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Tuesday, 21 December 2010.
2.15 pm
Prayers-read by the Lord Bishop of Derby.
Introduction: Lord Cormack
2.22 pm
Sir Patrick Thomas Cormack, Knight, having been created Baron Cormack, of Enville in the County of Staffordshire, was introduced and took the oath, supported by Lord Crathorne and Lord Lamont of Lerwick, and signed an undertaking to abide by the Code of Conduct.
Introduction: Lord Sharkey
2.28 pm
John Kevin Sharkey, Esquire, having been created Baron Sharkey, of Niton Undercliff in the County of Isle of Wight, was introduced and made the solemn affirmation, supported by Baroness Scott of Needham Market and Baroness Bonham-Carter of Yarnbury, and signed an undertaking to abide by the Code of Conduct.
Introduction: Lord Ribeiro
2.34 pm
Sir Bernard Francisco Ribeiro, Knight, CBE, having been created Baron Ribeiro, of Achimota in the Republic of Ghana and of Ovington in the County of Hampshire, was introduced and took the oath, supported by Lord McColl of Dulwich and Lord Patel, and signed an undertaking to abide by the Code of Conduct.
Peers
Question
2.39 pm
To ask Her Majesty's Government, in the light of the announcements by the Prime Minister to appoint a number of new life Peers as "working Peers", what is their definition of a "working Peer".
The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, the term "working Peer" has been used since the 1950s to refer to Peers appointed to the House of Lords following nomination by one of the political parties. Such nominations are subject to vetting for propriety by the House of Lords Appointments Commission.
Lord Selsdon: My Lords, I am most grateful to my noble friend for that little bit of history, but is he aware that the official advice given to me is that there is no term "working Peer" and that Members of your
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Lord Strathclyde: My Lords, I know that my noble friend speaks for himself in posing these questions. He said that he was glad of my little history lesson. I know that he has done endless research on this question. He is broadly right: there is no statutory basis for the term "working Peer". It does not appear in the Companion or in our Standing Orders. It has been used in the past as a term of convenience. My view is that all Peers come here to work; no Peer comes here except as a volunteer; and they fully understand the duties that they will have to perform when they get here.
Lord Hunt of Kings Heath: My Lords, I am sure that the noble Lord is right to say that all Peers come here to work, but is not the question whether there is enough room for them to come given the propensity of the Government to appoint many more of their own Peers to flood this place?
Lord Strathclyde: We know, my Lords, that there is not enough room. However, I am delighted to say that, very shortly, I shall be receiving from my noble friend Lord Hunt of Wirral a report on retirement from the House. I hope that will point us in the right direction of finding ways to reduce our numbers voluntarily or perhaps even otherwise.
Lord Geddes: My Lords, is there not an implication in the style of "working Peer" that those of us who are not deemed to be such are idle?
Lord Strathclyde: That was certainly the view in the 1950s when the term was first introduced. I do not think that it is necessary to use the phrase "working Peer" any more. It is certainly not one that I will use from now on and I shall encourage others not to use it either. I do not think that Peers should encourage being described either as working or non-working Peers.
Lord Faulkner of Worcester: Could I ask the Leader of the House about working Ministers? Is he satisfied that a significant number of his Front-Bench colleagues are not in receipt of a ministerial salary? Is that not an undesirable trend, which was started by the previous Administration and continued by this one? I declare an interest as someone who was for a considerable time unpaid and latterly was paid.
Lord Strathclyde: My Lords, I am sure that the noble Lord deserved exactly what he got. The noble Lord tempts me. This is slightly beyond the scope of
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Lord Campbell-Savours: When the next crop of Peers is finally in, what will be the proportion of Peers on each of the Benches?
Lord Strathclyde: My Lords, appointments are entirely in the hands of the Prime Minister, but the coalition agreement indicated that, pending long-term reform of the House, we would gradually move towards appointments made more in proportion to the political parties in the House of Commons.
Lord Phillips of Sudbury: My Lords, after the noble Lord, Lord Hunt of Wirral, reports on retirement arrangements, what does my noble friend think should be done, if anything, about those Peers who do not take the enticement but do not speak, do not vote, do not serve on committees and often do not attend?
Lord Strathclyde: That is exactly why I will await the final report of my noble friend: to see whether or not he raises any of those issues.
Lord Howarth of Newport: My Lords, could a working definition of a working Peer be a Member of your Lordships' House who spends a lot of hours in the Chamber very properly scrutinising ill thought-out, badly prepared and excessive legislation such as the Parliamentary Voting System and Constituencies Billbrought in by this Government?
Lord Strathclyde: My Lords, in many ways, that may well have been a definition of those Peers who worked bravely on behalf of the Opposition in the dark years between 1997 and 2010. However, I indicated in answer to an earlier question that I thought the term "working Peer" was now outdated.
The Earl of Sandwich: My Lords, would the noble Lord agree that without financial inducements there is no possibility of any Peer-or very few Peers-retiring?
Lord Strathclyde: My Lords, when the leave of absence scheme was introduced, several hundred Peers-or in the low hundreds-took advantage of it without financial inducement, so I do not agree with the noble Earl's premise. I also think that the public would find it very hard to understand why many who had been given the honour of being a Member of the House of Lords should then be paid to leave it.
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Prisoners: Diet
Question
2.45 pm
To ask Her Majesty's Government what action they are taking to ensure that prisoners receive a healthy diet and are treated reasonably.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, prisoners are provided with three meals a day and can choose from a multichoice, preselected menu system which is compiled to cover a minimum of four weeks. This menu format takes account of seasonal variations and prisoner preference and is capable of meeting different dietary requirements, such as religious, cultural, medical and lifestyle needs.
Lord Sheldon: I thank the Minister for that reply. Each of the 85,000 people in our prisons costs £38,000 a year, with as many as seven out of 10 offenders who have been in prison ending up in prison once again. Short-term sentences often bring moderate offenders into long-term crimes. Those who start a probation rather than imprisonment limit the increasing rise in the prison population. Should not the Government support Ken Clarke MP in limiting the increasing rise in prison population?
Lord McNally: I warmly endorse the noble Lord's last comment, and hope that all noble Lords will take home for their Christmas reading the Green Paper which my department has published. However, welcome as his point was, it was a little far from the Question. I shall just say that the amount that we spend per day on prisoner meals is £2.20.
Baroness Trumpington: Does the Minister think that it was a good idea to get rid of the prison farms, which supplied pork, vegetables and other necessities for prisoners' well-being?
Lord McNally: My Lords, I do think that it was wrong to get rid of the prison farms. One thing that we are looking at as part of making prison terms working terms is looking again at the idea of prisoners doing farm work. I think that it would be a very good thing to return to.
Lord Ramsbotham: My Lords, I declare an interest as vice-chairman of Natural Justice, an organisation which in 1997 conducted a random double-blind trial in the young offender establishment in Aylesbury, proving that, given the right mixture of vitamins, minerals and fatty acids, offending and antisocial behaviour came down by 40 per cent. We are currently conducting a second trial. Can the Minister assure me that the second trial will be given a more favourable reception than the previous one, after which it took 11 years to convince government that replication was sensible?
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Lord McNally: My Lords, we are following this research very closely. It was conducted by Oxford University and funded by the Wellcome Trust. We understand that it is due to report in 2011 and we will build on the work to which the noble Lord referred, which was based on the Aylesbury Young Offenders' Institute. There is a lot of evidence tying in diet and behaviour, and we look forward to the report, after which the noble Lord will have to wait for our response. I hope that it will be a positive one.
Lord Mackenzie of Framwellgate: My Lords, given the laudable wish to improve the conditions of prisoners, should we not spare a thought at this time of year for the victims of crime, who far outnumber the perpetrators?
Lord McNally: Absolutely. There is no part of the programme that the Ministry of Justice has put forward that puts the perpetrators of crime ahead of the victims. Victims of crime are central to our policy, and all our measures are designed both to help victims and to avoid future victims.
Viscount Falkland: My Lords, will the Minister confirm reports in the newspapers that there has been a marked increase in the number of people serving custodial sentences who are over the age of 65? Is it not possible that many of them will have conditions that require dietary control? How will the Government deal with that? Will it make it much more expensive to look after these people who, in my opinion, should not really be there anyway?
Lord McNally: My Lords, one of the aspects of penal policy at the moment, with longer sentences and a larger prison population, is that there is now a significant number of older prisoners who face many of the problems that my noble friend refers to. That is one of the reasons why in our Green Paper we invite a fundamental and radical look at prisons, at what they are intended to do and at how we respond to these issues.
Lord Sheikh: My Lords, what is being done to arrange for halal meat to be served to Muslim prisoners?
Lord McNally: There is a halal option for all prisoners, and Muslim prisoners take advantage of that option.
Lord Bach: My Lords, I was delighted to hear the Minister say that the Government support victims in just the same way as the previous Government did. However, why is the victims panel being abolished? What is going to happen to the Victims Commission? Will he tell the House about the Government's plans for funding for the Victim Support scheme? My understanding is that they are cutting back severely on funding for victims. How does that work if they are still in favour of victims, as we were?
Lord McNally: A number of these issues will be discussed in the Public Bodies Bill that is going through this House. I am hoping, at some stage during that
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Baroness Howe of Idlicote: My Lords, does the Minister agree that one way both to improve the health of the prisoners and to train for the future might be to run a celebrity chefs course as part of the full-time work that the coalition Government are going to be introducing?
Lord McNally: I am not a great fan of celebrity chefs, but that is just a personal opinion; I know how popular they are. The Prison Service has recently been invited to consult on food, nutrition and behaviour within the young offender institutions, and the School Food Trust, a non-departmental body set up by the Department for Education and Skills, is looking into that with the Howard League for Penal Reform. I understand that it is operating on the basis of work done by Mr Jamie Oliver.
Baroness Farrington of Ribbleton: My Lords, will the Minister care to comment on the fact that the Government seem reluctant to accept the benefits for children of high-quality and suitable diets at midday and, in schools in deprived areas, at breakfast? Will he transfer his commitment to good quality food for young offenders to all children?
Lord McNally: Absolutely, the noble Baroness is talking common sense, as she often does.
Universities: Alternative Medicine
Question
2.55 pm
To ask Her Majesty's Government what steps they are taking to discourage United Kingdom universities from offering Bachelor of Science degrees for courses in alternative medicines such as aromatherapy, reflexology and Chinese medicine.
Lord Taverne: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I declare an interest as chairman of Sense About Science, a charity that promotes evidence-based medicine.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): My Lords, universities decide what they should or should not teach. This is a key protection of academic freedom and helps to maintain the world-class reputation of our higher education institutions.
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Lord Taverne: My Lords, with great respect, as lawyers used to say when they meant the opposite, will the Minister convey to his department that that is not an entirely satisfactory Answer? How can the Government justify supporting universities that show no regard for academic standards and offer science degrees in courses which teach that certain essential oils cure specific diseases, areas of the foot lead to pathways to certain inner organs, and health depends on the pattern of energy flows within the body? If the Government believe in evidence-based science, can they really remain indifferent to the fact that some of their funds are used to promote quackery and mumbo-jumbo and call it science?
