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The order indicates that it allows Irish citizens and Irish bodies to enter into financial transactions. What about people who live in the Irish Republic and are not UK-registered voters but who do not regard themselves as Irish citizens—they regard themselves

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possibly as British citizens or as British-type organisations? They are not Irish, and under the Belfast agreement they are entitled not to be Irish if they do not wish to be. How does the order cope with them? Apart from that one query, the group to which I subscribe will be supporting the order.

Lord Bew: My Lords, I should like first to apologise to the Minister for missing the first two minutes of his speech—which again, as in July last year when we discussed these cognate issues, was very fair and effective. I wish to speak in broad agreement, as has the noble Lord, Lord Laird.

I do not want to revisit any issue from last July when we talked about the family legislation which dealt with donations. It is now 10 months on. It is now May 2008, and there is an awkward symbolism in the fact that the Government are telling us that they still believe that it is necessary to keep donations or loans secret because of the safety factor for individuals. At the same time, this is the month that our Government had said was in principle the right moment for the devolution of policing and justice for Northern Ireland. There is an awkward symbolism there. There is nothing to be done about it, but I think it should be noted this evening.

There is also the fact that this issue is becoming more important in Northern Irish politics because of the increased discussion of the role that Fianna Fail might play in the politics of Northern Ireland. Some of our concerns regarding donations and loans from outside Northern Ireland seemed somewhat academic 10 months ago but now seem considerably less so. We are in a new place in both those respects. None the less, broadly, I have to concede that there are anomalies in life and particular anomalies in the peace process, and what the Government are doing tonight is acceptable. I only ask the Minister to reassure us that the intention is for the Government to look at this again in 2010 and that their view at this point is not that these arrangements are in any sense permanent.

Lord Brooke of Sutton Mandeville: My Lords, I would like to reassure the Minister that my contribution will be no longer than that of any other noble Lord who has spoken. I am much in his debt for having explained the background to this, which I would have had a little difficulty in following had he not done so. It is clear from the welcome that the order has received around the House that your Lordships approve of what the Government are doing.

Since I am by nature an optimist, and since I recall with vividness the remarkable way in which the late great Lord Williams of Mostyn, who was once responsible for Northern Ireland affairs in your Lordships’ House, turned the Bill on voting, postal votes and registration in Northern Ireland electoral matters totally around between Second Reading and Third Reading in this House, the Bill having already gone through the House of Commons where Mr Desmond Browne was not able at that stage to exercise the degree of influence that Lord Williams of Mostyn used, I believe the tremendous success of that legislation in regulating Northern Ireland affairs could very well be emulated

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across the face of the United Kingdom. If at any stage the Government choose to extrapolate from the example of Lord Williams of Mostyn, I think they will find that that also is welcomed on these Benches.

Lord Rooker: My Lords, my late friend Lord Williams of Mostyn was a class act and is much missed by the House. In this legislation we are seeking to catch Northern Ireland up with what currently happens in Great Britain. I love the phrase in my speech—I am trying to stick to the brief—which says that we now enjoy the benefit of donation and loans regulations. It was not always considered a benefit, but it was certainly found to be a necessity. From that point of view, there is a different experience in Northern Ireland.

I do not have the title of the second order as it is not ready yet. There is still some drafting work to be done and some discussion to be had, although it is our intention to lay the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2008 as soon as we can. It is our intention for all the orders to be enforced by 1 July so there will be no undue delay and there will be plenty of time for debate in your Lordships’ House. It will therefore be laid as soon as possible after this first order is agreed by Parliament. This first order has of course already been through the other place—I think it was last week or the week before.

We have also had the benefit of the donations legislation for Northern Ireland for a short period; it came into force last year. There is nothing for me to report from the Electoral Commission on using the new legislation. Procedures in that legislation prevent leakage from Northern Ireland to Great Britain’s political parties to prevent the brass-nameplate operations in Ireland being used as a front for money to the north. The rules about substantial functions of a business or other organisation are all there.

