Previous Section Back to Table of Contents Lords Hansard Home Page

I have some sympathy with the point made by the noble Lord, Lord Cormack, about the insistence on moving towards more and more absent voting, both proxy voting and postal voting. On balance, it is preferable to try to extend voting in person and to make that as easy as we can, not just for reasons of potential corruption and fraud but because it is part of one's civil responsibility to come together as a community to vote. I hope that is true.

The noble Lord, Lord Howarth, referred to the briefing by the Electoral Commission, and I should say en passant that I am a member of the informal advisory group of politicians of all parties who give guidance to the commission every so often. Its summary is in effect that at this stage it would be premature to insist on moving towards weekend voting, which is really why my noble friends and I have put it not in a prescriptive way but in an advisory way that we should be moving in that direction. It is disappointing that although there have been pilots for so many other aspects of improving access to the voting process, there has been so little attention to or consultation on this issue. Incidentally, I endorse the point made by the commission about the number of advantages in advance voting. This is not an either/or. They are both quite useful ways in which we could get more people to go to the poll to cast their votes.

There is an interesting opportunity here. I hope that my noble friend the Minister will at least be able to indicate that he will not adopt the attitude of the previous Government, which was personalised, illustrated and characterised by the noble Lord, Lord Bach, in his honeyed words but with mighty little action. Before we get to the definitive moment to which my noble friend referred when we will know the shape of the new constituencies in October 2013, I hope that more work will have been done to consult all interested parties and to conduct pilot schemes to see whether a two-day weekend polling period with shorter hours each day would not suit our fellow citizens much better than plumping again for a Thursday, which is so inconvenient for so many and causes so much disruption.

Lord Grocott: My Lords, I echo what my noble friend Lord Howarth has said about how much better debates on major constitutional reform are when we get contributions from all parts of the House, which has characterised the debate on this amendment. I welcome the fact that we have had the opportunity to discuss this amendment even though I have real anxieties about it. Perhaps it is a sign of a simple mind, but one

15 Mar 2011 : Column 170

of the tests I put to constitutions is the extent to which they are straightforward, intelligible and as simple as possible, which is one of the many reasons why I am so strongly in favour of first past the post.

While I do not doubt for a minute the good intentions of people who think that we should have a couple of days to vote, there would be a problem. It would just extend the development, which has undoubtedly occurred in most of our lifetimes-I do not want to be rude in characterising it in this way-towards a kind of rolling election as opposed to an election day when the nation makes a decision. In part, a rolling election is very much as the noble Lord, Lord Cormack, has said. I know that under a Labour Government there was substantial development of postal voting. In effect, we have at least two election days, if not a longer period. There is the crucial day when the postal ballots go out and people react to that. Then there are the days between the postal ballots and the election day when more ballots come in, which makes it a kind of rolling election.

I feel a certain nervousness about extending the election over two days. At least it might mean that a lot of the drama will undoubtedly be removed from election day. Perhaps I am wishing for days that have passed to think that that drama can ever come back. The February 1974 election was certainly profoundly dramatic for me because it was one of the many elections that I managed to lose and there were several recounts into the middle of the night. We were pretty tired over that period, but that is part of the drama of an election night.

What would happen between the two polling days? Perhaps we would all sit in limbo. Again, I am trying to avoid crudely partisan points, but occasionally I cannot manage that. A rolling election period would be made worse by more complicated election systems. I genuinely respect the noble Lord, Lord Rennard, who has participated throughout. If the AV vote is passed, it will inevitably mean that counting will occur on the day after. It is inconceivable that an AV vote could be counted through the night of an election day.

Lord Rennard: One of the attractions of voting on a Saturday and a Sunday, between the hours of, say, 9 am and 6 pm, would be that the counts would begin at 6 pm on Sunday. Before the last general election, there was great controversy in the other place about when counts might take place and great concern that many of them would take place on the Friday rather than the Thursday. The Electoral Commission was greatly concerned about the accuracy of the counting by people who had been involved in the process from setting up the polling stations for 7 am to finishing at 10 pm and then counting the vote sometimes through to 4 am or 6 am on the next morning. It seems much more sensible for voting to take place during normal hours on a Saturday and Sunday and for votes to be counted on a Sunday evening. The noble Lord says that he personally did not like the February 1974 election results. I wonder whether he would prefer the system of 100 years earlier when a general election took place on different days in different constituencies all over the country.

15 Mar 2011 : Column 171

Lord Grocott: That rather proves my point. I like the simplicity of polling day being polling day. We all know the beginning and the end, that the election programme will be on the BBC and that we will get an instant polling verdict on "News at Ten". Are these bad things? I believe they increase the drama of an election and you need some drama in politics. It cannot be reduced to a dull procedural convenience. I do not doubt for a moment, as I have said, the motives of people who wanted more postal votes. There were many in my party who did and my Government facilitated it. It was done with good intentions but the outcome of what I can only describe as a rolling election has not been a good one. Likewise, I do not think the idea of having more than one polling day would be a good one. The noble Lord, Lord Rennard, says it makes people very tired so that they cannot cope and might make mistakes. However, our elections are amazingly free of challenges once the results have been declared. I have lost some elections and won one after a recount but people accept the results and rarely contest them.

My final concern is that, if elections are to result in more hung Parliaments-I doubt that they would under the first past the post system, as some claim, but they certainly would under a more proportional electoral system-the period between people first starting to think about an election and casting their postal vote will be prolonged and the country could reach a verdict weeks afterwards. So I recognise the motives behind these proposals but it is easy to have good intentions but bad outcomes. We have elections relatively rarely, and we will have them even more rarely if the Government have their way with this Bill. They ought to be dramatic days and I fear that these amendments would make them less dramatic and certainly less decisive.

Lord Newton of Braintree: My Lords, it is more or less fatal for me to come into the House because somebody always presses a button that leads me to get to my feet. In this case, it is all this nostalgia about February 1974, which is the date on which I was first elected. My memory of it is that it took a very long time because Braintree did not count during the night; it only counted the following day. After a nervous, sleepless night, I came in with a relatively small majority at about the same time as the Western Isles.

I have a lot of sympathy with the points made by the noble Lord, Lord Pannick. I would not support these amendments if they were pushed, but consideration of change should not be ruled out. I make three points in support of that. First, on the point made by the noble Lord, Lord Cormack, most of the criticisms of abuse or problems connected with postal votes seem to relate at least as much to people who have had them for years as to new postal voters. Secondly, like many people here, I live in London during the week and at my home in Essex during the weekends, so I now have a permanent postal vote for everything except parliamentary elections, which I cannot vote in anyway, because I never know where I am going to be.

The third point picks up that made by the noble Lord, Lord Howarth, about the greater use of postal votes and non-postal votes-if I may oversimplify what he said. A key strategic problem is the decline during the past 20 or 30 years in the number of people

15 Mar 2011 : Column 172

who vote at all. During most of my time in the other place, the turnout was never less than 75 per cent. It was several times more than 80 per cent, and I had villages in my constituency where the vote went over 90 per cent. In the previous two elections, we have been down to percentages which we used to associate with American elections-between 60 and 70 per cent. Therefore, the key problem here is getting the vote up. We should be willing to consider anything which could be shown to contribute to that.

5.30 pm

Baroness Golding: My Lords, I was an election agent for some 15 years, so I do not think that there is very much that I have not seen. I have dealt with four elections-parish, county, district and general elections-all on the same day and all over a big area, and have learnt much through practice. Does the amendment refer just to a general election? Will all other elections follow suit? If we have a general election at a weekend, is it being proposed that county and parish elections take place then as well? Or will they be on a different day?

Lord Pannick: My Lords, the noble Lord, Lord Rennard, in answer to my intervention, accepted that if there is to be weekend voting it would need to be over the whole two days of the weekend, albeit during shorter periods on each day. There are difficulties about that, not just the loss of drama to which the noble Lord, Lord Grocott, referred. The difficulties arise from the fact that one day of voting involves all the electorate, with the exception of those who are postal voters, voting on the same factual premise. It is a snapshot of opinion at a particular time. Broadcasters are prevented from broadcasting any material during that day which would be politically partisan. That is entirely acceptable and workable. All that becomes much more difficult if the period of voting extends over two days. What happens if an event of considerable political significance-it may be a foreign policy issue or a terrorist attack-occurs during the first day of polling? The danger is that one can envisage circumstances in which the electorate who vote on the second day would be voting on a set of facts that would be materially different from those on which the electorate voted on the first day.

Lord Newton of Braintree: The noble Lord refers to certain instances, including a terrorist attack. Such an event could occur in the middle of polling day, in which case there would be a completely different mood among those who had voted early and the very large number of people who vote going home from work. I do not think that even a single day of voting avoids that risk.

Lord Pannick: The noble Lord is of course correct, but it is much less likely that the electorate who vote during a single day will be aware of or affected by a major news event during that day than if the event occurs during that day and there is second day of voting. This seems to be at the very least a factor that should be taken into account if consideration is being given to two days of voting.

15 Mar 2011 : Column 173

The Advocate-General for Scotland (Lord Wallace of Tankerness): My Lords, I thank the noble Lord, Lord Howarth, and my noble friend Lord Rennard for introducing these amendments. I say in respect not just of the amendment of the noble Lord, Lord Howarth, but of a series of amendments as we go through the Bill that it is important that there will proper scrutiny. The amendments that have been tabled already indicate that although the Bill is relatively short it is important, and that most if not all its key components will be addressed. We look forward to those debates.

I think that there is a consensus across the Chamber, as I think there was on a number of occasions-although it was sometimes difficult to believe it-during the passage of the Parliamentary Voting System and Constituencies Bill, that it is important that we try to look at ways in which we can increase turnout and participation in elections. No matter which party we belong to, or even if we belong to none at all, I think that we recognise the importance of trying to increase turnout.

It is probably fair to say-no doubt those opposite will correct me if I am wrong, because they were in government and responsible for introducing them-that the greater availability of postal votes is more a response to decreasing turnouts than a contributory factor as my noble friend Lord Cormack suggested. It is also fair to raise concerns, as has been done, about the security of postal voting, but it should be recorded that measures have been introduced during the past couple of years to ensure that postal votes are properly verified. Some of the debate which has taken place in recent days and weeks about the timing of the counts for the Scottish Parliamentary and Welsh Assembly elections in May has been coloured by the fact that returning officers are now very conscious of the time that will quite properly be taken in verifying postal votes.

My noble friend Lord Rennard indicated that this issue has never been properly debated in Parliament; I hope that he feels that it has had a reasonable airing today. It is clear from the contributions that have been made that there are arguments both for and against moving the polling day from the traditional Thursday to another day and, as the amendments would foreshadow, to weekends. There has been debate, too, on the cases for and against the holding of elections on more than one day. The noble Lord, Lord Pannick, said that if one was to have polling day on a Saturday it would raise religious issues for some faiths. Equally, I can think of places, not least in my native Scotland, where if voting was only on a Sunday there would be difficulties. That led noble Lords to consider the possibility of voting over two days. The noble Lord, Lord Pannick, indicated some of the practical issues to which that would give rise. I do not think for a moment that they are insuperable, but they would certainly have to be addressed if we were to hold elections on more than one day.

A number of issues have been raised. The previous Government instigated a significant test of opinion, by way of a consultation held in 2008, on the very subject of moving elections to weekends. The consultation sought views from a range of groups on whether

15 Mar 2011 : Column 174

elections should be moved from the traditional Thursday to one or both days of the weekend and whether this would improve access and opportunity for voting. There were diverging views on this issue. While it is fair to say that there was a balance of opinion in favour among members of public who responded to the consultation, the majority of respondents did not favour a move to weekend voting.

It is not obvious from that survey, which was published in March of last year, that such a move would make it easier for electors to vote. As the noble Lord, Lord Howarth, pointed out, there is nothing in statute that says that polling day should be a Thursday. I am sufficiently old, and enough of a political anorak, to remember a lot of local elections taking place on every day of the week. I think that I am correct in recalling during one of our debates on the Parliamentary Voting System and Constituencies Bill someone on the opposition Benches saying that they were once a candidate, or an agent, in a local election that had taken place on Saturday.

Baroness Armstrong of Hill Top: In the Local Government Bill in 1998, we made provision for significant pilots to take place on this and on different ways of increasing participation. It may be useful to the Minister and others interested in this amendment to look at some of those. The first organisation to do this in depth was Watford Council, which led to the Liberals taking over-so I was not too popular.

Lord Wallace of Tankerness: The noble Baroness is encouraging me to look at these pilots. However, I seem to recall that voting took place on a number of days. In Scotland, local elections were for many years on a Tuesday. For some reason, they all seem to have coalesced round a Thursday. Picking up the point of the noble Lady, Lady Saltoun of Abernethy, I recall that in 1978 the Hamilton parliamentary by-election took place on Wednesday because Scotland's first match in the 1978 World Cup finals was being played on the Thursday. I am not sure what it did for the noble Lord, Lord Robertson of Port Ellen, but it did not do much for the Scottish football team.

There is a consensus on the need to find ways in which we can increase the turnout, which undoubtedly ensures that those elected to the other place have a stronger democratic mandate.

The noble Lord, Lord Howarth, referred to the briefing of the Electoral Commission, which echoed what the Electoral Commission said in the consultation undertaken by the previous Government. The Electoral Commission stated that it was,

That view was shared by the Committee on Standards in Public Life, which in its response to that consultation said,

"The Committee is not opposed in principle to moving the day of elections from Thursday to the weekend. But we have seen no evidence that such a move would bring any clear benefits ... It is not obvious that [people] would find it easier to vote at the weekend".

15 Mar 2011 : Column 175

One might say in the Scottish context that this is a not proven verdict, but that does not mean to say that there should not be trials. With regard to advance voting, which the noble Lord, Lord Howarth, mentioned, that was referred to in the consultation paper on The Governance of Britain published by the previous Government. It pointed out in that consultation that, as part of the previous Government's programme for piloting innovative voting methods, 20 local authorities had piloted advanced voting in polling stations since the year 2000. Evidence from these pilots, however, indicated that the availability of advanced voting had done little to increase turnout.

