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Does the Minister understand that, in the Green Paper and his Statement today, to describe the Conservative Party as being committed to a substantially elected House of Lords is wholly unfounded? The actual words of the manifesto are:

Does he appreciate that the difficulty of that task for the Conservative Party, if it understands its own Back Benches as my noble friend wishes to do, is expressed in the fact that an overwhelming majority of the party in this House and a majority of the party in the other House do not wish to see a substantially elected House of Lords? Does he not appreciate that that deserves to be regarded as a substantial obstacle? Is the obstacle not worth respecting?

Everyone who has spoken so far has paid tribute to the immense quality of the work done in this place. The suicide bombers, therefore, are suicidal not merely in reflecting themselves; the suicide bombers, as so often, are going to destroy the building in which they are found, without any rational argument at all having been advanced for that action being taken. Suicide bombers generally are insane as well.

Lord Hunt of Kings Heath: My Lords, I am not quite sure how I should answer that. Obviously, the noble Lord, Lord Strathclyde, is well able to answer for his own Front Bench in these matters. I suspect that he does not entirely have all his colleagues with him on this.

I make it very clear that the Government wish to remove the hereditary peerage, but that they wish to see that done as part of a comprehensive reform of your Lordships’ House. I go back to the Irvine agreement, because that view is entirely consistent with what was said at the time.

I am sure that the general contribution of your Lordships’ House, very clearly stated by the noble and learned Lord, Lord Howe, will be acknowledged not just by Members of this House but also by many people in society. Equally, the Commons, the primary Chamber of this Parliament, have after many efforts finally come to a considered view that the second Chamber should be mostly or wholly elected. We have to pay some notice to that, but we also want to ensure that the best traditions of this House are carried forward into the new proposals.

Lord Soley: My Lords, the Minister will appreciate that this is a complex and delicate matter marked “Handle with Care”, but that does not necessarily mean that it is the bomb referred to by the noble and learned Lord, Lord Howe. Do the Government accept that just about everyone in every part of this

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House wants it to remain a dynamic and effective part of the parliamentary system, but that continuing uncertainty does no one any favours whatever? It is therefore a great burden of responsibility on all the leaders of the political parties in this House and its Members to make sure that we come to a degree of agreement that can then be put forward at an election or, as the party opposite wants, at a referendum—although my guess is that the nearer one gets to an election, the further away one will get from wanting a referendum, but that is a matter of judgment. However, I emphasise that it is important that we try to resolve the uncertainty, because it does not do this House any good in the long term.

Lord Hunt of Kings Heath: My Lords, I certainly accept that uncertainty is unhelpful to the House in discharging its major responsibilities. That is why we will press on with work in the cross-party group. I hope that we will produce a White Paper by the end of the year. The more consensus achieved in that White Paper, the more certainty there will be.

Lord Steel of Aikwood: My Lords, I agree with the noble Lord that it was quite sensible to make this Statement before the debate on my Bill tomorrow. I apologise because I listened to Mr Straw deliver it in the other place, so I did not hear the Minister deliver it here. One thing that was said in the Statement was that my Bill,

that is, the other place. Does the Minister not understand that that is precisely its point? It does not attempt to deal with comprehensive reform. Does he agree that to get the comprehensive reform there must be agreement among the election manifestos of the parties; new conventions between the Houses, as the Cunningham committee recommended; agreements on an election system, because the party list system did not find favour in either House; difficult legislation on the Floor of both Houses, including dealing with matters such as finance and accommodation for the new Chamber; and the holding of elections? Does he agree that it is unlikely that all that will be accomplished—going at a snail’s pace, as my noble friend indicated—by about 2014? Therefore, is there not a good case for tidying up the existing House as it is now and dealing with the controversy of cash for peerages and the by-election for hereditary Peers, thereby enabling Members to retire so that we can bring down both the numbers in this place and the average age?

Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Lord for his comments. No disrespect was intended to him in making the Statement today before tomorrow’s debate. It would be wrong to go into great detail of the Government’s response to the noble Lord’s Bill tomorrow, because we will need to hear what takes place in the debate. I understand what the noble Lord is saying. I suspect that 2014 is cited because that is the date of the European election and the February White Paper clearly proposed that the European election should be used as the date by which a future second Chamber should be elected. I understand

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where he is coming from on the date. He is also right to say that I fully understand that he did not intend to bring forward a comprehensive Bill and intends it as a helpful interim step towards full reform. All I would say is that the Government’s approach is to focus attention and work on achieving a comprehensive reform.

Lord Higgins: My Lords, the Statement rightly stresses the importance of consensus. On the point just made by the noble Lord, Lord Steel, there seems to be a very wide basis of consensus on that Bill. The crucial point is that the Bill can go ahead regardless of what decision is eventually made about composition or powers. The other important point is that there is almost a total lack of consensus between the leadership of the Conservative Party and its members in both Houses and the leadership of the Labour Party and its members in both Houses. Therefore, it is tremendously important that the membership of the cross-party group should include representatives of those who take a different view from that of the party leaderships. That point was raised on the debate on the conventions, but the Government have gone ahead without taking it into account. It would be absurd to take any notice of the cross-party group’s report unless it is representative.