There is also the citizenship issue. The noble Lord, Lord Laird, asked in a roundabout way—I think I have got his question right—whether UK citizens resident in Ireland can make donations to parties in Northern Ireland if they are on the UK electoral register. The answer is yes. If they are not, however, they cannot. That would count as a foreign donation because those are the rules; you must be on the electoral register. I was about to say that it is as simple as that, although from one or two cases that we have read about recently, people are learning from experience. There is this sensitive issue—I appreciate that—but the rules are quite clear; we are talking about Irish citizens. That was defined in the other legislation and it will be set out in some considerable detail in the second order that I will lay before the House.

Lord Laird: My Lords, does that discriminate against British citizens who live in the Irish republic and who are not voters in the UK, as opposed to their next-door neighbours who are Irish citizens and can donate money to parties in Northern Ireland?

Lord Rooker: My Lords, if there is an impediment to people being on the UK register, I am afraid they cannot make donations. That is the basic tenet of our

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ensuring that “foreign” money does not come into UK political parties. You can do so if you are eligible to be on the UK register. If you are not eligible, your donation does not count. So far, as I said, I have nothing to report from the Electoral Commission about donations. The rules will be broadly—I cannot say exactly—the same for loans as they are for donations.

The noble Lord, Lord Bew, mentioned time. I fully accept his point. He mentioned that this month was forecast in the original legislation for the possible devolution of policing and criminal justice, which clearly is not taking place. We do not see this as a permanent arrangement. The confidentiality of loans and money to political parties must be temporary; otherwise there is no transparency in democracy. Therefore there is that limit. It can be extended, but it is not our intention either to extend the limit that we have now or to wish to do so when the time comes. There is a finite date of 2010. We are in a transition period in which Northern Ireland can enter normal civil society, which it is doing very fast. Part of that involves transparency in funding to political parties. We see no difficulty in the parties coming to the table in 2010 and being fully transparent.

Unless I have missed out anything, I think I have covered the central thrust of the questions. As I said, the House will probably have the other order in a few weeks’ time, when we can debate the detail and the nuances of the nature of the society and the organisations that will be eligible to make loans.

Lord Glentoran: My Lords, I am slightly perplexed about one issue. Perhaps the Minister can write to me. The noble Lord, Lord Laird, asked about British people living in Ireland and how they can donate funds to Northern Ireland political parties. If they are living in Ireland and maintaining a British passport, and bearing in mind that they are entitled to have two passports—an Irish one and a British one—I would be surprised if they were not entitled to the same benefits or rights as other Irish citizens in this context. I have not thought this through before, but when I listened to the small debate between the Minister and the noble Lord, Lord Laird, I was left a little uneasy that there might have been some confusion.

Lord Rooker: My Lords, I hope that I do not add to the confusion. As far as I can see, the position is absolutely clear. In order to donate, or indeed to loan, to a political party, you are required to be on the electoral register. It is a mechanism to stop any attempt to channel money to Great Britain. In other words, there is a ring-fence around Great Britain for all the main parties. Some of the main parties in Northern Ireland operate legally, although they may not put up candidates. This is an attempt to ensure that money is not passed from one to the other to undermine the GB restrictions, as much as anything else. It is quite clear that if you are eligible to be on the UK electoral register but are not on it, you still cannot donate. You must be on the UK electoral register to make a donation. If you are an Irish citizen living in Ireland, the order will allow you to donate as long as you are an Irish citizen or an Irish organisation—a

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company or otherwise—that functions in Ireland and is not a brass nameplate. The rules make that clear in the case of loans, so the rules in respect of this question will be the same for donations as they are for loans.

Lord Kilclooney: My Lords, this is still not clear. It is not a question of being on the electoral register. This is special legislation to facilitate people in the Republic of Ireland financing political parties in Northern Ireland. It is totally discriminatory. It allows Irish citizens living in the Republic of Ireland to finance and support parties in Northern Ireland that are generally nationalist and anti-British, and it forbids British citizens living in the Republic of Ireland to support other parties that may be pro-British.

