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We in Parliament must continually renew our commitment to see power as a trust held on behalf of the people and, I would say from these Benches, under God. In the face of declining public confidence in political life today, we might be tempted to think that we are living through a crisis. We are not. There is little or no energy among the wider public for major constitutional reform. The public want to see our democracy working better than it is, and the quality of governance strengthened and improved. The people are not, however, marching on our streets for the radical reform of Parliament.

This remains the people’s Parliament. It is for us, as their servants, to ensure that it works well for them and builds confidence in our democratic traditions. The report is a welcome, clear and profound statement

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of how things are between our Houses and what we must agree to ensure an effective relationship between them.

I welcome three crucial features of this report. First, picking up from the comments of the noble Lord, Lord Tomlinson, it clearly understands that we inherit an unwritten constitution: it is interested in flexible ways of working, without boxing us in to rigid procedures of our work. Secondly, it recognises our history and the unique history of democracy in these islands, bringing together the many faces of our common life in one Parliament; holding within one place the tasks of calling the Government to account, legislating and remaining, in extremis, the high court of the land. We hold to a unitary structure. Thirdly, and crucially, following in the great tradition of Edmund Burke, it seeks amendment of our constitution by evolutionary rather than revolutionary processes. That ensures that the future builds on the past, and that a proper sense of history always informs what we do.

It has been commented on right around the House that the Government have picked up on the central issue of this report in their response: its meaning for the reform of this House. While that is not the subject of our debate today, it nevertheless appears both in the report and the Government’s response. As others have said—notably the noble Lord, Lord Higgins—having established the principle of the primacy of the House of Commons, the report goes on to point out in paragraph 61 that a shift in the structure of this House is bound to lead to a fresh examination of these issues. In their response, the Government said:

our present situation—

That would be the first time that had happened in British history. Function and form are inevitably intertwined; we cannot escape that.

We must talk about this a lot more in the coming days. That is not to say that, on the basis of the present balance of powers, no further reform on the Lords is possible. If we want to maintain the basic balance of powers between the Chambers, however, that will influence how we think about reform. I did not find the Government’s references to Canada, Austria and Germany convincing. We have an unwritten constitution, and shifts of power are going on the whole time. Things are never rigid. That seems to me to underlie this report.

We can consider crisis moments. For example, let us suppose that we had a wholly or mainly elected second Chamber of 500 or more Members elected by what the people thought to be a fairer system of election, that an election took place at a time of great political crisis and that there was a large turn-out. Would that not introduce some element of conflict between the two Houses? We have to think those things through.

I prefer the words of the report to the Government’s written response, but I was greatly comforted by the speech of the noble and learned Lord the Lord Chancellor. It seemed to give us more flexibility in that matter.

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Although the principle of the primacy of the House of Commons is important and entirely right, we need to be reminded that the fundamental principle we are dealing with is the sovereignty of Parliament. That means that Parliament must always be free to act as it believes right for the needs of the United Kingdom. From the statements in the report about having flexible and unenforceable conventions, it seems that the committee understands the principle that Parliament as a whole has to be free to act. That is the principle of our democracy. It is at the heart of our constitution, and I believe that we have a common duty to protect and maintain it. I am hugely grateful to this report for making a significant and long-term contribution in that direction.

4.57 pm

Lord Barnett: My Lords, I am delighted to support the Motion proposed by my noble and learned friend the Lord Chancellor. I am glad that he did not ask us to support his written response to the report because I certainly could not have supported that. As my noble friend Lord Tomlinson and other noble Lords have said, the written response is very different from the noble and learned Lord’s speech. I welcome his speech. I liked it very much, but I do not approve of parts of his written response. I shall make clear to my noble and learned friend what I have in mind.

First, like many other noble Lords, I congratulate the committee chaired by my noble friend Lord Cunningham. It is not surprising that it is an excellent report. The Government could not have found a better man to come up with a unanimous report that decided that we should retain the status quo. On top of that, it unanimously pointed out that we should effectively throw the whole thing away if we ever had an elected House, whether it be a hybrid House, which the Government seem to want, or any other type. I should make clear to my noble friend that I am not treating the excellent report lightheartedly. He and his committee have done a great job, and I welcome the report.