Lord Henley: My Lords, I again remind my noble friend that it is very important to remember that universities are autonomous bodies and it is for them to make decisions about these matters. The Government have no power to intervene. I have some sympathy with the message that my noble friend is getting across but it would be wrong for the Government to intervene in these matters.
Lord Harris of Haringey: My Lords, is it not the case that the Government have differentially removed resources from universities on the basis of some of the courses concerned? Does the fact that resources are not being withdrawn from these Bachelor of Science courses suggest that the Government are endorsing the pseudo-science that is implicit within them? If they are not endorsing that pseudo-science, why are they allowing the funding to continue?
Lord Henley: My Lords, the noble Lord is trying to take us back to a debate we had last week. Those matters have been dealt with. I am making clear that it is not for the Government to interfere. We offer guidance to HEFCE. The letter to HEFCE from Dr Vince Cable and David Willetts went out yesterday. That sets out the parameters for HEFCE to make the appropriate decisions about university funding, but it is not right that we should do that.
Lord Willis of Knaresborough: My Lords, given the legislation that went through this House last week, which will now see the taxpayer underwriting degree courses at £9,000 a year, does the Minister accept that the taxpayer should not fund what is little less than quackery in universities such as Thames Valley which offer BSc honours courses in homeopathy?
Lord Henley: My Lords, again I make it clear that it is for the higher education institutions themselves to make these decisions. It would not be right for the Government to interfere.
Lord Krebs: My Lords, in choosing to fund these courses in universities, will HEFCE treat them as science, technology, engineering and medicine courses, in which case they will receive a higher allocation than if they were not treated as such?
Lord Henley: My Lords, the noble Lord makes a very good point. I do not know the answer to it but I will certainly make inquiries and write to him. Again, I reiterate the fundamental point that these are matters for HEFCE to decide, not the Government.
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Lord Marlesford: My Lords, does the Minister agree that it would be a mistake to dismiss the emerging evidence of the benefits of traditional Chinese medicine? I declare two interests. I represented the All-Party Parliamentary China Group at a seminar at Cambridge University last summer in which some very striking evidence was produced. That seminar was attended by six fellows of the Royal Society. I also declare a personal interest in that for the past 10 years I have taken a Chinese mushroom pill daily.
Lord Henley: My Lords, my noble friend is obviously flourishing on his Chinese mushroom pill. I have no strong views about Chinese mushroom pills or other aspects of complementary medicine. However, I want to make it clear that the Government remain neutral on the whole area of complementary and alternative medicines, and we leave all decisions on commissioning and funding in that area to the NHS.
Lord Pearson of Rannoch: My Lords, I declare an interest as the patron of the Register of Chinese Herbal Medicine in this country and as someone who has benefited much from it over the years, like the noble Lord, Lord Marlesford. In that capacity, can I ask the Government to do nothing to discourage these courses, many of which are of very high quality and give assurance to the millions of people in this country who have benefited from alternative and complementary medicine?
Lord Henley: I am sure that the noble Lord has also benefited from his mushrooms over the years. Some noble Lords do and some do not, and different noble Lords have different views. I just want to make it clear that we remain neutral on this issue.
Lord Howarth of Newport: My Lords, the noble Lord says that it is at the discretion of HEFCE as to how university courses should be funded differentially. Is he actually saying to the House that it is a matter for HEFCE as to whether or not funding for the humanities and social sciences teaching is to be cut by 100 per cent?
Lord Henley: My Lords, we have offered guidance to HEFCE in the letter that I mentioned, which was published yesterday. I will make a copy available to the noble Lord. It is then for HEFCE to make its decisions.
Lord Harris of Haringey: My Lords, what does that guidance say about pseudo-science and the courses which the noble Lord, Lord Taverne, mentioned in the first place?
Lord Henley: My Lords, I will make the letter available to the noble Lord as well.
Africa: Ivory Coast
Question
3.01 pm
Asked by Baroness Falkner of Margravine
To ask Her Majesty's Government what discussions they have had with the United Nations, the European Union and the African Union about the results of the presidential election in the Ivory Coast.
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The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, Her Majesty's Government have had extensive contact with key international partners in the United Nations, the European Union, the African Union and the west African regional security body ECOWAS in attempts to forestall conflict in the Côte d'Ivoire, following the disputed presidential election. My right honourable friend the Foreign Secretary agreed with other EU Foreign Ministers on 16 December that the EU would adopt restrictive measures against those obstructing the peace process, including Laurent Gbagbo.
Baroness Falkner of Margravine: My Lords, I thank the Minister for that reply, but I fear that the EU's limited sanctions and travel restrictions will not go quite far enough. Not only has Laurent Gbagbo stolen the election from Dr Ouattara, but he has mobilised paramilitary troops, and it has been discovered that nearly 1,000 people are missing. Does the noble Lord agree that the international community now faces a potential Srebrenica moment, whereby the UN may need to withdraw under fire and atrocities will be committed on a large scale? Will he suggest to his right honourable friend the Foreign Secretary that ECOWAS, and potentially UN peacekeeping troops from Liberia, need to be mobilised to intervene in a more substantive manner than mere sanctions?
Lord Howell of Guildford: My noble friend may well be right to say that pressures do not go far enough. Indeed, the EU is now moving on from the proposed targeted travel ban, which includes Mr Gbagbo, his wives and others associated with him, and is considering much more targeted sanctions and freezing assets. On the EU side, more proposals are being put forward, with the active involvement of British officials and colleagues.
At the UN level, the Security Council has expressed very deep concern. There are further problems about trying to get UN sanctions in place, not least because it is supposed that some countries, certainly among the permanent five members of the Security Council, would oppose them. However, the United Nations has rightly insisted, with our full support, that the UN operation in the Côte d'Ivoire-the so-called UNOCI-stays there, despite the fact that ex-President Gbagbo has insisted that it goes. UNOCI is embedded there; it intends to stay there and does not intend to leave. Further pressures will certainly be considered and may well be necessary.
As for Liberia and Senegal becoming involved in other areas, there are difficulties and it is not quite clear what their remit would be. For the moment, the French troops are still there, although they have been told to leave, and the UN troops are there. That is the position at the moment.
Lord Hannay of Chiswick: Does the Minister not agree that the United Nations force may need something more muscular than what is available to it in the Côte d'Ivoire now? Does not the experience of Sierra Leone show that having an over-the-horizon capability, which can be provided only by countries with fairly sophisticated military forces, is often the best way of deterring the outbreak of fighting?
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Lord Howell of Guildford: The noble Lord has great experience of these things, but different situations demand different approaches. Preventing the rising and particularly ugly conflict in this country from spreading to other areas and affecting everyone's interests may well need a larger military mobilisation. However, for the moment there is a precarious situation in which the UNOCI has insisted on staying there, the army appears to be under the control of ex-President Gbagbo-or President, as he would style himself-and there is a sharp stand-off between the two. That is the position at the moment and it is very hard to comment beyond that. Certainly, any remit for a larger military force would not be at all clear in the present complex situation.
Lord Judd: Does the noble Lord agree that there is a danger of a trend towards tokenism in the international presence in these situations, and that this is disastrous for the effectiveness of the UN? Does he also agree that if this is to be put right, it is absolutely essential that in the Government's approach to the reform of the UN they give priority to increasing the effectiveness of the military planning staff at the disposal of the Secretary-General?
Lord Howell of Guildford: The noble Lord is right that a more effective arrangement of that kind should be followed through in precisely the way that he suggests. However, "putting right" is a big phrase in the present situation. The pressures from outside are bound to have some limitation on them, and within this hapless country there are hideous and dangerous rivalries that I am afraid have been there for many years and are nowhere near being resolved at the moment.
Lord Brett: Quite often, the problems that confront the African public are discussed in your Lordships' House and the solutions seem quite simple. They are not simple in this case, as we well know. Does the noble Lord agree that building up the African Union so that it has both presence and political authority is the only long-term solution to dealing with these kinds of unfortunate events in Africa, although they are becoming rarer? Could I also tempt him, in the spirit of Christmas and given that dictatorship is not limited to Africa, to comment on representations made on the arrest of candidates in the recent election in Belarus?
Lord Howell of Guildford: Belarus is a shade distant from the Côte d'Ivoire, but I will be delighted, in the Christmas spirit, to talk afterwards to the noble Lord about Belarus and indeed about many other places. As for this situation, it is complex and dangerous. We are working to reinforce the will of the African Union in general, and the economic organisation of west African states in particular, to take stronger views. ECOWAS has been quite forward and firm in what it said. It has behind it the driving forces of both Nigeria, which is a gigantic country, and Ghana, which is a successful smaller country. These are sources of authority, and pressure from them, encouraged by us, might make some progress and prevent further slaughter.
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Lord Chidgey: Does my noble friend agree that in spite of more than 20 years of internal conflicts, civil war and endemic corruption, the Côte d'Ivoire remains a focus of economic stability in the region? While a solution to the return of democracy and the rule of law may well be best led by UN and African efforts, will our Government commit to providing essential support for the thousands of refugees now fleeing to Liberia and Guinea to escape the massive human rights abuses cited by the UNHCR?
Lord Howell of Guildford: My Lords, I wish that that was right, and I hope that it becomes right. The areas of stability in the region are Ghana in particular, which is a well governed country, and other countries around such as Nigeria, all of which have some problems but which are large and influential. We hope to see the Côte d'Ivoire come back to being an area of stability, but I am afraid that at this moment it certainly is not.
European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Republic of Indonesia) Order 2010
European Union (Definition of Treaties) (Partnership and Cooperation Agreement) (Republic of Indonesia) Order 2010
8th Report Joint Committee Statutory Instruments.
Motion to Approve
3.09 pm
Moved by Lord Howell of Guildford
Relevant Documents: 8th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 20 December.
Welfare of Farmed Animals (England) (Amendment) Regulations 2010
Mutilations (Permitted Procedures) (England) (Amendment) Regulations 2010
Motion to Approve
3.10 pm
Relevant Documents: 7th and 8th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 8 December.
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Re-Export Controls Bill [HL]
Order of Commitment Discharged
3.10 pm
Moved by Lord Alton of Liverpool
Lord Alton of Liverpool: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Identity Documents Bill
Bill Main Page
Coy of the Bill
Commons Disagreement and Reason
Consideration of Commons Reason
3.11 pm
The Minister of State, Home Office (Baroness Neville-Jones): My Lords, I beg to move that the Commons reason be now considered.
Lord Hunt of Kings Heath: My Lords, I must say that I am rather disappointed that the Minister has not sought to give any explanation at all as to why the Government have not given further consideration to this matter. In fact, it is quite extraordinary that she gave no explanation at all to your Lordships' House.
On 12 November, this House agreed by a substantial majority to an amendment to give compensation to ID cardholders whose cards are due to be cancelled. The Commons have now sent it back to us on the grounds of financial privilege. As it is a privilege reason, my understanding is that it would be contrary to convention to send back another amendment, which would clearly invite the same response. The debate this afternoon none the less affords an opportunity to the House to indicate to the Minister the strength of feeling on this matter and, even at this late stage, to ask the Government to reconsider.
The introduction of ID cards was subject to intense debate in your Lordships' House. We on this side saw the ID card scheme as a convenient and secure way of asserting one's identity in everyday life.