Lord Rooker: Yes, my Lords, but it does not prevent British citizens living in England, Scotland and Wales from donating or making loans to Northern Ireland political parties. This is not a one-sided operation at all.

Lord Laird: My Lords, I draw the Minister’s attention to the example of the 25,000 people along the borders with Northern Ireland who could consider themselves to be British and not Irish. They have been recognised under the Belfast agreement and get parity of esteem and total equality, but under this order they do not. The Orange Grand Lodge of Donegal cannot give money—it operates in the Irish Republic but is maintained and operated by people from a British background who consider themselves to be British—while its next-door neighbours, the Ancient Order of Hibernians, can. Does that seem fair and in the spirit of the Belfast agreement?

Lord Rooker: My Lords, as I have said, the rules for this will be exactly the same as they are for giving donations. This has been agreed by Parliament. As I have already said, I have had no negative vibrations from the Electoral Commission on the way in which the system is working.

On Question, Motion agreed to.

Lord Davies of Oldham: My Lords, I beg to move that the House do now adjourn during pleasure until 8.24 pm.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.50 to 8.24 pm.]

European Union (Amendment) Bill

House again in Committee on Clause 2.

Lord Taylor of Holbeach moved Amendment No. 40:

“(i) Article 2, paragraph 48, amended Article 36 TEU (TFEU), first paragraph, the words “European Parliament and”;(ii) Article 2, paragraph 49(c), amended Article 37 TEC (TFEU), new paragraph 2, first sentence, the words “The European Parliament and” and the words “, acting in accordance with the ordinary legislative procedure and”; and(iii) ”

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The noble Lord said: Amendment No. 40 is in my noble friend’s name. I will also speak to Amendments No. 41 and 41A. I ask noble Lords to note that I am actively engaged in my family’s agricultural and horticultural business and, as such, I must declare an interest.

The Lisbon treaty and the new constitutional settlement—that is what it represents, notwithstanding the semantics of the Government’s position—have relatively little to say on the detail of the common agricultural policy. This is probably just as well—noble Lords have enough to give them concern with the Bill as it is.

However, it is a matter of European Union history that, other than the European Coal and Steel Community, the common agricultural policy is the longest living relic of the idealism of those early days. It would greatly extend the nature of this debate to decide whether in the 1066 and All That version of history it has been a good thing or a bad thing. It has certainly presided over a period of considerable change—both structural and technical—and, up to now, provided the countryside with some economic security and the consumer with good-quality food at reasonable prices.

However, things are changing fast and I am far from sure that politicians are changing fast enough. Almost certainly, Europe’s common agricultural policy is too inflexible and hidebound in national self-interest to change fast enough. What have the Government been doing to force the pace of change? For what reason did we give up our rebate? It was in direct return for reform of common agricultural policy. Where is that reform? I have no doubt that the Minister will refer to the health check, but Miss Mariann Fischer Boel, the Agriculture Commissioner, expressly stated that it is not reform.

The Government know that the enemies of CAP reform are deeply entrenched in Europe. How do they explain their weakness in confronting the opponents of change? Will the noble Lord give any assurances of worth in this area when it is clear that the French have dominated the agenda in agricultural affairs since the founding of the policy?

Recent changes in market conditions have alerted all and alarmed some. They are not brought about by poor harvests alone but are also consequent on demand-led changes—global economic changes and the new demands of renewable energy and biofuels. All this has led to a realisation that all is not well in the world of the common agricultural policy. Stuck as it is in the political philosophies which gave it birth, it is overcentralised, overbureaucratic, inflexible and wasteful. The current health check is a long overdue investigation into where this policy is leading.

It was originally envisaged that the CAP would support the interests of farmers and the rural community and, at the same time, look after consumer interests, but it is in danger of doing neither. It has become the creature of national Governments operating in their own self-interests and the victim of the trade-off policies which, more than anything, have destroyed the idealism that lay behind the formation of the European Community, now the European Union.

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Much will hang on the health check, the draft report of which is due next week. It would be useful for noble Lords to know—the Minister might assure the House—that the draft report will be debated here and that nothing in the Bill impedes such reform as may emerge.