The report raises many important issues with which I wholeheartedly agree. The central issue is the primacy of the other place, which I strongly support. In one sense, it is not an issue because the Government told the Joint Committee to accept primacy. It not only accepted it, but went on to give good reasons why the primacy should prevail. The major issue is that the role of this place—whatever changes in its competition take place—should be as a revising Chamber that provides effective and robust scrutiny of the legislation that comes to us. That is right, and I accept it. That should be our main role. Indeed, we do it much better than they do in another place—if I may say so, having spent a fair amount of time there myself. Most of our debates on legislation take place without party-political content and they are much the better for it. It is when party-political elements are brought into our debates on legislation that we tend to be as bad at scrutiny as the other place but, on the whole, we do not.

One area in which we consider legislation coming from the other place has been referred to by the noble Lord, Lord Wakeham, and others; I should like to say

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a word about it. We are better than the other place at scrutinising legislation of all kinds, but especially Finance Bills. I am not talking about taking powers to amend them, because the committee rightly says that we should not take those powers and would be wrong to do so. That is covered very well in paragraphs 243 and 244 of the report and again in the conclusion in recommendation 21.

However, as the noble Lord, Lord Wakeham, rightly said, the Economic Affairs Committee under his excellent chairmanship in no way seeks to infringe that financial privilege of the Commons. Indeed, as he said, a self-denying ordinance is in effect taken by the sub-committee that we should not do that. We could go much further, as is clearly indicated in appendix 6 to the report. Indeed, I hope that the committee will but, at the moment, it does not and, as a member of the sub-committee under the noble Lord, Lord Wakeham, I am glad to be able to confirm exactly what he said.

Finance Bills, which, sadly, we are unable to consider in detail, get larger every year. The reason for that is precisely because the other place does not properly scrutinise them. Whoever is in opposition—I plead guilty, having been both in government and in opposition—tend to pick out and look at primarily what may be called the sexy political issues. The rest of the Finance Bills are hardly considered at all. Consequently, the next Finance Bill gets larger because it has to amend the badly drafted previous Finance Bill. They get larger every year, as we see today.

Although, as I say, the sub-committee of the Economic Affairs Committee does a good job, it would be better to have a separate committee considering Finance Bills. That would not be to amend them—I am not asking for those powers—but we should be able to give advice and help to the Chancellor and Treasury Ministers. I assume that the written response was drafted by the Treasury, rather than by my noble and learned friend Lord Falconer. As a former Treasury Minister, I have only to read it to know that I would have drafted in that way too, because the Treasury does not want anything to be done.

The written response states that the matter should be reviewed and that what the sub-committee does will be kept under review. There is no need to keep it under review. As the noble Lord, Lord Wakeham, said, the sub-committee does that for itself. In no way does it seek to interfere with the fiscal privilege of another place. So there is no need for that review and I am very sorry that the response is drafted in that way. I note that my noble and learned friend Lord Falconer did not refer to that in his verbal response today, so I am hoping that he did not really mean it or that he did not agree with his colleagues in the Treasury who wrote it.

The response is interesting because almost every paragraph refers to composition, which the Joint Committee was not supposed to look at. I went through the response and only one or two paragraphs did not refer to composition. The right reverend Prelate the Bishop of Chelmsford also referred to it when he quoted from paragraph 12 of the Government’s response:

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Paragraph 10 states that changes to the composition will make the Lords “more assertive”—I repeat, “more assertive”. I have always been astonished that the other place has not been as concerned as I am, and not just about this place being more assertive. It is bound to do that. That is an understatement of how an elected or hybrid-elected House would react. It would be much more than assertive in looking at its powers. Even if there was only one elected Member, the idea that it would restrain itself against the other appointed Members is the reason why—whatever leaders of political parties in this or the other place may say—I do not believe for a minute that in this House there would be agreement on a hybrid House, whether it be 20, 30, 40, 50 or 80 per cent, as apparently some leaders want. It would not happen without the use of the Parliament Act.