There are a number of issues and I recognise that this is inevitably an issue to which your Lordships' House will wish to return. I hope this is not honeyed in any way and I am not standing at the Dispatch Box to say that the Government are about to launch an initiative with regard to weekend voting. However, picking up the point made by my noble friend Lord Newton, I want to make clear that we are not ruling it out. I want to reassure the House that not including something in this Bill will not rule out the possibility of us returning to this issue.

I do not believe-this is an important point-that this is the appropriate legislative vehicle to make the change. In this Bill, we have tried to do only that which is strictly necessary to establish fixed-term Parliaments and, as far as possible, reflect existing practice. It has become common practice to hold the elections on the first Thursday in May. Three of the last four were held on that day, the exception being in 2001 when the need to move it was widely agreed due to the outbreak of foot and mouth.

The noble Baroness, Lady Golding, also indicated that one of the issues that had to be looked at is that, if we are moving the date of parliamentary elections to the other place, should we also look at the local elections and, for that matter, the elections to the devolved Parliaments and Assemblies.

It is not a criticism of the drafting because I think the point of these amendments was to raise an important issue, but there are a number of consequential issues which would flow in terms of any change that was to be made. In the light of that, I want to reassure my noble friend that if this Bill goes through without amendments, that will not be used at a future date as evidence of Parliament agreeing that it will be that day. That was the assurance he was looking for. It will not be thrown back at him like that. I hope that in those circumstances, the noble Lord will agree to withdraw his amendment.

5.45 pm

Lord Howarth of Newport: My Lords, this has been a lively debate with contributions from noble Lords all around the House speaking from their extensive experience and their serious concern that we should find the best ways we can to improve participation at general elections. As my noble friend Lady Golding reminded us, it is equally important that we raise participation in other elections, notably local elections, although that is outside the scope of the Bill's Long Title.

15 Mar 2011 : Column 176

I am most grateful for what the noble Lords, Lord Rennard and Lord Tyler, had to say. The noble Lord, Lord Rennard, speaks with even greater knowledge than the noble Lord, Lord Tyler, though it could be a close-run thing. Both of them made invaluable contributions, the noble Lord, Lord Rennard, rehearsing with us the somewhat dispiriting history of consideration of this issue-the unsatisfactory pilot scheme and the citizen summit that never took place. The noble Lord, Lord Tyler, made the extremely important point that our traditional practice of holding elections on a Thursday means that schools all over the country closed. That is undesirable.

On the other hand, the noble Lord, Lord Pannick, put his finger unerringly on two real difficulties. One is not necessarily an insuperable difficulty because he rightly reminded us that there are different religious traditions in this country and you cannot decently or appropriately legislate for polling to take place on one particular day of the weekend. He then went on to make a point that I take seriously: that it is desirable that as far as possible people should cast their votes on the basis of the same information and that, if some dramatic event were to intervene, that could have the effect of altering the tendency of polling on the second day. We would need to think carefully about that.

That serves to illustrate that there are significant arguments on both sides. I rarely disagree with my noble friend Lord Grocott on anything-he was my Chief Whip, after all-and particularly in the constitutional field but I am not sure there is not a hairline crack between our two personal positions on this particular issue. But he and the noble Lord, Lord Cormack, rightly appeal to our sense of tradition and history. What my noble friend Lord Grocott had to say about the importance of the drama of election day and what the noble Lord, Lord Cormack, had to say about the ceremony of election day were very important observations. We do not want in any way to diminish the occasion of polling, which, as the noble Lord, Lord Cormack, suggested, has perhaps been somewhat diminished by the increasing resort to postal voting. If postal voting has raised turnout overall, however, that is an important merit in it.

The noble and learned Lord, Lord Wallace of Tankerness, responded in as positive a spirit as he could but it remains the case that the Government, while they may have reviewed previous consultation, have not applied themselves to this question with any seriousness at all in advance of including prescriptive provisions in this fixed-term Parliaments legislation that polling will take place on a Thursday. The noble and learned Lord himself reminded us that at the moment there is nothing in the law that requires polling to be held on a Thursday.

If there is a major national crisis, as in Scotland, and the Hamilton by-election has to be moved from a Thursday to a Wednesday because of a football match, there is at least the freedom to do that. But this legislation would remove that freedom. The noble and learned Lord says that the Government are not ruling out a change, but by stating in this Bill their intention to legislate, they make it that much less likely that there will be a change. I had hoped that the Minister

15 Mar 2011 : Column 177

would have been able to tell us rather more definitely what the Government intend to do. We may or may not agree with his point, but he said that this may not be the right legislation in which to incorporate provision for polling to take place on a weekend rather than on a Thursday. He suggested it has to be considered on a separate track. I heard no convincing evidence from him that he intends to pursue that track.

While the feeling of the House is that it would be inappropriate to vote on this issue today, Amendment 16 tabled by Members of the Liberal Democrats, which would require the Prime Minister and the Government to have made up their minds about what they want to do by October 2013, has enormous merit. For my part, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

The Deputy Chairman of Committees (Baroness Pitkeathley): As we come to Amendment 3, I remind your Lordships that if it should be agreed to I cannot call Amendments 4 to 8 for reasons of pre-emption.

Amendment 3

Moved by Lord Grocott

3: Clause 1, page 1, line 5, leave out "is to be 7 May 2015" and insert "will be determined by a referendum to choose between 6 May 2014 and 7 May 2015"

Lord Grocott: My Lords, I start by apologising to the Committee because my amendment includes the dreaded word "referendum". I can understand why everyone else's heart sinks just as much as mine does at the very mention of that word. I tabled this amendment alongside my noble friend Lord Howarth, who has amendments along similar lines in this group-and they may well be better than mine-because I want to raise two or three issues. It is important that we correct an error that has been uttered on a number of occasions by no less a person than the Deputy Prime Minister. It is an error to say that this Bill removes the right of the Prime Minister to determine the date of the election. At Second Reading in the House of Commons on 13 September last year, the Deputy Prime Minister said:

"We have a Prime Minister who is the first in history to relinquish the right to set the date of the general election".-[Official Report, Commons, 13/9/10; col. 622.]

What he should have said is, "This is the first Prime Minister to relinquish the right on behalf of future Prime Ministers to determine the date of the next general election". Not only has this Prime Minister decided the date of the next general election, he has legislated to enshrine in law his choice of date. I hope from now on no one will use that as a justification for this Bill, which, as the House may know, is not a Bill that finds much favour with me. Can we at least correct that error? As I shall say later on, the Prime Minister is uniquely legislating to enshrine his favoured date in law, so people need to have a say about that, which is what we do in a referendum.

15 Mar 2011 : Column 178

My second reason for tabling this amendment was to seek clarification from the Government on when and why they use referendums as a basis for constitutional change. The Committee is entitled to an answer to that question. The Deputy Prime Minister has said many times that these are hugely important constitutional changes. As far as I know so far, and we may still be counting, four major constitutional changes will be decided in this Parliament. We have already determined two, which are quite separate issues. The first was that there should be a referendum on AV and the second was that there should be fewer Members of Parliament. There is a referendum on one of those but not on the other. The one that we are debating now is to fix the terms of Parliaments, which is an important issue on which the present thinking from the Government is that there should be no referendum. The one coming down the line, which may take a bit of time in this House, is to abolish the House in its present form and replace it with senators.

I would simply like the noble and learned Lord, Lord Wallace, who always treats these questions with great seriousness, to tell us why there is a referendum for one of those four major changes but not the other three. What factors have the Government brought to bear in determining which will be decided by referendums? Although I need some persuading of this, we have been told quite frequently by the Government that this is a coherent whole of constitutional change.

Lord Cormack: The answer is simple: the Government knew that they could not get AV through the House of Commons. Therefore, they have gone to a wider electorate.

Lord Grocott: I hope that the wider electorate reach a sensible conclusion. We shall know soon enough.

The Earl of Onslow: As the leader of the Labour Party has been discouraging the Deputy Prime Minister from taking any part in the AV campaign, it will be interesting to see the outcome.

Lord Grocott: I am interested but also worried because I care deeply about the outcome of the referendum and the damage that I believe can be done to our constitution. But we must not go back over that. It has been concluded and now it is for the people to decide.

I do not favour any of these changes, but if they are to go ahead the public need to be consulted. A referendum should be considered to determine whether there should be a four or five-year fixed term because of what I hope the Committee will agree is a powerful point: that the Bill reduces the power of the electorate. It reduces the number of occasions on which the electorate can be consulted.

If you reduce the power of the electorate, which the Bill undoubtedly does, then surely the electorate have the right to be consulted about that. It was right in 1975 for the then Labour Government to have a referendum on the Common Market, as it was then called, because it reduced the power of this Parliament. By the way, I voted no in that one. It is right that the choice should be given to the public. It is unarguable that the Bill reduces that power.

15 Mar 2011 : Column 179

Lord Maclennan of Rogart: My Lords-

Lord Grocott: I thought that I might provoke someone.

Lord Maclennan of Rogart: Does the noble Lord believe in the opposite proposition-that to give power to the electorate you should not have a referendum? That might affect some of his earlier arguments about reform of this House.

Lord Grocott: I do not know which of the various constitutional proposals increases the power of the electorate. The noble Lord referred to reform of this House. One of the key reasons why I am opposed to this being an elected House is that it would seriously diminish the significance of a general election to the House of Commons. I hope that my argument is consistent; I will have to read it in Hansard tomorrow.

I hope that I can put this with some conviction but, according to my maths, since the 1945 election there have been 17 general elections in this country. If this Bill had been an Act, we would have had 13 general elections. I simply put this proposition: does that or does that not weaken the power of the electorate? There can be only one answer to that. The answer is yes.

I do not want to go to absurd lengths but we can all assume that, if there were no elections, that would seriously weaken the power of the electorate. I am not sure about the other end of that continuum-perhaps the Chartists with their annual elections. But there is no doubt that the convinced and settled view of the members of the Government who are voting on this Bill is that since the Second World War the British electorate have had too many general elections. Which ones should we not have had that we did have? Was it wrong in 1951 for a Labour Government who were tired to seek another mandate? Was it wrong of Mr Heath? Was it wrong of Harold Wilson, who had a majority of three in 1964, to call another election, or should he have soldiered on for another five years? Should Harold Wilson's Government in 1974 have gone on without a majority?

I would like to know the answer to a fairly simple question: why do the Government think that we have had too many general elections since the Second World War? Which ones were superfluous? There could be an interesting answer to that.

6 pm

Baroness Farrington of Ribbleton: My Lords, between now and the next stage of this Bill I wonder if my noble friend could ponder whether, as has been proposed, the reason that AV is going to a referendum is because it could not be got through the House of Commons. Does that mean that we must have a referendum on Lords reform if it proves impossible to get it through your Lordships' House?

Lord Grocott: What a persuasive argument-I am completely convinced by that.

If the Government are going to reduce the power of the voters over their Government, they must give us a very convincing argument as to why that is desirable.

15 Mar 2011 : Column 180

Of course, I very much hope that my amendment becomes entirely surplus to requirements, because I very much hope that the Committee will decide later that we should have four-year gaps between Parliaments. I do not agree with fixed terms, but if there is to be one I hope it is four years. For the first time in my life I am operating entirely in accordance with the Liberal Democrats' manifesto and Ihope they will be voting with us on four-year Parliaments. However, if the Government unilaterally reduce the power of the electorate to have general elections and to make their decisions about Governments, I hope that they will only take this power away on the authority of the electorate in a referendum.

Lord Howarth of Newport: My Lords, I am very happy to support the spirit of my noble friend Lord Grocott's amendment. I have tabled two amendments-Amendments 57 and 58-which also require that a referendum should take place before we move to fixed-term Parliaments in this country.

I do not, in general, favour referendums, but there is a particular case for holding them when major constitutional change is being proposed. I think that is a view that the Constitution Committee reluctantly came to. The basis of that has to be that the constitution belongs to the people-it is not the property of those politicians who happen for the time being to have the privilege of serving in either the House of Commons or the House of Lords. Those who are Members of Parliament in either House, and certainly those who are in Government, should regard themselves as holding the constitution in trust on behalf of the people, by whose authority they have been given and entrusted with the opportunity to serve. They should treat that constitution with the very greatest respect and should move to change it with the very greatest caution. That applies even more particularly to a Government such as this present coalition Government, which does not have a mandate from the electorate for its policies.

It is, as my noble friend Lord Grocott suggested, curious that this Government-which makes great claim to be a liberalising Government who want to improve the quality of our democracy and increase the accountability of Government, and indeed Parliament, to the people-are proposing legislation that would mean that we would in practice have fewer general elections than we have had in the past. The average interval between general elections since the war has been three years and 10 months; if the Government have their way on this Bill, it will be not less than five years. That is one of the reasons why I, like my noble friend Lord Grocott, believe that-although I am no enthusiast for legislating to fix the term of Parliament-if we are to fix the term, then we had better fix it at four years. We do not want to see accountability diminished in a major measure of constitutional reform.

It is also curious that the Government believe that it is appropriate to hold a referendum on changing the electoral system and that it is appropriate to hold referendums when there may be some transfer of power-possibly no very great transfer of power-between London and Brussels, but they do not think that it is appropriate to hold a referendum on whether we should move to fixed-term Parliaments. My noble

15 Mar 2011 : Column 181

friend Lady Farrington raised the question of whether there might be a referendum on reform of the House of Lords, which would be a very major constitutional change by any standard. It seems extraordinary that the Government should propose to take that forward without incorporating provision for a referendum in the legislation.