The Minister of State, Ministry of Justice (Lord McNally): I am advised that there is nothing before the House to debate at the moment.
The Lord Speaker (Baroness Hayman): There is a Question before the House that the Commons reason be now considered. Afterwards, a Motion will be called, to which the noble Baroness will speak, and there will then be an opportunity for debate. However, if the noble Lord, Lord Hunt, wants to contest the consideration at this moment, I understand that it is possible for him so to do. If that is his intention, then we are debating procedurally whether or not to debate Motion A.
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Lord Hunt of Kings Heath: My Lords, shall I carry on? Perhaps we can have a debate on the general issue. I am most grateful to the Lord Speaker for helping us through that.
Following the introduction of ID cards, 12,000 or so members of the public purchased a card for £30. The cards were for a period of 10 years. As a result of the Bill, these cards are to be cancelled within a short time, many years before their due expiry date.
Whatever one's views on ID cards, noble Lords from all sides of the House were concerned about the Government's mean-spirited decision to refuse to refund the £30 to those who purchased an ID card. The Home Office Minister, the noble Baroness, has appeared-
Lord Higgins: Can the noble Lord say which Motion he is debating?
Earl Attlee: My Lords, perhaps I may help the House. We are debating whether we should consider the Commons reason. We are not yet debating the Commons reason. If the noble Lord opposite wants to take advantage of our procedure, he is able to do so, but I hope that he will not speak at great length.
Lord Hunt of Kings Heath: My Lords, I am in the hands of the House. I want to debate the issue, as this amendment has been returned from the Commons, but if the House would prefer the noble Baroness to move her Motion first, I can resume speaking afterwards. Clearly that would be helpful.
The Lord Speaker: I sense that that is the will of the House; so we shall take the procedural Motion now, and I am sure that there will be an opportunity for debate when we get on to Motion A. The question, therefore, is that the Commons reason be now considered.
That the House do not insist on its amendment, to which the Commons have disagreed for the reason given.
Page 2, line 5, at end insert-
"( ) giving cardholders the option of being reimbursed £30 on surrendering their ID cards by such a date and pursuant to such arrangements as the Secretary of State considers appropriate"
The Commons disagreed to the Lords amendment for the following reason-
Because it would impose a charge on the public revenue, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.
Baroness Neville-Jones: My Lords, consideration of the Bill during its passage through this House and the other place has recognised that the decision to scrap the ID card and destroy the national identity register was a commitment in the general election manifestos of the Conservative Party and the Liberal Democratic
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Noble Lords are today focusing on the detail of the decommissioning process rather than on the significance of a Government destroying a national database. The Bill is a major step in removing the state from unnecessary and undesirable intrusion in the personal life of the individual. We should not forget the significance of the Bill, nor should we minimise the landmark action of a Government legislating to get rid of a national database. However, there are costs associated with dismantling the scheme. In incurring those costs, the public must be confident that taxpayers' money is being spent effectively and efficiently. The ID card scheme and associated work on biometrics and policy development has to date cost the taxpayer £292 million. Further costs of about £5 million will be incurred in dismantling the scheme.
Further spending would be required if we were to provide refunds. I am aware of the strength of sentiment that has been expressed on this point, but this proposal would cost around £400,000. That may not seem much in the grand scheme of spending to date by the previous Administration on ID cards, and it may be that some Members of this House consider it an insignificant sum, but this is not how the coalition Government look at public finance. We are tackling the deficit which we inherited. We are doing that by ensuring that moneys are spent only where necessary and that such spending delivers more for less. Providing a refund on ID cards does not meet any of those criteria.
I am not ignoring the fact that cardholders spent £30 each on a card for which there will be no further use on enactment of this Bill.
Lord Maxton: If no compensation is to be paid, then presumably the card will become the property of the person who holds it. We briefly debated that point when we considered the Bill. Does that mean that the person who now holds the card as their own property, as they are not being given any compensation for it, will be able to use it to prove their identity in certain circumstances, such as for young people in pubs, or whatever else it might be?
Earl Attlee: My Lords, I think that it would be for the convenience of the House if we allowed the Minister to lay out her stall, as in doing so she may very well answer the noble Lord's point. I know that the Minister is very keen that all noble Lords' questions are answered.
Baroness Neville-Jones: I will respond to the noble Lord's point. The answer is no. The card does not have value or efficacy because it is no longer attached to a database which would enable it to be a valid document that could prove your identity. It is simply a piece of paper, because there is nothing behind it.
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I am not ignoring the fact that the cardholder spent £30 on a card for which there is no further use. During debates here and in the other place opponents of the Bill indicated that the decision to refuse to issue refunds will affect the poorest or the less well off members of society. However, there is no socioeconomic breakdown of cardholders, so neither noble Lords opposite nor the Identity and Passport Service can indicate the economic status of cardholders. I cannot imagine the circumstances in which a person struggling to make ends meet would think that buying an ID card was a necessity. If the ID card scheme was intended to allow travel to Europe or to provide proof of identity to get into pubs and clubs, then, frankly, it is doubtful that we should consider this form of purchase to satisfy the criterion of core household spending.
There is no provision in the Identity Cards Act, which the Benches opposite passed in 2006, for applicants short of cash or on a limited income-
Lord Davies of Stamford: My Lords-
Earl Attlee: My Lords, long experience shows that the best way of dealing with this type of business is to allow the Minister to lay out the current situation and update the House. The noble Lord will have plenty of opportunity to make his points. As I have said before, my noble friend will be very keen to answer them.
Lord Davies of Stamford: I have to say that I think it is quite extraordinary that the noble Earl should find it necessary to try to protect his Minister, who is doing her job and defending as best she can the policy of the Government of the day. I hope that no Minister worthy of the name would need protection of that kind. I would be grateful if the Minister will just answer a simple question. Do the Government realise that there is a fundamental moral issue here? It is not a matter of complex socioeconomic categories-it is a very simple moral issue, is it not? Citizens have bought in good faith from the Government a good or a service and a new Government are now proposing not to deliver. Is that not the action of a dishonest trader? Is that the sort of example which this Government believe it is right to set for the nation?
Lord McNally: My Lords, as there have been a number of interruptions, and we are perhaps following precedents which perhaps should have been challenged before, I shall just read to Members on both sides what the Companion says on this matter:
"A member of the House who is speaking may be interrupted with a brief question for clarification. Giving way accords with the traditions and customary courtesy of the House. It is, however, recognised that a member may justifiably refuse to give way, for instance, in the middle of an argument, or to repeated interruption, or in time-limited proceedings when time is short. Lengthy or frequent interventions should not be made, even with the consent of the member speaking".
I suggest that we stick to the Companion.
Baroness Neville-Jones: That legislation did not put in place a scheme to offer financial support to buy cards at the point of issue, nor was there any provision
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I acknowledge that the intention of noble Lords is to ensure that the individual is protected where appropriate. That is a key and important function of this House. In this case, however, we have to protect the interests of the taxpayer. We should not be spending yet further sums of taxpayers' money on a scheme that has very little public support and that would be scrapped on enactment of this legislation by Parliament. I beg to move.
Lord Hunt of Kings Heath: My Lords, first, I apologise to the House for intervening rather too early in proceedings. I have listened very carefully to the Minister but, although she says that she has listened, she appears surprisingly unsympathetic to the thousands of people affected. What really worries me is that she is completely oblivious to the precedent that is being set.
At Second Reading, she said that,
- "those who chose to buy a card did so in the full knowledge of the unambiguous statements by the coalition parties that the scheme would be scrapped if we came to office. They cannot now expect taxpayers to bail them out".
- "citizens have to be aware of what is going on around them. It was clear that this scheme would have a risky future ahead of it".-[Official Report, 18/10/10; col. 715.]
She dismissed the potential refund of £30 as,
- "rather less than probably most people pay for a monthly subscription to Sky".-[Official Report, 18/10/10; col. 742.]
On Report, the argument had advanced. The noble Baroness said:
"We do not believe that the statutory basis of the issue of ID cards creates a contract or anything akin to a contract in relations between the Secretary of State and the cardholder. Remedies that would be available in the courts if the contract were governed by the law of contract or consumer legislation ... is not available for identity cards".-[Official Report, 17/11/10; col. 792.]
Today, we hear this argument about the socioeconomic background of holders of the card. What on earth has that got to do with it? This is a matter of principle.
Let us just think about the wider principle, not just in relation to ID cards and the sum of £30. For example, an incoming Government say that because they disagreed with the original policy of a previous Government, it is just tough luck on members of the public who decided to act on the provision that became available as a result of the actions of the previous Government. Does the Minister not see that, in refusing to refund the £30, she is developing a new principle that will essentially reduce trust in Governments generally?
What policies might this apply to in the future? If we were to accept the logic of the noble Baroness's argument, it would be open to an opposition party to say, "We don't agree to a policy being brought in by the current Government". If, subsequently, that opposition party came into Government, they could simply rescind the policy and refuse to pay any compensation if that policy had involved an outlay of money by members
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It is no wonder that on Report the noble Baroness's noble friend Lord Vinson described the Government's position as "morally indefensible". What is her response to my noble friend Lord Richard who pointed out that,
- "identity cards were not sold on the basis of, 'You are buying it from a Labour Government, but if another one come in, things may change and you may have to renegotiate it'"? -[Official Report, 17/11/10; col. 789.]
What does she say to the noble Earl, Lord Erroll, who thought that the Government were guilty of mis-selling? As he said,
"If you expect a member of the public, seven months ahead of the general election, to be able to predict its outcome, there are a lot of geniuses among the public whom we ought immediately to recruit to become pollsters".-[Official Report, 17/11/10; col. 787.]
Has she taken on board the comments made by her noble friend Lord Phillips of Sudbury? On Report, he said:
"Governments must set an example of the standards they expect of private industry. Had private industry engaged in a tactic of this sort, noble Lords on all the Benches would have been up in arms, and rightly so".-[Official Report, 17/11/10; col. 785.]
On Report, the noble Baroness said that she would look at the matter again. The defeat of the Government after her comments required no less. I would ask her what form her further consideration took. Will she say why the Government are not taking on board the views of this House? She cannot simply hide behind financial privilege.
She also said on Report that she would seek advice on whether the Government risked legal challenge from the holders of ID cards since the Government are essentially confiscating cards without compensation. She was asked by the noble and learned Lord Morris of Aberavon to confirm that the advice she received came from the law officers. Will she inform the House whether the law officers gave such advice?
Finally, I appeal to the noble Baroness to consider the matter again. The Government are setting an extraordinary and dangerous precedent by not paying compensation. Such a precedent goes much wider than ID cards and would be very unfortunate as regards trust in government. She should think again.
3.30 pm
Lord Howarth of Newport: My Lords, it is one more noxious constitutional innovation on the part of the coalition that the Government seek to pray in aid financial privilege when they do not want to face up to the consequences of their policies and their legislative actions in this House. Historically, I believe, privilege has not been claimed in relation to matters of expenditure. I am very willing to be corrected by noble Lords who are former Speakers or Deputy Speakers of the House of Commons, but that is my belief. There is hardly a policy, a Bill or a statutory instrument introduced by Governments into Parliament that does not involve
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On that point, I appreciate that the noble Earl, Lord Attlee, always seeks to act in the best interests of the House, as does the noble Lord, Lord McNally, but I would say to them that we are a debating Chamber. As my noble friend Lord Davies said, the noble Baroness, Lady Neville-Jones, is very well able to look after herself. The House respects her and I am sure that she is personally willing to enter into debate.