Speeches in political party meetings are not supposed to be made public for us to consider. But there was a report that the Prime Minister—which my noble and learned friend would not discuss of course because it is private—indicated that the Government would not have in mind to use the Parliament Act on such a major constitutional matter as changing the composition of your Lordships’ House. I see the noble Lord, Lord Strathclyde, nodding. I hope that he feels the same and I look forward to his speech.

I do not ask my noble and learned friend to confirm what the Prime Minister has said, or whether he agrees, because he will not be here for much longer. I am not referring to my noble and learned friend—I am sure that he will be here for a long time. Perhaps he would confirm, deny or refute the idea that major constitutional changes of the composition of your Lordships’ House would be done by default because they would not get through this House.

5.08 pm

Lord Howe of Aberavon: My Lords, it is always a pleasure to follow the noble Lord, Lord Barnett. But as I now look at him across this House, I am reminded that some years ago we were both, to our astonishment, appointed by the relevant trade association as “Tie Men of the Year”. We have always had that kind of warm relationship with each other. I join him and everyone else who has spoken in paying tribute to the work of the committee and, in particular, to the leadership of the noble Lord, Lord Cunningham of Felling. I had the privilege of serving under his less than horrendous lash on the previous Joint Committee, and I have witnessed his skill at first hand. He has done a formidable job and so have his colleagues.

In a way, the most important conclusions are summed up on page 4:

It is that spirit which is of such enormous importance.

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Surely we have had enough evidence already of the damage that can be done by codification, as it becomes necessary either inadvertently or advertently. A modest example, entirely benign in its intention, has been the consequences of the Nolan committee, chaired by our colleague the noble and learned Lord, Lord Nolan. He did a formidable job in a way, but let us look at the work now being done by the Committee on Standards in Public Life. Its last report discussed the formulation and reformulation of further codes and sub-codes of practice in eight or nine different areas. That goes on and on indefinitely as one code breeds another, and God knows where we are.

Perhaps I may say something less respectful to the noble and learned Lord, Lord Falconer, than most of the other things that have been said. His brainchild—if that is what it was—the Constitutional Reform Act 2005 tackled the question of codifying the relationship between the Lord Chancellor and the Lord Chief Justice. That had been entirely a matter of convention for centuries, but in that Act there are no fewer than 250 statutory provisions providing for that. And even with all his diligence, last year it was necessary to introduce two statutory instruments to deal with 50 other relationships that needed codification but which had been overlooked. So I wholly endorse the proposition: God save us from codification.

It is vital to understand, and not just in this context, the importance of unwritten rules and conventions. I have quoted in this House before a speech by the American judge Learned Hand in Central Park, New York, in 1944, defining some of the propositions which they were defending. He said, “I often wonder whether we do not rest our hopes too much upon constitutions, upon laws and upon courts. These are false hopes. A society that needs a court to save it, no court can save”. That is a profound proposition and echoes something that was said some years before by Lord Moulton, a one-time Liberal MP but then a Lord of Appeal:

There are offices in this country today where that is of formidable importance; that of the Lord Chancellor was one of them—today the Attorney-General’s is another—where compliance with unwritten laws that are difficult to apply but very important is fundamental. That is the spirit of conventional government, which I am glad to say runs through this report.

One aspect of the flexibility that is desired has been touched on by my noble friends Lord Higgins and Lord Wakeham, and finally by the noble Lord, Lord Barnett. The scope for flexibility should allow a development of the work being done by the Economic Affairs Sub-Committee on our fiscal legislation. As noble Lords probably know, until recently I presided over the steering committee of the Tax Law Rewrite Project. That has functioned with the assistance of a joint committee of both Houses, scrutinising the Bills

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produced by the tax law rewrite committee. Since it has been operating, work has also been taken forward on the case for having a similar structure, that of a joint committee of both Houses to look not just at the language of the law but at its substance as well—subject as always to the reservations emphasised by the noble Lord, Lord Barnett, and my noble friend Lord Wakeham.