Lord Hunt of Kings Heath: My Lords, I hear what the noble Lord, Lord Higgins, says about tomorrow’s debate. We shall listen very carefully to what is said in your Lordships' House, but the preference of the Government is to press ahead with comprehensive reform. As for the question of representation, I must make it clear that the group consists of the leadership of the three political parties together with representation from the Lords spiritual and the Cross Benches. We think that that is the appropriate method of taking forward these discussions. However, as my right honourable friend said in his Statement, alongside that we will want to talk and engage with parliamentarians in both Houses. My noble friend the Leader of the House has already signalled her intention to ensure that this House has ample opportunity to do that.

Lord Lea of Crondall: My Lords, is it not the case that, in order for this process not to be associated with the idea of democratic centralism, the simple demand to get consensus should involve not only consultation with outside groups—as if we were an outside group—but the representation on the work of the group of the majority of this House, which we are by four or three to one?

Lord Hunt of Kings Heath: My Lords, I hear what my noble friend says, but I cannot agree with him. This is a cross-party group representing the leadership of the three main political parties alongside representation from the Lords spiritual and the Cross Benches. That is the appropriate mechanism by which to achieve consensus between the political parties and the substantial groupings in your Lordships’ House. I well understand what my noble friend says about the

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general view on the form of a second Chamber among my colleagues on these Benches and those on the Benches behind the noble Lord, Lord Strathclyde. They will have every opportunity to make their views known, but it is appropriate that the cross-party group consists of the membership that it does. It is within that group that we must strive to achieve consensus.

House of Lords: Members’ Interests

1.36 pm

Lord Pearson of Rannoch rose to ask the Chairman of Committees whether the Committee for Privileges has rejected a recommendation from the Sub-Committee on Lords’ Interests that members in receipt of pensions from the European Union should as a matter of course declare such pensions as a financial interest when taking part in debates, statements and questions on European Union matters.

The noble Lord said: My Lords, I am afraid that the unfortunate answer to the Question before us is yes. My purpose in holding this debate is to persuade the Committee for Privileges to change its mind and agree with its Sub-Committee on Lords’ Interests. After all, that sub-committee is chaired by the noble and learned Lord, Lord Woolf, the former Lord Chief Justice.

I am encouraged in this endeavour by our code of conduct, which was adopted by a resolution of the whole House in 2001. That resolution requires that Members of this House must comply with the code,

Paragraph 6 of the code states:

Paragraph 8 requires that Members must,

Paragraphs 9 to 11 helpfully define a relevant interest thus:

It is this last point which, I understand, requires me to declare in debates touching on learning disabilities that I am the father of a child with severe lifelong intellectual impairment. It helps the listeners and those who read Hansard to appreciate where one is coming from. By the same token, I should have thought that it was also incumbent on former EU Commissioners and employees at least to mention their former incarnation in debates about the EU.



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The code is more prescriptive on financial interests—and here I come to the heart of my argument. EU pensions are unusual and perhaps unique in that holders can lose them if, in the sole opinion of the Luxembourg court, they indulge in any action incompatible with their former duties. The rules governing former Commissioners are set out in Article 213 of the Treaty Establishing the European Community, which states that members of the Commission,

The solemn undertaking includes the promise to,

and,

The undertaking goes on:

The rules covering former staff are covered in Section 3 of the staff regulations entitled, “Disciplinary Measures”. Article 9 of those states:

So it seems clear that both former Commissioners and EU staff can lose all or part of their pension if, in the judgment of the Luxembourg court, they behave sufficiently badly. I shall return to what that behaviour might be at the end.

That was accepted by the Government in a Written Answer of 6 October 2003, which stated:

However, that correct interpretation of EU law was, at first, not accepted by your Lordships’ Sub-Committee on Lords’ Interests which reports to the Committee for Privileges. When the sub-committee was chaired by the noble and learned Lord, Lord Browne-Wilkinson, it could not reach agreement on the matter. So the noble and learned Lord then went through a most unusual legal manoeuvre. He wrote an opinion to himself as chairman of the sub-committee. That contained a number of misunderstandings, and I do not have time to deal with them all now. An important error was to find that an EU pension can be removed only if the pensioner accepts unsuitable employment after leaving office. That possibility is indeed emphasised in the treaty, but its scope is much wider, as I have quoted. Indeed, it is open-ended and entirely at the discretion of the court. More generally, the noble and learned Lord appears to have misunderstood the most obvious need to declare an interest when he said,



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What interest could be more declarable than the fact that one is speaking about one’s employer?