On the constitutional point, I think that this really is of the greatest importance. It seems both cowardly on the part of the Government and contemptuous of this House that they seek to evade debate and, under a new and bogus claim of financial privilege, seek to prevent us from voting on issues on which we have traditionally been entitled to vote. This is a constitutional innovation of which your Lordships' House should be aware and upon which it should reflect very carefully indeed.
Baroness O'Cathain: My Lords, we have just listened to the most toe-curling self-righteousness from Members of the Opposition, who were, after all, the ones who introduced the ID cards scheme in the first place. They encouraged people to think that it would be a great thing to have an ID card. The fact that 30,000 people or thereabouts bought ID cards does not necessarily mean that those people thought about whether the cards were a good thing; they were encouraged to think so by the previous Government. Now we have the noble Lord, Lord Howarth, whom I have a lot of time for, saying that the Government will have to face up to the consequences of their policies in this House.
I say to noble Lords opposite that they should all face up to the consequences of their policy of bringing in ID legislation in the first place and of encouraging people to go and buy the identity cards. I am not taking sides on this one-
Baroness O'Cathain: No, I am not. Please listen to what I have said. The self-righteousness coming from the other side is quite sickening.
I abstained in the debate because I felt that there was a moral justification for the money to be repaid to the people who were conned by those opposite into spending money on ID cards. There is no point in denying that by trying to be the people who support everybody out there and by adopting a high moral tone and self-righteousness. Rubbish.
Lord Pannick: My Lords, I hope that I will not be accused of being self-righteous if I say that I share the concerns that have been expressed by the noble Lords, Lord Hunt of Kings Heath and Lord Howarth of Newport.
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Behind the moral issue and the issue of principle, I think that there is a legal issue. The Minister will recall, as mentioned by the noble Lord, Lord Hunt of Kings Heath, that it was suggested to her on the previous occasion when we debated the matter that she might wish to take specific advice from the law officers as to whether the Government's approach is consistent with this country's obligations under the European Convention on Human Rights. The concern, which is very simple indeed, is that the Bill removes a property right without any compensation, in breach of Article 1 of the First Protocol to the ECHR and, therefore, that the amendment that noble Lords approved was not only wise but necessary.
When we last debated this matter, the Minister's answer was that the ID card remained the property of the Government and therefore there was no difficulty. With respect, however, that is no answer at all. It is very well established in the case law of the European Court of Human Rights-indeed, it is common sense-that, when the Government grant a licence or an authorisation to do something, that of itself establishes a property right. If that licence or that authorisation is then removed by the Government, contrary to the expectation that has been created, the Government have a duty, other than in the most exceptional circumstances, to pay compensation. That legal obligation is precisely consistent with the substance of our debate on the previous occasion and with the amendment that was approved by noble Lords.
I therefore join the noble Lord, Lord Hunt of Kings Heath, in asking the Minister to explain whether she has indeed taken specific advice from the law officers, to deal in more detail with the substance of this concern and to explain to noble Lords how it can be that what the Government intend to do is consistent with this country's international obligations.
Lord Campbell of Alloway: If there is a breach of human rights, of course that is a worry, but it is the job of the Court of Human Rights to put it right. If we are concerned with a matter of principle-I understand what the noble Lord is saying-surely the policy of a previous Government cannot be constitutionally binding on the next Government. Whether it is unfortunate and whether there is criticism, the policy of this Government was in fact accepted by this House. If we have got it wrong and the noble Lord is right, that will not affect the validity of this piece of legislation in this country. However, if an application is later made to the Court of Human Rights, it may decide that the point of principle here is that this Government-I do not always agree with them or, indeed, with any Government-have the entitlement in constitutional principle to reject the advice of the previous Government.
Lord Pannick:I have, of course, enormous respect for the knowledge and judgment of the noble Lord, Lord Campbell of Alloway, but on this occasion, with respect, I do not agree with his opinion. It is part of the law of this country that the Minister, like all other Ministers, has a positive duty under the Human Rights Act to confirm to this House and the other place that the legislation that the Government are bringing forward
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Baroness Hamwee: On all previous occasions when we discussed this matter, I was honest with the House that I had some difficulty with it, but is what was the substantive issue then in fact the issue for today? I have been waiting to hear some comment on the Commons reason for disagreeing with this House's amendment. The noble Lord, Lord Howarth of Newport, addressed the issue of financial privilege and suggested that we should not accept it. However-and this is an entirely personal view-I think that this may well be an issue that goes to heart of the relationship between the two Houses. I have grave doubts as to whether we should tackle that convention on the back of this Bill. This is an important, stand-alone issue, but it is not one that we should seek to overturn in this manner.
Lord Howarth of Newport: My Lords, I agree with the noble Baroness, Lady Hamwee. Before she sits down-
Lord Morris of Aberavon: My Lords-
Earl Attlee: We should listen to the quick intervention of the noble Lord, Lord Howarth.
Lord Howarth of Newport: I agree with the noble Baroness that the constitution issue has to be disentangled from the question of what is immediately to be done about the practical issue-the substance of the policy-in the Government's rejection of the amendment that was made in this House. I hope that the noble Baroness, Lady Hayman, the Lord Speaker, is already engaged in this matter-I am sure that she is-and that she will wish to hold discussions with the Speaker of the House of Commons about the possibility that the doctrine of financial privilege is being extended in a manner that is dangerous to the interests of this House and the fulfilment of its proper responsibilities.
Lord Morris of Aberavon: My Lords, the noble Lord, Lord Pannick, made a powerful case on whether or not a right of property has been established. He made an equally powerful case on the last occasion that we debated the matter. I asked then whether advice had been sought by the Minister, particularly from the law officers, as that would have been helpful. I understood that we might be told before Third Reading that that advice had been sought. In the Bill there is a declaration that the legislation is compatible with the European Convention on Human Rights. Having heard the powerful arguments of the noble Lord, Lord Pannick, is the Minister satisfied that that is the case?
Lord Phillips of Sudbury: My name was on the amendment and I have listened carefully to what my noble friend the Minister said in opening the debate. Three issues need clarifying before we can safely push this matter forward. The first has been well aired-namely, whether this is compatible with the European Convention
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The second issue has also been well aired-my noble friend Lady Hamwee has just referred to it-namely, whether we can at this juncture pick a fight with the Commons on its reasons. I listened carefully to what the noble Lord, Lord Howarth, said and I would be the first to leap on to the barricades if I felt that the privileges of this House were being undermined, but we need clear advice on that. Perhaps the learned Clerk may have something to say. I am very disappointed to see him shake his bewigged head. My own sense, for what it is worth, is that the Commons have a case. The amendment is a specifically money amendment; it specifically commits the Exchequer to compensation at the rate of £30 per ID card surrendered.
3.45 pm
Lord Howarth of Newport: Does the noble Lord agree that this is about expenditure and not about revenue raising? It is a relevant distinction.
Lord Phillips of Sudbury: My understanding of the conventions is that we have no right to impose expenditure on the Commons and this is an expenditure provision-an expenditure of £30 per card surrendered. However, that is another matter on which we must have absolutely clear advice. It would be folly for us to go ahead today-
Lord Low of Dalston: If we cannot contest the issue of financial privilege, why is it being raised at this stage when it was not raised when we debated the matter previously? If it is a matter of financial privilege, why was it permissible for this House to debate the matter previously and to pass the amendment that it did? Would it not have been appropriate to make the point that this was a matter of financial privilege and not open to the House at that stage?
Lord Phillips of Sudbury: I am obliged to the noble Lord for his intervention-of course, he is right-but I took some comfort on the day that we debated and passed the amendment from the fact that my noble friend the Minister made no reference to privilege. I took that, obviously fallaciously, as indicating a potential open-mindedness on the part of the coalition Government, my Government, to think again on this issue were we in this House to pass the amendment that we did. That is my third point: regardless of whether the two legal issues here are stoppers, I would have hoped-even at this stage, given that views across this House have been expressed with not a single voice in favour of what the Commons are proposing to do vis-à-vis the amendment-that my noble friend would be able with my other friends in government to do the right thing. The right thing is abundantly clear. My noble friend talked of effectiveness and efficiency. It is not effectiveness or efficiency that we are talking about here; it is fairness, which is the single most important claim made by my Government. I want to see them walk the talk.
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Lord Soley: To follow the noble Lord's speech is rather pleasant, because he put more passion into it than I could hope to put into mine and because I agree with him. I had not intended to intervene, so I shall brief, but I am increasingly concerned about the way in which the procedures both on issues of this nature and in the House more generally are being changed. As my noble friend pointed out, supported by the noble Baroness, Lady Hamwee, there is a problem about us overturning what the Commons have done. I am not saying that we should do that now, but I am becoming less clear about financial provisions. Very few issues come back to this House that do not involve some expenditure. If the rule is to be no expenditure, there will be an awful lot of things that we will be unable to pursue. That will affect all sides of this House.
I say again, as I have said on many other issues, that the Government are driving through and changing procedures, which is deeply unsatisfactory for this House. We saw it from the Front Bench today. I know that the noble Earl, Lord Attlee, is keen to help the House, but to have a Minister telling another Member of the House not to intervene when the other Minister has already accepted the intervention does not fit with the guidance that the House offers. I have my reservations about whether this really is a self-regulating House, but, if it is, one Minister should not intervene to tell a Back-Bencher to sit down and not intervene on a Minister who has already accepted the intervention. It must be wrong. For the noble Lord, Lord McNally, who is sadly not in his place, to follow that up in the way that he did was not helpful. The Government have to recognise that they are not in charge of Parliament. Parliament controls government; government should not control Parliament. We are seeing far too much of this. I support my noble friend Lord Howarth in his request to the Speakers of the two Houses to try to clarify this important issue of expenditure and finance-raising.
On the issue itself, the noble Baroness has strayed into the area of the pros and cons of ID cards. I was always unsympathetic to the idea of ID cards, but the Minister has problems coming down the line. She might want to have a word with her colleague the Minister for Health in this House, who was very helpful to me. A couple of months ago, I raised with him the situation that is developing in the health service where GPs' surgeries are refusing to register patients unless they produce their passports as ID. They will not accept any other form of ID. By taking away the ID card, we are creating a situation where other things become an ID card. Please do not think that this issue is going away. It will be difficult.
That is another part of the noble Baroness's problem. Frankly, what the noble Lord, Lord Phillips, said in his intervention is absolutely right. It is sheer common decency that when a Government take over and choose to reverse a policy taken by the previous Government, which is a perfectly reasonable thing to do, they must make sure that ordinary citizens do not lose out. That is what is wrong with this. I am afraid that it also fits in with the danger of the Government trying to run Parliament and not the other way round.