I am not necessarily a devotee of consistency in constitutional matters, because I believe that there are many anomalies in our present constitutional arrangements, which have grown up for compelling historical reasons, that actually provide flexibility and enable the constitution to accommodate different traditions and to adapt itself as time goes by. If we are slavishly schematic in our approach to constitutional change, we shall be even more likely to get it wrong; but I wonder why the Government are quite so inconsistent in their approach to holding referendums on constitutional reform. Surely the Government should conduct themselves on a certain set of principles.

Turning to the particular amendments that I have tabled, I suggest to the House that they incorporate a better design for a referendum than the design of the one we are to have on 5 May on electoral change-there are differences between what I propose and what Parliament has enacted at the behest of the Government. The referendum that I have proposed would be advisory only and would leave scope for Parliament to meditate upon the message that voting in a referendum sends to Parliament. Amendment 57 would also provide that, if less than a threshold of 51 per cent of the electorate support the introduction of fixed-term Parliaments, then the question would be dismissed. That latter point should have applied also in Amendment 58-it was an omission on my part not to have included that in the drafting of that amendment. If we come back to this issue on Report, I can repair that then.

My amendments would provide for two questions. The first would be to ask the people whether they favour the introduction of fixed-term Parliaments, as provided for in the legislation. The second would ask them the other key question: if we are to have fixed-term Parliaments, do they think it right that the term should be fixed for four years or for five years? We all agree, I think, that this is quite the outstandingly important issue that remains to be resolved in this legislation apart from the overall issue of whether there should be fixed-term Parliaments, which has been approved in Second Reading. However, the question of four or five years remains wide open. I put it to the House that that may also be something that should be offered for the decision-or at least for the advice-of a wider electorate.

Lord Marks of Henley-on-Thames: My Lords, I am one of those who is largely in favour of referendums for important constitutional reforms. The noble Lord, Lord Grocott, is quite right to ask in what circumstances referendums are appropriate and to say that the matter should be considered by the House.

The Constitution Committee in 2010 used the word "fundamental" in respect of constitutional reforms for which referendums were appropriate. The question

15 Mar 2011 : Column 182

arises as to what is meant by fundamental. I accept entirely that a referendum is appropriate in respect of the proposed change in the voting system to AV on the 5 May, as it was appropriate for the European referendum in 1975, which noble Lords will know was the last UK-wide referendum-I am not suggesting that such referendums should take place only every 36 years, or anything like it. However, it is significant that the same Constitution Committee report produced a list-not an exhaustive one-of the type of issue that might be appropriate, in which it included any decision:

"To abolish the Monarchy;

To leave the European Union;

For any of the nations of the UK to secede from the Union;

To abolish either House of Parliament;

To change the electoral system for the House of Commons;

To adopt a written constitution; and

To change the UK's system of currency".

The report made clear that that was not intended to be a definitive list.

Lord Howarth of Newport: Does the noble Lord agree that this Bill marks a very significant step towards the creation of a written constitution in this country?

Lord Marks of Henley-on-Thames: My Lords, I do not accept that. It might indeed be desirable to have a written constitution, but that is a matter for another day.

I accept that the Bill provides for an important constitutional reform, but it is not a fundamental change to our constitution. I say that for a number of reasons. First, in terms of whether or not a referendum is appropriate, the fixed term proposed is within the existing maximum term of a Parliament. Under the 1911 Act, Parliament can last for up to five years; under this Act a Parliament will last for five years unless either of the trigger mechanisms for an early dissolution is activated.

The Earl of Onslow: May I interrupt? Actually, it is a fundamental change. As the Bill is not subject to the 1911 Act, we can veto this Bill because it seeks to extend the life of Parliament. That is a fundamental constitutional change, which in my view should be resisted at all possible costs.

Lord Marks of Henley-on-Thames: My Lords, the noble Earl is entirely right to say that the Bill is capable of extending a Parliament under the two-month extension proposal. That is the reason why the Parliament Act does not apply. That does indeed give this House the right to veto the legislation, but it is a non sequitur to suggest that it follows from that, and that alone, that this is a fundamental reform of the type to warrant a referendum.

Baroness Farrington of Ribbleton: Can the noble Lord, Lord Marks, explain to me, because I listened to the logic he was developing, how changing a system of voting for a Chamber of Parliament, where that Chamber is already elected, is a greater change than introducing a system of voting for a Chamber of Parliament which

15 Mar 2011 : Column 183

is not elected at the moment? I raise this as somebody who is in favour of reform-I do not want to be dismissed as somebody who is not-but I find a real fault line in his argument, unless he is about to conclude that he thinks there should be a referendum on Lords reform.

Lord Marks of Henley-on-Thames: My Lords, the noble Baroness's logic is seductive and attractive, but it misses the point that, as all noble Lords accept, this House accepts the primacy of the House of Commons. Therefore, a change to the voting system for the House of Commons, which alters the entire electoral system for the House that has democratic primacy, should have different weight accorded to it from that of a change to the composition of the upper House.

Baroness Farrington of Ribbleton: My Lords, can I just press the noble Lord further? As I understand it, the noble Lord's party's view is that AV is, to a degree, an acceptable alternative to the present system of first past the post. However, I believe quite senior members of his party have said they regard AV as a staging post. If your Lordships' House were to be elected by a system that was further down the staging-post road, would we not be in a difficulty, using the reasoning of the noble Lord's own party, given that it is not certain that the democratic legitimacy of the House of Commons -which I accept-would be accepted by a more democratically elected second Chamber?

Lord Marks of Henley-on-Thames: My Lords, the noble Baroness is perhaps addressing a debate that we are yet to have on another occasion. It is well known that in the past we have favoured, and indeed do favour, other electoral systems. It is also well known that the coalition agreement commits us to a proportional system of representation for the election of Members of this House. However, noble Lords will accept, I hope, that that is a matter for another day and what we are now concerned with-if I can just finish my response to the noble Baroness-is considering an amendment which calls for a referendum on the Fixed-term Parliaments Bill and a separate referendum on the question of four years or five. The future electoral system for this House is of interest and of course of some relevance, but it is not central to this point. I give way to the noble Lord.

6.15 pm

Lord Cormack: I am extremely grateful to the noble Lord, but when he read out the list of issues which could be subject to a referendum he mentioned the abolition of the monarchy and the abolition of either House. Does he not accept that, if your Lordships' House is replaced by a different second Chamber, wholly elected, it has to be abolished first? Therefore, surely there is no logic at all in saying there should not be a referendum on that issue.

Lord Marks of Henley-on-Thames: My Lords, I do not accept that. It is not the abolition of a House to change its composition, however attractively the point might be put.

15 Mar 2011 : Column 184

I remind your Lordships' House that we had a very significant constitutional reform with the Constitutional Reform Act 2005, whereby the highest court in the land, having been constituted by a committee of this House, was replaced when the Supreme Court was established. Nobody then argued that there should be a referendum on that very significant and wide-ranging change in the constitution.

Both the noble Lords, Lord Grocott and Lord Howarth of Newport, addressed the question of four or five years. That is an important point which we are addressing in this Bill and on which there will be a separate debate during this Committee stage, and I would not be at all surprised if either or both of them contributed. However, the point here is not the length of a fixed-term Parliament, which is a matter of judgment and on which many speeches were made at Second Reading, including my own, but whether this is a matter for a referendum.

There are a number of further points. In a lengthy consideration of the Bill by the Constitution Committee -which I might say was not an enthusiastic report endorsing the Bill and the way it had been handled-it was not suggested that this was a matter for a referendum. Had it genuinely been believed at that stage that there were respectable arguments that this was a fundamental issue of a nature that required a referendum, I suggest that it would have been put before the committee and either adopted or rejected.

Baroness Farrington of Ribbleton: My recollection is that the Constitution Committee took the view that there should have been pre-legislative scrutiny, which would have led to many of these points being discussed properly, particularly the role and relationship proposed in this Bill between the Prime Minister and the Speaker in another place.

Lord Marks of Henley-on-Thames: My Lords, the noble Baroness is absolutely right to draw attention to the fact that the Constitution Committee thought that pre-legislative scrutiny would have been a good idea. Nevertheless, the committee heard evidence over a number of days and read a great deal of written evidence from some of the leading academics in the land and nowhere was it suggested that this was a referendum issue in my reading of the evidence of the report. That was the point that I was attempting to make.

The other point of importance that I would invite noble Lords to consider is that the principle of fixed-term Parliaments was subject to manifesto commitments of the Labour Party and my own party and in neither case was there a suggestion that it should be the subject of a referendum rather than legislation. The Conservatives embraced that commitment very shortly after the election, and the Members of Parliament elected as Conservatives to represent their constituents did not seek to interpose a referendum before this legislation should become law.

There is a danger, which I urge the House to bear in mind when it considers these amendments, that we move from a representative democracy, which the vast majority of us value a great deal, to government by

15 Mar 2011 : Column 185

plebiscite. If you lose sight of the principle that only fundamental changes require referendums, you move some way down that road.

Lord Grocott: Did the noble Lord not say in the first part of his remarks that he was very much in favour of referendums? I am not sure how that squares with what he has just said.

Lord Marks of Henley-on-Thames: I qualified that by saying, "on important matters of constitutional reform", and I then went on to explain what the Constitution Committee said when they used the term "fundamental". I stand by that. What I am saying is that, if you extend the number of referendums that you have well outside the ambit of what is fundamental, you move away from representative democracy and towards government by plebiscite. It is a matter for Parliament properly to decide-both the principle and the question of four years or five.

I make one final point about Amendment 57, which the noble Lord, Lord Howarth of Newport, applauded -in spite of the fact that it is his own-and said that he liked its design. He said that the amendment was advisory only. That is entirely wrong since, as drafted, the amendment is a wrecking amendment, as it seeks to impose a mandatory 50 per cent threshold, which means not 50 per cent of those who vote but 50 per cent of the electorate, without which the Bill cannot become law. That is a very high threshold indeed. It means that a turnout of anything less than 50 per cent cannot give effect to the Bill, even if not a single no vote is cast.

Lord Cormack: It is nowhere near as high a threshold as has been put in this Bill for a dissolution of Parliament.

Lord Marks of Henley-on-Thames: My Lords, 66 per cent of the House of Commons voting on an occasion when we may expect a turnout of well over 99 per cent is not, in my respectful submission, a very high threshold. The thresholds are different in kind, and my noble friend Lord Cormack knows that perfectly well.

In the recent Welsh referendum we had a turnout of 35 per cent, which was seen as somewhere between respectable and high. Not only do thresholds detract from the view that referendums are valuable, because they involve telling the electorate that we propose to ask for its view and then reserve the right to turn around and reject it after the event, but thresholds of this magnitude, which are mandatory in this way, do nothing for the cause of democracy.

Baroness Hayter of Kentish Town: I apologise to your Lordships for intervening at this stage when I was not here for Second Reading, not least because I missed the maiden speech of the noble Lord, Lord Cormack, which I have had the pleasure of reading since then.

The reason why I was not here on St David's Day when the Second Reading happened was that, thanks to the Commonwealth Parliamentary Association, I was at the New Zealand Parliament, which I had the

15 Mar 2011 : Column 186

great pleasure of visiting with the noble Lord, Lord Rennard, although he made it home rather faster than I did. When I was there, I discussed the three-year terms that they have in New Zealand, and how business and elections could best be organised around that period. It is true that many people in New Zealand, politicians and civil servants, consider that four years would be a better period. I have to say that they do not even go to five years; it was not on their agenda at all. The interesting thing from the point of view of this debate is that, despite the fact that many would like to move to a four-year period, they have never dared to test that in a referendum with the electors, because from their sample polls and from listening they know that the move from three to four years would be rejected. That is a lesson for us to learn about extending a Parliament's life. The Government should perhaps heed that.

There is a broader lesson with this amendment, and that is to note the incredible significance that the legislators in New Zealand attach to their electorate. They would not dare even to ask them to extend their term of office without a referendum. They will not do that until they think they can win it. So we should ask the people their view before we entrench anything new in our law. I would even like to put the option of three years as well as four years and five years in that referendum, but I would certainly favour at least going out to ask people for their opinion to find out what suits them rather than suits the politicians who will be elected in those elections.

Lord Cormack: My Lords, when I was first elected to the other place, I was a very staunch believer in parliamentary democracy, full stop, and did not like the idea of introducing the referendum into our system. But the fact is that we have done so, and on a number of constitutional issues. We had the referendum on what was then the Common Market, or European Union, in which I participated on a platform with friends and colleagues from the Labour Party, urging a yes vote, while I believe that the noble Lord, Lord Grocott, was doing the opposite. Now of course I find myself in virtually total agreement on almost every subject of a constitutional nature with the noble Lord, and that is a very happy relationship. But it is a bit like the atom bomb or the internet; you may have strong views, but you cannot uninvent things-and you cannot uninvent the importation of the referendum into our constitutional system. And you should not treat it capriciously.

The noble Lord, Lord Marks, uttered his honeyed words. I have not been a Member of your Lordships' House for long, but I have heard the noble Lord's felicitous utterances on a number of occasions and he is very good on honeyed words. But I could not help but think of Pickwick Papers and the case of Bardell, where there is "a weak case and an abused plaintiff's attorney." It was a bit like that, with the capricious favouring of one referendum rather than another. By what turn of logic anybody could suggest that the creation of an elected senate does not involve the abolition of this House I do not know-unless it is a Liberal desire that the two Houses should sit separately or work alternate days. That is a fundamental

15 Mar 2011 : Column 187

constitutional proposal. I believe, along with the noble Lords, Lord Howarth and Lord Grocott, that the issue that we are discussing this evening is at least worthy of consideration for a referendum.