Not surprisingly, a number of us were not satisfied with the noble and learned Lord's opinion, which was accepted by his sub-committee and by the Committee for Privileges, so we asked the sub-committee to think again. It duly did so, this time chaired, as I have said, by no less a personage than the former Lord Chief Justice, the noble and learned Lord, Lord Woolf. Its report is available from the Printed Paper Office as Priv. 2006-07/1. It comes down unambiguously in favour of declaration and recommends that Members of the House in receipt of pensions from the European Union should as a matter of course declare such pensions as a financial interest when taking part in debates, Statements and Questions on European Union matters. However, when the full Committee for Privileges met on 5 June, I regret to say that it did not accept its sub-committee's view. I believe a copy of the minutes can be obtained from the Clerk to the committee, but no reasoned report has been published. The minutes are far from clear or satisfactory.

I know that I am regarded by the Europhile majority in your Lordships’ House as the naughtiest boy behind the bicycle sheds, but it is quite wrong to say that the matter was reopened only because of pressure from me, which is what the minutes say. The noble Lords, Lord Tebbit and Lord Vinson, both wrote to the noble and learned Lords, Lord Browne-Wilkinson and Lord Woolf, and the noble Baroness, Lady O'Cathain, and the noble Lord, Lord Vinson, went together to see the noble and learned Lord, Lord Woolf, in person. Many other noble Lords have expressed concern, as one would expect. I do not believe I need to trouble your Lordships with their names; of course, they are the other usual culprits. I am most grateful that the noble Lord, Lord Waddington, is to speak later.

The minutes also suggest that the crime we have in mind is merely criticising the Commission in debate. We agree that there is nothing to stop the court deciding that that is indeed sufficient pretext to remove or to reduce a pension. But there are other more serious things that pensioners could say in debate which would almost certainly result in financial penalty. They could reveal some hitherto unpublished scandal, which would bring the EU into even further disrepute; they could support a referendum on the next EU treaty and they could speak against that treaty in debate; and they could even have a Damascene conversion, in common with a large and growing majority of the British people, who have come to believe that this country would be much better off outside the political construct of the EU, while keeping our friendship and free trade with the other member states.

Of course, I agree that all that is unlikely, but it is not impossible. One thing is certain: that the prospect of jeopardising one’s pension prevents any such views, scandals or criticism being uttered in debate in your Lordships' House. Therefore, it is a declarable financial

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interest. We are not talking small beer. I am advised that one former Commissioner in your Lordships' House is looking forward to a pension of some £73,000 per annum, at present exchange rates.

My noble friends and I maintain that this failure to declare former EU employment and pensions prevents public understanding of our debates on EU matters. For example, on 14 June, we had an important debate in the name of the noble Lord, Lord McNally, to extol the advantages of our EU membership. Of the 22 speakers before the gap, 10 were former EU employees of one kind or another, yet only one declared that as an interest. The public could not possibly know from where the other nine noble Lords were coming.

I have only one question for the noble Lord the Chairman of Committees. Was the decision on 5 June reached by a vote, or did he judge the mood of the meeting, which may have been distorted by exaggerated claims of my personal involvement? If so, could he try again?

The quality of your Lordships' House debates is a highly prized national asset, something of which we are all proud. I trust that this debate may help to maintain that.

1.46 pm

Lord Williamson of Horton: My Lords, as this short debate concerns specifically European Union pensions, it is certainly appropriate to declare that I have a pension from the European Commission and I do so now. I wish to make a few brief points which run in the opposite direction to those put forward by the noble Lord, Lord Pearson. Over the past seven years, I have spent much time trying not to quarrel with him and I shall continue on that path.

First, the matter was looked at very carefully in 2004 by the Committee for Privileges on the basis of a report from the Sub-Committee on Lords’ Interests and a very full legal opinion by the noble and learned Lord, Lord Browne-Wilkinson, to which the noble Lord, Lord Pearson of Rannoch, referred. The report of the Committee for Privileges was published by the authority of the House—HL Paper 69 of 5 April 2004. I do not see what has changed in relation to EU pensions—I am well aware that some Members have queried the situation—since the declaration of interest was examined only three years ago by the Committee for Privileges. As is well known, the sub-committee recommended that:

The Committee for Privileges endorsed that recommendation, and that is set out in paragraphs 4 and 5 of HL Paper 69.

Secondly, it is very important to distinguish between former European Commissioners and former staff of the Commission. The duties of Commissioners are covered by a specific treaty article—Article 213, which has been quoted already and will probably be quoted later—which is in the consolidated treaty, and they are

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not covered by the staff regulations. Article 213 is primarily directed to ensuring the independence of the Commission. Members of the Commission have to be totally independent in the performance of their duties and they shall neither seek nor take instructions from any Government or any other body and shall refrain from any action incompatible with their duties. During their term of office, they may not engage in any other occupation. Evidently, those provisions about the independence of Commissioners from governments and other bodies apply to them when in office in the Commission.

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