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Lord Faulks: My Lords, the noble Lord, Lord Pannick, and other noble Lords speak with great authority on the Human Rights Act, the convention and our obligation to follow the Human Rights Act. On this issue, there are strong cases to be made on both sides and there are abstentions. The reason why the Government may have decided that the Bill is compatible with the Human Rights Act is simply that the Act is concerned with substantial matters; it is concerned with violation of rights of real value. Whatever one may say about the value of £30, I respectfully suggest to the House that that is not what the Human Rights Act is concerned with. That is one of the reasons why the Human Rights Act has not always been welcomed on all sides of the House.
Lord Sewel: I briefly follow my noble friend Lord Howarth on the substantive issue of the Commons reason. This is a sensitive issue and there are clear conventions that we should not in this House criticise the proceedings of another place-and I would not dream of doing so. However, I wonder whether I can take Members of this House back to another period of Conservative government. I recognise that a declining number of Members of this House were in here at the time of the last Conservative Government. Those of us who were used to delight in the tussles between my noble friend Lady Hollis and my friend but, alas, noble opponent at the time, Lord Mackay of Ardbrecknish, on pensions legislation. Frequently, Lord Mackay of Ardbrecknish had to make concessions and was sometimes defeated. The effect of those concessions and defeats was that this House increased government expenditure. That Conservative Government never cried financial privilege.
Lord Maclennan of Rogart: My Lords, before the House reaches a judgment on the Commons reason, there ought to be absolute clarity about the intention of the House of Commons. It is far from clear in the reasons that have been provided that it is the intention of the House of Commons to claim financial privilege. A single reason is given and that is that the amendment that we are considering, which was carried in this place, would impose a charge on the public revenue. In opening the debate, my noble friend explained that as the Government giving priority consideration to the taxpayer over those who have paid for their identity cards. That does not sound like the invocation of the right of the House of Commons in respect of financial privilege. Without some greater authority indicating that that was the Government's intention, there seems no bar to this House paying serious consideration to the law officers' views on the legality of what is proposed under the terms of the human rights convention. I hope that the House will not be forced to take a decision without those views being made abundantly clear and without absolute clarity about the intentions of the Commons in bringing forward this sole reason for their disagreement. To my mind it is far from clear. We will establish a bad precedent if we determine that claims can be made lightly, not by the Commons themselves, that their privilege in this respect has been breached.
Lord Maxton: I shall be brief, although I thought that the actions of the noble Earl, Lord Attlee, and the noble Lord, Lord McNally, were provocative, to say
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On the relationship between ourselves and the House of Commons, the important question was asked why we were allowed to vote on the amendment in the first place if, in fact, it was not legally our right to do so. If we voted for it and it went back to the Commons, surely we should be allowed to look at it again and vote on it again if we so wish.
I am one of very few people in the House who came out publicly in support of the ID card and opposed this piece of legislation. I think that we will come back to the issue. I listened to some of the debates last night on the register and the census and that sort of thing and I thought to myself that, if we all had ID cards, it would all be irrelevant and we would not need to go through that process. I am still not at all clear in my own mind as to what the standing is of the ID cards that have been issued. The Government are claiming that the cards are their property, so surely they should ensure that every one of them is returned to them. They should not be leaving that in the hands of private individuals; it is up to the Government to say that the cost of claiming back all the ID cards would be as much as paying compensation to those who have them.
The other point is one that I have consistently raised. Can someone actually use the ID card-perhaps in an exchange between two people, such as a barman or pub owner and a young person? The youngster might say, "I've got an ID card", and show it to the barman, and the barman could say as a result, "That's fine, I accept you're over 18". Is it legal for that person to do that? If the card belongs to the Government, surely the person has no right to use it in that way. Can we get an answer to that question from the Minister? We seem to be in limbo on it. I do not quite know what the standing is of the ID cards held by individuals if they are not being compensated for them in any way whatever.
Lord Palmer: As a compromise to this extraordinarily heated debate, would it not be worth considering that those people who have invested £30 on an ID card could put that cost against their next tax return?
Baroness Neville-Jones: My Lords, we have had another lively debate on this subject. Perhaps I can deal with some of the issues to which it has given rise. On compatibility with the European Convention on Human Rights, the Government would not put forward legislation that they did not believe to be compatible with the convention. We believe this Bill to be compatible with the convention. I hope that that is a clear statement. We believe it to be compatible with the European Convention on Human Rights.
Lord Hunt of Kings Heath: Can the Minister confirm that the law officers have given such advice? She said on Report that she would find out. I am surprised that here we are, over a month away, and noble Lords who took part in that debate have not yet been informed of that.
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4 pm
Baroness Neville-Jones: I repeat to the House that the Government believe that this legislation is compatible with the European Convention on Human Rights. I do not think that I am obliged to say whether or not we have consulted the law officers, nor to say what legal advice we have taken. However, we believe it to be compatible with the convention. As we take our duties seriously, that is a clear statement to the House that we believe that we are acting lawfully.
Lord Pannick: Does the Minister appreciate that the question is not simply whether or not the Government are satisfied that the Bill that they are putting forward is compatible with the convention? Will she address the point that on the previous occasion, and in the debate today, a specific concern has been raised about why it is feared that the Government's position is incompatible with the convention? That is why it was suggested to the Minister on the previous occasion that specific advice should be taken from the law officers on this precise point. I am sure that it would assist the House if the Minister were at least able to say whether she went back to the law officers in the light of the debate on the previous occasion, and in the light of the specific concern that was raised, in order to assure herself and noble Lords that that point had been considered and the Government were satisfied with regard to it.
Baroness Neville-Jones: I do not think that I am able to enlighten the House any further on the question of taking legal advice. We believe our actions to be lawful.
Lord Morris of Aberavon: I have the record of our debate on the previous occasion in Hansard. I asked, and my noble friend Lord Hunt has referred to this:
"On the assumption that no advice has been obtained from the law officers on these matters, would it be prudent before the next stage of the Bill to obtain such advice?".
"My Lords, I will confirm the advice that I have received".
"Is the advice from the law officers?",
"I am not sure that I can confirm that. I will seek to do so before Third Reading"-
that is, confirmation that advice had been received from the law officers.
Baroness Neville-Jones: My Lords, I think the House knows that it is a strong convention that we do not reveal the source of legal advice. I am confirming to the House that we believe that we are acting lawfully.
Lord Sewel: As I understood it, it is quite right and proper that a Minister does not reveal the nature of the advice that has been received from law officers. It is another matter for the Minister to confirm whether or not advice has been sought, and it is that second question that the House wants an answer to.
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Baroness Neville-Jones: Advice is sought on legal points in the normal course of events.
Lord Higgins: The question is really quite simple. When this was debated last time, we understood that my noble friend would go back and take advice from the law officers. What that advice may be is one thing, but can she confirm that she did in fact go back to the law officers and seek their advice?
Baroness Neville-Jones: I think what I said was that I could not confirm that the law officers had been consulted, and I cannot confirm that today either. I am afraid that I cannot take this issue any further. We believe that we are acting lawfully; I would hope that that was a good answer to the House. We are acting lawfully.
Lord Low of Dalston: If it is the case that the Minister cannot confirm whether or not the law officers were consulted, is she in fact confirming that she did not go back and seek the advice of the law officers, as the House had requested and as she had undertaken?
Baroness Neville-Jones: I am neither confirming nor denying; I am simply saying that I cannot take this any further.
Lord Howarth of Newport: Is it the case that the noble Baroness does not know whether advice has been sought from the law officers, or is it that she thinks it is inappropriate to tell the House whether advice has been sought from the law officers?
Baroness Neville-Jones: I really have nothing more that I can say on this subject. Could I go on to the question of financial-
Lord Clinton-Davis: Why is the noble Baroness unable to answer the very relevant question put by my noble friend?
Baroness Neville-Jones: Because I think it is inappropriate to answer it and I cannot take the matter any further. I am very sorry, but I do not think that I can take this any further. The House has made its point and I have given an answer. The House may not regard this answer as satisfactory.
Lord Morris of Aberavon: On the specific point, the noble Baroness said:
"I will seek to do so before Third Reading".
That was a promise made to the House in the course of the deliberations. Did she seek to do so before today's proceedings? Has she made any attempt to do so? We know the conventions, which have been broken over the years. One could give a series of examples of the law officers coming to another place to give advice. They can do so, so it is not a convention that cannot be breached at all, but I come back to the simple statement that the noble Baroness made:
"I will seek to do so before Third Reading".-[Official Report, 17/11/2010; col. 792.]
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Baroness Neville-Jones: This is becoming rather a sterile exchange. I am not able to enlighten the House further.
Lord Howie of Troon: My Lords, this has become somewhat unsatisfactory. Is it not time to send for the Leader of the House?
Baroness Neville-Jones: This is a matter for the House, but I should like to answer the other points that have been made.
Lord Pannick: I am very grateful to the noble Baroness but she really has not answered the substance of the concern. I suggest that the only way she can do that is by telling the House whether or not the law officers have been consulted. It is a matter for the House what step to take but I suggest to the noble Baroness that the appropriate step for it to take is to adjourn further consideration of this matter until she is able at least to assure it that the concerns that have been expressed by a number of noble Lords have been considered by the law officers. I entirely accept that there is no obligation on the Government to tell the House what the advice of law officers is but it must be assured that they have been consulted on this matter. Therefore, I ask the noble Baroness to accept that the appropriate step is for further consideration to be adjourned.
Earl Attlee: I think that it is appropriate for the Minister to carry on with the rest of her speech, answer the other questions that noble Lords have asked and wait to see whether further inspiration arrives.
Lord Dholakia: My Lords, may I make a suggestion? Would it not be appropriate for the House to adjourn to enable the Minister to seek the advice that is being asked for and then the House could resume soon after that?
Earl Attlee: My Lords, my noble friend has numerous points to answer. Let us hear what she says and whether she can convince the House to agree with another place.
Lord Soley: That is unacceptable because the noble Baroness gave a commitment to this House, as has been quoted. The answer to the question is a simple yes or no. If she gave that commitment and then did not deliver on it, she needs to say that. The House will not necessarily hang, draw and quarter on the issue, but we need to know the answer. If the Minister cannot answer that question, I am afraid that the Government have to answer the wider question of what they are doing in this regard, given that they are responsible for this department. If she cannot answer the question, the case for adjourning the House while she finds the answer, as the noble Lord has just suggested, or summoning the Leader of the House is very strong. We cannot have a situation whereby other Ministers keep jumping up to defend this Minister; that cannot be right. The Minister must be responsible for what she said at a previous stage and for what she is saying today. If she is not responsible for that, it is a serious matter.
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Lord Hunt of Kings Heath: My Lords, I am glad to see the Captain of the Gentlemen-at-Arms in her place. The position is that the noble Baroness, Lady Neville-Jones, on Report, told that House that she would seek to take certain actions. It has now become clear that for the House to come to a view on this matter, it is important that it knows the information that noble Lords requested on Report in relation to the law officers. It is equally clear that up to this point the noble Baroness has not been able to satisfy the House. Given that this is almost the end point for the Bill, I would suggest that if she is unable to answer the point, a short adjournment would in fact be sensible and in order.