I hope that my noble and learned friend Lord Wallace of Tankerness will be able to explain what the coalition Government's philosophy is on referenda. I prefer the word referenda to referendums, as I am sure the father of the noble Lord, Lord Howarth, the High Master of St Paul's, would have done. What is the Government's philosophy on referenda, and what is the list of subjects that merits that constitutional accolade? It was reasonable to suppose that AV should be the subject of a referendum, although as I indicated in my intervention the only reason that we are having one on that is that it was not considered possible to get it through the House of Commons. Is the Government's definition of a referendum that if you cannot get something through the Commons you have a go by going to the people? Is that the definition? If so, there is a certain cynical logic in it and I am sure we would like to hear that. However, if the other definition is that we will have a referendum only on an issue of supreme constitutional importance, is not the alteration of our electoral system to have fixed-term Parliaments, to which I am not intrinsically opposed, a very fundamental constitutional change? As the noble Lord, Lord Grocott, indicated, it will mean that the people have less frequent chances of voting. If that is to be the case, should they not be given the opportunity of saying whether that is what they want?

6.30 pm

I look upon this amendment, as I am sure noble Lords who spoke to their amendments look upon those amendments, as a probing amendment, and not as an issue on which we should even begin to contemplate dividing the House today. However, I do think that it is up to the Government to try to produce what I would call a coherent pattern of constitutional reform. In recent years the worst thing about constitutional reform-I referred to it in my maiden speech a couple of weeks ago-has been what I call back-of-the-envelope constitutional reform, something of which both Governments stand guilty. They say, "We'll get rid of the office of Lord Chancellor. Jolly good thing. Yeah, we'll announce it". Of course we all know what happened. Another example is the negotiations over the formation of the coalition, which I gladly support. The leader of one party says that he wants certain constitutional changes, while the Prime Minister is keen to reduce the size of the House of Commons, so they put them together. However, there is not a really thoughtful approach. There has been no opportunity for pre-legislative scrutiny. There has been no opportunity to consider and contemplate papers, green or white. Although some people quote Harold Wilson who said that royal commissions take minutes and sit for years, royal commissions do not have to sit for years. It might have been far better, and the basis for a far more coherent approach, had a royal commission on the constitution been established to look at all these issues and at the role and composition of each House of Parliament and what it should do and not do. What we are doing is having piecemeal constitutional legislation. It is

15 Mar 2011 : Column 188

back-of-the-envelope stuff. I think that there is a time to pause and reflect. I hope that between now and Report we will see some reflection and some convincing answers to some of the very important issues that have been raised today and that will doubtless be raised at subsequent stages as we debate this Bill.

The Earl of Onslow: My Lords, I crave your Lordships' indulgence and apologise for not being able to speak at Second Reading. There was a slight horlicks done by our Whips' Office, for which I apologise.

This Government, who I support extraordinarily strongly, have the opportunity to produce some of the greatest social reforms and improvements for the benefit of this country since 1911. If Iain Duncan Smith gets his welfare reforms right, that will be a major contribution to the well-being of this country. If George Osborne gets the economy right, it will be of major benefit. If education reforms and medical reforms are as good as I personally think they are going to be, these will be the successes of a very great Government. But why have they gone completely doolally over constitutional change?

The trouble with this country is that constitutional change is extraordinarily easy. Every other country has complicated locking mechanisms in it. The Bill reduces the power of the House of Commons, reduces the power of the electorate and increases the chances of chaos. In 1870 or 1871, the French Government resigned. Either the President or the Prime Minister refused a dissolution-I cannot remember which. As there was no possibility of a dissolution, they played the game of pass the parcel and wrecked French government from 1870 until 1945. That is bad constitutional form. We would do the minimum amount of harm by adopting something along the lines of what the noble Lord, Lord Grocott, says. In my 30 or so years in this House, I have regarded myself as a disloyal Conservative, and I will go on being a disloyal Conservative. If they are doing something that I believe is as fundamentally wrong as this, I will say so. That does not mean that I will come and join you over there.

Lord Pannick: My Lords, I, too, support the observations of the noble Lord, Lord Cormack, as to the need for careful consideration of constitutional reform. The noble Lord, Lord Marks, accurately pointed out that the Constitution Committee, of which I am a member, did not suggest that a referendum is required in relation to the introduction of fixed-term Parliaments. As the Committee well knows, the Constitution Committee expressed grave concern in paragraph 20 of our report that this Bill owes,

I suggest that the Government's position in relation to whether a referendum on constitutional reform is appropriate is precisely a matter that appears to be determined by short-term considerations-alternative vote, yes; reform of this House and fixed-term Parliaments, apparently no.

It is very difficult to deny that the Bill that we are currently considering will introduce major constitutional reform. In paragraph 40 of our report, we refer to the

15 Mar 2011 : Column 189

evidence that we heard from Professor Vernon Bogdanor in which he pointed out that the Bill, if enacted, will prevent,

it will prevent,


"Most importantly of all, because we could be moving into that situation with our hung Parliaments, it means that coalitions can change in the middle of a Parliament without the people being allowed to pronounce on that".

This is a major constitutional reform. I am no fan of referendums, but I would welcome guidance from the noble and learned Lord, Lord Wallace of Tankerness, on behalf of the Government, as to what their policy is as to when a referendum is appropriate for constitutional reform and when it is not, and I would welcome an assurance that that issue is not determined by short-term political considerations.

Lord Brooke of Sutton Mandeville: My Lords, I realise that I regard the noble Baroness, Lady Hayter of Kentish Town, as an agreeable ally on constitutional matters, but I was sorry that the noble Lord, Lord Howarth of Newport, felt it necessary to precede her in this short debate. Of course I understand the protocol that he was pursuing, but we always know that the noble Lord, Lord Howarth of Newport, will have spoken before the Minister rises-he is indeed a pillar of the constitution. However, I think that chivalry has a role. At Second Reading, I alluded to the French Revolution. In Burke's memorable sentences:

"It is now sixteen or seventeen years since I saw the queen of France ... the age of chivalry is gone. That of sophisters, economists, and calculators, has succeeded; and the glory of Europe is extinguished for ever".

I understand why the noble Lord, Lord Howarth, spoke but a little variety in our experience might bring the government Benches back into the Chamber on constitutional matters, as he was wishing earlier, just as everyone who speaks in these debates has their own personal and individual subjective view on how we could increase voter turnout.

An aspect of variety in this speech is that, most unusually, I disagree with the noble Lord, Lord Grocott, whose constitutional views I respect just this side of idolatry. However, I have a reservation on this occasion. He prayed in aid the statistical fact that there would have been four fewer elections since the war under this Bill than factual history produced. I have profound admiration for the maturity of the British electorate. On only one occasion among those 17 post-war elections did they possibly make a mistake, as they themselves may have conceded, by giving more votes to one party and more seats to the other, but that does not mean that we may want more opportunities as an electorate to exercise our maturity or indeed our wisdom.

The reductio ad absurdum to which the argument from the noble Lord, Lord Grocott, could be made subject is that we should hold a referendum on whether

15 Mar 2011 : Column 190

the electorate wanted more elections or fewer. There is some polling evidence that they would vote for fewer but that would accelerate the number of referendums we felt it necessary to think that we need.

Lord Hunt of Kings Heath: My Lords, that is an interesting contribution to follow. Like the noble Earl, Lord Onslow, I am pleased to make rather a late entry into your Lordships' deliberations on this Bill. I am glad that it is on such an interesting matter and I am grateful to my noble friends Lord Grocott and Lord Howarth for their amendments.

As a number of noble Lords have suggested, this is part of what was promised to be a comprehensive package of reforms on the constitution by the Government. We have already had the Parliamentary Voting System and Constituencies Act. We now have this Bill and before too long, although it seems to be a somewhat lengthy time in coming, we are promised the draft House of Lords reform Bill. Like other noble Lords, what I find so puzzling is the piecemeal approach and lack of consistency on the part of the Government to how these different measures are brought before Parliament, then in some cases put to the electorate and in others not so.

We are to have a referendum on AV. We are also promised, in the coalition agreement, a referendum on any changes or amendments to the European Communities Act 1972 where there is a proposal under a treaty to transfer areas of power or competencies. Yet there is to be no referendum on the principle of a fixed-term Parliament, on whether it should be for four or five years, or on reform of your Lordships' House. I agree with other noble Lords that, arguably, this Bill and the one to come are constitutionally much more significant than changing a voting system from first past the post to AV.

As the noble Lord, Lord Pannick, said-it is worth reflecting on this-the view of the Lords Select Committee on the Constitution is that this Bill owes,

I agree with that. My noble friends Lord Grocott and Lord Howarth are surely right that the period of five years must mean that the voters will find themselves less able to hold the Executive to account. That is therefore of significance. The noble Lord, Lord Brooke, may be right in suggesting that the public might welcome being inconvenienced on fewer occasions. But should that not be put to the public in a referendum? Surely it is the same when it comes to Lords reform. Like the noble Lord, Lord Marks, I think that the issue of Lords reform is highly significant to the debate that we are having.

6.45 pm

Lord Tyler: The noble Lord and I both served for many months on the working group chaired by his colleague, Mr Jack Straw, when we looked in very considerable detail at the various proposals for reform of your Lordships' House. At not one single moment through the whole of that White Paper's preparation did he or his colleagues suggest that it was necessary for those proposals to be put in a referendum for the

15 Mar 2011 : Column 191

public to take a view. Why is there suddenly this interest in making that proposal the subject of a referendum?

Lord Hunt of Kings Heath: It is because it is part of a series of measures of constitutional change. The noble Lord, Lord Tyler, will also know that the intention was always to produce that White Paper, which we did, then to ensure that it was in the manifestos of the three parties at the last election, which it was, then to bring forward proposals. For myself, I believe that a referendum ought to be considered in the context of the current Government's decision to go for a referendum on AV and their other constitutional changes; and because it is abundantly clear, from all that I have read and heard, that they are not prepared to deal with the issue of powers when it comes to Lords reform.

My noble friend Lord Grocott and I do not always see eye to eye on Lords reform, but I certainly agree with him when he challenges the naive assumption that an elected senate will simply carry on in much the same way as your Lordships' House does, without any impact on the House of Commons. I do not accept that; an elected second Chamber is bound to impact on the Commons and on our constitution in a major way. In many respects, it will be a new House even though there may well be a transition period between where we are and where we get to in the end. The same applies to the Bill. As a result of the Bill there will be less accountable Parliaments, because they will last longer, and a legislature with a more limited ability to evict a Government who have lost the confidence of the Commons. I say to the noble Lord, Lord Marks, that that is pretty fundamental to me. At the very least the Minister, whom we all value for his contributions on constitutional issues, ought to have a shot at showing where the consistency is between those constitutional changes which are to be subject to a referendum and those which are not.

Lord Wallace of Tankerness: My Lords, we have once again had a spirited and interesting debate with a number of important points made. It is also obvious that some of the issues raised went beyond the question of a referendum and into some of the detail of the different constitutional reforms that have either been debated and passed or are about to come down the track.

Perhaps I might start by taking issue with the noble Lord, Lord Grocott, on a couple of the points which he made at the outset. He said that he hoped that never again would he hear that the Prime Minister was surrendering power or determining the date of the election. While it is the case that the Prime Minister and the Government are, in this Bill, putting forward a date for an election as being the first Thursday in May 2015, and while I hope that the Bill will be passed with that in it, that in itself means that the Prime Minister has surrendered a power because it is not possible-

Lord Pannick: He has chosen it.

Lord Wallace of Tankerness: He has actually put it to Parliament for it to support. Parliament will have had to vote that through, as is quite clear because we

15 Mar 2011 : Column 192

have other amendments coming down to change that date. Unless circumstances arise that would trigger the mechanisms in Clause 2, the Prime Minister of the day will not have the opportunity to seek Dissolution when it might seem opportune other than to have the election on the date set down in the Bill. He will have surrendered that power.

The Earl of Onslow: The Prime Minister has said, perfectly reasonably, that he thinks his Government will go on until 15 May 2015. He has made a perfectly legitimate choice to the House of Commons, but binding his successors is a different matter altogether.

Lord Wallace of Tankerness:My Lords, my noble friend's point goes to the heart of whether one should have a fixed-term Parliament, bearing in mind that no Parliament can bind its successor. We debated the arguments for fixed-term Parliaments at Second Reading. I believe that they would ensure that Governments were able to plan, as indeed could Parliament, for a fixed period, and that they would not allow a Prime Minister of the day to seek an opportune moment to go to the country earlier than the full length of a Parliament for partisan reasons. This is an advance on what we have at the moment.

The point I am making is that if the Bill becomes law as it currently stands, the Prime Minister's hands will be tied. If he saw an advantage some time in the spring of 2014, it would not be possible for him to cut and run because, if the Bill was on the statute book, he would not be allowed to do so. The fact that the Bill ensures that Parliament cannot otherwise be dissolved means, as the noble Lord, Lord Hennessy, remarked at Second Reading, that the Prime Minister has given up an important power.

We could debate whether the electorate have been denied as many chances to go to the polls as otherwise. The crude arithmetical approach-I do not mean crude in a pejorative way-adopted by the noble Lord, Lord Grocott, did not take into account that in no case since 1945 would any circumstances have arisen that would have triggered the mechanisms for early Dissolution or an early election under Clause 2; he assumes that that would never have happened. However, if one looks at history, it may well have happened in 1951 when there was a consensus between the parties that an election was needed. It may well have happened in February 1974. I know that my noble friend Lord Cormack thinks that the then Prime Minister, Mr Edward Heath, was wrong-and, indeed, as the electorate pointed out, he probably was-but there may well have been circumstances then in which it was felt that the Government of the day, and, one assumes, the Opposition, would not have stood in the way of an election, and that could have triggered Dissolution. It may well be that, as a result of that election in 1974, when there was no working majority for any party, another election may again have been agreed.

The point I am trying to make is that you cannot simply indicate that every Parliament would have gone the full five years since 1945 because there may well have been circumstances during these years that would have triggered an election. That is the whole point of

15 Mar 2011 : Column 193

the provision of trigger mechanisms, which no doubt the Committee will debate in due course. With issues such as no-confidence Motions and their wording, there is plenty of material and meat for debate.

