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House of Lords

Tuesday, 8 June 2010.

2.30 pm

Prayers-read by the Lord Bishop of Newcastle.

Lord Clement-Jones took the oath.

European Union: Debts


2.37 pm

Asked By Lord Pearson of Rannoch

Lord De Mauley: My Lords, EU finance Ministers agreed on 9 May that up to €60 billion of emergency finance can be provided to any member state in accordance with Article 122.2. Only where there are defaults on loan repayments would there be a cost to the EU budget. Member states would be liable for a share. Based on the United Kingdom's contribution to the 2010 EU budget, the UK's share would be approximately 13.6 per cent, or up to a maximum of around €8 billion. Euro-area finance Ministers have also agreed a €440 billion package of assistance to be provided through a special purpose vehicle. The United Kingdom has chosen not to participate in this, and there is therefore no question of any liability arising to the United Kingdom.

Lord Pearson of Rannoch: My Lords, I thank the Minister for that Answer, and I welcome him to his new position. However, I have to point out that this article can only be used legally to help with natural disasters, such as earthquakes and so on. Is he aware that the Eurocrats are also violating Article 125, which prohibits financial bailouts of any kind? If so, can he tell us what the sum of all this illegality is going to cost us? Secondly, since this year we have to send a further £9.7 billion in net cash to Brussels, and since the TaxPayers' Alliance puts the cost of our overall membership at £120 billion a year, has the time not come to review that membership, starting perhaps with an independent cost-benefit analysis?

Lord De Mauley: My Lords, there were several questions in there. I shall first answer the noble Lord's question about Article 125-the so-called bailout clause-which states:

"The Union shall not be liable for or assume the commitments of ... governments ... A Member State shall not be liable for or assume the commitments of ... governments ... of another Member State".

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That does not rule out member states lending each other money. The noble Lord refers to a figure of £9.6 billion. The Government do not recognise that figure. If he can give us a basis for it, we will look into it.

Lord Waddington: My Lords, I wonder whether my noble friend can help me on this point. If we had been foolish enough to join the euro, what would have been our contribution to the Greek bailout simply as a result of being a member of the eurozone?

Lord De Mauley: My Lords, a package of assistance was agreed in early May for Greece, consisting of €110 billion over three years and comprising an IMF standby arrangement of €30 billion and an intergovernmental package of bilateral loans from euro-area member states of €80 billion. This is, of course, subject to strict conditions. I think noble Lords would agree that it is not for me to speculate on what might have been.

Lord Soley: Will the Minister confirm that neither party of the coalition would support any support for the euro?

Lord De Mauley: My Lords, so far as I am aware, despite the best efforts of noble Lords opposite, there is a quite remarkable degree of agreement between the two parties of the coalition.

Lord Newby: My Lords, does the Minister agree that it is in the UK's national interest, as well as that of Greece, that collective action has been taken by the EU to prevent the complete collapse of the Greek economy?

Lord De Mauley: My Lords, I quite agree with my noble friend. We must be alive to the risks that the current uncertainty poses because of financial-sector linkages well beyond the euro area. The UK's support for the €60 billion euro element of the package represents a sensible position that strikes a balance between UK support and the need for the euro area to take the lead in resolving these problems.

Lord Eatwell: My Lords, as the noble Lord is undoubtedly aware, the exposure of British financial institutions to the heavily indebted southern states of the eurozone is estimated at more than £100 billion. In those circumstances, if the European authorities asked for British financial participation in an activity that would strengthen the security of British banks, would the Government participate? Yes or no?

Lord De Mauley: My Lords, I am not in a position to answer a hypothetical question today.

Lord Low of Dalston: My Lords, does the noble Lord agree that any scrutiny by the EU of the UK budget would be unwarranted interference in our domestic affairs?

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Lord De Mauley: My Lords, I quite agree with the noble Lord.

Lord Stoddart of Swindon: Is the noble Lord aware that people simply will not understand why Britain has to make a contribution to the bailout of a member of the eurozone when the United Kingdom is not a member of that zone? What would our potential liability in a total bailout have been had we been members of the euro?

Lord De Mauley: My Lords, the €60 billion euro element of the total €500 billion package is available in the existing EU budget, without a change in legislation, for any member state to drawn on. It is not confined to the euro area. While we declined to participate in the €440 billion element, we cannot and should not simply walk away. A strong and stable euro is in the United Kingdom's national interest. More than 40 per cent of our exports are to the euro area, and I am sure the noble Lord would agree that it would be unwise to jeopardise that.

Lord Hannay of Chiswick: Does the noble Lord find it a little odd that all this questioning ignores the fact that, as a member of the International Monetary Fund and a substantial subscriber to its resources, we provide relief for any number of countries, both in and outside the euro area, and we should do so? That is the purpose of these institutions.

Lord De Mauley: I cannot disagree with the noble Lord.

Lord Higgins: My Lords, given the strain that the weak members of the European monetary union are putting on the system, would it not be wise to consider possible contingency plans which could be used if one of them wished to withdraw?

Lord De Mauley: My Lords, these are early days. Several countries have announced new packages of fiscal recovery measures in recent weeks. I am sure that my noble friend will agree that it would be inappropriate for me to comment on individual member states or to speculate on what might or might not happen.

House of Lords Reform: Committee Membership


2.45 pm

Asked By Lord Lucas

The Minister of State, Ministry of Justice (Lord McNally): My Lords, my right honourable friend the Deputy Prime Minister announced yesterday that he will chair a committee composed of Members of all three major political parties in both Houses. It will be

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charged with producing a draft Bill by no later than the end of this year. The draft Bill will then be subject to pre-legislative scrutiny of a Joint Committee of both Houses. Those serving on the committee will be Mr Mark Harper MP, the noble Lord, Lord Strathclyde, the noble Baroness, Lady Royall, Sir George Young, Mr David Heath, Miss Rosie Winterton, Mr Jack Straw and me, under the chairmanship of Nick Clegg.