Lord Waddington: My Lords, I am getting rather exasperated by all these exchanges. Surely, if the House is not satisfied with the replies given by the Minister, the time will come when that can bear on noble Lords' judgment when they vote. However, the Minister has given her reply and I, for one, think it is high time that this debate came to a conclusion. The Minister has been very generous in giving way. Perhaps I may remind her that she is not obliged to give way. That has been made quite clear already this afternoon, when a long passage from the Companion was read to the House. I respectfully submit that it is about time we followed normal procedures and, if the House does not like the replies given by the Minister, that can be reflected in its vote. However, noble Lords must not disrupt the business of the House by silly points of order.
Lord Howarth of Newport: My Lords, the noble Lord, Lord Waddington, suggested that we should resolve this matter by a vote. I am not entirely clear whether it is the position of the Minister that the House should not be entitled to vote because the Government are claiming financial privilege.
Lord Phillips of Sudbury: Perhaps I may intervene briefly because I-
Baroness Anelay of St Johns: My Lords, it is customary, when one Peer in this House asks a question, that permission is granted for an answer to be given, if the Minister wishes to do so, before another Peer gets up. I merely ask that we might follow some of the usual courtesies today.
Lord Phillips of Sudbury: I am grateful for the noble Baroness allowing me to respond to the argument of the noble Lord, Lord Waddington, on which, although he is my friend, I have to say I disagree. The points being made are not remotely trivial and I really believe that the House will be much clearer in its mind if we deal with this preliminary matter first, because, frankly, to go ahead and vote when a crucial, central and legal matter is unresolved seems to be the worst of all worlds. That is why I would favour an adjournment, as suggested by my noble friend Lord Dholakia.
Lord Davies of Stamford: My Lords, does this not go to the heart of parliamentary government as we know it and understand it in this country? The Minister gave a clear and solemn undertaking on a previous
21 Dec 2010 : Column 1015
Baroness Neville-Jones: My Lords, I am just not in a position to advise what information has been provided by the law officers, but I can confirm that we are satisfied that the provisions of the Bill are compatible with the ECHR. I have an answer on the substance. Could we perhaps turn to the question of financial privilege?
Baroness Neville-Jones: The question has been asked as to whether the Government are "sheltering behind financial privilege". The Government are quite clear that they do not actually think that it is justified to refund this money. The Government's position is very clear on the substance. As regards the issue of financial privilege, the Commons cannot even make a determination without the House of Lords itself putting forward a proposition. One has to have the proposition from the Lords before the House of Commons can take a view on that. It is obviously then a matter for the Commons to determine. The Government are not going to avail themselves-
4.15 pm
Lord Hunt of Kings Heath: My Lords, that is well understood. The Commons did not consider this matter; it was simply returned to this House with financial privilege. I have no doubt that that might happen again. The point is that the Government were given a number of weeks to reconsider the matter. The noble Baroness, on Report, wished to dissuade the House from voting and said that she would give the matter further consideration. She has not explained what further consideration has been given and why the Government are sticking to the principle of no compensation despite the clear majority of votes on the matter in your Lordships' House.
Baroness Neville-Jones: My Lords, the Government have given it further consideration and decided that they are not going to supply refunds. That was the position of the House of Commons. It is very clear that the Government are not going to avail themselves of the opportunity to waive financial privilege. This amendment would impose a charge on the taxpayer. Our view is that the taxpayer should be saved from having the charge imposed. Citizens are also taxpayers, not simply purchasers of ID cards.
On the substance of the matter, I say that we should have a sense of proportion about £30. It is absolutely not the same as, for instance, the example cited by the noble Lord opposite of assisted places for children. Of course, if a child had an assisted place, their educational career depended on it, and the policy changed, one
21 Dec 2010 : Column 1016
The card will no longer have a database behind it to demonstrate its validity. Of course, it will not be an illegal act for someone to use it when they go to the pub. However, it has no legal validity, and one could perfectly well use a passport or driving licence for that purpose. For all these reasons, the Government do not believe that it is right-
Lord Berkeley: Will the Minister explain what would happen if someone used one of these ID cards to go for a short holiday on the continent? It is a lot cheaper to buy an ID card than a passport. She may say that £30 is nothing to people who go on holiday, but that is a slightly arrogant approach. She says that the card could be used in pubs that ask for ID, but that no one will be able to check it against a database. However, we all know, from going into and out of this country, that there are different ways of being checked by electronic means. Will these identity cards still work when one goes through immigration or will they be cancelled?
The Minister says that the database has been abolished. I doubt whether any database ever gets abolished, because MI5 or someone else will want to keep it. At what stage will the ID card not work when one goes through immigration, and what is the other solution? Not everyone has a driving licence-why should they? Will it be the case that one cannot go abroad unless one has a passport, so that going abroad will not be possible for people who cannot afford a passport? I would be glad if the Minister would respond to some of those questions.
Baroness Neville-Jones: The ID cards will not have a database behind them. The previous Government decided that the database should be separate from the passport database. It is not possible to join up the two databases because they are not compatible; that is one of the problems. This database will not exist. Therefore, the ID card, although it might be regarded as a courtesy proof of age, for instance in a pub, will have no legal validity at the border. The receiving country might be willing to accept it, but I fear that the individual might not get back into this country because they would have to show a document that had a database behind it.
Lord Morris of Handsworth: My Lords, can we return to the point raised by the noble Lord, Lord Pannick? It is a very simple point. The citizen acquires an identity card that becomes his or her possession. The Government, as is their right, withdraw the card and it is nullified. Have the Government fulfilled their obligation not under the Human Rights Act, as we have been invited to do, but under the European convention, as the noble Lord, Lord Pannick, reminded us? That, for me, is the crucial issue. It is crucial
21 Dec 2010 : Column 1017
Baroness Neville-Jones: Yes, my Lords, I give the assurance that we believe this legislation to be compatible with our commitments under the European Convention on Human Rights. I have tried very hard to answer the House's points and I beg to move.
Lord Hunt of Kings Heath: My Lords-
Earl Attlee: After the question has been put, no one can speak.
Lord Hunt of Kings Heath: My Lords, I wish to move that the House do adjourn to allow the noble Baroness the Minister to seek further advice so that the House may be allowed to hear the response that she should have given to noble Lords following her commitment on Report. I should like to move that further consideration of Motion A be adjourned.
Earl Attlee: My Lords, I strongly oppose the question that the House do now adjourn. We need to determine this matter now.
The Lord Speaker: It is perfectly in order for the noble Earl to oppose the question after I have put it to the House, so perhaps I may do that. The question, as I understand it, is that further consideration of Motion A be now adjourned.
Earl Attlee: My Lords, I strongly oppose the question that we adjourn this debate. We have had a good and tough debate. I understand the sensitivities and it has been difficult but we need to determine this matter.
4.23 pm
Division on adjournment of consideration of Motion A.
Contents 156; Not-Contents 112.
Adjournment of consideration of Motion A agreed.
Aberdare, L.
Ahmed, L.
Anderson of Swansea, L.
Bach, L.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Berkeley, L.
Best, L.
Bew, L.
Billingham, B.
Bilston, L.
Blackstone, B.
Boateng, L.
Borrie, L.
Bragg, L.
Brooke of Alverthorpe, L.
Brookman, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Chorley, L.
Clancarty, E.
Clark of Windermere, L.
Clinton-Davis, L.
Coussins, B.
Crisp, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Donaghy, B.
Donoughue, L.
Drake, B.
D'Souza, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Erroll, E.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
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Flather, B.
Foster of Bishop Auckland, L.
Freyberg, L.
Gale, B.
Goudie, B.
Graham of Edmonton, L.
Grantchester, L.
Greaves, L.
Guildford, Bp.
Hannay of Chiswick, L.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hunt of Kings Heath, L.
Hutton of Furness, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jones, L.
Jones of Whitchurch, B.
Kakkar, L.
Kennedy of The Shaws, B.
Kerr of Kinlochard, L.
Kilclooney, L.
Knight of Weymouth, L.
Krebs, L.
Lea of Crondall, L.
Lester of Herne Hill, L.
Liddle, L.
Linklater of Butterstone, B.
Lipsey, L.
Listowel, E.
Low of Dalston, L.
McAvoy, L.
McFall of Alcluith, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Maclennan of Rogart, L.
Mar and Kellie, E.
Masham of Ilton, B.
Maxton, L.
Monks, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Newby, L.
Nye, B.
O'Loan, B.
O'Neill of Bengarve, B.
O'Neill of Clackmannan, L.
Palmer, L.
Pannick, L.
Patel, L.
Patel of Bradford, L.
Pearson of Rannoch, L.
Pendry, L.
Phillips of Sudbury, L.
Pitkeathley, B.
Prashar, B.
Prosser, B.
Quin, B.
Ramsbotham, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rogan, L.
Rooker, L.
Rosser, L.
St John of Bletso, L.
Sandwich, E.
Sawyer, L.
Sewel, L.
Sherlock, B.
Shipley, L.
Simon, V.
Slim, V.
Smith of Basildon, B.
Soley, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tonge, B.
Touhig, L.
Triesman, L.
Truscott, L.
Tunnicliffe, L. [Teller]
Wall of New Barnet, B.
Walmsley, B.
Warner, L.
Warnock, B.
Wheeler, B.
Whitaker, B.
Williams of Elvel, L.
Wills, L.
Wilson of Dinton, L.
Wilson of Tillyorn, L.
Young of Hornsey, B.
Young of Norwood Green, L.
Addington, L.
Alderdice, L.
Allan of Hallam, L.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Ashdown of Norton-sub-Hamdon, L.
Astor of Hever, L.
Attlee, E.
Baker of Dorking, L.
Barker, B.
Bates, L.
Black of Brentwood, L.
Boswell of Aynho, L.
Bowness, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browning, B.
Burnett, L.
Buscombe, B.
Campbell of Alloway, L.
Cathcart, E.
Chidgey, L.
Colwyn, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Courtown, E.
Crathorne, L.
De Mauley, L.
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Dykes, L.
Eden of Winton, L.
Falkner of Margravine, B.
Faulks, L.
Fearn, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
Green of Hurstpierpoint, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Henley, L.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hurd of Westwell, L.
Hussein-Ece, B.
James of Blackheath, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Lamont of Lerwick, L.
Lawson of Blaby, L.
Lee of Trafford, L.
Lindsay, E.
Lingfield, L.
Luke, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
McNally, L.
Maddock, B.
Maples, L.
Marlesford, L.
Methuen, L.
Morris of Bolton, B.
Neuberger, B.
Neville-Jones, B.
Newton of Braintree, L.
Nicholson of Winterbourne, B.
Noakes, B.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Palumbo, L.
Parminter, B.
Perry of Southwark, B.
Rawlings, B.
Reay, L.
Roberts of Llandudno, L.
St John of Fawsley, L.
Sassoon, L.
Seccombe, B.
Selborne, E.
Selsdon, L.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Steel of Aikwood, L.
Strathclyde, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Trenchard, V.
Trimble, L.
Trumpington, B.
Tugendhat, L.
Verma, B.
Waddington, L.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Warsi, B.
Wei, L.
Wilcox, B.