My noble friend Lord Onslow, in his response to my noble friend Lord Marks, asked whether the Bill would extend the lifetime of this Parliament. My noble friend Lord Marks was right to say that it has the potential, if the power is used, to extend the date by two months in certain agreed circumstances, such as the foot and mouth outbreak in 2001. However, it is important to put on record that the general election last year took place on 6 May and that the first meeting of the new Parliament took place on 18 May; therefore this Parliament can continue until 18 May 2015. The latest date on which an election could be held is 11 June 2015, so stipulating the date of 7 May 2015 does not extend the life of this Parliament. The power is there to be used in exceptional circumstances and is subject to the votes of both Houses, and that is why the Parliament Act would not apply.

The amendment invites the Government to hold a referendum on whether the general election should be held in May 2014 or May 2015, although it makes no provision for the result of a referendum to be reflected in the length of a fixed-term Parliament after that general election. I think we get the spirit of what the noble Lord, Lord Grocott, is moving. My reaction is similar to that of my noble friend Lord Brooke; I am not sure what the public will make of being invited to choose the date of the next general election. I suspect that they would consider that as one trip to the polling station that they did not need to make.

The noble Lord, Lord Grocott, asked my noble friend Lord McNally which issues would be submitted to a referendum, and my noble friend replied:

Indeed, it will be possible for Parliament to make that judgment on any legislation.

As to the referendum on the alternative vote, let me try to put into context where we are. I do not make any bones about the fact that in the aftermath of the last general election, when quite clearly no party had an overall majority, there were coalition negotiations in which we tried to seek agreement. This has put in place a Government who are doing things of which my noble friend Lord Onslow heartily approves. I have been involved in coalitions in devolved Administrations, and there is inevitably an element of give and take and compromise in the negotiations. It is quite clear that the Conservatives did not support electoral reform in the shape of the alternative vote, and I do not shy away from the fact that some movement was required on that if there was ever going to be a coalition that would address the immediate economic crisis facing the country. There was therefore an agreement that there should be a referendum on the alternative vote, a policy that had been in the Labour Party's manifesto. The Conservatives did not espouse a policy for fixed-term Parliaments, but they were prepared to accept it as a part of a coalition agreement because the Liberal Democrats were prepared to accept many other things.

15 Mar 2011 : Column 194

This has subsequently laid the foundations to get us out of the economic and fiscal mess bequeathed to the Government.

Both the Labour Party and the Liberal Democrats had a commitment to a fixed-term Parliament in their manifestos, although neither of them said what the period would be-certainly the Liberal Democrats did not say so. We had party policy papers from the past, but we did not say four years in our manifesto. Crucially, neither party said that there would be a referendum on that commitment. Contrast that with the Conservative Party, which indicated that it wanted referendums on British membership of the European Union and ceding further powers to Brussels.

Baroness Farrington of Ribbleton: The Minister is very careful in his choice of words. Can he assist me? What should I say in the referendum campaign to people who ask me whether there will be the same AV system for voting for Members of the House of Lords? If it is not to be the same, what should I say to people who ask me why we should not have the same system for the House of Lords? The fundamental flaw in the Government's policy is not the options that they choose on an individual issue, but that when they all come together they begin to look like a committee trying to design something but not knowing how many legs it has or whether it has two heads.

Lord Wallace of Tankerness: Far be it from me to suggest how the noble Baroness should answer questions about the merits of the AV system. I am not sure which side she is on but I should like to think that we are on the same side. I cannot answer her question because I am not a member of the committee looking at Lords reform and have not seen its proposals. I genuinely do not know the answer to the question.

I do not think that it would be appropriate to go into the merits of Lords reform in the context of this Bill, but I pick up the point made by my noble friend Lord Tyler that in all the discussions with the previous Government on the committee chaired by Mr Jack Straw, it was never anticipated that there would be a referendum. As was confirmed by the noble Lord, Lord Hunt of Kings Heath, the purpose identified was that a White Paper would propose either a wholly or a substantially elected second Chamber, which would go into the manifestos of the three main parties. Indeed, that proposal was put before the electorate in the manifestos of the three main parties. I did not find it a very convincing argument that there should now be a referendum on Lords reform or anything else just because this Government have brought forward other constitutional measures.

7 pm

Lord Hunt of Kings Heath: My Lords, the noble and learned Lord will know that the Government's intention is that when the draft Bill is published, it will then go before a Joint Committee of both Houses for pre-legislative scrutiny. If, as a result of that pre-legislative scrutiny, the Select Committee does indeed report that there are significant constitutional issues involved in the proposals, would the Government then consider a referendum?

15 Mar 2011 : Column 195

Lord Wallace of Tankerness: Tempting though the honeyed words of the noble Lord are-that seems to be the phrase of the night-he knows full well that it would be wrong of me to anticipate a hypothetical situation regarding that committee other than to confirm that it is proposed that there will be a Joint Committee to carry out pre-legislative scrutiny. It would be wrong for me to speculate on what that committee will propose, because that is some way down the track, or what the Government's response would be.

My noble friend Lord Marks indicated that the previous Government brought forward legislation that fundamentally changed the relationship between the judiciary, the Executive and Parliament, and did so without a referendum. That might be thought to be a far more fundamental and far-reaching constitutional reform than the one we are considering. With the exception of the proposed referendum on the alternative vote, the Constitutional Reform and Governance Act, introduced in this House before the wash-up, had a plethora of constitutional measures, none of which, other than the AV referendum, sought to have a referendum attached to it. While I take on board the strictures of the noble Lord, Lord Pannick, on the Constitution Committee's consideration and view on this Bill, the committee did not, as he confirmed, recommend that there should be a referendum. If one reads the Constitution Committee report from the previous Session, when I was a member, one detects a great reluctance to go down the route of referendums-or referenda, in deference to my noble friend Lord Cormack.

The items on the list read out by my noble friend Lord Marks, including the abolition of the monarchy and the secession of one of the nations from the United Kingdom, are of a different order from what is proposed in the Bill. This country is, after all, governed by a system of representative democracy in the other place. We in Parliament are basically entrusted with the power to make important decisions on behalf of the people of this country and, in the other place, by the people who are elected to make these decisions as representatives of the people. There must be an exceptional reason to ask people a direct question in a referendum, and I do not believe that the case has been made this evening for that exceptional high threshold to have been reached in respect of the Bill. I therefore urge the noble Lord to withdraw the amendment.

Lord Grocott: My Lords, I really am grateful for the contributions that have been made to this debate, not least because, as I said at the beginning, I felt that I needed to apologise to the Committee for mentioning the word "referendum". It seems that there is still a fair degree of enthusiasm for talking about it now.

I will not use the term "honeyed words", but the noble and learned Lord, Lord Wallace, always puts together a strong argument. I must say, however, he was on pretty weak ground when he tried to suggest that it was not the Prime Minister who decided that the next general election will be on 7 May 2015. No less an authority than his own dear leader said:

"We have a Prime Minister who is the first in history to relinquish the right to set the date of the general election".-[Official Report, Commons, 13/9/10; col. 622.]

15 Mar 2011 : Column 196

Who did set the date of 7 May 2015? If it was not the Prime Minister, who was it? That decision was quite clearly made by this Prime Minister, and the only rights he is relinquishing are those of future Prime Ministers. I suggest taking the Denis Healey advice on that one-when in a hole, stop digging. The Prime Minister made his decision, with the Deputy Prime Minister, for the understandable political reason that they are in a fragile political situation following the general election and they had best try to bank five years in the job rather than risk their term being foreshortened. I really cannot put it any more strongly than that.

The noble and learned Lord suggested-and this may or may not be true; this is, by definition, something that cannot be demonstrated conclusively-that there might have been a few more general elections than I said since the Second World War if the provisions of this Bill had been in operation. He suggested that there might have been scenarios in which a general election would have been triggered according to the provisions that deal with that. I find that argument pretty unconvincing. I am trying to imagine a scenario in the House of Commons when two-thirds of the Members-that means the whole of the governing party and a substantial number of opposition party members-were cheerfully voting together to charge to the polls. It is very difficult to imagine.

The only time when an election would have been triggered under the provisions of this Bill was in 1979, when the Government lost a vote of confidence. I will not repeat too much of what was said on Second Reading, but that seems to have been the perfect operation of our constitutional arrangements. It was beyond improvement. Why on earth we need to start defining that kind of thing in legislation is beyond me. It was a magnificent occasion although, from my perspective, it was also a magnificent defeat. It was the constitution working as it should have done, and we only diminish the constitution by these provisions. But we will come to that later.

I am encouraged by a number of the contributions to this debate that were, on balance, more in favour of acknowledging that this is a fundamental change. Having fewer general elections weakens the electorate-surely we can agree on that. The noble Lord, Lord Brooke, as ever, put forward an interesting tangential view. I agree with him that perhaps the electorate would not give the answer to the question, "How many elections do you want?", that we might assume they would. They might decide, "We can't be bothered with another blooming election for quite a few years now". That is quite possible. However, I certainly think that they should have, as my noble friend said, the right to decide whether, instead of having an election every three years and 10 months on average, there should be one every five years. That, surely, is a fundamental constitutional change. I do not want to misrepresent what the noble Lord, Lord Pannick, said, but I think that he as good as said that, as did a number of other speakers.

I realise that there is a weakness in my amendment, which is what my noble friend Lady Hayter said I might say. It was a pity that she did not go to New Zealand earlier because I would have loved to have

15 Mar 2011 : Column 197

heard her views of what the people there felt about changing their electoral system from first past the post and whether it had brought undiminished joy and happiness in the way that people who argue for proportional representation suggest.

Baroness Hayter of Kentish Town: It does bring the likelihood of coalition very much to the fore. Some people favour that and some do not, but undoubtedly in New Zealand the great advantage for those who support coalitions is that abandoning first past the post makes a coalition more likely.

Lord Grocott: I wish even more that we had had the benefit of a contribution from my noble friend and that she had been to New Zealand earlier. Perhaps we should take some advice on that front. However, her fundamental point was that, if you are going to increase the gap between general elections, you should certainly not do so without consulting the electorate.

I do not know whether the noble Earl, Lord Onslow, was supporting the proposal for a referendum but I very much agreed with him on what I think he referred to as the "constitutional madness" of the Government or a phrase of that sort. He said that they have got everything else right-which I obviously do not agree with-but they are getting constitutional reform wrong.

The Earl of Onslow: I said that it was doolally.

Lord Grocott: Doolally was the word. It is a splendid parliamentary term and I would not disagree with it.

There were many contributions to this debate but the only one with which I strongly disagreed was that of the noble Lord, Lord Marks, as he will not be surprised to hear. From his perspective, he did a good job in trying to persuade us that this is not a fundamental constitutional change, but the balance of the arguments we have heard suggested that it is. The only doubts that everyone has are in relation to there being another referendum, and I freely admit that I would not be absolutely thrilled at that prospect either. However, I hope that this short debate has established in the Government's mind, even if it has not convinced them, that a lot of people believe that this is yet another major constitutional change. It diminishes the power of the British people by reducing the number of elections. It is surprising that the determination to proceed comes principally from the Deputy Prime Minister, who has made much of the need to reconnect Parliament with the people. How this proposal squares with that is something on which I look forward to hearing an explanation. However, in the mean time, with thanks to everyone who has taken part, I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendment 4

Moved by Lord Cormack

4: Clause 1, page 1, line 5, leave out "7 May 2015" and insert "27 March 2015"

15 Mar 2011 : Column 198

Lord Cormack: My Lords, I do not wish to detain your Lordships for long on this amendment. I am conscious that there are other very important debates to come, and I am also aware that there is very important dinner break business.

I tabled this amendment for one simple reason: I am extremely unhappy about the coincidence of elections in May 2015. It seems wrong to have a general election for the United Kingdom at the same time as elections for the devolved Parliament and Assemblies. I feel that very strongly. I have a son who lives in Scotland and I have had considerable experience as chairman of the Northern Ireland Affairs Committee in the other House. I know that in Scotland-and I assume that the same applies in Wales and Northern Ireland-specific and real local issues which are very different from those in the United Kingdom rightly dominate the general election. It seems to me that it would devalue the devolved Parliament and Assemblies to have a plethora of elections on or at around the same date.

I was not an enthusiast for devolution in Scotland and Wales but it has happened. As it has happened, I am very anxious that it should continue to work, and work as well as possible, but I do not believe that it would be assisted by having this plethora of elections on the same day or at about the same time. Since I tabled the amendment, I understand that the Scottish Parliament has decided that it wants to prolong its life by a year. That raises some interesting constitutional issues because there is no second Chamber there to say, "Hold on a minute". For the Scottish Parliament to prolong its own life, in effect because of what we are doing here, does not do a service to parliamentary democracy either in Scotland or in the United Kingdom in general.

7.15 pm

Lord Empey: I am very grateful to the noble Lord for giving way. His very thoughtful amendment is obviously designed to assist the devolved Administrations. There are of course other aspects to the amendment. It would mean that those regions would be in a prolonged state of electioneering for additional months, for obvious reasons, and of course the parties would face additional costs because one election would follow the other. The question would also arise as to whether it would be possible to get the people to come back out again so shortly after being at the polls. Therefore, a series of issues arise here. It is a very thoughtful amendment and I know that the noble Lord has many years of experience in these matters. We are obviously dealing here with very sensitive issues and therefore the Administrations should certainly be consulted to get their views on the ideas that the noble Lord is putting forward.

There is also a possibility that local government elections could collide with some of the elections in certain places. Of course, depending on the circumstances, we also have the ever-present European elections, although they will not clash with that date. I thank the noble Lord for bringing forward the proposal. I think that there should be consultation with those most directly affected to test their views on it.