Lord Lucas: My Lords, the best part of that Answer was the inclusion of the noble Lord himself in the list of members. Does he agree that it is important that the committee should have a deep understanding of the way that the House of Lords operates within the constitution in order to avoid some of the mistakes made by the previous Government when contemplating constitutional reform? Will he assure us that, unlike previous attempts at reforming the Lords, this one will be conducted openly and with full access for Members of this House to the committee to put their views and ideas?

Lord McNally: I thank my noble friend for his comments. I think that Fabio Capello could not get a better blend of youth and experience than this committee. How the committee will do its work will depend on what it announces after its first meeting. But I agree with him. I hope that Members of both Houses and organisations outside will feel free to feed in their ideas and opinions. But it is a working group to draft legislation. It will not just go around in ever-decreasing circles, which has been the experience of the past 10 years.

The Archbishop of Canterbury: My Lords, given the historic role of this Chamber as representing the interests of non-partisan civil society, will the Minister give us some assurance that the proposals before us do not represent an increase in underlining the partisan character of this House? I speak of course with some interest from these Benches and with the Cross Benches in mind.

Lord McNally: I understand the interest that has been expressed. I can say only that the committee will take such considerations into its deliberations. Its conclusions will be reflected in the final draft Bill which will be presented for scrutiny by a Joint Committee of both Houses.

Lord Grenfell: My Lords-

Baroness Jay of Paddington: My Lords-

Baroness D'Souza: My Lords-

Lord Strathclyde: My Lords, I know that many Peers wish to speak. Perhaps we could have the Convenor next and then someone from the Labour Party.

Baroness D'Souza: My Lords, does the noble Lord, Lord McNally, agree that two fundamental issues must, or should, underline the deliberations of the

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cross-party committee? The first is the need to identify the clear and necessary functions of the House of Lords. The second is that any proposals put forward should necessarily enable this House to do its job more effectively.

Lord McNally: My Lords, when we first meet I will draw those statements to the attention of the chairman, because they give a succinct work-in-progress for us.

Baroness Jay of Paddington: My Lords, given that the coalition has clearly set out the policy that it wants to see in terms of the Bill to be presented to both Houses of Parliament, what is the agenda, the remit, for this committee?

Lord McNally: The remit for the committee, taking into account what the Convener of the Cross Benches has just said, is to prepare a Bill. One of the great weaknesses of all our discussions over the past 10 years has been that no one has had a bone to chew on. We are going to produce a Bill.

Noble Lords: Oh!

Lord Tyler: My Lords-

Lord Grenfell: My Lords-

Lord Forsyth of Drumlean: My Lords, would it not be more useful for the Deputy Prime Minister to set up a committee to look at the performance of the other place, given the amount of legislation that has come to this House to be reviewed and revised without having been debated or even considered in the House of Commons?

Lord McNally: My noble friend has always been skilled at getting an audience on his side and his point may well have merit. But the fact is that the three major political parties which fought the last election all had in their manifestos reform of this place. We are going ahead with those commitments as perhaps the other party should have done at some stage when it had the majority to do so.

Lord Grenfell: My Lords-

Lord Tyler: My Lords-

Lord Kakkar: My Lords-

Lord Strathclyde: My Lords, let us hear from the noble Lord, Lord Grenfell, and then from the noble Lord, Lord Tyler.

Lord Grenfell: I am most indebted to the Leader of the House. It is almost as difficult to get into an Oral Question these days as getting into Fort Knox used to be. In light of the composition of this very cosy committee, if I may characterise it as that, the exclusion from which of all Back Benchers I find discouraging-to put it ridiculously mildly-can the noble Lord assure

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us that we will be given plenty of time for pre-legislative scrutiny because I expect that that exercise will be ferocious, and it should be so?

Lord McNally: I could not agree more with the noble Lord, but the point is that this committee is about drawing up a Bill. It is not a debating society and therefore it is absolutely appropriate that those on the committee should represent the official policy of their parties. As I have said before, some of the speeches from the Labour Back Benches should really be made at Labour Party conferences to change Labour Party policy.

Noble Lords: Oh!

Lord McNally: In the mean time, Labour Party representatives will be on this committee furthering what they presented to the British people at the last general election.

Lord Tyler: My Lords, does my noble friend recall that after the White Paper of 2008, the previous Government promised to bring forward for pre-legislative scrutiny precisely the Bill to which he is now referring, but never did so? In order to meet the concerns expressed on all sides of the House, I suggest that the sooner we get a draft Bill for pre-legislative scrutiny before a Joint Committee, as set out by my noble friend, the better. To accelerate that process, I would draw my noble friend's attention-modestly-to the fact that the Second Chamber of Parliament Bill was introduced in the other House five years ago by Mr Kenneth Clarke, Mr Robin Cook, Mr Tony Wright, Sir George Young and myself.

Lord McNally: The building blocks for this Bill are all around us. The work has been done in many committees; I have served on three over the past 10 years. But this committee is going to do a real job of work that will allow the proper work of Parliament on its proposals.

Schools: Modern Languages


2.53 pm

Asked by Baroness Coussins

Baroness Coussins: My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as chair of the All-Party Parliamentary Group on Modern Languages.

The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): My Lords, we are considering our priorities for the national curriculum, including what subjects it should cover. We will be announcing our plans in due course.

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