4.35 pm
4.45 pm
Baroness Anelay of St Johns: My Lords, it may be for the convenience of the House if I make a brief business statement at this point. With the consent of the usual channels, it is proposed that we should first continue with the normal business on the Order Paper, which means that we will now deal with the Second Reading and remaining stages of the Consolidated Fund Bill, which I understand are merely formal. We will then begin Second Reading on the Loans to Ireland Bill and take the first three speakers; that is, my noble friend Lord Sassoon, the noble Lord, Lord Liddle, and my noble friend Lord Newby. The proposal is that the House will then adjourn proceedings on Second Reading so that we might return to consideration of the proceedings on the Identity Documents Bill, at which point I will invite my noble friend Lady Neville-Jones to make a statement to the House to clarify matters which have clearly been of great concern to noble Lords. I hope that this clarifies the issues. I appreciate that the Clerks and the Lord Speaker will advise on the words of procedure that I should now adopt.
21 Dec 2010 : Column 1020
Lord Bassam of Brighton: My Lords, I should like to clarify that on this side of the House we are entirely in agreement with what the noble Baroness has put before your Lordships. It is a sensible way to proceed.
Baroness Anelay of St Johns: My Lords, I am grateful to the noble Lord. I understand that there are two Motions, the first of which is that further consideration on Motion A should be postponed. I beg to move.
Baroness Anelay of St Johns: My Lords, the second Motion is that that further consideration of the Commons reason be now adjourned. I beg to move.
Consolidated Fund Bill
Second Reading (and remaining stages)
4.47 pm
Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.
Loans to Ireland Bill
Second Reading (and remaining stages)
4.48 pm
That the Bill be read a second time.
The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, it is the Government's intention to ask for authority to make a bilateral loan to Ireland as part of the multinational assistance programme for that country. This is the right action to take, given our country's close economic, financial and political connections to Ireland. By passing this Bill today, the UK will be ready, come the new year, to meet its commitments to one of our closest international partners.
The legislation before the House today is narrow in scope but it is still enabling legislation. It will sit alongside the actual loan agreement, which will set out the details of what we offer Ireland. I intend to address the substance of both the legislation and the loan agreement. Before that, however, I would like to remind the House of how Ireland ended up in its current predicament.
Over this year, it became increasingly clear that the situation in the Irish economy was unsustainable. Irish banks had become almost wholly reliant on central bank funding to maintain their operations. At the same time, Ireland's market interest rates rose to record levels and its sovereign debt markets have now effectively closed, with little prospect of reopening.
This situation cannot go on. So, on the weekend of 20 November, Ireland's Prime Minister, Brian Cowen, made a formal request for international financial assistance. The United Kingdom, alongside the IMF, the EU, the euro area and other member states, made
21 Dec 2010 : Column 1021
In terms of contributions to the cost of the package, Ireland itself will provide €17.5 billion towards the total. The remaining €67.5 billion will be split, with one-third coming from the IMF, one-third from the European financial stability mechanism and one-third from the euro area facility and bilateral loans from the UK, Sweden and Denmark.
This is a significant package that will help Ireland deal with its problems and restore stability to its economy. It will help it recapitalise its banks and set up a contingency reserve for future problems. It will also help the Irish authorities cover the shortfall in their budget, which was presented to the Irish Parliament earlier this month.
I understand that some noble Lords may have concerns about the size and the timing of the loan. Indeed, some may be asking why we are extending a loan to Ireland in the first instance. We are doing this because it is overwhelmingly in our national interest that we have a strong Irish economy and a stable banking system. This is not just about the Irish economy and Irish jobs; it is about the British economy and British jobs.
A loan does not add to our deficit; any increase in borrowing is matched by the commitment of Ireland to repay it with interest. Ireland is the fifth-largest market for British exporters, and accounts for 5 per cent of our total exports. Ireland is also the only country with which we share a land border, and in Northern Ireland our economies have particularly close ties.
Just as our two economies are linked, our business and banking sectors are also interconnected. More Irish companies are listed in London than companies from any other foreign country. In Northern Ireland, two of the four largest high-street banks are Irish-owned, accounting for almost a quarter of personal accounts. Our own banking sector has a considerable exposure to Ireland.
I should stress, however, that the UK's banks are sufficiently well capitalised to more than manage the impact from the situation in Ireland. But one thing is clear: it is undoubtedly in Britain's national interest that we have a growing Irish economy and a stable Irish banking system. That is the purpose of this Bill.
The Bill has two substantive clauses. Clause 1 sets out the parameters under which the Treasury may make payments under UK loans to Ireland. The total international assistance package, including our contribution, is denominated in euros. However, our bilateral loan will be made in sterling. Subsection (3) includes a cap on the total size of our bilateral loan of £3.25 billion. This will be the total size of our bilateral loan to Ireland, and the period over which these loans may be paid out will end on 8 December 2015, five years after the Bill was first published.
21 Dec 2010 : Column 1022
I would like to make it clear that there is no expectation that we will have to make further loans to Ireland in the future. This is reflected in subsection (4), which is intended to prevent an increase in the size of the loan unless an order is made by statutory instrument. But because the loan is denominated in sterling, a mechanism is needed to accommodate potential changes in the exchange rate in the period between the publication of the Bill and the signing of the loan agreement. Therefore, the Bill allows the Treasury, under subsections (4) to (7), to make an order once the Bill is in force to increase the limit, as long as this is done solely to take account of exchange rate fluctuations between now and 30 days after Royal Assent without further parliamentary procedure. Let me be clear: any increase in any other circumstances or for any other reason would require approval in another place. This is something that I and my right honourable friend the Chancellor of the Exchequer do not envisage happening. We also expect full repayment to be made over the term of the loan.
We want the process to be as open and transparent as possible. Clause 2 therefore creates a requirement for the Treasury to prepare and lay before Parliament a report every six months on any payments made by the Treasury by way of a loan to Ireland, the original term of each loan, any sums received by the Treasury by way of interest or repayment of such loans, the amounts outstanding, and the remaining terms of any outstanding loans.
I would like to update the House on the main terms of the bilateral loan, which we have agreed in principle with the Irish authorities and have made available in the Library of the House. The loan will be drawn in eight tranches, each with a seven-and-a-half-year term. This is in line with the terms for both the European and IMF loans. The first tranche of our loan will be available to be disbursed in September 2011 and the interest rate charged on each tranche of the loan will be fixed specifically for that tranche. This will be set by adding a fixed margin of 2.25 percentage points to the appropriate market-determined interest rate, the sterling seven-and-a-half-year swap rate, at the time of disbursement. For example, at present, the estimated interest rate on the first tranche of the UK loan would be the sterling seven-a-and-a-half-year swap rate in September 2011 plus 2.25 percentage points. That margin was set to give an estimated interest rate of 5.9 per cent for the first tranche of the loan.
The rate on our bilateral loan is slightly higher than the estimated rate of 5.7 per cent for the first tranche of IMF and EFSM funds, but it is also slightly lower than the estimated 6.1 per cent rate the EFSF will charge on its first tranche of lending. This reflects the different costs of funding and is a measure of the international confidence in the UK's public finances. We will charge interest every six months and there will be a repayment of principal at the end of the seven-and-a-half-year term of each tranche. As with the IMF, there will also be a commitment fee for making this loan. We will charge half a percentage point on the total amounts that may be drawn down under the loan agreement for the forthcoming 12-month period. If the loan is drawn the fee will be waived, effectively replaced with the interest charged on the loan.
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There are two conditions on the loan set out in the terms, to which I would like to draw the attention of the House. The first condition is that the IMF as well as the EU must be satisfied that Ireland is complying with the agreed restructuring plan. This is a very important safeguard. The second crucial condition is that there are to be no amendments to the restructuring plan that could have a material adverse financial impact on the UK operations of Anglo Irish Bank, Allied Irish Banks and Bank of Ireland. Given the scale of their operation in the UK, this is vital.
The official advice from the Treasury is that this loan represents value for money for the British taxpayer while being in line with the terms offered by both the IMF and the euro area. A summary of the key terms of the agreement and a final written agreement will be forthcoming shortly.
One thing is clear: Ireland is a friend, and a friend in need. Because of the steps we have taken, our economy is currently in a far stronger position than Ireland's; that is why we are able to offer such reasonable and sensible terms for our bilateral loan to Ireland.
I should like to talk briefly about a related matter which I know is of interest to this House: the proposed permanent stability mechanism for euro area economies. Both my right honourable friends the Prime Minister and the Chancellor of the Exchequer have been very clear that when it comes to putting in place a permanent mechanism, the UK should not be part of it. The time has come for the euro area to put in place its own mechanism for dealing with the imbalances. It needs to be part of a comprehensive solution that sees countries addressing more decisively their own problems, including in their banking systems. As my right honourable friend the Prime Minister said yesterday, it is clear from the recent Council conclusions that the mechanism will be for:
"Member states whose currency is in the euro".
Britain therefore will not be part of it.
Since our coalition Government came into office, we have taken action to put our own house in order. We are now in a strong position that enables us to help Ireland, our closest neighbour, in its hour of need. As I have said, this is clearly in our national interest. A strong Ireland-indeed, a strong Europe-is vital to the success of the British economy. Today's Bill will help to ensure this. I beg to move.
5.01 pm
Lord Liddle: My Lords, first I apologise most sincerely to the Minister for not being in the House for the start of his speech. I was trying to catch what his ministerial colleague Mr Lidington was saying to us in evidence in the EU Committee about the permanent mechanism.
I support very strongly the principle of helping Ireland in its hour of need. The case seems self-evident given the interconnectedness of our economies, with 5 per cent of our exports going to the Republic, and the consequences for us of a collapse of its economy, which would be serious, not least for British banks.
No simple solution such as coming out of the euro is available for Ireland, as a lot of people who opposed the legislation seemed to think. It is worth bearing
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However, while I fully support the objectives of the Bill, I dislike it considerably. I dislike it because of its bilateral nature. The Government are profoundly wrong in the working assumptions that lie behind this bilateral Bill: that the euro problem is a problem for the eurozone, that it is for the eurozone to sort itself out, and that it is none of our business. That is profoundly misguided and not in the UK's national interest.
It is wrong for three reasons. First, as we in Britain seek the necessary rebalancing of our economy towards exports and investment, it is absolutely clear that we are dependent on very strong growth in the euro area, which is our biggest market. I know that the rest of the world is growing much more strongly and Asia is growing very strongly indeed, but Germany, more than the United Kingdom and other members of the European Union, is getting the most benefit out of that global expansion. We will be the beneficiaries of that German growth in the eurozone. We live in Britain today in an economy that is deeply integrated into the rest of Europe. Our fortunes are dependent on the rest of Europe. It is completely misleading to talk about their problems over there and think that we can sort out our problems over here as though they are completely separate questions.
Secondly, our banks are extremely interconnected. I was reading the Bank of England's report on financial stability, which was published last week. It states:
"UK banks' holdings of sovereign debt issued by countries under heightened strain are relatively small. But total claims on these economies, including lending to households and businesses, are larger ... Losses on such lending could increase were heightened sovereign concerns to be accompanied by weakening economic conditions. Credit risk could also be amplified by the interconnectedness of European banking systems. UK banks have claims of almost £300 billion on France and Germany, whose banking systems are more heavily exposed to the most affected economies".
The Bank of England argues that there is strong interconnectedness, and we must think in those terms, not that we are something separate and apart.