15 Mar 2011 : Column 199

Lord Cormack: I am grateful to the noble Lord for his speech, rather than his intervention. This is very much an issue that your Lordships' House should consider, and the Government should give us a very considered response.

There is of course an additional by-product of my amendment. Bringing forward the election by virtually a couple of months would prevent the Prime Minister having the opportunity to prolong the life of the Parliament. That might have the incidental benefit or disbenefit of robbing your Lordships' House of the ability to reject this legislation, because as it is currently drawn it cannot be subject to the Parliament Act, as we have heard again today. However, that is another point.

I urge the Minister to think very carefully about this. We value our devolved Administrations. Having created them, we have to nurture them, and we have to make sure that the powers they exercise are complementary to the powers exercised by the United Kingdom Parliament and that we do not create unnecessary tension between the devolved Administrations, the United Kingdom Parliament and the United Kingdom Government. Again, I think this is an example of not thinking through sufficiently carefully the consequences of the Bill. More damage has been done by the law of unintended consequences than by any other statute. We are in danger of having another law of unintended consequences. I beg to move.

Lord Howarth of Newport: My Lords, Amendments 6 and 7 in this group, which are in my name, are also intended to try to avert this unhappy clash between elections to the devolved institutions in Scotland, Wales and Northern Ireland and the general election. Mr Mark Harper, the Parliamentary Secretary, giving evidence to the Constitution Select Committee, noted that this clash could have happened anyway under existing legislation. However, the Bill makes it inevitable that the clash will occur in 2015 and every 20 years thereafter, all things being equal. It adds injury to insult. The insult has already been in the Government's insistence that the AV referendum should be held this year on the same day as the elections to the devolved institutions. They ignored the complaints about that from Scotland, Wales and Northern Ireland, and they ignored the pleas from both Houses of Parliament not to bring about that situation. It is contemptuous of the devolved institutions and those nations.

The Government of the United Kingdom should show better respect towards them. They appear to treat elections to the devolved Parliament and Assemblies as being of no real importance. Yet, the Liberal Democrats, before the general election, proposed that there should be regionally elected assemblies in England, and a number of Conservatives have argued seriously that there should be an English Parliament. Do they believe in devolution? Do they believe that there should be a mutually respectful relationship between the Parliament of the United Kingdom and the devolved Parliament and Assemblies or not? I fear that having the elections on the same day in 2015 and periods thereafter will wreck the devolved elections. Candidates in those elections ought to be judged on their own record and promise in the important fields of government that are

15 Mar 2011 : Column 200

devolved and the important political service that they give. They should not be caught up in the backwash of the general election.

Professor Padgett, giving evidence to the Constitution Select Committee, observed that in Germany, where elections take place on the same day, federal issues and campaigns have, as he put it,

Dr Milner, also giving evidence at the same session, noted that in Sweden, where national, regional and local elections coincide on the same day, there is high turnout-that is a merit-but that people gave very little attention to the issues in the regional and local elections. On the other hand, in Norway, where regional and local elections take place at mid term of the four-year cycle of national elections, the focus is truly on the regional and local elections when they happen. He also made the worthwhile point that more frequent elections are good for democratic engagement and democratic education.

There will, inevitably, be great confusion if all these elections are held on the same day, fought on different boundaries, possibly on different voting systems and with different campaigns for the different elections. On the administrative side, returning officers have complained that it will be very difficult for them to acquit themselves of their responsibility. Mr Harper said to the Select Committee that the question of coincidence of the dates of the elections for the devolved Assemblies and the general election was a bigger question than the clash with the AV referendum. As of early last November, when he gave that evidence, he said that he was considering what the appropriate solutions might be. He said that,

Of course the consultation process should have taken place before the Bill was published. He said that he hoped that an agreed way forward would be implemented in the Bill.

I should be grateful if the noble and learned Lord would give us a report on what has transpired in these consultations and what the Government intend. Is it, as the noble Lord, Lord Cormack, suggested, correct that the Government have been tempting Members of the Scottish Parliament to have their term in office extended to five years, or do the Government envisage that the dates of the elections to the Scottish Parliament and the Assemblies might be shifted to a lesser degree? How can it be that a Government who believe in fixed-term Parliaments are mucking about with the fixed terms that have already been legislated for the Scottish Parliament and the other Assemblies? Will we see government amendments on this? If so, will that be at Committee stage or on Report?

The amendment proposed by the noble Lord, Lord Cormack, is preferable in the sense that it would shift the proposed date of the Westminster elections and does not incommode the devolved elections. My own amendments equally involve some shifting of the dates of the Westminster election and my Amendment 6 would bring it forward to October 2014. If we are to have fixed-term Parliaments there is no reason why we should not have elections in October rather than in May. I look forward to hearing the Minister's response.

15 Mar 2011 : Column 201

Lord Hunt of Kings Heath: I shall make a short intervention. This has raised an important point. There is no doubt, as was said at Second Reading, that this Bill leads to the real possibility of difficulty every 20 years in the close timing of the Scottish Parliament and Welsh Assembly elections on the one hand and the Westminster Parliament elections on the other. All three elections are specified to occur in May under normal circumstances. I understand that the Government are involved in consultations with the devolved institutions on that issue. It would be useful if the noble and learned Lord could report to the Committee on the progress of those negotiations, particularly if there is any potential for amendments to be tabled at later stages.

The noble Lord, Lord Cormack, and my noble friend Lord Howarth have each put forward a different approach. They may have noticed our Amendment 52, which suggests a third approach. It states that a,

Today's debate will be helpful in allowing us to discuss this matter more fully later.

I agree with my noble friend Lord Howarth and the noble Lord, Lord Cormack, that there should be stand-alone elections in the devolved Administrations. As my noble friend pointed out, we know the problem of holding different elections on the same day with different voting systems. I should have thought that it would be foolish to repeat the problem that we have seen in the past. I hope that the Minister will be sympathetic and at the very least update us on the discussions with the devolved Administrations.

Lord Wallace of Tankerness: My Lords, I thank my noble friend Lord Cormack and the noble Lord, Lord Howarth, for tabling the amendments and giving me an opportunity to update the Committee further to what I said on the Second Reading. My noble friend Lord Cormack asked the Government to think carefully about this and I confirm that we have done so. As was indicated from the evidence given by my honourable friend Mr Mark Harper to the Constitution Select Committee, this is an issue that we have considered and on which we have been in consultation.

I have much sympathy for the points that have been made and the underlying purpose of the amendments in trying to separate out the dates of the 2015 United Kingdom general election and the general elections to the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly. As has been indicated, it is not solely as a result of the Bill that a conglomeration-if that is the right word-of elections could happen. Indeed, it would happen only once every 20 years but it so happens that the first time would be in 2015. The Bill has given advance warning. Clearly under the present system, towards the end of the five years for which this Parliament was elected, a decision could have been taken to have an election on 7 May 2015 and there would not have been the opportunity to have the same kind of consideration and consultation that we have had.

One reason why the Government would not favour the proposal in the amendment tabled by the noble Lord, Lord Howarth, is that all three devolved assemblies

15 Mar 2011 : Column 202

will not always hold their elections on the same day. I think that it has always happened to date that the Welsh Assembly and the Scottish Parliament have held their elections on the same day, but the Northern Ireland Assembly has not always done so. I can check but I understand that this coming May is perhaps the first time that all three have coincided on the one day. I also take the point made by the noble Lord, Lord Empey, that two months may not be a sufficient gap between the elections, if indeed the purpose of separation is to ensure that one is not overshadowed by the other. Apart from the stresses and strains that two months might put on those who would be in permanent campaign mode, it might be difficult even then to disentangle the relevant issues as to which was devolved and which was reserved to the Westminster Parliament.

7.30 pm

At Second Reading, I updated your Lordships' House on the discussions that we had been engaged in with the Presiding Officers of the Scottish Parliament and the Welsh Assembly. I will deal later with the position with regard to Northern Ireland. As part of those discussions, which have been ongoing since last year, my honourable friend Mr Mark Harper wrote to the Presiding Officers on 17 February proposing that if the Scottish Parliament or the Welsh Assembly passed a resolution with the support of at least two-thirds of all Members agreeing that the 2015 Scottish Parliament or Welsh Assembly general elections should be moved up to one year earlier or later-that is to a date between the first Thursday in May 2014 and the first Thursday in May 2016-the Government would table an amendment to this Bill which would set the dates of the elections on a one-off basis. Copies of these letters are in the Library.

In that regard, I say to my noble friend Lord Cormack that it is not a question of the Scottish Parliament extending its own life. It cannot do that. The Presiding Officer has a very limited power at the moment to change the date of the general election for the Scottish Parliament by, I think, one month either way. It will not be the Scottish Parliament prolonging its own life. It will require primary legislation, and we propose to do it through an amendment to this Bill.

I am pleased to inform your Lordships' House that the Scottish Parliament passed a unanimous motion on 3 March confirming that it wished the United Kingdom Government to bring forward a provision to defer the 2015 general election to 5 May 2016. I understand that a similar motion is being prepared in the Welsh Assembly, although we have yet to hear whether that has been tabled. With the dissolution of the Welsh Assembly looming, one awaits the outcome.

As I previously outlined to your Lordships' House, in line with the proposal put to the Scottish Parliament and the Welsh Assembly, and subject to a motion being passed in Cardiff, we will bring forward an amendment to provide that the general elections to the Scottish Parliament and the Welsh Assembly scheduled for May 2015 will be varied to the dates specified in the motions passed by the Scottish Parliament and the Welsh Assembly-in the case of the Scottish Parliament, to 5 May 2016. This will ensure that the two sets of elections do not coincide on the same day in 2015.

15 Mar 2011 : Column 203

Subject to these amendments being accepted, in the longer term we will need to carry out a detailed assessment of what the implications would be of the two sets of elections coinciding at a later date. In the light of this assessment, we would consider whether to conduct a public consultation in Scotland and Wales on whether the devolved institutions there should permanently be extended to five-year terms. That is not for consideration now. It would be something we would wish to consider further down the line. I confirm that it would be our intention to bring forward an amendment in Committee-certainly in the case of Scotland because the Scottish Parliament has passed the resolution, and we will wait to see what Wales will do-so that those who go to the polls on 5 May this year know the length of the Parliament which they are electing.

Lord Hunt of Kings Heath: I am sorry that the noble Lord, Lord Marks, is not in his place because I presume that on that basis he would argue that, since the proposal might be to extend the devolved Administrations from four years to five years, it should be determined by referendum.

Lord Wallace of Tankerness: My Lords, I do not think that a referendum would be appropriate in those circumstances, not least because people go to the polls on 5 May, which is about six weeks away, and we could not hold a referendum in that time. It is important that people know the term of office of those they elect on 5 May. That is why we wish to bring forward that amendment in Committee. We await the outcome from the Welsh Assembly.

Northern Ireland Office Ministers are conducting separate discussions with the parties in Northern Ireland on this issue and have concluded that it would be better to await the outcome of the combined polls scheduled for May 2011 before taking a decision on whether special provision will be needed for Northern Ireland.

For the reasons I have outlined, and in the light of the fact that we have been working not only with the parties but with presiding officers in Scotland, Wales and Northern Ireland, I hope that the concerns that legitimately motivated these amendments have been addressed, and I invite the noble Lord to withdraw his amendment.

Lord Cormack: My Lords, never has a probing amendment produced more in the way of disturbing information from my noble and learned friend. Anyone who knows him likes him. He is an extremely agreeable man who was rightly very popular in the other place and is clearly popular in your Lordships' House, but if ever there was an illustration of the maxim of my late father that you should think before you do anything, it is the response that we have just heard. We are now going to have discussions in Scotland to see what the implications will be.

Lord Wallace of Tankerness: There are no discussions about what the date will be for what will no longer be the 2015 election. We have said that in the longer term

15 Mar 2011 : Column 204

there ought to be discussions to avoid a recurrence of the clash. We are not at the moment prepared to put the Scottish Parliament on to a permanent fixed five-year term. It is about the longer term that there will be discussions, but I make it clear that they will not be with regard to the date for the election that would otherwise have been on 7 May 2015. I hope that my noble friend will agree that that is something that should not be rushed into and that it is proper that there is consultation.

Lord Cormack: Yes, of course, but I respectfully say that there should have been consultation before we got into this mess. As I listened, I could not help but remember a quotation from WH Auden, writing just before the last war, who said that every great drama has two acts. In the first, the mistake is made, and in the second people discover that they have made a mistake. I could not help but think that there is a lot of that here. If only there had been consultation with the devolved institutions first. Then there could have been a proper working out of the most sensible date on which to have these various elections. However, the probing amendment has worked to some degree, and in the spirit of conciliatory unity which is so prevalent in the House today-I am delighted by that-I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

House resumed. Committee to begin again not before 8.36 pm.

Transfer of Functions (Dormant Accounts) Order 2010

Copy of the SI

Motion to Regret

7.37 pm

Moved by Lord Hunt of Kings Heath

Lord Hunt of Kings Heath: My Lords, I make it clear that I support the use of dormant bank accounts for socially useful objectives. It was the previous Labour Government who took through the Dormant Bank and Building Society Accounts Act 2008 to make provision for the Big Lottery Fund to distribute dormant account money to meet expenditure that has a social or environmental purpose. The big society bank clearly originates from those proposals. We proposed then that dormant money would be distributed to meet expenditure on or connected with the provision of services to support opportunities, to meet the needs of young people, to support the development of individuals' ability to manage their finances, or to a

15 Mar 2011 : Column 205

social investment wholesaler. Let me say that we welcome the Government's decision to continue the work of the social investment wholesale bank. However, it is currently unclear how the big society bank will be set up and on what terms it will receive capital from UK banks. I hope the Government will be able to explain how they will guarantee the social mission of the bank and ensure that it does not become just another mainstream lender.