Amendment No. 40 is designed to resist moves to weaken control of national Governments over important framework laws governing the CAP and the CFP. The Committee will know that many reforms have been suffocated by the inability of European institutions such as the European Parliament to come to grips with change. It has consistently opposed reforms such as those affecting the wine industry or increased modulation—that is, the transfer of budgets—whereas this country and Portugal have been alone in initiating them on a voluntary basis. Indeed, the Parliament has vouched to lock many of its current policies after 2013. Amendment No. 40 is designed to exclude co-decision-making powers from the European Parliament, for it can be easily seen that it is likely to become a roadblock to reform and a second line of defence for protectionists.

8.30 pm

This is not assisted by the treaty, which, as my noble friend the Duke of Montrose pointed out on a previous amendment, gives the Community exclusive competence on the marine environment. It is true, as the noble Lord, Lord Pearson of Rannoch, has pointed out, that the definition of agriculture includes fishing. Additionally, “agricultural products” means the products of the soil, livestock farming and fisheries and covers the first-stage processing of all these products. Amendment No. 41 seeks to challenge the treaty in seeking such competency.

We can have no doubt, therefore, that Europe intends to maintain and extend control over these matters. Already overregulated, we should note that the Commission may also authorise other measures, the conditions and detail of which it shall determine. What role for Defra when the statutory instruments arrive by first-class post from Brussels?

Amendment No. 41A seeks to make sure that Parliament here in Westminster still retains a role in the development of the CAP. I hope the Minister is able to reassure the Committee that this will be the case should the Lisbon treaty be ratified. I remember assurances that the whole purpose of the treaty was to engage national parliaments in co-decision-making. Perhaps I have misinterpreted this proposal. It is certainly important to know that CAP reform would involve a role for Westminster.

Perhaps I may conclude by making a particular observation. The Lisbon treaty makes provision for the common organisation of agricultural markets in one of the following forms: common competition rules, compulsory co-ordination of national market organisation or a European market organisation—different structures for different products. It is not difficult to see that this could lead to a considerable tightening of the interference and control in the marketplace. I am minded that the drafters of such proposals need a seminar on the operation of the market from the noble Lord, Lord Jones of

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Birmingham, who, although not in his place, instructs the House as a Minister on this subject regularly and to good effect. Regulation and control have no relevance for a world which has become anxious about food security and where land-use prioritisation, following the development of biofuels, is creating powerful pressures to increase capacity.

The Government have presented us with a Bill which they say is designed to set the pattern for the future of the Union. The reality is that it avoids issues such as the CAP, or where it includes them does so in such a way that it makes them irrelevant to the greater challenges facing Europe’s farmers and the anxieties of Europe’s citizens. Our amendments recognise this. I beg to move.

Lord Willoughby de Broke: I warmly support the amendment so ably moved by the noble Lord, Lord Taylor. He is suffering from a slight attack of hopefulness after dinner because, no matter which colour they are, all British Governments have suffered from delusions over the common agricultural policy and its reform. All British Governments have argued for reform but, I am afraid, have never got anywhere.

The CAP still consumes some 45 per cent of the total EU budget, to which we contribute disproportionately. Our last shot at reform was during the EU presidency when the then Prime Minister, Tony Blair, agreed to give up quite a lot of our hard won rebate in return for reform of the CAP. Of course the reform just turned into a “health check”. Our partners in Europe must have had their fingers crossed. The health check consists at the moment of: “Let us see the colour of British taxpayers’ money. Yes, that is okay; they are still paying a whole lot of money. What about French agriculture? Open wide. Yes, that is all in perfect working order as well. Health check complete”. We are still paying and the French agriculture sector is still receiving. The result is that British taxpayers are still shelling out enormous amounts of money, still shovelling billions a year into the EU budget that is so riddled with fraud and irregularities that its accounts have not been signed off by its own auditors for 13 years. That looks like another classical government winner on the lines of Gordon Brown’s sale of gold at the lowest point in the market for 100 years.

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