The truth is that one should look at a report published a couple of years ago by the Institute for Fiscal Studies under the chairmanship of Sir Alan Budd, which stated:

The conclusions are quite clear. We surely should be willing to enjoy the flexibility that we have—with, of course, the consent of the other place and within the limits of the established constraints—that would enable this House to address tax legislation in that way.

Beyond that, the thing that strikes one so powerfully about this debate and the report is the remarkable consensus, so far, about the qualities of this House and the way it works. I therefore beg the forgiveness of the House if I say a word or two about the implications of that for the substance of the structure of this House and of possible change in composition. The Committee’s central message is one that I have probably uttered far too often already: if it is not broken, do not fix it. This ruthless, detailed examination of existing conventions in face of the specific proposals in the Government’s manifesto came to the conclusion that they did not need to be fixed; that they are remarkable in the way in which they function. That is the approach which one should surely adopt towards the future composition of this Chamber.

In their response to the committee’s report, the Government have two things to say about that. In paragraph 8 they identify the necessity, in their view, of further change in the composition of this House and of offering Parliament the chance to decide on whether there should be further changes to make the Lords more effective, legitimate and representative.

As to representativeness, the diversity of expertise and experience in this House far exceeds that in the other place. As the committee of the noble Lord, Lord Wakeham, pointed out, selection and appointment is far more likely to produce a pattern of representative diversity, even regionally, ethnically and in terms of sexual discrimination, than the process of election. So representativeness is not doing too badly.

Legitimacy is a topic on which a number of noble Lords have already spoken. The noble Lord, Lord Wallace, pointed out the significance of the disappearance for ever of the built-in Tory hereditary majority and the increasing role played by life Peers. We now have a House in which neither major party has more than 30 per cent of the seats and that equation—give or

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take, no doubt, some variations—has itself become something like a convention of the House. As the noble Lord, Lord Wallace, pointed out, it is certainly unlikely that we will see any elective system which gives the Government or the Opposition of the day an overall majority.

One has to address this 40 per cent of notable creatures who sit on the Cross Benches and notable—but perhaps less notable—creatures who sit on the Liberal Democratic Benches. I do not mean to be unkind or impolite. That 40 per cent of the House is the jury we have to convince. It is a formidable system of working. Its effectiveness has produced a transformation in what happens. In the six years from 1999 to 2005, this House secured almost 300 victories against the Government which were sent back to the Commons. That sounds terrible until you realise that 40 per cent of those “defeats” were accepted by the Government and the Commons. That shows that we have, perhaps, grown in confidence, as the noble Baroness, Lady Jay, predicted long ago when the proposals were still going through. It also shows that we have maintained a degree of self-restraint; and the acceptance of our proposals on that scale establishes also that we have grown in legitimacy, if that is not too crude a boast for us to make in this place.

So the only question that remains is: what can be done by changing the composition of this House to improve the effectiveness of the place? On that, I delight in being able to say not three cheers but hundreds of cheers for the noble and learned Lord, Lord Falconer. In his speech only hours ago, his description of this place, which apparently some people seek to reform fundamentally, was that it performs “exceptionally well”; that it does a “hugely impressive job”; that it has been “transformed”; that it is an “effective revising Chamber, which adds substantial value”. Not many institutions in this country deserve school reports of that kind. When they come from someone as noble and learned as the noble and learned Lord, Lord Falconer, himself, we are surely entitled to take account of them.

Noble Lords: Hear, hear.

Lord Howe of Aberavon: And he, I hope, is entitled to take account of this, my Lords. His view, as is apparent from the speeches, is likely to be reflected in any views expressed by this House on the prospect of changes to its composition. They have already been reflected in Divisions on previous occasions. It is clear that a substantial majority here is resistant to the arrival of an elected element of any size. Most if not all of us worry about the impact of that, whether it is incremental or dramatic.

The manifesto on which the Government were elected said, rather delphically, that they intend to allow,

That is very odd—a free vote of the House. Surely there must be a free vote in this House, which is the House to be dismantled or rearranged, and the value of that free vote must be as substantial as that of any comparable vote in the other place.

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