commission does not agree with the intention of my hon. Friend the Member for Stone. As my hon. Friend the Member for Torbay (Kevin Foster) says, there are better sources of information—such as literature from the various campaign groups that I mentioned and information from public bodies such as the Office for Budget Responsibility or the Bank of England. I would encourage members of the public to read Hansard, where the speeches of many distinguished hon. Members can be found, including from this very debate.

[Sir William Cash]

It would be useful, if people really wanted to hear how the debate was progressing, for them to follow the transcripts of European Scrutiny Committee, Treasury Committee and Foreign Affairs Committee proceedings. That will tell them an enormous amount about what is going on and what questions are being asked of Ministers.

[Mr Mak]

My hon. Friend makes a cogent point. The proceedings in this Chamber are available not only in Hansard but on parliamentlive.tv as well as BBC Parliament. I encourage all members of the public and all those who are interested in the proceedings of the House to tune in, particularly to my hon. Friend’s Committee, the European Scrutiny Committee, which he has led with distinction for many years, and other Select Committees, including my own, the Procedure Committee, which has been involved in numerous deliberations. I am delighted to see two of my distinguished Committee colleagues in the Chamber today.

The Electoral Commission undertook research as part of its statutory assessment of the type of information that the public would want to know as the referendum process began. As my hon. Friend the Member for Torbay and the hon. Member for Glenrothes (Peter Grant) said, it found that members of the public were not necessarily clear about what the consequences of the referendum would be. There was no real understanding among large sections of the public about what leaving would entail. There was not enough information about what staying in would entail. There was certainly some confusion about the very many campaign groups that have sprung up, which I mentioned as I opened my speech.

What the Electoral Commission did say, which I found heartening, was that there was a strong appetite for more information about the implications of leaving, as well as an appetite for information about the implications of remaining and, as my right hon. Friend the Member for Wokingham said, information about other models of engagement, including Switzerland, Norway, other members of the European economic area and, indeed, countries in Asia, Africa, Latin and South America. He is absolutely right: there are a number of models that can be invoked and, according to the Electoral Commission, the public are keen to have more information. As the hon. Member for Glenrothes said, there is an appetite for more information.

The Electoral Commission found that the public do not simply want dry facts. They would like contextual information, including worked examples, explanations and case studies, giving the views of right hon. and hon. Members. The Electoral Commission recommended that campaign groups, which I mentioned at the beginning of my speech, include on their websites and in their literature worked examples and real-life case studies, along with testimonies from Members of Parliament, Members of the other place and members of the public who wish to share their experience. That would help a great deal to educate the public about the choices to be made.

The Electoral Commission said in its letter that it would be reluctant to adopt the extra powers that some hon. Members believe that it should have, as it has no powers to police information that is put into the public domain alongside Government reports. It has no legislative powers to regulate such information. Finally, the Electoral Commission made a good, cogent point with which I agree. It does not have the capabilities to undertake an extension of its role, which some Members of the House of Lords and of the House of Commons have proposed that it should have. It said in its letter, referring to the extension of its powers regarding the referendum and the Government report, that

“it is also the case that we would not have the capabilities to do so”.

It also said:

“We will have no insider knowledge of the negotiations, nor the required expertise to judge a report to Parliament about the UK’s membership of the EU.”

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[Sir William Cash]

My hon. Friend will have heard that the Electoral Commission has had duties imposed on it by Parliament, but what the amendment is driving at above all else, with respect to him and to my hon. Friend the Member for Fareham (Suella Fernandes), is that there should be proper impartiality and accuracy in the information. If the commission cannot do that, the Government can. If they do not do it, the courts will ensure that they do.

[Mr Mak]

I thank my hon. Friend for his explanation. My interpretation of the letter is that the commission did not want to take on more powers, as it already has core duties, including the good administration of elections and of the referendum. It conceded that it was not an expert in constitutional law, politics or negotiations about the UK’s continued membership of the EU; it was merely a good administrator, and that is the role that Parliament centrally wants it to fulfil. It is certainly the role that I want it to fulfil as the referendum process continues. The commission was saying, frankly and openly, that it lacked the expertise to make any determination about the Government report.

Next year, as many right hon. and hon. Members will know, we will have local, county and mayoral elections, as well as police and crime commissioner elections, which will increase the workload of the commission in its current guise, whether it is arbitrating on voter rolls, interpreting various aspects of election law or undertaking other statutory duties, which are all a drain on its resources. The Electoral Commission lacks the necessary expertise, as my hon. Friend the Member for Fareham (Suella Fernandes) said, and will be burdened with a heavy workload next year, given the frequency and geographic spread of elections in which it will be involved, particularly from an administrative perspective. There is therefore no role for the commission as proposed by the amendment, so the Government’s view should prevail.

May I turn briefly to Lords amendment 13, which was tabled by Baroness Anelay of St Johns and has some support in this House? I should like to elucidate what it does and to share my views on its place in this House. As hon. Members will know, section 108 of the Political Parties, Elections and Referendums Act 2000 allows the Electoral Commission to designate permitted participants—that is likely to be the campaign groups that I mentioned earlier—as organisations to which assistance is available under section 110 of that Act. Such assistance could be logistical or financial, and in some cases there would be media opportunities. Where a referendum has only two outcomes, which is the case for the EU referendum, as my right hon. Friend the Member for Wokingham and others have said, under section 108, the Electoral Commission can exercise the power to designate one organisation for each of the outcomes or not designate any at all.