There are serious questions about how the big society bank will function. What form will the capital from the Royal Bank of Scotland, Barclays, HSBC and Lloyds take? Will it be legally incorporated? What working rate of return are the Government expecting to provide to the banks? What interest rate will the big society bank charge? Will it be allowed to issue bonds and raise additional wholesale finance? What kind of social enterprise will the big society bank favour? Will the big society bank have paid employees? What salary levels will be paid? What bonus structures will be used? When the funds are passed to the community groups and voluntary organisations on the ground, will they represent the total sums of money put into the big society bank?

I also ask the noble Lord what he has to say in response to your Lordships' Merits Select Committee, which reported on this statutory instrument. He will know that it made the comment:

"The infrastructure of the Big Lottery Fund is already up and running, and using it as a conduit offered potential economies of scale".

The Merits Committee wanted to know, and invited the House to ask, whether the policy proposals that the Government are bringing forward will result in an additional administrative cost. I would be grateful to the noble Lord for his response to that.

Going beyond the specific questions that I am asking the noble Lord, there is a more substantive issue at the heart of my Motion. In the face of tens of billions of pounds in spending cuts, which are more likely to be cut from public service contracts that impact directly on the voluntary sector-it holds many of those contracts-the limited amount of money that the big society bank will receive is very small beer. In fact, it is hard not to conclude that the big society is a misnomer for what this Government are all about. They are embarking on a destructive assault on our welfare state. It is clear that the voluntary and charitable sectors are taking a massive hit as a result.

Over the past few weeks, I have mentioned the situation of Birmingham on a number of occasions in your Lordships' House. In Birmingham, the CAB is threatened with closure and it is not alone. Many of the city's voluntary services are similarly threatened as a result of decisions made by the Conservative-Liberal Democrat council. At the same time, we are seeing large reductions being made in legal aid services. All those decisions will have a dramatic impact on the most vulnerable people living in Birmingham. What is happening in Birmingham is happening up and down the country. Libraries, children's centres, the youth service and the charitable sector-all are being adversely affected.

15 Mar 2011 : Column 206

When the Government's big society policy concept emerged, the role of the voluntary sector was said to be crucial. Since then there have been various interpretations of what the big society has meant but I believe, from my reading of the various enunciations from Ministers, that the voluntary sector is still at the core of what it is about. I support and embrace the role of the charitable and voluntary sector.

When Labour was in office we took important steps to support the charitable sector and volunteering. But no one can volunteer at a library, the CAB or a children's centre if it is closed. No wonder many charity heads have warned that the speed and depth of the cuts imposed by local councils make the big society impossible to deliver. The director of Eaves and the POPPY Project, Denise Marshall, said:

"David Cameron, I get what he's trying to do ... but he needs to understand that groups like mine can't function without that funding. We can't go from year to year hoping that people will fill our begging bowls. We have to have proper funding ... domestic violence victims don't storm the town hall saying don't close down the refuge because they can't".

She said that the Government,

That was only four weeks ago. She concluded:

"We are going to really mess up more services and we're going to make women's lives more difficult".

The reality is, as the Association of Chief Executives of Voluntary Organisations has estimated, that the voluntary sector will face a reduction in funding of £1.14 billion this year, rising to £3.1 billion per year by 2014. The Society of Local Authority Chief Executives has said that,

7.45 pm

Let me come back to the details that arise from this order. The big society bank is providing loans or risk capital, not revenue. Any funding made available to civic society cannot be treated as a replacement for grants and earned income that organisations are likely to lose. I would be grateful if the noble Lord would say when he thinks that the big society bank is likely to be operational. But if it is not operational until, say, the third quarter of 2011 and as a wholesale bank, as the NCVO has warned, it will take time for those funds to reach the front line. The problem is that the big society is clothed in warm words about empowering individuals, neighbourhood groups and communities to choose how to deal with their own affairs. But, as my noble friend Lord Beecham has written, it is one thing for the Government to use the big society as a cover for savage cuts in public expenditure but what is emerging is that its very name is a misnomer. In fact, what the Government are seeking is a small society, with the role of the state reduced and replaced by a fragmented society.

I do not want to go on. Noble Lords will have got the thrust of what I want to say tonight. The noble Lord needs to understand that at the moment many of the organisations on which so many people depend-

15 Mar 2011 : Column 207

whether it is in the concept of a big society or a great society, call it what you will-are very vulnerable. The point that I really want to put across is that I support the use of these dormant accounts. It follows the policy enunciated and developed by the previous Government. But the sorts of funds likely to be available are very small. In the mean time, many of the essential things that those charitable and voluntary organisations do are in jeopardy.

Baroness Butler-Sloss: My Lords, I have put down a take note Motion so perhaps your Lordships' House will permit me to go next. I have to declare an interest as a member of the Merits of Statutory Instruments Committee, which is why I have read this order, which I support. I congratulate the Government and I support them rather more perhaps than the noble Lord, Lord Hunt of Kings Heath, has done.

I have absolutely no intention of suggesting that there is anything wrong with this order, nor do I intend to go outside what might be called the parameters of the order, unlike the noble Lord, Lord Hunt of Kings Heath. However, there are some points and questions that need to be asked within the confinements of this order, which provides for a very sensible amendment of the 2008 Act. The questions that I would like to ask are based on the fact that the present position is very vague and it would be helpful to know rather more as to how this new bank is intended to work.

The present position, under Section 16(1) of the 2008 Act, is that the purpose is to be social or environmental. Under Section 18(1), the distribution will focus on providing places to go for young people. That is one of the main objectives. From what I have read of what has been said recently about the proposed big society bank, neither of those matters has figured. It is important to go back to see what the purpose of the Act was to which this order relates. Is one of the destinations of the big society bank to be providing places for young people to go to? How will the bank apply social or environmental purposes? Who will be the recipients? What will be the spending priorities? How will the bank work as the "social investment wholesaler"-what a terrible phrase-in investing and managing financial intermediaries? What are the financial intermediaries intended to be?

The noble Lord, Lord Hunt of Kings Heath, and the Select Committee on Merits also raised the issue of the additional costs. Undoubtedly, the current structure is set up under the Big Lottery Fund. Consequently, any move to the bank is going to cause some additional costs. How are those going to be met? Is it likely that the administration will be so expensive that the £100 million or more from the dormant accounts-I hope those will provide much more than £100 million-will not cover it? One does not want too much of that spent on the additional cost of this big society bank. I am hoping that those costs can be kept to a minimum, but I am somewhat concerned about the movement from the Big Lottery Fund to this new bank.

I would also be interested to know to what extent, if any, there will be any form of parliamentary scrutiny of the bank's activities. It would be helpful if Parliament had the opportunity to know what was going on and to express a view. I do not wish to comment on what

15 Mar 2011 : Column 208

the noble Lord, Lord Hunt, has said about the wider picture, but we ought to know rather more about how the big society bank is going to work within the confines of the 2008 Act. The debate on the Bill in this House undoubtedly raised considerable expectations and it is crucial that the big society bank should fulfil them.

Lord Newby: My Lords, it is a great pleasure to return to the joys of the Dormant Bank and Building Society Accounts Act 2008. I may be the only person in your Lordships' House who sat through the entire proceedings of that Bill.

That was a fascinating process because the original purpose of the Bill was to do what the Government plan to do, namely to make the funding available from bank accounts to a new social investment bank-the brain-child of the current leader of the Labour Party. When it became clear that some new funding was available, other members of the Cabinet thought it might be a good idea if they had a share. Therefore, a new purpose was added to the Bill to make expenditure available for the provision of services for young people-Ed Balls' proposal that every community should have a new youth club. This was the second purpose inserted after the first purpose. The third purpose about financial literacy was inserted by the Treasury because it was fed up that it was not getting a look-in. So we ended up with an Act which was a muddle. It had started with a simple purpose and ended up with three purposes.

The relevance of that to the report of the Merits Committee is that it explains why the Big Lottery Fund has a role in the Act as it is currently set out. If you were going to have, as was originally envisaged, part of the funding going to establish a national network of youth clubs, somebody had to be in charge of allocating the money for those youth clubs. And if you were going to make money available for financial literacy, somebody had to decide where the money went. It was agreed that the Big Lottery Fund was a logical home for that. It was never intended that the Big Lottery Fund would have any role to play in terms of the social investment wholesaler because that is not what it does. I suspect that the only role of the Big Lottery Fund now, given that the first two purposes have fallen by the wayside and we have got back to the original intent of the Bill, is to decide who the social investment wholesaler will be. Someone has to do that, so it has to be either a civil servant or the Big Lottery Fund. I doubt very much whether there will be any additional cost involved with that.

Regarding the original purpose of the Bill, I believe it is extremely important that the big society bank is established. Whether you agree with the cuts or not, it is undoubtedly the case that many public services are being better delivered today than they were yesterday because they are being delivered by social enterprises. I have referred in previous debates in your Lordships' House to Sandwell healthcare services, which provide facilities in the West Midlands for half the price previously provided by the local authority. I know this because the chief executive came before the All-Party Parliamentary Group on Social Enterprise, which I chair. When asked how Sandwell was able to do that

15 Mar 2011 : Column 209

for half the price, he said that nobody is paid any less but some simple things have been done such as reducing the average number of days' sick leave from 32, when the services were administered by the local authority, to two. He has made huge efficiency savings by motivating staff and freeing them from a bureaucratic environment.

The problem with the social enterprise sector is that it is full of organisations such as Sandwell healthcare services doing tremendous things but on a small scale. One of the main reasons they are not doing things on a large scale is that it is very difficult to get access to finance. Very often social enterprises do not have the business record because a lot of them are relatively new, nor do they have assets against which a loan can be secured. Therefore, the mainstream banks do not lend to them. The big society bank, with the combination of funding from this Act and from the high-street banks, will for the first time provide a significant pool of capital for social enterprises.

As I say, whatever you think about the cuts, having more social enterprises will enable public services to be delivered more efficiently and more effectively than is often done at present. Therefore, I strongly welcome the establishment of the bank. This is a minor order that helps clear the way for that and it has my full support.

Baroness Pitkeathley: I want to speak in favour of the Motion proposed by my noble friend Lord Hunt. I declare two interests. Until 31 March 2011, I am the chair of the advisory body to the Office for Civil Society, which has responsibility for the big society bank. I was also a member of the original Commission on Unclaimed Assets, chaired by Sir Ronald Cohen, so in that sense I go even further back than the noble Lord, Lord Newby.

I want to remind your Lordships of what Sir Ronald said at the time of the launch of the Commission on Unclaimed Assets, which was set up originally in 2005 and launched in 2007. He said:

Further, it was pointed out that,

That was the spirit of the Commission on Unclaimed Assets and its purpose was that it would support the local voluntary and community sector. If that was the purpose then, how much more important is that purpose now when, as we all know, the voluntary and community sector is somewhat in difficulties because of the withdrawal of funding?

8 pm

That metamorphosed into the big society bank. I agree with the noble Lord, Lord Newby, that it is good that we have returned to the original purposes of the Act. However, there are two major problems with the big society bank being promoted as the solution to the problems of the voluntary sector. First, nobody

15 Mar 2011 : Column 210

knows how much money there is and on what terms it will be available. The second, and even greater, problem is one of timing. It will take much longer than anybody thought for the big society bank to come on stream and be available to local voluntary and community groups. I bow to no one in my admiration of the charitable sector and its ability to adapt, but it cannot adapt that quickly. In order to re-establish itself, to effect mergers and partnerships and so on, or to replace funding, it needs a lot more time than it is being given at the moment.

I keep talking to charities which say, "We'll be gone in four weeks' time. We have no more money". That is a major problem. Therefore, we should stop promoting the big society bank as the solution to all the problems currently faced by the voluntary and community sector, on which so many in our society depend. There is a lot more that we need to do to support it than rely on the big society bank.

Lord Beecham: My Lords, I must apologise for not being in the House when my noble friend Lord Hunt opened this debate, especially as he was kind enough to make reference to me subsequently-although I did hear that.

I want to take up one point, on which my noble friend Lady Pitkeathley touched almost in passing, while welcoming the principle of the order and of the bank and recognising that there is certainly some potential for helping the voluntary and community sector. She mentioned in general the terms under which investments and loans will be made. Can the Minister give us any assurances about that? Sir Ronald Cohen, who is a very enthusiastic supporter of the principle, has suggested that interest will be at commercial rates. If that is the case, is there not a danger that voluntary organisations, which after all will be seeking investment anyway because they are having some financial difficulties, will find it difficult to proceed when they are being expected to pay commercial rates of interest on loans? It would be different if grants were being made, but my understanding is that this is to be a rolling investment fund and that it will be a question not of grants but of loans. It would be helpful if the Minister were able to give an indication on that issue.

Lord Taylor of Holbeach: My Lords, I am sorry if my slowness in rising rather gave the impression that the debate would be longer than I had imagined. I am not reluctant to spring to my feet for I believe that this is a very welcome debate and thank all noble Lords who have participated in it, in particular those two noble Lords whose Motions are before us this evening, because it gives me an opportunity to expand further on the Government's plans and actions deriving from the order which is the debate's subject.

The noble Lord, Lord Hunt, has expressed concern over the current challenges facing voluntary, community and social enterprise organisations. I share the view that the VCSE sector plays a crucial role in our society and economy, but as I will make clear in these closing remarks, the big society agenda, with its emphasis on social action, community empowerment and public sector reform, will open up many new opportunities

15 Mar 2011 : Column 211

for these organisations to thrive in the future. This Government are taking a number of measures which will directly support the sector through this difficult time in the short term, but which will help to ensure a more secure and stable future in the long run. Those measures include the setting-up of the big society bank.

I join the noble and learned Baroness, Lady Butler-Sloss, in welcoming the coming-into-force of the transfer of functions order. As the noble Lord, Lord Hunt of Kings Heath, will know, and as he said, this derives from legislation enacted under the previous Government which we supported. It marks an important step on the way to meeting the Government's ambitious plans for a big society bank. With this order, the Minister for the Cabinet Office can now direct the Big Lottery Fund on how to use England's portion of released dormant accounts to achieve social benefits in line with the provisions of the Dormant Bank and Building Society Accounts Act 2008.