Thirdly, when there is a crisis, we will end up paying for it just as if we were in the eurozone. I looked at the Hansard report of the debate in the other place on this subject and at what the Chancellor of the Exchequer had to say about it. He said that,
- "our contribution has been calculated on the basis of what we would have paid if we had been part of the facility".-[Official Report, Commons, 15/12/10; col. 946.]
In other words, it is a bilateral contribution but it is based on a calculation of what we would have paid if we had joined. Mr George Osborne goes on to say:
"We are paying pretty much exactly what we would have paid if we had been a member of the euro".-[Official Report, Commons, 15/12/10; col. 948.]
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We cannot avoid our obligations to the rest of the European Union by pretending that this is something apart from us.
What is going on here is that UK politics is taking priority over the national interest. Clearly, we in Britain are in this up to our necks. Our banks are in it up to their necks and our prospects for growth are dependent on the euro area. Instead of the Prime Minister saying, "This is nothing to do with us", he should be doing today what Gordon Brown did in October 2008; he should go to the summit of the eurozone countries and say, "Here is the plan to rescue the banks in the area. Britain has a vital interest in being part of this". Instead, we get a washing of the hands of Britain's role. It is clear that this policy will not last. I looked at what various economic experts were saying about the likely pattern of what was likely to happen in the eurozone. It is difficult for the Government to comment on this because no Government can forecast that there will be defaults.
I looked at an article by the one professor who forecast the crash of 2007 and 2008-Professor Roubini. In his view, what he describes as the current strategy of kicking the can down the road will soon reach its limits. He goes on to argue that,
The consequence of the orderly restructuring of distressed foreign debt would be the necessity also to carry out another restructuring of the European banking system, in which Britain's banks are intimately involved. Instead of doing these bilateral things, we should be putting ourselves at the heart of Europe and of the argument about what needs to be done in order to rescue the European economy. What we are seeing here is a policy for marginalising Britain that is profoundly against our national interests. We will pay a very high price for it in future, because when the new mechanism is set up the key economic decisions will be taken by the eurozone, which will go along to ECOFIN, and Britain will be forced to agree with what the eurozone has decided because decisions are taken by qualified majority voting.
This principle of staying out and doing bilateral deals is a very bad policy for Britain. It is putting playing the politics of the Daily Mail and Rupert Murdoch before a real, patriotic sense of where our national interest lies.
Lord Pearson of Rannoch: My Lords, during the noble Lord's remarks I think that I heard him say that British prospects for growth depend on the eurozone. Could he enlighten us as to his views on the prospects for trade in the rest of the world?
Lord Liddle: I touched on that subject, because I said that Germany was taking far better advantage of global growth than we are at present. The Prime Minister is absolutely right to try to expand our exports in India, China and other countries, but the fact is that German export success benefits us in the growth in the eurozone, which accounts for half our exports.
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5.13 pm
Lord Newby: I thank the Minister for his very clear introduction to the debate. I was slightly concerned, however, that he did not refer the House with the degree of attention that it may deserve to paragraph 21 of the Explanatory Notes, which deals with the compatibility with the European Convention on Human Rights. I was tempted to ask him whether the law officers had been consulted before the Chancellor of the Exchequer made the statement that,
- "pursuant to section 19 of the Human Rights Act 1998 ... the Bill is compatible with the Convention rights".
As this is the first time that we have debated the Bill, the Minister has not had the chance to give any undertaking to speak to the law officers, and it would be invidious to ask him to do so. However, one hopes that that will not be necessary.
Was there any alternative to the loan and the Bill? As the noble Lord, Lord Liddle, has explained, there was not. If the EU had not intervened in the dramatic way in which it did, it is almost certain that Ireland would have had to default and leave the euro. That would have been bad not only for the eurozone but for the UK. It would have been bad for the UK for trade reasons-I shall come back to the point made by the noble Lord, Lord Pearson, a bit later in my speech-as we have a large volume of exports to Ireland. Indeed, 40 per cent of Northern Ireland's exports go to the Republic. I am sure that the noble Lord, Lord Bew, will expand on that point.
The prospect of Northern Ireland, as a depressed region of the United Kingdom, suffering significantly as the result of a major crisis in the Republic would have had not just a severe impact on Northern Ireland but, obviously, a severe knock-on effect here, including to the public finances. We would have had, in effect, to have filled in some of the hole that would have been knocked in the Northern Ireland economy. Such a crisis would also have been bad for the UK because of the exposure of UK banks. Again, as the noble Lord, Lord Liddle, pointed out, the Bank of England has set out starkly the scale of that issue. A default would have led to instability in sovereign debt markets more generally and could have increased the costs of UK government borrowing.
That does not necessarily mean that we agree with absolutely everything that is being done to restructure the Irish banking system. The arguments for establishing the National Asset Management Agency can be made either way. Effectively nationalising all the risks taken by all the Irish banks raises moral-hazard issues, which we have sought to avoid to a considerable extent in the United Kingdom.
Another issue is whether, even with all this activity, we will have been successful in stabilising the Irish economy. To pose the question that Martin Wolf posed in the Financial Times recently, the question is not whether the Irish banking sector is too big to fail but whether it is too big to save. Hopefully, the answer is that the Irish banking sector can be saved as-heaven knows-it is not lacking resources. The amount that has gone in both from the Irish Government and, via them, from the EU is now considerable.
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It would have been irresponsible for the UK not to participate in the Irish bailout, but the Irish problem is not the only issue facing the eurozone. There are broader issues that relate to Greece, Portugal and now Spain and Italy. Given that we are outside the eurozone, it is a logical if inglorious position for us not to commit to taking part in any further bailouts of other member states.
When contemplating this debate, I cast my mind back to the debates that we had a decade ago on whether Britain should join the euro subsequent to, as many noble Lords will remember, the famous five tests. I am pleased to see the noble Lord, Lord Morris, in his place. Uniquely in my hearing, he was able to make a joke-which at least I laughed at at the time-about whether we should join the euro. At a TUC summer reception, he said that, having been asked by the then Chancellor, Gordon Brown, what he thought about the five tests, he had replied, "Well, we've won one, we've lost one, we've drawn one, but I think we might win the series in Sydney". A decade on, a lot has changed both in cricket and in our perceptions of the euro.
At that time, many of us on these Benches supported Britain's attempts to join the euro. One of the joys of doing a considerable amount of work with Charles Kennedy, as I was doing then, was that we were summoned from time to time to see the Prime Minister for an uplifting talk on matters of common interest and concern, of which the euro was one. At that point, Charles Kennedy was keen to press the case for British membership of the euro on a Prime Minister who was keen but extremely nervous about that prospect. Indeed, he said at the time that he would like to join the euro but he thought that it was impossible to beat both public opinion and the popular press-he could beat one, he thought, but not both-so he did not attempt it. As a result, we are now in a situation in which nobody seriously thinks that we should join the euro in the foreseeable future. Although it is inconceivable-for the reasons given by Tony Blair among many other reasons-that we should join the euro at this point, some of us at least are not absolutely convinced that we took the right decision a decade ago.
However, if I were to dilate on that argument and those tests, I would no doubt keep your Lordships here all evening. I know how much Members-particularly those opposite-hate overlong speeches. The noble Lord, Lord Hunt, is clearly already extremely impatient with me, and I can understand why that might be the case.
Even though we are agreed that we should not join the euro, two interlinked questions need to be considered-we cannot amend the Bill, and it would be foolish to attempt to do so-in this discussion on the Bill, which gives us an opportunity to range slightly wider. Realistically, what should our role be in terms of ensuring financial stability within Europe? And what should the eurozone do now? As I say, the two issues are inextricably linked, but the first principle should surely be to support eurozone members in doing whatever they agree is prudent to strengthen the working of the eurozone. For example, it would surely be perverse and ridiculous if the Government committed themselves to having a referendum on changes to the
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As the noble Lord, Lord Liddle, has pointed out, the Chancellor is more generally in an extremely odd position when considering the development of the eurozone. The eurozone's success or failure is obviously of crucial importance to the future of the British economy, as has been exemplified by the situation in Ireland. However, as the noble Lord pointed out, there are three reasons why the success or failure of the euro and the eurozone is important to us. The first of those reasons, to which he referred-and on which he was challenged by the noble Lord, Lord Pearson of Rannoch-relates to trade. It seems to me bizarre and sad that we export more to Ireland than to the BRICs combined. However, that may be a slightly misleading figure, as I suspect that the figure includes all the re-exports of goods that come from the rest of the world to Ireland via the UK. For example, I suspect that goods that are shipped from France to Ireland by road through the UK count as UK exports to Ireland. I may be wrong on that, but that may slightly inflate the figure. Even if that is not the case, the figure is still very high.
However, if one wants suddenly to change gear completely and export significantly greater amounts to the BRICs, the problem is that, frankly, that is easier said than done. It is not easy for a small business suddenly to decide to sell its products in China or Brazil, given the problems of language and distance. Therefore, even with the best will in the world, it would take a while before we could re-orientate our trade significantly away from the eurozone, particularly given that our strength rests in exports of services, many of which are easier to export to the eurozone than to the BRICs. That is particularly the case in countries where there are institutional barriers to exports of services. It is not simply that a lawyer or accountant seeking to open an office in India has their work cut out for them but that they cannot do it. Therefore, it would be an extremely difficult challenge for the UK simply to do a handbrake turn and suddenly start newly exporting huge quantities of goods to the BRICs. Therefore, we need the eurozone to do well, because that is where many of our exporters already have links and where, as we grow, they could develop those links significantly more.
Lord Pearson of Rannoch: My Lords, of course I admit that our trade with the eurozone is important, but is the noble Lord aware that our trade with the rest of the world-both inwards and outwards-is in fact increasing very much faster than that with the eurozone? Surely that points the way to the future rather than to the past.
Lord Newby: My Lords, the fact that such trade may be increasing more quickly is not surprising for two reasons. First, it is increasing from a smaller base, so it is easier to achieve a higher percentage increase. Secondly, most of those economies are growing more quickly than the eurozone, so you are feeding into a
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Lord McAvoy: My Lords, I hope that the noble Lord will forgive me, but I will be extremely brief. In the interests of transparency, would the noble Lord care to share with your Lordships' House the contents of the note that he has received from his Chief Whip?
Lord Newby: I may be mistaken-I do not know the noble Lord desperately well-but I think that, in a former incarnation, he was a Whip. It is not normal, when asked a question, to pose a question back, but I would be inclined to ask the noble Lord, if the House so allowed me, whether, when he was a Whip, he thought it a good idea that everyone who received a note from him in another place be required to divulge the contents of that note. My guess-I may be wrong-is that he would not necessarily have been desperately happy at that.
Lord McAvoy: I did not have to send notes. I just looked encouraging.
Lord Newby: Well, as I am sure the noble Lord is learning, we do things differently in your Lordships' House. I realise that I must make progress.
Lord Pearson of Rannoch: Even in your Lordships' House, I believe that I am right in saying that the Companion suggests that Second Reading speeches should be curtailed to some 15 minutes. We are now in the 17th minute of the noble Lord's peroration.
Lord Newby: My Lords, I am extremely grateful to the noble Lord for making that point. He will be aware that I have been interrupted on a number of occasions. However, I am well aware of the conventions of the House and will happily draw my speech to a conclusion by saying, as I said at the beginning, that we support the Bill.
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