Lords amendment 13 would enable the Electoral Commission to designate a lead campaigner for one side of the argument, whether that is to remain in the EU or to leave it, at the referendum without designating a lead campaigner for the other side. That would apply only where for a particular outcome, whether to leave or to remain, there were no applications on the other side or the Electoral Commission was not satisfied that there was an applicant who adequately represented those campaigning for that outcome. For example, vexatious or clearly inadequate groups would be disregarded by the commission.

In the event that only one campaigner was designated, that campaigner would be entitled to a higher spending limit, a free mail-out to voters and access to meeting rooms—for example, in council or other municipal buildings—which is a positive. However, it is important for the House to note that that campaigner would not be entitled to a grant from the Electoral Commission of up to £600,000 under section 110 of the 2000 Act, nor would they be allowed to make a referendum broadcast to the people of this country under section 127 of that Act.

Having reviewed the amendments in this place and the other place, and having read representations from the Electoral Commission and from broadcasters, my view is that that is a fair compromise. The amendment implements recommendations that the Electoral Commission made following the 2011 referendum on the voting system. As I said at the start of my remarks, we must pay heed to what the Electoral Commission says, while also taking into account hon. Members’ views. Based on the experiences of 2011, the Electoral Commission recommended that steps should be taken to reduce the potential advantages under the 2000 Act designation model for a prospective lead campaigner to decide against applying for the designation. The Electoral Commission had identified an example where a campaigner might have a tactical advantage in not seeking designation with a view to frustrating the other side’s access to additional benefits. I find that a cogent observation on the part of the Electoral Commission.

I said that I would touch briefly on Lords amendment 13. The Government’s position on all the amendments deserves the support of the House.

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[Mr Lidington]

The amendment refers to “rights, and obligations”, not to “the rights and obligations”. It gives the Government the discretion to select for presentation the rights and obligations that we think will best aid public understanding. I want to make it clear that our purpose in recommending acceptance of these amendments is that they should enable us to provide for greater public understanding. I completely agree with my right hon. Friend that membership of the EU touches on matters other than trade or economic policy. I am sure that the relative balance of advantages and disadvantages that arises out of EU membership on all those issues will be a matter of vigorous debate during the referendum campaign, but we do not envisage that debate taking place in the context of the obligation placed on us by amendment 6.

Lords amendment 6 is about providing factual information on the basis of which the public can take an informed decision. It is also about describing some of the existing arrangements that non-member countries already have with the European Union. We think that that is a better course of action than for the Government to attempt to hypothesise about what the United Kingdom’s future relationship with the EU would be in the event of a vote to withdraw, because that depends on assumptions made about not only the future intentions of the British Government, but the likely response of other European countries.

[Sir William Cash]

On rights and obligations, the Minister is already beginning to move the argument into the arena of the question of impartiality and accuracy. If the Government pick and choose, the public will not have a clue whether what is chosen suits the Government or them, and it is the voters who will have to make the final choice.

[Mr Lidington]

To follow my hon. Friend’s logic, the implications of a requirement to provide an exhaustive list would mean going through the entire corpus of EU law—not just the particular areas of competence, as specified in general terms in the treaties—and trying to draw out from that what would be a voluminous list of both the rights and the obligations that derive from each of the measures. I simply do not think that that would aid public understanding. Actually, I think it would act as a formidable deterrent for many members of the public to read the document at all.

My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) asked about the form of publication. No decision has been taken yet, but I envisage it being comparable to a White Paper, if not an actual White Paper. As is normal these days, such a publication would be available online, so it would be widely accessible. The reports would have to be published at least 10 weeks before the referendum, which would give the campaigners clear time to lead the public debate. I emphasise that neither Lords amendment 5 nor 6 in any way affects the section 125 restrictions on Government publications during the final 28 days of the campaign. I hope that my hon. Friend the Member for Stone, in view of what I have said and of the Electoral Commission’s express view that it does not agree with his amendment, will agree to withdraw it.

[Sir William Cash]

Before I declare whether I am going to withdraw my amendment, I have asked my right hon. Friend several times to make it absolutely clear, on behalf of the Government, that when they give information under Lords amendments 5 and 6 they will do so with due accuracy and impartiality. Is he going to do that or not?

[Mr Lidington]

Certainly, that is the case, because it would probably have a perverse impact on the Government’s recommendation if they were to be seen to be acting in an excessively partisan manner. I say again to my hon. Friend that, at the end of the negotiation, the Government will express their view, their recommendation and their reasoning, but we see the statutory provisions laid out in the Lords amendments as being about the provision of actual and factual information.

Lords amendment 13 has also been debated in detail. It would allow the Electoral Commission to designate a lead campaigner for only one side of the argument in the event that either there were no applications for a particular outcome or the Electoral Commission was not satisfied that any applicant met the statutory test of adequately representing those campaigning for that outcome. Given the vigour we already see in opposing campaigns, it is very unlikely that we will end up in such territory. I hope that the House will accept Lords amendment 13 to prevent gaming by one side of the campaign to the disadvantage of the other.

[Sir William Cash]

I simply say that in the light of the clear assurance that there will be due impartiality and accuracy, I will not press my amendments to Lords amendments 5, 6 and 13. I beg to ask leave to withdraw amendment (a) to Lords amendment 5.

Amendment, by leave, withdrawn.

Lords amendment 5 agreed to.