As the Prime Minister announced in July 2010, the Government intend to use all the dormant accounts money available for spending in England to capitalise an independent big society bank, or-I apologise to the noble and learned Baroness for the phrase-social investment wholesaler. The role of the big society bank will be to help build a sustainable social investment market, making it easier for voluntary, community and social enterprise organisations to access the finance and advice that they need. Although a nascent social investment market has emerged over the past decade, it remains small and fragile. Many of these organisations tackle our most intractable social problems and deliver vital public services. They empower local communities and work with the most marginalised members of society, yet still struggle to access the finance they need to grow and develop.

The big society bank will work with a range of social investment intermediaries to increase the overall pool and variety of capital available to front-line organisations. In the long term, our vision is of a fully functioning and more sustainable social investment market which will enable voluntary, community and social enterprise organisations to grow and develop, and to become more resilient.

There are many ways in which the bank will work to achieve this. For example, I believe that there are people and organisations, including the public sector, willing to invest in social impact. There are also organisations trying to create that social impact but few mechanisms to bring the two together. Some new ideas include social impact bonds, community bonds and community share schemes. One of the things the big society bank might do is support innovation, particularly proposals that find new ways of matching the needs of front-line organisations with potential providers of capital.

There are also organisations-community groups, social enterprises, charities-which are viable businesses but are unable to access working capital or capital to buy new assets from commercial banks. The big society bank could increase the flow of capital via intermediaries which specialise in affordable loans to these institutions. And for organisations which are looking to expand

15 Mar 2011 : Column 212

and grow, the big society bank will look to increase the availability of risk capital, where the investor takes a stake in the future success of the organisation.

In refocusing the priorities of dormant accounts allocation, we are not downgrading the importance of youth and financial inclusion. We would like the bank to include both themes within its investment mandate and believe that far better outcomes can be achieved through the social enterprise and community-led solutions that the bank will support. I am grateful for the support of my noble friend Lord Newby and the noble learned Baroness, Lady Butler-Sloss, in recognising that the Government's proposals build on the original Act in a positive way.

We recognise that the current economic situation and the need to tackle the deficit create a challenging and sometimes painful environment for many organisations, including those in the voluntary, community, charitable and social enterprise sectors. We also understand that organisations might have difficulties managing the transition to a tighter funding environment and getting to a position where they can take advantages of the future opportunities presented by the big society agenda. This transition is more difficult in an environment than either the Government or the previous Government would have wished.

This is why we have set up a £100 million transition fund to give a lifeline to those VCS organisations that are delivering front-line services and are affected by reductions in public spending. The fund provides grants of between £12,500 and £500,000 to help organisations make the necessary changes in order to thrive in the long term and take advantage of the opportunities presented by the big society and public service reform. Already, following a large number of applications, 18 early transition awards have been made and many hundreds more will be announced in the coming weeks and months.

We will also shortly be announcing a programme of work to give front-line organisations access to support and expert advice beyond funding matters that will enable them better to meet their changing needs. We also want to help the sector access a wider range of funding to increase its strength and resilience for the long term. That is why we are aiming to capitalise a big society bank to increase levels of capital investment in the sector and we are also reviewing ways to incentivise further philanthropy and charitable giving. We are committed to opening up public sector delivery so that voluntary, community and social enterprise organisations can compete for national and local government contracts and access a greater proportion of government spending.

We have established a red-tape taskforce, chaired by my noble friend Lord Hodgson of Astley Abbotts, to remove the barriers that get in the way of sector involvement. It is looking at a range of issues that we know cause difficulties for voluntary organisations, including charity law, licensing, insurance and funding, and will be reporting in May. We have also introduced new powers to help communities save local facilities and services threatened with closure and give the communities the right to bid to take over local state-run services.

15 Mar 2011 : Column 213

We are working hard to set up a big society bank. Not surprisingly, this is a complex process. None the less, by April of this year, we aim to have arrangements in place so that we are able to start making early investments as soon as the first round of dormant accounts money becomes available in the summer. It will take longer for an independent big society bank to be set up and fully operational but we are already in the process of seeking the state-aid approvals necessary to capitalise it with dormant accounts. We have been delighted that Sir Ronald Cohen, previously head of the Social Investment Taskforce, and Nick O'Donohoe, formerly head of global research at JP Morgan and head of its social finance unit, have volunteered to develop a proposal for an independent big society bank. We look forward to working with them and other social investment experts. In addition to the investment from dormant accounts, as the Prime Minister announced on 9 February as a part of a broader package, four of the UK's largest banks have agreed to invest a further £200 million in a fully fledged big society bank. We expect that the final bank will be a lean organisation, and I assure this House that we are conscious of the need to keep any administrative costs to an appropriate level.

In this way, with the combination of dormant accounts money and the support of the banks, we expect that the big society bank will be capitalised with at least £300 million over the next two years, with further injections of capital as more money is released from dormant accounts. This is a significant sum, especially when we consider that in 2010 the entire amount of social investment in the UK was less than £200 million.

In addition, we expect that the bank will attract increasing levels of private sector investment over time, generating hundreds of millions of pounds for charities, social enterprises and voluntary groups, and creating a strong, vibrant and sustainable social investment market in the future.

I will try to answer some of the questions that noble Lords have asked. The noble Lord, Lord Hunt of Kings Heath, asked whether the bank would be able to raise capital, what rates it would set and the salary levels. The big society bank will be able to raise capital although it is unlikely to be able to do so in its first few years. The details of the BSB investment will be decided by its management. They will have to be demonstrably in keeping with its social mission. Salaries will be set in line with the sector, but I know that Sir Ronald Cohen and Mr O'Donohoe are giving their services free to the project to set up the bank.

The noble Lord also asked what form capital from the bank will take. That is being negotiated with the banks and we want to ensure that the terms enable the BSB to deliver its social mission. How will the social mission be guaranteed? The BSB is being set up as an independent, non-public organisation, but we have made it clear that we will direct dormant accounts only to organisations that have a clear, protected social mission in their founding articles, and governance accountability arrangements to protect that mission.

Rather predictably, the noble Lord also asked about the citizens advice bureau in Birmingham, because we

15 Mar 2011 : Column 214

have debated that in another context and I suspect that we might debate it further. Perhaps I can put that decision in context. As the noble Lord will know, the Government have a strategy for basing these decisions at a local level. Many councils have made substantial savings through increasing efficiency in back-office functions rather than passing on cuts to the VCSE groups which, as the noble Lord admits, do excellent work. The Government have set out reasonable expectations of councils, challenging them to work with the sector and organisations and not to pass on disproportionate cuts. We expect that from local government throughout the country.

The big society is not a cover for cuts. The challenge that we face in terms of public finance cannot be ignored, but the big society was an approach developed before the recession which is at the heart of the Government's programme of reform. The big society will give individuals and communities a role in shaping the provision of services and give more power to communities rather than central government.

The noble and learned Baroness, Lady Butler-Sloss, asked particularly about parliamentary scrutiny. The aim is for the big society bank to be independent in order to have flexibility to respond to the market, but our key criteria for directing BSB money include robust governance and accountability arrangements, which will include the principle of transparency. Parliament will, in the normal way, be able to scrutinise government spending directions of dormant accounts and in that way scrutinise the whole function of the big society bank as the recipient of those funds.

The noble Lord, Lord Newby, said that in many ways the Government had gone back to the original Bill, and showed how the social enterprise sector can be an effective deliverer of community services and how these proposals will provide much-needed funding.

The noble Baroness, Lady Pitkeathley, asked a number of questions, but I can reassure her that the whole purpose is to use this money-people's money, as she said-to support the voluntary, community and social enterprise sectors. She is right that the big society bank is not the whole solution, but it is part of the development of this sector, which I know she believes in greatly.

The noble Lord, Lord Hunt of Kings Heath, seeks in his Motion to place the Government's proposals in the context of the spending review and ignores the state of the public finances under the previous Government, which made budgetary reduction a vital part of the coalition's strategy for rebuilding the economy. He has also chosen to ignore not just the degree to which the Government have sought to protect the VCSE sector but the measures, of which this is part, to provide it with the opportunity and ability to play its part in reshaping the economy for the future.

This has been a useful debate and I hope that I have been able to reassure the House that this instrument is being used to positive effect. I would like to thank the noble and learned Baroness, Lady Butler-Sloss, for tabling her Take Note Motion and her support of the order. In the light of this, and my comments, I hope that the noble Lord, Lord Hunt of Kings Heath, will feel able to withdraw his Motion of Regret.

15 Mar 2011 : Column 215

Lord Beecham: Before the noble Lord sits down, will he comment on the rate of interest that the bank might be deploying and whether it is likely to be a commercial rate?

Lord Taylor of Holbeach: The bank will be operating in the market, and it is unlikely that the bank is going to be able to provide finance at a subsidised rate. None the less, the most important thing to secure is the availability of the funding. That is the direction of travel of the bank at this time.

Lord Hunt of Kings Heath: My Lords, I am very grateful to the noble Lord, Lord Taylor, for his response and for some of the details he gave to noble Lords. However, from what he said, it seems that it will be some months before money starts to flow and the amounts seem likely to be modest. His contribution was, as ever, meant to be as constructive as possible-until at the end when we heard from him about the deficit and the financial position of the public sector. He made no mention of the global financial context in which the last Government had to move to protect the economy. Also, the Government do have a choice-they can slavishly carry on as now, or, as I hope, they can take steps to deal with faltering growth in our economy; establish a plan to create jobs in the private sector to deal with the crisis of youth unemployment; and take steps to support the voluntary and charitable sector.

I appreciated the comments of the noble Lord, Lord Newby, and his tour de horizon on the passage of the 2008 Act. I agree that social enterprises are invaluable and that we want to support the sector. I also agree with his point about access to finance. However, as my noble friend Lady Pitkeathley says, the voluntary and charitable sector is running short of cash now. At the very least, it needs an injection of resources and time to adapt. As my noble friend Lord Beecham suggested in his question about commercial rates, that is highly pertinent. I know that access to capital is an issue, but when very little revenue is available from traditional sources of funding, the cost of capital becomes a major inhibition on the very organisations the noble Lord is relying on.

The noble Lord is ambitious for the future, for the proposals contained in the order and for the role of the voluntary and charitable sector. I applaud that ambition. However, many of the organisations on which he wants to rely are not going to survive. That is why I continually come back to the situation of the CABs in Birmingham. Of all the organisations on which one would have thought the Government would have depended to provide that kind of infrastructure support, I cannot think of a more important organisation than the CAB. Indeed, that is why in the Public Bodies Bill we are seeing the CAB being asked to take on the responsibilities of a number of consumer organisations. How can the Government say they are supporting and relying on the sector when a key part of that structure in this country's second city is under threat of complete closure?

I respect the noble Lord, Lord Taylor, enormously. We support the use of dormant accounts but the context in which we find ourselves is that the very

15 Mar 2011 : Column 216

organisations on which the Government depend so much are being obliterated by the impact of the cuts taking place. I commend the Motion.

8.26 pm

Division on Motion.

Contents 102; Not-Contents 159.

Motion disagreed.

Division No. 1


Adams of Craigielea, B.
Andrews, B.
Bassam of Brighton, L. [Teller]
Beecham, L.
Bilston, L.
Blood, B.
Boyd of Duncansby, L.
Bradley, L.
Brookman, L.
Campbell-Savours, L.
Clark of Windermere, L.
Collins of Highbury, L.
Corston, B.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L.
Dixon, L.
Donoughue, L.
Drake, B.
D'Souza, B.
Dubs, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Gale, B.
Gibson of Market Rasen, B.
Gilbert, L.
Gould of Potternewton, B.
Grantchester, L.
Grey-Thompson, B.
Grocott, L.
Harris of Haringey, L.
Hart of Chilton, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Jones, L.
Judd, L.
Kennedy of Southwark, L.
Kestenbaum, L.
Kirkhill, L.
Knight of Weymouth, L.
Lea of Crondall, L.
Leitch, L.
Liddell of Coatdyke, B.
Lister of Burtersett, B.
McAvoy, L.
McDonagh, B.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
McKenzie of Luton, L.
Martin of Springburn, L.
Massey of Darwen, B.
Maxton, L.
Moonie, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Murphy, B.
O'Neill of Clackmannan, L.
Parekh, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Quin, B.
Ramsay of Cartvale, B.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Smith of Leigh, L.
Snape, L.
Soley, L.
Stair, E.
Stevens of Kirkwhelpington, L.
Stevenson of Balmacara, L.
Sutherland of Houndwood, L.
Symons of Vernham Dean, B.
Taylor of Bolton, B.
Thornton, B.
Touhig, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Wall of New Barnet, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Wheeler, B.
Whitty, L.
Wilkins, B.
Young of Norwood Green, L.


Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Attlee, E.
Barker, B.
Bates, L.
Berridge, B.

15 Mar 2011 : Column 217

Black of Brentwood, L.
Blencathra, L.
Boswell of Aynho, L.
Bottomley of Nettlestone, B.
Brinton, B.
Brooke of Sutton Mandeville, L.
Browning, B.
Butler-Sloss, B.
Byford, B.
Cathcart, E.
Chalker of Wallasey, B.
Clement-Jones, L.
Colwyn, L.
Cormack, L.
Cotter, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
De Mauley, L.
Dear, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Eccles, V.
Eccles of Moulton, B.
Edmiston, L.
Empey, L.
Falkner of Margravine, B.
Faulks, L.
Ferrers, E.
Fookes, B.
Forsyth of Drumlean, L.
Framlingham, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Garel-Jones, L.
German, L.
Glentoran, L.
Greenway, L.
Hamilton of Epsom, L.
Next Section Back to Table of Contents Lords Hansard Home Page